Drumbeat: February 19, 2010

Iceland looks to green, innovative income sources

The new, more sustainable, direction is long overdue according to experts like Kristin Vala Ragnarsdottir, dean of the School of Engineering and Natural Sciences at the University of Iceland, who has been advising government ministers on sustainability.

“The financial and development outlook of the last government was all based on harnessing energy and building heavy industry like aluminium plants, but if we built both of the aluminium factories currently planned we will have used every drop of energy in the country,” she said.

“In addition, a lot of people are still predicting a world economic collapse, and we have already reached peak oil, or are approaching it, so we have to change.”

U.S. natural gas rig count hits 11-1/2-month high

NEW YORK, Feb 19 (Reuters) - The number of rigs drilling for natural gas in the United States rose 2 this week to an 11-1/2-month high of 893, according to a report on Friday by oil services firm Baker Hughes in Houston.

It was the eighth straight weekly gain and puts the gas rig count at its highest level since March 6, 2009, when there were 916 gas rigs operating.

British firms could be hit in revenge for Falklands oil drilling

Argentina is preparing to target British companies with links to the new oil drilling ventures off the coast of the Falkland Islands.

Two Oil-Field Companies Acknowledge Fracking With Diesel

Two of the world's largest oil-field services companies have acknowledged to Congress that they used diesel in hydraulic fracturing after telling federal regulators they would stop injecting the fuel near underground water supplies.

Halliburton and BJ Services acknowledged to the House Oversight and Government Reform Committee in January 2008 that they had used diesel in the controversial process that has expanded access to vast natural gas plays.

Venezuela Is Evaluating Colombia Electricity Offer

(Bloomberg) -- Venezuela is evaluating a formal proposal from Colombia to send electricity amid nationwide rolling blackouts and a severe drought, Foreign Minister Nicolas Maduro said.

Colombia sent a proposal yesterday and the offer is being reviewed by Venezuelan Electricity Minister Ali Rodriguez and a team of technicians, Maduro said today on state television. Venezuela, which froze relations with Colombia last year, doesn’t want the issue to become politicized, he said.

Petrobras Share Sale May Be Worth $75 Billion, Folha Reports

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, may issue $75 billion of shares in what would be the world’s biggest stock sale ever, Folha de S. Paulo reported.

Petrobras, as the Rio de Janeiro-based company is known, may swap shares for about $25 billion worth of oil rights from the federal government and raise up to $50 billion in cash from investors, Folha said today, citing unidentified investment banks involved in the operation.

Tougher IAEA line reflects new management

The latest report on Iran by the UN's nuclear watchdog, International Atomic Energy Agency (IAEA), reflects a tougher approach by the agency under its new director-general.

But while the language is stronger, it is less clear that the evidence is. There are still more questions than answers.

China's Iran Dilemma

The world's nuclear standoff with Iran is ratcheting ever upward. On Feb. 8, Iranian President Mahmoud Ahmadinejad (no diplomat he) matter-of-factly announced that Iran would soon begin enriching uranium for use in a "medical reactor." That means China will have to answer the central question that confronts it, which was embedded within Yang's diplo-speak: What actually is China's long-term interest in Iran?

Clive Maund: Unlock Profits with Technical Analysis

CM: Excesses in the fiat money system automatically lead to inflation as larger amounts of money chase the same or a finite quantity of goods and services. In an inflationary environment, money naturally gravitates to assets or commodities that are real and have intrinsic value, such as oil, gas and also uranium, and will hold that value by rising in price as the value of currencies is eroded by inflation.

TGR: Is this logic true for other sectors such as food or consumer staples? If so, what makes energy a better investment opportunity?

CM: Yes it is, but what makes energy a better investment is that it is finite and depleting and is perceived to be so, especially in a world of rising population and expanding demand. You have all heard about Peak Oil that, if true, must result in a continuing long-term uptrend in the price of oil.

TGR: What do you see for gold and silver prices for the next six months? If precious metals are being acquired more as currency and less for jewelry, do you see the typical seasonality for gold being eliminated this year or in future years?

CM: This is a difficult question to answer because if deflation breaks loose again, which could happen if there are sovereign defaults, the Chinese economy implodes or rates enter a determined uptrend, we could see another severe bear market emerge in a wide range of asset classes, including precious metals.

Taking Another Look at Simon vs. Ehrlich on Commodity Prices

At last week’s TED 2010 conference in Long Beach, California, I gave a short talk about what I called “the most important bet in history”: the Simon/Ehrlich bet on commodity prices. This year marks the 30th anniversary of that bet’s start date.

Peak Oil: Did You Know?

Technocracy is the antithesis of free market individualism. It's a fallacy that has been very popular throughout history, particularly in the early days of the Nation-State. Technocrats are the modern day, scientific-looking ancestors of the Chinese mandarins, the intellectual guardians of the State's thirst for plunder. And they have always been abject failures.

So What?

So know your enemy, that's all. Technocracy is scientific soclialism in real life and it fails as spectacularly in real life as Bohm-Bawerk predicted it would when he wrote History and Critique of Interest Theories (1884.)

Vision For The Future: Consumerism Or Frugality?

The energy sector is facing major challenges over the next decade with the need to “green” the energy mix and maintain security of supply while simultaneously minimizing cost to customers. The key facts mentioned in the ITPOES report were: the industry is not discovering more giant fossil fuel fields at a sufficient rate; there are concerns about the levels of reserves quoted by the OPEC countries (which are critical to the confidence levels associated with future production capacity); there are indications that underinvestment in the oil industry over the past decade has led to infrastructure and under-skilling problems that will make it particularly difficult to increase production capacity rapidly in the short-term; the net flow rate data shows that increases in extraction will be slowing down in 2011-13 and dropping thereafter. Given the long lead-times involved in developing the necessary infrastructure, this trend is unlikely to be reversed within the next five years.

An Energy Playbook for Team USA

As players mature, they learn to play their positions and go where the ball will be, not where it is. They pass it around, executing well-rehearsed plays and setting up their shooters for scoring opportunities. Rarely do you see more than two or three people actually chasing the ball.

In short, they learn that teamwork is more important that personal performance if you want to score goals.

And so it is with energy policy.

To be precise, we don't have one. There is no playbook. We are simply hurtling at high speed toward the net energy cliff.

The Sustainable Expo for 2020

Hawaii, the most isolated major populated area on this planet, is that canary in the coal mine of Peak Oil. The economy is so locked into the visitor industry, that the coming jump in oil prices will mean skyrocketing jet fuel prices and the end of tourism as we know it.

You would think that with this so obvious inevitability the State would by now have forged a plan to avoid this calamity? Nope. As pointed out in "We Need to Work Together, Now," politics, union-labor relations and personality clashes have overwhelmed good sense. Maybe worse, there appears to be no sense of urgency.

Living the dream: A former urbanite has put down green roots

There was a time when the only concerns that certified financial planner Bradley Roulston had to face when setting out for his daily run was Toronto’s noise, pollution and traffic.

These days, the president of Toronto-based Healthcare Financial Group Inc. has other things on his mind when he goes running: keeping an eye out for bears and cougars. That’s because Roulston now lives in a close-knit community in British Columbia’s Interior. Roulston still directs his financial planning business from its Toronto and Vancouver offices — and he still loves many aspects of city life. But, Roulston says, his move to Nelson (slightly less than 700 kilometres from Vancouver) has helped him achieve some much-needed balance between the artificial world of finance and the natural world he cherishes.

That balance includes participation in a number of local environmental initiatives, such as Transition Towns, a global movement that encourages communities to find their own solutions to address the issues of peak oil and climate change. Self-sufficiency and sustainability are the major themes of that movement.

Consumer advocate says Ohio power company should not recover costs of bulb plan it abandoned

AKRON, Ohio (AP) — Ohio's consumer advocate is complaining about a utility's proposal to have its customers pay for a controversial light bulb program it scrapped.

FirstEnergy Corp. has asked the Public Utilities Commission of Ohio to let it pass along to consumers about $772,000 in costs from its eliminated plan to mail a pair of energy-saving light bulbs to each customer. The company changed its mind following an uproar over its intention to add a surcharge onto electric bills that was more than the cost of the bulbs.

Obama's 'sexy stuff' creates an efficient, affordable home

President Obama recently called insulation "sexy stuff" because it saves money. The above video, also available here, shows how insulation -- not solar panels or geothermal heat pumps -- can be the key to building or retrofitting affordable, ultra-efficient homes.

sOccket: Soccer Ball by Day, Light by Night

Lin told me that the idea for sOccket grew out of a group project for an undergrad engineering class at Harvard. She and the rest of her team all had experience in the developing world, and they realized two things. First, kids are playing soccer all the time in many parts of the world, be it with a ball, a tin can, whatever. And second, the vast majority of those kids have homes with no reliable electricity. Light sources, if they exist at all, are often provided by unhealthy sources such as wood fires or kerosene lamps. As Lin told me, "There were stories we would hear of children going out to the street and studying underneath street lamps, or literally coming to school with blackened noses because they'd been studying near kerosene lamps."

James Cameron: Fox didn't want Avatar's 'treehugging crap'

When they read it, they sort of said, 'Can we take some of this tree-hugging, FernGully crap out of this movie?' And I said, 'No, because that's why I'm making the film.'

Cameron says Avatar doesn't provide facts about the planet's future, but its "eye candy" aims to jostle viewers out of their environmental "denial" and motivate them to work for change.

Reactions to Climate Group Departures

BP and ConocoPhillips made “tactical” decisions to opt out in order to pursue more advantageous terms in the final version of the legislation, said Tony Kreindler, director of communications for the Environmental Defense Fund, one of the member groups. “It shows that now we’re getting down to the brass tacks on these bills.”

Other environmental advocates agree. “In some ways, it’s a sign that people are still taking very seriously the likelihood that the legislation will move,” said Daniel Lashof, the director of the climate center of Natural Resources Defense Council, another member of the Climate Action Partnership.

Cars Emerge as Key Atmospheric Warming Force: Study

In their analysis, motor vehicles emerged as the greatest contributor to atmospheric warming now and in the near term. Cars, buses, and trucks release pollutants and greenhouse gases that promote warming, while emitting few aerosols that counteract it.

The researchers found that the burning of household biofuels -- primarily wood and animal dung for home heating and cooking -- contribute the second most warming. And raising livestock, particularly methane-producing cattle, contribute the third most.

U.S. January oil demand down 3.8 pct vs yr ago-API

WASHINGTON (Reuters) - U.S. demand for crude oil and petroleum products fell sharply in January as the economy sputtered along the road to recovery, industry group American Petroleum Institute said Friday.

January's total petroleum product deliveries, excluding exports, averaged 18.407 million barrels per day, down 3.8 percent from a year ago, according to its report.

Deliveries of distillate fuels, which include heating oil and diesel, fell 12.2 percent to 3.578 million bpd.

API Chief Economist John Felmy said an 11.5 percent drop in demand for low sulfur distillate fuel, which is used by trucks, is a bad sign for the economy.

U.S. heating oil demand hit by conservation

TORONTO (Reuters) - A fresh wave of conservation efforts spurred by a government incentive may help to spark another drop in U.S. heating oil consumption and counter a decline in the number of homes switching from the fuel to natural gas.

Core inflation drops for first time since 1982

WASHINGTON - Consumer prices rose less than expected in January while prices excluding food and energy actually fell, something that hasn't happened in more than a quarter-century.

The Labor Department said Friday that consumer prices edged up 0.2 percent in January while prices excluding food and energy slipped 0.1 percent. That was the first monthly decline since December 1982.

Richard Heinberg: Goldilocks and the three fuels

When discussing the increasing perils of the current oil supply-demand-price balancing act, some commentators opine that the world supply of oil has peaked; others say it is demand that has peaked. It is a distinction without a difference.

There are similarities with U.S. natural gas. Current shale gas projects are tapping into an abundant supply of fuel, and there is plenty more where that came from. But the costs of getting it out combined with the per-well decline rates are high, so gas prices need to be very high to turn a profit.

Nearly everyone believes that U.S. coal supplies are virtually endless, but the Goldilocks syndrome is coming into play there, too. Coal prices just about doubled in the two years leading up to the economic crash of 2008, and high-quality coals from the eastern region of the country are depleting fast.

We will never run out of coal, oil, or natural gas—in the absolute sense. The Industrial Revolution started in British coalfields, and there is still an enormous amount of coal in Britain; but the coal that’s left there is prohibitively expensive to mine, so that nation’s coal industry is virtually gone.

Paolo Scaroni - Remember: Their Oil, Not Ours

One of the big themes of the 21st century will be how to combine population growth and sustainable economic development with the challenge of limited natural resources—food, water, metals, and, of course, energy.

This is not a new concern. Thomas Malthus raised it as long ago as 1798. But, over the years, seemingly inevitable crises have been avoided time and time again, thanks to technological advances which have increased production, reduced waste and changed the way we do things.

House Panel Probes Natural Gas Hydrofracking Process

The House Energy and Commerce Committee said Thursday it had begun an investigation into the potential impacts of a natural gas production process called "hydrofracking" on the environment and human health.

Environmentalists and some lawmakers are pressing to give the Environmental Protection Agency federal oversight of the process, concerned that the drilling technique is contaminating water supplies.

Fort Hills latest oil-sands casualty

Alberta's $24 billion Fort Hills oil-sands project has been put on hold until next year so Petro-Canada and its partners can get a better handle on costs.

The project's schedule needs "breathing room," said Ron Brenneman, chief executive of the country's third-largest oil company. Shares in Petro-Canada fell more than 7 per cent yesterday after the delay was announced.

Russia to adopt new price strategy

Russia's Gazprom, which supplies Europe with a quarter of its gas needs, has agreed to add spot gas prices to its long-term contracts with customers, according tosources.

Lukoil misses full reserve replacement

Russia's second biggest oil company Lukoil replaced 95% of its 2009 production with new reserves, trailing behind its top rival Rosneft.

Apache Cites Record Production Fueled by International Growth

Apache reported that international growth fueled record 2009 production of 583,000 barrels of oil equivalent per day, up 9 percent from 2008.

"Although we reduced capital expenditures by about 40 percent from 2008 levels to achieve our goal of living within our cash flow, Apache increased production by 9 percent and ended 2009 with $2 billion in cash," said G. Steven Farris, Apache's chairman and chief executive officer. "In 2010, we anticipate continued growth of 5 to 10 percent as we ramp up drilling activity across our portfolio and commence production from earlier discoveries."

ConocoPhillips Replaces 141% of Reserves

ConocoPhillips confirmed 2009 preliminary net proved reserve additions of approximately 1.216 billion barrels of oil equivalent (BOE), including equity affiliates. The company's reserve replacement ratio was 141 percent, based on 865 million BOE of production, including fuel gas. ConocoPhillips' total proved reserves at year-end 2009 were 10.326 billion BOE.

"Our strong reserve replacement ratio was achieved by progressing major projects during 2009," said John Carrig, president and chief operating officer. "Our reserve replacement ratio also benefited from the addition of Syncrude oil sands mining operations and net reserve additions from our LUKOIL Investment segment."

