Drumbeat: January 29, 2010
Posted by Leanan on January 29, 2010 - 10:09am
U.S. Oil Rig Count Rises to Highest Level Since 1993
(Bloomberg) -- Crude oil rigs operating in the U.S. increased this week to the highest level in 16 years as drilling rose in Texas and the Dakotas, according to data published by Baker Hughes Inc.Oil rigs rose by seven to 444, the highest level since the week ended Dec. 17, 1993. The count has more than doubled since June, when it bottomed out at 179.
“With oil in the $70 to $80 range, it’s very economical for operators to be drilling oil wells,” said Gene Shiels, assistant director of investor relations at Baker Hughes. “We’re really seeing it in two places, in the Permian Basin in Texas, where the wells are pretty shallow, and in the Williston basin, also known as the Bakken basin, in the Dakotas.”
Venezuela bid has big risks, rewards for oil majors
CARACAS (Reuters) - Venezuela's Carabobo auction presents global oil giants with a major opportunity to gain access to what the U.S. Geological Survey recently called one of the world's largest reserves of crude oil.But winners of the auction face risks that could include delays in development, a major financing burden and a thicket of problems building infrastructure from roads, pipelines and ports to high-tech facilities to upgrade the heavy crude.
Royal Dutch Shell intends to sell of some its leases in Nigeria's restive Delta
LAGOS, Nigeria (AP) — Royal Dutch Shell PLC says it wants to sell off leases it has in three oil plays in Nigeria's restive Niger Delta.Shell says its Nigerian unit has reached a deal to sell its 30 percent stake in the leases to Seplat Petroleum Company Ltd.
Texas judge warns CPS in Texas nuclear suit
HOUSTON (Reuters) - NRG Energy Inc CEO David Crane said Friday the company would not pursue the construction of two nuclear reactors in Texas, if an ongoing dispute with project partner CPS Energy causes NRG to miss out on federal loan guarantees needed to finance the project.
Reaching Peak Oil: Something to Fear
In today's global financial crisis, people are looking for ways to fix the mistakes that led to the current disastrous situation. Fixing the problem is always second best, however, to making sure the problem never happens in the first place. It is important not only to learn about past global economic catastrophes, but also to anticipate coming ones. Oil will definitely have a major influence on the next global financial collapse. The United States now accounts for about a quarter of world oil consumption (with more than half that total imported from OPEC and other overseas producers). On the other hand, annual oil consumption in China is growing seven times faster than in the United States. America is entering an era of unprecedented growth, as well as a dwindling supply of its bloodline to the industrial world. This is where the theory of "peak oil" comes in.
Iran Says U.S. Sanctions Won’t Halt Gasoline Supplies
(Bloomberg) -- U.S. legislation to impose gasoline sanctions on Iran over its disputed nuclear program won’t succeed in halting fuel supplies, an Oil Ministry official said.“If for any reason any refinery or trader would stop working with us, we can refer to other refineries and traders and receive the amount of gasoline needed,” said Hojatollah Ghanimifard, vice president for investment affairs at the National Iranian Oil Co. “These kinds of unilateral sanctions are not new to us. For the past 30 years such sanctions have been imposed by the U.S. and everyone knows they could not be workable,” he said by phone today from Tehran.
Clinton Says China Under Pressure Over Iranian Nuclear Program
(Bloomberg) -- U.S. Secretary of State Hillary Clinton said the Chinese government is coming under pressure to recognize how Iran, on which it relies for oil, may destabilize the region with its nuclear program.“China will be under a lot of pressure to recognize the destabilizing effect that a nuclear-armed Iran would have in the Gulf, from which they receive a significant percentage of their oil supplies,” Clinton said in remarks to students, military officers and diplomats today in Paris.
Saudi Aramco, Total Said to Obtain Loans for Jubail Refinery
(Bloomberg) -- Saudi Arabia’s national oil company and Total SA raised $6 billion in bank loans to finance the construction of an oil refinery on the Mideast nation’s Persian Gulf coast, according to two bankers involved in the transaction.Saudi Arabian Oil Co., the world’s biggest crude producer that’s known as Saudi Aramco, and Total, Europe’s biggest refiner, plan to sign the loans by the end of the first quarter, said the bankers, who declined to be identified before an agreement is completed. The debt will help finance the $12 billion Jubail Export Refinery, the bankers said.
Pemex Sells $1 Billion of 10-Year Bonds Overseas
(Bloomberg) -- Petroleos Mexicanos, the country’s state-owned oil company, sold $1 billion of bonds in overseas markets to help raise funds for an investment plan aimed at slowing six years of falling output.The 10-year bonds yield 6.16 percent, or 2.5 percentage points above U.S. Treasuries, Mexico City-based Pemex said in a statement. Citigroup Inc., Barclays Plc and Credit Suisse Group AG arranged the sale.
API Encouraged by Potential Offshore Drilling
American Petroleum Institute President and CEO Jack Gerard issued the following statement today on Wednesday's State of the Union address:"We are encouraged by the President's words that decisions need to be made about opening new offshore areas for oil and gas development. These are important and necessary decisions for the American people and the American economy. Greater access to America's vast oil and natural gas resources would bring more domestic energy, thousands of American jobs, billions in government revenues and less reliance on imported energy.
"We support the President on jobs and are ready to do our part putting more Americans back to work. But to create these jobs, we will need policies that allow investment and development -- policies that are pro-job, pro-consumer and pro-energy. We are ready to work with the administration to help make that happen."
Chevron production shut in Nigeria
A Chevron executive said today that about 20,000 barrels oil per day of production is currently shut in due to sabotage claimed by militants in Nigeria.
NEW YORK (AP) -- Chevron Corp. said Friday its fourth-quarter profit fell 37 percent as higher crude prices led to huge losses in its refining business.
SAO PAULO (Reuters) - Brazilian state-run oil company Petrobras said on Friday its exports of oil and oil products in 2009 reached an average 705,000 barrels per day, up 4.8 percent from 2008.Exports of oil alone rose 8.9 percent to 478,000 barrels per day.
Analysts see BP widening Shell gap
UK supermajor BP may continue to widen the valuation gap with rival supermajor Shell as it’s set to post about $2 billion more in profit than its European rival in the final quarter of last year.
Commodities Set for Biggest Drop in 13 Months on Demand Outlook
(Bloomberg) -- Commodities headed for the biggest monthly drop in 13 months on concern that demand may wane as governments seek to control economic growth.The Standard & Poor’s GSCI Index of 24 raw materials is down 6.8 percent this month, the most since December 2008, led by slides of 17 percent for both zinc and lead. Copper has lost 8.5 percent this month, also the most in 13 months, and crude oil is down 7.6 percent, the first decline since July. Sugar, feeder cattle and platinum climbed.
Imperial disputes Arctic pipeline recommendations
CALGARY, Alberta (Reuters) - Backers of the C$16.2 billion ($15.1 billion) Mackenzie gas pipeline in Canada's Arctic have urged regulators to reject a number of recommendations made by an environmental and socioeconomic panel late last year.
Private Equity Is Bullish on Clean Energy
With strong interest from corporations eyeing the clean energy sector, 2010 could turn out to be a good time for private equity and venture capital firms to pursue investments.
Plans for Fast-Charging Stations Raise Concerns Among California Utilities
Think, the Norwegian electric automaker, announced a deal this week with a California company, AeroVironment, a maker of electric vehicle charging stations, to introduce fast-charging stations that can charge its battery-powered City car to 80 percent capacity in as little as 15 minutes.A conventional charger can take eight or more hours to charge an electric car, depending on the battery.
“The development and deployment of very-fast-charge stations will help speed the electrification of automobiles in the United States and globally,” Richard Canny, Think’s chief executive, said in a statement.
But utilities — concerned that fast-chargers could overload the electricity grid — are more cautious.
California Officials Would Not Regulate Electric Car Charging Firms
California officials have indicated they are not inclined to regulate electric car infrastructure companies that plan to sell electricity to drivers through networks of charging stations.Whether to treat such companies as quasi-utilities has been a contentious issue. The state’s three big utilities have split on the topic, while battery charging startups Better Place and Coulomb Technologies have warned that regulation could stifle innovation and scare off investors.
California lawmakers take aim at free parking
Reporting from Sacramento - State lawmakers are taking aim at what some of them see as a menace to California's environment: free parking.There is too much of it, the legislators say, and it encourages people to drive instead of taking the bus, walking or riding a bike. All that motoring is contributing to traffic jams and pollution, according to state Sen. Alan Lowenthal (D-Long Beach), and on Thursday he won Senate approval of a proposal he hopes will prompt cities and businesses to reduce the availability of free parking.
Moorlands and hills targeted to grow crops for biomass and biofuels
One tenth of Britain, including moorlands and hillsides, could be used to grow crops for biomass and biofuels. Countryside protection groups warned that this would turn large swaths of the countryside into monocultural landscapes and pose a threat to wildlife.
Overcoming the Ugly Factor in Building-Integrated Solar Design
The idea of integrating solar power with building materials has been an attractive concept for decades, but one of the biggest challenges, according to Anna Dyson, director of the Center for Architecture Science and Ecology, or CASE, has been aesthetics.Most applications thus far, Ms. Dyson said, “are pretty ugly and impede your view.”
While visual elegance may not seem like a serious concern to those determined to generate electricity from the sun, for architects and developers looking to sell or rent properties, looks matter.
Massachusetts Sets Ambitious Energy Standards
Massachusetts state officials announced on Friday new energy efficiency standards for utilities that aim to be the most ambitious in the nation.The plan calls for a statewide reduction of 2.4 percent in electricity use and 1.15 percent in natural gas use annually for three years. The savings are to be achieved largely through $1.6 billion in incentives for utility customers who take certain actions to conserve energy, like insulating their houses or replacing conventional light bulbs with compact fluorescent ones.
New Panel Will Study Disposal of Waste
WASHINGTON — The Energy Department plans to announce on Friday the formation of a “blue ribbon” commission to study the disposal of nuclear waste.
British Columbia's fight against climate change should focus on conserving at least 50% of its land base using new strategies for nature conservation and carbon storage, says a new peer-reviewed report by senior ecologist Dr. Jim Pojar."Our survival is intertwined with nature's survival, and climate change is forcing us to re-evaluate the way we protect nature," said Dr. Pojar. "A minimum conservation target of 50% is what's necessary to give our plants and animals a fighting chance to adapt, while also keeping and drawing more carbon out of the atmosphere so that over time we can slow and reduce climate change."
As we all know, several additional Earths would be required to allow all of humanity to live in a suburban house with two cars and a lawn, and this obvious constraint is sometimes evoked to justify the impossibility of reconciling finite resources with rising standards of living. Most contemporary cities, in rich countries or poor, repress the potential environmental efficiencies inherent in human-settlement density. The ecological genius of the city remains a vast, largely hidden power. But there is no planetary shortage of ‘carrying capacity’ if we are willing to make democratic public space, rather than modular, private consumption, the engine of sustainable equality. Public affluence—represented by great urban parks, free museums, libraries and infinite possibilities for human interaction—represents an alternative route to a rich standard of life based on Earth-friendly sociality. Although seldom noticed by academic urban theorists, university campuses are often little quasi-socialist paradises around rich public spaces for learning, research, performance and human reproduction.
NASA Directed Toward Climate Change, But Not the Moon
There will be money lacking for NASA's Constellation program, the program designated to return humans to the moon by 2020. The White House will instead direct NASA funding to concentrate on Earth-science projects -- principally, researching and monitoring climate change, -- and on a new technology research and development program that will make human exploration of asteroids and the inner solar system possible.This could be good news for the folks under Dr. James Hansen who monitor climate change at the Goddard Institute for Space Studies (GISS).
