Drumbeat: March 25, 2010

Mexico oil output slips in Feb, down 2 pct yr/yr

MEXICO CITY (Reuters) - Mexican oil production fell in February but at a far slower rate than in early 2009, suggesting state oil monopoly Pemex is successfully controlling the decline.

Crude output was 5,000 barrels per day lower than in January at 2.61 million bpd and 2 percent below the year-ago level in February, Pemex reported on Thursday.

Sliding oil production has put pressure on Mexico's public finances, which depend heavily on export revenues to fund its federal budget. Pemex has struggled since 2004 to contain the rate of decline at its giant Cantarell field, which once pumped nearly two-thirds of Mexican oil output.

Declining oil output was one of the main factors behind the decision of two bond rating agencies to downgrade Mexico's sovereign debt last year.

Energy: Progress frozen

Last April, far above the Arctic Circle, on a peninsula so  remote that locals call the  mainland “earth”, Vitaly Arefyev watched workers drill through the tundra. Their efforts were part of a drive by Gazprom, Russia’s state-controlled energy giant, to develop a gas field large enough to supply Europe’s needs for decades to come.

“Gazprom is ready to start producing as soon as Europe is ready,” Mr Arefyev, who had run the vast Bovanenkovo gas field since 1992, proclaimed at the time. “The question is whether the world is ready for us.”

Less than a year on, it seems the world is ready to wait. Many of the workers building Bovanenkovo back then have since been transferred; work is still going on but much of the field lies in limbo, a symbol of a shift in global gas markets that has transformed a looming shortage into a glut.

Ukraine’s Premier Wants ‘Clean Slate’

Ukrainian Prime Minister Mykola Azarov, seeking to revise a gas contract with Russia, called for the two sides to forget the legacy of Ukraine's previous government during talks Thursday with Prime Minister Vladimir Putin.

“Perhaps, we must forget what happened between our countries over the past five years, turn the page and start our relations from a clean slate,” Azarov said in his opening remarks.

Venezuela Power-Plant Diesel Use Rises to 7-Year High

(Bloomberg) -- Diesel use by Venezuelan power plants last month rose to the highest in at least seven years as a drought reduced hydroelectric generation and natural-gas shipments from Colombia declined.

Diesel consumption rose 13 percent from a year earlier to 59,000 barrels a day, and fuel oil use climbed 47 percent to 57,000 barrels, according to monthly figures posted today on the Web site of the National Administration Center, which runs the country’s power grid.

Venezuela is seeking to diversify its energy sources away from hydropower, which provided 66 percent of its electricity in February. The nation is installing gas-powered generators at the Siderurgica del Orinoco steel mill as part of a plan to bring at least 4,000 megawatts of new capacity online this year.

Copel May Sell Bonds to Fund Acquisitions, CEO Says

(Bloomberg) -- Cia. Paranaense de Energia-Copel, the largest electricity distributor in Brazil’s southern region, may sell reais-denominated bonds in the local market to finance acquisitions in Parana or neighboring states, Chief Executive Officer Rubens Ghilardi said.

Copel “has a huge capacity to raise funds in the market,” Ghilardi said in a phone interview from Curitiba. “To buy an asset, we would probably sell debentures.” He declined to say when the company may sell bonds.

Critics Seek to Halt Ethiopian Hydro Project

Several environmental and human rights groups have joined forces in crafting a petition decrying Ethiopia’s Gibe III hydroelectric dam project, which they say has the potential to destroy the livelihoods of 500,000 people in Ethiopia and Kenya.

Austin Aiming for a Grid Makeover

The city of Austin, Tex., today presented a wide-ranging list of recommendations for remaking its electricity system, including more energy efficiency measures and a change to the business model of the local utility.

The effort, known as the Pecan Street Project, goes beyond the concept of smart-grids and could serve as a national model, its backers say.

Interview with George Penfold: Thinking about the future of Kootenay Boundary

RT: It's pretty insane to think that you can hope for 5% growth per year forever because a hundred years down the road, you have no environment left. It seems as though some sort of shift in people's thinking has to be coming down the line. It was interesting when you spoke about Peak Oil and climate change in your report.

GP: It would be interesting to start looking at ourselves and our lack of population growth as being ahead of the game in some respects [laughs]. We're where the rest of the world may have to get to at some point over the next fifty years. So how can we get the most out of our situation? I talked about Peak Oil in the report in some ways to be challenging. We need to start having those conversations. I'm not advocating that no growth is a position we have to adopt, but I think we have to consider it because it's pretty reflective of what our experience is. Changing that experience to something different in the future may be possible but we can't assume that because we'd like to have 1% annual population growth we're going to get it. The evidence says we won't.

Death of coral reefs could devastate nations

WEST PALM BEACH, Fla. — Coral reefs are dying, and scientists and governments around the world are contemplating what will happen if they disappear altogether.

The idea positively scares them.

Coral reefs are part of the foundation of the ocean food chain. Nearly half the fish the world eats make their homes around them. Hundreds of millions of people worldwide — by some estimates, 1 billion across Asia alone — depend on them for their food and their livelihoods.

If the reefs vanished, experts say, hunger, poverty and political instability could ensue.

"Whole nations will be threatened in terms of their existence," said Carl Gustaf Lundin of the International Union for the Conservation of Nature.

New Ways to Gauge the Finite Atmosphere

I recently became aware of fascinating efforts by Adam Nieman to help society appreciate environmental challenges in fresh ways by visualizing volumes that are otherwise abstractions. In 2003 he created the image above, illustrating the volume of the world’s oceans and atmosphere (if the air were all at sea-level density) by rendering them as spheres sitting next to the Earth instead of spread out over its surface. To my eye, this helps powerfully convey the finite nature of these shared global assets.

Saudi may shelve Ras Tanura refinery plan - sources

KHOBAR (Reuters) - Saudi Arabia may shelve for years plans for a 400,000 barrels per day refinery expansion at Ras Tanura, industry sources said on Thursday.

The kingdom put the $8 billion project on hold last year, one of several schemes held up while the world's top oil producer aimed to take advantage of the economic slowdown to drive down the cost of new projects.

But while state oil firm Saudi Aramco and partners have since proceeded with other new refinery plans, expansion of Ras Tanura stayed on hold and preliminary design work has slowed, the sources said.

Natural Gas Falls Below $4 as Supplies Gain More Than Forecast

(Bloomberg) -- Natural gas fell below $4 per million British thermal units for the first time in almost six months as a government report showed that U.S. inventories of the power-plant fuel rose more than analysts anticipated.

Inventories gained 11 billion cubic feet in the week ended March 19 to 1.626 trillion cubic feet, the Energy Department said today. Analysts forecast an increase of 8 billion. The five-year average change is a decline of 37 billion.

Doug Casey: Making Terrorism Your Friend

Iran seems like the obvious flashpoint. If the U.S. strikes Iran, oil will go to $200 a barrel. In the long run, that oil could be replaced, especially at the higher prices that make oil sands, shale oils, heavy oils and such more economic – but in the short run, the supply is extremely inelastic. You can't just throw a switch and get more oil from some other source. You combine that with the financial chaos that would ensue, and even decreased usage wouldn't make up for the crunch. Higher oil prices seem like a lock-synch at this point.

Houston: where energy is king

By the 1970s, US crude output was in decline. Much of what is left in the ground today is uneconomic to access, and the world’s major oil companies have spent the decades since then seeking new supplies overseas. Now even economically accessible global assets are hard to find, leading to talk of peak oil and the need to find alternatives to fossil fuels. With billions of dollars in investments being poured into wind and solar ­energy as well as biofuels, many outsiders predict Houston’s central place in the world’s energy industry could be lost. But that could not be further from the truth.

“It’s a myth that we’re getting off fossil fuel,” says Amy Myers Jaffe, ­energy expert at the James A. Baker III Institute for Public Policy.

Hybrid vs. diesel: luxury mpg champs

When the talk turns to saving fuel, "hybrids" naturally rise to the surface. But there's something else that ought to be part of that discussion: diesel. Unfortunately it rarely gets mentioned, at least in this country.

Consider this: Combined city and highway fuel economy for Lexus' new HS250h compact hybrid car is 35 miles per gallon. For the similarly sized Audi A3 TDI diesel car it's 34 mpg. And, in highway driving, the Audi goes considerably farther at 42 mpg vs. 34 for the Lexus.

Please Pay Me To Use Less Energy

EnerNOC pays companies to cut energy use. Why won't someone pay homeowners to do the same?

Energy efficiency? Alone, it’s not all it’s cracked up to be

Imagine a future in which all our cars, appliances and industrial processes are 10 times — maybe even 100 times — more energy efficient than today’s models. Wouldn’t that be great? Just think of all the oil and coal saved, all the energy bills reduced, all the carbon dioxide emissions we stop pumping into the air.

Or maybe not. While energy efficiency is usually near the top on official to-do lists for combating climate change and staving off the ravages of peak oil, it tends to look better on paper or pdf than it does in real life.

Russia, Ukraine PMs edge closer on gas issues

MOSCOW (Reuters) - Russia and Ukraine edged toward compromise over a gas supply deal that divides the ex-Soviet neighbours during a visit by Ukraine's new prime minister, Mykola Azarov, to Moscow on Thursday.

Yukos haunts Rosneft: A spectre of litigation

REMEMBER Yukos, Russia’s biggest oil firm, which was bankrupted by improbable tax claims and then dismembered in bogus auctions? The Russian government would rather that you did not. Although it has expunged Yukos from official registers, the firm’s ghost is haunting the Kremlin and its state oil company, Rosneft, which swallowed Yukos’s assets. In the past few weeks this ghost has been particularly active, making appearances in several European and American courts, demanding retribution and winning injunctions against Rosneft. Earlier this month an English court froze Rosneft’s local assets in a case brought by Yukos Capital, an offshore affiliate of Yukos. A week later a similar freezing order was imposed by a court in Ireland.

Hayes Valley: A Former Freeway Turns into a Farm

The 1989 Loma Prieta earthquake left many of San Francisco's urban freeways structurally unsound. (Back then, there were many, carving up the core of the city.) But the flipside was a boon: The teardown of broad segments of elevated road has led to the revitalization—the reinvention, really—of neighborhoods like Hayes Valley. It has also given the city chunks of unused space, including the stretch between Laguna, Octavia, Oak, and Fell Streets, where ramps to the old Central Freeway haven't led anywhere in years.

San Francisco plans to develop this lot eventually, probably with mixed housing and green space. But a clever new project has been conceived for the interim years: an urban agriculture cooperative called the Hayes Valley Farm. "The Hayes Valley Neighborhood association contacted the Mayor's Office of Economic and Workforce Development to 'activate' the lots," says Chris Burley, now the project's director. Agriculture was the idea that moved everyone. "We've all seen the power of gardens to transform a space," he says.

Lights out for climate change

Attention travelers and aliens assigned to monitor our planet from outer space: you may notice major landmarks, tourist attractions, and large areas of many cities and towns around the world going dark for an hour on March 27.

Do not be alarmed. It’s just Earth Hour, a rolling, global black-out designed to draw attention to climate change. First organized in Sydney, Australia back in 2007, during last year’s Earth Hour there were voluntary lights-out events in 87 countries. This year, millions of people, more than 115 countries, thousands of cities and hundreds of major attractions and landmarks worldwide have pledged to switch off the lights for an hour as well.

John Michael Greer: The Logic of Abundance

The three centuries of exponential growth that put those bootprints on the gray dust of the Sea of Tranquillity were made possible by the conjunction of historical accidents and geological laws that allowed a handful of nations to seize the fantastic treasure of highly concentrated energy buried in the Earth’s fossil fuels and burn through it at ever-increasing rates, flooding their economies with almost unimaginable amounts of cheap and highly concentrated energy. It’s been fashionable to assume that the arc of progress was what made all that energy available, but there’s very good reason to think that this puts the cart well in front of the horse. Rather, it was the huge surpluses of available energy that made technological progress both possible and economically viable, as inventors, industrialists, and ordinary people all discovered that it really was cheaper to have machines powered by fossil fuels take over jobs that had been done for millennia by human and animal muscles, fueled by solar energy in the form of food.

Kurt Cobb: Will Enhanced Oil Recovery Be An Oil Supply Savior?

Oil supply optimists often say that the application of enhanced oil recovery techniques to existing and future wells will vastly expand oil reserves and oil production. The trouble is these techniques aren't new, and they are already being widely applied. That means current oil reserves and production already reflect any effect they have had.

Oilsands market shifting, Enbridge VP says

The U.S. Gulf Coast, once seen as the largest new market for expanding production from Canada's oilsands, may not need as much oil as thought, Steve Wuori, executive vice-president of pipeline operator Enbridge Inc. said Tuesday.

Wuori told the Reuters Canadian Oil Sands Summit that the Gulf of Mexico region, the largest concentration of refineries in North America, will likely replace declining heavy oil supplies from Mexico and Venezuela with crude from Brazil or new deepwater fields in the Gulf of Mexico.

That will push new Canadian supply to the U.S. Midwest, which already takes the bulk of Canada's oil exports. A series of refinery expansion and conversion projects in the region is increasing the appetite for heavy crude from the oilsands.

Energy's future unsettling

New Brunswick business groups are lamenting the cancellation of a power deal with Hydro-Québec that promised to address what's seen as a growing energy crisis in the province.

The announcement by the New Brunswick and Quebec governments Wednesday that they will not move forward with a $3.2-billion agreement for Hydro-Québec to buy some NB Power assets in exchange for power rate freezes and reductions for New Brunswickers was a bitter pill to swallow for industry leaders reached for comment.

Saudis to Turn Increasingly to Oil to Meet Power Needs

Saudi Arabia’s booming economy and soaring demand for electricity is increasing the kingdom’s reliance on oil to produce power. By 2012, it may be using 1.2 million barrels a day -- nearly two times current levels -- to meet its electricity needs. This increasing use of oil is occurring because the Saudis’ natural gas production cannot keep up with power demand.

The gas shortage is occurring even though Saudi Aramco has been working to to boost natural gas production. But a combination of reasons and trends point to the inevitable increased use of oil, a factor that could have deep impact on world oil markets in the future, despite Saudi Arabia’s current spare oil production capacity of about 4 million barrels per day.

$60bn China gas deal a threat to prices for Queenslanders

THE $60 billion deal involving exports of Queensland natural gas to China could have the potential to slightly push up domestic gas prices on Australia's east coast.

Nigeria: Nation's Silent Energy Crisis - the Way Forward

Nigeria is experiencing a silent energy crisis. About 95 million Nigerians depend on wood for their daily cooking.

Wood energy constitutes 90% of household energy use and today the demand for wood far outstrips supply, resulting in rising prices. Despite a national policy to promote a transition away from wood energy use, prospects remain bleak. Over 92% of Nigerians - approximately 130 million people live in poverty. Poverty and weak policies present a critical roadblock to fuel substitution.

US To Give $125m To Help Pakistan Meet Energy Crisis

The United States pledged on Wednesday to give $125 million for energy development in Pakistan and would also assist in thermal power projects.

In a joint press briefing with Foreign Minister Shah Mehmood Qureshi in Washington after holding strategic dialogue with Pakistani delegation, she termed strategic sitting conducive not only for Pakistan but for US administration also.

Govt taking all possible measures to reduce gap between demand and supply: Raja Pervez Ashraf

Minister for Water and Power Raja Pervez Ashraf on Thursday underlined said that government is taking all possible measures to reduce the gap between demand and supply. According to Spokesman of Ministry of Water and Power, he said during a meeting of the Cabinet Committee on Energy Crisis ( CCEC ) held here Thursday under the Chairmanship of the Federal Minister for Water & Power, Raja Pervez Ashraf to discuss the current power situation and related matters.

Why Pakistan should not get a nuclear deal

Pakistan, arguably, has been the US’s best ally in South Asia in the post-colonial era. Off late, however, the relationship between the two countries has been marred by the 9/11 attacks and subsequent acts of terror around the world.

As the two countries begin their week-long high-level strategic talks later today, Pakistan will be keen to make the most of it. It will, however, be interesting to see how many goodies the US doles out to its “long-time friend”.

Energy consumption in industrial sector declined in 2009

KARACHI - The share of industrial sector in overall energy consumption has declined to 40 per cent in FY09, an energy analyst said on Wednesday.

Speaker criticizes commuter rail proposal

The cost of subsidizing these systems negates any potential savings in energy and reductions in pollution, O’Toole said.

He said that for the cost of government subsidies per riders of most rail systems, each rider could receive a hybrid car for each year for the rest of their lives. He suggested that the proposed KRM line could cost up to $8,135 per potential rider in government subsidies.

Nuclear Power Beats Coal, Gas When Lending Costs Low, IEA Says

(Bloomberg) -- The International Energy Agency, an energy policy adviser to 28 countries, said it expects nuclear power to be a more competitive energy source than coal or natural gas when borrowing costs are low.

The Paris-based agency studied cost data for 190 plants in 21 countries under two discount rate scenarios for a report released today called “Projected Costs of Generating Electricity,” co-written with the Nuclear Energy Agency.