Battling with shortage

Over the last three weeks many Egyptian families have struggled to procure the gas cylinders on which they rely for cooking. The 2,700 gas cylinder distribution outlets have daily seen queues forming as citizens gather in hope of securing the LE5 subsidised cylinders.

To combat shortages, the Ministry of Petroleum is producing 1,256,000 butane gas cylinders daily, tripling monthly production. Working hours in 50 butane gas factories have been increased to three eight-hour shifts a day so they can continue production around the clock.

Fuel Shortage Hits Greece as Strikes Grow

Greek drivers lined up for gas at the few stations still open Friday as a customs strike against government austerity measures left many pumps running dry.

The fuel shortage was the first serious consequence of growing labor protests against the Socialist government's emergency spending cuts program, aimed at easing the debt crisis in Greece and shoring up market confidence.

The Philippines: Opposition urges Arroyo to use emergency powers in Mindanao

OPPOSITON lawmakers on Thursday urged President Gloria Arroyo to call a special session so that Congress can declare a state of emergency in Mindanao to deal with an energy crisis that they said could doom the May elections.

Saudi Arabia hosts U.S. energy czar Chu but woos China

Saudi Arabia's oil affair with top consumer the United States is being redefined as contracting demand in the West means the kingdom competes more fiercely for dominance in the growing Asia market, especially China.

U.S. Energy Secretary Steven Chu will visit Riyadh on Monday but it is Beijing's allure that has intensified for oil suppliers in 2008 and 2009, as demand grew more in China but contracted in the United States and Europe at the same time.

Iran Supreme Leader Denies Nuclear Bomb Plan, Says ‘Forbidden’

(Bloomberg) -- Supreme Leader Ayatollah Ali Khamenei said Iran deems nuclear weapons to be prohibited under Islam and isn’t seeking to build them, after the International Atomic Energy Agency announced the country may have been working on a warhead.

“Our religious beliefs consider such weapons forbidden as symbols of destruction,” Khamenei said today after he presided at a ceremony where Iran’s first domestically made guided- missile destroyer was put into service from a base in the Persian Gulf. “We don’t believe in atomic bombs and we do not seek one.”

Ohio regulators didn't mean to end power discount

CLEVELAND - Utility regulators in Ohio say they never intended to allow an end to discounts for all-electric homes when they approved a new rate plan for FirstEnergy.

More than 100,000 homeowners who heat with electricity were stung by the move, with some complaining that their monthly power bills doubled.

Horizon Wind Energy signs 20-year deal with TVA

Horizon Wind Energy LLC has landed a 20-year power purchase agreement with the Tennessee Valley Authority.

Under the terms of the agreement, Horizon will sell 115 megawatts of renewable wind energy from the first phase of its Pioneer Prairie Wind Farm in Iowa to TVA. Energy from the Pioneer Prairie Wind Farm will be delivered to homes and businesses in TVA's service area in parts of seven southeastern states.

India: Rice millers urged to tap co-generation potential

The state has 7364 rice mills, with 552 of them using modern machineries to produce rice from paddy. But only six of them have biomass based gasifiers or co-generation facility to generate power.

Potential for US wind energy is 10.5 GW

The top state for wind energy potential is Texas, which has 435,638 km2 of wind land area where the capacity factor for wind at 80 m hub height is 30%. After excluded lands (protected lands, parks, wilderness, urban area, airports, wetland, water features) are subtracted, the remaining 380,306 km2 represents 55% of the state which could install 1,901,530 MW of wind turbines and generate 6,527,850 GWh a year of renewable power.

Mississippi was the only state to show no potential for wind energy, with Florida having potential for 0.4 MW of wind turbines that could generate 1 GWh per year. Other states with low wind power potential are Delaware (9.5 MW), Connecticut (26.5 MW), Rhode Island (46.6 MW) and Kentucky (60.6 MW).

Philippines to Boost Rice Imports to Record, NFA Says

It’s “possible” the Philippines, which accelerated purchases after storms last year destroyed about 1.3 million tons of rice, may buy 3 million tons this year as El Nino parches crops, Jimenez said. The government limit of 2.4 million tons on 2010’s state rice purchases, set late last year, hasn’t been raised yet, he said.

Michael Pollan: Forget Nutrition Charts, Eat What Grandma Said Is Good for You

We're not aware of it, but food, like everything, is political. It is the biggest industry in the country; it's the most essential thing. We've had the luxury of not having to think about it for the last thirty years, thanks to Earl Butz and having all this cheap food around. But you know, if we as a society have to live without gasoline, which is unimaginable, we will figure out how to do it. We did it for millions of years. We've never lived without food. Food is really essential, and when you have anything that's essential, there is enormous political and economic forces that contend about how it will be organized.

In the last thirty years, we have had this kind of agriculture industrial complex, which by some measures has worked quite well. It's kept the price of food low; it's kept the food industry healthy; it's given us a lot of power overseas--we're big food exporters--but what we're getting in touch with, I think, is that the by-products of that system, or the unintended consequences and costs, are catching up--every thing from obesity to diabetes.

Green Eyes On: Is Bees' Thirst Leading to Their Demise?

A key discovery has strengthened the link between pesticide use and colony collapse disorder, a long considered cause of CCD. In the article, the Organic Center's chief scientist, Dr. Charles Benbrook explained that scientists in Europe have discovered a new pathway through which bees are ingesting nicotinyl insecticides (the Sierra Club is currently working on banning this class of insecticides) in virtually all intensively farmed regions.

The new pathway? Drinking water.

Calif. locals vs. lake of chicken waste

FRENCH CAMP, Calif. - At the end of a remote road lined by houses, children play in yards just a short distance from a stagnant, 16.5-acre lagoon filled with the waste sludge of a factory egg farm.

Flies hover over the pond as chicken urine and feces get pumped daily through white pipes connected from Olivera Egg Ranch's huge laying facilities, which can house more than 700,000 caged chickens.

Residents of this town 80 miles east of San Francisco say they've complained for years to local air and environmental regulators about the waste lagoon, saying the stench and eye-burning fumes give them headaches and nausea. They say nothing changed.

Now, after the Humane Society of the United States petitioned state air regulators for an investigation last month, Olivera Egg Ranch is facing six violations for expanding and operating its facilities without proper permits.

New clunker deal: Get rid of that old fridge

Are your appliances more than five years old? May be time to go shopping.

Barclays and Bank of America see looming oil crunch

For oil markets, it as if the Great Recession never happened. Surging demand in China, India and the Middle East is making up for decline in the debt-crippled West, ensuring another global crunch within three or four years.

Bank of America and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade. This is a stark contrast from recessions in the 1980s and 1990s, when it took years to work off excess drilling capacity built in the boom.

The Paradox of peak oil

The irony goes two ways: as much as the fossil fuel economy does not end, the very knowledge of its peak and the increasing price actually create the conditions for the transition to new low-carbon solutions and unconventional sources.

This is also largely facilitated by the fact that, during the transition, peak oil creates future insecurity and is also marked by high levels of price volatility. Volatility in price will impose uncertainty in future investments in stranded, conventional or uneconomic reserve sources.

This will be disruptive and these disruptions will create an inclination to move to less volatile sources and diversification of sources to improve resource security and lower supply risk.

Fossil-fuel resources running out: scientist

DAVID Hughes, a geoscientist who studied Canada's energy resources for 32 years with the Geological Survey of Canada, does not mince words when it comes to his views on the earth's fossil-fuel resources.

Speaking at the Future of Trucking Symposium in Winnipeg on Thursday, Hughes said production of non-renewable fossil fuels will likely peak early this century. He said some noted experts believe that happened in 2008.

That will mean the end of cheap energy to fuel the global supply chain.

"The existing paradigm is over, whether we like it or not," he said. "It is just a question of time."

Crude Oil Falls as Dollar Gains After Fed Raises Discount Rate

(Bloomberg) -- Crude oil fell for the first day in four after the Federal Reserve raised its discount rate, pushing the dollar higher and damping investor demand for commodities.

Oil pared yesterday’s 2.2 percent rally as the U.S. currency traded at a nine-month high against the euro. The Fed raised the rate it charges banks for direct loans for the first time in more than three years. Energy Department data showed U.S. crude inventories rose 3.09 million barrels last week, topping a forecast for a 1.73 million-barrel increase in a Bloomberg News survey.

Crude Oil May Fall on Rising U.S. Stockpiles, Survey Shows

(Bloomberg) -- Crude oil may fall next week on rising U.S. inventories and speculation that demand will decline next month, a Bloomberg News survey showed.

Twenty-three of 45 analysts surveyed, or 51 percent, said oil will decline through Feb. 26. Fourteen respondents, or 31 percent, forecast a gain and eight said prices will be little changed. Last week, 50 percent of analysts predicted there would be an increase in futures.

BP, Shell, Noble Hire Tankers to Store Jet Fuel, List Reports

(Bloomberg) -- BP Plc, Royal Dutch Shell Plc and Noble Energy Inc. hired four tankers this week to store jet fuel off northwest Europe, Lloyd’s List reported, citing an Asia- based broker with freight-derivatives exchange Imarex ASA it did not name.

Oil Price vs. Non-OPEC Supply

Non-OPEC crude oil supply peaked six years ago in 2004, at a sustained annual average of 42.068 mbpd (million barrels per day). Supply then fell every year thereafter through 2008, before making a small recovery in 2009. What’s telling, of course, is that supply peaked in a year when the price of oil averaged only $41.51 per barrel.

Yes, I’ve made this point before but it’s worth making again: Non-OPEC oil supply, which accounts for 60% of total world supply, failed completely to make a response to price.

Blame Canada!

My opinion is that we may be nearing the peak of easy production—where the large oil discoveries of the past 50 years that didn’t require much work to find and develop are declining, and new discoveries are in harder-to-reach places.

And government stimulus or no government stimulus, if the price of anything goes high enough, alternatives will be developed.

The Only Way to Play Energy Now

That's right, I said it ... despite a shaky economy and despite the Obama administration's likely crackdown on speculators that the Commodity Futures Trading Commission now blames for 2008's historic run-up.

Because, let's face it, over the long haul, demand for oil and gas will drastically outstrip supply. And the majority of that supply is controlled by a handful of obscenely wealthy foreign businessmen who, as old T. Boone Pickens points out, don't like us very much.

Gas cost increase boosts Canada's inflation rate

Canada's inflation rate took its biggest jump in more than a year in January as higher prices at the pump pulled up consumer prices.

Inflation edges higher

NEW YORK (CNNMoney.com) -- Consumer prices rose from a year ago amid climbing gasoline prices, the government said Friday.

The Consumer Price Index, the government's key inflation reading, rose 2.6% during the past 12 months.

Total Workers on Strike Vow to Halt Refinery Output

(Bloomberg) -- Total SA refinery workers on strike at plants across France threatened to halt crude processing operations and create fuel shortages.

The Confederation Generale du Travail union said today the disruption may spread to other refineries, including Exxon Mobil Corp. plants in Port-Jerome Gravenchon, Normandy, and Fos- sur-Mer in southern France.

Morgan Stanley ups US rig outlook

Investment bank Morgan Stanley said it was incrementally positive on US offshore drillers, citing a surge in jackup rig demand, and named Ensco International, Noble and Transocean as its top picks in the sector.

Arrow Wins Approval for A$550 Million Queensland Gas Pipeline

(Bloomberg) -- Arrow Energy Ltd., Royal Dutch Shell Plc’s coal-seam gas partner in Australia, won government approval to build a pipeline to the proposed Fisherman’s Landing liquefied natural gas plant in the state of Queensland.

Construction of the link, expected to cost about A$550 million ($493 million), will start next year, with the first gas supplied for processing in late 2012, Arrow said today in a statement to the Australian stock exchange. The pipeline will stretch northwest from Dalby in the Surat Basin to Chinchilla, before heading north to Gladstone on the central Queensland coast, Arrow said.

GE to supply power generation equipment for gas-fired plants in Iraq

GE has signed contracts totaling approximately $200m to supply power generation equipment and services for two gas-fired power projects in the Kurdistan region of Northern Iraq.

Cnooc, Sinopec Said to Mull Devon’s Caspian Oil Stake

Bloomberg) -- Cnooc Ltd. and China Petroleum & Chemical Corp. are considering bidding for a Devon Energy Corp. stake in an Azerbaijan oil field that may fetch as much as $3 billion, said two people with knowledge of the matter.

Japan’s Itochu Corp. and Inpex Corp. are also among companies that may bid for the 5.6 percent holding in the Azeri- Chirag-Gunashli oil project, four people said, asking not to be identified because they aren’t authorized to discuss the sale publicly.

Iran Says 2,000 Km of Persian Gulf Oil Pipelines Need Repair

(Bloomberg) -- Iran has 2,000 kilometers of Persian Gulf oil pipelines that need to be repaired or risk leaking, which may result in “serious sea pollution,” Mohammad-Javad Mohammadi-Zadeh, vice president of the country’s environmental protection agency, said in the state-run Islamic Republic News Agency.

Technical problem curtailing production at Buzzard

Nexen said yesterday the Buzzard oil field in the UK North Sea had reduced output to 30,000-50,000 barrels of oil equivalent per day (boepd) because of a technical problem.

The Canadian oil and gas company, which operates the UK North Sea’s biggest field, said, in a statement with its annual results: “We are currently investigating the cause and have temporarily reduced production volumes. Preliminary findings suggest that Buzzard will be operating at these reduced rates for the next several weeks.”

Eni Stake Sale Could Be Risky for Italy, Poli Tells Corriere

(Bloomberg) -- An Italian government sale of its stake in Eni SpA could be “dangerous and problematic” for the country, Chairman Roberto Poli told Corriere della Sera.

Italy has “lost too many essential companies through pure financial operations,” Poli said in an interview with the daily.

Brazil's Petrobras announces oil discoveries in Angola

Brazil's state-owned oil and gas giant Petrobras announced on Thursday two oil discoveries in Angola.

According to the company, the discoveries were made in wells of Nzanza-1 and Cinguvu-1, which are located in Block 15/06, some 350 kilometers northwest of Angola's capital city Luanda. The oil was found in a water depth of some 1,400 meters.

Frantic Warning Given Before Blast At Middletown Plant

Minutes before a deadly power plant explosion in Middletown, an employee monitoring natural gas levels discovered a dangerously high concentration and broadcast a frantic radio message urging workers to evacuate.

The warning came too late for five men who were killed and the dozens who were injured in the 11:17 a.m. blast on Feb. 7. Since then, a survivor, other plant workers, investigators and engineering experts have described in detail conditions at the plant that preceded the radio message — conditions they believe may have contributed to an explosion that was heard and felt for miles.

Falklanders 'disappointed' at Argentinian moves

LONDON (AFP) – Falkland islanders are "disappointed" at Argentina's move to disrupt oil drilling in the south Atlantic archipelago, their leaders said amid a war of words between London and Buenos Aires.

