Drumbeat: January 22, 2010

Give it the gas: On the road to a cleaner energy future, natural gas offers an alternative route

Every few weeks, it seems, fresh news arrives telling of impressive discoveries of oil and gas in the Gulf of Mexico, an area that, until recently, was viewed as well worked over and unlikely to yield any new bonanzas.

Last September brought word of a giant Gulf oil field reeled in by British Petroleum. And the latest Gulf headline-maker is a potentially major gas play offshore Louisiana that appears likely to add new trillions of cubic feet of gas to growing domestic reserves of the cleanest-burning carbon fuel.

So much for worked over. The new take on the Gulf is decidedly more optimistic.

Goldman Sees ‘Upside Risk’ for China’s Oil Demand

(Bloomberg) -- Goldman Sachs Group Inc. said it sees “significant upside risk” to its forecast for China’s oil demand this year.

China’s oil consumption growth may exceed the bank’s forecast of 625,000 barrels a day in 2010, analysts including Jeffrey Currie said in an e-mailed report today. The country is the world’s second-biggest fuel user.

Pakistan: Rise in fertilizer rates to cause Rabi yield decline

LAHORE - The sudden raise in the prices of fertilizers after acute shortage of water in the country could lead to decline production of Rabi crops particularly wheat up to 20 to 30 per cent of the total production.

Experts said that the quantity of fertilizers is usually increased in case of water shortage.

Zambia: State to Plan Ahead for Indeni Maintenance

MINISTRY of Energy and Water Development Permanent Secretary Teddy Kasonso has said that advance preparations in the face of routine maintenance closures at Indeni Oil Refinery will help address the fuel shortages in the country during the period.

In the past, the nation has experienced fuel shortages because of starting the preparations for sufficient fuel stocks at the last minute.

Ethiopia inflation soars to 7.1 pct y/y in Dec

ADDIS ABABA (Reuters) - Ethiopia's year-on-year inflation rose to 7.1 percent in December from 0.6 percent in November on the back of rising fuel, food and construction material prices, the statistics office said on Friday.

Inflation in the vast Horn of Africa nation hit a high of 64.2 percent in July 2008. It then entered a period of deflation from July to October last year.

Life getting harsher in North Korea

Food shortages have been made more painful because "it's the elite that creams off the food produce," said Muntarbhorn, whose six-year term expires this year, at a press conference in Tokyo.

"There's also a shortage of medicines, particularly now the H1N1 flu has arrived," said Muntarbhorn, who said he had interviewed many refugees from North Korea but never been allowed to visit the isolated country.

Indonesia: Gasoline prices in Timika skyrocket

This shortage of fuel had caused a two-kilometer long queue of hundreds of motorbikes and cars for gasoline at two fuel stations in Timika over the past week.

In response to the situation, Nawaripi fuel station`s supervisor, Rifai, said the state oil company, Pertamina, just delivered him eight to 10 kilo litres a day over the past six days.

That supply was much lower than 29 kilo litres a day he normally received from Pertamina, he said.

Hawaii school bus service being cut back as costs soar

Public school bus routes, which were cut back in November, will be reduced further next school year and the fare may climb to $1 from 75 cents.

The Department of Education will eliminate more school bus routes on O'ahu next school year by increasing the distance students will be required to walk to school.

Walk distances for students were increased in November from 1 mile to 1.5 miles for secondary students, and the fare jumped from 35 cents to 75 cents for a one-way trip.

Asia Fuel Oil-India Essar offers second Feb cargo

SINGAPORE, Jan 22 (Reuters) - India's Essar Oil has issued a tender offering up to 60,000 tonnes of February-loading fuel oil, its second cargo for the month, amid an improving market, tender documents showed on Friday.

Oil Caused Recession, Not Wall Street

The take home from my work and that of Hamilton’s is that the received wisdom may be wrong. Wall Street, sub-prime and regulatory failure are not the ultimate cause of the economic melt down. The root of this crisis is probably oil.

Are You Prepared for the 5 Deadly Emergencies?

Oil prices are on the devil’s own roller coaster, but the big picture is that we are still in a head-on collision with peak oil. What’s more, the cheap, easy-to-pump oil is fast being used up.

To be sure, there were plenty of oil discoveries in 2009, especially in Brazil and the Gulf of Mexico. A whopping 10 billion barrels of oil was added to reserves, the highest rate since 2000. However, the world is consuming around 83 million barrels a day, which equates to 31 billion barrels a year. So, even in a good year, we barely replaced one third of the oil we consumed.

Biofuels: The New Alchemy

At the World Future Energy Summit, some of the most influential people in the renewable energy industry will strategize for solutions to the global climate crisis. Read about some of these new technologies.

Solar Power: Sunshine's Cloudy Days

After a period of rapid expansion, panel manufacturers today are reeling from a pronounced supply surplus, falling prices and stagnating sales. In 2009, industry revenue plunged by nearly 40% to about $25 billion from $40 billion the previous year, according to BankAmerica Merrill Lynch alternative-energy analyst Steven Milunovich. Solar-panel output far outstripped demand last year; manufacturers made 66% more product than they were able to sell, estimates research firm iSuppli located in El Segundo, Calif. Some analysts believe the dismal conditions will persist into 2011, setting up marginal players worldwide for failure. "A large number of manufacturers will not survive," says Paul Semenza, an analyst with research company DisplaySearch, based in San Jose, Calif.

Cutting Carbon: Should We Capture and Store It?

The potential impact of CCS is huge. The Intergovernmental Panel on Climate Change says that CCS could contribute between 10% and 55% of the cumulative worldwide carbon mitigation effort over the next 90 years. The International Energy Agency says that CCS is "the most important single new technology for CO2 savings" in power generation and industry, and will need to account for about one-fifth of the carbon mitigation effort this century — reducing carbon emissions as much as renewable energy sources will.

Though it requires up to 40% more energy to run a CCS coal power plant than a regular coal plant, CCS could potentially capture about 90% of all the carbon emitted by the plant. To solve the problem of climate change, we "need to use every option we can," says Nick Otter, head of the newly-created Global Carbon Capture and Storage Institute (GCCSI) in Australia, which will fund pilot programs and network CCS efforts around the world. "And we've got to have some realism to the approach."

In Abu Dhabi, the Green Economy is in Rude Health

The feeling among many conference-goers can be summed up like this: the politicians might have failed to act on climate change, but everybody else is going to push on regardless. Take Bill Gross, founder of eSolar, a California-based firm that builds solar power plants that use mirrors to concentrate sunlight and boil water that then turns a turbine. Gross has just cut a deal with a privately-owned Chinese power equipment manufacturer to build, over the next 10 years, solar power plants that will generate 2 gigawatts of electricity. To put that in perspective, that's about four times more power than what's produced by all the solar power plants in the world right now. There's interest beyond China, too. After a lunchtime presentation, would-be buyers from the Middle East and Europe milled around to talk to Gross about possible projects, as well.

Real People, Real Preparation, Part 6 With Faith Carr and Carolyn Baker

Faith Carr, after working hunched over a desk for 35 years, ended up disabled. Exhausted after even more years of progressive political activism with no success, she turned her hand to her own backyard. The 25 square-foot herb garden turned into a homestead. Come the revolution, she'll bring the eats.

Pick-your-own vegetables to replace flowers in high street

A Lancashire town is experimenting with using traditional floral displays, including hanging baskets and herbaceous borders, to grow slightly less colourful but more practical greens.

The idea taking shape in Clitheroe is to replace flowers with edible vegetables and offer a modest "pick-your-own" service of plantings to anyone passing by.

Growing Home—Urban Agriculture in Chicago

"Well over 50 percent of the world's population lives in urban communities," says Orrin Williams, the employment training coordinator for Growing Home, as he explains the importance of urban agriculture.

“Urban agriculture is, in my mind, critical to the rebirth of cities and communities that have fallen on hard times,” Williams says.

Oilrigs should be used for homes in areas at risk of flooding, report says

Decommissioned North Sea oil platforms should be towed to the waterfronts of coastal cities at risk of flooding and converted into homes, shops and universities protected from rising sea levels, a study recommends.

Britain should not retreat from the waves but embrace them, adapting to climate change and consequent flooding by building new communities, either on stilts or floating platforms.

Should energy independence be a high priority in the US?

The year is 2013, five years after peak oil. Gas is now over 11.00 a gallon. The average American no longer drives a car. Only the government and the military have access to large amounts of gasoline. It is a world none of us could have imagined.

The average American family of four has made drastic changes to survive. It is a cold Midwest morning, the alarm goes off at 7 AM. The family wakes up to a cold, 55 degree house. An electric spacer heater is the only form of heat, and all electric, nation wide, is shut off from 11PM-7AM. Through out the winter months, only three rooms are heated, the living room, the kitchen, and one bathroom. Because of this, all the beds are now set up in the living room. On top of each bed, are sub zero sleeping bags. These sleeping bags are the difference between life and death, as all across the nation people freeze to death every night in their homes. This has become so common that no one even takes notice anymore.

Oil Falls to Lowest in a Month on Concerns Over Demand, China

(Bloomberg) -- Crude oil fell for a third day, dipping below $76 a barrel in New York to its lowest in a month, after a U.S. government report showed refineries in the biggest energy consumer cut processing in response to lower fuel demand.

U.S. refineries ran at 78.4 percent of capacity last week, the lowest rate outside the Atlantic hurricane season since at least 1989, according to the Energy Department. Oil is headed for a second weekly drop after U.S. President Barack Obama proposed restrictions on risk-taking at financial institutions while concerns grew that China may take more steps to curb price increases.

Commodities Have Further to Advance, Hermes Fund’s O’Shea Says

(Bloomberg) -- Commodities, as measured by the S&P GSCI Light Energy Index, may gain as much as another 10 percent this year, led by oil, sugar and coffee, according to Colin O’Shea, head of commodities at Hermes Fund Managers Ltd.

The index, which Hermes uses as a benchmark, advanced 15 percent last year, buoyed by Chinese demand for oil, copper and other commodities. The gauge has a 36 percent weighting in energy, 30 percent in agriculture and almost 18 percent in industrial metals, based on data from Jan. 21.

Russia Sees Oil, Gas Share of GDP Falling to 14%

(Bloomberg) -- Russia, the world’s biggest energy supplier, may see the share of oil and natural gas in gross domestic product fall to 14 percent within a decade from about 25 percent now, Finance Minister Alexei Kudrin said.

Oil prices may average less than $70 in the course of the next 10 years, undercutting revenue and reducing the energy industry’s share of GDP, Kudrin said at a conference in Moscow today. Budget revenue from the mineral extraction tax and export tariffs on oil and gas may drop as much 4 percent during this decade, Kudrin said.

Russia Considers Shift From Crude Oil Export, Extraction Taxes

(Bloomberg) -- Russia is considering shifting from oil export and mineral extraction taxes to a levy on “excess profit,” said Ilya Trunin, director of the Finance Ministry’s tax and customs department.

Schlumberger Profit Falls as Customers Cut Spending

(Bloomberg) -- Schlumberger Ltd., the world’s largest oilfield-services provider, said fourth-quarter profit fell 31 percent after oil producers slashed spending during the global recession.

Net income dropped to $795 million, or 65 cents a share, from $1.15 billion, or 95 cents, a year earlier, Schlumberger said today in a statement. Excluding one-time items, profit was 67 cents a share, 3 cents higher than the average of 26 analyst estimates compiled by Bloomberg.

Venezuela’s Planta Centro Generator Sputters Amid Energy Crisis

(Bloomberg) -- Planta Centro, Venezuela’s biggest fossil-fueled power plant, is operating at less than a fifth of its designed capacity, exacerbating a power crisis that has shuttered businesses from aluminum plants to shopping malls.

The plant operated at 267 megawatts of power on Jan. 20, or at about 13 percent of its 2,000 megawatt capacity, according to a daily report from Venezuela’s grid manager, the National Electric System Administration Center, known by its Spanish acronym CNG. The plant hasn’t produced at more than 26 percent of capacity in at least three months, according to CNG.

Venezuela rejects Junin 10, Mariscal Sucre offers

CARACAS (Reuters) - Offers made by foreign companies to help develop Venezuela's Mariscal Sucre offshore gas field and its Junin 10 extra-heavy crude field "did not meet expectations," oil minister Rafael Ramirez said on Thursday.

Nigerian Court Tells Cabinet to Decide on Presidency

(Bloomberg) -- Nigeria’s Federal High Court said the Cabinet must decide within 14 days whether ailing President Umaru Yar’Adua is unfit to discharge his duties as leader of Africa’s top oil producer.

Justice Dan Abutu issued the ruling today in one of three lawsuits seeking to force Yar’Adua to step down and hand power to Vice President Goodluck Jonathan.

'We can survive -- but we must change`

Human population has been on overdrive since the Civil War, he said, and a sustainable level of human population may be no more than 1 billion people. That has created quite a predicament -- the long emergency. A group of 500 scientists gathered for an energy conference in Denver last fall agreed that the global rate of oil production peaked in July of 2008. From that point on, oil will be increasingly expensive and harder to pump.

"Our governments are not prepared for peak oil any more than they were for the recent recession," Brownlee said.

The experts are telling us we need a 20-year crash program to prepare for and avoid the coming devastating consequences, but "it`s not even being considered yet. We`re likely to be caught short. Local communities will feel the pain."

Reliance Industries Q3 profit rises 15.8 percent

MUMBAI — Indian refining and energy giant Reliance Industries announced its first profit rise in over a year on Friday as its performance was boosted by higher natural gas production.

Reliance, India's largest private sector company, said net profit rose 15.8 percent to 40.08 billion rupees (878 million dollars) in the fiscal third quarter to December from 34.62 billion rupees a year earlier.

The electric car revolution will soon take to the streets

For years, the promise and hype surrounding electric cars failed to materialize. But as this year's Detroit auto show demonstrated, major car companies and well-funded startups — fueled by federal clean-energy funding and rapid improvement in lithium-ion batteries — are now producing electric vehicles that will soon be in showrooms.

Swiss pilots aim to circle world in a solar-powered plane

ABU DHABI (AFP) – Bertrand Piccard is no conventional environmental activist -- he hopes to raise awareness about the potential of renewable energy by flying a solar-powered aircraft around the world.