“In the low discount rate case, more capital-intensive, low-carbon technologies such as nuclear energy are the most competitive solution compared with coal-fired plants without carbon capture and natural gas-fired combined cycle plants for baseload generation,” according to the report.

Crude Oil Futures Rise as Equity Markets Gain, Dollar Weakens

(Bloomberg) -- Oil rose as equity markets advanced in Europe and the U.S. dollar slipped versus the euro, enhancing the appeal of commodities for hedging inflation.

Oil earlier fell as much as 0.5 percent after the U.S. Energy Department said yesterday crude inventories rose 7.25 million barrels to the highest since August, more than four times the increase estimated in a Bloomberg survey.

The Coming Boom in Oil Service

Now, in 2009, the easy pickings are mostly gone. Salt domes like Spindletop are tapped dry (Spindletop itself quit producing in the 1930's). Lots of hydrocarbons remain in the earth, but they are increasingly difficult to extract.

Peak oil tax? UK oil & gas tax take at all time low

Peak oil tax? The UK government’s tax take from oil and gas production in the North Sea fell to its lowest ever level, under the current fiscal regime, in the year ended March 31, 2010, according to government data published on Wednesday 24th March 2010.

The UK treasury expects to take £6.4 billion (GBP) in corporation tax and petroleum revenue tax from companies producing oil and gas in the UK over the year. This is less than half the tax take in the previous year, during which oil prices hit their record high.

Rahui Katene: Infrastructure Bill

In this light, the Maori Party supports improved public transport, rather than investment in roading itself.

We want to see more support for integrated public transport networks of buses, trains, walking and cycling tracks. We are concerned now, about the impact of infrastructural decisions on our environment.

And in particular we want to reduce our reliance on oil in the face of peak oil. We have a preference for transport and roading which is frequent, reliable and inexpensive.

Minsk sues over Russian oil fees

Belarus has filed a lawsuit against Russia over oil export fees, the Belarussian Justice Ministry said today.

Gazprom May Not Lower Gas Price for Ukraine, Kommersant Says

(Bloomberg) -- Russia’s OAO Gazprom does not view participation in a joint venture to manage Ukraine’s gas pipelines as sufficient grounds to lower the price Ukraine pays for imports of Russian natural gas, Kommersant reported, citing officials with the knowledge of the matter.

Turkey strengthens Iraqi energy ties

MONTREAL - Turkey last week strengthened its energy ties with Iraq by renewing a contract to import Iraqi oil to the Turkish Mediterranean Sea port of Ceyhan, where Azerbaijani oil also arrives via the Baku-Tbilisi-Ceyhan (BTC) pipeline. Earlier this year, it was announced that Iraq will export between 5 billion and 10 billion cubic meters per year of natural gas to Turkey for inclusion in the Nabucco pipeline carrying the fuel to Europe.

The oil will come from Kirkuk in Iraqi Kurdistan, along the route of the already existing 1,000 kilometer Kirkuk-Ceyhan oil pipeline. The pipeline, built in the late 1970s, consists of two trunks, with a combined design design capacity of 1.6 million barrels per day, or more than half as much again as the BTC's design capacity.

Sinopec to Build Gas Chemicals Plant in Kazakhstan

(Bloomberg) -- China Petroleum & Chemical Corp., the Hong Kong-listed company known as Sinopec, won a contract to build a $1.7 billion polypropylene plant in western Kazakhstan.

Sinopec agreed to buy and export all the polypropylene produced at the facility, Kazakh Deputy Oil and Gas Minister Aset Magauov told reporters today in Almaty. The Export-Import Bank of China will provide a $1.26 billion loan for the project, he said.

Eni May Help Finance Kazakh Energy Projects, Gain Caspian Fields

(Bloomberg) -- Eni SpA may arrange financing for six energy projects in Kazakhstan in exchange for development rights to Caspian oil fields, said Galimzhan Amanturlin, a managing director at KazMunaiGaz National Co.

Exxon Gets U.S. Export Bank Financing After Paying for Travel

(Bloomberg) -- Exxon Mobil Corp. and its partners in a $15 billion Papua New Guinea gas project last year paid the travel expenses for employees of the U.S. Export-Import Bank as it considered whether to help fund the venture.

PetroChina Full-Year Profit Drops on Lower Crude Oil

(Bloomberg) -- PetroChina Co., the world’s biggest company by market value, posted a 9.7 percent drop in full-year profit, missing estimates, after oil prices fell from a record.

ONGC Said to Seek Acquisition of Canadian Oil Sands

(Bloomberg) -- Oil & Natural Gas Corp., India’s biggest energy explorer, is seeking to buy oil-sands assets in Canada, three people familiar with the matter said.

ONGC is currently evaluating the finances of a Canadian field, the people said, asking not to be identified because the discussions are preliminary. The explorer is considering buying an asset that can produce about 10,000 barrels a day of heavy oil, worth at least $1 billion, two of the people said.

Minister sees hidden agenda behind oil sands foes

(Reuters) - Some international groups behind campaigns opposing Canadian oil sands development are actually trying to erect trade barriers under the guise of protecting the environment, Alberta Energy Minister Ron Liepert said on Tuesday.

Lukoil Abandons Iran Project Under Pressure of U.S. Sanctions

(Bloomberg) -- OAO Lukoil, the Russian oil producer with the most overseas assets, abandoned work in Iran because of the threat of U.S. sanctions, while saying it may still return to the Persian Gulf nation.

Dutch Power Secrets at RWE, Vattenfall Increase Costs

(Bloomberg) -- More than five months after buying the two biggest Dutch utilities, RWE AG and Vattenfall AB are resisting consumers’ calls to reduce costs by continuously disclosing to buyers and sellers how much power they produce.

The companies have said they helped boost competition and lower prices in Germany by voluntarily releasing supply data and publishing planned and unplanned outages. RWE cut fees 8 percent in 2009 “due to competitive pressure,” Chief Financial Officer Rolf Pohlig said Feb. 25. Vattenfall began selling power in January to Aurubis AG, Europe’s biggest copper refiner, under a contract that may reduce its electric bills by 5 percent.

Chavez extends Venezuela Easter holiday to save energy

President Hugo Chavez has added three days to Venezuela's Easter holiday to deal with a growing energy crisis.

The move - which will close government and public offices - means most Venezuelans will have a seven-day break starting on 1 April.

Mr Chavez said the aim of the measure was not to encourage "laziness, but to save energy."

Dubai World gets $9.5 B bailout

DUBAI, United Arab Emirates (CNN) -- The Dubai government announced plans Thursday to inject $9.5 billion in funding to help out its state-owned holding company, Dubai World.

What if It Was All Just a Big Bubble?

One of the things that many people go through their entire lives without ever realizing is that conditions haven't always been the way they remember them to be. Due to the length of a typical lifetime and the number of those years that individuals are productive, it's reasonable to think that someone in their mid-60s could retire today and look back at the last 40 years only to conclude that what they just experienced was normal.

But, what if the last 40 years were anything but normal?

What if, in the world of finance and economics, it was all just a big bubble?

China tops USA in spending on clean energy

China is emerging as the world's clean-energy powerhouse, according to a new study by The Pew Charitable Trusts.

Last year, China spent more than any other major country on clean energy, including wind and solar, toppling the U.S. from the top spot for the first time in five years, the Pew report says. The U.S. is also on the verge of losing the top spot in terms of installed renewable energy to China.

Ranking Cities on Building Efficiency

Los Angeles and Washington took the top spots in the United States Environmental Protection Agency’s ranking of cities with the most energy efficient buildings.

Warren Buffett sees strong rail system as key to U.S. growth

Buffett chuckles at the suggestion that buying the nation's second-biggest railroad is a sign of senility. He argues that railroads represent the future. They're best-positioned to haul the raw material and finished goods for a nation and economy that he insists are bound to grow. Unlike trucks, trains don't have to compete on congested highways. Nor do railroads depend on strapped governments to maintain infrastructure.

"They don't need the government to build them new highways and airports," he says in an interview with USA TODAY. "They've already invested heavily in their infrastructure and technology, and they plan to invest more to keep up with the growing demand.

"They're the only mode of freight transportation that can handle growth. What's not to like about that?"

Monbiot: Windfarms are stricken by the British refusal to share

If every windfarm company pledged 10% of its income to the local community, many more would be approved.

Stop Hand-Wringing About Peak Oil and Climate Change and Do Something

You may or may not have heard of the Transition movement — described by its founder, Rob Hopkins, as “an exercise in engaged optimism”— yet Transition’s ideas are informing and even guiding the conversation of how communities confront the twin crises of peak oil and climate change.

Protecting water resources a critical political issue

Sandford, the keynote speaker for World Water Day at UBC Okanagan, made it clear water is as much a concern for our world, and our country, as peak oil and climate change; in fact, they’re all the same problem.

If you understand that energy issues are water issues and water issues are energy issues then the political decisions needed to conserve both—and stem the tide of climate change—really become much clearer, in his mind.

But the entire move hinges on avoiding political lobbies which push profit over logic. “We cannot afford to let crucial water issues be hijacked by public relations spin,” he said. “The domain of water resources is not politically neutral.”

The Battle Over Bottled Water

Published in recognition of World Water Day, a video called The Story of Bottled Water (at right, on top), made its debut on YouTube this week, using animation and snappy narration to convey what its makers consider to be the evils of bottled water. (It comes from the same folks who produced ”The Story of Stuff” — an eco-themed viral video sensation from last year.)

Not missing a beat, the International Bottled Water Association, declared the new video to be sensational, and quickly posted its own minifilm, highlighting the sustainability practices of its members, which include major brands like Nestlé.

Farming reform needed to end hunger without obesity

OSLO (Reuters) - Agriculture needs revolutionary change to confront threats such as global warming and end hunger in developing nations without adding to the ranks of the obese, an international study showed on Thursday.

The report said South Asia and Africa were "battlegrounds for poverty reduction" as the world population rose to a peak in 2050. Prospects for quick advances in curbing hunger are better for India and Bangladesh than sub-Saharan Africa, it said.

Deforestation Continues, but More Slowly, Report Says

Deforestation slowed in the past decade, in the first sign that global conservation efforts are bearing fruit, but an area the size of Costa Rica is still being destroyed each year, the United Nations said on Thursday.

How Republicans Learned To Reject Climate Change

As climate change emerged as a top issue on the national scene a few years ago, it had one unusual quality: The response to it showed surprising signs of bipartisan support.

Two or three years ago, Republicans such as Sen. John McCain and Govs. Arnold Schwarzenegger and Charlie Crist played nearly as prominent a role as Al Gore in advocating a robust regulatory response.

No more. Climate hasn't yet become as partisan an issue as, say, health care and taxes. But it's getting there.

A Physics Maven’s Take on Skeptical Science

I’ve been meaning to highlight a particularly interesting blog on climate, Skeptical Science, and finally have the chance. What’s appealing about it is the simple way its Australian creator, John Cook, has cast his journey. It’s basically a list of reference-laden responses to the many assertions made by one or another of the variegated camps rejecting the need for action to curb greenhouse gases. There is a conventional blog stream covering developments as they occur. But most useful, perhaps, in a world of information overload, is the basic litany of 101 (and counting) skeptics’ arguments and responses. (Users of iPhones might say the most useful element is the popular new Skeptical Science application for the phone.) Here’s one example from the online list:

Skeptic Argument: “It’s the sun.”

What the Science Says: In the last 35 years of global warming, the sun has shown a slight cooling trend. Sun and climate have been going in opposite directions.

The Indirect Land Use Change dispute is coming into political focus nationally as California’s CARB regulations get closer:


Left out of the questionable CARB decision is the logic of assigning all the ILUC to Californian use of Midwestern ethanol. Suppose for sake of argument that ILUC and the carbon produced from it are valid. Clearly this “pollution” is occurring in Brazil or where ever and not in California when Midwestern ethanol is consumed there.

Brazilian ethanol is the same as Midwestern ethanol and it is not being assigned the ILUC emissions even though it comes from the country where those emissions supposedly occur. And California treats the carbon as though it is being added to the atmosphere of California when in fact it is being added to the world atmosphere of which California is only a small fraction.

Not only that, it is most likely being added in area below the equator where the tropical convergence zone tends to separate air masses somewhat. And the Southern Hemisphere is not noted for its intensive industrial pollution since it is mostly water and a lot of undeveloped land like the Outback of Australia and the wilds of Southern Africa.

California has failed to show how the added carbon from hypothetical ILUC change gets to California and it has failed to show what portion of this added carbon actually arrives in California. It has failed to show why ethanol from the country that produces the ILUC carbon emissions does not get charged with them and why Midwestern ethanol is charged with emissions from Brazil instead.

If they can show all that, what about pollution produced in other parts of the world when oil is imported into California? Should California add carbon emissions from the flaring of oil wells around the world to the carbon emissions of oil since those emissions wind up in California when imported oil is consumed there?

Oh wait, I forget oil products are not subject to ILUC. They can produce all the carbon emissions they want. It is only renewable fuels from the Midwest that are subject to carbon emission standards even if those emissions occur on the other side of the globe and only a portion if any arrive in California.

As a result of all this nonsense 12 Midwest states are organizing opposition to California and other states adopting the Californication of ethanol:


Meanwhile, the Midwest is moving ahead to develop its own standards.
Iowa Agriculture Secretary Bill Northey, who serves on an advisory group looking at developing low-carbon fuel standards in 12 Midwest states that are members of the Midwestern Governors Association, said that group of states is heading in a different direction.

Wisconsin, Minnesota, Illinois, Indiana, Iowa, Michigan, Kansas, Missouri, Nebraska, North Dakota, South Dakota and Ohio are in agreement that a state-level LCFS shouldn't penalize fuels for ILUC at all, Northey said.

The Midwest advisory group includes industry representatives from seed, ethanol and oil companies, as well as biofuels associations and state agencies.

"We don't believe the numbers are solid enough to include land-use penalties," Northey said. "We do absolutely believe it is impossible to figure out a land-use penalty."
Jesse Heier, director of the Washington, D.C. office of the Midwest Governors Association, said member states see the importance of developing a regulation unique to the Midwest.

(Bloomberg) -- The International Energy Agency, an energy policy adviser to 28 countries, said it expects nuclear power to be a more competitive energy source than coal or natural gas when borrowing costs are low.

It takes the IEA to figure that out? Of course it is: nearly all the cost is up front, so the discount rate influences the profitability much more than for a coal-fired project which has large costs for fuel.

The basic problem with this statement is that a low discount rate infers long-term capital is readily available at very low interest rates. It isn't, unless you're a stable government, and even their current borrowing rates are not going to stay low for very long.

U.S. 30 year treasuries are currently around 4.7%. I'd be very surprised if any investor would even look at a nuclear power station which broke even at less than 10% discount rate. By the time it starts construction treasuries will probably be paying over 10%, unless the Federal deficit comes down substantially. I expect that to happen around about when ice skating becomes a common sport in Hades.

My sentiments exactly Ird. But if this recession continues, and I believe it will, the economy will continue to shrink. Which means the tax base will shrink. And with an ever shrinking tax base how is the government going to pay back an ever expanding deficit?

Of course it will not pay it back unless hyperinflation makes the debt much smaller. Other than that default is the only option. Either way it leads to collapse.

Ron P.

There is an alternative to collapse, and that is concentration. That is what seems to be going on, and so far as I can tell, it is proceeding smoothly. The concentrated core will do nicely, and the chaff will be spun off.

It's hard to take a long look at history and remain a doomer. People are more resilient than that.

It's hard to take a long look at history and remain a doomer.

Unless, of course, you are deemed to be chaff.

Quite a statement, isn't it.

I'm sure NeverLNG wasn't using "chaff" in a human sense, but it is important to remember the human costs of any economic restructuring. Jobs have increasingly lagged every recent economic downturn and the current one promises to be the worst yet. Even the most wildly optimistic projections of future job growth admit that it will take 6 years of unprecedented job growth just to get back to even. A lot of people will be wiped out. Those who are middle-aged or older will likely never recover.

For the big dogs with power and money the chaff probably accounts for 98% of the population - all of us "useless eaters"...

I'd say 98% puts you firmly into doomer territory.

Since there's not historical precedent for 6 or 8 or 10 billion souls on board U.S.S Earth I'm not sure how one can reach any other conclusion than to be a doomer...

"Since there's not historical precedent for 6 or 8 or 10 billion souls on board U.S.S Earth I'm not sure how one can reach any other conclusion than to be a doomer..."

Of course the fly in that oitment is that you could have said it about the time when there were 4 billion souls on earth (no historical precedent) or 2 billion souls on earth (no historical precedent). This is the logical fallacy that if it hasn't occured in the past but it occured starting today, it must be bad news...I like the way it simplifies things though, it makes things easier..."all new news is bad news". :-)

Roger, when the earth had two billion souls, how many other great apes do you think existed? How many elephants or tigers or bison? What percentage of the world was still covered by forest when the earth had two billion souls?

