Drumbeat: January 31, 2010

Yemen clashes continue, ceasefire offer rejected

SANAA (Reuters) - Yemen rejected a ceasefire offer from Shi'ite rebels on Sunday and said fighting was continuing, as neighbouring Saudi Arabia accused the insurgents of mounting sniper attacks inside its territory. The conflict with the northern rebels, who complain of social, religious and economic discrimination in the southern Arabian state, has rumbled on since 2004, but intensified last year and drew in oil-rich Saudi Arabia.

Yemen is also struggling against al Qaeda and southern secessionists, and Western powers fear it could become a failed state.

Saudi to spend $120 bln on energy projects

DUBAI, Jan 31 (Reuters) - State-owned Saudi Aramco plans to invest around $120 billion over the next 5-6 years in developing projects in the oil and petrochemicals sectors, the company's chief executive told Arabiya TV.

The world's top oil exporter has completed a number of refinery expansions and is now working at meeting the country's gas demands in addition to moving downstream into production of petrochemicals.

Saudi Arabia eyes India to enhance its oil technology

Saudi Arabia has decided to take advantage of strong ties with India and its proximity to the region to seek technological assistance to support a massive expansion drive by its state oil operator, the company said yesterday.

Saudi Aramco, the world's largest oil producing firm, said it had set up a company in New Delhi to oversee increased imports of oil equipment and expertise for its expansion projects in crude oil, refining and petrochemicals.

Mexico shuts Gulf oil ports due to bad weather

MEXICO CITY (Reuters) - Mexico's three main oil ports in the Gulf of Mexico were closed on Sunday due to poor weather, the government said.

Mexico Ends 2009 With Fiscal Deficit Equal To 2.3% Of GDP

MEXICO CITY (Dow Jones)--Mexico ended 2009 with a fiscal deficit equivalent to 2.3% of gross domestic product as the government increased spending to cushion the impact of a recession that crimped tax revenue and oil income.

The Politicization of Food Aid Under One-Party Rule in Ethiopia

The West has provided hundreds of millions of dollars of food aid to Ethiopia in the past several years. However, donor countries have placed few monitoring and accountability mechanisms to ensure that the aid provided is delivered to the target populations.

As a result, the ruling party has been able to effectively use relief aid to mobilize support for itself and undermine support for its opposition.

Mongolian herders move to cities as snowstorms kill livestock

Snowstorms battering Mongolia since late 2009 have devastated livestock numbers, forcing herders to migrate to urban areas in search of work.

The cold snap and heavy snow have killed more than one million livestock, the herders' main source of income, according to the National Emergency Management Agency (NEMA).

The bad weather also has reduced food security, intensified poverty and increased domestic rural-urban migration of many families.

Fall in gas-tax funds pinches rural paving

Shrinking gas-tax revenues across the state will mean fewer gravel roads will be paved and northeast Indiana roads in general will receive less maintenance this summer.

Some counties say they could be a few years away from switching roughly paved roads back to gravel because of a chronic lack of money. Allen County, however, has seen its budget increase and plans to pave more county roads.

Church Puts Solar Panels On Roof To Promote Green Life

One of the most prominent and historical churches in Yerevan, Armenia uses solar panels on the top of its roof to promote renewable energy and green lifestyle.

One can agree that it is a very rare phenom to see solar panels on the top of the roof of the house of God. Moreover, when solar energy panels are seen on the roof of an Orthodox church, known for its conservatism, the challenge to reconsider your view on Orthodoxy and its approach to stewardship of creation becomes irresistible.

Canada outlines greenhouse-gas targets

Environmentalists and opposition politicians are dismissing the Conservative government's latest pledge to reduce greenhouse-gas emissions, with one group predicting they'll actually increase under a new agreement hammered out last year.

The 10 anti-anti-commandments and Lord Monckton's verbal bombs

Dr Pachauri has denied all allegations made against him. No charges have been laid. Since becoming head of the IPCC in 2002 he has been an outspoken advocate for international action and co-operation to mitigate the affects of global warming. In 2007, he accepted the Nobel Peace Prize on behalf of the IPCC.

Lord Monckton's Sydney bomb-toss: "Pachauri is being investigated by the [UK] Charity Commission. He faces the possibility of going to prison."

Peak demand vs peak oil, the debate picks up in Davos

(MENAFN - Arab News) Global energy outlook too has been under the hammer at Davos - and despite the freezing cold temperatures outside the huge auditorium - the debate was enough to keep adrenaline flowing. A battle was on - with the crusaders arguing that peak oil was just round the corner. And there were defenders, warning, and rather forcefully, that it's this buzz that would keep the demand - supply balance stretched in the coming years and not any lack of resources.

Indeed many in this part of the world, including this writer strongly believe that the worries over oil production peak have at least been relegated to a back burner, if not totally discarded. Yet the debate in Davos once again reminded us that the peak oil pundits are not going to give up - despite some recent setbacks.

Notes from Davos: World Energy Outlook

On Thursday the Davos World Energy Outlook Panel took place. It's well worth a look, you can find the video or podcast here. The participants were:

Chair: Daniel Yergin - Cambridge Energy Research Associates


Thierry Desmarest - Chairman Total (TOT)
Khalid Al-Falih - CEO Saudi Aramco
Tony Hayward - CEO BP Group (BP)
Peter Voser - CEO Royal Dutch Shell (RDS.A)
Andrew Liveris - CEO Dow Chemical (DOW)
Ilham Aliyev - President Azerbaijan

Oil, Coal Barges Back Up on Ohio River on Lock Damage

(Bloomberg) -- Barge traffic on the Ohio River halted at the Greenup Locks along the border between Kentucky and Ohio after a 240-ton gate was damaged, stopping shipments of coal to about 30 power plants and forcing at least one refinery to slow oil-product deliveries and curtail production.

Lukoil, Statoil Sign Contract for Iraq’s W. Qurnah-2 Oil Field

(Bloomberg) -- Iraq, holder of the world’s third- largest crude reserves, signed a contract with a group led by Russian producer OAO Lukoil to develop the West Qurna Phase 2 oil project at a ceremony in Baghdad today.

Oil firms missing targets face 'huge fines' - Iraq

BAGHDAD (Reuters) - Oil companies have committed themselves to the ambitious targets set in deals signed this month with Iraq and face fines of billions of dollars if they miss them, the Iraqi oil minister said on Sunday.

JPMorgan May Not Acquire U.S. Units of Sempra, Times Reports

(Bloomberg) -- JPMorgan Chase & Co. may acquire some of Royal Bank of Scotland Group Plc’s Sempra Commodities stake while excluding its U.S. activities, the Sunday Times said, without saying where it got the information.

Tesla to stop selling electric sports car next year

It sounds like the initial public offering of electric-car maker Tesla is already being greeted with skepticism, but some of the fine print about its plans may give potential investors even greater cause for concern.

A reading of the fine print by Wired's Autopia blog uncovers some disturbing product planning news. To wit, the company only product, the first true freeway-capable, mass-produced electric car of the modern age, will go bye-bye next year

Suzlon Energy Expects More Orders on Alternative Energy Demand

(Bloomberg) -- Suzlon Energy Ltd., India’s biggest maker of wind-turbine generators, said it expects orders to increase this year as a recovering global economy rekindles investments in alternative energy projects.

In Portland, Going Green and Growing Vertical in a Bid for Energy Savings

PORTLAND, Ore. — Urban gardening used to seem subversive. People planted tomatoes in public parks, strung their hops to rooftops to make homebrew and reclaimed empty lots as community farms, never mind the property owner.

Yet here in one of the more thoroughly tilled cities in America, subversive has come full circle: the federal government plans to plant its own bold garden directly above a downtown plaza. As part of a $133 million renovation, the General Services Administration is planning to cultivate “vegetated fins” that will grow more than 200 feet high on the western facade of the main federal building here, a vertical garden that changes with the seasons and nurtures plants that yield energy savings.

Green future

Silicon Valley earned its name and first great fortune as the cradle of the computer age. Then it built a launching pad for the Internet age. Now it has assumed a leading role in the global competition to develop renewable energy and other clean, green technologies.

