Drumbeat: March 18, 2010

Brazil subsalt output to see early peak - minister

SAO PAULO (Reuters) - Brazil's subsalt oil production could shoot up in 2013 and 2014 before leveling off to match production in other off- and onshore areas, Planning Minister Paulo Bernardo said on Thursday.

Output from the offshore subsalt region will grow slowly in the next two years and jump significantly during 2013 and 2014, said Bernardo, who spoke in an interview with the state television channel. He did not provide estimates or give the source of his projections.

"Maybe in 2015 output at the subsalt region will be as significant as production at our current sources of crude," he added.

Bernardo's estimates sharply contrast with estimates by state-controlled oil company Petrobras, which estimates subsalt production could match that of other regions by 2020.

EIA: Energy earnings bounce back in 4Q, but still down

Independent energy companies reported net income of $2.2 billion in 4Q 2009, a rebound from losses in 4Q 2008 but still below averages for the same period over the past five years, the US Energy Information Administration said.

Canadian energy profits seen rising 66 percent in 2010

CALGARY, Alberta (Reuters) - Profit in Canada's oil industry may climb by two-thirds this year as rebounding crude prices and rising output overshadow the impact of higher operating costs, the Conference Board of Canada said on Thursday.

Betting the farm on oil

In the past decade, oil and other commodity price inflation have shattered records. Oil price inflation averaged 43% per year and commodity price inflation averaged 28% during 2002-2008, dwarfing commodity price inflation of the 1970-1981 period, a record for modern times with oil prices rising at 26% a year and commodity price inflation at 10% a year.

Why has the period 2002-2008 been so inflationary for commodities? Central banks, notably the US Federal Reserve and European Central Bank (ECB), have categorically denied any link between their monetary policies and oil and commodity price inflation during this period. Instead, they have blamed it on rapidly growing Chinese and Indian demand for oil and other commodities and on constrained supplies on the part of producers. Academics and the media have generally supported this view. The impact of expansionary monetary policy by the Fed during 2002-2005 and the impact of widening US fiscal deficits on oil and commodity markets have been simply ignored.

Why 70 Miles Per Hour Is the New 55

If gas prices spike again this summer, as some predict, the idea of dropping speed limits again may get a new hearing. But Virginia's decision and the powerful cars consumers are buying suggest otherwise.

Renewable energy technology threatened by rare earth metal shortage

A U.S. House of Representatives Investigations and Oversight Subcommittee heard testimony March 16 that the U.S. faces a potentially serious shortage of rare earth metals, without which next-generation renewable energy technology for wind turbines, hybrid vehicles, cell phones and national defense technologies don’t work.

Report says China is squeezing U.S. firms out of its massive wind-power market

WASHINGTON – U.S. companies are getting squeezed out of the big Chinese wind-power market even as Dallas investors are bringing Chinese firms here via a big wind farm in Texas, according to a new industry report.

"They've used every measure you could possibly think of to enhance production of renewable energy equipment in China," said report author Alan Wolff of the trade law firm Dewey & LeBoeuf LLP.

First parasitic nematodes reported in biofuel crops

Researchers at the Energy Biosciences Institute (EBI) at the University of Illinois have discovered widespread occurrence of plant-parasitic nematodes in the first reported nematode survey of Miscanthus and switchgrass plants used for biofuels.

Timminco suspends solar-grade silicon production

(Reuters) - Shares of Timminco Ltd dropped 13.3 percent on Wednesday after the company said it was suspending solar-grade silicon production and would not resume operations until customer demand recovered.

Timminco said after markets closed on Tuesday that it expects gloomy solar energy market conditions to continue hurting demand for its products and financial results in the foreseeable future.

China’s hunger for oil hard for US to digest

It is no secret that some OPEC nations have been pumping crude above their quotas.

What is more mysterious in an oversupplied oil market is where in the world those unsanctioned barrels have ended up.

In the case of Iran’s estimated 400,000 barrels per day (bpd) of excess output, the answer could lie, at least partly, in China. The world’s third-biggest energy consumer has been stockpiling crude for the past 18 months in response to a government programme to establish strategic petroleum reserves equal to 90 days of consumption.

It continues to do so as Beijing builds more storage to reach a 2020 target of more than 475 million cubic feet of state-controlled capacity.

Mexico's move: Times change and the country should change oil policy to welcome foreigners

It isn't overstating matters by much to say that the world of energy innovation has passed Mexico by. The country's readily accessible oil has largely played out. Other, more challenging reserves remain plentiful, but tapping these requires advanced technology and large-scale investment, areas in which Mexico needs assistance. The prize is offshore Gulf development of an estimated 50 billion barrels, but tapping these potential new reserves will require technology Pemex does not have and levels of financing that are better shared with outside investors.

Thus, the pressing dilemma for Mexico's political leadership: how to maintain a tradition of fierce independence while doing what is necessary to return the oil industry to good health by letting foreigners participate with their skills and cash.

UBS cuts targets on weak gas outlook

UBS cut its price targets on shares of 11 drillers and oil service companies, including Transocean and Schlumberger, citing potentially weaker natural gas prices.

Alcoa Gets Energy Chill From Australia’s $130 Billion Gas Boom

(Bloomberg) -- Australia is attracting more than $130 billion of investment in some of the world’s richest natural gas fields to supply buyers in Japan and China. Domestic customers, including Alcoa Inc., will have to wait.

Alcoa’s stalled alumina refinery expansion in Western Australia “will not be back on the agenda until we can secure long-term competitive gas supply,” Michaela Southby, a Perth- based spokeswoman for the biggest U.S. aluminum producer, said in an e-mailed response to questions. The project may cost $4 billion, according to a 2008 estimate by ABN Amro Holding NV.

MEast fuel oil rebounds on tight supply

DUBAI (Reuters) - Middle East fuel oil prices rose this week with the tight regional marine fuels market keeping the market propped up despite a gush of arbitrage flows moving from the West into Asia.

India has pricing, security concerns over Iran pipeline: Krishna

A day after Iran and Pakistan sealed pacts to launch a long-discussed gas pipeline, India Thursday said it was in touch with Tehran to resolve issues relating to pricing and security on what had started off as a tri-nation project.

Rosneft shrugs off Yukos moves

Russian giant Rosneft confirmed today that managers of defunct oil producer Yukos had won injunctions in US and UK courts seeking the seizure of some of its property, but denied that the court orders would hit its operations.

Canadian Co Eyes Jordanian Oil Block - Sources

Canada's Ammonite Energy Ltd. is awaiting approval from the Jordanian government for a preliminary agreement to carry out oil exploration in the kingdom's Jafr and Central Jordan block, a person familiar with the negotiations said Thursday.

First Nations refinery plan gets mixed reaction

The upgrader, which would carry a pricetag of more than $6 billion, would create thousands of much-needed jobs and economic development for Alberta's aboriginal people, said Eddy Makokis, Treaty Six grand chief.

Still, some in the energy industry wonder if producing more fuel in Canada is a good idea.

Depressed markets in North America have already resulted in Shell Canada stopping production at its refinery in Montreal, said John Skowronski of the Canadian Petroleum Products Institute.

Indonesia to exceed coal output on favorable weather

Indonesia, the world’s biggest exporter of thermal coal, expects to exceed production targets for this year by up to 8 percent due to a mild El Nino and dry weather that will help to optimize the extraction rate.

Arab energy ministers call for more investments in electricity plants

BEIRUT: Arab energy ministers involved in the regional power grid said on Wednesday that there was a strong need to invest more money in power plants as electricity demand was expected to rise in the near future.

Energy ministers from Lebanon, Syria, Iraq, Palestine, Iraq and Turkey as well as a representative from Jordan. were attending a conference held at the Phoenicia-Intercontinental Hotel in Beirut.

HSBC bankers turn climate crunch champions

Bankers may not be the world's most popular people, but at HSBC they have the good of the planet at heart – the bank has invested $35 million in sending employees to assess the potential effects of climate change and preach the green gospel to colleagues back at the office.

China defends detention of lead poisoning victims who sought medical help

Police in Jiahe, Hunan province, blocked a bus carrying 53 villagers who were on their way to get health checks last September, according to Chinese media.

Mistakenly believing the villagers were planning to protest, the police have detained two of them for the six months since on the charge of "disrupting traffic". Though it has since been proved that they and their children were contaminated by illegal emissions of heavy metals from a smelting factory, the local government was unapologetic.

John Michael Greer: Energy concentration revisited

In the same way, I’m convinced, certain widespread misunderstandings about how energy interfaces with economics are causing a great deal of alternative energy investment to go into schemes that are going to offer us very little help dealing with the end of the age of cheap fossil fuels, while other options that could help a great deal – and there are quite a few of those – are languishing for want of funds. That was the theme of last week’s post; the response was one of the largest these essays have yet fielded, and it helped me clarify the differences between the ways that certain kinds of energy can be used in practice, and the ways that a great deal of current thought assumes they can be used.

Where Dark Green Meets Cleantech (Or, Beyond Shades of Green)

“Transition thinking seems obsessively focused on coordinating individual actions (like helping people barter their free time or connecting people who want to garden); even at its most ambitious, it generally focuses on building alternative systems (say, starting a local currency scheme) rather than reforming the larger systems that shape life all around us (say, starting an actual credit union or rewriting banking regulations). Part of this is the legacy of the counter-culture out of which it emerged. Part of this is that Transition Towns aim to offer a way to step out of emotional paralysis by saying ‘just go ahead and do something, anything.’ Part of it is intentional: groups spread more rapidly when the demands placed on their members are minimal. However, the approach also betrays a far darker mindset.”

That darker mindset, argues Steffen, is a morbid (and he would say delusional) focus on collapse-mitigation rather than visioning a different kind of future. It is an approach, he seems to think, that is not only self-limiting but immoral. “Dark Green” according to Steffen, stands in contrast to “light green” and “bright green” environmentalism. “Light greens,” he says, tend to emphasize lifestyle/behavioral/consumer change as key to sustainability, or at least as the best mechanism for triggering broader changes.

Turn Out The Lights, The Party's Over

The same message about the proper role of finance is being made today by economists like Joseph Stiglitz, and only an ideologically blinded fool cannot, or will not see the same thing happening in 21st Century America as happened in early 20th Century Britain. Today's GOP agenda is based on a rigid, ideological commitment to "free market" capitalism that allows finance and insurance to dominate the economy while petroleum and fossil fuels remain solidly entrenched politically, thanks largely to the GOP's ability to manipulate Bible Belt voters by pandering to them on things like abortion and school prayer.

Thus you may recall Cheney's "Energy Policy Task Force" comprised solely of fossil fuel industry executives that convened in the White House in early 2000, followed by the Bush administration's trillion dollar oil war in Iraq while pressing concerns to develop new, renewable energy technologies were ignored. That same mindset, combined with financialization of the economy and the emergence of the religious right, are exactly what caused both Holland and England to fail after attaining global dominance for a 150 years or so.

Europe Is Unlikely to Match U.S. Shale Boom Soon

(Bloomberg) -- Pumping natural gas trapped in shale rock has made the U.S. the world’s largest producer of the fuel. While geologists say Europe may have similar fields spread from northwest England to Ukraine, drilling them profitably will prove a whole lot harder.

Getting the shale gas out requires drilling hundreds of wells and blasting the rock with water and chemicals, raising environmental objections in densely populated Europe. Those obstacles suggest Russia’s OAO Gazprom, supplier of 25 percent of Europe’s gas, will have plenty of customers for its fuel pumped through new pipelines across the Baltic and Black Seas.

“There is a great future for Russian gas in Europe,” John Barry, a strategic issues manager at Royal Dutch Shell Plc, said in an interview. “There is a lot of unconventional gas in Europe, but it’s a very, very early part of the story.” Shell has already faced public opposition to plans to explore in Sweden for shale gas.

Oil Declines as Dollar Strengthens, Crude Stockpiles Increase

(Bloomberg) -- Crude oil fell for the first time in three days as a stronger dollar weakened demand for most commodities and a report showed U.S. crude stockpiles increased last week.

The dollar index, which measures the dollar against six other major currencies, rose for the first in three days. Crude oil inventories grew last week to the highest level since August, according to a U.S. government report yesterday.

“Currency is a short-term factor for the oil market,” said Christophe Barret, a Credit Agricole CIB oil analyst in London. “Prices are disconnected from the physical market; demand looks very weak.”

Oil Has $88 a Barrel as Next ‘Port of Call’: Technical Analysis

(Bloomberg) -- Crude oil will have $88 a barrel as the next “port of call” if the market this week can surpass technical chart resistance above $83, according to National Australia Bank Ltd.