And how many or how much of this was still there when the earth had 4 billion souls. As our numbers increase the numbers of all other animals, except things like mice, mosquitoes and such, must decrease. And it continues. We are competing with all other species for food and territory, and we are winning... big time! And we are destroying the animals, the forest, the rivers, and the lakes just to maintain the status quo. Even if we stopped our population growth today the destruction would continue... it must to feed and house our population that is already deep into overshoot. That is only one of the reasons that I am a doomer.

Footnote: The human population of the earth increases by approximately 200,000 each day! The combined population of all other great apes on earth is slightly less than 200,000. That's right, the human population grows each day by more than the combined population of all other great apes on earth. And the population of one great ape, Homo sapiens, keeps growing each day while the population of all other great apes declines a little each day. That is one of the other reasons I am a doomer.

Ron P.

We are competing with all other species for food and territory, and we are winning... big time!

We're winning??? Alright!!! Go team! U-S-A! U-S-A!, er.... HOMO SAPIENS! HOMO SAPIENS! HOMO SAPIENS!

Wow, so like, what's our prize? Do we all get a Singularity-style techo-utopia teeming with buxom babes, unlimited HD cable, and frosty cool beer on tap?

Report: Central African gorillas may go extinct

Gorillas may go extinct in much of central Africa by the mid-2020s -- victims of a meat trade, of logging and mining, and even the Ebola virus, a new report says.

Ron, I agree the Homo sapiens are apes. It remains to be seen just how great we are... :)

You would be right if the effects of human civilization on the environment were still unknown. Then we could declare that we really don't know if 4 billion, or 6 billion, or 10 billion, or 1 trillion, is the upper limit of our species.

Everywhere you look, though: fossil fuel depletion, deforestation, species extinction, global warming - we are changing the earth in very profound ways and they have been measurable for some time.

Limits to Growth got the story basically right but nobody will listen to a Cassandra.

Notice that I did not say whether 6 billion humans (or 2 or 4) was good, bad or ugly. All I said is that as a logical argument you cannot assert that simply becausee a population number has never been seen before (i.e., "no historical precedent") that can be used in itself as an argument for impending catastrophe. Humans, like all animals, consume, and due to our ability to design and construct complex devices there is no way to assert that we do not consume above our basic needs, sometimes far above them. Humans are of course the only animal on earth that can also control it's own population growth while still allowing sex to occur. Whether or not we will do that in time to make anything more than a marginal difference remains to be seen.

But to the main point you guys are making, you of course introduced other information beside simply "this population has never been seen in history so that alone demonstrates....(whatever), and I have no doubt there must be a human population number that is so great it completely overwhelms the ability of most other species to survive in company with that many humans (no matter how efficient we become) I just don't know what that number is.


That's funny, it used to be the "HMS Earth". What happened?

Of course, it's also a 'little' bit funny that to be an active doomer, you have to be one of the survivors, from a long line of survivors. It is a skewed perspective to start from, but it doesn't help to be ungrateful about it, either.

joku -- Actually in time it may be the "PLAN Earth". That would be the Peoples Liberation Army Navy, of course.

YES ! I debated long and hard whether it should be USS or HMS - I think I went with USS as a nod to Star Trek - you know, the future and all that :)

The simple SS Earth is most appropriate. She doesn't belong to any of us (despite aspirations to the contrary).

Somewhere in the literature thre is the following exchange, more or less:

By what right do you claim this land?

By the right of a strong right arm! (flourishing sword)

Remember history is always written by the winners.

But in my heart I agree with your sentiment.

It's hard to take a long look at history and remain a doomer. People are more resilient than that.

So, a "doomer" is defined as anyone who thinks everyone is going to die? A "doomer" believes in zero human resiliency?

Sounds to me like you're "looking at history" with one eye shut.

As I say repeatedly: The world is not going to end--and that is the least of our problems.

Hi, Darwinian,

Are you willing to speculate as to which is most likely , collapse without major inflation, hyper inflation and collapse shortly thereafter, or hyperinflation and survival of the world as we know it for another few decades?

Mac, I am confident that we are in for a collapse. And your last scenario is definitely not a probability. There will be no survival of the world as we know it for decades. I favor your #2 scenario. There will definitely be collapse and most likely it will be preceded by hyperinflation. But hyperinflation is not necessary for collapse to occur. The collapse could happen before hyperinflation has time to take affect.

Ron P.

I was watching CNBC earlier today; Ben Bernanke promised the Fed was not planning to monetize the national debt. He promised!!!

Doesn't that mean no hyperinflation? Please!!!


It looks like the word about peak oil is spreading. Blogs that formerly would not post about peak oil are now having another look at the subject.

The Moderate Voice: Thread on Peak Oil and its Implications

If peak oil is around the corner we are looking at an economic collapse (if nothing is done in the mean time) that makes the last few years look rosy. To understand why you have to understand that the economy is based on credit and for a credit based system to work it must continuously expand.

Gail, in several threads, has stressed this point over and over. Chris Martenson in his "Crash Course" stresses this point also.

Credit means that you are borrowing from the future. But if the future is not growing but contracting there is no way that the money can be paid back in the future. Our current economy is based on credit and a credit based economy requires growth. Without growth credit collapses this means the economy collapses.

I hear people railing against growth and suggest that we switch to a steady state economy. In the past, well before the industrial revolution, there were long periods of little or no growth. But our economy has morphed into a system that requires growth. And if our credit based economy does not grow, it must collapse.

Our current system is very complex but one must try to understand the importance of credit. Well over 90% of all homes are purchased with credit. Autos are usually purchased with credit. Farmers borrow to plant this year’s crop and hope to pay it back in the fall

I haven't the statistics but I would wager that over half the employment in America, and likely the entire developed world, depends on the availability of credit.

Basically I am saying that I do not believe a slow collapse is possible. Once credit collapses, and that is starting to happen right now, then the entire system collapses.

Ron P.

And if our credit based economy does not grow, it must collapse.

Hmm.. This seems to imply a system where the following happens:

  1. Entrepreneur has an idea
  2. Entrepreneur convinces a lender to lend them the capital.
  3. Lender lends entrepreneur capital at an agreed interest rate
  4. Entrepreneur is successful ( on average because of general economic growth ) and pays back the loan with interest, so that lender makes money.

In this system, the entrepreneur doesn't risk his own assets, but those of others, namely those of the lender. The entrepreneur merely convinces the lender of the feasibility of their idea. Usually this is done by somehow having an existing idea that the entrepreneur wants to expand. If the entrepreneur successfully pays the lender back with interest, then the entrepreneur is wealthier than before because they now own an expanded business. In the case of a retailer for example who gets a loan to purchase inventory, the retailer who pays back the loan and the interest can keep any excess above that amount to pay it's employees, heat their store, advertise, and use as profit.
A lender isn't an entrepreneur. They can never be so informed as to the likelihood of success or failure as the entrepreneurs they lend to. This is similar to the way that an insurance company can't know how likely it is that my house will burn down because they don't know how careful I will be. If they know I own a wood stove, they don't know how often I use it, or if I clean my chimney regularly. They only know how having a wood stove effects the risk that a house will burn down ALL OTHER THINGS BEING EQUAL. That is, only things they can measure can be accounted for in determining risk.
An entrepreneur may realise their store is going to close become worthless unless some miracle happens in the next quarter and sales improve. They have a large incentive to tell a lender that things are FINE to get the needed capital with which to buy the next quarter's inventory because without that inventory there is no chance for a miracle to happen.
In fact there may be a 75% chance that a miracle WILL happen leaving a 25% chance that one won't happen and the lender won't get paid back. The entrepreneur who is 'in the know' isn't going to tell the lender that.
However if the entrepreneur is investing their own money ( revenue from last quarter ) in their inventory, then they will use their revenue to buy inventory for another quarter of operations only if they believe it to be a wise investment. If there is only a fifty percent chance of making a good return, the entrepreneur will decide to close up shop and keep the money. No lender or convincing or conflicts of interest are involved.
The entrepreneur's interpretation of the risks involved will depend on specific facts relevant to their situation that they know, and their ability to make money is not dependent on whether businesses like theirs 'as a group' tend to make money or not. There may not be practical ways for outsiders to classify groups of businesses as credit worthy. It may be that all identifiable GROUPS of businesses are NOT credit worthy. However there will be some businesses that may have sufficient knowledge of their situation AND capital so that they can continue operations. Of course there will be many 'innocent' businesses that could make money but for the lack of capital which will cease to be unless they can find some source of working capital. Perhaps astute insiders will choose to invest their capital in these sorts of ventures. Astuteness will be necessary to differentiate winners from losers and make money of course. We may have reached the end of the 'if you have X dollars and don't want to think much you can make a positive return without much risk'.
Astuteness and *gasp* work and proprietorship on the the part of the owners of capital (capitalists) may now be absolutely necessary to grow wealth.
The scope of the credit economy may shrink ( I doubt there will ever completely cease to be areas where credit can be extended without undue risk, though those who can be classified as outsiders as credit worthy may shrink in number far more than the number who actually are credit worthy. )
Think about what credit has done to the price of housing. If there were no credit at all, houses would be even cheaper, to the point where it might well be within the reach of many to save for their houses rather than get a loan. And there are many possible points along this continuum. Maybe it's possible to save half the amount required to purchase a home or three fourths, or one fourth.
With less credit homes will be cheaper. If you bought a house for cash you saved at the height of the housing bubble it cost you so much largely because you were competing for that house with those willing to take out zero principle zero downpayment ARMs. The money you competed with for your house ultimately came from creditors who failed to account for systemic risk when lending.
If credit dries up, then there will still be economic activity. Knowledge skill and hard work will more than ever be power, and those who employ such in conducting enterprise will still be able to make a buck.
Stupid money will run from place to place (gold/treasuries) until it becomes clear to all what the success stories are then the stupid money will try to ride on the coat tails of those who rode out the storm well. Stupid money will lose value as it flees from place to place. Smart money will find durable advantages even in a declining world.

CodeMonkey your post makes a lot of assumptions, most of them wrong. First of all, it is not just entrepreneurs that depend on credit, it is everyone. All bonds, government, corporate, and municipal, are a form of credit. Without credit all forms of public works would be shut down. Cars could not be built because everyone from the supplier of every part of the car to the dealer where it is sold depends on credit to stay in business.

If there were no credit at all, houses would be even cheaper, to the point where it might well be within the reach of many to save for their houses rather than get a loan.

Honestly, did you give any thought to that statement? How would the builder build a home without credit? Would no credit make building materials any cheaper? And if it did everything would have to be scaled back, including salaries. Far fewer homes would be built and couples would have to live with their parents. And with virtually no construction most all construction workers would be laid off. With so many people out of work salaries would be greatly depressed. Very few people would be able to afford even cheaper houses.

Smart money will find durable advantages even in a declining world.

What money? Money is loaned into existence. The amount of money in circulation would be a fraction of what it is without credit. Anyone with money would likely be hording it.

Go here: Chris Martenson.com, then click on "Click Here to Watch the Crash Course". It is in sections so you can watch it piecemeal. But the whole thing is about 3 hours long. It will be the most informative 3 hours you ever spent in your life.

Ron P.

My grandparents (paternal and maternal) owned their own homes, but didn't borrow money to do it. I doubt anyone would loan money to people like them back then. As Stoneleigh put it, for most of human history, the only people could borrow money were those who didn't need it.

My grandparents saved their money until they could buy empty lots, and built their homes by hand. My paternal grandfather was very good carpenter; his home is built of wood. My maternal grandfather was a stonemason, and his home is built of concrete. My mom remembers being given a tablespoon and told to start digging. That was how the basement of the house was started.

I wish I could have my grandfather's tools. They'll probably be thrown away. Nobody uses hand tools any more; they want electric drills, saws, etc.

Throughout most of history, money consisted of either gold or silver. Gold and silver cannot be loaned into existence, only fiat money. Even when we were on the "Gold Standard" or perhaps better labeled the "Silver Standard" only paper currency and coins had to be backed by gold or silver. Fiat currency that is bank deposits and such that existed only as an input in a ledger had no gold of silver backing. It was loaned into existence even back then.

Now even paper money and bimetal coins have no real value other than the trust placed in them by the people.

Anyway back in my Dad's day no one in our neck of the woods had fine homes. I was born in a three room sharecropper’s shack. Those kinds of homes could, in those days, be thrown up for a few hundred dollars. Yes, it was possible in those days to live without credit... if you were very small potatoes like we were. But even back then industry ran on borrowed money or bonds and so called "risk capital" called equities or stock.

Ron P.

I don't think my grandfather had a bank account. IME, that generation in general preferred cash...perhaps because of the bank failures of the Great Depression, perhaps because poor people in general don't have much use for banks.

My grandfather kept his money as a stash of gold coins in the basement. Even his wife, my grandmother, didn't know about it until he passed away. He didn't have life insurance, but she was provided for anyway.

Leanan -- A lack of checking accounts just came up on the radio this morning. One of the little tidbits in the new health care legistlation gives authority to the IRS to electronic access the checking accounts of all citizens and with draw any ins. premium they deem required. Someone asked the question: what if you don't have a checking account? Supposedly there's a new bill being drafted that requires every citizen to have a checking account. I haven't confirmed that part yet so it may just be a new urban legend. But it would make sense. Same reason the IRS requires withholding from your paycheck: folks wouldn't tend to set aside the required payments.

Interesting times ahead, to say the least.

One of the little tidbits in the new health care legistlation gives authority to the IRS to electronic access the checking accounts of all citizens and with draw any ins. premium they deem required.

please step back from radio rush limbaugh.


Claim: Page 59: The federal government will have direct, real-time access to all individual bank accounts for electronic funds transfer.
False. This section aims to simplify electronic payments for health services, the same sort of electronic payments that already are common for such things as utility bills or mortgage payments. The bill calls for the secretary of Health and Human Services to set standards for electronic administrative transactions that would "enable electronic funds transfers, in order to allow automated reconciliation with the related health care payment and remittance advice." There is no mention of "individual bank accounts" nor of any new government authority over them. Also, the section does not say that electronic payments from consumers is required.

I think you need to come into the real world here....do you work for the criminal fedgov?

The IRS, can and will enter your bank accounts whenever they want. It's called a "LEVY".

Been there, done that. Wake up people, every day you lose a little more to the criminal fedgov.

That's not the point. The question was whether the new bill requires every American to have a checking account. It doesn't. And it would be pretty difficult to require it, because if you don't have money, what are you going to put in said checking account? How will the government take your payments from an empty account?

Leanan - That's why I thought the "requirement" part of the story was added to spice up the story. But it dose seem the gov't will have to come up with some sort of a withholding system (just like with income taxes) to make sure all who owe into the system can pony up we time comes. That would seem to be a good reason to have the IRS involved in the administration of the process.

Rockman, you replied to my prior post a week ago on Red Leaf Resources-- you said that the process doesn't appear to address the other problmes, what other problems? Thanks so much.

Gun -- If I recall correctly they still have to mine the oil shale. I recall the big problems were recalamation, waste disposal (the shale beomes more "oily" and is thus considered hazardous waste, water usage (I think). I don't really follow the oil shale debate that close. I thought some of those folks might join in to answer you.

i am well aware that the irs can levy or lien any account or property they have access to. if one is stupid enough to allow electronic bill pay, they deserve what they get.

1) how does this bill change that ?

2) these levys or liens are done after the irs has exhausted their attempts to collect taxes they (the irs) deams due. unfortunately, the irs is the decider.

nominally, the irs is required to afford the respondant with due process. also unfortunately, the respondant will have to hire an expensive tax attorney to excercise his or her right to due process. good luck with that. the good tax attorneys are all busy working on $million tax cases and dont generally have time for your $ 4,000 or $20,000 tax dispute. bad tax attorneys are more common.

my gf had just such a $4000 tax dispute a few years ago. the first tax attorney she hired was off to colorado moving her step-daughter when the deadline came to file a petition in tax court. needless to say that tax attorney was fired.

the second tax attorney was an x-irs attorney. he agreed to a $4000 settlement in favor of the irs without her knowledge or agreement. that tax attorney was fired. firing a tax attorney requires a petition be filed with the us tax court. the filing of that petition and a letter to the district council resulted in the case being settled in her favor.

i have been there and done that.

i live in the real world. what world do you live in ? and no, i do not work for the criminal fed govt.

Gold and silver cannot be loaned into existence, only fiat money.

False. Thoughout most of banking's history, bank drafts against X gold in the vault have been written amounting to X * 1/(reserve ratio) gold. So for a reserve ratio of 1/10 there can be drafts payable in 10X gold in existence backed only by the X gold in the vault. 9X of that 'gold' was lent into existence.

Strange, Alchemist tried for centuries to create gold from base metals with no success. But now you say gold can be loaned into existence. I thought it could only be created in a supernova explosion. Boy do I have a lot to learn. Julian Simon said copper could be created from other metals. I don't think so but perhaps copper also could be loaned into existance just like gold.

Seriously, you know as well as I that gold cannot be loaned into existence. Bank drafts against gold can be lent into existence in any ratio the government allows, perhaps 10 to 1 or even 1000 to 1 if the government allows, but more gold cannot be created by lending it into existence.

But I did enjoy your attempts at rationalization, it was a good one.

