Drumbeat: January 9, 2010
Posted by Leanan on January 9, 2010 - 10:38am
When the going gets tough, China goes shopping for energy assets.Last year, Beijing sent its powerful state-controlled enterprises on a mission to scour the globe for oil and gas supplies in a bid to quench the country’s growing thirst for fuel. In hard bargaining with sometimes hostile governments, the Chinese firms did not always bag their quarry, but they nonetheless racked up deals worth tens of billions of dollars in a single year, in countries as far afield as Venezuela, Canada and Iraq.
They also took advantage of asset prices that had fallen significantly in tough economic times.
China, Nigeria Discuss Investment in Oil, Electricity
(Bloomberg) -- Chinese and Nigerian officials held discussions about China increasing investment in the West African country’s electricity and oil industries.
ExxonMobil May Strike Deal for $1B Arctic Rig
Exxon Mobil Corp. is reportedly mulling over a deal with leading offshore rig contractor Transocean to construct a drilling rig capable of operating in extreme Arctic conditions for as much as $1 billion, according to Reuters.
Analysis: Nearly 60 New Rigs Scheduled to Hit the Waters in 2010
With utilization rates in the mid 70th percentile worldwide, offshore rig demand is not as tight as it was a couple years ago, but nevertheless the worldwide rig fleet is expanding to meet the continuously growing demand for oil and gas exploration and production. Rig orders placed in 2006-2008, near the top of the offshore rig demand cycle, are poised to bear fruit in the form of rig deliveries over the next several years.Likely having peaked in 2009, the current rig construction cycle is one of the largest in the offshore rig industry's history. However, with only a handful of orders placed since the credit crunch, the offshore rig order book is likely to continue to wind down as the offshore rig market digests the supply that is already poised to come online over the next couple of years.
Venezuela's Energy Crisis Hinges on a Single Dam
CARACAS, Venezuela (AP) -- Venezuela is at risk of a devastating power collapse that could also pose a serious political threat to President Hugo Chavez.The South American country relies on a single hydroelectric dam for most of its electricity and drought has swiftly brought the dam's levels to dangerous lows.
Fuel efficient cars blamed for fuel tax shortage
Your wallet and the environment may be celebrating if you drive a hybrid, but the Texas Department of Transportation isn't."It already has begun to be a crisis," State Representative Joe Pickett, R-El Paso, said.
The problem is that the state depends on the fuel tax to fund most transportation projects. Drivers, however, are buying less gas these days as cars have become more fuel efficient.
DAR ES SALAAM, TANZANIA - Finally, the power rationing that had threatened to leave dozens of employees jobless due to low production in factories will end this week following governments order to have Independent Power Tanzania Limited (IPTL) switch on its generators.
ICCI resents withdrawal of electricity subsidies
ISLAMABAD — Expressing resentment over government’s decision to withdraw electricity subsidies including those meant for lifeline consumers and the agriculture sector, Islamabad Chamber of Commerce & Industry (ICCI) called upon the government to reverse its decision as it will make life tougher for the consumers and farmers.
Belarus says fails to agree Russian oil supply deal
MINSK (Reuters) - Russia and Belarus have failed to agree an oil supply deal for 2010, the Belarussian government said on Saturday, adding its delegation had left Moscow.
Obama's Yemeni odyssey targets China
Many accounts say that Obama, who is widely regarded as a gifted and intelligent politician, is blundering into a catastrophic mistake by starting another war that could turn out to be as bloody and chaotic and unwinnable as Iraq and Afghanistan. Yes, on the face of it, Obama does seem erratic. The parallels with Afghanistan are striking. There has been an attempt to destroy a US plane by a Nigerian student who says he received training in Yemen. And America wants to go to war.
Oilpatch activist released without charges in EnCana bombings
GRANDE PRAIRIE -- Wiebo Ludwig was released without charges Saturday following his arrest a day earlier in connection with a series of pipeline bombings in northeastern British Columbia.
Obama unveils $2.3 billion for clean energy jobs
NEW YORK (CNNMoney.com) -- President Obama unveiled a program Friday that will provide $2.3 billion in tax credits for the clean energy manufacturing sector, a move aimed at creating 17,000 jobs.The funding, which comes from the $787 billion American Reinvestment and Recovery Act, has been awarded to 183 projects in 43 states, the White House announced.
Canada to study biofuel's environmental impact
WINNIPEG, Manitoba (Reuters) - The Canadian government has ordered a study of the environmental impact of making ethanol and biodiesel just as a government regulation mandating fuel blending is set to take effect.The study, ordered on Wednesday, comes after evidence of harmful environmental effects from ethanol plants and amid growing criticism of biofuel technology, according to a government document from the environment ministry, Environment Canada.
"Experiences in the U.S. and Brazil now suggest that existing biofuels production facilities are responsible for the generation of a range of new air- and water-related problems as well as recent concerns over human health," the document states.
When Will Renewable Energy Companies Overtake Traditional Energy Companies?
Renewable energy has got buzz, growth and growing government support. But it's no secret that it still makes up a small portion of the overall energy mix. As interest in renewables increases, the question has begun coming up more and more often: When will renewable energy companies catch up to conventional energy companies? That is, when will we see an Exxon Mobil Corp., Chevron Corp. or ConocoPhilips of renewables?
Military To Rely On Solar Power To Decrease Vulnerbility
On January 5, members of Ohio’s Air National Guard's 180th Fighter Wing joined Representative Marcy Kaptur (D., Toledo) to dedicate Phase IV of the unit’s massive, ground-mounted solar array currently rated at 1.2 megawatts.The solar farm, which will provide 37 percent of the electric needs of the base, is the largest of its kind at any Air National Guard station in the United States, and also the largest installed or projected solar installation in the state. The next largest is Dayton Power and Light’s proposed 1.1-megawatt array near its Yankee substation in Washington Township.
Hydro Green Energy fish survival study could spur future projects
A fish survival study has found that very few fish are injured by a slow-spinning electricity turbine installed in Hastings by Houston-based Hydro Green Energy LLC.Just one of 402 fish allowed to swim through the 12-foot diameter turbine installed in the tailrace of a hydro-power dam showed evidence of damage from the blades – a 0.002 percent damage rate that thrilled Hydro Green Power executives.
Why? The study, paid for by the hydrokinetic power developer, could speed development of other so-called “run-of-river” energy developments by Hydro Green, which wants to install nearly 500 megawatts of environmentally friendly units in 12 states.
That’s because the turbines that line the Hastings unit spin just 21 times a minute, significantly lessening chances that environmentalists will complain about a development because it endangers fish.
£100bn wind farm plan heralds green energy era
Revolutionary plans for a massive expansion of offshore wind farms have been unveiled in a £100bn project designed to usher in a new era of green energy for Britain.A quarter of the country's electricity needs would be met through wind power by 2020 under the strategy, with the construction of 6,400 turbines within nine sites dotted around the coast. The programme amounts to the biggest energy supply shake-up since the discovery of the North Sea oil and gas fields more than 40 years ago.
Energy bills will rise to fund £75bn 'dash for wind power' as Britain tries to hit climate targets
Energy bills will rise to pay for a £75billion plan to build 6,400 giant wind turbines around the coast.The scheme would see the equivalent of two windmills - each one rising 500ft above the sea - going up every day between now and 2020, making it one of the biggest engineering projects in recent history.
The 'dash for wind' is being fuelled by climate change targets set by Europe. By 2020, Britain must generate 15 per cent of all energy used on fuel, transport and electricity from 'renewable' sources.
Bentek Sees U.S. Gas-Productivity Gain Displacing Imports, Coal
(Bloomberg) -- Surging productivity from U.S. fields will end the need for natural-gas imports and provide enough additional fuel to run vehicle fleets and reduce coal-fired power generation, said consulting firm Bentek Energy LLC.“We may very well be on the cusp of a completely different energy era than we’ve had for the last 30 or 40 years,” Bentek Chief Executive Officer Porter Bennett said yesterday in an interview in Bloomberg’s Houston bureau.
Bentek, which tracks gas flows across the nation, predicted in 2008 that output gains could push Canadian imports and liquefied-gas cargoes sent by tanker ships out of the U.S. market by 2020. That was before advances in technology that proved last year to invalidate old formulas for predicting gas output based on the number of active drilling rigs, he said.
Call to extract the UK's remaining gas supplies
The offshore energy industry has warned that pressure on gas supplies has shown that more should be done to extract the UK's remaining supplies.Oil and Gas UK, the trade body, said that improved storage facilities should be a priority.
They also warned against downplaying the remaining potential of gas supplies in British waters.
Crude edges higher as thousands of jobs vanish
NEW YORK – Crude prices edged higher to end the week, despite huge supplies and tens of thousands of lost jobs in the U.S. last month.Energy prices have rallied for weeks on some signs that manufacturing activity had picked in the U.S. and China, but again it was the falling dollar that inflated the price of crude Friday.
Gasoline Reaches 15-Month High on Refinery Fire, Unit Shutdown
(Bloomberg) -- Gasoline jumped to a 15-month high on speculation that inventories in the New York Harbor market may tighten after units were shut at refineries in Newfoundland and New Jersey.
Border oil dispute worsens fears about Iran's influence over Iraqi government
BAGHDAD -- A dispute between Iraq and Iran over an inactive oil well has become a rallying cry for Iraqi nationalists and exacerbated fears of excessive Iranian influence in Baghdad.The fight for Fakka oil well No. 4 began late last month when a contingent of 11 Iranian troops occupied the relatively insignificant well in Iraq's Maysan province near the shared border. Forces from both sides are now dug in a few hundred yards apart, the oil well between them, about 250 miles east of Baghdad.
The incident has inflamed passions in Iraq over two deeply sensitive subjects: sovereignty and oil.
Venezuela's Chavez devalues currency
CARACAS (Reuters) - President Hugo Chavez devalued Venezuela's bolivar currency on Friday, attempting to resuscitate local production but running the risk of worsening inflation in the South American oil-exporter's flagging economy.Facing a recession and galloping prices in the 11th year of his presidency, Chavez had long been pressured by business for an adjustment of the over-valued exchange rate, but was not expected to make the move so close to an election.
British Columbia’s own version of King Solomon’s mines lies in a bed of deep, gas-bearing shale in the northeastern quadrant of the province. Locked up, molecule by molecule, within the stratified rock, is a vast reservoir of natural gas—fuel so cheap, efficient and clean-burning that most Canadian cities have been using it for residential heating since the 1960s. Six or seven years ago, new technologies and royalty incentives made it feasible to extract the gas from the shale. But buried treasures always seem to come with a curse, and, if you study a lump of the heavy shale with a magnifying glass, you can see the tiny pores where the bad news resides.Most of Western Canada’s gas deposits, including the Montney play, near Dawson Creek, B.C., contain hydrogen sulphide—one good breath of it can kill you.
Chevron oil pipeline attacked in Nigeria - sources
ABUJA (Reuters) - A Nigerian crude oil pipeline, operated by U.S. oil major Chevron (CVX.N), was attacked by unknown gunmen in the Niger Delta early Friday, security sources said."The Chevron Makaraba crude pipeline located in Delta state was attacked early today by some unknown persons," one security source said.