So Much for Peak Demand - try 134mb/d by 2030

Can you spot the difference? The OECD and FSU (Former Soviet Union) projections are reasonably close. It's the rest of the world line that is much different in the DOE's projections. The DOE suggest that China, India, OPEC etc will grow at one fifth of their historic oil demand rate, despite higher income growth. Instead of the DOE's 0.56% growth rate, the authors' projections finds close agreement with the historical growth rate of 2.54%. It's not exactly unreasonable to expect the rest of the world to (attempt to) raise their consumption of oil from 1 liter per day to 2 liters per day, especially if their income is rising. The OECD slurps over 6 liters per day, after all.

The difference between the DOE's and the authors' projections is some 20mb/d, or two Saudi Arabias. So in 2030, a plausible buisness as usual scenario suggests world demand at 134mb/d.

Inside the Peak Oil Demand Model

Where I think the paper falls down, at least a little, is on changes to behavior in the transportation fuel market. Yes, a steady rise in oil prices might not elicit many changes, thus causing the above per capita demand effects (were supply to somehow magically appear). But I don’t think that it is what we will see. As I said in my TED talk this year, we will more likely see multiple fuel spikes much higher, perhaps $150 or more, which will have very different shock and awe effects than steady increases due to inelastic liquid fuel demand in developed countries. That doesn’t make the situation more palatable, of course, but the non-linearities in the system are the key to understanding that it won’t happen the way it is being econometrically modeled.

Nigerian Cabinet Dismissal May Ease Paralysis, Analysts Say

(Bloomberg) -- Acting Nigerian president Goodluck Jonathan’s dismissal of the Cabinet may end the paralysis that has gripped the West African nation during ailing President Umaru Yar’Adu’s four-month public absence, analysts said.

Saudi Aramco Said to Buy Term Gasoil Cargoes; Shipments Arrive

Saudi Arabia, holder of the world’s largest oil reserves and the biggest producer in the Organization of Petroleum Exporting Countries, imports refined products such as gasoline and diesel because it lacks capacity to meet domestic demand.

Aramco is investing billions of dollars to expand its refining capacity and the 7 million barrels represents less than 4 percent of its annual distillate fuel production, according to Bloomberg calculations and Aramco data for 2008. Refining profit margins began to recover this quarter after declining last year as the recession reduced fuel demand.

Rio protests: Sharing Brazil's oil revenues will hurt 2016 Olympics

Thousands of Brazilian schoolchildren and city and state workers were given the afternoon off to gather in Rio de Janeiro today and protest a federal law that would reduce the amount of petroleum royalties the energy-rich state now gets.

Less oil money, they say, could also hamper plans to host the 2014 soccer World Cup and the 2016 Olympics in Brazil.

Rio’s governor said the proposed law, which would share Brazil's oil revenues more evenly among the country's 26 states, was “a lynching” for his state, and openly wept when discussing the legislation.

Yemen to free Shi'ite rebel prisoners within days

SANAA (Reuters) - Yemen plans to free Shi'ite rebel prisoners within days under a truce to end a long-running war that drew in neighboring oil exporter Saudi Arabia last year, a government official said on Thursday.

Sudan hangs two for killing Chinese oil workers

KHARTOUM (Reuters) – Sudan executed two people convicted of killing four oil workers, two of them Chinese, in one of the country's most energy-rich regions, state media reported on Wednesday.

The two were found guilty in 2004 of killing the workers and looting their vehicle in Heglig in Sudan's South Kordofan state, state Suna news agency reported.

Three Oil Firms Will Get Tax Cuts Larger Than Tories' Green Spending, Ndp Says

OTTAWA -Three of the biggest oil companies in Canada are projected to receive more in corporate tax cuts than what the Harper government plans to spend on green initiatives, an analysis by the NDP concludes.

More regulation needed for Canada oil sands: report

CALGARY, Alberta (Reuters) – Steam-driven projects to extract crude from Canada's oil sands, often held up as more environmentally friendly than mining, have major drawbacks of their own that require more stringent regulation to fix, an environmental think tank said on Wednesday.

Coal Port Shut as Cyclone Nears Queensland Coast

(Bloomberg) -- BHP Billiton Mitsubishi Alliance, the world’s largest steelmaking coal exporter, said the Hay Point port remains shut as Tropical cyclone Ului bears down on the northeast Australian coast.

Transport of coal by rail to the terminal will stop and output at some mines is affected because of a stockpile limit at the port, Fiona Martin, the Melbourne-based spokeswoman for BHP, said by e-mail today. Conditions will be monitored to decide when it’s safe to reopen the terminal, she said.

Steven Chu Proposes 22 Percent More for Solar Research

Bottom line; the current administration is taking a hard line on renewables, with President Barack Obama issuing a three-year moratorium on offshore drilling. The message; go on a fossil-fuel diet, even if it does stunt an embryonic economic recovery.

The execs were not happy, with one writer describing the alternative energy subsidy in America as the classic definition of insanity; repeating an action in hopes that the outcome will be different. The phrase “economic suicide” was also heard in context with Chu’s proposal.

GE Tells Obama ‘Sell Hard’ in Indonesia With China in Pursuit

(Bloomberg) -- General Electric Co. Chief Executive Jeffrey Immelt wants Barack Obama to “sell hard” in Indonesia as he extols U.S. expertise in industries such as clean energy. He’ll have to work fast -- Premier Wen Jiabao will make China’s sales pitch in Jakarta next month.

China Drawing High-Tech Research From U.S.

The Chinese market is surging for electricity, cars and much more, and companies are concluding that their researchers need to be close to factories and consumers alike. Applied Materials set up its latest solar research labs here after estimating that China would be producing two-thirds of the world’s solar panels by the end of this year.

Ex-BP’s Browne Calls on Governments to Aid Clean-Energy Loans

(Bloomberg) -- John Browne, the former chief executive officer of oil company BP Plc, said that governments worldwide should help companies get loans to develop alternative energy sources as banks recover from the recession.

“The single-most important thing at the moment is to find ways of producing more finance for the sector,” Browne said today in a television interview at the Bloomberg New Energy Finance conference in London. Borrowing “is difficult to come by because banks have no capability of lending significant quantities.”

Jeremy Leggett: Feed-in tariffs are not suppressing innovation in Germany or the UK

George Monbiot's third article on government grants for domestic solar panels ignores the errors that I and others have protested about in the opening assertion in his first article. He alleged that the UK government's feed-in tariff regime is "about to transfer £8.6bn from the poor to the middle classes". In saying that, he managed to get three things wrong. The actual sum raised from the tariff levy from all electricity consumers, not just households, to 2030 will be £6.7bn; it will be spread over 20 years; and it will be more than offset – if the government is true to its word – by energy efficiency savings stimulated in parallel market-building schemes.

Yet we see no retraction in George's latest, much less an apology for trying to turn feed-in tariffs into a new form of class war on a false premise.

New man-made species could solve energy problems

Craig Venter sure doesn't look like Dr Frankenstein. He's a genial looking bloke: bald and sun-damaged on top and whiskery, like the keen sailor he is, on the chin.

But like Mary Shelley's hero, he has created life from spare parts. He's re-thinking Darwin and he's trying to solve the world's environmental and health problems.

Major California Solar Project Moves Ahead

California regulators on Wednesday recommended that the state’s first new big solar power plant in nearly two decades be approved after a two-and-half-year review of its environmental impact on the Mojave Desert.

Aviation experts predict biofuel-powered flights within 10 years

AMSTERDAM — Within a decade, passenger planes will be flying on jet fuel largely made from plants — flax, marsh grass, even food waste — as airlines seek to break away from the volatile oil market and do their part to fight climate change, aviation experts said Wednesday.

Though biofuels are still in the experimental stage, the projected shift has stoked concern among environmentalists that the possible insatiable appetite of airlines for plant oil will hasten the destruction of tropical forests and the conversion of cropland from food to fuel.

Nissan to make electric vehicle known as the Leaf in Britain from 2013

TOKYO (AP) — Nissan Motor Co. said Thursday it will make its electric vehicle, the Leaf, in England from early 2013 as the automaker gears up for global sales of the zero emission car.

Wind energy gains still lost in grid lock

(Reuters) - Europe will not make the most of its multi-billion euro clean energy investments until old monopolies are broken up or made to build the dozens of power links needed to manage the rise of wind power.

Underwater Cable an Alternative to Electrical Towers

Generating 20 percent of America’s electricity with wind, as recent studies proposed, would require building up to 22,000 miles of new high-voltage transmission lines. But the huge towers and unsightly tree-cutting that these projects require have provoked intense public opposition.

Recently, though, some companies are finding a remarkably simple answer to that political problem. They are putting power lines under water, in a string of projects that has so far provoked only token opposition from environmentalists and virtually no reaction from the larger public.

Lester R. Brown: Zero-Carbon Buildings

The building sector is responsible for a large share of world electricity consumption and raw materials use. In the United States, buildings—commercial and residential—account for 72 percent of electricity use and 38 percent of CO2 emissions. Worldwide, building construction accounts for 40 percent of materials use.

Because buildings last for 50–100 years or longer, it is often assumed that cutting carbon emissions in the building sector is a long-term process. But that is not the case. An energy retrofit of an older inefficient building can cut energy use and energy bills by 20–50 percent. The next step, shifting entirely to carbon-free electricity, either generated onsite or purchased, to heat, cool, and light the building completes the job. Presto! A zero-carbon operating building.

Are ‘Green’ Consumers Less Trustworthy?

The Guardian newspaper picked this up recently, and it also makes an appearance in the most recent issue of Conservation magazine: people who buy green products may be, on the whole, more likely to steal and cheat when given the chance.

Strip mining adds to coal's greenhouse emissions, study says

CHARLESTON, W.Va. -- Mountaintop removal coal mining adds to greenhouse gas pollution by destroying forests and potentially releasing carbon dioxide that was previously trapped inside rock and soil, according to a recent scientific paper.

Carbon dioxide emissions from the Appalachian coal industry are up to 17 percent greater than previously estimated if these types of sources are added to emission generated by burning coal in power plants, the paper found.

Cancun Climate Talks Get Dim Prognosis Nine Months Before Start

(Bloomberg) -- Government negotiators are already writing off chances for a global treaty to fight climate change, nine months before the annual talks begin in Cancun, Mexico.

Kunihiko Shimada, principal international negotiator at the Japanese Ministry of the Environment, said yesterday a deal this year is “almost impossible.” Jos Delbeke, who spearheads European Union climate policy at the European Commission, ruled out a “comprehensive legal agreement” in 2010.

Senate Trio Courts Industry in Bid to Pre-empt Ad War

Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) say they are writing a business-friendly global warming and energy measure, and they are taking their case to the biggest umbrella group of them all: the Alliance for Energy and Economic Growth, or AEEG.

The senators hope to bring the coalition's members into their tent as a way to win over new votes and avoid the type of multimillion dollar ad campaigns two of its biggest members -- the U.S. Chamber of Commerce and American Petroleum Institute -- launched against last year's House bill and earlier proposals to limit greenhouse gas emissions.

Environmental Groups: Stop the Push for Global Warming Legislation

It is time to admit the truth -- no legislation that actually addresses global warming will pass the Senate this year. With the great majority of the Republican minority committed to a no vote on almost anything, and with senators beholden to powerful coal (think Sen. Rockefeller), oil (think Sen. Murkowski) and nuclear (think Sen. Alexander) only interested in legislation that actually advances their destructive industries, this is a terrible climate to insist that there must be a vote. Anything that could get a supermajority will be a terrible bill.

And the bad news is that the Senate context will probably be worse next year.

The Energy Fetish

Despite all the attention deservedly given to power plants and automobiles' contribution to climate change, only about half of global greenhouse gas emissions actually come from energy. Approximately seventeen percent come from the clearing and burning of tropical rainforests and another fifteen percent comes from agriculture (the rest comes primarily from dangerous chemicals used in refrigeration). Because many of the people who first brought attention to the climate crisis have their background working on energy issues, the role of forests and agriculture has tended to get short shrift - but that doesn't mean they're not vital.

Cold Tuna, Hot Baseball Face New CO2 Rules in Tokyo

(Bloomberg) -- Tokyo will start a citywide cap- and-trade system next month, beating the central government to become the first jurisdiction in Japan to introduce mandatory pollution limits and trading in carbon credits.

Everything from chilling sashimi-grade tuna at Tsukiji fish markets to cooling baseball fans at Tokyo Dome will be subject to the new rules, which require 1,400 companies to reduce emissions by as much as 8 percent, said Kazuya Tanada, director of the city office managing the plan.

Chindia's Net Imports

From 2005 to 2008, Chindia's (China & India) net imports increased at about 9%/year (EIA). Expressed as a percentage of combined net exports from the (2005) top five net exporters, Chindia's net imports went from 19% in 2005 to 27% in 2008 (probably to about 33% in 2010). If we take Sam's best case for net exports from the (2005) top five and project Chindia's current rate of increase in net imports out to 2018, then in 2018, Chindia's net imports would be equivalent to 100% of projected (2005) top five net exports.