Ron P.

Money is not wealth, and wealth is not money.

You cannot loan wealth into existence, it has to be found and/or made.

The failure to recognize this is the largest contributor to the current financial situation.

Money is not wealth, and wealth is not money.

huh ?


1. a great quantity or store of money, valuable possessions, property, or other riches: the wealth of a city.

Fiat money is disconnected from all the other aspects of wealth in that definition.

It may represent wealth, or it may not, just ask your average Zimbabwean if those extra zeroes on their money make them richer.

Well if you are counting virtual dollars as dollars, then you have to count virtual gold as gold.

I know that the general trend is toward power tools, but there is a large group of us hand tool users out here. We pride ourselves on being able to do things with our hands, and know that some things will have to be forged and worked at with long hours of work to replace the blades and other metal parts of our hand tools. But all those skills are still in our skill library.

My maternal grandfather was a jack of all trades, fixing and building several homes, cabins and even a houseboat that was human powered with paddle wheels and bicycle parts. He died before my mom and dad met in his mid 80's. My mom and her siblings were his second set of children. The story is that he rode 24 miles on a horse in 1925 to go see his future wife, just to go on a date.

My dad has a stack of catalogs that sell hand tools, some of them rather high end, but once you have them they will last decades. Most power tools these days with the battery packs wear out in about 5 years of heavy use, though some might last a while longer, but not as long as well made hand tools, which don't need power to run.

I would hope that you can save them for someone to use and not throw them out. If you don't want them yourself, and have access to them I am sure someone from TOD would find some way to trade or settle with you for them.

Skills and hand tools are the things that keep me positive about collapse, just barely, but barely is good enough most days.

BioWebScape designs for a better fed future, ( my hand drawing tools and skills are keep handy when computer aided drafting fails )

A lot of my grandfather's tools are at least partly handmade. He probably bought the blades, but made his own wooden handles for them. And like your grandfather, he built boats. Not houseboats - just fishing boats. I spent many hours of my childhood on his boats, fishing, crabbing, or just sitting around.

I had a friend from high school, I've lost track of him these past 20 years, but the last time we talked, he was going off to New England to learn old fashion hand tool using boat building. Thinking it was going to be of great need in the future. He was already a skilled engineer in making light weight race cars and was good with hand tools and wood working.

-Goes off to hunt his name down online.

BioWebScape designs for a better fed future.

Let me start from the bottom of your post and go up.
First, I can't watch video right now, but I will later.

What money? Money is loaned into existence. The amount of money in circulation would be a fraction of what it is without credit.

Well, there is of course paper money. That's the only money there would be without credit. Uncle Sam ( or insert your country's mascot here ) still demands dollars to pay taxes, so people will still accept dollars for goods. In fact the number of paper dollars in existence currently would command far more goods for each if there were no credit. If somehow credit were eliminated, then dollars would be a sound fiat currency. Checkbook money loaned into existence by banks would go away if banks did not lend at all. It would be equivalent in terms of money supply to the case where banks did lend but the reserve ratio were 1.0
It makes sense to hoard money if there is deflation, but once the deflation has taken place, then hoarding money no longer makes sense. In a sound money system, money supply is constant so deflation only occurs when there is an increase in supply of goods. ( such as deflation with respect to computer processing cycles ). This kind of deflation is an unmitigated good thing.

How would the builder build a home without credit? Would no credit make building materials any cheaper? And if it did everything would have to be scaled back, including salaries.

The builder could either use their own money to speculate that they might be able to sell the home they built at a profit, or demand cash up front from an alternate speculator. Whoever that would commission the building of the house ( and ultimately own it ) would have to front the money without credit. And building materials WOULD be cheaper in terms of dollars if there were no credit in the dollar economy because there would be far less dollars around ( unless/until the government started printing more ). In terms of real value, however, the cheaperness would be far less than it would be in terms of numerical dollars. Basically instead of competing for resources with everyone and their brother's hairbrained promises about the future, you would only be competing with people who had the money in the present.
Yes, of course less dollars around to pay everyone's salaries means salaries go down ( measured in dollars ) however since the value of dollars goes way up, it may be close to a wash. And the stuff that gets scaled back, I bet, is the marginally good ideas, not the obviously good stuff. People with money want to own the obviously good stuff at a bargain price.
I doubt deflation would be that pronounced anyway if the reserve ratio were slowly moved to 1 by law. The government maybe should print money to replace any lost to the money supply and use it to pay off some of the national debt, or else the diminished money supply ( and increase in the real value of the dollar the debt is denominated in )would make that debt unbearable. Probably we'd end up with a (sound) dollar worth about what it is today.

All bonds, government, corporate, and municipal, are a form of credit. Without credit all forms of public works would be shut down. Cars could not be built because everyone from the supplier of every part of the car to the dealer where it is sold depends on credit to stay in business.

Instead of credit, the government could print physical money when tax reciepts were short and destroy money when there were a surplus in tax reciepts. As for the corporate world, and individuals, savings, and investment of one's own resources can work better than credit. It would not take much time for businesses to adjust their business models and for individuals to adjust their spending/saving habits.
Credit is always a bad idea ( game theory wise ) in the same way as insurance is always a bad idea because lending is a form of underwriting. If you think you will be successful, you want to be risking all your own money because that way you will be getting the best return. If you think you will likely fail, then you want to be risking the money of a lender so that you can profit somewhat in the event of a success, and in the event of a failure, the loss is to someone else.

Well, there is of course paper money. That's the only money there would be without credit. Uncle Sam ( or insert your country's mascot here ) still demands dollars to pay taxes, so people will still accept dollars for goods.

No the government does not demand paper money for taxes. They accept your bank draft. People accept checks and debit cards but that is not paper money. Greenbacks are paper money and all the rest exist as bank entries that were loaned into existance.

The builder could either use their own money to speculate that they might be able to sell the home they built at a profit, or demand cash up front from an alternate speculator. Whoever that would commission the building of the house ( and ultimately own it ) would have to front the money without credit.

Their own money? Greenbacks? That is the point. Almost all builders today must borrow to build. If there was no credit the number of builders would be reduced by about 99 percent.

Instead of credit, the government could print physical money when tax reciepts were short and destroy money when there were a surplus in tax reciepts.

Of course they could. Germany did that in the 20s. Zimbabwe has been doing that for several years now. And when would they likely have a surplus in tax reciepts?

Question: Are you serious or are you just pulling my leg? That's it, you're joking... right?

Ron P.

No the government does not demand paper money for taxes. They accept your bank draft.

Except if the reserve ratio were 1 instead of 1/10 then every single dollar of bank draft would need to be backed by a corresponding paper bill in the bank's vault. With a ratio of 1/10 the bank need only keep 1/10 what it lends in a vault. I believe banks would still exist with a reserve ratio of 1 because electronic funds transfer, and even loans are useful services. However even when money was backed by gold, it did not prevent banks from creating bank drafts amounting to more gold than was in existence in the world, and having credit crises when the money supply ( virtual gold! ) dried up. There were gold shortages etc.. Sound currency is more important than currency backed by anything. Because the government accepts fiat money for payment of taxes there will always be a demand for it. How else will you pay your taxes?

Since a fiat currency can just be printed ( no need for physical gold etc ) the government has no need to borrow.

Since a fiat currency can just be printed ( no need for physical gold etc ) the government has no need to borrow.

Yes, you said that before. I reminded you that Germany and Zimbabwe have tried the same thing. The result was it eventually took a wheelbarrow full of money to buy a loaf of bread.

Prenting the debt is not the same thing as printing money. Well perhaps it is but at least the debt must be sold, thereby putting some controls on how much can be printed. If there were no controls then just more and more could be printed, like Germany did in the 20s and Zimbabwe is doing right now. But there is no need for physicl gold right now. Nothing is based on gold or silver anymore.

Ron P.

Since excessive printing of money has consequences, then there would be political pressure not to do excessive printing of money as well as pressure to print money excessively. Voters know this ( or they would learn it fast ).
US National Debt involves the Treasury printing a security which is bought by someone somewhere with dollars. US Debt outcompeted other possible investment opportunities for this transaction to have taken place. The government spends the dollars to get things done, and in the process outcompetes someone for the resources necessary. When the government buys asphalt, then it shifts that resource away from some other potential use. If the governments purchases of asphalt are big enough then asphalt is manufactured to meet the government's needs, INSTEAD OF MANUFACTURING SOMETHING ELSE TO MEET A PRIVATE NEED. When the government spends taxed money or borrowed money it costs the economy the same either way, though the distortions are felt differently. Printing money has the same effect.
The idea of using Taxation to pay for things is to have control over who feels the pain. Would holders of US national debt invest their money elsewhere in the dollar economy if the US were debt free, or is the National Debt displacing domestic private investment? Maybe those who now hold US Treasuries would just buy securities held by other governments to hold. What would domestic holders of US Securities invest in? Would they exchange their dollars for something else just to hold some kind of security? Or do they like the dollar economy enough to try private investment? What about large foreign government holders of US Securites such as China and Japan? If we paid them back, what would they do with all the dollars?

What about large foreign government holders of US Securites such as China and Japan? If we paid them back, what would they do with all the dollars?

I suppose they would buy real stuff, such as oil, copper, steel, cement, fertilizer, corn, agricultural land, foreclosed buildings, military hardware, etc. Oh wait, that's what they ARE doing...

E. Swanson

It works like this:

Bank borrows money from the Fed at 0.75% interest; bank puts 10% into reserves, and loans 90% to the Government at 3.62%, or to you or me at 5.62% or so, but only if we are rock solid, no risk customers. We cannot print money, and the bank cannot borrow from us since we are trying to borrow from them. That soaks up most of the government debt, as the Fed loans to the banks are lent back to the US during bond purchases.

Of course, in normal use, the banks take deposits from their customers, hold 10% in their reserves and lend out 90%.

The amount of cash involved in all of this is very small. Less than 1 Trillion.


This is a problem, since there is about 4 times that on deposit, and if everyone tried to 'get their money out of the bank,' there is no way they could all get US Dollars. Especially since about half or more is held outside of the USA.

The rest of the money is all virtual. It exists only in the minds, and the computers, of the financial community. The Tipping Point post from several days ago had a link to an article that goes into detail about the basis for wealth, and does a very good job in its discussion. I recommend that you read it beginning to end. It runs 54 pages, and doesn't take all that long.


Furthermore, you don't 'grow' wealth, no matter what sort of crap you hear from CNBC, WSJ and the rest of the MSM.

I can grow wealth, just plant me a few seeds of this or that crop and sell the results to nice men on street corners, I'll grow wealthy rather fast, though I also might grow cold one afternoon while doing such activities.

Sorry I just had to type what I thought, on the Not Growing Wealth comment.

BioWebScape designs for a better fed future, growing food so you don't have to spend your wealth to eat.

I can grow wealth, just plant me a few seeds of this or that crop and sell the results to nice men on street corners, I'll grow wealthy rather fast, though I also might grow cold one afternoon while doing such activities.

Even if you have your own seed bank I think you are still going to need some seed money. ;-)

Money isn't wealth, and wealth isn't money.

If money was wealth Zimbabweans would be in the lap of luxury today. Just add a few more zeros and Woohoo!

The fact that it has been a reasonable proxy in the developed world for quite a while confuses people on this minor point.

I think you are both partly right. The description of the money system described by Chris Martenson is correct, until he claims that all money is created from borrowing, then concludes that it all must be paid back with interest. He neglects the effect of default. Once a loan is charged off by the bank (as has has recently been reported concerning $90 billion of credit card debt), the money continues to circulate and 'blend in' with debt-money, but there is no longer a repayment schedule attached to it, so it becomes permanent. This and printing of M1 money are the only ways to create permanent inflation.

But this is also a collapse safety-valve; the faster and less orderly a money contraction is, the more charge-offs, therefore more permanent money content as a cushion.

The best strategy to cope with this situation is simple - get out of debt, become self-sufficient, sell useful goods/services.

The best strategy to cope with this situation is simple - get out of debt, become self-sufficient, sell useful goods/services.

It is possible to live this way, financially, but I do not consider it eazy, and is self-limiting.

I am not self-sufficient for food, or things brought by utilities. Not even close.

My little family has no outstanding debt, almost all our income goes to bills (rent, utilities, daycare, etc).

We live almost paycheck-to-paycheck, with a 12yr old car, just keeping this one family car running, while I commute by bicycle or public transportation.

If our car finally becomes beyond my ability to keep running, then the situation changes: We would have to get a car loan, which would make us 'the same as almost everyone else: using credit'.

Or you could save up before then and buy a car that you can afford when the old one finally dies.

People really used to be able to buy things before credit became common, it just involved self discipline, something that is sorely lacking in most people nowadays.

It looks like the word about peak oil is spreading. Blogs that formerly would not post about peak oil are now having another look at the subject.

This is a fun URL to visit on it, too:

It is clear to me that, without credit, asset prices, such as those for housing, will collapse, have collapsed, and are collapsing. House prices are not recovering in large part because credit has become much difficult to come by.

However, house prices will continue to collapse until people can afford them with the reduced credit and much higher levels of equity will be required to purchase houses.

While it is probably true that an economy based on credit needs to grow,it is not necessarily meaningful, to simply say it will collapse. The question is, to what level will it collapse, and what kind of society will we have once this supposed collapse has taken place.

In the mean time, many of us will be dealing with this lack of credit by downscaling our expectations and our expenditure levels, including what we think we need with respect to housing size.

For a lot of reasons, growth will either end because of resource constraints combined with some voluntary restraint.

My basic question is, does collapse due to credit scarcity necessarily push us back to a dark ages scenario. Or is there some sort of minimal level of decency that we can maintain in the world of the future.

There seems to be extra places for people to live, be them empty houses, or empty apartments in complexs places. We don't have enough people dying in the country to make up for all the houses that are empty.

When credit fails to be available for everyone, everyone will be like a lot of people I know who have no credit( no one will loan them money because of bad credit or no job, etc).

Out here on the fringes of the US people live hand to mouth, or if they have a job that pays more than the expenses they save for things bit by bit.

I am not without credit, but I am considered to be of bad credit standing, my one credit card will be paid to less than $100 balance by the end of this year, then I'll have an available to borrow from my future balance of 1/4 of my yearly income. But I make less than $9,000 dollars a year.

When credit dries up for everyone, we will go back to something like the 1930's because we still have a lot of in place junk in place, roads, houses, etc etc. And we have hard value of all the land and resouces that can be traded back and forth.

What will hurt if that happens is the farmers of the US feed 4 times as many people as live in the USA, if they can't buy seeds and otherwise do their job, that feeding extra will stop cold and you will have death and starvation inside of 2 years world wide.

If you take all the real money (paper 100 dollar bills, coins, gold etc) and divide that amount by the population of the US you get less than about $7,000 cash money per person. So without credit, without all the national dept and other things that hold the value of Credit where it is, we would be dealing with a lot less and have to really do some hard times looking at our problems.

No credit will mean businesses can't hire, will fail, and times will get tougher than they were in the hardest of the 1930 great depression. I don't really know why the credit would fall to ZERO though. It is shrinking though and that will make the times ahead very rocky and there won't be a gold goose under any one's christmas tree this year.

The above is my opinion and not based on anyone's blog or news article, feel free to tell me I suck at my logic.

BioWebScape designs for a better fed future, living closer to the bone than we are now.

A great article by Rob Hopkins just popped up on the net:

Government ‘Peak Oil Summit’ Starts The Process Of Government Acknowledging Peak Oil?

On Monday Peter Lipman and I represented Transition Network at an event which could potentially be the day people look back to as the day when UK government finally starting to ‘get’ peak oil. Fascinating and frustrating in equal measure, the event, “Policy Response to potential future oil supply constraints”, was billed as “a half-day workshop hosted by the Energy Institute in partnership with the Department of Energy and Climate Change, under Chatham House Rules”.

Hopkins expands on this event in great detail. At the end of the article he lists things that he found fascinating and frustrating.

Frustrating because the techno-fix mindset was prevalent, and the idea that part of a response might include the intentional refocusing of the scale of economic activity, the application of the Proximity Principle to economics didn’t really register with people.

Ron P.

Hmm, an interesting report.

I hold by my previous reply to Gail, this looks to be not a serious realisation of peak oil. Its rather something of a consequence of Wicks getting shifted out of the Energy Minister role, and thus that obstacle to addressing the matter being removed. Hunt seems to have no firm views on the subject - but at least won't sit on discussion about the matter.

The cynic in my looks at the calendar and suggests it was on someone's key performance targets for the year to "liaise with industry on energy security" - hence the rush to get it done so they can get their performance bonus.

I'd also say, the shape of the meeting and the participants, means its not serious. Its a paper exercise that will influence little - done for how it looks more than anything. Watch for a speech from Hunt if you want to see what they really think. My guess is the push for more nuclear stations is the main thrust of policy, so expect to see climate change/peak oil/nuclear power linked somewhere along the line. The Labour Manifesto can't be too far away - maybe expect to see something explicit there?

You'll know if they start taking it seriously; they'll look to audit the reserves (although they will keep the result secret).