In a statement posted on the Falkland Islands government website, they insisted that drilling would begin as planned next week, "weather permitting."

Niger leader Mamadou Tandja held after military coup

Niger President Mamadou Tandja and his cabinet are being held by soldiers after a gun battle and coup attempt in the capital, Niamey.

Gunfire broke out around the presidential palace at about 1300 (1200 GMT) and continued for 30 minutes, says the BBC's Idy Baraou in the capital.

State radio is playing military music - a similar pattern to two coups in the 1990s.

Tensions have been growing in the uranium-rich nation since last year.

Oil Addiction: Fueling Our Enemies

In Iraq and Afghanistan today, our military is facing down bullets and improvised explosive devices that are being paid for right here at home!

The U.S sends approximately one billion dollars a day overseas to import oil. While this figure is staggering by itself, the dangerous implications of our addiction are even more pronounced when analyzing where our money goes -- and whom it helps to support.

Today, the Truman National Security Project is releasing our latest report, Oil Addiction: Fueling Our Enemies.

As an Iraq veteran, I am joining with hundreds of my fellow veterans as part of Truman National Security Project's Operation Free to secure American with clean energy. We want to make sure Americans understand the true costs of our addiction to oil.

Audi A3 gets diesel right, but noises can annoy

Car companies that believe they must tune transmissions to shift somewhat unresponsively to get good fuel economy should run the A3 TDI around their test tracks, then try to develop something as good as the six-speed S Tronic — a dual-clutch, automatically shifted manual. Those are growing in popularity because they are more fuel-efficient than most automatics or even conventional manuals.

Frost & Sullivan’s view of car sharing

As the population swells and clusters increasingly in urban centers, appetites for personal convenience surge and the environment suffers. The increasingly urgent need to address consequent issues, and especially the pressing need to mitigate climate change, have fuelled interest in alternative transportation modes. One of the most innovative and promising of these is car sharing, a personal transportation solution based on shared, self-service, on-demand, pay-as-you-use, short-term vehicle usage. This form of car rental slashes the fixed costs of vehicle ownership, curbs fuel costs, reduces vehicle congestion and emissions, and, importantly, provides a solid platform for the growth and acceptance of EVs.

From 'Pawn Stars' to 'Pickers,' America's trash is TV's treasure

Historical significance and story lines aside, the lingering effects of the recession and unemployment angst appear to be behind the growing interest in salvaging treasure from castoffs and clutter, giving waste management a whole new meaning.

"Not all of us are going to hit the lottery, but all of us have something laying around the house," says independent media analyst Shari Anne Brill. "The beauty of these shows is they can help you assess if the junk you have is actually worth something."

..."Before the recession, it was about families raising money for luxury items like hot tubs," Sencio says. "But that morphed into something more practical — like raising money for a new stove."

World's top firms cause $2.2tn of environmental damage, report estimates

The cost of pollution and other damage to the natural environment caused by the world's biggest companies would wipe out more than one-third of their profits if they were held financially accountable, a major unpublished study for the United Nations has found.

The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils.

'Main Street' economic conditions misread by GDP

Traditional gauges of economic activity severely overstate the standard of living as experienced on 'Main Street,' say University of Maryland researchers, who have worked with their state officials to apply a more accurate and greener index.

Maryland recently became the fourth U.S. state to adopt the Genuine Progress Indicator (GPI) as a supplement to the traditional state-level economic index, the Gross State Product (GSP).

"This is not merely a question of dueling statistics - the difference in the two figures can be startling and represents very different pictures of our standard of living," says Matthias Ruth, director of the University of Maryland's Center for Integrative Environmental Research (CIER), which calculated the GPI for the state.

Palm Oil, Sugar Cane Most Sustainable Energy Crops, Study Shows

(Bloomberg) -- Sugar cane grown in Brazil and palm oil from Malaysia and Indonesia rank as the most sustainable of the current generation of biofuel crops, according to researchers at Wageningen University in the Netherlands.

Researchers at the university’s plant-science department compared nine crops on criteria including soil erosion, water use for each unit of energy produced and nitrogen usage, according to Sander de Vries, author of the comparative study.

“In terms of net energy, sugar cane has the best score of all energy crops,” Wageningen University’s De Vries said by telephone yesterday. “A crop like corn, which scores poorly, is at 10 percent of that.”

Electric avenue: Electric cars on a two-way street?

Think of it as the end of cars' slacker days: No more sitting idle for hours in parking lots or garages racking up payments, but instead earning their keep by helping store power for the electricity grid.

"Cars sit most of the time," said Jeff Stein, a mechanical engineering professor at the University of Michigan. "What if it could work for you while it sits there? If you could use a car for something more than just getting to work or going on a family vacation, it would be a whole different way to think about a vehicle, and a whole different way to think about the power grid, too."

Russia to fund Bulgaria Belene nuclear project

SOFIA (Reuters) - Russia will extend funding to Bulgaria for the construction of the stalled Belene nuclear power plant project until Sofia finds a strategic investor, Bulgaria's economy and energy minister said on Friday.

Ormat CEO Expects to Double Power Output From Geothermal Plants

(Bloomberg) -- Ormat Industries Ltd., the second- biggest owner of geothermal power plants in the U.S., expects to double its output, aided by cash from government stimulus programs, Chief Executive Dita Bronicki said.

Scientists, Amish to fight Chesapeake Bay pollution

The latest effort to clean up one of America's most polluted waterways is focusing on an unusual target — two dozen mostly Amish farmers.

Federal and state environmental officials are working with Lancaster County, Pa., farmers to stop cow manure from draining during rainstorms into a nearby stream. That stream flows into the Chesapeake Bay, which has remained highly polluted despite $6 billion spent over the past 25 years to clean it up.

Vehicle Tests on Emissions Were Faked

Dozens of auto repair shops and service stations in New York City, Long Island and Westchester County faked the results of emissions tests, giving nearly 21,000 cars and light trucks passing grades, state environmental officials said Thursday.

Proposal calls for emissions study with new government-approved projects

The Obama administration proposed rules Thursday that could affect construction of coal-fired power plants and other government-approved projects that produce large amounts of greenhouse gases.

The guidelines for the first time set uniform standards on how federal agencies consider the causes and effects of climate change during their environmental analyses. They would require study of the greenhouse gas emissions of any project expected to emit at least 25,000 metric tons of carbon dioxide a year -- roughly 4,600 cars' worth.

Climate pact appears increasingly fragile; U.N. official quits

Just two months after patching together a climate deal in Copenhagen, the world's biggest emitters of greenhouse gases are trying to figure out how to keep the fragile accord together, while the United Nations, which has played a central part in 15 rounds of climate talks, seems destined for a smaller role in the future.

Climate sceptics are recycled critics of controls on tobacco and acid rain

The fact is that the critics — who are few in number but aggressive in their attacks — are deploying tactics that they have honed for more than 25 years. During their long campaign, they have greatly exaggerated scientific disagreements in order to stop action on climate change, with special interests like Exxon Mobil footing the bill.

U.S. Climate Data Reliable

A study by scientists from the U.S.'s National Climatic Data Center refutes claims from climate change skeptics that data from U.S. weather stations was seriously flawed and exaggerated the rate of temperature increases.

The study, published in the Journal of Geophysical Research, says that U.S. weather stations may have actually slightly underestimated temperature increases.

Missing 'Ice Arches' Contributed to 2007 Arctic Ice Loss

PASADENA, Calif. – In 2007, the Arctic lost a massive amount of thick, multiyear sea ice, contributing to that year's record-low extent of Arctic sea ice. A new NASA-led study has found that the record loss that year was due in part to the absence of "ice arches," naturally-forming, curved ice structures that span the openings between two land points. These arches block sea ice from being pushed by winds or currents through narrow passages and out of the Arctic basin.

Beginning each fall, sea ice spreads across the surface of the Arctic Ocean until it becomes confined by surrounding continents. Only a few passages -- including the Fram Strait and Nares Strait -- allow sea ice to escape.

"There are a couple of ways to lose Arctic ice: when it flows out and when it melts," said lead study researcher Ron Kwok of NASA's Jet Propulsion Laboratory in Pasadena, Calif. "We are trying to quantify how much we're losing by outflow versus melt."

Re: Barclays Outlook for Higher Oil Prices (uptop)

China and India's ("Chindia's") oil imports as a percentage of net oil exports from Saudi Arabia, Russia, Norway, Iran and UAE (the 2005 top five net oil exporters) rose from 19% in 2005 to 27% in 2008 (EIA).

If, for the sake of argument, we extrapolate Chindia's 2005-2008 rate of increase in net oil imports out for a few years and if we take Sam's most optimistic projection for net oil exports from the (2005) top five net oil exporters, then in 2018--eight years from now--Chindia's net oil imports would be equal to 100% of net oil exports from Saudi Arabia, Russia, Norway, Iran and the UAE.

As we have discussed, the recent pattern that we have seen is that non-OECD oil importers are effectively outbidding OECD oil importers for oil supplies, so my outlook for OECD oil importers like the US is that we will be squeezed between a long term, and accelerating, net export decline and rising oil import demand from non-OECD oil importers like China & India.

I think I'm going to have emblazoned on a new T-Shirt;

"16% of 3 Billion = 96% of 500 Million..."

-meaning that we are not talking about 'Poorer countries' vs 'Richer countries' when thinking of the likes of 'Chindia" but rather subsets of massive populations that can afford to BUY THE OIL (and its derivatives) at any $XXX asking price...

...or put another way;

Joe Sixpack going down the Mall in his 6litre Ford Freeloader v8 to buy ciggies is now competing with GuptaSingh who is using his new fuel efficient compact to get to his accountancy practice...

In addition the West has such high amounts of debt that debt repayment is already a significant fraction of average income expenditure whereas these 'Poorer countries' are only just getting aquainted with the GoldmanSachs boys bag of tricks...


When one considers the vast unfunded liabilities that most OECD governments have (plus the on the books public + private debt), many OECD countries are effectively bankrupt--so one begins to wonder who is "rich" and who is "poor."

But unfunded liabilities can be un-promised. I think there is a decent chance that this is a real (and perhaps the only) possibility to get out of this mess. We overpromised and that has to be fixed. Once the first state files chapter 9 and reduces unfunded liabilities there will be a large number of states following that one.


I may be wrong, but I think that only cities can file Chapter Nine. I don't think that there is a provision for states filing bankruptcy.

But on the national level, as Marc Faber said, promises will be broken, or currencies will be inflated, or both.

This link
has an interesting twist on it - look at the Nevada situation.
I agree though that promises will be broken in some way, shape or form


It will certainly hurt taxpayers if munis cannot be insured any more, since interest rates will spike. OTOH, one should not cry in ones beer for the poor investors, having to invest on something that is not a sure thing! It will also curb reckless spending - not a bad thing, all in all.


I could be wrong, too, but my impression is that states can simply default on their debts, and that's that. In the US federal system, they retain sufficient sovereignty that they can actually do sovereign defaults. I suspect that the US Supreme Court could require them to pay off whatever portion of their obligations were owed to the FedGov, but that is about it.

I'm not familiar with the history of most states, but I do know that Indiana defaulted in the 19th century, and its present constitution prohibits from ever paying on the defaulted obligations:

Section 7. No law or resolution shall ever be passed by the General Assembly of the State of Indiana, that shall recognize any liability of this State to pay or redeem any certificate of stock issued in pursuance of an act entitled "An Act to provide for the funded debt of the State of Indiana, and for the completion of the Wabash and Erie Canal to Evansville," passed January 19th, 1846; and an act supplemental to said act, passed January 29th, 1847, which, by the provisions of the said acts, or either of them, shall be payable exclusively from the proceeds of the canal lands, and the tolls and revenues of the canal, in said acts mentioned, and no such certificates or stocks shall ever be paid by this State.

At least in the US "unfunded liabilities" are almost completely dominated by medical cost inflation. A serious program to reduce that is the only meaningful strategy for dealing with them.

in 2018--eight years from now--Chindia's net oil imports would be equal to 100% of net oil exports from Saudi Arabia, Russia, Norway, Iran and the UAE.

Yes, that is a matter of serious concern. The US is importing nearly 2/3 of its oil and the EU is even worse. If they get into a bidding contest for oil with the emerging Asian superpowers, it would be a bad experience for their consumers.

Based on their recent efforts to buy up the world's oil supplies, it seems the Chinese have already thought the implications of this situation through. OTOH, US and British authorities seem to be completely oblivious of it. However, the French have invested in nukes and high-speed trains.

The Saudi Dollar/oil peg is bet by the Number One oil producer on the US at the expense of China.

China does not have a trading currency and cannot pay for any goods except with the currencies they collect by way of exports. It is impossible for the Chinese to outbid the US for any good using US currency for more than a short period.

China's business is lending at low rates and exporting manufactured goods - that is, cheap labor + cheap coal in modified forms. The China export business is fading fast and China is now lending to itself at an accelerating rate and monetizing interest costs, which is a kind of Ponzi scheme.

China dollar reserves will be spent for oil and the bilateral deals between China and non- Saudi producers will come under pressure as dollars disappear from world FX markets. Look for China to reach inte the Eurodollar markets to dump non- dollar currencies for dollars as well as sell Treasuries (which already started a few months ago).

Holding the dollar peg overseas will bankrupt China and do so a lot faster than most people think. China's economy is fragile and burdened mis- investment. Its infrastructure cost advantage has largely disappeared as it is rapidly becoming more auto- centric and energy dependent. This leaves China with a choice, to continue to peg its currency to the dollar and import US deflation or break the peg by inflation/devaluation.

I've been calling for hyperinflation in China for some time. I think this inevitable for two reasons.

- China lending has shifted from lending to the US to lending to well- connected Communist party apparatchiks who have borrowed trillions of yuan for real estate speculation. These loans would be eradicated by rapid inflation, while deflation would ruin the same people who run the Chinese government.

- China cannot export any more and must make its hundreds of millions of low wage sweatshop toilers into consumers in order to continue to manufacture. The only way to do this is to put currency into the toilers' pockets. Welcome to the wage- price spiral!

Hyperinflation is another form of default. It enriches the government at the expense of the public. Even a large government like China cannot use the oil that its citizenry is too poor to consume. At some point China will have to start buying dollars from 'Mama'. At that point China will have nothing to trade. It's cheap labor advantage will be worthless or non- existent. China will be Greece or Ireland ... with some dirty coal.

China had an opportunity a couple of years ago to risk the yuan as a trading currency and they let the opportunity pass. It was a mistake that will be fatal to the current Chinese regime. Saudia will wind up with all of China's dollar currency reserves and China itself will return to the state it was before its 'Great Experiment in Being Just Like America'.

if we take Sam's most optimistic projection for net oil exports from the (2005) top five net oil exporters

westexas, what exactly is the most optimistic projection ? Taken from plateau oilproduction in KSA and Russia until about 2020 ?

First, remember that we are talking about net oil exports. Saudi crude production in 2008 was only down by 3% versus their 2005 rate, but their 2008 net export rate was about 8% below their 2005 rate.