But have we ever seen a sustained near double digit rate of increase in net oil imports over a long time period?

From 1949 to 1977, the rate of increase in US net imports was 11.8%/year, exceeding the current rate of increase in Chindia's net imports. Of course, until 1973, oil prices were fairly stable and this time period (1949-1977) corresponded to generally increasing global net exports, but on the other hand Chindia has shown increasing consumption and net imports, even as oil prices rose at 20%/year from 1998 to 2008.

EIA (PDF) production, consumption, net imports chart for the US:


Incidentally, the rate of increase in net imports from 1949 to 1970 was 11%/year, but US net imports really kicked up after US production peaked in 1970, going from 3.2 mbpd in 1970 to 8.6 mbpd in 1977 (and then entering a period of decline, before resuming the increase in later years). But in any case, the rate of increase in net imports from 1970 to 1977 was 14%/year, after US production peaked in 1970. Over the same time period, 1970 to 1977, US oil prices also rose at 14%/year (EIA).

Note that two factors contributed to the late Seventies decline in US net oil imports--falling consumption and rising production from Alaska, as the Alaskan pipeline was finished. It would appear that the all time annual record high for US net imports was in 2005, at 12.5 mbpd.

Recent EIA data show that Chinese oil production is flat, while Indian oil production is down slightly.

I wonder what will happen if it turns out China really is a superbubble about to burst.

Isn't the whole world we created for ourselves, a superbubble about to burst?

Some people think so. But I suspect it will be more a slow deflation for the US. Though some very smart people disagree.

Leanan, that's very discriminatory. Some of us dumb ones also disagree. :)

True. Either we crash or we slowly decline like the British Empire.

I assume that collapse is the path of least resistance. It's easier to collapse then decline slowly. But I do not know for sure how things will play out. I’d prefer a slow decline. Only time will tell.

Personally, I think TPTB are doing their best to make this a slow decline and not a crash. If there were not so much propping up and stimulus going on right now...which do you think we would be experiencing?

I have a lot of respect for your insights Leanan, especially since you seem to have an encylopedic recollection of articles from over the years.

I tend to think decline is likely, because it's been going on already for decades. However, that doesn't preclude some pretty good crashes along the way, like we had in 2007 or worse.

Really the point I was going to make is that the impact is always individual in the end. If you were a steelworker or an autoworker, your heyday was decades ago, and the crash has been fairly hard and very long.

If you are an offshoreable service industry person, you've already felt the crimp as well. Ditto if you're in technology like telecom or computers.

When you get to that point that you've lost your last "good" job and are making do with odd-jobs and underemployed full-time roles, the crash has arrived for you. All your dreams must scale down or dissipate, and your lifestyle must drop at least a tier or two.

I'd say 10-20% have felt at least one good crash already. That still leaves a lot of pain to go around. And there will be other generations coming who will live out their lifecycle starting a bit lower and ending up lower still, generation-on-generation compared.

And there will be other generations coming who will live out their lifecycle starting a bit lower and ending up lower still, generation-on-generation compared.

I think this is a very good point. One that has been made previously by others, but also one that doesn't always enter long-term thinking about collapse/decline.

The views of the generation now growing into adulthood will be very different from the views of the previous generations. Their lives will be very different. Their thinking will be very different. I would even argue that those who are not in that generation (us old-folks) are potentially incapable of even imagining how different it will be. Though, perhaps an old person who was a child during the Great Depression might be able to imagine it!

It's even possible that the generation growing up now will not view their lives as "starting a bit lower and ending up lower still".

That's what I was thinking also Paleo. Many of my kin made a fairly decent living in the home construction biz. A framer could make enough to raise a couple of kids in a decent apartment and keep his used car running without too much trouble. But those days ended 20 years or so ago when cheap labor started flooding in. Masonary guys took an even bigger hit since they fell from a higher income bracket. I took a big hit in the mid 80's along with the rest of the oil patch. But I've obviously came back strong but much of the oil patch is now sliding backwards again.

It's difficult to imagine too many components of the US work force not taking a serious hit in the mid future. Most of the jobs added to the roles recently have been gov't positions. Obviously in the face of declining tax revenues, especially at state levels, that won't hold the economy up much longer IMHO. Lots of talk about green jobs replacing much of the loss but we haven't seen any significant expansion there. Lots of optimistic chatter but haven't seen that new headline pointing out the 5 million folks now employed in the green fields.

That brings some personal comparisons to my mind. One of my dad's best friends (My dad was born in 1911)worked in a gas station. He owned his own home and raised 5 kids! My dad quit school after the 8th grade and worked as a machinist his whole life. There were four of us kids. We moved around a lot but my dad never collected one day of unemployment insurance. He could move to another city and have a job the same week. We never missed a meal. A family that he grew up with on the south side of Chicago had eleven kids! The father was a peddler of some kind, pushed a cart through the streets. As far as I know all twenty of those kids (including me)did better than their parents.

Both of my children,(in their twenties) have bachelor degrees yet I doubt that they will have the security that my parents or my generation have had.

Absolutely right. Next will come healthcare (first private, then government). After that will come government agencies (federal; state and local is already happening). Next will come military. Finally, will come energy.

When people in the fossil fuel and the alternative energy sectors no longer have steady, high-income employment, we'll know it's over. We could already be seeing this but it has to happen worldwide, and we have a long way to fall.

Hi, Leanan. I have to ask for a definition here. Define crash, and then define decline. What are the timeframes and what is the magnitude limit for each?

I have seen what I would call a crash already, followed by a 'recovery." And, I expect we will see repeated rapid declines, followed by recoveries, never to the old level.

According to Greer, this is a decline. So, for the long term, I agree with you. And, I agree that we will see a greater crash than 2008. I have seen excellent analysis showing that it won't take place until 2012, and others that show as clearly that it could happen within a month or two. Of course prediction is easy looking back, 20-20 hindsight and all that rot, and it is more difficult looking forward.

Still, we can look at facts, and from them draw inferences based on knowledge at hand. In general, we can say that our economy cannot continue to sustain in a closed system, and that either we must go to the stars or limit our population and energy use. The only thing hard about this is the timing... will we last 2 months, 2 years, or 20 years? Have we waited too long already, or can we draw down slowly with little pain? Facts suggest the 2 year figure, and that we have waited too long and can only expect a difficult and painful withdrawal from our addictions.

The greater question, of course, is whether we can survive that, and the speed of decline would seem to be a major factor in that equation. As conditions deteriorate and the situation becomes clear to one and all, what will happen to our system of laws? Will we be able to maintain an orderly society, or will anarchy and chaos rule the day? What new regulation will we be willing to accept and support?

Don't you think that a long-term "slow deflation" will be 'unacceptable' to most citizens of the United States? Won't they, no, won't we - since you and I are part of the body polis - demand that they (our elected officials) "do something" about it? As irrational as it sounds, that is what I expect will happen. My wife's good friend is a very smart woman... she simply says, "I like driving my SUV... they will just have to do something to keep the gas flowing."

My in-laws pray, and say that "God will take care of it."

My own best friend is a member of Mensa; he says that the "dead hand of Adam Smith" will do the trick, and there will always be plenty of oil and gas. He refuses to listen to any statements about thermodynamics, closed systems, ELM (which I have explained to him in detail), or anything that disagrees with what he wants to believe. Cognative dissonance to the n'th!

Strange species, homo sapiens. I wonder if they'll be missed.


I think we have to distinguish societal collapse from economic collapse. They are not the same thing.

Economic crashes can happen very rapidly. However, I'm becoming more convinced that that won't happen to the US. Like I said, very intelligent people disagree. But what I took away from 2008 is that the system is not as fragile as many of us feared. Which may not be a good thing in the long run, but that's another issue.

...distinguish societal collapse from economic collapse.

I understand they are not the same. Doesn't one follow from the other, though?

I mean, the Vandals and Huns overran the Roman Empire; the Empire collapsed. And, yet, wasn't it precisely the economic fall that allowed the military fall of Rome? Being unable to support a large army, Rome suffered a number of invasions. At the end of all, their society was a relic of the past.

It seems to me that the economy will certainly collapse. Society could be defined several ways, and if you mean 50 States of the Union, that could well happen without a general collapse of all social interaction - again, local government will almost certainly survive. The question must be whether we lose all of the knowledge that makes up the intellectual framework of society. And, IMO, a large part of what we in TOD should be about (using here what is admittedly a value judgment) is preparing for a potentially devastating crash by helping to preserve what is most needed by way of knowledge and science.

Certainly I wish for a gentle, easy ride down the slope of Hubbards curve. I am most uneasy about just standing by and watching, hoping that things will come out okay, and enjoying the last few years of empire.


Doesn't one follow from the other, though?

Not necessarily. At least, not in a time frame we who are alive now have to worry about.

Iceland had an economic collapse. Argentina had an economic collapse. Heck, it could be argued that the world had an economic collapse - the Great Depression - and recovered.

Right, but the world's oil declines, and declines relentlessly, over the next 50-100 years. There is no substitute for it. Which may cause various feedback loops including economic collapse causing societal collapse, and vice versa.

IMO, this is a cataclysm that rivals the collapse of the Roman Empire and of many indigenous American peoples.

How you compare that to financial crises of limited time and scope in relatively small countries is beyond me. Even the Great Depression, bad as it was, was not caused by resource decline, but rather various inequalities brought about by the industrialization of the Western world. And, incidentally, we've returned to having those inequalities. Add that to the decline of oil and you have quite the combustible mix.

WWII was arguably an indirect result of the Depression.We might lose the next time, or there might not even be people around to call themselves the winners.

Forgive, me zaphod42, but your wife's friend and your "high IQ" friend don't sound like smart people at all.

At some point, we have to draw the line. If people can't even think of any implication, no matter how small, of peak oil or higher energy prices or rising global demand or overpopulation or any of that, than they just aren't intelligent people, period.

I'm not the brightest bulb but even I can understand that the SUV is toast and that there won't always be "plenty of oil and gas."

Why do I bring this up? Because many of the supposedly smart people are running our government. And just look at the results for yourself.

Remember, Enron had the "smartest guys in the room."

Cognative dissonance strikes one and all. I guess there are some places where I am guilty as well. 'Would that God the gift would gie us,' and all that.

And I don't mind that as much as it infuriates me that the guys in charge, the supposedly smart guys, who really do know the facts, for a few bucks, sell us out. Do you really think that Ben & Timmy are not fully aware of the circumstances. Do you believe that the suits in D.C., including our 535 elected representatives and senators, don't have access to data that we have trouble finding?

If you believe those things, perhaps CD is a a problem there as well...

The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviors, or by justifying or rationalizing them.


Terry Goodkind deals with this as well, with Wizard's First Rule:

Given proper motivation, almost anyone will believe almost anything. Because people are stupid, they will believe a lie because they want to believe its true, or because they're afraid it might be true. Peoples' heads are full of knowledge, facts and beliefs, and most of it is false, yet they think it all true. People are stupid; they can only rarely tell the difference between a lie and the truth, and yet they are confident they can, and so are all the easier to fool.

Considerable wisdom here.



Yes, exactly.

I wonder what will happen if it turns out China really is a superbubble about to burst.

What if??? There is absolutely no doubt about it, China is really a superbubble about to burst. A few weeks ago I posted a CNBC video that stated that 27 percent of the employed population are employed in construction. From your link:

To maintain high employment, China has poured money into infrastructure and real estate projects. This explains why, in 2009, new floor space doubled and residential real estate prices surged 25 percent. This also explains why the Chinese keep building new skyscrapers even though existing ones are still vacant.

The enormous stimulus has exacerbated problems that already existed, threatening to turn China into a less shiny but more drastic version of debt-riddled Dubai, United Arab Emirates.

What happens in China doesn’t stay in China. A meltdown there – or even a slowdown – would have severe consequences for the rest of the world.

They are building and building just to keep people employed. Beijing’s office vacancy rate of 22.4 percent and they just keep on building and building. Soon the bubble MUST burst.

Beijing Seen Vacant for 50% as Chanos Predicts Crash

And China in Midst of ‘Greatest Bubble in History,’ Rickards Says

Ron P.

Staniford had a post about Chinese Leverage vs US Leverage. His conclusion was they were much less in the hole overall than we are, but that's not the whole picture of course. One commenter pointed out that he was lowballing US debt to an extent too.

All I really have to go by is my gut feeling, as I don't really grok economics. Fresh new cities and monster shopping malls that are totally empty just aren't right. We can see this in the wake of the US housing bubble; you watch those videos of Schiff on CNBC from 4 years ago and it's downright bizarre how passionate the assorted bubble heads were about holding their position in re: RE values heading up forever.

Thanks for those links, Ron.