Underwater mortgages drain equity, dampen retirement

"It's a rude awakening. There's a total change in thinking going on," says Amy Bohutinsky of Zillow.com, a real estate website. "People got caught up in the idea you could borrow against your homes, but they no longer think of them as savings accounts. We're going through a big psychological shift. Will this recession change how we think about our homes? Are they an investment vehicle or a place to live?"

Americans always thought of home ownership as a way to build wealth. Now they're finding out that it can be a highly effective way to destroy wealth as well. People with sterling credit scores, who had six-figure down payments to put down...now upside down, and being foreclosed on. They'd have been better off renting.

Though that last guy interviewed boggles my mind. He owns a four-bedroom house on an acre by a lake. He's unemployed, upside down, and many of his neighbors have walked away. But he wished he could buy a bigger, newer house. Good gravy. Do two people really need more than four bedrooms?

Another housing story:

Study: Homeless shelters stays can cost more than rent

Many communities probably don't know that they are spending as much "to maintain a cot in a gymnasium with 100 other cots" as it would cost to rent an efficiency apartment, says Dennis Culhane, a University of Pennsylvania professor who studies housing policies. "We are paying for a form of housing that is largely substandard, and we are paying as much, if not more, than standard conventional housing."

I recall reading about communities that had come to the same conclusion and had decided to offer the chronically homeless housing vouchers or subsidized apartments.

Here is one of the problems with the programs I see around here. No one wants to admit there is a problem.

The places that could be made into homeless care centers are being blocked by nieghborhoods saying they don't want the traffic of those kinds of people in their areas. NIMBY is really big around here in that regard.

My 3rd ex-wife gets SocSec disability but that check does not cover her rent 365, for a shabby trailer with a leaky roof (an on going issue with the new owners of the trailer court, as well as the AC and Heating that does not work well, she has heart trouble and hot boxes are killers for that condition). She is trying to pay as many of her bills as she can, but her check does not cover it all. I will be looking into what the aticle talks about as Obama not wanting to have homeless in america and see if there is programs for her. Her trailer mate, was homeless as well, before he moved in, no jobs, no skills, half mile walk to the nearest bus stop, but no money no ticket, he has a siezures and is trying to get help, but doctors need money up front to treat you, unless you go to the ER and when he has one, getting him to go is a problem there too.

So just because Washington and Obama want to solve the problem the problem is big and some states are horrible at doing their part about it. Little Rock was voted worst city in america for homeless people several years ago, they aren't much higher these days.

BioWebScape designs for a better fed future, with a side line in helping everyone.

From the same article:

When Jennifer and David Wakefield bought their home at the end of 2005, they believed its value would rise. After all, the couple they'd bought it from made a $100,000 profit in just three years. But instead, the housing market foundered, and the house in Oviedo, Fla., that the Wakefields bought for about $230,000 is now worth just $115,000.

Good grief - the previous owners realised a 77% capital gain in just three years. That is some bubble. Whatever happened to expecting your home to double in value (in nominal dollars at best) in 7-10 years?

That was something that always bothered me about how people were treating their houses, as if they were claims in the gold field. My parents wanted to buy a house to have a place to call home, live out their lives and not have to worry about paying rent and then getting told to leave. My dad made sure that his Air Force retirement check would cover the house payment and the utilites, knowing that he could get the rest from working somewhere, but he did not want to over extend himself PERIOD. He wanted a farm, he grew up farming and in the oil patch (his father was a coal miner, but he was raised by an aunt and her husband who owned his own oil company and service station, So I knew a lot about oil before coming to this site).

But my brother thought of his house as an investment, and it has bothered me for years and still does that he did not learn the same lessions I did even though we were taught the same things.

I hope that in the darker days ahead I'll be able to keep this house, I've been involved with it a long time and though it is small, after having lived out of a car for a while, this place is a mansion.

A neighbor went out and bought a bigger more roomy house than his 2 bedroom and he is single. The mindset is bigger is better, bigger feeds my ego, my self worth, keeps me up to the royality standards of the famous people I aspire to be in the future, a totally distructive thought pattern, and rather wasteful. (I am a son of two raised in the depression parents, waste not want not. Penny pinchers. with Ultra-high credit scores)

All those empty houses if not burned down will make nice squatter shacks for all the homeless folks in 20 years.

BioWebScape designs for a better fed future, house designs are also part of the mix.

That was something that always bothered me about how people were treating their houses, as if they were claims in the gold field.

Yes ... but there is good debt and bad debt ... diving into your home equity for consumer expenditure (holidays, cars, college, etc) is fraught with problems, but we turned our increasing equity in our first home into a small portfolio of six investment properties. We are not hugely rich, but by selling and re-investing in superannuation, we can fund a comfortable independent retirement no problems. But hindsight is always terrific - and Australia has not had the housing bubble hit the pin yet.

If only we would treat ourselves as well as we treat our pets.

Octomom accepts PETA spaying sign offer

Octuplets mother Nadya Suleman, with 14 young mouths to feed and a mortgage to pay off, accepted an offer to use her lawn to promote responsible pet ownership in exchange for cash and food, her lawyer said.

People for the Ethical Treatment of Animals (PETA) sent Suleman's lawyer an offer to pay for placement of a sign in the yard of her La Habra, California, home. The sign would read: "Don't let your dog or cat become an 'Octomom.' Always spay or neuter." The ad features a litter of kittens nursing with their mother.

"If only we would treat ourselves as well as we treat our pets."

Especially when it comes to the end of life. It would be considered cruel to put our pets through what we subject our parents and grandparents to.

A well crafted Power of Attorney for Health Care will allow the elderly to make their own end of life decisions before loss of competence. Unfortunately, we deny that end of life will ever come.

Minor, but irritating waste of oil

Outside my door is a large truck mounted generator, with six 400 amp wires leading from it. It is there for a two day movie shoot around the corner (Bruce Willis, Morgan Freeman). Directly overhead are the distribution wires for the local utility and a 3 phase transformer (larger than most as well).

It would not have taken that much effort to have tapped into the local grid and used more efficient power (nuclear + gas fired). We certainly have spare capacity with the current weather (63 F ATM). MUCH quieter as well.

I know the fuel cost is a rounding error in the budget, but that rental generator & crew tending it have to be a few % of the total site cost (excluding star salaries).

Best Hopes for Better Planning,


Studio shoots will generally tap the grid (not always), but Location work is generally going to insist on having full control of portable power. Yes, it's a wasteful industry in many ways.. when power costs a more realistic amount, even filmmakers might change.

Some of us do already, and we have some incredible tools that can let even a very low budget film create brilliant night scenes, for instance, by using computer graphic backgrounds (where you can add as many 60k's up in the virtual sky as you like), or compositing in digital stills taken as long exposures in existing light conditions. I'm about to shoot a SciFi film in a sandpit in Massachusetts, lighting only the near and middleground where the actors are, and all the deep Lunar Vistas will be created on computers. My background lights will consist of a dozen or so LED place markers running on tiny little nicads! www.shockwavedarkside.com

'course, those rendering computers are on for a lot more hours than those honkin' big lights would have been. As Paleocon was saying yesterday, Two steps forward, one (or two or three) steps back!


Oh, I'd also meant to toss in this old story..

When filming Superman in NYC, the 1977 Blackout struck, just as the Lighting department had plugged a light illegally into a street pole.. and they were sure they had caused it.

A friend who grew up in NY claims that during the '77 blackout, the production offered their gennies to help with emergency power. This friend also works at the Lighting rental house closest to ground zero, "Xeno Lights" , and they donated lights and generators to help deal with the immediate aftermath of the Trade Tower Destruction..

Ah ha!, so it was **you**, Bob.

I was listening to 1010 WINS when the lights flickered out on that hot July night. The newscasters and technicians did an admirable job keeping things going under some very challenging conditions. Limited lighting and no air conditioning (and the studios soon became miserably hot because of this) and although the phone system still worked, no one could tell which lines were in use because none of the indicator lights worked. Producers and editors were frantically calling out to get information, arrange interviews and coordinate operations in the field and, at the same time, reporters were calling in with their live reports from various parts of the city. The seemingly random punching of line buttons by both newsroom staff and announcers all sharing this pool of lines brought snippets of these conversations on air, the vast majority of which were not intended to be broadcast. The constant jostling and fumbling, interruptions and lines suddenly going dead made for rather interesting radio and no doubt many red faces.


From the WSJ:

Fannie and Freddie Resist Loans for Energy Efficiency

The PACE program would provide loans for energy efficiency to people, but these loans would be senior to current mortgages, and needless to say, that is not what Fannie and Freddie want. There are likely already big debt defaults coming from these loans. There is concern that allowing folks who are pretty marginal for borrowing to take out more loans, payable before their regular mortgages, will make the problem worse, since if they do default, Fannie and Freddie will have less coverage for their loans. According to the article:

"The fundamental problem is that there isn't a free lunch but there often appears to be," said William K. Black, a professor of economics and law at the University of Missouri-Kansas City.

Are the value of energy efficient foreclosed homes higher than inefficient ones ? If the delta is close to the remaining efficiency mortgage (after XX months of payments), then no harm done.

Lower utility bills will likely reduce the rate of foreclosure (and annual energy savings should be > 2nd mortgage payments) with savings for everyone.

In many cases, in a few years, after energy prices climb, inflation kicks in and the 2nd mortgage begins to amortize, the 1st mortgage holders will be in a much BETTER position.

Even if not, Freddie & Fannie are owned by the US Gov't. As a society, we are MUCH better off with an efficient housing stock, even if it slightly increases default losses.

Gail, on another thread you have 3 ways to enhance natural gas supplies so that NG could be diverted to NG transportation. Your three were lower taxes for oil & gas companies, opening new areas for drilling and more wind displacing NG for electricity.

Reducing residential NG and electricity use is greater than your three policies combined. Both NG directly and NG indirectly (for generating electricity) will be saved by greater efficiency.

VERY good for the climate too !

So, FULL STEAM AHEAD energy efficiency mortgages !

Best Hopes for More such initiatives,


One source of natural gas, tankless gas water heaters (note: greater savings of NG during the winter than the summer; thus extra good for storage and pipeline capacity).

Offer a $1,250 to $1,800 15 year mortgage at 2% (senior lien) for any residence (rental or owner occupied) that installs one (and has it inspected for proper installation). The note on a $1,800 mortgage is $12/month (perhaps payable with the utility bill).

Once the gas pipes are upsized and the flue upgraded, the replacement tankless gas water heater will be much less than the first one (expected life of a tankless gas hot water heater is 20 years).

The $12 may, or may not, reflect the savings from NG, but the owner also saves on conventional water heater replacement. For someone on a tight budget, $12/month sounds better than a couple of hundred upfront for a cheapest possible water heater (note: comparing to cheapest possible tank water heater increases the energy savings).

Perhaps the mortgage could follow the house and the foreclosing mortgage company just pays the $12/month for the time that it owns the property.

In any case, the NG saved (directly and indirectly via reduced electrical use for water heating) will "produce" more NG per tax $ in subsidy, and "produce" more NG in toto, than your proposal; to reduce taxes on natural gas producers.

Also note that NG produced from a well requires energy and capital to pipeline it and store it for winter peak use. NG "produced" from a tankless gas hot water heater frees up pipeline and storage capacity and has no auxiliary energy losses once installed.

Best Hopes for Increasing Energy Efficiency,


The real scandal is the 'home appraisal' racket of the banks where investments in energy efficiency are appraised by banks as being worth 50 cents on the dollar, unlike giant bathrooms and kitchens, garages, granite countertops, square footage, and other 100% must-have enhancements that increase the bank valuation of your home.

As far as I can see the only advantage of an EEM is that the back will let you borrow more. On an FHA loan the monthly debt to income maximum is 29% while with a EEM FHA will let you borrow up to a 33% limit based on your HERS audit.

Over the life of the loan you also get the mortgage interest tax deduction and whatever tax credits the government offers as well as state and utility programs.

One problem with the HERS software is that it favors improvements with savings-to-investment ratios greater than 1 and with cheap energy paybacks start at 7 years and go up.

I can imagine these incentives working much better at $4 per therm than $0.5 a therm. (Hello carbon tax!)

The government is offering to a tax credit of 30% off the cost(usually up to $1500 per 2 year) on energy star approved items.
For example if you had to replace your old furnace anyways, a base 80% efficient '3 ton' furnace would cost only $1200 versus +$3000 for a'2.5 ton' energy star condensing furnace while maybe $200 per year. In other words, a 9 year payback (or including the 30% tax credit on $1500 of equipment, a 6.5 year payback; $3000-$1200-.3x$1500/$200=6.5).

That would be fine if you were going to live in that house for 30 years and enjoy $200 savings over 21 years but that's not in our US character; accummulating small advantages, careful planning, foresight, etc. is for 'losers'.

Third of Americans use library computers

SEATTLE - A third of Americans — about 77 million people — use public library computers to look for jobs, connect with friends, do their homework and improve their lives, according to a new study released Thursday.

It confirms what public libraries have been saying as they compete for public dollars to expand their services and high-speed Internet access: library use by the general public is widespread and not just among poor people.

That's more people than I expected who are willing to schlepp down to the library to use the computers.

On the flip side, it's also more people who are affected by the law requiring library computers to have filtering software.

I have a large microfiche well log data base, and I need to print log sections so rarely that I just use the microfiche printer at the local library. I was at the library a couple of weeks ago, waiting for the doors to open so I could use the microfiche printer, at 2:00 P.M. on a Sunday afternoon, and I counted 30+ people waiting for the doors to open.

I expect libraries will morph into the way people will get live-saving information, often even access to a doctor.


Third of Americans use library computers

Has anyone told Spock :-)

USS Enterprise (NCC-1701) library computer

That doesn't seem right, especially since it's mostly young people. It sounds like they're counting school libraries as public libraries.

According to the study, it's not mostly young people. Those who use the library for Internet access come from across the age spectrum. And it clearly says these are public libraries. School libraries are not public.

Both Little Rock's system and North Little Rock's Layman library (NLR has a seperate system of only one library, where LR has what is called Central Arkansas Library System), have good computer access areas.

The WiFi node for the LR downtown library spans out about 3 blocks, over into the river market area where people hop on in the main table seating area.

Not a place filled with a lot of kids, mostly adults all the way up to seniors. Some have computers at home, but most don't, or just don't have paid service yet.

I don't know what the school have, no kids, not much need to go asking about it. But the libraries in virtually every town I have been in all the way back into the early 90's had computer rooms for the public. Utah, Wyoming, Indiana, Alabama, Arkansas. We had computers at home and still used the ones in the library because we could have both of us(second wife),or in the case of 1st wife all 3 of us online at once.

More power to them is all I say.

BioWebScape designs for a better fed future. (hopefully an internet connected future as well)

The EIA briefly had the preliminary 2009 country level production, consumption and net export/import data up earlier this year, I assumed by mistake, and it was later taken down. But when they took it down, they removed the easily accessible historical data tables that I had used for our ASPO presentation in 2009. In any case, a portion of an e-mail from the EIA follows. I'm a little puzzled that it would be "sometime in the next few months" before they get the historical data back up.

One begins to wonder if they don't want the historical net export data to be easily accessible, or maybe it is a technical problem, but it does seem a little odd.

From the EIA:

The preliminary 2009 data was posted earlier this year due to a technical error. It really wasn't ready yet for public release, so it was taken down. The current estimate as to when the 2009 data will be ready is sometime near the middle of this year. There was also a technical issue with the historic data that was appearing on the Country Energy Profiles, so that feature was removed. The current estimate to get this fixed is sometime in the next few months.

Here is a list of top importers, from the EIA country level website. One of the things that the preliminary 2009 data showed was the China has surpassed Japan as the #2 net oil importer.

EIA website:

Top World Oil Net Importers, 2008
(thousand barrels per day)

United States




Korea, South











But when they took it down, they removed the easily accessible historical data tables

Ah that explains why I couldn't find them when I looked recently. I don't know why the EIA should be having a problem as they have massively increased their international accuracy in recent months. In fact in the current International Petroleum Monthly (Table 2.1) they manage to balance 2009 Q3 World Oil Demand/Production to within 0.04 million barrels per day with 84.41 mb/day of reported production - that's an accuracy of better than 0.05%

At this rate everything will balance absolutely precisely soon - a clear indication every single oil figure in the world must be 100% accurate obviously. Or not...

re: Speaker criticizes commuter rail proposal

He said that for the cost of government subsidies per riders of most rail systems, each rider could receive a hybrid car for each year for the rest of their lives. He suggested that the proposed KRM line could cost up to $8,135 per potential rider in government subsidies.

And presumably the riders would have to leave that brand-new $8,135 hybrid car in their garage because apparently nobody budgeted any money for roads for it to drive on, nor gasoline to keep it running. And it's almost certain that the value of the garage exceeds $8,135. The average car in the US has four parking spaces to park in, and the total capital cost of all the "free" parking spaces for cars in the US exceeds the value of all the cars in the US.

Let's take a real-world example of a cost-effective light rail system: the Calgary C-Train.

