Drumbeat: October 28, 2009

The Peak Oil Crisis: $80 a Barrel

The international forecasting agencies are already talking of a jump in demand for oil next year which will put worldwide consumption back in the vicinity of where in was in 2008. Given that the world has only 2 or 3 million (or if you are optimistic 4 or 6 million) barrels a day (b/d) of spare oil production capacity and that it is taking all the industry can do to keep up with the roughly 4 million b/d that depletion is taking away each year, we will see tight oil supplies on of these days.

If this scenario plays out there will be much higher oil prices. We can't have it both ways. It will either be a really deep global recession and cheap gas or some sort of start at recovery and spiking oil prices. Discussions have already started as to what level of oil prices causes serious damage. In the past an inflation adjusted $80 a barrel was a favored recession inducing number as this was the price that seemed to cause recessions back in the 1970s and 80s when Middle Eastern wars and embargos restricted supplies.

Byron King: The REAL Flying Saucer Hoax

In a macro sense, it means that the global energy industry is pulling what’s left of the conventional oil out of the early-discovered fields and taking the gas too. When it comes to Peak Oil, we’re there, and in fact, we’re past it.

The future of conventional petroleum output is downhill, even with the future output from the deep-water offshore discoveries. That deep-water oil will sure help, but it won’t power the world of the future the way it powered the world of the past. We live in a different world now.

Grand Arctic promises

The decisions are not in fact made by international bodies, since the body in question -- the UN Commission on the Limits of the Continental Shelf -- will not make recommendations concerning areas subject to overlapping claims. All the Commission does is assess the scientific evidence advanced in support of uncontested claims, with any coastal country being entitled to sovereign rights over any "natural prolongation" of its continental shelf. Overlapping claims need to be resolved by negotiation, now, before the stakes are raised by more melting ice and peak oil. Unfortunately, the Canadian government has failed miserably on the diplomatic front, making false accusations of law-breaking against Russia with respect to a flag-plant at the North Pole (which is located on the "high seas") and bomber flights (which stayed well within international airspace). With President Barack Obama "pushing the reset button" on U.S.-Russian relations, it's time for Canada to get with the program. It's time for us to actively seek and support international cooperation across the circumpolar North.

Kurd leader demands control of oil-rich Kirkuk

BAGHDAD (AP) -- The president of Iraq's Kurdish region demanded Wednesday that oil-rich Kirkuk be incorporated into his autonomous area, as parliament prepared for a showdown on the contentious issue of which of the northern city's residents can vote in upcoming elections.

Massoud Barzani's comments ratcheted up the pressure on the eve of a vote on the electoral law that will lay the groundwork for January's key parliamentary ballot. Lawmakers are split over amendments on which voting list will be used in Kirkuk - one favoring Kurds or one favoring Arabs.

Conoco to cut refinery rates due to margins

NEW YORK (Reuters) - ConocoPhillips said on Wednesday it has no plans to shutter any refineries at this time but will slash refinery utilization rates this quarter due to weak profit margins.

Fourth-quarter refinery utilization rates are seen in the upper 70-percent range, down from about 90 percent in the third quarter, the oil major's top executives told analysts in a conference call to discuss quarterly earnings.

ConocoPhillips to keep Lukoil slice

ConocoPhillips’ boss said today the company's announced $10 billion restructuring plan doesn't include the sale of its 20% stake in Russian producer Lukoil.

"We will maintain our strategic relationship with Lukoil," ConocoPhillips head Jim Mulva said in an earnings conference call.

Chesapeake will not drill for gas in NY watershed

NEW YORK (Reuters) - Chesapeake Energy (CHK.N) has decided not to drill for natural gas in the New York watershed, following pressure from environmentalists who say drilling could contaminate water supplies to the New York City area.

The U.S. natural gas producer said on Wednesday that it will not develop its leases in shale gas plays in upstate New York ahead of hearings on state rules on the drilling Wednesday.

"[Chesapeake] has no intention of drilling natural gas wells within the New York City watershed," the company said in a statement.

Why we don’t do much about climate change

A fascinating paper from the World Bank looks at the question of how people understand climate change and change their behaviour accordingly - or more often, don’t.

Climate change, the paper argues, is an anthropogenic problem, so the solutions need to be anthropogenic too. Instead, current talk of solutions focuses almost exclusively on economics and on technical solutions - but rarely on individual behaviour. And individual decisions, such as travel, heating, and food purchases, result in about 40 per cent of OECD greenhouse gas emissions.

Russian LNG Aims Face Big Challenges in Arctic Regions

Russia, the world's biggest gas producer, has invited international energy majors to help it realize its ambitions to conquer one-fifth of the global market for liquified natural gas by 2020, but experts say it could be more than a decade before new production comes onstream.

Russia says it wants to beef up shipments of liquified natural gas, or LNG, to Asian and U.S. markets at the expense of pipeline deliveries to Europe, which are threatened by questions over demand and ongoing transit issues with neighboring Ukraine.

Gazprom eyes gas deals revamp

Russian gas giant Gazprom hinted today that it could adjust its long-term deals with European customers to avoid imposing huge fines on them for reduced gas purchases.

The comments came as industry analysts claim Gazprom is having a tough dialogue with its customers in Europe under which they must buy a minimum amount of gas or pay fines, a clause known as take-or-pay under long-term contracts.

EIA sees boost in US gas cache

The head of the Energy Information Administration (EIA) told Congress today that the agency will report later this week that US proved natural gas reserves increased from 2007 to 2008 by 3%.

That is slower growth than the 13% increase in proved gas reserves seen the year before, the EIA's Richard Newell told the Senate Energy Committee at a hearing on natural gas.

Iran, Venezuela to launch joint oil company: report

TEHRAN (Xinhua) -- Iran and Venezuela will launch a joint oil company with its headquarters based in Spain, the semi-official Fars news agency reported on Wednesday.

"Iran and Venezuela are establishing an oil company named Beniroug which allows us to make investments and activities in other countries, including Cuba, Sudan, China and Bolivia," First Secretary for Energy Affairs of Venezuela's Tehran Embassy, Louis Mayta, was quoted as saying.

Analysis: Pickup in U.S. Jackup Market Not Yet in the Numbers

After hints at a pickup in domestic jackup demand were dropped on several offshore driller conference calls held last week, it is worth taking a closer look at drilling permit applications and drilling plan requests as these datapoints have historically had a high level of correlation to contracting activity in the U.S. Gulf of Mexico (GOM) jackup market.

Conoco profit falls 71 percent, but tops Street

HOUSTON, (Reuters) - ConocoPhillips reported a 71 percent decline in third-quarter profit on Wednesday as weak demand for fuel hurt its refining business and oil prices fell from a year earlier, but the results exceeded Wall Street estimates.

The global recession has taken a serious toll on demand for both natural gas and crude oil. And fuel inventories like diesel remain high, hurting refining margins.

Clinton unveils energy aid

ISLAMABAD - VISITING US Secretary of State Hillary Clinton used her visit to Pakistan on Wednesday to unveil a US$125 million (S$175.1 million) programme to improve the country's inadequate electricity supply.

'The funding will be aimed at repairing generation facilities, improving the overall effectiveness of local utilities providers, replacing inefficient tube well pumps and promoting energy efficiency,' she told a news conference.

The Philippines: Oil companies begin rationing

EXPECTING a demand spike because of a government-imposed freeze on pump prices, Shell, Chevron and Total yesterday said they would start rationing fuel to their gas stations based on their average volume of sales.

At the same time, the company announced it would not sell gasoline to large volume buyers at its stations, unless they are regular customers.

Pickens: OSU town hall will be among his last

OKLAHOMA CITY — Billionaire energy magnate T. Boone Pickens says a town-hall meeting planned for his alma mater to promote his "Pickens Plan" for energy independence will be his next-to-last in a university setting.

The Oklahoma State University graduate has scheduled the meeting for Thursday at Gallagher-Iba Arena in Stillwater and says he's hopeful to fill the arena, which seats about 13,600.

Midwest farmer speaks on rural crisis, financial collapse

"A mega-farmer is a farmer who wants to be just like the big banks, big enough that he can't fail. But high-risk farming by mega-farmers is becoming a reality. Mega-farm operators are pushing family farmers off the land they have farmed for decades. Mega-farmers can do this because they farm in an unsustainable manner. They work on narrow margins of profit. The risk is so great that these mega-farmers know they can't do the right thing and make a profit, so they don't even put back the nutrients into the soil that the crop takes out."

"Therefore they are stealing from one of our greatest natural resources: the soil. The impact is felt severely. What's left is poorly maintained fields, agricultural runoff, and diminishing productivity at a time when the world's population continues to grow and we have to feed the people all over the world. Large-scale mega-farm operators are bypassing local agricultural suppliers and costing local communities billions of dollars in economic activity every year."

Food, Fossil Fuels, and Climate Change

There is a solution to these intersecting problems of climate change, food and energy security, and ocean health. Our current food system relies largely upon heavily mechanized farms, growing food in monocultures, using artificial fertilizers and pesticides synthesized from fossil fuels, transporting food long distances, and lacking effective means of recycling farm wastes. Collectively, these characteristics of industrial agriculture contribute to intensive greenhouse gas emissions, uncontrolled pollution, and inefficient fossil fuel consumption. In contrast, we can alleviate all of these symptoms of our food system by switching focus and support to small, local organic farms where the labor is largely provided by humans and animals, products are marketed to nearby communities, the plants and animals are raised in diverse polycultures that deter pests and prevent diseases, the animals feed the soil with their composted wastes, the soil feeds the plants, and the plants in turn feed the animals in a tight recycling of wastes and nutrients.

Energy secretary: Science demands action on climate

WASHINGTON -- Energy Secretary Steven Chu on Tuesday laid out the scientific risks of inaction on global warming and went straight to his main point — the climate and energy bill starting its way through the Senate could help drive what he called "energy opportunity."

U.S. Must Lead Way in Clean Energy Technology, Agency Heads Say

Backers of a sweeping energy and environmental bill are hoping to inject new momentum into a stalled effort to cap carbon emissions, with a major push timed around extensive hearings this week on Capitol Hill.