Cleantech is poised to be Silicon Valley's third great wave of innovation — not just the next big thing, but perhaps the biggest thing ever. Confronting the peril of greenhouse gases and climate change happens to be a multitrillion-dollar business opportunity.

Exelon backs Obama's carbon capture initiative

THE biggest US nuclear power generator has joined the government's flagship initiative to clean up coal-fired electricity generation in the face of climate change, signing on to a project other utilities have abandoned.

Exelon said it intended to join the FutureGen Alliance, a US government-backed project to capture and store greenhouse-gas emissions from a coal-fired power plant planned for Mattoon, Illinois.

India Pledges to Cut Emissions

NEW DELHI--India committed Sunday to reduce the intensity of its carbon emissions by 20% to 25% by 2020 from 2005 levels, meeting a deadline for developing countries to set voluntary carbon-curbing actions.

In its statement announcing the target, the Environment and Forests Ministry didn't spell out what measures India, the world's fifth largest polluter, would take to meet the goal. The statement also said the targeted cuts won't be legally binding.

Copenhagen climate deal gets low-key endorsement

OSLO (Reuters) – Nations accounting for most of the world's greenhouse gas emissions have restated their promises to fight climate change, meeting a Sunday deadline in a low-key endorsement of December's "Copenhagen Accord."

Experts say their promised curbs on greenhouse gas emissions by 2020 are too small so far to meet the accord's key goal of limiting global warming to less than 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times.

Power bills could rise
New conservation agency’s programs will cost $23m to implement this year

Nova Scotians will be digging deeper in their pocketbooks to pay their power bills with the rollout of new energy conservation programs under an independent agency the province has set up.


Alan Richardson, a vice-president of Nova Scotia Power, said the energy conservation programs will cost $23 million this year and the cost is expected to rise next year when many of them, such as a business lighting retrofit, will be expanded into more areas of the province.


"A large study was done to meet electricity needs going forward," Mr. Richardson said. "Is it better to build a power plant to supply the load or is it better to run these programs to eliminate the load? It was found that it is much better to run these programs and not have the electricity usage in the first place."

See: http://thechronicleherald.ca/Business/1164522.html

Nova Scotia Power's load grew an average of 0.9 per cent per year over the five years spanning 2003 through 2008 and is projected to increase 0.6 per cent annually over the next ten years. In 2010, the utility's DSM initiatives are expected to reduce peak demand by an estimated 25.8 MW and its energy supply requirements by 82.7 GWh. By 2017, the cumulative reductions are pegged at 392.1 MW and 1.9 TWh respectively.

To meet its 2013 RES targets, Nova Scotia Power will be adding an additional 471 MW of wind capacity (currently, 110 MW).

Source: http://oasis.nspower.ca/site-nsp/media/Oasis/2009%2006%2030%2010%20Year%...

Aggressive DSM + wind will go a long way to weaning this province off imported coal and oil (roughly 85 per cent of our electricity is presently generated through the burning of these two fuels).


the utility's DSM initiatives are expected to reduce peak demand by an estimated 25.8 MW and its energy supply requirements by 82.7 GWh.

I know from personal experience that aggressive pursuit of "negawatts" is the first step to mitigating our energy situation. Best hopes for efficiency + alternatives. Cudos for NS!

Regarding the discussion about Peak Oil vs. Peak Demand, this is now the cutting edge of the fossil fuel debate, and as I pointed out on TOD a couple of years ago, is of great concern to the oil producers, in particular Saudi Arabia and OPEC:


While the Saudi's assert again and again that the oil producers of the world can deliver over 100 million barrels per day, the question now is how many years (if ever) would pass before the world market could absorb that volume of oil (leaving aside the debate of whether they can actually produce it). The Saudi's, while never showing any real sign of worry about whether or not they could deliver the oil, have at times shown signs of panic concerning whether they could find buyers for it over the long haul.

Green legislation and market pressure will put pressure on all developed nations to never get to that 100 million barrels per day consumption level, even if the oil can be affordably delivered. Balance of trade issues insure that most nations could not possibly stand to export the amount of currency required to consume oil in such a profligate way. In other words, the developed world would hit the "peak money" wall long before the "peak oil' wall (unless you take the position that the two are one and the same, but the debate now becomes one of policy and economics, not technology and lifestyle).

So what does it all mean? Simply this: All political and economic pressure is setting the developed world up to get off oil as it's essential fuel for future development and growth, again, whether the oil is out there to be gotten or not. The peak oil debate and energy policy for the nations of the developed world will only get more complex in the upcoming years. Those hoping for a return to a simpler age seem to be bound to be disappointed.


the question now is how many years (if ever) would pass before the world market could absorb that volume of oil

Sorry, I think this question is utterty pointless, without relevance. Even it mass peace in the world broke out and martians came down and built us 1000 new drilling rigs there is no way the world could get to that figure. What bit of the megaprojects articles did you disagree with to come to the conclusion that worrying about how we would absorb 100mbd was a relevant question?

Green legislation and market pressure will put pressure on

What Copenhagen meeting did you watch?

The peak oil debate and energy policy for the nations of the developed world will only get more complex in the upcoming years.

Let me simplify it somewhat. Modern man owes just about his entire exsistance to fossil fuel and our entire infrastructure is built on it so we aint going to stop using it any time soon, developed nation or not.

My last caveat Roger is to say I always respect your ideas and posts here but I personally think this one is far out on leftfield!!



On the 100 million barrel per day number, I have long felt that the world suppliers cannot get there either (in agreement with you) but they constantly insist they can, so I simply said, in effect, okay fine, even IF they can deliver the 100 mill, is there any chance that (a) the developed nations can deliver the money it would take to buy over 100 million barrels per day (unless we assume the oil price drops back to $20 per barrel) and does anyone assume that the world, which is already near hysteria regarding carbon release would accept the carbon release from over 100 million barrels per day?

And yeah, Copenhagen was a joke, but it was intended to be from the start, a way to humiliate any of the nations who came there to show off and then couldn't commit (Obama walked into that one, actually Bush used to play it smarter, saying simply that we won't commit to anything because we may not live up to it! He at least wasn't made to look like a loser in front of the world on camara, at least not on that issue) but Copenhagen is a blip, all the political pressure from the greens in Europe and the moderate to left of center in the U.S., Japan and China are on the side of carbon limits, the argument is simply over who is going to have to foot most of the bill.

To your closing point "Modern man owes just about his entire exsistance to fossil fuel and our entire infrastructure is built on it so we aint going to stop using it any time soon, developed nation or not", I agree absolutely. But as many people here on TOD point out, it does not require the stopping of the use of oil to be revolutionary, simply a stopping of the growth of the use of oil would radically alter the economics of the industry. If this were caused by peak supply (as many here on TOD assume will happen first) or peak demand first (as oil suppliers, in particular OPEC, are showing increasing worry about) the effects on the investment of billions of dollars (possibly even trillions worldwide over years) wuld be altered. Why would the Saudi's and others invest in huge development plans if they could not be assured a growing demand curve to help drive price for the product? Why would the Brazilians be willing to spend billions far out in the ocean unless they can be assured of a growing demand curve? The fact that oil will still be used in some considerable amount well up to the year 2100 (and I think that is absolutely the case) does them no good in recouping those massive investments.

Again, sorry if my ideas on this don't seem to suit, but I have tried to chess game this one, and come up with some other sensible option, but I am going to bet with the ones who seem to get things right over and over again, the Saudi's, who are convinced that their hardest job will not be to find oil but instead to find customers with both demand for more oil and with money to buy it. The times they are a changin'...


OK, let me move my Knight! if we take Ron's point that Peak demand IS peak supply then we are already at the point where you say simply a stopping of the growth of the use of oil would radically alter the economics of the industry. ie we HAVE seen a drastic alteration - at least most economists/leaders etc would agree that the world has hit some limits in (temporary?)terms of growth.
To follow on then at some point everybody is expecting us to come through this and demand will pick up again. This time however enerygy will be starting off from a higher base than before......rinse and repaeat you get the picture. We are pinched in the bud becasue energy is so expensive. And why is it so expensive....because it's not being pumped fast enough..ergo we hit the limits becasue of a lack of supply, not a lack of demand.