The commercial property space under construction in China at the end of November was the equivalent of 6,800 Burj Khalifas -- the 160-story Dubai skyscraper that’s the world’s tallest.

And there is always theNew South China Mall with it's 99% vacancy rate since its 2005 opening. It is the largest mall in the world based on gross leasable area. Lo and behold, McDonald's has already move in :-)

They are building and building just to keep people employed. Beijing’s office vacancy rate of 22.4 percent and they just keep on building and building. Soon the bubble MUST burst.

(a little humor, but maybe...) Perhaps the central planners in China's government are so forward thinking, that they are planning for the influx of humanity from other parts of the world, as those other parts become economically unacceptable, as the decline unfolds?

Actually, I do worry that they will decide that the answer is to have more people, and take away the one child policy.

From the Chin in Chindia we have this example of the energy of can-do-ism, which stands in stark contrast to the emergent can't-do-ism of the USA, a particular affliction of TODoomists:

"When Xie Lina, a 26-year-old Applied Materials engineer here, was asked recently whether China would play a big role in clean energy in the future, she was surprised by the question.

"“Most of the graduate students in China are chasing this area,” she said. “Of course, China will lead everything.”"

China Drawing High-Tech Research From U.S.

China's emergence as a world power has certainly energized their citizenry -- particularly the young and the newly wealthy. While they may end up "saving the world" with some breakthrough technology, so far, they have only succeeded in emulating the West's wasteful and polluting way of life.

I worked in a Chinese company for a while. When staff members visited from China, their favorite activity was shopping. I don't think that bodes well for our collective future.

If those Chinese would just stop emulating us, then we'd be able to party it up a little longer.


Weren't we the ones who convinced them to follow our lead?

Toil -

China is surpassing the expectations of even the most accomplished TODoomists - see Darwinian's post downthread - they're managing to deplete their aquifers at about 40 ft per year. Not bad...

Most of the graduate students will soon be chasing potable water supplies.

Of course the technocopians will say "hey - let's jam some hydrogen and oxygen together - voila - we have water..." or some such nonsense.

China will lead alright - here's hoping they hit the edge of the cliff first.

Hey, that's cold.
I live in a Chinese neighborhood. They are great people. I'm kind of hoping none of us collapse, and somehow we manage to muddle through. And learn to live with less.

I intended no ill will toward the "people" of China - they have been caught up in this whirlwind of globalization and probably for the most part have no idea what hit them. I'm much more critical of all of us in the US who actually have had a few generations to recognize the path we were being led down but have been mostly been ineffective in instituting any change to BAU. That doesn't change the fact though that the forces that have been set in motion and the inertia that China has now can only produce one outcome I'm afraid - I don't think it's conceivable that you have a controlled "power-down" in a country that continues to build scores of coal fired power plants each year and a population going in a direction completely opposite of learning to live with less. They ramped up their own industrial revolution at such a frantic pace that I don't see them muddling through anything...

China does have a one child policy.

They ramped up their own industrial revolution at such a frantic pace that I don't see them muddling through anything...

They are used to using very little energy, because their industrial revolution doesn't go very far back.

These coal fired power plants don't have a long history.

We are spoiled, they are not.

We expect to have our cake and eat it to.

Yes, they have problems, maybe they'll even have another revolution, but, they are in much better shape then we are.

And, China will continue to exist as a country long into the future. I'm not so sure how we're going to make out.

The Chinese have cars right now but don't really need them, we've boxed ourselves into a corner, we cannot function without cars.


Right. There is nothing special or magical about China, or its people. They deserve neither excessive praise of a quasi-mystical nature (the same Americans used to give to Japanese in the 80's), nor condemnation for their less than stellar human rights record or growth driven overindulgence.

They are, like us Americans, merely human. Which means they are subject to the same physical laws and will undergo collapse just like we will. Although we have much farther to fall than they do.

China is not even remotely survivable.
It is merely the last great industrial power, a mating dinosaur.

I know China is heavily overpopulated

They have only been an industrial power recently. No one was talking about China's powerhouse economy 15 or 20 years ago.

China is an ancient civilization. They have a very, very long history. They do have a problem with fossil water, but,
I would not bet against China. They have a one child policy.

And I think they have a higher carrying capacity then we do.

Most Chinese were riding bikes just 10 or 15 years ago, most still ride bikes. Cars are a very recent thing for them. I'm sure when prices get too high for them to drive, they will just shrug it off, as opposed to us and our car centric society.

They have cities that don't require the use of cars, unlike us.

And yes, feeding the population is a challenge, but, that's why they aren't picky eaters anymore. The Chinese will eat anything.

Will China collapse rather then decline slowly, probably, but I'm sure they'd handle it better then us.

China has problems, but I'm sure their culture and attitudes will be better able to deal with depletion then us.

For decades, China has been trying to hold back the deserts that cover one-third of the country and produce seasonal sandstorms that scour Beijing and other northern cities.


Nuff said about China.


Just a guess but I'd say they may not want to be depleting their aquifers to the tune of 40 ft per year...

So was the Three Gorges Dam project their Hail Mary play for both water supply and energy ?

have this example of the energy of can-do-ism, which stands in stark contrast to the emergent can't-do-ism of the USA

So from a small group of "yes we can" selected by a reporter you've drawn a conculsion?

Hrmmm. How about I go drag some rah-rah-sis-boom-bah posters from, say Little Green Footballs or FreeRepublic who claim the US of A can solve the problems via tech and having the best darn citizens under an almost perfect political system - would you then change your mind about the "can't-do-ism"?

Well, I wouldn't conclude that can't-do-ism has afflicted the entire US population. And given the resistance to this debilitating disease displayed by many on TOD, I don't think it ever will. Some mope, while others cope.

Of course we will use technology to solve the problems born of the era of expanding fossil fuel supply. Fortunately under-utilized and nascent technology abounds: bicycles, electrified rail, drip irrigation, indoor agriculture, rock wool, multiple means of knowledge dissemination...Different living arrangements will both flow from and facilitate the integration of these technologies.

Will new technologies be discovered, developed and implemented? Why should we expect otherwise? Novelty by combination is practically, if not theoretically (WHT?), an infinite source of innovation. The urea briquet in which several existing processes and ideas are combined in a new technology is an excellent example of this process (less fertilizer, less herbicide, more rice production).

In all probability the US, with Canada in loyal lockstep, will voluntarily abandon consumption as usual (CAU). No amount of force will permit the US to maintain the present flow of low entropy into its maw. Eventually even some of the folks at Fox may realize that victory in Grenada and shock and awe campaigns of terror elsewhere don't justify the inefficiencies of the national security state.

Two or three people to a car? I think we can survive that step in the transition to a lifestyle with a reasonable measure of sustainability.

How will we abandon CAU? Mostly, I anticipate, with the information flowing from the price signal.

Yes, I know that some people's feelings are going to be hurt as consumption continues to rise in greater Chindia as it declines in USland. But you'll get used to it. And don't worry. Eventually, things will more or less even out.

Interestingly, and in relation to Ron P.'s comment above, the Chinese, while on the frontier of the "green" manufacturing wave, have now built massive real estate projects (skyscrapers, office parks) that are locked into reliance on fossil fuels for energy. They are married to these buildings, just as we are to our suburban "McMansions" for at least a third of a century into the future, probably more like a half century, so that energy consumption is already locked in. I see no way China can sustain the growth they have known over the last decade, but only time will tell.


Unlike us, China had a clean slate and blew it. What are they thinking? Ramping up a massive auto industry in the face of global oil realities. Smart but stupid. They had a chance to build a new kind of civilization based upon a new model that recognized the disastrous impacts of pollution and coming resource shortages. They will probably end up leading the world, but unfortunately that leadership will lead the world into an early oblivion. The desert awaits for those few who will learn how to live in it. Earth, the new Dune. The Chinese don't have any better grip on reality than anyone else.

I am in Beijing right now working on clean energy projects. From what I can see, the primary source of funding for energy efficiency in particular, but also small renewables is foreign money from the World Bank, Asian Development Bank, IFC and European donors/development banks.

China does not at this point appear to be leading anything in clean energy development or finance, although they are certainly very impressive people and are moving in the right direction.

The exceptions to this appear to be large wind and hydro (if you consider any of the projects clean energy), which they have done a lot of, as well as PV manufacturing.

Hi Tex,

My personal opinion is that the build up has as much to do with getting rid of financial assets and replacing them with physical assets as fast as possible as it does with fears of temporary supply disruptions-and after alm that is all a reserve is good for-making up a shortage over a few weeks or months.

The local auto wrecking yards are paying ten dollars and fifty cents per hundred pounds today for the carcasses of old automobiles-carcasses that have been picked clean of any salable parts bit still containing a lot of glass, plactic and rubber.I haven't bothered to check, but I have no doubt the scrap is mostly going to China and India.

A big pile of scrap iron will always be worth something; a big pile of bonds or a bank account full of electrons may well be worthless in a few more years.

There is a WSJ article today on the dwindling supply of scrap metals, and the rising prices:

Scrap Metal's Lament: Few Scraps

In Connersville, Ind., scrap merchant Price Glazer is struggling to find enough bits and pieces of metal to keep his customers happy. A shortage of iron and steel scrap has sent prices soaring 70% in a year, as recession-hit consumers kept their old appliances longer and manufacturers slowed production, meaning fewer offcuts, or scrap pieces, were created. At the same time, demand from China and other emerging markets is growing.

Two years ago, as many as 300 people a day would stop by Mr. Glazer's Integrity Metals to drop off scrap. Now he sees 100 or fewer. Integrity Metals now pays $260 a ton for crushed car bodies, up from $175 in August. "Just about everything off farms and everywhere else has been picked up," Mr. Glazer said. "Right now, the price of scrap is high because the supply is so limited."

Hi Tex,

My personal opinion is that the build up has as much to do with getting rid of financial assets and replacing them with physical assets as fast as possible as it does with fears of temporary supply disruptions- all a reserve is good for is making up a shortage over a few weeks or months; or hehging a future price increase.I am ready to bet my last dollar that enerrgy prices and steel prices will increase at a rate that makes it possible to stockpile thwe materials economically if you are a soverign govt and don't have to pay properety and bisiness taxes on any inventory you own.

The local auto wrecking yards are paying ten dollars and fifty cents per hundred pounds today for the carcasses of old automobiles-carcasses that have been picked clean of any salable parts bit still containing a lot of glass, plactic and rubber.I haven't bothered to check, but I have no doubt the scrap is mostly going to China and India.

A big pile of scrap iron will always be worth something; a big pile of bonds or a bank account full of electrons may well be worthless in a few more years.

Incidentally, the rate of increase in net imports from 1949 to 1970 was 11%/year, but US net imports really kicked up after US production peaked in 1970, going from 3.2 mbpd in 1970 to 8.6 mbpd in 1977

Makes you seriously wonder about China's internal production if I've not posted before and I think I have I think that there internal production is crashing.

They are effectively at the same point in a lot of ways as the US was in the 1970's including falling internal production of oil and possibly coal.

Given that there overall oil resources are much lower than the US its sort of a fast version if you will.

Westexas. Thanks for this exceedingly great comment. I can't resist the lure of your analysis. As I read through the stories above the comments... waiting with baited breath for the possibility of a comment by you...".Chindia's net imports would be equivalent to 100% of projected (2005) top five net exports. ".....nothing to see here folks....please move along. Any of that pesky price increase will have some other underlying reason.
Thanks in advance for an updated superpost on the ELM and implication by Sam and yourself.

TG80 sends regards

Couple of stories from the McPaper today...

More Americans live with multiple generations of family

"Our cultural norms shifted," says Paul Taylor, director of Pew's Social & Demographic Trends project, which analyzed Census data as well as its own surveys for the report.

I suspect this is the answer to the question of how housing prices can keep going down when population isn't.

And here's the dark side of those handy-dandy car GPS devices:

Texan accused of disabling 100 cars over Internet

DALLAS — A man fired from a Texas auto dealership used an Internet service to remotely disable ignitions and set off car horns of more than 100 vehicles sold at his old workplace, police said Wednesday.

..."He caused these customers, now victims, to miss work," Austin police spokeswoman Veneza Aguinaga said. "They didn't get paid. They had to get tow trucks. They didn't know what was going on with their vehicles."

I suspect this is the answer to the question of how housing prices can keep going down when population isn't.

Increasing population does not equal increasing effective demand, not now anyway. The puzzle is that housing prices haven't collapsed even more given the overhang.

Not really a puzzle Dave - the Real Estate Industrial Complex has thrown everything (including the kitchen sink) at keeping house prices inflated. It won't work in the end when the liar loans stop, easy credit is withdrawn, and people realize that their lame wages will simply not support buying a split level ranch for $500,000 - but they sure are trying to squeeze those last few drops from the proverbial stone...

The puzzle is that housing prices haven't collapsed even more given the overhang.