"What we want to do is to fly day and night to show that, with renewable energies, you can have unlimited duration of flight, no restriction," Piccard told AFP at the World Future Energy Summit in Abu Dhabi, where he had a booth to promote his venture.

British State May Have to Subsidize Nuclear Power, Auditor Says

(Bloomberg) -- The British government may have to subsidize construction of nuclear power plants because it lacks a guarantee from Electricite de France SA that new stations will be built, the country’s auditor said today in a report.

Economic considerations, including the price of carbon, difficulties getting plants approved and EDF’s financial position may hamper the company’s efforts to complete projects, the National Audit Office said.

NRC cites fire hazards at Alabama nuclear plant

WASHINGTON (AP) -- Federal regulators warned the Tennessee Valley Authority on Thursday about "apparent violations" involving fire safety at the utility's Browns Ferry nuclear plant in north Alabama.

Officials from the Nuclear Regulatory Commission said the findings don't pose an immediate safety risk but are urging TVA to fix the three-reactor plant, which suffered a nearly disastrous fire in 1975 and later had to shut down for more than two decades due to problems.

Governments 'must tackle' roots of nature crisis

Governments must tackle the underlying causes of biodiversity loss if they are to stem the rate at which ecosystems and species are disappearing.

That was one of the conclusions of an inter-governmental workshop in London held in preparation for October's UN biodiversity summit in Nagoya, Japan.

China-led group may discuss climate fund for poor

NEW DELHI (Reuters) - A meeting of four of the world's fastest-growing carbon emitters on Sunday ahead of a January 31 deadline for countries to submit their action plans to fight climate change may discuss a climate fund for poorer nations.

Senators Want to Bar E.P.A. Greenhouse Gas Limits

WASHINGTON — In a direct challenge to the Environmental Protection Agency’s authority, Senator Lisa Murkowski, Republican of Alaska, introduced a resolution on Thursday to prevent the agency from taking any action to regulate carbon dioxide and other climate-altering gases.

Protecting against climate change could cost nothing

Fresh air is valuable stuff. Climate change mitigation measures needn't cost us a penny, because the clean-air benefits could more than repay the price, according to a new study.

Low-cost carriers greener than full-service

Ryanair has emerged as an unlikely model for sustainable travel in new research showing that low-cost carriers produce up to 35 percent less carbon emissions per passenger than their full-service counterparts, due to higher load factors and seat density, as well as newer fleets.

Global Warming Increases Flood Risk in Mountain Areas

ScienceDaily — The world's mountainous regions are home to about 800 million people and the source of some of the world's major rivers. In these regions, runoff is strongly affected by temperature. This suggests that flooding could be quite sensitive to global warming, but there has been some lack of scientific consensus on the effects of temperature variations on floods.

Stronger Atlantic Hurricanes Seen Increasing, Damaging Property

(Bloomberg) -- The strongest Atlantic hurricanes may almost double in frequency by the end of the century as the planet warms, U.S. scientists said in the journal Science.

Occurrence of the most destructive hurricanes may rise 81 percent over 80 years while the total number of storms, including weaker systems, is projected to drop by 28 percent, the researchers said. The net effect may be to increase property damage by 30 percent, Tom Knutson, a co-author of the study, said in a telephone interview from Princeton, New Jersey.

Temperatures in Past Decade Were Warmest Since 1880, NASA Says

(Bloomberg) -- Temperatures in the decade that ended in 2009 were the warmest since record-keeping began in 1880, NASA said, backing up data from the U.K. Met Office and the United Nations’ World Meteorological Organization.

For the past three decades, surface temperatures rose about 0.36 degrees Fahrenheit (0.2 degrees Celsius) per decade, said Gavin Schmidt, a climate scientist at NASA’s Goddard Institute for Space Studies in New York. Average global temperatures have increased by about 1.5 degrees Fahrenheit since 1880.

“It’s completely unambiguous that the last 10-year period from January 2000 to December 2009 is very clearly the warmest decade in the historical record,” Schmidt said yesterday.

Energy independance in the US will occur when we run out of oil imports.

Energy independence should be a priority for all Americans. If, for whatever reason, you cannot pay your utility bills, your utility company will teach you all about energy independence. The sun and wind are free if you happen to have a residence and can afford to purchase the infrastructure to convert them to electricity. A passive solar home with super insulation could also be a useful adaptation.

The organism, which is our civilization and 98% of its infrastructure are adapted to living with cheap energy. Most of that infrastructure and those that depend upon it will soon find themselves in a position of energy and food starvation. Those that have the resources to adapt now may fare better.

The momentum of economic and population growth means that even full-scale thorium reactor development, if possible, will not catch, replace or ameliorate the depletion of existing energy sources. We will take one step forward, but then we will take two steps back until finally we stumble backwards into the chasm. If a nuclear program is undertaken, it will occur first in places with lax environmental laws and a command economy. China is there now, and I have no doubt that the U.S. will resemble current day China in many ways in the not too distant future.

If I could sum up the future and energy independence in one word it would be “abandonment”.

I stated what will be not what could or should be.

Fortunately we can each choose to make energy independence a personal action, rather than a unplanned situation. I would say "decision", but I've decided already but my actions are lagging.

hey Paleo those panels we talked about earlier arrived a week and a half ago. I called my ultility today to tell them to expect another little RE producer on their grid soon.

So many (south) facing roofs so little time.

China is not a command economy. You may be too young to remember, but the 'gang of four' did not prevail following Mao's death. Instead the 'capitalist roaders' were triumphant.

As far as I know, China doesn't even force a diversion of agricultural land into fuel production, such as occurs in the US with the ethanol mandate.

Energy independance in the US will occur when we run out of oil imports.

Those are on the wane:


Exactly why isn't so obvious.

RE: Should energy independence be a high priority in the US?

Interesting scenario. I'd peg it more like around 2020-25 than 2013, but otherwise she might not be all that far off the mark.

I liked the bit about how fortunate the family felt because they had sleeping bags and a sewing machine, bought back before there was even any thought of being prepared. I also liked the point about how things that people assumed they could fall back on, like wood heat and hunting, didn't work out because too many others all thought the same thing. It was interesting how large the little things that most people don't think much about, like soap, loomed in the story.

The US will eventually become "energy independent", for the simple reason that there eventually will be no more oil we can import.

Interesting scenario. I'd peg it more like around 2020-25 than 2013, but otherwise she might not be all that far off the mark.

I second that, but think the scenario is more likely in 2030+, because the shale gas boom will give Americans a temporary reprieve.

As for the rest of the world, my guess is that accelerated die-off will begin by 2030 latest. The later it is postponed, the worse it gets further down the road.

Shale gas will help for a while, that is one of the reasons I lean more toward moderate declinist scenarios like this one rather than doomer die-off crashes. There may be a little gas for residential heating for quite a while, yet. On the other hand, with oil exports declining so quickly under the ELM model, who knows what kind of crash program there will be to convert transportation of all kinds over to CNG, which gets us right back to not much being available for home heating.

I second that, but think the scenario is more likely in 2030+, because the shale gas boom will give Americans a temporary reprieve.

Except for the gas we get from Canada we import only about 5 percent of the natural gas we use but we import about two thirds of the crude oil and petroleum products we use. Therefore the shale gas play will provide little reprieve if any as far as energy independence goes. And, we already export coal.

As far as imports go, oil is our only concern. We will never be independent of imported oil until the global economy completely collapses. And when that will happen is just a guess. My guess is sometime between now and 2020.

Ron P.

I think we could substitute natural gas for oil without too much difficulty, for many purposes. This has already happened in some third world countries. People convert their cars to run on natural gas, because gasoline or diesel are not available.

I've driven a natural gas car, and you would never know it was natural gas powered except that there's much less room in the trunk. It looks like a normal car, except for the huge tank that takes up so much trunk space, and the valve under the normal-looking fuel hatch, which looks kinda like the ones you see on gas grills.

And the receipts from the gas station show $.97 per GGE (gasoline gallon equivalence) instead of $2.47 per gallon for gas, here at least.

You mean we would save a buck and a half per gallon equivalence? Then why are we not doing it right now? There must be some reason that there is not a mad rush to convert cars, trucks and tractors to natural gas. Why is that not happening?

Ron P.

For a lot of reasons, most having to do with the difficulty of change. It's hard to find a place to fuel up, it costs money to buy a new car or convert an old one, and perhaps most importantly, no one is sure the price advantage will remain. A lot of people who converted their homes from oil to gas heat were burned when the price of natural gas jumped a few years ago.

But if we reach the point where there are actual shortages, I expect that will prompt those who can switch to do it.

Thailand has been promoting NGV for over 4 years. There are several issues with NGV, but they can be solved with sufficient government subsidies. Some of these are that the conversion costs over $1500 per vehicle, a standard gasoline engine will have valve problems requiring an overhaul after 30,000 - 50,000 miles, range is limited to less than 200 miles per fillup, fueling stations cost over $600,000 ea. to install, and an average fill takes 6 minutes, thus leading to long queues.

Yes, NGV is cheaper, but it is also substantially less convenient than liquid fuels. But realities have forced Thailand to commit itself to NGV, and in only 4 years they have placed more than 100,000 CNG vehicles on the road, with fueling infrastructure covering about 40% of the country. Realities may also one day force this change in the USA, but do not kid yourself that you can switch even a small portion of a fleet the size of the one in the US in less than a decade.

NGV is a great solution for the privileged and wealthy to continue driving once gasoline is rationed. It will not likely be possible for the average consumer to take advantage of it in a short period of time though.

Oh, and high pressure CNG tanks have been in a shortage for the past 2 years. Before you could even think about NGV for general use, you'd need to build several factories to produce the tanks. It is sad that this is the best option for keeping the automotive fleet running.

$1500 for conversion
200 mile range
6 minutes to fill up

Electric Cars would kill to get that kind of specs !

Here I have a pump 2 miles from my house, and a friend has a Civic GX (CNG) and I've considered one as well. The only issue is range, which is about 300 miles, and at least here CNG availability makes this an island. It's a great deal for a "city car" in my view.

It costs an arm and a leg to convert an older car legally in the US and a hell of a lot to convert a new one.But if you are willing to buy the same exact make and model that is being bought by phone companies, etc, for conversion by the hundreds , you might be able to negotiate a pretty good deal on a conversion, relatively speaking.

Anyone who thinks they will be able to buy gas without paying large retail markups on the gas (not necessarily the same thing as profits of course) and extensive highway use taxes over the long term is deluded.

Speaking as a gearhead , I feel very confident in offering this advice-buy the smallest most fuel efficient car you can for now,drive it as little as possible, and drive it until you can pickup your new ngv or dual fuel ngv at the dealership with a full FACTORY warranty on it.This will save you a lot of headaches and money.

I'm sure there will be plenty of them available within five years or so if gasoline and diesel prices go where most of us think they are and stay there.And your old car that gets excellent gasoline mileage will bring a good price from someone who can't afford a new car or lives where the ng service stations are still few and far between or simply nonexistent..

Your chances of recovering the cost of conversion of an older car are pretty close to nil unless you can fill up at home at the "wholesale" price of ng and then you would have to put a lot of miles on the car.Filling up at home off of a residential gas line is going to be a real can of worms in and of itself.


Great comments as always, but I differ with you on a few points.
Buying the same models as the NG fleet vehicles is excellent advice, as is the alternative of just getting a smaller, more efficient vehicle and waiting a while.

But for recovering the conversion, cost, well, it just depends on how many miles you drive per year, and the price difference. If you drive 50,000 miles a year, especially in a city, then yes, it's worth it. Many taxis in Australia and elsewhere do this, as do urban delivery vehicles. Also, by using cleaner burning natural gas, it helps city air quality too.

I know of one salesman in Canada (Toronto) who drives a CNG Honda, and has the home filling station. he does almost 200 miles a day, but fills up from his home station every night, for the equivalent of $1/gal. Granted the filling station is $5k, but at 50,000 miles/year and 30mpgge, he uses about 1600 gge per year, and saving $2/gal, well, he pays it off in 1.5 years.

Bottom line - the more the vehicle is used, the better the economics, and if you drive less than 20,000 miles per year, then you are right, it's not worth it (yet). That is why all the CNG action is in fleet and commercial vehicles, but it will spread slowly.

One other, often overlooked, advantage of a natural gas economy instead of an oil economy, is that we can produce natural gas (methane) as a biofuel, from any feedstock, including cellulosic. And with a nation wide gas grid, you can put it in, and take it out at any point. Landfills, dairy farms and feedlots are now starting to produce methane, upgrade it to pipeline quality, and sell it. And there is potential for lots more of that sort of thing, particularly from landfills. All of which contributes to our "energy independence", which is, of course, the whole idea.

For diesel engine vehicles the story is even better as you can simply add NG to the air intake (called fumigating) and run on up to 80% NG, and when you run out of NG, you just carry on with (more expensive) diesel. I know of some farmers in Australia that are going this route - no problem to tow a trailer with a CNG tank behind the tractor and the implement - and you can use the one CNG tank with any of your (suitably equipped) tractors.
of course, a train could do this no problem at all.

Certainly less convenient than liquid fuel, but eventually that convenience will be expensive enough to justify it. I expect most people would choose to suffer the inconvenience of CNG before they choose suffer the inconvenience of public transit, which is cheaper still.

That idea of "fumigating" a diesel would also seem to work with wood gas too. Take one of those big diesel PU trucks and add a wood gas generator to the bed, then throttle the wood gas into the intake. The diesel fuel flow would run at idle setting, the power control would be via the wood gas flow control. Add a small compressor and tank to store the wood gas during periods of power demand is low and away you go. The waste heat from the cooler in the wood gas generator could be use to run an absorption A/C unit. Sounds neat, maybe I'll throw one together if the price of oil gets painful again...

E. Swanson

Hi Paul,

You make some good points.

I believe Honda bailed on thier ng cars, and the filling stations too, and there are some really pissed people who will never buy a Honda again as a result.Getting that car serviced , if it needs servicing, is going to be very difficult indeed-most dealers have never seen one of them and nobody has the parts in stock.The car can't really get over about eighty miles from home.How long it will take for the local authorities to slap a meter on the filling station is anybody's guess.