The White House budget request, which is certain to meet fierce resistance in Congress, scraps the Bush administration's Vision for Space Exploration and signals a major reorientation of NASA, especially in the area of human spaceflight, according to the Orlando Sentinel.
Oil demand has peaked in developed world: IEA
LONDON (Reuters) - Oil use in rich industrialized countries will never return to 2006 and 2007 levels because of more fuel efficiency and the use of alternatives, the chief economist of the International Energy Agency said on Thursday.The bold prediction, while made previously by some analysts, is significant because the IEA advises 28 countries on energy policy and its oil demand forecasts are closely watched by traders and policymakers.
"When we look at the OECD countries -- the U.S., Europe and Japan -- I think the level of demand that we have seen in 2006 and 2007, we will never see again," Fatih Birol told Reuters in a telephone interview.
Oil hovers below $74 as traders eye dollar, stocks
Oil prices rose slightly Friday, helped by a slight pullback by the U.S. dollar and optimism in European stock markets, but remained near a six-week low under $74.
Shell Sees Oil Trading Between $60 - $80
DAVOS, Switzerland (Reuters) - Oil prices will not go back to the 2008 peak levels of more than $140 a barrel and are expected to trade in a $60 to $80 range, the Chief Executive of oil major Royal Dutch Shelltold Reuters Insider. Asked whether he expected oil to go back to $140, Peter Voser said: "I don't think so. Volatility is still high, but I do not see it as high as we have seen it in 2008."
Europe Inflation Accelerates to Fastest in 11 Months
(Bloomberg) -- European inflation accelerated in January to the fastest in almost a year after cold weather pushed oil prices to a 15-month high.
South Africa to Raise Gasoline Price by 2.3% on Feb. 3
(Bloomberg) -- South Africa’s government will increase the price of gasoline by 2.3 percent on Feb. 3, the Energy Ministry said in an e-mailed statement today.
Industry leaders say reliance on oil will endure
DAVOS // With global energy demand undented by the financial crisis, the top priority for consumers and exporters should be creating conditions that allow oil producers to keep up, a group of petroleum executives said yesterday.“There is too much rhetoric about moving away from oil, about independence in energy by many nations that is unachievable and misleading,” said Khalid al Falih, the president and chief executive of Saudi Aramco, the world’s largest producer and exporter of crude.
DAVOS: Global Oil Barons Differ On Energy Outlook At WEF
DAVOS, Switzerland -(Dow Jones)- How quickly is the world running out of oil? This was the important question a panel of some of the world's most powerful energy executives failed to agree upon on the second day of the annual meetings of the World Economic Forum.
Shell May Cut More Jobs as Energy Demand Recovery Remains Muted
(Bloomberg) -- Royal Dutch Shell Plc, Europe’s second-largest oil company, may need to cut more jobs this year to control operating costs as a recovery in energy demand waits until the second half.“It’s normal in any business that you have to go further and you have to operate your operating expenditure in a very tough way,” Chief Executive Officer Peter Voser said in a Bloomberg Television interview in Davos, Switzerland. “As part of that, it may also mean that some more people have to go.”
LG Chem Quarterly Profit Misses Estimates on Costs
(Bloomberg) -- LG Chem Ltd., South Korea’s biggest maker of petrochemicals, reported a fourth-quarter profit that missed analyst estimates because of higher marketing expenses and raw material costs.
U.K. Coal Declines to One-Month Low in London as Loss Widens
(Bloomberg) -- U.K. Coal Plc, the nation’s largest producer of the fuel, fell to a one-month low in London trading as the company posted a wider full-year loss.The operating loss was about 65 million pounds ($105 million), from about 700,000 pounds a year earlier, the Doncaster, U.K.-based company said in a statement today. Sales shrank to about 317 million pounds, from 393 million pounds.
Ukraine to Seek Firm Gas Deal With Russia, Financial Times Says
Bloomberg) -- Ukraine will pursue a firm agreement with Russia on natural gas in a bid to discourage OAO Gazprom from constructing pipelines that bypass the country, the Financial Times reported, citing a senior Ukraine diplomat.
Venezuela gets bids for all 3 Carabobo projects, ONGC bid included
CARACAS (Reuters) – Venezuela has received bids for all three projects in the Carabobo bidding round in the Orinoco heavy oil belt, sources said on Thursday, with major oil companies Chevron and Repsol among the bidders.The government of leftist Hugo Chavez has drawn interest across the oil industry despite nationalizations of Orinoco projects just three years ago that boosted concerns political risk in the OPEC nation.
Nigerian oil militants warn ceasefire in jeopardy
Nairobi/Abuja - Nigeria's main militant group on Friday said that it may end a ceasefire declared last October and resume attacks on oil facilities in the Niger Delta.Attacks by the Movement for the Emancipation of the Niger Delta (MEND) had slashed the West African nation's oil production by around a quarter and helped drive up global oil prices when MEND responded to a government amnesty and laid down its arms.
However, MEND spokesman Jomo Gbomo said his group had become disillusioned by the government's failure to create real dialogue.
Virginia senators slam delay in offshore drilling
WASHINGTON (Reuters) – Virginia's two U.S. senators on Wednesday urged the Obama administration to carry out a previous plan to lease almost 3 million acres (1.2 million hectares) in federal waters off the state's coastline to oil and natural gas companies.The lawmakers said in a letter to U.S. Interior Secretary Ken Salazar that recent comments by a department official that the Virginia lease sale originally planned for late 2011 would be delayed until 2012 at the earliest are frustrating given that drilling creates jobs and needed energy supplies.
What the Future Holds for Oil and Natural Gas
Every announcement of a "new oil field with 1 billion barrels of oil" unleashes a flood of MSM propaganda about the incredible abundance of oil and natural gas.My objections to the propaganda are founded on three questions:
1. Did anyone do the math? 1 billion barrels sounds impressive until you do some simple multiplication and discover that is less than what the U.S. consumes every two months.
Why we’ll pay for China’s car obsession
The world’s most populous country has caught the car bug, and we’ll be picking up the tab.By 2020 there will be around 140 million cars in China and according to Chinese government estimates there will eventually be 250 million cars traversing China’s rapidly growing network of highways. There are currently 25 million cars in China.
After the Great Financial Crisis and the Great Recession, What Next?
The so-called "War on Terrorism" is a misnomer. One can't have war on terrorists the way one can on nation states, as if a handful of scattered groups and individuals constitute a war opponent for the most powerful military force in history. In fact, such an objective, even if we were to take it seriously, quickly mutates into a war against whole peoples and nations, feeding imperial aspirations, which are always there. True there are real terrorists, guerrilla fighters, opponents of the United States, in the countries that Washington is struggling to control by means of militarism and imperialism. But here we come to a chicken and egg issue. To what extent are the terrorists (real or so-called) themselves the product of the prior assertion of U.S. imperial power and ambitions?On why the United States has devoted so many resources of late to controlling this region of the world, one cannot avoid what in foreign policy circles is euphemistically referred to as its "vital strategic resources" -- namely oil and natural gas. As Alan Greenspan said in his book The Age of Turbulence: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."
Oil giants promise to rebuild industry in Iraq
The leaders of two of the world's biggest oil companies have pledged to rebuild Iraq's oil industry and boost production to about 10 million barrels of oil a day over the next decade – more than the current production of the world's largest producer, Saudi Arabia.
Energy industry isn’t giving up on fossil fuels
In further evidence that the energy industry is not about to let oil production peak, GE Energy Services is moving toward boosting oil and natural gas production from reservoirs unreachable with current technology, which begins to break down at the higher temperatures at greater depths. In 2008, GE Energy asked the US Department of Energy to support its program to develop high temperature electronics required for oilfield and geothermal drilling.
ERA Says Spending to Hurt Earnings in ‘Tougher’ Year
(Bloomberg) -- Energy Resources of Australia Ltd., the uranium producer controlled by Rio Tinto Group, said it expects a “tougher year” in 2010 as increased spending on expansion and maintenance curtails profit.“You have to spend money to make money,” Chief Executive Officer Rob Atkinson said by phone today from Darwin, declining to provide estimates. “This will set us up for the future.”
Energy Resources, which sells uranium to power utilities in Asia, Europe and North America, has a “very positive” long- term outlook for nuclear fuel demand as countries seek alternatives to coal and oil to reduce greenhouse gas emissions, he said.
The number of nuclear power reactors may double by 2030, driven by India and China demand, the World Nuclear Association said. As of Dec. 1, China had 11 reactors in operation, data from the association show, with 18 under construction.
Obama Said to Seek $54 Billion in Nuclear-Power Loan Guarantees
(Bloomberg) -- President Barack Obama, acting on a pledge to support nuclear power, will propose tripling loan guarantees for new reactors to more than $54 billion, two people familiar with the plan said.
Demoralizing His Supporters, Obama Calls Nukes, Coal, And Oil Drilling ‘Clean Energy Jobs’
President Barack Obama’s discussion of energy policy in his first State of the Union address pandered to corporate interests while demoralizing his progressive supporters. Though Obama made a strong case that real investments in clean energy such as solar technology, advanced batteries, high-speed rail and efficiency are critical to job creation and international competitiveness, he also offered sops to established corporate polluters.
Spanish company plans New Mexico solar plant
SANTA FE, N.M. – A Spanish company plans to invest $1 billion to build a large solar energy production plant in New Mexico.Gov. Bill Richardson joined Wednesday with executives of GA-Solar and its parent company, Gestamp Corp., to announce the photovoltaic solar plant. It will cover 2,500 acres near Santa Rosa in eastern New Mexico.
Ohio's rail plans back on track
Sometime in 2012, people should be able to board a train in Columbus and get to either Cincinnati or Cleveland in about three hours for $20, state officials said yesterday after the Obama administration announced that Ohio was getting $400 million to relaunch passenger rail service.
Davos Dispatches: Why Davos Matters
Davos is a weathervane for the global economy – whatever the pervasive feeling is there, it tends to become the mood for the entire year ahead, shaping how people think about the issues. “Davos is the Frankfurt Book Fair of economics,” says Canadian author Margaret Atwood, one of the token cultural figures brought in to entertain the men in dark suits. Last year, chaos reigned – the world was still reeling from the financial crisis that began in September of 2008, and there was a palpable sense of panic in the Congress Center. Endless disaster scenario panels reflected this – there were talks on peak oil, how the world was running out of food and water, and whether banks would ever lend again. Even the politicians were jittery – Turkish prime minister Recep Tayyip Erdogan angrily stormed out of a debate with Israel’s Shimon Perez. The crisis vibe, of course, motivated world leaders to stabilize things. Post Davos, the world’s central bankers promptly started helicoptering in money and U.S. officials snapped up trillions of mortgage backed securities.That’s one reason that things are a bit calmer on the Magic Mountain this year. The mood isn’t crisis, but a vague unease with a world order that is clearly changing.
The Lleyton Hewitt lesson in solving Australia's population issues
On Monday night, immediately after ABC's The 7.30 Report's population debate, I watched the ineluctable defeat of Lleyton Hewitt. It struck me that the same national character traits were in evidence, both good and not so good. On one hand Hewitt reveals an admirable indomitable spirit. But the sublime ease of Federer's handling of Hewitt was disconcerting because it was horribly obvious what strategy the Australian needed to at least put up a fight: take risks and mix up his returns. Instead he remorsely, stubbornly, dumbly even, continued to plod away with the same old baseline cross-court shots almost as predictable as the tide. It was painful to watch.One guesses at how many coaches, friends and observers (eg. commentator Jim Courier) have told him this but Hewitt seems no more able to alter his strategy than . . . well, than Australians can conceive of alternative ways to run their cities or car-based, sprawled urban lifestyle. Even as it steadily turns into a nightmare.
