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Drumbeat: October 21, 2009
Posted by Leanan on October 21, 2009 - 9:30am
New Agency to Lead Global Energy Push
PARIS — The International Renewable Energy Agency, set up this year to lead a global crusade for renewable energy development and sharing of technology between the developed and developing worlds, has come a long way in a short time.Signed into existence in January at a founding conference in Bonn, the agency — known by its acronym, Irena — now has 137 member states, including the United States, which joined in July. Mexico has said it plans to join shortly.
Oil Surges to One-Year High on U.S. Gasoline Supply Decline
(Bloomberg) -- Crude oil rose above $81 a barrel in New York for the first time in a year and gasoline surged after a U.S. Energy Department report showed a greater-than-forecast drop in supplies of the motor fuel.Gasoline stockpiles fell 2.21 million barrels, more than twice the median of analyst forecasts, to 206.9 million barrels in the week ended Oct. 16, according to the department’s report. Oil also advanced as U.S. equities increased and the dollar slipped against the euro, bolstering the appeal of commodities.
Mexico lawmakers pass tax hikes; rating fears remain
Lawmakers met through the night to approve the income side of the 2010 federal budget and a bill to lift value-added tax, or VAT, to 16 percent from 15 percent. The lower house also approved raising income taxes for high earners to 30 percent from 28 percent.It was unclear whether that will be enough to stave off threatened debt downgrades by ratings agencies. Analysts at Merrill Lynch and 4Cast on Wednesday both put the probability of a downgrade at above 50 percent.
Mexico's public finances are under pressure from a slide in oil output since 2004, although Energy Minister Georgina Kessel told Reuters the decline has now stabilized, as the country suffers its worst recession since the 1930s.
Indonesia president surprises with energy minister pick
Analysts had wanted someone with strong reform credentials who could resolve conflicts between the many competing interests and speed up development and investment in the resources sector.Saleh, 48, was born in Riau, Sumatra, and is a trained economist with an academic background. He has a doctorate in economics from the University of Indonesia, where he lectures, and an MBA from the Middle Tennessee State University.
However, he has a low profile in the energy and mining sector, although media reports said he previously worked as a consultant and in finance, including in the oil and gas sector.
Shifts in Annual Energy Efficiency Rankings
California again claims the prize for most energy-efficient state, while Wyoming is holding steady in last place, according to new rankings from an efficiency advocacy group.Massachusetts has leaped from seventh in last year’s rankings to second, and Maine rose from 19th place to crack the top 10 for the first time, according to the survey, which was conducted by the American Council for an Energy Efficient Economy.
Rhode Island also broke into the top 10, which is dominated by coastal states — plus Minnesota.
Beyond GDP: We need a dashboard for the whole economy
The report's 12 recommendations centre on changing the emphasis from measuring economic production to measuring human well-being, on the problems of defining well-being and - perhaps the thorniest of issues - how to measure environmental sustainability. The report notes that this last goal will require indicators of crises such as those linked to climate change or to the depletion of fishing stocks.Measuring quality of life directly is not going to be easy. In passing, the report cites such gems as the finding that women in Columbus, Ohio, surveyed about their feelings, or "affect", while carrying out different activities, felt better walking than when they were having sex. Puzzlingly, the same researcher, Alan Krueger of Princeton University, has also discovered that "the correlation between life satisfaction and net affect is only 0.44": people's description of their separate experiences does not predict very well how they feel about their lives.
Clocking off - Are holidays good for the economy?
Americans work longer hours: theirs is the only rich country that does not give any statutory paid holiday. (In practice, most workers get around 15 days off.) This work ethic may in turn help to explain Americans' material wealth. Even adjusting for purchasing-power parity, America generates more wealth per person than all but a handful of mainly oil-rich economies such as Norway.
Potential Grows for Biomass Energy
SAN FRANCISCO — Woody biomass provides just 0.94 percent of all U.S. energy now, supplying the equivalent of 3.5 million American homes. But Bob Cleaves, president of the Biomass Power Association, a group in Portland, Maine, that represents about 80 plant-burning incinerators in 16 states, says available raw material would allow the industry to double its output. New incinerators are already being planned in many states.
Enthusiasm for Natural Gas Cools
MADRID — Developing countries around the world are increasingly turning to natural gas as their alternative transportation fuel of choice. But early official embrace of the technology in industrialized nations has mostly cooled, because risks inherent in mass deployment outweigh the benefits, especially in regard to climate change.
Fuel Cells vs. Batteries: The Arguments Get Bitter
Congress gave final approval to nearly $200 million in hydrogen research funding last week, at a time when the arguments between fuel-cell and battery car advocates are heating up. In their dialogues, which are sometimes more like screaming matches, the more conciliatory hydrogen advocates point out that fuel-cell vehicles use the same kind of electric motors as battery cars, and that the two technologies can support each other. But E.V. supporters, many of whom supported an unsuccessful attempt last May by Energy Secretary Steven Chu to cut $100 million in fuel-cell money, would like to see hydrogen permanently defunded.“I’m not sure we will see a single truly commercial hydrogen vehicle by 2015,” said Mr. Romm, who is a climate blogger and former Energy Department official. “A couple of companies are still flushing their money down the toilet on fuel cells, but nearly every car company will have plug-in hybrid or battery electrics on the road in the next few years.”
Turkey Lays the Foundation for an Alternative Energy Rush
ISTANBUL — The billboards on the airport road were hard to miss: large red placards from Akbank proclaiming that “Sustainability is our favorite topic.” The Turkish bank’s intended audience? Investors, bankers and delegates arriving for the annual meetings earlier this month of the World Bank and International Monetary Fund.But some investors in renewable energy projects say they are troubled by a more disagreeable topic: slowness by Turkey’s government in moving to privatize its energy markets and take advantage of its capacity for generating wind power.
In Britain, Going Green Is Politicians' Ticket
LONDON — In what may be its last months in power, the Labour Party government is laying out its most detailed long-term plans yet for cutting Britain’s carbon emissions, an ambitious effort environmentalists hope the opposition Conservatives will push forward if they win office next year.
Exposed: Groundbreaking Report Details Climate Change Hotspots in US Southeast
WASHINGTON /PRNewswire-USNewswire/ -- A number of "hotspots" of vulnerability to climate-related hazards exist in the US southeast, according to a new groundbreaking study released today by Oxfam America. The report, "Exposed: Social Vulnerability and Climate Change in the US Southeast," is the first of its kind to combine hazards associated with climate change with social variables, revealing the people and places that will most likely be hit worst by climate change."Climate change will impact everyone, but not everyone will be impacted equally," said Oxfam America President Raymond C. Offenheiser. "Social factors like income and race do not determine who will be hit by a natural disaster, but they do determine a population's ability to prepare, respond, and recover when disaster does strike. This report will serve as a critical tool to help us identify especially vulnerable communities and invest wisely in their climate resiliency and preparedness."
Mexico can keep oil output stable for years
MEXICO CITY (Reuters) - A dramatic slide in Mexico's oil production has come to an end and it can maintain output at 2.5 million barrels per day for the coming years, Energy Minister Georgina Kessel said on Tuesday.Mexican crude output has plunged by nearly a quarter since peaking in 2004, straining public finances and spurring bond rating agencies to warn the country's debt could be downgraded.
However the government now believes the rate of decline at the giant Cantarell field has slowed and become more predictable.
Oil world says fossil fuels most realistic for now
LONDON (Reuters) - The world must invest heavily in fossil fuels or face an energy crisis, said leaders of the oil industry gathered in London this week as they voiced scepticism about prospects for a climate change deal in Copenhagen.The oil industry has shifted its message to a more climate-friendly approach, but argued that for now oil and gas were the ways to meet the world's energy needs.
"There is no getting away from fossil fuels," said Nigerian Oil Minister Rilwanu Lukman, speaking on the sidelines of the Oil and Money industry conference.
Total Calls on Norway to Ease Rig Regulations to Boost Drilling
(Bloomberg) -- Total SA, Europe’s third-biggest oil company, said Norway should ease regulations concerning drilling rigs to boost exploration.“It’s very difficult,” Michel Contie, head of Total’s U.K. operations, said in an interview in London yesterday. “If you have a rig in the U.K. you cannot bring it there for safety reasons, but safety isn’t better in Norway than in the U.K.” Drilling costs would fall if Norway made it easier to move rigs into its waters, he said.
Judge delays Eni Nigeria ruling
An Italian judge has put back a decision on a prosecutor's request to bar oil major Eni from doing business with the Nigerian National Petroleum Corporation (NNPC), a lawyer for Eni said today.The public prosecutor confirmed, however, it would press ahead with a request for Eni and its Saipem unit to be banned from doing business in Nigeria, judicial sources said to Reuters.
Gazprom May Make U.S. Acquisition to Gain Shale-Gas Expertise
(Bloomberg) -- Russia’s OAO Gazprom, the world’s largest natural-gas supplier, said it may consider acquiring a U.S. shale-gas producer to gain the know-how to exploit similar fuel deposits in its home country.“An acquisition of a shale-producing company could make a lot of sense,” John Hattenberger, president of Gazprom’s U.S. energy-trading unit, said yesterday in an interview at Bloomberg’s Houston bureau. “Russia has huge shale reserves.”
Coal demand soars as Asia economies rebound-Peabody
NEW YORK (Reuters) - Demand for coal to generate electricity and make steel in China and India is expected to grow by 7 percent to 8 percent annually in the next five years, leaving the world "chronically" short of the fuel, the head of U.S. coal miner Peabody Energy Inc said on Tuesday.He also outlined his company's plans to double exports from Australia to handle Asian demand and to develop its joint venture in Mongolia to produce coal for the Chinese.
Mexico closes all oil ports due to bad weather
Weather-related port closures are common for Mexico's Gulf coast ports, but long shutdowns can force state oil company Pemex to cut output as it has limited onshore storage capacity.
California is the only oil-producing state in the nation that doesn’t receive a fee from oil companies that pump oil from state land.“Texas funds a large portion of its universities with this money,” said Beth Willon, Lt. Gov. John Garamendi’s communications director. What a coincidence that Texas universities have the lowest tuition rates in the nation.
Nudging Recycling From Less Waste to None
Across the nation, an antigarbage strategy known as “zero waste” is moving from the fringes to the mainstream, taking hold in school cafeterias, national parks, restaurants, stadiums and corporations.The movement is simple in concept if not always in execution: Produce less waste. Shun polystyrene foam containers or any other packaging that is not biodegradable. Recycle or compost whatever you can.
Business Travelers Take to Their Bikes
Christopher R. Bennett, a civil engineer for the World Bank who was out of the country for work 172 days last year, is one of what experts say is a growing number of business travelers who bicycle while on assignment.“To me, cycling is part of my DNA,” Mr. Bennett said in an interview from Tbilisi, Georgia, where he was overseeing investment in road construction. He travels with a bike that disassembles and fits in an average-size suitcase, or uses bicycles he stores at hotels he frequents. “Bellhops know when I’m coming and bring them to me,” he said.
The days of inexpensive food are coming to an end. As a result of rising populations, incomes and urbanisation, food demand is expected to grow, albeit at a slower pace than seen in the last couple of decades, and the composition of that demand will change towards higher value and more resource-intensive items, such as meat products.
'Four Saudi Arabias' needed for oil
THE world will have to find four Saudi Arabias by 2030 if it wants to maintain its oil dependency, the International Energy Agency says.The reality of peak oil is fast approaching, and more must be done to develop and encourage the use of alternatives including solar and nuclear, the agency's chief economist has warned.
"My main motto never changes, the era of low oil prices is over," Dr Fatih Birol said.
"When the economy recovers, oil prices will recover accordingly. Mid to long term, we will be experiencing high prices."
Hess CEO: US Needs Gasoline Tax, Mileage Limits To Save Energy
LONDON -(Dow Jones)- The U.S. government should put tax gasoline at $1 a gallon to save energy and avoid a looming oil crunch, the chief executive of U.S. independent oil company Hess Corp. (HES) said Tuesday."A gasoline tax of $1 a gallon would boost conservation and help pay down the federal deficit by $120 billion a year," said John Hess at an oil industry conference here.
Non-Opec producer Oman posted a 36.3% drop in net oil revenues in the first eight months of the year on the back of weaker oil prices, but raised spending by 1.7% official data showed.Gulf Arab states in the world's biggest oil-exporting region, heavily reliant on income from oil and gas exports, witnessed sharp drops in earnings this year as oil prices tumbled to the mid-$30s a barrel.
The ‘obscure’ peak oil hedge fund and the ailing lender
What does struggling US commercial lender CIT have in common with peak oil?Quite a lot, if a rather mysterious offer for some of CIT’s debt is serious. CIT is under pressure from activist investor Carl Icahn over its plan to reduce its $30bn debt load by almost $6bn. Icahn says the terms CIT is offering its existing bondholders to take part in the debt exchange are poor and would destroy the value of their assets.
Cnooc Falls in Hong Kong on Earnings Decline Report
(Bloomberg) -- Cnooc Ltd., China’s biggest offshore oil producer, declined the most in almost a month in Hong Kong trading after the Wall Street Journal said the company’s nine- month pretax profit fell 46 percent from a year earlier.
Enbridge opens oil-sands terminal
Oil pipeline giant Enbridge Inc. officially opened its new contract terminal in Hardisty, Alta., yesterday. The 19-tank facility is capable of holding 7.5 million barrels of crude oil from the oil sands. One of the largest in North America, the Hardisty terminal is the starting point for two major pipelines that will initially carry one million barrels a day of bitumen to U.S. markets.
Nigeria hopes peace can bring big China deals
LAGOS, Nigeria (CNN) -- Nigeria has set its sights on making multibillion-dollar oil deals with China amid peace moves with militants.Lawmakers in the west African country -- one of the world's top producers of oil -- are crafting new money-making changes for its state oil corporation, as officials negotiate multibillion-dollar oil deals with China. At the same time, the government is brokering peace with bandits whose attacks have cost the oil industry millions.
Iran Agrees to Draft Deal on Nuclear Program, Diplomats Say
VIENNA -- The International Atomic Energy Agency says Iran has agreed to a draft deal on its nuclear program.In addition, diplomats say the deal would see the country ship out most of its enriched uranium to Russia, stripping Tehran of most of the material it would need to make a nuclear weapon.
Salazar calls for probe of Bush oil-shale changes
SALT LAKE CITY – The Department of the Interior is rewriting the rules for oil-shale leasing as the secretary called Tuesday for an investigation into last-minute changes made by the administration of President George Bush to favor oil companies.
Texas leads U.S. in generating wind power
HOUSTON (Xinhua) -- Texas has now embraced wind power generation, leading the U.S. states in total operating wind capacity, according to the latest report of the American Wind Energy Association (AWEA).AWEA said in its report on Tuesday that Texas had increased its capacity for wind power generation in the third quarter of 2009 by 436 megawatts (MW) -- greater than any other U.S. state.
Small firm names another site for Idaho nuke plant
BOISE, Idaho – A small company that's pushing a billion-dollar nuclear power plant in Idaho now says it wants to build another one at a different location.Alternate Energy Holdings Inc. says it's asking Payette County to amend a plan that governs land use, so it can build a nuclear power plant on approximately 5,100 acres in western Idaho.