In any case, here is Sam's beast case, most optimistic, projection for the (2005) top five net oil exporters (Saudi Arabia, Russia, Norway, Iran & UAE), at three mileposts along the projected decline. Most optimistic assumes lowest rate of decline in production and lowest rate of increase in consumption. Note that the 2006-2008 data points fall between his middle case and best case. CNOE = Cumulative Net Oil Exports.

Annual Net Oil Exports and Percentage of Post-2005 CNOE Remaining, for (2005) Top Five Net Oil Exporters:

2005: 24 mbpd & 100%

2013: 20 mbpd & 48%

2022: 11 mbpd & 14%

2034: Approx. zero & zero

First, remember that we are talking about net oil exports.

I know, WT.

Most optimistic assumes lowest rate of decline in production and lowest rate of increase in consumption.

So even in the most optimistic scenario production keeps going down. This is probable but not sure, I would say a 95% chance. Westexas, what are the numbers for 2013, 2022 and 2034 with flat production in KSA and Russia and low rate of increase in consumption ?

Actually, I think that Sam's best case shows production increasing up until this year. The projections really haven't changed much from our 2007 paper. The country by country low case, middle case and high case projections are shown:


westexas, in that article can be read:

Recently, Sadad al-Huseini the former head of exploration and production at Saudi Aramco, has stated that he believes total world oil production will not increase, that world proved oil reserves are significantly overstated and that key oil fields in the Middle East are significantly depleted. While he is cautiously optimistic about future Saudi production, he points out that it is heavily dependent on the production performance from new fields.

Russia’s initial 10 year projected production decline rate is -5.1%/year ±2%. The projected rate of increase in consumption, which is heavily weighted toward recent consumption and therefore on the low side, is +0.3% ±0.8%. The initial 10 year projected net export decline rate is -8.2%/year, ±4%. Our middle case shows Russia approaching zero net exports in 2024, within a range from 2018 to 2029.

So KSA production, depending on what new fields can do, decline rate is projected at 2,7% +/- 2% and Russia projected production decline rate is -5.1%/year +/-2%. For Russia that is a rather steep decline. I would have based the most optimistic scenario on the possibility that KSA and Russia manage to keep their production about flat until 2018-2020. And I am interested in what the numbers are then; I don't have a program to run the numbers.

Russia has basically been on a production plateau since 2007. The problem with maintaining this plateau, even with new fields, is the same problem that all post-peak regions face--the decline from old, large oil fields.

In any case, here is a net export scenario for Saudi Arabia, based on flat total liquids production of 11 mbpd, with a 5.7%/year rate of increase in consumption, which I believe is below what they showed from 2005-2008:

...and here's one possible positive feedback loop that will bend this exponent curve into more of an 'S' shape;

As net oil availability decreases and hence price increases in order to avoid falling income KSA will seek to maximise exports by building out dessert based solar arrays to replace currently ultimatley oil-powered desalination...

-IMO the reason this has not been seen in existing countries like UK and Indonesia is that these governments are pre-peakers, once the threat is clear action will be taken...


Also SA and some other OPEC have absolutely nothing except oil. Just to maintain the lifestyle of royalty they need to keep exporting oil. I expect the price volatality to be as destructive to their economies as it is to ours ...

KSA will seek to maximise exports by building out dessert based solar arrays to replace currently ultimatley oil-powered desalination

And when that is in place within 10 years, KSA oilconsumption in 2020 will be about 3,5 mbd or less.

Han -- Mmmmm...chocolate fudge covered solar panels, I just love "dessert" based solar arrays. I am free to tease as geologists are well known as being some of the worst spellers on the planet.

Yeah ROCKMAN. It's going to be a big dessert with a lot of chocolate, fits nice with the chocolate rainbows and unicorns. But when all the chocolate is gone the sun will shine like hell.

Russia has basically been on a production plateau since 2007. The problem with maintaining this plateau, even with new fields, is the same problem that all post-peak regions face--the decline from old, large oil fields.

Sure westexas. But one could give the small possibility that they are able to keep plateau until 2018-2020 at least a chance in the different scenario calculations. Of course your warnings should be taken very seriously. To get the necessary doses of realism I regularly visit TOD.

Westexes, I've been trying to think of an analogy to use for the ELM -something highly visual that people will immediatley say "Oh dear!". Of course graphs do it in most instances but hows this for size;

The amount of oil a country produces can be considered like the length of a pole-vaulters pole whereas the amount they consume is like the height of the bar...

The gap between the jumper and the bar represents the amount of oil that gets released each year into the pool of oil that everyone bids on...

Now each year the bar gets hiked up by x% and someone chops x% of the pole...

...hence each year this global pool shrinks in size...

...and what your saying to use the analogy is that by 2018 the clearance needed just by Chindia is equal to the current clearance that the whole world enjoys...



that by 2018 the clearance needed just by Chindia is equal to the current clearance that the whole world enjoys

The global economy has collapsed by then, unless the more than 'most optimistic scenario' comes true (KSA and Russia plateau production until 2018-2020), and with it collapses oil consumption.

I have a question in an area where I have little expertise. I heard though a fairly credible source that a very competent engineer who works for a car company is claiming that he can develop an after-market device that would use kinetic energy to give cars two to three times the gas mileage they are currently doing. This seems impossible unless he is talking about using that and also shrinking the size of vehicles? What could a device that captures kinetic energy capture in terms of improving a current vehicles gas mileage?

If he is right that would be a game changer but I probably don't believe it.

As far as I know, kinetic energy storage devices = flywheels.
There are ways to incorporate flywheel technology into vehicle propulsion systems; the technology is pretty well known, nothing new. I believe the downsides are increased vehicle weight and extra cost for the additional precision parts.

Hopefully the flywheel is not too efficient, as it will turn into a part of the Command-Central of the vehicle, alongside the driver.
The gyroscopic effect will tend to want the car to go straight forward in curves ...... bang!

Of course, it is possible to use multiple fly wheels, each rotating in different directions. Which would make the vehicle want to stand still? Or tear itself apart!


Not knowing the exact technology, I would expect that the system would be a mechanical version of a hybrid. The energy would be stored in a flywheel instead of in a battery. These devices have been proposed for decades, since high rpm flywheels were first used in satellites. If the flywheels are less expensive than batteries and lower weight, the resulting improvement in MPG would be expected to be better than that of a battery.

E. Swanson

He could also be talking about a hydraulic accumulator system: A hydraulic pump pumps oil into a cylinder which compresses nitrogen gas while the vehicle brakes, and when the vehicle accelerates again the pump (or a seperate unit, I'm not sure) is used as a hydraulic motor to help the vehicle accelerate.

This both saves energy and allows engine size to be reduced because the peak load (acceleration) is mitigated by the hydraulic accumulator. However, I doubt a factor of 2 or 3 fuel savings could be achieved. A CVT and an engine sized appropriately to the car would probably be just as good.

Either not-credible source or incompetent engineer. It is not possible. Edit: you guys above are missing the point, the only available kinetic energy is to divert energy lost to breaking, which is nowhere near enough to double or triple the mileage.

Flywheel storage has long been used for stationary usages. In out efficiency should be greater than for batteries, so perhaps in a completely start/stop dominated driving reqime you could get that kind of economy boost. One difficulty for mobile applications is that rotating masses are huge gyroscopes, and will resist having their axis of rotation changed. This can cause serious problems with turning, or woth slope changes. I think that means the flywheel has to be mounted so its axis of rotation doesn't change as the orientation of the vehicle changes, which
should translate into greater expense and size.


Gimbals are great, but then you have to have a linkage to apply and then extract the energy from the wheel, doing so with very high efficiency. At that point, it seems that the losses in batteries or supercapacitors are fairly reasonable, weighed against the precision parts and likelihood of considerable maintenance and replacement..

If you can feed and discharge the wheel electromechanically with acceptable losses, you might have an expensive component that would, like renewables, make sense when viewed as a long-term asset, where batteries are more attractive as a quicker and simpler solution in the short-term.

The car will automatically lean in curves ;) and it will work great for left or right turns.


Sounds like a flywheel hybrid (http://www.hybridcars.com/related-technologies/flywheel-hybrids.html):

Engineers are now taking the geared high-speed flywheel concept and applying it to full-sized cars, trucks and buses. The prize is an SPU efficiency of at least 60%, with the possibility of 80% or more with further development. The result is a further dramatic improvement in fuel economy, at lower cost, without sacrificing acceleration.

a very competent engineer who works for a car company is claiming that he can develop an after-market device that would use kinetic energy to give cars two to three times the gas mileage they are currently doing.

But I, on the other hand, could offer you an even better deal on a bridge in New York which will soon be for sale at distress prices due to the city's economic problems. Don't delay, because you might miss a great opportunity! (There are also opportunities to buy some rare waterfront property in New Mexico).

Remember the basic investing rule: If it sounds to good to be true, it is too good to be true.

Where o where is my old Fish carburator?

Re: Missing 'Ice Arches' Contributed to 2007 Arctic Ice Loss

The article mentions a report in the GRL, published 9 February 2010. Here's the reference:
R. Kwok, L. Toudal Pedersen, P. Gudmandsen, and S. S. Pang (2010), Large sea ice outflow into the Nares Strait in 2007, Geophys. Res. Lett., 37, L03502, doi:10.1029/2009GL041872.


[1] Sea ice flux through the Nares Strait is most active during the fall and early winter, ceases in mid- to late-winter after the formation of ice arches along the strait, and re-commences after breakup in summer. In 2007, ice arches failed to form. This resulted in the highest outflow of Arctic sea ice in the 13-year record between 1997 and 2009. The 2007 area and volume outflows of 87 × 103 km2 and 254 km3 are more than twice their 13-year means. This contributes to the recent loss of the thick, multiyear Arctic sea ice and represents ~10% of our estimates of the mean ice export at Fram Strait. Clearly, the ice arches control Arctic sea ice outflow. The duration of unobstructed flow explains more than 84% of the variance in the annual area flux. In our record, seasonal stoppages are always associated with the formation of an arch near the same location in the southern Kane Basin. Additionally, close to half the time another ice arch forms just north of Robeson Channel prior to the formation of the Kane Basin arch. Here, we examine the ice export with satellite-derived thickness data and the timing of the formation of these ice arches.

E. Swanson


Discusses the relationship of the recent heavy snowfall to AGW.

Meanwhile, here in Texas, insanity reigns supreme. Governor, "Secede Now" Perry is suing the EPA...



Just substitute AGW for evolution in the comic below ;-)

There is a perennial, make that biennial because the legislature meets every two years, move in Texas to put 'intelligent design' into the science programs in public schools. I am fairly certain that not just a few believe that the earth is flat.

Ah jus gotta move me outta here, y'all.



Trust me Florida ain't much better...

Man and dinosaurs did co-exist and still do, they are called birds (search "birds are dinosaurs")

If God exists than he is the cause of everything including evolution.

Maybe Texans are brighter than you think.

If that isn't a perfect example of spin, then one doesn't exist.


On the other hand, see:
Arctic cable pitched to Canada

A U.S. company with plans to run a $1.2-billion fibre optic cable through the Northwest Passage has approached Canadian officials to begin laying the groundwork for approval of the proposed telecom link between Eastern Asia and Western Europe via North America's polar frontier.

There's also a project underway to connect the Canadian arctic seaport of Churchill to the Russian arctic seaport of Murmansk via the Arctic Bridge route - a shortcut from Central North America to Central Europe.

That's the video showing the ice flows between Oct 1, 2007 and March 15, 2008


From the link up top The Paradox of peak oil

While peak oil pundits tend to be alarmists, the opposing reaction tends to be complacent. Neither is conducive to good policy. There is always an aversion to risk. Both trajectories will survive in the transitional period until the real winner takes all.

And from the link Blame Canada

And government stimulus or no government stimulus, if the price of anything goes high enough, alternatives will be developed.

This is the general theme seen in more and more articles on peak oil. That is, even though peak oil may be a fact there is absolutely nothing to be concerned about. There is really no risk because alternatives will be developed, party on.

Oil prices have already been extremely high, high enough to plunge us into a deep recession. And they remain very high, high enough to prevent any real recovery, and alternatives have still not been developed. There is no real alternative to cheap oil.

The paradox of peak oil is that the real winner will be the Grim Reaper.

Ron P.

My short post yesterday discussed this. It would take an extraordinary scientific breakthrough to create the alternatives we would need, and there have not been that many paradigm changing discoveries in recorded history. Finding that new technology that does not exists is only part of the problem.

In addition, it would need to be implemented. Conservatively, it would take 20 years or more (more likely more) to deploy those alternatives. We are talking about a major infrastructure rebuild here. And, given our history, it won't happen even then. I mean, we do have some alternative electrical generation technologies that could have been deployed during the past 25 or 30 years, and have done nothing. In fact, we have allowed the inefficient but existing infrastructures for both transportation and electric decay.

Strange species...


Correct. The alternatives to oil are limited. Laboratory finds that look good have problems of scale among other faults. And the current alternatives face resistance from analysts who seem only able to concentrate on one aspect of an alternative at a time.

Unfortunately for some reason they concentrate on the most fallacious abstract analysis, for example EROEI/Net Energy and sustainability. They ignore more important aspects like utility, availability of feedstock over time, costs of that feedstock, and infrastructure availability to handle and store the feedstock. Also ignored are the in place structural mandate for liquid fuel compatible with gasoline or diesel. The structural mandate is powerful and difficult to change without governmental mandates and subsidies.

This article from up top is a prime example:

Palm Oil, Sugar Cane Most Sustainable Energy Crops, Study Shows

It is clear that palm oil and sugar are human food and any expansion of these is likely to reduce human food supply in some of the poorest parts of the world. Yet corn ethanol is bashed since it is barely energy positive according to the analyst.

It doesn't matter. Electricity is energy negative, yet that is held up as as a partial answer to Peak Oil. Utility can be more important than energy analysis which is only valid when comparing like forms of energy anyway. A high utility form replacing a low utility form is sustainable even if energy in/out analysis says no. Energy is not finite. Oil is finite. A new supply of energy arrives each day from the sun that exceeds all the oil energy consumed in a day.

The trick is to convert that energy into forms that are usable by the current infrastructure mandate and to change that mandate over time away from oil without reducing as much as possible the food supply. The alternative energy form should be such that parts can be shut down in situations of bad weather or run away prices and that such action mitigates the food supply. This rules out cellulosic ethanol for example since it is made from non food crops by diffinition.

Since palm oil and sugar are direct human food while corn is for the most part animal feed, to claim palm oil and sugar are more sustainable is ridiculous. Brazil is already importing ethanol because sugar prices make use of sugar cane for sugar more profitable than for ethanol. To say that sugar cane ethanol is more sustainable than corn ethanol makes no sense, yet that is what the article says.

Alternative energy analysis is full of this kind of nonsense. Alternative energy is a complex issue and fallacious energy in/out analysis and goofy sustainability analysis do not help.