Diverse crowd hears lecturer talk of future lacking resources, growth
SONORA - Normally, grim graphics showing the worldwide depletion of resources such as oil and copper would seem unlikely to get a laugh.Yet that is exactly what Chris Martenson got Thursday night when he noted that many economists and political leaders continue to predict continued economic growth anyway.
"Reality will win. Not everybody holds that view," Martenson said.
Those of us on the Doom & Gloom side vary primarily in how fast we think things are going to fall apart, how painful the bumps on the way down will be, and how long it will take to recover if we ever do. We’re a jolly bunch, and our prognostications range from the most sanguine (the Greater Depression dragged out to Japanese lengths), to violent upheaval following the collapse of either government or the dollar, to dicatorship, and we make our bets accordingly. I certainly hope for the best (the dismal prospect of the Greater Depression), but I hold with preparing for the worst.
Today’s critics of prosperity are guarded about expressing their views directly, instead hiding behind climate change, ideas about ‘moral limits’, and the elevation of happiness over GDP. This makes it even more important to oppose them.
U.S. Signs On to Copenhagen Climate Accord, Pledges to Cut CO2
(Bloomberg) -- The U.S. signed on to the Copenhagen Accord to slow climate change, following through with its pledge to support an agreement widely criticized for being non-binding.The biggest economy aims to cut greenhouse-gas emissions about 17 percent by 2020, the U.S. said in a letter late yesterday to United Nations Framework Convention on Climate Change Executive-Secretary Yvo de Boer, repeating a vow made in December while brokering the accord in Denmark’s capital.
Calderon: Global climate deal hinges on money
DAVOS, Switzerland – The success of talks this year to salvage a global climate accord hinges on money, Mexico's President Felipe Calderon said Friday, urging executives at the World Economic Forum to pay more to fight climate change.
Cave clue points to drier Southwest
Global warming will likely lead to dramatic poleward shifts of Earth's wettest storm-laden weather patterns, according to a remarkable 56,000-year-old stalactite found in a New Mexican cave.This means some places, like New Mexico, could dry up while others, like some parts of China, will become very, very wet.
Water vapour caused one-third of global warming in 1990s, study reveals
Scientists have underestimated the role that water vapour plays in determining global temperature changes, according to a new study that could fuel further attacks on the science of climate change.The research, led by one of the world's top climate scientists, suggests that almost one-third of the global warming recorded during the 1990s was due to an increase in water vapour in the high atmosphere, not human emissions of greenhouse gases. A subsequent decline in water vapour after 2000 could explain a recent slowdown in global temperature rise, the scientists add.
Bin Laden blames U.S. for climate change
CAIRO - Al-Qaida leader Osama bin Laden has called for the world to boycott American goods and the U.S. dollar, blaming the United States and other industrialized countries for global warming, according to a new audiotape released Friday.In the tape, broadcast in part on Al-Jazeera television, bin Laden warned of the dangers of climate change and said that the way to stop it is to bring "the wheels of the American economy" to a halt.
He blamed Western industrialized nations for hunger, desertification and floods across the globe, and called for "drastic solutions" to global warming, and "not solutions that partially reduce the effect of climate change."
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"South Africa to Raise Gasoline Prices"
To put this in US Dollar terms, R8.04 per liter, at today's exchange rate of 7.58 Rands to the US Dollar, equates to just over $4 per gallon.
Along with rising electricity prices, this is starting to put substantial pressure on the S. African economy. There really isn't much public transit there either - very much a car culture.
What little public transit there is, is not very safe - there are numerous muggings on trains, for example, for cell phones and small change. One of the main modes of group transit in the city is the minibus taxi - which is often way overloaded with passengers, and the drivers are pretty wild too.
Warfare often breaks out between minibus operators over "turf" . Main arterials have been closed due to outbreaks of gunfire and tossing of "Molotov Cocktails" between taxi operators.
Do you think they'll be able to pull off the World Cup?
If you mean "pull off" in the sense of holding the events, I'm sure they will. It's very important to South Africa. I think there will be a strong police presence, and, like the Beijing Olympics, there will be a lid on things.
Also, soccer is very important as a sport in South Africa. Rugby was viewed very much as the "occupier" sport, while soccer was the "street" sport. Animosities are likely to be put on hold for the duration of the World Cup.
I was thinking more of the sheer logistics of accommodating all those tourists. Over the past year, there have been reports of shortages of everything from jet fuel to gasoline. If the public transportation system isn't good, it doesn't bode well for accommodating all those people who will be trying to get to the same place at the same time.
I think there will probably be additional transport options provided for tourists - rental cars, hotel shuttles, regular taxicabs and the like. That's not to say it will be inexpensive.
Of course, there is also the Gautrain rail project, which, developers say, will be ready in time.
http://www.southafrica.info/business/economy/infrastructure/gautrain-080...
http://www.gautrain.co.za/index.php?fid=1&fp=0
There are funding issues, though, and a tight time frame to get finished. I think it will be a pretty safe option, relatively speaking.
As for accommodation, I think there will be quite a lot of apartment rentals or B&B's available, or if you know someone in-country, friends and family.
People traveling to the World Cup should consider some basic "street wise" safety rules.
1. Don't carry a lot of cash
2. Don't wear fancy jewelry or carry expensive electronic equipment
3. Don't leave purses and bags unattended for even a split second
4. Do rent an in-country cell phone (you can get international service)
5. Do dress down and try to look inconspicuous
6. Do travel light. Whatever you find you need will be available to buy locally.
Oh, and one more : Plan Ahead ! I think it's likely that car rental companies will be oversubscribed. I suspect there will be a lot of "entrepreneurs" offering transport and accommodation. Many may be genuine, some may be scams.
1. Don't carry a lot of cash
2. Don't wear fancy jewellery or carry expensive electronic equipment
3. Don't leave purses and bags unattended for even a split second
4. Do rent an in-country cell phone (you can get international service)
5. Do dress down and try to look inconspicuous
6. Do travel light. Whatever you find you need will be available to buy locally.
I'm sorry, but if these are the requirements of travelling to a country in order to take in a few important soccer games, why would you go? A Yahoo Finance report a couple of days a go (no source - my apologies) said that 1/3 of tickets for the World Cup remain unsold.
I am rather staggered that 2/3 have actually been sold, given that (a) the country is a million miles from where most soccer fans live (who will attend a Korea v Greece game, for instance), (b) the country is as violent as hell, (c) it is not the major sport in the country (cricket and rugby exceed it substantially in terms of international success), (d) the infrastructure in terms of hotels etc is suspect, (e) some of the games are played in very out of the way cities, and (f) most of the locals who would like to to attend can't afford the ticket prices in any case.
I'm staggered the World Cup was ever given to RSA - but I hope fervently that they pull off a good one, and show that Africa can deliver.
I would say those guidelines apply for visiting any large city in the US or Europe, too.
"Why would you go ?"
Well, I imagine, for most attendees, it's an opportunity to visit a country they've never been to before, and for residents, it's an opportunity to host world class players. If you've never lived in a country that was once the subject of international sanctions, I don't imagine you'd get how important this is for people.
"Only 2/3 of tickets have been sold"
There's a new phase of ticketing opening Feb 9th
"(a) the country is a million miles from where most soccer fans live."
Soccer fans travel routinely, all over the place.
"(b) the country is as violent as hell"
Read my first post on this item
"(c) it is not the major sport in the country (cricket and rugby exceed it substantially in terms of international success)"
Cricket and rugby were, historically, viewed as "white" sports in S. Africa. Soccer is viewed as the "peoples'" sport. i.e. the majority.
"(d) the infrastructure in terms of hotels etc is suspect."
Uh - have you actually been there? There are many outstanding hotels, B&B's and rental apartments. People are very hospitable, and this will be a major event. People will be going out of their way to give visitors a great experience.
"(e) some of the games are played in very out of the way cities"
Every city is on a major arterial highway, and they all have airports, and inter-city bus and rail service. For folks with a rental car, it should pose no problem. I've driven Cape Town to Johannesburg, or vice versa, many times, in around 14 hours. In a regular car, not an ATV.
"(f) most of the locals who would like to to attend can't afford the ticket prices in any case."
Cheap seats will start at around R140 ($20 US). That's not exorbitantly expensive. For folks who can't attend, there is TV.
If Chicago had been selected for the Olympics, likely I would not have been able to afford a ticket. It's not about tickets, for locals, it's about stimulating local economies. Lots of people will benefit by providing services to visitors.
There's an obvious trend, with Rio being selected to host the Olympics in 2016.
I think in a situation like this it would make a lot of sense for the US to provide low-interest financing and export subsidies for US clean energy products. Same could be done with other countries facing massive energy crises. Say 500 MW subsidized for wind maybe 100 MW for solar, could make a pretty big difference, and would get US companies a foothold in that market.
There's a large market for Chinese-made solar panels, since they are less expensive. The exchange rate between South Africa and the US is somewhat unfavorable for South Africans, and imports have always been more expensive.
The main issue is how to wean everyone off coal, which is pretty readily available in the country, and they have coal-to-liquids technology.
There is some experimentation going on with thin film solar. It's apparently almost at commercial stage, to be manufactured in-country.
http://www.sagoodnews.co.za/science_technology/sas_thin-film_solar_tech_...
PostScript: From the US point of view, I wish the politicians would start waking up and realizing that the rest of the world is passing the US by in terms of renewable energy.
The Soviet communists tried industry subsidies instead of a free market economy and it led to bread lines. The government is more than a trillion dollars in the red bailing out failed businesses without fixing them. In Russia they used to have to spend their money very quickly because it lost value very quickly. Things have changed there. The Russian government was actually paying down government debt.
The Soviet communists did not allow private enterprise at all. Nobody is suggesting that the US government should do that. Private enterprise with its profit motive has its place but there are some things only a government can or will do. The problem with the private sector is that it is motivated by short term profits. Some things are worth doing even if there is no immediate profit.
Here is a list of some outstanding things done by the US government:
1. The interstate highway system.
2. The space program (NASA & JPL are government entities).
3. Invention of the internet over 40 years ago by DARPA, a government agency. It took 25 years for the private sector to make commercial use of the internet which would not exist if it was not for the government.
4. Rural electrification.
Which of these things do you wish the government had not done?
I think the government must aggressively fund high speed rail and alternative energy programs. There may not be a profit in it today, but you will be creating infrastructure that will be used by the private sector to make a profit in the future.
I'll bite.
All of the above.
INTERSTATES, my extended family is scattered to the high heavens because they can be. I buy products from all over. People drive all the time, is this quality time? How is this beneficial in the long run?
NASA, are you kidding? Is velcro that important? You keep it, and give me my money back.
INTERNET- Ok, so I know of Peak Oil because of it, but the decline is going to be awfully steep because we are so efficient in transferring knowledge. I'd rather be ignorant and protected by isolation.
RURAL ELECTRIFICATION- How does this help, post-Peak? If electrification historically had to pay it's way, we might have local, isolated electrical grids. Even if my grid failed, I could always borrow from my neighbors in the next county. Now, those who prepared for Katrina with a generator had to turn it off for fear of their neighbors.
All these vaulted 'improvements' have driven this country so deep in the hole financially that we will never get out. Now you want to spend more money I don't have. Why are you raiding my kids college fund for your petty project? Get off my back, monkey!
Government intervention has dug us into the hole and it ain't gonna get us out. If you are such a visionary, put yourself into hock and build away. I hope you succeed.
You live in a dream. All those government projects massively padded the pockets of the politically connected while destroying those with small-scale alternatives. Globalization is a curse. Yes, we should think globally, but actions should be local. But with all this massive, unsustainable government intervention, local solutions fail.