Byron King: Peak Oil – The Risks

A couple weeks ago, I attended the 2009 international conference of the Association for the Study of Peak Oil and Gas (ASPO), out in Denver. Here’s the long and short of it. We’re in trouble. With a capital “T,” and that rhymes with “P,” and that stands for Peak Oil. By every measure, the world’s output of crude oil peaked between 2005 and 2007.

Yes, the worldwide total output of what we generically call “oil” has risen – slightly – in recent years. But that’s because there are increasing volumes of natural gas liquids (NGLs) in the mix, plus unconventional oil like what the global marketplace obtains from Canada’s oil sands. But the production of oil – actual oil – has peaked already. The future of conventional petroleum output is downhill, even with the future output from the deep-water offshore discoveries.

Have We Reached Peak Oil?

The Energy Information Administration [“EIA”] is the “statistical agency of the U.S. Department of Energy and as such is the Nation’s premier source of unbiased energy data, analysis and forecasting”[1]. As mentioned in its webpage, it aims to “provide policy-neutral data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy and its interaction with the economy and the environment”.

In fact, should there be an imminent decline in global oil production, as feared by a growing number of energy experts, the EIA is the one responsible for warning the U.S. government about it.

Oil in ‘Uptrend’ as Prices Remain Above $70: Technical Analysis

(Bloomberg) -- Crude oil remains in an uptrend even if the market unwinds gains made this month and falls back toward $70 a barrel, according to an analysis of price charts by National Australia Bank Ltd.

BP’s Hayward Revives Explorer by Cutting Costs, Boosting Output

(Bloomberg) -- More than two years after taking over at BP Plc, Chief Executive Officer Tony Hayward is turning around Europe’s second-biggest oil company and beating its own cost-savings target by $1 billion.

BP May Cut 600 Jobs in Germany, Westdeutsche Allgemeine Says

(Bloomberg) -- BP Plc, Europe’s second-largest oil company, may cut 600 jobs in Germany, Westdeutsche Allgemeine Zeitung reported, citing the head of BP’s German unit.

PetroChina’s Third-Quarter Profit Falls 24%, Misses Estimates

(Bloomberg) -- PetroChina Co., the world’s second most valuable company, posted a 24 percent drop in third-quarter profit after oil prices fell from record levels a year earlier.

The oilman who went back to nuts and bolts

When Tony Hayward moved into the executive suite at BP’s London headquarters in May 2007, one of the first things he did was to order changes in the boardroom. This was not a shake-up in the traditional sense but a rearrangement of the pictures hanging in the room overlooking St James’s Square.

The abstract paintings favoured by his predecessor Lord Browne were quietly replaced with rather more prosaic photographs of BP oil rigs, refineries and tankers.

It was a simple touch but a sign of Mr Hayward’s determination that BP should focus on the nuts and bolts. To judge by yesterday’s third-quarter figures, that focus is now paying off handsomely.

Sinopec Had Refining Loss in October on Crude Costs

(Bloomberg) -- China Petroleum & Chemical Corp., Asia’s biggest refiner, incurred processing losses this month because increases in domestic fuel prices haven’t been proportionate to gains in crude costs, a company official said.

“The international crude oil price has risen by a relatively big margin recently but the government didn’t raise fuel prices in line with the gains,” Zhang Jianhua, a vice president at the company known as Sinopec, told reporters in Beijing today.

Nexen profit plummets 86%

Nexen Inc. says its profit in the third quarter fell to $122-million, down 86 per cent from the same time last year.

The Calgary-based oil and gas company's profit amounted to 23 cents per share for the three months ended Sept. 30.

Prudent overspending: Saudi state spending and signs of recovery

Saudi Arabia has embarked on an ambitious public spending scheme but we believe it is manageable, should create few stresses on the fiscal situation of the kingdom and is unlikely to stoke inflation on its own. The country is pursuing prudent overspending, despite the obvious oxymoron. As private investments contract and private consumption falls, the state is compelled to boost spending until private investment and consumption pick up in 2010.

With Saudi Arabia's oil revenues continuing to surpass our initial forecasts and those of the government, state coffers are being replenished quickly enough to ease any budgetary stresses that might have occurred during a prolonged period of depressed oil prices.

Bahrain and Aramco in talks to build pipeline

MANAMA: Bahrain is now in talks with oil giant Saudi Aramco over plans to move ahead with constructing a new pipeline between the two countries.

No requiem for this pipeline

The Post’s John Ivison and Carrie Tait reported yesterday that Ottawa, according to sources, had killed the Mackenzie Valley gas pipeline by withdrawing the promise of subsidies. If so, this is welcome news for Canadian taxpayers.

Spill response 'world class', oil company says

Operators attempting to stop the massive oil spill on the West Triton oil rig say the clean-up efforts so far have been "world class".

This is despite four failed attempts to plug the gap, more delays and criticism from Australia’s peak oil and gas body.

Obama’s Power-Grid Grants May Revive Industry in ‘Paralysis’

(Bloomberg) -- Companies that make smart meters, thermostats and other elements of an electric transmission system gained in New York trading yesterday as the U.S. announced an $8 billion upgrade to the nation’s grid.

Echelon Corp. of San Jose, California, rose 4.5 percent, St. Louis-based ESCO Technologies Inc., gained 3.5 percent and Liberty Lake, Washington’s Itron Inc. climbed 3.2 percent after President Barack Obama announced the U.S. was giving out $3.4 billion.

Giant Centrica deal gives hope to future funding of green energy

Centrica today pulled off the world's biggest wind-power refinancing deal in a joint venture between private equity and banks that is set to become a model for the industry.

The £460-million package enabled the owner of British Gas to announce a £725-million investment in an offshore wind farm at Lincs, off the coast of Skegness and next to its existing wind plants, that it will start building next year.

What the Solar Industry Wants in a Climate Change Bill

ANAHEIM, Calif. -- The national mandate to use solar electricity combined with policies to support new electric grid transmission projects and a "green bank" to finance renewable energy projects are on the wish list of the solar industry for the climate change legislation, said Rhone Resch, executive director of the Solar Energy Industries Association.

Halloween event with a difference

A HALLOWEEN event with a difference has been planned for on Saturday (October 31) at the Fold Eco cafe, Bransford.

Transition Malvern Hills, which campaigns to raise awareness of the twin issues of peak oil and climate change, has arranged a Halloween Ceilidh with local band Loose Canons.

Organiser William Coleman said: “The point of the Transition movement is to get organised to make an orderly transition from dependence on fossil fuels, to a post oil economy.

The Carbon Economy

This November, The Economist will convene a diverse group of senior representatives from business, government, academia and international organizations to explore the global policies necessary to secure the world’s energy future. Timed with the publication of a special report in The Economist, The Carbon Economy summit will examine how the political environment has changed since Kyoto and how committed regions and industries are to a sustainable carbon strategy.

The time is now - for government, business and civil society to decide how to combat climate change and secure our energy future. In December 2009 a new framework to replace the Kyoto Protocol will be discussed in Copenhagen. Although challenges remain, opportunities abound as new green markets are being created. Over a day and a half, speakers and participants at The Carbon Economy will exchange ideas on how governments and the business community will ultimately find innovative solutions to conquer global warming while sustaining economic growth.

The Global Climate Movement Comes of Age

Climate activists have been waiting two long decades to see what a global climate movement would look like. As of last Saturday, we know. And as movement mentor and 350.org co-founder Bill McKibben wrote in an email after watching photos of grassroots actions around the world projecting from the giant, iconic screens of Times Square, “it looked diverse and creative and beautiful.”

Diverse? There were events on every continent and in all but 14 of the world’s countries—from Americans at home to soldiers serving in Afghanistan; from England to Lebanon; from dirt-poor Tanzania to fast-developing India to oil-rich Abu Dhabi. Creative? How about Malaysian scuba divers removing invasive starfish from a local reef. Or 350 synchronized swimmers diving into a public bath in Hungary? Or taking the Saturday college football spotlight and forming a giant 350 at midfield during halftime of the Syracuse game.

Envoy: No China-US climate pact from Obama visit

SHANGHAI – President Barack Obama's visit to China next month is not likely to yield a separate accord on countering global warming, though both countries are pushing for progress for upcoming global talks in Copenhagen, the top U.S. envoy on climate change said Wednesday.

"I don't think we're going to get an agreement per se," said Todd Stern, the U.S. special envoy for climate change. However, he said Obama will work with Chinese President Hu Jintao toward facilitating an agreement at the international meeting.

Florida still developing coasts as sea level rises, study says

As early as the 1980s, scientists warned that rising seas could submerge vast portions of Florida's coast.

How have local and state governments responded? Build, baby, build.

Economics of climate change in forefront

For a decade or more, the political battle over climate change has been fought largely over the validity of the science of global warming. But Tuesday, as the Environment and Public Works Committee opened its first hearing on a Senate climate change bill, those concerns took a rear seat to a different issue: the potential economic impact of climate change.

Idea for a Campfire post - a review of “Emergency: this book will save your life” by Neil Strauss.

This is NOT another of those textbook scenario response type books. This is a book about a guy who becomes aware of the potential big problems out there and sets out to be prepared 'just in case'. But of course, the more you look the more you find and he soon has everything from terrorism to economic collapse to earthquakes on his To Do list. It follows his journey from unaware to concerned to doomer to something more (I don't know how to write a review without giving away the story). Here's an excerpt from the website:

EMERGENCY traces Strauss’s white-knuckled journey through today’s heart of darkness as he traverses a panic-stricken America that’s lost its sense of safety and attempts to escape the system.

Along the way, he learns to shoot a man and get away with it, hide his assets from the government, survive in the wild with nothing but a knife, track animals, trap humans, deliver a baby, fly a plane, pick locks, hotwire cars, evade bounty hunters, suture bullet wounds, and escape with a second passport to a small island republic.

It's a tale of paranoid fantasies and crippling doubts, of shady expatriates and dangerous cult leaders, of billionaire gun nuts and survivalist superheroes, of weirdos, heroes, and ordinary citizens going off the grid.

It's one man's story of a dangerous world—and how to stay alive in it.

