Drumbeat: April 24, 2010

Shale-Gas Drilling in U.S. May Stall as Below-Production Prices Erode Cash

Drilling in U.S. shale-gas formations may tumble as companies run short of cash after prices for the fuel languished below the cost of production for more than a year.

Natural-gas explorers will realize the need to cut drilling in the next few months, said Murry Gerber, chairman of EQT Corp., the largest producer in the Appalachian Basin. “I think the rig count is going to come down, and then you’ll see the production follow,” he said in a telephone interview.

Natural Gas Rises as Decline in U.S. Gas Drilling Signals Lower Production

Natural gas futures rose in New York after data showed the number of gas drilling rigs in the U.S. fell for the first time this year, a sign that producers are cutting exploration and production.

The number of gas drilling rigs fell 17 to 956 this week, the first decline since Dec. 25, according to Baker Hughes Inc. Gas also gained as sales of new U.S. homes surged last month by the most in almost five decades, boosting optimism that demand for the industrial fuel will increase.

State Decision Blocks Drilling for Gas in Catskills

New York State environmental officials announced on Friday that they would impose far stricter regulations on a controversial type of natural gas drilling in the upstate area that supplies most of New York City’s drinking water, making it highly unlikely that any drilling would be done there.

Although they did not impose an outright ban on drilling, state officials said that any natural gas company would have to conduct a separate environmental impact review for each well it proposed to drill in the Catskills watershed, which supplies the city.

Those rules also apply to the smaller Skaneateles Lake watershed, which supplies drinking water to Syracuse and some other communities.

Russian gas exports increase 120% in first quarter

Russia's natural gas exports in the first quarter of this year reached 52.1 billion cubic meters, a 120 percent increase year-on-year, the Energy Ministry said Friday.

Russia exported 15.15 billion cubic meters of gas in March, a 110 percent growth over last March.

Crude Oil Increases as Dollar Declines, Bolstering Appeal of Commodities

Crude oil rose as the dollar fell against the euro for the first time in seven days, bolstering the appeal of commodities as an alternate investment.

Oil increased 1.7 percent on the euro’s strength after Greece called for activation of a bailout package. Prices also advanced after the government reported that sales of new homes surged in the U.S. in March and orders for durable goods excluding transportation climbed.

The Return of Oil

While U.S. President Barack Obama may have made much recently of steps to achieve "energy independence," the country's reliance on imports from Canada -- as well as the volatile Middle East and other nations around the globe --won't be changing soon and perhaps not for decades.

Oil Spill From Sunken Gulf of Mexico Platform May Be Dispersed by Storms

Storms forecast to rumble through the Gulf of Mexico may dissipate oil spilled after a Transocean Ltd. drilling rig caught fire and sank this week, the U.S. Coast Guard said.

Search Ends for Missing Oil Workers

NEW ORLEANS — The Coast Guard called off its search Friday for 11 oil rig workers who had been missing since an explosion on the rig Tuesday night in the Gulf of Mexico.

“We have just made a very difficult decision,” said Rear Adm. Mary E. Landry, the commander of the Coast Guard’s Eighth District. “After a three-day search covering 5,300 miles, we have reached a point where reasonable expectations of survival has passed.”

Big question now: How did rig blowout occur?

Transocean officials have said a blowout within a deep oil well was likely to blame for the catastrophic blast late Tuesday night at its Deepwater Horizon drilling rig, but speculation still abounds about how exactly it happened.

While a blowout — or an uncontrolled release of oil or gas from a well — is uncommon, it’s still more rare for one to occur under the circumstances in which the rig was operating, experts said.

Ripple Effects After an Offshore Oil Rig Explosion

The explosion is bound to generate criticism about the safety of offshore oil and gas drilling — coming just a few weeks after President Barack Obama announced support for increased offshore energy exploration. The reality is that while the industry has improved safety in recent decades, drilling for oil and gas in deep water is inherently risky. Seawater is corrosive to equipment, while wind and weather can turn lethal with little warning. A spill that can be relatively easily contained on land can quickly bleed out of control on the water. "Obviously the more you explore, the greater risks you have," says White. "What you need to have is a balance."

Oil Drilling Accidents Prompted New Safety Rules

A federal agency that oversees offshore oil drilling identified so many accidents in a study published last year that officials were moving to create new safety rules before this week's oil rig explosion in the Gulf of Mexico.

Explosion in the Gulf

Nearly a dozen people are missing and presumed dead after the huge explosion aboard a deep-water oil rig in the Gulf of Mexico. The accident provides further evidence that despite advances in technology, oil drilling poses big environmental and human risks.

Ukraine opposition says to prevent Russia fleet deal

(Reuters) - Ukraine's political opposition on Saturday sought to rally people against a decision by President Viktor Yanukovich to allow the Russian navy to stay in Ukraine's Crimea until 2042.

Iran oil capacity more than 4.1 mln bpd - minister

TEHRAN (Reuters) - Iran has the capacity to produce more than 4.1 million barrels per day (bpd) of crude but is pumping at well under that level due to OPEC restraints, Oil Minister Massoud Mirkazemi said on Saturday.

"Iran has always tried not to go beyond 3.6-3.7 million bpd to remain committed to OPEC quotas," Mirkazemi told a news conference at an oil and gas trade fair in Tehran.

Oilfield Margins On the Rise, Schlumberger Says

Schlumberger Ltd., the world’s largest oilfield contractor, said international profit margins are poised to rise. The company’s shares gained 6.6 percent.

Syncrude faces multimillion-dollar tailings costs

(Reuters) - Syncrude Canada Ltd, the country's largest oil sands producer, will spend hundreds of millions of dollars building two plants to reduce toxic waste under recently tightened regulations, it said on Friday.

Drilling off Georgia's coast draws proponents, foes

At a meeting about offshore drilling Friday, area environmentalists had a clear message for the federal Minerals Management Service:

Get lost.

Foreign Oil Dependence: Why the Crux of the Energy Issue Centers on this Fossil Fuel

Picture the scene: It’s 1856 and the Industrial Revolution is just getting underway in the United States.

As America ratchets up its manufacturing and innovation and grows into a vibrant industrial hub, the driving force behind this growth is the greatest energy windfall in the history of the world…

The discovery and commercialization of oil.

Quite simply, it’s a time that heralds the “Age of Oil.” A new energy era.

Flash forward to 2010: We’re still relying mostly on oil to satisfy our energy demands. But the end of the “Age of Oil” is on the horizon and the world faces major energy problems. Supply. Demand. Cost. The environment. The list goes on…

These problems affect the prosperity of countries and people around the world.

That’s because when it comes to economic growth and the future of mankind, there is nothing more precious – and more crucial – than cheap energy.

County takes Rodeo refinery to task over expansion project

ConocoPhillips has not fulfilled several conditions related to an expansion project at its Rodeo refinery and must show compliance by May 5 or face possible modification, suspension or revocation of its permit, Contra Costa County regulators say.

Chickens? This is a city, Mr. Mayor, let's work on that

Mayor Gregor Robertson, a former organic farmer who spent a decade living in rural communities before setting out on a political career in Vancouver, is the leading force for a new "agri-lifestyle" here. Policies around the promotion of backyard chickens, vegetable gardens and beehives have helped to define Robertson and Vision Vancouver's term in office.

While the source and quality of the food we eat is important, we ask: What has this got to do with city hall? The real tools for managing food policy are in the hands of the provincial government, not cities. The mayor's abbreviated stint as an MLA might have taught him this.

The Imminent Crash Of Oil Supply: Be Afraid

Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.

Energy sustainability: Involving the entire community

In 1970, the world’s human population was “only” 3.5 billion people and China and India barely made an impact on Earth’s environments. In 2010 world population is nearing 7 billion people and China has passed the U.S. as the world’s largest user of resources and emitter of pollution. India and most other developing countries are striving to match China’s “progress.”

We are using up resources worldwide at rates that will be impossible to sustain no matter how many “economically viable substitutes” we can come up with. We are disrupting the very ecosystems that sustain us and our economies so that they are becoming stressed to the point of collapse. Human society cannot exist without a sustainable economy and sustainable economies cannot exist without stable environments to support them. No amount of technological breakthroughs can alter this extremely important and immutable fact of human existence.

Driven to Destruction – The End of The Interstate Age

Despite the obvious warning signs, Americans are undeterred in their petroleum-based love affair. Calls for more and bigger highways and expanded offshore drilling drown out the voices suggesting that we look for new and more sustainable ways to travel. We are addicted to our Interstates. And like so many addictive substances, our Interstates are slowly killing us.

An Uncomfortable Fact About Oil

America is mired in recession. Europe is in turmoil. Banks are reducing lending. Families are selling their extra vehicles. All of these factors would tend to push the price of oil down. Yet, the opposite has happened. The price of crude-oil futures jumped more than 70 percent over the past year, and as of mid-April sat near $86 per barrel.

This strange contradiction is an overlooked warning sign that nations—especially America—would do well to heed.

Bigger Questions Than Streetcar

In the near future, Cincinnati City Council may put the city on track to build a streetcar system by voting to borrow $64 million for the project. Last week's 6-2 vote to spend $2.6 million on preliminary work shows that council is poised to commit the city to a project that could transform a key Downtown-to-Uptown corridor.

It would be a big step for the city. But that likely prospect doesn't - and shouldn't - stop the kind of questions that we and many Cincinnatians continue to have: Can we afford it? Will it bring the benefits its proponents claim? Is it a "need" or a "want"? Will Washington grant the other $50 million or so to build it?

German Government Agrees to Planned Solar Subsidy Cuts, Reuters Reports

The German government agreed on plans to slash subsidies for solar energy, sticking to the main points the Cabinet had agreed on earlier, Reuters reported today, citing unidentified officials.

Renovalia Energy Sees No Chance That Spain Will Reduce Existing Solar Rate

Renovalia Energy SA, the Spanish renewable-power producer, sees no chance of the government reducing rates earned by existing clean-energy plants, co-owner Juan Domingo Ortega said today.

“No sensible government is going to do this,” Ortega said in Madrid at a briefing where company executives commented on their planned initial public offering to raise as much as 153 million euros ($203 million).

Wisconsin warms to solar energy development options

Anyone who has experienced the arctic blasts of a Wisconsin winter probably would have a hard time believing the state has more potential for harnessing energy from the sun than Germany, the world leader in solar development.

But with 20 percent more sunlight than Germany, the Badger State has loads of untapped potential, a recent report by Wisconsin Environment concluded.

Vietnam Plans to Build 74 New Hydropower Projects, Nguoi Lao Dong Says

Vietnam is building 74 new hydropower plants to increase its generation capacity, Nguoi Lao Dong newspaper said on its Web site, citing the Ministry of Industry and Trade.

Green Mountain College biomass plant opens today

A biomass plant makes its official debut today at Green Mountain College in Poultney, significantly reducing the school's greenhouse gas emissions and putting the institution's goal of "climate neutrality" within range next year, one of the earliest target dates of any college in the country.

China Alternative Energy Stocks Rise on Government Plans to Promote Usage

China will increase the consumption of non-fossil energy to 15 percent by 2020, Premier Wen said in a statement posted on the government’s Web site yesterday.

The target of cutting carbon dioxide emissions by between 40 percent and 45 percent by 2020 will be a mandatory indicator in medium- and long-term plans for economic and social development, said Wen.

Does H. Sapiens Need a New Tune?

The day after the 40th Earth Day is a good moment to revisit music of this sphere and ponder whether humans should start singing a new tune about forging a more durable relationship with their home planet. I love the music of the 20th-century environmental movement. No song captures the spirit of that era better than Tom Paxton’s “Whose Garden Was this?”

Existential Crisis of a Plastic Bag

An 18-minute film chronicling the life of a plastic bag has gone viral on the Internet.

“The Plastic Bag” questions the environmental impact of consumerism in a world that treats it like trash.

On the frontline of climate change

For many of North America's indigenous activists at the Bolivia summit, the fight against climate change is rooted in local issues.

