Drumbeat: December 21, 2009

Green Giant: Beijing’s crash program for clean energy

In the years that followed, the government pumped billions of dollars into labs and universities and enterprises, on projects ranging from cloning to underwater robots. Then, in 2001, Chinese officials abruptly expanded one program in particular: energy technology. The reasons were clear. Once the largest oil exporter in East Asia, China was now adding more than two thousand cars a day and importing millions of barrels; its energy security hinged on a flotilla of tankers stretched across distant seas. Meanwhile, China was getting nearly eighty per cent of its electricity from coal, which was rendering the air in much of the country unbreathable and hastening climate changes that could undermine China’s future stability. Rising sea levels were on pace to create more refugees in China than in any other country, even Bangladesh.

In 2006, Chinese leaders redoubled their commitment to new energy technology; they boosted funding for research and set targets for installing wind turbines, solar panels, hydroelectric dams, and other renewable sources of energy that were higher than goals in the United States. China doubled its wind-power capacity that year, then doubled it again the next year, and the year after. The country had virtually no solar industry in 2003; five years later, it was manufacturing more solar cells than any other country, winning customers from foreign companies that had invented the technology in the first place. As President Hu Jintao, a political heir of Deng Xiaoping, put it in October of this year, China must “seize preëmptive opportunities in the new round of the global energy revolution.”

Kurt Cobb: Technology will save us...or not

Technology will save us--it's the mantra heard around the world when it comes to climate change, fossil fuel depletion, and myriad other environmental and resource challenges. But, that mantra rarely comes with the proviso that technology often has unintended and even perverse consequences.

"Yes, yes," you will say, "we know that." Then, why, may I ask, is this almost never mentioned in the same speeches, op-ed pieces, and journal articles that tout the efficacy of one or another technology to definitively solve or at least help solve critical environmental and resource problems? It is because these pronouncements are polemics, or more properly, sermons meant to instruct us in the supposed invincibility of our technology.

Gulf to keep spending high in 2010 as oil prices up

DUBAI (Reuters) - Gulf Arab states are likely to keep their large spending packages in place next year, even as major economies withdraw stimulus, as higher oil prices give the world's top oil exporting region enough room to support a fragile recovery.

The global financial crisis slashed income for top Arab economies -- Saudi Arabia and the United Arab Emirates -- making them drain reserves as they embarked on massive spending plans to help emerge from this year's downturn.

But with oil prices more than doubling from last December's lows of around $32 a barrel, most Gulf governments expect to book budget and current account surpluses this year and are more upbeat about 2010.

China power shortage may spread on low coal stocks

BEIJING - China's major coal-fired power plants have only enough coal stocks for nine days of power generation as of last Wednesday, industry data showed, down from 12 days at the end of November and 15 days at the end of October.

The shortfall comes at a time when coal and power demand enters its winter peak season, stoking worries that a power shortage could spread as some Chinese provinces struggle with insufficient coal and power supplies.

Saudi adopts 2010 budget with $18.7 bln deficit

RIYADH - Oil-rich Saudi Arabia unveiled a budget for 2010 on Monday that forecasts a deficit of 18.7 billion dollars for the second year in a row but still boosted public spending, the finance ministry said.

The new budget estimates spending at 144 billion dollars, the highest projected expenditure ever, as allocations for development projects increased by almost 10 billion dollars to 70 billion dollars, the ministry said.

Aramco awards $373.3m deals for seismic work

Saudi Aramco has awarded two seismic contracts to explore offshore oil and gas reserves worth SR1.40bn ($373.3m) to Arabian Geophysical and Surveying Co. (ARGAS).

The award comes just a few months after BGB Arabia won contracts to conduct seismic studies in the Red Sea, Moneefa oilfield and some areas in the Empty Quarter.

The Saudi-based ARGAS expects to start gathering the data in the Zuluf oilfield in November 2010, it said in an e-mailed response, adding that work would be completed in two years.

Alcoa, Saudi Arabia to invest $11B in venture

NEW YORK — Alcoa Inc. said Monday it and the Saudi Arabian mining company, Ma'aden, will invest $10.8 billion in a joint venture to develop an aluminum industrial complex in Saudi Arabia.

The complex, which will range from a bauxite mine to production facilities, will be developed in two phases with initial production expected in 2014.

Nigeria Says Shell Will Need Government Approval to Sell Assets

(Bloomberg) -- Nigeria’s Oil Minister said Royal Dutch Shell Plc will need government approval to sell oilfields following a report that it plans to sell as much as $5 billion of assets in the West African nation.

...“It’s not theirs to sell,” Minister of Petroleum Rilwanu Lukman said by phone from Abuja today. “They’re holding concessions given them by the government.”

Sierra Club's Pro-Gas Dilemma

When energy companies began preparations to drill for natural gas in upstate New York last year, the local Sierra Club quickly organized against them.

The group's New York chapter demanded studies on the environmental risks, pushed for stricter regulations and called for a statewide ban on most gas drilling. The drilling hasn't begun as the state works to develop regulations.

It would have been a typical story of environmentalists battling industry, except for one thing: The national Sierra Club is one of natural gas's biggest boosters.

Russian oil magnate boosts gas stake

Russia on Monday approved a huge increase in the stake held in gas firm Novatek by Swiss-based Russian oil trader Gennady Timchenko, co-founder of the third largest oil trading company in the world.

The government's commission on foreign investment approved the consolidation of an existing five percent stake in the company held by Timchenko's Volga Resources fund with a new stake of more than 18 percent.

Indonesia: Reducing the vulnerability of our electricity supply system

Electricity shortages, blackouts and brownouts have become common phenomena in Indonesia, including in the capital Jakarta recently.

Elsewhere in Indonesia, including world-class oil- and coal-producing regions like East Kalimantan and Riau, electricity shortages have long been an ironic truth for the local people.

An electricity shortage is actually a phenomenon which can be predicted long before it happens.

Turn out the lights!

Silent night, holy night. All wasn't calm. Where were the lights? In the twinkle of an eye, Northeast Ohio's holiday spirit dimmed overnight.

Local communities pulled the plug on Christmas decorations in December 1973 to comply with a federal order to save electricity.

One cold Christmas, everyone wanted coal

Beginning in December of 1917, the city of Manchester -- as was the case with most major cities on the East Coast -- found itself in the throes of what was described as a "coal famine," a critical shortage of the once-prevalent heating fuel that threatened lives and livelihoods here In The City.

It was a problem that arose from a perfect storm of chance, circumstance and ineptitude, and, with the United States still sending thousands of doughboys to Europe to battle The Hun, the choice between guns and butter -- make that guns and coal -- polarized public opinion.

Book Review: Peak Water

If oil supply peaks and begins to decline times will be hard. Standard of living will decline and people may go hungry but they will be able to adapt by powering down and making do with less.

If water supply- for domestic use but also for irrigation- peaks and declines people have no option but to migrate.

What we'll drive next

These 6 insurgent automakers are outmaneuvering the Big Three to shape the future of the automobile.

Bill McKibben: Copenhagen: Things Fall Apart and an Uncertain Future Looms

The Copenhagen summit turned out to be little more than a charade, as the major nations refused to make firm commitments or even engage in an honest discussion of the consequences of failing to act.

Dutch have a simple answer to energy crisis – working together

Profit currently handed to shareholders of the big power companies.

And since some of those power companies are government-owned (along with the grid network), that's a straightforward steal – taking cash from the public in the form of hiked-up energy prices to give to private shareholders.

Try another model. Suppose that same amount of profit was used in a different way – to finance renewable energy projects – then the shift from carbon to sustainable energy societies could begin immediately and the target of 50 per cent renewable energy by 2030 could be realised. But if that quarter of the energy price continues to be "lost" as shareholder profit, where will conventional power companies find the extra cash to invest in alternative power? More importantly perhaps, why would they bother? With billions sunk in oil, coal and gas technologies and power stations, do any of the existing energy players really want to make a massive switch now?

ANALYSIS - IEA gas producers likely to shun "gas OPEC"

LONDON (Reuters) - Cartel opponents Australia, Canada and the Netherlands are unlikely to join an OPEC-like gas group, despite Russian claims that they might.

Russian officials heading the GECF, whose 11 members control nearly three-quarters of the world's proven gas reserves, said last Tuesday the GECF could become a price-influencing group like OPEC.

It said the Netherlands was in talks to participate, and that Canada and Australia could get involved later.

The prospect of the Netherlands, the biggest gas producer in the European Union, or Canada -- the biggest supplier to the United States -- colluding with the Gas Exporting Countries Forum (GECF) would startle consumers already concerned about prices and uncertain supply.

But all three countries are long-standing proponents of free markets and opponents of supply controlling groups like Organization for Petroleum Exporting Countries, so Russian claims they could join a group hoping to supporting fuel prices through collaboration seem hollow.

EnCana seeks natural gas highway network

One of Canada's biggest energy companies is asking the federal government for $1-billion to kick-start a transformation of the country's highways.

Over the past few months, EnCana Corp. has been in talks with government officials about a plan to build a network of hundreds of compressed and liquid natural gas fuelling stations between Windsor, Ont. and Quebec City, Canada's busiest highway corridor.

Shell has not told Nigeria of oil sale plans-minister

LAGOS (Reuters) - Royal Dutch Shell has not informed the government of any plans to sell oil fields in Nigeria, as reported by several newspapers over the weekend, Minister of State for Petroleum Odein Ajumogobia said on Monday.

"Shell has not informed the government of any such plans," Ajumogobia told Reuters, when asked about reports that the Anglo-Dutch company was seeking to sell onshore oilfields valued at up to $5 billion.

Russia eyes Samsun-Ceyhan slice

Russian interests may get a 50% stake in the Samsun-Ceyhan oil pipeline linking Turkey's Black Sea and Mediterranean coasts if the country can supply more crude, Russia's oil pipeline operator Transneft said.

China extracts more concessions from Myanmar for oil pipeline

BEIJING: China has managed to extract greater concessions from the military rulers of Myanmar about a crude oil pipeline connecting the two countries. Myanmar has agreed to give the state-owned China National Petroleum Corp. exclusive rights to build and operate the pipeline besides granting tax relief.

Indian oil companies had been competing with their Chinese counterparts to secure Myanmar oil and gas until CPNC clinched the deal. This is what makes the stipulation in the deal about "exclusive rights" being given to CPNC very significant.

The Nuclear Industry Will Settle for 25-30 New Plants by 2030

To meet the current goals for greenhouse gas emissions, the U.S. would have to build 187 new nuclear plants by 2050, according to former New Jersey Governor Christine Todd Whitman, who now co-chairs the Case Energy Coalition, which advocates increased nuclear power in the U.S.

But the industry will settle for 25 to 30 by 2030, she said. That would be enough to meet the expected growth in demand for electricity in the U.S. while keeping nuclear around 20 percent of the mix. The U.S. currently has 104 reactors.

Nigel Lawson: Time For Plan B

The time has come to abandon the Kyoto-style folly that reached its apotheosis in Copenhagen last week, and move to plan B.

And the outlines of a credible plan B are clear. First and foremost, we must do what mankind has always done, and adapt to whatever changes in temperature may in future arise. This enables us to pocket the benefits of any warming (and there are many), while reducing the costs. And since none of the projected costs are new phenomena, but the possible exacerbation of the problems our climate already throws at us, addressing these problems directly is many times more cost-effective than anything discussed at Copenhagen. Nor does adaptation require a global agreement, although we may well need to help the very poorest countries (not China) to adapt.

Global Warming vs. the Next Ice Age: Will the greenhouse effect prevent the return of glaciers?

Even if the rate of growth could be moderated enough to stabilize levels at about 550 ppmv, average temperatures might well rise by about 5 oC--with devastating effects for us earthlings, such as rising sea levels and dramatic changes in weather patterns.

But even that warming will not stave off the eventual return of huge glaciers, because ice ages last for millennia and fossil fuels will not.In about 300 years, all available fossil fuels may well have been consumed.Over the following centuries, excess carbon dioxide will naturally dissolve into the oceans or get trapped by the formation of carbonate minerals. Such processes won't be offset by the industrial emissions we see today, and atmospheric carbon dioxide will slowly decline toward preindustrial levels. In about 2,000 years, when the types of planetary motions that can induce polar cooling start to coincide again, the current warming trend will be a distant memory.

Kunstler: Blue Christmas

The infatuation with technology, and the disgusting cockiness that goes with it (so well-captured in Avatar), is but one facet of the psychosis gripping the nation -- and by that I mean the profound detachment from reality. We have no idea what is happening to us and, naturally, no idea of what we are going to do. I sat in a bar Friday evening with a financial reporter from a national newspaper, trying to explain the peak oil situation and what it implied for our economy. He had never heard it before. The relationship between energy resources and massive debt was new to him. (It also came up in conversation that he could not tell me what the Monroe Doctrine was about, despite a history degree from Yale.) There you have a nice snapshot of the mainstream media in this land.

Gas could be the answer in global warming fight

An unlikely source of energy has emerged to meet international demands that the United States do more to fight global warming: It's cleaner than coal, cheaper than oil and a 90-year supply is under our feet.

It's natural gas, the same fossil fuel that was in such short supply a decade ago that it was deemed unreliable. It's now being uncovered at such a rapid pace that its price is near a seven-year low. Long used to heat half the nation's homes, it's becoming the fuel of choice when building new power plants. Someday, it may win wider acceptance as a replacement for gasoline in our cars and trucks.

Total’s De Margerie Is Considering U.S. Shale-Gas Investment

(Bloomberg) -- Total SA, Europe’s third-largest oil producer, is considering investment to extract natural gas trapped in shale rock in the U.S. and elsewhere, Chief Executive Officer Christophe de Margerie said.

“We’re looking at it,” de Margerie told Bloomberg on the sidelines of a conference in Beijing today. “There are strong chances that the U.S. is a good place” for shale developments.

China faces a quandary over oil

Situ Yu, a 28-year-old Beijing resident, often chooses public transportation nowadays, although she bought a Ford Focus in 2007.

"The gasoline price is so expensive now. I have to tighten my belt," she said, adding that she has to pay around 1,000 yuan to buy fuel every month.

"The price was going up too quickly this year," she said. "Some of my friends also choose to drive less because of the high fuel prices."

Oil Climbing as Rebound Makes Most-Accurate Forecasters Bullish

(Bloomberg) -- Oil’s biggest annual rally since 1999 is poised to continue with gains of 20 percent next year as the global economy recovers and OPEC curtails production, the most accurate crude forecasters say.

Societe Generale SA’s Mike Wittner and Hannes Loacker at Raiffeisen Zentralbank Oesterreich AG, whose predictions this year that were within 9 percent of market levels, now say oil will end 2010 near $88 a barrel, up from current prices of about $73 in New York. The median Wall Street estimate is for an increase to $83.

Nigeria: Oil reserves fall, threaten OPEC quota

THE Nigerian Petroleum Corporation (NNPC) has alerted that the Nigeria's oil reserves are dwindling to the extent that the nation's Organisation of Petroleum Exporting Countries (OPEC) quota might be under threat if the slide is not checked. The corporation has however set a target of $29 billion (about N1.8 trillion) revenue from petroleum resources in 2010.

In a memo forwarded to the National Assembly on the 2010 Budget, the corporation said: "The current trend in decline in oil reserves, if not addressed, will hamper the country's ability to negotiate for higher OPEC quota and will invariably lead to a reduction in government revenues, in the long term." The solution, according to the NNPC: "Funding to explore deeper plays in the mature Niger Delta region could be our best hope to address this situation."

OPEC Has Consensus on No Change in Output, Badri Says

(Bloomberg) -- The Organization of Petroleum Exporting Countries has a consensus on “no change” in oil production quotas for the bloc’s meeting tomorrow, its secretary-general said.

Abdalla Salem el-Badri doesn’t envisage any need for the producer group to raise the output ceiling from its current limit of 24.845 million barrels a day, he told reporters in Luanda, Angola, today. The group also doesn’t need to meet again before its next scheduled March 17 conference if market conditions stay the same, he said.

Oil hovers above $73 ahead of OPEC meeting

Iraq took back a remote oil well from Iranian forces over the weekend, a confrontation that briefly sent oil prices higher Friday on investor concerns about a wider conflict, although analysts quickly excluded a lasting impact on the market.

"There are continued issues on the exact positioning of the Iranian-Iraqi border but there will not be a new Iraq-Iran war," said Olivier Jakob of Petromatrix in Switzerland. "While it does create some nice headlines in a holiday market, the market reaction on Friday shows the risk of buying oil on such hyped headlines."