But like you say, if you run the car enough miles, you can come out rather well for now.Maybe even better later.I have had some experience with delivery trucks that run on propane, essentially the same setup except the tank is smaller and holds liquid at a much lower pressure.They work just fine, no problems.

My concern is to make sure that a potential customer for a conversion realizes that the potential for continious and expensive headaches is enormous. Most repair shops have a firm policy of not working on modified cars as they are hard enough to fix nowadays even when in factory trim. The savings are not at all likely to be enough to recoup the costs within a reasonable time.The figures thrown out in this thread as to the conversion costs are imo extreme lowballs for cars done legally here in the states, but I could be wrong in this respect..Dealers and manufacturers will use the conversion as an excuse to deny warranty coverages.The computer diagnostics codes and modes may not work any more , etc.

The delivery trucks are a tried and true standardized conversion.They fleet operators have thier own in house mechanics,they work on only one make and mostly one model, etc. and have thier own stock of repair parts.And they never want to drive the truck to Grandma's house over the holidays where there is no filling station.

Anyone interested in the Honda story can go to "the cutting edge news" site and type Honda into thier search window and hit enter for an earful. They ran about six articles on this little scandal.

OFM, Honda is still selling their NG Civic, though only in Calif and NY. I did hear they have sold the business for the filling station. When gasoline goes back up to $4+, we will see some more action, but in the meantime, it will be the fleets and buses, for the very reasons you say.

Agreed about the cost numbers being thrown around, I did a propane conversion 12 years ago and it was $2k then. I would expect at least $4k here.

Block Dog, you are correct about being able to use wood gas on the diesel - this is how they did it in WWII. In fact, it is the easiest way to run an engine on woodgas, the diesel becomes the pilot ignition, and you use about 10-20% of the normal volume of diesel. But if you run out of wood, you can go completely diesel. However, I have not seen system using the compressor. I have seen pictures of old buses with gas bags on the roof, to store it at atm pressue. You could do a compressor, but that would be quite a complication for a road vehicle, and unnecessary for a stationary engine which would run at near constant speed.

As for using the waste heat, you will have 3x as much from the engine exhaust as you will from the gasifier. In fact, if the gasifier preheats its own incoming air, the woodgas can be as low as 200c before an extra cooling. To see a good system, that you can buy, google Victory Gasworks.

Do a search for "woodgas truck", and you will see numerous examples of pickups converted to run on wood gas. A really compact system would only cost you 3ft of bed length. Some guys in Finland tow a gasifier trailer behind their cars - use it only when you want to.

You must make sure your gas filtering is thorough - I have read about engines failing after 5000km from poor gas filtering. Still, there were over one million vehicles run on woodgas in WWII, and Henry Ford powered his factories on it in the 30's - if they could do it then, we certainly should be able to do it now. !

I agree, Leanan, that there are opportunities for converting oil-burning uses to gas-burning ones.

Here in California, gas is the source of most of our electricity, as well as for heating and cooking. Oil heat is very rare. I understand that in the east coast and Midwest that oil is commonly used for home heating. What if federal and state governments established tax credits or other incentives for property owners to convert from oil furnaces to gas furnaces, so long as the projects met efficiency standards for the heating units and accompanying weatherization? It would create jobs in the short run, and help protect against oil price shocks, reduce greenhouse gas emissions, and reduce air pollution over the longer run. New York City is considering requiring cleaner-burning boilers to replace polluting ones burning No. 4 and No. 6 heating oil.

A lot of folks couldn't benefit because they aren't near gas lines, but many others could.

How many of those still using oil heat have NG available? Maine is usually mentioned as a laggard, but is it even an option (i.e. do they have NG pipelines). When I sold my Wisconsin house back in 95, the first thing the buyers did was switch it to gas heating. I suspect that because of the cheaper operating cost many who have the opportunity to do so already have.

I think there are still a lot of homes in the northeast that could switch, but haven't. It costs a lot of money to convert. (About $5,000 - not worth it unless you're planning to stay in the house awhile). Some people are afraid of it. (We had a house blow up an entire neighborhood around here a few years ago.) Natural gas was actually more expensive than heating oil for awhile, so that discouraged conversions, too. (Though new houses are almost always built using natural gas, if possible. I think federal environmental laws encourage it.)

There are tax incentives in place for converting, though they could be much more aggressive. There is up to $1500 available to convert to biomass (e.g. wood pellets), but as Leanan pointed out, a conversion is much more than that.

If we had a (real) wartime situation, where oil, but not NG, wood or elec, was rationed, I expect these would be the first things to be converted, if not outlawed.

The US uses about 450,000 bbl/day of heating oil, roughly equal to total oil imports from Iraq. And heating oil is the only heating source that is imported (unless you include electricity from Canada). That is roughly $11.5bn per year, leaving the country for a heating fuel that could be replaced with a domestic one. There is lots of potential for, and benefit from, fuel switching from oil to anything else for heating.

Great facts, Paul – thank you!

I actually ran up with that at my house the summer before last. The way it worked out was that we had an original oil boiler (1950s house) and the oil tank busted, so my dad replaced it. As heating oil prices were topping $4 and I was in my TOD whipped furor I got my parents to replace the old boiler and old hot water tank.

My house has a NG pipe in the street, but it would have been several thousand to dig a trench and put the line to my house, and NG prices were being far from stable. Had we not already purchased a new oil tank, we would have bought a NG boiler, but the extra money to put in the pipe would have made it too costly. We got the higher efficiency triple-pass boiler and and an indirect hot water tank, which was the most efficient combination they offered.

We heat with oil & use propane for hot water & cooking. The apartment out back uses propane for heating, too.

Must be some natural gas lines around somewhere not too far... but we're a bit in the sticks here!

I live in the northeast and converted to natural gas in 2006. The bill for my 95% 2 stage variable speed furnace was $2700 plus $122 for permits. I had to pay $300 for a man to cut up my oil tank and remove it from the basement.
The best part of having natural gas is how much cleaner the air is in the house.

The good thing about shale gas IMO is that it puts a lid on NG prices because while it's not always the least expensive source, for all practical purposes we can produce as much as we want given the right price. Plus, NA has practically no capacity to export NG, so consumers are pretty insulated from the world price. This is why I question the premise of $7 per gallon gas--even at $4, NG conversions started to make a whole lot of sense.

NG conversions may be a nessecity in the future, but what about the infrastucture required. Maybe not a problem in cities, but how to get sufficient quantities to outlying and rural areas is a big question. The nearest pipeline to us is perhaps 60-70 miles. LNG trucks? Build pipelines? A lot of expense there. We are deeply invested in our current infrastructure. Who will pay, and how much will this cost?

The thing about natural gas is that a lot of the infrastructure is there. No, you don't have natural gas service stations, but you do have pipes running a lot of places, and in some areas, even some pumps set up as part of plan to reduce greenhouse gases.

Rural areas may not have that kind of infrastructure, but they don't have to. If people in urban and suburban areas switch to natural gas, that will leave more gasoline and diesel for rural areas. I could also see rural areas making their own natural gas.

I think demand destruction will play a big role, too. We will probably all be driving less, because it will be more expensive, and we'll have less income.

Actually Leanan, in low volume rural areas you don't really need the pipeline. Few of the filling stations in Thailand are actually near the gas pipeline.

Instead, you have large, 18 wheel tractor trailers which carry 3 long, cylindrical tanks arranged longitudinally inside the trailer. These are simply backed up and connected to the filling station, and the rig hauls away the spent trailer to be refilled at the central station.

It is much the same principle used by gas stations today, except they deliver high pressure gas instead of liquid fuel. This is not economical in high volume areas, but it works quite well where you have limited traffic.

Leanan, you make a number of good points regarding natural gas, but my question is: Wouldn't it be that as the use of NG increases for transportation, this would also tend to increase the cost and decrease the supply? Would there not be also an exponential increase it's consumption, drastically reducing worldwide reserves? And yes, I did pay attention to Professor Bartlett's lectures...

Pete Deer

I don't see it as a permanent solution (and neither does T. Boone Pickens).

I just see it as something that might delay a fast-crash scenario.

Everyone really wants BAU to continue, so there will be a lot of effort put into trying to keep some semblance of it going.

Vehicles that burn only oil and a fuel distribution system that is set up for only oil are what I call structural mandates. They are as real as government mandates.

Ethanol advocates have had some experience in dealing with structural mandates as well as governmental mandates. By far the more powerful mandate is the structural mandate.

The structural mandates have politically powerful and wealthy backers. Oil refiners will be gradually put out of business in a switch to natural gas for example. And oil producers/distributors do not want competition from cheap natural gas any more than from ethanol.

Automakers don't want the complications and the added expense of making cars flex fuel since the added cost has to be paid buy purchasers and will likely reduce auto sales.

So ethanol producers have resorted to governmental mandates because they have some clout in government as many states grow corn. Fortunately ethanol can be blended with gasoline so an incremental mandate is possible.

But natural gas is all or nothing in most cases. And as has been pointed out in above comments the conversion is expensive. Even Boone Pickens who never tires of attacking ethanol as a stupid fuel goes begging to Washington for subsidies for natural gas conversions. Is that stupid or smart?

He's a free market Republican. Why not let the market force a switch to natural gas? Of coarse it can't and won't until it is too late.

Subsidies will be needed to switch to natural gas since it is up against structural mandates even more powerful than in the case of ethanol. Ethanol has been fighting the situation for over 2 decades and it is still touch and go with lots of opposition.

Natural gas faces the same structural mandate obstacles and will be fought by oil interests even more than ethanol because it has the potential to shut down oil related businesses rather take just a small portion of the market like ethanol.

It will be a long slow process to convert to natural gas. Scare tactics will be used as was done with ethanol. Instead of the specter of people starving because of corn being used for fuel, there will be fear mongering that people will freeze to death because the can't afford natural gas to heat their homes if it is used for transport. A lot of people will buy into it just as they do with the fear mongering of the anti corn ethanol crowd.

So natural gas really isn't a viable substitute for oil in the near term even though it is cheap and abundant at the moment. It is too different from oil to be used by the current transportation infrastructure. And that structural mandate will not easily or quickly change because of cost and political opposition.

A good place to start learning about NGVs and other alternative modes of transportation is the EERE: Alternative Fuels and Advanced Vehicles Data Center Program Home Page. More info can be obtained by searching Google for 'natural gas vehicle conversion' Conversions in the US seem to run $4-6k, owing to the scarcity of qualified mechanics and our high safety standards; the tank needs to be nigh-unto bombproof, usually built out of kevlar. Don't forget the info Robert Rapier passed on from Marc Rauch about draconian EPA strictures on conversions, too. $6k is also roughly what the premium is on the GX version of the Honda Civic, the only NGV sold in the US. Europe has a far more varied market for these cars but I haven't researched that myself. Lots of bi-fuel models, which solve some of the limitations with NGVs.

I agree with Pickens that NG should be implemented in the shipping fleet first. It's heartening that the gov seems to agree.

I believe KLR'S figures are about right-they are at least in the ball park with what I have seen.

And I forgot to mention in my other comments that if the shop that does your conversion, or the company that makes the kit goes belly up, well.....whoever fixes your car if it can be fixec without a complete redo, is likely to have no problems paying for his kid's braces.

Good point. The best way to do an end run around the structural mandate of the petro-fuel distribution system is to run the alternative fuel only on on vehicles that do not travel farther than a half-tank-full radius from a central refueling facility. That is why municipalities and metro transit systems are able to successfully convert to CPG or LPG or biofuels or whatever. They have set themselves up so they don't need the existing system, and can just ignore it.

A similar logic can apply on a smaller scale for individuals. Take NEVs, for example. As long as you can arrange your life so that you need to use these only for short trips of a radius less than 50% of your battery capacity, you can just recharge at home and not worry about the lack of a widespread recharging system. This presumes that you have other alternatives that you can use for longer trips. For the person who has a conventional petro-ICE car and/or nearby access to a very good public transport system + car rentals, having an NEV to use for local trips only could make very good sense. This is why I think that the future prospects for NEVs look pretty good, much better than for longer-range EVs (which run smack up against your structural mandate problem).

Another way around it is that you can set up the NG vehicles to run on both NG and gasoline/diesel, then you are not limited to either one. YOu do give up the ability to tune the gasoline engine specifically for gas, and power suffers a bit, but if you are doing it to save money, then you will not be concerned about the traffic light grand prix.
For diesels, it's very easy, and you can run the NG in any proportion, and the the high compression gives the full potential of NG.
If you run out of NG, just carry on with the liquid fuel. And thanks to the magic of Google and Iphones and the like, finding NG stations is now very easy, which is good for both driver and station.
When the price difference is enough, people will start changing. And given that US oil production and reserves are dropping, and NG production and reserves are increasing, I'd say the price advantage for NG will only get wider. It would need a substantial portion of the vehicle fleet to go to NG to start raising the NG price - think of how many cars can be powered by just one 500MW combined cycle gas turbine power plant.

Natural gas faces the same structural mandate obstacles and will be fought by oil interests even more than ethanol because it has the potential to shut down oil related businesses rather take just a small portion of the market like ethanol.

Why is it that in a country like Brazil they have Flex fuel cars that can run on either gasoline or ethanol and they also sell relatively inexpensive NG conversion kits for those same cars that any competent Brazilian mechanic can install. Non of this is brain surgery, the technology is really not that complex and the parts shouldn't cost an arm and a leg!
It also seems that TPTB Oil, Gas and Ethanol producers seem to be capable of pulling this off in Brazil without destroying the Brazilian economy or each other.

Sorry this link is in Portuguese:

Os veículos FLEX foram desenvolvidos para trabalhar com mais de um combustível. A mudança significativa se deu nos módulos eletrônicos destes veículos.

Para se instalar um Kit GNV em um carro FLEX , torna-se necessário a utilização de componentes eletrônicos inteligentes compatíveis com os que acompanham os veículos. Isto se encontra facilmente nos Kits de boa qualidade disponíveis no mercado.