Billionaire investor Warren Buffett's MidAmerican Nuclear Energy abandoned a proposal to build a nuclear power plant in Payette County in early 2008, saying it did not make economic sense.
But Don Gillispie, Alternate Energy's chief executive, says his projects will bring benefits to rural communities.
Solar thermal technology advances
KINGSTON – As an interest in solar power has surged in the last few years, its different technologies are also coming to the forefront. And solar thermal was getting some due attention Tuesday during a conference at Tech City.Sponsored by The New York Solar Thermal Consortium, the Solar Thermal Roadmap Symposium highlighted some of the positive aspects of solar thermal technology.
UK radar research may release large wind projects
LONDON (Reuters) - Government-funded research on radar may pave the way for wind projects that have been held back because they interfere with aviation radar, the British Wind Energy Association (BWEA) said.BWEA said in a statement late on Tuesday the 5.15 million pound research should help release the six gigawatts of wind projects, including offshore, which could power as many as 3.4 million homes.
The Technology That Will Replace 148 Billion Barrels of Oil
The real story here is battery power, a technology market that’s heating up in a big way. Just the market for rechargeable batteries is expected to zoom from $36 billion in 2008 to $51 billion in 2013.And yet the battery market gets less attention than solar or wind power, its higher-profile (but less-technologically developed) cousins.
States eager to power up electric car-battery industry
DETROIT — The U.S. government has made it clear that developing a domestic auto-battery industry — for advanced batteries to power next-generation electric cars — is a priority. That has states scrambling to be sure they get a piece of the action.
At Tokyo Auto Show, Hybrids and Electrics Dominate
TOKYO — Green technology will be in the spotlight at the Tokyo Motor Show, which starts Wednesday, but the light will not shine on many automakers from outside Japan.
Carmakers back more fuel economy, but seek flexibility
DETROIT — Public hearings on new, higher federal fuel-economy standards are set to start here today, and the Alliance of Automobile Manufacturers says it will support the aggressive rule changes.But it also plans to press the Environmental Protection Agency and the National Highway Traffic Safety Administration to ensure the rules retain flexibility that lets makers be creative in reaching the goals. The new fuel-economy standards will start to phase in by 2012 and raise the required industry average, now 27.5 miles per gallon for cars, to 35.5 mpg by 2016.
Death of 'Soul of Capitalism: 20 reasons America has lost its soul and collapse is inevitable
ARROYO GRANDE, Calif. (MarketWatch) -- Jack Bogle published "The Battle for the Soul of Capitalism" four years ago. The battle's over. The sequel should be titled: "Capitalism Died a Lost Soul." Worse, we've lost "America's Soul." And worldwide the consequences will be catastrophic.That's why a man like Hong Kong's contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today."
No, not just another meltdown, another bear market recession like the one recently triggered by Wall Street's "too-greedy-to-fail" banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great "American Economic Empire" for 233 years will collapse, a total disaster, a destiny we created.
Mexico To Receive $1.5 Billion World Bank Loan To Lower Emissions
MEXICO CITY -(Dow Jones)- The World Bank said Tuesday that its board of directors has approved a $1.5 billion loan to help Mexico develop public policies that lower greenhouse gas emissions.The loan will support the Mexican government's climate change program, which includes infrastructure investments that promote sustainable economic growth.
Developing nations join West in deforestation fight
WASHINGTON (AFP) – Six developing countries will join five western nations, including the United States and Britain, to combat climate change by better managing forestry resources, the World Bank has said.
India, China sign climate change pact
NEW DELHI (AFP) – India and China put aside a diplomatic spat to sign a five-year agreement Wednesday to cooperate on climate change leading up to crucial talks in Copenhagen.The pact establishes a working group to exchange information on climate change ahead of a high-stakes summit in the Danish capital from December 7-18 where nations will attempt to clinch a treaty to reduce carbon emissions.
Companies quitting US Chamber over climate stance
ALBANY, N.Y. – A growing number of companies are quitting the U.S. Chamber of Commerce over its climate change policies.The latest is a New York paper company. Mohawk Fine Paper says membership in an organization that has been critical of climate change legislation hurts its position as a business with a strong commitment to climate protection.
Ships, Planes Should Cut Greenhouse Gases by Up to 20%, EU Says
(Bloomberg) -- The European Union proposed that the shipping and airline industries reduce greenhouse-gas emissions by as much as 20 percent over the next decade as part of any new United Nations accord to fight global warming.Ships would have to cut greenhouse gases by a fifth in 2020 compared with 2005 and airlines would need to trim discharges by 10 percent during the period under the EU proposal to the UN. European environment ministers endorsed the negotiating position at a meeting today in Luxembourg.
World's leading energy scientists call for reduced use of fossil fuels
STOCKHOLM, Oct. 20 (Xinhua) -- World's leading energy scientists on Tuesday called for reduced use of fossil fuels, in the run-up to the UN Copenhagen Climate Change Conference to be held in December.They made the call in a statement issued at the end of the two-day Energy 2050, International Symposium on fossil-free energy options organized by the Royal Swedish Academy of Sciences in Stockholm.
Government climate change figures 'are misleading'
The Government has been accused of exaggerating Britain’s success in fighting climate change by presenting “misleading” figures on carbon emissions.Sir Michael Scholar, chairman of the UK Statistics Authority, said that presentation of data by the Department of Energy and Climate Change was “unsatisfactory”.
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Something personal.
Why can't we change? Why should we.
Why are we waiting for someone else to solve all problems? That's much easier.
Why doesn't our gouvernments do something? They only run the show.
Why don't we do something? Is there a problem I don't know about.
Why do we act like sheep? I don't like that question.
Why didn't we do something when it made more sense? Is there another problem I don't know about.
Why do we do what we do? What else should I do.
Why?
Without a good reason there is no need for change.
Probably most people aren't affected yet. This will slowly change, and "we" won't notice.
This show will continue until change is needed and this will be prosponed as long as possible.
Because giving up "the good live" without a reason makes no sense.
Is peakoil a hoax? No it's a valid theory, undeniable and very well thought threw.
Why can't we change than?
Nobody wants to make that decision. Unplugging the live support for millions of older and helpless relatives. Is one of the issues that can't be solved. Everybody will know someone who will be directly affected. Making this decision would be immoral and against everything we stand for.
Slowly deflating and keeping everything together will be our mantra for the coming years.
Stopping all non essential things will be a part of this.
Worrying about peakoil isn't very usefull, yet I did.
Thinking about all the things I really posses changed my view radically. When I stripped away everything I posses, only one thing remained.
Limited time.
But I have a flaw, I never believed in credit. I never bought a thing I couldn't pay. No I'm not rich (money wise).
loosing "the money thing" isn't a big deal for me either, as long as I can get the basics that keeps my body going my live will be worthwhile.
Realizing that most other people are afraid of loosing these things, explains the gridlock we have entered.
In a sense we are always afraid of loosing something. But we ignore it untill it gets to close.
Limited time.
Nobody can take that away from me (yeah I know) but this became my new start in the new world. I always lived like I would never die. But this is not true. So the rest of my live will be about the small things, which makes living worthwhile.
Using our words for fun instead of blatent li.. Helping others to cope with all the small issues. Putting perspective where it is needed. Building things from scratch if needed. Well you get the picture I guess.
Realizing that most people don't posses that many skills, most are city folks nowadays and I'm not. Added another issue.
Our society evolved slowly into the "drone" thing we have nowadays. Don't think, just do as told.
Most skills weren't needed anymore, because we automated everything we could. Yet I'm convinced that everybody has some unique skills and when the time arrives these skills will be usefull again.
Waiting for the end of the world as we know it, will never come. Our minds can't pick up slow changes. At some point it's just the realisation that things have changed. When I look outside my window I can't see the changes, everything looks normal. At the same time I feel that something has changed.
Realizing that it's us that is changing gives me the drive for all these silly writings I'm putting down.
We can change and we will change. Whether we want it or not.
Sorry for intruding the drumbeat with this.
Look at the possibilities: After TS stops hitting the fan the survivors will most probably be able to do things in public that they aren't allowed to do now. Oh, the things I will do with aluminum foil....
8-D
Most people will have changed at that point.
True, our minds can't pick up small changes but change will not always be slow. When a person loses his or her job, that is not a slow change, it is dramatically sudden. When the sheriff comes to set a family’s furniture on the lawn, that is not a slow change, it hits them suddenly, like dropping a ton of bricks on them. If the family then becomes homeless and must live under a tarp or under a bridge, that is sudden.
When the economy collapses, as depicted in the above link: Death of 'Soul of Capitalism: 20 reasons America has lost its soul and collapse is inevitable, it will happen suddenly. I don’t mean overnight but over a period of a few weeks to a few months. And during that collapse period, there will be no doubt in anyone’s mind what is happening. When the dollar is collapsing to a fraction of its former value and the unemployment approaches 40 then 50 percent, there will be no doubters then.
Things, right now are happening very slowly and watching things happening is a little like watching grass grow. Everything is happening so slowly that we are lulled into a belief that this will be the norm, all the way to the bottom. It won’t.
In yesterday’s thread on TOD, Hubbert's Peak - John Kinhart's Comic, the pot smokers, after seeing the stock market recover from what they originally thought would be the final crash, then decide that it will be a slow crash, two steps down then one step up, then two more down…. That cannot possibly happen. Oh it can happen before the sudden collapse, like it did during the great depression. But the entire world economy never collapsed then. Seventy-five percent of the workforce were still employed then.
In the debate on climate change, there is talk of a tipping point, a point which, after being reached, tips the climate into irreversible warming. But very few believe there could be such a thing as an economic tipping point, the point where the economy must suddenly collapse. However there are several things that could tip the economy into irreversible collapse. A point where there is not enough real money in the economy to keep it working. Or a point where credit completely dries up and all construction, of any kind stops. And if I thought for awhile I could come up with a dozen or more black swans that will tip our already fragile economy over the edge.
Ron P.
Ron
"very few believe there could be such a thing as an economic tipping point,"
Why not? Seems logical there would be. Is this just a gut feeling or...
One pattern I have noticed is how things seem to experience a longer period of slow overall decline and then take a big somewhat sudden drop, level out then drop again, and so on.
PS
Can someone tell me how to make that nice little quote box.
<blockquote>quoted text here</blockquote>
Will result in:
Use the preview function to test it, please; don't post test messages here.And remember, you can edit your post if you make a mistake, as long as it hasn't been replied to yet.
are listed under the comment window - copy and paste them into your comment.
Ryeguy, I was speaking of people's belief system, not what will or will not happen. Why don't people believe there will be a sudden economic tipping point. Belief systems are a very difficult subject. And no, it is not a gut feeling it is just a simple observation. Ask the next ten people if the economy will suddenly tip into sudden collapse and see how many say yes. As I said, it is just an observation.
You make blockquotes this way. However relpace the brackets, [, with chevrons, <. [blockquote] Put your quote here. [/blockquote] The chevroned "blockquote" opeans the quote and the /chevroned "blockquote" closes it. You can practice this by using the "preview" button instead of the "save" button. With the preview button you get to see your message, and make any necessary changes, before you save it to the list.
Ron P.
When you go to the reply page look down at the bottom........"more information about formatting options".
looked for this info page but did not think to look on the reply page, logical place to put it... :)
thanks all
Here is Gerald Celente in an interview: "there is NO economic recovery" http://eclipptv.com/viewVideo.php?video_id=7886
And the latest of his trendsresearch newsletter (PDF alert) http://www.lewrockwell.com/celente/Future-Trends-2012-Celente.pdf
All the things you're revering to got me worried also, I'm not stating that it will be easy. I'm only trying to put some perspective.
When I read your writings It looks to me that you're describing the powerdown we need.
When money stops functioning I will work for free/food.
The great depression stopped because there was enough energy to restart.
This time things are different. That's your Black Swan.
The depression of last century stopped because WWII broke out, which ended with a few mushroom clouds. Give me 1 good reason to expect another outcome.
Wars have always been about getting something. Our western world and basicly the rest of the world is depleted. Invading a country for it's papermoney doesn't sound logic.
Wars costs lots and lots of energy, peakoil means choosing what to do with the last remainings. Wasting it on war with nothing in return?
Rebuilding infrastructure after a war, like after ww2 is out of the question.
I think we are to poor to go to full scale wars. Keeping everybody in place is the only logical thing that is left.
History from a political perspective is the same as our pretending leaders nowadays.
PO might as well mean that oil exports will be forced to take place, ie taking it from a producer. Waging war with return. Many here have suggested that the general population may never reckon PO as an important reason for many problems. It might be pretty easy at some point to get public support to invade evil socialists/communists/arabs/islamofascists/colored people (take your pick) who are denying your god-given right to "our" oil.
We can grow food with their oil. food is the other form of energy we really can't do without.
Economic downturn will be a big social problem but the foodindustry can survive if oilproduction goes downhill. With cooperation, not with a worldwar.
I think there are some interesting problems around EROI with regards to stealing other people's oil. I can't see how any local population would let the oil leave their country without resistance, and it is extremely difficult to secure oil infrastructure and tanker fleets. Not to mention how truly excellent the US has proved to be at fighting insurgencies.
Which leaves you with only two viable courses of action.
The first is stealing from your only geographically convenient neighbour: Canada. Small enough population to exterminate around producing areas, easy transport to the home market, enough oil to make it worthwhile, and while not communists, we certainly come close to qualifying on the "evil socialists" tag.
Why am I not worried? Because option 2 is to steal it from each other. I think that civil war and partition in the US is a more likely outcome. I think that the oil collapse will happen in an unequal, gradual way, and that even with some kind of rationing system, some parts of the country and some classes of people will do better than others. I remember the Western response to Canada's National Energy Program (a program to promote energy self sufficiency which had some negative tax and revenue implications for producing provinces, to oversimplify) in 1980: "Let the Eastern bastards freeze in the dark". I don't think you"ll do any better; in fact, I think you'll use guns rather than bumper stickers. You will fall for a deeply ironic reason: because you are NOT communists.
ERR07, this is the question. Let's say in 2016 starts a worldwar and about 3 billion or less people survive. Then world oil and other fossil fuel production and export could be high enough to rebuild the necessary infrastructure. Unless a lot of big oilproduction facilities are destroyed.
Sorry but this just struck me like the final 'war room' scene from Dr. Strangelove.
Assuming a lot of big oil production facilities are not destroyed. (Something which seems to be seen as a primary target in most major conflicts since oil's importance to waging war has been understood)...
...And figuring that some entity actually 'survives' with enought intact resoures, organization, and oil reserves to effect the rebuilding process...
Why does a lower number of people necessarily make it easier for production and export capacity to re-emerge? Something like demand destruction? I doubt the 3 billion survivors will share the resource equitably any better than it's being shared now. Perhaps not even on a local level. Certainly not in a conventional nation-state sense
I see mostly EROEI problems with a major resource war post peak. Like Saddam blowing the Gulf wells except that happening on such a scale as to make getting crews secure, effective access to many areas very problematic.