This may yield some insight:

The owner of this property stopped making payments sometime in late 2006. It has been over [three years] since this owner stopped paying, and she is still listed as the property owner, so one can assume she still occupies the property.


The NY Times had an article about the "ghost inventory" in Florida. Not only are the banks not foreclosing - they are even begging the borrowers to stay in the homes, even if they can't make payments. Because it discourages vandalism and the like.

One family lived in their home without making payments until a pipe broke. They couldn't afford to get it fixed, so they moved...and were surprised that they could rent much nicer homes for a fraction of what they expected. One man who was asked by his mortgage company to stay in his in waterfront mansion lived there until the water company cut his water off for nonpayment.

Multiple generations? I am way ahead of the curve here!

Wife & Me

One house, our house. It's noisey and crowded - and interesting, and fun.

Life is what you make of it. The future can be good, or bad. The real problem of course is living through the unescapable decline. If we can grow sufficient produce to provide for ourselves, and if our neighbors don't kill us off when they realize they have blown it, the species can survive.

It is possible.



Wanted: house with granny flat

Almost 70 per cent of Coldwell Banker Real Estate agents see economic concerns compelling more families to seek housing together in 2010, according to a January poll.

At least in the short term, multi-generational housing demand is a boon for home builders, architects and developers mired in the deepest housing slump since the Great Depression.

Demand is not caused just by population numbers. It is caused by what people are able and willing to pay for.

If people don't have money (and they don't - it's all gobbled up by energy and food prices - and as for their wages or credit, they'll never rise as Wall Street must have it's bonuses, even in a deflating world), then they can't pay for that exurban McMansion.

Which means that prices have to fall - maybe even to Detroit levels.

We are undergoing a deflation and quickly becoming a second world nation. Much of the housing closer to the city core will retain value better, at least in the medium term, though even these prices will fall as people simply don't have the money to afford high rent or mortgages.

In other words, L.A., Las Vegas, Phoenix, and Miami can be rich with 2 million people, and quite poor with 4 million people. In fact, I suspect that's exactly what's happening.

Today I'm commemorating six years as a peak oil nutjob.

In honor of this somewhat less than historic event, I made a little video from snippets of peak oil debates online that kind of sums up the lack of meeting of minds when I try to discuss this issue with friends.


kenny - We have a lot in common...I became Peak-Oil aware about six years ago and I went through a period where I talked about it to everyone that would listen. After a few years I figured out that all I got for my efforts was derision. From my perspective it's not worth it and in the end it won't change anything. We might as well enjoy the final hours of the fossil fuel fiesta while it lasts.

C'est la vie!


I shared around the book "Out of Gas" a lot. For me that was the book that convinced me of the magnitude of the problem of peak oil mitigation. And of course "Twilight in the Desert" came out the year after that, a virtual masterpiece of level-headedness.

That is so odd..."Out of Gas" by Goodstein was my first Peak Oil book. I also read "Twilight in the Desert" but what really sold me was "The Long Emergency". I bought 10 of them and gave them to friends and colleagues.


Mine was:
"Hubbert's Peak, Impending World Oil Shortage."
from Kenneth Deffeyes

excellent book
goes in to details of oil, and extraction, where to look for it.

I knew there was trouble from the introduction alone, it's that good.

Then I went on to read half a dozen other books including the follow up to "Hubbert's Peak," and a book from Colin Campbell.

"Out of gas" is good, and so are the others. I read books from Heinberg too. But none are nearly as good as the first book.

I go to this site almost every day and ASPO at least several times a week. I've learned allot on the oil drum. ELM for one.

Never read Twilight though.

If you liked Kunstler's TLE, you'll probably also like Orlov's Reinventing Collapse, a very entertaining writer.

My favorite in many ways is Colin Campbell's Oil Crisis. It's not an easy read, but gives you the perspective of someone with an intimate, lifelong involvement with the oil scene. Deffeyes is also good, especially if you want an easy introduction to modelling techniques some peakers like to use.

Deffeyes IMO is a sloppy modeller, his analysis is all heuristics, and treats statistics as if it's conjured up by magicians. Read his breathless prose on working with a CBS news statistician for example.

All I can say, it is enetertaining.

Kenny, I watched this video a couple of weeks ago and there were about ten sections to it. Your link above only brings up the first one and I could not find a link to the others on that page. Am I missing it?

Ron P.

No there are no others, and I only put this one together yesterday. But the video animation tool is very easy to use and I wouldn't be surprised if someone else has done something similar.


I'll be celebrating 7 years in Oct. or Nov. of this year.


Congrats you guys. You make me chuckle though: sounds like a bunch of AA memebers. Which, in a sad sense, fits. The first step to change is admitting you have a problem. The big problem is if we can't get the public to make the first step how can they make it down the next 9 steps.

I suppose I might have the dubious distinction being one of the elders having been PO (we called it the "reserve replacement" issue back then) aware for over 30 years.

Peak Oil is allot more catchy than "reserve replacement issue."
Better for marketing too.

If you put "reserve replacement issue" as part of the title of a book, far fewer people would read it.

So true duckie. We've chatted about coming up with a better handle then "Peak Oil". Something more suited to sound bites and limited public attention span. We need a good hook like they have in those Terminator movies. Something similar to "I'll be back". Maybe "I'll be depleted". Naa...that doesn't work either.

Hm, there is an advantage to the "reserve replacement issue" moniker. How likely is that someone is going to call you a "reserve replacement issue" nut? I mean, you've already lured them off their turf onto the reservation. By the time you've explained what the hell you're talking about... .

I foresee millions marching on Washington demanding: Address Reserve Replacement Now! Are the cops going to beat on you for that? No -- they'll ask, what are you guys and gals all about? They'll go back to their superiors complaining of headaches, reminiscing about the good old days when they could at least understand what the marches were about.

I'll be better after my nap.

ROCKMAN, it's nice to hear from an old timer...like myself. I was an absolute true blue doomer in the late 1970's, ("Limits To Growth" and all that) and was pretty much convinced that I would not be driving an automobile past the age of about 25 (that was in 1984) after I read Alvin Toffler's "The Third Wave", and was sold on the collapse of the American economy by William Simon's "A Time For Truth" in which the former Secretary of the U.S. Treasury predicted that once the U.S. debt went past 1 trillion dollars, the U.S. would essentially collapse into anarchy (and who argues with a former Secretary of Treasury, right?). So as for me, I am on borrowed time, and I only wish I could tell you how much my early days of steadfast gloom cost me in real money, (my estimate, millions). But hey, we all live and learn...or do we?


I know how you feel TIIO. When I was driving a cab in the mid 80's after the KSA flooded the world with $8 oil you think it might have been difficult to hang on to PO beliefs. But the geology didn't change...just demand. Not unlike what we just experienced. That $38 oil we hit in early '09 told Joe6Pack the same things as $8 oil did back in the 80's: no need to worry...we have all the cheap oil we need. Not being particular good at anything other than geology I just stuck with the crap jobs until things turned around. Fortunately I found a niche in 1985 that worked out well for me.

the KSA flooded the world with $8 oil

If one then ties that back to charges (correct or not) of a deal done by R. Regan with the KSA to cause Russia to collapse - one need not wonder where charges of "the pricing/demand is rigged" come from.

Maybe eric. But I recall a report by an analyst after the KSA open their valves wide. The KSA had been cutting production in order to keep prices up. But had they maintained that rate of reduction within 18 months 100% of all KSA production would have been shut in. Obviously that couldn't be tolerated. So to follow your theory it was actually the KSA that was helping Russia and the rest of OPEC that was conspiring with Reagan.

RC I fail to see that you where wrong. All that happened is instead of suffering another great depression and a lot of pain we chose to instead take actions that would eventually threaten the existence of not just the US but our very civilization.

If we had played by the rules and accepted the real economic situation then yes it was pretty gloomy but just a deep depression something that was survivable.

We did not we decided to take and unsustainable path that eventually will result in a far worse situation. Depending on how you do the math it bought us about 20-30 years of deferred pain but that all. And with one hell of a bill at the end.

So I really don't see anyone was wrong back then. I wish I was older I would have taken a different road my self and gladly lost millions of dollars if you will.

I would have never gotten involved in the rat race but instead simply chosen to live sustainability and been happy. I was to young at the time to understand.
I have the opposite viewpoint all the years I spent living BAU where completely wasted time I'll never get back. By the time I learned about peak oil the housing bubble was full steam ahead and for me at least made it difficult to create a sustainable homestead. Lots of personal details of course but hell yes I want out.
And I don't really care if we manage to some how squeeze out of things this time next time we won't make it or the next.

I don't care I don't want to play the game anymore its a waste of precious time.

...aware for over 30 years.

That would be about at the time of the first OPEC embargo in '72? That was what caught my interest at the time. I told everyone I knew that we were in trouble; embarassingly, my suggestion for resolving the problem at the time was "smaller cars!"

Of course, no one listened to me. They didn't listen to Jimmy Carter (whose solutions are almost as embarassing, but at least he saw the difficulties ahead) either. Instead we listened to St. Ronnie the Wrong...


What can I say?


Craig - I guess that was part of my quick indoctrination too: I started with Mobil Oil in 1975. The other obvious source was being tasked with finding the next spot to drill a well. Watching the drill count jump to 4600 in just a few years and then witness dry hole after dry hole being drilled drove home the point of diminishing opportunities. I saw what seemed to be an unlimited supply of capital available to hunt for oil/NG and watched a very portionately small amount of success.

I was working a McGovern fundraiser in '72, and the speaker was talking about peak oil. Don't remember if he used that phrase, don't remember if he mentioned Hubbert by name, but he did say we had a bit more than 20 years B4 the world peaked. I knew at the time the '73 shortage wasn't the Big One. The world economic downturns of the 80's are thought to have pushed the peak back about 10 years. That would make it just about '05.

Interestingly, '05 WAS the peak, to-date, of crude oil production. Imagine!

And here I thought all I had to do was demand, and the Earth would supply!



I first heard about it in 1971, when Ian McHarg spoke at a celebrated architecture and planning conference in Sydney. There was an even more prescient speaker from a university in Washington DC, who talked on resource depletion, and pollution.

They were heady days for us young students.

In 1971 McHarg delivered a speech at the North American Wildlife and Natural Resources Conference in Portland, Oregon, called "Man: Planetary Disease." In the speech he asserted that, due to the views of man and nature that have infiltrated all of western culture, we are not guaranteed survival. Of man, McHarg said, "He treats the world as a storehouse existing for his delectation; he plunders, rapes, poisons, and kills this living system, the biosphere, in ignorance of its workings and its fundamental value." [5] To this end man is a "planetary disease", who has lived with no regard for nature.

Cheers to my brother! Who turned me on to the peak oil situation.

I can say that getting and keeping out of debt, staying clear about the situation and making doomerish mental notes are in large part due to him.

Ha! I liked that.

I'm very late to the party and it's been probably all of a year and a half since I've arrived. Better late than never.

As economy booms, China faces major water shortage

Water shortages, brought on by a bigger industry and larger cities, could cause the Chinese economy to founder. The problem is pitting farmers against factories, ecology against industry, and upstream against downstream....

Shortages have spurred the drilling of new wells. Underground aquifers now provide three-quarters of Beijing's water supply, but the water table is falling. He, a groundwater expert, said Beijing is drilling down to 1,000 feet, five times as deep as 20 years ago.

That means the aquifer around Beijing is dropping at an astounding 40 feet per year. The water problem in China is bad and getting worse each day. Farmers have had to stop planting because their water was diverted to the cities.

China's once mighty Yellow River now only reaches the sea during the short monsoon season.

Ron P.

Thanks Ron. I have been spending a lot of time recently researching and thinking about water. It appears to me that 'Peak Water' is way, way bigger a problem than peak oil. We can live without oil, we can't live without water and once those aquifers are depleted they take at least 100s of years to refill. Not much good if a human dies within 3 days without water.

While many correctly believe that the industrial world is going to be brought to its knees because of Peak Oil and energy scarcity, it is the water situation which will really change the face of the world's economy. Absolutely everything we buy in the shops is produced with water and in some cases a staggering amount. How will economies and money systems built on the assumption of ever-increasing consumption of physical products fare when the water is gone?

Water is the problem. It makes peak oil look like a side-show.

When major cities lose their water supply they will depopulate. No choice.

When an agricultural area can no longer afford to pump water out of ever deeper wells because of ever more expensive energy, then crop yields will fall. If this happens in a food exporting country then that country will export less food. If it happens in a wealthy country, they will import more food. Either way, it is the poorest people in the poorest countries who go hungry first.

A billion people are hungry today.

Population is the problem. Water is a symptom, as is peak oil, but water is renewable at a significant rate....if your use can be managed below that rate.

Water just isn't a global problem like peak oil, and never will be. A problem for the deserts? Sure. But that's been true since time immemorial.

