Drumbeat: May 10, 2010

Rig Owner Had Rising Tally of Accidents

The sinking of the Deepwater Horizon drilling rig, which triggered the spill spewing oil into the Gulf of Mexico, caught the energy world by surprise. The operator, Transocean Ltd., is a giant in the brave new world of drilling for oil in deep waters far offshore. It had been honored by regulators for its safety record. The very day of the blast on the rig, executives were aboard celebrating its seven straight years free of serious accidents.

But a Wall Street Journal examination of Transocean's record paints a more equivocal picture.

Nearly three of every four incidents that triggered federal investigations into safety and other problems on deepwater drilling rigs in the Gulf of Mexico since 2008 have been on rigs operated by Transocean, according to an analysis of federal data. Transocean defended its safety record but didn't dispute the Journal's analysis.

Oil companies fought stricter regulations

The company that owns the offshore well spewing crude oil in the Gulf of Mexico and other major oil companies spearheaded a campaign to thwart a government plan to impose tighter regulations aimed at preventing similar disasters, according to government records.

In the Gulf of Mexico, what went wrong with the Deepwater Horizon oil drilling rig?

No one is sure what exactly happened on the night of April 20 to trigger this crisis. Critical pieces of evidence, including the immolated rig itself, sit under nearly a mile of water on the mud floor of the gulf.

What's certain is that more than one thing had to go wrong. Some failure of well control permitted a bubble of gas to surge to the surface, where it ignited and turned Deepwater Horizon into a Roman candle in the night. Moreover, the fail-safe mechanism known as the blowout preventer, a massive stack of valves and pistons that is the most critical hardware in the system, failed to choke the well.

BP Preps Second, Smaller Dome

The containment dome that was deployed last week has been parked away from the spill area on the sea bed. Efforts to place it over the main leak point were suspended at the weekend as a build up of hydrates prevented a successful placement of the dome over the spill area.

A second, smaller containment dome is being readied to lower over the main leak point. The small dome will be connected by drill pipe and riser lines to a drill ship on the surface to collect and treat oil. It is designed to mitigate the formation of large hydrate volumes. This operation has never been done before in 5,000 feet of water.

Drilling for oil: The cost of needing our fix

You might expect a disaster of this scale would get us thinking. But the desperation of drilling doesn't relax. Even in recession, the world's oil appetite barely flinched. Shocked as we may be when something like this happens, oil companies have our implicit permission -- thanks to our relentless consumption -- to do whatever's necessary to supply our dope, even to short the safety if that's what gets the job done.

Edwin Black: Oil Spills—Large and Small—Create Continuing Disaster

Environmental damage caused by the petroleum industry and its consumers is earth-shattering, literally. The world focus is now on BP’s massive, out-of-control underwater gusher in the Gulf of Mexico. Estimates of that oil pollution telescope across the numbers. Many sources estimate as much as 5,000 barrels per day are escaping into the Gulf. Other experts say the true number is closer to 1.1 million gallons—approximately 26,500 barrels— per day. A barrel of crude equals about 42 gallons. It is all evolving guesswork based on a cascade of satellite images and thickness estimates derived from visual descriptions of the slick. At press time, at least 4 million gallons—or as many as 21 million gallons—have thus far spilled, and the spill clock is rapidly racing forward.

Oil bashing may cost consumers

THE Obama White House is taking a tough line on big oil. At least, that is how it appeared as pictures of the first oil-soaked birds in the Gulf of Mexico filled TV screens. Ken Salazar, the US Interior Secretary, said he would "keep the boot on the neck of BP" over the Deepwater Horizon oil spill. But he needs to be careful. If he treads too hard, his other boot will land on the neck of Joe Plumber and every American who objects to $US3 gasoline.

How Long Should BP Remain in Charge?

So far the oil and gas gushing from the well drilled nearly four miles into the seabed for BP has confounded all efforts by the company to put the genie back in its bottle. The list of options is expanding to “top hats” and “junk shots,” according to the Associated Press.

When does the time come for the Obama administration to exert more control over next steps? One week ago, I was getting worried that the company might be too focused on conventional means to stanch the flow. Since then, a containment structure — a device that has worked in shallow waters — in this case filled like an upside-down Slushee cup with methane hydrates. In the meantime, work continues on a relief well, but at least two to three months will be required to drill down nearly three miles.

MMS Completes Rig Inspections

The U.S. Department of the Interior's Minerals Management Service (MMS) has completed its inspection of all 30 deepwater drilling rigs in the Gulf of Mexico, the MMS' director for the Gulf of Mexico Region reported Saturday.

New technology ‘to boost Saudi recovery rates’

Top oil exporter Saudi Arabia aims to boost recovery rates at key producing oilfields by up to 70% through new technology, Oil Minister Ali Naimi said.

CEO: Shah field project lifts off without Conoco

Abu Dhabi National Oil Co. awarded a major slice of the $10 billion contracts for its sour-gas project late last month. Despite Conoco’s withdrawal, the chief executive officer committed to pushing ahead with the venture. Saif Ahmed Al-Ghafli, CEO of the Abu Dhabi Gas Development Company has reiterated recently that whatever rumours abound, the project will come onstream as scheduled.

“The Shah gas development is set to come on stream in the second or third quarter of 2014,” he said, speaking at an event in Abu Dhabi in late March.

New gas pipeline to strengthen Fujairah

The new 244km pipeline that has a capacity to feed 350 million cubic feet of gas per day (cpd) into Fujairah, an emerging hub of cement manufacturing, will change the power supply equations in the emirate and strengthen its industrialisation efforts, industry insiders told Emirates Business.

Beijing's bid to woo Abuja falters

Talks between Nigeria and China over Beijing's bid to buy 6 billion barrels of the Opec member's oil reserves have been stalled for months due to a dispute over price, a senior Nigerian government official said today.

Libya Reviews Oil Law to Add Clarity, Ghanem Says

(Bloomberg) -- Libya, holder of Africa’s largest oil reserves, is reviewing a proposed national resource law to boost transparency in exploration deals and include areas like natural gas and refineries, the country’s top oil official said.