Seems more likely that a very effective tactic will be to continually target the oil infrastructure of your opponent in order to defeat his ability to project power before he puts your source of production out of commission. Run up to this going on presently.
A major conflict resulting in the deaths of half of the world's population would necesarily mean most of the oil production and export capacity would be damaged or destroyed, IMHO most permanently. A few well placed ship sinkings, pipeline destruction, refineries bombed altogether would put a huge kink in the 'victors' ability to re-establish the former large scale oil based economy of yore.
Alas, I unfortunately expect that if there is a quick die-off (due to war, disease, or what have you) that preserves sufficient resources to start anew, there is a very good chance we'll simply take another run at the wall.
Unless and until we truly conquer population growth there is no other end but a ratcheting decline. We could build thorium nukes at ever cross-roads and fill in with wind and solar in between and still we'd have a teetering world full of starving masses ready to go for each others' throats again....before long, anyway.
Yeah, The demolition derby syndrome. Last one that can still turn a wheel wins.
'Hey it don't look so bad, see if she'll start, we'll have another go at it'
Yes xburb, that's why I wrote: necessary infrastructure. Far less than now is present in a country like the U.S.
Untill recently (2006) only a little demand destruction was necessary. There was enough oil to avoid conflicts and war on a worldscale.
Yes, that's a big threat.
Money will stop functioning when the economy collapses, totally. Do you really believe that most people will still be able to find food after the collapse? Do you really think folks will be able to work for food? If I had food then I would be guarding it with my life because my life would depend on me keeping it and not sharing it with anyone, no matter what they promised to do for me.
Ron P.
not sharing it with anyone, no matter what they promised to do for me.
I am reminded of the world's oldest profession.
Or if you have a severe toothache or other pain.
A broken arm that needs to be set.
If you were cold and shivering.
"Man does not live by bread alone".
Alan
That depends on the decisions we will make.
Our leaders have also families and children.
Sounds like fun guarding your last possesions.
I think there will be doubters, no matter how fast or devastating the collapse is.
It's human nature. Yes, if you lose your job it is dramatically sudden. But people lose their jobs all the time, even in the best of times. A personal tragedy won't be recognized as irrevocable societal change. Even if it's happening to a lot of people, there will be still be the belief that it's a temporary crisis.
It may be that future historians will look back and see Katrina as the end of New Orleans. But few see that now. Even in the depths of the crisis, there was the belief that the city would be rebuilt, perhaps be even better than it was.
The way I see it...collapse can be fast and sudden in places, but it won't necessarily be seen as permanent. There will be recoveries, in certain times and places, and people may never notice the overall downward trend.
Which city is in worse shape, Detroit or New Orleans? Will either be 'recovered' in 10 years?
How many other major cities will collapse due to external catastrophes or financial implosion?
I don't think 10 years is long enough, for recovery or collapse.
However, I think Detroit might do okay in the long run. The old industrial cities that many experts are predicting will die might actually thrive in the post-carbon age. Old cities are where they are for a reason. They have good soil, plentiful water, and are along waterways that can be used as transportation. If global trade collapses and we are forced to manufacture what we need, the Rust Belt may revive.
I think 10 years is long enough for a lot of collapse, but not for much recovery. I tend to agree with your point about location, but I think there will be wildcards involving energy as well. NO could survive without AC better than Detroit without heat.
Texas seems to understand the value of energy -- they already have oil and gas, yet are leading the charge for wind. They also have good control of their grid. I can see pros and cons for many cities, but cities who already have lots of urban poor and few resources (water, power, minerals, etc.) are going to struggle to bootstrap themselves.
Well my suggestion to many is don't come to Oregon go to Texas its a lot better place :)
Seriously though if times get touch and oil prices do skyrocket Texas is starting to look like the California of the next Great Depression. Whats really interesting is it may well be the descendents of the Okie's leaving California for Texas. Before I left I was able to talk with Hispanic Californians some and the common theme seemed to be families that had not been there for generations or even ones that had but also had relatives in Texas where ready to leave California. The housing bubble was esp brutal to most of the minority populations in California with unscrupulous real estate agents of the same ethic group responsible for a lot of the crazy lending. Having a home and living the "American Dream" is huge for many minorities and the bought it hook line and sinker in Cali. So as housing continues to collapse we have a whole lot of disillusioned people willing to pull up and move. As usual government stupidity has unintended consequences and one of those is that as the housing bubble blows instead of people tied to a particular region because of homeownership mobility actually increases.
And I assure you damn near any place outside of Detroit is looking good to many in Cali these days nice weather looses its luster pretty quick when you have lost everything.
Needless to say doing well when everyone else is really hurting is not necessarily a good thing.
I don't think energy shortages are going to be as much of a problem as I once did. If the economy is that bad, we're simply not going to be consuming that much energy. And there is still a lot of room for conservation in the US.
The problem I see with Texas is their water shortage.
The Great Lakes region has plenty of water, and they seem to understand its value.
There might also be advantages to being the first to collapse. Rust Belt cities like Detroit and Youngstown are doing things like consolidating neighborhoods and razing empty homes to plant community gardens...while there are still the resources for such projects.
As far as energy shortages go I dunno. Assuming the Government does not do some really stupid rationing schemes which I actually think won't happen at least at first.
The real problem will then be the wealth distribution issue. Basically anyone with a job thats not paying to much income on their mortgage can afford much higher prices for gasoline. How high is anyones guess. I'm a bit of and outlier since I work at home and of course I use public transport but my pain tolerance for gasoline is around twenty dollars a gallon or so. Assuming of course my situation does not change but even if it did I love to ride motorcycles so and I'm pretty sure in Oregon employers will be more tolerant of people using public transport so I don't see offhand any significant change in my tolerance level.
Admittedly I'm and extreme case but I suspect when push comes to shove other people can do what they have to do to absorb higher priced gasoline. I'm not in my opinion conserving gasoline at all I simply did my best to ensure I can use the gasoline I want to use to make my life easier. For example I have a older mini-van thats paid off I have no plans to trade it in for a more fuel efficient car basically forever or until it fall apart. Its paid off an no price for gasoline would convince me to take on a car payment in fact the higher it goes the less willing I will be to take on debt. Not that I'd do it anyway :)
I'm not altruistic in the least its simply once I learned of peak oil I've done my best to always ensure I can pay the price of expensive oil. If other people can't afford it well to friggin bad.
Certainly conservation plays a role but obviously that role is to absorb higher prices and use less gasoline i.e the goal is to try and keep the percentage of the budget spent on fuel constant using less gasoline is and obvious side effect but not the primary goal.
I'm not saving fuel so the price remains low and other people can afford to continue their current lifestyles like I said I could really care less they will change when they have to.
Now back to shortages etc well the problem is more complex because its not just about absolute availability obviously other "jerks" like me can work to adjust their life styles to keep their fuel bills bounded but this sort of conservation is only in response to higher prices the moment the price drops I'd increase my usage. I freely admit it :)
Of course I can lose my job at any moment just like anyone else and I'd fall immediately into the demand destructed class i.e I simply can't afford gasoline basically at any price. Even if I find a job maybe I have to take whatever I can get and then transportation costs regardless of how I get to work are a serious problem. Food and fuel loom large in my budget if I'm lucky to get a job. Here I would actually be far more aggressive with my conservation to try and get a little bit more money for other stuff.
I'd ride a bicycle instead of taking the bus not that I could not afford the bus but I'd rather spend my money on something else and the only way to save is to lower transportation costs. I'd still take the bus on certain days so even with my new meager budget I still have optional fuel usage.
This is in my opinion a real world view of how we use oil through it all runs the theme that price alone won't really change our oil usage except to cause it to contract in response to price but if price is going up because of a absolute fall in total oil output then we have no real choice but to contract our usage.
Shortages of course occur on top of this back drop and technically they are a miss-allocation of resources. In a perfect market prices would have always kept supply and demand in balance as my above examples are written to illustrate. However although I assume no government interference obviously at some point this won't be true any attempt to put an allocation scheme on top of the above say for example to ensure the buses run is certain to throw some sand if not some monkey wrenches into the works. On a global scale as the ships leave the various producing regions which direction they actually move depends on who the highest bidder is. Regions can readily find that they have allowed there storage to run to low in concert with other regions while allowing slightly wealthier regions to win and get oil at a fairly cheap price. The winning bid need only be the top bid not the maximum someone is willing to pay. In any cases just depending on market flow you could readily get a vicious bidding war developing and its over short term availability which is finite and there is only one winner at any price.
That means shortages no matter what and even a open market is not immune to strategy collision amongst the market players.
Of course assuming the spike abates and say prices fall back inline with more responsible bidding and people realizing they can't wait to the last minute the new higher prices won't seem so bad better than a shortage.
If I'm correct and the basic course is people conserving to try and keep fuel expenditures at a fixed percentage of their budget then price is simply not well constrained like a lot of people think. Eventually of course substitutions of various forms serve to cap the price at the end of the day we don't actually need to burn a lot of oil it may mean dramatic changes in how we live but its possible to adjust how painful is a open question.
But I simply don't see any real reason why along the way to transforming our lifestyles to eventually make oil usage completely optional that very high prices and outright shortages won't be part of the picture. It really depends only on how much of a signal is needed from the market to force substitution and in my opinion this is the critical issue almost all substitutes for oil are a inferior substitute at least for a while.
As and example going from coal->oil is simply completely different from oil->coal.
I'm not personally aware of a lot of economic literature on the use of inferior substitutes but taking our move to less durable Chinese imports as a guide lower prices where the key to known examples. However in this case it was a substitute at the end of the day of cheap Chinese coal and cheap labor for American NG and expensive labor and using ever expanding debt to cover the fact we could not really make the substitution.
I think its obvious today that even this one example was probably a false substitution covered by our ability to expand debt and the central role of the dollar.
I'm not sure what happens when a true inferior substitution is forced on a economy esp if it loses its ability to leverage debt however I see no reason to expect things to be ok.
Exactly the opposite actually.
Underlying all of this is the observation that there really is no substitute for a critical resource thats declining in volume and increasing in price with only inferior substitution as a option. As far as I can tell it does not really work esp if you add in the inability to expand debt during the process. The result is simply the system becomes dysfunctional and only the creation of a new system that simply does not need the resources and most importantly is not dependent on inferior substitution solves the problem. The economic model simply changes to a different one not based on the previous one at all. Inferior substitution will correctly be rejected as not being a true substitution.
Probably sticking my neck way out there with these claim but what the heck that how I see it. Bottom line is we will be forced to change until we give up on using transportation except where its allowing real economic function to take place. Any pleasure use case will be leveraging viable critical economic transportation. Passengers in addition to freight is the rule not the exception. This is of course extreme but it shows how the whole basis of the transportation network is completely different in my mind. Obviously it won't be that bad and of course actual transportation of people can be a key economic condition but the whole viewpoint and design of the system is radically different from what exists in the US today. Stuff only moves if moving it makes a profit including people. Being wealthy enough to have your own private transport using excess wages is simply gone and no longer part of the transportation infrastructure.
I think energy cost is piece and parcel of the future economic/manufacturing options, and as always those areas with resources will win out. You make a good point for fresh water, and businesses that need water (plus ag and maybe even people) will tend to go there, but manufacturing businesses will more likely revert to the older model of manufacturing-driven towns near the key resources. If an area has relatively cheap power AND some form of transportation, then that area will tend to attract manufacturing versus an area with neither, for sure.
I'm not saying there won't be a significant collapse in those areas too, just that the raw inputs for creating a viable (and hopefully more sustainable!) societal base would at least exist.
I think investing in HVDC or AC grids and electric rail plus wind/solar or nuke would make a lot of sense for states. The less picky states might end up with a huge advantage over the NIMBY/BANANA states.
That's what I meant when I said the old cities are there for a reason. The Rust Belt may rise again.
IF they acquire cheap power. Oil won't be as cheap (though you could argue it'll be cheap enough for manufacturing for a lot longer than it is for driving). Nat gas would need to be piped in, but could serve for a while. Nuke would work, but it's a long-time coming, so best get at it. Wind would be an option in some places. Solar not so much. Coal...well, that's probably viable for quite a while, but oh what a dirty solution.
Rather than spending money "rescuing" cities and their denizens, electrifying rail, re-building the grid, and investing in power generation would likely permit those cities to "help themselves".
And of course a weaker dollar will be needed, but that's a given for a 10-year horizon.
The Rust Belt cities were built before the age of oil. Energy is a big reason the Rust Belt is where it is. It's near the coal mines of Pennsylvania, Kentucky, etc.
Wyoming produces far more than Appalachia, though. Of course coal is readily shipped, IF you've done your rail electrification.
And that assumes that all the coal will indeed be burned, which I do suspect is the case. And without sequestration at that. Climate change is far-thinking luxury that will still be ignored once the debt/finance and energy situations can no longer be.
Of course that alone tips the scale toward Detroit vs N.O., and for interior lake/river cities versus low-lying coastal cities.
Wyoming produces a lot of coal, but I don't see a manufacturing belt starting up there. They lack a lot of the other things the Rust Belt has. Navigable waterways are important; they're the most energy-efficient way to move cargo.
A few years ago, there was a major problem shipping coal from Wyoming east, to where it's used. There was landslide (due to poor environmental practices) that covered the railroad tracks, and took months to clear. There was also a severe drought in the west, which affected coal barges.
One reason Wyoming produces so much coal is that their coal is cleaner than Appalachian coal. Environmental rules passed in the '70s made Wyoming coal more desirable than Appalachian coal. In an energy-scarce world, though, I think environmental laws will go out the window.
I've been talking about the situation in Detroit for quite some time, as you may have noticed. However, one of your assumptions is off:
"They have good soil."
This should read, "They had good soil." Virtually all the land here in Detroit is in need of remediation. There is very little in the way of "sustainable" farming because virtually everyone is bringing in amendments to deal with - read cover over, avoid using - the existing soils. This seems to primarily have to do with lead content.
If we end up buying the house we are in escrow on, we will do soil testing right off.
Cheers
I've seen that there was actually a treehugger article about that but isn't the powder river coal relatively low in terms of energy content? It would still be way ahead, but it may be that Wyoming's advantage isn't quite as high on a BTU basis as it is on a tonnage basis.
I'd say the rust belt cities are good rebirth cities for a different economy. Thats not the same as being better during decline. If anything things are likely to get worse before they get better in the region. But any sort of longer term 10-20 year viewpoint should show that that most of the rust belt cities are indeed located at naturally city locations.
In my sort of big picture view of America long term I see the Mississippi/Ohio valley region become the central power of a post peak North America esp with the easy transshipment to the Great Lakes and out the mouth of the Mississippi. And of course the costal seaports will remain but more locally oriented with most trade flowing through either the Great Lakes or Gulf of Mexico.
Of course other areas have merits but from a big picture view it seems natural that this region will eventually become the core or power region.
In a lot of ways its rise to power was simply disrupted temporarily by our brief globalization debt game. Heading even into the late 60's the now Rust Belt was taking over from the coasts for natural reasons before it collapsed.