Electricity is energy negative,

And how do you come to this statement?

It's like a Rubic's cube.. it's just so tough to avoid tacking X's screwy conclusions and trying to make some sense of it.

Can I resist? Lord, I'm trying..

Oscar Madison:
"Murray, I don't have time to unravel your logic!"

On the face of it, I suppose he's talking about a Second-law issue.. that's a tough bar to jump over, even for the mighty electron!

Actually, the EROEI for corn ethanol is so low as to make it a farce. That is because the amount of energy it takes to convert the corn into fuel is so high. Like hydrogen, which is created at an actual negative EROEI, it is more like an energy storage device. Switchgrass, which I understand grows almost anywhere, has a much higher return, but not as good as sugar cane.

Corn, while it is mostly used for animal feed, contributes to human food in that way, since we eat the animals. Beef are one of the least economic to raise, from an energy standpoint. Chickens are better, and rabbit is, from all I have read, about the best.

In any case, turning food into fuel would be okay if there weren't so many dadgum people around. Sustainability is still a function of population.


"Chickens are better, and rabbit is, from all I have read, about the best."

Perhaps, but I've never found those rabbit eggs to be very tasty ;-)

This is a summary of what was presented at the ASPO 2009 conference on this topic

Diminishing Returns of Fossil Fuel Energy Invested


The only way out is to use less. I would say there is no alternative to fossil fuels. I guess batteries and electricity $could$ replace them to some extent, but even the most advanced batteries are nothing compared to a gallon of diesel, pound for pound.

We need to prioritize use of what we have left and use them smartly, like not driving to offices to push around papers and taking WHITE kids to basketball tournaments thinking one days they'll be NBA superstars :)

Then there's the question of time. Some alternative energy technologies must double their outputs several times in order to be a significant fraction of the whole energy supply. At aggressive rates of growth, such as 10%, the time to double 5 times is 35 years! How far down the backside of Hubbert's Curve will we be when said technology rides to the rescue? What will the market conditions be then? Will anyone be able to afford a new energy source without massive new debt?

I don't believe that we can ramp renewables up fast enough to totally offset FF depletion, and I am doubtful that they can ever be ramped up enough to replace 100% of our FF use, let alone any growth.

However, there is room for expansion, even without making any assumptions about any significant technology breakthroughs. My guess is that if we (USA) set a goal of reducing our total energy use by about 75% over the course of the next half-century or so, we should be able to ramp renewables up enough to power an economy that only uses 25% of what ours does now. That seems to me to be a feasible scenario. According to this flowchart from Lawrence Livermore labs, renewable energy resources supplied 7.28 quads out of the total 99.2 quads used in the US in 2008. Increasing it to around 25 quads over the next few decades does not seem to me to be an altogether insurmountable challenge. Increasing it to 100 quads, though, would be a different story.

Actually, it isn't really even a matter of having to set a goal. I suspect that this is what will actually happen, in spite of all efforts to sustain the unsustainable BAU.

My guess is that if we (USA) set a goal of reducing our total energy use by about 75% over the course of the next half-century or so ...

Forgive my myrth (and scepticism), but the likelihood of a 75% reduction in energy use in anything like an orderly and systematic manner - I think is laughably implausable. The US public (and its politicans) have shown no willingness to get behind even a 5% reduction over the past decade or two ... let alone a serious, significant, lifestyle-changing cut.

Personally I think the US will take whatever it wants from the rest of the world, for as long as it wants (and can do so) - until they prize the gun out of its hands. I could be wrong, but I would be really interested in any signals - from say 1960 onwards - that I might be.

If the energy isn't there, then it isn't going to be used, regardless of what people might want.

I don't think that the scenario that I sketched out is going to be achieved by any sort of deliberate plan - although it could be, and probably with a lot less pain. No, we are simply going to end up doing what circumstances force upon us.


While i agree that your numbers could be right, the way down is going to be very ugly. Just dealing with the mutants that stroll the aisles of WalMart/Target/Aldis... it sends a shiver up AND down my spine of what will happen when the oil runs out and ma and jr can't get sugar O's for $.99/box. I'm investing in bows and arrows :) I think Rambo went that route.

Re: Blame Canada

It makes the interesting point that in a world of constrained energy supplies, two countries with the most energy resources and the least people are Australia and Canada.

Australia has the advantage that it is closer to the major population centers of Asia, but Canada has the stronger banking system (no Canadian banks have gone bankrupt or had to be bailed out). Both have huge energy resources which the domestic markets cannot use, so they may end up supplying much of the rest of the world in a scarce energy situation. And, of course, they also have large food surpluses, although in a global warming situation Australia might suffer (while Canada might improve.)

The Peak Oil Argument ‘As-Is’ Ignores the Reality of Alternatives

Isn't the problem with this article in that statement? There is no "Reality" of Alternatives. Wind, Solar, Tidal, and even Nuclear are real, but there has been no deployment. And, the unfortunate reality is that the existing infrastructure could not accomodate full replacement... nor even begin to accomodate it.

It would take 20 or more years to rebuild the power transmission grid to accept diversified input. And it would take that long or longer to construct sufficient wind, solar, etc., sources to implement them.

Of course, the Blame Canada item was done by an investment maven, promoting his own ideas on where to put your money to grow your wealth. That is what is important, isn't it? Growing wealth. Instead of earning it. Trading stocks, instead of owning them. What does Greer call it? Hallucinated wealth? Or was that Kuntsler? No matter, the point is that Peak Oil changes everything, starting with debt and personal consumption for non-essential goods and services. Which, of course, is why commercial real estate is seeing its problems manifest, as those selling plastic junk begin to close their doors.

Without making value judgments, we are certain to return to neighborhood stores as transportation costs soar. Big box outlets will not be feasible, simply because not enough people will be able to travel to them. The limit to size will be a factor of demographics. How many people live close enough to travel to your store? How much money will they have available? How essential is your product? Do you offer additional services [value addeed], such as training, data on use and so forth? Is there another similar store already functioning nearby? Competition will be partly price, but more the added value, and location will be top priority.

When I was growing up, we had nearby 'neighborhood stores.' Three of them were within 1/4 to 1/2 mile, and very walkable. For larger purchases, there was a bus to downtown, where dry goods were sold, and there was one very nice grocery store for 'luxury' items, fresh meats and vegetables. Every year, as Christmas drew near we planned a trip, via an electrified railway, into Chicago, where the "Big" merchants had flagship stores. Marshall Field's (no longer exists, I guess), Carson Pirie Scott, and Sears were the big draw there. It took more time that we are willing to expend today, and it was doeable and walkable. I don't see how we will be able to avoid a return to these modes of transportation and of commerce.

And, while "Blame Canada" may sound good, that places an unneeded perjorative on the entire concept. It is not because it is better, in a value-placing way, or worse. It will happen because it is necessary, and necessity remains the mother of invention.

So, my main point is that when people say, "If the price gets high enough, alternatives will be found," walking is certainly one alternative, as are streetcars, electric busses, and deferred shopping. And, they are much more likely in the mid- and long-term than are magic, phantom and fantastic new sources of energy.

Good luck investing in Canada and Australia.


And, while "Blame Canada" may sound good, that places an unneeded perjorative on the entire concept.

One has to assume it's a tongue-in-cheek pop culture reference. I'll go with the Robin Williams version:

... but Canada has the stronger banking system (no Canadian banks have gone bankrupt or had to be bailed out).

The Candian banking system might well be strong, but there is certainly nothing amiss with the Australian system either - in fact many of us think it is far too strong and not prone to genuine competition or price pressure. No bank has defaulted, nor required propping up ... their profits are good, and there exposure to toxic debt is pretty minimal. Plus Australians do not default on their home mortgages, very much.

But lack of reliable water, and the degradation of arable land, are the biggest agricultural problems we face ... not likely to be ameliorated by global warming, no. We are still a big quarry for Asia, and that keeps us in nice cars and new plasma TVs.

Knowing, as I do, nothing about the Australian banking system, I might concede that it is also extremely strong and like the Canadian system (and unlike the American system) has had no banks go bankrupt in the last few decades.

Canada is somewhat better on the reliable water front, having as it does about 20% of the world's fresh water and 0.5% of its population. It also has nice cars and new plasma TVs, although as in Australia the cars are significantly smaller than what the Americans were buying before things started falling apart.

And Canada is also a quarry for Asia, although this is not entirely a one-way street. See Husky Energy CEO to step down, run Asia business for an example.

The chief executive of Husky Energy Inc, Canada's second-largest oil producer and refiner, plans to step down and take leadership of the company's Asian business.

The company, controlled by Hong Kong magnate Li Ka-shing, has been considering a plan to create a publicly traded company out of its Asian operations, which include some large fields in the South China Sea.

It's just one big happy planet, nowadays. Canadians, being relatively color-blind, are happier about this than most people.

The "alternative" that might develop is simply having to do without, AKA "poverty".

In the past the book Possum Living: How to Live Well Without A Job and (Almost) No Money was mentioned.

More about the author and tracking down her on techdirt:

And there is another one of them thar internet games about the future.
If my memory is correct, this group did a peak oil game once before.

The link to the actual story about "Dolly Freed" is here. Pretty interesting stuff.


Thank you so much for the link to "Dolly Freed!" I truly love her book and printed it our way back when. I highly recommend it to anyone who is interested in living really low on the hog or simply wants a good survival guide.


If you poke about in my profile you'd see the links I had from the last time Dolly came up.

Interesting story on Dolly Freed.With people like that all is not lost for the US of A. Never,ever,give up.

Here is the TED Talk of Bill Gates on Energy. He talks about nuclear power and mentions the TerraPower traveling-wave reactor.

Bill Gates has also claimed that Windows is a great product.

Given the amount of time Man spends dealing with the failures of Windows, the failure of man to implement fission power, and the failure of nations to figure out who gets/who does not get EXISTING fission reactors - exactly why should Mr. Gates be believed when he opens his mouth talking about how some technology will be really great?

Should we take a poll and see just how many of us are reading your comment through this 'Notta-so-great' operating system, then?

Sure, it's the monkey on most of our backs, and it likes throwing globs of temp-files at us through the bars of its cage.. while laughing uproariously, but you gotta admit it's managed to keep reproducing pretty effectively.

it's managed to keep reproducing pretty effectively.

This forum documents human stupidity and inertia on a reg. basis.

Last time I checked the forum you read the comments on is via the power to serve - FreeBSD.
(wish they'd be able to xen dom 0.)

Always the charmer, Eric.

It's just so easy to rag on Windows, and no doubt it deserves it, but it's also like the Yogi quote,

"No one goes there any more. Too crowded."

I'm not sure if you're using BSD as an acronym for something else, but I'm afraid I'm on ratty old XP, under firefox. I'd try to set up linux, but I don't have the brainspace to replace all the Adobe Apps that I use. But if it helps you to think I'm stupid and inert, go for it, have a party.

I'd try to set up linux, but I don't have the brainspace to replace all the Adobe Apps that I use.

I am going to censor myself, and just mention that perhaps searching via google for things such as the phrase "open source" and the application, say Photoshop, may find you with alternatives, like the cross platform (M$ and Linux, plus other OSs) of Debian, GIMP, Inkscape, Open Office, and such.

If the M$ versions seemed acceptable, stop there for now, no running on Linux needed. But it does show a way to transition away from Peak M$ ;)

Your mileage may vary.

[Self-censoring now activated for Linux advocacy and Open Source advocacy, as way off-topic for TOD]

I did mention brainspace, right?

Believe me, I'd love to dive into BSP or Ubuntu, and eagerly await the chance. I am already starting to tango with Blender. As Billy Joel said, 'Sometimes just surviving is a noble fight..'

I suspect I've invited a poll to start that will test the bounds of skewed responses.. I mean really, how many weary and humbled Windows Paeans are likely to raise their hands and go 'Ooh, ooh, me!!'

My revolutionary DIY, hands-on stuff is usually around the workbench.. or what I am making WITH my plain-jane kill-bill mainstream OS.


don't worry about it, I have my laptop here with millenium on it , works fine - don't intend to change until its dead.

the question is for the "open source" crowd is - how long will it remain open source in a world wanting a return on everything ?

perhaps that should be a topic for the campfire...


" one of those sheeple everyone else complains about - baaaa!"

Should we take a poll...

Linux user since 1999.

Fortunately (or is it unfortunately) switching to Linux seemed to be easier than changing to accomodate Peak Oil :)

Linux user since 96. Scared of virus's.

It strikes and disappoints me that Bill G never approached the American Internalo-Combustio Auto-centric lifestyle.
Mandating Japanese/European-style small car standards would "suddenly cut the oil demand in half" over a decade, but noway Jose... don't mention our SUVs. This is going nowhere.

It would be great though if that nuke-waste process materialized.

**) Regarding Windows problems mentioned by Eric. I have not had any troubles for at least 5 years or more... (XP, never leave a running train...)

I was listening to the news about the "kamakaze" pilot who flew into the IRS building.
One law official said that the pilot "was angry at the IRS."

It's probably more accurate to say that he 'took his anger out on the IRS;' but remember that we have a sizeable chuck of the population that grew up being told how, if they work hard, things would work out. As it turns out the system can't fulfill that promise (that was made by salesmen).

I REALLY hope that someone goes after exploring the real reason, otherwise we really won't have gone far to prevent equvalent future incidents. The reporters didn't even cover the substance of his note; namely, his feeling of inequity. This guy felt that he lost all control over his life... his ability to choose the manner of his suicide probably gave him his only feeling of control.

a sizeable chuck of the population that grew up being told how, if they work hard, things would work out. As it turns out the system can't fulfill that promise (that was made by salesmen).

Samuel Byck felt that way about his life and decided Nixon was to blame.

An item from Drudge about a man who bulldozed his own home, in advance of foreclosure proceedings:


I am beginning to think that a lot of people are going crazy, just at different rates. . . .

My daughter, who teaches at a local college, said one of her colleagues heard from a friend, a professor at another school, who had been involved in a heated discussion with a colleague. The friend withdrew and headed back to his office. The other party followed him to his office and started physically assaulting him.

I am beginning to think that a lot of people are going crazy, just at different rates.
77% of the respondents agree with what he did - per one sites comments BTW.

If one thinks the methods of redress are crooked or non existent - other paths will be chosen. Paths that are gonna hurt. (per one of the whack job radio programs I'm just listening to - the people of Iran 'tried the overthrow' route once and 'got something worse'. Look at the calls for a 'constitutional convention' and the counter 'no don't do it' arguments for examples of 'could be worse')

Moyers and Howard Zinn - "Change will Not Come from Politician but strait from the Citizens"

And now I can't find the survey claiming dissatification with leadership in the US of A is as wide if not wider than during the separation from England. I so wanted to add that link. :-( And now I found it.

Only 21% Say U.S. Government Has Consent of the Governed
However, 63% of the Political Class think the government has the consent of the governed, but only six percent (6%) of those with Mainstream views agree.