Coal-rich province rations electricity
BEIJING: China's coal-abundant Shanxi rationed electricity as the province reported the most severe power shortage in three years as the current coal output fell short of demand drove up by the prolonged icy weather.Two major thermal power plants in the capital city of Taiyuan, namely the branch factories of the China Guodian Corporation and the China Datang Corporation, saw power coal reserves enough for less than the warning level of seven days of use.
U.S. Girds for Icy Weekend as Europe Braces for Snow
(Bloomberg) -- Electricity use in Texas hit a winter high and orange-juice futures rose by an exchange limit today as the U.S. Northeast and South girded for a frigid weekend. Europe braced for more snow.The forecasts come after a week of storms and cold that have hampered coal and grain shipments, shut down trains and livestock markets and sent energy demand soaring across the Northern Hemisphere.
Pipeline bomber faces new charges
Only last fall, investigators had sought Ludwig's help in the case, after saying they had dismissed him as a suspect. Ludwig even wrote an open letter to "the Person(s) responsible for the bombings," urging a halt to the explosions.Eco-terrorism expert Paul Joose, who teaches at the University of Alberta, says the charge of extortion makes clear there is a bigger mystery behind the investigation and Ludwig's role.
Gazprom granted more time to complete exploration work
NEW DELHI: The government on Saturday allowed Russia's Gazprom to carry out exploration work over 18 months to make up for delays in work already allotted.Gazprom was an operator under the NELP-1 round of auction of oil and gas blocks in the north east coast, but its work had run into delays.
The Future of the Southwest: Localization and Carrying Capacity
For the holidays this year, I stuck with my vow to never fly again at Christmas and opted to drive the roughly 1,600 mile round trip instead....On the way, I had ample time to muse about the future and take in the on-the-ground reality of the Southwest. Foremost in my mind was the question: How will these communities fare in the transition to a localized, renewably-powered future?
As I explained in my final columns of last year, I am pretty much done with talking about the problems of peak oil (really, "peak everything") and climate change. That message is tired, and the tipping points have arrived. The time for ringing the alarm bell and counting on federal or state solutions has passed. From now on, we all need to be eyes-front, focused on what we can do locally.
What Happens When the Wells Run Dry?
One nagging question that the industrial world has been asking itself since the discovery of the first oil well is what happens when the wells begin to run dry. The answer is relatively simple to imagine. We had a dry run, so to speak, when Dubai’s economy tanked a few years ago. And although the causes of Dubai’s ills and ails were financial and not oil related, the drama which unfolded gave us a watered-down version of what might transpire if and when the oil wells stop producing.But before we run the Armageddon tape that the world will stop functioning because of lack of oil, let’s all take a deep breath and think again. The oil companies, the people who manufacture cars and airplanes and legions of scientists and inventors have all been planning for that day. And as far-fetched as it might seem to some of us, that day will undoubtedly come, very probably within our lifetime.
Markham plan could contain sprawl
A groundbreaking plan to freeze Markham's expansion onto prime farmland could voluntarily take the fast-growing suburban powerhouse where no GTA municipality has dared go: upward but not outward.Several councillors are pushing for a permanent "food belt" within the town's borders that would be preserved for agriculture until at least 2031. This is land politicians and developers have typically considered ripe for development.
Bicycling safely into the future
It is obvious to anyone who is currently informed about the converging trends of peak oil, declining material living standards in America and much of the rest of the Western world, and global environmental stresses, that one of the major outcomes will be a radical restructuring and down-sizing of our current energy-wasteful systems for transportation.As predicted by James Howard Kunstler in his visionary book, "The Long Emergency," everyday life in the future for most people will become intensely localized. Future generations will, of necessity, have to produce and consume essential products on a local basis, economies of scale will greatly diminish, and personal travel will be greatly circumscribed by the rising costs of both petroleum fuels and the vehicles that run on these fuels.
China to Increase Energy Supplied by Fossil Fuel Alternatives
(Bloomberg) -- China, the world’s second-biggest oil consumer, may source as much as 13 percent of its energy supply from alternatives to fossil fuels by 2015, Han Wenke, head of energy research at the National Development and Reform Commission, said at a conference in Beijing today.The country will boost development of hydro, wind and solar energy, and may also increase nuclear power capacity to as much as 40 gigawatts before 2015 and to 76 gigawatts by 2020, he added.
New smog rule could surprise some counties
LOS ANGELES - Parts of the country that haven't worried about air pollution may soon be in the fight California has faced for decades: cleaning up smog.Stricter rules proposed Thursday by the Obama administration could more than double the number of counties across the country that are in violation of clean air standards. That would likely have a big impact on other parts of the nation since California already sets stringent standards for cars, ships and trucks.
Pine beetles transform B.C. forests into greenhouse enemy
In a single season, an army of pine beetles has transformed our allies in the battle against climate change into the enemy.Now the province is in a race against nature, as one billion beetle-killed trees across the province slowly seep the greenhouse gases they had so generously stored up in their decades of growth.
China would never accept checks at Copenhagen: official
China was never going to accept outside reviews in Copenhagen of its efforts to slow greenhouse gas emissions, a top official said on Saturday, after critics accused Beijing of blocking the talks.Xie Zhenhua, deputy head of the powerful National Development and Reform Commission, told a forum that Beijing achieved its goal at the climate talks by ensuring aid for developing nations was not linked to external checks.
Beleaguered U.S. climate bill seeks Obama lift
WASHINGTON (Reuters) – President Barack Obama's State of the Union speech to Congress could indicate how badly he wants a global warming bill, which opponents say will cost U.S. jobs and raise prices -- a scary prospect for politicians trying to ride out a horrible economy in an election year.Obama, who played a dramatic role in negotiating a nonbinding international climate change accord last month in Copenhagen, now faces a tough economic and environmental balancing act to win the climate change legislation in 2010.
A Rebuttal to a Cool Climate Paper
Richard Lindzen, the meteorology professor at the Massachusetts Institute of Technology best known for his longstanding rejection of research pointing to dangerous climate disruption from human-generated greenhouse gases, has been bluntly challenged over a popular paper in Geophysical Research Letters last year that he co-wrote with post-doctoral researcher Yong-Sang Choi. The paper, assessing tropical sea surface temperatures in relation to flows of energy into and out of the atmosphere, asserted that the climate system was far less sensitive to human actions than the predominant view had it.In a followup paper accepted for publication in the same journal that examines the same question using the same sea-temperature data sets, four scientists say the Lindzen-Choi conclusions are “seriously in error.” When one flaw is fixed, they say, the analysis produces a much warmer estimate of future climate. But the result gets hotter still, they add, if an objective method is used to select the sea data in place of the choices made by the M.I.T. team.
Why Antarctica isn't melting much – yet
Antarctica is warming, but not melting anything like as much as expected. In fact, during the continent's summer this time last year, there was less melting than at any time in the 30 years that we have had reliable satellite measurements of the region.The apparent contradiction is explained by the seasonal pattern of warming, say two glaciologists writing in Eos, the weekly newspaper of the American Geophysical Union. The continent's winters and springs have warmed most, but it is still too cold in these seasons for anything to melt. Melting in Antarctica happens almost entirely in the summers, which have warmed very little, say Andrew Monaghan of the National Center for Atmospheric Research in Boulder, Colorado, and Marco Tedesco of the City College of New York.
Coral can recover from climate change damage
Scientists and environmentalists have warned that coral reefs may not be able to recover from the damage caused by climate change and that these unique environments could soon be lost forever. Now, this research adds weight to the argument that reducing levels of fishing is a viable way of protecting the world's most delicate aquatic ecosystems.
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I've been wondering about the latest rise in oil prices when the EIA's inventory has been showing an increase and it made me wonder about the move Saudia Arabia and Kuwait are making to the Argus index sometime in January.
I searched on news about the Argus Index and found the articles below.
This is speculation on my part, but makes some sense. Maybe the increase in crude price is somehow related to switch to the new Argus index. Thoughts?
Article from 1/5/10:
Saudi Arabia increases 'light' oil prices for US
http://www.arabianbusiness.com/577955-saudi-arabia-increases-light-oil-p...
Other related articles concerning more countries looking at the index:
Kuwait To Switch To Argus Index For Oil In January-Official
http://online.wsj.com/article/BT-CO-20091215-709351.html
ANALYSIS - China eyes Caribbean fuel oil market now, crude later
http://in.reuters.com/article/businessNews/idINIndia-45219720100107?page...
Kuwait Move From WTI Pricing 'Important' - Venezuela Oil Min
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=20091221...
Iraq to switch US oil pricing benchmark
http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&...
US crude oil inventories have fallen from 375 mb in early May, 2009 to 327 mb currently. Using 270 mb as the Minimum Operating Level (MOL), we have about 96 hours of supply in excess of MOL.
Some long term perspective on total Days of Supply:
Re: Crude edges higher as thousands of jobs vanish.
Another article that doesn't seem to get it. Futures markets are just as the name says, about the future not the present. Their function is to find a price such that no physical shortage occurs as time goes on. The price has to move to where buyers and sellers can trade due to reduced demand or increased supply if possible.
Buyers and sellers know their own situation and place hedges on the futures market to offset their exposure so as to reduce risk in the future. The actual physical inventories or demand at the moment are irrelevant.
I have seen this work many times in the grain futures markets which are seasonal. Oil is also seasonal. When prices are high at a normal seasonal low something unusual is going on. Last fall grain prices were high at harvest. The reasons were a harvest from hell and a falling dollar.
Oil has a reason it is making new highs at a normal season low. The falling dollar is one, but it seems to me that westexas's ELM model is kicking in. There simply are not enough loads of oil available from oil exporters and that is why tankers are sitting idle and being used for storage.
Now is the time when oil refiners and others hedge their needs to built up inventories for the summer driving season and spring agricultural demand. They are buying futures contracts so that if the price of oil rises they will be protected since the higher cash price on physical delivery will be offset by a gain on the futures contracts they purchase.
To have oil making new highs on the charts at a normal seasonal low time tells me that oil is headed much higher in 2010.
Yes, I agree with what you are saying, but doesn't the fact that many of the largest exporters are moving their trading to an index outside of the control of the USA weigh in on this price rise at all? Is this move making the inventories at Cushing, OK less of a factor in setting the global price of crude, especially the more sour varieties?
The change is giving countries that are not necessarily America's best friends (China, Venezuela, Iraq, etc.) another way to play the petro-game where the USA does not own the court and the ball.
Dragon -- Though I've worked in the upstream side for 34 years I've never studied the indexing game to any great degree. Thus an explantion would be greatly appreciated. Say an Exporter X's crude is indexed to Cushing at 85% Cushing. But now he's going to index to some other benchmark...ABC Crude. And ABC Crude was indexed to Cushing at 90% Cushing. Does that really change the game: If ABC Crude index doesn't change isn't Exporter X now = .9 x .85 =0.765 Cushing? Or am I looking at it wrong?
Rockman,
I read sometime back, too far back to provide a link unfortunately, that Wall Street banks controlled about 1/4 of Cushing's storage.