Among the Rust Belt cities, the eastern cities that track I-95 pre-date coal. They're located on the Fall Line, where the hills flattened out to the Coastal Plain and the topography was ideal for water power. The earliest manufacturing was powered by water wheels, with all the machinery driven by belts snaking through the building.
I lived in a old woolen mill converted to Apts in Mass.
Incredibly well built buildings and these where factories of the time period.
Certainly they had to be built to withstand the weight of the machinery but buildings like this make you realize how much we have lost even from that time.
You could not build like that today period you simply don't have the massive timbers.
Its seems that up till recently either buidlings were thrown up effectively shacks or build carefully with the expectation of use for a hundred years or more.
When I lived in Utah I did see a few early buildings that probably should have simply torn down obviously put up in a hurry but this was the exception not the rule.
Looking at old pictures one only wonders how many fine buildings have been razed in the US.
God only knows in other parts of the world with much older population centers.
You are right. The question is why would you want to?
Injection Moldable Octet Truss Hub
http://challenge.bfi.org/application_summary/165#
If you have a problem with these materials use bamboo as a structural member in the octet truss and papercrete or some other less carbon intensive binder and make your own super strong ultra lightweight structural members.
I get more and more frustrated with this idea that the only way to do things is the way they were done in the pre fossil fuel era and that we no longer have the resources to do that.
That's right we can't and we don't, so I guess we need to think outside the
boxicosahedron...http://challenge.bfi.org/
Illinois is all coal south of I-80, but its high sulfur.
You're correct, a personal tragedy won't be recognized as irrecoverable societal change. But what about 20, 30 or 40 million personal tragedies?
If history is any guide, prolonged mass unemployment will likely have profound social and political consequences. Tipping Points are "the levels at which the momentum for change becomes unstoppable." Nobody can predict exactly where that level will be, or what will happen when it is reached. But in an environment of plummeting net energy and crumbling ecosystems, we can make some pretty good guesses.
It can be sudden and fast, but what most people "hope for" is that things will get back "normal."
But it is not such a difficult thought exercise to look at the structure of the US and level and lack of civil discourse to realize that "normal" might not include a good number of us.
How bad might that be?
I suggest the following exercise to each and every one of you. Walk though your neighborhood and imagine what it might be like with two-thirds of the population lost (as in dead).
The world after collapse might need your experience and expertise to run a semblance of an existence, but there is no guarantee that you will be around to provide that. For example, whatever knowledge that I have in performing a "black start" on a de-energized grid could be lost in the random acts of mob-rule. Nothing can bring that back once it's lost. I don't know if that of any other engineering type knowledge will be useful after a collapse
Do "wingnuts" even consider such things (survivalists might, but the evidence suggests that they are looking to hold-out and wait for attrition)? Or will it be more important for them to "win" even if that is short-lived?
Darwinian,
A minor quibble-Black Swans properly defined are unpredictable and cannot be foreseen as even possible(until afterward!) if I read Taleb correctly-it's been a few months and I don't have the book anymore.
Of course the meaning of the term seems to be evolving into "any extremely disruptive yet very unlikely event" event or something close.
I for one would very much like to know what your thinking is along these lines-in particular concerning any Black Swans that have not been discussed or mentioned on TOD.
I find so many good links here that I hardly have time to read them all and seldom do much original search since finding this site.
You are correct. By definition you can't predict a black swan as a credible event because its supposed to be outside the realm of what an expert would consider possible.
What we always called high impact/low probability events was "Shocks". These can be predicted and planned for, and should be.
Of course that doesn't stop a politician trying to claim a 'shock' that happens and wasn't prepared for a 'black swan'. The WTC attack was a shock, not a black swan. The only bit that was black swan was the eventual total collapse of the buildings - since experts didn't expect that AFAIK.
They are different classes of event. Anyone in charge of a large scale enterprise should have a list of shocks and mitigation activities. Black swans can only be met with flexible, agile and intelligent capabilities. These tend to get cut.
My reading of Taleb was that a black swan is very low probability and very high impact. I would say shocks are modest probability and large impact.
The trouble with shock theory is that shock mitigation is like any risk mitigation -- management tends to view mitigation as an assignment which enables them to ignore risk. I like to think of shocks as grey swans. There will always be a thankless job that involves whitewashing swans white before the fact, and a very lucrative job in helping to paint some new swans black after the fact.
As I pointed out last year, the statement "nobody could have foreseen" appeared everywhere, and this year's version is "worse than expected". All just grey swans in disguise. I'm not sure we've even seen a black swan yet in the global financial malaise.
By focusing on maximal profit we purposefully design many complex systems to ignore the potential for non-white swans, and to thereby to increase system frailty, potentially turning baby grey swans into mature black ones.
Not quite. I haven't read Taleb, but this is what the phrase means:
A "black swan" is something that no-one ever thinks is possible, until it happens. Like the first Europeans seeing black swans in Australia. Up till then, all swans had to be white - it was part of being a swan, to Europeans. They could not conceive of swans any other colour than white.
The mere combination of low probability and high consequence doesn't count. If you can anticipate a risk, then by definition it is not a "black swan", just something to insure against.
The appearance of a "black swan" means that your model of the world is flat-out wrong. I don't see any economists admitting that apart from Paul Krugman.
OK, I'll stop being lazy. Here is Taleb, straight from the Prologue.
"A Black Swan is an event with the following three attributes.
First it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable."
I guess the wiggle room is the snippet "convincingly point to its possibility". It is definitely necessary but not sufficient that it be low probability. It must indeed be unexpected, but perhaps not completely inconceivable.
In any case, we're now quite precisely bandying semantics, and I'm definitely smack in the middle of Taleb's third point about explaining it away after the fact.
It is tempting to say that all models are always wrong, because they're just models, and the crux of the issue was a purposeful ignoring of boundary conditions on top of poorly understood complexity. But you are likely correct in that in the heads of the economists the world was indeed simple, and they were indeed unbelieving of the Black Swan. Most still are.
paleo-
I'm with your analysis on this one, as that is how I understood it, and Taleb expresses it.
Paleocon is correct because he quotes Taleb, and Taleb defines what a Black Swan is. Still there is room for lots of discussion here.
For example, instead of Black Swans, a much more practical concept is the idea of fat-tail probability. Most of quantitative finance relies on Gaussian (Normal) statistics and that has proven very inadequate, as the likelihood of extreme events on the fat tails of the probability curve is much higher than Gaussian predicts.
I can give many examples of fat-tail probability situations in everyday life, yet no one wants to avoid using Normal statistics, largely because of the huge "sunk-cost" factors of our financial world. All their theories would have to go out the window. This is really quite ironic as economists were the ones who first came up with the sunk-cost model.
Live by the sword, die by the sword.
I'm with you Paleo. And agree we gain little by arguing over semantics. "Not possible" is such a loaded phrase. There are few potential events that one can call "Imposible". Perhaps extremely unlikely. Could an alien spaceship land tomorrow and solve all our energy problems overnight? I don't think I'll change my career based on that possibility but it could happen. No one can prove it couldn't happen.
There was at least one person who saw the possibility of 9/11 years before it happened. I don't recall his name but it has been documented. Certainly the hijackers didn't see it as a Black Swan. There were economists warning about the future subprime blowup. Perhaps the definition of "Black Swan" is totally observer dependent. The subprime blowup wasn't a potential BS to many economists... it was going to happen ...no doubt. I'm sure if we dig deep enough we'll find a couple who even predicted the timing. Just as I'm sure we can find folks who truly didn't see the possibility...this would be a BS to them.
Given how many folks really believe Elvis is still alive I don't think I'll spend much time debating what's "possible" and what's not.
It's a bit off topic here but as far as the towers collapsing goes:
The steel was wrapped or coated with fire proofed insulation.
The violence of the impact and the undoubted near explosive force or the fire and debris sweeping thru the floors that were actually involved stripped off the fireproofing,allowing the steel to heat up rapidly.
I have no experience with jet fuel but it is similar to kerosene and diesel and if violently agitated-as in being thrown against a wall at high velocity- these fuels breakup up in to small droplets and fumes and burn very hot and very fast.
Any body who has ever spent time around any job where steel work and welding is done knows that red hot steel is no stronger than taffy.
Answering as a welder and mechanic if asked I would have said that if there is a very large very hot uncontrolled fire the building must fall because red hot steel won't support it's own wieght-let alone the wieght of a high rise building.
Anybody who has a twenty dollar propane torch-the kind you use to solder water pipes- and an old steel coat hanger handy can verify this personally.
So if the collapse was unforeseen as a possibility I suppose that is the result of people who have knowledge of plane crashes(mine is limited to seeing some old news reel and military film)and engineers who designed the building not talking to each other.
Any engineer would have instantly realized that a fire of that type and size would necessarily soften the steel to the point of certain collapse.
I believe that the collapse of such buildings if hit by a large plane should have been on the list of possible problems of everybody involved-city offfocials, insurance companies, airlines, engineering firmss, and the state and federal safety regulators-not that they could have necessarily done any thing to stop the terrorists, but they should not have been suprised by the collapse once the planes hit the towers.
I agree. I was working in an office full of civil engineers on 9/11, and we were about evenly split on whether the buildings would remain standing. (FWIW, I predicted the building would collapse as soon as I heard what happened.)
When I saw a shot of what appeared to be molten steel leaving a corner of the building the statement was "Remember when you asked if I thought they'd come down and I said Yes - eventually?" yea "Well instead of months from now it'll be really soon - I just saw hot steel leave the side."
(Going from memory here) The ASCE report on the collapse said the jet fuel burned out pretty quickly, but the offices had enough paper and combustibles to keep the fire going and raise the temperature into the danger zone. The structural steel got weak, but the real cause of failure was the connections between the inner steel frame and the outside walls. The frame held, the connectors didn't, the walls separated from the structure, the buildings collapsed.
Well yes. Under compression there is a failure mode that is referred to as buckling. Depending upon the length of the column, its stiffness, and the compressional force. Once the force gets too high, or the length too long. In the case of the towers, as the outer shell walls became longer (by becoming disconnected from the core and opposing walls) eventually this limit is reached. Once that happens the structure only has seconds left.
The WTC ... what a day ...
Lessee, the twin towers were built in the early 1970's. The steel and union steelworkers did a nice job on the buildings which were very lightly framed. The supports were the 'core' of 48 large steel columns in the center of each tower plus the palisade of linked columns making up the exterior walls. The span between the core and the palisade was quite long.
The spaning framework was wire truss- joists welded in advance to the corrugated sheet- metal pan and assembled in sections. Over this was poured a concrete floor surface approximately 4 inches thick. There was no wire mesh or other reinforcing to the concrete.
In New York City in the 1970's the concrete industry was dominated by the mafia. Like trash hauling, the dons required overpayment for all services and their 'product' was what they felt like providing.
In both towers, the concrete served the purpose of heat sink. The pan- and- truss design did not have enough mass to conduct the heat from a fire to the exterior of the building where it could be absorbed and re- radiated to the outside by the palisade. Good quality concrete would have filled the heat sink role. Concrete is slow to heat and capable of holding a lot before it slowly conducts it away and re- radiates it.
Good quality concrete is also rigid when heated and would support the corrugated sheet metal pan in an undeformed configuration as well as itself while the heat was increasing.
It is likely the mafia- supplied concrete had little portland cement in it and quickly degraded into sand and gravel when it was heated. It is also likely the aggregate was of low quality and very soft, such as a sandstone rather than a harder material. With the great heat, the concrete broke up and started to migrate toward the center of the spans deforming the wire joists and putting strain on the connectors between joists and columns. It was the weight of the concrete that caused massive failure and eventual collapse.
The concrete residue of the WTC did not contain any slabs, or aggregate, for that matter. The result was a fine powder, the material left over contained the dust of concrete, sheetrock and acoustical tile. The lack of hard materials or partial slabs pancaked together suggests poor quality concrete.
Info here:
http://911research.wtc7.net/wtc/analysis/collapses/concrete.html
http://vincentdunn.com/wtc.html
The chief engineer who performed the post- mortem examination of the WTC disaster was W. Eugene Corley. Corley also did the post- mortem on he Alfred Murrah building collapse in Oklahoma City.
If you look carefully at the photograph of the Murrah building you will see a solid concrete building ... that has no rebar or steel reinforcing within its slabs or columns. Without the rebar, the concrete cannot accept tension forces or shear. The low- powered explosive would have blown out windows and partitions of a properly reinforced concrete building, but not destroyed it. The blame lies with inadequate specification or the contractor willfully leaving out the rebar, believing that the building would last for many decades before its absence would be discovered.
You can see what should have been in the building, here:
Corley was disingenuous about the lack of reinforcing in his Oklahoma City reports and did not remark about the concrete quality or its source in his WTC reports.
There is a lot of corruption and malfeasance in the contruction of government buildings. The WTC was built by the Port Authority of New York and New Jersey as a patronage/urban renewal project.
The question remains whether there was a cover- up. Knowing how the private- government partnership has evolved (by examining the current finance fiasco's unwinding) makes it hard not to be cynical. It would not be surprising if such a cover- up or corruption and shoddy workmanship has indeed taken place.
Interesting comments. However, you apparently shoot yourself in the foot by posting the photograph of the Murrah building.
As you suggest, take a good look at the photograph. One sees several sections of concrete slab hanging down along the side of the lower floors. One also sees numerous strands of some kind hanging down from each floor. I would think that the strands are rebar, which were left behind as the concrete shattered and fell away. The hanging slabs presumably are retained by rebar which is still connected to the respective floors. Concrete and rebar works only so long as the concrete remains solid. If the concrete is shattered by a blast, the rebar provides no effective strength. Of course, the building as not designed to survive a blast, i.e., an upward force on the floors instead of a downward force in normal use, so it's likely that the least amount of rebar was used to carry the expected static loads.
As for the World Trade Center, that's a different story, IMHO, and I can't comment on your analysis.
E. Swanson
A lot of what is hanging is acoustical ceiling tile track, wires and cables, carpet/floor covering and metal studs.
I can see where there was some rebar @ the bottom of the floor slabs, where the bars have pulled down the concrete ceilings leaving a pattern. I don't see any higher- layer rebar up in the slabs, which would be sticking out.
Your point about loads is well taken.
I don't see any rebar sticking out of spandrels or columns. I used to do a lot of work in big highrises and there is a lot of steel in the framing, but this is in Washington, DC. I interpret the 'hanging dross' as carpet, although some could be hanging slabs. There are electrical, security, communication and other conduits cast into the floors of these kinds of buildings, too.
I'm looking for that furry effect with lots of steel bars sticking out. Look at this pair of photos and please give me your opinion about this:
The one on the left is Murrah, the one on the right is building five or six @ WTC. The WTC didn't have any reinforced concrete buildings, all steel frame plus pan. There would be no rebar and none is seen in the photo.
The left photo has a good shot of the collapsed floors. I would think if the rebar disassociated itself from the slabs there would be a pile of it @ the bottom but I don't see much if any.