Gasoline Rises on Bets It’s Undervalued Relative to Heating Oil

(Bloomberg) -- Gasoline rose and heating oil slipped on speculation that heating oil was overvalued relative to the motor fuel.

Gasoline rose, narrowing the discount to heating oil by 4.35 cents after lagging behind earlier this week after the Energy Department reported that heating oil supplies were the lowest since April and motor fuel inventories rose a fourth straight week.

Iraq Seeks More Petroleum Gas in Tender, Extends Bid Deadline

(Bloomberg) -- Iraq, holder of the world’s third- largest oil reserves, is seeking to buy more liquid petroleum gas for February and March and extended the deadline for bids as it reissued a tender for the fuel from earlier this year.

The State Oil Marketing Co. is looking to buy as much as 30,000 metric tons of liquefied petroleum gas a month for shipment to the Khor Al-Zubair terminal, according to a tender posted on the Oil Ministry’s Web site today. Bids are due by 12 p.m. on Jan. 4 and can be submitted starting tomorrow.

Has peak theory reached its tipping point?

First there was peak oil. Then came peak wood and peak gas. What is it with all these peaks ? Is the world really running out of the raw materials it needs to make it tick, move and communicate? Or should the next peak be in stories about peaks?

Attributed to American geophysicist M King Hubbert, peak theory assumes that resource production follows a bell-shaped curve. Early on, the production rate increases as discoveries are made and infrastructure built. Later in the curve, after the eponymous Hubbert's peak, production declines as reserves run dry. US oil production reached its Hubbert's peak in the early 70s and has declined since. But what about the rest?

Iranian Troops Leave Disputed Iraq Oil Field After ‘Violation’

(Bloomberg) -- Iranian troops withdrew from a disputed Iraqi oil well in the East Maysan field after an armed confrontation at the deposit, Iraqi government officials said.

Russia Blames RusHydro Disaster on Human Error, Technical Fault

(Bloomberg) -- An accident at Russia’s largest power plant that killed 75 people in August was caused by a human error, as staff failed to shut down and examine a faulty turbine, Russian lawmakers said today.

The disaster occurred as OAO RusHydro’s Sayano-Shushenskaya plant continued to operate its second turbine, which had exceeded allowable vibration levels since Apr. 21, said Yury Lipatov, the secretary of the lower house of parliament’s commission to investigate the Aug. 17 accident.

Mass. Turnpike usage drops

The number of motorists using the Massachusetts Turnpike has dropped this year and that is pushing down toll revenue, a double dip that has not occurred since the 1974 energy crisis.

If the trend continues through the end of the year, it will be just the second time in the 52-year history of the Mass. Pike that both motorists’ usage and toll revenue have fallen simultaneously. Also, after a decline in usage last year, 2008 to 2009 is on pace to become just the second time in turnpike history that fewer drivers used the highway in consecutive years.

Turnpike officials blame the recession: Fewer jobs means fewer commutes.

Carriers have a weather eye on future

LISTEN to the environmentalists, and airlines are on a highway to hell where they will be be brought down by the dual forces of peak oil and climate change.

Talk to the aircraft manufacturers, and the future's so bright that airline executives have to wear shades.

The reality will likely be somewhere in between.

EDF Didn’t Abuse Trading Market Dominance, Energy Watchdog Says

(Bloomberg) -- Electricite de France SA, Europe’s biggest power generator, didn’t abuse its dominant market position for power trading in 2008, the country’s energy regulator said after carrying out its first audit of the utility’s trading and generating operations.

“EDF is in a dominant position, which is not forbidden. What is forbidden is to abuse it,” Fadhel Lakhoua, director, financial affairs and wholesale markets surveillance at the Commission de Regulation de L’Energie, said in an interview. “The way to look at this is to see whether prices are significantly higher than costs.”

SouthGobi May Spend $800 Million on Mongolian Output

(Bloomberg) -- SouthGobi Energy Resources Ltd., a Canada-based coal producer operating in the southern deserts of Mongolia, plans to spend as much as $800 million in the next three years to increase output and supply customers in China.

The Toronto-listed company aims to boost its coal production in the Gobi desert by more than sixfold to 8 million metric tons by 2012, Chief Executive Officer Alexander Molyneux said at a media briefing on Dec. 10 at the Ovoot Tolgoi mine, about 950 kilometers (590 miles) south of the capital Ulan Bator. SouthGobi, 79 percent-owned by Ivanhoe Mines Ltd., embargoed the release of information at the press conference until today.

Violence next in mountaintop mining battle?

For nearly a decade, environmentalists and the mining industry battled in courtrooms and the Capitol. Arrests were unheard of.

This year, as mountaintop removal has drawn more scrutiny from regulators, policy makers and the public, the activists' strategy changed.

Europe's wind companies snap up U.S. stimulus cash

NEW YORK (Reuters) - European companies have scooped up the majority of U.S. stimulus money set aside for wind power projects, drawing on their expertise and global reach to tap into Washington's effort to grow the base of renewable energy sources.

While those government funds have generated U.S. jobs and provided a lifeline to the green energy industry during the financial crisis, the cash flows show European companies remain crucial to U.S. goals to advance the renewable power sector.

2010 preview: Automotive X Prize contestants power up

More than 40 teams from around the world are set to compete in a number of performance trials, culminating in a stage race across the US in June or July. The contestants include small custom shops, well-known start-ups such as Tesla Motors and Aptera, and the giant Indian car maker Tata. No major US or European manufacturer is competing.

The contest features two classes. Mainstream cars must carry four passengers on four wheels and have at least 10 cubic feet (280 litres) of space for groceries. Alternative entrants, of which the eVaro is one, can have fewer seats and wheels, and need not have any carrying space.

Ethanol: Not All It Seems To Be [PDF]

Newspapers and politicians describe ethanol as a panacea for reducing dependence on oil-based fuel. Teams of high school mathematics students say “not so!” Who should you believe, and why? Read on, and see what you think. Here is an overview of the 2008 modeling competition that addressed this issue and the winning paper.

Entirely Internet-based and free of entrance and participation fees, the M3 Challenge awards scholarship prizes to teams of three to five high school juniors and/or seniors, who are asked to solve a real-world problem in 14 hours or less using mathematical modeling and analysis.

Carbon Emission Permits Tumble After ‘Modest’ Climate Accord

(Bloomberg) -- European carbon prices fell the most since February after the Copenhagen climate accord didn’t set targets that would boost demand for permits.

Marxist Professors Are Gift to Climate Skeptics

The public’s skepticism toward the scientists is part of a bigger problem, one that threatens the fabric of our culture. Academe has been so politicized, and so radically disconnected from the population, that ordinary citizens no longer trust anything that it produces -- even science.

The sad fact is that explicit or implicit political litmus tests are far more important than science at universities and so-called peer-reviewed journals. Universities may pay lip service to “diversity,” but diversity of thought is taboo.

Climate reality: Voluntary efforts not enough

COPENHAGEN - Around the world, countries and capitalism are already working to curb global warming on their own, with or without a global treaty.

In Brazil more rainforests are being saved, and in Chicago there's a voluntary carbon pollution trading system. People recycle, buy smaller and newer cars, and change lightbulbs.

But the impact of such piecemeal, voluntary efforts is small. Experts say it will never be enough without the kind of strong global agreement that eluded negotiators at the U.N. summit this past week in Copenhagen.

China Says Climate-Change Talks Yielded ‘Important Results’

(Bloomberg) -- The Copenhagen climate-change talks yielded “important and positive results” by pushing rich countries to take steps to cut carbon emissions and providing poor nations with money and technology to fight global warming, Chinese Foreign Minister Yang Jiechi said.

U.S.-Backed Climate Deal to Give Obama Sway in Senate

(Bloomberg) -- The first offer by China and India to limit greenhouse gases in a global agreement may help U.S. President Barack Obama win over members of the Senate who don’t want to impose similar restrictions on American companies.

The accord brokered by the three countries last week at United Nations talks in Copenhagen, while not legally binding, also calls for international verification. That addresses demands by senators who oppose UN rules that may hurt U.S. businesses’ ability to compete in the global marketplace.

An Air of Frustration for Europe at Climate Talks

Caught off guard by the Copenhagen accord, European leaders felt pressure to back it even though they they thought did not go far enough and had a process in which they had little influence.

Stiglitz Says Copenhagen Is a ‘Great Disappointment’ (Update2)

(Bloomberg) -- Nobel Prize-winning economist Joseph Stiglitz said the Copenhagen climate-change agreement was a “great disappointment” because it lacked a framework to cut carbon-dioxide emissions blamed for global warming.

“The real question is burden sharing,” Stiglitz said in Singapore today. “It wasn’t just that it’s not legally binding. Who is going to reduce their emissions and what is the framework for an agreement on reducing emissions? There was no progress on that as far as I can tell.”

Global warming a tough sell for the human psyche

NEW YORK — The Copenhagen talks on climate change were convened with a sense of urgency that many ordinary folks don't share. Why is that? One big reason: It's hard for people to get excited about a threat that seems far away in space and time, psychologists say.

"It's not in people's faces," said psychologist Robert Gifford of the University of Victoria in British Columbia. "It is in the media, but not in their everyday experience. That's quite a different thing."

The consequences of global warming are seen as occurring in far-off places, he said: "It's happening up in the Arctic or it's happening in Bangladesh, and it's not happening in my backyard." And the slow changes are not as attention-grabbing as a "fast disaster" like an earthquake, he said.

OK: wall street estimate for 2010 is $83

let me go on record as saying it will be at least double that: $165.

wait I just reread the article - it say oil will END 2010 at 83. so are they saying average median mean or just Dec 31st 2010?

i am saying average will be 165

Annual US spot crude oil prices through 2008 (EIA):

The 2009 annual price is going to be about $60. IMO, the annual 2010 price will exceed $60 and then from there the question is when we see enough of a net global decline in demand to again show an annual decline in prices, followed by rising prices--as non-OECD countries tend to take a larger share of declining net oil exports, with OECD countries generally being forced to reduce their consumption. Basically, a pattern of higher highs and higher lows (the 2009 annual price is more than four times the price that we saw in 1998, $14).

Please don't use the Width=100% tag. It makes the image unbelievably ugly and unreadable if you have a large monitor.

WT -- FWIW I've been polling around and found that most companies are running oil price decks around $60-$70 with little or no inflation factor. As you know the attitudes of the bankers have a big influence on a company's pricing assumptions. For the rest of TOD such price decks are not so much a prediction of future oil prices as it is a necessity to run economic analysis. Typically companies try to stay on the conservative side of the fence. Even in the summer of '08 when oil was bouncing over $100 most companies were still using price decks starting at $80 or less.

As I mentioned the other day most in the oil patch don't bother trying to predict future oil/NG prices. That's why most price decks reflect prices at the current time. Like I said: when you been so wrong so many times you just stop trying.

let me go on record as saying it will be at least double that: $165.

I would be very surprised if oil was at $165 at anytime next year. Unless of course there is a total dollar collapse.

I don't think the dollar will collapse and I don't think the economy will be able to handle $165 oil. I would find $40 oil and few being able to afford it as being a more credible scenario.

I don't think the dollar will collapse and I don't think the economy will be able to handle $165 oil.

I agree. The Great Recession will still be raging all year long. There is just no way the economy can support $160 oil. Watch this CBS 60 Minutes video. (13 minutes long) Wilmington's Long Recession. Scott Pelley says; "This week marks the third Christmas of The Great Recession." He then tells the story of Wilmington Ohio, where just about everyone has lost their job. I think that it is highly likely that in just a few years all of America will resemble Wilmington Ohio. If that is the case there will be a glut of oil long after the peak of world oil production.

There is just no way oil will go over $100 a barrel if this recession gets even deeper, and I believe it will. When predicting oil prices one must take the economy into consideration. Did we not learn that lesson last year?

Ron P.

Today I agree with you Ron. The ecomomic impact of a recession on oil prices was a big surprise to most of us last year. It shouldn't have been, it is only logical, after all that we use less when things get tough, but for some reason most of us did not see it coming, your's truly included.

So what's it take to increase employment?

1) More exports - this would benefit from a weaker dollar, which isn't much happening yet.
2) Cheaper energy - this would benefit from a stronger dollar. Wait, how does that fit with (1)? To fix this we need to improve efficiency, conserve, and shift sources. "Drill baby drill" is the best we've come up with?
3) Lower manufacturing taxes - the US has increased business taxes for decades, and IIRC is now among the highest. Won't go down with liberals in charge.
4) Reduce regulation - Copenhagen and most enviro controls add regulation and costs, and promote shifting of production to places like China that don't have those costs. Not much change of a change here, either. China is depending on it. Heck, they may specifically promote the double-standard.
5) Availability of capital - Banks are sitting on what they have, and incentives are maintaining rent costs while stifling lending to anybody but the gov't.
6) Resources - Getting scarce, and what is available is more regulated and costly. Not much change of a "new frontier" outside the Amazon.

How can the recession POSSIBLY end, with pretty much every business drivere pressing downward?

This is not just a recession, it is the end of this version of capitalism. The US is terminal.

I thought that little bit of misguided wishful thinking expired months ago.

No way, Jose. The pessimists have not changed their minds a whit on that this issue.

Pessimists, almost by definition, aren't going to change their minds.

But the likelihood that the ongoing economic slowdown is transformative at the level of operating system looks a lot smaller to me - and I expect, most people - today than it did a year ago.

But probably not most peak oilers.

I would say most peak oilers believe that this time it is different...because we're past peak oil.

Among other things.

Keep watching Jack.......it won't be much longer.

An obvious approach is to put a long term stable price on carbon (aka a "price signal") that would help level the playing field for renewable energy development. IMHO this would help to free up what capital there is to invest in related energy and transport projects that would create jobs.

You left out:

7) Reduce/eliminate the minimum wage. US workers are now competing against workers in other countries who are every bit as good, or in some cases better, and who are willing to work for a fraction of our minimum wage. Ergo, US workers are being priced out of the global labor market, and will continue to be so, until their price declines to global standards. Everyone hates this, but welcome to reality. The US per capita GDP is declining, and this must inevitably be part of it. Instead of denying reality, and leaving increasing millions of Americans out of work, what we really need to be doing is figuring out how to make it possible for people earning such low amounts per hour to actually keep fed, clothed, and sheltered.

We can do this willingly now, or we can just wait until so many people are unemployed that there are not enough tax revenues left to keep the FedGov wage and hour enforcers staffed, allowing employers and employees to just ignore the law.

Krugman had a piece about this last week. His argument (he assumed all wages would decline proportionately), was that this is similar but not as good as currency devaluation. Note that the cost increase due to nominally increased energy import costs is probably less than the increase in exports, i.e. we would probably gain more than we lose via currency devaluation.

His argument (he assumed all wages would decline proportionately), was that this is similar but not as good as currency devaluation.

Krugman is right, it is not as good as devaluation. If this happens, then the value of debt actually increases! If currency devalues, value of debt shrinks to affordable. It is this that makes Noble Laureats like Krugman want to devalue currency.

Good luck with all that.

Remember that "globalization" allowed capital to flow across borders more freely but did not take into account the added cost in the US for things like worker safety, environmental regulations and health care paid for by employers. Many of the countries where US jobs have moved have draconian policies regarding the rights of employees. It also fails to take into account that the capital that is moving from the US to low wage countries benefitted from the US taxpayer providing incredible infrastructure for the corporations to make those initial profits.

A civilized country would have taken this into account when enabling the flow of capital. I believe there would be a lot less "globalization" if these factors mattered. The average productivity of US workers is not that bad.

Well of course eventually it does matter. What kept the bubble going was expanding credit. I.e everyone that was industrializing was more than willing to except our IOU's in exchange for selling us goods and services.

Its like my former employer on reason they laid off their US staff is they claimed they could simply higher a bunch of Chinese programmers for a lot less than us.

Well thats fair I don't have a lot of control over my cost of living I can't easily compete with a Chinese worker who's costs are a fraction of mine.

However now you have the problem who will buy your products ? Certainly the low paid chinese worker is not going to pay as much as the American using credit. And neither are the newly impoverished Americans like me. My purchasing power or consumption fell rapidly. And it will stay low from now on out regardless of what happens. More and more people are going to reject credit and hunker down.

At that point my former employer has a problem it does not matter that he managed to lower his cost by some amount as there is simply no demand for his product at any price. Once the credit bubble bursts attempts to evade the results by slashing wages just feeds the fire as employers maintain production capacity at reduced costs for a shrinking market.

I think we are just starting to really enter the point where price deflation becomes a serious problem because of serious overcapcity problems.

Now this does not mean I'll ever get my "American salary" back however it suggest that the problem of disparity in living costs will become a huge issue as global wages fall to similar levels against a shrinking market and production capacity is well beyond the new level playing field.