A rose by any other name (or should that be a ruse by any other name)

They are changing the name of the war in Iraq:

War in Iraq will be called 'Operation New Dawn' to reflect reduced U.S. role


as they move the troops to Afghanastan. Wonder what they will call the Afghan affair, to reflect the increased U.S. role.

Shell games, disinformation and spin. We need to add this to the cost of oil! It is past time to tax oil and gas to pay for the indirect costs, and in particular the medical costs and military costs.


zaphod42 -

About the only true creativity I have seen coming out of the Pentagon in recent years are the action-movie names they give to their various operations, e.g., Desert Storm, Rolling Thunder, New Dawn, etc. I was always curious as to whether the Pentagon actually employs a full-time 'operation namer' .... very likely some hack who was once employed as a B-movie script writer.

A full-time 'operation namer'? They've got a whole department dedicated to naming operations. And I'll bet it has a pretty snappy name, too ;-)

It's sort of like when you're starting a rock band - if you can come up with the right name, you've got it made!

"Operation Poppy Pull".

It seems that it would be cheaper and more effective at gaining Afgani support if we just agreed to buy all of their poppy production, even outbidding the opium producers. Some of the harvest could be used for medicine production, the rest destroyed. There seems to be no substitute for this high value crop in the Afgan economy.

But we already do buy all their poppies (eventually)!

It's not like the Chinese are buying it all.

Just this way we also get to spend money on Lockheed Martin, General Dynamics and corrupt ex-Unocal consultants masquerading as heads of state.

You have to admit, TPTP know about adding value at each step in the supply chain...

I'm pretty anti-conspiracy-theory but the issue of poppies in Afghanistan keeps bothering me. After the Taliban took over the country the media repeatedly said that they had eliminated poppy production. Then we invaded. Next thing you know the Taliban was financing their military activity with opium sales.

Just how hard is it to eliminate poppy production? Lets see. Use a drone to find a poppy field. Drop a bomb. Now we are waging a big battle in poppy fields. Go figger.

Don't forget O.I.L

Operation Iraqi Liberation.

This was quickly retracted in favor of Iraqi Freedom or whatever it was...

I believe that has now been renamed "Operation Rolling Blunder."

very likely some hack who was once employed as a B-movie script writer.

Naw, you're thinking of the B-movie actor who played the role of President.



very likely some hack who was once employed as a B-movie script writer.

Naw, you're thinking of the B-movie actor who once played the role of President.



In the wake of Gail's excellent post and discussion yesterday (Peak Oil: Looking for the Wrong Symptoms?), I'm starting to ponder some counterintuitives here. Wondering, for example, if the environmental movement isn't setting itself up for a huge fall here, since renewables can't begin to fill the gap; left env types will be blamed, big time for our energy woes. And if Westexas is at all right pressure to drill is going to escalate even more rapidly. To avoid a potentially violent fascist turn in the US and some OECD countries, perhaps electing a conservative in 2012 would be a useful stopgap - let the conservatives take some of the heat for no oil. Let's have a big drilling effort and see what's out there. Kind of like Nixon going to China - maybe it takes a Romney, say, to tell people the hard truth?

I've not thought this through much at all, just allowing myself some Drumbeat space to wonder about counterintuitive feedback loops.

It is very appealing to tell people, "All we have to do is switch to renewables," but if the strategy really doesn't work well, because the up front costs are so high, and because the substitution is not for what we really need (oil), and because governments are in such poor condition that they cannot afford to scale up their subsidies to even a higher number of units, it seems to me that you are right, it is going to come back around.

It has been fashionable to "dis" oil companies and especially coal companies, but we really need their efforts, whether we like them or not. If we decide we don't like the environmental impacts of fossil fuels, our option for the most part is doing without--and that is the point people have not had made clear to them.

Part of the gap can be made up by renewables and energy efficiency, but that part is likely pretty small (especially in comparison to expectations that are being built up). Going around and "selling" a switch to renewables and energy efficiency, without full disclosure, is going to result in some nasty surprises down the road, I expect.

Reviewing your pie charts from yesterday, and plugging in news items from today:

The Labor Department said Friday that consumer prices edged up 0.2 percent in January while prices excluding food and energy slipped 0.1 percent.

This is an example of how the increase in fuel [mostly] and food costs forces the inelastic budget to reduce spending on "everything else."

It is also a frightening reminder that depressionary deflation may be the order of the day, even as oil related costs continue to surge.


Funny thing is that stopping nukes is one of the great successes of the greens, yet that success contributes directly to the growth of coal for base-load power, and thus AGW/CC. After the 70's shock, we were well on our way to a nuclear future. Certainly it has downsides, especially those designs, but in a vibrant market significant enhancements would now have been made. Instead, we have effective deadlock on all forms of energy between NIMBYs, enviro regs, waste concerns, up-front costs, safety concerns, and fuel costs.

Yes, I think there will be backlash if the nuke and drilling proponents market their positions well. It might get lost in the midst of a large sentiment against gov't and corporations overall, though.

I don't think it's the "greens" fault that the US Government has not found a way to dispose of the waste produced by the nuclear power cycle. Nor is it the problem of the greens that the industry did not pay enough attention to real safety issues and the fact that major accidents could be extremely expensive. Another big reason for the failure of the nuclear industry was the massive real costs of building those power plants. Even with the Price/Anderson insurance subsidy, there's still the other costs of building and operating those plants and the fact that uranium is also a "fossil fuel", which could rapidly increase in price as the easy to obtain reserves are consumed. Also, with today's problems in the financial world, where is the money to build the nukes?

There might be other options, such as thorium, but that's not what is being offered to the electric utilities today.

E. Swanson

Granted the financial factors play into things (expensive nukes versus cheap oil was not a choice in the 70's, nor will be in the 20's), which is about the same thing as noting that we have no real national energy policy.

But the framing of the discussions of the late 70's/80's wasn't "we need better nukes that are safer and with less waste", it was "no nukes". Or at least that's what I recall from seeing on the nightly news as a teen.

Certainly the nat'l gov't shifted direction and funding away from alternative nuclear approaches. The combination of social activism, cheap oil, and ambiguous and internally fractious gov't positions (strong military use but proliferation worries, and focus on fusion funding versus improved fission, etc.).

Breeders could certainly help provide a century-long transition pathway to fusion (if that ever pans out).

Back to the key point, though -- worrying about what to do with a megaton of radioactive waste versus a gigaton of CO2 seems like it would have been a reasonable option to consider.

I worked in the nuclear industry in the seventies. After the "Arab" oil shock of 1973 we thought we were going to build a thousand power plants. By the middle of the decade it was clear that in spite of the cost of oil the escalated cost of building plants ended that dream. We entered a game of chicken with our customers of who was willing to pay the most to exit contracts. We paid them to get out of some, they paid us to get out of some, but they all were cancelled because of costs.

I think it was concurrently becoming clear to the public that issues of safety and hazardous waste disposal were nowhere near under control. We were still, as late as 1978, filling 55 gallons drums with "low level" waste such as used gloves and damaged machine parts from fuel processing and dumping them into the ocean.

It was all over after 3 mile island in 1979.

building those power plants. Even with the Price/Anderson insurance subsidy, there's still the other costs of building and operating those plants and the fact that uranium is also a "fossil fuel", which could rapidly increase in price as the easy to obtain reserves are consumed.

Black Dog,

I know what you are saying, about Uranium being classed as a Unrenewable Fuel Like Fossil Fuel that were organic to begin with. But Uranium is not an Organic compound, it is an element in short supply.

I wish I had done more research into the issues for that HighSchool term paper back in 1980. I wrote on the pro's and Con's of nuclear power. Three mile Island had just happened and there were all kinds of neat fictional stories about failing plants and radiation sickness and the like.

An old story I think the title was "Level 6" About A group of people put in an underground facility to be there if the Big One happened. That they had music playing on a 2 week track, only 336 hours of music. I always thought about that, because both my father and my brother are audiophiles, music was always playing at night.

I guess I will have to go hunt that story down.

Cheers for a better future,

Level 7, by Mordecai Roshwald

I don't think it's the "greens" fault that the US Government has not found a way to dispose of the waste produced by the nuclear power cycle.

I respectfully but vigorously disagree. It was green opposition, and scaremongering hype that made any proposed waste site dead before arrival. Now I normally consider myself pretty pro-green, but certain sectors of the green movement have been major obstacles in the way of clean energy. Whether it be Nukes, or solar thermal electric, or campaigns to tear down hydro plants, or just about any long distance tranmission, they force power plants builds into reliance on fossil fuels.

When you use the term "green", I suspect that you are thinking of the "garden club" environmentalist. You know what I mean, the NIMBY variety, as in, "I'm very worried about environmental problems in my neighborhood, but wouldn't give up any of my toys (or wealth) if that what it would take to really fix things".

Back in the 1970's the nukes were dangerous and there was no plan to deal with the waste. The public outcry after TMI and especially after Chernobyl, forced the industry to add more safety systems and to think beyond "Too cheap to meter" and "Less dangerous than being hit by a meteor (WASH 1400)". As a result, newer nukes will be safer, but also cost even more. And, the Feds attempted to find a way to deal with the waste, which apparently didn't work out...

E. Swanson

Aren't those mostly the same nukes still operating today, and being licensed beyond their original expected life? How many people actually died from US nukes?

Like I said, the success was the socio-political aspect, that petrified legislators and fueled lawsuits and regulations. Perhaps the pendulum swung too hard, too fast the other way, and hung up until now?

The gov't has tried to find a politically palatable waste solution, not a technically mature one. Given how much has been spent on other programs even a handful of big gov't waste eater/breeder reactors would seem to be a better option than coming up with long-term storage for unlimited waste quantities.

I think the next generation will cost less, as tort reduces, wages drop, and NIMBY concerns are replaced by desires for power and big gov't influx of dollars and work. IMBYP will be the eventual cry, just like new federal prisons and gas fields -- In My Back Yard Please!

How many nukes (or wind turbines, or solar panels) could be built with the dollars that have been flowing for foreign oil, with trickle-down here rather than SA and Dubai?

I'm not trying to be pro-nuke unabashedly -- I'm trying to say let's do some of ALL the reasonable alternatives and see which ones happen to do best (hopefully better than expectations) and do more of those.

Every day I drive a car, knowing that chances are good that I or my kids will die in a car accident. I eat some hamburgers too, despite understanding heart attack risks. You can't avoid all risk, and most people work awfully hard at avoiding fear rather than avoiding practical risks.

NIMBY concerns

I would never have imagined that this would be such a powerful lever against things, even when the things, at first glance, did not seem objectionable.

Now I see in internet news, stories of opposition to wind turbines, solar farms, all due to NIMBY concerns.

Kind of amazing how we act, as a species, sometimes.

I was absolutely disgusted with Robert Kennedy jr when, after a distingushed career of providing legal services to environmental causes came out against and offshore wind farm because it could barely be seen from Cape Cod.

In my area, there have been two proposals for large wind energy farms. The first, by the TVA, included a chemical battery system for storage. The locals shot that one down and the British company which was to build the chemical "flow" battery was later bought by a German utility (if memory serves). The second proposal would have put the turbines on top of an undeveloped mountain which I can see out of my window. It too was shot down, with the claim that the visual impact would hurt tourism, as the turbines could be seen from a local ski/resort area.

I went to a big public hearing for the first project. I guarantee you that those who attended and protested the project were not your usual college educated "greenie" sort. Those NIMBYs were only interested in the loss of value of their property or their jobs...

E. Swanson

we were well on our way to a nuclear future. Certainly it has downsides, especially those designs,

And yet - the downside risks were enough.

but in a vibrant market significant enhancements would now have been made.

And there was a 'vibrant market' - thus assuring "significant enhancements"?

How's the 'vibrant market' deal with sleeping security guards?
Or nation states that are on the 'friends list' and can place orders for fission plants - then can't get delivery later?
Or how about claiming you need the protection of government law 'till you can prove how safe you are' - then never actually getting off that protection plan?
Or re-processing complaints that end in the death of the wistleblower?

The biggest downsides were cheap oil and cheap coal, no national energy policy, and the socio-political environment (i.e. never-ending lawsuits and regulatory delays). No worries, we'll just burn coal in old thermal-plants now.

There was a short-lived, one-off sort of market to begin with, then standardization on big, Westinghouse-style reactors. Several designs were being considered, but eventually all were mothballed and the expensively-educated staffs dissolved.

Security issues abound everywhere. Still, more people die in coal mines than ever have died from nuke plants.

How'd that non-proliferation thing work out? Seems like a few more nuke plants (including breeders) would have made little difference.

Tort protection is a norm for any major industry -- that's what everything from building codes to regulatory agencies really accomplish. I'm not saying there wouldn't be issues, accidents, and so forth, given a few thousand (hopefully smaller) plants...nor that there won't be issues with wind turbines and EV trains, either. It's just a question of relative impact. 50K people die in cars every year -- we readily deal with high-risk activities in an actuarial fasion.

Whistleblowers always suffer -- the only person in jail from the recent multi-billion-dollar UBS tax-fraud case is the whistleblower. That would be less likely with smaller, less costly plants of any sort -- less incentive to cover-up and white-wash.

You pretend to understand markets, yet can't seem to absorb two facts directly pertaining to the electric power generation market: 1. the cheapest way to expand nuclear, in the US especially, has been to increase the efficiency of existing nuclear facilities; 2. coal and natural gas cost a great deal less, in the short and medium term anyway, making the nuclear power option an obviously poor investment choice.

I don't know if you pretend to understand politics as well, but the notion that the 'greens' have anything more than a marginal impact on a public policy decisions is laughable.

?? Markets?? I don't think anybody can understand the markets, and I don't pretend to. I'm just saying that the enviro-left has had huge impacts on public policy, especially nukes. Nukes were a third-rail in politics for a long time. Even today nobody really was to say they're "pro nuke".

And I agree completely about dollar-wise investment choices -- I'm just not at all convinced that choosing cheap coal over expensive nukes (and solar, and wind, and for that matter, cheap conservation) is a sound long-term strategy. Since when have we, collectively, been happy with lowest-bidder national decisions?

Halliburton and Westinghouse probably like the massive, unitary reactor designs. I'd prefer much smaller, more modular designs (even if co-located for security or convenience). There are always efficiencies of scale to be gained when producing anything complex in volume.

As for my mental absorbency, cost wasn't the key point of the discussion. We were already starting from a "what might have been" perspective, so current 'facts' don't matter too much in a subjective frame. If we're looking at $250 oil, high-CO2 levels, massive coal-mine surface destruction, and NG going for home-heating while cars stay parked, the relatively high current cost of nukes (and solar, and wind, etc.) might seem quite unimportant.

I don't think anybody can understand the markets, and I don't pretend to

Then where did your 'virbrant markets' claim come from?

That comment was related to a broad, competitive market for complex products like reactors. That IS something I know a bit about, and I to a degree understand the interplay between competition, innovation, technology, and finance, at least in my little corner of the world. There can always be black swans to change things up (or gray ones, like 3 Mile Island), but in any competitive mass market there will be innovation and evolution of products.