A melhor alternativa é fazer uma instalação utilizando um Kit completo CAGN. Este Kit possui recursos incorporados ao sistema eletrônico que facilita muito a regulagem para o GNV.

Recomendamos escolher uma Instaladora capacitada tecnicamente para este tipo de instalação, pois nem todas as oficinas tem pessoal tecnicamente capacitado e equipamentos adequados para fazer este tipo de trabalho.

Uma instalação inadequada de Kit GNV em carros FLEX , pode causar danos a eletrônica embarcada no veículo, com conseqüências sérias do seu desempenho .

"An electric spacer heater is the only form of heat, and all electric, nation wide, is shut off from 11PM-7AM."

Since most electricity is generated from coal, hydro, and nuclear, this part of the scenario puzzles me.

The timeline is also exaggerated as obviously there will still be oil flowing, just not the cheap sweet crude we have been used to. What bothers me is that people stop paying attention to doomsday scenarios such as this because they never come true. The boy who cried wolf, etcetera. This makes it difficult for more reasonable prophets.

My belief is that our grandchildren will live much as our great-grandparents did. No SUV, no large-screen television set, take the train or bus, and eat lots of root crops in winter.

I wonder about the nighttime blackout, too. Yet, that is exactly what is done in some places of the world where energy supplies are limited. It is an effective, if crude, method of rationing. I am assuming that there are backup generators that power places like hospitals and police and fire stations and military bases during the blackouts, or maybe they get put on a part of the grid that does not shut down. Another possibility: Although the US has a lot of coal, it may be forced to actually export a lot of it to pay for a small trickle of oil or other essential imports.

Oil imports account for about 2/3 of total US oil supplies. The domestic 1/3 has mostly gone through the steep part of the decline curve already, so it will continue to trickle for a long time to come. So yes, there will still be some oil when the imports go away (and we shouldn't assume that the US will be able to successfully outbid the Chinese or others for the last of the oil exports, either - that is why their elimination might come as soon as 2020 or so). That 1/3 domestic fraction cannot possibly keep most things running, though. It is enough - especially if supplemented with biodiesel - to keep essential military, public service, agricultural, railroad, and shipping equipment running. The scenario is realistic, though, in assuming that no fuel remains available for private motor cars.

Even your take I think is too drastic. If price is the mechanism of rationing, which given the ideological bent of the country seems to be the only credible path, then those who can afford it will continue to do it. Of course people who can't afford a plugin hybrid (which probably will be the style of choice) may only use their vehicle for emergencies and special occassions.

I think our oil production actually went up last year. Assuming that wasn't a blip, but was really a result of better tech -probably horizontal drilling -perhaps we can even push it up a bit, maybe 6mbpd is feasible with an aggressive plan.

I agree that price will be the mechanism for rationing to the general public. However, I am certain that the government will have a mechanism to assure that oil and refined products go to the military, public services, agriculture, rail, shipping, and high-priority manufacturing at essentially global wholesale prices. The tiny little bit left over will then be released to the general market to be sold to the higher bidder. I am sure that under such a scenario, even $11/gal is way too low of an estimate; I wouldn't be surprised if it quickly got bid up to triple digit territory. Yes, there will still be a few people who can buy the very little fuel still available even at those prices. The big question in my mind: Where will they still be able to drive where they will not be dragged out of their car and torn to shreds? I think it more likely that whatever fuel these wealthy elites can still buy would be used in the vehicles of the private security forces paid to patrol and defend their fortress-compounds.

Whoever wrote the story has a good imagination but a rather poor grasp of day to day reality..I have not yet read a single piece of doomer lit that seems to remotely match up with reality.

This author, in an economy performing so poorly the people are almost starving has lots of people working from home over the net.What, pray tell , might they be doing to earn money over the net?Selling Cabbage Patch dolls?? And why would all the schools be closed, when people would have pulled into the central areas, and doubled up, and a very large portion of the kids could walk to school?

There is essentially a zero probability of a scenario like the one described-trains would run, coal is plentiful ,( so is wood-within the time frame, not for the long haul),we can eat very well if necessary with next to no ff inputs into our ag system by getting off the corporate diet and back to basic foods-when there are that many unemployed there will be plenty of people to raise potatos and beans at least, and plenty of tent cities for them to live in while they do it too.

In World Made by Hand, a handful of people seem to have all the skills necessary, and all the materials needed (usually mined somewhere else and shipped in)right in the nieghborhood to manufacture large heavy concrete pipe.It would be real interesting to know where the got the sand, gravel , lime,and machinery , etc, since they had no trucks.

The electricity seemed to still come on for a few minutes at odd intervals years after the grid went down-restless electrical ghosts , I suppose.

There was a big shortage of ammo for guns which were also in short supply-but gunpowder and bullets are very easliy manufactured, and there are many , many tens of millions of guns that can be converted to black powder in any simple workshop with a good set of hand tools.

If anybody knows of a doomer book that gets the details right , I would appreciate thier posting the author's name and the title.I surely will buy a copy.

On top of each bed, are sub zero sleeping bags. These sleeping bags are the difference between life and death

I'm in a comfy 15 degree down bag as I write. Heated houses are a drag! Just need to keep it warm enough so the pipes don't freeze. That was not a problem in Montana where I lived, as we didn't have pipes, but you needed to break the ice off the top of the well.

hightrekker - you should try finding a shearling comforter. I have spent half my life living above 8000' and my wife and I would sooner give up our first born.(kidding. I would probably try skinning him first) If you don't drink it I have often seen my 16oz cup of water freeze solid over night.

I like the sleeping bag reference too - I think they're one of the best investments you can make...

My girlfriend and I currently have Mountainsmith and Alps sub-zero bags on our bed. Even though we don't "need" them yet they sure are comfy - and they're just about the closest thing I've found to an instant heat "source" (aside from a nice woodstove, of course)...

Even in the warmer month we have a couple lighter Marmot sleeping bags hanging around because they're a great way to warm up on a chilly morning.

Something from this line is on my wish list (sooner rather than later, hopefully) -



Got an old sleeping bag or two from our camping dayse long ago but never use them.

At night I burn no wood for heat. I use NO heat at night.

I have a 3 inch memory foam topper on my full size bed. Good damask 300 thread sheets and a flannel cover over that followed by a electric blanket which is use to just take the chill off. Over that is two quilts.

I sleep very very warm and comfortable. I have two very large down comforters in the cedar chest by the bottom of the bed but so far haven't had the need to break them out. With a good quality down comforter you can stand about anything.

So I have used about 1/4 cord of stove wood so far this winter. I do keep a very small ceramic heater turned low in the bathroom where all my canned goods are stored and the water pipes mostly are. Just enough to prevent freezing.

I cook on a single electric hot plate or on top my wood heater stove when its fired up and the temps must drop to below freezing before I ever fire it up.

I know this is not full sustainability but I could get there very fast as far as not having utilities. Which is just electric only. My own well and my own woodlot will suffice.

Its been not too bad a winter in WKY so far. A big freeze a few weeks ago but now its in the mid 50s during daylight hours.

So I sleep warm at night. Rest of the time its thermal underwear, insulated pants and shirts and possibly a set of Carrharts over that if need be.

Being active you don't need to come in and stand by a stove. I go out to my work shed and sometimes fire up a small kerosene heater. Its insulated very heavily so doesn't take much.

Of course my wife left the farm and wouldn't put up with this being a city girl but I really live a healthier life and far far cheaper than her and I am pretty much independent of every thing society might have to offer.

This year I am going to enclose the whole barn with surrounding sides with transparent roof panels and put a greenhouse under one side. Solar heat gain is the object there. Then I will start some PV projects to power my computers and ham radios.

Airdale-the key is sleeping well at night and eating your own healthy food and staying away from big crowds when diseases are rampant, like I think I got my H1N1 last month from the Nursing Home I took my mother to.

I agree, a good down bag is on the top of the list for needed items, and I use mine (actually I have several, as I backpack frequently, and adjust bag weight to conditions I'm likely to encounter) everyday.
As mentioned above, quilts are also an option, and the lightweight backpacking community is using them.

The US will become energy independent when dollars become too valuable to spend overseas for something used once for nothing.

The US will become energy independent when dollars are worthless and no exporter will accept them as payment for something used once for nothing.

Excuse me, I have to go back to working on my 'Economic Growth Theory' ...

I think on (?)Monday(?) they announced that new home building permits for December were up by 11% and afterwards word came out that economists "are saying" that the home building industry was now "a good investment."

Spoke with a civil engineer on late Wednesday. He told me that it takes a few years (in many cases) to approve a new permit (especially if an inpact study is involved)... so that news really didn't mean anything to him. He also mentioned that an awful lot of foreclosed homes have had frozen pipes and massive water damage (especially with this latest thaw)... may partly explain my question as to why many properties aren't being aggressively sold; they are probably wrecks inside.

Hopefully foreclosed or empty homes have been winterized by whoever owns them.

A building permit shouldn't take long at all to get approved. Approvals for a new subdivision may take a lot longer, but at least around here that's not an issue -- plenty of half-build divisions to choose from.

I did hear from a builder buddy that they're moving to FHA-targeted home building, with smaller lots, smaller homes, and Energy Star ratings. A step in the right direction, at least.

I know of someone that has lived in a foreclosed home for about a year rent free. Recently they moved to a nearby rental and locked the house, waiting for the bank to finish foreclosing upon the property. Someone broke into the house and winterized it by pouring antifreeze into the komodes and sinks, etc. This person said that if they were in the house during the breakin, they may have shot the intruders.

In the end, Chase bought the house and there it sits. They must have a huge portfolio of unsold houses waiting for market conditions to improve before unloading them. When do you think that will be?

I am surprised it has not happened yet. One fire after another, bank gets paid off from insurance? Or can a house only be insured by the person holding the mortgage?

Or houses being stripped for useful items, or being squatted in by homeless people.

I moved out of a house that my brother owned, he was doing to remodeling, but not everything of mine was out of it yet. They broke it, took a 75 gallon fish tank, which they had to get 20 gallons of water out of, plus the 150 pounds of gravel out of just to move. A small window AC unit and some tools my brother had left over there.

While I lived there, I never locked the door when I left the house, or when I was there, no one bothered the place ever of the 7 years I lived there. But I was gone 2 months and this all happened.

Where are the news reports of houses getting trashed that are empty in the 'burbs of the wastelands of America?


I can't believe they took a 75 gallon fishtank. Those things are huge and heavy. And not terribly valuable for the amount of work it takes to move them. If you keep an eye on Craigslist or the classifieds or your local Pennysaver, you can usually find someone offering a large aquarium really cheap or for free, just to get it out of the house.

I go over there and walk into the den, which was a garage turned into extra room and lo and behold my fish tank and stand are gone. They even took the gravel, we couldn't find it in the yard anywhere. It was kinda spooky to say the least. Not something I would have thought was going to be taken.

Now that I think about it, there were a few folks that lived in the neighborhood that could have gotten use out of it, but until I see it in their houses I won't say they did do it.

When I moved onto the street, there was a drug house two doors down, it took us almost 2 years to get rid of them. It was a high crime area of town. But like I said, I never locked my doors, and never had anything go missing. I had before the move about 1,000 gallons of fish tanks, up on a 24 foot wall in the den, which had a concrete floor. Me and my first wife ran a tropical fish breeding business out of that room.

I gave most of the tanks and set ups to a local flea market vender who took them home to use on his farm. I hope they got good use out of some custom built cages for reptiles that my father and I built.

2006 was an odd year.


To insure a house, or anything else, for that matter, you need what is called an "insurable interest." The bank has that, and the always continue insurance post foreclosure.

I would be surprised if the big insurance companies do not take a stand that the banks must do more to protect the properties. Right now fires in foreclosed homes (many accidental, by squatters in unheated homes) is a big problem. It is only a matter of time that big Insurance takes a stand against that as outlined. That, IMO, is when the properties go on the block!

Hopefully foreclosed or empty homes have been winterized by whoever owns them

apparently the contracts to "winterize" are given to the lowest bidder(or highest briber). winterization is typically done by draining the pipes of water. the problem is water settles in the lowest area(by the majic of gravity drainage). draining the pipes doesnt mean that all the water is removed, and is subject to freezing. a properly winterized house needs to have the pipes blown out with air to prevent bursted pipes. anyone considering buying a "winterized", forclosed house needs to consider this possibility.

Ignorant -

Even if all the pipes are properly drained, an unoccupied house that has had its heat turned off for some time can be very prone to serious mold and mildew problems.

Such problems can start to surface at both ends of the winter, when one has a relatively warm humid period that is followed by a sharp drop in temperature. This can cause condensation on walls and other surfaces, and that soon results in mold and mildew. Once mold and mildew get past a certain point, it can become very expensive to correct.

Then of course if the house has a bad roof, flashing, or window frames, actual leakage can further worsen a mold and mildew problem because the cold interior never gets a chance to dry out.

Anybody contemplating buying a foreclosed house that has been unoccupied for a significant length of time would be well advised to have a thorough top-to-bottom inspection done before making any commitment.

"Empty house syndrome" can be a big problem for unlived in homes. We had a business winterizing summer homes in the area. We drained the pipes and fixtures, then pumped glycol solution into the plumbing, if the owners were willing to pay. If not, they had to sign a release that we weren't responsible for damaged pipes. A friend had a business opening these homes up during good weather to air them out, then they would clean and air the homes out before the owners' came for the season. We got out of the business because people were such a pain in the ass and didn't want to pay enough. One guy tried to blame us for a break-in. When the Sheriff came, I told him that we have a key, why would we break out the windows. Nuff said. We eventually had to up our insurance, making it non-viable as a business. The realestate folks were even worse.

Perhaps the worst thing that happens to an empty house is when the P-traps in the plumbing dry out, allowing sewer gas and odor to back-up into the house. Dangerous and stinky!

After you pour some glycol in the trap, couldn't you put a few tablespoons of vegetable oil on the surface to keep it from drying out?


I was talking to a realtor a couple years ago and he was telling me that he gets experienced inspectors to look over any house that was built before 1900, because it usually has had "modern" insulation put in. According to him, many older wooden buildings were designed to "breath" while newer insulation techniques restrict airflow; not long before rot sets in.