Total capital cost to 2000: $446.2 million (USD). Weekday passengers in 2000: 187,700. Cost per weekday passenger: $2400. Now, note that this system has been operating since 1981, so that $2400 was spent over a period of nearly 20 years - a capital expenditure of about $120/year/passenger. Try buying a new hybrid car for that price!

As for operating costs,

Although this paper has focused on capital costs, it is noteworthy that the effectiveness of Calgary’s LRT has resulted in a low operating cost per passenger. For 2005, the average hourly operating cost of LRT is approximately $139.40 USD. This figure includes operating, maintenance and utility costs. With an average of 600 boarding passengers per operating hour the average cost per LRT passenger is only $0.23 USD.

The bottom line is that the capital costs of this light rail system were about $120/year/passenger and the operating costs are about 23 cents per ride.

American lobbyists get away with saying the dumbest things because nobody challenges them on their numbers. That's how the American economy got into its current state.

Automobiles have far more utility than a train will ever have. Once you get off the train you must take a cab, buses take too long to get you where you need to go and are unreliable. You end up spending far more in both time and money riding the train and taking cabs to get to someplace you need to be. I rode buses for years, there is no way you can rely upon public transportation to get you to your work on time.

How much did Las Vegas waste on their light rail system? When I was there last time it was cheaper and much faster to take a cab to the end of the strip and back to your hotel when you'd finished than it was to buy a pass.

I prefer to walk when I get off the streetcar.

Best Hopes for Non-Oil Transportation,


Automobiles have far more utility than a train will ever have.

Until you can't get fossil fuels for them any more, which is coming. Did I mention that the above-mentioned light rail system ran entirely on electricity generated by wind turbines?

Once you get off the train you must take a cab, buses take too long to get you where you need to go and are unreliable.

As it happens, I rode the above-mentioned light rail system for some decades. It stopped within a block or two of the skyscraper I worked in. (I worked in several different skyscrapers, but it stopped a block or two from all of them). At the other end of the ride, I walked 5 or 6 blocks home.

I rode buses for years, there is no way you can rely upon public transportation to get you to your work on time.

If you can't rely upon public transportation, you need to fire your local politicians and get a better bunch in because they obviously aren't doing a good job. If you think this can't be done, you don't have much experience in local politics.

How much did Las Vegas waste on their light rail system?

The Las Vegas Monorail was not financed by the City of Las Vegas, and does not actually enter the City of Las Vegas. It is currently in Chapter 11 Bankruptcy, although no public money was lost, and it continues to operate.

In a real city you don't build monorails because they only work in theme parks like Disney World. Las Vegas is kind of a theme park, but it's not like Disney World, although the Las Vegas Monorail uses the same trains as Disney World.

Fossil fuels aren't running out any time soon and there are alternatives if you can afford to pay for them. I would rather ride a motorcycle than ride a train.

Be sure not to wear a helmet ! We need organ donors.

Trains are orders of magnitude safer than cars (last passenger fatality on St. Charles streetcar was 1910 I was told), and motorcycles are an order of magnitude less safe.

All this concern by so-called "conservatives" about "safety" (so lets invade Iraq, etc.) and none about real, personal safety.

Best Hopes for fewer Republicans ?


More to the point how much does Las Vegas waste being a city in the desert? Oh and throw in Phoenix while I am ranting about silly cities in areas that have no business trying to support such big numbers of people in places that they don't really need to be amassed.

Most of the waste comes in turning the desert into a climate changed by man, with all the green lawns, swimming pools, and water wasting gadgets just to have the america dream in a sunny locale.

Sure maybe a small city to support the ranchers, or road stops along the way through town, but why was it ever let to grow so big?

Peak water is going to kill these cities, they could stay in place but they need to reduce their water needs by at least 50% if not 75%.

Rant off//

BioWebScape designs to feed and house people better in the future.

Automobiles have far more utility than a train will ever have. Once you get off the train you must take a cab, buses take too long to get you where you need to go and are unreliable. You end up spending far more in both time and money riding the train and taking cabs to get to someplace you need to be. I rode buses for years, there is no way you can rely upon public transportation to get you to your work on time.

Pure unadulterated Yak Dung! Can't get to work on time? Try getting up earlier...or better yet get a job that allows you to have a more flexible schedule. You MUST> take a cab?! why?

Buses are unreliable?! I rode buses to work In Sao Paulo Brazil for years and was never late once.
Most of the people who commute in the world use some form of public transportation, not cars.

Obviously your statements are made from the very spoiled US perspective of "It's my god given right to live in the suburbs and drive a 4000 lb hunk of steel powered by fossil fuel and let someone else pay the costs..."

I strongly believe that the private automobile centric way of life has to go the way of the Dodo whether you or anyone else likes it or not, it isn't sustainable, period!

Time is money, and motorcycles are cheap. If private automobiles ever go it will be because we're on our way back to Olduvai gorge. If that's the case, there won't be any public transportation because every government entity will be broke. I don't live in the suburbs, I live in a town. I hate cities and don't want to be anywhere near one.

If things were to really ever fall apart, the Broward county area would turn into a free-fire zone.

Time is money

No, it isn't!


Time in physics

Carroll set up the problem by noting that, based on thermodynamics alone, we shouldn't expect that the Universe should be anything more than a momentary dip from maximum entropy. Unfortunately, that means that anything outside of the room we're in, and all of past history, is likely to be unreliable, an illusion of our specific entropy dip. We avoid this thermodynamic awkwardness because the big bang provides us with a low entropy boundary state.

But that creates an issue of something like the anthropic issues associated with our Universe's particular physics—it seems to grant our particular direction of time a privileged position, as compared to an equally attractive alternative direction. Physicists, egalitarians that they are, tend to hate indications of privilege. Carroll, who is a theoretical cosmologist, has been looking for ways to remove our Universe from a privileged position.

The idea he's currently focusing on is whether a universe that looks much like ours eventually will, given a few hundred billion years—a high entropy state of diffuse cold matter—spawn child universes. In a universe-sized, high-entropy field, small individual regions will randomly fluctuate into lower entropy. Carroll thinks it might be possible for these to pinch off from the larger universe, at which point they act as their own, distinct universe. The temporal direction of these baby universes will be random, making our own Universe's arrow of time a matter of chance, rather than privilege.

Time is a matter of chance. Are you feeling lucky today?

Of course they take things further and from a biological perspective they conclude with this:

...So, at least in the brain, the more significant distinction seems to be one between familiar and unfamiliar, not future or past.

Not that this tells us anything about the physics, but it's still pretty interesting.

In any case, whatever it is, and however we as humans perceive and deal with it, I'm pretty darn sure that, cliches aside, Time is NOT Money! ;^)

Something from Greer's article caught my eye:

One of this blog’s readers, Sebastien Bongard, pointed out to me in a recent email that on average, only a third of the energy that comes out of electrical power plants reaches an end user; the other two-thirds are converted to heat by the electrical resistance of the power lines and transformers that make up the electrical grid.

This 2/3 loss figure is out of bounds when considering transmission/distribution losses. The powercos would go broke. My industry sources always reported total losses of from 5% to 10%, depending on conditions. From wiki:

Transmission and distribution losses in the USA were estimated at 7.2% in 1995 [13]. In general, losses are estimated from the discrepancy between energy produced (as reported by power plants) and energy sold to end customers; the difference between what is produced and what is consumed constitute transmission and distribution losses.


And the original source (interesting reading):

I doubt that the total EROEI of the electric grid could be this low, from the ground up to actual work done. IM(Humble)O, for the sake of credibility, JMG needs to question the accuracy of his bloggers' comments prior to inclusion in his posts.

I've heard people who should know better say exactly the same thing. I believe the source of this may be someone confusing efficiency of typical coal fired power plants (about 30% energy in coal converted to usable electricity) with transmission losses.

Ghung, I've already received several other comments along these lines. Dr. Bongard is a physicist, and cited his source in his email to me; I've contacted him to ask for his response to this.

Thanks, John. Looking forward to his response. It may be as Undertow suggests, confusing total losses from fuels (coal) with grid losses.

World Energy Council "Energy Efficiency Indicators," including thermal power plant efficiencies, broken down by region and country. I mean to compile all of this info sometime. Here's the #s they give for the world:

 1980 1990 2000 2007
 n.a. 32.1 34.4 34.3 

Rate of electricity transmission-distribution losses:

 1980 1990 2000 2007
 8.3   8.5  8.9  8.7

Electricity transmission-distribution losses could be more than meets the eye-
India struggles with power theft

15 Mar 2006: Power theft means almost half India's electricity goes unpaid for ...

Add bad indian wiring to this and you get what I call a societal challenge. On top of that more: than 50% of India's inhabitants are set up with only candle lights at night- no el...

Oh ohhhhh Holly Crapola - And the winner is ..

More Indian power theft articles here- it's really BAD

Ghung, we'll see. One way or another, as I see it, it doesn't affect the central point of the post, which is that at some point on the curve of declining energy availability, levels of inefficiency we accept now as a matter of course will become impossible to tolerate.

I agree with the gist of your post (as I usually do). Just don't want to give the trolls anything to latch on to. You know better than I do, if you want quality control, just post it on the Drum.

No kidding -- that's one of the reasons I read the Drum daily. It's also a crucial resource for someone like me, with a background in history and the humanities rather than tech.

Dear Mr. Greer,

I've read your post with some interest for quite a while but I think your most recent post makes assumptions that I believe are wildly inaccurate, for instance:

If I suggest in a post here, for example, that the internet will fail on all three counts in the years ahead of us – very little of what it does is necessary; most of the things it does can be done with much less energy and resource use, albeit at a slower pace, by other means; and the resources needed to keep it running would in many cases produce a better payback elsewhere...

To propose that getting letters and mail sent around the world, using paper, stamps, trains, planes and automobiles is more efficient communication than e-mail or google appears to be false without even a technical enquiry. Do you propose that we should expect to go back to The Pony Express? I counter that argument with the proposition that in The Long Descent, we would eat the horses for protein long before we get back to those simpler times.

...just as the twentieth century was the era of rural electrification, the twenty-first promises to be the era of rural de-electrification.

You don't even mention the fact that life expectancy on a rural farm in the early part of the 20th century was cut short by the reality of back-breaking labor. My great-grandmother died in harness doing the family wash - by hand. If you have a quaint notion that we will somehow go back to the land (with 7 or 9 billion people crowded onto this small planet) while the land is denuded well beyond what it was a century ago I have to say you need to recalibrate your calculations. I don't believe there is any way back to the days of yore.


Joe, of course seven or nine billion people are not going to go back to a preindustrial lifestyle. At the end of the Long Descent, maybe a century and a half from now, the one billion or so survivors will have gone on to a deindustrial lifestyle not that much different from the preindustrial one. Yes, a lot of people will have much shorter lifespans, as your grandmother did, and for many of the same reasons. (I've lived under those conditions, by the way, so I do have some idea of what I'm discussing.) I don't claim that any of this is a good thing; I suggest that it's going to happen whether we like it or not, and that pretending it can't or won't happen is one of the best ways imaginable to make things turn out even worse than they have to.

It's easy to insist, to turn to your more specific point, that the internet is "more efficient" in some abstract sense. To run a postal system, though, you don't need server farms, thousands of them, that use as much electricity as small cities; you don't need factories making silicon chips in clean rooms from raw materials that can't even be provided at the necessary levels of purity at a significantly lower technological level; you don't need what, all things considered, is one of the most complex and expensive infrastructure systems on the planet. All you need, as the postal services of Ben Franklin's time demonstrated quite nicely, is paper and some means of transport. In a world where energy is very scarce and what there is has to go toward necessities, paper and some means of transport will be within reach; the internet will not.

...maybe a century and a half from now, the one billion or so survivors will have gone on to a deindustrial lifestyle not that much different from the preindustrial one.

On that point you and I are in complete agreement. I suppose where we differ is in our perspective of how we might arrive at that "deindustrial lifestyle". I don't happen to believe that it's possible for the planet to lose 90% of the human population in a peaceful fashion. To have a population crash to that degree and a reversal of technology would require violence and savagery on a scale that even the 20th century mind couldn't imagine unless you discuss the Nuclear War Paranoia of the 1950's 1960's and 1970's.

I'm grateful that I'll be long dead before this nightmare unfolds.


I agree, and even some of our most astute observers and commentators feel very uncomfortable going there.
It shuts off possibility, and diminishes understanding.

I think the main question is, how long will the descent take? Greer thinks it will be 150 years or so, in the manner of past regressions. Others believe it will be very fast. The "Tipping Point" article the other day suggests it is very possible it will be fast. If it is, then IMHO, the die off will be extremely fast as well, since world food distribution is on a short term supply train. How much food do you believe is stored within 30 miles of your home? With delivery cut off by a sudden, dramatic, crash, as that article suggests, not only will many people die of starvation from lack of nearby food, but much produce will rot in the field for want of harvesting.

I suggest that with such a crash we are looking at a few weeks, maybe a month and a half. And, that is for death; struggle will end far earlier.



Short of all-out global nuclear war (and granted, that's not 100% impossible, but it doesn't appear to be the subject), what scenario cuts everything off instantly as would be required to kill most of the population off in a matter of just a month and a half??? Even Zimbabwe hasn't managed to take it to that level and they don't even have domestic fossil fuel. I'm not sure anyone ever has managed quite such a scenario except in a very localized disaster or war zone. Are you expecting the Earth to collide with Mars?

It's not as though domestic US or European fuel production is zero. It's not as though governments wouldn't step in with draconian reallocation and conservation measures, as in Britain during the World Wars. So inquiring minds wonder: what is the purpose or usefulness of this sort of blind hysteria?

Paul, good. The US, last I checked, was still the third largest petroleum producer in the world, and it's also well supplied with coal and natural gas, not to mention hydroelectric power and a growing wind sector. That doesn't mean we can dodge the bullet over the long run, but it means that fantasies of instant apocalypse are exactly that: fantasies.

As to why this sort of doomer porn is so popular, well, your guess is as good as mine. I sometimes wonder if it boils down to an excuse for doing nothing, on the assumption that there's nothing that can be done.


I've always considered you a sort of Doomucopian. That is, you see the best possible death, sort of like the noble soldier marching to certain death or the cowboy dying with his boots on.

Here's the problem: Just as economic bubbles tend to overshoot and then undershoot, virtually all bubbles do this. The height of the rise is shown proportionally by the depth of the fall.

Not only are we coming out of the greatest bubble of all time, but all the possible brakes are already dust. Past collapses happened within a structure of global abundance. This time is different.

* Fisheries
* Fuels
* Soil
* Water
* Population
* Unstable weather
* Unstable climate
* Rising seas
* Rising temps

And on and on. There's a story out about the corals dying and how that alone may destabilize whole nations due to the effects on the food chain.

There is no buffer from any direction or quadrant. Society is not a willow, it's an icicle. Heck, it's not even *that* robust; it's a huge snowflake awaiting the rising sun.

Past collapses have been local/regional. There has never been a global collapse for humans within past meaningful time frames, i.e., any of recorded or near pre-history. Nor has there been this level of complexity. The more complex, the more likely to fail,no?

Evert so often I get lulled into thinking as you do, but then I remember how chaotic systems act. I remember about cascading failures. And I remember just how complex we have made our world. Then I remember that so very few have the skills to make a suddenly stricken world stable.

What I think *is* possible is that we hold off collapse for quite a while, but that once it begins to accelerate, it does so quickly.

There is not much resilience. One of the few tools we do have is our penchant for patterns. Falling back into the patterns of nature now will build some resilience in and allow some communities to pass through the storm (less a few marauding hordes, at least). This is why we are studying and teaching permaculture. It's also why Transition is built on a foundation of permaculture. (Not to mention that innovations such as a Food Forest/Forest Garden can do away with a lot of that back-breaking labor.)



How long does it take to die? One individual, I mean. How long? Years? Months? Days?

Or is it seconds? Mere moments? One moment the entire body functions and is breathing, thinking, blood-pumping, and alive, the next moment, the entire body stops. Why does it stop so quickly? Because once the critical systems stop, heart, brain, lungs, nothing else works for much longer afterward.

This is collapse.

A few critical inter-dependent systems failing is all it takes. We've been able to skirt this process as a civilization for thousands of years by usurping more of the planet's resources. Now, with a population in overshoot so highly dependent and inter-dependent on one-time use fossil fuels, all of which is dependent on petroleum.

A few weeks or months is not "instant". It could happen that fast. And if nuclear war is brought up as a reason for a really fast collapse, people will argue that it doesn't seem likely. How likely did Hiroshima and Nagasaki seem to the general population in 1943? And how quickly were those cities destroyed in 1945? The difference is, of course, that then they didn't know, and now we do know we have nuclear weapons.

How much food do you believe is stored within 30 miles of your home?

The amount varies, but several decades to a century in the grain elevators along the lower Mississippi River. Corn, wheat and rice mainly.

Bakery is 7 blocks away, regional supplies of natural gas for baking, etc.