That really is the most sense I can make out of the situation. I think you think we still have to get to that point but I would argue we are already there!Just maybe if Global warming were 20-30 years down the line just now then we would create a delibirate peak in fossil fuel.......


Roger: When it comes to OPEC members, watch what they do, not what they say. Way back, when they upped their reserves without discovering any new oil, to me, that told the whole story. They lie! Also, as far as KSA is concerned, they have high birth rate and going higher with most people under 25 and unemployed, the old school cannot tell these people, "We blew your inheritance" or they will be killed.

Not to worry though, spring is soon to be here in the high desert and it's time to get out the garden catalogs and plot this years garden.

...Also, as far as KSA is concerned, they have high birth rate and going higher with most people under 25 and unemployed,...

According to Earthtrends database Saudi Arabia has a birth rate that has been dropping in a fairly straight line from 49 per thousand in 1950-55 to 27 per thousand in 2000-2005. Still high by western or European standards but dropping significantly.

Roger, great post but I will have to disagree with most of it. But first I have a comment on Peak Oil verses Peak Demand. They are basically the same thing. That is as the price of oil goes up due to the plateau of production; prices naturally go up, killing demand. Therefore we do have peak demand but that peak demand is caused by peak oil. That is the part that the peak oil deniers cannot or will not accept.

You state that: "Green legislation and market pressure will put pressure on all developed nations to never get to that 100 million barrels per day consumption level, even if the oil can be affordably delivered."

What green legislation? What bills have been passed, by any nation that limits carbon emissions or in any way limits the consumption of oil? There has been lots of talk but nothing remotely close to actual laws put into place and I doubt that we ever will. Well, any that will make one whit of difference that is.

We will never get to 100 million barrels per day because of peak oil and for no other reason. Non-OPEC C+C peaked in 2004 and both the IEA and the EIA say Non-OPEC All Liquids will peak this year. That means that the entire 15 million barrels per day needed to reach 100 mb/d would have to come from OPEC. Well, actually it would need to be a lot more than that because by 2020 Non-OPEC will have declined by from 5 to 10 mb/d. Also OPEC's old fields are also in sharp decline so they would have to make up for that decline also. So to make up for all the declining production plus increase world production they would need to come up with about 30 mb/d of new oil. Fat chance!

You say: "All political and economic pressure is setting the developed world up to get off oil as it's essential fuel for future development and growth, again, whether the oil is out there to be gotten or not."

My question is; Get off oil and onto what? The idea that we will simply, because of laws and economic pressures, transaction to some other form of energy is a joke! Coal is just another dirty fossil fuel and if we switched to coal generated electricity for an electric fleet, we would just be getting out of the frying pan and into the fire. And we for sure are not going to build enough nuclear power plants to make that transition. And that would be a transition that the world in midst of a deep recession, on the brink of a deep depression, could never afford to make anyway.

Sans fossil fuels and nuclear power there is no other form of energy. I know, I know, there is wind and solar and whatever but the idea that the world can continue business as usual with these so called renewables is an even bigger joke.

And you know Roger that I haven't even gotten started yet. We are deep into overshoot. Even if we found a free source of completely clean energy... things would only get worse. Currently we are acting like parasites that are dedicated to killing our host. And as our numbers grow by about 70 million persons per year, it only gets worse. Even if we did find that magic clean free energy the entire ecosystem would collapse by about 2035 anyway. Cheap abundant energy has enabled our numbers to grow until we are at the brink of the destruction of the natural world.

Ron P.

So we all seem to agree that contrary to what the Saudi's are saying, 100 million barrels per day, never (Christophe de Margerie, exploration cheif and later big cheese at Total of France has been saying that for years), what we are now discussing is whether it will be becausee of peak oil happening befor demand peaks, or peak demand hits before peak supply hits...

And the only reason the order of the above events matter is because one (peak supply first) is much harder on the economy of the world than the alternative (peak demand happens first), because as you pointed out Ron, the two will have to match out before long (supply and demand).

To the question of what will replace oil, I will not go back into how much will move over to natural gas and use of electric grid power to shift off of oil, but that will happen in a bigger way than most folks probably assume (think of how oil use for electric power production essentially disappeared after the 1970's crisis and in less than a decade, one of the most radical switching operations in energy history), but point out that a lot of oil consumption will be wiped out simply by waste reduction (logistical changes in business and transportation) and vehicles that waste less fuel...we could argue the exact technology and details all day, but I am accepting as my first premise that oil consumption will NOT recover as the economy recovers, and that recovery is turning out to be a pretty wobbly one anyway.

The oil companies may have to wait awhile to see any real increase in oil demand...but I don't have to go through all this explanation, simply go and find some old magazines and newspapers from 1982 and points just after, and imagine if the technology to reduce oil waste had been about 10 times better. Even if with crap technology oil demand collapsed for over a decade after the last recession...one wonders when we will see the old high on the demand side this time...my bet, NEVER, but even if it we did get back in 15 or 20 years (and that is not unrealistic even if we ever recover given the example of the 1980's, we would be talking about reaching the old oil consumption high in about 2025 or 2030...but that is assuming a dead technology stop on efficiency design for the upcoming two decades...

I just can't make that scenario work either, but if I'm completely wrong, I will suffer worst, because I am pretty much betting my investment and planning on the scenario I have outlined (no return to old oil consumption levels, or if ever, 15 years out as a hedge bet)...you have to bet your money on something...:-) so wish me luck!


IMO, a plausible estimate is that we have already burned through something like 20% of post-2005 global cumulative net oil exports. In any event, my analysis of Saudi net oil exports versus oil prices in the 2002 to 2008 time frame:

Saudi Cumulative Net Oil Exports Versus US Oil Prices
2002-2005 & 2005-2008 (EIA, Total Liquids)

One of the primary contributors to the 2002-2005 increase in crude production, followed by the 2006-2008 decline was Saudi Arabia, but let’s look at Saudi net oil exports, which are defined in terms of total liquids, inclusive of natural gas liquids and refined products.

Here are the average Saudi net oil export numbers per day by year, versus average annual US spot crude oil prices:

2002: 7.1 mbpd & $26

2003: 8.3 mbpd & $31

2004: 8.6 mbpd & $42

2005: 9.1 mbpd & $57

2006: 8.4 mbpd & $66

2007: 8.0 mbpd & $72

2008: 8.4 mbpd & $100

Relative to the 2002 net export rate of 7.1 mbpd, in the following three period, 2003-2005 inclusive, the cumulative three year increase in net exports was 1,716 mb, versus a three year increase in oil prices of $31. So, for every dollar increase in oil prices, three year Saudi cumulative net oil exports increased at 55 mb per dollar, again relative to the 2002 rate.

But then we have the 2006-2008 data.

Relative to the 2005 net export rate of 9.1 mbpd, in the following three year period, 2006-2008 inclusive, the cumulative three year decline in net oil exports was 841 mb, versus a three increase in oil prices of $43. So, for every dollar increase in oil prices, three year Saudi cumulative net oil exports fell at 20 mb per dollar, again relative to the 2005 rate.

Note that in early 2004, the Saudis reiterated their support for the stated OPEC policy of maintaining an oil price band of $22 to $28, and they made good on their promises to support lower prices as they significantly increased net oil exports in the 2003-2005 time frame, but then in early 2006, they started complaining about problems finding buyers for all of their oil, “Even their light/sweet oil,” even as oil prices continued to increase. Apparently no one thought to ask them in early 2006, as oil prices traded over $60 per barrel, why they didn’t offer to sell another two mbpd of oil for $28 per barrel.

RC Yesterday Swerve,expressed an opinion that the Saudis had 4MBD of excess capacity. For many years Sheik Yamani, Harvard educated and a brilliant economic tactician, ensured that Saudi oil production kept oil prices in a range which limited the development of alternative forms of energy. This is what stopped alternative energy development in the 70's.

I don't believe the Saudi's have forgotten that their economy is a one act play. Oil is it and if the price goes too high alternatives come to play, and to some extent already have. From 2005 to 2008 prices skyrocketed while Saudi production declined. If they could have prevented this they would have.

Let me repeat that. If they had the capability to prevent that rise in price they would have. I don't care what one of their oil ministers says, 4MBD excess capacity is simply not there and there is no question that we hit supply limitations Before we hit demand limitations in 2008.