I'm curious, is there any place I can find info on older house construction/maintenance?.. specifically those that breath.

Ignorant -

While I have an older house, I am hardly an authority on the subject. There has to be numerous books on old house construction, restoration, and maintenance. Any decent size public library should have some. Ditto chain book stores like Border or Barnes & Noble.

You bring up a good point re old versus new houses. Those drafty poorly insulated old houses, for all their faults do tend to 'breath' better than many of these ultra-tight modern houses. Thus, I could see why a modern house might not fare as well as an old house during long periods of being vacant. Still, it doesn't take much trapped humidity to start causing problems in a relatively short period of time.

One observation re old houses: almost any house in the Mid-Atlantic states or the South that is circa 100 years old is more likely than not to either have or have had termite problems, particularly if there is or had been water damage. (Termites love and seek out damp rotted wood.) In a way, old houses are a lot like old cars: while they may have a certain charm, one has to be willing to live with their drawbacks.


Thanks for the suggestions.

After many seasons and many visits I found that certain homes felt a lot easier to live in. Certain central air systems were awful.... In some 1950s era homes I remember sitting there at a Christmas Dinner and watching how the candles on the table would flare to life after someone opened the front door. In a 1920s home I found the steam radiator to provide a certain "comfort" even though my nose went dry.

Of all, a drafty place seemed to have a certain freshness to it... even though I know it was an energy eating draft.

Oddly, a fairly modern home with humidity control does have molds on the bathroom ceiling even though the owner has repeatedly painted over the spot.

He also mentioned that an awful lot of foreclosed homes have had frozen pipes and massive water damage (especially with this latest thaw)... may partly explain my question as to why many properties aren't being aggressively sold; they are probably wrecks inside.

Certainly true here in Detroit in most cases, though almost all are helped along by either strippers or squatters. Happened to me. When I inspected this place it was bone dry. A week later I came in to soggy carpets and water spraying from a burst pipe.

Oh, joy.


Interesting article at WaPo today, about how Volcker prevailed over Geithner, to the banking industry's dismay. The administration ignored him, so he took his campaign to the streets. (Sort of. I suspect the attendees at Volcker's speeches weren't your average Joe.)

I'm hoping that Obama sees the errors of the past year and starts knocking some heads instead of bailing out. I'd love to see Volcker in place of Geitner, and somebody like an aggressive state AG in place of Bair.

My expectations are naturally set pretty low, though.

Geitner will be sacrificed in the next election bloodbath, just as Rummy was sacrificed during the Bush Regime.

Where you use the term “sacrificed” I would use the term “deservedly fired”. The term “sacrificed” implies that they are undeserving of their fate, and in this case a poor choice of a words.

Ron P.

Point well take. It had that blood image that i liked, but you are correct, they both are completely incompetent (which may be the reason Geinter is in the position, as it may be a asset for the corp whores)

Ron, Hightrekker,

We could use the term burned at the stake.


The Administration is painted into a corner. What is that proverb? "Be careful of what you wish for, you might get it?"

Everyone hates Bernanke except the finance industry, which has received hundreds of billions in free, no strings attached cash from him. The Fed supports the markets to facilitate the process. What happens after he leaves?

The Fed also supports the Eurodollar market. Foreign central banks rely on Fed dollar- denominated swaps for liquidity. Bernanke is also supplying hot money liquidity to the Chinese government feeding massive inflation and an equally massive spec bubbles in real estate and stocks. With a long and growing lineup of sovereigns poised at the edge of the debt default abyss, who will supply liquidity when they start toppling over the edge, one after the other?

Bernanke is quick with the checkbook, this is what has kept the status quo treading water. Fed funds and the Treasury supporting money markets - and phony 'stress tests - triggered the March, 2009 stock markets rallies. Installing Volcker would precipitate what ... exactly? Volcker's last tenure as Fed chief featured 20 percent Fed funds rates. Volcker is a hard money fetishist in an environment where Saudia by means of the crude/dollar trade has made the dollar quite hard all by itself.

A Bernanke failure has been his 'kill the dollar' tactic which was not foolish but by- the- economics- taxtbook orthodoxy. It failed when Saudi Arabia successfully pegged the dollar to crude. If a dollar is worth something - a half gallon of NyMEX crude - it cannot be shorted. Ali al- Naimi is the new Paul Volcker, we don't need another one.

In 1931 the hard currency pegs of Stirling, Francs and dollars to gold destroyed the world's banking system and intensified a garden variety money panic into the Great Depression. The dollar/oil peg is doing the exact same thing. US monetary policy is now made in Riyadh. One way to break the peg is for oil to become scarce enough to overcome Saudi support for it. One- hundred dollar oil would break the peg and weaken the dollar but would crash the world's economies. Firing Bernanke under these circumstances is closing the barn door after the horses have left.

The only other way to break the dollar/crude peg is for the US to cut energy consumption.

Liquidity will vanish with Bernanke. The incoming Fed chief would have a devil of a time creating and adjusting liquidity flows. Liquidity now flows to finance and real estate. Where should it flows next might be hard to answer quickly, under great pressure. Likely any new liquidity would also flow into finance and real estate.

Either that or toward OPEC.

A related question is how will the Euro react to the onrushing Greek default? If the euro crashes, what will this do to oil priced at a remove- in euros? A declining euro amplifies the super- hard dollar, which would price oil very low in dollars but make dollars - and oil - very expensive for the EU to buy. The Greek default can and likely would result in a very rapid energy price crisis in Europe. Discussions about the euro do not mention energy, only individual defaulting states in glorious isolation. How would replacing Bernanke change this metric? Wouldn't a change make matters much worse.

Who would provide discounted dollars to Eurolandia? Volcker wouldn't and neither would the tea baggers. The likely outcome would be a dollar mania and a run on the euro. The ECB is not capable of supplying massive amounts of liquidity in any denomination. This is an Achilles heel of the ECB. At the same time, the super- hard dollar is massively deflationary. What happens here, at home? Answer is a flight out of assets and a mad scramble for cash.

Hi, Stoneleigh. How's it going?

Both Bernanke and Geithner have put guns to the head of the US and world economies, guns given to them by the economies, themselves. Christopher Dodd said such in not so many words this morning. In a worst case scenario, 'the Two Stooges' can orchestrate a panic by pulling the plug on one of the many TARP zombies and crashing the money markets. They did just this - Bernanke as Fed Chairman and Geithner at the New York Fed - in 2008 with Lehman Brothers. The entire mortgage market as it exists today because Timmy 'Turbo Tax' has removed limits to mortgage RE giants Fannie and Freddie's underwriting. Bernanke supports the back side of these giants by buying their [worthless] paper at par. This supports real estate sellers, enabling them to launder illiquid properties into cold, hard, cash.

Removing liquidity crashes real estate prices. The question, 'Good, bad?' cannot be answered but must be considered. All actions have equal and opposite reactions, both in physics and in policy making.

While ending these interwoven processes might be 'good for the country' simply reacting to populist ire [read, Koch brothers'- and Richard Mellon Scaife promoted reactionary tea- bagger politics], the result is likely to be a crash from which there is a strong possibility of a 'no second coming'. There is a lot of debt out of sight in the finance ambit, no safety net for citizens, no energy policy, no plans for an alternative finance structure, an insolvent FDIC, a dysfunctional finance system that fails to reform itself, a government of cronies and corporate lackeys ... nothing exists to prepare for an outcome far out of balance with what would ordinarily be the public rejection of a failed bureaucrat.

More for the finance oriented rather than the peak oil community, which recognizes the underlying issues, the unfocused dissatisfaction with the current regime requires more sensitivity than conditions would suggest. A characteristic of finance since 2004 has been the acceptance of asymmetric risks taking place without understanding of the consequences of taking those risks. Firing Bernanke - and his partner in crime Geithner - must be done ... exceedingly carefully.

While both richly deserve firing, doing so without making proper preparations is likely to be a process filled with danger to all of us. Firing Bernanke will likely end the Fed's Money Laundry - [unless he is replaced by William Dudley]. Without the support of this operation, most of the risk markets will fall sharply.

Welcome to the 'Double Dip'.

"Where you use the term “sacrificed” I would use the term “deservedly fired”. The term “sacrificed” implies that they are undeserving of their fate, and in this case a poor choice of a words." Ron P.

Except that they are not being fired because they deserve it. They are being fired because TPTB perceive that some red meat needs to be tossed to the public to keep the game going a little while longer.

Antoinetta III

I don't know about sacrificed ... Rummy & Geithner are the most egrageous examples of failed policies.

if rummy was sacrificed, the gods were not placated.

Economists Serving their Political Masters


The Wall Street Journal devoted a half page to [Michael J.] Boskin’s list of offenders. Politicians are interfering with the Gross Domestic Product calculations in France and Venezuela. They have toyed with the inflation rate in Argentina. In the U.S., the Obama administration has taken the phony numbers game “to a new level.” Here, Boskin is writing of the current adminstration’s calculations of jobs “created or saved” from its stimulus bill.


Peleocon, I think Elizabeth Warren would be a good match for FDIC head. Hell, Give her the SEC and the Justice Department while your at it. That woman is tenacious and smart. Too bad no one in Congress or the Administration is taking her seriously.

Pete Deer

I found it difficult to relate to this article. In the UK petrol is $8 per gallon, not too far from the $11 assumed for the US in 2013. Here in the UK economic planning is increasingly concerned with energy saving and localisation. Nuclear, wind, hydro and energy crops are being actively pursued. Higher energy prices are starting to drive consumer behaviour changes even if people dont buy into climate change. Food production is at long last being promoted rather than relying on imports.

I'd guess that land availablity for energy and food crop increases will soon bite, and if we have a repeat of 2008 food price spikes then the burgeoning GYO trend will accelerate with fewer ornamental gardens.

With petrol at 113p per litre I now drive a small car that gives 50mpg. Heating oil is c50p a litre and we've cut usage by 60% thru retrofitting efficient insulation, installing a woodburner and heating the main rooms of the house, using trvs to reduce heat in other rooms. Yet its a toasty 21C in the living areas at night. Electricity consumption is 45% down, with no noticeable reduction in quality of life and a solar pv retrofit will soon mean that electricity bills are a thing of the past.

The doom and gloom is overdone, yes the US should try to be energy self sufficient, but its within your power to make massive savings on energy used and still have a good lifestyle. But that does mean rejecting the concept of mass consumerism, instead being satisfied with a sufficient lifestyle.

Maybe there is one voice of sanity in a chorus of madness.

Nah! That voice is just in your head ;-)

Along with a number of others ;)

Isn't the real issue, for the US, anyway, one of OIL independence? If you don't count energy from Canada as imports, the US is independent in virtually every energy form other than oil.
And though there is some oil used for heating (5% of total US oil consumption), a shortage of (imported) oil does not mean that the coal or NG fired electricity plants stop running. With the world's largest coal reserves, and rapidly increasing NG reserves, the US could easily increase electricity production to keep houses warm and the lights on.

There is now very little linkage between oil and non-transport energy, less than 20% of oil is used for non-transport purposes. And with half of US oil coming from N. American production, there will still be enough for planes, trains and plastics, just not our vehicles.

We may have to walk/cycle/take the bus/train, but we won't be dying of cold in the dark anytime soon.

Bernanke losing some Democratic support

Federal Reserve Chairman Ben Bernanke's confirmation for a second term, once almost a surety, received another body blow on Friday when two key Democrats said they opposed letting him continue to steer the economy through the financial crisis.

The growing chorus of opposition to Bernanke, 56, among Democrats prompted the White House to restate its support of the chairman, who began his term under Republican President George W. Bush. It ends on Jan. 31.

Energy independence is of course impossible for the U.S. with its current energy usage.

But another news item shows how energy is really viewed by the people who make financial decisions: Schlumberger, the world's largest oilfield services contractor, has announced a fourth quarter profit under $800 million.

Within the last week, two large banks (out of quite a few large banks worldwide) have announced fourth quarter profits of between three and four billion dollars.

So it is obvious that there is a lot more money to be made shuffling figures representing dubious real assets from one pocket to another than there is doing real work to extract real energy from the earth. And the oil industry is painted as a den of thieves and robber barons, while the banks are "too big to fail".

I'm sure the cutback in exploration and development demonstrated by Schlumberger's lower profits increases the probability that production will never again reach the 2008 or 2005 levels. The good news is that slower exploration and development now might, just might, slow the decline. If there are enough trained people left in ten years to do the work. Most of us are over sixty now.

Enegy independence starts at home. It dismays me to know how utterly dependent modern homes are on external grid supplied energy, much of it derived from imports.

Real story:

It is January in the mountains and the family is just waking up. It is "cool" in the bedrooms, around 60 degrees, but we like it that way. We snuggle up under the blankets, and on the long, cold winter nights we let the poodles sleep with us for warmth (theirs and ours). Dad is up, just before 7 AM, lets the dogs out, and checks the battery voltage. 23.4 volts is a bit low but the morning glow through the fog promises that will soon change. Like sun flowers, solar panels await the morning sun in their eastern-most positions. The batteries are hungry, as there has been little sun for 4 days. Dad goes into the bathroom, thankful for the warm glow of heat comming from the tile floor.

Soon, in the kitchen, he notices that the refrigerator has switched on as the main inverters wake up. The voltage meter drops slightly from the load, but no worry. The sun will hit the panels shortly. He takes some satisfaction that the living area is still at 65 degrees, despite the fact that there has been no heat used for days, despite that it has been cloudy and cold for most of the last week. All of that insulation, thermal mass, and passive solar is paying off in ways dad couldn't have imagined ten years ago. Even on mildly overcast days the sun's energy warms the living areas and the bedrooms (when the family remembers to open the thermal blinds). He has only burned one small cart of wood in four days, to heat the water in the big tank for the bathroom floors and showers. The generator has been idle also, conserving fuel for later, for when it gets really cold and snows again. Layoffs have taken the family to conservation mode and funds are tight. But the property taxes are paid for another year and the root cellar has sufficient food for months.