Climate Claims Could Raise the Prices of What You Buy

Mankind's advancement is blamed for heating the planet, but the proposal to stop the seas from rising and the glaciers from melting could cause an economic Dark Ages.

"Cap-and-trade" emissions controls are peddled as the solution to global warming. As the limits get smaller over time, however, it's a sure bet that costs to businesses will be passed on to consumers.

As with so many regulations, cap-and-trade is likely to hurt those least able to afford it.

Climate bill gives polluter and nuclear breaks

WASHINGTON (Reuters) – The U.S. climate change bill expected to be unveiled on Monday contains incentives to spur development of a dozen nuclear power plants, but delays emissions caps on plants that emit large amounts of greenhouse gases, industry sources said on Friday.

The draft bill, led by Democratic Senator John Kerry, has loan guarantees, protection against regulatory delays and other incentives to help companies finance nuclear plants, which can cost $5 billion to $10 billion to build, the sources said.

Shell, Conoco Said to Join Exelon in Backing U.S. Climate Measure

Oil companies including Royal Dutch Shell Plc and ConocoPhillips will back new climate-change legislation in the U.S. Senate, according to people familiar with their plans.

Exelon Corp., the biggest U.S. utility owner, also supports the measure, and Chief Executive Officer John Rowe will be on hand when the bill is presented at a news conference on April 26, said Howard Riefs, a spokesman for the Chicago-based company.

Genesis in reverse

Bill McKibben has always struck me as a puritanical figure who needs to lighten up a bit. But he's a damn good New England writer and a “real deal” environmental activist. He wrote about climate change long before the Arctic ice shelf collapsed and the oceans started to acidify (The End of Nature). He questioned the wisdom of letting mere mortals engineer different forms of life as casually as Mexican drug gangs cleansing a working-class neighbourhood (Enough). And he's examined the meaning of Job, God and climate change (The Comforting Whirlwind). You'd think he'd be ready to surf the waves on Hawaii's North Shore.

But not McKibben. He's the founder of the carbon-battling 350.org and a man with a gung-ho mission. To appreciate his old-fashioned radicalism, you have to understand his origins: He hails from Lexington, Mass. That's where the American Revolution started. The idea that small communities must revolt against big tyrannies just swims in his blood.

Cash for Appliances (Stimulus Bill)

8 AM this morning was the first application deadline for the Louisiana version of Cash for Appliances (a better deal for society than "Cash for Clunkers"). Every state has it's own version.

I reserved $100 for an Energy Star washing machine and $250 for a new refrigerator (old ones must be recycled).

I will buy a Bosch Vision 300 washing machine (Vision series are both the most energy efficient and the only ones "Made in the USA" other than Staber AFAIK).

My leading candidate for a refrigerator is the Kenmore 7997 model. Sears has a 30% off (off a too high price) sale this weekend on both. Sales price is competitive. Any suggestions there ?

It is my understanding that a number of states are launching their programs today (all funded by stimulus $, about $1/capita in each state).

Best Hopes for Efficiency,


PS: In the first 50 minutes, 12% of available funds were reserved

Ours started Thurs, and I put $100 down on a Frigidaire fridge...389KWH/year. Thank you, President Obama. Should be here in a week. I figure my 23 year old one uses at least 1000KWH/year, so now I'll be a net producer of electricity, and PGE starts paying us this year.

I figure my 23 year old one uses at least 1000KWH/year

It may be worthwhile to use a meter, like a kill-a-watt, to actually measure those appliances you suspect of using a lot of electricity. The meter costs only about US$25, and can even to be fun to share with others...

I own one, and found it quite useful.


I figure my 23 year old one uses at least 1000KWH/year, so now I'll be a net producer of electricity, and PGE starts paying us this year.

Yes, I saw the letter enclosed in my net-meter billing. You'll probably only get 8.1 cents per KWhr. I think that is actually a fair price, you shouldn't get full consumer tariffs for excess net. You (and I) are already getting a "grid storage subsidy".

NC doing a similar deal too, I ordered a Whirlpool energy star dishwasher.

If you want a really efficient refrigerator, consider Sun Frost.

Good choice on the Bosch. We love ours.

A few months ago our old GE died and I found a floor model ES fridge at a KMart, 40% off. Had to do a bit of calling around and perhaps this was the right time of year for them to clear stock with specials like this.

Oregon paid me $30 to have the old fridge recycled - they did the pick up - all it had to do was show that its motor was operational, even though the cooling elements were out of action; and then all they would do with the thing was chop it up.

My leading candidate for a refrigerator is the Kenmore 7997 model. Sears has a 30% off (off a too high price) sale this weekend on both. Sales price is competitive. Any suggestions there ?

We bought a Kenmore Refrigerator and the compressor went out only after a year, but within the two year warranty. It took 2 months to get a Sears repair person out, then 4 weeks to get the replacement part, then another 3 weeks to get the sears repairman out to replace the comprssor. The compressor went on for hours then off for hours, with the result being a warm refrigerator. When the repairman showed up the unit was on and he refused to replace a compressor that was working. After much arguing, I finally started yelling at him and he then agreed to replace it. They are made in Brazil! That was a shocker. But anyway, since then it has worked. If you want to know more horror stories about Sears repairs and appliances, do a google search on it. Oh my!!!

We also bought a Sears Kenmore stove/oven, and the heat sensor went out after using it 3 times! So if we try to use the oven the sensor goes off and it sounds like a fire alarm - piercing loud. There is no way to stop it except pull the stove out, dive behind it and pull the giant 220 volt plug out. After what we went through to get the frig fixed we didn't bother with getting a 'Sears' repairman out to fix the stove. The burners work fine, so we just use a counter top cooker for things we need to bake or broil.

I ended up going to Lowe's for the Bosch Vision 300 washing machine and they "price matched" Sears, minus -10%. $617 + tax -$100 rebate from Uncle Obama -$100 "Gift" Card from Lowe's (from mail in rebate for buying $400 worth of insulation#. I will also get a 30% tax credit on the $400 + sales tax) - several merchandise return cards. :-)

My existing washing machine appears to have a broken mount and is old, inefficient, etc. So I am pleased with the deal.

Best Hopes for "Playing the System",


# Lowe's cut the price of R-25 "less itch" (Comfort Therm) unfaced fiberglass insulation by more than half as part of the incentive program. So I got about $850 worth of insulation for $400 + sales tax minus the $100 "Gift" card minus a 30% tax credit on the $400 + sales tax. Thus R-60+ in my attic :-)

Some accounting.

Washing Machine - $617 (list @$800) + sales tax = $675
Insulation - $412 (last years price @$875) + sales tax = $451
Appliance Rebate -$100
Lowe's Mailin Rebate -$100
30% Tax credit -$135

Net Cost for R-60+ insulation and most efficient washing machine - $791, less than insulation alone (before sales tax) without the tax credit

Remember that with your washer its not just the direct energy it consumes, there's also hot water. Least noticed, but probably of greatest importance is how dry the clothes are left after the spin cycle (your dryer has to expend energy to evaporate it). So unless you are using a separate spin dryer, the great unknown is how much your dryer will have to work because your washer did an incomplete job (i.e. why not a spin dryer incorporated into the washer). I'll bet your dryer consumes more energy than your washer.

They do need to recycle the old refrigerators. Otherwise people usually take the subsidy on a new one, and put the old one in the garage -where it probably consumes even more energy than it did in the kitchen.

My dryer uses solar energy.

However, the much faster spin cycle of the Bosch will significantly shorten the time on the line.

I am going to use more cold water washes with the new machine (did not work that well with old washing machine except with very mildly dirty laundry).

Best Hopes,


Yeah! The key to the future is in the purchase of lots of large appliances.

I think we got it figured out folks. Go back to work so you too can become part of the solution.

Apologize in advance to you eternal optimist who I have offended.

No, clearly the key to the future is to bray and whinny at everyone.. keep that high school spirit alive.

Does any of your food sit inside a fridge? Cook anything on a stove? Expect that situation to still be in place in a year?


Sen. Charles Grassley (R-Iowa) has sent a letter to Treasury Secretary Tim Geithner pointing out that GM has apparently paid back its TARP money with...more TARP money

Yeah, how are they in a position to pay back their loan when they aren't making money? Does this make any sense long term, or is it just a one-off PR stunt?

GM seems to have one of the worst marketing departments of all time. From the misleading "230 MPG Volt", to the nationwide spending spree on ads for "Thank you for bailing us out", to this new campaign of "look, we payed off all our debt". Each time, the lies have been so transparent, or the hypocrisy so blatent, that the campaign has backfired within a week. To claim that GM has "paid off its obligation in full" when they are currently losing money, borrowed more government money to pay off the loan, AND the US government converted over $40 BILLION of the loan to GM to the equivilent of "faith based stock certificates" in the company, brings hypocrisy to an all new level. The fact that they are continually wasting even more bailout money on expensive, nationwide, false advertising just makes it worse. Until the US govermnet can PROFITABLY convert the currently worthless GM stock into real cash, GM should keep its voice down and figure out a way to turn a profit so that it can start paying off its debt in reality, instead of in fantasyland.

Each time, the lies have been so transparent, or the hypocrisy so blatent, that the campaign has backfired within a week.

I think they've got the same marketing staff/marketing school grads as in the past. In the past when the marketers had a message that was BS the people who'd find/critique the message would publish and "the masses" wouldn't care/had the channels to pass the message about. Remember these grads are weaned on the people noted in 'century of self' with the spices of Willi Münzenberg and a pinch of Goebbels.

Now, part of "the masses" care because they got their wallets Gore'd. And with e-mail lists needing nothing more than 'send' on a PC or signing up for a list on Yahoo/google/whomever or "putting up a blog" means more can get to the message of 'and here is the con job of this sales message' if they want it.

Greece Asks for $60 Billion Bailout

Sinking under the weight of its own debt and shunned by international investors, Greece asked fellow euro-zone members and the IMF to bail it out, a humbling step that reshapes the rules of the currency union and, for Greece, augurs years of economic pain. . .

Investors have been walking away from Greek bonds all year, under Athens' darkening budgetary cloud and persistent worries about the accuracy of its financial reports. That exit turned into a lathered gallop Thursday after the European Union's statistical arm said Greece's budget deficit was even wider than believed. Ten-year bond yields shot to nearly 9%, almost triple what Germany pays to borrow.

I've described the post-2005 debt race between developed countries as the "Thelma & Louise Grand Prix of Debt Race," whereby various governments are racing each other to the edge of the fiscal cliff--which I define as the point at which they can't borrow enough money maintain their spending levels. On the national level of course, central bank monetization will be attempted.

Since private lenders are pricing Greek debt at a level which assumes a future default, it appears that we have seen the first country drive over the edge of the fiscal cliff. Greece wont' be the last. On a state level, Chris Puplava noted that we have our own PIGS here in the US, the CINN's (California, Illinois, New York, New Jersey).

Why pick on those states? California, I can see. They've kind of been the poster child for state budget woes. But there are a lot of states in worse trouble than, say, New York. (Not that they're in great shape.) Funny how "red" states like Arizona and Oklahoma are usually left off these lists, even though they're worse off than California, at least percentage wise.

Our esteemed governor here in Texas boasted about the state budget being balanced (in contrast to the budget problems in California). He neglected to mention that the budget was only balanced because of federal stimulus money.

But in any case, it's just a question of how bad finances are for most governments in developed countries, whether they be local, regional or national governments.

More in the same vein:

Welcome To The Banana Republic: GM In Hot Water With FTC Over Misleading "Repaid Bailout" Ad When All Just TARP Shuffle

suffice to say that if you ever needed confirmation that America is a banana republic in which fraud, corruption and lies are now the norm, here you go: Government Motors is now blatantly lying to its existing and future buyers, and everyone in the administration is complicit...

..."General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds."

My guess for all its problems, California still has valuable advantages in terms of human capital and an educated workforce. The concern is the loss of 'the California Dream'. No one ever mourned the Oklahoma Dream, to be frank (not to pick on OK alone).