It would seem that being able to accept or defer delivery might allow these banks to "manage" trades more optimally (for them). I suspect this additional leverage provoked the Saudis into developing an offshore pricing model.
I also suspect the recent sale of their (the Saudis) Caribbean storage facility to the Chinese is an effort to promote this new pricing strategy. It allows the Chinese to assume a significant role in regional inventories and traffic.
They are not moving their trading they are moving their benchmark!They are switching their benchmark to the Argus sour crude index. The Argus contract has the exact same controls as the WTI contract. Both are dollar based and both are in the US and subject to the very same SEC regulations. Both are part of the CME group and both are traded on the NYMEX, and both subject to the exact same controls and regulations.
Argus Sour Crude Index (“ASCI”) Products
Also: CME Group Announces the Launch of ASCI OTC Futures
They are switching because the Argus is a sour crude index and more in tune with what they produce. However it is true that the Cushing hub is a bottleneck that the Gulf Coast PADD does not have. The small Cushing hub often causes excess volatility and was no small consideration in the switch either.
Ron P.
Thanks Ron/Will. Yep...controlling some inventory, especially in a tight market, is good leverage. And I did note that Chinese storage deal when it popped up. Connect that to the continuing Chinese trades on Vz heavy with their thoughts of acquiring the Aruba refinery and there does seem to be a plan afoot. Or maybe I'm just a naturally suspicious type.
"They are switching because the Argus is a sour crude index and more in tune with what they produce."
Could this be seen as further confirmation (if we needed any) that we are well past the peak in light sweet crude?
Right, I thought that as well. Why the sudden interest in pricing sour crude more strategically?
As I mentioned late yesterday, it was noted that Oil Movements is reporting a steep drop in oil exports:
http://www.dailyfx.com/forex/fundamental/forecast/daily/2010-01-07-2300-...
While all the attention is focusing on 'high' inventory levels (shouldn't they be the highest at the start of winter anyway?), the real story is the persistent drop in oil imports into the US. Oil imports may have already fallen to a level below that needed to supply US refineries in the longer term. It remains to be seen if imports can pick up when oil imventories eventually fall to the MOL (minimum operating level).
Tex, I'm still a newbie to the specifics of oil,although I make myself at home here. MOL is another of those terms that appear to tbe self explanatory but the definitions may be sort of shall we say -variable?
Are you saying that if out of the ground domestic production and imports were to cease and we continued to consume at the same rate that the system would start to crash in four days?
Or that if if takes a typical barrel of crude thirty days(I have no idea how many actually) to go from the well thru a pipeline maybe on a boat to a refinery to a storage tank farm for finished products that the system could continue to deliver for thirty days but that it would then take thirty days for a new supply to work its way thru the system?
Or that if production and imports resumed after four days we could operate but there would be zero cushion in the system or what?
As soon as you start thinking about a lot of this lind of stuff , you realize that something that appears to be simple as two plus two can turn into one giant question mark.
Or maybe that 270 million barrels is functionally literally the minimum content of the system and in order for a million barrels to emerge from the output end a million barrels must be injected into the other end?This makes the 270 million barrels functionally inaccessible?
If this is the case it's a lot easier to understand why prices can fluctuate so fast.
Maybe I'm just toooo tiiiirrrrred to get it but....
Here is my interpretation of Westexas' meaning:
Yes.
Yes and yes.
An analogy explaining MOL presented by someone who I do not remember here on The Oil Drum referred to water distribution. Before one drop of water can come out of your kitchen faucet, all of the pipes from the well to your faucet must be filled with water. That volume of water is the MOL, minimum operating level.
Correct. Inventory numbers are frequently given in terms of recent five year ranges. What this overlooks is that the industry has deliberately gone to a Just In Time inventory system, versus the inventories that they used to hold in the Eighties--presumably because they have the SPR as a backup.
First of the year Friday night failure:
Horizon Bank closed by regulators
Re: Gas productivity gains displacing imports and coal. This analysis is very misleading on several key issues IMHO. First: “We may very well be on the cusp of a completely different energy era than we’ve had for the last 30 or 40 years,” Bentek Chief Executive Officer Porter Bennett said." Not even close to true. THE big change in NG supply in the last 40 years has been the development of the offshore Gulf of Mexico NG plays. And this continues with the Deep Water plays. Due to pipeline construction DW NG development has lagged behind oil. But it's catching up: about 1.5 years ago the Independence DW Hub came online adding 1 bcf/day to supplies. Granted the SG plays will be still developed long after the last GOM NG is depleted. But that will likely be a few decades down the road IMHO.
Second: “A drilling rig today produces about two to three times what it did a couple of years ago,”. Obviously drilling rigs don't produce NG (he's just being a little sloppy here but it does shed light on his grasp of the business). The shale gas plays did get the rig count up quite a bit so, yes, more wells being drilled. But some of the better estimate of SG productivity is around 4 to 6 bcf per well. When I started 30+ years ago individual wells with URR of 30 to 40 bcf were more the norm (the offshore plays again). The SG wells did account for a good bit of the gains in national NG rates. But as most here know those individual well rates drop very quickly in the first couple of years. Along the same line: " last year that U.S. gas production held up even as the number of active rigs slid, Bennett said". Again, NG wells produce NG wells...not drilling rigs. Of course NG rates look good after the rig count fell 50%: the rigs aren't producing the NG...the wells they drilled are. And those wells obviously keep producing whether the rigs are drilling other wells are not.
Third: "He said there’s a good chance the country can produce as much gas as it needs with prices in the range of $3 to $6". Guess he missed the fact that one of the most active (and knowledgeable IMHO) SG players dropped their SG rig count from 18 to 4 when NG prices fell below $6/mcf. And they paid a $40 million cancellation penalty to do so. Will the SG plays push LNG out of the US market? Time will tell. Excluding the Marcellus, which has a big price advantage ($1-2/mcf) being close to its end market, the rest of the SG plays will compete against LNG delivered price of $3.50 or so (last numbers I saw anyone offer). From the last word I heard from the other SG plays they need at least $4-5/mcf to get them to even think about pushing many more rigs back in. The last I read the biggest hang up with importing more LNG is the lack of receiving terminals. In fact, I think there are legal actions underway by Boston(?) to prevent LNG deliveries to the existing terminal for fear of terrorist attacks.
As far as displacing coal there are TOD folks who know more about coal economics so I'll defer to them. But from their words I gather that once NG gets north of $6 or $7/mcf coal starts looking pretty good to most switchable users.
Rockman,
Given the current climate with oil prices remaining under $100, what are your thoughts about NG construction for the next several years?
cac -- If by construction you mean more drilling there does seem to be a little more activity planned by conventional players but probably not enough to change the bottom line very much IMHO. The Marcellus SG may see more increased activities but it seems like the local politics may start getting in the way. From what I've read it appears they are having difficulty getting the regulatory side structured and that's getting the local population worried. And rightfully so IMO.
From where I sit oil/NG prices are more than sufficient to encourage drilling. Especially oil prices. And now that NG prices are moving up some we'll see more wells drilled. We're buying prospects and drilling as fast as possible. But I think many operators are not too optimistic about NG prices holding up well during the summer so there doesn't seem to be a big rush. But I truly do believe it's the lack of capital that's holding back many companies more than any other factor IMHO. With prices up and, more importantly, costs down (we're drilling a well right now that had a cost estimate of $23 million a year ago with the current estimate at $13 million) most operators would be doing as we are if they had the capital. When prices move upwards there has always been a capital move towards the oil patch. But I suspect the financial meltdown we've experienced in the last two years has dried up many of the sources. And, as we just discussed, much of the activity in the last few years was generated in the shale gas plays and many of those prime players are dormant for the most part.
My guess is that if we don't see a lot more activity in the oil patch soon the decline profile of all the SG wells drilled in '08 and earlier will become a factor by next winter. Even with the current cold snap we'll probably be OK until next heating season. But if it's another cold one and the US economy does show a little more life supplies could get tight by Jan 2011 IMHO.
Rock,
From what I have learned, there were several large projects that were scheduled for last year- but with the econocrisis the brakes were put on. With that backlog and a decent NG market I have been told that the next two years should be pretty solid for rigs and pipeline construction. Which I think is in line with what you are saying, am I correct in that? Thank you for your response.
cac -- I don't quit see it that way. Always some big projects down the road. But overall not looking too good. But probably not too bad either in the short run. Remember we have about half the rigs running now as we did in '08. That means around 700 rigs not operating, not generating income for the drilling companies, virtually all rig construction shut down, 1400 drilling crews not drawing a pay check and are looking for jobs elsewhere, many thousands of associated service company hands no longer working, thousands of service trucks (frac trucks, etc) mothballed, etc, etc. You get the idea. We also own a steel scrap company. Just bought the derricks from two rigs that had been drilling E. TX shale gas. Cut them up and shipped the scrap to China. 3Q '09 we cut up 10 offshore oil field work boats and shipped that scrap to China. If a company can't see an asset generating income down the road in a reasonable time frame they sell it for scrap. Especially if their ops are barely generating enough cash flow to keep the doors open.
I'm not too connected to the pipeliners but I'll offer a guess: can't justify building a p/l unless you assume a certain volume thru put over a number of years. Not a good investment to build a p/l into an area where drilling has slowed up: no new wells = no new NG to transport. The biggest buld out might be in the Marcellus in NY but the local politics appear to be getting tense. But the good news is that the domestic oil/NG supply doesn't change very quickly. The decline in SG drilling wasn't going to show up in a quarter or two or even three. The new wells keep on producing. I know some operators, like Chesapeake, said they were going to cut production when prices dropped. But that's never done industry wide. In fact, when prices drop companies typically try to push production up as much as they can: cash flow usually drives the business...not profit.
That's why I think we won't see any problems with supplies until next winter...and then just maybe. And that would probably take some good economic growth in addition to a long cold winter. But the slow move negative is matched by slow moves to the positive: if we develop true shortages and NG prices spike it will take a couple of years for activity to respond enough to make any real difference. And, IMHO, I'm not sure the industry will rush back to drilling like we saw back in the early SG boom days: lack of capital, equipment and experienced people. And people may be the biggest problem: we are an old lot. A very big chunk of the experience hands will be heading to the house permanently in the next 5 to 10 years. And almost no one is hiring right now. Just the opposite: laying off like there's no tomorrow. Thus no FNG's to train to replace the old farts like me. In the last years I've meet just one geologist under 50 yo working for an operator. When we have joint ventures meeting the casual conversations eventually swing around to recent surgeries and comparing heart medications. And sometimes the smell of Bengay on the rig can be overpowering. LOL. Really.
if the marcellus doesn't pan out for any reason,the "drillbabydrillists" will blame the evil "environmentalists".
it appears the decline in production showed up in about 1 or 2 quarters. dry ng production has been in decline since feb. '09. not a huge decline, but a decline.
http://www.eia.doe.gov/oil_gas/natural_gas/data_publications/natural_gas...
very few of the la haynesville wells have been curtailed. chesapeake curtailed some of their production, basically a token effort. for the majority of haynesville players, it was sell-baby-sell. some of these wells may have sold 1/2 their eur in the $ 2.25 - $4/mmbtu range.