This is what I believe was at the root of the Depression. Employers cut wages and cut workers but it was impossible to shrink excess production capacity as markets everywhere shrank. Sure we get a brief period where companies look good on paper. But as they are forced to sell at a loss these paper profits will go up in smoke.

Its now a steady downward cycle of impoverishment as falling wages lead.
The problem is of course production capacity and living costs are sticky i.e they intrinsically fall slower than wages leading to a permanently crippled system. Left alone to its natural course I'd guess it would take decades to actually stabilize into a new low debt economy. Decades more before wealth really increased. And of course it seems sensible that you would have to have population contraction to really pull out. Only falling population seems to be the way you can steadily increase the value of the individual. Eventually of course as the population fell wages would rise and so would consumption debt would not be needed and a saving society would have developed again.

If population instead increased you would have to imagine the swelling ranks of impoverished would lead to social unrest and chaos.

I just don't see how the natural process would not be slow and painful and take a long time to really repair and balance the system. Its a bit unfortunate that WWII cut short the slow plodding pull out from the Great Depression. Given that population continued to increase during the time period.
And the thesis is you end in chaos if this happens then WWII would be expected.

You have to go back to the Black Plague to see a natural cycle where the rapid fall off in population eventually lead to prosperity. My opinion is that the system cannot fundamentally grow once it goes over the peak of a credit society until shrinking population forces wages to start rising again.
Its a certain downward spiral that only bottoms out as the intrinsic value of a worker increases because of a basic shortage of people.

The other approach is war which primarily destroys infrastructure but also can lead to a reduction in population. If you win your former enemy is forced to take on debt from you to rebuild and or is enslaved and its productive capacity simply stolen or both. Its a way for humans to short circuit the long natural cycle after credit and civilization have peaked. And of course the re-purposing of production capacity to produce ware material plays a huge role.

And invariably once the war ends you have a recession as the war economy winds down regardless of how much rebuilding is needed.

If this concept is true whats really interesting is the fact that workers will quickly cave and agree to lower wages lies at the hart of the problem and of course this is because the population is simply intrinsically to large to support a low debt economy as it comes off a debt induced bubble.

Memmel you've shown again why you're one of my favorite mammals.

It's a race to the bottom, almost all of the feedback loops are positive now.

In my own case, I used to buy a new computer about every 2 years, now when this 13-year old machine, lent to me, dies that's it.

I used to spend $800 a month on shipping, now I mail one letter every 2-3 months.

I used to spend $100+ a month on gas, now it's maybe $30 on a really active month, it's more like $10 or less for this month.

I used to struggle to keep my food expense down to $10 a day, now I'm spending maybe $10 a week. Maybe.

I've scaled down like crazy and am scaling down more, progressively. This isn't voluntary, I'm not a very advanced soul or that disciplined a person. It's involuntary.

This Xmas I'll likely sit here at home, doing nothing and spending nothing.

I wonder if Kondratieff ever foresaw this, people being forced to essentially go on strike, permanently, from Capitalism?


Just wanted you to know that I never skip over any of your posts.

You are living proof of where this country is headed and also how resilient some can be in the face of adversity.

To me you represent the youth of this country that I thought had vanished. Most have but
you appear to be better and more capable than I think the rest are.

Where are todays youth anyway? What are they really doing? Is this chaos affecting them in any way?

I don't know about the above but the ones I do see are standing around in Best Buy as employees and doing absolutely NOTHING. They can't seem to adapt.

You have and are adapting.

Regards and Happy Holidays,

Man power will slowly replace fuel power in a much more austere future.

It should have been obvious at the time that we were being sold globalization's bill of goods that if you eliminate barriers between any two countries, their prevailing wage rates will eventually converge toward a common mean. Since the US had some of the world's higher wage levels, the inescapable conclusion should have been that the pressure on US wages would be downward until they were equalized with Mexico, and then with China (and maybe then with Haiti).

This was clear to me at the time, which is why I didn't think it was a good idea. However, this was not generally talked about, other than by Ross Perot (already marginalized as a "kook" by the mainstream medai).

If the general public had been fully informed about the reality of this, then I believe I can safely say that globalization would have had a snowball's chance in hell of coming into being.

That is the purpose of labor unions.

Excellent point , WNC

I have been accused (politely and indirectly) more or less forever by both by my less perceptive "republican type" conservative friends and acquaintances as well as virtually all my liberal buddies of being a ding aling for making this very same point.

Now the publicans are mostly self employed or managerial types and the liberals are mostly professionals who never thought THIER jobs would be threatened-teachers and other govt types , plus some others such as accountants or medical personell.

Well they have thier golbalization now and quite a few of them are choking on it.

I saw a piece a while back where we will be allowing nurses by the thousands into the states from places like the Phillipines , at just about the same time that nurses were beginning to get a little professional respect and courtesy from the rest of the medical industry due to thier scarcity.

And of course nobody in the UAW or the steel workers unions could ever concieve of THIER jobs and states being at risk-they swallowed the bait whole, the bait being that they would get thier blue jeans at Walmart prices fron China while textile workers and other less organized southern labor enjoyed some involuntary sex.

It never occured to them that a textile worker making twenty five or thirty thousand can ( just barely) afford a new Chevy but a Mickey d burger flipper can't. or that they wouldn't buy American on half thier former wages out of patriotism , even though Japanese cars were much more durable, much more reliable, easier on gas, and cheaper to boot, not to mention more fun to drive if driving the cheaper models.., And it certainly never occured to them that thier congress critters -virtually all of them democrats-would sell them out and allow import car companies to build plants in Tennessee and Alabama-or at least fail to prevent the building of such plants.

You are assuming Globalization will continue. Personally, I think the conditions under which it existed are changing rapidly and that it will soon be dead.

I think this is a key point.

Unless we go to a Western European model, wage rates are bound to continue to decline:

Ford offers buyouts to all UAW workers


Not only does a minimum wage hike pander to the working poor and those unions who index their pay based on the minimum wage, but it also helps inflate tax revenues from the middle class as everybody bumps up a little. Since tax rates tend to be progressively lopsided, the much-derided AMT phases in and many deductions phase out according the absolute dollars, not the actual value of the dollars, so even those who make more often end up being able to afford less.

Of course all the loopholes and accountants feed into measured GDP, so once again we have positive feedback that looks good on paper but does nothing for the future wealth of our children.

when are bernanke's wages going to drop? and paulison's and summer's and
giethner and corzine and the rest of the gold man sacks crew? hmmmm?
shouldnt they be priced out of the market? woops, me bad. they the ones who are pricing everyone else out. i wish i was doing god's work. looks like i am going straight to hell. well, at least i'll have lots of company and i will know everyone there. i hope they have the internet and i can still post to the oil conundrum. "it's all good"

While the rest of the people go out to the soup kitchens, the Government and it's bankers are eating big lunches.

When will we see change? Oh never mind some of you all voted that one into office a year ago. Then the next question is where is the bottom to this ride so I can get off and go play shoot the ballons and get in my shooting practice.

My current income is equal to $4.50 an hour. I am sure Fleam and a few others are much less than that. How many folks that read TOD are amoung the unemployed?


I was actually about up to $4.50 an hour when things were going good, over the summer - with a 100-mile commute. Now well, no income really.

There's so much computer hardware sitting around that still works well enough, and so many of us bunching up with others who are able to pay an electricity bill and an internet bill for now at least, that I suspect there are a lot of destitute folks on the Internet.

After a bit more time, as our computers die or those we're living in the "back 40" trailers of become destitute themselves, we'll just drop off of the system.


Many have disappeared from this site and from others, and they're not remembered, talked about, wondered about, etc. They are GONE and no one gives a damn.

This is why I stress so much, forming relationships with real people. And setting your life up with the death of the Internet in mind. When you lose your ability to get onto the net, it won't be coming back, it'll be over. The. End.

You will have to be able to network with people in real life. Make a living and barter, arrange odd jobs, etc etc without the use of the net. You can't structure your life counting on making some product and selling it on-line, when you're destitute there is no on-line.

Think about it: The poorer you are, the more you are living in the Future!


I've only been on this site for a few months, since good high speed came to my nieghborhood.

I can tell you for sure that I miss my few electronic friends when they have disappeared from this site, which is the only place I post comments-It's the only one I 've found with people and content capable of holding my interest.

And I spend a considerable amount of time thinking about the tough situation a lot of people are in these days,and thinking about something I could do to help.I might add in gentle reproof to those so adamantly set against religion that as a child a Sunday never passed that I did not receive moral instruction of which the key tenent is "Do unto others as .....".

Otherwise I might be one of those republican kind of conservatives so beloved of liberal bloggers - kind that believes starving workers desperate for a job makes for a great economy.

I am not in need personally and my immediate family is ok, for the time being at least, and if ts really htf we at least have a small paid for farm that will support us all on beans and potatos and eggs, plus more hard cider than will be good for us.

But we have very little money.I hire a local farm hand who is out of work a half a day a week to do chores I would normally be doing myself to help him pay for his groceries.One of my cousins has provided him with a camper and an extension cord and water so that he is not homeless, although his home is modest indeed.Between a hundred dollars worth of foodstamps and odd jobs we will make sure he doesn't freeze or starve.

In my immediate family we have taken in one otherwise destitute relative so far.The last time this was necessary I was a kid myself.

Let me offer a suggestion as to getting some work.There are and will continue to be a lot of old people around with a ltlle money -even if it is only a social security check.They inevitably wind up hiring a few essential chores taken care of when they don't have children to look after them.

Once you have established a working relationship with one of these people you will find that they will want a little something done rather frequently not so much necessarily because they need the work done as because they have outlived thier friends and are lonesome.You can start to meet some of these people thru a local church.Just keep your mouth shut mostly and listen and hang around and make friends.

If there is any way in the world you can get your hands on a cell phone with free incoming calls you can put out a lot of hand lettered flyers advertising your services as a handyman willing to do chores.All you need to make the flyers is a magic marker and some cardboard.

The trick to this is to remember that while the return on the time invested seems impossibly small at first that you WILL get a FEW calls.Each one is precious because if it is handled right it will result in work, repeat work , and referals, -eventually.

When you get a call and your potential customer asks what you charge simply say that you need enough to cover your expenses getting there and back plus whatever they fell like the job is worth.

You are obviously a rather capable and perceptive individual and can learn real fast how to figure out what kind of person you are talking to and of course in order to go to the job you must have an address.You've got the net, you will know how to find out fast about the nieghborhood.

If it's a nieghborhood where people are flat out hard up, expect five or six dollars an hour, which will be hard enough for your customer to pay. But if the nieghborhood looks to be a little more middle classish,you might be pleasantly suprised to find that you get fifty bucks for a half day plus maybe a couple of cups of coffee and a hot sandwich prepared by your employer.

People are creatures of habit and once they know you and the quality of your work they will continue to patronize you to an amazing degree so long as they have a few bucks left for your services.

Even if things are crashing getting work out of strangers is still about salesmanship first and performance second,because without the salesmanship there is no opportunity to perform.A good performance is it's own salesman of course.

Now as it happens I am from a very poor part of the US, and have spent a very large part of my life in intimate contact with poor people and people eking out a living in the gray part of the economy or the straight out underground economy and I have used these techniques to build a business myself in lawn care, which at one time netted me up to two hundred and fifty dollars a day thru the spring and summer months.

I just kept putting my flyers out over and over and over in the same nieghborhoods week after week.
The very fact that the people who see them see them week after week reassures them that you are legit in the sense at least that the police aren't looking for you for burgleing your customers houses.

Sometimes I wouldn't get a single call-but eventually I had as many customers as I wanted, and started shedding the ones that were less profitable in favor of newer ones able to pay more.

In every case when I went to a new customer I said whatever you think doing your yard is worth above my expenses-this first time- and was never seriously "cheated" but twice and even then I made a little bit.Not worth it but still not a cash loss.

Not knowing you personally( please don't be offended) I must assume that you have no particular reason(s) to avoid the local police and another thing that will help is if you are on friendly terms with whatever officers patrol your nieghborhood-enough to chat with them on the street.

If they have some idea who you are it may result in your getting some work that otherwise might not come thru-lots of people talk to cops whom they know personally informally about the people they see around the nieghborhood.

I wish I was in a position to offer more than advice but unfortunately while I made a good bit of money at times like all younger people I never believed I would get old and not feel like hustling anymore until it happened.

My hustling days are over as far as physically serious work day after day is concerned.


And I spend a considerable amount of time thinking about the tough situation a lot of people are in these days,and thinking about something I could do to help.I might add in gentle reproof to those so adamantly set against religion that as a child a Sunday never passed that I did not receive moral instruction of which the key tenent is "Do unto others as .....".

I'm sure I'm one of those that falls into the camp of those in line for that gentle reproof ;-)

Having said that religious or not it really does come down to do unto others as you would like them to do unto you. If those that I encounter in my passage through this life pass that particular test then I usually find their personal belief system becomes irrelevant to my interaction with them and in general they and I can move forward in mutual respect.

Otherwise I might be one of those republican kind of conservatives so beloved of liberal bloggers - kind that believes starving workers desperate for a job makes for a great economy.

Sorry! that one I don't buy. I don't know you but the mental image I have of you is someone with some more self respect and balls than what I think of when I think republican conservative. Sorta like this :-)


Sorry! that one I don't buy.

Me, neither.

"Oh, judge, your damn laws: the good people don't need them and the bad people don't follow them, so what good are they?"


As to conseratives.

To me one of the very big principles of conseratives is the belief that Government is not the solution. Big government is to be avoided and power to the people.

Yet Big Gov IMO, be it Repub or Dem, has brought us to this point. Oh some say..we get what we deserve but still IMO Big Gov with its lobbyists and liars and shapeshifters have created or allowed by their machinations to have what we now are undergoing.

I read Thoreau and others on this. You judge conseratives by quoting Bush and others. Like Cheney.

They say they are conserative but they are NOT.

I am proud to be a conserative and put my faith more in the hands of my fellow man that big government.

Once businesses were conserative. The WSJ was conserative. That is gone. I watched it happen while I worked for one of the worlds largest corporation. I can tell exactly when it all started to go wrong.


I hear you Airdale, I suspect that you like OFM are people that I could sit down with over a couple of cold ones and have some heated disagreements but at the end of it all we would probably leave the table with no hard feelings for each other.

Whereas I can not bring myself to imagine that I would be able to do that with most of the cowards that call themselves conservative Republicans these days, being at the same table with them would cause some violent retching due to the utter disgust that I feel for them.


I guess I should have added a winky face myeslf to the comment about being a "republican" type of conservative.My kind of consrvatism hardly exists in terms of public discourse any more as the word on the right has been hijacked by the big biz boys and slandered from the left by people in too big a hurry to make fine distinctions. I have just about decided to abandon the term on favor of describing myself as a mongrel libertarian anarchist populist with a socialist grandmother hidden in the family closet.

Thank you and Leann for your vote of confidence in my humanity-and if anybody wants to lay a bet for some cash I can put them in touch with my second wife , a nice Jewish artist type from Yonkers.

And it's not that I particularly care to SUPPORT the concept of religion or any particular flavor of it as it is to point out that it seems to be necessary in some way , to be a stone in the foundation of our perception of reality in a manner of speaking.

Take that stone out and something that may be worse WILL rush in to fill the void.It could be another religion, or a personality cult, or an ism of the national , fascist,or communist sort.

Of course it might be possible for a very well educated and culturally cohesive society to evole away from religion and do quite well, as evidenced by western European societies at the moment.

But SOMEBODY is going to be in control of the levers and threads that make the little puppets dance on the stage , is going to be the author of the morality of the age.

That author will be whoever is able to put the citizen in the position of hearing and listening to his message most consistently-whether it is the advertising arm of the motor car industry or the folks that teach us to gamble by ad vertising state lotteries or drink or smoke by pushing beer and tobacco.

When religion is gone what will fill the void?

Not that I think we will ever get rid of religion- it will just morph in to other forms of the same basic phenomenon.

Any old farmer will tell you that absolutely under no circumstances should you ever open a gate until you have a reasonable idea of what lives on the other side.

You know what?
I actually should be cheering to keep the status quo active.
I have enough to last until I die but I can't stand watching this disgusting parasitic system reward the worst of the human species.
I am cleaning my guns while I type this.

We are living in a turning point of history.....isn't it obvious?
I want to be on the right side.

What is the Right Side?

What will you do when approached and alone and the person is one you do not know? Is he armed? Will he slit your throat in the middle of the night and take what you have.

When a group approaches and sends out 'flankers' with firearms? What will you do at that point as you stand alone?