Dad's daughter comes in, thanking him for the shampoo he loaned her yesterday. He laughs and tell her it is dog shampoo he uses for his grooming business (which is very seasonal, both of his clients cancelled this week. It may be the weather, the economy perhaps). Great stuff, it dilutes 100 to one, and he is glad he stockpiled it in the fall when business was good. Eight gallons of concentrate would last for years, if TSHTF. It could be used for all sorts of things, and it's hypo-alergenic as well. She says it worked great on her hair and body.

The fog-filtered sun is beginning to come throught the windows in the greatroom, warming the floor. There is already enough sun on the pumping array to begin pumping water to the tank (the pressure gage tells him this) and with an arrogant sense of self satisfaction dad reaches for his cup of coffee, spilling it all over his collection of Homepower magazines. He realizes that this is a sign. Humility must be maintained at all cost. All is not well in the world outside. After cleaning up his mess, he logs onto the Drum to get his daily dose of "reality". Soon, a trip out back to chick the checkins and get some fresh eggs for breakfast. Then it'll be time to start planning this year's garden and collect the wood blown down in yesterday's storm. Waste not, want not!


Very very good. I copied your above text. Opened WinExplorer and created a GHUNG.TXT file where I pasted your comment and placed it on my DESKTOP folder.

Its sitting in the lower right of my LCD display soon to be placed by FENCES within my DOTHIS window. Along with some other noteworthy gleanings.

Thanks for that info man. Your will perhaps be most of model for the very near future, starting I hope this spring.


Gee, Airdale, I'm flattered. Truley am. It just seems common sense to me.

Many, many people do not have the capacity for self-reliance of any sort. Then again, many rely on the system to enable them to do what they want and don't give their lack of self-reliance a second thought. They then blame the "system" for failing to do for them what, IMO, they should have been doing all along (at least some of the things). This irks me. For them it is a choice, perhaps a selfish one. Yet, when eventually they don't have the ability to care for themselves, they find that those that have "followed their lead" haven't the time or resources to help. It's a complex conundrum our society is in. Time to change it. This too begins at home. A little planning and forethought is everyones' responsibility.

When TSHTF, a sign goes up at my gate:

"Lack of planning on your part does not constitute an emergency on mine. You were warned!"

This is your radio station WKCH 93.9 on your FM dial and your host for tonight's fantasy hour is Johnny Denial!

Well that was nice, Ghung, however we all know your story can't possibly be true! No human beings have ever been known to survive under such extreme conditions without fossil fuels. There is no survival outside of BAU. Quit making up these fairy tales.

Long whining wail: "Mahhhhhmy, I don't waaaana negotiate my lifestyle!"

Stern lady's voice: "I've run the numbers on this and it just won't work! So go curl up in a fetal position in the corner over there and die please, thank you!"

And now a word from our sponsors at the giant acme coal and oil co who provide the energy that runs your power and light company...Uh, We apologize for momentary technical difficulties in our transmission due to a major power outage...Oh, thankfully our solar powered battery backup just kicked in because it seems...

Station manager angrily cutting in: "Hey you can't say that on the air! there are half a dozen of our sponsors that will yank their advertising dollars for letting that cat out of the bag.

How many of you remember that the stupid "Lost in Space" program's premise is that they were shipped off into space in order to relive the Earth of its overpopulation problem? That was SO realistic, of course - spend a gazillion dollars sending ONE family into space to breed elsewhere (and implicitly assuming that Will and Penny are eventually going to have to commit incest to carry on the line).

"Warning! Warning! Danger, Will Robinson!"

:-) Great story :-)

The December state unemployment numbers are out and 6 states had decreases in unemployment and 2 remained constant 42 states and DC Increased.

I expect the National number for Dec will be revised up when the Jan number comes out. 6 states had increases of .7% and .8%


From CNN:

"This reversal is so surprisingly negative that it causes us to be cautious," said Craig Thomas, senior economist at PNC. "This report has been unreliable, and it tends to miss turning points."

The economy and labor market are indeed "at that turning point," Thomas said, noting improvements including a pickup in retail sales. He thinks the state report will reflect the recovery more accurately come March.

It's so bad, it can't be true?

I suspect that the employment numbers are leveling off in our area due to the number of people who have joined the "shadow economy". Also, many folks who have lost their incomes, or have seen declines, weren't eligible for unemployment (like me) and many are severely under-employed. The number of applications for available jobs is astounding, and most of these jobs are part time and minimum wage. The real world numbers aren't good, despite what the PTB want us to beleive. My wife applied for a job that payed $40K/yr last year (according to her friend that held it before health problems). The same job is being offered (and filled) at $9/hr. I'm sure this situation is happening all over.

I'm honestly not sure which way things are going. I think we may get a bit of a bounce, or fall off another cliff, or continue in this twilight of uncertainty.

I realize that personal experiences mean nothing...but things are definitely looking up among my circle of friends. People who had been searching for jobs for over a year have started finding them. At higher salaries than they had been making before.

I hope things get better here, at least for a while. I have things to do before the next wave of demand destruction. Some of them will require fiat funny money.

For me, almost all are still employed but their kids are having a harder time of it. Those working have mostly had benefit cuts or modest wage cuts of 5-10%.

Two years ago I had 3 full-time employment opportunities "in the hand" anytime I wanted them. I've now taken the last of the three that remained, and fall-backs are thinner than they've been since 2002. And really my salary is comparable to what it was in 1999, correcting for inflation. But that's so much better than many that I'm not complaining a whit.

If I can get my house paid off and a couple of kids through college, I could take a 50% cut. I fully plan to reduce total household income on par with each new tax increase, so as not to be "rich enough" to vector out of the middle-class deductions.

That, Ghung, is the sad, "rest of the story." All over the country, and the world, jobs that are replacing those lost are paying significantly less than those that were lost... though they perform the same exact function. And, as we engage in a 'race to the bottom,' more and more jobs will suffer the same fate. Except, apparently, those of the CEOs and managers who have created this mess.

Read today's TOD! Most relate to the "The year is 2013, five years after peak oil..." and the predictions concerning that time, in our so near future.

I don't know if it will be quite that bad, and it may be delayed a bit by the shale gas and Iraqi oil. Problem is, we are have never taken any steps, "we" being the human race, of course, to prepare for, and now are taking exactly the same steps towards mitigation of, peak oil.

The only suprise lately is that there are a few MSN stories that hint at reality. Not that anyone seems to care. My wife's best friend recently told her that she "refuse(s) to stop driving an SUV and cooling [her] home in the summer, to 72 deg." And, she went on, that is why she does not believe in peak oil or global warming. And, she is in many ways a very intelligent person. Wierd!

Need I add, "Strange species, homo sapiens. I wonder if they'll be missed"?

I'm not a big fan of MSM news. I watch CNN some and am warming up to MSNBC lately. I usually am left frustrated by the lack of depth or substance on TV news, but last night I caught Olbermann's rant on the Supreme Court thing. He didn't hold back much. Worth the watch:


I don't have much use for the far left loonies or the far right loonies. Unfortunately there are not too many people calling it down the middle these days.

Thanks for posting. He articulated much of what was swirling around in my head (amongst the voices ;))

Having grown up in South Africa in the 70's and 80's, I have a horror of state-run media. It's amazing and terrifying what propaganda can do. Shacks being bulldozed in the middle of the night, six blocks from where you live, and the news reporting on the rugby match.

Corporate media is not much different.
I can't imagine how this will all play out....or rather, I should say, I can...

Corporate control of the legislative and the executive branches of federal govt. has long been the concern of many. This control has now been sanctioned by the judiciary. The corporate bully pulpit is now completed, under the guise of free speech.

The talking stick has been burned and the ashes are blowing away...


The Talking Stick

Carol Locust, Ph.D.
Native American Research and Training Center
Tucson, Arizona
(Tribal affiliation -- Eastern Band Cherokee)

The talking stick has been used for centuries by many American Indian tribes as a means of just and impartial hearing. The talking stick was commonly used in council circles to designate who had the right to speak. When matters of great concern came before the council, the leading elder would hold the talking stick and begin the discussion. When he finished what he had to say he would hold out the talking stick, and whoever wished to speak after him would take it. In this manner the stick was passed from one individual to another until all who wished to speak had done so. The stick was then passed back to the leading elder for safe keeping.

Some tribes used a talking feather instead of a talking stick. Other tribes might have a peace pipe, a wampum belt, a sacred shell, or some other object by which they designate the right to speak. Whatever the object, it carries respect for free speech and assures the speaker he has the freedom and power to say what is in his heart without fear of reprisal or humiliation.

"Growing Home—Urban Agriculture in Chicago"

Here's another example of a city farm, right next to downtown :-

"City Farm is a sustainable vegetable farm bordering two very diverse Chicago neighborhoods: Cabrini-Green and the Gold Coast. The farm boasts thirty varieties of tomatoes as well as beets, carrots, potatoes, gourmet lettuces, herbs and melons. All produce is grown in composted soil generated from various sources, such as restaurant trimmings from some of the city's finest kitchens."


We need more of those. We do have many vacant lots we can use.

"We'll need more of those"

We'll need a lot more of those, and people to defend them.

Yes, we do. Many of us here in Detroit are doing this are trying to, but most are on a smaller - an better, imo - scale.

A big nit to pick: the use of "sustainable." Anything with a greenhouse swathed in plastic is anything but sustainable. Most people think that organic with a good compost pile equals sustainable.

Education is needed.


There have been all kinds of renewable portfolio standards (mandating certain % renewable fuel content by selected year) passed with respect to electricity. I thought this article was interesting:

Are Western RPS Standards Technically Feasible? Yes, but...

WREZ identified more resources in each state than are required by each state’s RPS target. In places such as Colorado and New Mexico, WREZ identified many times the renewable energy resources required to meet each state’s RPS target. In other states, such as California and the Pacific Northwest states, slightly more renewable energy resources were identified than are required by RPS targets. The magnitude of resources quantified in each state does not imply quality; the project’s objective was to quantify the best resources in each state. . .

The highest quality renewable energy resources are often located far from the load centers. . . The extent to which utilities will actually buy power from far-flung generators will depend on many things, one of which will be the availability of transmission across state lines.

Although abundant developable renewable energy resources exist across the WECC, other issues will help determine whether or not RPSs are met. One is the cost of renewable energy resources. It has not yet been widely demonstrated that renewable energy is cost-competitive with conventional sources of generation. In almost every case where an RPS has been established, the rules provide that the standard need not be met if the cost is too high. If it is not possible to meet RPSs with renewable energy generated at an acceptable cost, these standards might not be met.

Is anyone familiar with how this legislation defines "acceptable cost"? Is "acceptable cost" inclusive of all costs, including, for example, grid upgrades?

In Colorado's statute, it's determined by its effect on retail prices: it can't increase rates to consumers by more than one percent relative to purchasing non-renewable power. It's probably not the limiting factor. The renewable requirement is for 10% of the portfolio, and much of the shared capital recovery (transmission and distribution lines, etc) are common, so guess that they have to be within 15-20% of conventional power. I believe one of the utilities is already mixing biomass with coal in one or more plants; wind power is probably within that limit; solar is more problematic.

Absent a substantial carbon tax, renewable has tough competition -- we have lots of cheap nearby coal. Xcel is currently in the process of finishing a new 750 MW coal-fired addition to an existing plant.

An early warning heads up!

I got our W-2s out at work last week - I try to get them to our people early.

Remember that "economic stimulus" last winter? Part of the deal was a tax credit, and that was factored in to the withholding tax tables, which were revised.

Well, some of our employees are discovering that it now looks that the revised tax tables ended up underwithholding for them. Rather than getting the large refund check they usually do every spring, they are going to end up owing some money.

Only a few have gotten so far as doing their taxes yet, so I don't know how widespread their experience actually will be. However, if this does prove to be a widespread phenomenon, then need I explain what that will do to the economy in the 2nd quarter this year? Instead of people going out and spending their refund checks, they will be cutting way back instead. Stimulus? Anything but!

Again, a couple of data points don't make a trend. However, I suspect the reason nothing much has been said in the media yet is because I am exceptionally early in getting the W-2s out - most people won't get theirs until next week.

My wife and I looked at our taxes already and noticed that we are in the same situation. We both have zero exemptions throughout the year so typically get about $15k back due to mortgage interest write-off. Well this year we end up owing about $1k. Very annoying, as we had planned to use that money toward building a backyard deck. That's almost $20k less toward the local economy from us this year...

And no, we've never gotten any stimulus tax breaks, ever.

"Rather than getting the large refund check they usually do every spring, they are going to end up owing some money."

One basic rule of good finances is that you should owe the government some taxes when you do your annual return. If you got a refund due to excess withholding, that means you loaned the government money interest-free. But then again, the people who rely on refunds will probably just buy a large-screen TV with it or put it in a term deposit paying 3%.

I always owe money, every year.

However, if it turns out I owe a lot more than expected, it's still not good.

Not least because they fine you if you owe too much.

That's the problem - and why I usually give in and give them the free loan for the year. One screw-up and the interest-income is blown.

It takes more than one screw-up, I believe. You get a pass the first time you exceed the limit.

I have significant uncertainty due to owning mutual funds. You just don't know what capital gains will be reported, until the year is over. I try to withhold a bit more than the previous years taxes, as then you aren't subject to penalty if you underwithheld. Of course there are enough time lags with capital gains, that you get taxed for them after the market value has already tanked -so it feels like a double hit when the market passes a peak. Last year was one of those, the market had crashed, but my reported 2008 cap gains were high, and I had to pay big time. I have long since given up on the automatic deduction formulas, and instead specify the exact amount of withholding each month.

I haven't seen people owing money, yet, but a few have said their refunds are a lot smaller. That is to be expected, when paying in less, of course, although folks won't get it until they see this year's return.

They go out and only grow so few things in the early spring garden! Where are the lettuces, mustards, collards, chards, spinach, beets, radishs. The Kale from up under the snow, and Turnips and parsnips. The stored potatoes might be gone by mid winter, and the onions too, but maybe a pumpkin held over till later.

Why are the chickens in the barn? and not the house in the spare bedrooms, seeing as they are living in the living room.

Save the wood ash and tallow and make your own soaps.

Cut a hole in the floor and put in a root cellar.

It is bleak to see this taking place in 2013, just 3 years from now, might they have wanted to say 2023?