One layman understood perfectly well the dangers of the buildings, and paid the price while being perhaps the most heroic of all on that final day:
http://news.bbc.co.uk/2/hi/uk_news/england/1711325.stm
I read an article that said the shift from asbestos to alternate fire-proofing material played a significant role in the structural weakness to fire. Asbestos can be bad, of course, but in a permanently-sealed application such as a tower it would be harmless and is of course one of the most effective insulators.
http://www.foxnews.com/story/0,2933,34342,00.html
Yes getting rid of asbestos was another "mis allocation of resources". I would bet it paid a pivotal role in the collapse.
This is a lie promoted by brownlash author Stephen Milloy as part of the whole liberatarian / conservative attempt to roll back any sort of environmental regulation.
Fire ratings of insulating materials are done as how many hours it can withstand a fire of X degrees. A two (or four) hour fire rating is a two (or four) hour fire rating regardless of the material used. Two hours with asbestos will last two hours. Two hours with non-asbestos material will last two hours.
But neither will do any good if they were blasted off the beams by the impact. I've read that the asbestos insulation was more friable, and would have probably been blasted off the beams even more than the non-asbestos material used.
OFM, it's been widely stated on the intertube and idiot box that the designers of the WTC designed the towers to withstand the impact of a slow-flying 707. The scenario being a plane trying to land at La Guardia but lost in fog.
Unfortunately the 747 had about 10 times the kinetic energy and twice the fuel load than anticipated.
They thought about it all right, they just didn't add in the usual safety factor.
The two aircraft which were flown into the twin towers were Boeing 767s, not 747s. 747s have four engines, vice two on 767s, and are significantly larger and heavier. However, 767s are significantly larger and heavier than 707s. Also, F=MA...the 767s were cooking along at high speed...higher than usual/allowed for traffic pattern/below-10,0000 feet ops.
Probably imprudent to mention, but I assumed that at least one tower would be brought down by terrorists, and figured large airplane impacts as relatively likely since they'd be searching U-haul vans into the basement. It was such a no-brainer that it didn't occur to me that it wasn't obvious to those tasked with security.
The last time I went up to the Fiduciary Trust offices, in '97, the entire building was lurching in the wind like a sailing ship since some of the basement supports had been blown up. I didn't care for it, and the folks there kidded me about my unease. It was with a sense of relief I took the long elevator rides down, and since I had a couple hours before my next appointment I lay on a bench between them and looked up at the ridiculous enormity of the things and assumed that building would be down before I had occasion to go up in it again. It was a bit of deja vu on 9/11/01 when I turned on the tv.
I've often wondered if American engineers inadvertently gave bin Laden the recipe. I remember after the truck in the basement, a lot of engineers laughed at the stupidity of such an attack. There were threads on Usenet, etc., talking about how the base of a skyscraper was the strongest part. It's built to support the entire weight of the structure. It's dumb to attack there. You should attack the top, where the building is weakest.
In one of Tom Clancey's novels, a japenese pilot few a airplane into a joint session of congress. The pilot made sure to make sure the airplane had a full fuel tank, and in the book, the fire did most of the damage.
To me, this is the most likely inspiration for the method of the attack, since two planes were going to hit the Capital building and the White House.
From what I read, Bin Laden thought he could kill a lot of people by the fires, but the collapse was seen by him as an unexpected bonus. And I suspect the bulk of the victims were on or above the floors hit and were doomed whether the building fell down or not.
And, about a year earlier the French had foiled a plan by Algerian terrorists to crash a hijacked plane into the Eifel tower. Its not like it took any real imagination to come up with a deliberate crash scenario.
mac-- I'm going thru "Black Swan" right now. One big point I'm taking away is that, as you say, Black Swans are not predictable by definition. But that doesn't mean their possibility can't be seen regardless of however unlikely anyone would regard the possibility. Taleb offers that you should minimize your risk (or maximize your reward) to potential BS's. The mortgage bust, for example: at a time when the vast majority were saying the good times will never end you could take a contrarian view and reduce your exposure to major losses, however unlikely you think the chance might be. You might miss some profit opportunities but if things did go south badly you could survive. Likewise you can make all high risk investments and chance losing everything. Or just put a small amount in the long shot BS opportunities which could pay off better then all you other investments combined. And, if the good BS doesn't materialize you don't lose much. His main point is that when we invest in moderately risky investments we often under estimate the risks and over estimate the rewards. Thus we lose more then we expect while making smaller profits with the net being YOU LOSE.
Something of an intuitive approach we've adopted in our business plan which was devised long before I began reading "BS". The bulk of our drilling dollars are going into high probability projects utilizing the best technology. Not huge profits but very good bets. But we'll also start drilling a well in two weeks that has the potential to find over $1 billion net oil/NG with a risk cost of $3 million. Obviously not a low risk possibility. But a possible chance to make over 300 to 1 on our money. Certainly not going to take a chance on too many such deals like that. But think if it works...just think.
It's important to realise that Taleb talks both about mis-estimating risk rates on "understandable potential events" as well as "black swan" events. Part of his point is about not just about minimising the risk in ways you "analyse if you take the right mindset" but about avoiding having things so tightly coupled that if part of your portfolio/company/economy (depending if you're an individual, company or government) gets whacked by a devastating black swan event only part of it gets devastated, the whole thing doesn't go down.
Regarding your business venture, a "hypothetical" black swan would be finding out that abiotic oil actually exists in mindblowing volumes in easy access areas we just haven't looked at yet, so that existing oil facilities become uneconomic due to a glut of production. (I think virtually every expert thinks this is comprehensively ruled out by observations, which is precisely why, were it to somehow be true, it would qualify as a black swan event.)
Rockman,
Best of luck there-this is as close as I'll ever get to that kind of money-talking to somebody who has a slim chance of actually seeing it.
I trust you will be in for some small part of it if it pays off-even one one hundredth of one percent would keep you in premium cigars.
I read the Black Swan the same way you are reading it-my problem is that I don't have any money to invest so it's all academic to me from that pov.
mac -- Hopefully there will be a big chunk of self benefit from our efforts. Simple plan: accumulate reserves and then sell out when the market peaks again. I've gotten little tastes of the honey over the years but nothing close to this potential. More than glad to share a vicarious thrill with you. Unfortunately it will last only until we drill a dry hole on that project. But there's always another prospect down the road.
embryo -- I see it your way. That was one surprise as I read: while "Black Swan" is the title I'm understanding more about how poorly we anticipate non-BS's as well, especially the delusions generated from the numbers pushed by "experts". Long ago I rejected the typical oil industry approach of risked reserves. Simply: wildcat A has a reserve target of 1 million bo. We geologists assign (often arbitrarily) a prob of success. Let's say 25% in this example. So we multiply by .25 and use the value of 250,000 bo to run economics. This is ridiculous but it a standard approach by many companies. I always tell folks who do this they are wasting good printer paper. All exploratory wells are good economic ventures...on paper. The nature of exploration is that you have rather wide boundaries to predict reserves. You can't prove there's any oil/NG there without drilling a well but you can assign a volume??? (this is why, with all due respect, I laugh at all those projections of the billions of bbls of oil that will be found in this or that undrilled region). Any explorationist who knows his stuff will assign a large enough reserve number so that when risk is applied the numbers still look good. And typically the selected probability of success is also too optimistic. Back to Taleb's point about how most view the risk to reward relationship. My approach is much more simple: are the factors presented which could indicate oil/NG "reasonable" and " realistic" in magnitude. Obviously the success of such approach is completely dependent on one's experience and, more importantly, being brutally honest with yourself. I've seen more than one geologist, out of desperation, convince himself that his prospect was better than it really was. I'm sure we've all seen similar cases in our particular careers. This might sound little odd but I've gotten more grief from clients by refusing to recommend a drilling project then by drilling a dry hole. Often these situations are similar to what college professors find themselves: publish or perish. In my current positions it's critical that my cohorts and I are brutally honest: failures subtract from out potential pot of honey. And fail enough and our replacements will be chasing that pot instead of us. I view our situation in the light of one of the most profound mottos I've ever heard: from the French Foreign Legion: "March or die". Says it all IMO
When I read the thing about the lost soul of capitalism, as soon as I hit the one about "Nobody's planning for a Black Swan," I heard that bit from Monty Python in my head
"Noooobody expects the Spanish Inquisition!"
culture vulture
global hawk
black swan
plucked chicken
cooked goose
cold turkey
wise owl
The analogy I've been using is that it's not so much watching a train wreck in slow motion, it's more like stepping through the film of a train wreck frame by frame and meticulously searching through to see what's changed between frames. Sure it's a tedious process but when you're talking about TEOTWAWKI (and I feel fine ;-) it's hard not to be obsessed with the minutiae.
Thanks for the mental picture, and I great name too!
there is another thing here. understanding the root of the cause, and knowing what to change.
people in the maldives can go witchhunting, their country is still sinking. people in detroit can live within their means all their life, when the factory goes bust, they're in pretty much the same hole as the others.
knowing why the wells are dry is one thing, sacrificing goats to the rain gods is another.
All we have to do is change the minds of one percent of the US population and we can solve most of our problems... or we could just put those same people on trial for crimes against humanity and put them away for life. That's the revolution I'd like to see. I can dream can't I?
Yes, I have a question, what's your point? The developed world consumes far more than it's fair share of global resources. Some countries, like Norway, consume even more of thair fair share than does the US. This is because they have more to consume. They, or we, are richer countries. It is just the nature of things. It is human nature. No, it is just nature to defend what you have when others want what you have. And it is also just nature to gain resources for yourself, and your tribe, by any means possible. It is the same case in the animal world, those that have will defend their territory until they are either killed or driven off.
Ron P.
My point is twofold:
First, a very small portion of the population has access to an unfair, in terms of the commons, part of the over all resource pie. Humans, like all social primates, posses an innate sense fairness.
"Monkeys Show Sense Of Fairness,"
http://news.nationalgeographic.com/news/2003/09/0917_030917_monkeyfairne...
Second, An even smaller group within that already small group controls those resources making the unfairness even more glaring but making it clear that if we change the paradigm for that group we can have a very large overall effect, so it is logical to find a way to focus any efforts on that group.
There are two ways to accomplish this either by appealing to their sense of fairness, they're human, or if that won't work then by having the community hold them accountable and punishing them.
BTW I'm just the monkey that's screeching, raising a fuss and throwing some dung at the bullies hopping that the others will join me. Of course it's more likely I'll just be expelled from the tribe ;-)
While the average human might have a sense of fairness, there is a small fraction of humanity that are classified as sociopaths (or, perhaps, psychopaths) for whom there is no remorse. There is also a goodly fraction of humanity who have addictive personalities, who use drugs to excess and ignore the consequences.
I would not be surprised to learn that the small fraction of people in the developed economies who control most of the wealth fit into one or the other of those categories. In other words, the simple fact that they have intentionally accumulated massive wealth indicates that they don't care about anyone else beyond their family or peer group, if that.
E. Swanson
I have no doubt that there are sociopaths who end up in power accumulate vast amounts of wealth and do not care about anyone else.
However the assertion that "the simple fact that some have accumulated massive wealth indicates that they don't care about anyone else beyond their family or peer group, if that.", simply doesn't hold water. There are many examples that come to mind, Bill Gates for example.
It might be good to check out how Jared Diamond responds to this question.
http://www.pbs.org/gunsgermssteel/show/index.html
The book is quite a good read by the way.
Cheers!
It would probably be useful to look at the pareto exponent for wealth distribution across orders of magnitude (and between cultures) to explore the notion that the wealthy are acting differently (more sociopathic, altruistic, etc). Since those distributions are generated by small-scale local interactions throughout the system, it might be a reasonable assumption that the same qualitative behaviors are occurring where the exponent doesn't change much over many orders of magnitude.
greenish
I have reread this three times and I still have little clue what you are trying to say. I did look up the word "pareto" new word for me. Fancy way to say win/lose?
Anyway if you have the time to expand on this...
Pareto is also called the "80/20" or "90/10" rule. In the case of wealth, this would mean that 80% of money is owned by 20% of the people.
One theory that I am very partial to is that a small variance or divergence in the rate that wealth is accumulated by different classes of people will lead to a big disparity in ultimate wealth. This is what greenish is hinting at.
This is depressing because it is next to impossible to throttle this dispersion, as it has as much to do with entropy than anything else.
WHT, I have huge respect for your expertise in such things. It just seemed like an interesting way to look at the question of whether "the rich" are sociopaths or just acting like everyone else. Of course I imagine the power-law distribution changes at the very high and very low ends of the wealth spectrum, but that's a pure guess.
Of course, money makes money and savings will tend to increase more for those who have more. I'd think if this was the mechanism the pareto exponent would change over time due to compound interest. I'll bet it hasn't, but again that's a guess. As I say, it was just a notion.
I've known people across many orders of magnitude of wealth, and they all seem to act pretty much the same to me, but that's pretty subjective.
The whole subject of the ubiquity of power-law relationships in disparate natural systems, and in human systems, is fascinating to me because of the deep similarities that are implied. It's like the behavior of all sorts of complex systems would fall into a relatively small number of sets or types which would be governed by very simple rules.
I think you get a power law distribution. Apply the 80/20 rule. Then look at the top 20% and subdivide that 80/20. now you get 80:96 percentile having 16% (20% of 80%), and the top four percent getting 64% (80% times 80%). Then you further partition the top four percent, and keep doing this.
So if I got this tight, the pareto distribution is just the continuous version of this sort of thing. Of course if you change the ratio from 80/20 to say 70/30 you'll get a different exponent.
I'm certainly not a numbers person like many on this list. So saying, and you can google, a "Pareto distribution" is a power-law relationship across scales in a system.
They show up in a lot of disparate kinds of systems, including the distribution of human wealth. I think a crucial characteristic of such distributions is that they are generated by simple local interactions of the systems' parts. For instance, the size vs. frequency of earthquakes, the size vs frequency of forest fires, the number of people killed in wars vs. the size of the conflict, and all sorts of such things. There are deep similarities between many kinds of real-world systems.
My conjecture here, and it may be naive, is that it is hard to think of a set of circumstances which would "tune" a system to resemble such a distribution other than the consistency of behavior of the system's basic components across scales. Thus, to the extent the pareto exponent for human wealth distribution remained stable across many orders of magnitude, it might be reasonable to infer that the people are behaving the same at many levels of wealth. That is, that the behaviors are the same and not necessarily sociopathic (or conversely, that all levels are equally sociopathic). I haven't actually looked at the data, just throwing out a notion.
cheers.
greenish
Not being a numbers person, looks like creating a decent visual understanding of pareto distribution would take some serious time/motivation, my first impression is that it is an artificial construct of the neo-normal mind. I just do not see the purpose of the high level math. Likely because I have never taken time to learn the math you say...
My take for what is worth...
Since wealth is income-expenses, income and expenses are the two main factors.
Income level is a function of the sociopathic tendencies or willingness to play win/lose games. The more willing you are to be more sociopathic the more income you potentially will obtain other factors being equal.
Expenses are controlled two ways both depend on how strong your sociopathic tendencies are but they work in opposite directions. First the willingness to live simply. Second the willingness to pay a fair price.