This is a new book and the people I know who have read it already greatly enjoyed it. This book is often pretty funny, in a strange way. Here is the link to the book's website:
http://www.neilstrauss.com/emergency/ and a short video of Strauss telling about his experience learning all the things he did to create the book: http://www.youtube.com/watch?v=FyjHj34CCFc

Anybody else read it yet?

Thanks! Interesting stuff. We will discuss.

Patch to SF-Oakland Bay Bridge snaps, bridge closed
More BART trains scheduled


Unfortunately, the BART system under the SF Bay is reasonably close to capacity. IMO, it would make sense to build the replacement tunnels now, expand the BART fleet of cars and increase capacity by Urban Rail.

Also, "modest" extensions of BART to the south Bay would allow a short, shallow water (on pilings) bridge to provide a second cross-Bay connection. (I am thinking of where my memory says a railroad bridge is today. Due to differences in gauge, BART would likely need a new bridge).

Best Hopes for Better Alternatives,


More and more and more, I 'spect. Leanan's catabolic collapse in action.

Once upon a time I lived in Concord, worked in The City, and rode BART daily. It was packed even back in the 70s.

Maybe adding BART tunnels is a good idea. I know the bridges seem to have problems. This skirts the real problem. People live 30 miles from work! The solution: move to where you work. If no one can work in San Francisco because there is no transit, and housing is too expensive for folks to live there, The City will die, and will deserve it.

Eventually, with the Peak past, we will either move the people to their work or their work to the people. There will be no other way.

Of course, most work today is making toys out of plastic. For adults they are expensive toys. Still, though, we will have to get back to clothing, housing, energy and food. With fewer toys to manufacture [since there will be no plastics, or what there is will be so high priced and needed for the energy sectors], there will be less work. People will be home more... shorter work weeks... lower pay, but with no toys or cars we won't need so much.

Hm... maybe the grim future will be not so bad? At least after the die off. It may be TEOTWAWKI, but the new world we learn about could be more than barely survivable. Maybe. At lest this is not total doom and gloom...

Eventually, with the Peak past, we will either move the people to their work or their work to the people. There will be no other way.

I disagree and would use Boston's commuter rail system as an example.

Stylized schematic


As in, say, 1950, a town of, say, 2,500 to 8,000 in semi-rural Massachusetts. Small manufacturing plant or two in town (supplies and products shipped by rail), walkable & bikeable community, milk, eggs, apples, pears and summer vegetables from surrounding farms (soil not the best in MA).

Workers in local plant and support workers (teachers, two dentists, GP doctors, police, etc.) walk or bike to work every day (or golf cart type EV on really bad days, those with bad knees, etc.). Others take train to work in Boston and bring back $$. Special needs (specialist doctor, see Red Sox play, attend regional conferences, etc.) are also meet by travel to Boston or transfer to Amtrak.

Run rail on renewable electricity (Quebec hydro + local wind) and perhaps nukes and I can see such a system working for a very long time.

I also think such a lifestyle would lead to a higher quality of life.

Best Hopes,


I guess the big question is whether Boston would still work. Maybe the US is okay for food, but IMO sustainable farming, using composting [including composting toilets, generating fertilizer and friable additives from organic waste], very little mechanical assist, reclaimed water and small acerage plots will be what keeps us alive. I really think food and water are a bigger constraint to survival in the mid to long term than middle distance transportation. Walking and electric powered mass transit will be a given. Again, your small EVs, especially for us old folks whose knees have given way, are okay. Plastics from fossil fuels will have to be rationed to energy sector needs. Sort of an oil and gas triage as it were.

Still, I agree the quality of life could be fine... it is just getting past the initial die off phase as the economy tanks, and people are trapped within the inner cities and begin to starve due to either no food, or lack of transportation of food into their supermarkets. Things could be dicey for a while there, don't you think? Even in your small Massachusetts village.

Having twice been cheerful, I feel constrained to add the following:


Have a fine day, all.

the concept of an 'initial die off phase' to me is based on a faulty assumption. though our government is not omnipotent, i think it is more prepared and more informed than many think. we've established strategic relationships, fought wars, etc. all in the recognition that oil is the world's most precious commodity. every president in the past hundred years has been intimately involved with oil policy and oil diplomacy.

we've got a strategic petroleum reserve, and who knows, every military base in the country might be on top of a major field. if prices jump, and there was a threat that shipments of food and staples (like medicines) would stop flowing to major cities nationwide, the government could act to moderate prices to ensure those shipments get made.

could this subsidization last forever? no. but i think the government can create breathing room for social and economic adaptation to take place. they could regulate the price of a gallon of gas at, say, $6.50, spurring behavioral change without letting all industry and transport collapse.

i am not saying bau will continue as oil prices rise, but i certainly don't expect the government to crumble. those that expect that obama or any future american president will be taken by surprise by oil prices rising i think supremely underestimates how informed our leaders are.

(yes, we relied on greenspan, and he was surprised by the derivatives crisis, but oil has been around a lot longer and is a much more simple issue - supply vs. demand.)

Bert,I basically agree-I can't see any reason for oil production to fall off so fast that we can't ration fuel and petroluem products for quite a while-barring war or a sudden drastic collapse of the economy.In the latter caes I think emergency laws-martial law if necessary- will keep the industrial ag system functioning well enough to prevent starvation or severe malnutrition, although life might get a little monotonous at meal time.

As a matter of fact this is the most likely outcome imo if oil depletes as fast as the worst pessimists think it will.

At that time we can and will get seriously into local farming and localized everything again-I see a couple of very tough decades but not a dieoff here in the states, nor in any major western country-the rest of the world is a different matter altogether.

The amount of resources that are expended daily in this country to no net good effect staggers the imagination.

If somebody who owns his own home gives up a car for public transportation, that will leave him with thousands of dollars a year available to pay for a pv system or a ground water heat pump and triple glazed windows.

It's not like the man on the street is incapable of changing his ways once he percieves the necessity of doing so.

If we just quit building new highways,sports stadiums,and govt office complexes-not to mention post offices, jails and courts to incarcerate pot smokers,and back off few billion here and there on the banksters welfare checks,we can pull thru ok.

And we will-simply because we will have no choice.

One way of looking at our problems is to count off the number of people who churn money and paper but provide no productive services-there are tens of thousands of parasites whichever direction you look-in a bankers economy they earn a profit but they produce nothing-grant writers,advertising agencies,professional athletes-we could have just as much fun watching thirty thousand dollar athletes as we could three million dollar athletes.We could get just as tipsy on locally brewed unadvertised beer as we could on any national brand-and probably enjoy it more as it would almost certainly taste better.

Who thinks a grant writer adds any thing useful to the economy?

life might get a little monotonous at meal time.

Not likely a problem in New Orleans :-)

Best Hopes for Local Cuisine based on local ingredients,


So true Alan. Nothing like a big pot of red beans with a nice chunk of salt pork in it on a cold winter day, eh? Pass the Crystal hot sauce please.

Hi Mac,

One thing people don't understand about the 'Niewe America' is how f--king hard everyone is going to have to work in order to survive. There will be no more 'lifestyle' as such.

People don't really 'get' what re- industrialization means. The first few factories making shoes and clothes for Americans in America will be swamped with orders; the hours will be long - 10/12 hours a day, six or seven days a week for a pittance. Nobody who buys the shoes/clothes will have much of whatever is called money. Consequently, there will be little to distribute to labor out of returns.

What is done today with machines making machines will be done by people with machines. Pay will be low and conditions very hard. People will train/walk to work then sleep in corridors to start work the next morning. This happened during the depression. People I knew in New York City had parents that would walk from the Bronx to factories in lower Manhattan to work and return home on weekends.

There will probably be no more retirements/pensions/social security or medicare. Doctors will require cash. People will work until they die, like they did in the good ol' days. When the oldsters can't work or entertain any longer, they will be locked up in the upstairs bedroom and left alone until starvation does its work. 'Nursing home' is an obsolete business.

America has become the laziest country in history; the consquence of cheap oil and cars and teevees and bad food and no exercise. The return to the world of labor is going to be mind- boggling to most people in this country. They literally have no idea.

As for the timing; listen to Jeffrey Brown's (westexas) remarks on Jim Puplava's Financial Sense Newshour for October 24.


Also, please see the related comment down below.

hi Steve,

Agreed.I was the first in my family to make it out of the hills-the older folks in my family worked like dogs, as did everybody else around here.

I don't know if things will be as bad as you picture them on the average-but then I don't know that they won't be worse, either.I'm sure that they will be far worse than the typical citizenm can imagine.I can't see the average man or woman who has never worked anywhere other than in an office making a go of a tough physical life-the good looking young women may have to lower thier standards and date redneck farm boys if they want to latch onto a meal ticket!

If things get bad enough I see some sort of revolution-and the conditions resulting from revolutions are generally worse than the conditions that provoked the revolution to begin as I read history.

I come from Bulgaria, you know from the Kunstler book "America has railway system that the Bulgarians would be ashamed of" ;). I currently work in the information technology field, but my grandfather lives in a remote rural village - he has nothing to do with the current consumerist society, almost all of the food he uses he produces it himself. Belive me he is much more happy with it. I am already sick of living in a big city, in cities at all, everything is so artificial. Currently almost nobody already lives in the rural villages, only few gypsis and old men. I think that sooner or later people will return to thhe villages, unfortunately it will not be so easy for them. I think USA could follow the Bulgaria way after the fall of the communism - anarchy and widespread corruption and gangs ruling the day, who knows. But I fear this is the greatest threat for the future, and this will prevent the gradual downscale.

People don't really 'get' what re- industrialization means. The first few factories making shoes and clothes for Americans in America will be swamped with orders; the hours will be long - 10/12 hours a day, six or seven days a week for a pittance. Nobody who buys the shoes/clothes will have much of whatever is called money. Consequently, there will be little to distribute to labor out of returns.

I don't think they'll be swamped with orders.

In the '30s, the average man had six outfits, the average woman, nine. Even the poor have a lot more than that these days. Most of us probably couldn't even count the number of outfits we have. Most clothing that is donated to charity is shredded for use paper products, etc., because even the poor don't need it.