Do they mean ill will or just honest folks looking for something?

How do you JUDGE and how will you react? Have you already gone past the point of no return before they even arrive?

Given what we observe of our fellow man. Road rage, crimes of the worst sort and so on?
Who can you really trust and chaos envelopes us all?

A redneck? A New Yawker? A angry white man? A negro? A youth of 20? A dope addict?
Who and how do you judge what might transpire? They want many things but above all they hope to survive and does then not Darwin's fabled law of The Strongest Survive. Or 'technical superiority'?

Isn't it stated that the survivors, no matter what they do, are the ones who WILL SURVIVE?
Or will the meek inherit? Or just be the first to 'go under'?

Airdale-questions I ponder daily

3) Lower manufacturing taxes - the US has increased business taxes for decades, and IIRC is now among the highest. Won't go down with liberals in charge

- do you mean nominal or effective corporate tax rates - the difference is not trivial. If you go by what corporations actually pay, we're comparable to other G7 countries - and about 2/3 of our corporations pay no taxes [see: Steve Benen's comment]. This liberal will happily support lowering the nominal tax rate if some conservatives would support closing all the loopholes

Interesting to see that some in the public sector still seem to be doing fine. http://www.mlive.com/news/muskegon/index.ssf/2009/12/public_employees_al...

Good point. Of course companies that make no money pay no taxes, but a lot of companies that make a lot pay little too. This conservative is all about level playing fields. And that is not what either party has worked to create.

I'm also all for smaller companies and more local gov't, even at the expense of less "efficiency". But that's not happening either.

I usually find I get along with liberals just fine if we start off by agree to have even rules and a balanced budget. Nobody wants huge soul-less corporations, pollution, hunger, debt peonage, or untreated medical needs (well, some obviously do, but not most average voters). It's the nature of the political game to avoid the broad agreement topics of prioritization and fairness and argue over the obvious disagreements first.

I get along with liberals just fine if we start off by agree to have even rules and a balanced budget.

We indeed get along, if that is what you would propose. I usually start off with just this proposal. Let's start with an Amendment that requires every spending bill to be a taxing bill. Build in all taxes to the amount proposed, based on last year's tax revenues from given income. Proportion taxes, with no tax on those making less that real poverty levels, then a small tax on the next amount equal to that, for instance if poverty for one earner is considered to be $15,000, then the first $15,000 it totally tax free, including social security, medicare and the whole shebang. The next $15,000 would be taxed at a rate determined by the spending vs. projected income, say at 10%, with the following $15,000 at 20%, the next $15,000 at 30%, etc., until all of the taxes due on all of the spending voted in is accounted for. Then we can add a 2% additional tax on all earners in all brackets above 20% to pay down the national debt.

That way, when a lying politician says, "I voted for your special interest" he could not also say, "I voted against tax increases," because any increase in spending would automatically increase taxes. Eventually we would pay off the debt.

Of course, the creepy neo-cons say no to that because they are not really conservatives. They are Neo's, and they live in their own Matrix. The creepy liberals say no because they know that it would be impossible to get people to vote for every program they want because all would be aware that this would increase their taxes. It would be in the interest of the wealthy to have everyone making more than poverty wages, because that would bring everyone into taxability. More, they might even want help paying down the debt, so they would need to have more in the 20% bracket [triple poverty]. And, since the brackets go up by poverty level jumps, they would want to jump poverty level. Also, if the programs required that much, they would see marginal rates increase by 10% for each level, up to a maximum of, say 95%? At that level, corporations might want to pay workers, invest in capital expenditures for buildings and equipment, build in better retirement, etc.

So, Paleocon, if you are up to it, let's try to get that program started. Whaddya say?

Eventually we would pay off the debt.

The U.S. as well as the rest of the world will never pay off its debt because it makes no sense to do so. Debt deflates away and is replaced by new debt.

The U.S. should reduce its debt burden somewhat to get back to what should be an ideal debt level, but that is not no debt.

The problem at this point is not that the U.S. has debt, or even really the level of debt, it is the budget deficit that is leading to an endless expansion of debt.

If the U.S. closed its budget gap and did not change its debt level, or even let it grow with GDP to maintain the same % of GDP, it would not really be a life threatening problem.

But we're not closing the gap, and if GDP precipitously declines the debt issue becomes profound even if we do manage it.

While debt can leverage the future (arguably good), debt also presumes upon the future, which carries risk when the future is uncertain.

I wasn't worried about debt until last year, when rather than defaulting it we nationalize it. The combination of unconstrained spending, moral hazard, and incipient decline is profoundly threatening, IMHO.

Actually, I agree with you on all of the above. I was trying to make a technical point that debt (or some part of it, in the U.S. case) may not actually need to ever get paid down.

I tend to agree that risks related to the U.S. budget deficit are becoming increasingly worrisome. I live on the other side of the planet, and am dollar hedged. But I'm sure that will help me much. I can't see the dollar going down hard alone.

I'll not only take that, but up the ante. Instead of having zero taxes for the lowest tier, I'd go for a "negative income tax" with a sliding scale for the lower two tiers, but reduce welfare correspondingly. With a proper ratio, there will always be incentive for low-earners to make more money, while not pricing themselves out of benefits (I know people who have quit jobs to avoid breaking the medicare boundary for their disabled children, for example).

Of course I'd rather see fewer income taxes and more usage taxes, with rebates to prevent them from being regressive.

I also think that any multi-year debt, rather than being incurred as a blurry deficit, should be line-item bonds sold for the specific purpose. Then the market can help pick and choose what is a "good" use of debt and what isn't. When people are against a war, the bonds will be hard and expensive to sell. Bonds for a national insulation program might be easier, if Buffett or somebody decides to buy some at a low premium as a philanthropic gesture.

You sound like me. I used to think of myself as conservative, until Bush & Co. came along with their pack of neo-Con, rabid right, religions right and Militia fanantics, and took up the name. Now I don't know what I am. Mostly progressive, fiscally conservative. Does that make sense? I try to be pragmatic and take what works...

I think there of more of us out here like you zap then the MSM would consider. Repubs have given conservatives a bad name. They even get away with it down here in Texas. I have to register here as a Repub for the same reason I registered in La. as a Dem: otherwise your vote doesn't count for much. Getting harder to stomach every day though.

Sorta like my religion: I was "raised Catholic" which is a whole lot different then being Catholic if you follow.

Zaphod 42, I presume you are A Douglas Adams fan? He's the funniest writer of recent vintage I have encountered without a doubt.

I would be very pleased to meet with you on the very grounds you propose and work on starting a third party-not that I judge our chances of success being very good.

The manner in which US corporations achieve comparable or even lower tax burdens than in other countries is counterproductive to the economy as a whole. This is accomplished through extensive lobbying, an activity which produces little or no useful work, to create tax loopholes. Once the lobbying has created tax loopholes, the actual tax is lowered by employment of accountants and lawyers to exploit the loopholes, again producing little or no useful work to society at large and actually detracting from the capital available for the corporation itself to perform useful work.

The correct solution is to lower the tax rate but close all loopholes at the same time. Unfortunately, I do not believe such a solution is possible in our current congress from either party. Ideally, the goal should not be a tax rate comparable to other nations but one slightly lower, in order to attract investment to the US, which in turn creates jobs.

Let me offer some counterpoint (but I will not start out by saying "Jane, you ignorant slut..." ;->)

1) More exports....of what specifically? It seems we have largely given up most our manufacturing base to others. Maybe certain agricultural products (more like an "oil for food" program) could be exported but they won't "pay the bills."

2) We are desperately "upside down" on the energy front. As an example, "North America has more than 100 years of natural gas...." Yes, if you consider that the resources haven't discovered where two-thirds of that gas is located AND, even if it is located, you have zero growth in consumption.

3) Although I have not checked for either 2008 (a very bad year) and 2009 (probably an even worse year overall), in 2007 (a boom year) if you had cut corporate taxes to zero, it would have cut tax revenue by less than $400 billion. If the median income in the US is ~$16/hr, according to the DOL, the problem is not taxes being too high, it is wages being too high, compared to the competition, by a factor of 10-20 times too high. We are competing in a global market, with our own excess population, against a labor market willing to pay $0.50/hr. As an aside, those "small businesses," that create all those jobs (reportedly "two-thirds") create low paying jobs if the median income is only $32,000/year (and $50,000/yr per household). Those jobs are too expensive compared to our competition.

That means for about 98% of the US population, we are going to have to learn to live the equivalent of $1-2/day. That will take care of a lot of other problems listed below and completely eliminate the US as a competitor for resources (at least from a monetary standpoint).
China might be able to lose the US as an export market and deal with the lower costs from lower demand/competition.

Of course, for some of that tax you actually have to make a profit to pay the corporate income tax. And I would also point out that infrastructure and other components that have a society and an economy work don't simply appear out of thin air (even if they are subsidized by those other governments).

4) We could "turn off" the environmental controls and just let us deal with whatever comes out of the stacks. In the US, for example, that would eventually be 1.3 billion tons of coal flyash per year, as well as millions of extra tons of SO2 (by turning off the scrubbers that exist on approximately 30 % of all plants. Ash and SO2 together are a really bad mix for the lungs) and NOx by stopping low-NOx combustion and turning off the ammonia and/or urea systems for both SNCR and SCR systems. As an operator of a coal-fired power plant once told us "we burn coal to produce flyash and as a waste byproduct, we happen to produce a little electricity." But at $1-2 of income per day, the energy we've become accustomed to will be too expensive to obtain so that part of the environmental effects amy not occur.

It would be an effective way to eliminate an environmentally sensitive population (an observation made concerning the Chinese and the Indians). What the Chinese are counting on is us and their own people not minding or noticing that their pollution effects have serious repercusions. On the plus side, the thick cloud of ash that would be generated by the US would likely cool the Northern Hemisphere for awhile.

As far as putting GHGs into the atmosphere, what we can say with certainty is this: at no time in the last 800,000 years (and probably longer) has the CO2 concentration in the atmosphere been anywhere near the current levels. The highest CO2 level before the modern industrial age found in the EPICA Dome C ice core samples occurred (nominal to today) about 332,970 years ago at a concentration of 298.6 ppm (volume) CO2 in air. All other interglaccial periods in the ice record show CO2 maxima lower than this value from two cycles ago. Even in the current interglaccial period (the Holocene), the CO2 concentration had been relatively stable, particulalrly over the past 4500 years with an extremely slow rise from 270 ppm up to about 280 ppm entering the industrial revolution.

This year (2009) the average CO2 level will be somewhat greater than 387 ppm. We should reach 400 ppm in less than 5 years.

5) Capital, at least in the US, has largely turned into a shell game.

6) Resources- some are becoming scarce, some are not. We have an overabundance (lack of scarcity) of human resources and unused human labor. We measure that both by unemployment rate and the participation rate.

I think your counterpoint actually supports my arguments precisely, because those things which are necessary to continue BAU are increasingly difficult to maintain.

Still, to keep the non-argument going, a few rejoinders.

1) I do think we will eventually have the opportunity to trade food for a lot more value. But why would we? If there are too many people and too few other resources (from the last point), letting a bunch starve somewhere would make sense, wouldn't it? And those who don't want to starve would pay dearly.

2) Exactly, so we SHOULD be investing heavily in other energy forms. But we're not, so this part of the problem will only get worse.

3) Why have taxes at all, since spending is so much higher than tax revenues? Just borrow it all, and fund the gov't via dollar inflation. Since we've successfully skewered moral hazard umpteen ways already, why not make it explicit?

I actually don't think wages are the item to focus on, as they are so relative to the value of the money involved. A better measure would be wealth, in terms of durable goods created and non-durable consumption per capita. A bunch of well-paid workers who toil to create long-lasting value while paying dearly for durable homes, transportation, and energy assets will result in a better standard of living than a bunch of ill-paid factory and service workers who convert their pay into short-lived gizmos, fast food, and wasteful homes.

I think it is not so much what the pay actually is, but that we've chosen to spend what we really "own" -- our time and our national resources -- so poorly.

On items 2 and 3

I often get the "French nuclear" question when I'm making presentations on energy issues. I point out a couple of simple facts. First, we have more nuclear power installed than the French (not as a percentage but as an absolute number). More importantly, the French use about 1/11th the amount of electricity per person. I find it interesting from a strictly political standpoint that people who would pillary the French use them as an example of what the US should do.

On item 3...I often have this discussiom with certain libertarian friends of mine. I'm fine with no taxes, just don't expect any government or public ANYTHING. The concept of right of way and easements, public roads, sidewalks, water or even air (even though you might find it difficult to confine). Even "ownership," rights laws and any way of enforcing anything as simple as an agreement or contract, as a concept, must fall. Even money as a unit of trade must fall.

A few years ago, part of the justification the corporate headquarters had for terminating many engineers was that if US citizenship was not required by contract, why pay an engineer $50-100K, when you can pay an offshore engineer $12K and improve profit?

"More importantly, the French use about 1/11th the amount of electricity per person."

Really? Wishful thinking to bolster a dodgy political point? According to these (2005) numbers it's 1460 and 851 watts per person, USA and France respectively. Can those numbers really be so far off that French people only get 133W each? Ever been to France? It's not the USA but it looks a helluva lot more like the USA than like some third-world country that only gets 133 watts.

Actually, I have been to France. I should not have said "per person" (see below). I know better and that's what happens when you are in a hurry. I certainly don't say "per person" in the presentations.

The basis: When you look at the total installed base of all electrical generation (including the nuclear component) in France compared to our operating generation capacity base, you find that the generating capacity is 1/11th of the US. It's been two years since I looked at the complete list of French generation plants and the complete list of US plants but that hasn't changed in a dramatic way. France didn't suddenly double it's generating capacity in the last two years.

Correcting the "per person" statement. What I meant to say that as a country, France's generation capacity is 1/11th of the US. As a country the US consumes almost 9 times the amount of electricity compared to the French (actually about 8.77 times, but that is close enough to 9 to round it to that). With a population of 64 million their population is about 1/5th the US.

On a per person basis, they use about 55% (per person) of what the average American uses.

But what I was trying to get at was a sense of scale. The combination of a smaller population with a smaller consumption pattern makes a huge difference in load calculation. To even begin to approach the French example would require more than 500 reactors at 1400 MWe each.

Not likely.

Add in growth and retirements and it gets even more unlikely. Thats because the scale is all wrong for the BAU scenario. Drop the consumption level back to the 1950's or early 1960's level and it becomes a lot more do-able.

More importantly, the French use about 1/11th the amount of electricity per person.

I assume this is in comparison to an average US person. Really? Honestly? If you say 50% less then I may not have object.

You are exxagerating some effects, and that doesn't help the process of bringing clarity to the issues:
(1) More exports, but we don't make anything.
Actually the amount of stuff manufactured in the US has been roughly constant for the past several years (near its maximum value). Now relative to the overall size of our economy thats not good, but the popular opinion that we no longer make anything is seriously wrong.
(2) No problems with your analysis here.
(3) Wages versus the rest of the world. Definietly a challenging area, as globalization would tend to equilibrate wages across countries, and developing nations are a lot cheaper. But, we do have some advantages, mainly accumulated capital per capita, and capita (in the form of productive equipment) leads to higher productivity. If we can maintain an adavantage in productivity we can maintain an adavantage in average wages. Of course the ration of our productivity to that in developing nations is slipping, and will continue to slip. For some sorts of high end brain work wage differentials are not so high. My buddy, who is a high end engineer, would make about half as much if he went back to India. Chinese engineers are making incomes only a bit smaller than US engineers. So at least at one end of the wage scale, wage differentials are converging, and at non terrible levels.
(4-6) I largely agree.

Actually the amount of stuff manufactured in the US has been roughly constant for the past several years (near its maximum value). Now relative to the overall size of our economy thats not good, but the popular opinion that we no longer make anything is seriously wrong.

Correct. The issue is not the amount of manufacturing in the U.S., which remains quite high. It is (or should be) the number of Americans employed in manufacturing, which has been heading down. I don't see how this structural trend will reverse.


When I go down the list of production workers on the Dept of Labor's monthly survey and the BLS' most recent Occupational Outlook (see http://www.bls.gov/oco/oco2003.htm#total_openings ) and all the historical data, and then go to the US Census economic aite what is evident is the decline. When I look at the permits for operation, I see decline. In terms of what is left, they might be operating at capacity (though worker hours also suggest otherwise). I can drive along so many highways and see not only empty buildings, but parking lots where the grass and weeds have started to take over. This is not a recent phenomena of the current recession.