So in a way having wealth does not imply sociopathic tendencies, but the acquiring of wealth does.
scale invariant self-similarity is more a concept than it is math; I just find it interesting that the same sort of distribution which applies to meteor impacts, earthquakes, forest fires, the longevity of species, and many other natural systems also shows up in human wealth distribution. Obviously these natural systems have no "agenda". To the extent "wealth" obeys a similar distribution, it may imply that humans behave similarly across many orders of magnitude of wealth.
So this would lead me to:
Natural systems no agenda distributions have a similarity to the distribution of mankind's willingness to express and to control sociopathic tendencies over wealth accumulation.
Interesting that to acquire wealth you must both express sociopathic tendencies, maximize income, minimize purchase cost, but have to control these same tendencies to be able to live simply (live simply so that others can simply live) enough to keep outgo below income.
Maybe the reason the distribution seems to hold over many orders of magnitude is because of the need to both control and express these sociopathic tendencies.
There are many examples that come to mind, Bill Gates for example.
This would be the same Bill Gates who accepted a conversion of BASIC but because he was under the age of legal majority the contract was declared null and void?
The same Bill Gates who was so 'honest' with Seattle Computer Products?
The same Bill Gates who was called "evasive and nonresponsive" WRT the trial United States VS Microsoft?
I guess I'm confused as the what 'caring' means in the context you have used it.
uprate
Al
I would assume the reference was to Gates' charitable contributions, which are considerable.
True, but only after he was shamed into it.
I'm skeptical that shame in itself is sufficient motivation for Gates to part with billions of dollars. The uncaring are mostly unimpressed by shame.
Now that you mention it...I think "uncaring" is a pretty good description. He literally didn't care enough to be charitable with his money, until the media pointed out how little he actually gave to charity, despite his wealth. He started his foundation after the bad press made him realize that the public expected it of him.
Not saying he's a sociopath, mind. I don't think he is. At least, no more than the average person. But I do think there's a difference between giving to maintain your social standing, and giving because it's a personal priority.
Perhaps his wife had an influence?
Or his old man? Or even Warren Buffet?
I suspect our sense of "fairness" is fairly localized. Upthread canuckistan comments about the western canadian attitude to sharing with the eastern provinces " Let them freeze in the dark!". Especially as moderated by politics, the sense of fairness seems to apply only to fairness within our local political/tribal unit. Resources of other units are fair game, and their welfare be damned, is the most likely response.
isn't that more of a French versus English thing?
Toronto is NOT beloved by the rest of Canada.
Alan
Toronto isn't even beloved by the rest of Ontario.
That's just jealousy ;-)
(Native Torontonian.)
No from what I can tell western canuk land hates everybody and also of course is superior.
Think of it as a northern province of California and you have it about right. Now with that said I will say that just like CA there are alternative cultures floating around that are completely different and not part of the get super rich game. The warped hippie/conservative exploiter dual culture seems to be common from Baja and the Mexican border towns all the way through Canada to Alaska. Its two different cultures that for the most part have agreed to disagree.
The problem of course for Eastern Canada is that the western culture will either treat them as just another customer in sell to the highest bidder or the hippies would correctly I might add simply not exploit the natural resources. No matter what Eastern Canada is hosed. Now of course when Western Canada eventually implodes under its own stupidity you can bet they will go running to the central government for a bailout.
With housing construction tanking and probably going to tank more I've been watching with some interest to see how the once mighty western Canadian forestry industry does.
http://www.statcan.gc.ca/pub/11-621-m/11-621-m2007055-eng.htm
Eventually of course the mighty will fall and like I said the politics in Canada will get very interesting.
I would suggest the possibility that sociopathic tendency is not an either/or type of thing but runs a spectrum. We all have sociopathic tendencies that range from relatively little to extremely pronounced. I would guess that most people are much closer to the middle than they would ever want to admit.
Um, my understanding is that a sociopath is someone who has almost no sense of other people sharing their emotional states and needs. If you've got someone who is perfectly capable of understanding this but in a particular context (say, work) they don't care, then they won't not be a very nice person but they aren't sociopaths. I would be surprised if more than a tiny fraction of those who control large amounts of wealth are sociopathic, because my understanding is that most sociopaths tend to end up in middle range positions: they don't, and often can't simulate, human empathy that makes the collaborations necessary for being ultra-successful impossible.
Indeed, in my experience of the business world the successful business people care about money more as a sign that they're winning than for money as such (beyond the level to afford the luxuries they'll actually experience). My suspicion is that it's not so much that they don't care as much as they value spending time doing business more than they value doing something about members of society who've experienced very bad luck. (Bill Gates mentioned above is an example of this.) Which is not to say that these actions have any better effects than the excessively selfish, but I think the intent is being misattributed.
Yes, there are two reasons monkeys show fairness. One is called "Tit for Tat". Meaning I scratch your back and you scratch mine. The other reason is called "Kin Selection". They are fair to their own family members far more than they are fair to outsiders.
Chimps, when the territory becomes overcrowded, will drive less powerful and less popular members out. Then they will form hunting packs and kill, one at a time, the chimps that have been driven out.
And one other point, everyone with a full stomach can afford to be a philanthropist. But once food gets scarce people look out for number one. Of course they take care of their own family then after that their own tribe. But outside their own tribe, there is only competition. These people might attack you and try to steal your food therefore if your tribe is strong enough you form a war party and try to kill them before they kill you.
That is how we evolved and down deep, we are still that very same animal.
One more very important point. What is happening now, (an unfair distribution of wealth and resources), will not change as things get worse, the unfairness will only get worse.
Ron P.
That's what I'm expecting, though I still hope that there may be a way to appeal to the powerful to use their power to engender a major change in the current paradigm. Though I'm most certainly not holding my breath.
Modern society is largely based on the depletion of finite resources. When the availability of these resources cannot continue growing and starts to decline, the overall society will, at some point thereafter itself contract/collapse. The issue seems to be the overall level of resources available to said society rather than the internal fairness of the distribution of those resources within that society.
Antoinetta III
Fmaygar,
I'm afraid I have to agree with you and Darwinian in regard to our actions as they relate to family on up thru the nieghborhood or tribe thru the nationality.
But there is some reason for hope in that certain ones of us seem to be able to view all of humanity as the "us" group.Sometimes political parties are able to bridge the gap too.
But it's a very slim hope.It might have been enough to serve as a starting point if we had a few more centuries of easily exploited resources.
I can understand multiculturalism as a beautiful social idea-but I strongly suspect that those who push it are so conceited that they are ignorant of the fact that if they are successful in tearing down the culture we have we may wind up with a worse one.
Revolutions are like genetic mutations-nearly all of them are bad news.
Personally I'm not interested in sharing this country with another fundamentalist culture for instance-one is more than enough-especially if the new one will be into it tooth and claw with the old one forever and ever or until there is no one left able to travel far enough to pick a fight-and the record for walking to the fights seems to be about two years or so on the road although some dawdlers undoubtedly took a lot longer.
IMHO, if we can't do a better job than that of improving upon our original programming, then perhaps extinction is not just inevitable, but well-deserved.
The latest finding of a new species of pre-humans suggests that humans are not directly descended from chimps (SCIENCE 2 October). At least, the teeth found in the Ardipithecus skull suggest that humans came from an earlier primate than the chimps. Anyway, I've heard that humans are more closely related to Bonobos (SP?), primates with a rather different social structure in the wild. But, this isn't my field, so blast away.
E. Swanson
To be accurate, we did not descend from chimps, Chimps and Humans decended from a common ancestor. Chimps may have changed more from the common ancestor than we have changed.
Warnings are everywhere. Why not prepare? Why sabotage our power, our future? Why set up an entire nation to fail? Diamond says: Unfortunately "one of the choices has depended on the courage to practice long-term thinking, and to make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions."
From: Death of 'Soul of Capitalism: 20 reasons America has lost its soul and collapse is inevitable
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The Michigan Judiciary, in the case of Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668. (Mich. 1919), the Court decided that a corporation has a fiduciary duty to its shareholders to maximize profit, and cannot consider long term public good. Wall Street rewards companies for reducing employment; they reward CEOs for short term performance.
Just as the item said, we cannot run and we cannot hide from the consequences of so many years of bad policy and short sighted planning. Now we have to plan for survival, not for avoidance.
that not exactly a big leap over the course of 4 years. it's like 1 in two persons would buy another laptop / cellphone.
by that time, i reckon we will be facing more urgent problems. like mexico not being an oil exporter perhaps?
Hello everybody from Italy : So, do we really need 4 S.A. within 20 y ? Yes, but considering depletion rates of Cantarell and North Sea, we would probably need one every 5 years, starting from now !
I believe there will be a post from Rembrandt at the beginning of November that will show we have enough "Saudi Arabia's" coming online to keep things going at least until 2014.
Check out his sildes from the ASPO-USA conference.
Of couse the information in the mega-projects gets a little thin after 2014.
And Sam's best case is that the combined post-2005 cumulative net oil exports from Saudi Arabia, Russia, Norway, Iran and the UAE will be more than 50% depleted at the end of 2013. And the observed net export decline from Canada, Mexico & Venezuela was 250,000 bpd per year from 2004 to 2008.
That is in theory. Most projects don't deliver what they promise and there will be a lot of delays. "Keeping things going" doesn't take ELM into account: the difference between oilproduction and oil-exports.
The installed wind electric capacity in Texas of 436 MW is less than 1/2% of Texas peak electric load requirements of 60,452 MW.
http://in.reuters.com/article/oilRpt/idINN2252309020090623
The state with the most windpower may not even keep up with the electric needs required by a one percent plus population growth, much less switch all carbon energy uses to wind power.
Hi rainsong,
Texas has almost 9,000 MW of installed wind capacity and the rate of growth in the past ten years is rather impressive; the last three in particular.
Cheers,
Paul
is there not a difference between installed capacity and the % of time the blades are actually turning. I'm not an expert but I remember being told to be cautious comparing installed capacity with other power generation. It is the % of time the blades are turning at optimum speed which matters is it not? If the installed capacity is 9,000MW then this means that if all the blades are turning at the optimum speed 24/7/365 then yes there will be 9,000MW/year cranked out. Never having been to the Lone Star state I have no idea how windy it is but I would be mighty surprised if it is constantly blowing at the optimum speed!
Hours in Year x Nameplate (9 GW) x 34%-35% would be a decent estimate for MWh from Texas wind farms.
They produce some power almost all the time (say 80%), but at partial capacity, not at nameplate.
Nukes were averaging 80% till they were broken in and problems resolved. Now some are >90%, fleet is in high 80%.
Alan
I had previously commented that FPL's expansion of it's 180 turbine wind farm around the home place looked to be about 10 turbines. I now guesstimate that it is at least 30 turbines from my latest drive around.
FPL, unlike Pickens, doesn't say much about what it is doing. You only find out after the fact as the towers go up. This investment would be about $90 million at $3 million per turbine so I was wondering where all the money is coming from. It looks like it's Warren Buffett:
http://www.bloomberg.com/apps/news?pid=20601087&sid=atotKPoKfmy0&refer=home
We will now have a full forest of wind turbines around us. Before we were kind of on the edge of the forest.
What's the take by the locals? Are they noisy? Problematic? Beneficial?
Hi HAcland,
Capacity and availability are two key metrics. According to ERCOT, wind represents 10 per cent of installed capacity and in 2008, it supplied 5 per cent of all energy generated, up from 2.9 per cent in the previous year (the monthly contribution varies considerably). Interestingly, of the 97,000 MW of new generation requests in Texas currently under review, some 48,000 MW or roughly half is wind.
Source: http://www.ercot.com/content/news/presentations/2009/ERCOT%20Quick%20Fac...
According to The Wind Coalition, the average net capacity of Texas wind farms is 44 per cent.
Source: http://www.windcoalition.org/wind-energy/faq#What%20is%20net%20capacity%...?
Cheers,
Paul
Scheduled availability is also a consideration.
I don't have the reference at hand, but sometime in the last couple of years ERCOT decided that for maintenance scheduling, wind counted as zero. That is, if a coal-fired generator was coming off-line for maintenance, they would not include any wind in their calculation of the remaining capacity, and whether it would be sufficient to meet forecast demand.
This is a significant issue for wind generators to address. If this is a precedent followed by the other reliability councils, wind is forced into a niche where it is used to offset some other peak load generators (eg, natural gas), but is never included in base load. This is perhaps an even worse problem in a deregulated market. As a utility or a large end consumer, I need to purchase scheduled electricity: I need 800 MWh on each of Tuesday and Wednesday, not 1600 MWh on Wednesday.
Frequent auctions are the solution. Wind is quite predictable for the next 30 minutes or hour. It is 12:12 now, I can bid 213 MW starting at 12:45.
Alan
Okay, I'm intrigued. How much of the total power delivered would be through this hour-ahead spot market? All of it? Or only peaking power? If just the peaking power, then wind would be in the niche I described: wind would be the low-cost (or low bid) source during those times when (a) the wind was blowing and (b) there was demand above the base load. If all power is to be purchased on an hour-ahead basis, how do coal and nukes play? They can't generally spin their output up and down that quickly. Or at least, they don't like to because it's hard on the equipment.
Nukes do not load follow (even French ones, see long debate a month ago on a TOD article).
Coal plants can load follow and some do. Coal powered plants that routinely (as in most of the day, every day) load follow tend to have thinner steam turbine blades, variable speed pumps and other details I know only vaguely.
It is my understanding that they are bit like battleships. Advance planning (say half hour ahead) is good to either ramp up or down.
One detail is coal being ground up for firing. Limited storage capacity for finely ground coal (and they don't like to let it sit and clump up). But ground coal is required to fire the plant. 10-20 minutes before either speed up or slow down the coal grinders.
There is also a time delay from more or less coal being added, to steam in the generator.
It has been decades since I have seen a generation response chart for a coal plant, but 50% > 100% or 100% > 50% in less than an hour for one designed to load follow is within specs. But this is with foreknowledge and planning.
Coal plants often supply spinning reserve, where they will be called upon to supply XX MW within seconds when a major fault occurs in the grid. Hard on the equipment, but 15% to 20% surge is often rated. Complex mechanical and thermal response to this unexpected and sudden demand.
As for what % of power is bid spot ? My understanding is a high %, perhaps most. I would like to have current knowledge.
Alan
Hi mcain6925,
As you probably know, routine plant maintenance is generally scheduled during the swing seasons when electricity demand is at its lowest (minor measures, overnight).
In terms of normal, everyday operation, day-ahead and hour-ahead forecasts allow plants to be dispatched in their lowest cost order. On days when good wind resources are available, these facilities are likely to top the pecking order, whereas on calm days they simply fall off the list. The amount of wind that can be integrated into the network will be determined in large part by the generation mix, internal transmission limits and the strength of the inter-ties with neighbouring utilities, but I suspect there's considerable room for future growth.
Cheers,
Paul
Re: Hess CEO: US Needs Gasoline Tax, Mileage Limits To Save Energy
Add a $1 per gallon tax on gasoline? It's too little and it's already too late. The U.S. should have started ramping up the tax on transport fuel back in the 1970's after the OPEC/Arab Oil Embargo in 1973. We didn't do it then and didn't do it after the 1979 Iranian Crisis and didn't do it after the Tanker War and didn't do it after Desert Storm nor did we do it after 9/11.