The average American has so many clothes they probably never need to buy any more. They may wish they had newer, nicer, more fashionable clothes, but if they have no money, they'll make do with what they have. They'll get their clothes tailored to fit, if need be. They'll freshen clothing by dying it, sewing on new trim, or accessorizing it. They'll repair things when they used to throw them out. They'll sew their own clothes, like my mom did. They'll swap clothing, and wear hand-me-downs.

Agree that the work may be hard, but the hours may not be long. If there isn't enough work to go around, we may go for a shortened work week, to spread what work there is around. (Congress actually passed a 30-hour work week during the Depression, though FDR vetoed it.) Especially if the globalization collapses. Globalization gutted the labor movement; its end may see the return of the union.

I do not think you realize the beating that shoes get when you walk quite a bit.

I admit to a preference to high end Made in USA shoes (Johnston & Murphy, Allen Edmonds, Cole Haan) and I may be rougher on them than most (and I like shoes in good repair). Yet in 2008, I spent $179 on fuel for my old Mercedes and $159 with my cobbler for shoe repairs.

Cobbling and making shoe supplies will be a booming business post-Peak Oil IMHO. And new shoes (good walking shoes) will be in demand ! Same for bicycling.

Best Hopes for Walking & Bicycling,


BTW, hard manual labor is tough on clothes and shoes. Look at Dickies and Red Wing boots.



Oh, I realize it. I lived for years without owning a car...in a small town that had little or no public transportation.

However, today's shoes hold up pretty well. A couple of decades ago, the soles would wear out. Now they're made so tough that the sides will often wear out before the soles. You may not have much traction, but it takes a long time to get holes like you used to with older shoes.

I also wonder if people will do much walking. I think it's more likely that people will simply travel less. Perhaps, as the Boston Globe predicted, the new Depression will be marked by the "flickering glow of millions of televisions glimpsed through living room windows, as the nation's unemployed sit at home filling their days with the cheapest form of distraction available."

You must be finding better shoes than me. Even my good boots need to be re-soled every 2 seasons. Running shoes never last more than a year, usually much less. And I only walk a couple of miles a day. I do have a pair of good hiking boots that I expect to last a long time, but shoes (and jeans) are very much on my mind as things that I should stockpile a lot of spares for while they're cheap.

Okay. I tried to respond once, and will do it again. Maybe my computer will allow it this time.

Bert, the die off I speak of comes from going past peak food. Peak oil first, then peak food, then peak population.

Malthus was right, in a way. The earth can not support a limitless population of any species, even homo sapiens. I have heard anywhere from .8 to 1.5 Billion sustainable, and we now have about 6.5 Billion. I use 1.25 B as my number just because I have to figure something. That means, when we begin to run out of oil, we have to begin reducing population. When we are out, we need to be at 1.25 Billion. 5.25 B are not going to be very happy, are they? I think it could be dicey, though we in America have sufficient areable land to do better than some places.

The government can mediate all they want, but no matter what the price, or how mediated it is, if there is not enough food for everyone, someone goes hungry.

Now, maybe you are right and we have enough time to deal with this situation. I hope so. And, again, I am relatively optimistic about America... except that there are places where it be bad. Inner cities come to mind. Suburbanites may have enough yard space to supplement and survive - maybe - if they know how to do it.

It sounds to me like your army will have things well in hand. My advise to you is, enlist!

I personally am making preparations. I just don't know if there will be enough time to complete them. lago Energy thinks by 2013 we will be in deep doo doo. The crash will start before then.

Maybe that 2012 date is prophetic after all?

i'm with you all. grant writers are new-age messenger-lackeys. food in nawlins will still be great. after petrol machines become expensive to operate, we'll have to do a lot more work with our hands (but most every able bodied person will be employed eventually - for themselves or for the local baron). and villages in bulgaria seem pretty alright.

zap, i agree with you. in the long-run, we are overpopulated. but in the short run, there is a beauty to capitalism - for better or worse, it adapts to market forces faster and more nimbly than other systems of exchange. while that adaption takes some time... as food prices shoot up, someone puts more seeds in the ground. if gangs roam and poach crops, someone puts up a fence, hires security, and raises a bunch of big hounds. as trucking becomes expensive, trains get longer. i think if americans are given time to adjust, the adjustment period is likely to be mostly peaceful.

all that said, i'm also making preparations. no doubt, we're in for a ride.

For what it's worth-anyone who wants a nieghborhood ev-aka known as a golf cart-can buy an amazing bargain in a used one these days , as so many courses have closed up.

Buyer beware of course in this sort if situation.

I took Bart under the bay from The City to my office in Berkeley 5 days a week.
It was to quick to get any reading done.

That would be "The Long Descent" by John Michael Greer. Great book, as books by Druids go. And, that is what I really hope for... because the alternative, "The Long Emergency" is far worse!

So. The economy tanks, slowing the use of oil, extending availability sufficiently that we can begin to revamp our power grid and our transit systems [moving to true mass transit], down size families and spending, and hunker down to have a good time without the internet.

Or not.

It is really up to us, isn't it? TOD as salesmen and marketers for the new paradigm. Is that possible?

The bridge failures may be what really does in happy motoring in the end. Bridges are always bottlenecks. As more and more of them close, more and more traffic gets re-routed around very long detours, and gridlock naturally follows. Given tightening state budgets, we might already be past Peak Bridges.

There are other bottlenecks being plugged as well. For example, in my neck of the woods:

3 Months for I-40 Rockslide Cleanup 'Unrealistic'

This is a huge bottleneck on a heavily traveled, very important E-W route. Don't expect it to be back in operation before next spring. This happened only 12 years before, and will likely happen again in the future. These mountains used to be as high as the Himalayas, and they are not yet done erroding.

Edit: Pretty impressive aerial photos of the slide here.

A lot of brittle infrastructure all around. High winds knocked out power in a few places here last night, and the broken traffic signals jammed up traffic pretty well.

Maybe we just need to start designing bridges differently. There are stone arch bridges that have lasted thousands of years and are still in use today.
Bridges today are designed to fail in relatively shorts spans of time rather than designed to last very long time spans.

That's because these days, an engineer is someone who can do for one dollar what any schmuck can do for two.

That Boston Globe article about what a new Great Depression would look like predicted that people's priorities would change, and they would value high-quality (if initially more expensive) products that were built to last over cheaper, flimsier items. I hope it works out that way, but I have my doubts. When money is tight, it's hard to resist the allure of cheap.

Especially if those engineers are called Sverdrup.


I've always liked that definition of an engineer.

So as a corollary, does that mean if you give the engineer the two bucks, you get something twice as good? I'd like to think that's why the stone bridges held up -- the designers knew how to build them better than your average schmuck.

I'd like to think that's why the stone bridges held up -- the designers knew how to build them better than your average schmuck.

No, I think there are two reasons old structures held up. One, the poorly built ones didn't hold up, but we don't know about them, or don't remember them. Two, ignorance. Ancient engineers didn't have the knowledge we have, so they massively overbuilt things, just to be safe - even if the structure wasn't meant to be permanent. Now, we use supercomputers to calculate to the gnat's rear the size and shape of beams to use, etc. The Romans may well have done the same, if they had the technology.

Good Morning America just had a segment on bridges. They said that the average design life for US bridges is 50 years, while the average age of US bridges is 43 years, and that the US is only spending about 60% of what we should spend in order to fully maintain bridges. I suspect that we are going to be forced to resort to selective abandonment.

I posted a note a year or so ago about a couple of civil engineers I talked to who predicted (like you) that we would see more and more bridge failures in the years ahead.

I don't much care for Ayn Rand, but it is rather interesting that in Atlas Shrugged, the event that proves to be the final straw and that plunges the entire US into collapse is the failure of the last bridge across the Mississippi river.

Fortunately the Huey Long Railroad and Highway Bridge in New Orleans is extraordinarily robust. Built in 1933-35 with an excess of steel (supposedly over 10% of US production for those years). Design loads were flat cars full of tungsten steel on both tracks with a generous safety factor.


Unlimited weight, dual track railroads plus 4 (soon 6) highway lanes.


A lot of our highways and bridges were built in the '50s and 60s, as part of the interstate highway system. (Which, incidentally, came to be from a mix of auto industry and defense interests.) They were designed with 30-to-40 year life, which of course means they are now past their due dates.

Back then, people saw no reason to build a bridge that would last longer. In 30 years, they figured, we'd want something newer and better. No one imagined that we might not have the money to replace everything. Nor did anyone realize how dependent we would become on the new infrastructure, and how difficult and expensive that would make it to repair or replace it. Taking Farmer Brown's chicken coop via eminent domain to build a new highway is a far different story than closing down I-95 for a couple of years and taking the adjoining businesses to widen it.

There were even people who assumed we would no longer need roads and bridges in 40 years. They thought we'd have flying cars, like the Jetsons.

I suppose budget busting bridge failures are just getting started-like the first few kernels of corn popping-water and sewer lines are also past due for replacement most places.

At least if the economy continues to decline-which I believe it will-at least the highways themselves will need less maintainence as traffic declines.

I had just about gotten good and comfortable with the idea that the oil crisis was a thing of the future-as in two or three years from now-due to the economic slowdown.

That would have been a good thing in terms of getting ready for me and anyone else actually making preparations.

If you own a clunker in a place where you can keep it registered cheap,maybe you ought to hang onto it-four dollar gas will probably get you another shot at a welfare check at the expense of the people who already own economical cars and those who can't afford to trafe regardless , not to mention all those who don't drive.

If Simmons and the other guys who are predicting a fast run up in oil prices are correct then we can expect a similar runup in the price of agricultural inputs such as fertilizer.

There will also more than likely-some would say definitely-a big runup in retail food prices , although there might be a considerable time lag of up to a year depending on how and when the cards fall.

I think I will be investing in fertilizer and other petroleum based easily stored inputs this year.
It also looks like a great year to be making energy related upgrades to family castle.I think it's time for either wood fired or solar hot water at our house-too bad pv is still so expensive.

Anybody renting and therefore able to move w/o too much trouble should be considering the possibility of shortening thier commute and lowering thier utility bills.

Anybody living in areas already at the edge economically speaking-and this includes most tourist dependent areas in my opinion-should give some thought to moving to places with more sustainable economies if a move is under consideration .