“The previous law doesn’t have gas, this law will encompass gas and downstream,” Shokri Ghanem, chairman of Libya’s National Oil Corp., said in an interview in Doha, Qatar, today. “It will also emphasize that oil and gas blocks should be awarded through a bidding process. It emphasizes transparency and competitiveness.”

Delaware City refinery: Lingering suits cloud sale

A costly and unusually bitter wrongful-death lawsuit will keep some of Valero Energy's fortunes tied to the Delaware City refinery this summer, despite the impending sale of the plant to an investor group led by European refiner Petroplus.

Pakistan needs huge investments in energy sector

LAHORE: Pakistan needs huge investments in the energy sector and foreign investors should come forward for this purpose, Punjab Chief Minister Shahbaz Sharif said on Sunday.

Brazil's Serra says no need for new subsalt oil firm

BRASILIA (Reuters) - Brazil's main opposition candidate in the October presidential elections, Jose Serra, criticized the government's reform plans for the oil sector on Monday and said new energy alternatives should be explored.

The government has sent draft legislation to Congress which would entail sweeping reforms of its oil industry to prepare for a surge in output after the discovery of potentially massive offshore reserves deep under a layer of salt rock.

Tokyo Electric to Buy 9.2% of Texas Nuclear Plant

(Bloomberg) -- Tokyo Electric Power Co., Asia’s biggest utility, agreed to pay $125 million for a 9.2 percent stake in the South Texas nuclear project from Nuclear Innovation North America LLC.

Power politics

So far, all signs point to the national nuclear renaissance passing by New England.

Iraq invites bids to install 2,500 MW turbines

(Reuters) - Iraq's Electricity Ministry has invited foreign companies to bid to install 20 gas turbines that would boost the country's power capacity by 2,500 megawatts in the next few years, an Iraqi official said on Monday.

Harnessing the power of photosynthesis to make green fuel

When people at cocktail parties used to ask Charles Schmuttenmaer what he did, he would say he was a chemistry professor who worked on transient-photo conductivity in gallium arsenide. "At that point they would generally ask me to pass the chips," the Yale chemist says with a laugh.

Now Schmuttenmaer tells them he's working on a way to harness the power of the sun to produce carbon-neutral fuel. "And then the response is, ‘Oh, that's wonderful. Way to go!'" he says.

Biotech in Africa: 'A shortage of maize means a shortage of food'

Nairobi, Kenya - In Iowa, corn is king. In eastern and southern Africa, it's more important than that.

Americans feed corn to livestock or turn it into motor fuel or a sweetener for soft drinks. Africans eat it. Every day, sometimes more than once.

Burning questions linger for biomass

Emera Inc.’s record profits could be coming at the expense of local jobs and industry as well as the environment.

The possible connection is spelled out in a set of six reports released this week by the provincial Natural Resources Department ahead of a new natural resources strategy later this year.

Emissions Are Down, But Is It a Trend?

The decline is welcome news for environmentalists hoping to curb effects of global warming. The drop may also indicate that the country may be on its way toward the Obama administration's goal of cutting emissions by 17 percent in the coming decade.

Energy use, however, is strongly tied to economic activity, and the recession doubtless accounted for a portion of the drop in emissions. For environmentalist/author Bill McKibben, that a drop meant that an unrestricted financial sector had unintended consequences.

"Arguably, this is George W. Bush's sole environmental accomplishment -- knocking the economy off a cliff temporarily slowed our appetite for fossil fuel. Hopefully Obama can figure out a more graceful way to do it," Mckibben told AOL News.

Monsanto's seeds of discord

"The cost to farmers and consumers if Monsanto succeeds will be in the billions of dollars," asserts David Boies, DuPont's lead outside lawyer and perhaps the most sought-after American trial lawyer of his generation. "But the worst cost," Boies says, "will be the restrictions on innovation and the restraints on yields that prevent American growers from being more competitive around the world and keep us from feeding more people with less resources."

Birders, boaters fret over shrinking Great Salt Lake

SALT LAKE CITY (AP) — Some of the biggest fans of the Great Salt Lake are floating a new idea in response to concern the lake is starved for water and could shrink even more.

Giving the lake its own water share, through a dedicated water right or conservation pool, was one of the proposals discussed at the Friends of Great Salt Lake forum this week.

Fuel tax hike needed to rebuild Michigan roads and our economy

Counties in Michigan have returned some 100 miles of paved roads back to gravel because they couldn’t afford to maintain them.

That simple fact underscores what a state Transportation Funding Task Force warned us back in 2008, when it said Michigan isn’t just underfunding road repairs; it is now disinvesting in its roads.

Economics for the Story of Stuff

What a dilemma! The planet can’t sustain our pattern of consumption, but people get steamrolled in the economy when consumption slows down. The solution is to figure out how to structure the economy so that people can meet their needs without trashing the planet. But restructuring the economy is no simple task. Even gathering the will to take a shot at it is difficult.

Baking Better Bread Or Just Making More Dough?

With the growing success of organics and increasing consumer interest in buying foods grown on sustainable farms without toxic chemicals, many food companies are launching new marketing campaigns chock-full of environmental-friendly catchphrases and re-packaging products that lend the appearance of the company “going green” — even if little or no actual change to the product has occurred.

Kurt Cobb: Politically impossible?

Last week I spoke before a very committed group of juniors and seniors taking a college class on sustainable cities. In our discussion I suggested that one approach to improving public transit would be 1) to end all subsidies for fossil fuels, cars and trucks including road building and repair subsidies and 2) to place very heavy taxes on fossil fuels and the use and ownership of roadway vehicles. This I conjectured would make private investment in and ownership of city transit and intercity passenger rail attractive (which is the way it used to be) and could lead to a relatively rapid buildout and improvement of such services. But, I concluded, the first two steps are, of course, politically impossible.

My last remark evoked a spirited rebuttal from a woman in the class. She said, "I'm tired of people in your generation saying that everything we really need to do is politically impossible. All of us here are graduating soon, and we will be moving into positions of responsibility including ones in government. When we're the generation making the decisions, the things we need to do won't be politically impossible." Point taken. I promised in the future to tack on the words "right now" to any declaration that some action seems politically impossible.

Saudi, Algeria Oil Ministers See Consumption Rising

(Bloomberg) -- Crude oil demand will rise this year, unimpeded by a debt crisis in Greece that may spread to other European nations and slow growth, oil ministers from Saudi Arabia and Algeria said.