The Farm Bill- Killed small family farms
The War on Drugs- Established massive profits for criminals
Three Strikes- Filled the prisons with petty criminals.
Medicare and Medicaid- Led to shorter lifespans
Social Security- Destroyed family interdependence
Federally Mandated Education- Led to lower levels of education
Standing Military- Led to international intervention
Welfare- Destroyed community cohesion
Federal Reserve- Destroyed citizen's ability to save
Government intervention has made us poor, we are in hock up to our eyeballs. Our society is disintegrating. If you can depend upon the government for everything, why do you need a church, neighbors or family?
Need I go on? I don't propose to have a solution for you. You shouldn't pretend to have a solution for me. Sorry for my venom, but you hit a nerve.
Cold Camel
All these vaulted 'improvements' have driven this country so deep in the hole financially that we will never get out.
Not true. 75% of the federal budget is spent on the following:
1. Social Security
2. Medicare & Medicaid
3. Defense
4. Interest on debt
The first two are mandatory entitlement programs, the third is a tool for empire building and the last is the consequence of the first three. None of the above expenditures are related to building infrastructure or advancing scientific knowledge.
The Farm Bill- Killed small family farms
The War on Drugs- Established massive profits for criminals
Three Strikes- Filled the prisons with petty criminals.
Medicare and Medicaid- Led to shorter lifespans
Social Security- Destroyed family interdependence
Federally Mandated Education- Led to lower levels of education
Standing Military- Led to international intervention
Welfare- Destroyed community cohesion
Federal Reserve- Destroyed citizen's ability to save
Government intervention has made us poor, we are in hock up to our eyeballs.
Perhaps you didn't notice that I have not supported any of the above programs. The above programs are related to entitlement spending/social engineering and not infrastructure building or R&D.
The US or Alaska does not exist in isolation. As a society if we don't advance technologically, build high quality infrastructure and grow our economy, we will be at the mercy of societies which do these things. Some of the infrastructure and technological advancement can only come from the government because there is no profit in it in the short term.
Just take a look at what China (which is hell bent on modernizing) has done to Tibet which before the Chinese takeover was very close to the type of society you want. Tibetans are already a minority in Lhasa and virtually all their monasteries have been destroyed. In a few more decades, there will be virtually no trace of Tibetan culture left in Tibet.
Do you want your country or region to end up like Tibet? Do you want the US to fall behind - which will eventually make us vulnerable like Tibet - as other countries build infrastructure of the future, invent new technologies and create better jobs for their citizens?
I disagree with cherry-picking. I challenge you to produce a viable plan to get our present political system onto a sustainable descent path.
Your last three paragraphs are absolutely correct. So how do we get the monkey off our back? Are you all hat and no cattle, or can you whistle up your mob and prove me wrong?
In the absence of a viable plan, I say gridlock is good, but I'm on your team if you can convince me.
Cold Camel
The South African thin film research company is a public-private partnership. I think this is a good approach - you have research and entrepreneurship coupled with supportive policy-making.
Link up top: Oil demand has peaked in developed world: IEA
Why! Why has demand peaked in the developed. I know, the recession caused the current drop in consumption but everyone except us peak oil nuts expect it to last.
What does that mean? What structures have changed that dictates that we will never use as much oil as we did in 2006 and 2007? Don't they realize that the end of growth in oil consumption means the end of growth?
Now I know some argue that growth can continue with wind power, solar power, and coal power but what Birol and the IEA are saying is that demand will stop growing. If demand stops growing then everything else stops growing. And this economy must grow or collapse.
Ron P.
Based on recent trends, I think that oil importing OECD countries can look forward to consuming a declining share of a declining volume of global net oil exports, with developing non-OECD oil importing countries taking an increasing share of a declining volume of global net oil exports.
I live in the developed world, but haven't noticed any major cultural shift toward greater energy efficiency or less desire for energy. Also, our population (Canada) is still increasing rapidly because of immigration. I would say that Birol is full of it.
Hi Frugal,
Maybe you haven't noticed a lot of change yet because you live in a more affluent segment of your society that your handle might suggest.
In my nieghborhood, I see sales of new cars and trucks trending down in size in a very big way,lots of new windows, doors, and insulation being installed, a wood shed at many houses that lacked one a few years back,clotheslines coming into favor again, gardening making a big comeback.
Of course the down turn has hit us here harder than most places, and our part of the country was relatively poor to begin .
Ron, that is what they are saying:
So in their optimistic view oil demand stops growing because everything else keeps growing.
We are headed from 300 million population in the USA to 450 million in the next 40 years or less, BUT we are not going to need as much oil with 450 million people consuming as 300 million. I don't buy that for an instant.
I think the one thing the "leaders" never seem to take into account is the population growth problem.
And of the possibility that the 450 million will be using less oil than the 300 million are using currently because..
a. those 450 million collectively have less purchashing power than the current 300 million
b. the 1.34 billion in China and the 1.17 billion in India will outbid the 450 million of what they would like to have
c. that the 372 million within OPEC (soon to be ?) will burn the 450 millions' portion in their cars and their desalination plants before the oil ever has a chance to leave their shores
d. it is impossible to get that which does not exist
I think 450 million in 2050 is about as likely as world oil extraction peaking in 2030.
Exactly and the likely mechanism to make Americans use less oil will be high prices as the dollar dramatically weakens and international demand grows.
(PS This is not the end of the world but it will be a painful economic transition to a simpler American life style, smaller cars, smaller homes, closer vacations and likely more taxes and obviously much more inflation.)
Yes I don't think there is any way to avoid inflation once bond holders begin to doubt whether they will be paid back ,demand high premiums and refuse to lend for more than a few years out. Inflation charts (and bond yield numbers) for UAE, Iceland, and Greece seem to bear this out pretty well.
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=AED
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=ISK
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=GRD
The temporary 'flight to quality' benefit seen in terms of relative strength can probably disappear pretty fast. , a bit of tightening from China here, (14 trillion dollars in debt) a cut from a ratings agency there and whee! off you slide.
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=USD
I doubt that that will happen. We are headed towards a significant crash well before 40 years from now.
What do you think the U.S. population will be by then? I'm thinking the American Southwest will have a lot less people living there.
Well that depends on the scenario - all out nuclear war perhaps 0. No war but Richard Duncan type collapse (end of the electric grid) perhaps 1 million. Grid still up but global warming in full swing maybe 100 million. Just guesses but I am sure it will be less than the current population
Personally, I believe Olduvai theory is a bit too doomerish. I figure with maybe a 2.2-3% decline in extraction post peak/plateau we'd be looking at a population maybe a bit larger than that of today. Worst case scenario oil is diverted to food production and food transport through rationing while coal to liquids and nuclear is ramped up. I'm not sure, total population depends on how long some form of BAU continues, if amnesty is granted we'd have 20+ million overnight with even more through chain migration shortly. Throwing in an extra 30-40 million people this decade before things really deteriorate could derail any crash program.
Once depletion starts it is inexorable. The 3 percent decline often quoted is per year. Thus in 2040, 30 years from now, we will be at virtually zero oil.
Yes, once oil extraction goes into terminal decline, net oil exports will dry up long before oil stops coming out of the ground. It will be interesting times for sure, but I don't think it will lead to a mass die-off of 90% of the world.
Oil production decline curves are non-linear (exponential, harmonic, or hyperbolic). They approach the axis asymptotically and never actually reach zero. Oil wells and oil fields are generally shut in when they become uneconomic, not when they stop producing completely.
Also, new oil fields are constantly being discovered, albeit not at a sufficient rate to offset the decline, and non-conventional oil is being pulled onto the market by high prices, again not fast enough to offset the decline.
So, I would estimate 30 years from now, global production will be 2/3 to 3/4 of what it is now. You will be able to buy all the fuel you can afford, although that won't be as much as you can afford now, particularly considering there will be more people competing against you to buy it.
As I said in an article that was published in Oil & Gas US Magazine and here at The Oil Drum:
Why has demand peaked in the 'developed' world? Because all those bums who have recently had themselves declared redundant have no motivation to get off welfare and take one of the millions of available jobs out there.
It's all the Obama's fault.
More seriously, Ron, you can not just proclaim that the end of growth in oil consumption means the end of growth (increased GDP), as though the Gods themselves allow no other outcomes. It is perfectly conceivable that oil consumption decline while GDP expands. Especially in the context of economies characterised by massive waste of oil products; for example, in the transport of people and goods.
It's easy to make facile declarations about "massive waste". But since you mentioned transport, much has been bandied about with respect to reducing energy "waste" by forcing everyone to trade a half-hour of driving for two or three hours walking to, waiting for, and creeping along in buses and trams. Such a vast waste of time would certainly be perceived as part and parcel of a markedly decreased standard of living. It might even subtract from perceived "growth" depending on how much of the wasted time had to come out of productive activity.
Other measures to reduce "waste" may have similar consequences. For example, there's constant mention of reducing goods-transport "waste" by railroading everyone into spending countless hours to grow trivial quantities of trivial vegetables in backyard gardens. Those hours, too, will come out of something else.
As all these time-parasites accumulate and suck harder and harder, maybe we'll end up with life something like the way it used to be in Romania (emphases added):
"railroading everyone into spending countless hours to grow trivial quantities of trivial vegetables in backyard gardens."
What is your problem? Nobody is "railroading" anyone into anything. You seem to have a bit of an issue with gardening. Learning to grow food, building soil - these are not trivial things. Are we only to be allowed to purchase food from Monsanto?
I don't know many folks who can grow all their own food, but one can grow a very non-trivial amount of produce in their backyard garden (I do), without spending "countless hours". Hours which are, for the most part, rather pleasant. And more and more people have more and more hours.
Nobody is forcing you to garden for countless hours in your backyard. Your belittlement of the effort of those who would, however, is nonsensical and insulting.
In fact, I would really recommend that PaulS does NOT do any gardening in his trivial backyard, particularly if there are Railroads involved. It could only end badly.
But I'll come by with some baskets of tomatoes and cukes, and will gladly sell them to you Paul, for very reasonable prices!
Bob
No Bob,
He must be railroaded into growing his own.
;-)
Especially vining crops like pole beans and cukes, which must be TRAINED. . .
Ouch!
Paul, I agree with you. Mass transit and victory gardens are consistent with a lower standard of living. Some of us assume -- given our massive debt overhang, our lack of wage competitiveness, the inflated cost of our housing and the likelihood that we are or will soon face serious constraints in our energy supply and other resources -- that these things (mass transit and gardens) will be necessary. I don't want to die a poor, old man. But I think that's the most likely scenario and I'd like to prepare for it.
It depends on your definition of standard of living. If your definition of a high standard of living requires driving a big SUV to work and eating pre-packed fast food, then, yes it would be lower.
OTOH, if you think that having a high standard of living requires having convenient walking and bicycle paths, breathing clean air, having clean free-running rivers, enjoying convenient parks, eating natural food, and getting free health care, then that's more my definition.
In return I was willing to take a wind-powered light rail system to work and grow my own garden so I could pick fresh vegetables any time I wanted a salad. It seemed a fair trade-off to me.
Rocky, there's "standard of living" which I equate with having resources to waste and "quality of life" which I would say is weakly correlated with riches, assuming basic needs are met. I certainly agree that our values are skewed by our desire to keep up with the Joneses.
When I lived in France, it was impressed upon me that a good life was possible without being rich. The French did not have the money to blow that the average American did but still clearly enjoyed their life. My next door neighbor was, for a time, the President of the Automobile Club of France (I believe that was the name of the organization) and he drove an old Peugeot whose paint had seen better days. Any American in such a position would certainly have needed at least a new Cadillac.
Our standard of living is in decline. Our quality of life is somewhat more negotiable.