That seems to be what's playing out with LNG. We've been pretty slow most of the year but just this week we had three ships offload. We're also at about 1.3 bcfd sendout pretty much non-stop...or at least we have been for the past week and a half. I believe some of it was because someone further south on the pipeline declared force majeure and one of our compressor stations suffered an ESD.
The nice ladies at the bank have been looking strained and wary for months.
Hang in there, hamsters. Help is on the way. Washington Federal Savings is taking over the deposits. They must have gotten a deal, since they are not paying the FDIC a premium.
The FDIC has the usual encouraging noises about operations being unaffected. No doubt this is true for retail customers. Horizon Bank has been very active in local commercial real estate and condo projects, including a huge development deal which has been on and off for years.
My work takes me out driving around, looking at buildings. It has been an unsettling sight for some time. Both deferred maintenance and initial casual construction (all kinds of cutting corners) during the boom years are taking a toll. It's as if someone put a straw into the built environment and has been sucking money out for years. Horizon's $1.3 billion in assets may be worth rather less on closer inspection.
Hamster -- what part of the world are you looking at? Thanks in advance.
Rockman,
Bellingham, WA, population about 70,000, home to Horizon Bank and 13 other bank chains. Gross domestic product of Whatcom County (mostly dairy cows and berries), population about 150,000 total, is five billion dollars. Don't blink going through downtown Bellingham or you will be on your way to queueing for the border.
Thanks Hamster. Have actually stopped in Bellingham once long enough to blink a few times while on the way to Vanc. Having grown in elevation-challenged S. La. I really enjoy your vistas up there. If you just had a little more oil/NG up there I would have moved years ago.
Northern neighbor Bellingham has a robust sustainability group, as well as being home to The Oar Club, which promotes the use of engineless sailing with sculling as backup. Two of the sailboats here in Seattle's Sail Tranport Company follow this model.
Whatcom County is also slated to get two energy silver BBs in the form of manure digesters from local Farm Power: "It takes slightly more than three gallons of liquid cow manure to create one kilowatt-hour of electricity."
Sustainable Ballard and Hamster,
I'd be interested in taking my Energy Export Databrowser talk to either of your groups to get some feedback from real people instead of all these virtual folks here at The Oil Drum. Do you invite presentations from outsiders?
-- Jon (the Fremonster)
Hi Jon,
Sustainable Ballard does, as do the other SCALLOPS groups (Sustainable Communities ALL Over Puget Sound). You can contact me: kathy(at)sustainableballard(dot)org. We also create a community festival every fall, which might be a good spot for presenting your work: check out the Sixth Annual one.
On the subject of the recent weather and possible climate change.
I sent the following email to several friends last year:
'Subject: Blast from the past, recent weather. Better than the met office try and find it is the media.
On resending it got back. What is NAO?
Here is my stab at an explanation:
The theory of changes in the Gulf Stream and disruption of the plantary thermohaline system (as a theory) seems plausible to me. More on the idea:
http://en.wikipedia.org/wiki/Shutdown_of_thermohaline_circulation
While some suggest that this effect could reverse global warming, common sense tells me that it would only exacerbate extremes in weather/climate. All of that heat has to go somewhere.
One must remember that the Gulf Stream is not the same as the Thermohaline Circulation (THC).
The Gulf Stream is a Western Boundary Current and is caused by the easterly winds along the thermal equator. These winds push the surface waters toward the west, which eventually reach the continental coasts, both in the Atlantic and the Pacific. The water piles up against the coasts and then flows to the North. The waters of the Gulf Stream have passed thru the Caribbean Sea and the Gulf of Mexico, before rounding the southern tip of Florida and heading northward to become the Gulf Stream. The Gulf Stream is the current which results as this flow turns toward the East and leaves the US coast.
The water in the Gulf Stream spreads out as it crosses the North Atlantic and eventually, some of it enters the Nordic Seas. A portion of this water later cools and sinks thru the THC process. If the THC weakens or stops, that flow of warm water from the Gulf Stream would have nowhere to go, as the return leg of the loop would no longer work. One should also be aware that some of this warm water from the Nordic Seas does enter the Arctic Ocean, but the water in the Arctic Ocean has few exits and it's been found that the flow thru the Bering Strait nets out as a flow into the Arctic.
Research has suggested that a weakening or shutdown of the THC will result in cooler conditions over Northern Europe. Studies of climate using coupled GCMs tend to project a weakening of the THC as the Earth warms due to AGW. There was evidence found which pointed to a THC shutcown having happened in the Greenland Sea in the late 1970's. One mechanism proposed is the freshening of the surface waters of the Nordic Seas, caused by increases in precipitation and river runoff, as well as the import of low salinity waters and sea-ice from the Arctic Ocean. Increased melting of the glaciers covering Greenland would also contribute to the freshening of the surface layer.
There is weak evidence which suggests that a reduction in the THC has occurred again the past couple of winters in one area thought to be a major source for the THC. If so, that may provide a reason for the colder conditions over Europe this winter. Thus, the variations in the NAO may be a result of these changes, not a prime cause of the colder winds pushing south from the Arctic.
E. Swanson
Great clarification! Thanks E.
In Europe there were many cold winters between 1940 and 1960 during a negative NAO cycle.
If this was directed at my post I would suggest your proposition is in fact not materially different from my own conclusions.
Except that you have muddied the waters, in fact as no one has been able to predict the NAO over any time period it seems likely to have a periodicity of its own making your proposition a nonsense.
It could just as easily be reversed to variations in the NAO may not be directly linked to the GS.
As a trained scientist this is why I use the caveats of Personally I think and my theory is that.
this seems more intellectually honest than
.
There is weak evidence that the Pope is not a Catholic, LOL.
My evidence is specifically referred to that is the definition of science.
Check out the Wiki link posted by Ghung. They reference Peter Wadhams regarding his efforts to monitor the THC convective chimneys in the Greenland Sea. I recently e-mailed him and asked about his present thinking. He thinks the THC has slowed. I know of more information, but it's less accurate. I commented on what I observed in a public comment regarding a CCSP report in preparation, CCSP SAP 1.2. You may read the public comments from the CCSP library site. My rant is way down the list...
E. Swanson
Thanks, E. Swanson
It is physically impossible for the whole THC to slow. It takes 1600 years for water to make a single circuit with this circulation so changing a part of it in the North Atlantic has no impact whatsoever on a decadal or even century timescale globally. The water flux in the THC does not stop but gets redirected. In the past, when the CO2 equivalent loading of the atmosphere was around 300 ppmv a surge of fresh water into the North Atlantic managed to shut off the THC *regionally* and temporarily and led to cooling. This scenario is totally irrelevant today since we do not have the vast glacier melt fresh water lakes that are about do be unleashed as they were 13000 years ago and we are in a completely different thermodynamic regime thanks to the 430+ ppmv CO2 equivalent greenhouse gas load of the atmosphere.
The origin of weather and the middle latitude jet stream is eddy flux from the subtropical jets. The NAO is not a cause it is an effect. I have seen people invoke the NAO as if it disproves the thermodynamics of greenhouse gases. The energy source for the NAO and the tropospheric extratropical circulation is tropical heat (which drives eddies due to the fact that the planet rotates). The increase in this energy source leads to more eddy heat and momentum flux and a less zonally symmetric middle latitude jet structure. Before jumping up and down about freezing in Texas and Florida being evidence against AGW people should take some basic courses in atmospheric dynamics.
My understanding is that there are 2 main locations for the THC, the first in the Nordic Seas and the second around Antarctica. In the first instance, the sinking occurs due to the cooling of water near the surface in winter. This process appears to be associated with the sea-ice, through the creation of down welling flows in the form of convective chimneys. These chimneys have been found in a few locations in the Greenland Sea and may also happen in the Labrador Sea. The chimneys are analogous to inverted thunderstorms, with the water on the surface cooling to some threshold such that convection begins. The chimneys are rather localized, but intense and thus difficult to monitor during the storms of winter.
The other process around Antarctica is associated with the annual cycle of sea-ice. As the surface water freezes, salt enriched brine is rejected and tends to sink to the continental shelf below. From there, the water flows down the slope and cascades into the depths, forming the bottom most layers of the ocean.
"dissident" claims that "It is physically impossible for the whole THC to slow", which may be partially correct, as the process around Antarctica is not likely to be impacted by AGW, at least, for the near future. Certainly, there's no possibility of a large flood of water from a glacier fed lake, such as the Younger Dryas event or the 8200 yr BP event. However, the surface waters of the Nordic Seas are being impacted, as seen in measurements of salinity taken over time.
The present process in the North Atlantic and the Arctic Mediterranean is clearly not the same as the flooding type event said to have brought on the Younger Dryas period and to claim this proves there's no problem ignores the overall situation. If enough fresh water builds up in the Nordic Seas, the effect may be the same, that is, a shutdown in the local THC. Let me note again that this sort of event may have happened in the 1970's, as evidenced by tracer measurements taken from the Greenland Sea. Furthermore, recent measurements undertaken as part of the RAPID program have suggested that the THC is more variable on short time scales than previously believed.
The fact that the sea-ice cycle over the Arctic Mediterranean appears to be heading toward complete loss of ice at the end of the summer melt season is likely to have an additional impact, as the loss of sea-ice would open the Fram Strait to allow more low salinity surface water to flow from the Arctic into the Nordic Seas and thence into the Labrador Sea.
As a result, I think one can not dismiss the possibility that the THC in the North Atlantic will experience considerable change, perhaps beginning as an increase in variability, possibly leading to a shutdown at some point in the future.
E. Swanson
The haline component of the circulation is also driven by evaporation of the warm water into the cold atmosphere. Ice free summers in the Arctic Ocean will mean later freeze up and hence enhanced early winter evapouration. There are only a few of these columns you refer to and at least one of them completely shut down in the last few years. These columns are not some valve that controls the flow in the pipe. So the analogy to such with use of the phrase shut down is highly misleading.
http://www.cru.uea.ac.uk/cru/info/thc/
"A recent intercomparison of changes in the North Atlantic THC simulated by a number of different General Circulation Models as a response to global warming (Gregory et al. 2005) showed that the THC weakens gradually in all of the climate models that were investigated, but it collapses in none of them."
There are more channels for this circulation which has a massive inertia which is not contained by some notional pipe wall than simplistic, sensationalist analysis would indicate.
The convective chimneys don't operate with very much inertia. Their existence may be less than a year and they only exhibit sinking during the winter months, so they are actually "shutdown" for about 3/4 of the year. The effects of sinking waters in the Arctic Mediterranean (which includes the Nordic Seas) are isolated from the deep layers of the North Atlantic by the relatively shallow sills along the Greenland-Iceland-Scotland Ridge. Your suggestion that there is vast inertia within the system ignores this separation and the short lifetimes of the chimneys. I seriously doubt the claims from model studies, such as Gregory 2005, since the chimneys, like convective thunderstorms, tend to be smaller than can be explicitly represented at the resolution of the GCMs.
The modeling problem is quite complex. In GCM experiments, most of the models have not been able to produce the rate of reduction in sea-ice area seen in the recent past and since sea-ice melt would effect the surface salinity in the Nordic Seas, one must be skeptical of the results of similar models when used to assess changes in the THC...