Best Hopes,


Joe, I'm not suggesting it's going to be peaceful, or planned, or any of that; the fall of a civilization never is. On the other hand, I think you're exaggerating the level of violence and savagery required. Remember that even at current rates of demographic contraction, the population of the former Soviet Union will be half its 1980 level before 2100. Once death rates rise well above birth rates, population contraction can set in very quickly.

It never fails to fascinate me that so many people seem incapable of imagining any middle ground between business as usual and total cataclysm. A bit more attention to the history of previous collapses might help.

John - The collapse that was discussed heavily on this site a few years ago was the Easter Island collapse as documented by Jared Diamond.

The parallel of Easter Island and Planet Earth are noteworthy:

1. A remote isolated island with no close neighbors.
2. A society with competing Headmen focused on maintaining political dominance for it's clan or tribe.
3. Denuded environments and deforestation.
4. Ecosystems in collapse due to over-harvesting.
5. An inability of the people of Easter Island to unite in a common struggle to prevent what must have seemed obvious.

Consequences of the above start with starvation, a population crash and then a descent into cannibalism. The most inflammatory taunt of an Easter Islander: "The flesh of your mother sticks between my teeth."


That's true...but it wasn't fast.

It took a couple of generations from the time resource constraints became a problem to the descent into cannibalism.

Oddly, it appeared they did band together. The political groups got larger (as did the statues) as the end drew nigh.

Joint Eurozone and IMF bailout

The political groups got larger (as did the statues)

Thanks for trying to cheer us up Leanan

In the last days of man They will build a tower to reach god and call it the tower of Beijing.

There was a site, I don't have the url (old computer is being worked on) that lists all the building over 30 stories in the world, and China has the most of any nation. They will want to go out with the highest I am sure.

Man I'd love to base jump off that tower, thanks for the picture, dreams of youth.

BioWebScape designs for a better future (and parachute tech)

Yeah this one is Burj Dubai (but the Easter Island and biblical proportions are interesting). We saw that one in China being done, welding sparks cascading out of it at 10:30 at night. Whole place was being built in a big hurry when were there. I'm pretty sure the world has never seen anything like it. Even thinking pyramids, freeways, and the US high rise boom. (Though Panama, Suez and the night lit sky probably show up better from space)

Your points are well taken, but I think many pieces of the tech that we've assembled probably won't come to ground as much as the most intense microchips may. If Email crumbles, for example, I think that we'll be able to keep a range of radio and similar wireless communications quite easily, while maybe not at the level of saturation we have right now, but I certainly expect any town will have the ability to remain connected to their neighbors and the world (not to forget that shortwave at night can give one contact far around the Earth's curvature..) in ways not dreamt of until the 20th century.

I have nothing against the manual options when all the fancy machines are offline, but I don't think all our tech systems are as doomed as you do.


Bob, I've been saying exactly that for years now -- and it's the reason why I took the time to learn enough about radio to get my Extra class ham radio license a couple of years ago. Of course it's possible to maintain some of the less centralized, more handbuilt, more flexible technologies -- I'm also advocating that we get to work dusting off the old "appropriate tech" of the Seventies, now that it's a good deal more appropriate than it was then! To say that the internet and the electric power grid are pretty much toast is not the same thing as saying that we're headed back to the caves; it means that the technology we have some hope of taking with us into a very challenging future needs to be rethought and reengineered along very different lines than the ones we've used in recent decades.

Radios and their use will be here for a long time, you can hand crank the needed power to use them. And Though it might not be a TV'd future at least you will still be able to talk to others around the world and maybe even ship to shore, on close in runs.

What most people think about is the extreme loss of life and all the gadgets we have now going poofy, but the gadgets we have now were built from something that has not gone away, but gone hidden. To many people hardly listen to the radio any more, and they forget that it has been around for a long time.

It'll be the hobbist that is the person that will be the kings of information in the future, not the kids with their cell phones and no knowledge of where all their bright toys came from, history is good for some things other than getting repeated all the time.

BioWebScape designs for a better overall future, food, house, and Ham radio.

A handful of chip fabs in selected areas can provide the minimal needs of the future world (select from, say Sweden, Canada, Brazil, Switzerland, Siberia/Russia, Japan, USA, New Zealand, Iceland). VERY high value per weight, and no deterioration in transit, can make delivery by camel practical to some "remote" areas.

Chip technology can, and is BTW, changing towards lower power consumption. Couple that with greater longevity, and the power demands decrease by a magnitude or more. And then just charge per search (say a 5 to 30 minutes worth of labor) and the # of searches will drop dramatically (but still be there). Another drop in power demands by a magnitude+. So 1/1000th the current power demand to keep Google going. Site next to major hydropower plants if need be. Take two steps down Moore's Law and make a, say, CMOS early Pentium power chip more or less standard in PCs.

Telecom can work well with glass fiber (no raw material constraints) and reduced bandwidth solves a lot of problems. Current tech appears to be (AFAIK) pretty low energy and durable if bandwidth is reduced. Thisd can, of course, be improved. Land networks can be supported by the same tech centers listed above and low to medium bandwidth over oceans can be done by radio or a few submarine cables.

North and South America are linked by land (one tough stretch of 100 km). Europe, Africa and Asia are also linked by land. Australia and many islands are more isolated. Some may indeed fall off the internet except for very limited radio contact (eMails maybe, only the government and industry may be able to download large pdf files and then late at night).

The internet will change and quite likely degrade, but survive in one form or another. DARPA designed it to survive a nuclear war after all.

Best Hopes for the Internet,


Alan, the question I've been trying to raise -- and it fascinates me that almost everyone talks right past it -- is whether it will make any kind of economic sense to keep the internet going in a deindustrial future. The usual response -- yours here is a good example -- is to insist that it's technically possible, claim that the internet is too useful to let go, and jump from there to the claim that of course the internet will keep going.

The problem with that logic is simply that if the necessary jobs can be done more economically by some other means in an energy-constrained future, then they will be done that other way. In a world where half the surviving population farms for a living and energy supplies are tightly constrained in concentration as well as quantity, there are many better ways to handle information flow than vast server farms that burn through as much electricity as a small city! A shortwave radio net, using packet methods as long as computers are available, and downshifting to more human-centered methods as human labor becomes cheaper than concentrated energy, is one obvious choice.

The irony here is that the same sort of logic you're displaying here gets used against you all the time when you advocate for rail. How many people insist to you that it's technically possible to run cars on something other than gasoline, and cars are just so much more useful than trains, so of course we'll have cars? They're wrong, too; in a future of energy constraints, rail has all the advantages, and the extravagant technostructure that makes cars seem to make sense will go -- well, the way of the internet.

Information storage has been going to digital formats for a long time. The company I worked for in Mapping, was taking almost as many hardcopy maps from various sources be they local, state, federal or international and converting them to digital because the updating time was way lower and the error checking rate way higher. Drawing paper maps will never ever go out of style, as anyone who has ever traveled anywhere needs to know where things are, and maps have been around for a long time. The better the map the better you'll get where you are going. But doing that with a computer is so much faster and easier that those people who have the know how will try to hold onto that ability for as long as possible.

Transfering that date is eaiser via a network of linked computers, if you use WiFi instead of land lines you can move the data around with a bit more ease and less cost I would think at least for a while.

Cars are not needed in that in an energy constrained world, there will not be many people driving anywhere alone like we do now. In the past going to town in a horse an buggy was a family affair. Car grid roads will degrade to the point that traveling via car on gravel roads will drive people toward rail( pun intended ).

I am not a fast crash doomer, but I know that some things can fast crash, doing research for one of my stories, It's posted in my blog(see user profile), I found that there are things in this world that could kill a lot of us, especially in our interconnected by travel world. That they haven't yet, does not mean that they can't or won't.

Recent fear of SARS and H1N1 and all the others, are there, and could get worse if something just got loose a bit longer due to no money in the chain to fight it, or hunt for it. That is where any down hill portion of the future can lead to crashs.

My guess is that a lot of little things will be done, some areas will have local internet, others will have a few less rails and more horses, we will slowly break up into kingdoms and go back to castle moot cities, but with a bit more tech than those days of old.

Each country will go back to fending for itself in the long run of 150 years out from today, with trade by ships and camel routes, and warring tribes hunting for a better pot of resources hidden in old tombs of city towers, etc etc.

We'll always know how to make cave drawing though, and we'll always know how to kill one another, so those won't get lost with time.

Everything else in the middle ground is up for grabs.

BioWebScape designs for a better fed and housed future.

In my opinion the Internet is both a maturation and an over-complexification example of communications in general. Or, in other, words, there is the Internet from a protocol perspective and the Internet from a usage perspective.

The latter aspects are obviously a symptom of a high-energy, complex lifestyle. The former are a robust and mature result of input by many intelligent contributors.

In between is the infrastructure, with a scaling point driven by current usage and a design driven by the Internet architecture. Servers may fail, rates may reduce, and availability may decrease, but the fundamental design should persist.

TCP/IP and Ethernet, the connectivity protocol workhorses of the Internet, are now supported over all sorts of physical media, and there is no real reason to put this genie back in the box. Packet radio, telephony links (dial-up or DSL), wireless modems, fiber -- all can be employed to maintain connectivity.

Sure, it's nice to have a 50Mbps connection to support several channel of on-demand HDTV, but 28.8K dial-up will still provide all the text you'd ever want to read.

In a big crash, I'm sure corporations will go bankrupt and significant issues will arise. I am really pretty sure that basic connectivity will persist. The only real issue is power, and that's really more a question of priority than anything -- what fraction of existing applications will still cost-justify their power usage?

I'm not that concerned about power. I think it's economics that will kill the Internet.

I agree with you about the robustness of net. It's not actually designed to survive a nuclear war, but it's clearly more resilient than, say, the telephone company. We don't really need those server farms. They exist to power sites like Amazon and YouTube - site that cannot exist without a lot of people spending money they don't have on stuff they don't need.

But sites like that are the reason a lot of people pay for Internet access. All that content on the web is supported by corporations, advertising, and/or individuals using their own time and money. I could see a "death spiral" developing. Money's tight, so people begin dropping their ISPs. (The number of households with phones went down during the Great Depression.) Sites start to go dark, because they're not making money. ISPs go out of business. The net starts to contract. As people and content drop off the net, even those who can afford Internet access lose interest in it. When their computers fail, maybe they don't bother to fix or replace them - especially if they've become very expensive, instead of ever cheaper, like we're used to.

The people left using the net will be hobbyists, like ham radio operators. But they aren't going to be making their own silicon chips, and without a critical mass of users, there may be no incentive to keep the expensive manufacturing infrastructure going.

Yes, the Internet is useful. But one thing that jumps out at you if read Diamond and Tainter is that even very useful knowledge can be lost.

If the DNS system goes down the internet is useless. Local area networks can still operate.

The DNS system is just a handful of master servers. Even if they go down you're still able to connect via IP, just unable to resolve domain names.

Not really, DNS is distributed and as long as you can access a server that knows the name you are looking for it works.

An intermittently balkanized internet would dramatically increase the importance of regional top level domains relative to global TLD's for exactly that reason. ISP and corporate servers would have more complex configurations, but not horribly so.

Perhaps if I had quailified "useless" with for the majority of people". How many folks even know what an IP address is?

I think that the same applies to many of our systems. A few people will have the knowlege/ability to adapt current systems to a different (lower) level of functionality. Maintaining them over the long term will be another issue.

All I was saying is that while you might not be able to reach Google, Facebook, or ToD (at all) you would be able to reach your local bank, town hall website, and local/regional businesses and forums by name still. I'm a network administrator, and I hate typing raw IP addresses. For my sake I would make sure my DNS servers kept track of as many second-level name servers as possible if access to the Top-Level servers got erratic. The other people that use those servers would benefit.

The Internet will continue to function pretty normally even as it degrades, it just won't be 24/7 99.9999% availability video-on-demand types of functionality. The knowledge is well spread out and well documented in the RFC's (including how to deal with unreliable and intermittent connections). (IPv4) or the newer generation (IPv6) that is being handed over the old limited one of ages past Telnet and BBS's MuDs era. I can wade through most of the techno-jargon but I have been out of the loop for a while. Started my life as a Programer, but I was to multi-tracked and went into CAD and then off elsewhere. But almost all of my jobs have been linked somehow with my techno-junkie and hacker ideas (Yes Both kinds). I was a Cypherpunk for a while, but I was involved in earlier groups while going to college the first time around, IRC was a great way to connect with like minded people. My first computer, ran off a cassette tape drive, my next one had to be booted from a floppy, It was a wonderous time when I got to have 2,400 baud modem speeds.

Even today when I think about it, I am going along and thinking how slow the net is and I have the hit myself in the head, used to be a lot slower and pictures took a while to crunch out of binary files off ftp.

I don't doubt that it will be all gone with enough time if things get really rough, but I would hope for staying power, even though I know complex things like the connections of tiny wires on a wooden motherboard pounded on with flint knives might fizzle.

BioWebScape designs for better future.

John, I think that you are making the error of seeing the internet of the future as a duplicate of the internet of today. It will not be.

As pointed out, energy use for server farms could be 1/1000th or 1/100,000th of today and still retain most of it's fundamental economic utility.

Farmers will want to know about how crop storage in other neighboring areas is. Weather, insects, new varieties of plants and ag center results from comparative farming techniques, biodiesel alternatives (soybeans vs. cottonseed oil, etc.). Techniques for restoring degraded land.

Farming is a relentless series of optimization exercises and information is critical for that. Often timely information.

Add medical information, basic civil and other engineering know how, etc.

We can speculate about how the internet will evolve, but there is no doubt that it will change to suit future needs.

Best Hopes for Communication,


BTW, I can see the demise of postal service in favor of the internet if one must go.

Of course, the internet could be slimmed down a very great deal without killing it off. Think back to the pre-Windows, pre-WWW days. Monochrome screens, and nothing fancier in the way of graphics than Gopher. The amount of computing power and storage required to support that style of internet must be a tiny fraction of what is required today. It seems rudimentary now, but even that would sure beat nothing at all.

Also, in a resource-constrained world with a rapidly declining economy, I seriously doubt that petabytes of information are going to continue to be stored and made available to all for "free". At some tipping point, the internet will have to shift to a cost-recovery basis, and that in itself will slim things down considerably. If people have to pay-per-view, then there will be a lot fewer views; fewer paid views will result in less things being available for view. The demand for bandwidth and for server capacity will decline, maybe in a death spiral, or maybe leveling off at some much lower, more sustainable capacity.

The internet might still be there, most of us just won't be able to afford to surf it very much, and there will be a lot less stuff worth looking at anyway.

Today, the two viable "for pay" sections of the internet are sex and financial information.

I could see survival (including farming) techniques being added to the "worth paying for" list post Peak Oil.

Co-ops of every type could thrive with internet connections.

All with low bandwidth.


Let me restate an earlier point.

Farming is a relentless pursuit of optimization.

It is not the simple plant, tend and harvest that many non-farmers suppose.

There are a vast number of variables, and limited resources (including time and labor). Information, especially current information, can significantly help this optimization.

One example, a decent 5 day weather forecast can be invaluable (depending on the crop). But crop mixes and schedules are as valuable, as well as information on many other factors.

What to do when wet spring weather prevents a timely planting of corn ? Plant late and hope for a late frost ? Plant soybeans instead ? But who has seed ? Or sunflowers or ??

If you plant corn late, should it be spaced further apart to encourage faster growth ? When should late corn be fertilized ? Is one variety of corn best for late planting ? Who has any extra seed ?

I can see a basic internet being well worth supporting just for farming applications.

Best Hopes,


My grandfather (sharecropper @ age 14, owned 800 acres of Kentucky bluegrass in the end) said that he made more money thinking and talking than he did working in the fields. Doing the right thing at the right time was crucial, more so than the sun up to sundown work (although that was required as well).

One road we are all too likely to find ourselves travelling in the coming century or two will indeed look little like the days of yore. I'm looking at some possibilities sketched out in Limits to Growth: The 30-Year Update, e.g. scenario 1 on p. 169. Looks like a population peak around 7.5 billion in 2025, declining to around 4 billion in 2100. I don't know how elaborate their demographics is in this model. The population will decrease to whatever the available resources can support, one way or another. Just because life is a lot easier for us than it was in the days of the Pony Express, doesn't mean that life can't get a lot harder. It is already a lot harder for many people in the world today.

Yup, as I said below, someone has confounded transmission losses with conversion losses. This doesn't affect the gist of the original article that much (given that one accepts the overall crash scenario, which is a whole other question that will be argued endlessly elsewhere) but clearly it needs fixing. Conversion losses nearly always come into play when converting energy from one form to another because (1) hardly anything ever attains perfect theoretical efficiency, (2) electrical energy is essentially pure exergy while coal or gas energy is not quite, and (3) combustion driving a heat engine is an indirect way of converting fossil fuel energy to electricity and imposes a (Carnot) loss that (for realistic fuel-driven plants) is approximately inversely proportional to the turbine hot-side temperature. (If you could run the hot side at the temperature of the surface of the Sun, the loss could conceivably be made negligible, on the order of 5%. But in practice you can't, since any material you can build the piping and turbine out of will have a disconcerting tendency to vaporize at such temperatures, to say nothing of liquefying at considerably lower temperatures.)