I wouldn't at all equate standard of living with having resources to waste. I would equate it with having resources put to good use. Let's try some web definitions of "standard of living":
Britannica Concise Encyclopedia: Level of material comfort that an individual or group aspires to or may achieve. This includes not only privately purchased goods and services but collectively consumed goods and services such as those provided by public utilities and governments.
US History Encyclopedia: Standards of Living include not only the ownership of consumer goods, but also aspects of living that cannot be purchased or are not under an individual's direct control—for instance, environmental quality and services provided by the government.
Wikipedia: Standard of living is generally measured by standards such as real (i.e. inflation adjusted) income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used.
Wiktionary.org: A relative measure of the quality of life of a person or group has
MrKersey.org: The material quality of life, often measured by education, housing, health care, and nutrition.
Worldbank.org: The level of well-being (of an individual, group or the population of a country) as measured by the level of income (for example, GNP per capita) or by the quantity of various goods and services consumed.
So, I would say that the World Bank definition is closer to yours, but they are bankers, after all. Not being particularly in sync with the bankers, I would go with some of the other definitions.
PeakOil Tarzan, Atlanta for one has excellent mass transit and I can drive from out in the country to a town where I can pick up a shuttle to the Atlanta airport. Since I frequently visit my elderly dad in Atlanta these two sources of mass transit increase my standard of living. I am not forced to negotiate the dangerous high speed, high crash roads of Atlanta. I can read a book the whole way and leave the worry and work to someone else. MARTA in Atlanta should be expanded and copied in other areas so many more people could experience this increased standard of living.
Hey Paul, what about wasting time in traffic jams. I bet also in the U.S. a lot of people need more than half hour by car to get to work.
Apart from this, a lot of waste IS a part of the economy. In other words, the unemployment would rise dramatically if almost only basic stuff was made.
I think that's quite possible. We may end up with a lot more time than money on our hands, after all. We may even end up paying our taxes via hours worked, as some think the ancient Egyptians did.
How about trading a half hour of driving for a half hour of riding on the area-wide rapid transit system that could have been finished by now if people had taken the oil crises of the 1970s seriously?
You pays your money and you takes your choice. Apparently your choice was freeways.
Gardening is rather relaxing. Many people discover after retirement that puttering around in the garden is one of the most enjoyable things they do. Of course, if you're always under constant time pressure to get places, and too tired to do anything after work other than collapse in front of the TV, you won't have experienced this.
If you'd tried it, you'd know that you can grow almost all the vegetables you need in a rather small garden that will fit comfortably on an average suburban lot - there's a technique called "square foot gardening" that is particularly suitable for small lots and fairly efficient in terms of time and effort.
I managed to grow a lot of the vegetables I needed in the back yard of a 25x95 foot lot, between the house and the garage. The space beside the garage was colonized by rhubarb from the neighbor's patch, raspberries and strawberries took over the space between the fence and the sidewalk, and a cherry tree planted itself beside the house. A lot of this didn't involve any work on my part, but it made for some very enjoyable meals.
Paul:
I walk to and from work, 1.7 miles/45 minutes each way. I can drive the same route in less than 10 minutes. So, am I "wasting" over an hour a day? Do I feel poor and deprived? Actually, no. I do need some exercise, and this is a good way to build it into my life. I know of others who commute by car, and then drive to the health club to exercise. Add their time at the health club to their commute, and there goes that hour "saved". BTW, since they are out of pocket an extra $30/mont in health club fees that I'm not, which one of us is actually "poorer"?
There is more to it than that, though. In my daily hikes I get fresh air, quiet, some connection to nature, some connection to neighbors, and some time to clear and refresh my mind. The people in their cars and at the health club don't get all that. Which of us is "poorer"? I don't think it is I.
As for urban mass transit, earlier in my life when I lived in Indianapolis I commuted by bus every day. I didn't mind it at all; actually, I rather enjoyed it. I struck up friendships with several of the "regulars" who also rode the bus. I also saved quite a bit of money by not needing a 2nd car and not needing to pay for parking. I didn't feel that taking the bus made me "poorer".
And as for gardening, I've grown gardens when and where I could throughout my life. I never have seen it as something I HAVE to do, it is something I WANT to do. I like connecting with the soil, there is something deep inside my psyche that needs that. I like the fresh vegetables. The exercise probably benefits me. Besides, we save a little money. I don't feel that gardening makes me "poorer". On the contrary.
I find it sad that you even need to explain this. I was living the kind of life you describe 35 years ago. Somehow, people just can't imagine surviving without the auto.
Don`t fret!
Peak autos arrived in the US in 2009 and in Japan in 2008. Now their numbers are in decline.
Toyota`s massive recall...GM and Chrysler bankruptcy...Honda also announced a recall....the bigger picture says the auto age is over (but it will take a while before such a massive beast like the car culture finally rolls over and dies)
But the auto age will end!
Look, the new up and coming auto cultures of India and China can only afford light, low-powered, cheap cars. If you add up the weight of all their cars and compare with the same number of American cars` weight added together........you`ll see that they are pushing or speeding or sending less matter cycling around because EROEI is too low now to support the Western standard.
So, be happy!!! Cars` days are numbered. Maybe 10 years or maybe 20. Not more than that probably.
Believe it or not, I'm well aware that people engage in diverse hobbies, and that other people will have a range of opinions ranging from embracing those same hobbies to thinking them completely potty. And I'm also well aware that the same is true of other more integrated activities such as cycling or walking in the course of daily activity.
So I'm OK with someone getting their exercise on the way to work (indeed, this recalls a chat with a European, years ago, who spun a totally hilarious narrative about the so-called train service he had endured from New York to Boston, and about the Americans he had encountered pushing the tillers of wallowing land yachts to try to reach expensive health clubs, in lieu of integrating the exercise into their lives.) I'm OK with someone gardening if that's how they get their jollies. But I'm also OK with someone spending their free time in community theater or music, or for that matter, heaven forbid, skydiving, if that's, er, what floats their boat. Or whatever else within reason.
On the other hand, I certainly know people who would flatly refuse to engage in one or another of those specific activities. I often cycle to work when the weather is not too dangerous, but I'm well aware that many others see that as sheer terrifying madness. I've done community theater, but I'm aware of some who become so overwhelmed with stage fright that they vomit. And, personally, I don't find anything the least bit "relaxing" in being beset by swarms of mosquitoes, no-see-ums, or biting flies, in the process of fishing, gardening, or other summer activity that keeps one in nearly the same place. And I've heard the tiresome "connecting to nature" meme, but it owes too much to too many cheaply charming talking animals in too many Disney movies. "Nature" is not some arcadian realm just of flowers, milk and honey. It's also the mind-numbingly ugly horror-show in which "thousands of animals are being eaten alive, many others are running for their lives, whimpering with fear, others are slowly being devoured from within by rasping parasites, thousands of all kinds are dying of starvation, thirst, and disease" (Dawkins) - and there's nothing much in said existentially arid horror-show worthy of "connecting to", other than to study it in the interest of medicine, pest-control, or the like.
So, what does raise my hackles a bit is the sheer arrogance of a constant ... drumbeat ... of blanket commentary that implies remaking everyone in some imposed image - whether by pushing a favored set of activities or hobbies willy-nilly on nearly everyone, or forcing a near universal removal of cars, or something else along similar lines - as if the would-be imposer could know best what is and is not "waste", and by implication how others ought to live their lives.
Paul, sometimes you don't get the options you would like to have. It's not us that is going to force a near universal removal of cars, it's the fact that people won't be able to afford to buy the gasoline to keep them running.
It's at that point you could thank fate that you bought an 18-speed alloy frame bike that you can ride to work, and convinced your local government to install a wind-powered light rail transit system that will take you everywhere you want to go. You'll be happy that you developed an interest in gardening.
Or not, if you didn't. Life is full of different paths you can take. Some paths are better than others. Some paths lead to dead ends, and it's not a good idea to continue on them when you see where they're going.
Paul, I have absolutely no interest in shoving my personal preferences and inclinations down anyone's throat. I will note that the automobile-centric built environment HAS pretty much been shoved down MY throat. Many people who would gladly elect to take public transport, and really do wish they could, cannot because an automobile-only transportation system has been shoved down their throats.
Also, nobody asked for my approval for the subsidized industrial agriculture that we've developed, and that I am forced to expend quite a bit of time and trouble to circumvent. Ask the people who live in urban "food deserts" how many choices they have been given.
I do think that things are going to change in the future, regardless of what people might want, and the direction of that change in going to be in the form of long-term economic decline. People are going to have to adjust their lives to that, and that is going to mean doing things they might not otherwise do, like raising a backyard (or maybe even a front yard) garden and walking or bicycling or taking public transit to work. Some of us are just being "early adopters" and thus serving as pioneers for our neighbors.
When I read Oil demand has peaked in developed world: IEA I thought:
My gosh! How convenient that oil demand has peaked just when oil supply peaked. Boy. Things could have gotten really bad if we actually wanted more oil than the rocks are prepared to produce. Phew. I fell better now.
Right, Joseph. And, how convenient when you have been denying that oil had or would peak, to have demand fall off. Wow! Now IEA doesn't have to explain anything. It is the demand that peaked. Not supply. Neat and tidy. Or, as George Carlin would have said, "wierd!"
Craig
Me, too.
I think the conventional wisdom (CW) is that there is a trend towards more efficient use in the developed economies, i.e. more hybrids, less SUVs and PUs. There is not
a one to one relationship between oil consumption and GDP, I get the same untility commuting in a Prius as I would with a Hummer, but my oil consumption is dramatically less. So the "oil efficiency" , which means amount of GDP per barrel of oil is increasing. If the rate of increase of the price is moderate the CW may be correct. Remember we are talking about the OECD as a whole, I have the impression Europe and Japan are more serious about conservation than the US, Canada, and Australia. Of course if the oil price spikes, I would expect the developed economies to suffer, particularly those who have given little more than lip service to conservation.
"And this economy must grow or collapse."
Yes, exactly. Herein lies the essence--and the Achilles' heel--of capitalism.
I think the problem is fractional reserve banking, not necessarily capitalism or free markets. If banks did not have to loan out money and get money back with interest, there would not be serious issues.
Mr. Birol chose his words as carefully as he could. In the manner in which he used "demand", "supply" would be synonymous. The oil supplied to these OECD countries will never match the 2006-7 levels.
He also didn't say "alternative energy" or "green" or "clean energy". He said fuel efficiency (speaking mainly about Japan and the EU) and "alternatives", such as biking, walking, and doing without.
250 million cars is China? I'm willing wager hard cash that this will never happen. There won't be enough oil to power all these cars, not even close.
From that same link: Why we’ll pay for China’s car obsession
We have talked about this on Drumbeats but something still puzzles me. Do the Chinese think they can secure cheaper than the world market price? Do they think their resources in Chat, or wherever, will guarantee that they can get their oil at affordable prices while the rest of the world pays much more. Will those foreign governments in Chad, Iraq, Nigeria or wherever sell them oil at a much reduced price simply because of a deal they made years earlier?
I have my doubts. I don't think Russia will give the US a reduced price of the oil Exxon-Mobil extracts fro Sakhalin Island simply because they are a US company. And I don't think China will get any better deal from their "secured supply" in foreign nations.
Ron P.
Doesn't it depend on the terms of the deals that China and each supplier have made? The price paid at any point may be tied to some index.
I haven't seen any indication that China has been looking for lower prices; rather security of supply seems to be the motivation.