E. Swanson
it takes one Sverdrup (=on million cubic meters per second) of fresh water to stop the submerging of the THC. No model I've seen of Greenland melt comes close to that rate.
In the latest paper by Hofmann and Rahmstorf, their model results suggest that the addition of 0.2 to 0.3 Sv of increased freshwater input to the NA would shut down the AMOC. The paper appeared in the 8 December PNAS. They mention another study which claims the melting of the entire Greenland ice sheet over a period of 1000 years would produce 0.1 Sv extra freshwater. Timing is everything.
E. Swanson
The oceanic meridional circulation is related to the atmospheric one (including the middle atmosphere) and is a wave driven effect. Except that unlike the atmosphere it is driven from above and not from below. In the case of the oceans the waves and eddies are concentrated in a shallow layer (above the thermocline) below the surface and are driven by the atmospheric drag on the surface water. This has nothing to do with salt and freshwater fluxes and will be happening for as long as there is an atmosphere and oceans on this planet. Also the driving is occurring at latitudes other than just the northern ones were the haline component is significant. No turning of spigots and shutdowns will occur.
It is interesting that the development of the understanding of the ocean circulation was pioneered by the theoretical advances in middle atmosphere dynamics with about a 10 year lag. The middle atmosphere circulation regime resembles the Antarctic circumpolar ocean current in that it is not obstructed by basin walls. The same wave-mean flow formalism (e.g. the transformed Eulerian mean circulation and Eliassen-Palm flux divergence) applies.
A lot of hysteria about the THC stems from the following paper:
Bryden, H.L, H.R. Longworth, and S.A. Cunningham, 2005. Slowing of the Atlantic meridional overturning circulation at 25° N. Nature, 438, 655-657.
The media picked up on this article and ignored the followups that showed no trend:
Meinen, C. S., M. O. Baringer, and S. L. Garzoli, 2006. Variability in Deep Western Boundary Current transports: Preliminary results from 26.5° N in the Atlantic. Geophysical Research Letters, 33, L17610, doi:10.1029/2006GL026965.
Schott, F. A., J. Fischer, M. Dengler, and R. Zantopp, 2006. Variability of the Deep Western Boundary Current east of the Grand Banks. Geophysical Research Letters, 33, L21S07, doi:10.1029/2006GL026563.
It has been drilled into people's heads that you can turn off the meridional circulation like a switch just by dumping some fresh water in the north Atlantic. This just shows a total lack of understanding of the dynamics.
BTW, where the hell are the 0.3 Sv of freshwater going to come from and more importantly for what period of time? The only possible source is Greenland. So we are going to have catastrophic melt of Greenland. Based on what? Is the cooling of northern Europe going to last long enough for the glaciers to return? Don't forget that the oceanic meridional circulation is not driven by a small region of salt water descent. Also the alleged 4 C of cooling is going to occur when there are over 4 C of warming from greenhouse gas increases!
The Younger Dryas occurred 12,800 to 11,500 years ago during a period when CO2 levels were about 300 ppmv and there was still plenty of ice sheet cover (i.e. high albedo). So the background climate sensitivity was completely different from today.
You seem obsessed with atmospheric circulation. Perhaps your focus is weather, the study of which tends to ignore the oceans, since the ocean currents and temperatures change slowly relative to the fast changes seen in daily weather. But, there is a massive flux of energy between the oceans and the atmosphere above and changes in the ocean can not be neglected when studying climate.
The notion of a shutdown of the AMOC has been around for a several decades. Your reference to a paper from 2005 as being the source of the "hysteria" ignores all that earlier work. You might begin by reading Broecker WS (1991), "The great ocean conveyor", Oceanography 4:200–206. If you want to go back even further, read Stommel H. (1961), "Thermohaline convection with two stable regimes of flow", Tellus 13:224–230.
The THC sinking in the Northern Hemisphere is the cause for most of the northward component of the ocean's high latitude surface flows. Sure, there are wind stresses at the surface, but the water in the Sub Polar Gyre would tend to simply re-circulate around the gyre absent the THC removal of a portion of that water. Were the water to just circulate around the gyre, the surface temperature would be colder, as the warm currents which now branch to the north from the North Atlantic Drift Current would not happen as there would be nowhere for the water to flow.
There have been model experiments in which the THC shutdown due to AGW was investigated. Some have suggested that the climate around the North Atlantic, especially Northern Europe, would be cooler. At the same time, there would be warming from AGW, the result being that the warming would offset the cooling from the lack of the THC.
You ask where would the fresh water flux come from. That's an important question, especially as the salinity measurements in the Nordic Seas indicate that the waters ARE freshening. One paper (Curry, SCIENCE 2005) suggested that the freshening represented an addition of some 9 feet of fresh water to the surface over the time period studied. There are other sources for fresh water besides Greenland, such as the surface water from the Arctic, which is freshened each year as the melting of sea-ice leaves nearly fresh water behind. Increases in precipitation and the resulting runoff of surface water into the Arctic must also be considered.
The important point is the total flow, not just one component. And, we know for a fact that the Great Salinity Anomaly happened and likely had an impact on the THC and thus on the weather in the 1970's. Do you deny that the GSA happened or are you just going to ignore it?
E. Swanson
"You seem obsessed with atmospheric circulation"
What a cheap ad hominem. Get an education and learn about ocean and atmosphere dynamics. You are implicitly claiming that they are unrelated.
Read for example http://echorock.cgd.ucar.edu/oce/gent/elpalm.pdf before spouting off. Andrews and McIntyre (1976) is a seminal work in middle atmosphere dynamics.
The ocean meridional circulation NOT driven by the haline differentiation. You are the one truly obsessed with the notion that the ocean circulation is driven by salt water sinking in the north Atlantic.
Before you recognize this distinction your pontifications cannot be taken seriously.
Thanks for the reference. I'll freely admit that my memory of dynamics has faded over the years. That said, I did have an understanding of such based on satellite dynamics. In reading your referenced paper, I have not noticed any reference to an inertial reference frame. In an Earth fixed reference frame is used, the Coriolis term transforms to a force, as I recall. Of course, there's lots of jargon in the paper, which may hide the basic physics from the casual reader. Reading this paper is about like jumping into the middle of a bar room fight and not knowing which side you are on.
Playing games with mathematical models is lots of fun. I still think that the atmospheric flows would tend to follow a Great Circle trajectory in an inertial reference frame. Of course, with the Earth rotating around that reference frame, the apparent motion to an observer who's feet are planted on the rotating reference frame, will be different.
Given the references I've seen regarding the THC, particularly that of the North Atlantic, I suspect that I'm not the only one concerned about the potential problem of a shutdown in the Nordic Seas. Anyway, you use the term "ocean meridional circulation" whereas I am interested in the Atlantic Meridional Overturning Curculation", the AMOC. It's the AMOC which could be impacted by changes in the THC. What happens regarding the rest of the surface circulation is a different question. And, the THC in the Nordic Seas is only one part of the AMOC, but weakening or shutdown of that branch would have major consequences on the regional climate of the areas around the Nordic Seas.
Did you mean to refer to the AMOC or are you referring to surface flows, such as the Antarctic Circumpolar Current mentioned? I recall that the formation of Antarctic Atlantic Bottom Water represents the coldest, densest waters in the Earth's oceans, ad this water forms below the sea-ice. If they were formed by meanders associated with the Antarctic Circumpolar Current, one would think either the temperature would be greater or the salinity less, i.e., both close to that prevailing in the area of the meanders. Apparently, that is apparently not the situation.
I did notice in your previous reverence, Schott et al. 2006, the mention that there is a northward current at the bottom of the North Atlantic which may bring Antarctic Atlantic Bottom Water into the mix. The efforts to measure the currents and obtain a net flow is hampered by the lack of measurements of this current. Then too, the flow over the Faroe-Shetland sill follows a different path compared with the flow over the sill in the Denmark Strait. Needless to say, there's quite a bit to be learned.
E. Swanson
Tone it down, please. This discussion is going so well. I don't want to see it turn into a flame war.
Here is another one for you to read and get a clue:
http://www.ima.umn.edu/preprints/dec01/1820.pdf
Salinity is only ONE factor in driving the ocean circulation. The other IMPORTANT factors are the exchange of heat and momentum between the ocean and the atmosphere as well as solar heating gradients. Rotating fluid systems produce, for example, Rossby waves based on horizontal variations in the temperature (or more precisely the geopotential). Even though the spatial scale of Rossby waves is very different in the atmosphere and oceans they are still the source of forcing on the mean circulation.
Ah, another reference to a model.
And what in dog's name, does this model have to do with the THC in the Nordic Seas? The modelers don't include sea-ice nor does their model include topography. There's no THC in the Northern Pacific and the North Atlantic exhibits sinking in a relatively small area, with the convective chimneys having horizontal dimensions of a few tens of kilometers.
Think about it...
E. Swanson
Dissident,
As I said above, all of that energy has to go somewhere. Then it is possible for AGW to cause above average weather extremes by way of increased "eddy heat and momentum flux", if I read you correctly, as the total energy of the system increases, including abnormally cold winters in normally moderate climates.(?)
Yes. Right now Greenland is experiencing above normal temperatures via flow from the south while North America and Europe are getting below normal temperatures via flow from the north and north-east, respectively. There is also poleward flow over the Pacific Ocean. To tell if we are really colder one has to average over the hemisphere.
The baroclinic eddies drive both the intensity and the meander of the the middle latitude jets. This is a rather complicated process as exemplified by so-called blocking events where the flow stalls for sometimes two weeks in a very non-zonal (i.e. north-south aligned) configuration. So the baroclinic instability and the eddies (low pressure systems) that it drives is not just some diffusive noise but also produces organized structures. In some hypothetical and unrealizable limit of no eddy formation and no topographic variation air masses would be trapped into latitude bands and there would be some broad and weak zonal jet in balance with the meridional temperature gradient. There was some debate in the past about what the baroclinic eddies would do under climate change: would they become smaller and more intense or would there be more of them. I am not sure what were the conclusions but the bottom line is that more heat flux would go to the poles and associated with this heat flux is momentum flux which has a large impact on the jet structure in addition to the direct temperature effects.
Nice rant! Sounds like you know what you are writing about, until you got to your suggestion that without eddy formation and topography, the flow would become lattitudnal. That claim is clearly wrong, as the Earth would still experience major seasonal changes in energy flows due to the tilt of the axis of rotation, thus the tropic to polar flows would continue in winter months to balance the energy flows entering and leaving the Earth.
Your suggestion would appear to ignore both the fact of the tilt and the fact that there is a Coriolis Effect due to the rotation of the planet. While we humans sitting here on the surface tend to think of the Earth as if it (and we) were not moving, the reality is that the atmosphere is not so structured since there is no solid connection between the surface and the air above. The atmosphere does not rotate in lock step with the surface, but tends to follow what may be thought of as orbital paths, except that gravity keeps the air stuck to the surface. At equatorial latitudes, the atmospheric flows tend to be east-west, but at higher latitudes, the meridional components become more obvious, somewhat like the orbit of a satellite at high inclination to the Earth's equatorial plane.