There is a rail bridge at the south end of the bay from Newark to East Palo Alto. It has not been used for over 25 years, and suffered a trestle fire in 1998 that destroyed a large protion of it. (I was one of the last ones to go over it as a management trainee while riding around with freight train crews to learn what they do).

There is a proposal to restore passenger service across this bridge.

Another crossing around the San Mateo Bridge would be much more expensive, and it probably could not be done on pilings, given that Redwood City insists on being a deepwater port.

Unfortunately, the Bay Area has sort of become bifurcated, with BART and conventional rail systems competing, and now defining movement corridors. While the function of each is somewhat different, they really haven't blended the two together well.

For example, the Capitol Corridor would make more sense if they created a station adjacent to the Oakland West BART station, so BART could better performthe feeder function rather than having to ride BART all the way from SF to Richmond, including all the stops in between.

BART's having characteristics of both light (or maybe "medium") rail and heavy causes the problem.

Likewise, if the California High Speed Rail initiative ever gets off the ground, will go from LA to SF (with a leg to Sacramento) but then riders will have to take BART (assuming it is extended to San Jose) from San Jose to East Bay points. If they ran the high speed service to SJ then a stop adjacent to the Oakland West BART station, SF passengers could take the Baby Bullet Caltrain to the Peninsula and SF from San Jose, or take BART from Oakland West, and Contra Costa and Richmond passengers would have much faster service out of Oakland West.

Commentary from UAE

oil looks set to remain a jealously guarded, much-coveted commodity

But then the discussion turns to that other commodity, water.


Best Hopes for Awareness, Step #1 to mitigating


After reading yesterday's DB, I was hoping for more discussion of Jacobson's article on transitioning to 100% renewables.

Specifically, we should address the question that was dealt with on TOD in the past, of whether such a buildup would put enough GHGs into the atmosphere to cause us to exceed the tipping point for catastrophic climate change (assuming we haven't already done that).

I actually e-mailed Jacobson about this and while he emailed me back, he did not directly address the question of why he did not clearly include massive conservation as a cornerstone of his thinking. His answer seemed to imply instead that renewables were preferable to ramping up coal, as we otherwise would. He did not say whether he had even calculated the necessary GHGs in building not only turbines and panels, but also transmission lines and EVs.

I would encourage the better-connected and more engineering-savvy among you to email him. He is clearly interested in random members of the public's opinion of his work.

Will Americans embrace massive conservation? How will we know until Madison Avenue tries to get us there? From the folks who got us to wear high heels and eat McDonald French fries, and watch that infuriating drivel interrupted by commercial pitches for several hours a day?? Why risk underestimating (humans or Madison Ave)?


I 'm with you-hoping the engineering types have something to say about the physical realities of making a transition.My personal guess is that it is possible but that it won't happen , given political realities.

But in a country with roughly three hundred million people,a hundred billion dollars-which is supposed to be enough to build a hvdc transmission system allowing us to utilize wind for a third or more of our electricity-would cost only a few hundred dollars per capita.

We should be able to recover that in fuel costs alone, not to mention avoided pollution, in just a few years.

If solar hot water and pv were to be mandated as part of all new large scale construction(or something equivalent in unsuitable areas, such as triple thick insulation and state of the art lighting, etc)itseems to me that that lovable idiot Amory Lovins will be proven partly correct at least- having most of this stuff will soon be cheaper than not having it.

I believe the buildout will proceed like a wind driven brush fire once ff prices stay in the two hundred dollar oil equivalent range -unless we go broke too fast for it to achieve critical mass.

Maybe the next investment bubble will be in something that will retain its value-renewable energy.

It's at least a very pleasant daydream!

Regarding the Jacobson's article, most of the comments in the Scientific American site are negative and skeptical.
I think that a transition to 100% renewables only makes sense if the current energy use is reduced enormously.

[Electrified] Railways handle 32% of Swiss freight traffic and 16% of passenger traffic, but they use only 3% of the total energy required for all transportation.”

- SBB (Swiss Rail) Environmental Report

Note: About 90% of that electricity comes from SBB owned hydroelectric stations. Swiss generation is about half nuke, half hydro.

Best Hopes for Energy Efficient Transportation,


My guess (with only a very brief look at the numbers) is that it would take something like an additional 15% tax on personal income around the world from now until 2030 to pay for what is being suggested. Even with this tax, it is not like other costs would go away. It is hard to believe people would accept such a huge tax increase to pay for all of this.

In order to have enough resources to do this, there would have to be huge cutbacks in other areas--few new homes built, little road repair, few new schools, few new factories. Even with this, it is not clear that there would be enough materials of all sorts to accomplish what is needed, especially with rare mineral shortages and increased depletion. I don't know about the impact on CO2--we certainly would be producing CO2 at maximum levels from now until 2030.

The whole idea seems hard to accomplish. I would like to get someone from The Oil Drum staff to write a post about the article. So far, I haven't found a volunteer, though.

I have a draft of an article "No New Technology Required" that is close to this. However, I have not devoted any time to it since a previous submitted (twice) article of mine (one of my best ones IMVHO) "Peak Oil vs. Peak Oil Exports" is being ignored by TOD staff.

I am pondering where else to submit my stuff ATM since TOD has apparently decided to ignore me.


BTW, you apparently assume a tax will be required as a source of funds. Investing $ works at least as well (probably better) than spending tax $. Lending works as well.

No doubt that

1) The US economy needs to tilt the balance in the GDP towards investing and saving and against consumption. We are *WAY* out of whack in our over consuming today ! While investing in plant & equipment shrinks and savings is about zero.

2) Such energy & environmental policies will require exactly "what the doctor ordered". Much more investing in long lived energy producing & energy efficiency infrastructure as a % of GDP and much less consumption.

Best Hopes for Less Consumption,



I really think a 2030 timeframe is way to far off. If >50% of oil remaining in the Middle East in 2005 is exported by 2013 [see yesterday's TOD, and the lago Energy item about that], 2015 might not be possible. Total cost? Who knows? But, we have to get it done while we have the materials and energy to do it.

Today's posts mostly favor the view of gradual decline, rather than sudden, but long term 'Emergency." I just hope that total economic failure does not reverse that... and we do what we can.

If there are people in charge who know what they are doing [IMO they are ALL guessing!], they are keeping it a secret. I sometimes wonder if the global warming alarms are being promulgated because those in charge recognize that Peak Oil would scare everyone S-less, and the 'solutions' are the same for both problems. Just a though.

Partial completion will have significant benefits before 2030.

Once we are going in the right direction, we can speed up as things get tighter, and slow down when we run short of resources.

However, the USA, with coal, mules and sweat, built subways in all of our largest cities, a good electric interurban system and streetcars in 500 cities, towns and villages in just twenty years (1897-1916).

FAR less technology, 3% to 4% of today's GDP (inflation adjusted), a population <100 million at the start (1897), >100 million at the end (1916).

Best Hopes for doing it again !


In the midst of this deep recession, one sector is booming - community colleges:

NYT: New Meaning for Night Class At 2-Year Colleges

My daughter, who teaches biology & microbiology at a community college, is experiencing this first hand. They are swamped. I told her, only half-kiddingly, that we are not too far away from community college admissions officers telling prospective students that the community colleges are full, but that the students might try Harvard or Yale.

In my neck o the woods, this has already happened at one community college. I believe its called Orange Coast College.

westexas -

Given the cost of a four-year college education these days, the situation you describe should not be surprising. Being that my son graduated from our state university over ten years ago, when I see current college costs, I come down with a severe case of sticker shock.

FYI, here is the listing of the 100 most expensive colleges:


The total cost of tuition plus room & board range from about $45,000 up to almost $54,000. What surprised me the most was that some of the big-name Ivy League schools weren't even in the top 50, while some relatively obscure liberal arts schools were way up there near the top. Go figure.

Of course, college prices are sort of like appliance and clothing retail prices: they are inflated so that when one gets a 'discount' (in the case of colleges, scholarships and financial aid), one is fooled into thinking it's a bargain. Even so, I find it pretty outrageous. It's probably a bit like health care costs: the people who can afford to pay heavily subsidize those who can't.

Nor are the high costs all that difficult to explain. The schools compete with each other on status more than academics, and to build and maintain that status they went on a profligate spending binge during the 1990s and early 2000s. For a while it seemed that no expansion or 'improvement' project, no matter how superfluous, was ever turned down as being too costly. Build and spend, build and spend.

We recently visited a relative who had been going to University of Delaware. She shared a dorm 'unit' with three other girls. This place was nicer than a lot of luxury hotel suites, with each girl having sort of her own mini apartment and all sharing a central living area with a fully equipped kitchen. Quite a contrast to the bare cinderblock walls of the tiny cramped dorm room I dwelled in while going to a small engineering school (whose tuition, by the way, increased more than 10-fold since I graduated in 1967).

Higher education has to be right there near the top of the list of unsustainable systems!

Greg Jeffers, who has the American Energy Crisis blog, predicts that about half of US private colleges will be closed by 2020:

Extinction Level Event for Private Colleges

. . . the "College Bubble" was funded by loans that will NEVER be repaid and furnished by Sallie Mae, and in much the same way that Fannie Mae and Freddie Mac ABSOLUTELY, POSITIVELY were the largest contributor to the HOUSING BUBBLE. Just as when the financing dried up for housing, the housing bubble popped... so, too will be the fate of the "College Bubble".

Not to worry, though. These people will work extra hard to B*ll Sh*t you, manipulate you, and out right lie to you in order to keep those latte's and co-ed's coming.

But the wheels are coming off this system, and there ain't much to be done about it.

There are only four reasons to pursue higher education:

1) To have four years of the "college experience" prior to starting one's adult/working life. Research "party schools". Most of the best values are state universities. For families with plenty of money, I suppose this makes the same amount of sense as the annual vacation in Aruba, and both will be "sustainable" for about the same period of time.

2) To acquire a fat contact list and a "school tie". This is the only real appeal of the Ivy league and the private other schools on that "most expensive" list. You pretty much get what you pay for, but some of these schools definitely provide more bang for the buck, and there very definitely is a pecking order. The question is: what is the net present value of all that, given an economy in long-term decline.