With all the online resources there, why are they suffering so much? It must be their first year out of the gates. If it is their second or even thrid year and they have not done better than rice and beans and oatmeal, they are doomed.


Who are "they"?

I think he is referring to that 2013 oil independence scenario we've been discussing upthread.

Sorry forgot to say it was the post from up top about the link to a page talking about oil independence. One side had a story about how in 2013 this family was living a doomer style life.

When I read the part about how they were only going to grow certain vegies and would have to wait till later in the growing season of others, I kinda posted what I did.

With good planning you can have almost a year around harvest of things, especially root crops that over winter well in cold ground.


There are such widespread opinions on the future price of crude oil. Some say that it will be >$200/barrel in 2013 because of demand shortage, other say that this is false since new technology will help to produce enough oil. Yet, others say that there is enough oil in the ground but it will cost >$100/barrel in offshore production. Today, at a conference the Russian Finance Minister Alexei Kudrin said "Oil prices may average less than $70 in the course of the next 10 years ...". One can only assume that he has hidden agenda since he cannot be that ignorant.

Maybe Alexei Kudrin realises that the world cannot pay more than $70 a barrel and still have a healthy economy. He is probably more worried that the world cannot pay $50 a barrel. Peak Oil seems to be more to do with price being influenced by geology.

Don't bet on prices always going up. If you have no money, you have no oil at any price.

I know this has been addressed before, but, again, does Iraq really have that much untapped oil???
"If the seven oil projects awarded to foreign oil companies this weekend, and the three from an auction earlier this year, develop as planned, within eight years, Iraq will see its oil production capacity leap to more than 12 million barrels per day (bpd)."


Just my opinion GLT: Even though they may be a tad optimistic about the amount of PROVEN oil they might well have enough to reach that daily rate. But only for a while. How much is undiscovered? Won't know that until it's discovered.

But as many have pointed out in great detail it doesn't matter if they have a brazillion bbls of oil in the ground if they can't get it to the surface. As in they can't keep the wells/pipelines from "spontaneous combusting" into flames. And that assume enough capex is brough to bear in the first place.

they might well have enough to reach that daily rate.

Okay, I will concede that point. If you have a 1,000 gallon fuel tank and use pressure to push it out the nozzle, the amount you get per minute will be directly related to the pressure in the tank. If you have have 5 pounds of pressure pushing fuel out a half inch line, let's say you get one gallon per minute. But now you increase the pressure to 100 pounds you will get many times a gallon per minute, but the 1,000 gallon tank will empty a lot faster. To a fool it may look like you are getting a lot more fuel out but anyone with half a brain would know better.

I think that is what is happening at Khurais. If they pump 2 million barrels of water into the reservoir per day, they will get almost that amout of water plus oil out. And they just may get 1 million barrels of oil out per day... for awhile. Just like your 1,000 gallon fuel tank, if you put enough pressure in you will get what's in there out a lot faster. But not for long.

And if they can pull that trick on Iraq's tired old fields, which are already in decline, those pushing the hardest will get the most money the fastst, then when the water hits the the wellhead they will get the hell out of there... and fast.

Ron P.

In may even be worse then you imagine Ron. Depending on exactly how the contracts are written there may be too much incentive to produce the wells as fast as possible. I've seen many millions of bbls of recoverable reserves lost forever by pulling wells too hard. Given the amount of capex and all the different risks involved I would expect this possibilty.

Having spent some time watching MegaStructures covering the building of the Karahnjukar dam in Iceland and listening to all the 'man taming nature' bull I looked at the project sites and Wikipedia but can't find any estimate of the amount of energy used to build the structure. All costs are in USD or time but nothing in terms of energy.

Anyone know where I might find this?

The Karahnjukar Hydropower Project will generate 4.6 Twh annually (when finshed).

A) 4.6 Twh is 4.600.000.000 Kwh and B) 1 barrel of oil equivalent (BOE) is 1.700 Kwh

So the amount of energy generated from Karahnjukar expressed in BOE then comes to : 4.600.000.000 Kwh / 1.700 Kwh = 2.700.000 barrels (2.7 Mega barrels of oil)

Iceland's oil consumption is/was 18.460 bbl/day (2005 est.) , but new and daily added energy from Karahnjukar will be 7.400 bbl/day(BOE) (2.700.000 barrels/365days). Of course this is electricity which will be worth it's "weight" in gold when TSHTF and el_cars will be the 'only' option...

Karahnjukar will energy wise be representing 40% of their 2005 oil consumption, BUT of course -EVERY YEAR- for the next 100-200 years with little or less maintenance - A very good project in other words (almost all hydro projects are, they just churn on and on for generations, assuming the water is flowing in of course).

IMO, EROEI pay-back within first or at the latest second year of operation

On a paralell note : The Icelanders love their electricity

Some calculator on the number from the latest link, indicates that the Karahnjukar Hydro will add 50% more electricity to their production capacity, or in other words be representing 1/3 of production capacity.

I worked on Karahnjukar for Landsvirkjun as a consultant and visited the site several times. The owner's representative & project manager, Gudmunder Petersson, stayed with me last Jazz Fest in New Orleans.

From, memory, Impregilio, the main contractor, was originally given 10 MW of electricity (mainly used for TBM drives), but this was increased to 12 MW. Diesel was used to haul equipment in. Some from the East Icelandic ports and some from Reykjavik / Keflavik. Rarely more than a few dozen trucks/day.

I am confident that the EROEI > 1,000.

They are in full production now and are running above planned capacity by running all six turbines at once. Water flow is a bit higher than expected, in part due to glacier melt.

Best Hopes for Iceland,


Alan -
Interesting and just for fun - and let's say those 12 MW were used flat out for the entire construction period (X nos years)

Annual el-consumption : 12 MW *365 *24 h = 105.120.000 Kwh (OR 105 Gwh/y)

The entire Karahnjukar Complex will generate a staggering 4.600.000.000 Kwh (OR 4.600 Gwh/y)

One year of Karahnjukar production (4.600 Gwh / 105 Gwh) could run the electric drills and site utilities for 44 years alone.

Further on you say "Rarely more than a few dozen trucks/day" , lets say 50 trucks consuming 10 barrels each , that is 500 barrels a day ==>> 182.500 barrels a year or 10 days worth of Icelandic consumption at some 18.000 a day.

Construction time about 6 years==>> Energy payback will be counted in months - perhaps 6 months - not in years.

Anyways, Alan what sort of consultant were you over there ?

('A Best Hopes for Karahnjukar' Shaman ? sorry , I couldn't resist ;-)

I second guessed the EU engineers design :-)

Found one fault that could have crashed all the turbines (in the spring, when they started adding water from a secondary source, the water sitting in a 10 km tunnel all winter would have been warmer by 5 - 7 C. Add warm water to CLOSE tolerance turbines ...)

Strongly suggested barrier for "splash" at crest of dam. Volcano going off underneath glacier (I was held up for 3 days once because volcanic ash was blowing the wrong direction) could push large chunks of ice into the other end quickly.


Best Hopes for me not missing something !!


Great (!) sounds important enough to me. After all it turns out you are a Karahnjukar-Shaman :-)
But if the Kverkfjøll volcano goes ballistic, you can just dive into one of your local bayous till the heat is gone... just in case.

Thanks for the info.

Rarely more than a few dozen trucks/day.

For equipment I am sure you are right but what about the millions of tons of rock, steel and concrete constituents? Surely this is the bulk of power requirement? (Plus the same for the river diversions to build it).

Still confident about your EROEI?

Rockfill dam with concrete facing. (honestly forgot thickness, but primary purpose is for erosion control).

Local rock (electricity to grind it, and then drive conveyors to move it into place).

Cement hauled in, concrete made on-site.

Only visited smaller saddle dams once, but same MO.

The heavy equipment used (most sold at auction afterwards) and the turbines, generators, transformers, transmission lines (two to coast about 70 km away) all require energy outside Iceland.

OTOH, the design lifespan was 400 years. Some equipment is designed to last that long, most is on repair/maintenance/replace schedule. They hope to not drain the tunnel for 200+ years (perhaps the full 400 years).

It is odd dealing with design lifetimes that long. They do expect the glacier feeding the plant to dramatically shrink, which will change the cycle of operation somewhat.

Best Hopes for renewable power for 400 years,


Yesterday I posted a link showing the Dow down two hundred and something. Today, the same downward amount - look:


For the Dow to lose over 200 points 2 days in a row is unusual. Yesterday the market pundits blamed Obama for coming down on the Banks. So what's their excuse today?

Fact is, the market has moods. On up mood days, bad news gets ignored, and on down mood days good news is ignored. So obviously the sentiment was down and Obama just gave them an excuse to take profits. I think this is either a big correction, or something bigger is going on. Anyone have an angle on what that might be? Is China ready to implode?

. So what's their excuse today?

They're still blaming Obama for coming down on banks.

How to fund a deficit?
*early 2010, bond prices falling (decrease in buyers?)
*Obama stands firm against banks causing panic migration from stocks to bonds...

(Disclaimer: this post is worthless speculation from a market ignoramus)

Oh no, I think you may have something there. The Blame Obama bit seems to just about cover it all and is so popular right now, from blame for a recession he inherited with all its ramifications of high unemployment, slow growth, foreclosures, bus. shutterings, etc. to blame for trying to curb the banks from so much greed it causes another stock market crash, and in turn causing a stock market correction, that in turn makes it look like a conspiracy to float bonds for greater deficits.

Fascinating too that during jr's 8 years the debt soared from 5.4 trillion to over 10 trillion, but not even the tiniest bit of concern was voiced by conservatives. In fact, the huge deficits contributing to the much larger debt was justified by the right as being a small percentage of GDP.

As soon as Obama took office, the too high deficits bit started by the right in earnest, and then blossomed into the tea bag movement. You'd think Obama had single handedly raised the debt and de-regulated the loan industry to cause the recession/depression in the first place.

You know what, blame him for everything, period. That should about cover it. Isn't that how the right destroyed Carter?

Many conservatives expressed dismay at W deficits, but the Republican leadership did not.

The stock market is not a reflection of main street or the nation anymore -- it's a reflection of banking/finance health mostly. Who cares if the banks crash?

Obama has had a full year of buying into the same buyouts that W did, and pushing up the deficts even more. He can choose to change direction -- hopefully he does -- but he "owns" the situation now.

But don't forget Glass-Steagle being reformed by Carter, or the FM an FM social-engineering loan mandates, and of course the easy money from the early 90's onward.

Plenty of blame to go around, including those who see their credit-lifestyle staring them back in the mirror of their over-mortgaged bathroom every morning.

It's not how we got here, but where we go next that matters. And Obama's thin statements about breaking up banks is as yet a far cry from regulating them reasonably. But it's at least a start, and the best start in years IF anything actually comes of it.

There's an old barber in town, hard core conservative and very well read. He says he'll never forgive himself for voting for W the first time. He was warning folks about the mess we're in 6-8 years before anyone knew who Obama was. He was the first person to tell me about credit derivatives and "the energy bomb" as he calls it, long ago. He doesn't like Obama much, but if you come into his shop and start blaming Obama for our current mess, he'll kick you out. "Jesus Christ couldn't get us out of the mess we're in, not in a year, not in five!" He says he's not happy with many of Obama's decisions, but realizes that it takes years to create the kind of changes we need now.

I know that politics are not considered kosher here, just pointing out that many of the issues we discuss here are predicaments that have no good solutions. The only realistic solution is to scrap the system and start over, and that's not realistic. Mitigation is rarely well received.

the 'hard' dollar ends the dollar carry trade; borrowing dollars at insignificant interest rates and trading them for assets that yield more.

Dollar strength derives from its relationship to crude oil. Since oil prices haven't risen past eighty dollars a barrel for more than a few days, the take- away is that the dollar is worth more than the fraction of a percentage point its debt analog suggests.

At some point the dollar 'short squeeze' begins as traders who borrow dollars on margin must either come up with more dollars in cash or close out their short positions. Since most asset traders have been shorting the dollar, the other side of the trade is concentrated in a few hands - Goldman Sachs, for instance. The can set the 'real' price of the dollar under this circumstance and kill stocks, bonds and other assets.

I've been telling people for months to close out all short- dollar positions.

Politics is a big part of "energy and our future." I just ask that it be discussed thoughtfully, rather than via Rush Limbaugh/DailyKos style talking points.

Greece rising insolvency is driving down the Euro, Japan ready to inflate, China falling back, with a resulting flight to safety to the dollar? Stocks aren't down much more than gold.

"Chicago and north shore gas customers can expect higher home heating costs starting next month after the Illinois Commerce Commission approved a rate hike for two area gas providers.

Despite pleas by watchdog and citizens groups, the ICC today approved the increases sought by Peoples Energy and North Shore Gas. Both companies are subsidiaries of the Integrys Energy Group.

Early estimates indicate that Peoples Energy customers will pay about $4 more a month, or $48 a year, while north suburban residents will pay an extra $5.50 a month, or $66 a year. The increases will take effect Jan. 28 and will be reflected on customers' bills beginning mid-February, officials say.

The utilities didn't have a concrete figure on how much money they would earn from the hikes, but it is believed to be in the tens of millions.

Peoples Energy officials said the increases were necessary to offset higher delivery and maintenance costs."


Sorry if already posted:

Refiners Can't Afford Crude

Scarce Whales: Oil Creates a Decennis Horribilis for Airlines

The jet fuel share of total costs spent running global airlines has roughly doubled since the early part of the decade:

2000 14%
2001 13%
2002 13%
2003 14%
2004 17%
2005 22%
2006 24%
2007 28%
2008 32%
2009 26%
2010 26%*

Very interesting numbers.

Would be good to know what percentage running costs were of ticket prices - if it is $8 on a $500 plane ticket then fuel charges will never make any difference.

Fuel is now the single biggest cost for airlines. Surpassed labor, which had traditionally been number one. You know, before we hit peak oil. ;-)

I wouldn't be surprised to see this hit 50% by 2014 or so. I would be surprised if a great many airlines found it possible to keep on operating at those levels.