We waste alot of water that doesn't need to be wasted, and any area with a freshwater supply or rainwater will do just fine, even as the globe heats up. There are a variety of ways to use and replenish water.

Water just isn't a global problem like peak oil, and never will be...

There are a variety of ways to use and replenish water.

Sorry Sachs but your assumptions are simply wrong. Water is a global problem in that water shortages affect well over half the world's population. And there is just no way to replenish a falling aquifer in less than a few hundred years.

And trying to get water from places where they have plenty of water to places where water is scarce is a lot harder than you seem to think. Read my first link above As economy booms, China faces major water shortage. Northern China is dying because of a water shortage.

BEIJING -- A decade ago, China's leaders gave the go-ahead to a colossal plan to bring more than 8 trillion gallons of water a year from the rivers of central China to the country's arid north. The project would have erected towering dams, built hundreds of miles of pipelines and tunnels, and created vast reservoirs with a price tag three times that of the giant Three Gorges Dam.

But the plan's biggest section, which was supposed to break ground this year, has run aground after a group of academics and experts voiced alarm about costs, environmental damage and earthquake dangers. Though a rare victory for ordinary citizens, the halting of that part of the project leaves behind water shortages that could cause the entire Chinese economy to founder.

The project was cancelled because it would cross three fault lines and require more pumps and maintenance than it would be worth. It was a silly idea that could never work.

To try to bring water to India's drying interior where water tables are dropping just as fast would be even more impractical. There is just nowhere to bring the water from. The Ganges is already being drained too fast.

Where farms are irrigated from aquifer water there is a serious problem and there is just no way to fix that problem... other than the population dropping by about three fourths that is.

Ron P.

That's why I support China's one child policy. It may be too little, too late, but at least they've tried, which is more then I can say for most of the rest of the world.

Most the rest of us will end up like Easter Island.

I applaud China's appreciation that they have a population problem, but wonder about the long term consequences of the one-child policy.

In a graduate class a few years ago, the prof asked the question, "How many of you are the single child of single children?" Eight students raised their hand, all students from China. The Chinese population is already "aging" faster than the US; in 40 years, the population will on average be significantly older than the US population. Whether through private or public actions, caring for the elderly will take up an increasing share of the country's production.

Absent wars or large-scale emigration, a shrinking population is an aging population, which creates its own set of problems.

Not to mention an imbalance of the sexes, which does not bode well for social cohesion.

A smarter policy would have been a two child policy, rigorously enforced. This would have slowed population growth while also relieving many of the problems associated with demographic bust and oversupply of males.

That's true but it beats collapse, if they can avoid it.

The story is similar in India. In my place of birth, the water table was literally at 6 to 8 feet depth. And this is about 25 years ago. I know because when we dug for the foundation of our house, water showed up almost right away and had to be pumped out. Now the water table is down to 600 ft or more.

Yes, there has been a huge draw down of the water table in much of northern India. And SW China now has a severe drought. On the other hand, there has been historic flooding in Mumbai and elsewhere in recent years.

This will be the pattern--after living in a goldilocks climate for millennia, where most of the time rain fall patterns were predictable and moderate, we are going to see severe droughts next to or followed by sever flooding, with the severity of both increasing.

Add that to the vanishing water tables around the world, and we don't need PO to imagine disaster.

Of course, ready energy availability allowed for drilling and pumping water from ever deeper wells, and it also enabled the green revolution that brought about the need for more water and other inputs...

So ultimately, it's all interrelated.

It drives me right out of my skull:


Headline, today's NYT. Coming up: Mean grannie bites attacker, ill-mannered 4 year old spits on molester. viscious skunk sprays attacking pit bull.

I'm starting to come around to the opinion that the editor is actually an anti-imperialist, subverting the empire's media from within.

If I were younger and more energetic I would start a blog based just on the NYT headlines. I remember seeing one when I was young guy -- 439 VIET CONG KILLED IN BOMBING RUN -- or something very close to that. 439? Not civilians? In the jungle?

Capitalism seems to be much the better weapon. You can still get the noncombatants to quietly expire without all the bad press.

Capitalism and selection for evolutionary fitness among our species have produced a resilient life span for capitalism.
Unfortunately, it is superstition based on infinite expansion in a finite system, and we are now seeing it bumping into these constraints, and it will only continues down this path.

No one said late stage capitalism would be fun, but it has been an interesting ride.
Lets hope it doesn't end by crashing into a wall.

Those traits that produced fitness are probably liabilities.

A great video posted today on Copenhagenize.com titled "Designing Streets as Public Spaces in Northern Climate Cities."


It is a presentation (in English) by the Danish architecture/urban planning firm, Gehl Architects. It portrays how public space designed with people as the priority rather than cars can create a more vibrant and lively urban fabric and a happier populace. There are interesting examples of how wind and weather can be managed, and in the last third of the presentation there is good detail of how to generate a year-round bicycling culture even in a Nordic climate. (If you've ever doubted whether people can possibly bicycle in the winter, watch this video!)

The story seems to be a uniform one: people resist having parking taken away, then begin to really enjoy the improvement to their quality of life and wonder why someone didn't do this before.

I have no doubt that people can bicycle in the winter...hell, people have climbed Mout Everest and swam the English Channel. Well, okay, not ALL people, but some have...

I am beginning to think Bucky Fuller may have had the right idea when he talked about geodesic doming the whole city...either that, or I am waiting for Walmart to just attach apartments to their superstores, and then we would never have to go anywhere.


Thousands of people bike through the winter here in Minneapolis, and we have large snow storms and temperatures well below zero, sometimes for weeks.

More seem to be doing it every year. One speeds are popular for this because road salt can't get into any gears and mess them up.

As a Mother of 2 teenage girls,,,,,that's exactly what I told them, a while back.

If Walmart Does'nt sell it....

You don't need it.....

Once I SAW the light, I have never shopped there in the last ten years...never will again.

Great presentation, well worth the time.

In regards to the article - Saudi Aramco Said to Buy Term Gasoil Cargoes - all indications are that not only is domestic demand in the Saudi peninsula increasing, but capacity to deliver products for this new demand is lacking. Despite plans to increase refin-ery capacity – using to some considerable extent heavy oil mostly undesirable elsewhere (which I discussed in some detail here two years ago), demand appears to have exceeded efforts to supply oil products locally. Exportland 2.0 is in effect.

Curiously (not mentioned in the linked articles above and below), the Saudis are also rapidly in-creasing their domestic storage capacity. It is unclear if that is to meet domestic demand of re-fined products, or to have supply available when needed for exports – or both.

There is a very good recent article about Mideast demand, including an interesting review of the gasoline situation in Iran in the face of international sanctions. (sorry if this was posted before).

Middle East oil demand to outpace world with petrodollars

I saw this pass though my twitter stream from The PBS NewsHour at 09:03 PDT

NewsHour - You tell us: What's the next big thing? http://tiny.cc/L7Mkj

Of course I left a comment about Peak oil. Comments are still open...


It's interesting that contributors following you on the PBS twitter stream came up these two gems:
Agricultural Technology: How will farmers produce more with less?
and, ta da!
Cellulosic ethanol.


Obviously, the hope is still there to beef up (pun intended) the green revolution, (using fossil fuels???) and to continue happy traveling powered by renewable bio-fuels.

I will be surprised if peak oil will receive much attention. There's too many people out there who believe that the future will be just like the present, only later.

But then again, it was brilliant of you to list this URL. If you manage to get a few keen PBS fans to look at the Oil Drum, kudos to you! Mission accomplished.



Re: Turn Out The Lights, The Party's Over,up top.

Very good analysis of the political situation. I can find nothing in the article with which to disagree. This GOP strategy has been going on for over 30 years now. Hope is fading fast for the Empire.

CNBC had a discussion on oil prices this morning. Their talking head claimed that crude oil prices and gasoline prices are out of whack, and something will eventually have to change. He wasn't sure whether oil prices would go down or gasoline prices go up.

He seemed to think it was something other than supply and demand boosting crude prices; he says there's still way too much refinery capacity in North America, despite the recent closings of refineries in Delaware, New Jersey, and Montreal. More will probably have to be shut.

Wasn't it only a couple of years ago that people were screaming that we needed more refinery capacity, but tree-huggers and nimbys wouldn't allow them to be built?

It only makes sense that oil importers on the losing side of the bidding war for (currently) slowly declining net oil exports will continue to shut down refineries, unless oil can be profitably imported and then exported as refined product. A link to an article by Jeff Rubin that you posted a few days ago summarizes it pretty well:

Looking for oil demand in all the wrong places

Exactly why oil traders and speculators think the (US inventory) data has anything to do with the state of world oil demand is beyond me. I suppose, like Pavlov’s dog, they’re only doing what they’re trained to do. But their training comes from a world that no longer exists.

While the U.S. oil inventories data pertains to the largest oil-consuming nation on the planet, it is no more indicative of world demand than U.S. oil production numbers are indicative of world supply. Both are in terminal and irreversible decline.

Came across this in the California Energy Commission Publication Transportation Energy Forecasts and Analysis for the 2009 Integrated Energy Policy Report - DRAFT STAFF REPORT:

Over the last couple of years, diesel fuel demand in California has demonstrated a good correlation with the total number of TEUs processed through the ports of Long Beach, Los Angeles and Oakland.

"TEU" is twenty foot equivalent units, a standard measure in container shipping. Here is a chart of the total loaded units handled monthly at the Port of Long Beach (POLB) vs total California #2 Diesel fuel supplied:

Port of Long Beach TEUs CA Diesel Supplied

As the CEC states a strong correlation shows. The data set for the diesel ends in June '08 "to avoid disclosure of individual company data." Also the data have a few gaps in them for some reason.

Calculated Risk: What February Los Angeles Port Traffic Is Saying About The Economy

Note: this data is not seasonally adjusted. There is a very distinct seasonal pattern for imports, but not for exports. LA area ports handle about 40% of the nation's container port traffic.

Sometimes port traffic gives us an early hint of changes in the trade deficit. The following graph shows the loaded inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported.

Loaded inbound traffic was up 33.8% compared to February 2009. (up 9.5% compared to last year using three month average).

Of course trade collapsed in February 2009, so this is a very easy comparison. Inbound traffic was still down 18.3% vs. two years ago (Feb 2008).

If diesel is still moving in lockstep with shipping the seasonal highs being reached now would be approaching the median of '99-'05, and could soon be back in that band for good. It is interesting how the # of TEUs grew without an equivalent rise in diesel supplied; I'd guess this is from shifting from gasoline over to diesel for the overall medium/heavy market, as alternative fuels for these vehicles only comprised 1.35% of the total in 2008, according to the chart on pg 52 of the report. Or it could be due to a shift in the makeup of TEUs; the # of empties jumped ahead of the # of loaded outbound (=exports) in '04; these lighter loads would be less demanding of fuel, obviously.

To no particular topic, I just need to vent, and that is what friends are for, right?

HOUSE PRICES, are still freakin' INSANE. I just got off the phone with a realtor...a house that's been sitting empty for 2 YEARS, and they still want a bloody fortune for it...:-( :-( :-(, a "reduced price" sign on it means it's been cut in price about 2% from two years ago!!

Houses out in the middle of freakin' nowhere (Brandenburg KY, look it up on mapquest if you don't believe me) "sale priced" at over a quarter of a million dollars!!

Okay, that's my venting rant...but if I hear one more word about why "house prices are so cheap" I am going to put a wine bottle through my monitor screen! :-O


Certainly, there is pretty sizeable contingent that would like you to think housing prices were cheap (and soon to be headed in the other direction). But, if the middle class is going to have less discretionary income every year going forward, then surely housing prices will have to continue their decline.

Of course, there are probably a lot of people still hoping that housing prices will soon resume their upward trajectory so that they can cash out and retire comfortably. Fat chance.

Agreed. Not to mention the banks that don't want to sell at a loss, or even foreclose on loans that will never be paid off, because then they'd have to book it as a loss.

This is why I think the economy still has further to fall. Housing prices still have not gotten back in line with incomes. And incomes aren't going to be rising.

Good point Leanan. Also, this may just be a lull in an overall descent scenario, as evidenced by this article about the Greek debt bit not going away.


FOREX-Euro drops vs U.S. dollar on Greek pessimism report

The euro weakened against the dollar on Thursday as worries over Greece's debt problems heightened after a report saying the country was not optimistic about aid from euro zone members.

It seems likely that all the government borrowing around the World that has taken place to keep economies moving, is a just a temporary fix. Afterall, how can borrowing replace the wealth that use to come from cheap energy? Reduced net energy is not something that can be scuttled away as debt ad infinitum. At some point that strategy will fail, and when govt's cannot borrow huge amounts of money, that will either be the collapse people talk about or at minimum a giant step down.