Or, one can think of the Coriolis Effect as an example of Conservation of Momentum. As a parcel of air begins to move away from the tropics toward the poles, it retains some of it's tangential velocity, which is greater than the higher latitude land below, thus the flows appear to turn toward the East in the NH. The return flows from the N Pole toward the tropics presents the opposite situation, where the tangential velocity is less than that of the surface, therefore the flow turns toward the west in the NH.
The result is that high pressure zones look like they rotate from a point of view fixed on the surface. The topology over the continents interferes, but over the oceans, the turning is much more obvious, especially over the Pacific. The eddies form along the frontal boundaries between the flows as the warm and cold air masses meet, since the respective velocities are in the opposite directions.
Weather folks tend to look at the eddies as the cause of weather, but others with atmospheric science backgrounds may see things differently. Maybe you have been watching the Weather Channel too long...
E. Swanson
Woops, I should have referenced the CCSP SAP 3.4. The public comments can be found HERE. My comment begins on page 65.
E. Swanson
A discussion on another board had me revisiting a whole different transition topic: The Buffalo Commons.
As noted in a recent, recommended diary on DailyKos, the Kansas City Star editorial board printed an opinion endorsing the establishment of a Buffalo Commons National Park back in November - what could be a seedbed for a much larger, 10-state Buffalo Commons suggested by Popper. As noted by many, there are roughly the same number of head of cattle in the US today as there were buffalo in the US 200 years ago. Granted, intensive agriculture does more than just raise cattle, but in the dry, high plains, a buffalo common may not just be esthetically pleasing - it may outproduce traditional agriculture. It will certainly do so in the long run as trad ag requires water which is not available on an annual budget. Out in the high plains, a lot of agriculture relies on the Ogallala Aquifer, which is being drawn down unsustainably. So while the discussion is currently framed as in the language of "National Park", I think of the Buffalo Commons more as a long-term, sustainable transition project.
DailyKos recommended diary
Daily Kos: Hike-On!-A-Buffalo-Commons-National-Park-in-Kansas
Kansas City Star Editorial
http://voices.kansascity.com/node/6547
Wiki on Buffalo Commons
http://en.wikipedia.org/wiki/Buffalo_Commons
Wiki on Ogallala
http://en.wikipedia.org/wiki/Ogallala_Aquifer
Great Idea! Putting Buffalo back, adding to the topsoil rather than depleting it, sequestering carbon, rather than adding, and nutrient dense protein rather than nutrient impoverished grains.
Link up top: What Happens When the Wells Run Dry?
Well not according to Swedish physicist Kjell Aleklett.
In other words it was the IEA's vast overestimation of Gulf reserves gave Dubai the belief that cheap oil, and cheap air travel, would last for decades. (Of course the IEA was just repeating the absurd reserve estimates of the Gulf Nations themselves.) Anyway it did not happen.
Really, regardless of the IEA's estimates or Gulf Nations overestimation of proven reserves, I think it ludicrous to claim that Dubai's massive economic collapse is not oil related. Were it not for oil Dubai would still be a small, nearly unknown, sheikdom in the desert.
Ron P.
From your linked article we also get this:
Speaking about exaggerated claims, Peter Davies, former head economist at BP, does not mention anything about the exaggerated published OPEC reserves and how this will affect future production.
And of course we've heard the following many times before.
I would counter that by stating: "Those who don't believe in peak oil tend to believe that geology and the law of finite resources don’t matter, and I think this is false."
"Those who believe in peak oil tend to believe that technology and economics don’t matter, and I think this is false."
Huh? It is precisely because of economics that Peak Oil is certain. Specifically, the law of diminishing marginal returns.
I think one other factor that probably affected Dubai was 9/11. Dubai is the financial center of the middle-east (say like Singapore) - but a lot of money exchanged was through hawala. That essentially stopped after 9/11.
The permiability and porosity for the lower Tertiary GOM fields average lower than for the Miocene reservoirs further up the column (Chevron). While there have been some large finds, the recovery rates might be lower, the development times longer, and the drilling more expensive.
Technology increased oil flow from depleted fields, but usually did not restore the wells to their original flow rates. In Mexico's case the flow at Cantarell was significantly increased by gas injection, but not for long. Now the KMZ field has surpassed Cantarell in oil production, but the nitrogen injection boosted production at KMZ is likely to go bust. KMZ is near peak production. Chincontepec is up for development. After that there is the Mexican deep water frontier.
Dubai oil production peaked in the 1990's. Dubai real estate speculation peaked in the 2000's. The UAE has not fully developed its oil resources.
rainey -- PEMEX should soon be taking delivery of two new Deep Water drillships. Be intersting to see if they take delivery and, if they do, what part of their national budget will they drop so they can pay for DW exploration. A difficult decision for sure. As much as they need to boost oil exports it will take many years and billions to do so. Not sure if they can stand the wait.
China Tries a New Tack to Go Solar
They have licensed the eSolar design for some of the projects they have planned..
It seems like that as the US talks, China acts -- nuclear power, solar power, wind turbines, highspeed rail, etc. I wondering if "democracy" is such a good idea in a post peak world?
An interesting question, but I don't know how you would categorize China these days. They are really communist in name only, and in some ways they have embraced markets and consumerism. Consider that they are also building cars and roads at a breakneck speed as well.
They still have lots of central planning, and the people there seem more resigned to the results of this "planning" (esp when the new road goes right through where your house is). None of this guarantees that a government doesn't make poor decisions, of course.
Our problem is that our own government seems to be crippled by partisan bickering, and we have a shadow government in the form of lobbyists that exert undue amounts of influence.
I think the problem is in confusing democracy for capitalism.
Ofcourse the problem in US are the arcane laws in senate. In no other country would you need 60% votes to pass legislation. A very united GOP has made sure nothing gets done in the US - thus greatly weakening Obama. Contrast this with a much divided (big tent?) democrats earlier when Bush could get quite a few things passed. Anyway as Dems are set to lose a couple of seats it will get worse. I think absolutely nothing will get done after next year's elections.
Which could be a good thing, as this will bring everything down faster, and reality will eventually have to be dealt with.
The dems are a slow death, while the repugs are a runaway train heading for a wall.
These days I think that China is more nationalist than anything. Authoritarian as well, of course, but unlike some authoritarian regimes it is not exclusively about maximizing the power and loot of the authoritarians. It looks like those in charge really want to advance what they see as the long-term national interests of their country.
Frugal,try reading some history of Communist China and the USSR then let us know what you think about the supposed advantages of these systems.If only the millions of dead Russian and Chinese victims of these regimes could could speak it could even change the minds of certain Western apologists.
Why do you have to assume that a dictator always has to be brutal? I'm talking about a benevolent dictator, not Hitler, Stalin, or Mao Tse Tung.
Oh, yeah, like a "Philospher King", maybe?
Trouble is: How do you find them, how do you get them in, and how do you keep them benevolent once they are in?
I believe most people here at TOD would make pretty good benevolent dictators. How to get them in power is a different story. Keeping them benevolent once they're in power would probably not be as difficult as you may think.
"Keeping them benevolent once they're in power would probably not be as difficult as you may think."
Power tends to corrupt, and absolute power corrupts absolutely. (Lord Acton.) Where is there a shred of evidence to the contrary? How do you keep them benevolent if there's no countervailing power that starts to resemble "democracy"? How do you select them in the first place? Once they're installed, they're dictator, so they get to select the next one, or it's by heredity. No, this seems like yet another naïve otherworldly invisible-pink-unicorn "solution" to me.
Meanwhile the alleged democracies such as the USA produce a succession of presidents that bomb countries and kill tens of thousands based on various pretexts and lies. If you start adding up all the deaths from the imperial adventures of the self-anointed "beacons of humanity" in the west it starts to compete with those dictators that are always invoked.
The bottom line is that governments are not accountable to any absolute principles and the public is too dumb or apathetic to actually govern itself (why was Bush "re-elected" in 2004?). History also demonstrates that social revolutions are the worst thing (the US war of independence was not a revolution). In the name of social engineering and goodness for humanity millions are slaughtered and starved to death one way or another.
I don't believe that statement. Whether you're corrupt or not depends on what's going on inside your head, not whether you're a dictator or not. For example, if you yourself became a dictator, would you all of a sudden become absolutely corrupt?
I'd like to think not - and most likely so would we all. However, if such thinking were broadly valid, we'd have little use for laws - and yet it seems best to have them, even concerning matters creating vastly less temptation than being dictator. History seems to demonstrate time and again that it's simply best not to put the matter to the test.
And let's please notice that the issue was the wisdom of having dictators, not whether I take myself for a saint. Still, changing the subject was certainly a cute - even if hackneyed - rhetorical trick. So OK, sure, why not, let's go for it. But it makes no never-mind since the odds that I, myself, would ever be the one appointed are essentially nil.
Oh, and it's very much the wrong question - as with the other day's last tree on Easter Island, it just doesn't usually happen that way. No, in the real world the issue is not so much overarching corruption parachuting in suddenly from nowhere, but long-term corrosion, a corner cut here, another corner there, and so on, bringing it to a crashing bad end in the fullness of time. Or, as another old chestnut has it, the road to hell is paved with good intentions. (Which, as with the last tree that never happened, reminds me yet again of the social characteristics of a certain oily predicament.)
I hope you realize that I'm grasping at straws as I watch the world collapse around me. It's not like I can't see problems with dictators running the show, but I just don't see how democracy is going to save us. The problem with democracy is that most people use it to try to benefit themselves, not solve overarching problems like resource depletion and over population. Do you think we could implement a one child policy in the west without commiting political suicide? Yet, China has managed to do it and has in the process prevented 300 million people from being born.
It is difficult to think of an example of a benevolent dictator in a communist regime, but I think the last two Chinese premiers might come closest. While there has been repression, few fundamental guarantees of basic rights, many persecution of minorities and political opponents, plenty of imprisonments and executions, there has been a general lack of war and a general good-government type prosperity.
The King of Bhutan is in fact a true benevolent dictator. They can exist and probably have in the past. They are just like flawless diamonds, very rare.
If there was only some way to invest a whole bunch of energy to somehow, like a flawless diamond, be able to be grown from scratch without flaws. Like some kind of Brave New World.
The thought comes to mind that the Chinese premier isn't really a dictator - there are committees that theoretically have some degree of oversight. The inner workings of such committees isn't really well understood by outsiders. As a hypothetical, the premier would probably be ousted if he were to go insane, for example. Consider that Khrushchev was ousted by the Soviets.
I find it fascinating that Hu Jintao is actually an engineer by training (hydraulic engineering, to be specific). We tend to select lawyers instead.
The thought comes to mind that the Catholic Pope is sort of along the same model - the College of Cardinals selects the pope, but once selected it is a lifetime appointment. But I am not Catholic, so I guess I am freer to compare the College of Cardinals to the Politburo without fear of ending up in hell :-). But here they seem to self-select new cardinals that have the same sets of views, so in a way they have become rather ossified.
There's democracy, and there's democracy. Here in the US, we have a system that's very slow to react, as PG wrote about a few years back. Europe is different.