That is what a skyrocketing price indicates. A falling price would have indicated lack of demand. That only happened as a result of the economic meltdown which oil prices were a tipping point for.

Are you suggesting that the Saudis don't have magical oil fields that don't deplete?

Jeffrey, Ah yes, that is precisely what I am intimating.

I suppose that you are going to tell me that you don't believe in elves, fairies and unicorns either.

Sometimes I think that it might be nice to live in the special place that Yergin and Lynch inhabit--where they do have magical oil fields that don't deplete, along with elves, fairies and unicorns.

The Saudis have been starting up projects with in excess of 500,000 bod liquids production over the past decade. The Saudis have oil.

In South Texas an Eagle Ford shale well in the condensate zone might yield 250 barrels of condensates a day.

The U.S. was producing close to 5.5 million barrels of oil. Production of NGL's + other liquids + refinery gain was 3.8 million barrels a day for a total of about 9.3 million barrels of liquids per day. Almost 38 years after peak oil, the United States has oil remaining. World liquids production has been rising since the most recent OPEC cut.

rainsong said, "World liquids production has been rising since the most recent OPEC cut"

But has demand been rising to match it? That now is becoming the question, how long can oil producers spend valuable cash to develop oilfields (if they are there) given that there is no proof the demand will rebound to needed levels to support a reasonable return on investment?

From where is this demand going to come? Not Japan, which has been dropping in consumption, not Europe, which has had a slow economy that is recovering very slowly if at all, plus a pledged set of goals to reduce oil consumption by 20% or more (and with a slow economy only assisting them on this), not from the U.S., with a slow economy recovering slowly (if at all) and a flood of natural gas at this time...

So the whole world recovery in oil demand is pretty much resting on China and India. But the Chinese and Indians need customers to grow, and there are some indications they suffer from the same sort of 'bubble' in real estate and other investment we have just been through in U.S. and Europe...

The oil producers at this point seem set to spend as much effort looking for customers for oil as they do for oil itself. And this all in the face of a political environment worldwide that is less and less oil friendly as it relates to carbon release, thus pushing efficiency and a dash to natural gas even faster.

Now the question becomes, will depletion and decline in net export occur even faster than the loss of customer base for oil?

We'll just have to wait and see, but this seems to be where the action is, centered around this one set of questions layed out above.


Roger, all you must do is look at stocks. If stocks are remaining about the same then demand equals supply. And they are, pretty much anyway.

Of course there are no stocks for "all liquids". Actually some of those liquids don't come in barrels at all but come in pressurized tanks. And some, like ethanol and palm oil are usually measured in gallons instead of barrels. I have no idea how those stocks are holding up.

But it simply doesn't matter Rainsong and Roger. Whatever is produced will be consumed. Demand will equal supply even if the price must drop to $20 a barrel for that to happen.

Ron P.

Explain to me again how we had a collapse in demand, since monthly oil prices increased from $42 in January, 2009 to about $79 in January, 2010--versus $13 in January, 1999.

Granted a dollar won't buy what it used to buy, but compare the nominal prices of things like Citigroup stock in January, 1999 to January, 2010.

And don't forget that I have a new field discovery that should produce 40 to 50 BOPD per well.

The "peak demand" argument is brilliant.

By this sleight-of-hand, "Peak oil" predictions are always wrong, even when they come true!

And when people like Colin Campbell get the economic crisis right, even years before it happened, it can be safely dismissed as coincidence! Because actually, it's all about peak demand, not peak flow rates (which don't exist, geologically speaking).

After all what is energy but economic voltage. At least the real potential in the real useful work arena. When the economies of the world expanded to the limits of capacity at the $147. intersection peak demand met peak flows and the 'grid' went down. To my knowlege that had never happened before globally due to (oil) energy constraint. (70's but then the cheap oil flowed again) Now the re-start is proving difficult for many of those economies. You might say the peak demand is still too great.

Those with ample cash or current accounts might shock the patient back to life with real stimulus. Those with energy surpluses have enough real capital to get up and running by drawing from underground or potential real energy accounts. Those inefficient (bloated, high caloric) sections are faced with a new paradigm to overcome. They are in deficit and their economies are not configured properly to function in a lower capacity system.

They can call it peak demand (I know that's not the argument) because the capacity to ultilize the available oil production is hemmed in by the inability to create economic projects on the one side due to debt load and on the other side by unaffordable/unavalable oil. The box canyon. Choices are really limited if these local grids want to get back on their feet. Crash efficiency and conservation along with renewables and a drastic reduction in wealth. (load shedding to stay with the analogy) Or the Olduvial slide.

It won't really matter what the actual price of oil is for them ,there will never again be enough to support most OECD economies in the manner to which they became accustomed. Economies which are getting up and running due to resources, wealth, or efficiency will continue on and outbid them for oil whether they inflate, deflate, or just stagflate on.

Some Thoughts on Death and Die-off...

I was watching a tape of an old Kingston Trio reunion concert last night. For interest, I checked to see how they were doing. Well, with the exception of Dave Guard they are all dead. Mary Travers (of PPM) was also on the show and she's dead too.

At my age, most of the entertainers, authors and many high school and college classmates I grew up with are dead. This isn't particularly surprising.

But, this started me thinking how the generations younger than I will deal with a die-off (if/when) it comes. It is one thing to be old and another to be "in the prime of your life" and lose what you've known.

Does it matter if it is fast the result of nuclear war or a pandemic or slow from starvation due to the collapse of society? Are there different psychological strategies that would be employed?

It's something to think about.


Todd: About 40 years ago I knew an old lady who lived in East Texas in 1917-18 and the flu killed almost half the population. IT killed every pregnant wowan in that small town. I asked her how did they continue? She said that everyone knew how to garden, grow cotton, blacksmith, etc so when one died someone just picked up the job and did it. They did not produce as much as before of course but they continued to live and produce.

I too @ 76 have see most all of my heros and friends die from one reason or another. I have not, in my experience, seen anyone die of neglect. It happens all over the world but not in the US so much. That will be a terrible awakening here associated with collapse from one cause or another. Peak oil of course is just one possible cause.

Whether one liked him or not, I think the death of Michael Jackson hit the immortal rock generation pretty hard.. especially with such a perennial Peter Pan as Jackson had tried to be. There was part of that dream that people disdained, but another part that is central to the 'movement', if you will.

(Not that I suspect MJ was in the lineup with the Kingston Trio..)

As long and full a life as he's lived, the loss of Pete Seeger will hit me pretty hard.. but I'll try not to get ahead of myself here. Sorry, Pete!


My mom's ashes sit in a plastic box not far from the Guitar she played 'Little Boxes on the Hillside' and 'Puff the Magic Dragon' to us with. Now I get to see what part of the 'idea' is kept alive with the song, and what leaves with the singer.

'Dragons live forever, but not so little boys..'


If you like Pete Seeger, you'll love his new book, Where Have All the Flowers Gone: A Singalong Memoir, ISBN978-0-393861-4, 300+pages plus an MP3 with snips from hundreds of songs. My wife bought a copy for me for Christmas since I sort of play guitar and some other instruments. A truly amazing book!!!

Stories; words and music to all kinds of songs (some are his, some are others), anecdotes, TAB some for guitar or banjo, some chords and odd tunings, hints galore. It's a never ending stream of enjoyment!


Thanks, Todd!

I'll see if I can't score me a copy!

Took a while to reply. Spent the day at a Kids Concert featuring the Kotschmar (sp?) Organ, (and Disney's Resident Organist, in from LA) in the Concert Hall that shares our City Hall, to keep with 'music kept alive', I suppose.. This is a block from the UU church where I go, and where the Ashes of Kotschmar himself reside, along with another grand Kotschmar pipe-organ.

Also went skating with the girls in our Town park.. pretty cold.. but I love skating, it's always a 'level playing field' if you will, with most class distinctions temporarily wiped away by the unifying forces of gravity and friction, bringing us crashing down to the same level at last!


Also Thanks Todd:

Amazon has it here


My 87 Year Old Banjo Uke and I will get a little work out. :-)

"Whether one liked him or not, I think the death of Michael Jackson hit the immortal rock generation pretty hard",

And of course the very image of youthful beauty at about the same time, Farah Fawcett. With the loss of George Harrison a few years ago...the seventies suddenly seemed very, very long ago...