In November I flew on a United flight from San Francisco to Vancouver, and while we were waiting at the gate to leave, the co-pilot came on and gave us the stats on how much fuel we were going to use. miles per gallon per person etc. It was something in the order of $50 per person for fuel, for the 80% planeload we had. My ticket had cost $150 (before taxes, etc) for that leg, putting it at 33%, so those numbers are about right.

The pilot also pointed out (correctly) that if you were to drive the same distance, you would use more than twice as much fuel.

I think air travel will return to the point where it is relatively expensive and you only do it if you have to - the days of $50 airfares are gone...

Data for 2006 indicates that the average jet fuel consumption in passenger aviation was 50.1 revenue passenger miles per gallon. If the flights had been fully loaded, the consumption would have been 62.3 available seat miles per gallon. I didn't realize aircraft did that well.

However, if you had driven a Prius or VW diesel with 2 people on board, the result would have been less fuel use than flying. Then too, driving your car to the airport and the transport from the destination airport to your hotel (or where ever) would have added more fuel consumption and expense, whereas when driving your car, you could go door-to-door. I think your pilot was feeding you a bit of airline disinformation.

E. Swanson

Well, if you happen to be one of the 1% of people that have those cars, and I wish i was one with a diesel vehicle...

Also, with planes, you are going straight line. road distance can be up to 20-30% more.

And, for a trip from Vanc to SF and back, if you are driving, and I have done it, you need 18hrs of driving time, each way. So even if your fuel usage could be comparable, your cost and time certainly is not.

Planes are that efficient in passenger mpg because we accept being shoehorned into a tight, but very aerodynamic shape for a short time, along with many others - the ultimate "vehicle pool". That and their ability to go point to point, although this is rarely brought up in comparisons, but if the road trip involves crossing mountain ranges, this starts to become significant.

Based on a single occupant vehicle, the pilot was still right.. and he was certainly right when he said that fuel is their single biggest cost.

Your points are quite correct.

However, the fact that the price of fuel represents large fraction of the total expense in flying points to the ultimate problem. At higher prices for oil, flying quickly becomes too expensive for many people who currently use the system. That results in many fewer passengers and from that one can see even higher costs to fly as the cost of purchasing and maintaining the aircraft grows even larger adding to the cost per mile. The result could be a downward spiral in the industry overall, with only the most wealthy being able to enjoy the benefits of air travel.

We've already seen several US airlines going bankrupt, some going thru the process before the 2008 oil price spike. I experienced this personally, having invested in one airline company's preferred stock for the assured dividends, only to find later that my investment had lost a large fraction as the preferred shares were converted to common shares after the airline reformed. I've seen comments to the effect that the present business models of the airline industry begin to fail with oil above $100 a barrel. The news release I linked to also indicated the the break even load factor for the industry was around 77%, that being before the price of oil moved upwards sharply in the following years.

The news about Japan Airlines is just the latest round. I expect more airlines to tumble if the price of oil exceeds $100 a barrel and recovery from the "The Great Recession" turns out to be a prelude to another Great Depression...

E. Swanson

Black Dog,

I think you are quite right inn your statement of the "ultimate problem", the costs will go up, with less people to share them, and the airline industry must, and is, shrinking.

It will go back to where it was decades ago, in relative cost terms, where only those whose time is worth the money will fly, and for leisure travel, well, you'll have to save up for a while - those cheap packages to the Caribbean etc just won't be around much longer.

Business will find ways to do business with less travel

Given the trend in the airline industry, any new investment in expanding airport infrastructure must be viewed as risky, and quite possibly unnecessary.

There will still be an airline industry, but we can expect another round of "shrinking pains", just like the auto industry, though hopefully without the bailouts.

With the first round of cutbacks, there is a surplus of terminal space and parking.

The first round included a major degree of downsizing a/c , seat reduction was greater than flight reduction.

But smaller a/c use more fuel/seat. Even a 737-800 uses several % less fuel/seat than a 737-700 and an A320 < A319 < A318.

I expect the next step in cutbacks to ground many of the regional jets, increase layover times at hub airports and increase fuel efficiency/seat. And terminal space will become a glut, too many runways, etc.

Best Hopes for even greater efficiency,


Black Dog,

I think you are quite right inn your statement of the "ultimate problem", the costs will go up, with less people to share them, and the airline industry must, and is, shrinking.

It will go back to where it was decades ago, in relative cost terms, where only those whose time is worth the money will fly, and for leisure travel, well, you'll have to save up for a while - those cheap packages to the Caribbean etc just won't be around much longer.

Business will find ways to do business with less travel

Given the trend in the airline industry, any new investment in expanding airport infrastructure must be viewed as risky, and quite possibly unnecessary.

There will still be an airline industry, but we can expect another round of "shrinking pains", just like the auto industry, though hopefully without the bailouts.

I jsut got a card in the mail, in which Xcel Energy is offering to donate $25 to one of 3 charities, just because "it's our small thanks to you for being an Xcel Energy customer", even though, as they point out, I have little choice in the matter.

Should I worry? Rate hikes? Smart meters?

what do i know? i work in a factory. my lifestyle has been reduced to going to work and going home and not much more. i can pay my taxes and bills. that's it.

"One quarter of US grain crops fed to cars - not people, new figures show. New analysis of 2009 US Department of Agriculture figures suggests biofuel revolution is impacting on world food supplies"

and an interesting article from englisrussia:
i like the part about the amount of coal mining shut down. talk about reduced lifestyle. study the soviet model.

do you know that titan, a moon of saturn is covered in hydrocarbons?
IT HAS LAKES OF METHANE!! imagine the great lakes of earth filled not with water but methane. that is the situation on titan. isnt that a juicy plum ripe for plucking?

and what of peak rock and roll? R&R happened in the seventies along with hubert's peak. it is a sad time indeed.

how will we know when peak oil has passed? when the internet shuts
down and you cant post to the oil conundrum, that's when.

also, less flying is a manifestation of the reduced lifestyle bally-hooed about by pundits. it must be embraced.

and what of the earth quake swarm in the yellowstone basin?
is the super volcano about to blow?

any truth to the rumors of big oil deposits around haiti?

"it's all good"

The first time I was in Yellowstone was in '67, (just a kid) and the Park Service Geologist was giving his presentation on the nature of tectonics at the park. He was discussing the big quake of 1959 (7.1, I think) when the ground shook and rolled. It was my first real quake and at first we thought it was a ruse of some kind. When I looked at the Ranger's eyes, I knew it was the real deal.

Yeah, Hum, that's just what we need.

Ok humbaba ,fine, you can go to Titan- I'm definitely heading for the constellation Centaurus

Btw, what kind of vehicle are you opting for ?

Wow! A girl's best friend and only 50 light years away.

As bugs bunny would say, that's a lot of carats (carrots)!!

Found in Centaurus, eh? No bull!!

Critically important perspective:

White House Needs New Look At Energy

By MICHAEL J. ECONOMIDESPosted 01/21/2010 06:44 PM ET

The Americans should not be surprised by the Chinese moves. A far more pragmatic nation, China is acutely aware that energy, in short domestic supply, will be the "choke point" in its future development unless resources are secured throughout the world. That's why the very capable Chinese oil companies — CNPC, Sinopec and CNOOC — have fanned out in dozens of countries, making hundreds of billions of dollars of oil and gas investments, including in America's backyard, Argentina, Venezuela and Canada and a country America presumably dominates, Iraq. . . .
In discussions with Chinese intellectuals, government officials and company executives, the Chinese are often incredulous, all asking essentially the same question: Why is America letting us have a free and uncontested ride in all these energy ventures?
. . .
What the world is witnessing is the largest peaceful transfer of power in history. Energy means power, and while the U.S. is consumed by environmental ideologies and climate rhetoric, it is committing economic hara-kiri in the process. China, riding on energy acquisitions with little competition, will propel itself into the economic stratosphere.

The U.S. should be concerned, but doing something about it will require an unlikely sea of cultural change in the Obama administration.

• Economides is a professor at the University of Houston and the author of "Energy: China's Choke Point."

The first paragraph of the article has a misprint. It says that US capacity is 1000 MW. I think he meant 1,000,000 MW.

The U.S. should be concerned, but doing something about it will require an unlikely sea of cultural change in the Obama administration.

And what will they do, following this cultural change? China has two things the U.S. doesn't: A bankroll, and nationalized oil companies. With two wars to finance and continuing bank bailouts, massive deficits and falling revenues, I'm not sure we could compete even if we did get our collective sh@t together.

Unless I missed something, Economides offers no solutions of his own.

China also has something else that the US lacks; a government that can actually govern.

Antoinetta III

The benevolent dictators. I think I'll stay put and take my chances here.

Hello Ghung,

Many would agree.

China: 2009 Marked by Political Hardening
Rights Defenders Targeted in Face of Weak International Engagement
January 20, 2010
Related Materials:
China: Forcibly Returned Uighur Asylum Seekers At Risk
China: Liu Xiaobo’s Trial a Travesty of Justice
China: Sham Trial of Veteran Human Rights Activist
World Report 2010
Other Material:
World Report 2010: China Chapter
That the Chinese government this year released a national action plan on human rights is ironic, as its real plan seems to entail steadily curtailing – not protecting – rights.
Sophie Richardson, Asia advocacy director at Human Rights Watch
(Washington) - Human rights protections in China faced significant setbacks in 2009 as the Chinese government, emboldened by increasingly weak international criticism of its rights record, pursued politically-motivated attacks against dissidents, human rights defenders, and civil society advocates, Human Rights Watch said in its annual World Report, released today.

I don't think you missed a thing Ghung. I don't think were facing a political problem that hasn't been holding us back for decades: Project X is undeniably a benefit to society but will require some collective sacrifice (increased taxes, decreased benefits, etc). Politician A has to push the project but the long term development means he won't likely be in office when it's time to cut the ribbon. Thus why take the heat if you're not going to get some of the gravy. The free market system isn't any better at making the long-term play: Wall Street demands to see benefits in the short term.

You've seen all the same viable ideas as to how we might lessen some of the impacts of PO. But I've seen none that can benefit a politician or CEO during his time. In fact, by pushing such a position he might even expect to shorten his political/employment lifetime. And this is one area the Chinese have an obvious advantage. The strings that come alone with their form of communism may be ugly but it's difficult to deny their efficiency and single-minded effort.

Thanks to the Drumbeat, I get a good mix of news and commentary on all sorts of things. This time I got the short end of the straw...

I expanded three links, based on their titles and summaries. The Energybulletin's "Oil caused recession, not wall street" was based on previous Oildrum reporting, now being reported again here. Talk about circular. Uncommon Wisdom's "5 deadly emergencies" way okay, but then went on to try to sell me a book. And Helium's Yes debate on America's energy independence was a work of fiction (and didn't espouse to be anything else).

I read the drumbeat regularly and enjoy it a lot, but I humbly suggest fewer articles in future posts: partly so repeated info can be winnowed out, and partly to keep the ensuing comments a bit more focussed. Thanks!

The Energybulletin's "Oil caused recession, not wall street" was based on previous Oildrum reporting, now being reported again here.

It's an update of his previous article. It wasn't different enough to run as a key post, so one of the editors asked me to link to it.

Uncommon Wisdom's "5 deadly emergencies" way okay, but then went on to try to sell me a book.

If I eliminated all articles with a commercial interest, it would be a very short DrumBeat indeed. A lot of the peak oil analysis is coming from people who want to be paid for their work. I've been linking to Sean Brodrick since the DrumBeat began, and yes, he's been trying to sell his books/analyses, etc., all that time.

And Helium's Yes debate on America's energy independence was a work of fiction (and didn't espouse to be anything else).

One side was, the other wasn't.

I post links to fictional future scenarios quite often. Everything from Vanity Fair's depiction of a future abandoned Las Vegas to that "Sixty Days, Next Year" blog scenario where Saudi Arabia's oil production collapses due to civil war.

I read the drumbeat regularly and enjoy it a lot, but I humbly suggest fewer articles in future posts: partly so repeated info can be winnowed out, and partly to keep the ensuing comments a bit more focussed. Thanks!

You realize that if I winnow the DrumBeat, it may be the articles you like that go, in favor of the ones you don't like.

I do try to keep the comments from wandering too much, but this is an open thread, and our focus in general is broadening. We're past peak oil now, and focusing solely on oil production just isn't of much interest any more.

You realize that if I winnow the DrumBeat, it may be the articles you like that go, in favor of the ones you don't like.

Yeah, yeah, good point; and I chose three articles this time, and it was probably those particular three that all had something I picked on. After all, what was the first thing I did this morning after I groggily got out of bed? I checked out the next DrumBeat! So I think I might have been a bit harsh, sorry!


Robert Bryce and T. Boone Pickens interviewed by John Stossel on Fox. The above address has a link to the video.

Stossel clearly favored Bryce, but Pickens made Bryce look totally ignorant by asking him questions about a few basic figures (how much oil China imports), which Bryce didn't know. Pickens says he believes in Peak Oil, and predicts shortages about 2012.

Smarmy creampuff John Stossel 'interviews'...


Below is a copy of a comment I left attached to an article I found while reading a link from Yahoo News.


Made me think others have been reading Westexas' ELM posts about getting below your current wages.

Maybe there is a seachange going on and it will stick.

Peak Spending
Laughing all the way to the bank with my 700 dollar a month living wage. I live on less than $8,600 a year. Grow food in a yard that I've been planting for 30 years. Eat out about 12 times a year, the rest is home cooked. Thrift shop buying of clothes, or using ones that I have had for years. Selling or giving away things I don't need. Learning to do as many things as possible with my own two hands. The house is paid for and is under 900 Sq Ft. Frugal is not just a life style change it is something some of us grew up with, and have used all our lives.

Could I live on 75% less than I do now? Maybe in a few years, I'll need to plant more edible landscaping, find some locals to start a truck farm with, actually get into rasing a few laying hens in a coop out back (city codes allow it). Yeah I could go down 5% every year till I got to about 50% of my income now. Taxes is what I'd be paying with the money left, everything else would be literally living off the land.

Try this for a month. Live on $2.00 worth of food every day. Plan your meals, buy smart, buy fresh. See what that does to your thinking.

Cheers, God Bless.