Nice rant - this pretty much mirrors a weekly rant I have...

The propoganda arm of the real estate industrial complex has done a good job promoting the following two lies:

"There may never be a better time to purchase a home."


"Home prices are so cheap - it's a buyer's market !"

Interest rates are low but this is overwhelmed by the fact that it is very difficult to put down a significant portion of the purchase price for most homes. So you end up paying more in interest even though it's a lower rate.

I'd take a much higher interest rate with a much lower principle any day - there's always the possibility of re-financing to a lower rate should they drop. But today - there's nowhere to go but up. And with a lower principle I might actually have a chance of paying it off significantly early - that will never happen even if I somehow manage to scrape together 20% down for a $300 - 500K house.

By any historical criteria used for evaluating how much a person should spend for their house - current prices are still WAY overpriced (especially given the economic climate - keep in mind that nearly any current demand is artificial - fueled by the $8000 tax credit).

Don't buy a house right now - "you're just throwing your money away..." - to steal a favorite phrase from our real estate agent friends (also known as used house salesmen)

Well, a 300K house for me would be an idiotic purchase, but I did find a classy old brick house, 3 bed, full basement, 2 1/2 bath, built around 1920, sort of "mongrel Craftsman" style but classy in a down to earth way...it's a $90,000 house they want $126,000 for...at 90 grand it would be worth it (barely) but 125 grand is too high, demonstrated by how long it has sat empty. But I like where it is and what it is, and apartment living is like being in a skid row jail to me...


If you have $70 or even the $90k in cash consider going in, putting down all the cash as earnest money with the only condition a clear title. If you like risk - offer less and don't demand a clear title.

In effect - here is a pile of money. If you accept the contract, the money is yours once the home is signed over to me.

If you have faith in "the system" and don't have the cash, see if a relative has it and is willing to help in the short term as "the system" will all you to borrow VS the free and clear home and you can pay 'em back. Or they become your banker.

reminds me of the quote Leanan gleaned from a real estate huckster during the initial stages of the collapse...
"It's a Buyers AND a Sellers market!!!"

That reminds of selling a house about 30 years ago. I had talked to a really hot shot realtor but declined to list the house with her. I put a sign in the front yard ("For Sale By Owner") and fairly quickly sold the house. Unbeknownst to me the buyers had been working with the hot-shot realtor. When they told her what they had bought she told them she could have gotten the house cheaper, even though she had quoted me a much higher price. She also called me and told me she could have gotten me a higher price from the buyers.

Selling for a living is some combination of faith, delusion and moral compromise.

Welcome to the long wait - I suspect the investor class will hold out for inflated currency then sell for what they are actually priced

Don't worry, be happy!

Look at Detroit to see where house prices are going to end up.

The government can only play extend and pretend for so long. If it takes up the debt of the housing market, as it is doing, then next up comes sovereign debt default.

And then house prices will come down in a hurry.

Yes I've been mentioning the cripplingly steep yield curve quite a bit lately and sovereign default a couple of years back. Trying to prop up every US industry at fantasy-cheap-energy mortgage-the-future-forever high prices will run the nation further broke nearly as fast as squandering the last hours of ancient sunlight habitually hauling millions of persons fat butts around at 70mph in some humongous 1 occupant SUV.

Talked to a realtor in Sandpoint Id. the other day. She said aside from VA and FHA nothing moves. Lots of big new beautiful lakeside condos sitting empty. Same story everywhere we ride. Nice big prices but the money that would have bought them has long since melted away.

Many lifestyles are hollowed out to keep the lights on and gas in the SUV. Buying a house isn't on the stove top or even in the kitchen. Rather strategic default is today's recipe. This round of gas price hikes is really going to bite.

For the folks who don't see the connection to PO just watch carefully, this will be like instant replay with slow motion. Inability to Fedstim linked to high interest long borrowing slows stimulus $$ while more jobs based on discretionary spending go under. Construction slows from a crawl to a standstill. Housing legs down as the bottom feeders find they are having trouble turning their short purchases and more developers pull out mid project.

Detroit indeed. Just with fancier landscaping.

I have figured out The Entire Solution to the peak oil, climate change, overpopulation, resource depletion, unmanageably complex fire-monkeys problem.

Now suppose that I actually did have the solution. And it involved ELP, walkable communities, copenhagenizing, no more utopian programs. Mutual respect for each other and the living environment, functional multiculturalism, spirituality without organized oppressive religion, and science-based sustainability for human lives.

So far, all I would still have is an idea without any way of implementing it. There are so many smart thoughts and good ideas, they're coming out of our ears. The key is having a way to get people to understand or at least to follow any given solution.

So if I did have a solution that did include a way of getting people to "come around", to "get onboard" with peak oil, etc., that way of getting people to "come around" could be used for any other competing idea. It's a technology that can be easily copied.

The way of implementing the hypothetical solution, the technology of convincing people and changing their minds could instead be used to strengthen belief in profit, corporations, banks, and BAU. It can be used to serve myopia, pettiness, greed, and abuse.

So as soon as someone comes up with the way to get people to come around to our correct way of thinking, it can be used to get people to go back to what they were doing incorrectly before.

I never thought I could come up with so many ways in which we have screwed ourselves.

I love the new verb "copenhagenizing"! And actually, it is very descriptive as it turns out!


Bingo. Nature is striking down the current crop of humans with a vengeance. Only evolution can change things. If all the monkeys with aggressive genes kill one another, then eventually something better will result.

Something tells me exactly the opposite will happen for now. Those that are most psychopathic will reproduce and survive.

Really great article on the state of US Finances.


It should be fairly clear that we are effectively already screwed now.

There is a bit more to the story also and that has to do with the maturation dates of the various treasury holdings. My understanding is is heavily weighted to various shorter term issues. With very little actually rolled into long term 30 year debt.

I think Jesse covers this issue in a related article. In any case if you overlay issues about the duration of debt and assume that rolling it longer term can get very problematic fast then your pretty much seeing what I'm seeing.

Its already the end of the road now if we do issue 1 trillion or more in debt this year then its just adding fuel to the fire.

Thus the end game in the great government debt bubble should start playing out in 2010 not the worlds longest lived bubble given its the last one. And this applies to debt globally not just the US governments around the world will soon be forced to increase interest rates to fund new deficits once that starts its game over given the amount of outstanding debt.

Do you think Pelosi, or anyone for that matter in Congress, has any idea what is, coming soon to a theater near you? Is there a chance in Hell that we will get thru this without civil unrest? Should we beat feet, to the woods?

As a Mother of teenage girls, what whould be a likely plan of action for this?

You aren't going to like my answer, but you asked for it.

Condoms and birth control. And if those don't work, chastity belt.

I'd be more inclined to believe that blood relatives are less likely to cause problems and help, so having families should be encouraged. I don't think Mad Max is coming to a street near you any time soon. Personally, I'd avoid places like the American Southwest and any large city even during good times.

LOL the US policy is pretty clear now.

They are going to floor the gas pedal and jump the ravine are fall in. Its all or nothing now. V shaped recovery are we are done.

Now with that said the US is in pretty good shape I'd not get supper worried. Well to a point. Most of these losses are concentrated in the uber rich as they have most of the money now. It does not have a huge effect on us in reality and by that I mean simply reasonably being able to stay alive and live somewhat comfortably. Food clothing shelter the basics.

At a personal level for the average American the reason is simple we can readily monetize all the equity in our housing stock and convert it to daily cash flows to stay alive. Most people that own homes don't realize that renters can readily cash out the equity if you will and convert it to cash flow for living expenses. Its done a number of ways. Defaulting on a mortgage, moving in with mom and dad and seeking lower rents and obviously not buying homes with mortgages. Given we have a massive oversupply of homes esp if one assumes denser living conditions and they are massively overvalued there is a monstrous pot of money that can readily be converted to cash flow to offset rising costs.

Equity holders will of course be wiped out but so what it will buy the average American a lot of time. Same thing for most of the OECD countries. This is of course directly expressed as rapidly falling rents and applies to commercial real estate also however for the core economy falling rents are the key to keeping us going.

If you own your own home outright and value it for shelter and or its real utility then your ok if you rent your ok. If you depend on equity and or have a mortgage then you will be wiped out.

Now my basic claims are pretty simple demand for commodities for daily living are relatively constant and correlated with population this is fixed. Because of the massive over building and over valuation of structures shelter simply is not a problem. Clothing is basically manufactured now so obviously manufacturing capacity is in oversupply so its not really a problem. Certainly you my keep stuff longer and buy at the goodwill to meet your clothing needs but actually being clothed is not really a issue for a long time.

Next the only hard "truth" is that commodities will simply take a larger and larger percentage of your income stream. This happens in a variety of ways income falling and prices rising. Certainly plenty of heated debates and someone will be correct but regardless from now on out the cost of simply staying alive will consume more and more of your daily cash flow on a percentage basis.

Given that the truth is the demand is probably fairly inelastic the highest probability is this will be with rising prices.

What to do well depends on where you are. If your deeply in debt then defaulting and giving up on credit and starting to save and live within your means makes sense regardless of what happens to prices cash in the hands of consumers is simply in short supply. For us peons cash will be king for quite some time.
If you can pay off your mortgage or have none then do so or invest in sustainable stuff that lowers your living costs. Generally this is gardening and or alternative heating cooling stuff. Although the value of your property may fall dramatically in nominal terms as far as exchanged it at some point in the future for a similar property well thats does not depend on the nominal value.

Of course if you actually have equity you can speculate if you wish sell now go to cash and buy later and probably get a lot more for your money. But that has a lot to do with if you think your house is a good doomstead or not. Way way to many factors to even make a call on that one. And cash will be king till its not. So there is a limited about of time where the dollar will even have value.
I'll add I rent and this is the route I'm taking but because I rent its intrinsically a safe choice. Like anyone I could easily go buy a house in Detroit for 1 dollar if I wanted to own shelter plenty of shelter around already thats super cheap decent in good places to live for dirt cheap. A job to provide for the rest of your needs is a issue :)

Good time to consider small business's on the side i.e ones that allow you to continue to work if you have a job again lots of tough decisions but no matter what happens people will continue to live and life goes on this means basic old fashioned commerce will be with us even if it falls to the level of barter. Your goal is to ensure you have some skill or trade or resource of value to others in a more basic economy. But don't forget the current economy of scale manufacturing economy is still around and has massive over capacity. Knitting sweaters or making candles is probably not a good short term business move. Obviously its a catch 22 situation the current economy can produce far more goods than can be consumed and the consumers basically need to produce goods to buy them.

Be careful of farming ventures as every body and their mother that has a plot of land can readily go plant a garden and sell the surplus. Potential buyers on the other side will have a lot less money to spend. This is for non core commodity foods can you say zucchini. Staples like wheat and corn etc are difficult to grow for profit on a small scale and will still have to compete with industrial farming.
Hard to say but obviously for food anyone can become a producer and the customer is getting steadily poorer so it might be the only market but its a tough one.
Unless your all cash and have low overhead you probably will at the minimum face some very tough times. Even if you are all cash and setting pretty cash flow will be erratic. Its all relative and no one really does well. If your business plan is based on the current markets for food well good luck your gonna need it.

With all that said surprisingly at least for a while I just don't see things as being that bad unless a lot of your wealth is in equity and you have debt and its important to you. Other than that your basically talking about rolling back your standard of living to say the 1980's or something like that. Its different in the sense that housing would be cheap but other than that its not that bad.

Obviously I plan on following my own advice. Recognizing that the largest source of money is housing equity and I want as much of that as I can get and plan on taking it I'll do what I have to to take it. Right now my rent is 1300 my goal is to do my best to cut this by about 50% down to 700 or lower. This gives me a buffer to handle falling income and rising prices. Dunno if I'll reach my goal and it may well mean moving every year but I'll be aggressive and cash in as I can. For me at least steadily dropping my rent whatever it takes is the best possible move.
Even going to 1000 for a local move pencils out. And of course since I think there are plenty of rentals on the market I probably won't move until its the worst time to try and rent a place just depends. This of course will leave my current landlord holding the bag if I say move over Christmas or something like that. But its hardball time. My guess is November will really screw them and ensure I get the best deal on my new place. Or they cave and match rents but I doubt it.

In any case thats my basic plan for the future steadily cut my monthly rental costs and save as much as I can. As food becomes more expensive I'll stock up on staples and buy other food stuff in season as its cheap. Garden also of course.