One of the main reasons that some states get picked on is a matter of size. A budget crisis in Oklahoma is not a national-interest story; a budget crisis in California or New York is. If you start with the ten biggest states, then cut that list by states that contain one of the ten biggest cities, you get five candidates for national stories: California, Texas, New York, Illinois, and Pennsylvania. According to the CBPP, Texas isn't having a budget crisis (no gap in either FY 2010 or FY 2011). And most of the country doesn't think about Philadelphia the same way they think about LA, NYC, or Chicago.

Another factor that makes a "good" story is conflict. California has various forms of Republican vs Democrat, which can be written in such a way to appeal to both sides. It is not surprising that national stories tend to cast California legislative Republicans as a minority holding fast to their principles on spending restraint, and the Dems as struggling to find funding to maintain the state's social safety net and higher ed system. New York's Senate gridlock has been good, but limited, material. Where's the grab-your-attention conflict in Illinois?

Small state budget woes are getting plenty of coverage in their local papers. The Denver Post, even though the Dems hold both houses of the legislature and the governor's office in Colorado, certainly runs plenty of Dems vs Repubs budget stories, and stories about the impacts of cuts. But those stories don't get picked up by the AP, or by the NYTimes or the Washington Post.

California has the lowest credit rating. Illinois has the second lowest credit rating. Tied for 3rd place are Arizona, Louisiana, Michigan, and Kentucky.

But I do not trust the credit ratings. The recent Pew report on state pension funding showed the states have overly optimistic assumptions on pension ROI. So they really owe far more to their pensions than they claim. Which states owe the most per capita or as a percentage gross state product once more realistic ROI assumptions are made? Not sure.

I've been predicting for months that Greece would get bailed out by the IMF, and it will happen either sooner or later.

Yet the problems of Greece are tiny as compared to the US. The US already has $100 trillion of actual and contingent debt (this is coming from the US government itself, not some 'doomer' on the web).

Although we think as the IMF, and individual US states, as separate entities, in reality it is the US government that will eventually guarantee most if not all of the IMF and US states debts (note this is something I do not want to happen). Essentially the world money system, with the US dollar at its base, can not and will not function if too many defaults occur. I know many here predict 'deflation' and frequently quote Mish as well as other deflationists, but there is a 90% chance we will never have general long term price deflation. That is because the US government and the Federal Reserve will intervene first to prevent a full scale credit collpase - wherever that might start. If necessary, the influence of the US will be exercised through the IMF. This is not to say retirees in Greece, California, New Jersey, will see their full retirement benefits. They won't - but neither will Greece, California, etc., actually go bankrupt in the formal sense (although there is a good possibility of a managed default in some cases, as what happened in Iceland a year or so back).

Interesting article on the buildup in Chinese naval forces:


westexas -

I think we are starting to see the contours of possible future resource wars beginning to take form, particularly as it relates to US vs China.

The backbone of US Naval power is of course the carrier battle group, of which I believe we have either 10 or 12 in active service. Each consists of the super carrier itself plus 7 to 10 accompanying vessels, including various missile cruisers, frigates, destroyers, and auxiliaries. These are enormously expensive. The new generation super carrier that the Navy wants to build will cost something like $5 billion each (batteries not included).

Unfortunately, many military analysts no longer on the Pentagon payroll are of the belief that that aircraft carrier of today is rapidly becoming as obsolete as the battleship was by the end of WW II. While the aircraft carrier may be very effective in intimidating third-rate military powers lacking the means to strike back, they have become highly vulnerable.

Their main nemesis is the high-speed, sea-skimming cruise missile, highly sophisticated versions of which have been developed by both Russia and China. Also, China is said to either have or is in the process of developing a ballistic missile specifically designed to take out aircraft carriers at long range. The Aegis defense system is of minimal effectiveness against either.

The other threat to carrier battle groups is the modern submarine. It has been reported that war games conducted by the US Navy pitting carriers against subs almost always show the carriers coming out on the losing end, even when heavily escorted.

Unlike heavily armored battleships, which were designed to slug it out toe-to-toe with other battleships and absorb an enormous amount of punishment, carriers, despite their enormous size, are relatively fragile. It is not necessary to actually sink a carrier to put it out of action. A few cruise missile hits on the flight deck, or a few well placed torpedoes will render it essentially incapable of launching and retrieving aircraft, not to mention damage to all of that highly advanced electronics that the system is entirely dependent upon. An entertaining discussion of this is at:

So, getting back to Iran and the sanctions that US/Israeli want to impose upon them, there are some very unpleasant scenarios that do not appear to have been thought through all that well. For instance, let's say that the US decides to embargo refined products going into Iran in an attempt to cripple its economy. And then what if China declares that it will deliver gasoline and diesel to Iran (in exchange for maintaining China's favorable trade relations with Iran)? Will the US Navy interdict Chinese tankers headed for Iran? What if those tankers are escorted by Chinese naval vessels ...... are we going to initiate a naval engagement with the Chinese Navy in order to maintain the embargo? How does one keep such a conflict from escalating, either deliberately or by accident? Is this the type of conflict in the best interest of the US?

Nothing good can come of having both US and Chinese naval vessels in the same region where both countries are competing over its oil.

Iran's missile technology is surprisingly developed, and may be a wild card in the whole mix.

Operation Millennium Challenge...on paper, "The Worst US Naval Disaster Since Pearl Harbor"

---according to Jane's Defense Weekly and other sources, Iranian government officials were in Moscow the previous year (2001), shopping for the latest Russian anti-ship missile technology.7 By their own admission the Russians developed the Yakhonts missile for export. No doubt, it was high on Iran's shopping list.

If carrier battle groups are highly vulnerable, then how vulnerable are supertankers?

The problem for the US is of course--at least based on recent trends--that we are on the losing side of the bidding war for constrained net oil exports. And the irony is that if any country attempts to interfere with the free flow of oil at market prices, it would probably be the US.

However, I've been of the opinion for a while that we will not see attempts to ship oil, by force, to the US or to any other importer--because it is so easy to sink or damage supertankers, using a variety of methods, especially with submarines of practically any design.

Or, should we attempt to blockade other countries (which is classified as an act of war), it's easy for countries to retaliate by sinking or damaging tankers off our shores.

Moreover, the US has every reason to end the export of dollars for the purchase of a product that it wastes without productive benefit.

Domestic energy production and brainpower(c) is more than sufficient to meet the country's energy needs. Substitutes for absent foreign oil are barely tapped.

Start with the passenger seat. No, that's wrong. Start with the possibility of staying put. And work the substitutes' list from there.

We import 70% of our oil. I would be interested in seeing a detailed list of those uses which could be cut to reach 30% of our consumption. I would start by cutting the military budget by 70%, with the focus on ending all military expenditures related to our oil dependency from overseas. This would also help avoid conflict with the likes of China in the future.

Domestic energy production and brainpower(c) is more than sufficient to meet the country's energy needs

Unfortunately our politics, culture, and infrastructure will never allow this to happen. There are two main reasons:

1) The U.S. military-industrial complex was in an existential vacuum following the end of the Cold War. 9/11 and peak oil provide the perfect excuse not only for its continued existence but its expansion, at all costs. So from now on we will provide as much money as it takes to occupy the M.E. indefinitely. and thereby siphoning off capital that might otherwise be used, in conjuction with American know-how, to wean us off imported oil.

2) We are a multiracial, multicultural, very large nation filled with 300 million people spread across vast distances, and increasingly concentrated in large urban/suburban conglomerations. Oil, now mostly imported, not only makes this possible, but also makes possible the living arrangements that people of various classes/races prefer - namely, to be amongst themselves. The suburban way of life is not just about space, though that is important. It's also about the ability of middle class, church going, conservative, mainly white but also other, families to segregate themselves from the both the noise and scum of the city as well as the backwardness of the rural hinterlands. Peak oil almost certainly puts an end to this arrangement one way or the other. Those here who claim that people will be happier crowded into tenements and taking mass transit or riding electric bikes everywhere, surrounded by hordes of people of every hue, language, and culture, are gravely mistaken. I doubt people would be satisfied in the other equally likely arrangement - serfs on organic farms. Mass unrest and civil war are more likely.

So, in short, our dependence on and support of our military-industrial complex, as well as the structural and cultural aspects of our suburban living arrangements, guarantee that the ride down Hubbert's curve will not be mitigated peacefully with brainpower or domestic energy production.

my god man, have you ever been to Park Slope? The Upper East Side? Dumbo?????

Lots of rich white people don't mind living next the "scum" of the inner city I guess. They aren't exactly packed into tenements either.

This psuedo-analysis is just silly.

Furthermore, you're right on one thing -- this is a multi-racial society, but it's also poly-racial. As "one drop" distinctions fade out so will much of the identify politics that goes along with it.

There is an unsteady march towards racial integration and equality in the US, unsteady though it is, it always moves over time in the right direction.

Most white people are not rich, and cannot segregate themselves in the city as effectively as the upper crust WASPs and Jews of New York. Moreover, show me the Manhattanite who is comfortable in the Bronx and I'll buy your argument.

No, once the people in the suburbs are forced inwards, the apartments/condos/former office spaces in the cities effectively become tenements due to overcrowding.

People overwhelmingly prefer to be around their own race, most of the time. Moreover, the dream of the "golden" people will never happen - there is not enough critical mass, and most multiracial people themselves marry into and mate with people who are only of one "race." This has been happening in America since it's beginning - many white people have native ancestry, and many black people have white ancestry, etc. However most of them still think of themselves as belonging to one race, because race/genetics is so powerful. Moreover, as the number of people of various races continues to increase in America, there is less and less pressure or need for race based assimilation.

Basically in order to fund a privileged lifestyle and entitlements for aging middle class white people, our leaders decided to effectively open the doors to the entire world. It's conveniently forgotten that though immigration is what built this nation, it was mostly from Europe which ultimately favored integration. Now it's from everywhere - Latin America, Asia, M.E., you name it. Somehow I don't think that cosmopolitan tolerance will work in a nation of tea partiers, 90 million guns, and Mexicans fleeing the drug war.

Have you been paying attention? Our society is in absolute free fall right now.

Believe me I wish things could be different, but I don't buy the liberal feel good nonsense here about the state of our nation.

Don't worry oilman, we just need to electrify trains in the cities and hand out food in bread lines and everyone will sing kumbayah into a post-industrial future and live happily ever after in poverty right up until those ICBMs start flying and T-72s start rolling. In the event that occurs, no one in any urban area is getting out alive.

If some on TOD wish to ignore history they're free to do so.

... and that's when the C.H.U.D.s came at me.

Quite the convincing counter argument and scenario there !

ICBMs and T-72s (why not M-1As ? They are MUCH closer) seem to show the non-logical, emotional thinking that underlies much "conservative" "thought".

If you have diabetes & hypertension (due to obesity and lack of exercise from driving everywhere) and cannot get medical treatment due to your isolation in Exurbia, you will also die.

My scenario is much more likely and realistic than your "ICBMs & T-72s" scenario.


I think it's quite logical to assert that in the future everyone will be much poorer. Those who are already poor will become quite angry, poor countries will have serious stability issues and it could create problems else where.

Let's see...

Greece is having terrible financial issues.
Thailand is in a political emergency.
Kyrgyzstan's president has been ousted once again.
Iran is continuing research into nuclear technology.
A South Korean warship was recently sunk off the coast of North Korea.
Unfunded liabilities and national debt in the U.S. can never be paid at the current rates.
We have never ending war in the middle east.

But of course the world is just a wonderful, safe place and nothing bad ever happens in it. Oilman is correct, Society is in free fall. Too many people are too busy watching American Idol to realize this place cannot be salvaged.

I do not know how you can claim that those of us who believe New Urbanism as a response to PO is misguided for various reasons are "Conservative." I never suggested moving to the rural hinterlands where medical care is unavailable, just far away from any large population center.

just far away from any large population center

Where the best remaining medical care will be.

Also, it is the Suburban middle class (see Tea Party) that will be angry and violent at getting poor, not the poor getting poorer. THAT is the historical precedent BTW.