I have discussed in posts here on TOD that with or without peak oil, the biggest "die-off" in history is indeed coming, and it has profound implications.

The whole post war economy of the developed world can be summed up in one word: "Boomer". The economy was driven by and built by the boomers. As the boomer generation grew and rose in prosperity, influence and power, so to did the economy. Can we make the assumption that the curve will follow the boomers on into their declining and finally dying years?

The recent so called "banking crisis" was at the essential level the first stripping away of the power and wealth of an aging generation that seems no longer able to defend itself. This is why it was frightening in its implications to boomers. They find that with age comes weakness, a loss of the power and influence needed to defend all they have worked for. They are getting a hard taste of reality, the reality that faces all aging people of every age and time: They are now dependent upon the mercy of the young.

But there are so many of us! There will be so much to take...the homes, the cars, the wealth in the annuities and the pension funds, the benefits checks from the most over insured generation in history, we are seeing the beginning of the greatest wealth transfer from generation to generation in history, and we have a front row seat.

Only the wisest and cleverest of the aging population will be able to defend their wealth in their declining years. They cannot count on "law" to do it: We recently saw conduct by the banking and financial community that would have been considered so outlandish, so immoral, so lacking in any sense of decency or of fudiciary responsiblity so as be considered unthinkable only a few years ago, and the law did and will continue to do nothing to prevent it. The law, like the financial community is now controlled by the young.

This is why men such as Warren Buffet are now the cultural heros to the boomers, the example of the aging man who seems to be able to hold on to his financial power and influence in a world that is decreasingly friendly to aging people.

Surely the most vulnerable are aging single people and in particular aging single females. Who will help defend them as they get older, get ill, who will even help them handle the documents and make the ever more complex decisions as their abilities decline? If the boomers do not begin to relearn how to bond together to help each other, they will be left derelict, alone and pathetic and penniless in a place they no longer recognise and cannot comprehend. The generation that "bowled alone", that renounced in large percentage the bonding of marraige and family, will have no allies.

The fear of such abstractions as "peak oil", even if we are aware of them at all, are pushed aside by the very real battle to survive in an increasingly hostile land.

Some here on TOD often say that the biggest driver of coming change will be resource depletion, and that may turn out to be so. But the assured driver that is already underway is the absoluteness of the biggest demographic change in modern history, the decline and dying away of the biggest, wealthiest, most creative and inventive generation in history, a generation that not only built new ways of thinking and seeing in the cultural and social sense, but also in the technologies, financial and political arts. The world looks as it does, feels and sounds as it does, thinks about wealth and culture and science and art and even sex and love as it does because of the massive influence of the baby boom generation of the developed world. Not since the priests of the ancient Egyptians or the influence of the Latin based church and the Gothic cathedral builders of the birth of modern Europe has any one generation been so influentual at creating a world aesthetic, a world economy, a world philosophy and view of existence, a world as we know it.

Time and death has ordained TEOTWAWKI (The End Of The World As We Know It) whether peak oil occurs soon or not (and it will occur if it has not already by the way, we just don't know exactly when). The shock to the boomers at the extinction of the world they have known will be more than enough to break the will of the aging boomers even without peak oil occuring soon. If peak oil is at hand, it can simply be heaped onto the challenges already facing a generation being cut from its existential roots, one more bit of crap to be dealt with in those "golden years"...

Roger Conner


But, this started me thinking how the generations younger than I will deal with a die-off (if/when) it comes. It is one thing to be old and another to be "in the prime of your life" and lose what you've known.

Doomer turned declinist here. A couple of years ago I fretted about my ailing parents and wondered if they would have to endure hardship in their twilight. Worried myself sick -- would they have quality food, would they be comfortable in the summer heat and in the winter cold, would medicines be easily accessible, etc. Now its me I fret about, still in my prime more or less, but its been more than a couple of decades since I was at my peak of strength and stamina. Been in IT most of my adult life, picked up a few health issues, chronic sleep problems, blood wants to clot, heat intolerance. Concerns are not quite what I had for my aging parents but similar in some regards. What type of work will be available for me in fifteen years? Will it be physical and grueling and will I be able to withstand the rigors at that age after a career at a desk? Will I be able to live far enough away from noise to get the necessary quiet I need to sleep?

These peak demand scenarios really demand something more solid to be convincing. Looking at BP data for regional consumption, in recent decades Europe is phasing out light distillates and gaining on middles, utilizing more diesel than gasoline, in other words; but the net is still growth in demand, with odd years showing marked drops in the total consumed. The other two components of BPs regional consumption data, Fuel oil and "Others," shrink and grow respectively. At some point no more fuel oil can be trimmed, unless they plan to power ships with nuclear reactors or something, or wholly divorce themselves from industrial applications of petroleum. These consumption patterns have been following trends steadily since about 1983; it will take something truly drastic to moderate demand even in the developed world, I believe; and Europe is much more progressive in these matters than North America.


Yes peak demand is patent nonsense. Demand wouldn't have fallen in the first place if the price of oil hadn't gone up so much. Even factoring out speculation oil price has increased at a rate very much greater than inflation and that of course happened because oil started getting much harder to find/pump etc.. To suggest otherwise is a serious case of the tail wagging the dog.

It's like somebody saying, this capitalism and growth economics thing is getting a bit boring. Lets all go back to wielding hoes in a nice commune somewhere. Now, maybe people with long hair would like to do that but the vars majority of others in the world, especially developing nations, they want to use MUCH MORE of the stuff!


One thing people miss about diesel is that it takes 23% more gallons of oil to make a gallon of diesel than to make a gallon of gasoline and burning diesel emits 17% more GHG
than gasoline, not to mention large particulate emissions.

According to the Union of Concerned Scientists, diesel engines have historically emitted 10 to 100 times more soot than comparable gasoline engines. Soot can cause lung cancer and also increases the risk of heart attack and other health problems.
Nitrogen Oxides
Diesel engines typically emit twice the level of nitrogen oxides (NOx) compared with that of gasoline engines. Nitrogen oxides are a key factor in the development of warm-weather "smog" in urban areas.
Carbon Monoxide
A diesel engine burns fuel quite efficiently, so it generally produces somewhat less carbon monoxide than a similar gasoline engine.

Global Warming Gases

CO2 from motor vehicles contributes to global warmingDiesels get better per-gallon mileage than gasoline engines, as diesel has about 14 percent more energy per gallon than gas and diesel engines are also more efficient. However, it takes more petroleum to make diesel fuel, so there really isn't much of an overall advantage in lowering carbon dioxide (CO2) emissions when using regular diesel.
Biodiesel blends (2 to 20 percent biodiesel) significantly reduce levels of air hazards such as particulate matter (soot), air toxics such as polycyclic aromatic hydrocarbons (PAHs) and sulfur dioxide. The use of a B20 blend (20 percent biodiesel) significantly reduces the emission of the global warming gas carbon dioxide when compared with the use of regular diesel, giving an overall reduction advantage when compared with gasoline combustion.


With all due respect, your quote is a bit outdated regarding the soot emissions of diesels. The article's claim about soot uses the word "historically" when referring to soot emissions. The presently marketed diesel designs emit much less soot compared with the traditional designs of a few decades ago.

Furthermore, direct injection gasoline engines have appeared which can operate at the higher expansion rations of the diesels, thus giving improved efficiency over older gasoline based designs. Then too, when coupled to a hybrid transmission system, gasoline engines are already capable of achieving the MPG of diesel designs, even without direct gasoline injection.

One of the big advantages to a hybrid is that the engine can be shutdown while sitting at a stoplight or caught in traffic, further cutting the otherwise wasteful consumption of fuel. Another advantage of a hybrid is the ability to capture some of the energy traditionally lost when breaking, returning that energy to the drive wheels on acceleration. By building a mix of small diesel and gas hybrid vehicles, there's no reason to think that there would be a problem with a shortage of diesel going forward. All that would be needed in the US would be higher pump prices for transport fuel, prices similar to those already found in Europe or Japan.