... but in any competitive mass market there will be innovation and evolution of products.


No. In every competitive (and unregulated market) there will be corruption, back stabbing and people clawing over the still warm bodies of their foxy friends and neighbors just to get to the top of the zero sum pile on game.

Truth is ... but you don't want the truth ... that pretty much every "innovation" we have now a days came out of a government program. Internet was a DARPA project. How often do we need to be reminded?

That comment was related to a broad, competitive market for complex products like reactors.

And on what planet is the production of fission reactors not an oligopoly but is what you have claimed?

but the notion that the 'greens' have anything more than a marginal impact on a public policy decisions is laughable.

Except when it comes to stopping "green" power. They've tied up Cape wind for better than a decade. And set back solar thermal electric plans in the California desert by years. I agree, they can't get the US to adopt environmental policies on a national level, but they have been pretty effective at gumming things up at the local level.

Going around and "selling" a switch to renewables and energy efficiency, without full disclosure, is going to result in some nasty surprises down the road, I expect.

Right you are, Gail. This why, when I have consulted with folks about installing a PV system, my first sales pitch is to talk them out of it. I want to avoid any misconceptions. If after I make my "are you sure you still want to do this speech" they are still committed, we can move forward into the particulars. This method has resulted in near 100% satisfaction from peoples' investment.

My goal is to make sure that people make an informed choice. Implying that renewables can replace fossil fuels in the near term (or ever) is misinformation. Then again, when the petrol majors run TV adds about their research into biofuels from algae or their "new" directional drilling platforms, this carries with it an implication that BAU will continue. This is equally misleading. Proponents of BAU and renewables are in the sales business, not the "informed choice" business. Most people don't seem to be interested in being well informed anyway. They just want to be told what to do.

Implying that renewables can replace fossil fuels in the near term (or ever) is misinformation.

It certainly is. And, today, the best that can be done is to have an alternative source of energy for some of what you want done. Or most, depending on how much you want to spend.

How are you dealing with repair and replacement contingencies? How much back up and redundancy do you believe will be needed? Do you have a general guage of cost for ranges of power needs, and is there an available online source for this information?

Thanks for the good input.


Gail, I must protest. The cost of solar thermal, such as home hot water systems, is less than the cost of new nuclear electric generation. Electric power can only compete when it's used with a heat pump, which adds considerable capital cost onto the consumer's shoulders.

A big part of the problem is that renewables don't work like the traditional energy sources, since they aren't available 24/7. People in the US are spoiled with the instant availability of electricity or gasoline for fuel. Thus, it's going to be much more difficult to sell Joe Sixpack on solar when he can still drive his 4x4 PU or SUVto town and pump gas (or diesel) into the tank. Don't forget that pump prices for gasoline in Europe range from 1.10 to 1.50 Euros/liter or about $5.60 to $7.66 a gallon (or more?), which works out to $235 to $322 a barrel. Why should the typical American feel put out to pay $3 to $4 a gallon? It's all perception...

E. Swanson

Gail -

"It has been fashionable to "dis" oil companies and especially coal companies, but we really need their efforts, whether we like them or not."

Obviously, you are one of those who believe that the oil and coal companies are part of the solution rather than part of the problem. (Perhaps you acquired this perspective during the several PR junkets they have invited you to). I myself happen to believe the exact opposite and feel that quite a bit of the 'dissing' is more than well deserved.

These are for the most part global corporations whose sole reason for being is to generate profits and value for their shareholders. In that regard, the fact that they are in the business of mining fossil fuels is incidental. They have virtually no real interest in what the energy situation will be 25 years hence, simply because that will be on someone else's watch and has no bearing on the financial performance for the next few quarters. The long-term future is so highly discounted by these people that it is essentially out of sight and out of mind.

Quite bluntly, the global energy corporations cannot and should not be trusted to do the right thing when it comes to our future energy situation. They have an inherent conflict of interest not to.

Having said that, no reasonable person believes that it is going to be easy or painless to switch to a drastically less energy-intense world heavily powered by renewables, but to say that renewables are essentially irrelevant to the future scheme of things is highly short-sighted if not irresponsible.

A question I don't think I've ever heard you address directly is: What do we do for energy when available fossil fuel essentially runs out for the vast majority of the world's population? Tell me - what steps are these 'necessary' global energy companies taking right now toward preventing our grandchildren and great grandchildren from living a brutish dystopian existence?

joule -- As part of the evil oil patch (LOL) I can acknowledge the absolute truth of your statement: "They (the oil patch) have virtually no real interest in what the energy situation will be 25 years hence, simply because that will be on someone else's watch...The long-term future is so highly discounted by these people that it is essentially out of sight and out of mind." But I can also equally assert that this is exact position of the vast majority of the America public as well as our political leadership.

But let's be brutally honest: with the exception of some smarmy self serving ads by the major oil companies the industry has never pretended to be motivated by any other factors. We have never been charged with the responsibility as securing America's enegy future. IMHO I'm no more responsible for preventing my Yankee cousins from freezing in the dark then my dentist (not that I don‘t truly sympathize with them). Not once in my 34 years have I ever asked anyone to trust my motives. In fact my motives have been openly and loudly proclaimed: “drill here and let's make some money". Not being part of the corporate PR I couldn't care less what the public thinks. And I’ll offer that this feeling is common to virtually all my cohorts. It has no impact on how we do our job. If folks what some emotional comfort regarding their future energy security I would humbly suggest they look for it from a priest or bartender and not the oil patch. We ain’t your momma.

I personally take no offense to your statement. The truth is the truth. It is exactly how we view our role in the universe. OTOH, as a member of society I like to think I’ve added my own tiny little contribution to aiding the public interest. I just wish my efforts weren’t wasted on greedy and thoughtless consumption. When I started my career in 1975 my first mentor clearly explained PO to me (but we didn’t call it “PO”. It was the “reserve replacement” problem). And he had absolute confidence that the public would just keep sucking down crude as fast as we can find it with no regard to the future. More then 30 years later his position appears well born out.


Why, some of my best friends have been oil industry people. No kidding!

Actually, I am no stranger to the oil industry. During my environmental consulting days, I have been to oil refineries, gas processing plants, terminals and distribution facilities, as well as petrochemical plants. I have actually been involved in a number of studies for the API. Most of the people I met were a decent sort, even a bit on the straight-shooter side. So, it is not a personal grudge against the oil industry or its people.

But I think what you've said sort of reinforces my assertion that we cannot look to the global oil industry to plan and prepare for the long-term energy well-being of our civilization. They are too busy making money in the here and now. And yes, the public is not without blame, as the vast majority would just as soon not know where their oil comes from and what had to be done to get it. And the politicians, as they always have, will continue to take the path of least political resistance.

I picture this situation in terms of a parable involving a candy vending machine:

There's this small remote airport that has a handful of candy vending machines that sell only one brand of candy, Petro-Bars. The machines have always been faithfully kept full by the vending machine owner, and the customers can get all the Petro-Bars they want any time they want it simply by dropping a coin in the machine and pulling the knob. It is implicitly assumed that Petro-Bars will always be there for the taking.

But then some inside information leaks out that the manufacturer of Petro-Bars can't get all the necessary ingredients too make Petro-Bars anymore. However, nobody really gets too worked up because the vending machine owner has a huge existing inventory of Petro-Bars and has assured everybody that it's no problemo. When confronted by the airport owner with rumors that Petro-Bars might be getting scarce, the vending machine owner cheerfully claims that everyone will be able to eat all the Petro-Bars they want well into the next century, so no need to start looking for alternatives to Petro-Bars. Reassured, everyone calms down and forgets about it.

An upstart company also knows that Petro-Bars are on the way out and decided to market an all-natural ingredient candy called Eco-Bars. Unfortunately, they are more expensive than Petro-Bars and don't taste quite as good. And they're not always available due to variations in growing conditions. So, the airport owner sticks with Petro-Bars and tells the Eco-Bar people that Eco-Bar is a product whose time has not yet come.

One day there's a blizzard, and travelers are stranded at this tiny airport. As there is no snack bar, everyone starts going to the Petro-Bar vending machines. However, they are already nearly empty because the vending machine owner had gone through the last of his inventory of remaining Petro-Bars the day before. As the situation gets more desperate, fights break out at the vending machines and the famished passengers try to kill each other trying to get the last Petro-Bar dropping from the vending machine. By the time the blizzard lifts, five people are dead and ten are seriously injured. We might call this a 'resource war'.

Moral: When someone strenuously tells you that everything is going to be OK, chances are it will not. Or, don't trust someone's projection of the future if his livelihood depends on the future being the same as the present.

joule -- Mmmmm...Petro-Bars. LOL. Love the fable. The TOD subject is so deadly serious I think we need an occasional dose of humor for the sake of our collective sanity. But you left out the best part of the tale. Just as some folks see those Petro-Bar machines are running empty a fellow rolls in a new machine: Rock-Bars. The fellow says that thanks to everyone's greedy eating habits Rock-Bars (just as good as Petro-Bars) will be available (for a limited time) and will cost a good bit more. And they'll run out in time too so y'all are going to still starve to death but a little slower. You're welcome.

But the owner of Rock-Bars certainly appreciates your business especially since his 9 yo daughter has decided to become a horse vet one day. As the owner had not anticipated such a high maintenance child he had not planned for such expenditures.

Of course, there’s a very sad portion of this fable. And that’s the fate of the rescue party trying secure the last of the Petro-Bars from nearby locations. As the body bags fill with these dedicated souls it does take a good bit of Rock-Bars owner’s smile away.


I think one important thing I left out of this fable is that the Petro-Bar vending machines have a tiny little window that only shows the single Petro-Bar that will be dropped next. Therefore, the customer has no way of knowing whether the vending machine holds 100 Petro-Bars or only one more. The vending machine owner won't disclose such information because it is high classified 'reserve data'.

While we're diddling with this parable, I could also fantasize that Bill Gates, Warren Buffet, and a Saudi oil sheik also happen to be at the airport during the blizzard and are stranded along with the rest of the passengers. As the Petro-Bars start running out, Bill Gates gets up and declares, "I will give anyone $1,000 for his/her Petro-Bar." He gets no takers. He raises it to $10,000 because he is very hungry. Still no takers. Warren Buffet then gets up and says, "I will offer $1 million for a Petro-Bar." He gets a willing seller. But then the Saudi oil sheik raises the stakes to $10 million. Just as the transaction is about to be completed, some teenage gang banger in full ghetto wear comes up, pulls out a Glock and says, "Gentleman, please perceive that we are now operating under an entirely different socioeconomic paradigm .... so give me the #%*& Petro-Bar or I blow your head off!"

Well, such are the limitations of the magic hand of supply and demand.

Yup. If you have lead you don't need gold.

Yes indeed joule. Difficult to end any of these fables without a vision of more filled body bags.

Do you think your mentor realized that the public would keep sucking down crude until there was no future?


Craig -- He certainly did. In fact he seemed rather rathed perturbed by the whole aspect. Being just a puppy geologist at the time I really didn't grasp the significance of his feelings. Like most youths I still retained that invincible attitude to a fair degree.


Thanks for your refreshing candor. Candor is the beginning of truth which is the beginning of addressing our problems. Just being in denial about global warming and peak oil is not going to get us closer to solving our problems. Not saying it is sufficient, but it is necessary. There are approaches that are possible. One is requiring that all building be net zero energy. It has already been done and therefore it is possible.

We can also downsize our housing radically. Not saying we'll do it but it is possible and it will deliver the promise of less resource, oil,natural gas, coal, and other resource consumption.

We absolutely can build walkable and bikable communities. Not saying we will but the problems are not technological.

I say we deliver every tool available, including the full gamut of renewable energy and then we can conclude one way or another whether it is feasible.

What is in people's heads needs to change. Better technology would be nice, but it is not sufficient and maybe not necessary. People can change. I have changed radically over the years in what I consume and what I feel I need to consume.

It is probably reasonable to conclude that renewables can't "solve" our problem if by problem one means that we must continue BAU. Yes, if people think renewable will allow them to continue their current level of consumption, they will be disappointed.

But there is a dilemma. Based on the mind set now, renewables wouldn't stand a chance. That is why Gore, et al, feel like they have to promise a world without sacrifice. We can all have 10,000 square feet homes. And why not? Gore has one.

Having said that, we may end up going through a very fascist stage before this is all over. The environmentalists will be used for heating oil by the Palinistas.

It has been fashionable to "dis" oil companies and especially coal companies, but we really need their efforts, whether we like them or not. If we decide we don't like the environmental impacts of fossil fuels, our option for the most part is doing without--and that is the point people have not had made clear to them.

What part of unsustainable would you like to keep trying to sustain?! Whether you or anyone else likes it or not the definition of unsustainable is that it can't be sustained. That which can't be sustained won't be! It's that simple, deal with it.

The oil and coal companies are a very big part of the problem as is our addiction to fossil fuels. These are the two sides of the same unsustainable coin. We are going to go cold turkey and the fossil fuel companies, whether by hook or by crook will eventually be held accountable for their environmental impacts.

Yeah, we need the efforts of the coal companies like the junkie needs the efforts of the drug pusher! Gimme my damned fix! To hell with the consequences.

Withdrawal is gonna suck!


Meanwhile, our leaders will trot around the world....

....by plane of course. Look at the phantastic plans Australia has for the flying future:

Report card 2009 (part 2): Aviation and airport plans - pies in the skies

Matt,I can empathise with you on this.It is symptomatic of the disconnect from reality which is so prevalent in Australia at present.

Because we have largely escaped the GFC for now,mainly because we are busily selling off the farm,the decision makers think we can continue on those lines.

Well,we can,until we can't.That crunch point is not too far away.That is when cornucopian dreams will give way to harsh reality.

Records fall as transit system copes with heavy Olympic demand

The use of transit during the Vancouver Olympics has been unprecedented, blowning away all previous records. Before the Olympics, transit authorities had expected a 20% increase in transit use and a 30% reduction in private automobiles going into the downtown area. Indeed, the expected reduction in automobile use came to pass, but the use of transit has roughly doubled, going from 800,000 boarded passengers for an average weekday to 1.5 million. The numbers where especially impressive for the automated light rail system known as Skytrain, going from 364,000 passengers a day to over 700,000. The newly build portion of this rail system known as the Canada Line went from 93,000 to 220,000 leading to crush loads reminiscent of the Tokyo subway.

I went downtown last weekend and things were buzzing in a way that I've never seen before in this city. Portions of several streets that had been turned into pedestrian malls were cram-packed with people. There were all kinds of free events and pavilions, and it seemed everyone wanted to check them out. Vancouver that has a reputation as a nice but boring city, has suddenly turned into a party town. I have to admit that I got carried away by the buzz, although I still think the 10 billion spent could have been put to much better use.

I hope some permanent changes will take place after Olympics, such as turning some streets into permanent traffic-free zones. From what I observed, people really enjoyed walking around where they usually can't, and it certainly didn't hurt the local businesses.