Organization of Petroleum Exporting Countries members should abide by oil-production levels approved in 2008 even as demand increases, Abdalla Salem El-Badri, the group’s secretary general, said yesterday.

“Oil demand is very good, it is going to increase this year,” Saudi Arabia’s Ali al-Naimi said to Bloomberg in Doha yesterday. Use of crude will rise in China, India and the Middle East, as those countries “are not affected by what’s happening in Greece,” Algeria’s Chakib Khelil said in an interview.

Oil rebounds to $78 on European loan package

Oil prices rebounded from last week's 14 percent sell-off, rising to $78 a barrel Monday after Europe and the IMF pledged nearly $1 trillion to help defend the embattled euro.

By early afternoon in Europe, benchmark crude for June delivery was up $2.93 to $78.04 a barrel in electronic trading on the New York Mercantile Exchange. The June contract fell $2 to settle at $75.11 on Friday.

Oil Volatility Rebounds Amid Financial Turmoil

(Bloomberg) -- Crude oil volatility surged to its highest level in almost two months as turmoil across financial markets prompts speculators to sell futures contracts.

Oil’s 30-day historical volatility, a measure of how much crude fluctuates around its average price during that period, jumped 53 percent from near a three-year low in mid-April. Hedge fund managers and other speculators have pared their positions by 14 percent in the past month, data from market regulators show. Oil prices dropped to an 11-week low in New York last week.

Gasoline up more than 7 cents in last two weeks

CAMARILLO, Calif. - The average price of regular gasoline in the United States has jumped more than 7 cents over a two-week period to $2.92.

Speculators Increase Bets on Gain in Gasoline to Four-Year High

(Bloomberg) -- Hedge fund managers and other large speculators increased their bullish bets on gasoline to record highs in the week ended May 4, according to the U.S. Commodity Futures Trading Commission.

Long positions in gasoline futures and options outnumbered shorts by 70,742, up 12 percent from the previous week and the highest since at least 2006, according to the commission’s Commitments of Traders Report on May 7. Speculators also added to their long bets on crude oil.

Bull Market Signaled by Oil Stocks at 19 Times Profit

(Bloomberg) -- Investors in oil shares are more bullish on the U.S. economy than any time in the last eight years, convinced the biggest decline in equities since the bull market began will prove a buying opportunity.

Saudi Aramco to Supply Full June Oil Volumes to Asia

(Bloomberg) -- Saudi Arabian Oil Co., the world’s largest state-owned oil company, will supply full volumes of crude oil to Asia for loading in June.

Saudi Aramco, as the company is known, will provide 100 percent of cargoes sold under long-term contracts next month, according to a survey of refinery officials in Japan, Taiwan and South Korea who asked to remain unidentified citing confidentiality agreements with the Middle East producer.

Where oil sands products ends up: In Europe

Oil sands-rich Canada is the biggest foreign supplier of oil to the US. But how much of that unconventional oil then ends up in Europe, where oil majors Shell and BP are facing campaigns against their investments in tar sands production?

A study commissioned for Greenpeace has attempted to work out how how much product, specifically diesel, is sold to Europe via big refiners on the US Gulf coast. The authors (who were also behind the oil sands/peak demand report last September) are confident that some product - albeit a small amount - does. The destinations of a limited sample they identified broke down like this...

Centrica Adds Customers at Fastest Pace Since 2001

(Bloomberg) -- Centrica Plc, the U.K.’s largest energy supplier, said its British Gas unit added household customers at the fastest pace since 2001 after the company cut prices.

BP Says Reliance Ruling Helps Gas Contract Security in India

(Bloomberg) -- BP Plc said that a ruling by India’s Supreme Court last week clarifying the government’s ultimate authority over natural gas pricing and sales helped to uphold the security of exploration contracts in the country.

“We understand that the Supreme Court verdict has upheld the sanctity of the production sharing contract,” London-based BP said in an e-mailed statement. “BP strongly supports the notion of the sanctity of contracts,” which provide the long- term stability and regulation necessary for companies to make investment decisions.

Eni in talks with Turkey and Russia for Samsun-Ceyhan pipeline development

Eni, Turkey's Calik Holding and Russia's Transneft and Rosneft signed a Memorandum of Understanding in October 2009 for the implementation of the project.

Eni, an Italian integrated energy company, has said that its CEO Paolo Scaroni met Turkey's energy minister Taner Yildiz and Russia's deputy prime minister Igor Sechin, to discuss the further development of the Samsun-Ceyhan oil pipeline between Turkey's Black Sea coast and its Mediterranean coast, in Ankara.

JX to Cut More Capacity, Spend Upstream to Boost Net

(Bloomberg) -- JX Holdings Inc., the Japanese energy company created by the merger of Nippon Oil Corp. and Nippon Mining Holdings Inc., plans to speed up refinery closures and invest in upstream projects to boost profit. The shares gained.

The company will cut an additional 200,000 barrels of capacity a day by March 2014, moving forward by a year plans to reduce total capacity by 600,000 barrels a day, it said in a statement in Tokyo today. The stock was the best performer on the benchmark Nikkei 225 index, climbing 10 percent to 538 yen.

Russian President to Talk Arms, Energy in First Syria Visit

(Bloomberg) -- Russian President Dmitry Medvedev will discuss military supplies and natural gas projects on his first visit to Syria, days after the U.S. decided to renew sanctions against the country for support of terrorist groups.

Oil Spill Untamed, Sandbags to Bolster Coastline

(CBS/AP) Icy slush foiled plans to use a giant box to contain the uncontrolled oil gusher in the Gulf, leaving BP pondering an alternate solution at sea, while on land, helicopters were expected to drop sandbags in Louisiana to guard against thick blobs of crude that began washing up on beaches.

Gulf Winds Turn on BP as Oil Containment Plan Snarls

(Bloomberg) -- Weather forecasts in the Gulf of Mexico indicate shifting winds will push an oil slick toward Louisiana in the next few days after the failure of BP Plc’s latest attempt to stem the gushing oil leak offshore.