E. Swanson

As much as I like gasoline hybrids, they are not necessarily more efficient tham diesel. Hybrids are more efficient at lower speeds and start and stop driving. For continuous high speed diesels are more efficient. So it really depends upon the use.

In any case as far as I know, the cracking of a barrel of oil into gasoline diesel and other components doesn't allow much scope for changing the rations of the different products. So any optimal use will try to keep the ratio of gasoline to diesel demand consistent with the supply. Arguments over which fuel type is more effcient and rather pointless because of that.

The new ultra low sulfur diesel fuel(ULSD) and new engines with soot particulate filters have improved emissions almost to the level of gasoline, however I would again point out that while diesels are on average about 14% more efficient than gasoline engines (a selling point with consumers)fact remains that it takes 23% more petroleum to make diesel than gasoline; 1.14/1.23 = overall 93% efficiency wheels to well.

A cleaner alternatives is CNG and LNG which requires less energy to produce though the range is less.

fact remains that it takes 23% more petroleum to make diesel than gasoline

If what I say about refining is true, i.e. for a given grade of oil after refining you are left with X amount of gasoline, Y amount of diesel and Z amount of other, then distributing the oil intensity to the products is merely accounting. If oil production is gasoline demand constrained, then for demand G of gasoline oil demand is G/X and a change of the demand for diesel won't affect that. Butthat would imply diesel is in surplus, and relatively cheap diesel would get more people to switch to it. If instead we are (oil) supply limited at a level of O, then we have a supply of X*O of gasoline and Y*O of diesel, so the economy needs to adjust the relative usage of the two fuels to match the supply.

Now, if it is posible to change the refinery output so that eiether we create more X and less Y -or the reverse (and the cost is low enough refiners would do it), then we can consider changing the mix of fuel consumption (by either increasing or decreasing the number of diesel powered cars).

Refineries can make almost anything out of oil, however
long chain diesel fuel like 'centane'-hexadecane CH16H34 is made out of gas-oil the which distills at higher temperature(400-800 degF) and often under vacuum than straight run gasoline(200 degF) or short chain naphtha C5-9(100-400 degF).
So diesel is more energy intensive than gasoline.

Parts of greenhouse gas theory are not well proven. Steam is listed by some as a worse greenhouse gas than CO2. It does not come from coal, but from biomass, oil, and natural gas. Water has one effect at ground level, but differing effects at higher levels. Those clouds of ice crystals may not be warming the earth, or are they? Depends on who you read.

rainsong, I think you need to do some more reading.

Water vapor ("Steam") in the atmosphere is a strong greenhouse gas. The impact of water vapor is different than that of CO2, since the absorption bands occur at a different portion of the IR spectrum than CO2. The amount of water vapor is a function of air temperature as warmer air can hold more H2O at saturation. The water vapor is the result of the fact that air moves around and water evaporates from the solar heated surface of the land and especially the oceans. Mankind's additions in the form of boiled water are trivial as the water vapor cycles thru the air and rains out rather quickly. However, as more CO2 is added to the air, the resulting warming is expected to increase the amount of water vapor, thus water vapor acts as a positive feedback, amplifying the warming which may result from increased CO2.

Clouds form when the air reaches saturation, either as warm air masses meets colder air or as the air from the surface rises to higher levels with lower pressure and temperature. The lowest layers of clouds form a "ceiling", that is, a flat base to the clouds above. Clouds can either warm or cool the Earth, depending on their altitude, so there is some question regarding their net impact on climate.

E. Swanson

"Depends on who you read."

Yup. If you read or listen to Rush Limbaugh and associates, you certainly come up with one story.

But if you read published climatologists, you find that they are in essentially unanimous agreement that global warming is real, man made and dangerous.

And feedback from water vapor is indeed one of the truly frightening aspects of the dynamic. If we push this thing too far (assuming we haven't already), there are all sorts of ways it can start rolling on its own, rolling the whole world into a very different planet than anything seen since the beginning of civilization or even since humans evolved.

Of course, if your denialism extends to evolution, that last part probably didn't make much sense to you.

fact remains that it takes 23% more petroleum to make diesel than gasoline

Now I don't know diddley squat about refining but that just doesn't sound right. A barrel of oil contains 42 gallons. That makes 42 gallons of product plus about 2 percent refinery process gain. How on earth can it take more oil to make diesel than gasoline? Are you saying that it takes 12.3 gallons of crude to make 10 gallons of diesel, 23 percent more? Naw, that just doesn't sound right.

Tell us Majorian, how many gallons of crude does it take to make 10 gallons of diesel. Then tell us how many gallons of crude it takea to make 10 gallons of gasoline. We need something to work with here.

Where is Robert Rapier when we need him.

Ron P.

Tell us Majorian, how many gallons of crude does it take to make 10 gallons of diesel. Then tell us how many gallons of crude it takea to make 10 gallons of gasoline. We need something to work with here.

A ton of petroleum produces approximately 8.92 (42 gallon) barrels of
regular gasoline or 7.29 (42 gallon) barrels of diesel.
8.92/7.29 = 1.223 or 22.3%.


Here's an article that uses 25% rather than 22.3% so I settled on 23%.

Making a gallon of diesel fuel requires 25% more oil and emits 17% more heat-trapping greenhouse gases than gasoline reformulated with MTBE. Similarly, diesel requires 17% more oil and emits 18% more heat-trapping gases than gasoline reformulated with ethanol. This means that diesel fuel's advantages from its higher per-gallon energy content and better performance on greenhouse gases are partially offset by the impact of diesel's fuel-production process.


Sorry, I just got tired of hearing about the energy efficiency-superiority of diesel over gasoline which is so popular at TOD.

fact remains that it takes 23% more petroleum to make diesel than gasoline

What are you talking about, Majorian? Diesel is a different cut of the oil barrel than gasoline is. Some fractions (the lighter ones) go into gasoline, and other fractions (somewhat heavier) go into diesel fuel. Using crackers and reformers you can tilt the proportion one way or another, but eventually the whole oil barrel gets turned into some refinery product.

It's like slaughtering pigs, where nothing but the squeal goes to waste - However, you probably weren't brought up on a farm so this simile is probably wasted on you.

Re: Peak demand vs peak oil, the debate picks up in Davos up top

Here's an interesting comment from Saudi Aramco CEO Khalid Al-Falih:

Al-Falih took a jab at peak oil (underlining he doesn't believe in it), then stated that talk of the world weaning itself off fossil fuels does not inspire confidence to keep investing in oil production. "Of the 4 trillion (barrels) of oil the planet is endowed with, only 1 has been produced," Al-Falih said.

I wonder where he got the idea of such large potential reserves?

E. Swanson

I've been poring over news items from when the suspicious reserves revisions took place. One curious aspect is that some stories, such as this piece from the Jan 10, 1989 Anchorage Daily News, mention 6 years of studies from Saudi Armaco, contradicting this statement somewhat by describing this work being done at a "new" computerized center - OK, how new is it, then? But more tellingly, are we to suppose that similarly rigorous work was being conducted in other OPEC nations, all in concert?

The response from the media, in any case, was nothing more than a slap on the snooze button; two months later and news agencies were mentioning 260 bbo as writ.

I wonder where he got the idea of such large potential reserves?

It's pretty easy to figure out where that number came from. He just multiplied the world's real extractable reserves by 2, just like he did with Saudi's own reserves. I think this factor of 2 applies to a lot things that you hear regarding oil production, for example that Iraq can increase its production to 10-12 million barrels/day when the real number will probably be 5-6 million barrels/day.

Maybe if you add up all the hydrocarbon molecules, the planet probably does have some such total amount. The first question is then, how many of these are we likely ever to extract and use?

After that, the next question should be, how much is the net energy that we can make available? There is an interesting back and forth between the Dow Chemical guy and the Saudi guy. The Dow guys says that their hydrocarbon cost has gone up a factor of 4 from 2002 to 2009 or some interval like that. The Saudi guy says, hey, our cost per barrel - I didn't understand what he meant, maybe to set up production for a barrel per day, or what? But anyway, he quoted some unit cost increase of a factor of 6 or 7 across that same interval.

I recall that a big piece of the cost increase for oil producers has been concrete... anyway, as the price of oil goes up, the price of all kinds of industrial raw materials and products goes up, which makes oil even more expensive to discover and produce.