In general doing my best to lower my monthly costs and saving as much as I can to cover as many months as possible out of savings. Not a lot of long term planning but things are simply to volatile and since I don't own any property I'm willing to hang out and speculate on when I can buy a place for pocket change outside of Detroit or effectively when most places are as bad as Detroit so it does not really matter where you live. Here my only real worry is I live in a place with good local agriculture and either have access to wood for heating or live in a climate that allows you to get buy with no heat or minimal heating. Detroit itself obviously is not the best place to hang. Although plenty of wood in abandoned homes. Anyway maybe not the worlds most brillant plan but given my views on the eventual price of real estate I value mobility and maximizing cash flow and savings over investing in a house. By the time I actually buy it will be pretty much a farce transaction simply so someone can get rid of the tax liability.
Basically I'll only buy if taxes are substantially lower then rent and low enough that it covers the purchase price.

Obviously at some point rents will be higher than even falling taxes and its cheaper to pay taxes then rent but it will be a while before we hit that point.
I expect in the interim and attempt to raise taxes that will fail utterly will happen. Also I expect pretty much no matter what happens if you tie yourself to some property you will be liable for taxes to someone. Basically its when the cash value of property falls well under the taxed assessed value and taxes become sticky and basically simply rent that I'll look at property as thats its true rental value and exposes the fundamental fact your simply renting it from the government. So looks like I'll always be a renter only becoming and equity holder when its effectively zero :)

You are absolutely right, memmel, as long as you have enough intestinal fortitude to resist the group think of the middle classes that if you rent you are a loser and if you own (are in debt) you are a winner.

I agree flexibility is the key going forward. The doomsteaders may be right, but they, in effect, destroy their own lives far more effectively than any collapse in society can. You see, a world in which you have to be a doomsteader to eat is, quite simply, not a world worth living in. There's the rub.

It makes much more sense to relocate to a place - be it a country, state, city, town, whatever - that you think just might make it through collapse with enough sanity and reason to take measured responses to it, for example, concentrating on local food production for local people, or massively incentivizing energy efficiency, etc. So there's geographic, political, and cultural factors at play. However, this is not the same as a doomstead, which is an all out retreat from human society.

Morever, one of the key decisions, for those of us who haven't already done so, is whether or not to have children. If you don't, you likely won't starve, as you will have cash flow to support yourself. And if you do starve, there won't be the guilt of not being able to take care of your children.

If you have children, there are several possibilities. Either both you and they are going to be poor and/or starve. Alternatively, you will all be able to provide critical support for one another in a declining world. I'm agnostic on this.

In the end, I'm still human and generally support having children. But I think these decisions need to be done with much more thought than before.

I don't know if I have intestinal fortitude or if I am just plain lazy or too poor. But I like the flexibility renting is giving me right now

I have kids three actually my brother has none so in total we are under replacement level. And we did consider not having the third just he showed up during the process.

3-5-7 boy girl boy.

As far as the doomsteaders go its a wide range. In general if you can afford to at least neutralize your footprint on this earth more power to you. However actually creating the doomstead is certainly and investment and energy negative for quite a while. I won't even begin to go into that but nothing wrong with leveraging the last of the oil to try and better yourself later.

However I'm not been convinced that the doomsteaders really have it together as far as protecting the doomstead if things did reach the point people where starving.

I'm a pretty good shot and I'm fairly certain that if I had to I could blow your head off with a 306 while your planting your organic garden tomatoes.

Brutal but true its not a technical issue its a matter of willingness to commit such and act. I'm just as certain that plenty of other people that know how to shoot may well have the morals to do it.

So the actual real required doomstead config that would work best if it had to be done is not the current layout. You would need a fortified village sentries etc.
No way are the isolated doomsteads going to make it I don't care how well you know the neighbors. Perhaps a more disperse dwelling arangement can be made to work dunno but its a tactical issue. And one I'm not convinced the doomsteaders have really done a good job on. Thats not to say they won't figure out decent defenses such a problem tends to rapidly winnow the ranks and create successful solutions.

Indeed the failure of a few may well serve to ensure the better protected are left alone. But thats really the herd defense where some individuals are sacrificed.

And as I said the obviously correct solution will be taken if needed and thats a fallback to the protected village approach and communal lands and these will be positioned based on military needs coupled with access to farmland. And probably not according to the wishes of the original land owners where the best doomer village should be situated.

Obviously you can see that if we had to do such a transition its doubtful that most of what we have now works in that sort of Mad Max environment.

Now things are a bit better and its and issue of localization and security persists then fine its a business problem is your doomstead a competitive farm ?
Even here as I said the real business case is hard to figure however as long as you own your stuff outright and property laws convey then regardless you probably will do ok. However again I'm not convinced that most of the "organic" farming business plans I've seen that assume localization and stability are worth much.
The doomsteaders are on the ball vs these guys.

But I've worked for countless startup I don't even know anymore. I've seen more stupidity then I ever want to see. The same mistakes I've seen in business are rampant in the alternative community its pretty hopeless. And I assure you most won't listen to reason. I figured that out well before my last startup.
In fact I'm such a cynic my last few I simply told them how they where going to fail and when they where going to fail and set there and watched them do it. You can imagine I have no problem speaking my mind. And I assure you I enjoyed every friggin minute and had no problem saying I told you so.

I've seen to much to be politically correct and call it like I see it.

I will say that I also see a lot of people post that I'm pretty sure are going to make it and land on their feet and deal with whatever happens. Heck Alan down in New Orleans has a plan I'd not take personally but I'm convinced he will come out on top. His basic thesis is very sound New Orleans is where it is for a damned good reason and their will be a substantial city at the mouth of the Mississippi as long as we have cities. Perhaps not quite where the current one is who knows but I'm pretty sure those nuts down there will move if they have to and it will still be New Orleans even if they have to move every brick of the French Quarter by hand.

I used him as and example because his plan is different enough that I don't have to get into details of what this or that person plans suffice it to say in general a lot of them suck.

Regardless your right on the absolutely most important thing is to remain flexible and recognize whatever plan you have now its probably not gonna make it. This may well mean leaving the doomstead deciding to create one who knows. Outside of trying to stay geographically in a a region with good local agriculture and reasonably light population I don't think there is any real solid plan. Even the larger cities may not be bad if surrounded by ample farmland. Not that I would pick one but the midwest cities have more than enough surrounding farmland to grow crops for themselves even Chicago. Some like Atlanta are a bit iffy primarily because of water. I'd not pick it but thats me. I had no problem leaving the LA area as a doomer thats and obvious bad choice if we have any trouble at all.

Other than staying out of the obvious worst places and as far as I can from the largest cities and in agricultural regions I don't have a grand plan really to many unknowns. If for some reason you had to stay in one of these places then I assume its for financial reasons and you better be making enough money to buy something in a safer region. Of course all kinds of other reason exist but I'd be saving my pennies up to at the minimum be able to boogie to some small midwestern town and rent a trailer. Put what you can in the care and say have 5k cash if possible to tide you over.

I guess to wind this up although its interesting to consider solutions and anything that moves towards localization and self sufficiency is good. I think people need to recognize that we cant know the right answer until the current situation is behind us. Its fairly obvious the US is going to default on its obligations and with it every other nation on earth. Its only after we finally have this Jubilee and its a real Jubilee finally shedding the old promises that could not be kept can we really build the new world. Plans made before this event may or may not work out. Doing nothing at all as most will however is probably the worst plan of all. Its ok to go "long" if you can and do whatever permanent solution you think will work from doomstead to electric trains however you better have a plan B and C and remain flexible because its not a problem that can be solved. The real solutions lie after this fact of collapse at least of debt obligations is in the past and they are is simply unknown. Thus the after shocks of this certain macro scale event are going to hit everyone right down to the core.
Remaining flexible in your thinking and awareness and recognizing the fact your plans can fail is probably the most important thing. Indeed the number one cause of failure at start ups is the inability to acknowledge failure and change. Real success is built on a string of failures and recognizing them and recovering from them by changing. Understanding that made me a cynical bastard but also really really good at figuring how how and when people would fail.

So outside of probably getting out of LA I don't really have much to say despite the length of the post :)


Another good article. I'll note that this is basically the financial view of the peak demand argument if you will. That the current tight correlation will simply continue on the down side.

However as he notes in his article historically all the correlations we see now are abnormal. Markets are certainly getting correlated by hot money flows aka my rich mans inflation yes but its not fundamental.

Thats probably the most important point current correlations are almost certainly not representative of the fundamental state of the system. Thus you should expect for all the current correlations to be broken once things start collapsing again.

That by no means says how they will break just that the highest probability is we will see decorrellation if you will with fundamentals working to sift the wheat from the chaff.

Obviously I think oil will be the correlation breaker i.e it will go via rising oil prices but thats not whats important whats important is to recognize that in general whats happened of the last two years probably has zero utility in predicting the next two in the sense of how various markets are really going to move and decouple. If I'm right and they must and this coupling is simply a artifact of hot money flows. Of course financially the drives is huge amounts of the cash held by the wealth will be lost. These punishing losses in one market after another is whats going to fragment the flow as it creates winners and losers.

This means trillions of dollars in hard money needs to be destroyed.

Don't worry about the debt its already written off to zero. Its presence simply ensures we cannot borrow our way out of our fate. The actual time of default will be after we crashed. Not unlike the timing of Enron's debt downgrades.

For the next couple of years its destruction of capitol directly or concentrated wealth at the top. How can it be destroyed ?
Well asset values dropping obviously effectively all equity instruments of all types from stocks to real estate valuations. Bond holders obviously wiped out.
This suggests that cash flow through the economy is going to be a serious problem.
As underlying the wiping out of wealth has to be significant changes in income streams. We are already seeing this with tax receipts. But intrinsically many types of business have to become simply no longer viable and able to produce a profit.

But this to me has to have a trigger something has to cause fundamental cash flows to change course fairly dramatically redirected to new channels.

Given its a doomer scenario my opinion is of course the key game changer is simply staying alive day to day will get dramatically more expensive which means commodities have to rise in price.

So in the end the real problem remains we simply cannot support the total number of people on the planet with the current resource levels at anything close to their current life style. Once everything is said and done I argue this is the fundamental problem and it so basic it cannot be fixed. Any other problem can literally be papered over.

Right. Which means what for Latin America, Africa, Middle East, and South and Southeast Asia? Die off. And for North America, Europe, and East Asia? Well, living like people did 100 years ago.

I agree that the correlation is the ghost of hot money flows. Because the correlations were all really driven not by money flows but by energy and resource flows, abstracted by money. I would guess that when the physical problems, overpopulation and energy depletion amidst a shifting global climate, started being more heavily treated as financial and economic problems and addressed through increased currency manipulation and debt, this is a primary cause of the decoupling and new temporary correlations.

Value can also get destroyed by vandalism, extreme weather, and a relatively short amount of time with neglect and no infrastructure maintenance.

In relation to the top story above on Brazil's sub-salt oil production, I think that Brazil's non sub-salt oil production may have hit a peak plateau. All of the recent capacity additions do not seem to be sufficient to push Brazil's crude and condensate production over 2 mbd.

I am forecasting that there will be a small increase in production later this year due partly to sub-salt Tupi reaching 0.1 mbd. The decline rate of existing production base in Brazil is about 10% according to slide 5 of this Petrobras presentation.
That means that annual new production additions must be at least 0.2 mbd just for Brazil's oil production to stay constant. The additions shown below are design capacity additions which may have to be discounted by up to 25% to estimate annual production additions.

This Feb 2010 Kuwait study on world oil to peak in 2014 also gives a forecast for Brazil.

This study shows Brazi's oil production peaking at 2 mbd in 2010 assuming a URR of 21 Gb. I'm not sure how much of this URR relates to sub-salt. The study states that "our prediction indicates that Brazil, which has a proven reserve of about 12 BSTB, is on the verge of peak production in 2010 with a production rate of about 2 MMSTB/D."

In Jan 2008, Colin Campbell also has similar forecast profile for Brazil showing a peak plateau of about 2 mbd using a URR of 33 Gb.

Great analysis. Don't think that this was mentioned before that even ethanol has peaked:

HOUSTON, March 15 (Reuters)

Gasoline is also supported by Latin American buying. Brazil was forced by declining ethanol production to import 1.2 million barrels of motor gasoline in February and is seen importing again in March, traders said.


Interesting article,
Hard times send hotel industry into 'survival mode'


In January, U.S. hotels had a record-low 45.1% occupancy rate — the lowest January rate since industry statistician Smith Travel Research began tracking data in 1987.

•About 400,000 U.S. hotel employees were laid off during the past two years.

The total property value of U.S. hotels has fallen by up to 50% from its peak in 2007, according to Fitch Ratings.

•A record 15.7% of securitized hotel mortgage loans were delinquent at the end of last month.

Upscale hotels have been hit hardest, and some have closed.

For any UK readers, there was an interesting segment in the prime-time science show 'Bang Goes the Theory' (broadcast Mon Mar 15. 7:30pm, BBC One) on peak oil, which included an brief interview with Richard Branson on the subject.

Can be watched again here:

(the segment starts at 17:00 )

This is probably the most mainstream presentation of the topic in the UK I've seen so far.