Best Hopes for Bleeding Heart Liberals helping each other through tough times,


But how "far away"? Far enough for what? Where would "far away" be, in this context, but in the hinterlands?

Within two blocks of me I have million dollar mansions (built by silver & gold dollar millionaires @ 1850s) and Section 8 housing. An assisted living home within 3 blocks. Within 4 blocks an in house drug treatment center (Bridge House) and a Catholic Charities center (health clinic, GED classes, etc) plus Kingsley House (another social welfare center since 1920s).

It is just "conservatives" apparently that cannot stand to live near anyone not like them, or even imagine that someone else would.

Best Hopes for Better Understanding of human nature,


PS: Your reading of "history" is very lacking (hint: it is not all "blood and guts", just the parts that you chose to read). I base my position on historical examples.

Alan! Remember you live in New Orleans!!
New Orleans has had 300 years to learn integration.
I suspect Cajuns will adapt to Post-Oil better than most.

NJ -- I'll save Alan the trouble of responding. Despite the MSM pitch N.O. is not really part of Cajun America. It's more Creole (a wide blend of Europian, African, Spanish, French and a little Italian mixed in. Different type of cooking. And a somwhat different attitude about a variety of matters such as trains. Never heard a Cajun American say anything good about a train.

The way I explain the difference between Cajun and Creole cooking, is that Cajun is based on what you could grow, catch or gather from your front or back yard (assuming that you lived on the edge of a bayou in the country). Little butter or milk products or wheat and nothing imported.

Creole cooking is city food and assumes access to a port, dairies and bakeries but mostly food from the hinterlands (oysters in Creole, not in Cajun for example). All the ingredients of Cajun plus more.

None-the-less Cajun food is excellent and quite imaginative. Today, the two are slowly merging together.

Best Hopes for Good Cooking !


The trouble with these kinds of pseudo-analyses is that Americans don't get out much and don't see other parts of the world where people do things differently.

Take Paris for instance. It's a very big city with sprawling suburbs and lots of immigrants.

In Paris, the affluent upper-middle class professionals live in low-rise townhouses along broad, tree-lined boulevards in the inner city area, while the vast unwashed population of immigrant "scum" (to use your word) live in the suburbs.

This situation developed because the French government in the Napoleonic era had completely different objectives than the American government in the 1950s. The French authorities wanted to march their armies 10-abreast to any corner of the city to quell the innumerable riots, so they built the grand boulevards. Then they decided that they wanted to line them with politically dependable people, so they subsidized the construction of elegant townhouses along the boulevards. In the process they displaced a lot of poor people, and pushed them to the outskirts of the city, which was the only place they could afford to live since the rich now owned the center. When the immigrants arrived, they had to compete with the poor for decrepit apartments in the suburbs. This urban layout persists until the present.

Contrast this with the typical American city. The immigrants moved into the center and lived in squalid tenements. Then the blacks arrived from the South, and took over the most squalid of the tenements. The whites who could afford to moved to the fringes. Then the governments subsidized the construction of the Interstate and freeway systems, which allowed the affluent whites to move to the far distant suburbs. The US does not promote centralized planning or tax collection like France, so once the affluent whites were out of the inner city area, inner city taxes and services collapsed, and everybody who could afford a car bailed out. However, businesses which needed to be close to other businesses took over the downtown core and built skyscrapers. You thus have a completely different urban layout. An inner sector of skyscrapers, surrounded by disintegrating poor communities that look like they've been through a major war, surrounded by financially independent suburbs that become increasingly affluent the farther out you move. Vastly different from Paris.

The trouble is that most Americans think this is natural, when in reality it results from different planning priorities than in France. Nothing about it is either natural or inevitable.

Now, from a post-peak-oil perspective, the Paris layout is much better. The electrically-powered Paris Metro will continue to move people, since 80% of French power comes from nuclear reactors. Since central Paris is highly walkable, the affluent middle class will continue to walk to the boulangerie for their baguettes and to the boucherie for their meat. There will continue to be wine available everywhere, so the people of Paris will continue to eat, drink and be merry. The poor in the suburbs will continue to riot, but of course they've always done that. Being poor, they'll have to take the buses, but they've always had to do that, and the government might electrify them or put in trams.

The post-peak-oil experience in American suburbs will be considerably different from what it currently is, and that transition is already underway. They will much more like the Paris suburbs, but without the bus service. It will not be a lot of fun for the people trapped there without gasoline or jobs.

Although I agree Americans could get out to other countries more, don't assume anything about my own experience. I've been to Paris, other parts of France, 6 other European nations, and the UK three times. I've spent four years in Canada and been to Mexican border towns. I've also been to various places, countryside and cities, in Japan and India. Not to mention my travels across the U.S. including at least ten states, both small towns across the South and dense cities like NYC, Boston, and Chicago. And I'm not a business traveler. So I do have some sense on how things are different depending on place. In fact, my understanding of these differences animates my pessimism.

I was basically only referring to the U.S. in my posts. Paris, at least initially, would surely handle peak oil considerably better than most American cities.

Can we make a transition? Sure, but theory is different than practice. My gut tells me it won't be peaceful.

So, you have done more international travelling than most Americans, and you have seen how other countries differ from the US (the main difference being that they all do less driving). This gives you a big head start on most Americans, but you have to lose the illusion of cultural superiority that makes Americans unpopular in countries the world around.

Oddly enough, I've probably seen more of the US than you (probably twice as many states), although I've lived my whole life in Canada (despite the best efforts of various oil and service companies to transfer me to Houston.) I can live anywhere in the world I want, and high in the Canadian Rockies seems a choice location.

However, I have the even more odd characteristic that when I am in a strange city, I like to tour it by subway and walk around the slums talking to the locals. You find the best food and blues bars there. Of course I also ski on avalanche slopes and whitewater canoe on raging rivers, so I am not a chronic worrier. When lost I just walk up to some tough-looking dude standing on the subway platform carrying a bicycle chain, and ask directions. Usually they're friendlier and more informative than the pasty white guys in suits. They're certainly safer than the grizzly bears and timber wolves that wander through my back yard looking for food.

But to get back to the topic at hand, my impression was that US cities ended up the way they were because of government policies. American governments promoted freeways and automobiles because they thought the US had infinite supplies of oil. The fact that it doesn't, and in fact US oil production peaked 40 years ago and is in a state of terminal decline, has turned this into a crisis, and the crisis is likely to turn into a disaster if they don't smarten up. The Obama administration doesn't seem to be any smarter on this subject than the previous clown act, so the results are not likely to be pretty.

Now, if you benchmark Toronto against Chicago, or Calgary against Denver, you find some very interesting differences. Other than the fact that public transit ridership is about 2 or 3 times as high in the Canadian cities, the Canadian cities have far more immigrants than the American ones, and the difference is not at all apparent. Who would realize that half of the population of Toronto is immigrants, or that Calgary is nearly one quarter immigrants? The immigrants just wander around and act as normal as the people who were born there. (Not that the people born there are all that normal, but everybody acts weird in the same ways.)

Canada will do better in the post-peak oil era than the US because it is exporting more oil to the US than it is consuming itself, and that proportion will only increase as its vast oil sands come on production. However, Canadian cities do have the advantage in that they are less car-oriented than American ones. They are not totally dominated by freeways. American governments need to get out from behind the 8-ball and do some post-peak oil planning of their own. Abandon the freeways and build light rail.

The silly Nationalism displayed by a number of Canadians on this site is too funny. The overwhelming majority of Canada's GDP is related to the Service sector. Canada is not making most of it's money by exporting energy. Canada is going to be in a world of hurt as the service industry implodes. You can not live in the vast majority of Canada without a car, light rail does not work. Look on google streetview, every single home has vehicles.

I'm not sure why you mention Immigration, the Canadian Immigration system is far different from the U.S. system.

The overwhelming majority of Canada's GDP is related to the Service sector. Canada is not making most of it's money by exporting energy.

Well, of course like all other developed economies, the service sector is the largest sector of the economy, about 2/3 in Canada's case. And it also has a large manufacturing sector - in fact a disproportionate number of "American" cars are built in Canada. But, for a developed country, Canada has a disproportionately large primary sector, which is a major source of export revenues. And oil is a big, big contributor to the country's balance of payments surplus.

However, I bring up the topic of Canadian oil production in these threads mostly because it is of strategic importance to the US. The US imports around 2/3 of its oil, and Canada is the largest supplier of imported oil at about 20% and rising. The way things are going, Canada is going to be exporting more oil to the US than the US is producing itself in a decade or two. Not that Canada's exports are going to increase a lot, it's more that US production is going to be so low. Most of the other exporters to the US are in decline, and China is quietly cornering a lot of the global oil supply.

You can not live in the vast majority of Canada without a car, light rail does not work. Look on google streetview, every single home has vehicles.

You can't? I know lots of people who don't have cars, and many who don't even know how to drive. It's perfectly feasible to live in a major Canadian city without a car. Of course there are a lot of cars, Canada is an affluent country, people can afford to buy them, and there's a lot of oil to keep them running. But crank up the magnification on the satellites and you'll see that on average they are smaller and more fuel efficient. As for light rail - it certain worked for me the 25 years I rode it to work. Compare the ridership numbers of Toronto or Calgary and you'll see they're much higher than US cities. The riderships on both the Toronto Streetcar System and the Calgary C-Train are around 250-300,000 rides per day, which is particularly impressive in the case of Calgary. Over a quarter of a million rides per day in a city of a million is pretty good. And Calgary also has a bus system which carries at least as many riders, while Toronto has a bus system plus full-blown subway and commuter rail systems that carry considerably more.

I'm not sure why you mention Immigration, the Canadian Immigration system is far different from the U.S. system.

Well, it is much different. Canada allows in proportionately far more immigrants and is much less discriminating in where they come from. I only bring it up because Americans on the site are constantly whining about how all their problems are caused by immigrants. No they're not. Most of the problems Americans have are caused by Americans.

But interestingly (to me at least) the latest Statistics Canada numbers show that Canadians are turning into Heinz 57's. Nobody marries within their own ethnic group any more, they just all kind of pick partners at random. An interesting party game is "What were your grandparent's mother tongues?". A lot of people had grandparents who spoke four different languages. It completely screws up the census data, though, because nobody can figure out how to categorize these people. You give them a choice of "Black, White, Hispanic, or Asian", and they'll check off all four. We're cool with that.

The Canadian vehicles I see are identical to their American counterparts. The ones I personally see have been disproportionately larger, jacked up F-250s from Alberta and RX-330 SUVs from Ontario. You have maybe over a million citizens using mass transit. That leaves around 30 million dependent upon automobiles.

That oil may end up being a curse, just as it has been to a number of Middle Eastern leaders. Don't think for a moment that in the event of a crippling shortage in the U.S. Canada would be allowed to continue exporting it else where.

But interestingly (to me at least) the latest Statistics Canada numbers show that Canadians are turning into Heinz 57's. Nobody marries within their own ethnic group any more, they just all kind of pick partners at random. An interesting party game is "What were your grandparent's mother tongues?". A lot of people had grandparents who spoke four different languages. It completely screws up the census data, though, because nobody can figure out how to categorize these people. You give them a choice of "Black, White, Hispanic, or Asian", and they'll check off all four. We're cool with that.

Ethnic groups are not population groups, true exogamy is exceedingly rare.

westexas -

Supertankers are about as robustly constructed as giant water balloons and about as easy to destroy.

If the US Navy can't seem to be very effective in preventing a ragtag bunch of pirates in little speed boats from highjacking tankers, what hope does it have in preventing a submarine from sinking one on the high seas? If just one tanker were sunk, the result would be both a worldwide panic in the oil markets and a crippling of marine oil movement, as ship owners and their insurers refuse to allow their tankers to leave port.

If that were to happen, perhaps the only alternative would be to go back to WW II style escorted convoys. While that would afford some protection, it would hopelessly foul up oil delivery logistics due to the delays needed for convoys to be assembled and would increase the cost of transport many fold.