Has anyone here seen this video? Leave it to the comedians to help spread the word. Yabba dabba do! http://www.youtube.com/watch?v=SX0iDoTD1Q0 (sorry, haven't mastered making a link a word) Tracey Ullman Stuck In A Car, The Body Trap

Pretty good. Caught the PO message in the intro too.
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To all those in TOD that are interested in Sustainable growing systems and topics of that nature, Please If you will e.mail me and we can discuss it without going off topic so much in here.

Even though at times there is a news article linked up top, there seems to be sides forming along lines of contention, to limit those conflicts on the DB, Please lets discuss it in mail.

I'll be thinking about seeing if the Editors would open later a campfire post to some of these issues, but I need to have some time to gather the information needed to make it a worthwhile discussion.

I'll be out of touch of my computer most of the day,

Cheers for a better future,

Spring is here, some flowers are popping up.

Mortgage chart du jour from CR:


About one out of every seven US mortgages is in foreclosure or delinquent.

Ah, but westexas, can't you see that the top of the chart has a decline? Look closely, now! Housing is recovering!! Just like the rest of the economy.



That is 14% of all mortgages which represents 70% of all housing. This means that about 10% of all housing in the US is in foreclosure or delinquent on payments. The other 30% is roughly the amount of homes that are owned free and clear of a mortgage.

No, the housing crisis is not over. In fact, it's just getting underway.

In respect to the article linked to the exlosion at the power plant under construction:

At first glance it would appear that numerous safety peocedures which are sop for this kind oF work were ignored resulting in lossof several lives, numerous grave injuries, and probably hundeds of millions in property.

My guess is that the people running the job were simply cutting corners not even on actual expenses but days to completion.

Such shenanigins are not born out of thin air, any more thn one becomes a drunk by getting drunk once.More than likely a culture of risk taking in terms of cutting corners in such ways had developed among the companies and men running the job.

Some of them may have taken similar risks many times before, and suffered no harm.

If we hark bark to our younger beerswilling bar hopping days as students or soldiers or just plain old rednecks we will remember that in spite of the chances we took, we only had a serious accident once in a long while if ever.

But once is all it takes-I attended at least two funerals of friends in those days directly attributable to dui.

Any body who works in such industries needs to listen carefully t the old guys with dirt under thier nails and gray hair -thay are more apt imo to tell you the truth about such shortcuts than supervisors with bonuses on the line or late finish penalties staring them in the face.If you are ever on a job and one walks off unexpectedly after a safety question is raised and rejected, fOllow him!

On that job I would have told my super that I had recieved an emergency call-and left , after quickly talking to anyone else with enough sense to listen.May be I would have still ad a job on Monday, maybe not.

Three times over the years I simply picked up my stuff and walked away from a job being run recklessly.I'm still here. A couple of guys working on those jobs aren't, although niether died as a result of a "that day" accident.

As they say in the back country, they have old pilots, and bold pilots, but no old bold pilots.

We are running the same risk with the climate, and with the energy supply, and the banking system. Too bad most people don't understand !

I am surprised so many workers were even on-site. I'd heard stories where contractors were all kept off-site during dangerous operations, because their insurance company required it. They could (and sometimes did) kill off employees, but the liability of killing third-party personnel was massive.

If the plant safety guys answered to the bonding agents and insurers I bet more regulations would get followed!

On a related note, is it a coincidence that the explosion happened on a weekend, when many inspectors and regulators would likely not be available? I know around here the oil refineries seem to have flaring events and noxious releases far more often after dark and on weekends.

I expect there will be numerous mutli million ettlements, a bunch of revoked liscenses, some huge fines , and a lot of rich lawyers involved before ths is over.

Yes ,mac, I was amazed that they were venting huge quantities of gas in that way,let alone having people on site using gear which could provide ignition.

It's not as if the catastrophic results of gas explosions were not known.I guess the people who were responsible for that situation are still in their plush chairs ,pulling good salarys and enjoying their Christmas bonuses.The banksters are not the only criminals on the loose.

oldfarmermac -

At this point it's pretty hard to pinpoint the exact cause. But you can be sure that before this whole thing is over the lawyers will be lawyering and the consultants will be consulting, and a huge amount of money will have been spent on both. This tragedy is a liability attorney's wet dream.

My own take on this is that the purging of a large piping system containing flammable gas does not require a knowledge of rocket science, but rather strict adherence to established procedures and plain old common sense.

Cutting corners is certainly a possibility, and is one of the most common causes of major industrial accidents. And the reason for cutting corners is usually time pressure. Somebody gets reamed out for being behind schedule, so that person's natural inclination is to rush things and accept the risk in doing so. Judgement gets clouded when you're worried about your job. Sometimes you're lucky in doing so, and sometimes you're not.

My experience has been that many industrial accidents occur during those relatively brief periods when the plant is not operating under completely normal conditions. This often involves either construction activities by outside contractors or plant personal making bad decisions during outages for maintenance or upgrades. It's often a matter of miscommunication or people doing things out of synch.

Then you have attempts to rectify things actually making them worse. A perfect example is when not long after the plane hit the first tower during 9-11 and people had evacuated the second tower, they were told that the emergency had passed and that they should go inside and get back to work, a decision that led to the demise of several hundred people.

Lesson: If something doesn't smell right, trust your own instincts rather than an authority figure. It's better to be fired for insubordination than to be dead.

The economical (or eco-comical) situation of California keep getting worse, specialy in the education sector. ONe interesting stat provided by the president of the University of California (my employer for a few more month): California spend 11% of its budget on its prison system and only 7% on education... Make you wonder if it is better to be prisonner in California than a student... It is certainly better to be an officer in a state prison than a teacher, the pay is better, the job is more stable and you can hit people back (also the violence in most prison is probably lower than in many schools).

Here is my personnal Dilbert momment of the year:
Within a day I was informed -first that my demand for promotion was approved and that on July 1st I will get a 700$/month raise -second that due to lack of credit my contract will end on June 30.
I can enjoy the irony of it since I was expecting this to happen and have a job lined up back in France in September (plus I saved my vacation time).

It's time and way past time that we return to the true conservative concept of limited govt wherein the job of govt is to take care of such things as defense post office, and a few other functions at the national level,and keep it's nose out of people's personal affairs otherwise.

This argument is not incompatible with classical liberalism.

The vast majority of our legal problems stem from the so called war on drugs, which has long since been lost, and cannot be won.

We would all be far far better off if drugs were sold in nice clean little containers at liquor stores or pharmacies at a reasnably cheap price.There is no way it would cost as much to look after the occasional addicts children as it does to support the worlds largest per capita prison population and the legal and law enforcement industry it has spawned.

We would all be much safer, and Mexico would not be our next narco state.

But everybody seems to taken with the idea that Uncle Sam is thier Mommy, and that he should solve all problems, real , potential, or imagined, for us.The left wants its services, which if the truth is told, those asking expect to get more than they paid for.

And the modern day right wants to return to a time that never was via force if necessary.It's too bad the ignorant neoconservatives can't understand that the cops who lock up kids smoking pot are far more dangerous than the kids themselves in the long run.

But the average modern liberal is just as deluded, and in a potentially more serious fashion.He may and often does understand the failings of our current drug policies, but he is prone to making an even more dangerous mistake.

He is willing, nay eager in most cases, to create a society in which only the cops are armed.Now that is a truly scary idea.

And of course they can point out that this has worked -for a while, at least, recently, in western Europe.The possibility of a police state arising never seems to occur to them.


Nazi Germany had very strong anti-gun laws, except for the SS, Police, and military. Not that small arms in the hands of a bunch of redneck wannabes and untrained weekend hunters would do much against modern military weaponry. It just feels better to have some way to resist, should the need arise.

Still, I wish the NRA would spend more of its dues money on training and less on fighting against restrictions. My memories of customers pointing guns at me are a constant reminder to me that most private gun owners are simply ordinary folks, untrained in firearms. Just like most are ignorant of peak oil, I might add.


Stunningly wrong.
Typical NRA propaganda lies.

Germany had a very tight anti-gun laws from 1919-1928 due to the Treaty of Versailles. These were replaced with gun registration laws until 1938 when the number of gun permits were greatly expanded except of course, that Jews were forbidden to own any guns.

"The 1938 revisions completely deregulated the acquisition and transfer of rifles and shotguns, as well as ammunition."[4]
The groups of people who were exempt from the acquisition permit requirement expanded. Holders of annual hunting permits, government workers, and NSDAP party members were no longer subject to gun ownership restrictions. Prior to the 1938 law, only officials of the central government, the states, and employees of the German Reichsbahn Railways were exempted.[5]


Conservatives always seem to 'remember' events in a way that verifies their worldview and of course they are almost always wrong.

Not that small arms in the hands of a bunch of redneck wannabes and untrained weekend hunters would do much against modern military weaponry.

Fwiw, Iraqi irregulars fought the US military to a draw in Anbar province.

The salient point there was the type of weaponry. And Iraqi irregulars were better trained, and more experienced, in addition to having fully automatic weapons, to say nothing of RPGs and the like. What I am talking about is some gun nut with his .357 Mag, or his 30-06 deer rifle coming up against a motorized brigade.


And of course they can point out that this has worked -for a while, at least, recently, in western Europe.The possibility of a police state arising never seems to occur to them.

Can you name some countries that became a police state because of lack of guns ?

I can name some countries with wide spread gun ownership - but are fascist/highly authoritarian. Let me just start with two countries you may be familiar with
- Iraq
- Afghanistan

enuf said.

ps : Some years back it was said Afghanistan had more guns than the combined armies of India/Pakistan. This was before Taliban take over.

And don't forget that the CIA armed them with Stinger Missles and RPGs. In fact, Osama bin Laden was part of that group, and in a way we created al qaida.


We would all be far far better off if drugs were sold in nice clean little containers at liquor stores or pharmacies at a reasonably cheap price.


You probably mean well, but appear to have no clue about the destructive power of drugs or alcohol. Many a lives and families have been destroyed by booze, meth and the rest.

Step back:

True. Unfortunately, prohibition has demonstrated itself to be a very ineffective way to deal with those problems, and to have unintended consequences and colateral damage that end up creating as many problems as are solved. Everything would be MUCH, much better if people would simply behave responsibly. Unfortunately, as you well know, too many people fail to do that. That might very possibly be THE single biggest problem of the human species. There are not a great many examples of other species where many members of that species act in ways that are self-destructive and needlessly harmful to other members of the same species. Not for very long, anyway, because whenever such self-destructive behavior becomes common, that species invariably goes extinct.

Big problem. I have no idea how to solve it. Even the most repressive, totalitarian governments have only been able to press bad behavior underground and off to the margins, and at a terrible price.

The good news is that since we do have brains, some of us do occasionally use them, so getting factual and helpful information to people, such as the proven link between tobacco use and cancer, does actually get noticed and acted upon by some (but not all) people. Combining public information campaigns with strict law enforcement to get people who become a potential danger to others into a restricted location so that they can't continue threatening harm, seems to me to be about the best approach available to maximize good while minimizing harm.

"Many a lives and families have been destroyed by booze, meth and the rest." Posted by step back

So true, alas! But there are some things that no government, regardless of how autocratic or democratic it is, can really do much to effectively address. Drugs, alcohol and tobacco (DAT) are not a problem that can be "solved", in other words nothing government or anyone else can do will make these substances just vanish, although this seems to be the unspoken ideal in the minds of the proponents of the "War on Drugs."

As economies continue to contract, more and more sacred cows will be led off to the slaughterhouse as time goes on. Calculating the overall cost of DAT enforcement and regulation can be tricky, akin to figuring out which inputs to include when calculating the EROEI on an alternate fuel. However, when one considers the scope of the infrastructure needed to implement this enforcement and regulation (the bloated prison and legal systems, to name only two) it seems that the overall cost to society is FAR beyond the personal grief and issues it causes for the individuals and their families that get caught up in DAT abuse.

When the economic crunch gets to a certain point states will see that if they treat DAT like they were aspirin tablets, cat-food or corn flakes, they will find they can halve their prison population, shut down a number of prisons, and shrink the rest of the legal system to the extent that DAT cases occupy court time and resources. The only way states and cities will be able to come close to dealing with their budget problems is with a serious downsizing in the number of their employees. In California, at least, such a move would give the state the clout to bust the Prison Guard's Union, one of the more overpaid and obnoxious group of parasites leeching off the public till. At the same time, agencies such as the Alcoholic Beverage Control could be shut down in their entirety, and all the bureaucracy involved in local licensing and permitting could likewise be shut down.

The idea of "regulate and tax" defeats itself early on, as it just leads to black markets. Here in San Francisco, a pack of cigarettes costs about $6 in the store, but I can buy brand-name cigarettes (Camels, Marlboroughs, etc.) for $2.50 to $3 from street dealers in certain parts of town.

Antoinetta III


States are moving to ban the chemical BPA from food and drink containers, primarily those meant for infants and toddlers, because of health concerns. A dozen states are considering restrictions this year on bisphenol A, an estrogen-like chemical used to harden plastics in products such as bottles and cups. It is also in the linings of metal cans, including infant formula, to help them withstand high sterilization temperatures.

the military. how much oil is it consuming directly in the wars today? and indirectly in all the ordinance and support devices and manufacturing and man hours? and carbon footprint? FART! just contemplate DU. or agent orange. or nerve gas. or militarized anthrax. heh-heh, white phosphorus (i thought there was peak phos).

and what of the death and suffering?

and how much is justified?

a wag spoke of the greatest misallocation of resources.

well, here there is.

and i do mean,

have you reduced your lifestyle today?

and if you havent, did you reduce someone else's?

the military budget could put 10 KW PV solar system on every roof.
the military budget could put wind farms in every community.
the military budget could provide health care to all citizens.
the military budget could provide electric vehicles to all drivers.
the military budget could provide social security to all citizens.
the military budget could provide for the greed of gold man sacks.

all this parsing of PO (that is punk oil) with colorful graphs and hyperlinks to supporting evidence is also a misallocation of resources. O! learned pundits! reality is chaotic and messy.

die off comes to 100% of the human race. no one gets out of here alive. temper your smugness with that fact. or do i need a link?

"it's all good"

p.s. i'm smug also.

I just received an invitation to a event scheduled for the evening of Tuesday, March 2nd. Nova Scotia Power is celebrating that over the past year and a half their various DSM initiatives have helped their customers reduce their energy needs by some 70,000,000 kWh. Based on NSP's current fuel mix, that's a 58,100 tonne reduction in CO2 emissions. This is an impressive first step and the utility has established some very aggressive targets for each of the next twenty-five years, e.g., by 2013, the cumulative energy savings will exceed 800,000,000 kWh.

So a tip of the hat to my associates at Nova Scotia Power for their outstanding accomplishments to date and for their commitment to do even better in the years to come. And if you think I put in a long day, my counterpart at NSP sent his last e-mail to me at 03h12 this morning and was back at his desk at 08h30. So a special thank you to you, Scott.



Hi Paul,

DSM is shorthand for Demand Side Management.