Depends toil. As far as purchase contracts there would certainly be some indexing. But the Chinese are also buying working interest in new fields being developed. I don't know the actual numbers but my guess isn't probably too far off: China partners up with the Angolan NOC and invests X millions in developing one of their offshore fields. By doing so China earns a 50% interest in that field. The field ultimately produces Y millions bbls of oil. When you back out production operations costs the Chinese have invested $30 per bbl of oil. At some point the global market price for that oil might be $120/bbl. Even if China doesn't want to use the oil themselves they can sell it and make 4 to 1 on their money. And if they do take physical control of the oil they can ship it to China for $1 or $2 per bbl. Thus they are getting at least some of their oil at $32/bbl while the U.S. is paying $120+/bbl. In a nut shell, that's called oil/NG exploration and development. The Chinese gov't is in that business. The U.S. gov't isn't.
No, they think they can secure enough oil at the world market price. They will simply outbid the US for it. They will pay for it by exporting more and more goods to the oil exporters.
How will the US pay for its oil when China stops propping up the US dollar?
Frugal -- There will be enough oil to fuel those Chinese cars and many more. The catch is, of course, they'll be using oil that we and others thought would avaialble to us. There is plenty of oil left to be produced for many decades. But just not enough for everyone.
In a schrauderfraude way - watching the people who now claim 'the free market should overule government action' will squeal like flaming pigs VS the war elephants in days of yore and demand government action to secure the fuel that was somehow robbed from them - will be entertaining up until the rioting people shoot me in a robbery.
The stats I've seen are that there were over 13 million cars sold in China in 2009 and the current estimates are that they have a shot at hitting 15 million units for the coming year. So, I guess the math comes out at close to 40 million cars by the end of the year.
I'm with you, Frugal, I don't see this ending well (and even more likely, ending SOON).
As an Australian long resident in the U.S., I read with interest The Lleyton Hewitt lesson in solving Australia's population issues in the Sydney Morning Herald, noted above.
However, the proposed solution -- . . . examples of very large successful cities reveals that the only angiogenesis that works is networked public transport: in the US only New York City . . . -- begs some questions.
Does New York work? A quick review of it's status (http://www.reuters.com/article/idUSTRE60R5W520100128) raises some doubts: the city faces a $5 billion deficit; swimming pools are being closed; library hours are being shortened; police and firefighters who leave or die are not being replaced; and the city infrastructure, including the underground rail system lauded by James, is increasingly fragile, haunted by decades of skimping on maintenance.
Yet in spite of this, New York City is indisputably the most expensive city in the U.S. to live in or visit. A far more livable city in many ways is somewhere like Houston, where I live, in spite of the sprawl and the lack of mass transit. It is not an expensive place to live, and the city, while feeling the squeeze of the recession, is only looking to close a budget gap of a few million dollars. Interestingly, the New York budget deficit is larger than Houston's total budget.
Sydney, which is the focus of James's article, is the most expensive city in Australia. My feeling about Sydney is that its worst problems are due to its resemblance to New York, mostly in its sheer size.
Until December when Bill White retired, both Houston and New York had long-serving, popular and capable mayors. Yet Bill White's rating (http://www.citymayors.com/mayor_monitor/houston-white.html) was far higher than Michael Bloomberg's.
Those of us who deplore suburban sprawl need to think about why it is that a sprawling city like Houston seems to be doing a lot better than a denser city like New York. While there are a lot of theoretical advantages, particularly from an energy point of view, of denser population, it seems there are also many practical disadvantages.
I think the answer is obvious: cheap oil. Houston is built on it, in more ways than one.
And it's not particularly helpful to compare such "snapshots" of the economy and political situation. New York is hurting because of the Wall St. implosion. Their economy is very dependent on the finance industry. It has little to do with their density or transit options.
In any case, what's going on now may not be all that relevant to the future, for both cities.
True to a point Leanan. We typically have the cheapest gasoline in the country. And in the Houston area I usually have the cheapest in my neighborhood. But while Houston's density isn't close to that of NYC that's not as critical. We chatted before that a very large portion of metro Houston doesn't drive d/t to work. Find a shot of d/t Houston and I suspect many will be shocked to see how relatively small it is compared to much smaller cities. A large portion of our sprawl live, work, shop, etc in their outlying areas. Many of these folks don't burn more fuel to run their daily lives than folks in small towns. Even the d/t model some offer isn't too representative of Houston. In recent years there has been an increase in multi-unit construction. But the great majority of residents still live in single units. In that sense no different than folks living 30 miles north of Houston in the burbs. All these folks are like deer: they don't tend to roam but a short distance from their home base.
Perhaps what Leanan was pointing to was the profit creaming that oil industries may have enjoyed at $150+/barrel oil and the effects of that money sloshing around the Texas economy for a few years. Here in Wisconsin, we send $10 billion each year out of our state to import oil. Some of that ends up in Houston, I suspect, and Houston doesn't likely consume an equal share of Wisconsin exports.
Not sure I follow wisco. Perhaps I mistook leanan point. Re: equal share...do you think H consumes more or less than "an equal share of Wisconsin exports"?
As far as benefiting from the energy indiustry Texas and La most certainly benefit greatly on many levels. In addition to salaries and commecial taxes the state of Texas actually owns a good bit of oil/NG producing mineral leases. Much of our university system is funded by these royalty payments. We also get a cut of the royalties collected from federal lease off of our coast.
Like Mel Brooks said in that movie: "It's good to be king!"
I meant both, really. In New York, you can live without car quite easily, and many wealthy people do so.
In Houston, even if you don't travel very far, you still need a car.
And the point isn't whether Houston should share its oil wealth with the rest of the nation. It's that it's something that can't be replicated by other cities. Bragging about Houston's budget compared to New York's right now is like someone from Hawaii wondering why all those people in Maine spend so much on heating.
As you know, for most local, regional and national governments in developed OECD countries, it appears to be to what degree their budgets are in trouble--and not whether they are facing budget problems.
http://www.chron.com/disp/story.mpl/metropolitan/6806332.html
Year will be tight for Houston finances
Sales tax drop has Parker facing more of a budget strain than had been expected
I was looking at this gallery of "foreclosure hotspots." It's no longer just the places where real estate got bubbly. The reasons various places got in trouble are widely varied now.
Honolulu is on the list, because home prices are so high there. They're an overcrowded island, and real estate is physically limited. So people used those exotic mortgages to just afford a home where the median price is almost half a million dollars. And the military is a big part of the economy; if they bought a home at the top, then got stationed elsewhere, they lost big.
Portland, OR made the list because so much of their economy is based on the homebuilding business (timber, etc.).
Green Bay, WI is on the list, even though their economy is doing relatively well. People bought "a little more home than they could afford," and even though they didn't lose their jobs, they got their hours cut, and it's pushing them over the edge.
Provo, UT is on the list because their lax regulatory climate resulted in a lot of fraud.
And Gulfport is suffering because the casino business is down, since people have less discretionary income.
I'm not sure who was bragging but Houston has no oil wealth. Houston recieves almost no income from oil/NG production. The state of texas gets a nice check every month though. Granted we have lots of folks earning a living in the energy industry. But all Houston gets from that is the property and sales taxes those folks pay. And I guess I missed where Houston's budget is better than NY. Just how was that so?
Read the post that started this sub-thread.
Thanks Leanan. I get it now. I'm not sure one can even compare the two cites in any meaningful way. Never lived in NYC but I don't think I would try bragging about Big H over my Yankee cousins. Cheaper to live for sure. But we don't make the same salaries here either. Be nice to ride a subway to work. But it's also nice to jump in the car and be laying on a warm beach in 30 minutes. But again it seems like apple and oranges.
Now bragging about Texas is a whole nuther matter. Like a man once said: "It ain't braggin' if it's true."
Thats a diferent discussion altogether. I think the main point is energy, and particularly oil is not feeling the recession as bad as the industries NYC relies on.
But I have no doubt NY infrastructure is very expensive to build and repair. Because of the ultrahigh density any changes require expensive digging and care not to break other stuff. And it does help that the state has its own oilfunded nestegg to call on, so it doesn't have to make massive spending cuts during a recession.
I think you are partially right, in that Houston (and Texas) still have resources to exploit, while NYC is import-bound. But I keep coming back to jobs and cost of living. NYC has few jobs for people like me, while Houston has quite a few. I'm hard-pressed to name ANYTHING produced in NYC except bad financial instruments and some TV studio productions. I'm sure there is some industry, but it's been dying for a hundred years. Houston still builds some stuff, plus has it's resource boon to help grease the skids for other industries.
Oh, it's also cheap to find a place to live there, without funky rent-controls and all that.
NYC does have problems, indeed. The city and the state have relied far too heavily on tax revenues from Wall Street, and that is the single biggest cause of the budget deficits. But to say it is less livable is subject to personal tastes. I lived in Manhattan for fifteen years and despite the small and expensive living space, the city more than makes up for it in many other ways. It's interesting, it's vibrant, and you can live quite nicely without a car.
Also, the comparison to Houston is a bit off in this respect. The city of Houston encompasses 600 square miles that includes both the city center and suburban areas. NYC, with four times the population, is only 300 square miles and is totally urban. To farily compare NYC to Houston, you would need to include Westchester County, Nassau County, and Bergen County -- if you did, you would get a very different quality of life reading.
However, all that notwithstanding, New York's day is yet to come. Once gas prices get high enough to attract the middle class back to the city, the demographics and quality of life in the city will change dramatically. I think that day is not far off.
I came across this from an article cited by Energy Bulletin:
Declining oil supplies
Additionally, it said
I was shocked to see a decline rate of 9% -- that seems incredible. And $360bn is required each year just to reduce the decline rate to 6.4%. I'm sure many here have already seen these figures, but they really threw me for a loop. I was under the impression that we are looking at maybe 4% annual decline. This is much worse than I thought.
Is it accurate? The IEA is not known for pessimistic predictions, so it really makes me wonder.
Thanks in advance for any comments.
Kingfish, the key words here are: Without extra investment. Saudi has publically stated that their older fields are declining at a rate of 5 to 12 percent.
Saudi Arabia
And Russia's old fields have a decline rate of 19 percent and growing.
Alex Burgansky: Russian Oil and Gas Industry Surprises Analysts
Saudi Arabia has of course been re-drilling Ghawar, and their other old fields, with new MRC horizontal wells. And Russia has been drilling 5,000 to 6,000 new wells each year into their older fields, though they are drilling a lot fewer now. Anyway these superstraws have slowed the decline of these old fields to just over 2 percent in Saudi Arabia. I am sure the decline is greater than 2 percent in Russia's old fields but new fields coming on line have kept them on a production plateau. And... a lot of other countries are installing similar superstraws.
However, as I have argued for some time, these superstraws decrease the decline rate but they dramatically increase the depletion rate. It is just a matter of time before the water hits these horizontal superstraws. But it won't hit every country at once but we can expect a lot of them to start to drop very soon.
Ron P.
Darwinian,
You are exactly right that "without extra investment" are key words -- even so, I was shocked that a 9% decline rate is what the producers are up against. But I was shocked even more that $360bn a year is required just to get it down to 6.4%. I can imagine that KSA is well managed enough to make the required investments to minimize their decline rate, but are other producers as disciplined and well managed? If I'm reading the IEA correctly, they are saying that 6% is pretty much a minimum decline rate. If that is true, I don't think there can possibly be enough new production to offset that decline.
Thanks
Ron P., do you know if each field's superstraws are all at approx. the same depth or are they at different depths? For example, are Ghawar's all at the same approx. depth? Just wondering if and when the water does hit, if there will be a loss of pressure all at once for most of the straws or over many months, or even years. Not that it will make that much difference in the long run, just curious.
No, it would be extremely unlikely that they are all at the same depth. Ghawar is an anticline like the one depicted here. That is like as you can see from the illustration it does not have a flat top so the horizontal wells would not all be at the very top. Some would water out before others.