The US is anxious to throw stones yet forgets that it is living in a glass house.

The US Navy hasn't defeated the pirates because it hasn't seriously tried. Want to stop the pirates? Put a SEAL with a sniper rifle on each ship passing thru the area. Or just put a special forces guy with the ability to call in air support.

My assumpton is that it is only a matter of time before the US will be forced to cut back substantially - maybe 50% or so - on its defense expenditures. That will be the end of US interventionism in the Eastern Hemisphere. The US will be forced to adopt a maritime defense strategy and pullback to defensible (on the cheap) perimeters in the Pacific, Atlantic, Arctic and Caribbean. The Navy will hve to be cut by 1/3, the USAF by half, and the Army by 2/3. Under such a defense posture, the aircraft carrier groups actually make a good deal of sense - keep a couple on patrol at all times each in the mid-Atlantic and mid-Pacific, with a couple more on rotation in port, and a couple extras as a reserve - that should serve pretty well, along with a strong sub fleet.

This would of course mean cutting Taiwan, South Korea, Europe, Israel, KSA, etc. loose to fend for themselves.

The military industrial complex is the most powerful and entrenched lobby in the United States. Don't expect to see any major cutbacks soon, sadly. It would be my candidate for the first to receive drastic cuts. But then, I don't have to get reelected, nor do I need campaign funds.

Yes, they won't WANT to cut back. I am just saying that circumstances will eventually FORCE them to cut back, much as they will not want to.

In a very few years, China will have a standard gauge inland rail link to Iran (via Kazakhstan & Turkmenistan). Already, using different gauges and shipping across the Caspian, China can ship to Iran without bothering the US Navy.


Also (I seem to be the only one that has picked this up)

- Iran is extending standard gauge rail into Pakistan (almost finished)
- Pakistan has agreed to convert to standard gauge (from Indian gauge), at least from Iran to Islamabad
- China will build a rail line to it's new copper development in Afghanistan (via Tajikitsan)
- China later announced plans to extend the copper line into Pakistan

Alan, you're not quite the only one -- I've been following the spread of Chinese rail links across the future Chinese imperial hinterland as well. Still, you're right that most of the peak oil blogosphere doesn't seem to have noticed the extent to which the end of American empire is intersecting with the end of the oil age to serve up a big dish of trouble for those of us here in the US who are used to living on a third or so of the world's resources.

Seemingly, China is interested in the Greek railways too, as part of an alternate bailout package from Russia and China.

From The Rumor Bag: The Dangerous Politics Behind The Greek IMF Bailout And Why A Government Collapse May Be Imminent


Supposedly written by someone in the upper ranks of the Greek government, who will reveal himself when he resigns over this matter in the coming week.

He alleges G-Pap is rushing to get a deal involving the IMF because the Russians were about to offer a 50 billion euro, no-strings-attached (*ahem*) 4% loan package to Greece. Furthermore, the Chinese were showing interest in purchasing ΟΣΕ, the Greek national railroad, a real bleeder for Greek public finances, as part of a 60 billion euro European shopping-spree package.

I'm sure the idea is to buy the railway, and then they have a steady customer for rolling stock. Yet another line of global business that the US is making sure that it will have no part in.

One of the major drawbacks of its mostly privatized economy is the USA lacks any formative industrial or energy policies that promote the USA. Instead, private corporations having no loyalty to the nation are allowed to deindustrialize and thus massively damage the USA's fundamental national security. This is a point totally overlooked (purposely?) by media and government. No law stipulates that Exxon, for example, must supply the USA with X amount of oil per day or that X amount of steel used be made in the USA. Example: Exxon has a series of offshore wells in US territory that hypothetically contributes to the total amount of oil extracted in the USA, but it is free to sell to whomever offers it the highest price. A good question to ask is How much of the touted New Energy Infrastructure going to be produced in US factories employing US citizens? It seems likely that US-style "Free Enterprise" will destroy the US economy because the political process at the national level is controlled by the very corporations who've profitted greatly from exploiting US-style Free Enterprise by freely shipping it out of the country. If you're a Tea Partier and "Want Your Country Back," you'll need to go after the corporations that shipped "Your Country" overseas.

The trouble with the ideological free-marketeers is that they failed to recognize that much of the rest of the world is not playing by their rules (or lack of rules, really). Much of the rest of the world - or at least those places that are really going to matter - have governments that put the survival and well being of the nation (and of the regime, really) first and foremost. If the "market" moves in a direction that is conducive to and consistent with this, then that is fine and they leave well enough alone. However, they do not hesitate to intervene to whatever extent is necessary to put their perceived long-term national interest first. By refusing to play the same game, the US has just set itself up to be taken very great advantage of, to say the least.

Chindia, "hey what's our oil doing under your Rocky Mountains, your OCS and in those Canadian tar sands" That's ELM 2.0 with a bullet.

By refusing to play the same game, the US has just set itself up to be taken very great advantage of, to say the least.

Or it's been setup so that the only option for US politicians to take is war. Ultimately total war. That's always been the way of psychopaths and I remain absolutely astonished that most folks even on TOD don't get that.

There was madness in any direction, at any hour. If not across the Bay, then up the Golden Gate or down 101 to Los Altos or La Honda. . . . You could strike sparks anywhere. There was a fantastic universal sense that whatever we were doing was right, that we were winning. . . .

And that, I think, was the handle—that sense of inevitable victory over the forces of Old and Evil. Not in any mean or military sense; we didn’t need that. Our energy would simply prevail. There was no point in fighting — on our side or theirs. We had all the momentum; we were riding the crest of a high and beautiful wave. . . .

So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark — that place where the wave finally broke and rolled back.

-Hunter S Thompson

what if you can't pay the sailors?

what if the sailors realize the pieces of paper - called money - they are given wont provide enough for their families?

then we will see how far loyalty to the greatest nation on earth goes

The post linked above The Imminent Crash Of Oil Supply: Be Afraid is an interesting one.

It is written by a lawyer, and reads like something written by a lawyer. The author is clearly quite up to date on what is going on in the energy world. One of the things he does is link the CO2 emission targets to the expected decline in oil. I am not convinced he does this correctly (because of the difference between oil and all fossil fuels), but he does make an interesting point that many may not be aware of--there is a real need to cut oil use, just because it likely won't be there.


looks to me like the average sort of response you get from someone who has just joined the dots...

I guess any resource that declines at x% / year is going to show this type of graph and yes, that gap will be filled to some extent (maintainance of the infrastructure to keep the underlying decline curve is an additional overhead -MattS 'rusting infrastructure...)

It looks to me like oil prices are going to have to go higher to support this infrastructure spend and that without it things will get a whole lot worse. The fact -as now shown from our experiance of 2008- is that much higher prices crash the economy and reduce investment as oil prices crash... Now, the recent announcement by KSA that they need >$60 oil IMO puts a 'floor' on the price, below that they would probably shut down production...

Two thing seems clear: we need to become increasingly efficient in our usage of oil if we are to avoid discretionary income leaking away and crashing the economy and Infrastructure spending is going to have to increase a lot over the coming decades...


My real concern is the "network" that holds everything together, including the physical infrastructure (like paved roads) and the financial infrastructure (permitting free trade among international businesses, and permitting homeowners to buy such necessities as electric power). These networks need to hold together, or we will be in very tough shape.

I think the focus will be on mitigating the obvious decline issues (more efficient cars), but will miss what is the real issue--the invisible networks that hold everything together. These networks don't have any politician championing them as the major issue, and are difficult to address, so likely will be missed.

The original article is an interview of Glen Sweetnam, director of the International, Economic and Greenhouse Gas division of the Energy Information Administration at the DoE, by French newspaper LeMonde's energy reporter Matthieu Auzanneau.

The article was posted last month in the Le Monde blog.

Sweetnam's report along with the Defense Department's Joint Operating Environment 2010 indicate that the Peak Oil light is starting to leak under the door of the American Establishment which is largely invested in denial.

Glen Sweetnam, who is supervising in Washington the preparation of the next annual International energy outlook, now seems to wonder whether his “more unfavorable” scenario isn’t the right one, when he contemplates, in his interview with me, a decline of world liquid fuels production starting in 2011.

Such a sense of uncertainty cast by the Department of Energy is unseen. The DoE usualy stands among the most optimistic sources regarding the issue of depletion of world oil reserves.

Glen Sweetnam’s warning comes after a long set of warnings dealing with possible troubles ahead on the supply side of the world oil market. Those warnings have been emitted over the last years through a range of sound sources such as The Wall Street Journal, The Houston Chronicle (main daily newspaper of the world capital of crude oil trade), the CEO of Brazilian oil company Petrobras, a former n°2 of Saudi national oil company Aramco, an International Energy Agency ‘whistleblower’, the chief economist of the IEA himself, the UK Industry Taskforce on Peak Oil & Energy Security, or legendary-wildcatter-turned-renewable-tycoon T. Boone Pickens.

Perhaps the establishment will acknowledge peaque oil twenty years or so after it has come and gone ...

Funny, Pique Oil.


Boy, your links were seriously screwed up.

Please be careful, and check your links in preview before hitting "submit." If you don't want to deal with HTML, you just post the bare link and it should linkify. Also, using Firefox and extensions like BBCodeXtra will make posting links much easier.

I always use bare links because

1) It lets people know where they are going (Washington Post, IEEE journal, etc.)

2) It is simple and easy :-)

No one seems to mind.


These networks need to hold together, or we will be in very tough shape.

Sounds like you are talking about 'the BAU system' itself.
The NAFTA block is self sufficient in coal and natural gas, now and really for the next few decades at least.
The question is crude oil but even there the situation is not dire.
The US produces 5 mbpd of crude and imports 13 mbpd with 3.8 mbpd coming from Mexico and Canada.
Gasoline represents 44% of that crude oil.
Government rationing in WW2 reduced domestic gasoline consumption by 40% in 1943
and GDP went down by 1.8%( but then went up by 28% the next year, on average 7.6% rise per year 1942-1945). Of course this would make efficient cars quite valuable.


If we applied the same rationing to crude oil products, we would reduce oil use from 18 mbpd to about 10.8 mbpd not too far from 8.8 mbpd we produce now.
Ethanol replaces about .5 mbpd so it is possible to reduce the gap even more.
The US grew despite unpopular rationing but clearly the situation wasn't BAU.

Are you arguing that the US cannot change in anyway without the network collapsing?
Are you arguing for BAU?

SHORT term rationing can be achieved. Why do YOU think GDP increased the following year. WWII presented a purpose and goal and there was an unquestioning belief in a return to the norm (BAU)after small sacrifices had been made.

EVERYTHING you said is a complete screwing of facts. The past in your example having absolutely no bearing on what is taking place now. You are one very dangerous person by being deliberately misleading.

You should read more, probably "Blackout" by Heinberg would be a start and deliver you some knowledge about coal.

Stop and take some long, calming breaths, B'its. Maj was just pointing out precedents. We could also save huge quantities of gasoline by coordinated carpooling and jitney services--made easier by communication technologies. We COULD do all sorts of things that would greatly mitigate the coming maelstrom.

But I think maj would likely agree that, although many things are possible, nothing much in fact that is very effective is likely to be done; so, yes, it's going to be very, very bad, as Heinberg and others have suggested.

the invisible networks that hold everything together....don't have any politician championing them

I think politicians don't want the Public to see that Adam Smith's Invisible Hand is giving us the Finger.

Speaking of cutting oil use, did anyone else see the IMF article in the Washington Post today? (free registration required).

For nations living the good life, the party's over, IMF says

In the lingo of the International Monetary Fund, the future of the world hinges on "rebalancing and consolidation," antiseptic words that would not seem to raise a fuss.

But the translation is a bit ruder, something on the order of: "Suck it up. The party's over."

To keep the global economy on track, people in the United States and the rest of the developed world need to work longer before retiring, pay higher taxes and expect less from government. And the cheap imports lining the shelves of mega-chains such as Wal-Mart and Target? They need to be more expensive.