Now, we are going to pay the price for our short sighted politicians who would not do ANYTHING that cost them votes. So, how many of today's bought and paid for politicians would put their necks on the line by introducing a bill to boost the gasoline tax in the midst of a recession (or is it a depression)? Raise taxes when the government is desperately trying to shovel stimulus money out the door and sending out tax rebate checks? Obvious answer: ZERO.
E. Swanson
Europe did it then, but the increases stalled around a decade ago, when oil prices had fallen to their lowest point ever in real terms.
Since then, at least in the UK, cars have got bigger, heavier, faster. Average fuel consumption has stalled. However, we have the choice of very small petrol engine cars or medium sized diesel engine cars than can return 60+ mpg (imperial) if driven very carefully.
These vehicles are simply not available in the US.
(My car is fairly big by European standards , seats 7 and returns 35 mpg (imperial) ).
Petrol is over $8 gallon and rising.
We've known how to build hybrids for more than 20 years and small diesels for longer than that. It's the old chicken-or-egg problem. If we had raised taxes, the companies which make those European small cars would also be selling them in the U.S. When the price of gasoline skyrocketed towards $4 a gallon last year, the sale of hybrids took off. When the price fell, so did the sales. Remember back when the price of oil fall sharply in 1998 and the price of gasoline at the pump dropped to about $1 a gallon. That was the signal for short sighted Americans to go out and buy the latest gas guzzlers.
Given the state of mind amongst many Americans, there's little hope that the politicians will actually bite the bullet and tell the truth. It's sort of like trying to reason with the Taliban, whose world view is so entwined with their religion that conflicting facts don't penetrate very far into their brain.
E. Swanson
I would turn that around. We are suffering because our citizenship was/is too shortsighted. Because of that proposing gas taxes was seen as a career ending move by most politicians. As long as we are in an (imperfect to be sure) democracy, the politicians cannot afford to get too far ahead of the citizenship. I do not expect real leadership from the politicians because our system is set up to make them followers of popular sentiment.
uproar brewing on berman's blog:
http://petroleumtruthreport.blogspot.com/
The industry 'retort' to skepticism about shale oil as a viable long term energy source included this:
"7. Economic new math – Skeptics also believe that the Barnett/Fayetteville will recover less gas than people think (and by extrapolation, other shales like the Haynesville will also disappoint). With less gas from shales, the marginal costs of supply will be high – some skeptics say as high as $8/mcf. We agree that if shale disappoints, gas prices will be quite high. Yet some skeptics run economic analysis of shales at $4/mcf gas prices..to prove that the Barnett is uneconomical."
So, gas will double in price, thereby creating more gas? If gas doubles in price, what happens to energy costs, overall? Doesn't that drive cost of extraction up? And, what does that do to the economy? It seems to me that, the higher gas goes, the higher it will go as a consequence, until the economy tanks. At which time, who cares?
Daniel Yergin: A crisis in search of a narrative
Expansion of UAE SuperGiant Oil Field to cost Less
The Emirates (Abu Dhabi actually) plan to expand production from Upper Zakum by 70%. No absolute #s given. Completed by 2015.
Linked article claims that recent price drops for equipment have reduced budget from $12 to $18 billion range to $10 to $15 billion range.
I "have heard" that UAE oil fields were initially developed for 80 to 100 year production. If true, there may be room to expand production and deplete faster.
http://www.business24-7.ae/Articles/2009/10/Pages/20102009/10212009_31e5...
Best Hopes for One Possible Bright Spot,
Alan
As aid shrinks, more 'stuck' for day care
This reminds me of that Boston Globe story, that predicted a Depression now would look very different than it did in the 1930s. Food and clothing are so cheap now compared to back then. Even the poor have huge wardrobes compared to what people owned in the '30s. Where we'll feel it is in health care and day care.
Just an anekdote on the sideline: My youngest will go to school next Monday. This means we do not need (subsidized) day care for her any more, saving us around 10% of our monthly net income. So it finally starts to pay of that both her parents work.
You don't need childcare after school? Here in the US, this is a major problem. Even children in school need minding for a few hours after school ends and before their parents get home from work. I became a "latchkey kid" at age 10, but many parents consider that too young. (My parents insisted I stay inside with the door locked until they got home. I wasn't allowed to answer the phone or the door.)
I suspect the daycare solution here in the US is going to be relying on extended family, like it used to be. If you need childcare, and your grandparents or maiden aunt can no longer afford to live alone, well, there's an obvious answer, though it's not the American dream.
My wife works part-time, 30 hours a week, and we now need only 2 hours per week of care for both our kids, instead of 3 full days. Schools are obliged by law to provide facilities for child care after school ends, btw.
With high unemployment, the daycare solution seems obvious -- people will watch their kids and/or those of a friend or neighbor. My wife is working part-time now, and already we've picked up an extra kid for an evening per week. It wasn't a plan or anything -- just one of those things that comes along and works out beneficially for all. No formal agreement, all cash, no gov't visibility. What's not to love?
IMHO, it doesn't really help much to help subsidize daycare so moms can work to pay higher taxes and daycare....I suspect many are at break-even at best when viewed broadly. I'm looking forward to my wife being a stay-at-home mom again soon, and I'm expecting more travel and longer commutes for my job, so the added support at home will help with that too.
Weekly status report-one question that no one seems to be able to answer clearly is why relatively suddenly USA conventional gasoline supplies are so low (this week is an all time record low at 76)http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt
Blending it at the end of the pipeline -- there isn't a big difference between the EIA blending components and conventional gasoline.
This question keeps appearing even though it has been answered by a key post and in threads a few times. I thought the answer was pretty clear.
Summary of Weekly Petroleum Data for the Week Ending October 16, 2009
ELM in action:
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wttntus2...
Of course, while our consumption & net imports were down in 2008, that is not true for all net oil importers:
Brazil, China & India, Combined Consumption & Net Oil Imports (EIA)
Consumption:
2007: 12.77 mbpd
2008: 13.31 (Up 0.54 mbpd, +4.1%/year)
Net Oil Imports:
2007: 5.72 mbpd
2008: 6.06 (Up 0.34 mbpd, +5.8%/year)
US Consumption & Net Oil Imports
Consumption:
2007: 20.68 mbpd
2008: 19.50 (Down 1.18 mbpd, -8.2%/year)
Net Oil Imports:
2007: 12.22 mbpd
2008: 10.98 (Down, 1.24 mbpd, -10.7%/year)
Brazil, China and India didn't experience anything like the economic downturn the US had. China of course is run by a technocracy that has discovered that all it has to do is get the economic fundamentals right and 1.3 billion Chinese will take it from there. India isn't that organized, but they are doing relatively well and have 1.0 billion people who have learned to muddle through regardless (an old British tradition). Brazil has some big oil discoveries going for it and a thriving manufacturing section. They are building the fuel-efficient pickup trucks that the US should be building.
The US had George W. Bush and his footgun. Obama's advantage is that it would take real talent to be worse than Bush, but it remains to be demonstrated how much better it will be. US imports are down due to demand destruction caused by the rather nasty recession it is experiencing. You can't count on them continuing to go down unless there is another recession. You shouldn't count on disasters to bail you out of your problems. If imports start to go up, China will have tied up all of the available oil supplies.
An interesting thing is that both the Chinese and Indians are rapidly expanding their electric railway systems. They're both running double-stacked container trains under 25 kV overhead lines. What is the US doing with electric railways? Nothing.
Brazil, China and India are good examples of the overall pattern that we have seen for 10 years as annual oil prices rose at 20%/year from 1998 to 2008: OECD consumption was flat to declining and non-OECD consumption was up. They are rounding errors in regard to consumption numbers, but countries like Kenya and Morocco showed the same non-OECD pattern.
China has announced plans to electrify 20,000 km of rail, India announces on a line by line basis (recent was 800 km).
China is in the process of building three intertwined standard gauge rail links to the EU (no one nation can block all three). One has been announced, but I picked up data on the other two.
India has announced two new double track North-South freight only rail lines, one towards the East, the other towards the West.
There are rumblings in North America. I got a contact from a middle manager ...
Best Hopes,
Alan
Not to worry - the same brilliant Washington crew that has been at work fixing the nation's financial and health care industries will soon get to work on the transport sector.
/sarcasm
Some quite good news on the North American front. All I can say.
Alan
Tease. :p
Hello WT,
Thxs for the numbers. IMO, it show the gradual power of the Maximum Power Principle [MPP] to start leveling depleting resource usage around the planet. Of course, this is a basic driving tenet of R. Duncan's Scenario:
http://www.theoildrum.com/node/5419
--------------
Olduvai Theory: Toward Re-Equalizing the World Standard of Living - Richard Duncan
--------------
A quick link below to those that only wish to see the graphic:
http://www.theoildrum.com/files/DuncanFigure5.png
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Oil spot prices up $2 likely to close above $80 for the first time since the 2008 crash, I believe.
Part of this may be the Euro up to $1.50, its highest since the 2008 crash.
The high price of oil is more like the low price of the dollar.
According to zFacts.com, in less than two hours, the Federal Debt will hit the $11.975 trillion milestone. In around one week from now, the $12 trillion level will be achieved. Coupled with other agency debt, we are well above 100% of GDP.
that $ 11.975 trillion you quote includes the "agency" debt. refered to here as intergovernmental holdings:
http://www.treasurydirect.gov/NP/BPDLogin?application=np
that would be funds such as the social security "trust" fund
Of course that doesn't include underfunded obligations and liabilities.
But the overall picture for the nation is worse, because there is a LOT more debt than just Federal. Just one take...there are a zillion out there on Google.
http://mwhodges.home.att.net/nat-debt/debt-nat-a.htm
does that mean that cheney was lying when he said "reagan has proven that debt don't matter" ?
I think the meaning was that they could buy political popularity by spending more than they took in. Nothing catastrophic would happen before the next election, and the voters just love lots of services and low taxes.
What I refer to is the residual TARP losses and and Fredie deficits and losses that are not even counted even though it amounts to trillions of dollars. Where do all the toxic assets go? To the taxpayers of course. Privatizing profits and socializing debt and losses has consequences.
Re: Mexico can keep oil output stable for years (linked uptop)
As I noted yesterday, David Shields predicted that the Cantarell decline will soon be slowing, but he is not at all optimistic about total production from Mexico. And he demonstrated at ASPO how public pronouncements from government officials have consistently been too optimistic (a prime example of the "Generally Assume the Opposite Rule" in regard to comments on energy supplies from public officials).
In round numbers, the total liquids production decline rate for Mexico was about 5%/year from 2004 to 2008, while the 2007-2008 decline rate was almost 10%/year. If they average a production decline rate of 7.5%/year for the next four years, they will be approaching zero net oil exports by the end of 2012 (assuming no material change in consumption relative to 2008). However, in all likelihood, as of the end of 2008, they had probably already shipped about 80% of post-2004 cumulative net oil exports (CNOE).
Incidentally, this may be an interesting application of the 80/20 rule. The ELM, three former net oil exporters (Indonesia, UK & Egypt)--as well as Sam's projection for the (2005) top five--show that around 80% of post-peak CNOE have been shipped about halfway (time wise) to zero net oil exports.
It's fairly obvious that the Mexicans don't have a clue what's going on at Cantarell, or their other oil fields. They should be able to figure it out, but either they don't have the technical expertise, or their technical experts are lying to save their jobs.
Bottom line:
David compared the Pemex technical projections to the public projections and the Cantarell decline was pretty much what the scientists anticipated, but it's a good thing that we don't see this kind of nonsense with large publicly held oil companies.
http://www.nytimes.com/2004/04/08/business/08OIL.html
Oman's Oil Yield Long in Decline, Shell Data Show
By JEFF GERTH and STEPHEN LABATON
Published: Thursday, April 8, 2004
And since we can "rely" on public pronouncements from Pemex and Shell, I'm sure that we can believe Saudi Aramco in regard to the situation on the north end of Ghawar. Gotta go now. Have to tend to my herd of unicorns.
Westexas
If you have any breeding stock for sale I want a pair.My diesel stash will not last forever and when we switch back to horses all the people with gold stashes are going to want stylish rides-they can't be seen riding an ordinary horse of course.
If I can get a small herd demonstration herd established I can take my operation public and
sell franchises to other enterprising farmers.
Of course as an oil man you are probably too busy to be bothered but if you are willing to take some of these promissory notes we have printed on VERY NICE paper.......
I haven't actually seen my herd yet. I am awaiting delivery. I bought them from Michael Lynch, who lives in a special world occupied by elves and unicorns--where individual oil wells peak and decline, but oil fields--the sum of the output of depleting oil wells--virtually never decline.
A bit like the beer fridge I ordered a few days ago. Can't wait to take delivery! It is guarenteed that even though I take five pints out each night, the next day it is still full!
Sorry to burst your bubble HAcland, you see the way it works is all your neighbors need to have bought these fridges as well. That way even though the beer in your particular fridge gets used up and declines. The sum total of the beer in all the fridges in your neighborhood never declines and you all get the benefit. Got it?
Hey, you could look at it as business opportunity all your neighbors are going to want one of these fridges. Plus if they buy one and complain that it is not being adequately replenished in a timely manner you can explain what I said above and they can be another fridge reseller under you if they pay you a small franchise fee. Which, BTW, should more than cover your own beer costs at the company grocery store... :-)
The thing about many of these techniques such as nitrogen injection, water flooding, and horizontal wells is that they don't necessarily increase the ultimate recovery from a field, and they may actually reduce it. What they do is move future production back into the current fiscal year. From the perspective of a company, this can be a good thing for the investors; From the perspective of society as a whole, it may be counterproductive.
The problem with these techniques is that they result in a production profile that resembles the mountains overlooking my house. There is a long, leisurely stroll up the south slope, followed by a steep, screaming fall off the north face. One would hope there would be fewer people killed by these production profiles than by the mountains above me, but I'm afraid the former are going to kill considerably more. There have only been two people killed falling off the mountains above me so far this year.
Ghawar really frightens me. What really is going on there? Where is the CIA when you really need good info?
hopefully in Pakistan otherwise Obama is in trouble! Pakistan is a tinder keg, even Obama's dog can see that is where the spooks should be.
They increase overall recovery if you use the right accounting. Jeff Skilling can teach you all about it.
Hahaha! The CIA!
Someone upthread talked about Pemex engineers lying to save their jobs. Well, sorry, the CIA have that franchise.
Hi Westexas -
I heard a couple days ago on the Thom Hartmann show that Mexico has been quite aggressive in imposing tariffs on goods not manufactured in Mexico - I think it was a caller to Thom's show that indicated there were very few "Made in China" items to be found in Mexican stores due to these tariffs. I would think this would work to prop up internal demand for oil there - if they want to keep their manufacturing rolling (overall economic slowdown nothwithstanding - and what about the implications of a significant number of people formerly in the US returning to Mexico). Of course this is heresay and completely anecdotal - but interesting if true.