“The winds may play a huge role,” said Kristina Pydynowski, a senior meteorologist with AccuWeather.com in State College, Pennsylvania. “The big threat is that the potential exists for the oil slick to be pushed closer, if not onto, some of the Louisiana coastline.”

BP says oil spill cost $350 million so far

LONDON -- BP PLC said Monday that the Gulf of Mexico oil spill has cost the company $350 million so far as it outlined renewed efforts to contain the leak.

BP Investor Sues Directors for Lapses Over Gulf of Mexico Spill

(Bloomberg) -- A BP Plc investor has sued the company’s board of directors on claims its pursuit of profits at the expense of safety led to the Gulf of Mexico oil spill that could cost the company billions of dollars.

BP's Preparedness for Major Crisis Is Questioned

BP PLC engineers struggled over the weekend to overcome problems with a containment dome the company hopes might capture much of the oil spilling into the Gulf of Mexico.

Challenges with the dome come as White House officials, U.S. lawmakers and others in the industry ask whether BP failed to foresee and prepare for a disaster of this scale, as doubts deepen over the company's ability to handle the spill.

BP’s Openness Fails to Quell Sea Drilling Backlash in Congress

(Bloomberg) -- Florida Democrat Bill Nelson said the first time he received a visit from a top BP Plc executive in his decade as a U.S. senator was May 4, when Chief Executive Officer Tony Hayward came to discuss the oil spill in the Gulf of Mexico.

Nelson, an opponent of offshore drilling, said while he appreciated the gesture, he still supports legislation that would raise the cap on London-based BP’s economic liability for the spill to $10 billion from $75 million.

Minimizing the Risk of a Blowout

Did the relative rarity of oil rig blowouts lead to a sense of complacency?

We're all responsible for BP's oil spill disaster

Filled up your car recently? Bought new bike tyres? Popped any pills? Then you're in part responsible for the Gulf of Mexico oil spill...

BG Spends $950 Million Adding U.S. Shale-Gas Assets

(Bloomberg) -- BG Group Plc, working with Exco Resources Inc. in a U.S. shale-gas venture, agreed to pay $950 million for further assets in the Appalachian basin.

BG will get a 50 percent interest in companies that hold Exco’s assets, giving it access to 654,000 acres, mostly in Pennsylvania and West Virginia, the company said today in a statement. The transaction will raise BG’s estimated net gas resources by 2.4 trillion standard cubic feet, it said.

High Conviction: A Stock Play on Peak Oil That's Tapping High Margins

I own Schlumberger (SLB) as a play on peak oil, a hedge against a collapse in the U.S. dollar, and a bet on emerging market growth. Aside from these macro themes, SLB’s market leadership commands the highest profit margins and returns on equity in oil services.

I define “peak oil” as an irreversible decline in global oil production, and believe it will occur at about 90 million barrels per day. I think it is likely to start in 2012, though oil futures now assume prices of $83-$85 in 2011 and $90 in 2012. I believe average annual prices will be about $10 higher.

BP spews and BC sucks: welcome to Oil 2.0

The days of drilling shallow wells on nice flat land and extracting oil for a few dollars a barrel have come and gone. What is left is dirty, dangerous and expensive. Think tar sands, oil wars and monstrosities floating deep in hurricane alley. Instead of old-school oil spills we now get mile-deep oil volcanoes. Instead of rusting oil dippers we get giant “lakes” of deadly goop. So get used to words like “unprecedented” and “unprepared” and “devastating”. Oh yeah, and toss in a growing heap of climate shocks we are cooking up by burning it all. Let’s call that: Earth 2.0

It doesn’t have to be like this. But it is. So far.

The dark shadow of Peak Oil looms ominously over America

Petroleum is the force that drives the world's economies; it fueled America's industrial engines and created the world's foremost economic power. It was also the primary reason that the American lifestyle became the envy of the world. Now in a startling turn of events petroleum is destined to be a major cause for a dramatic change in the lifestyles of the American people.

Politicians: It’s time to embrace the chaos

We can’t remove this election from its national or international context. Under pressure from a number of social and environmental challenges including climate change, peak oil/energy descent, economic instability, rising population and loss of biodiversity, the world is reinventing itself everyday. There are ‘hung parliament’ scenarios – that is to say shifting paradigms of power and priorities, changes in heart and mind – running through everything that we do now.

China - Methane: AES says plans up to 25 VAM facilities in China by 2017

BEIJING (Reuters) - United States-based power developer AES Corp plans to expand its business of capturing methane from China's coal mines, which could potentially develop into a near-$1 billion industry if market incentives are in place, a company official said.

Energy Resources Says Nuclear Demand ‘Strong, Robust’

(Bloomberg) -- Energy Resources of Australia Ltd., the uranium producer controlled by Rio Tinto Group, said long- term demand for nuclear fuel will remain “strong and robust,” bolstered by increased use in China and India.

In Backing Clean Energy Start-Ups, Fund Looks for Longer Résumés

SAN FRANCISCO — Virgin Green Fund, an investment firm backed by Richard Branson, is not going after the hottest new clean energy start-ups. Instead, it wants the ones facing a midlife crisis.

Merkel’s Election Loss Hurts Chances for RWE’s Nuclear Reprieve

(Bloomberg) -- E.ON AG and RWE AG, Germany’s largest utilities, may not get to run their nuclear plants past scheduled shutdown dates after Chancellor Angela Merkel’s party lost control of parliament’s upper house in a state election.

The pro-nuclear leader of the Christian Democrats, punished by voters yesterday for her reversal on aid for Greece, may lose their hold on power in North Rhine-Westphalia, Germany’s most populous state. The party’s worst result since World War II robs Merkel of a majority in the upper chamber in Berlin, limiting her ability to extend the lifespan of nuclear-power plants.

Renewable breeders

Renewable energy isn’t cheap, but prices should fall as markets build and technology develops. Indeed the basis of ‘learning curve’ theory is that this is what happens, over time. So why are some renewables getting more expensive- off shore wind for example?

One reason is that materials, like steel and aluminium, have been getting more expensive, in part reflecting the increased costs of (conventional) energy – these are very energy intensive materials. Some of those price rises were just blips (e.g. linked to the oil crisis last year), but the long-term trend for fossil (and fissile) fuels must surely always be up, since they are finite reserves. So the old technology undermines the new. At some point in the future we will be using renewable energy to produce/process these and other materials, so the continual price escalation problem will be avoided. But that’s some way off.