To keep the global economy on track, people in the United States and the rest of the developed world need to work longer before retiring, pay higher taxes and expect less from government.

Not so different from the long term trends evident over the past twenty year. Perhaps the IMF is saying the obvious, it's BAU, except that today the downward mobility of the middle & lower classes is poised to further accelerate.

Elizabeth Warren is gaining more and more credibility every day.

I found an article on the insurance coverage for the recent blowout in the Gulf of Mexico:

Sunken Oil Rig Owner Could Be Liable For Millions, Lawyer Says

The firm owning the drilling rig that sank in the Gulf of Mexico could be liable for millions of dollars depending on its leasing agreement with BP, a lawyer familiar with oil and gas litigation said.

Meanwhile, in a filing with the Securities and Exchange Commission, Transocean, a global provider of drilling management services based in Zug, Switzerland, said the insured value of its drilling rig was put at $39 billion in aggregate.

Its insurance program consists of a combination of commercial market and captive insurance policies. The company maintains a $125 million per occurrence deductible on its hull and machinery, subject to an aggregate deductible of $250 million, Transocean reported.

However, in the event of a total loss or a constructive total loss of a drilling unit, the loss would be subject to a deductible ranging from $500,000 to $1.5 million.

The company also maintains a $10 million per occurrence deductible on crew personal injury, $5 million deductible on non-crew claims and aggregate deductible of $50 million.

The company says it carries $950 million of third-party liability coverage.

Transocean retains the risk for any liability losses in excess of the $950 million limit.

I don't know how the liability will be split with BP--there will likely be litigation on this matter (although perhaps there are written agreements that also apply). One possibility would seem to be "blowing through" the $950 million liability coverage.

Some other things from the same article:

Keith B. Hall, an attorney with the law firm Stone Pigman Walther Wittmann LLC in New Orleans, said there are three areas of liability coming out of this incident:

• Loss of life and personal injury.

• Liability to the government for its emergency response.

• Economic loss to private parties, in this case BP and Transocean.


Environmental concerns seemed to subside today with reports there was no oil leaking from the well site.

The company [Transocean] said in the filing that its customers [in this case, BP] “generally assume, and indemnify us against, well control and subsurface risks.”

Based on the second quote, any oil leak problems are likely BP's.

Based on the last part of the first quote, if Transocean is found to be at fault for the accident, and BP has substantial economic loss, then it would seem like Transocean could end up with substantial liability to BP. The reverse would also seem to hold if BP is somehow liable.

I'm trying to comprehend the overall economic impact of this event.
Anyone know what the total daily cost for the DH Rig was?
Where was it in it's Lifecycle? How more are like it exist or are being built?
Few seem to realize that deepwater production is neither a mature industry or common.
ie. what is the % of global oil supply comes from deepwater? A percent or 2 ?

I was a large plastics (PE) converter when Phillips Adam Terminal Ethylene chain lit off,
it was a decade before the market was back to normal. Anyone want to stab at the
discovery wealth this Rig would have generated in it's lifetime? Seems like discovery
efforts at this point is truly critical.

The blowout occurred in what was a new well, that wasn't in production yet, and wouldn't have been for quite a while. The accident will move production back a while (a year perhaps??). I don't know what the area will produce eventually--perhaps 100,000 barrels a day would be a guess, just based on the fact that not many fields are very big.

In total, Federal Offshore Gulf of Mexico production is shown in this graph

So in total, for all the gulf fields, out in Federal waters, away from the shore line, oil production amounts to about 1.6 million barrels a day, or about 2% of world oil production.

Production close to the shore line (miles varies by state, I believe) is treated as "State Offshore". It adds a bit more, but not a whole lot:

Offshore oil does make up a fairly significant share of US oil production. For the latest month, these two areas (Federal Gulf offshore and State Offshore) make up 35% of US oil production.

There is also a significant amount of natural gas produced in the Gulf of Mexico. Federal Offshore Natural Gas has been dropping quite a bit in recent years, and now comprises about 11% of US gas production.

Gail, what is the explanation for this sawtooth profile?

My first guess is that there are a handful of larger fields that are dominating the production. If you look at the side of the chart, the volume per day isn't very much--only about 400,000 barrels a day. It is possible to have a single field that produces half that amount, or certainly a fourth of that amount. There could be some smaller fields that provide a base, in addition.

Some other things could cause this patterns too--new areas being opened up for leasing, or new technology allowing drilling farther offshore, for example.

It probably would be better to get an answer from someone closer to the situation.

I know that wells do deplete rather quickly in the GOM, based on graphs Matt Simmons has shown.

Gail -- The pattern surprises me also. But I’ll make up an unsupported answer that has a fair chance of being right. As you say the volume isn’t huge so it can be easily skewed. But I would guess just the opposite: multiple smaller fields developing especially post 2000. As memory serves there have been no major state water oil fields discovered off Texas and La. during these periods. It may be a combination of the pricing cycle and advances in 3d seismic. Oil is much more difficult to identify on seismic than NG but as the data improved so did the success rate chasing oil. At some points in time the improved seismic capability coincided with an up price period and many new wells were drilled for oil in the state waters. Thus I’m guessing those saw tooth peaks are the result of numerous small fields coming on line at the same time. Another factor might be the mis-classification of gas condensate with oil. Increased drilling for NG fields with high condensate yields be come a hot target during these times also.

But, as I said, unsupported.

So it sounds like we want to understand whether the jagged profile is caused by counting noise or causal activities.

1. Get the individual pieces of data that composes the aggregate.
2. Plot and correlate the individual data and see if that has the same structure.

If the individual data profiles have the same structure then likely it has some causal origin based on aggregate economic decisions (recession, futures, etc) . The data is not independent.

If the individual data profiles are uncorrelated, then it likely as to do with counting noise or unique problems independent of the other pieces of data.

Apparently the data is all available so someone should look into it. That is what statistics is all about.

is it possible that this is just eia "new methodology" ? eia production reports are a little like the dow, the components change from time to time.

I ran into some information on likely production from the new well:

BP’s Gulf of Mexico Plans Unlikely to Be Set Back by Rig Blast

BP Plc, the biggest oil producer in the Gulf of Mexico, is unlikely to see output suffer after the Deepwater Horizon rig it leased exploded and sank, because the deposit it was drilling was relatively small.

The reservoir probably contains less than 100 million barrels and was of commercial interest mainly because of its proximity to existing pipelines, according to a person with knowledge of the matter who declined to be identified because the information wasn’t public. BP’s output in the area is 450,000 barrels a day.

“It’s not Thunder Horse, it’s not going to set them back three years,” said Iain Armstrong, an analyst at Brewin Dolphin in London. Thunder Horse, BP’s flagship deepwater Gulf project, was plagued by delays before starting production in 2008.

“It’s not Thunder Horse, it’s not going to set them back three years,” said Iain Armstrong, an analyst at Brewin Dolphin in London. Thunder Horse, BP’s flagship deepwater Gulf project, was plagued by delays before starting production in 2008.

I note here that this Iain Armstrong, in common with every single other analyst quoted in the media, has failed to notice the disastrous production collapse due to rising water-cut at Thunder Horse South and implies that all its problems are in the past. Therefore I would suggest his opinion be taken with a pinch of salt.

Thanks for digging up this information. It would be very interesting to see the trend in the industry's insurance costs.

It seems to me that the immediate aftermath of this could be that insurance rates for this type of activity could become too onerous to allow further development of this type of activity. In the immediate aftermath of Hurricane Iniki it became virtually impossible to get hurricane insurance in Hawaii. The state had to set up a hurricane relief fund, funded by premiums, of insured homeowners. The rates were high. Eventually, years later, the insurance companies came back and the state is now looking at how it can raid this fund, as you would expect.
When I see total insured value of many billions, you can be sure the insurance company actuarial people are working overtime. As is stated below, this is still a young industry. The fallout begins.

So it would take almost 500 million barrels at $80 per barrel just to pay for the insured value of the rig?

It should have quite an effect on the EROI for that field.

TEHRAN (Reuters) - Iran has the capacity to produce more than 4.1 million barrels per day (bpd) of crude but is pumping at well under that level due to OPEC restraints, Oil Minister Massoud Mirkazemi said on Saturday.

Iran holding back production whith oil at $80+ per barrel and with a second revolution simmering?? I very much doubt it.

For years, China curbed its once-explosive population growth with a widely hated one-child limit that at its peak led to forced abortions, sterilizations and even infanticide. Now the long-sacrosanct policy may be on its way out, as some demographers warn that China is facing the opposite problem: not enough babies.

A people shortage may seem unlikely in a country of 1.3 billion, the most in the world. The concern, though, is not with the overall number. Rather, as the population shrinks, which is projected to begin in about 15 years, China may find itself with the wrong mix of people: too few young workers to support an aging population.


This is a good sign. The world needs more people :)

They now need a one grandparent policy. Their logic is shared by many countries throughout the world, including some in Europe,is a recipe for enhanced global disaster.

Human beings just can't seem to get the mix between the young and old right.

Human beings just can't seem to get the mix between the young and old right.

What on earth could that possibly mean? As a matter of simple math, a steady-state population will skew much older than a rapidly growing population. Like it or not, you don't get to alter the age mix independently of the growth rate except by a modest amount and that only in the very short term.

Now if you mean that we have become capable of keeping people technically alive long past when they've gone completely gaga, and we really haven't the foggiest idea what to do with the exploding number who are in that condition, I'd have to agree. But why would we know what to do, when the problem has only surfaced at a significant scale fairly recently?

Our current "morality" says to throw in all possible medical care and so forth no matter how futile it might be, which was fine and dandy (and empty) as long as medical care all but didn't exist. But now that "morality" has turned inexorably into an unworkable Ponzi scheme requiring rapid population growth to keep it (just barely) going. When people prattle idly about tackling "tough questions", maybe this sort of thing is really what they're talking about, even if they don't know it and wouldn't want to know it.

Human beings just can't seem to get the mix between the young and old right.

What on earth could that possibly mean? As a matter of simple math, a steady-state population will skew much older than a rapidly growing population.

We've had some old SciFi stories (Blade Runner?), where they killed people when they hit thirty. So with a dramatic change of morals anything is possible.
The other approach would be to have good enough medicine and lifestyles to keep most people productive much longer than is currently the custom. I hope this becomes feasible.

Logan's Run, and 30 is truly fiction requiring more than a mere change of morals.

Combine this with a policy that no one can have children before 30 and you have a prescription for very fast population depletion ;-)

Aim for allowing the option of death with dignity for patients who are terminally ill or vegetables.

The establishment biases are there, you just have to look for them.

"Interest rates NEED to be low (because 'everyone' is a consumer and borrows money.)"

"Populations need to grow (because 'everyone' is middle- aged and needs young people to labor on their behalf as they get even older.)"

Everyone is NOT a consumer and low rates equals no return on conventional risk for lenders, who have not vanished to Mars but simply will not lend at zero return. No yield eliminates earned capital; speculative finance- generated lending is substituted for it increasing overall risk. The (American) capital that would have been saved by US workers is languishing in 'cold storage' in China, where it does little good for either country.

Everyone is NOT retiring. The problem is people hanging onto jobs (for dear life) leaving fewer jobs for younger people. The highest levels of unemployment are those of younger workers, teenagers, entry levels and minorities. This makes retirement benefit calculations more subtle than the establishment suggests.

If people were to work until they were physically incapable, there would be less demand for entitlements - as workers would pay into the system rather than collect benfits. The 'need' for population growth would be diminished. At the same time, long term employment for mature workers threatens to leave a large segment of the working- age population more or less permanently unemployed ... with diminishing skills as a byproduct. So, a higher level of benefits is necessary to convince workers to stand aside for younger cadres. At the same time, taxes for retirement support levied on younger workers must be low enough not to discourage the younger workers from taking employment. finding the right balance here is difficult.

The growthsters' assumptions are that adding people will magically add wealth to the system, similarly to the idea that growth would magically keep real estate prices in the US and elsewhere rising forever.