Note: The illustration at this link gives the impression that the reservoir is like a pool. I guess it assumes that we are all smart enough to know that the area pictured as oil, water and gas, is really a sandstone or limestone reservoir with oil, gas or water in the pores. Nevertheless lesser mortals would definitely get the wrong impression from looking at the illustration. ;-)
Ron P.
Thanks Ron for the information and link.
Ghawar has net reservoir thickness over 200 feet, and significant relief above the original oil-water contact (which rather interestingly has a measurable slope itself). But even hundreds of feet of relief over an anticline 12 miles wide and over 170 miles long still means very gentle dips over the whole structure.
This means that small changes in the oil-water contact will affect large areas of the field. But the hydrodynamics of this reservoir must be extremely complicated. It is not simply a case of the oil-water contact gradually getting higher and higher in a uniform manner over the whole field. It wasn't even level before the first oil was produced.
I'm certain Saudi Aramco has a much better idea of what will happen with Ghawar in the future than the rest of the world does. But they aren't telling, and even if they did, we have no way of knowing if they are telling the truth.
Very intuitive Ird. In fact, after 34 years I've seldom seem proof of nice uniform water level movement in what appeared to be nice uniform reservoirs. And, as you point out, I've read the same about the non-uniform nature of Ghawar. We all read about the huge super commputer driven reservoir simulators the KSA runs with the help of their Swiss engineers. I suspect these complexities are what's driving that effort.
U.S. Cattle Herd Falls to 1958 Low
Anecdotes:
My partner and I raise a rare breed, American Milking Devons. Usually, bull calves fetch a hefty price for hobby farmers that like the rare breeds for oxen. Not this year. "Abe" is going into the freezer next month.
While getting some sawdust, we ran into a guy who was working up in Central Maine where there were some calves running around. He said he was admiring this one calf when the farmer said: "Want him? Ten dollars." The guy wouldn't take such an offer: he gave him thirty, out of principle.
The extra twenty bucks might well have gone for fuel for the backhoe used to bury the rest of the herd. Cheaper to bury than to feed.
Except for the occasional pound of bison or venison, red meat is a thing of the past in our kitchen. A bit of chicken now and then and some wild fish is mostly what separates us from veganism.
It can get very ugly toil. Back in the 70's we hit a bad combination of drought and very low cattle prices. A former govenor of the state owned a big ranch with many head. His name is still dirt amongst many Texans for his solution: just let the cattle starve to death. And they did...by many thousands. Didn't even want to spend the money to have them shot where they stood. We might be OK with going out every fall and shooting Bambi's mom for sausage makings but letting cattle starve is another matter in the eyes of many here. I've had to put down stock a number of times. Not a happy chore. But better then leaving them to a slow death IMO.
Rockman - you should see how we Britons deal with Mad Cow. What usually happens is the government doesn't give a frig until it has gone into every corner of the country and then they call the army in and shoot 3 MILLION head of cattle and burn them in giant pits. Like something out of a horror movie. Sort of like Bovine Auchwitz. Not at all pleasant.
Damn HA. I knew you folks had a problem but 3 MILLION head! Don't even like just the mental image.
I learned something new about cows today:
In the US after the Civil War, when beef was first being sold commercially, the average critter was 4 years old--and weighed an average of 400 pounds.
Now there's something to chew on.
According to this, finished weight these days might be somewhere around 1300 pounds. Maybe one of our farmers can weigh in on how heavy those critters can get before they can't mooooo-ve.
Is it something to beef about?
I raise Angus/Simental cross. They are grass feed and slaughtered at the farm around July 1. They are 26 - 28 months old and hang in the butcher facility at 875 to 925 pounds. I slaughter early July before the grass starts to get dry. The result is a grass fed that is equal or superior to grain fed.
And after being driven from Texas across OK and up to the railroad in KS, the meat was about as tough as shoe leather. Put it in a stew or soup long enough and it was just about edible. Grinding it up helped a little bit, too - that's why just about every kitchen back in those days was equipped with a meat grinder.
If you were very rich and went to a fancy restaurant you could get a decent steak, but it didn't come from these cattle, but rather from the very few pampered ones.
I've got venison in the freezer, but have a good local supply of grass fed beef, so still eating the critters. But more vegan all the time, and a lot of foraging (mushrooms now) and berries and fruit, with some fish added on a regular basis.
“We’re forecasting that beef production in 2010 won’t be the smallest since 1958, because the average animal processed now weighs twice as much,”
Ahh, anolbolic steroids, pretty certain it doesn't affect eye/hoof coordination, albeit bovines don't really have a hall of fame? Could it be that more folks concerned with ingesting drugs and animal well-being are joining the vegetarian ranks, other than 3/4 of our household?
Its not steroids. Its selective breeding.
Whole-y cow!
So when does the "human herd" get culled? Aren't we next on the list?
Yup, "finished" on corn-syrup and ready for market. Mooooooo!
Never see again? Well either he sees population growth ending or he sees peak oil soon.
Anadarko drilled 600 ft. oil pay in the Gulf of Mexico:
http://www.anadarko.com/Investor/Pages/NewsReleases/NewsReleases.aspx?re...
This is what one blog says:
Not sure if comparing Lucius to Davy Jones makes much sense. One is a whole lot of oil and the other is a whole lot of NG. One is in water less than 100' and the other is in 7,100' of water. Lucius needs a 70 mile long pipeline (costing 100's of million of $'s) laid to it. Davy Jones had to be careful they didn't set the rig down on top of a NG pipeline. The initial Davy Jones well could be selling NG in 6 to 10 months. It might be 4 to 7 years before Locus sells its first bbl of oil. Production facilities at Davey Jones might run $30 to $50 million. At Lucius they might run $1+ billion. Individual wells at Davey Jones might cost $100 million. Well at Locus might cost $100 million.
I suppose one could compare a cow to a wide screen TV. But I'm not sure that would mean anything more than comparing these two very different fields. They both produce hydrocarbons so I guess someone thinks it has some meaning to do so.
http://www.washingtonpost.com/ac2/wp-dyn?node=admin/registration/registe...
I sometimes wonder how they can publish this obvious b.s. Perhaps we can burn it, at TEOTWAWKI, much the way the Tartars burn camel dung?
It might even be worse if it was true.
Edit:
I just realized the answer to a question that has been troubling me for some time. That is, how are the US Treasuries still selling? Who would want to buy them at 3.62%
The answer came to me, with a sudden cold feeling deep inside. The banks are 'borrowing' money at the discount window at 0.5% and then 'loaning' it back to the US at 3.62% This is the source of the bond purchases. Talk about your halucinated wealth!
Who is paying for the bailouts and excesses? The banks. Where are they getting the money? We are loaning it to them. Barney Frank has to be in on this, with Timmy and Ben, and the deal is, banks keep distressed properties off the foreclosure market... we pay 3.12% of what it takes for the banks to keep the treasury rates low.
Wonder what would happen if we stopped giving the money to the banks. Scarey!
Craig
Re-edit:
This just gets worse and worse. Maybe I am overthinking this, but follow me for a minute.
Bank buys some treasuries at 3.92%, goes to the window and gets more money at 0.5, buys more treasuries, now at 3.85%; repeats until bonds are at 3.57% or so, and departs the market, selling bonds at a profit (when interest drops, price rises in bonds). Nothing huge, except that they got the money at 0.5% and got interest on it at 3.6+ % all along, and they are dealing huge sums here.
Natural forces drive up interest when they leave, and prices drop again.
Repeat!
They make money on the interest; they make money on manipulated bond prices. We lose every way from Sunday.
Leanan! Help me. Or Gail? Someone, tell me how that is wrong!
::whimpers::
As you might expect, Denninger is skeptical.
If past experience is any guide, it's the Chinese and Japanese. The Chinese are buying them to keep the US government afloat and US consumers importing Chinese goods, and the Japanese because their own interest rates are approximately zero.
The Chinese reduced their treasury holdings in 2009. The Japanese can barely finance their own debt.
No, from what anyone can determine, who's buying treasuries is .. the Fed. They're printing up money just as fast as they can. Treasury gets dealers to buy up, and then the Fed takes them in the back door. Not much doubt how this one ends, it's just a matter of when.
What? You mean despite Hillary Clinton's pleading, Beijing is buying fewer US treasuries?
If the Fed is buying them, that is tantamount to printing money. I better get rid of all those American Express traveler's checks I've got in my sock drawer while there is still time.
Fortunately, I have almost nothing invested in US-based stocks and bonds.
I think that what Ben & Co are trying to do is to create new money as fast as it is being destroyed through bankruptcy, default and foreclosure. The trouble with this approach is that we are gradually moving from a money supply that is backed by solid economic assets and activity to a money supply that is built on nothing more than wishes and promises. This may not get us into trouble today, but it almost certainly will down the road.
But wasn't the money supply backed by assets in default and foreclosure just as much built on wishes and promises? At least, it seems to me the part based on asset bubbles would have been.
This is EXACTLY what the banks are doing! How do you think they can post record profits and bonuses in an otherwise down year?
Since the interest on bonds is paid by taxpayers, those big bonuses are in fact coming out of our pockets.
It's worse than you imagine Zap.
The banks are stuffed with toxic assets. The Fed magics money out of a hat, gives it to the banks for the most toxic assets, and puts the toxic assets on the Fed books. This is not called quantitative easing because the Fed bought something.
The banks then buy Treasuries because they need to rebuild their reserves. Treasuries count as reserves but pay interest. Meanwhile the Treasury spends the money on operations. Wash and repeat.
The process has gradually converted 1.2T in make-believe assets in the banks into government operations and profits for the banks.
Collapse of major corporations is contagious, so as things get worse you should expect to see bailout operations expand to all purchasers of suspect bonds, securities, stocks, derivatives, houses, currencies, you name it, but only in ways that keep capital from escaping the system. Economic growth is being imagineered by raising the social safety net with debt. Anyone caught in the net thinks this is a good thing, but the entitlement trap is inescapable. Debt drives out capital.
Here's another one Zap.
The Fed exchanges currency with every major sovereign nation, called swaps. What does the foreign nation do with that money? They buy Treasuries, of course. What do the Fed do with the Yen, Pounds, Francs? We buy their soverign debt. You scratch my back, I'll scratch yours. Now you know why interest rates are so low and exchange rates stable. Now you know why international relations are so subdued.
And a third problem.
The average duration of Treasuries is shortening. Few investors want to tie up their money for 10 years or more, and the Fed doesn't want high long-term interest rates. This is all fine, except purchasers can jump from Treasuries quickly, which increases risk.
Since we haven't hit peak corruption, it is safe to assume a logical soft-landing response is out of the question. TPTB are busy figuring out how to put a hole in the floor so the accelerator (interest rates) can go below negative.
Spend your 'overthinking' on contemplating how it all ends. Those of us with Peak Oil insight have an advantage, as we know sustained economic growth is not possible.
What will inevitably happen is that Peak Oil, corruption and a raised social safety net will make the reward of contributing too small to keep people from dropping out. Meanwhile, individuals with real capital (i.e. can be spent today, like bankers with bonuses) are paying off debt (running away) as fast as they can. The system will shut down, which will make everyone's life worse, including those who dropped out. We're a long way from social collapse, but we have passed the point of no return.
Cold Camel
This is how I see it happening. If we are lucky, the system will flake apart giving each of us the chance to replace withdrawn services with something more controllable. Right now, TPTB want to avoid a violent confrontation which works for us. This gives us time to scale down, re-localize, reduce our exposure to the system. We shouldn't waste the opportunity.
Tarzan, I appreciate the reply, but I don't understand.
How can the system 'flake' apart? How do you flake off pieces of an inflated balloon? You could be right, but I don't see how, so more detail would be nice.