A Sea Change For Biofuels
: Peak oil, fresh water shortages, and food challenges are driving innovations in aquatic feedstocks

As we enter a new decade in 2010, leagues of prescient scientists , businessmen, politicians, commodity traders, defense hawks, activists, NGOs and social entrepreneurs are taking on future challenges by invoking ancient wisdom. Necessity is the mother of invention. A sea change is coming to the global energy, food and water industries, bringing a new wave of opportunities for feedstock development.

Biodiesel program takes hold SALT LAKE CITY - One mile southwest of Salt Lake International Airport there is a 20-acre crop of safflower plants growing on previously unused municipal land. This fall the plot will be harvested and oil from the plants processed into biodiesel fuel to operate Salt Lake County vehicles.

It's all part of a Utah State University program that uses highway rights of way and other unused open spaces like this land in the airport's flight path to grow oil-seed crops for biodiesel fuel. Hailed by scientists, educators and transportation officials as a promising environmental and economic step, the program is spreading to a growing number of universities across the nation.

Israel’s Erdan Sees China Market in Clean Technology

(Bloomberg) -- Israeli companies have “endless” possibilities to sell clean technology to China in areas such as water recycling, desalination and solar power, Environmental Protection Minister Gilad Erdan said.

Muddy Road Molds Debate on the Future of Guyana

The argument over a plan to pave the road reflects a nation pulled between competing desires to delve into the global economy or pursue a more ecologically sustainable path toward development.

Environmental and Anti-globalisation activist awarded Sydney Peace Prize

Physicist, environmentalist and anti-globalisation activist Dr Vandana Shiva has been awarded the Sydney Peace Prize for 2010 for her commitment to social justice, her advocacy of human rights, empowerment of women, and her scientific contribution to environmental sustainability.

How to fend for yourself

No-one knows what the future holds, especially now that it's obscured by a cloud of volcanic ash. The view from here, such as it is, isn't brilliant.

Turn on the radio and TV and it's all economic collapse and climate change. Take a break and rent a DVD and you can choose between The Road (Viggo Mortensen wandering around a dying, post-apocalyptic world) or the Book of Eli (Denzel Washington, er, wandering around a dying, post-apocalyptic world).

On the bright side, some folks have never been happier. 'Survivalists' are people who firmly believe disaster, manmade or otherwise, is just around the corner and make preparations accordingly. For them, making a nuclear shelter and laying down 10 years' worth of bottled water and tinned sardines is just common sense. They're only waiting to be proven right.

Greenland glacier slide speeds 220 percent in summer

Reuters) - A glacier in Greenland slides up to 220 percent faster toward the sea in summer than in winter and global warming could mean a wider acceleration that would raise sea levels, according to a study published Sunday.

A group of experts led by Ian Bartholomew at Edinburgh University in Scotland said the variability was much stronger than earlier observations of glacier movement in Greenland.

BP spews and BC sucks: welcome to Oil 2.0

The days of drilling shallow wells on nice flat land and extracting oil for a few dollars a barrel have come and gone. What is left is dirty, dangerous and expensive. Think tar sands, oil wars and monstrosities floating deep in hurricane alley. Instead of old-school oil spills we now get mile-deep oil volcanoes. Instead of rusting oil dippers we get giant “lakes” of deadly goop. So get used to words like “unprecedented” and “unprepared” and “devastating”. Oh yeah, and toss in a growing heap of climate shocks we are cooking up by burning it all. Let’s call that: Earth 2.0
It doesn’t have to be like this. But it is. So far.

Look around folks. This is what the world looks like as we pass into the second decade of the peak oil era.

And in the immortal words of Tupac: STILL I see no changes...

Last fall, I was fueling up my sailboat up the BC coast a ways (300 litres of diesel, it can run for weeks without refueling, particularly if you get some good winds), and I looked around at the big fishing boats and loggers' trucks, and I thought, "You know, the economy of this place wouldn't work without Alberta oil to keep it running".

You don't see many wind-powered fishing boats, or clipper ships from China, or horse-powered logging operations in BC these days. The tourists wouldn't really get far up the coast by walking or horseback, either. My own sailboat wouldn't have much problem if the winds were good, but it's nice to have the auxiliary diesel to get to the dock amidst all the big fishing boats.

The good thing from the BC perspective is that most of the oil refineries in coastal BC have shut down, so BC gets most of its gasoline and diesel fuel from Alberta or Washington State. There is not much opportunity for oil spills in BC coastal waters (although diesel spills from boats and air pollution from freighters are a big problem).

There is not much opportunity for oil spills in BC coastal waters

They might not refine much in BC, but a lot of Alberta oil flows through there via the Trans Mountain Pipeline System:


Some of that is piped directly to Washington State refineries. However, some is also shipped out from the Westridge Marine Terminal:


Westridge Marine Terminal exports crude oil (brought by pipeline from Alberta) to California and Asia. Westridge also imports jet fuel from Washington State refineries, which is then delivered by another pipeline to Vancouver International Airport. That pipeline also transports jet fuel from the Chevron refinery and distribution facilities (i.e. tank farms) around Burrard Inlet to the Airport.

In 2008, about 2.2 million tonnes of crude oil was exported through Westridge, filling 40 large "Aframax" vessels--tankers that displace between 75000 and 115000 deadweight tons.


And there are controversial plans for another pipeline:


Langer is one of approximately 30 people who attended a Greenpeace vigil in front of Enbridge's Northern Gateway Pipeline office in downtown Vancouver today.

Dressed in black and holding white candles, demonstrators protested Enbridge's proposal to build a 1,170 pipeline that will flow more than half a million barrels of crude oil a day from Alberta's tar sands to the Great Bear Rainforest in B.C.

API has commented to me that pipelines are the safest way of shipping oil in terms of oil spills. I would expect this to be especially true for new pipelines.

True, although the pipeline which delivers refined product down the coast through Seattle and Portland sprung a leak and flamed a bit a few years ago.

But the point is that a lot of the BC pipeline's output goes onto a ship.