Believe me, this will take care of itself. I've said it before and I'll say it again.

Modern medicine is extremely complex and just as reliant on the just-on-time delivery of drugs, materials, technology, workers etc. that an oil based society so easily and wondrously provides. As the oil goes, so does modern medicine.

So you'll have people more naturally die of heart disease, cancer etc. Not to mention the return of previously controlled, or the spread of new, infectious diseases.

So it's not so much a question of "death panels" or taking granny off the vent. There won't even be a vent, much less what we think of as a hospital. Or it will be too expensive for widespread use.

After Katrina, three major sources of mortality were removed from New Orleans,

- Nursing home population
- A large majority of the frail elderly
- Anyone diagnosed with cancer was told to leave town and get treatment elsewhere

Despite this, the death rate increased by 48% in the first six months after Katrina and stayed high for a couple of years.


Is it really the case that "strong wind, clouds and rain" have halted the cleanup? Clouds???

Rain, choppy seas halt cleanup near sunken oil rig

NEW ORLEANS — Choppy seas, strong winds and rain halted Saturday's cleanup of an oil spill around the massive oil drilling rig that exploded and toppled into the ocean off the Louisiana coast.

..The bad weather rolled in Friday, bringing with it strong wind, clouds and rain that interrupted efforts to contain the oil spill. Petty Officer Erik Swanson of the Coast Guard said cleanup would resume once the weather cleared.

A boat with an oil boom tries to contain oil seven miles from the well

Just to give some more sense of scale to that pic


Coast Guard: Oil leaking from blast site

NEW ORLEANS - The Coast Guard says oil is now leaking from the damaged well that fed a massive rig that exploded this week off Louisiana's coast.

Guard officials on Saturday estimated that as much as 1,000 barrels of oil is escaping each day from the well head on the ocean floor, increasing the threat to the Gulf's fragile ecosystem.

As recently as Friday, the Coast Guard had said no oil appeared to be leaking. Rear Adm. Mary Landry said on Saturday that the leak was a new discovery but could have begun when the rig sank on Thursday, two days after the initial explosion.


Deepwater Horizon Incident, Gulf of Mexico

Situation – Saturday 24 April

The situation remains highly dynamic with severe storms and high seas hampering response efforts. Winds have been 20-30 knots gusting higher, seas 7 1/2 feet, with a tornado watch for coastal waters. The Mobile Offshore Drilling Unit (MODU), or rig, has been located on the seafloor approximately 1300’ northwest of the well. The riser has also been located and traced by remotely operated vehicles (ROVs).Two leaks have been identified, preliminary estimates are that the well is leaking 1000 barrels (42,000 gallons) a day at a depth of 5000’. The estimates will be revised pending information from ROVs monitoring the seafloor and surface and overflight observations as weather conditions allow. A flotilla of response vessels and personnel are on-scene. The U.S. Coast Guard suspended its search for 11 missing crewmembers on Friday, April 23. NOAA extends its deepest sympathies to the families and friends of the missing.

On April 24, aircraft observations indicated a 20-by-20-mile area of rainbow sheen and emulsified crude oil. All available response assets are either mobilized to clean up existing oil or on standby in the event that the release worsens. Planning teams are considering potential response strategies to control the well and address the floating oil. These include application of dispersants, drilling of relief wells, shoreline protection and assessment, cleanup plans, and working with state and local governments.

The latest NOAA oil-spill trajectory analyses do not indicate oil reaching shore over the next 3 days; this assumes that the rate of oil release is steady and weather remains as forecast.

NOAA Roles

The NOAA Office of Response and Restoration (OR&R) has 8 personnel on-scene and another 25 are providing home team scientific support. Many of the latter are also on standby to travel on-scene if necessary. Staff from NOAA's Office of Response and Restoration (OR&R) in the Emergency Response Division (ERD) have been providing scientific support to the U.S. Coast Guard and Unified Command, including predicting where the oil is going and its effects, identifying resources at risk, providing weather forecasts, and planning response and over flight operations. OR&R is coordinating with state and federal stakeholders to determine the potential severity of the incident and whether natural resource injuries may have occurred.

A NOAA Scientific Support Coordinator (SSC) is on-scene at the USCG Command Center in Houma, LA. Another NOAA SSC is at the BP Command Post in Houston, TX. A support team from ERD is also on-scene, including two additional SSC, an overflight specialist and physical oceanographer, and an information manager. NOAA’s Assessment and Restoration Division is coordinating with state and federal trustees on planning for assessment of injuries to natural resources. The National Weather Service is providing forecasting support. NOAA Data Buoy Center data is also being used in oil trajectory forecasting. NOAA Fisheries is engaged on issues related to marine mammals, sea turtles, and fishery resources. NESDIS is providing experimental imagery.


The incident involves a deepwater drilling platform approximately 50 miles southeast of Venice, Louisiana. An explosion and subsequent fire damaged the rig, which capsized and sank on April 22 after burning for hours. It is unclear how much of the estimated 700,000 gallons (approximately 16,700 barrels) of #2 fuel onboard burned before it sank. The rig is owned by Trans Ocean and under contract to BP.

For NOAA media inquiries please contact John Ewald or Keeley Belva at (240) 429-6127.

A Joint Information Center (JIC) has been established for response inquiries: (985) 902-5231 or (985) 902-5240.

I am surprised we have not had a key post on this incident.

I am surprised we have not had a key post on this incident.

Reuters: Well beneath sunken US rig has serious oil leak

"We are classifying this as a very serious spill and we are using all our resources to help contain it," Coast Guard Petty Officer Connie Terrell said.

Our readers are providing some awfully good information.

It would be best if that information was located in one thread rather than spread out among many.

Two leaks have been identified, preliminary estimates are that the well is leaking 1000 barrels (42,000 gallons) a day at a depth of 5000’.

What's the betting that the following pic is of the more minor "leak"

BBC: 'Serious spill' from sunken US oil rig

This image provided by the U.S. Coast Guard Saturday April 24 2010 shows oil leaking from the drill pipe of the Deepwater Horizon 5,000 ft beneath the ocean surface.

Oil is leaking from a damaged well feeding a rig that sank off Louisiana on Thursday, in what US officials are calling "a very serious spill".

...President Barack Obama said on Thursday that the government was providing "all assistance needed" for both the rescue and clean up efforts in the troubled area.

He described the crisis on the BP-leased rig as his administration's "number one priority".

I've just watched an hour of CNN International and there hasn't been a single mention of the US government's "number one priority". I guess the censors haven't got out of bed yet to give new orders.

"Sometimes I feel I'm not a reporter, I'm just reading the words of the machine."
- Anderson Cooper.

Tow -- That pic of oil coming out of the drill pipe adds a little to the theory of what went wrong. Picture a pipe (drill pipe) inside of another pipe (the casing) inside of a hole and you want to stop oil flowing out of both tubes. You can seal off the outer pipe with rubber seals but you can’t get to the inner pipe because of the outer pipe. Blow outs thru drill pipe are not uncommon. Part of the BOP system are shear rams which are designed to do just as it sounds: they slam shut with tremendous force and cut the drill pipe in two. No small task given that drill pipe is made to be extremely strong. If the shear rams don’t make a clean cut then anything coming up the DP will reach the surface. The worse case scenario is when the shear ramps only make a partial cut but are then are stuck in the DP. Basically can’t go forward and can’t go back. In technical language is referred to as being screwed.

And not to take anything away from the Coasties as they do a great part on the rescue side, but otherwise the gov't has nothing to do with the well control and environmental clean up. It's all handled by the industry. Which isn't a bad thing given events like FEMA's response to hurricanes.

Houston Chronicle: Oil may spew for months after rig blast

A slow-motion environmental disaster may be in the making with the discovery Saturday that 42,000 gallons a day of crude oil is spewing from a well on the bottom of the Gulf of Mexico near where a huge drilling rig sank last week — and it could be months before it's stopped.

The spill, which a day earlier Coast Guard officials believed was contained within a 16-square-mile area on the surface, now covers some 400 square miles — slightly bigger than the city of Dallas — and could grow as the well continues to leak, Rear Adm. Mary Landry, commander of Coast Guard District 8, said on Saturday.

“This is a very serious spill,” she said at a news conference, adding that governments of Texas, Louisiana, Alabama, Mississippi and Florida had been warned about the threat of oil coming ashore and are invited to participate in the response.

Word of the expanding spill came as the Deepwater Horizon drilling rig was found capsized and lying on the sea floor about 1,500 feet northwest of the well, located roughly 40 miles off the coast of Louisiana.

Canadian housing market correction in the cards, says economist

I'm still waiting for the Canadian real estate bubble to pop -- it could happen any time now. However, I'm really surprised how long bubbles can be sustained.

In 1997 I predicted that the dot.com bubble would pop anytime, but it didn't happen until early 2000. I remember visiting a cafe in San Francisco in 1999. The room was darkened but peoples faces were lit up from the laptop screens they were staring into. I asked one of the guys if they were programing websites this late in the evening.

He said "no, they were just checking their stock options".
"So everyone wants to become a millionaire?" I asked.
He said "no, they all want to become billionaires".
"But where is all that money going to come from" I asked?
His reply, "you don't understand, it's the new paradigm!"

Canada, the UK, and Australia seem to be the last places. Of course there's mainland China but it's hard to really figure out what's going on there.

The crash in Canada is going to be severe. The Asian money in Vancouver might just as soon quickly reverse and go back to Hong Kong and Singapore when things start to look bad.

Long term Canada should do ok given it's wealth of natural resources not to mention that it has prime land if the globe starts to heat up. But for now it's a shame to see a proud country so badly mismanaged.

Australian real estate just continues to rise and rise - some very bearish commentators believe it is a bubble with a serious (20-30%) correction overdue, but there seems no sign of it - assuming that a sign would be visible prior to the pop. Median house prices compared to median wages are at all-time highs, while affordability for most working and middle class buyers has reached historical lows (and is among the worst in the world).

The federal government has just announced new regulations concerning visa-holders having to divest property when they leave the country - a lot of cashed-up Chinese and other Asian buyers are seen to be a factor in forcing higher prices. I went to an auction last Saturday (most houses are sold by auction in the capital cities) - a relative of mine was selling her modest 1940s Californian bungalow in a nice but not exceptional street - three bedrooms and just one bathroom. Her reserve price was about $A750K, and the property sold at $A970K - with 4-5 keen bidders, and the (overseas) buyer thought he got a good deal. There are hundreds of these every weekend in Melbourne.

Who knows where it is going? But my partner and I are selling our modest portfolio pretty quickly - there must be a "pop" one day you'd think, despite the much-publicised housing shortage, and strong population growth.

The UK housing market has already gone south. Canada and Australia are different in that they are major resource producers with small populations, and their banking systems did not participate in the "global economic meltdown" because their banks were not allowed to indulge in the kind of get-rich-quick schemes that sank the US banking system.

There is an awful lot of money going into Canada and Australia, mostly from Asia. This is particularly true of Australia, which is closer to Asia and has more of the kind of resources China and India want, but Canada is also receiving a lot of money.

Vancouver is booming mostly because it has the biggest port on the West Coast of the Americas, and there is heavy two-way trade going through it. Canadian resources going to Asia, Asian manufactured goods going to Canada and the US. Canada can use its resource exports to pay for the goods, but the US has a problem in that regard.

There might be a crash if global energy prices decline dramatically, or the Asian economic boom comes to a halt. Neither appears to be in the cards at the moment.

Yesterday, I audited a local body shop. The front half of the building is heated by an air source heat pump, but the rear service bays have in-floor radiant heat supplied by a 120 kW electric boiler -- a Thermo 2000 DTH600120 (http://www.thermo2000.com/pdf/en-US/specs/DTH.pdf). Not surprisingly, the business has a high energy bill due in large part to its poor load factor.

When the building was constructed three years ago, the owner opted to go all-electric because he didn't want to heat with oil; at that time, fuel oil prices were trending upward and electric seemed like the better choice (and it would be, if he could improve his load factor). Also, he wanted in-floor radiant heat so that the guys working on vehicles wouldn't be laying or kneeling down on a cold concrete slab.