But when you go down the list of products tracked (particularly categories of import and export), while it might be true that we export some things and therefore make it here, the amount we import of the same product in many categoriesis dwarfed by imports. It also backs the following: you would be hard pressed in a typical day to point to anything that most Americans use that is "made in America."

Business taxes have dropped in the US by about 50% since the Kennedy administration. The shift has been to tax wage earners more and business less. I have a graph from the Heritage Foundation (they were bragging)but am too dumb to figger out how to attach it.

1) fewer exports, job exports, that is.

2) higher taxes, for the highly taxable

3) less spending, on wasteful search for wmd's

in summary, reverse the 8 year bush mess.

Completely agree except for maybe spikes due to geopolitical events which can't be ruled out.
They will be only temporary and not supported.

My owner (over coffee this morning) agrees with you Ron. He's got 12 PhD quants running models for him full time so it's more than just a hunch. Remember: his quants also predicted the last market crash which is why he had liquadated all assets before TSHTF. Maybe they just got lucky. Or maybe they are that smart. BTW: just found out they've made money EVERY DAY on their trades over the last full year. The previous 12 months they lost money on 6 trading days. The year before that they lost on 12 days. My guess is that they are just that good at the game. And getting better all the time.

I find it disgusting that we have to glorify the huge segment of highly intelligent individuals who spend all their considerable efforts SUCKING money out of the system without any benefit what so ever.

High fives all around boo yaaah

Ahh, the oh-so coveted "perfect model". In my role at the office I have researched more of those then I care to admit. Most are just silly. Seen a few do spectacularly, some for even a few years, then burst into flames and leave nothing left. The problem is there are too many variables (and those are just the ones we know of) and then that pesky human component (ie herding mentality). Point is they no matter how much you tweak, they all blow up someday.

So what's his braintrust predicting for the short-term? I think you shared that once in the last few months, can't remember what you said they thought was going to happen.

By the way, love your posts. Very educational.

The key to success in trading is money management and discipline.
I bet I could use random entries and as long as I apply good money management at all times I could show positive returns for ever.
I quit because I got burned out and also I came to see myself as a parasite.

And the money management rules are not complicated at all..........in fact here is a basic approach.
Risk a certain fixed percentage of total capital on any given trade defined by strict exit points and always honor the numbers.
That way you will approach ruin asymptotically and trade ever smaller when cold and ever bigger when hot.
That is the secret.

I'm with you degar when it comes to rolling my eyes when some announces "Shazam: the perfect model is here". OTOH, did you catch the part about them making money EACH trading day over the last 12 months? Something appears to be working. Remember he's not pitching anything to outsiders: this is all internal with the family monies.

He doesn't share to many specifics but in general: he sees the EU taking another huge hit not too far down the road. He also anticipates killer inflation in the US which is why he is swinging so heavily towards commodity ownership. I don't know that these plans are driven so much by his quants (they work in very much shorter time frames). It's probably as much his view of the big picture. One thing I know he's gone into full defense mode on is a potential change in US tax laws that might strip a huge chunk out of private hands.

Again, I'm just a rock-licking geologist that doesn't even reconcile his checkbook at the end of the month. I can't begin to evaluate anyone's economic theories. But when I see a guy batting 1000 I take it for granted he knows what he's doing.

But when I see a guy batting 1000 I take it for granted he knows what he's doing.

Bernie Madoff batted 1000.

We finally agree on something.

No he didn't maj. Bernie lied about batting 1000. And a bunch of idiots bought into his greed driven fantasy. Again, note what I said: my owner doesn't pitch his process to anyone. He invests only his family's money...no one elses. It's a very great secret. And it's how he is able to give me and my cohorts $300 million to drill for oil/NG. It's also how his family was able to contribute 10's of millions to medical research. As I may have mentioned before: this is the most unique set up I've ever run across in the oil patch. And am damn lucky to be part of it.


I can't say that I have ever caught you out making an obvious BLOOPER until now-but it is perfectly obvious on the face of it that anybody who can run a giant ponzi scheme for years before he gets caught KNOWS WHAT HE IS DOING. ;)

Methinks you have conflated professional expertise and ethics.

Best wishes for a happy holiday and a gusher in the new year.

Incidentally if you happen to know-when did the last gusher worthy of the name come in in the US?

Who is batting 1000?
This whole thing is a confidence game.
You don't "OWN" anything unless you are sitting on it with a gun in your hand.
I have played money and law games...................

Not doubting you or their abilities at all Rock. And that performance is darn impressive.

Lots of things are interesting right now in the world. But one of the things I find most so is this deflation/inflation debate that rages with anyone with a pulse and the ability to speak. I don't recall a time when so many people were so split about an economic theory question so passionately. I think it's just folks see change, don't know what it is and are desperately trying to regain control by labeling and pontificating. Not just the Joe on the street, but the "educated" amongst us. I suppose eventually we'll find out who's right.

Don't balance mine either for the record.

degar -- As they say: opinions vary. Not that some folks don't make monumental mistakes. But I take more seriously folks that vote with their pocket book instead of the mouths. An example: varying opinions on why ExxonMobil paid $41 billion for XTO. My own opinion: mostly it was an inflation play. They bought oil/NG cash flow. XTO may have some room left for redevelopment of XTO's producing properties but that's not ExxonMobil's character. In fact, in 2000 I drilled a series of horizontal wells for XOM in a Wyoming field (Hartzog Draw) with 550 wells producing 5000 bopd (less then 10 bopd from each well). The hz wells showed potential to significantly enhance recovery. But a year later XOM sold to field to XTO. XOM bought XTO as hedge against an energy inflation IMHO. Additionally, as a public company XOM's stock is valued as a function of reserve growth. Just a guess but if we had the bottom line numbers XOM may not have paid as much for the XTO reserves as XOM spent drilling to generate the same volume of reserves in recent years.

BTW – I won’t be surprised to see XOM sell Hartzog Draw Field in a year or so. It’s a rather labor intensive operation which a large company like XOM doesn’t tend to handle well. In fact it’s typical after such a corporate acquisition for the buyer to bundle together a series of similar fields for sale.

..XOM sold to field to XTO. XOM bought XTO ..

like a bad penny.

it don't look like hartzog draw was a phenomenal success.

Elwood : it was an amazing situation. Wells were averaging less than 10 bopd. The first hz I drilled XOM had expected 50-60 bopd. Came in at 400 bopd and was still doing 300 bopd. The field covered 25,000 acres. The production hands were obviously excited...came up with about 80 new locations over night. The Houston office essentially told them to sit down and shut up. The production unit didn't have a drilling budget and Houston, who did, didn't want to drill more than the 4 on the schedule. Then I got an email from Houston saying that if I discussed the hz results with the production hands again my contract would be terminated immediately. Don't know how the final economics turned out on those wells but they sure started off good. Don't know if XTO went after the oil reservoir or not. Was told they bought the field for the shallow coal bed methane play.

For those not familiar with how major oils operate the above tale probably sounds ridiculous. The oil patch types on TOD could tell you many equally ridiculous stories.

i wonder why exxon sold it ? if anyone is capable of financing a co2 eor project, it should be exxon. exxon also sold bell creek and more recently, savageton.


Send me an eMail. Just finished a peer reviewed paper he might be interested in. Co-authors include a member of the US National Academy of Science (one of 400 invited foreign members) & Developing Nations Academy of Science and another is emeritus for a division of Nat'l Academy of Engineering. Some "interesting" quant work on the way out of our combined energy, environmental and economic problems; Draft #1. Other low rank author (besides me) just got his PhD from University of Bergen, Europe's #1 modeling school.

Best Hopes !


The Great Recession will still be raging all year long. There is just no way the economy can support $160 oil.

I have to be amibvelant about this one. If, and that is a big IF, the dollar does not crash, this is the most likely scenario. Oil, at any price, unaffordable. Low demand and price, and things in the tank. This, btw, is the worst possible. Oh, and if it continues per our predicitons, when do they begin to recognize it as the Final Depression?

As likely, the dollar will crash. Why? The idiots running the show today seem to want inflation. Or, if they don't, they couldn't do much more to create it if they did try. As much as any agency, we can blame the Fed. Most of what they are doing his hidden from plain sight. If you know where to look, you see trillions of dollars being invented as the Fed provides the pump to inflate the greenback. It is the only way 'they' see to undo the crazy debt...

Personally, I believe that the many economists involved with our government are all guessing. Just like you and I. And, they are wrong most of the time, again just like I am. The most likely finale to this play is some unintended and totally unforeseen consequence that devastates what is left of the economy. PO will not be implicated by the MSM when TSHTF, though it is strongly connected.

It is all like watching a train wreck in slow motion... I hate to watch but cannot turn away!

I agree Darwinian. I can imagine, in fact do imagine, a future where the rest of the US resembles Wilmington OH, and can imagine $2 gas but less able to afford a tankful than now.

By far, this is the most probable future.


I see your logic and agree that oil can't go too awfully high in the next year or two due to the state of the economy-but this logic is based on current production capacity and sellers who will continue to deliver of course.

Fortunately for us in terms of bau, lots of seller have no choice but to put thier oil on the market-they need the money as bad as the world needs the oil.

But if the ELM models are correct, and I think think they are,there will be a time before too long when the state of the supply trumps the state of the economy and prices will inevitably go up sharply as I see it.I can live without the ten gallons I use occasionally to haul my little fishing boat to the river for a day, but the ten gallons that go into the tractor and the farm truck are absolutely essential , otherwise lots of little kids get no apple in thier lunch bucket..

I expect my personal situation is a good enough model for the economy for conversational purposes.

I will pay whatever I have to for that essential fuel.

So my question for you and anyone else who cares to venture a guess is this:

How long will it be before non essential uses are pretty well eliminated and supplies begin to tighten up so that prices do get into the hundred plus or maybe the two hundred plus level and stay there?

you asked,
"How long will it be before non essential uses are pretty well eliminated and supplies begin to tighten up so that prices do get into the hundred plus or maybe the two hundred plus level and stay there?"

Bit of a fly in the ointment there, why wouldn't you just convert to natural gas or propane?

If (I do not believe it is going to happen, but IF) gasoline prices soar to the levels being discussed, it would make a CNG (compressed natural gas) or propane conversion seem pretty affordable, don't ya' think? The dash to gas would be on in earnest (it is coming, we should be planning for it, whether we like it or not)



There will be a serious tim e lag because we won't get started on time or push hard enough once started, si there will be a period of very high oil prices in my estimation , even if the transition to ng proceeds smoothly.

What got me was the term "the great recession" If it has lasted over 3 Christmas' then it is a Depression!!

And the lady with all the horses could make some money renting them out as something to ride besides in a car.

But the town is better off because it has usable farmable land around and can feed itself if it needed to, which it looks like it does with all the people out of work. I would imagine that loads of them have moved because they have had to find somewhere they could find more jobs than are available there.

No Oil prices aren't going to be higher than maybe 90$, unless there is a big shortage somewhere, and even then the usage would drop like a rock because people just don't have the money to do otherwise.



Those people in Wilmington will NOT survive. They will Die In Place.

Oh a few will wander out to the farmland but being totally useless in skills,knowledge and lack of brawn they will some perish. A few good ones will hang on.

That will become part of the Remnant. The remnant will expand slowly and finally learn and then try to recreate it all over again.

The Native Americans were her on this continent for about 20,000 years. They built large cities and had big chiefs and priests and ruled the peasants. At time it was all abadoned and went back to smalll towns and villages and clans.

All of what we have done has been done before by those here before us.

Jake Page wrote an excellent book about all this. "In the Hands of The Great Spirit"
I live not too far from one of those fabled failed citystates. Mississippian Mound builders.

The survivors of that did not die off. They became the Woodsland Indian culture. Of them I am a descendant.

We (man) has been down this road before. It didn't work then and it won't work now.

Its dying as we speak.


"$40 oil and few being able to afford it" in 2010 strikes me as feasible only if there's been an economic collapse much worse than the current recession. $40/bbl crude translates to about $1.50/gal gasoline; if that is largely unaffordable, what does it imply about household incomes, unemployment, etc?

OTOH, I agree that $165/bbl oil, other than as a transient due to something like a disaster in the Middle East, would have to reflect a collapse of the dollar. There seems to be a rough cap on the price at about $80/bbl; above that and you get enough of a recession that the price comes back down.

I expect neither a collapse of the real economy on a scale to bring oil prices down to $40/bbl, nor a dollar collapse to drive them up to $160/bbl. Based on the following guesses at global changes in 2010 -- 5% increase in total goods and services output, 1% improvement in efficiency, 3% decrease in liquid fuel production capacity, and no broad-based inflation -- I'll guess $79/bbl average. I'll also guess that US consumption continues to fall, since marginal utility of a barrel is higher in both China and India than in the US.

The average of 2008 was ~$100, and that was enough to capsize the economy.

I assert the economy was already unstable, but the housing bubble lead to a perception of stability and future growth, which lead to insanely overly optimistic business decisions.

Those perceptions have been dashed in the intervening months, and of late businesses are far more cautious, if not paranoid -- at least the ones that have a chance of making it through to the other side.

Wall Street might just get this one right - I can't really see oil averaging much above the $83 point for an entire year. The feedback signals are just that much stronger and faster.

i am saying average will be 165

All of us here know oil will go up in the coming decade and more, and even much sooner. But I think it's utterly impossible to know what will happen in the coming one year. If the global economy completely tanks, it could go quite low -- if Iran gets attacked, it could go quite high. And everything in between.

I remember 3 or 4 years ago telling my condo board that gas would go up, up, up. At first I looked good, then I had doo doo on my face -- shale gas. I'm well convinced NG will become scarce again at some point, but I'll make no prediction for a year.

Availability of credit is very important to the price of oil. If people and businesses can't borrow, oil price is likely to stay low, regardless of how much "demand" there would be, if adequate credit were available. This is the missing piece, in my opinion.

I expect more credit unwind next year. This would suggest the possibility of lower oil prices. (It is also possible oil prices will fluctuate.)

Tell me about it! I called most things dead on over the last 5 years, but natural gas prices made me look a bit stupid in the long haul...:-(. Right now, I would not even make a guess on gas prices two weeks out in front, much less a year or more! :-) I always get made look like an ass when I try to play prophet, that's why I have learned (in most cases) to stop doing it. :-) Best bet, play cautious and hedge ALL bets, be ready to move on a dime...


last week on the oil conundrum a news article from bloomberg sed gazoleen will be $1.60 a gallon. looks like the grinch stole christmas
because now bloomberg sez oil bullish so gaz will be bullish. as a skeptic of human nature i would expect $4 a gallon before $1.60 a gallon.
"it's all good"

Re: Ethanol: Not All It Seems To Be, up top:

Leanan must be bear baiting me again. The study is so sophomoric I hardly know where to begin.

I'll just state the most obvious errors and leave it at that. Firstly hardly any gasoline is used in ethanol production. It is mostly diesel for tractors, combines and trucks that haul the grain.

Coal is not commonly used in the ethanol plants around here. The most common fuel is natural gas which has much lower emissions than coal. In any case, we're back to the old logical fallacy so common in energy analysis: comparing, adding, subtracting etc. things that are different. Can't do that! If you do it anyway the result is silly nonsense that tells us nothing.

Secondly the model compares ethanol production of CO2 with land left fallow. What world to these students live in? No land is left fallow.

Then they go into the nonsense about poor foreigners being deprived of food because they can't import corn because of ethanol. This is an hypothesis contrary to fact. Corn is mostly animal feed. The main food grain is wheat of which there is a large surplus currently.

Imported corn is used to feed animals in foreign countries just as it is here. Wheat and rice are the main grains used for human consumption.

The model is total garbage.

More interesting is this. Torturing E Coli to save oil:


Land used for grain ethanol production is land degraded for no redeeming purpose. Better to 'un-own' it, to 'dis-alienate it, and let nature have her way with it.

We need to stop growing grains, or there will be more yeast in the petri dish, and more auger consumed.
I'm having more Franz/Norman issues lately, and, after the domestication of wheat, they were the most destructive.

Just some rambling I did on another board this weekend:

Necessity is the Mother of Invention.
Grain is the Mother of Civilization.

The 'traditional' American grain was corn.
My corn experiment failed this year (open garden).
But I am a newbie gardener.

Quinoa is a possibility I haven't looked into yet.

Diamond, in Guns Germs Steel, mentions maygrass, little barley, knotweed, and goosefoot as NA, eastern woodlands cereals. Also, sumpweed.

For CO, consider the uses of sunflowers.
Also sunchokes.
Tubers for your starch.


Something of tangential interest:

Stone Age Pantry: Archaeologist Unearths Earliest Evidence of Modern Humans Using Wild Grains and Tubers for Food


Sumpweed got me thinking about ragweed.
Which led me to giant ragweed: Ambrosia trifida

Still looking for more info:

And I'm going seed hunting ...