More arm wrestling:

Canada also banned oil tankers from B.C.'s inner coast -- not that the federal government seems married to that notion anymore. After the Conservatives took power, Transport Canada blithely announced that no ban existed, that all we have is a voluntary exclusion zone keeping oil tankers out of Dixon Entrance, Hecate Strait and Queen Charlotte Sound as they travel between Alaska and the continental U.S. This interpretation, while perhaps technically correct, came as a surprise to many, including Victoria's former Liberal cabinet minister David Anderson, who understood what Pierre Trudeau was up to when shaping Ottawa's Pacific oil policy.

The idea was to keep tankers out of inside waters.

The Conservatives' weaselling seems tied to Enbridge's proposal to build a $4.2-billion, 1,200-kilometre pipeline from Alberta to Kitimat. The oil from the Northern Gateway pipeline would be hauled away by tanker, 225 of them a year, navigating the same enclosed waters in which the Queen of the North sank.

Similar injunctions to those in BC obtain south of the border: supertankers are banned from Puget Sound via the Magnuson Amendment forbidding expansion of existing ports to handle massive vessels, plus, for good measure, state statute RCW 88.16.190 forbids anything larger than a mid size Suezmax from entering the Sound in the first place. Ecotopia in action.

I think the basic point is that, although oil tankers are discouraged from travelling from Alaska to Washington State via the Inside Passage, nothing precludes them from going down the coast outside of the island chains.

Nearly all of Alaska's oil production goes via this route. There's a lot more oil being shipped down the coast of BC than is being shipped from or to BC. Alaska, Washington, and California are much more at risk from this traffic, though.

They're not delivering crude oil to the Great Bear Rainforest, they're delivering it to Kitimat. Kitimat is a company town built by the Aluminum Company of Canada (Alcan) in the 1950's.

In addition to the world's largest aluminum smelter and associated hydroelectric development, Kitimat also had a big pulp and paper mill - but that shut down early this year, and a methanol plant - which shut down last year.

Kitimat had the largest percentage population decline of any district in the last census, which may be one reason they are keen on becoming an oil shipping port. In addition to the oil terminal, they are also proposing an LNG terminal.

The bears, at last report, were not involved in either project.

You know, the economy of this place wouldn't work without Alberta oil to keep it running

I sure hope you're right. What a disastrous economy it has been. But with Alberta pumped oil becoming scarcer and Alberta synthetic oil becoming a bigger part of diminishing world supply and thereby pushing up the average cost of oil more rapidly than would otherwise be the case, there is hope that this nightmare will soon be over.

Maybe, just maybe, BC will be beautiful again one day.

I can't see much to look forward to in Alberta though. Conventional hydrocarbons will soon be spent, the water supply for both irrigated agriculture and meat manufacturing is at risk, the so-called high-tech sector will relocate to Chindia in a flash once government largesse is exhausted, then what's left. An industry turning bitumen into oil with a cost structure that leaves little room for government royalties.

Toil, when was the last time you were here? (in BC)
The main reasons why the place isn't as beautiful as it was are the Pine Beetle, and urban expansion, for which you can read - all the people moving here from the rest of Canada to retire, though especially Ab and Sk.

I wouldn't call the economy disastrous, though it has not be outrageously successful, either.

Sure, BC runs on Alberta oil, and that's just fine - leave producing oil to places that have lots of it. We'll concentrate on hydro power, something we have lots of potential for. And woody biofuels, something else we have lots of.

In my opinion, the new pipeline to Kitimat is a waste of money. There isn't even enough oil yet to fill a newly opened pipeline to the US, why build another one to the coast to export to China?

I do agree with RMG that it is a bit embarassing how much oil is used by BC Ferries and the like. They could easily set up the ferries to co fuel with NG - something which BC is actually a net producer of. Vancouver is actually a fairly energy efficient city, and getting better. The train service is finally catching up to Calgary, with a few more expansions to come. It's just too bad no one can afford to live there.
Shameful to see prime farmland in the Fraser Valley being turned into Mcmansions, but that happens everywhere...

AS for Alberta, the water supply is not at risk at all. There is plenty of water (in the north), it just needs for some of it to be sent to the south, no big deal, really. AB will weather the economic storm better than probably any other province. It's main exports - energy and food - are going to be in demand for quite some time. As for govt largess, I don;t think there's any province that has less of that than AB. We'll leave that to Quebec and the Maritimes, they are much better at it - meanwhile, we'll get on with real work out here, someone has to.

Toil, when was the last time you were here? (in BC)

For six months last year. Long enough to despair at what has become of my native province.

Cut out the armpit of Anaheim and paste it onto paradise. And you get BC today.

Prince Rupert is fine, when the sun is shining.

There is nothing much that can be done about the lower mainland, except to be thankful that since half the people live there, they are not all living elsewhere.

Maybe, just maybe, BC will be beautiful again one day.

Maybe, just maybe, I'm reading too much into that. However, I get the feeling that the intended sense is that BC would only be counted as "beautiful again" once hardly anyone lives there any longer to perceive or enjoy said beauty, owing to the economy being quixotically stamped out altogether in the name of restoring a wholly imaginary primordial paradise.

But with Alberta pumped oil becoming scarcer and Alberta synthetic oil becoming a bigger part of diminishing world supply and thereby pushing up the average cost of oil more rapidly than would otherwise be the case...

The implication here is that no syncrude would lead to a lower price than some syncrude. What sort of otherworldly analysis could possibly lead us to conclude that decreasing the overall supply should lower the price? I have no reliable info on alternate universes, but on planet Earth, decreasing a supply usually pushes the price up. (I'll grant that as in the 1970s, governments sometimes ensure that the price increase is partly manifested as gargantuan quantities of time wasted in queues, rather than being manifested fully and transparently in currency units, but that in no way contradicts the general principle.)

Take what is said in BC with a grain of salt. The logarithmic "hypocrisy meter" can usually run about 8.0 around here. Or petty self admonishment without consideration of the cause and effect seems to be a favorite past time.

See, one reason BC is "Beautiful BC" is because people can drive around in all sorts of vehicles to see the amazing locales. I for one, will be driving up to the Buddhist Centre of The Universe on Vidette Lake about 1-hour from my door. Along the way we'll be passing the Deadman Hoo Doo's which are spectacular. We're actually going for trout fishing, but the Centre of The Universe is a nice feature.