This might be the source: http://www.meridian-int-res.com/Energy/Renew.htm

Between half and two thirds (50% - 66%) of the electricity generated by central electricity generating stations in the USA is wasted in power line transmission losses. (Source: "National Energy Security Post 9/11", US Energy Association, June 2002, P34).

It does seem high, but I also remember an IEEE article from a few years ago that claimed similar losses. Can't find it right now, though.

That USEA document appears to be here. On page 34, it says nothing whatsoever to the effect that "Between half and two thirds (50% - 66%) of the electricity generated by central electricity generating stations in the USA is wasted in power line transmission losses." There is a graphic on page 34 showing conversion losses of that magnitude. On page 52 it also says "conventional electric power plants convert only about one-third of their fuel source to electricity." Certain modern designs can take that to half. In other words efficiency ranges from 33% to 50%, conversion loss from 50% to 67%.

Quite obviously some innumerate soul along the way has confounded the conversion losses with transmission losses, and the error has now spread. This probably doesn't alter the gist of Greer's text that much, except that creates a gross exaggeration of the relative transmission loss to remote rural areas versus cities. In the sort of crash he envisions, if rural lines go out first, it won't be because of (nonexistent) absurd transmission losses. It'll simply be because there's a lot of line per household, they're paying the same rates as anyone else, and the cross subsidy won't hold up well if things become tight, even without a collapse. (Some of the rural folks paid upfront when their line was first put in, but that's a sunk cost, and in many respects, like it or not, sunk costs just don't count.)

Responding with average losses may be misleading. One must also look at the extreme examples where for example a hydropower producer has electrical energy costing 0.5 cents per kilowatt at the busbar but limited market weighing a 1500 mile distant market worth 10 cents per kilowatt. Even if power losses make this power value at 5 or 7 cents at the other end the power company is still gaining profit from running hydropower plant at capacity.

I cannot give citation on this example but worth checking is efficiency of power transmission from British Columbia to Southern California.

There's a 1000KV DC line from WA State to SoCal. If they're using that, efficiency is pretty high.


Note the verticle dark line through OR and NV.
Straight brown lines are proposed HVDC.

According to this chart from Lawrence Livermore labs, total energy supplies going to electricity generation equal 39.97 quads. "Rejected energy" equals 27.39 quads, which is 69% of the total. The remaining 31% goes to residential, commercial, industrial and transportation end uses. I am guessing that the "rejected energy" figure is a combination of losses in both the generation and transmission processes.

RE : Warren Buffett sees strong rail system as key to U.S. growth

Yeah I guess he would but the Oracle of Omaha speaks with forked tongue:

The Climate Killers
Meet the 17 polluters and deniers who are derailing efforts to curb global warming.

Warren Buffett, the Profiteer.

Despite being a key adviser to Obama during the financial crisis, America's best-known investor has been blasting the president's push to curb global warming — using the same lying points promoted by far-right Republicans. The climate bill passed by the House, Buffett insists, is a "huge tax — and there's no sense calling it anything else." What's more, he says, the measure would mean "very poor people are going to pay a lot more money for their electricity." Never mind that the climate bill, according to the nonpartisan Congressional Budget Office, would actually save Americans with the lowest incomes about $40 a year.

But Buffett, whose investments have the power to move entire markets, is doing far more than bad-mouthing climate legislation — he's literally banking on its failure. In recent months, the Oracle of Omaha has invested billions in carbon-polluting industries, seeking to cash in as the world burns. His conglomerate, Berkshire Hathaway, has added 1.28 million shares of America's biggest climate polluter, ExxonMobil, to its balance sheet. And in November, Berkshire placed a huge wager on the future of coal pollution, purchasing the Burlington Northern Santa Fe railroad for $26 billion — the largest acquisition of Buffett's storied career. BNSF is the nation's top hauler of coal, shipping some 300 million tons a year.

Currently coal ash is still not being regulated as a hazardous waste and if TPTB have any say in things it won't be in the future either.


If you cap carbon emission, then the emission is just done somewhere else. It's a tax. Like all taxes it distorts the economy away from direct carbon emission. It probably doesn't tax carbon emitted in other countries to produce X Y an Z that gets imported. Carbon emitted no doubt stays the same, although there MAY be some strategic benefit to distorting one's economy away from carbon dependency by moving that industry offshore, however if one still depends on the result of carbon use ( this time imported ) then one is still dependent on carbon. No benefit - just a tax.
Recycling and conservation increase total resource consumption and total pollution, because they make the economy more efficient and so bigger. Recycling should be done only when it pays and the same goes for conservation of resources. See Jevon's Paradox.

Like all taxes it distorts the economy away from direct carbon emission.

Should be:

Like all taxes it distorts the economy; this tax distorts the economy away from direct carbon emission.

CodeMonkey, since no one had replied to your post, you could have simply hit the "edit" button and corrected your mistake. Then save it again and all is well. There was no need to correct it in a seperate post.

Ron P.

You can edit your comments, as long as no one has replied to them yet.

It's funny that as our society continues its rapid descent downhill, we look to guys like Warren Buffett as sort of quasi-mystical saviors, wise men of a saner, bygone era, when value was king, and investors thought on long term horizons and had a strong principled core.

But Buffett, like everybody else, is just interested in the buck.

Nicely said!


The biggest climate polluter is your everyday Human that drives a car, waters his green lawn, eats packaged meals, and dumps his trash on the side of the road.

Exxon Mobil just pumps what people want to buy, stop buying it and they might not be the biggest.

The article is full of hate language phrases, not being much better than those the author is railing against. And BNSF is good for a lot more than just moving coal around, rail has a higher ton per mile ratio than anything else out there. Those rail lines and tracks are worth gold in an energy constrained future.

Yes I was ranting,

BioWebScape designs for better food and housing in the future.

BNSF is the largest container railroad in the world (the Russians are #2 I believe). LA to Chicago is their TransCon backbone.


Saudis to Turn Increasingly to Oil to Meet Power Needs

Saudi demand spikes in the summer, this last June increasing 162% over February. The story refs a JP Morgan study suggesting 750 kb/d of additional oil will have to be shunted over for peak electrical demand by 2012; the summer peak is about 125% of the yearly average, using JODI numbers; KSA consumption has increased 4.03%/5.14%/6.33%/7.14% 2005-2008. Extrapolating this out we get 7.95%/8.76%/9.57%/10.37% for 2009-2012 and 3379.23 kb/d demand in 2012, spiking to 4,224 kb/d in June, using a base of 2380 kb/d from the EIA for 2008 - this differs from what the graph below suggests, nb. 4,224 kb/d is about 1/2 of current KSA net export capacity. For overall demand it would vault them ahead of 3/4 of the BRIC nations, ahead of all of Africa.

With any luck they'll calm down some, average consumption growth 1990-2002 was "only" 3.38%. But growth is inevitable, 1995 was the only year in all of that time with any contraction. But I'm not holding out hope here; don't know what the 2009 figure is as of yet, but this graph of Rembrandt's suggests that for that year at least they were following my high demand scenario:


I posted a similar story about summer demand a few weeks ago, and in general [in a different article] we get confirmation of what is being discussed here:

Middle East oil demand to outpace world with petrodollars

More specifically, the Saudis are rapidly building up their electrical grid - with very ambitious plans to link up first with other Gulf countries, and then to link up with Europe.

I don't know how far they will get with those plans as their own requirements for oil use rapidly increase, but it will certainly be 'interesting' to see what they do to meet the demands of a growing population and hot summer days.

Saudi considers all energy sources for power
by Reem Shamseddine on Thursday, 25 March 2010

Fast growing power demand is forcing top oil exporter Saudi Arabia to look at all sources of energy, the kingdom's deputy minister of electricity said.

Saleh Al Awaji, deputy minister for electricity told Reuters in an interview on Tuesday that demand grew last year by more than 8 percent and some regions in the kingdom saw demand rise by at least 13 percent.

Gulf countries have similar patterns of consumption, which sees demand peak in the summer. They have taken measures to connect their grids in an effort to stave off shortages.

The first phase of the $1.6 billion project to link the power grids of Saudi Arabia, Kuwait, Bahrain, Qatar was completed last year.

I was just looking at some weather stats for Riyadh, Saudi Arabia for July '09/'08... looks like the average mean temp in those months was 97F/98F... Lowest temps recorded for the month being right around 80F. Humidity wasn't too oppressive, but the heat is insane. For comparison, here in southwest WI the warmest July on record had an average temp of 79.5F in 1936... To survive there without vast imports and AC would be utterly impossible. Their out of control population, now around 27 million, in a land of sand and sun is just crazy. Nothing about that country is even remotely "sustainable".

They used to live in tents and survived just fine, but I know with most people especially those growing up now, they can't fathom living without AC.

I have done it in both Alabama and Arkansas in the ranch style homes of the late 60's, you just open the window and shade them and don't do a lot of hard work outside if it is real hot.

One summer in 1980 we lost our central AC here, and had to put a room AC in the bedroom that me and my brother slept in, my asthma was killing me because of the humid heat, we had the longest run of above 100 days on record, I think it went 20 straight, My garden was toasted. Houses around here weren't built for that kind of heat. But older ones were, high 10 to 12 foot ceilings and tall windows and shaded porches, and tall shade trees.

I lived in such a house in Mississippi, while going to Mississippi State University for Landscape Architecture, I did not have central heat, and did not run the AC because of the cost of power, and my limited budget, but high ceilings and fans helped.

The desert peoples will get used to what their grandfathers knew as life on the sands of time, it might make them surly, but they and we will get used to it again.

Modern man is spoiled, after all for 1,000s of years we survived without Central AC we can in the next 1,000 years, this is just a bubble of fantasy land in the middle, stories for the future camp fires.

BioWebScape designs for a better fed and housed future.

The seasonal volatility in Saudi oil consumption is very high.

JODI data for Jan 2010 has just been released.

Jan 2010 consumption was 1.65 mbd up 19% from Jan 2009. This implies that Jun 2010 consumption could be over 2.6 mbd. Jun 2009 was 2.2 mbd.

Saudi's increased burning of oil to produce electricity might partly explain why their Ras Tanura 0.4 mbd refinery has been delayed for at least five years.

It doesn't make sense to build a new refinery if the oil is burned instead of refined.

My updated forecast for Saudi Arabia is shown below and assumes that URR=185 Gb and extraction rates do not exceed 5% per year. Saudi Arabia's current production of 8.25 mbd is projected to stay constant until April 2011. The current extraction rate is 4.8%. World demand is expected to increase in a few months and Saudi Arabia may increase production a little.

It's also worth noting that Saudi Arabia has no new megaprojects until Manifa in 2015 so it has to rely on existing fields for production.

There was also some confusion at CERAweek when the Saudi Aramco chief said that "Aramco plans $90 billion in additional oil and gas projects between now and 2015".

Why would Aramco need to invest in further oil projects when Aramco has said they have about 4 mbd spare capacity? Perhaps almost all of the investment is for gas projects or Aramco really doesn't have 4 mbd of spare capacity.

click on chart for hi-res version

What a chart...
Those annual peaks takes place mid-summer northern hemisphere - assuming transport and other general oil usage is evenly increasing (straight line)- is it fair to guess the peaks are there to cover for "Air Condition" :-), only ?
Anyhow- "they" seem to have some special needs midsummer. Last summer was really nasty for them, thats for sure.

Edit : Alright Ace's add-on explains it all, thanks. Flashback to the 50's - oil for el. is progress inverted - Peak Oil came early this year.

Can't load the chart - what am I missing?

Thanks for the links, Charles and Tony. They do have Karan and Arabiyah to draw on, but their options are surprisingly limited what with associated gas being under quota. 2.6 mb/d = 8% growth as my forecast suggests. Of course BP have different numbers than EIA for 2005-2008: 4.86%/4.66%/10.33%/7.66%. That might suggest they are slacking off a bit now, but the average is 6.88% to the EIA's 5.66%. Wonder whose numbers track actuals the closest?

Checking the news I find this: No More Gas For Saudi Private Cos - Industry Source (Asian Chemical Connections)

By John Richardson

The gas feedstock shortages in Saudi Arabia - which we have commented on before - are such that no private company will receive any allocations in the future, claimed an industry source.

"It's only going to be for Saudi Aramco and SABIC from now on," he added.

Several privately-owned propane de-hydrogenation (PDH)-polypropylene (PP) plants have recently been commissioned in the Kingdom, whereas private ownership of crackers has never really got off the ground.

Saudi Arabia's Minister of Petroleum and Mineral Resources, Ali Al-Naimi, was reported to have said last December that the Kingdom was working on making more ethane available for petrochemicals.

But several well-placed sources we have spoken to have said that this was unlikely to happen anytime soon.

Can't load the chart - what am I missing?

The files are http://www.theoildrum.com/files/SaudiMT20100326.gif (low-res) and http://www.theoildrum.com/files/SaudiMT20100326.png (hi -res)

However both of these download as an HTML TOD Front Page!! A quick test shows any random string I type in the /files directory does the same instead of giving the expected not found error. I suspect the files are not called what ace thinks they are, or are not there, or a permission error prevents us from seeing them.

Whatever the case we shouldn't see an HTML page served up as an inline embedded GIF/PNG or similar. Unless TOD is trying to hack our machines that is!! :-) But I'm sure it's a genuine error at the TOD server and needs fixing (might even set off some security software).

Actually I am referring to your chart :-)

Some articles just speak for themselves, an item linked on the Drudge Report:

Gas up $1 a gallon on Obama's watch

Gas prices have been on a roller-coaster ride over the past decade, dropping to near $1 after President George W. Bush's first year in office, crossing the $2 mark in 2005 and reaching $4 in June 2008 before Congress and Mr. Bush took action, lifting presidential and congressionally imposed moratoriums on expanding offshore drilling on the Outer Continental Shelf. Mr. Bush lifted the presidential moratorium in July that year. The congressional moratorium expired Sept. 30, and prices fell precipitously, dropping more than $1 in October.

"The reason that it dropped is because the U.S. sent a signal to the markets, by dropping the moratoria, that we're going to drill on our lands. Obviously, we never followed up, and thus you see the crisis gradually rising," said Rep. Doc Hastings of Washington, the ranking Republican on the Natural Resources Committee. He said the solution is the same for both the short-term and long-term prices: Assure the markets that the U.S. will pursue domestic exploration.

I know I should no longer be surprised by the lack of knowledge on this topic, but still....


This says it all (from xkcd):

I know I should no longer be surprised by the lack of knowledge on this topic, but still....

Oh, I think it's much more cynical than that.

That writer knows doggone well that "correlation does not mean causation."

But in politics, anything goes--as long as it "meme" sticks.

William F. Buckley Jr. used to have a great bit about the causation vs. corelation discussion: He said that he wore narrow neckties throughout the Cold war and we never had a nuclear war, therefore, his wearing narrow neckties must have saved the world! Thank me, he said, for never abandoning narrow neckties!


The problem is that correlation DOES imply causation. Just not necessarily between or among the variables being correlated, and it is only an implication, not a durable meaning or proof.

There is also the problem that humans evolved to process correlations as possible causations.

Then you should than the Somali pirates for doing their part to combat global warming, as there is a correlation between rates of piracy and global average temperature.

As the mouseover text to the posted XKCD says, all it really does is gesture furtively and mouth "look over there". An implication is stronger than that (at least in logic, which is what the saying applies to).

Face it - American society is so addicted to cheap gas, and so fractured, that we're all but finished.

With the wide open frontier, endless resources, and a growing economy, our system works very, very well. It will be exactly the opposite in the future, if it is not already happening now.

You see, it's easy to say that oil rises $1 on Obama's "watch," because, of course, it did. But all that will mean is that in the turmoil to come, Republicans will gain back seats etc., as an increasingly poor and angry populace doesn't want to give up its toys or the American Dream, so they want to drill baby drill. And of course, they'll be elected but we'll continue the slide, and then Democrats will be elected after that, as liberals get angry and want cheaper healthcare and to tax the rich and end wars, etc. None of this will ever come to pass since we lack a governing consensus on anything. So there will never be big, bold moves to end our addiction. We are oil (and debt) junkies in complete denial of everything. It's terrifying to watch.

I've learned to stop reading the news (especially the financial news) so much, because sometimes it makes me feel like passing out.

In a functioning, literate society, Doc Hastings would be tarred and feathered for this nonsense.

Having access to so much information is a blessing and a curse. Surely in Roman times it took awhile for the average or even well connected citizen to realize things were over. But now, you can watch the collapse of the U.S. as it is happening - slow motion in our usual timeframes, but very quickly in historical time.

I forced myself to read the article. There are so many inconsistent messages and false assumptions here, such as market forces are working, and then not working, and we know for sure there is oil in the Outer Shelf - I don't even know what their point is, except maybe that political events have a major impact on markets. But if politics control markets, then they are not really markets - so I am left thinking there is no point here at all. This is what passes for oil news as Exportland 2.0 takes effect.

the headline could just as easily read "gas down $1 on obama's watch".