3) To acquire a credential - a college diploma. If the point is just to be able to place a degree on a resume so that one makes the initial cut amongst the hundreds of job applications, then for this purpose, almost any 4-year degree from any accredited college will do, and there is no point spending any more than is really necessary. The combination of two years at a community college, then transfer to a cheap local state university, is probably going to be the best bet. If one can manage to live at home and work one's way through school, it may even be possible to obtain the desired credential without carrying any debt.

4) To acquire an education. This is the real challenge, because learning is not just something that goes on in a classroom; it is mostly something that goes on inside of the learner's mind. Thus, where one goes to school is actually less important that the underlying intelligence, academic aptitude, and motivation of the learner. A highly motivated learner of above-average intelligence can quite feasibly become self-taught, mainly just by systmatically going through the "great books". Conversely, one can spend $200K to attend one of the "elite" private schools and end up having learned very little. There are places where there are gifted instructors who can motivate and bring out the very best academic performance from their students, but these are few and far between. Few, if any, institutions have entire faculties of such people; more typical is for a college to have just one or two or three such gifted instructors/mentors. Thus, if one wants to benefit from the instruction of such, then one is going to have to pick one's major carefully, and then carefully research not just colleges but also academic disciplines to seek out such instructors. Beware that those who publish the most are not necessarilly the ones who are the best teachers; usually, just the opposite is the case. Thus, "research universities" with a very heavy expectation upon faculty to publish or perish may not be the best places to actually get a basic, "liberal arts" college education. Even the most expensive private colleges might not have that many really good teachers. Small liberal arts colleges and some smaller state schools might actually have some very good teachers, and even some community colleges sometimes have some. Regardless, for most learning in most subjects, it is going to be up to the learner. I'd suggest trying to get as many courses out of the way through advanced placement in high school, then through credit by examination. Why waste time and money to sit in a lecture hall for sixteen weeks and learn nothing that you couldn't learn on your own?

Bottom line outlook:

I don't know how long taxpayers are going to be interested in continuing to pay for the subsidization of party schools that cater to spoiled rich brats. Some may survive, but their long-term future does not look promising.

There will probably continue to be some elites, and institutions that serve as selective gatekeepers to shepherd the favored few into the ranks of the elites. Quite a few of the instituions amongst the most expensive schools are actually pretenders and can't deliver the connectivity and cachet that goes with the price tag; these will not survive much longer.

Cheap public credential mills will continue to exist for a while, until it gets to the point where there are few jobs where a degree really matters and more jobs where it starts to be seen as a disqualification (the old "overqualified" thing). Again, taxpayers may start wondering why they need to be subsidizing institutions producing what the economy doesn't really need.

There will continue to exist a few places which bring together exceptionally tallented instructors and students, and where real learning takes place. These places will become fewer and farther between. More people are likely to discover that self-directed learning is very cheap (or even free if you use the public library), and maybe the best value of all. Expect to see a lot more emphasis on that in the future.

My wife and I work at a state ag school in the South. I often wonder about the future of this institution (and our accompanying jobs). The institution, given its history and connections to industry within the state, seems to be ideally situated to be a leader in understanding and illustrating what options we have as we go through the societal changes that lie ahead. Unfortunately, the pace of change here is painfully slow. The willingness of the administration to champion issues and technology where we could make an impact is less than stellar.

Its sad to watch what really seems to be a lost opportunity.

WNC Observer -

I think that was an astute and very nicely done summary of what college is all about these days.

Perhaps one might also add a fifth reason, though it could be considered a subset of your Reason No 1, and that is: to postpone becoming an adult. I know of several of my son's acquaintances who are in their early thirties, have never had a serious job, and have been sort of perpetual graduate students, having switched focus several times. They seem to get by on their parent's good will, meager stipends, and menial part-time jobs. An elaborate effort to avoid facing reality.

Of course, as times get tough that sort of thing is going to end, real quick!

The more pragmatic reason for attending college, i.e., going into a well-paid profession, such as engineering, accounting, or law, is also going to take a big hit. It can no longer be assumed that having a diploma in something like engineering is an automatic union card to a better life, as it once was, when I graduated from a well-regarded engineering school in 1967.

At that time the graduating engineers had an average of something like 4.3 job offers each. The question wasn't whether you'd have a job, but rather which one you'd pick. Only one person out of a graduating class of about 270 students didn't have a job offer, and this guy looked and acted like a cross between Truman Capote and Mick Jagger (if you can envisions such a thing). But to make sure our class was batting 1000, the President of the college called in some favors and got the poor guy a job. Today, even some of the best graduating engineers have meager prospects and are competing with engineers from places like India and Pakistan who are here on H1-B visas.

How long is it going to take for it to sink in that maybe four years of toil at an engineer school might not be worth the time, effort, money, and aggravation? Then what?

H1Bs, illegal immigration, and even quotas from "western" countries are likely to drop as employment plummets.

Note that nuclear and petroleum engineers already enjoy the best wages among engineers, and environmental engineering is growing as well. Industrial engineers and control systems engineers will be needed as the dollar plummets and factories re-tool for local necessities and lower-energy production.

I think engineering will do better than most degreed professions, though salaries are likely to drop.

Paleocon -

I can tell you first hand that the environmental field as an area of employment has been on a steady decline for well over a decade.

There are several reasons.

First, a good deal of the work had to do with pent up demand, in other words, playing catch-up with environmental problems that had been long neglected. Once those problems started to be addressed, then a certain amount of demand went away.

Then, the field became a bit overpopulated, particularly in the area of hazardous waste site remediation. Too many people got into it. An environmental employment bubble, if you will.

And finally, I think the general public and the politicians that supposedly serve them just got tired of the whole thing. It got stale after some 35+ years of feverish activity. I really don't think that the general public gives much thought about the environment (unless a specific problem affects it directly).

Plus, isn't it a bit contradictory to say on the one hand that you are bullish on the engineering profession, and then on the other hand say that H1Bs, etc. are likely to drop as employment plummets? Which is it?

I hope you are aware that there are certain law firms specializing in advising employers how to skirt domestic employment requirements, with the sole purpose of demonstrating that they cannot find sufficient qualified domestic employees and therefore must turn to H1B's as a 'final resort'. It involves creative resumé screening and then 'documenting' why certain domestic candidates do not qualify. A shameful legalistic cover-your-arse tactic.

As I see it, as long as the economy remains a basket case, then it surely follows that the prospects for engineers will be rather dicey, regardless of whether there is a real need for this or that to get done. Need does not necessarily translate into jobs. Plus you can always offshore a certain portion of the work or go H1B.

If I were a young man, I would definitely NOT go into engineering today. Come to think of it, I don't know what I'd do.

Well, I don't really know that much about enviro engr other than what I read on salary survey sites, but I know that petro is still doing quite well, and even electrical/electronic isn't suffering as badly as back in 2001-2003, and it is evident to me that an increasing fraction of our GDP is going to go into energy infrastructure.

That being said, I think ALL employment is headed down, just engr less than most. I'm "bullish" relatively speaking -- less drop in wages, and less unemploymenet -- for engr over many business jobs and a great many service industries.

I think it will still suck to be a new grad for several years, but I'd much rather my kid be an engr grad in this market than a liberal arts grad.

I surmise, but of course do not know, that immigration sentiment will shift right after unemployment benefits run out, and they'll shift again once the dollar weakens. Before too long a Chinese engr will make more money building stuff for Chinese customers than for American companies.

Engineering might still be a good choice for a major, as long as the student understands that they are preparing for a lifetime and not necessarilly for a career. They may very well end up not being a practicing engineer, but that doesn't mean that their education is of no value. It is worth having a lot of math, science, and technology know-how, and good problem-solving skills, even if these end up not being employed in the typical "engineer" sort of way.

I would suggest that engineering majors make a deliberate effort to broaden their education, and I mean more than just the minimal liberal arts core courses that most programs require their students to take. It would be worthwhile for engineering students to learn as much as they can about economics and accounting, they need to be able to write really well, and it would be worthwhile to become acquainted with as much history as they can (including business and economic history and science and technology history, as well as more general political and cultural history). I'd also try to squeeze in a course in business law if you can; that is something most non-business majors never are exposed to, yet over the course of your working life you are very likely to have to end up dealing with contracts, employees, and other things with a legal dimension, and what you learn in B Law can stand you in very good stead. I would also strongly suggest acquiring fluency in at least one other language, with Spanish or Mandarin being the two obvious first choices; adding at least a basic conversational and reading competency in a third language would be a definite plus. Even if you never do business overseas, it is still likely that you are going to have to be interacting with employees, suppliers, and customers who have limited or no English. It is worth doing all this, even if one has to carry heavy loads and take courses in the summer.

I'd also suggest trying to get a part-time job - not as a waiter or washing dishes, but in a shop that fixes things. That might be the most important educational experience of all.

Another reason for going to college was to find a mate, especially from post WW2 to the mid-1970s.

Majors I'd recommend: electromechanical engineering, nursing, vetrinary science, botany/ag science, and special ed teaching, all with a history minor.

Re:Byron King: Peak Oil – The Risks

One has to wonder how the first two commenters will react as the ground starts to shift beneath their feet. Will they go on a rampage or will they just throw themselves off of a cliff. The larger question is how a whole herd of these people will react. Watching this coming slow motion train wreck is one of the most fascinating things I have seen in my lifetime. I'm still personally torn as to whether a faster collapse is better or worse than a slow one. On the one side I'm anxious to get on with the necessary changes and the building of a new order on the other I still hope (I'm afraid in vain) for a bit more time to prepare and transition to just a different track that avoids a devastating collision and allows the train to just derail and come to a stop.

FMagyar - I totally agree. The comment by Matt Beck just made me laugh, especially the bit where he says "America’s (and the world’s) supply of coal is effectively limitless."

I had to add a response to that, he must be a comedian!

As for watching a slow motion train wreck, spot on.

. . . effectively limitless. . .

This is of course the conventional wisdom for fossil fuels of all types. It's the wackos who talk about finite fossil fuel resources who are out of the mainstream--and deemed to be roughly equivalent to space alien cultists.

"There will be winners and losers, but America is poised to do very well in the new regime provided we use our resources and our talents wisely."