So far living here in the Kamloops area I routinely see all sorts of raptors flying around my townhouse and the golf course, (Tobiano, #1 in BC thank you - yes, I had everything to do with it), or we actually had to move slowly through a herd of mountain sheep at Sun Rivers golf course to get to the 11th green. (Note, they're a lot bigger and tougher up close and those ram horns could snap your femur like a toothpick - definitely not your baa-baa kind of sheep). We also had to sweep our putting line of pellets. I guess the 11th green is the sheep singles lounge during rutting season.

We are proud of our province and only curse the Albertans for their lousy driving (but we'll take their gas and oil). Note to AB, one does not slow down to 70 km/h in the corners and then accelerate to 140 km/h on the straight stretches making sure to not let anyone pass in the three lane passing zones before getting to the next set of curves where an Albertan will invariably slow to 70 km/h again. BMT (biting my tongue)...

EE, were you actually involved with Tobiano? I hope they are doing OK, it seemed their timing of when they got most of their property to market was very unfortunate...

I like the Kamloops area, kinda like your own private semi-desert, and without the over development of Kelowna. Have done a lot of work for Sun Peaks resort over the years on their water system. Have been trying (unsuccessfully) to do a small hydro system up there, actually potential for several MW of power from those alpine streams.

I used to live at Invermere, and a traffic jam from the big horn sheep on the road near Radium Hot Springs was a routine occurrence. We used to tell American tourists that we had the sheep trained to a schedule as to when they would appear so everyone could photograph them. Came across a big ram while hiking there once, and they are VERY big close up, much more intimidating that the normal sheep on my brother's farm in Oz.

As for the Ab drivers, they are not as bad as Sk drivers (used to get lots of them at Invermere) as they are not used to driving any bends or hills!

Paul, our engineering firm was involved with both Tobiano and Sun Peaks (including the waste water system) before I joined. My involvement with Tobiano at this time is golf membership and surveying the wine list ;-)

I think are all in agreement (even Grenier if you can twist his arm) that their timing was unfortunate (I wanted to say "sucked" but it really wasn't their fault). To put it in perspective for our American cousins (or you can look it up), this is a residence and golf course development on the shores of Kamloops Lake. The lake is about 20 miles long in the northern part of the Sonora Desert. And, there is hardly anyone living along the lake! I half disbelieving say that if this were the States it would be packed from one end to the other with homes. This 18,000 acre development finally got off the ground just as 2008 came along.

The golf course is fantastic and I would put it on par (oops, pun) with some of the best in the world. In some ways it reminds me of Pebble Beach but set in the desert. This area is unique in that the town area is semi-desert and in 30-45 min. you can be above 3,000 ft. and in mountain forests and lakes. I honestly didn't know about the fishing here although my parents have lived in the area for over 16 years. Was here about 3 weeks and went out and bought an older Jeep and canoe. I love mountain lake fishing - very peaceful and picturesque.

Any idea about the hydrology of the alpine streams around Sun Peaks (Mt. Todd)? I know one of the best civil/hydrology engineers in the biz and he routinely works with these small scale hydro developments. FYI for those not familiar with run-of-river hydro electric, the hydrology is the money, the moola, the scratch, the energy source that is primary to a project's viability. Just in case anyone thinks disparage Civils, this is where they go to the front of the line, and us EE's once again have 15% of the work with 10% of the budget to do in 5% of the project schedule.

Hopefully BC Hydro will streamline the Standing Offer process a little more for this size development. Not sure if I could put investment interest behind them at this time, but can certainly start putting out feelers. (email in my profile).

umm, you guys do realize that Vancouver and environs has become a housing bubble whose size and scope will make Las Vegas look like a walk in the park, right? i'd be curious what you guys think is going to happen to life there in BC (schools, police, fire, govt, unemployment) once that bubble bursts? i'm wondering if a metro area the size of Vancouver could implode financially on the scale of say, Jefferson County, AL or Vallejo, CA? one thing's for sure, it is going to go BIG when it goes.

Housing bubble? A bit of one, but on much less of a scale than Vegas. There hasn't the same headlong rush to build tens of thousands of houses as Vegas, and the growth that did occur has not (entirely) been driven by retirees (that would be the Okanagan and Vancouver Island and Gulf islands)./
What has happened is that the price of housing has been steadily bid up, and yes there may be a correction, but there won;t be vast developments of empty, unsold houses as they don't exist

When this correction come,s people in schools, police, fire and other government will be just fine - they will still have their jobs, even if their houses are underwater.

There will be some turmoil, but not an implosion. One of the reasons why the property is so valued is that Vancouver is one of the best cities in the world, in one of the most beautiful locations, just with less than best weather. These desirable things will still be there regardless of property prices.

Just one question, what intrinsic value does Las Vegas have? Answer a) none, b) none, c)none, or d) all of the above. Sure Vancouver is ridiculous in housing price because it far exceeds the affordability. This bubble has been inflating for quite a while and it all started - believe it or not - in China...

I left Vancouver to finish engineering school in 1985. Prices were high, but no one foresaw the exodus out of Hong Kong in the early '90's. A decent Hong Kong apartment might cost $1 million or $2 million $HK which would buy a nice little McMansion in Vancouver with a couple of 735i's to spare. I didn't believe what my folks were telling me until I saw it first hand.

My grandmother knew a real estate agent that dealt in properties in the $+500K range and she received a phone call from Hong Kong that one Mr. Wong would arrive on a certain date, appreciate a limousine at the airport and would like to view 10 houses all in the aforementioned price bracket. One Mr. Wong was met at the airport by one limousine hosted by the real estate agent and toured 10 houses for sale all in the Shaughnassey and West Marine neighbourhoods. As related, Mr. Wong was expressionless and at the end of the house tour requested to be driven back to the airport. The real estate agent thought she had blown a day of sales and limousine fees.

The representative of Mr. Wong called on the following Tuesday and said, "Mr. Wong doesn't like this house or that house but he will take the other eight." Wealthy people were getting there money out of Hong Kong before the reversion back to China in 1999. I've seen it in Venezuela also - they ended up in Miami.