I've seen several references about Native Americans cultivating the giant ragweed - but nothing cited and the only detail in any of the accounts I've dug up so far is about 'seed caches found in Colorado.'

Here is something, a little thin, but something:

In other words, experimentation with planting and maintaining crops was occurring by the Middle Archaic Period, with native domesticates developed by the Late Archaic (see "Weeds Vs. Domesticates"). The two oily seeded plants, sumpweed (Iva annua variety macrocarpa) and sunflower (Helianthus annuus), are present in domesticated form by the Late Archaic, or by 3,000-4,000 years ago. By this time, pepo squash and bottle gourd are fairly widespread at eastern sites, and the first domesticated chenopod (Chenopodium berlandieri subspecies jonesianum) is found at sites in Kentucky and Arkansas. A crop locally important in the Midwest at this time is giant ragweed (Ambrosia trifida), although it was never domesticated. Another cultivated but not domesticated crop that appears by 3,000 years ago is maygrass (Phalaris caroliniana), grown for its starchy seeds available by late spring/early summer.


It's all about rates Ron.

Depends on your value system.

My return is based on pleasure of exploration, discovery, and knowledge.

Mine too.
Not most others though.

Yum... Quinoa is delecious in soup. It has a really attractive texture.

Quinoa Chupe (Peruvian soup)

-Saute a small onion and 2 garlic cloves in 2 tablespoons of butter, and hot peppers to taste.
-When the onions are good and ready add 8 cups of water or broth
-When the water is boiling add 250g of quinoa (wash it!) and put on low/medium heat
-Add in 3 peeled and cubed potatoes
-Just before the potatoes and quinoa are cooked add a cup of chopped green leafy and a can of evaporated milk
-Remove from heat and add salt and sprinkle with grated "white" cheese and/or boiled egg

Just another case of the weeds we try to get rid of being better than the grass we have in our lawns. Modern farming has done more damage to our eating habits than anything but modern food prep methods that have been fueled by those farming methods.

In Peru over 3,000 species of Potato were grown all over the place, each had a niche that filled to diet in some manner or another. That is one reason the Potato blight killed so many people, they had at most 2 species in use. Even today we only grow a half dozen.

When we crash, we will go back to the ways of old to survive, maybe not my generation but a few further down the road.

I grow Jerusalem Artichokes, other wise known as Sunchokes. I got some seed stock tubers about 25 years ago, and they have self seeded for all that time in the same bed as I planted them. You never can get all the little ones and they grow back in the spring, nothing much grows in the patch but them and a few vines that seem to stay with them. The planting is about 100 Sq Ft or so, I have not measured a harvest as I have never fully harvested the patch. But I'd say about 30 to 40 pounds could be had from the spot. As soon as the ground freezes and before the spring warming I'll harvest as many as I can and find a way to can what I do eat. They make a great raw vegie, but are good in soups too. Just don't go into the stand with bare arms, they will make you itch worse than fiber glass. The tubers will remind you of ginger tubers, but they are crisp and sweet tasting, and rather knobby.


Jerusalem Artichokes

They grow wild in NW Arkansas and in most of the eastern US. There's probably 100-200 pounds growing wild on my 5 acres. I've tried them, not fond of the taste but I'd be happy to eat them if I was hungry.

Marginal land is left fallow, depending upon demand. And much of Nebraska should be left fallow to stretch out the years before the fossil water is depleted and current corn cropland becomes grazing.

If we must promote via subsidies, growing something, it should be soybeans. *FAR* less nitrogen fertilizer to create dead zones in the Gulf of Mexico, less NG burned to create said fertilizer, no NG to distill soybean oil into fuel, soybean meal is a more digestible cattle feed than distillers grains (from corn) and the EROEI of soy-diesel is higher than corn ethanol. Diesel is used for more essential purposes than ethanol diluted gasoline.

Soy-diesel does smell like cooking oil when burned. Not sure why the politicians picked corn over soybeans (and corn ethanol is 101% political).


Why not pay them to grow soy, and then plow it under, or let it, stand in the field? It is a nitrogen fixing plant, but very dangerous to eat.
Chemical warfare at it's best, it prevents digestion, then interferes with your hormonal system, to reproduce. And a few other nasty tricks.
Cattle evolved eating grass, and should not be fed grains or legumes.

The greater part of Nebraska is already grazing land.
Nearly all of the aquifer in Nebraska is stable or rising in the past three years.
The largest amount of irrigation is drawn in the counties that have the highest rate of recharge or rise.
The aquifer in Nebraska has been stable or rising for the past 30 years.
The greatest part of the aquifer storage is under grazing land.
My family has several wells in the highest withdrawal counties and the formation thickness is monitored for their and the states benefit. During the past few years very little irrigation was used.


In the same wiki the overall Aquifer is in decline

Also, I didn't see anything about the last three years.

No reason for hope:

Changes in Water Levels and Storage in the High Plains Aquifer, Predevelopment to 2007

The water-level changes from predevelopment to 2007 ranged from a rise of 84 feet in Nebraska to a decline of 234 feet in Texas. The area-weighted, average water-level change from predevelopment to 2007 was a decline of 14.0 feet. From predevelopment to 2007, water levels declined more than 10 feet in approximately 26 percent of the aquifer area, more than 25 feet in about 18 percent of the aquifer area, and more than 50 feet in about 11 percent of the aquifer area. In approximately 72 percent of the aquifer area, water-level changes ranged from a decline of 10 ft to a rise of 10 ft. In approximately 2 percent of the aquifer area, water levels rose more than 10 ft from predevelopment to 2007 (McGuire, 2009).

The Ogallala Aquifer: Saving a Vital U.S. Water Source

The Ogallala Aquifer, the vast underground reservoir that gives life to these fields, is disappearing. In some places, the groundwater is already gone. This is the breadbasket of America—the region that supplies at least one fifth of the total annual U.S. agricultural harvest. If the aquifer goes dry, more than $20 billion worth of food and fiber will vanish from the world’s markets. And scientists say it will take natural processes 6,000 years to refill the reservoir.

And scientists say it will take natural processes 6,000 years to refill the reservoir.

So how much more in your face can our non-sustainable way of life be? About 200 years of human activity that needs 6000 years to recuperate...

That's still millions of years faster than our energy supplies. I'd say those 200 years needs 200,000,000 years to recuperate.

And much of Nebraska should be left fallow to stretch out the years before the fossil water is depleted and current corn cropland becomes grazing.

I wonder how much of a bribe you'd have to give Ben Nelson to get THAT through?

A phoney analysis by their biassed faculty advisor, Nuker Eng.

A gallon of ethanol replaces 132 gallons of 'gasoline'(1/.00757)!!!
They cite Shapouri(page 11) but ignore his results which shows that 1 of liquid fossil fuels produces 6.34 Btus of ethanol which therefore adds 5.34 Btus of liquid fuel net to every input of liquid fossil fuel .


Then they 'show' that including 104 g/MJ for land use change (in Brazil via Searchinger, who stated his result was a warning about Third World land use change)
ethanol produces more CO2 than gasoline. They also show that burning ethanol produces more CO2 than burning gasoline(octane) per unit of energy which is wrong.

Burning ethanol produces 1.91 grams CO2 per gram ethanol and ethanol has 67% the energy of gasoline so in gasoline equivalents that's 2.87 grams per gasoline eq which can be established by high school chemistry.
Burning octane(gasoline) produces 3.08 grams CO2 per gram gasoline(octane).

I don't blame these gullible students for this fallacious analysis but their fanatical boss. I imagine he gave them (and himself) an 'A'.

RE: Has peak theory reached its tipping point? Up page.

The only thing that hasn't peaked is errors in judgment. In fact, I would suggest they are just starting on the up-swing of an exponential rise.

Question Everything

The only thing that hasn't peaked is errors in judgment. In fact, I would suggest they are just starting on the up-swing of an exponential rise.

Case in point ;-)

Peak rock music Most of the good musical ideas really have been used up. Last year, popular culture blog Overthinking It analysed Rolling Stone magazine's top 500 songs of all time, and found that rock music peaked in the late 1960s.

Then again they may have a point, good ideas in classical music probably peaked in the late 1700s and have been declining ever since.

The performing lifetime of Louis Armstrong appears to have been the time of Peak Jazz :-(


Yeah, but looking on the bright side we can still listen to him live anytime we want due to the magic of recorded music and electricity :-)

BTW, In my case all I have to do is walk a couple of blocks to hear some pretty decent live Jazz and I live in Hollywood Florida...

People who live in New Orleans don't have the right to complain about "Peak Jazz" ;-)

I remember hearing about some anthropologists photographing a ceremony with some tribal group, and the participants were given prints of what was filmed. Later, some returning researchers saw that the event was no longer performed.. but the people would lay out the photos and look at them instead.

Even if that's just an urban legend, we can see it happening to ourselves, as we live in the 'virtual sixties' or forties or 1890s or whatever. Why learn how to play and write music, when the reproductions are so pretty?

"I have to believe it's getting better, getting better all the time (it can't get no worse!).."

OBEY YOUR THIRST .. and step softly, the Rust is Sleeping, and rock and roll will never die.. (we just can't bear to let it)

My brother can play and sing and does all the time. But he also listens to what other sing and play. Not all of this will die out. But I can see where people would think it when they are looking at the sales of musical instruments verses the sales of musical CD's and ripped songs online for the devices.

I have a cell phone, But I have it on vibrate, I only use it to call a few people, I don't text with it, nor get online with it. I tell people I am with to hold on a second while I answer it, and try not to walk about and talk on it. I don't use it while I drive. It is a tool not a play toy.

Pray for a slow decline, prepare for a crash.



The most interesting and astute observation made today!

Talk to young people now about going to a concert, and they say "why? I just download it..."

There are some steller, I mean STELLER artists out there in all genre's, but they cannot easily get support...the boomers (who are the largest demographic by far) will listen to nothing made since about 1980 (I once went with a woman who said it exactly in those words, proudly, "I don't listen to anything made since I was in high school" (!) The young get it all electronically, paying nothing and leaving the artist with nothing...and drive retro Beetles and Mini's.

The cultural issue worries me far more than the energy issue. New work, new design and new thought in the U.S. in all genre's and industries is drying up.


Most people stop buying new music at around age 35. Instead, they buy "best of" collections of the music they listened to when they were younger.

This is why young people are so coveted by advertisers. You have a chance to mold their buying choices for life. Older people tend to already have favorite brands, etc.

I think you're wrong about young people and concerts, though. They still like to go. Radio, vinyl, 8-track tapes, cassettes, and CDs did not keep people from attending concerts. Why should downloading music do that?

The net is a way artists who "can't get support" can get support. A way for artists who can't get a contract with a big record company to find an audience.

I'm more of a believer of the Church of St. John Coltrane ;-)

and found that rock music peaked in the late 1960s.
And this is news from anyone paying attention?
I'm so burnt on classic rock. Hopefully it is a quieter world for the survivors (if any) on the other side of the wall.

Europe's wind companies snap up U.S. stimulus cash

Story linked above. When the stimulus runs out, and plans are needed for a second round, stories like these are not going to help the effort. Also, lack of funds (other than printed money) will likely add to the problem.

Re: Dutch have a simple answer to energy crisis – working together

Fred Gardner's idea is simple. So simple that intelligent Scots will try to find a snag, instead of trying to follow suit. He found that around a quarter of the unit price of energy is pure profit.

Profit currently handed to shareholders of the big power companies.

And since some of those power companies are government-owned (along with the grid network), that's a straightforward steal – taking cash from the public in the form of hiked-up energy prices to give to private shareholders.

Sounds like a typical case of the "No true Capitalist Scotsman fallacy" ;-)

I was going to comment on that article as well. I love it! Let's work together comrades!

I wonder how long the author wondered the streets of Amsterdams doobie palors before he came up with this load of crap. Hey folks people are not into full time alturism and philantrophic activity with their doe-ray-me. I have quit investing in most U.S. utes because the public commissions in charge of state utility pricing will not let you make even a pittance return including dividends on a regulated utility. While many here believe profit is a dirty word they fail to or choose not to see what the other side of the no profit coin looks like.....Can you say the Soviet Bloc. Now there was a model of human and ecological progress.
While I agree the "consumer" society we live in is fairly pathetic I fail to see how amorphous capital seeking zero returns instills the discipline that asset investment requires. While profit elimination railors squeal their anti make a buck I wonder how long they really believe the free ride will float the collective boat. Sounds like a bunch of high toned mental masturbation to me. Yeah we have issues with the top 1/4 to one 1/2 percent controlling way to much wealth but watching my parents generation cashing in their dividend and CD checks so they can pay the bills does not conjure up mass exploitation to me. Simple fact if people are not incented to save...then why save? How do you generate investment capital if everyone spends all their money because profit is a dirty word? Seems like we have just been down that road, uh well I guess we are still on it. Now that's been working well

It's a shame that the American way of thinking in general doesn't allow for really free thinking, especially leftist, green, communist style of thinking, despite claiming to be the great land of The Free Tent Camps.

Having a few monopolist utilities determine the price of energy and bully their clients isn't that a great system either. I'm not seeing anything back of the profit our utilities make because they are mostly foreign owned, so I don't feel very sympathetic towards them and neither do they towards me.

Anyway, electricity in the Netherlands is quite expensive which allows alternatives to become competitive. Two examples:
A) Buying solar panels gives me the opportunity to generate as much as I consume on a yearly basis so besides the connection fee I pay nothing to the utility for electricity. Fortunately solar panels have dropped massively in price last year so doing the installation myself and buying smart has gotten me a system that will produce electricity for about 20 ct for the next 30 years (one inverter exchange included) where electricity from the grid costs 24 ct. This is already below grid-parity! I expect a healthy return on my investment since the electricity price has been increasing on average about 7% each year. Seeing that meter hurtling backwards when the sun shines gives me a big rush every day. Infinitely better then, say, having bought an SUV or a trip around the world for that money.

B) Noone private has the money to buy a big efficient windturbine although prices and subsidies make them attractive so getting together and collectively buy one or more is economically valid besides the environmental or social motivations. There are several collective windturbine operators and they pay a healthy divident of about 6% to their members, much better then savings on the bank do. Being able to participate in commercial windturbine exploitation also lowers NIMBY effects and democratises energy production and at the same time offsetting fossil fuel power generation. There are currently tests running where windturbine participants can use their own produced power without having to pay taxes for it (as if the turbine was positioned in their backyards).

The way of collectively producing power for your own use and sell off excess can perhaps be seen analogous to 19th century farmers collectively setting up and running diary plants which made The Netherlands a large exporter of dairy products.

So, yeah one must be truly bonkers, trying to be it's own energy supplier. It is real a dumb leftist, green, commie way of thinking and in no way fits the capitalist dream world. ;-)

Styno we just got net metering laws in Kansas and can now sell (maybe credit is a better term) wind or solar power back to the utility up to the level at which we use it. You have 12 months to breakeven on how much you sell them versus what you use. So we are designing a system that will generate about 95% of what we use on average over the course of a year. At first it will be a grid tied system but the inverter we are buying will facilitate a battery back-up. The cost will be subsidized by the gubmint to the tune of 30% as long as I have it installed by 2016. Bonus is that you are not taxed on your generated energy so savings are in effect tax free. This obviously enhances the return on the investment.
I like your ideas of collective production and have tried to get my locality to think of investing in turbines with sales tax revenues instead of more and more flashy infrastucture.....hard sell so far. Having the ability to invest in this as a resident and own a piece would be a great incentive. Our rural water system works this way no need for a marketing dept and advertising expenses. We meet a couple times annually to decide how we invest and charge ourselves. Many electric co-operatives in this part of the country work the same way.

Congrats on your panel installation and finding good value. With our current KWH of $.06 it makes my breakevens longer but still positive. Yours looks like a no brainer.

when i installed my 3kw pv solar system the 40% rebate from the state of nj was the only game in town. if you took the rebate you dont own the system. it stays with the house. i done lots of internet research. at that time, about 3 years ago i did not find any mention of a 30% fed rebate. if it was in committee it was a top secret. but i had $25,000 laying around to waste so i put the system up as a scientific experiment. oh, the system makes electric. i do see my electric meter run backwards. how ever, at the time 6 or 9 kw systems were too expensive, 50 or 90 grand. i didnt have that sort of money laying around. i say dont bother with 3 kw systems go right for 6 or 9. if you cant afford that, buy a wood burning stove, a "cat". you'll save more money with that then a PV solar system. i didnt take the nj rebate. i own my system. i can take it down and install it on my new place. "it's all good"

when i installed my 3kw pv solar system the 40% rebate from the state of nj was the only game in town. if you took the rebate you dont own the system. it stays with the house.