Good advise from Matt Beck. Now, were does one start?

well, investments to enhance the grid -- which obama's team seems most focused on -- occur to me to be a pretty wise opening salvo. to enable active competition, to foster new technologies, and to support conservation efforts (with more complete usage information), our energy transport, tracking and storage systems need overhaul. no new energy technology can make much of a difference if it's delivered on a 'leaky pipeline'.

His reply to you is comedy gold as well. Perhaps Dr. Bartlett could set him straight on that one.
Though I can imagine him sitting there with his fingers stuck in his ears saying "I CAN"T HEAR YOU!"

"One has to wonder how the first two commenters will react ...."

Glazed-eye stupor?

They are most likely just hacks making a living peddling thier own variety of snake oil-there have always been plenty of these characters around.Most likely they will just retire or change lines of work and think no more about thier foolish former statements and positons than a lawyer thinks about legal arguments he has made in court- talking a given line was just something he did for money as the case at hand demanded.

Of course some of them ,probably the majority of them , believe what they are saying-a good car salesman needs to believe in cars.

Well whether they're hacks or true-believers, I can't waste time on them.

*(except for the occasional note to mention WHY I don't waste much time on them)

I'm still personally torn as to whether a faster collapse is better or worse than a slow one. On the one side I'm anxious to get on with the necessary changes and the building of a new order on the other I still hope (I'm afraid in vain) for a bit more time to prepare and transition to just a different track that avoids a devastating collision and allows the train to just derail and come to a stop.

"Lord, give me a rapidly collapsing economy - but not yet!"

(With apologies to St. Augustine)

LOL! But in my defense, I'm just torn with regards to which of the two forms of collapse could have the "better" outcome. Note: I wasn't actually asking for collapse now or in the future.

At least St Augustine is the patron saint of brewers ;-)

A fast collapse-one that results in truly widespread starvation, homelessness,contagious disease and widespread lawlessness such as looting abd robbery mught lead to a hot aggressive war-In my opinion , tptb will go to war if faced with a collapse situation, viewing war as the lesser of two evils.

A cynic might take the position that are already at war mainly tp prevent a short term collaspe of the oil dependent bau economy.

I personally possess a strong cynical streak but I am willing to defend the our current occuopation of the middle east as being (only) mostly, not totally, about oil.

But I don't know anybody with a three figure iq who thinks we would be there if it weren't for the oil.

If I'm right about this a fast collapse might be more or less functionally equal to the end of the road-I don't have enough food , or a good enough fall out shelter, to sit out the cooling off period that wil follow a nuclear war.

And I doubt that even one person in a hundred who is a regular here is any better prepared for that eventuality than I am.

I suspect that quite a few of us are prepared enough to avoid an immediate and extremely unpleasant death from radiation poisoning. However, I would hope that there would be very few indeed who would not understand that their ultimate life expectancy would have been reduced from being measured in years to being measured in months or weeks at best.

Summary of Weekly Petroleum Data for the Week Ending October 23, 2009

U.S. crude oil refinery inputs averaged 14.2 million barrels per day during the week ending October 23, 133 thousand barrels per day above the previous week's average. Refineries operated at 81.8 percent of their operable capacity last week. Gasoline production increased last week, averaging 8.8 million barrels per day. Distillate fuel production decreased last week, averaging 3.8 million barrels per day.

U.S. crude oil imports averaged 8.9 million barrels per day last week, up 191 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.9 million barrels per day, 880 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 756 thousand barrels per day. Distillate fuel imports averaged 184 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.8 million barrels from the previous week. At 339.9 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year. Total motor gasoline inventories increased by 1.7 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components increased last week. Distillate fuel inventories decreased by 2.1 million barrels, and are above the upper boundary of the average range for this time of year. Propane/propylene inventories decreased by 0.6 million barrels last week and are in the upper half of the average range. Total commercial petroleum inventories decreased by 1.6 million barrels last week, and are above the upper limit of the average range for this time of year.

Energy prices slide on surprise jump in gas supply

Energy prices slumped Wednesday after the Energy Department reported a higher than expected jump in U.S. gasoline supplies.

I really wish we would see more charts like this one from Byron's article:

Just about every single chart I have ever seen on TOD is zoomed WAY in to the period 2002 to present, which is just a tiny fraction of oil production history. At best that is just plain lazy, and at worst it is deliberately deceptive.

If we have any hope of making sound arguments in favor of a near-term peak we need to be able to post these big picture charts going back decades and then make the case why that tiny little flat spot at the top is significant.


I agree with you Jerry...the big picture is interesting. But it would aid the big picture to post the "unconventional liquids" on the same chart as the total liquids. If you did, the total unconventional liquids volume (excluding NGL's) in 2008 would match the total liquids curve in 1938. Not so impressive as the right hand chart. Also, a small point: the vast majority of the unconventional liquids on the chart are "natural gas liquids". Virtually all NGL's are stripped from conventional reservoirs. I can't imagine the rational for classifying them as unconventional.

I noticed the same thing about NGL's in the graphic. I would not call them unconventional even though they have been essential in filling a gap for certain liquid products.

As Jerry's comment on the temporal span, I think it depends upon what you are trying to show and how much data you are willing to use.

Here is a type of graphic I use (I'll just share the link) to give a longer view. This graphic has not been updated (I have a more recent one I use in Powerpoint) but it conveys the message of US production, the different contributions and the rise in imports.


Interesting chart Trooper. But I'm having trouble with the color scale. It looks like the GOM is way too big. can you alter for clarity? Thanks

Also, I tried to be a little too nice is my original comment perhaps. I actually consider the charts grossly (and probably intentionally) misleading. Adding NGL's to the unconventional liquids category is absolutely fraudulent in IMHO. NGL's have been a mainstay of conventional production from the earliest days of the industry.

Actually, part of the problem is that it is a stacked chart. I do have another one that is the basis of this one..., the plotted individual flows from each of the components (except imports). When you look at the individual flows you see 3 fairly distinct "peaks" associated with GOM oil (as the oil discoveries go to more extreme distances and depths). The peak of US (lower 48 onshore) as well as Alaska (for which I have both onshore and offshore but I've kept them aggregated for the moment) are also noted in that other graphic where area flows are plotted.

I've got a more recent one that I haven't posted to my collection on Flickr. That will be soon.

My all time favorite, which I use in various presentations, is the one that shows US oil production from 1860 to 1970 (without showing the dates) that allows the eye to continue to an ever-increasing output. The next slide shows the sequence including the last 38 years (this time with the dates). The graphic I posted here is used to show just how dependent upon imports the US has become and why "drill, baby, drill!" can't get us very far.

Excellent Trooper. what and where is Flickr?

The Flickr site is a web-based photo hosting site (www.flickr.com). Much like Photobucket and a number of other web-based sites.

The link I post for the image was a converted Excel Chart (converted to jpg).

Here is the latest stacked chart with data up through August 2009:


A couple of things worth noting about this chart. The seasonal oscillation due both to gas and oil production really standout prior to the US oil production peak. Even after the oil production peak, the seasonal gas (and liquids) effects are noticeable. Eventually, even those effects smooth out. EST NGLs stands for an estimation algorithm from within the EIA data. MER NGLs stand for "Monthly Energy Review."

You asked about the GOM data. Here is the underlying GOM data that you see in the stacked chart. Data is from both the EIA and the MMS database.


You can see the three distinct peaks which are related to the various distances and depths. Will there be a fourth peak from the ultra-deep finds? Probably and it may not be as distinct or long-lasting. You can also see the effects of the various hurricane seasons as 2004, 2005, and 2008 really stand out.

Excellent work, this is exactly what I had in mind, thanks. As Gail pointed out further comparisons to other data (price, production per capita, etc) on this scale is the next logical step.

Just to be clear, I understand the need to present monthly data at the appropriate scale of just the last six years or so for the sake of clarity. My consternation arises from the fact that we rarely see that data put into a historical context of the last 60 years or so, which I feel is a gross oversight.



It takes a little work to get down to the monthly data and they are not always readily available. Before there was an EIA (or an EIA to compile some historical data), a trip to a technical library (and I have access to one that is quite good) was and is still necessary to review historical data whether in journals, microfilm or microfiche.

Over a long enough time frame annual data is probably easier to deal with because it smooths out the short-term noise.

Thanks again Trooper. I truly appreciate your efforts.

Sam used to include a graph like this in his production prediction "report cards." Not sure why he stopped. Perhaps because we've been trying to make posts simpler and shorter.

It's been long enough it would be nice to see the past couple of years' numbers on that same graph. Looks like reality is somewhere in the middle -- a lower peak than most, but not much drop either?

He did an update in July.

However, I think almost everyone accepts that the drop in demand (rather than geology) is at least partly responsible for the drop in production. So the graph just doesn't mean as much.

It stands to reason that if the economy tanks, less oil will be used. That means a more drawn out 'plateau,' if there is one at all. And, the slide takes longer as well. And, more importantly, that gives us a bit more time to fix a few things that need fixin', such as rebuilding energy infrastructure, building solar collectors, wind turbines, and geothermal and tidal energy facilities as well. Plus, the delivery infrastructure needed, ala T. Boone Pickins' plan.

So, in a way the finanical crash may help just a bit. Just another sunny post! Enjoy.

Thanks for the suggestion. We can do longer-term views too.

If one looks at per-capita consumption, the graph probably looks a fair amount different.

A detailed review of "The Prize" by Yergin would be a great topic.

I know the man is a hopeless optimist and that he is in the pocket ofthe bau crowd but the fact is that the Prize is almost certainly the best history of oil there is-up until the late eighties at least-it was published in the early nineties iirc.

Any one who reads it will come away with a lot of new insights into the history of oil and the twentieth century-especially of politics in the former "third world" countries with oil.

Starting in November water will be rationed in my city (Caracas, Venezuela). Every zone will have 5 days of supply followed by 2 dry days. I only found out when I broke our back-up water tank and went to the hardware store to buy a new one. Right now you can't find anything bigger than a bucket.

They are doing it because the water level in dams all over Venezuela is very low. The water company blames the extended El Niño phenomenon. I suspect population growth and decaying pipes have a big part to play. Almost every day I pass by broken pipes gushing out water. Sometimes a watermain breaks and a car-sized hole appears in the highway.

We also have scheduled power outages, related to low water levels in the hydro-electric dam and sky-rocketing demand.