As an aside - if there happen to be new people checking out TOD could you please re-post your conversations / experiences with your doctor regarding the Vitamin D and H1N1 connection (and any new updates if you have anything to report about your vitamin D experiment) ? I really appreciated that info when you first posted it and thought enough time has gone by that it might be good to re-post the info for anyone new that drops on by...
Thanks.
I'm actually in the process of writing a five page letter to my wife's doctor, who is sticking with the National Institute of Health (NIH) Upper Limit (UL) of 2,000 IU D3 for maximum daily Vitamin D dosage. I'm sure Leanan wants me to post it in its entirety (not). I'll see if I can get it down to a very short summary, with some links. In any case, here is a link to Dr. Cannell's post about two H1N1 & Vitamin D case histories. The Wisconsin case history was almost a perfect (accidental) experiment.
http://www.vitamindcouncil.org/newsletter/vitamin-d-and-h1n1-swine-flu.s...
Excerpt of my letter and some links follows:
Note that the third paper is available in its entirety. An excerpt from the abstract:
Excerpt from my letter:
WT, Thanks again for sharing this info. I wouldn't hazard a guess on how many people are applying this information. I've got our family on 5K IU but haven't done any blood work. How much does the blood test cost? So far we have dodged the crud in our family despite folks seriously sick to all around us.
FWIW, Sam's has pretty cheap 2K IU gel caps that are cheapest I have found.
You can order a Vitamin D test kit on the Vitamin D Council website, but otherwise it's just an add on as part of a standard set of blood test measurements. Just make sure that they run the 25-Hydroxy Vitamin D, i.e., 25(OH)D, test.
My daughter tested positive for H1N1, but her symptoms were quite mild (and she was taking lots of D).
Thanks for posting that again Westexas - very interesting stuff...
Morn Wes. Let me cut to the chase here. So from the numbers you Posted it looks like to you, that Mex could stop exporting Oil some time between 2012 and 2016 right. Now if that happens the US will have to find some other country to make up for that. Now the implications of that is Mex loses all that cash, and we lose all that Oil right. Having a Country the size of Mex just to the south of us in that situation can lead to a lot of bad things.
To help the average guy think about this, what happened in the USA when we went from being a Oil exporter to a Oil importer.
and was there a certain month that marks when the USA became a exporter to importer ?
Thanks for all the Info it still leaves me scratching my head. The guy admits to declining, then he says that don't worry we can control the rate of declining. LOL
Po
In a just a few years, we went from being a major source of oil for the Allies in the Second World War to becoming a net oil importer, in 1948. We "celebrated" becoming a net oil importer by tearing up most of our electric streetcar systems. Of course, we were able to buy cheap imported oil for decades, but times are a'changin.
Back in 48 Dagwood Bumstead used to come roaring out of the house late for work run over the postman or brush salesman and grab the streetcar with one hand. All that running provided for his slim profile. He even carried his lunch and briefcase. No power lunches for him.
Well, here it is '09. I'm usually headed out of the house late for work, too. Haven't seen a brush salesman since childhood, mail delivery is mid-day, so no human obstacles to run over. No streetcar, but I walk 1.7 miles to work instead. I carry my own lunch, no place within walking distance to buy lunch, power or otherwise. Still missing the slim profile, though!
At least Dagwood still carpools, rather than solo-driving a monster truck.
Pemex is set to release September data on Friday late in the day. The data is usually interesting to compare to projections.
TOD:Europe is filtered out at my library(Alberta), all other sub-domains of TOD are accessible. There are some filtered and non-filtered terminals for children and such I guess.
I've heard TOD:Europe has become an AGW Denialist playground and was just going to keep tabs and see what their latest angles are.
yup. we are a revolutionary bunch. I've said it before and I'll say it again: if AGW was true how come today is colder than this time last week? CO2 baaaahhhhh. Nothing to see here! Move along please!
Since you didn't include a Sarcanol Alert, I must ask, do you know the difference between weather and climate? Do you understand the Little Ice Age, the "Year Without A Summer" of 1816, or the Younger Dryas period? Most recently, what was the impact of the Great Salinity Anomaly on your country's weather (and climate)? Just checking...
E. Swanson
C'mon BD, re-read this phrase:
I've noticed that, too: Europe is blocked by many filters, while the rest of the TOD is not. I'm not sure what the reason is.
It could be a DNS thing. TOD is using a sub-domain for the europe site. (europe.theoildrum.com)
Shouldn't effect anything but you never know how the ISP filters are setup.
I don't know about TOD:Europe, but the main TOD seems to have a better-than-average comprehension of climate science. Which is nice. :)
I've heard TOD:Europe has become an AGW Denialist playground
Have any of the denialists ever come up with an answer to the rising CO2 levels in the ocean?
It strikes me that the destruction of the various calcium carbonite using critters is a fight worth having.
But, those calcium carbonate critters are microscopic, and out of sight! And even the big ones "corals" just don't show emotional states that humans can relate to -like a drowning or starving polar bear, so they get no vote.
so they get no vote.
Bah, even citizens get no vote these days. The only 'voters' seem to be the lobbists.
Here's one reason oil prices are rising:
According to this article 400,000 cars will be registered in Beijing this year as auto sales boom in China:
http://www.thetruthaboutcars.com/beijing-drowns-in-cars/
To deal with the congestion there is talk of implementing the
Kafkaesque Nigerian solution:
http://chinaautobiz.blogspot.com/2008/10/chinese-numerology-complicated-...
If the odd/even day restriction is imposed the likely outcome is even more car registrations as people buy two cars one with an odd license plate and one with an even. Under the Nigerian Solution the wealthy could buy a cars licensed such that each has an ending plate number that would enable them to drive everyday.
Oh Baby!!
Oil price on the sidebar looks to be around $82.
I voted with my heart, (wishing, hoping) not my head, on the last poll ( > $80 ). Looks like Hope wins!
Time for a new poll?
My oil stocks just bought me a new laptop so I can sell more solar!
sleepwalking into the night....
Knowing when to quit
Burtynsky's Oil Apocalypse
http://www.thestar.com/entertainment/article/713317--burtynsky-s-oil-apo...
There's a nice gallery here, if you didn't see it when I posted it last week.
wow, great pic's.
I have a question- and I remember it was asked once before but for the life of me I don't remember the explanation-
Why do oil pipelines always have what seem to be a lot of unnecessary bends, as in picture 2?
Thermal expansion, to keep this from happening:
.
Excellent explanation! Thank you.
All I can say is, if after looking at those pictures and knowing what is going on in the world wrt energy, food, water... you know, all of it... how can anyone not get the sinking feeling we are royally screwed. I, for one, am glad I live in the countryside. L.A. and all the other large metro areas seem like conflict and mayhem waiting to happen.
Not that living anywhere is going to be preferable to another if tshtf - except maybe those who are not connected to and dependent on what those pics imply. And they are decidedly in the minority. It boggles the mind. Geez, just the maintenance on what has been built, let alone the continuous and endless amounts of energy to run this way of living.
Other than reducing population back to some number which allows a less energy intense society (and even then), what would that look like? Can we really imagine a way of living so different now that we've experienced this? Just what would we be required to give up or, at the minimum, not replace once it no longer "works?"
Most of the material things I have now would last a long time. Approaching mid 50s, I focus on not getting some debilitating disease or injury. I'm in great shape and always have been... but I worry about it. Just this week I pulled back muscles on both sides of my rib cage and the pain was excruciating. I did without pain relief just to see what it would be like. Lots of grimacing and occasional outbursts along with lousy sleep.
I'm on day 10 of no drinking and, um, er smoking (you know) for 30 days. And while it's been good so far, I'm looking forward to a kick-ass margarita and a smoke. Sometimes (make that many times) I wish I didn't know what I know.
I have noted many comments about food after the crash. Just a few considerations, and I would like to hear from others.
1. Our fertilizers are mostly from natural gas. What is the expected year for PG? How about Peak Coal?
2. Factory farming depends on oil today. Tractors run on the farms, and large harvesters, trucks for transporting fertilizer and other farm related materials, and all of these use oil products. And, there is transportation from farm to plant - in trucks. Packaging is made from oil and paper, which is made using gas and oil.** In-plant processing depends on both gas and oil for power, plus all of these steps use vehicles and tools made using oil, gas and coal. Transportation to the supermarket or other big-box store selling the produce depends on oil or gas, whether truck or train [some produce comes an enormous distance by ship]. Consumers get to the stores in automobiles; most are in suburbs so far from local stores that without automobiles delivery would be uncertain.
3. Farm Fertility has been driven by gas derived fertilizers; it has depleted the soil so that, without heavy use of fertilizers productivity will drop to 1/4 or less. Probably less! From what I have read, the depth of soils has diminished alarmingly, and even with heavy fertilizers we may face desertification in the mid term [50 or so years].
Given the above, just how are we going to feed 6.5 Billion folks with the resources of a planet that is able to sustainably support only about 1 Billion, give or take 200 Million? The food industry may survive - but then how will they deliver the goods? And, since there will be so little food, compared to demand, the prices are certain to go up. There is a point where rationing would fail since it would result in everyone dying off. Who chooses who gets fed? Do the very wealthy, who have stripped the planet and consumed everything already, get special treatment because they have money? And, exactly what money will anyone who is actually able to grow food in excess of her needs accept?
Will 5.3 Billion plus people just go off and die? Or will they actually get mad and try to take food from those who have conserved it, or grown it?
What will the ultimate function of government be in those times? Protecting the wealthy? Enforcing rationing? Shooting the looters?
Who will keep the means of transportation in good repair [or any repair]? How will the do that? If we are in a barter economy, who sets values for trade? Will there be any government above local?
Since there are not many [yet] who buy in to PO and its consequences, do we have some noblesse oblige to prepare the way? How about after TSHTF? Are we doing this to make ourselves feel better, or so we can say, "I told you so"? Or, is there some real purpose in TOD and ASPO?
Are there any action groups set up? If so, where? IMO we can help each other, and we can assist others by informing them at least [though, God knows, they do not listen, do they?]. What else is our duty to our fellow men? What will we need from them that, if we have done nothing with our supposedly superior knowledge, we can in good faith ask from them?
I enjoy reading TOD, and so many people here are so well informed. I have already learned so much, and there is so much left to learn. And, yet, I am frustrated that so little seems to be in progress, other than these endless discussions.
Sorry to take up so much space and time. Hope someone will add to this with suggestions and answers. Thanks, all.
** As I read through this, it occurs that there is an EROIE problem with the packaging and production of food stuffs. That is, the energy cost must be factored in to value delivered. In fact, food itself is an energy store, with its own EROIE. Fossil fuels make distorted populations possible by providing energy that will not be around after PO/PG/PC. Then we will be forced to stabilize at the greatest natural level of energy delivered. If we are still around then, that is.
I would suggest reading the last several TOD:Campfire post. Many of your questions and concerns have been discussed there.
Start Here
http://peakoil.com/planning/
and learn from this thread
http://peakoil.com/planning/today-i-made-bought-learnt-for-a-post-oil-wo...
The longer a writing the lesser information it will have.
It's confusing and just to long to get the message for most people.
I stopped reading everything some time ago and the only one who is really making some sense to me at tod is also the one with the longest writings, amazing how many words he can use to relay his message.
Most people don't take time anymore to think about wat is said or typed. Maybe that's because of the hurry mode we have put ourselves in or maybe the newsindustry that brings always two versions. "it gives them something to talk about" and the discussions that should follow are muted. Yet everybody get confused. And I don't even think that's intential, it's just something we do and that's it. What's wrong with earning a buck. It depends on what we want.
Depressing ourselfs or doing the right thing.
If we just kick out money for the time being and everybody keeps on doing what he did, nothing has changed. Only horten is verboten. Everybody gets the same rights and nobody is left behind. Some software boys can write some programs to make it work with bankcards.
How long can our savings last, the money thing won't work anymore because it's based on more energy. What we need is a system based on less energy. A positive side effect will be that fraud will be impossible.
In the mean time we can think about what our sociëty should look like without the money thing.
tralala..lala...
Children anyone ?
Something I wrote sometime back;
"Sorry, but I like this one.
Staring down from the moon:
Seeing this little blue planet, ruled by some sort of stupid overlord monkeys, I really wonder why all the others are letting it happen. Can't they see that things are going down south really,really fast. Maybe they think " I can keep on doing this, others will stop first, for ever and ever".
From up here it looks like the human build planet heater is getting so hungry now that the CB's are seeing no other choice than to stop the first wave of servants from using to much fossils.
They really hope that this is gone free up enough energy to find more for the beast, and hopefully some extra for the moneypedal to build an even bigger beast. Ahh tankgootnezs they have found tupi. Everybody is saved!
But I haven,t figured out all those 3 winged blowers popping up all over the place, maybe some sort of global cooling device? They surely must know that when the planet heater stops things wil cool down pretty pretty fast. But than again this species can only build bigger and "smarter" fires. Hmm keeps me puzzled."
"Central banks and oil.
If you think that money and energy have no connection please stop reading.
Central banks (CB) must call their puppies* home when there isn't enough energy. Otherwise energy shortages start occuring.
We can't have that can we?
If CB's give huge amounts of puppies to banks, and the banks sends them back. Nothing has changed, it's just smoke and mirrors.
And yet they keep amazed the recovery hasn't occured.
Where on earth will the next wave of energy come from so that CB's can start showering us again with puppies.
Under normal circumstances this shouldn't be a problem. But logic dictates that burning our fossils at this rate makes any (unavoidable?) transition much harder and the downturn much deeper than necessary.
We can't have that can we?
Why not using our remainings for the best possible use?
We don't have to stop burning fossil fuels for a long time if we just bring down our baseload to acceptable levels.
This frees up so much energy that our CB's can start directing money towards the remodelling of our supply lines and all the necessities local community's need. So they can keep doing what they always did: feeding the more densly populated area's. We can also start shouting the recovery is here we fixed it. yeah.
Kicking people out of their houses and depressing a majority of people just doesn't free up enough energy to restart the economy. And it's just the wrong thing to do.
Are we waiting for a miracle or something else.
Sitting on the moon and watching this, just makes me scratch my head. Do they really think that some fossils makes them omnipotent.
*= fill in your own local currencie."
Oeps this writing is very long. I'm sure nobody will get it. lol
Maybe I should add in some numbers hmm what comes after quadrillion lets think hmm keeps me puzzeld.
Agreed. Brevity is best, at least in the comments of a blog. If you have that much to say, you should probably start your own blog.
Do you one keep talking until nothing is left to save?
If you are posting while intoxicated - please don't.
LOL! Good advice,Leanan. I am sure you remember OilCEO from a few years back: just brilliant when sober, but just god-awful and/or extremely funny when he posted Toasted!
More interesting and less harmful is a stream of conciousness when drunk than talking one's scribbler while, I assume, sober.
In case you missed it ...
The Warning,
veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
She was quite the lady. Standing her ground against impossible odds.
The whole thing reminds me of our climate warnings (or PO warnings). TPTB have been seduced by some simpleminded ideology, which says that the problem can't exist. And they shout her down with: "get the hell out of the way of BAU"!