I'm having trouble with that. Due to the cost of ripping the system off the roof and reinstalling in a new location, I think of the PV (I've had mine a month now) as a part of the house. Hopefully when it comes time to sell, the house will be more valuable because of it.

I think the 30% credit is a stimulus thing. At least the 30% credit for various energy saving investments is. The news blurb from my tax lady said 2009 and 2010 tax years for this one. I should get a lot of tax credits this year, PV system, some insulation, sales tax on a car, college tuition. Unfortuately I'll need that big refund to be ready for 3kids college tuition......

when i installed my 3kw pv solar system the 40% rebate from the state of nj was the only game in town. if you took the rebate you dont own the system. it stays with the house.

Just curious, what year did you purchase your system?

I would double check that information:



You are right, having a solar installation doesn't make me really independent ofcourse. I like to think about the grid as some sort of battery. This usually has benefits for both me and the utility: solar panels naturally help with peakshaving (or shorten the peak), in return I get some baseload during evening/night and power during cloudy winterdays. The utility is used for what they are: utilities. They should be there for me, not the other way around.

Also, in general, people who choose solar panels are (made) more aware of their usage and tend to move to a more sustainable lifestyle enthusiastically spreading the word. It will be quite some time before private solar power is becoming a real problem for the commercial utilities. They will probably try to get their money in different ways, like requiring higher connectivity prices (which is already happening here) or make electricity price more flexible.

One way or the other, utilities will have adapt to a world where more power is generated decentrally out of their control and their power is only used as backup. Solar panels and windpower are steadily getting cheaper which will result in many more people and businesses installing them.

I have respect for your choice for installing solar power and are aiming for off-grid while electricity costs only 0.06 ct. Can you elaborate on why you want to go off-grid and describe the problems and decisions needed for doing so?

The quote contains a contradiction, moaning over the companies being run for stockholders, but claiming it is government owned. If it is government owned the people are the stockholders.

The biggest utilities in the Netherlands are foreign owned (Vattenfall which is owned by the Swedish government and RWE). Besides that, it is much more efficient to keep money in your pocket then to pay it to a company and get a very tiny bit back as a stockholder.

Magnus Redin (commentator here on TOD, that works for the Moderate Party in Sweden) is pleased when Vattenfall (water fall) makes money in the Netherlands. It helps the citizens of Sweden.

And you Dutch like the Swedes don't you ?



Well, I like some of the blondes ofcourse, but not enough to give them my money out of generosity. I'm sorry for Magnus but I have left Nuon (which was taken over by Vattenvall) in favour of a 100% green energy supplier. :-)

Please watch this true patriot speak;


Share it

Thank you

That was great.

My take-away quote.. "Poor and working people in this country are sent to kill poor and working people in another country.."

My new bumper sticker idea for the day.. A picture of the Sun, and the words "STEAL THIS ENERGY"

Trying to think of a store where I can buy a QUALITY little Toolbox for my daughter (6), and realized that the most worthy and valued one will be a simple wooden box that I can make right here in my shop in probably an hour or two.

- Trying to remember what's real..

My new bumper sticker idea for the day.. A picture of the Sun, and the words "STEAL THIS ENERGY"

I like your idea... I'll work on it a bit more but here's a start.
Steal it

Dang you are good! I like that. Question, I was looking at British Petroleum's website the other day and they said 300 sq. miles of solar cells would provide all the electricity the earth needs. That can't be right. Am I missing something? Maybe it was in the US. I can't find it on their site now.

Question, I was looking at British Petroleum's website the other day and they said 300 sq. miles of solar cells would provide all the electricity the earth needs. That can't be right. Am I missing something?

The trick is converting the energy that impacts the surface of the earth to useful work.
True we get an enormous amount of energy from the sun but our technology for converting,storing and distributing it to where it is needed it is not yet very efficient.


The Solar Resource

The amount of energy from the sun that falls on Earth's surface is enormous. All the energy stored in Earth's reserves of coal, oil, and natural gas is matched by the energy from just 20 days of sunshine. Outside Earth's atmosphere, the sun's energy contains about 1,300 watts per square meter. About one-third of this light is reflected back into space, and some is absorbed by the atmosphere (in part causing winds to blow).

U.S. Solar Resources (Source: NREL)

By the time it reaches Earth's surface, the energy in sunlight has fallen to about 1,000 watts per square meter at noon on a cloudless day. Averaged over the entire surface of the planet, 24 hours per day for a year, each square meter collects the approximate energy equivalent of almost a barrel of oil each year, or 4.2 kilowatt-hours of energy every day. Deserts, with very dry air and little cloud cover, receive the most sun—more than six kilowatt-hours per day per square meter. Northern climates, such as Boston, get closer to 3.6 kilowatt-hours. Sunlight varies by season as well, with some areas receiving very little sunshine in the winter. Seattle in December, for example, gets only about 0.7 kilowatt-hours per day. It should also be noted that these figures represent the maximum available solar energy that can be captured and used, but solar collectors capture only a portion of this, depending on their efficiency. For example, a one square meter solar electric panel with an efficiency of 15 percent would produce about one kilowatt-hour of electricity per day in Arizona.

Thank you!

I should be more knowledgeable about the ecconomics of solar. One thing I wonder about is if it would be feasable for businesses to form partnerships to put solar systems on roofs. Specifically, on my personal roof, only a small portion faces the right way and I know for sure I would not go up on my roof every week to wash it. But, if say Costco sold partnership units and put the systems on their roof, the angles would be better and they would be a whole lot easier to keep clean. Being directly on the roof, there would be no transmission loss, utility tax issues, etc. Anyhow, that seems better than residental roof systems.

Anyhow, that seems better than residental roof systems.

That may depend upon how the pricing works. My boss (who thinks all environmentalists are commies) has a home PV system, because at his PG&E high end residential his marginal cost of power is quite high. At work, where we use quite a bit for the hundreds of computer CPUs we have, the business marginal cost is much lower, and it doesn;t seem worth it.

Unless you live in a very dirty location, I doubt you need to clean very often. Perhaps every 2-4 months. I was looking at mine with boniculars yesterday, there are two spots that are probably bird poop. But it is the rainy season, so I'll see what the weather does before trying to wash um.

Probably the best business case can be the greenwashing from being able to say you are using the sun. That might be a big benefit for some businesses, and probably worth little to some others.

If you have a large system, such that during peak production you don't use all the juice, then if the power company doesn't give you net metering (where you get the same price for power you give them as they charge for power you take from them), then I can imagine wanting to make a deal to supply surplus juice to the nieghbors. Adding a meter should be fairly cheap. Even in a residential situation, I could imagine running my neighbors pool pump, and using a meter to figure out what he owes me (but with net metering there's no point).

One thing I wonder about is if it would be feasable for businesses to form partnerships to put solar systems on roofs. Specifically, on my personal roof, only a small portion faces the right way and I know for sure I would not go up on my roof every week to wash it.

My brother lives in Germany and he is part of a co-operative that rents commercial roof space on which they have installed solar PV panels and they sell their surplus electricity to the the grid.
The Germans put their money where their mouths were and made this possible by giving significant financial and legislative incentives for this kind of enterprise.

Unfortunately here in the US this has not been done at the same level. It seems there hasn't been as much political will and the American public doesn't seem to think that solar energy is viable unless it provides enough electrical energy to run all their energy hogging appliances and stuff which many Europeans seem to be able to live quite well without.

These were solutions 25 years ago, and no one seemed to do anything about it then.

If TARP were directed into building Solar on every rooftop possible we might be looking at a better return on the money spent.

No No NO, forget that we could be solving some of our problems, we should just give every banker in the US 5 million dollars and call it money well spent. (rant off)

From the article up top about China, they seem to be about to do just that with solar and wind power, something we should have done ages ago.


That is great.
Make a good bill board for your business too.
Maybe you can sell the logo and make more than you do on solar!!LOL
You missed your calling..........advertising..........

You missed your calling..........advertising..........

I think I subconsciously preferred being able to sleep soundly at night ;-)

I did live in New York and had a computer graphics business with my ex back in the 90's, we worked for a few corporations in the music and toy industries. I did graphics and she having a degree in industrial design did model making and such.

Though just last week I had been brainstorming with some folks, who aren't too happy with the ways things are going with the solar business in general in our neck of the woods, to start a solar co-op of sorts and share our expertise in a sort of virtual company. This might work as a starting point for a logo for that.

I think I could add the words: TELL YOUR POWER CO. TO TAKE A HIKE, GO SOLAR!

In our area, the local electric co-op is about to begin selling and installing solar thermal hot water systems. They are much more cost efficient than PV. A typical hot water heating collector runs about 40-60% efficient, depending on time of year. Compared with the typical PV panel, which runs about 15% efficient, the solar thermal systems would cover only 1/3 or 1/4 the roof area for the same energy production. Total installed system costs run about $6,000 for a system including 2 flat plate panels, an 80 gallon tank, pumps, controller, etc. In colder climates, less energy is produced from flat plate collectors, thus the more expensive evacuated tube designs become more cost effective.

Using PV generated electricity to heat hot water is crazy, IMHO. That's what happens with a grid tied system where the load is a hot water heater in the house. Sure, it's fun to run your electric meter backwards, but are you sure you are actually saving dollars in so doing?

E. Swanson

Using PV generated electricity to heat hot water is crazy, IMHO. That's what happens with a grid tied system where the load is a hot water heater in the house.

That would be sort of a thermodynamic crime. But, is you used some sort of air-source heat pump water heater it would make perfect sense. In my house our gas bill (excepting the brief heating season) is only around $10 per month, so it just wouldn't pay to install a solar hot water system.

Way back in 1979 passive solar hot water was good enough to provide water so hot you couldn't put your hands in it. It is simple, gravity fed, and the figures way back then were done in winter. Ok, so it was in Northern California. Still, it was in the 30s and 40s daytime and sometimes below 25 winters.

I have heard, though, that in latitudes as far north as Chicago, it would still be good in wintertime, though you might want a demand gas heater to supplement during long, cloudy days in the teens.

Anyone considering solar should most definitely look at passive solar for hot water before looking at PV. Hot water is the best bang for the buck. I believe in Hawaii it is now state law that all new construction must have passive solar for this purpose.

BTW disclaimer, I sell solar systems including water heaters. While you are correct that you are looking at ball park of $6000 for an installed system. I personally think you could build a really high quality system of your own for about a third of that.

As a Florida resident I fully expect that there will be a state law similar to the one in Hawaii for solar hot water in the near future.


Passive flat plate solar thermal systems would make sense in regions where freezing is not a problem. The newer evacuated tube passive designs with heat pipes to transfer the solar heat into the attached tank would be great in the situation where freezing is rare as the evacuated tubes wouldn't freeze. In areas with regular hard freezes, passive systems might break.

As for making your own flat plate systems, it can be done, but you would not be able to collect the tax breaks which are available from the Fed, since the credits can only be used to purchase new SRCC tested panels and/or systems. In North Carolina, where I live, there are additional tax breaks that make solar hot water systems very affordable.

E. Swanson

Here in Portugal it is perfectly possible to install passive solar water heating for about 3500 to 4500$ (ie. c. 2500 to 3000€), and you will get back 40% of it up to 800€ (c. 1200$). We have reasonably economic water habits, so it'll take us some 7-8 years to pay for the remainder in savings from the gas heating we don't use. For an extra 100E we had some gizmo installed that fires the gas water heater if the water is not hot enough for us tot ake a shower. This happens about 1/3 of the time in winter, which here in Lisbon means over the course of two months if the sky is very overcast, and if the water has to heat more due to low temps. All in all, it is a simple piece of tech, looks quite resistant to weather, requires vey low maintenace and is very modular. We installed th 180 liters vesion which is plenty for my wife, me and a kid.

I'm now looking a PV pannels, but I doubt I can recover the money in less than 1012 years, unless price of kW goes up.

"All the electricity" (note: not "all of the energy") is on the order of 2000GW (averaged 24/7/365). So some round-numbers SWAG. For 2000GW gross, you need 2000km2 of land at high noon with the sun at the zenith. At 15% efficiency - clean new good-quality panels - it goes to 2000/0.15 or 13000km2. On average, it's night half the time, and tracking systems strong enough to stand up to wind are maintenance nightmares on a large scale, so multiply by about pi to allow for those and get 42000km2. Then, it's cloudy more than half the time, and politically you aren't going to put the whole world supply in the Sahara (and even in deserts it can get cloudy even if it does rain very little) because people won't stand for it, so multiply by a bit more than two and get, oh, say 90000km2. That would be 300km on a side.

Then factor in losses storing and retrieving the energy, which we don't know yet how to do on such a scale; throw in an allowance for long periods of adverse weather; throw in a fudge factor because some of the panels will be outside the tropics, i.e. where the sun never reaches the zenith; and factor in that solar panels on such a scale simply aren't going to be kept clean and new. So maybe double or triple or quadruple it again. That might or might not get you to, oh 220000km2, which is 300mi on a side, or 90000 square miles. Just saying.

Oh, and remember that around a third of the world population doesn't even have electricity; that 2TW works out to just 300W per person. If you are wanting enough electricity to supply everyone with even European business-as-usual for total energy, you might be wanting ten or twenty times as many square miles of panels - let's say roughly enough to cover half the area of the USA...

It's not that bad.
Nevada Solar One is 75 MW, 130000 Mwh/yr facility covering 90 acres in Boulder City Nevada. 2 TW would require 3750 square miles(61 miles by 61 miles) and produce 3467 Twh/yr.
Nevada Solar One cost $266 million dollars so 2TW version would cost $7 trillion dollars--not counting the zillions of transmission lines.


But you could cover much of our desert, and Mexican desert, and the Sahara desert, and have a good start.

Cut back population, cut back consumption, and add what can be added where it can be added -- and see where we end up.

The Sun "Steal this energy"

Yes, but for useful energy, just as in the suns roll in farming, thats only part of the equation.

I don't want 'useful energy'.. just clever slogans!

Nice, FM!

I thought it was a nice sendup to Abbie Hoffman, no? (Or Abbie Normal.. which was it?)


(I'm thinking of a Sleazy Dude in a trenchcoat, showing us the class M (?) star he has bundled in his pocket..) But I like yours! Maybe TOD could set up a page of pithy BS . ahem, Bumperstickers that we can trade and share.

Nice work.
But remember, it's a bumper sticker.
The text needs to be at least 3 times larger
(to be readable from a distance).


RE: China faces a quandary over oil

Interesting, that converts to $4 USD/gallon. No wonder why taxi drivers are groaning.

At present the 93-octane gasoline, which fuels most of Beijing's taxis and private cars, sells at 6.66 yuan per liter, an historical high.

This post is all about oil!

We have had several discussions on the Iranian situation. Most of us agree that the US is not going to attack Iran. That would be an utterly stupid move. However... “Will Israel Attack Iran?”

This is a ten minute video from Chris Matthews and "Hardball". The consensus of those in this video is that there is a better than a 50 to 50 chance that Israel will attack Iran. And there is a chance that America may be dragged in to help clean up the mess. But I digress...

According to the folks in this video, Iran has said that if Israel does attack, they will close the Straits of Hormuz. That will take, they said, six million barrels per day off the world market. That's why I say it is all about oil. Israel will not attack because of oil but from that point on, everything will all be about oil. And the whole damn world will be involved not just the U.S. because the whole world will suffer from the loss of the oil. The Great Recession will get worse as oil prices will be high but high prices will not produce more oil.

Anyway, watch the video, it is fascinating. The link also contains a complete transcript for those who are on dial-up.

Ron P.

Here is some background info from 2007 regarding the 12th Imam (or "Hidden Imam").


For those unacquainted with the more obscure tenets of Islamic theology, the 12th Imam is held by devout Shi'ite Muslims to be a direct descendant of the Prophet Mohammed who went into "occlusion" in the ninth century at the age of five and hasn't been seen since. The Hidden Imam, as he is also known by his followers, will only return after a period of cosmic chaos, war and bloodshed – what Christians call the Apocalypse – and then lead the world into an era of universal peace.

Rumours abound of Mr Ahmadinejad's devotion to the 12th Imam, and last year it was reported that he had persuaded his cabinet to sign a "contract" pledging themselves to work for his return. Another example of his messianic tendencies surfaced after 108 people were killed in an aircraft crash in Teheran. Mr Ahmadinejad praised the victims, saying: "What is important is that they have shown the way to martyrdom which we must follow."