The programmed outages aren't that bad, but one does need to get the right infrastructure and plan ahead.

Venezuelans urged to stop singing in shower to save water

I assumed something was up when I saw the above article.

It's been very dry here in France with little in the way of rain for 3 months where I am. The river/stream that forms a boundary on one side of my property has finally dried up. Much to the delight of the chickens as they can now march across the dry stream bed and into the village. I hadn't considered the stream drying up when I erected fencing for the chickens :(

I was curious to know more about the Montara blowout linked above by Leanan. It's been leaking oil into the Timor Sea for over two months now. Here's an update on the scale and effects, a caution to those thinking it couldn't happen 'here'.

And now apparently a second rig (owned by another company) has suffered a gas blowout.

Drought, typhoons hurt Asia's rice production

"We are not very far off from possibly another rerun of 2008," he said. Last year's record-high price of rice and other staples led to riots in at least 30 countries, according to the World Food Program.

Looks like things are spinning out of control in India with a 17% fall in rice production, historically the worlds third largest rice exporter. The government has scrapped the import levy on rice, presumably to encourage imports. India is also the world's second largest producer of wheat and it's increasingly likely they're also going to be a major importer of wheat too. They still haven't released any of their reserve stocks onto the desperate Indian market, although they've been promising the release for months.

Indian businesses, like the Solvent Extractors’ Association (SEA) of India (a body of over 800 edible oil producing companies), are getting panicky and urging the government to buy farmland abroad. Seemingly Paraguay and Uruguay are the favoured locations. The loss of food security in the world's second most populous country has to have major repercussions around the world.

India has a huge rat problem that is currently eating from 40 to 50% of the rice crop. In some years it is even worse. The Indian government has started a campaign to promote the eating of rat meat. Unfortunately, one of India's lower castes, the Mushars, I believe, are rat catchers/eaters and shunned by most Indians. The social barrier must be substantial and will likely make the effort to lower the rat population by eating more rat meat ineffective.

The Indian government also has a two rupee bounty on rat tails.



Great! Eat the rat; sell the tail!

How can I stay upbeat with that thought stuck in the back of my mind?

Great interview by Max Keiser with Paul Roberts http://www.youtube.com/watch?v=IOWREog3zYM

I mentioned a few weeks ago that we would be upgrading the lighting at a school for children with special needs. That project is now underway and, when completed, will reduce the school's demand by just over 10.0 kW and their annual energy needs by approximately 30,000 kWh.

I love every day of my work, but this assignment has been extremely gratifying to me. The staff have been wonderful to us and highly appreciative of our efforts, but it's their work with children that has left us in total awe. These folks are simply the best.


Really excellent article by Cheeky Bastard (!) over @ ZeroHedge:

On Iran, oil prices and how the Hajj f$#/ed Iran

After Iran had broken off the negotiations over its nuclear program and refused to ship some of its uranium supply to France, and other western countries, talk about the imminent attack have, once again, started to make the rounds. In his recent interview with the British Daily Telegraph , French foreign minister, Bernard Kouchner, expressed his deep concern ( as if ) over Israel. As you might know, Israeli prime minister Benjamin Netanyahu visited his Russian colleague Vladimir " I can kill you with my bare hands, and I will if you don't STFU and do as I say " Putin to discuss the potential backing of Israeli war efforts against Iran. The Jerusalem Post reported that the conversation between the two tsars .... uh, i mean, prime minister was focused on the potential Russian arms backing of Iranian military. This is the short excerpt from the article in The Jerusalem Post:

Israel Radio reported that Netanyahu leased a private jet since he knew using an Israel Air Force jet would raise the suspicions of the Israeli media.

For the purpose, his office used a plane of the company Merhav, a company owned by Israeli mogul Yossi Miman, one of the shareholders of Channel 10 and EMG, an Egyptian company supplying gas to the Israel Electric Company. Miman was not directly involved in leasing the jet, as this was done through a company he owns.

The PMO and Merhav refused to divulge the cost of the flight. Israel Radio further reported that the plane took off from a terminal in Ben Gurion International Airport which is mostly out of use.

Israeli media outlets speculated on the secretive nature of Netanyahu's Russian visit. One reasoning was that Netanyahu tried to persuade Putin about not backing the Iranian military efforts with shipments of Russian weaponry to Iranian military. Some journalist even reported that Netanyahu had promised Putin, that the dispute over a defense shield in Eastern Europe will be resolved shortly, if Putin stays clear from providing any help to Iranian government. After the talks were over, president Barack Obama publicly announced that the project of an Eastern European defense shield will soon come to an end.

There was some speculation brewing over the potential pan-Arabist unification if Israel attacks Iran, and that the potential Arab block could easily halt any global recovery via implementation of oil exporting embargo, as was done in the 1970s by King Faisal ibn-Saud during the Arab-Israeli conflict. But there is no support for such a claim, quite the opposite is true. Today the Saudi Hajj minister Fouad al-Farsi told Iranian officials not to politicise, or in any other way, disrupt the Hajj. Here is the article in which this is mentioned:

JEDDAH - Saudi Hajj Minister Fouad al-Farsi told Iran not to politicise the hajj after Tehran leaders said Iranians could experience mistreatment during the annual pilgrimage, a report said Wednesday.

Iran "should not take advantage of the pilgrimage for political purposes and its own agenda," Farsi was quoted as saying in the Al-Watan newspaper report.

Iranian President Mahmud Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei recently warned that Saudi Arabia, a predominantly Sunni Muslim country, might abuse the mainly Shiite Muslim pilgrims from Iran during the hajj, which begins in November.

"If they impose restrictions on Iranian pilgrims... the Islamic Republic will take the appropriate measures," Ahmadinejad said Monday in a meeting with hajj officials, according to the official website for the Iranian presidency.

On Monday Khameini also raised the issue of alleged "insults and mistreatment against some Shiite Muslims," saying "the Saudi government must take action against such acts."

As a gravitational center of Islam, Kingdom of Saudi Arabia is an important international player. As the largest oil producer on Earth, it also has a strong voice when it comes to global geo-political affairs. That said, it is impossible to consider that the Saudis and their allies will take sides with Iran. I would, if the circumstances were normal, never write about this, since we have seen similar situations, regarding Iran, in the past.

But given that the last peaceful solution has been rejected by Iranian officials, and that the sanctions which the international community is trying to put on Iran are not a pragmatic way to diminish the potential threat which would emerge with Irans development of a nuclear weapon, this circumstances, can in no way, be considered as normal. Hence the potential for, yet another, conflict in the Middle East is real. With the global economy on the path of recovery ( yes, yes, i also think that is BS, but the powers to be think otherwise ) the neighbouring Muslim nations will not take any part in this conflict if one emerges.

So, it is my belief that the serious disruption, in the global oil prices, will occur for several reasons. The current dollar policy conducted by the FED chairman Ben Bernanke has already influenced the rise in oil prices. Whether those price increases were due to the sectoral inflation, or because the traders were just hoarding into that specific commodity due to the belief that the recovery is on the way, is unimportant. What is important to know is that the stronger demand for oil will surely emerge IF the conflict arises, if for nothing else than for the demand which will be generated by both sides of that potential conflict. Also, if the FEDs dollar policy continues, and the dollar becomes weaker, a sudden surge of liquidity in oil will happen given that it is almost a standard belief that commodities are a good inflation hedge.

The saber rattling between Iran and Saudia is meaningful, the idea is the Saudis will supply any shortfalls that would emerge from combat activities ... from their incredible 'spare capacity'. The Saudis are caught between their ongoing and longrunning lies about their reserves on one hand and their perceived need to become hegemons in the Gulf on the other.

Forget Israeli bombers; the Israelis would put commandos on the ground.



The real battle is in DC w/ Obama- McChrystal vs. the 'liberals' who want out of Afghanistan/Iraq. The US/Nato has a large buildup in the region adding all the 'assets' in both countries and offshore .. plus Israeli forces. Probably close to 250,000 US/Nato regular combat troops plus aircraft and vehicles. Don't forget the 'private armies' of contractors. Maybe 250,000 ... of which a large proportion are high- quality combat soldiers.

Ending 3rd quarter FY 2009, USCENTCOM reported approximately 243,735 contractor personnel working for the DoD in the USCENTCOM AOR.




This is enough for an invasion of Iran and occupation. Forget Goldman- Sachs, this would be the biggest theft in history. Iraq/Iran and ??? Would an invasion 'wash'?

I suspect there are more US/Allied troops in theater than during the height of the Vietnam war in 1969. It's the 'secret buildup' that doesn't hit the media. 'Taking' Iran and Iraq's oil would both stifle the Chinese ambitions in the area, guarantee some 'notion' of fuel security and shift the 'white shoe' balance of power from the Shiites- driven militant factions toward the Sunnis and Saudi Arabia. The US and Europe would deplete the two countries in ten years or less and that would leave Saudia as the world's swing producer.

The 'attack' or raid or whatever it's called would require gas rationing in the US, but the curve of depletion will require rationing in a few years, anyway.


Look for a big upswing in US military activities. It's 'use it or lose it' time for the US and the Pentagon knows it.


I think the probability of a U.S.-led invasion/occupation of Iran is very low for the next several years...less than 5%.

Goodbye Lower Churchill Falls?

Source: Quebec to buy majority stake in NB Power

FREDERICTON — Quebec is about to buy a majority stake in New Brunswick’s power utility in a deal worth just under $5 billion to be announced by premiers Jean Charest and Shawn Graham, The Canadian Press has learned.

A Quebec government source confirmed that after months of talks and public speculation the agreement will finally be announced at a press conference Thursday in Fredericton.

The deal will see Hydro-Quebec shell out a bit under $5 billion for a majority share of the neighbouring province’s 89-year-old utility.

See: http://thechronicleherald.ca/Front/9013817.html


Kunsler would love this ... tonight on Nightline ...

Proposal to Bulldoze Vacant Homes in Flint, Mich

To push his hometown out of a housing glut, Kildee proposed a radical idea: demolishing 6,000 abandoned homes in Flint.

"It can maybe [be] a productive part of this larger area as open land. Or a forest of trees or a great big urban agricultural enterprise," he said.