It is really difficult to figure out a good system boundary to use when computing EROEI or net energy or whatever. But The reality of the issue came out nicely in that discussion - I don't know how much the Saudi oil folks buy directly from Dow, but I cannot imagine that the 6x or 7x cost increase they saw was not heavily driven by the rising price of oil.

I expect that we'll keep extracting petroleum long after it stops being an economical energy source. I have read that salmon was used for fertilizing farm fields along the Columbia River, a century or two ago. Now... salmon is practically gourmet food - not used too much as fertilizer! Petroleum will be that way too - far too expensive to extract to burn, but worth the bother to use as chemical feedstock. That's an ambiguity in the concept of Ultimately Recoverable Resource - the uses will shift.

Even "net energy" doesn't quite nail down the point at which petroleum will stop being an energy source. Exploration and production have other costs, too - labor, steel and concrete, fresh water, etc. Once the net energy available from other sources has a lower non-energy cost, petroleum will stop being worth pumping as an energy source. At that point there will surely still be at least a trillion barrels of hydrocarbon molecules tucked away in sand and shale etc.

From Google news today is this article:

Bailout cop: TARP's not working


When Congress enacted TARP, the hope was that injecting capital into hundreds of banks would spur lending and keep the economy from spiraling even deeper into recession.

But since then, lending to both consumers and businesses has continued to decline.

Still, there is no sign that the rate of foreclosures is slowing down anytime soon. Earlier this month, RealtyTrac, the online marketer of foreclosed homes, reported that foreclosure filings surged to a record 3 million in 2009, up 21% from 2008.

After all this time since the initial warning signs of defaulting loans, and the situation is still getting worse? How are we suppose to pull out of this recession if things are getting worse?

"How are we suppose to pull out of this recession if things are getting worse?"

Give a speach.

Another article on Barofsky:

Response to financial crisis response leaves US with even more risk

WASHINGTON - The government's response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.

"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.

The quarterly report to Congress was released Sunday.

This is some pretty explosive information to be released on a Sunday. Usually when the govt. has bad news it is released on a Friday, just after the markets close. Tomorrow should be interesting, whether the information is ignored or bank stocks take a tumble, it will tell us something about the mentality of the investors at this juncture.

I think it is disingenuous to say it isn't working. We would be a lot worse off if we hadn't done it -perhaps 20% unemployment by now (official not U6). The actions done have prevented a truly catstrophic depression, but they haven't yet brought about recovery. As an anaology, you jump out of an airplane thats going to crash, but your parachute is undersized, so you break both legs on impact. That doesn't mean the parachute was useless, just that it wasn't the ideal instrument for the job.

Flooding the economy with more borrowed money was never a solution, nor could it "break the fall." It's analogous to a junkie in withdrawal who just can't take it anymore, and begs for one more hit to get him through.

Except that unlike the junkie we're in much deeper now, more addicted and worse off than we were before that rescue-hit was administered. The next time the unwind begins anew, we'll have that much less opportunity and resources to undertake mitigation strategies, like WPA projects or soup kitchens.

Unless, of course, the intent all along was only to save the plutocracy and cut the working people adrift.

E of state, it may be helping but its not doing the trick. If foreclosures are continuing to increase then we are still stuck with how to stop them from continuing to increase. It's like a runaway train that is now doing 50 instead of 70 - its still going to crash, just not as fast.

On the contrary - all those people bought houses they couldn't afford to live in. All those banks made loans that could never be paid back. By doing so, they pushed up real estate prices far above where they should be. Most of them did it on purpose, because they all thought they could make money off the bubble and flip the house to someone even dumber before it caught up with them.

The foreclosures have to clear out completely and houses return to a sane market price before regular economic activity and lending can resume. Yes this will bankrupt a lot of people, and banks. However, the longer it gets dragged out the worse off everyone will be.

More like, you jump out of an airplane that's going to crash, but your parachute doesn't deploy. Fortunately, you fall onto the top of a big balloon that is climbing out of control. You're not quite sure when the balloon will pop and you have to fall again, but it's inevitable. When it does, though, you'll be even farther up than when you jumped in the first place. Are you better off or not?

Best analogy yet!

Al;an from the islands

Steve Keen has a very interesting post up on his blog:

CSIRO-UNEP Modelling

The United Nations Environment Program did a very unusual and far-sighted thing last year: it asked the CSIRO to produce a version of its biophysical model of the Australian economy for developing countries, and to pair that with an economic model which had to be non-equilibrium in nature.

The Stocks and Flows Resource Modelling team at CSIRO Sustainable Ecosystems, which maintains this biophysical model, approached me in July to see whether I would be willing to attempt the development of that nonequilibrium multisectoral economic model.

The CSIRO’s biophysical model uses a software package called WhatIf? that is designed for multi-dimensional aggregation of data and extrapolation of the trends that data displays. Resource data is stored at as disaggregated a level as possible (population, for example, is disaggregated by age, sex and location), and then aggregated to the national and global level. A similar exercise applies for consumer demand, which is driven by an age-based profile of the population, allied to the consumption patterns that apply for each age cohort across all industries in an economy, and the resource requirements of output in that industry.

There are two videos; the first one really knocked me out (even though both the audio and video quality is, well, bad). It's a walkthrough of a simulation of how demand for wood evolves through time, the effects it has on forests, and interaction with energy. A bit cursory, so I had a look at the UNEP and CSIRO websites, but gave up; the sites are huge, and there is a lot of wishy-washy politically-correct blah-blah.

Excuse me repeating myself, but: This is very interesting! Not to mention that it integrates most of the topics discussed on this site. I would love to see a more detailed presentation of their results. Does anyone here know anyting more about this? Any links?

Re: Tesla to stop selling electric sports car next year, up top.

TH!NK thinks it's got EV cities picked out:


20k EV sales per year will save about 163 barrels/day, given a base fleet of 106 million vehicles, the number that are driven solo to work each day.

There was a thread yesterday which talked about a politically destructive speech, hypothetically given by Obama, to explain, to the country, the real problems surrounding peak oil. It is my contention that no one would listen. After all the following was contained in a speech by George Bush in May 2001
"But what people need to hear, loud and clear, is that we're running out of energy in America." " This Nation is confronted with a major problem. And this administration is going to be honest with the American people about the nature of the problem, and we're going to come up with some solutions. And it's going to take a lot of political will for people to buck some of the trends that somehow believe—who believe that without finding additional supplies of energy, this Nation is going to be okay."
No one really listened then, and no one will listen today, even if the political will were there to tell the truth. Clearly Bush did not follow through on that promise, as was the case for all of his predecessors. Nor is Obama as near as I can tell. I'm getting to the Gerald Celente place, political atheism is the way to go.

Wondrous Words from W, to be sure, but what were they followed up with? Subsidies for corn ethanol, the "hydrogen economy," whatever the hell that was supposed to be, and of course the invasion and occupation of the nations holding the largest remaining undeveloped petroleum reserves. How inspiring a vision!

NOliver, We seem to have endless inspired visions from our fearless leaders. As a follow up to how people will not listen, i sent the following letter to the editor of our local newspaper. 1 week later there was no response. Nothing , Zero, Zip, Nada.

When will we get it?

Ten years ago I sent a rather detailed letter, with supporting data, to all members of the County Council, predicting the price of Crude oil would exceed $75.00 per barrel by the end of the decade. I also predicted that would cause economic turmoil. The purpose was to highlight the need for faster implementation of alternative energy sources. At the time oil was $15.00. Needless to say I received polite dismissal of this prediction from both the council and members of the general public.. A couple of inevitable letters about how there is enough oil for ten thousand years hit the press.
Even I did not foresee the rise to almost twice that number, but, in 2008, the world economy melted down two months after oil hit $147 per barrel, I do not believe that the price of oil was the cause of the meltdown, toxic financial instruments did that, High oil prices, and the demand destruction thus created, supplied the tipping point.
The same data and people, who allowed me to accurately make that prediction, now lead me to another. Ten years from today, the world will be producing, and therefore using, 25% less liquid fuels than we do today. There are many reasons for this, some geological, some economic, which I will not get into here, Since capitalism requires growth, and growth, to date, has always required more cheap energy, I am, therefore, very pessimistic about our economic future.
There are far too many variables to accurately predict what this will mean with any precision, but I can guarantee it will not be business as usual, or as we knew it a couple years ago.
I don't wish to leave the impression that the situation we are in had to be this way. There are things we could have done and perhaps still can do, alternatives we could develop. Unfortunately we do not presently have the political will, public support or financial capability to do what is necessary. I hope we can get some of all three soon. We certainly don't have much time.