For many of the hundreds of delegates who attended Mr Ahmadinejad's speech to the UN this week, his discourse on the merits of the 12th Imam finally brought home the reality of the danger his regime poses to world peace. Rather than allaying concerns about Iran's nuclear ambitions, Mr Ahmadinejad spoke at length about how a Muslim saviour would relieve the world's suffering. The era of Western predominance was drawing to a close, he said, and would soon be replaced by a "bright future" ushered in by the 12th Imam's return. "Without any doubt, the Promised One, who is the ultimate Saviour, will come. The pleasing aroma of justice will permeate the whole world."

Yes, it sounds nuts. But not any more nuts than, say the kinds of things that are in the Old Testament or said by fundy Christians and end-of-timers. Add in the fact that it's probably distorted by being translated from a different culture and language and to me it means ..... nothing. Boo! The purpose of such articles is to create fear, because fear is always useful to those who wish to push an agenda.

You may wish to couple the above comments with this article from Al Arabiya on how the US is blocking the 12th iman's return. Further, fundamentalist Shia theology requires Shia followers to assist in the return of the 12th iman.

The above is not said as an excuse for US behavior in the middle east but one should recognize the ascent of perspectives that are so at odds with the rest of the civilized world that they may not be able to peacefully co-exist. Mr. Ahmadinejad's perspective is certainly beginning to appear to be exactly that.

Westexas, It appears we are back up to 86 million barrels per day of all liquids. How much of that is exportable as opposed to the amount that was exported the last time we were at 86 million?

Westexas, It appears we are back up to 86 million barrels per day of all liquids.

According to the EIA's International Petroleum Monthly, September all liquids production was 84,857,000 barrels per day.

Ron P.

Ron, Was looking at the IEA numbers posted on the chart on the drum this morning. In any case I was not wanting to get into a contest of numbers other than differences. It seems we are supplying about the same amount today as we were in mid 2007. So how do exports today compare to exports then?

Short term estimates tend to be more inaccurate, and as we have seen even annual data are periodically revised by the EIA. I think that the underlying net export depletion rate is a much bigger story than the initial slight declines in post-2005 annual net oil export volumes. My guesstimate is that up to one-fourth of all the post-2005 oil that will be (net) exported will have been shipped by the end of this year.

Anyone who quotes Ahmadinejad and says "danger his regime poses" is obviously ignorant of Iran's politics and power realities. So, just ignore them. Infact I'd say a recent US president with similar ideas was vastly more powerful and thus more dangerous.

BTW, 12th Imam coming back is exactly like the second coming of Jesus myth. Such myths are there in almost every religion. No different from the cargo cult.


“John promised you much cargo more than 60 years ago, and none has come,” I point out. “So why do you keep faith with him? Why do you still believe in him?”

Chief Isaac shoots me an amused look. “You Christians have been waiting 2,000 years for Jesus to return to earth,” he says, “and you haven’t given up hope.”

Anyone who quotes Ahmadinejad and says "danger his regime poses" is obviously ignorant of Iran's politics and power realities.

I am guessing that if you were able to explain "Iran's politics and power realities", you would have. The top part of your post just seems like an another typical "take what I say on faith, ignore anyone whom says anything different" comment.

So, I find it ironic that the second half is a pretty good and accurate take down of arguments based on faith.

If people should ignore anything, it is simplistic viewpoints based on a faith rather than analysis, such as cargo cults, Jesus prophesies and anonymous commentators who say "trust me":, but won't explain why.

Would that qualify as a Black Swan since many people understand that it is a possibility? Is anyone doing anything to mitigate the possibility of that Black Swan?

Can anyone point me to a depletion scenario where the Muslims and Jews all of a sudden hold hands, let bygones be bygones, become best buddies, and decide to share the region and resources equitably?

The present balance of power in the ME may be extremely lopsided, but it is therefore pretty stable. A serious rival power in the region would change that, and I cannot see how the existing powers would allow that to happen if they can prevent it.

"...balance of power in the ME ..."

Ah, so thats why we went into Iraq. Now I understand.

Don't get me wrong - I don't think they can prevent it, it's just that I see a conflict with Iran as inevitable unless one side or the other implodes in some way.

Golda Meir already gave a scenario for that. When "the Arabs start to love their children more than they hate us. ..."

What a disgusting statement. Disgusting, but not surprising.

Yah, brotherly love is so disgusting.

Sorry, CCC, that might be trying to imply 'Brotherly or Motherly Love', but it misses the mark.

Golda and Israel also need to consider the viciousness of the circle it contributes toward spinning, and think about everyone's children.

Unsurprisingly, Rubin and Baer portrayed Iran as a country ruled by “irrational” people who can even “commit suicide” by blocking the energy corridor through the Straits of Hormuz after an Israeli operation, just to ensure “the destruction of the Zionist regime”. Iran’s only motive for obtaining a nuclear weapon is to attack rather than deter or balance Israel.

This is complete nonsense, but I am sure it's a useful distraction for Israel.

The last vestiges of theocracy in Iran ended in June of this year when the Iranian equivalent of the Russian siloviki finally assumed complete executive control in Iran and sidelined genuinely religious elements.

These events have nothing to do with religion - it is necessary to appear religious in Iran order to be in power, in the same way that it was necessary to hold a communist party card in Russia.

In contrast to the US and the UK where power emanates from the banking sector, in Iran, as with Russia, the positions of economic power lie in the control of the oil and gas state owned corporate complex.

June saw the completion of a power transition by the IRGC, who have been quietly - since Ahmadinejad was legitimately elected in 2005 - attempting to gain and consolidate the only positions that really matter in Iran, which are the higher levels of the Oil Ministry and its myriad companies.

I shared a platform with Dr Nematzadeh - head of NIOC, which is probably the most powerful executive position in Iran - in October 2008 at a major oil conference in Teheran, and was his last appointment on his last day in office the next day. He was quite philosophical about the transition: it was just politics meeting business and he'd done OK, I suspect.

The reason for the indecent haste by the IRGC/Bonyad faction in June was IMHO that the raft of privatisations - which had seized up in a flurry of doubts in the wonders of Anglo markets after Lehman went belly up - was restarting again, and much of the ownership of Iran's oil industry is being sold off. Does this ring any bells?

Events in Iran have nothing to do with religion and everything to do with power, oil and money in that order.

The current President is genuinely religious, intelligent, as far as I know, rational, and relatively powerless. He is not looked upon with favour by those in power, and there was quite an entertaining story circulating in Teheran in June to the effect that Khamenei's son had met the IRGC heads to suggest that the President be bumped off and to blame this on the reformists.

He genuinely wishes (indeed has already started) to distribute 'People's Shares' in the privatisation of oil wealth in pretty much the same way the Russians issued vouchers. It would probably lead to the same result, but the IRGC interests prefer the religious charities (Bonyads) to get the shares instead.

There is not one chance in a million that the sophisticated pragmatists who rule Iran would dream of using nuclear weapons, but they certainly would not give up cheaply the power to make them, and that means the minuet with the inspectors etc will continue for a while yet.

It actually suits both the Iranians (distraction from the economy) and the Israelis (distraction from territorial appropriation) for this perennial sabre rattling to continue. But the people I spoke to in Iran thought that if the US permitted the Israelis to attack then the Chinese would pull the plug on the US economy within hours.

But the people I spoke to in Iran thought that if the US permitted the Israelis to attack then the Chinese would pull the plug on the US economy within hours.

Then you should stop listening to them. The idea that China could or would "pull the plug on the U.S. economy" is about as foolish as saying that the U.S. would "pull the plug on the Chinese economy".

The two are so completely intertwined that there is mutual dependency. In theory either could destroy the other, but they would also destroy themselves.

The Chinese could stop buying future U.S. debt issuances, which would hurt the U.S. greatly, but would also drive up the value of the dollar and halt enough exports to inflict intolerable damage to China.

Similarly, the U.S. could in theory block Chinese exports, which would do the same thing in reverse. But neither country could pull this off with hurting themselves too greatly to make it even worthy of the briefest thoughts.

Perhaps some Iranians think the Chinese would fall on their swords for them, but I suspect they are just talking big. I'm quite surprised that you of all people seem to believe them.

Chinese behavior over the last year has been basically to roll over existing debt. They are not purchasing additional US debt and their US dollar FOREX reserves hold steady just under $800 billion. Reference. As documented in that article, they have increased US debt holdings by small amounts in some months and reduced US debt holdings by small amounts in other months. Their net position hovers around $800 billion for the entire calendar year of 2009. That's no actual increase. What they have been observed doing with their trade deficit dollars is buying commodities and contracts for commodities throughout Asia and especially Africa, as well as North and South America.

Your argument that China halting purchases of US debt would hurt both so much that it would not be done does not bear scrutiny given historical precedent either. In 1956 the United States told Great Britain to remove its forces from the then seized Suez canal along with the French and Israeli forces which participated in the seizure. At the time the US was one of the largest holders of British debt. The British initially balked. Eisenhower threatened to sell off British bonds thus crashing the pound globally as well a withholding US oil exports to Britain. Britain's retort was that this would damage both nations. Eisenhower's response was that it would hurt us but it would destroy you. Britain looked at its hand and folded.

Historically then, the mere threat of selling off the bonds of a debtor nation has acted at least partially to control such a debtor nation's behavior. Indeed, my observation is that the evidence of a standstill in Chinese holdings of US debt, coupled with China's public statements favoring a global currency not controlled by a single nation, and further coupled with China's initial issuance of Chinese bonds despite not needing to finance a deficit all point to China slowly backing away from the ticking time bomb of the US dollar. China is reported to have purchased no US securities at all in November. Indeed, there is a startling increase in purchases of T-Bills at zero or negative interest rates that do not fall under the normal categories of foreigners, banks, mutual funds or brokers as these groups are accounted for by their own categories. Such large purchases in a black box category further support calls for an open audit of the Federal Reserve system.

The above evidence thus does not square with your assertion that China would not back away from the US. Therefore, since you must have contrary evidence, especially given your recent diatribe against posters who make assertions based on faith, I would like to understand the factual basis for your position. Could you elaborate, please, with supporting links?

@David Ramsey

Agreed. And I have thought for some time that China have already given the US its 'Suez Moment' in the context of Iraq/Iran probably some time in the first half of 2007.

Energy security is probably China's highest priority - exactly as it has been for the US for the last 100 years.

Interesting excerpt below from the conference call yesterday for Talisman Energy, which shows their growing commitment to shale gas. Coupled with the remarks above by the CEO of Total (who is very much peak oil aware), these further illustrate the growing interest in shale gas resources--in sharp contrast to some on this board who say drilling and interest in these resources is dying.

We started the year with 90,000 Tier I acres in the Marcellus and we’ve now doubled that Tier I acreage at an average price of $3,250 US per acre. So, we now hold 180,000 Tier I acres which gives us about 1,800 net well locations in the area. We’ve been accelerating investment over the last quarter. Right now we have three rigs running and we’ll be ramping up to six rigs by year end. Plans for next year are still being finalized but we’re ready to go up to 10 rigs depending on our final capital decisions.

In the Montney we’ve been piloting several areas of the Montney shale in BC and as you know we’ve also been drilling what we call the Montney core in Alberta. We’re ready to move some of the pilot areas in the shale towards development in to next year. Within the Montney shale area in BC we’ve added about 80,000 Tier I acres to our land base which brings the total Tier I land within the Montney shale to about 166,000 acres which we think is about 3,000 net locations. We believe the economics of this acreage will be very similar to our Tier I Marcellus.

So you can see we’re accelerating our shale gas development activity as we gain confidence in the highest quality land positions.

Nathan Myhrvold was on Fareed Zakaria's show yesterday espousing the idea of pumping sulpher dioxide into the upper atmosphere to lower global warming. Seems good to me. Here is a different Myhrvold link to the same idea.

This is a fairly old (a couple of years at least) suggestion. Most recently touted by Lomberg. Basically it simulates the natural cooling effect of major volcanic eruptions. Of course there are probable, and probably unknown side effects. Often cited is the fact that the Asian monsoon tends to be weak during volcanic "winter" events. In any case there would be a lot of resistance to the idea, of adding "pollution" in order to countereffect the results of another kind of pollution. I think we will only do this if we get really desperate. {Getting pretty desperate in the future is probably already baked in}

Thanks to both of you for bringing this up. I also saw this segment and was hoping to hear a more educated and analytical discussion of the pluses and minuses.

The biggest problem with these schemes to increase the albedo of the Earth to counter AGW is the fact that the effort must continue for centuries, even after all the fossil fuels have been burnt. The stratospheric shield implies placing SO2 above the troposphere, again a continual injection is needed as the sulfate aerosol eventually "rains out".

As I understand it, the scheme Bjørn Lomborg has touted involves injecting sea salt into the lower atmosphere, the result being an increase in low level clouds. That scheme would use a fleet of automated sailing craft to spray sea water into the air, which would evaporate and leave salt particles behind. Again, this approach (assuming it would work) would require centuries of effort, without which the warming would kick in with what ever ill effects would obtain. Lomborg has a poor record with his previous science...

E. Swanson

Will this new infrastructure make the world a Better Place?


Technocopian BS

That fantasy would virtually guarantee that we would burn every last crumb of coal and probably start burning anything else close to it.

in san fransico they can fine a person for wood burning.
because of air quailty. from friday afternoon through sunday evening i had the "cat" stove cranking and spanking. my big a$$ living room with vaulted ceiling was at a toasty 70 degrees F. lots of spill over into adjacent living space. my solar panels had just cleared of the last storm and i got walloped again. i aint goan on dee roof to clear dem off. no sir-ree. specs i haint seen no benifits from dat sit she a shun dis monff.
all this talk of reducing consumption....i havent bought new foot wear in 5 years. luckily i stocked up while prices were low. same for pants and coats. not much buying there. but i thought i would recap some of my discretionary purchases for the last quarter of 2009. bought two pure sine wave inverters for my portable solar power generators. bought a used 1995 saturn wagon. bought a netbook. a fleece lined hoody at 20% off! i HAD to buy a tyre for my bicycle.
oh, real important. i bought two super sensitive vid cams for my fireball and bolide patrol study. that is "shoosh-ting" stars. i would spend more but my high property taxes and low wages prevent me from consuming more. it's good that the gubbermint is keeping my consumption is check. only the super elite doing god's work should be able to consume. that is bernancke, paulison, summers, giethner, corzine and all of god's soldiers at gold man sacks. tuff luck on the rest of us.
one other thing, i bought another frozen pizza, baked it and ate it it. mmmmm....it's all good! SN@RX!

Lights out in France

Paris - The French electricity grid was forced to cut off power to around two million people in the southeast of the country on Monday in order to avoid a massive regional blackout, the operator RTE said.

France had to import power earlier than normal this year and had warned that cold weather could force cuts because of near record consumption and delays to maintenance in its network of nuclear power stations.

"RTE has put in place a programme of controlled load-shedding in order to avoid a complete black-out in the region," an RTE spokesperson said, referring to the Provence Alpes Cote d'Azur region.

Reliable Baseload power, except when it's too hot, or too cold.

.. and a river runs through it.

Regarding the article 'The Importance of Iraqi Oil Production' appearing in this month's Oilwatch Monthly:

The failure of US oil majors to secure much by way of oil deals in Iraq may well be greeted with disappointment in the US. However, the most important consideration for the US is the price of oil, and the expected outcome was clearly stated by President Bush chief economic advisor, Lawrence Lindsey:

"When there is a regime change in Iraq, you could add three million to five million barrels of production [each day] to world supply. The successful prosecution of the war would be good for the economy."
- Wall Street Journal, Sept. 16, 2002.

And here is why he had that expectation:

"Like it or not, Iraqi reserves represent a major asset that can quickly add capacity to world oil markets and inject a more competitive tenor to oil trade. However, such a policy will be quite costly as this trade-off will encourage Saddam Hussein to boast of his 'victory' against the United States, fuel his ambitions, and potentially strengthen his regime."
- Baker Institute Study No. 15 “Strategic Energy Policy – Challeges for the 21st Century”, April, 2001, prepared by the Council on Foreign Relations. This report was commissioned by the Bush administration in preparation of the Bush/Cheney National Energy Policy of May, 2001.

The Bush Administration wanted to see Iraqi oil production increase substantially, but not with Saddam Hussein in power. That was one of the reasons for the pursuit of regime change in Iraq.

They may have believed it, but that doesn't change the fact that in the seven years since the invasion oil production has not increased measurably, and exports continue to be sabotaged by nationalists. The neocons were delusional.


There will be no major expansion of oil production in Iraq as long as the current US controlled regime is 'in control'.

haven't seen this one posted:

Alaska coast erosion threat to oil, wildlife