There is no way to change this, outside of changing the Constitution, and I don't see that happening. Just because of the way we're set up, we'll always be a two-party system, without a whit of difference between the two.
That said...I do sometimes wonder if democracy can survive peak oil. Tainter points out that we can expect government to become more tyrannical as collapse approaches.
And in Collapse, Jared Diamond hints that democracy may not be the best way to ensure sustainability. He notes that strong central control is the key to sustainability in a large society. A large society means the king has the means to monitor the entire kingdom, in a way an individual or local group cannot. And perhaps more importantly, the king has incentive to protect his entire kingdom, because his wealth derives from the entire kingdom, and he wants his heirs to inherit it.
In a democracy, though...since there's no guarantee your children will inherit your position, I fear there's a temptation for people in power to loot the country while they can.
Not only a strong central government - the need for competence cannot be understated. You might have a strong king that is a cretin for example - history has many such examples.
The Soviets had a strong central government, but the people they promoted were selected more for party loyalty and by cronyism than anything else. Whatsmore they would oftentimes try and define their own reality based more on wishful thinking than anything else, and in the process ignored facts that suggested that this reality was flawed. But if they focused on something specific, they could accomplish things. Forced labor can be quite cheap, but it would suck to be one of the laborers.
In many ways the Bush administration reminded me of the Soviets - mainly because of the levels of cronyism and by selecting people for specific jobs based almost entirely upon party loyalty. They also tried to define their own reality, and this tendency persists in the Republican party these days.
Not only a strong central government - the need for competence cannot be understated. You might have a strong king that is a cretin for example - history has many such examples. Posted by ericy
Not only a strong central government, but a break-up of the US and the central governments ruling over smaller land areas. But the key to sustainability is a hereditary model. Hereditary government seems to be unique in that a degree of long-term thinking and the consideration of future consequences of current policy. It mitigates the "discounting the future" paradigm that all other systems seem to augment.
And with a hereditary set-up, you get rid of elections. Since elections are fundamentally ALL ABOUT WINNING, short-term thinking is built into the foundation of the system, and long-term thinking equally shut out. Elections, and the campaigns associated with them are the choke-chain by which the various self-serving interests whose lobbyists pollute our system maintain control over congresscreatures, the president, etc. Intellectual honesty in any discussion is also shut out and replaced by rhetoric. And elections are rarely decided on the merits of the candidates or issues actually on the ballot, victory goes to whoever's spin-doctor comes up with the catchiest ad campaign, or who gets more boots on the ground out on Get Out the Vote activities such as running phone banks, doorbell ringing and distributing fliers.
A hereditary government, however, tends to the opposite. Without an election cycle every four years, long-term thinking becomes possible. The knowledge of rulers that their kids will someday succeed them also tends towards longer, multi-generational thinking. A hereditary ruler owes their position to no one save fate or the gods, and isn't therefore politically in hock to specific constituencies or corporate campaign contributions.
Antoinetta III
But this presupposes that your offspring are benevolent, competent and interested in and willing to rule. History has examples where a weak or incompetent king can ruin a country. The Russia's Tsar Nicholas II and King Louis XV/XVI of France come to mind as examples of how hereditary rule can fail.
I quite agree in that no system is perfect, but I think that after a certain point, it becomes counterproductive to continue the quest for a "perfect" model as no such animal exists.
But the hereditary model is the only one I am aware of in which awareness of longer-term issues is to some extent embedded in the system; something I think is a prerequisite for any sustainable system.
Also, as far as I know, all of the various political and economic systems we have experimented with since the Industrial Revolution have worked on an assumption of ongoing economic growth. None seem able to survive when the growth vanishes, as at some point it must.
So I suspect that part of the price we will pay for sustainability is that we will have to put up with the occasional Ivan the Terribles or Count Draculas, maybe such is part of the human condition.
And if we don't want something hereditary, what can be devised that will:
1. Embed a long-term thinking dynamic into the system.
2. Ditch the "Its All About Winning" mentality that comes with elections.
3. Eliminate the stranglehold over the system that political campaigns provide to the various parts of the lobbying class.
Antoinetta III
Off with her head! God save the new Queen!
I kind of like it.
IMHO, the answer for the US is going to have to be to downsize the FedGov and devolve most of its domestic powers and responsibilities down to the states.
The FedGov is just trying to do too much, so it is not doing anything very well at all.
The US Constitution was premised on the US being a fairly loose federation, with most governing powers and responsibilities retained by the states, and the Federal Government limited to just those few things that truly were federal/national in scope. Short of a revolutionary change in government, I don't see any other way than to restructure the FedGov back to a smallish and limited government that has very much less on its plate than it has now.
That may be what happens...but it won't result in sustainability.
Diamond points out that that model makes sustainability impossible. Limited government means the society collapses into internecine fighting. People who know better than to pollute their own water or clearcut their own forests will do that to others. Who will then retaliate. The end result being Easter Island.
Downsizing the FedGov is not the same thing as downsizing government entirely. I am just talking about shifting most government powers and responsibilities to the states (and from there, on down to the localities). It is quite possible to have the type of strong government at the local and regional (state) level that is necessary for the transition to sustainability. In fact, I would argue that is the way it is going to have to be. A sustainable economy is going to have to be one that is less rich than what we have at present, and if we are not going to be as rich then we are not going to be able to support anything like the top-heavy superstructure of government we have in place now. Localization makes just as much sense for government as it does for evertyhing else in a sustainability context.
One advantage of devolving as many things to as local level as possible is that it will make the difficult choices a little feasible to make. The fact is that this is a very diverse nation, and regional differences are very great. Some places have plenty of water, for example, while others are going to be very short of it. Some places will have lots of good energy options, others won't. It will be better if each locality and region is freed to select its own pathway, coming up with their own solution to their biggest problems, and freeing up resources to deal with those problems from lower priority things that are no longer affordable.
The point isn't strong government. The point is that a bunch of small or medium sized governments is not sustainable, while one large one is.
Why? Because problems are bigger than a small government can deal with, or even be aware of.
That is precisely why central control is required. Different regions have different interests, and they will pursue them at the expense of others. One state may burn coal, not caring if it causes acid rain that kills crops in states downwind. Another may dump nuclear waste in a river, not caring if poisons the people downstream. Or people upstream may hog all the water for themselves, cutting off those downstream.
I would go so far as to say with our current technology, a national government really isn't enough. What one country does on the other side of the world can matter here at home.
That's exactly why things will break down, there cannot be some sort of world government as we are all different groups of people with our own self interests. I don't care if acid rain kills people on the other side of the world, I just want to eat. They think the same way too. If you were to tell everyone "Cars are now illegal because they are unsustainable", you would be thrown out of office the next day. Meanwhile, China and India will continue to develop and use those fossil fuels and other resources that you were kind enough to stop using. The Chinese are not going to care what happens on the other side of the world unless it affects them.
The Chinese are not going to care what happens on the other side of the world unless it affects them.
I do not think one has to look to the future to see such expressed:
Your argument makes the point for having a federal government to deal with inter-state and continent-wide issues. However, these are a small subset of the total issues with which governance must be involved.
To give just one specific example to make my case for devolution and localization of government, let's consider health care. It is front and center right at the moment. I would argue that we really don't need to "make a federal case" out of this one. Almost all health care services are delivered at a local level. What is really needed is for the citizens of each local community to band together in a co-op to negotiate a fee/reimbursement schedule with local health care providers, and then set a single rate per person to pay for what is covered. If costs are high due to a lack of adequate health care providers, the co-op can be proactive in recruiting more health care providers into the area. There could be some sort of statewide, regional, or national reinsurance/stop loss program to protect co-ops from an exceptionally adverse loss experience. There could also be some sort of national program so that each community co-op extends reciprocity to members of other co-ops who are visiting their area and need medical care - this would not be open ended but would cover emergencies until the member could get back to their own community. As for people who cannot afford the standard community co-op membership, there are multiple approaches. The co-op membership might agree to assess themselves extra to fund grants in aid for the poorer members of their community. Or there could be an annual community fund drive, or integrate it with the United Way, to raise donations to cover the cost for those too poor to afford it. Or there could be some small tax assessed, and the revenues used to fund vouchers that could be given on a means-tested basis. As for Medicare, there needs to be some mechanism for people to contribute into a portable savings fund during their working lives, and for this to be used to fund their co-op memberships when they have become too old to work, with some built-in protections against being hit with unexpectedly high increases. This is something that the co-ops themselves should be able to work out together, with the FedGov merely providing some leadership and assistance. There would then need to be some sort of plan to facilitate the transition away from the present Medicare plan.
The FedGov could definitely do some things to help make this happen. Getting out of the way rather than usurping health care as its own responsibility would be at the top of the list.
Except...you kind of do have to make a federal case of it, as long as people can freely move between states.
No, you just work out some type of reciprocity and membership transfer mechanism between co-ops. The FedGov would have to exercise some leadership to facilitate this happening, but once it is in place, it would most likely stay in place. Nobody wants to travel out of town and have no way to receive emergency care, and nobody wants to be stuck forever someplace and have no option of changing jobs because they can't get health insurance elsewhere. It is in just about everyone's interest to set up some sort of reasonable mechanism to make this happen. It is not that way now because we have a health care finance system that is dominated by the FedGov and by for-rpofit insurers and corporate-paid employee health insurance. The way to fix things is to sweep the whole lot of them out of the way.
I think that would only work if times were very good indeed, and there was no question of scarcity. Not a situation I expect any time soon.
The problem is that some people will be a lot more expensive to care for than others. States under pressure will then do their best to deny care to those people. (Like those old parishes, that would try to chase unwed pregnant women to the next parish, so the baby would be born there and therefore not be their responsibility to provide for.) States that wanted to offer better care, and had the means to do so, would be swamped by refugees from poorer states. The likely result would be a "race to the bottom," or states setting up their own border guards.
I think is probably inevitable in the long run. I also think this means collapse into internecine warfare is also inevitable.
That may well happen eventually, but for the time being many of the states are even weaker than the Federal government. As bad as the Federal government is crippled by partisanship, California has it even worse. My own state of Virginia is crippled by partisanship as well. The Republicans were completely unwilling to cooperate with our outgoing governor - they wanted to make him seem weak and ineffective. I suspect they learned a lesson from a previous governor (now Senator Warner) - they cooperated with him and made him highly popular in the process. Our new Republican governor seems to be more interested in god, guns, gays and abortion than anything else. I guess the only good news is that by law he is limited to one 4-year term and then we will get someone else.
This situation will probably persist as long as there is no punishment for scorched earth politics. Many of the partisans would claim they are working in the interest of the state, but in their minds what they mean is that they think it would be in the interests of the state to have their party in power and the other party out of power. Voters claim to be tired of this nonsense, but they haven't been willing to penalize those who engage in this behavior.
Yes, there are problems at the state level, and devolving power from the FedGov to the states is no automatic panacea. Some states will undoubtedly do better with it than others.
I do think that part of the problem with the states is that the FedGov has usurped so much power for itself over so many areas that most people view the states as mostly irrelevant, Devolve real power and responsibilities to them, and that would change.