I suppose it could mean that nobody reads the stupid newspaper.

True NO. Same Wondrous Words we got from Nixon, Carter, Reagan, Bush 1 and Clinton. What's that definition of insanity: doing the same thing repeatedly and expecting different results. Perhaps President Obama may not have the same opportunity to let matters slide as past leaders have. We've fairly well proved we're not very good at planning to avoid a crisis. But we're hell on wheels when it comes to reacting to a crisis.

No one really listened then, and no one will listen today, even if the political will were there to tell the truth.

Right you are, Treeman. I originally wrote it as a silly jest to spoof a suggestion that such a revelation would ever occur. It is clear that Americans' ability to rationalize away even truthful bad news has rendered the POTUS impotent except in the case of a catastrophy. ie: When Bush made the speech you referred to, I mentioned it to a friend who was a Bush supporter and PO/GW denier. His response was that it was a CYA speech to covertly justify his war to any supporters who weren't buying the WMD thing. "What he's really saying is that we need to go get the damn oil."

I read some of the comments to an article on last year's CNA Military Advisory Board regarding energy and climate change:


(This may be the best article I have read on our vulnerability to CC and oil dependence. Recommended reading!)

Many of the responses were as you predict: dismissive, political denialist dribble. Many readers were unimpressed with the author's credentials:

Vice Adm. Dennis V. McGinn, USN (retired) is a designated naval aviator, test pilot and national security strategist. He has served as director of the Air Warfare Division in the Office of the Chief of Naval Operations; the Commander of the U.S. Third Fleet; and the deputy chief of Naval Operations, Warfare Requirements and Programs in the Pentagon..........CNA's Military Advisory Board (MAB) consists of 12 two-, three- and four-star retired admirals and generals, representing all four services of American armed forces.

The article drew responses like this:

This is a joke right? This is frightening if the military brass has bought into the hocus pocus "science" of Global Warming. What will we give the military for vehilces - an uparmored Prius? This scares me more than Obamacare !!

and this:

All this from a Government and Military that paid $1000 for a toilet seats, $600 for hammers and $5,000,000 for a treadmill. Pardon me while I laugh! Just smoke and mirrors folks. Bring our military home and surgically remove the insurgents.

Yet these folks are easily impressed and swayed by the likes of Limbaugh and Beck. This is why I think, as a nation, we're screwed.

Well, to some degree, I still see them as 'squeaky wheels'.. they make a lot of noise, but don't actually throw much weight.. except that they're frequently OVERweight now.. but that also helps reduce the actual 'Throwability'

So what happens when the squeaky wheels who used to get the grease.. can't find any more grease? Sometimes that irritating squeak (like ignorance) can be fixed with a good knock of reality upside the head. Ignorance is a bit of a convenience, and I think we're heading into some INconvenient waters..

This feature was written some five months ago. Does anyone see anything to conflict with what was said? A lot of words have passed but little actually done to mitigate the problem. IMHO People will only re-act to reality in the form of water rising on the seacoast or fuel at well over $10/gal.

The only anomaly I see in the article is a brief mention of melting Himalayan glaciers. While the status of that is in flux, it has little effect on the message. As former military myself I can attest to the fact that these are very serious people, with little regard for bullshit. While getting to the levels these people have achieved requires acute political skills, these are not politicians. They rely on information and analysis, not supposition or belief, and they're not concerned with re-election. Too bad more of our leadership doesn't conduct its affairs this way. Too bad so many of our citizens are so reactive and obtuse.

I am the person who started the thread on the Jan 30 DB mentioned by treeman above by speculating that the POTUS is really Peak Oil Aware (POA) and that his emphasis on GHG is just a cover for Peak Oil mitigation. IIRC one of the first things that a new president does after inauguration is attend a briefing where he is advised by the heads of the military and intelligence communities and made aware of classified information that only the president has access to. I remember thinking to myself that he must have heard some really sobering stuff in that briefing since he looked (to me) a little dazed for a few days after his inauguration. Of course it could just have been a reaction to the fact that he was actually now the POTUS and it was time to face the huge responsibilities that go with that.

As former military myself I can attest to the fact that these are very serious people, with little regard for BS.

I have the same impression of military officers in general and IMHO they get more serious the higher up they go. Going back at least as far as Hyman Rickover who's speech "Energy Resources and Our Future" made in 1957, is posted on this site at that link and regularly quoted by congressman Roscoe Bartlett, at least some elements high up in the US military have been POA. Judging by some fairly recent moves by the military like an apparent increasing focus on fuel efficiency and the installation of the Largest Solar Panel Array in Military History at a military facility, I am thinking that somebody in the military is thinking Peak Oil is closer than a lot of people think. All of this adds up to my belief that the POTUS is POA. In this case my mantra is "watch what they do over what they say" (actions speak louder than words).

I get a good deal of my cynicism from watching episodes of the BBC sitcom "Yes Minister" (clips of which can be watched at youtube)and then seeing instances of life imitating art playing out in both national and international politics. It has become obvious to me that the truth is often not what it seems and that one needs to read between the lines, as it were, to get to something closer to the truth.

Alan from the islands

Well, I keep getting told by some other posters here that oil inventories are 'high', and that world oil demand won't increase this year, and prices won't rise.

Yet excess inventories are slowly disappearing in the US and the rest of the world:

Oil Stockpile on Ships Shrinks

The volume being stored at sea has nearly halved from a peak of about 90 million barrels in April last year, according to ship broker ICAP, and are expected to fall even further.

Some analysts have seized on the contraction as evidence that world oil balances are tightening and the surplus that built up during the recession, when energy demand in industrialized countries plummeted, is eroding.

Crude stocks both onshore and offshore have fallen from their peak in the second quarter of last year, and land-based inventories in Japan, U.S. and Europe are now back to the middle of their five-year range. Analysts expect them to continue to shrink this year, and J.P. Morgan has even spoken of the risks of a price spike.


My understanding of ships is that they are made for shipping, not for storage.


This does not square with what Morgan Downey wrote in Floating Storage Surprising Increase a week ago:

Following are updates on oil stored in floating tankers from a model.  The model uses adjusted AIS data from all vessels over 5,000 DWT (VLCCs on down) worldwide.  Total oil includes both black and clean oils.  Black oil is crude plus residual fuel oil.  Clean oil is everything else such as gasoline, diesel, heating oil and jet.

Now I suppose Downey's number is "total oil on tankers", that is, including oil in transit, not just "oil stored on tankers to benefit from contango" as the WSJ piece seems to talk about, but still: Downey has the peak in October, not April, and even now are above April levels.

Given the fall in oil prices over the past weeks, the recent rise of oil in storage reported by Downey could be interpreted as supportive of the theory several commenters here have presented, that oil is transferred from (floating) storage to market when prices approach 85$/bbl, and kept on tankers when prices fall to the 75$ - area.

I must admit I find Downey more credible than the WSJ on this...

EDIT: for clarity

PS: Notice how Downey's reported drop from the oct peak thru early dec almost excactly mirrors the reported production jump in oct/nov (here, here).

Anybody noticed the "importance" of energy efficiency and renewable energy in Obama's 2011 budget proposal?
click on "full screen"

( Reducing the dependence on fuel imports and job creation anyone? )

From 11 big suprises for the next decade:

Pakistan Collapses-
The nuclear state falls victim of various terrorist groups who eventually succeeded in overthrowing the regime. The country falls into a bloody civil war. The U.S military, in a planned operation which was planned during the Bush years takes control of the military facilities and dismantles them. The civil war affects India, which increasingly suffers from terrorist attacks throughout the decade. The collapse of Pakistan symbolizes a new phase in the global "War on Terror" with the pro- American Gulf States becoming the main target.