What do you mean by the use of 'we' and 'us'? If you mean you and me, I agree, but the average bloke is toast. Do you mean that Tarzan is using the time, or that Tarzan is doing nothing and hoping that 'we' won't waste the opportunity?
Cold Camel
Long term, I see no chance of preserving this thing we call the United States. Whether that is a bad thing or a good thing will depend upon your politics and your historical perspective. Whatever your feeling about this, it's safe to say that we face an increasingly unstable (read "dangerous") future, both as a society and as individuals.
I was once what I would consider a patriot. Not a flag-waver certainly, but someone who felt an obligation to participate in the political system, to vote, to stand on a street corner holding a political sign. Though I often felt at odds with my countrymen, I still felt that "we" were part of something larger -- something worth fighting for and preserving.
I'm not sure I feel that obligation any more. Some of my disinterest probably stems from mid-life fatigue but some of it arises from the knowledge that this thing that we call "America" is a monster -- a machine that gobbles everything in its path for the sole purpose of supplying baubles to a permanently infantilized population.
It could well be that this thing we call society is prone to brittle failure, not gradual breakdown. I see many indications of this -- witness the paralysis that occurred in the US the week of Sept 11. Witness post-Katrina NOLA. Witness the collapse of the US financial system.
Either way we descend -- whether slowly or in a heap -- there is no time for "doing nothing." The gridlock you refer to upthread will only get worse. As I have said here before, as individuals we have only two choices: to find our own solutions (recognizing that this will involve hardship) or to try to remain plugged into the system and hope that TPTB find you useful.
I wish I could disagree with you Tarzan.
My only quibble is that 'remaining plugged in' is such a seductive route, most people fall into it naturally. That's the path I call 'doing nothing'. The German Jews, French and British politicians did it all through the 1930's. Up until the end, there were valid arguments for inaction.
Of course, inaction was the proper course for the Y2K non-event (at least for those of us not in the computer industry). So you are correct that inaction can be a rational response to potentially impending crisis. Cheers.
Cold Camel
I've read your post twice and will read it again.
Irrespective of the discussion going on upthread, instilling the notion that the system will not continue to function as it has, and that individuals and communities will have to reorganise themselves to deal with drasticly lower energy ,a fraction of the current wealth, and new self support services arrangements are probably some of the best pieces of take away information that this TOD forum provides.
If any significant % of US citizens understood this current economic process (and PO) as clearly and as cogently as you have laid out here we might have a chance at mitigating some of the most painful elements of the coming transitions.
ColdCamel asked how it would end... so I started to follow the threads. Does anyone else see what I see here? We have had "bubbles" for the past 20 years... dot coms, telecom, real estate. Bubbles happen when money piles up without reason, following other money, bad advise and probably not a little propaganda.
So, I asked, what is the bubble today?
How about Federal Debt? If treasuries can sell at 3.62% (actually they dropped today to 3.59%), that means a whole lot of people are buying them. Think money markets. What happens when this bubble, I will call it "The Last Bubble," bursts?
TEOTWAWKI?
I am trying to think about where to reposition. Right now my money is mostly in money markets... where I repositioned it just before the last bubble burst. Ahhhhhhhhhrrrrrgggg!!!!!!!
::cries::
LOL
Well somebody told me gold was for optimists so go for bullets , beans, and booze but seriously I wasn't having any luck anywhere else so I bought solar panels. Edit; We also put together two 'homesteads' ,a repair shop, and small greenhouses. There is a woodlot, a good fishing hole, and a fair amount of good hunting so far.
Yes on the bubbles. Esp the Fed bubble to end all bubbles. Back when the cheap energy quit flowing and it threw the real economy into reverse people who wanted to keep the party going came up with a game series called fantasy financing and we all joined up.
What I wonder is since anyone in power remotely PO aware is bound to be suspicious of any real economic resolution to the debt/revenue/resource quagmire what on earth are they thinking with these absurd machinations?! Money money just give me health, friends and a good bike trail.
Let the music play a bit longer , leave the punch bowl right where it is, and don't ya dare try to tell us the truth.
Cheers
No TEO zap. Not yet. TEO means that everybody leaves the Poker table. But too few players have enough chips to pay the coat check and valet. So when the Treasuries bubble pops, the next one will inflate. Bubbles will keep getting blown and popping, faster and faster but smaller and smaller, until nobody has anything.
Or at least until everybody notices that all the chips on the table won't pay the valet. That's when everybody walks away, but by then, the game doesn't really matter anymore.
It's like trying to pick the exact date that Rome collapsed. What mattered back then is not when it collapsed, but how did your family do?
What do you do? Take a blind leap of faith with your money now, or wait until it is worthless. If you have lots of money, you can take two blind leaps, or wait until it is worthless. No hurries, no worries.
I bought a farm. In a fantastic community. I am aiming for an 1870's existence. I haven't shot my wad yet, so I'm still looking for a better opportunity. Seven years in and I can't see another hedge that comes close.
Cold Camel
You got that one right, Camel! I am working to that end right now.
Craig
They can't do this in every state, but if they can, they're probably going to.
Lenders Pursue Mortgage Payoffs Long After Homeowners Default
That's excellent news - nothing would drive a stake thru the heart of the specu-vestors that drove up the price of houses more effectively than this. Once people get it thru their heads that THEY are on the hook for the risk THEY took then perhaps finally the incessant cheerleading for higher housing prices will end.
I hope the banks use every legal means possible to collect on this. Funny thing is I bet John King et al didn't bat an eyelash when their homes increased in "value" to completely unreasonable levels but as soon as the tide turns then everybody wants a bail out.
The crisis wasn't the lost "value" due to the collapse of the housing market - the crisis was the ridiculous levels that prices reached thereby causing many, many financially responsible people to have essentially lost a decade because they didn't want to participate in this nonsense.
Catskill, you're starting to sound like the Republican Health Care Plan, "Don't Get Sick".
We didn't speculate any further than expecting a fair market price after renovating an 1887 historical house. Two years of sweat equity and a lot of cash and here we are so far under water that if we paid off the mortgage as expected with a generous appreciation rate from here on out (hold the guffaws), we would be negative $200+K. (Not including the $100K in down payment and cash injection).
Foreclosure homes are going for $21K or $35K in the same neighborhood. I know because my in-laws bought those homes. What we are seeing is a propensity for speculation and carpet-bagging. Did we get caught up in the "equity as wealth" psychosis, ya betcha. But, in the net worth valuation, that's where we all were.
But the Louisiana Purchase was speculation, and Alaska was speculation. Done pretty good with those so far, eh?
145 years after the Civil War, slavery returns to the USA.
The problem is not people who borrowed money they couldn't pay back, it's the banks who loaned these people money under terms they didn't understand, and then repacked and collateralized the mortgages and sold them to people who didn't understand what they were buying.
At this point in time a lot of people don't know who owns the mortage on their house and have no way to get in touch with them, so they can't renegotiate the termsd. The people who are managing the mortgage just automatically foreclose on it because they don't really know who owns the mortgage, either. They have no authority adjust the terms or get creative about refinancing, and no motivation to do so, either.
If the bank that issued the mortgage (rather than the people who bought the repacked version) was stuck with the cost of the defaults, and the money came out of the management's bonuses, that would create a whole different mortgage market. They would be a lot more careful who they loaned money to.
Bingo! That's it in a nutshell. The very last thing Congress (and others) ever wanted in the whole world was for lenders to be "careful".
No, Congresscritters wanted to purchase votes by making life "fair". Meaning that the idiot, not worth even minimum wage, who could never figure out getting the noon bus off the square when the big hand and the little hand are both on the twelve, was to borrow a large sum from thin air and "buy" a palace. And the idiot, not worth even minimum wage, who sat around on his/her big fat nevermind spectating while machines blindly and automatically put the fenders on cars going down the line, was to do likewise. Then, periodically, the two would flip their palaces back and forth to each other.
This model was to extend across the economy. At each flip, "values" would rise, leaving a residue to be cashed out regularly. So our two idiots, and all the other idiots, would never have to work again. Everyone would become rich, finally making life "fair" for ants and grasshoppers alike.
Too bad, but apparently it didn't work out that way.
Yes, it's true that the US Congress is ultimately responsible for the mess. The people who were taking out these mortgages had no clue what the implications of them were if things went South.
I'm actually in Canada, and we had none of these problems. The banking rules don't permit it because the Canadian government thought that the US rules were a bad idea. No Canadian banks have gone under. Some of them have been fined hundreds of millions for reselling these creative repackaged US mortgages in Canada. That keeps them in line.
Can they get blood out of stone? I guess we will find out.
There is a doctrine that lets banks trade debt, cancel defenses and still collect against the borrowers. See D'OENCH, DUHME & CO., INC. V. FDIC, 315 U. S. 447 (1942).
Here is a discussion:
http://supreme.justia.com/us/315/447/
I learned a bit about it during the savings & loan crises of the 80's (so if any of this looks a bit familiar, we have had experience), and it will come back to haunt us.
What happens is that homeowner is lied to, and signs a loan agreement. The loan is then traded to a second lender. First lender bellies up, second lender gets in trouble and the loan goes to the Gov't, who collect against homeowner, who is the only one still standing. He defends by interposing fraud. The fraud could be patent... doesn't matter. He loses because the defenses were extinguished.
We're all screwed.
Yes, the US financial institution lobbyists have managed to game the system to where it's a "heads we win, tails you lose" experience for the average person. It's a case of the victim paying, because the government doesn't want to get stuck with the loss.
Heaven forfend that a banker should have to pay because he did something unethical.
Recourse loans?
Note the decline in oil exports versus the decline in crude production.
http://uk.reuters.com/article/idUKHAN37097920100129
Vietnam's Jan crude oil output plunges 26.2 pct y/y
Here are the EIA rate of change numbers for Vietnam, from 2004 to 2008:
Production: -3.5%/year
Consumption: +4.8%/year
Net Oil Exports: -46.0%/year
Leanan,
The link to "Overcoming the Ugly Factor in Building-Integrated Solar Design" is circular - i.e. it brings me back to the Drumbeat. Can you fix it? Thanks.
Sorry about that. Should be fixed now.
The "circular linking" thing means the link is formatted incorrectly. If the link can't read correctly, you're automatically routed back to TOD's main page.
the link:
Who Will Build The Ark?
http://www.countercurrents.org/davis290110.htm
sez we need six earths for everyone on earth to live like an uhmerikan.
i have seen this figure bantered about the webtubes for quite some time.
so....titan, a moon of saturn is covered in hydrocarbons. IT HAS LAKES OF METHANE!!! let's build a fleet of space ships and go get it. it will happen. the chinese will do it.
so how about russia's 5th gen fighter jet? and the resurgence of the cold war? spend trillions of dollars on that, hey? missile shields,
atom powered submarines, tanks, bullets, exactly what is the carbon foot print of all that? talk about waste!
i say lets' reduce our lifestyles by reducing the military.
hillary clinton warns china it may be isolated if it supports iran.
HAH-HAH!
"it's all good"
We'll be mining those lakes of methane before we ever cut the militay budget. Promise.
Update on Mainshill.
http://coalactionscotland.noflag.org.uk/?p=1110
I know that in the US you have no tradition of direct action, but couldn't Virginia mountaintops have done with something like this?
“As Climate Chaos grows exponentially worse, it is becoming more and more important to resist and obstruct the ever enlarging fossil fuel industry. We will do everything in our power to make the extraction, transport, and burning of coal as financially unviable as possible by continuing to fight against it at every step of the way, from the mines to the power stations.”
Update on US coal here
http://www.huffingtonpost.com/jeff-biggers/mountaintop-removal-mayhe_b_4...