This particular boiler has four stages (30 kW each), and each stage is controlled by its own aquastat. Thus, during milder weather, only the first stage is activated. However, if the return flow temperature falls below the second aquastat's set point, the next stage is turned on, and so on.

My recommendation would be to limit the operation of the electric boiler to the first stage only and to use a high efficiency air source heat pump to provide "volume" space heating. This would allow the slab to remain warm so that the guys working on the vehicles can continue to be comfortable, but the bulk of the space heating demand would be met by an air source heat pump that is two to three times more energy efficient.

Alternatively, if the customer does not want to go this route, I would adjust the second, third and fourth aquastats so that the following three stages kick on only if the slab temperature drops significantly. With this, I would install a time lock-out on these additional stages so that they only turn on after-hours when demand is lower; thus, the first 30 kW element can continue to operate freely during regular business hours, but these additional stages would be restricted to the overnight hours after everything else has been turned off for the night.

This customer pays $9.034 per kW of demand, so, at a minimum, if we can prevent the fourth stage from turning on, it would reduce their demand charges by $271.02. In addition, 6,000 kWh of their energy usage would shift to the lower cost second tier, which would result in a further $169.32 in energy related charges, for a combined total of $440.34/month. And if we can likewise prevent the second and third stages from activating during the business day, their savings triple to $1,321.02 per month.

A couple hundred bucks to install a timer and a couple low-voltage relays and some tweaking of the aquastats would allow us to eliminate up to 90 kW of demand during the critical peak hours and shave some $5,000.00 a year from this customer's power bill. And if we can displace the bulk of their space heating demand with a high efficiency heat pump, the cost savings to the customer could easily exceed $10,000.00/year.


I understand your want to help reduce the shop's electric bill, and you propose some good ideas. For many years I have worked as a consultant to companies that rebuild railroad cars and other transportation equipment. Many shops are located in the upper Midwest (one in Fargo, ND) and have similar problems with heat. As oil costs have risen most companies keep the shop temperature no higher than 54 deg. F or about 13 deg C. The employees then have to wear a sweatshirt or light coat while working. If floor heat is set this low then heat loss to ground is much less too.

Workers tend to move around more when temp is lower, so productivity is better at 54 deg. F than at 70.

Mark in St Louis

I appreciate your comments, Mark. I'm not a HVAC engineer and I certainly don't want to recommend anything that won't work as promised or that results in unhappy employees. My hope is that there is sufficient thermal mass in the slab to eliminate the need to fire-up these additional stages during normal business hours; so, again, the first 30 kW would run at will to help minimize slab cooling, and the following stages can help bring it back up to temperature, but only during off-peak hours.

An air-to-water heat pump working in tandem with the electric boiler is another option. Outwardly, the system would continue to function as it does now, but the heat pump would assume primary responsibility, or at least offset as much of their space heating demand as is technically and economically feasible.

Our first objective is to improve their load factor so that their average cost per kWh is brought back down to earth, and a few minor adjustments to the aquastats and the installation of a timer control should accomplish that. This is a low-cost/low-risk option that can be easily reversed or fine-tuned if need be. Then, if it makes good sense to do so and provided the customer is agreeable, an air-to-air or air-to water heat pump could be added to offset as much of their resistance heat as possible.


Also, he wanted in-floor radiant heat so that the guys working on vehicles wouldn't be laying or kneeling down on a cold concrete slab.

Health and safety education campaigns ought to be discouraging kneeling directly on a concrete slab of any temperature. Injuries aren't just of the immediate sort.

If for the lack of hoists or pits, they've got to lay down from time to time use a mat, even cardboard.

A lot of space heating and cooling requirements can be met by wearing seasonally appropriate clothing indoors, as well as outdoors.

Brainpower is the energy of the future.

Hi toil,

I didn't observe the workers in action, so I'm only going by what I was told, but hopefully they follow good industry practices. I can tell you that the place is absolutely spotless. I've seen a lot of truck and auto service bays over the years, but this one is head and shoulders above the rest in terms of cleanliness.


Heating with electricity generated by boiler fuel must be very inefficient. Do they use boiler fuel for electricity generation in Halifax?

Hi karlnick,

Natural gas is unavailable at the customer's site, so the two main alternatives are oil and electric heat. As mentioned, the front section is heated with an air source heat pump, but the owner wanted in-floor radiant in the shop bays. That being the case, a ground source heat pump would have been my preferred option, but there could have been technical issues that ruled that out or perhaps the first cost was deemed too high.

The cost per kWh of electric heat at the lower cost second tier is 6.78-cents, which is the equivalent of fuel oil priced at 59.5-cent per litre ($2.25 per U.S. gallon), not including the $9.034 per kW demand charge. The average cost of fuel oil in Halifax is currently 86.0-cents per litre and it had been as high as $1.40 a litre not that long ago. It's easy to understand why the owner opted to go electric.


I think you've covered most of the "supply side" options. I would think a heat pump for the water would be best from an efficiency standpoint. Shouldn't heat pump to water be more efficient than heat pump to air? But of course even air source to air in the vicinity should reduce the load. I would also think about better insulation as a way to reduce the needed load. I can imagine stuff like uninsulated garage doors etc. that have very small R factors (and load scales as area divided by R factor. So adding a little bit of insulation to an area with very little to start with could make a big difference.

Hi EoS,

The building is relatively new, nonetheless I expect the amount of insulation inside the walls and ceiling and underneath the slab to be less than optimal (it almost always is). The heating system and thermal envelope fall outside the scope of our work, given that our focus is strictly lighting, but the potential savings related to this boiler dwarf everything else, so I wanted to pencil out a few options for the owner as a courtesy. Adjusting the aquastats and adding a timer control is probably as far as we'll take it. Any further alterations or enhancements to the heating system should be carried out by a qualified HVAC engineer and not someone like myself.


"Shouldn't heat pump to water be more efficient than heat pump to air?"

Heat pump to water should be more efficient then the temperature of the water is warmer than the air.

One major drawback with air is that it will be least efficient during cold days then the most heat is needed although it will not hit the end user unless the power company could charge different fees for different days. I guess this is one of the rare cases there the small end user have an advantage over the large electricity companies. In large scale air heat pumps could be very expensive for the power companies since they must have sufficient spare capacity. Note that less heat could be drawn from the air at the same time as more heat is needed and this extra power is only needed for a short period of time each year.

Hi karlnick,

I think I'm going to ditch the heat pump suggestion, unless I can secure suitable funding from Nova Scotia Power. What I might suggest is that we reduce the first and second stages to 15 kW each, i.e., three 5 kW elements as opposed to six, one per phase so that they remain in balance. Thus, during the milder times of the year, only 15 kW would cycle on and off and not the full 30 kW. As the weather turns colder and the first stage can no longer keep up, the second stage would turn on, but it would only add an additional 15 kW to the load. Ideally, the third and fourth stages would remain locked out during normal business hours so that the maximum daytime load remains at 30 kW. And if we can push the envelope further, we might limit the third stage to 15 kW as well and leave the fourth at 30 kW, as summarized below:

     Stage 1 - 15 kW
     Stage 2 - 15 kW
     Stage 3 - Timer lock-out
     Stage 4 - Timer lock-out
    Maximum: 30 kW

     Stage 1 - 15 kW
     Stage 2 - 15 kW
     Stage 3 - 15 kW
     Stage 4 - 30 kW
    Maximum: 75 kW

Even if we forego the heat pump, we still gain up to a 90 kW reduction in peak demand during daytime hours (@ $9.034 per kW/mth) and shift 18,000 kWh/mth to the lower cost second tier (i.e., 6.781¢ per kWh versus 9.603¢), for a net savings of $1,321.02 per month. And if the client does not want to lock-out the the last two stages during the day, de-rating the first two (or three) in this manner would be a simple, zero-cost and worthwhile alternative.


Bill McKibben has always struck me as a puritanical figure who needs to lighten up a bit.
You'd think he'd be ready to surf the waves on Hawaii's North Shore.

But not McKibben.

I've read his book on the joys of cross-country skiing, Long Distance. He went on some pretty wild excursions. Is that what one would call Puritanical? Why do these writers feel like they have to make stuff up?

I have had the chance to meet with Bill McKibben and chat with him for a while. He is very thoughtful about what he says, and although he may come across as rather sober once in a while, he has a great sense of humor. I would never think of him as puritanical.

So great to know, SG.

This guy comes off cool as a cucumber any time I have heard him on the radio.

Thailand is close to civil war as its British-born PM rejects deal with angry Red Shirts

He came to power as the decent leader: a smooth British-born and Oxford-educated Thai aristocrat who promised to end political turmoil and restore democracy.

But Abhisit Vejjajiva was cowering behind razor wire in a military barracks in suburban Bangkok as his capital, turned into a smoking battlefield by mobs in red shirts, braced itself for an expected bloody crackdown.

Seems economic, climate and energy collapse is taking its toll around the globe. Korea, Belgium, Greece, Iran, Thailand, Kyrgyzstan, the list seems to grow daily as more countries fall into crisis for one reason or another.

Seems Mahmoud Ahmadinejad has been busy:

Iran strikes secret nuclear mining deal with Zimbabwe's Mugabe regime

Iran is running rings around the US, which seems to be at a complete loss as to what to do. Obama's panicky visit to Afghanistan followed Ahmadinejad's visit there to bolster ties with Afghanistan. Essentially Iran is holding the US by the balls and threating to tighten its grip if the US does anything about it. Likewise, Israel seems to be in a funk to, with an attack on Iran swiftly bring immediate conflict on multiple fronts.

And as long as fission power is an option for civilians - what ya gonna do - say Iran can't split atoms?

Mining Fissionables can be used for civilian power....

I admit that if I could afford one, I'd be living in a better house. Better not bigger. The house I live in is the family home, paid for, and rther small by most of today's standards under 900 square feet. But it can't survive without an Air Conditioner in the Arkansas summer time. My mom and I are always at adds with the temps of the AC I like it at least as low as 80, she'd be happy if it were almost 90 in here, my dad tries not to get into the fight. I also admit I wear shorts outside when it is below 40 degrees with no problem, I like it colder than most people.

But I can't change the house I live it just yet, If I had land I'd build an earth shelter type of home, and make it where I'd need no energy inputs to keep it a base temp.

The other day we were talking about Zoning laws on another thread. And up top there is daily mentions of more people understanding the plight the energy future is in, as well as the sales of homes that are already on the market.

Wouldn't be wise for us to start building homes that did not depend on the need for massive inpits of energy to keep them warm and cool? Wouldn't it be neat if all the design schools out there, had classes on designing for a Low-energy future?

We can talk all day about how we are going to not be able to keep driving our cars, but we hardly ever talk about where we are going to live in the future and in what kind of homes.

I've known about earth shelters for decades, almost my whole life, having seen them in books in 1972 while doing a paper for a gradeschool class. Why can't we live in them I always wondered?

I've drawn several plans for earth shelters, but never had the funds to go out and start one of my own.

We need to push not just car free cities but energy free homes, designs where the ground temps are what regulate your living environment and not an energy needy box of metal gadgets. Something that does not need to be repaired or replacement parts stocked up for the day when your system fails.

Aw well, off to check on the rain collected this morning from the water out of the sky last night.

BioWebScape designs for a better fed future.

...from my local TV News. The financial grind continues...

Garage Sale Economy

Over the last year garage sale listings on craigslist have gone up 80 percent nationwide. And as we found out the economy is playing a bigger role than years past.

About 20 garage sales were going on Saturday throughout Mid-Missouri, despite the rain. Some veteran garage sellers told us so many people are trying their hand at garage sales, the quality of the merchandise has gone down. People are now trying to sell items they normally would have donated or thrown away, because they need the money.

People we talked to say it's gotten to a point where sellers are in desperate need of money ... And buyers are looking for a cheaper alternative.

Because of the increase of garage sales across the country, we found some cities are actually putting a limit on how many sales you can have a year.