Also, I do not see the states as the stopping point for devolution. I want government power and responsibilities to continue devolving mostly to local governments as much as possible. It is only at the level of the local government that you can get any real input from and accountability to the citizenry.
Parliamentary systems offer equal representation, and can react quickly.
No one has chosen to emulate the cumbersome US federal system, (except a few failed African States).
You need an educated populace to make federalism work, and that has never been the case in the US.
In times of crisis, democracies commonly suspend normal operations ("declare an emergency") and hand over more-or-less complete power to a small group, which then hands power back when the crisis has passed. (China could be viewed as operating in this "emergency" mode.)
During the emergency it's possible to plan quickly and execute efficiently. This is attractive to engineers, but throwing out the democratic baby with the inefficient bathwater is not a good idea. Over time, the elite drift out of touch with reality, and you tend to end up with people like Josef Stalin or Idi Amin in charge.
It's true that democracies tend to let situations drift until they become emergencies. This is not a good strategy when faced with ecological limits like resource depletion and environmental degradation.
Best hopes for far-sighted leaders, and survivable emergencies.
"Over time, the elite drift out of touch with reality"
As opposed to the Bushes? Or the banksters that control most everything that happens in D.C.?
as the US talks ... I wondering if "democracy" is such a good idea in a post peak world?
The US of A isn't a democracy....even if the talking heads say it is.
Commodity-Cost Jump Threatens to Stifle Rebound
http://online.wsj.com/article/SB126300087414822579.html?mod=WSJ_hps_LEFT...
Yes, as Jim Rogers puts it is the economy is picking up you will do well with commodities, if it is not doing well commodities will have real value going forward.
Oil is uncoupled from the US short selling price depression and is acting as an asset class will do when demand exceeds supply.
This time there is no gold standard to uncouple from to pay for the peninsula lifestyle choices, gold has been flying out of the IMF vaults to central bankers over the last few months in preparation for the inevitable US bond short collapse when oil peaks again.
IMHO.
Jim, it's amazing how fast people forget, but it wasn't that long ago all commodity prices, particularly oil, were going up at breakneck speed as China's economy grew at double digits.
We all know what happened with Lehman Bros. and the subsequent commodity prices collapse.
But now we start the same commodity price increases again as the economy in fits and starts gains traction. So what happens when those prices exceed the struggling developed world economies capability to support those higher prices? Some catalyst like Lehman will alert the markets to the risk of equity investment and prices will fall again.
Once that occurs a 2nd time, how do the developed economies regain a new footing? Surely, money cannot be borrowed at the same scale as in the previous collapse. It's a harrowing scenario.
But here's an even odder idea. What if when the first collapse occurred, it 'was' the big post peak oil collapse, but we just didn't think it was because enough borrowing by governments stopped the freefall. Like a hiker that has slipped over the edge of a cliff, yet is still holding on with toe holds in loose strata and hand holds via weed roots, it was only the built up wealth from years of growth that allowed for unprecedented borrowing to slow the descent.
We have to ask ourselves a poignant question, and that is; Has the collapse already occurred, but just hasn't completely played out yet. Or, do we suggest that somehow the hiker can pull himself back up to safety.
In the movies, the hiker's buddy always comes along at the last second, and as the last root breaks he extends a hand. This is the type of miracle most sheeple seem to expect.
yes, this WSJ news is deja vu.
The second time around is likely going to be a lot harder since we have used up much of our money/borrowing capacity already. The economy may end up looking something like what is described here. http://www.youtube.com/watch?v=LGEz5J1yueg
Of course, China's economy could collapse which would deal us a big wildcard.
My guess is that your former conclusion is closest to the mark and this will play out over a long time frame.
Thanks for the link. Interesting that he used the same analogy of a cliff.
Still not sure if it will play out over a long time or not. On the surface it would seem so, and may turn out that way, but also wonder if there is some threshold drop down point where there is a domino effect to collapse. And of course the question then becomes will the collapse be just in the U.S., or all developed countries, or include undeveloped countries too, in particular China?
Right now most people think this is just another recession, albeit a long one and are patiently waiting for things to turn around. Some are banking on it with equities. But as the situation does its seesaw commodity price oscillations, at some point it's possible there will be so many disenfranchised that it will initiate the hundredth monkey effect, with enough people suddenly realizing what's going on, i.e. post peak oil aware as it affects the economy, dawning on them that their enjoyment of the party is permanently over and civil unrest will ensue. Once that starts, it will be difficult to keep it in check from transitioning into all out chaos.
It's one thing for people to have hope their lives will improve, but if enough become convinced it won't, then will they get angry with those that are still partying on to try to get back some of what they've lost, even if it's just temporary?
Accordingly, one could say that as long as the displaced keep taking it, the party can go on for those in a position to lavish themselves with the last of the complexity.
The surge in commodities "is a reflection of extremely strong demand in the emerging world, and growing hopes of stronger demand in the developed world," said Jim O'Neill, head of global economic research at Goldman Sachs in London. It is "encouraging so long as it isn't too persistent."
I don't think that demand exists.
I think it's a reflection of extremely strong financial demand, as with the cross commodity simultaneous spikes and crashes in 2008, and that it's what happens at the zero bound on dollar interest rates.
O'Neill is just talking up the market again. The more money there is in the GSCI fund, and in ETFs, then the more the commodity bubbles get inflated, facilitated by Goldman and the rest.
Get physical and take delivery of something useful I agree.
Consumer Borrowing Fell Once Again in November
That graph basically shows that the recession is getting worse. All the chatter about recovery is pure propaganda that attempts to leverage the psychological component of the economy. The current economy is based on borrowing (corporate and personal) so these drops are a clear indication of an actual contraction.
This is consistent with the fall in state tax receipts.
I agree your post dissident and with Gail's. Talking about propaganda in favor of this weak economy, ever watch CNBC? On one occasion, a person called into their panel and had some negative things to say about the economy, then as the call was concluding she said to him "we'll talk again sometime", then after hanging up said "yeah, maybe never", and the rest of the crew cracked up.
Even the unemployement numbers are false. People leaving the workforce or better put, leaving because they can't find any work are not considered part of the unemployed. I wonder how that makes the disenfranchised feel now they're only part of the food stamps statistic.
No but I wouldn't like it by the sounds of it. Such behaviour is like that of some schoolyard punks.
The official unemployment figure is basically useless in every country. I pay attention to the ILO number (which includes the not actively looking but able part of the population) and it is really bad for the US right now. It should be around 7-8% but is over 15%. At some stage a jobless "recovery" is not a recovery at all.
I guess I look at it differently. The recession cannot end as long as people are heavily burdened by debt, which itself had reached unsustainable levels, and where people had effectively stopped saving.
I don't ever foresee a return to what we had in 2007 - that level of economic activity was phony and based upon debt. Whatever we end up with when we really do exit the recession will be at a level that doesn't require us to load ourselves up with debt.
I agree that there should be healthy debt paydown and a credit driven GDP growth is ultimately unsustainable. But borrowing also reflects the normal operating regime of the economy. So the reduced borrowing is not just showing people and enterprises starting to pay off their debts or even taking a breather.
And the peak in consumer debt was July 2008--exactly the same month as the peak in oil prices. If people don't have credit, they don't buy things, and the economy does badly. It is hard to see a big turn-around coming, with such a big drop in consumer debt.
The Governator is asking California state employees to pay 5% more to their pension fund, and take a 5% pay cut. [PDF]
That's a 10% pay cut. I suppose that's better than the 15% pay cut represented by the furloughs. OTOH, at least with the furloughs you're getting extra time off.
running the "cat" stove 24 hours now. living room currently at 77 degrees! outside temp about 20 expected to drop to low teens. solar panels still covered with snow. gaz-o-lean priced between $2.49 to $2.69 per gallon (regular). who is going to bicycle about in such weather? not me. time to drop another wood splinter in the stove.
"it's all good", nuff sed.
Finally flipped my lid at the single-pane windows in our Saskatchewan house (ice inside got to me big time), window company coming by the measure us for triple-grazed, low-e, argon filled. Now thinking about where to put the woodstove... I'm a climatologist, trying to walk what i preach, it's alot of work (and money), but sesh there's alot of waste. It's really weird out here in the flyover zone, people just don't think about energy efficiency. Solar panels to recharge our laptops and a couple of lamps would be nice too, must be worked on....
Congratulations, Paleo. Single pane windows at -40C must be brutal ! You can expect a huge difference in personal comfort.
Cheers,
Paul
National Grid UK declares another Gas Balancing Alert (third this week) after another failure on the Langeled pipeline. Lucky this is a Saturday and demand is weaker.
I really appreciate the discussions in here. Lots of people are commenting carefully and thoughtfully about energy issues and crises. I realize that I may be dismissed as just another crackpot, but I have been paying close attention to the activities of Steorn in Ireland who are in the middle of a public demonstration of their free energy Orbo technology in Dublin which lasts through the end of January.
The upcoming schedule promises to be very interesting as they are embarking on a series of public experiments in which they will be attempting to validate their technology. You can see live streaming video 24/7 of orbo devices at www.steorn.com. More details about what to expect later this month are discussed here: http://www.freeenergytimes.com/?p=224
Give it a rest, already. The only time you post, it's to plug Steorn. They're a joke.
public experiments in which they will be attempting to validate their technology.
If you have to have a "public experiment" that will attempt to validate one's tech you are going it wrong.
The science is validated at independent labs. You give the instructions on how to get from start to finish so others can try to replicate the results.
If you rearrange the letters in Steorn a bit you get Sterno
...
I suggest you pay more attention to them, at least it burns and produces useful heat!
One of my fondest memories is of being a Tenderfoot Scout and pan-frying Spam on a Sterno stove. Somehow, Spam and Sterno seem made for each other.
I suppose this is a good question for westexas. Could China's multitude of oil contracts worldwide be considered another draw on the export land model? Not sure if it meets that criteria, but it certainly is a big draw against exports to countries other than China.
Technically this does not effect the export land model (ELM). But the net result is to take this oil bought by China under a contract with the supplier (Nigeria, Venezuela, Angola, Brazil, Canada) immediatly off the world market. So as world market, where most imports to the US are purchased, sees decline in amount of oil traded, the price will climb higher and possible shortages could result.
China will have guarenteed oil supplies even if price is somewhat variable under the contract. US will remain at the mercy of volatile world markets for its imported oil as domestic supply will continue decline, although in '09 the domestic production went up about 2 or 3% for the first time in many years. With the economy restricting lending, this rise will not be sustained IMO.
Thanks for the info on ELM. Guarnteed oil supplies - smart!
Does anyone have any thoughts on on how things might pan out if the Chinese economy crashes in near future?
http://finance.yahoo.com/retirement/article/108534/contrarian-investor-s...
There was some discussion on that article on Friday.
PE -- Not exactly a new move for China. The first time I noticed them locking up crude reserves was back in the mid 90's when they bought a Vz field making less than 400 bopd for over $160 million. That wasn't a typo: $160 mill for 400 bbl of oil per day. A few years earlier a US company (Bennington?) bought a similar field making around 200 bopd and cranked it up to 40,000 bopd using horizontal wells. This has been their biz plan for at least 15 years. Just few noticed until recently.