Vancouver has undergone a bubble fueled by the transfer of wealth from other regions. I counseled my good friend last summer and fall whom was looking to finally purchase a condo to get into the market before February-ish because I estimated, given the track record, that would be the bottom. My prognostication proved correct. Although Vancouver is the urban centralized proxy for the Province's wealth, (Check Ft. St. John or Dawson Creek for the true money), like Calgary is to Alberta, so is the Lower Mainland. The intellectual capital is centralized in the nicer regions to live; although, I wouldn't consider the commutes in Vancouver "nice", and hence have no desire to live there unless within walking or cycling distance.

So in the final analysis, Vancouver does not compare to Las Vegas, or Phoenix, or Ft. Lauderdale because these are cities built on fantasy, as Kunstler likes to say "of hallucinated wealth". They are fabrications of Disney-esque proportions that will pull the Americanus Gargantuas down into the mire of hubris ex mathimatica. Interpretation: People invested and moved there because they couldn't do the math. Lake Mead is down by a third and not expected to recover any time soon. What happens when Black Canyon (Oops, Hoover Dam) goes out of the electrical generation business? Will "Sin City" become sin cuidad (look up your Spanish and this will become clear).

in other words, you both believe 'this time is different'. ok, good luck with that...I think you'll be surprised.

Agreed. Sounds just like what others were saying here (California) before the bubble burst.

How anyone thinks their little region of the world is going to escape the largest credit contraction the world has ever seen certainly escapes me.

The difference is Vancouver has had a steady house valuation growth rate. I believe at the best of times it took a peek at double digits. California on the other hand - and South Florida, I know cause I was there and participated fully - saw home valuations driven up by nothing more than the next greater fool that wanted to get into the market before the prices rose further. Ergo, a pyramid scheme.

The other thing places in California, Florida and Arizona had in common is the city/suburban areas could keep expanding thereby not imposing any geographic constraints to limit the size of the market. Vancouver is bounded on all four sides by ocean, mountains, ALR (Agriculture Land Reserve, also known as what is left of the Fraser Valley), and Washington State. Even some of the GVR residency has spilled into Washington State as far south as Bellingham. But home prices in San Francisco have remained more constant due to the same types of geographic extents as Vancouver.

Vancouver and Calgary did undergo a bubble that popped in 1981 because it was driven by the same principles as the latest U.S. housing one. This has happened in Toronto also.

As for "believing", I'm afraid I would be exempt. I don't own property in Vancouver and therefore have no vested interest.

Filled up your car recently? Bought new bike tyres? Popped any pills? Then you're in part responsible for the Gulf of Mexico oil spill...

Nope...nope...nope...well, OK, I did pop one Zyrtec the other day (it is allergy season after all, and climate change only makes that worse). Some of us actually can "walk the walk," quite literally, that's all I'm saying. Using zero oil is pretty hard if not impossible in our society, but using a whole lot less is a whole lot easier than a lot of people might assume.

To paraphrase Orwell, we may all be responsible, but some are a lot more responsible than others.

One of the big news items today is

World Races to Avert Crisis in Europe

The European Union agreed on an audacious €750 billion ($955 billion) bailout plan in an effort to stanch a burgeoning sovereign debt crisis that began in Greece but now threatens the stability of financial markets world-wide.

The money would be available to rescue euro-zone economies that get into financial troubles. The plan would consist of €440 billion of loans from euro-zone governments, €60 billion from an EU emergency fund and €250 billion from the International Monetary Fund.

Markets are soaring on this news. The question is whether it will work.

I'm sure the markets love the idea of piles of free money coming to them, but it's unlikely to stop the peasants who are currently rebelling.

Whatever the real financial implications behind the headlines, this will be very unpopular in the UK. The street level reaction will be
'Why are we bailing out Greece / The Euro when we have a worse budget deficit and we are not even in the Euro? Why was this decided by a government minister who has just lost an election and will probably be out of office in 48 hours?'

However, the MSM is so full of the election deadlock that it has barely registered on the public consciousness. It is a very strange atmosphere around here just now. Whatever happens, a lot of people will be very angry .

RalphW - Completely agree. This is such a complete shambles. It is surreal. This is the final straw, the final attempt to fix an un-fixable system. And all those 'in the know' will use it to move out of fiat currencies and into something tangible. What we are witnessing is the biggest ever attempt to pay of one credit card with another. It is totally moronic. For the last six months we have heard from Labour, Tory and Liberals that we need to cut our deficit. So what happens just days after the election? We get saddled with another £8 billion debt. We don't have the money so will need to borrow it in the markets.... the same markets which are shot to bits. Or the BoE prints it up. Well here's an idea! Why can't someone bail me out? I was forced into borrowing £10,000 to give my small business another six months of air. So why not bail me out?

This stinking pile of crap is the final straw.

Britons consider emigration to leave woes behind

LONDON, May 10 (Reuters Life!) - Almost three-quarters of Britons have considered emigrating this year, with Australia as the most popular destination, according to a new survey.

Australia? ... that amazes me. Hotter than Hades half the year, serious water issues - and a noxious nanny state, what with stuff like the Great Australian Firewall proposal.

You have to understand that the Poms (or Brits, as all non- Aussies call them) think, correctly, that Australia is one of the best places in the world.
230 years ago they sent their prisoners there, and now they'll pay to go there.
If you have spent much time on Old Blighty, the idea of sunshine and beaches, and a country whose cricket and rugby teams actually win, is pretty appealing.
The water issues there are worse than many other places, but the management of them is way better. If they took the California approach it would have been disastrous.
Australia is quite welcoming of well behaved, legal, immigrants (Melbourne has the 2nd largest Greek population of any city after Athens!), just leave your homeland issues, at home.

I wouldn't call it a noxious nanny state, the government is fairly well run, but that doesn't mean it can't come up with stupid ideas like the firewall.
Governments can;t get too out of control there - the mandatory voting system ensures that. When you know that every single person will be casting a vote, you have to court the middle ground, the politics of polarisation don't work nearly as well in that situation.

Australia has a strong sense of independence and self sufficiency, and, right now, I think that's appealing to the Brits who feel that after 1000+ years of defending against Europe, that their govt has ceded control to the EU. You wont see Australia doing that to SE Asia.

Is it easier for Brits to get citizenship in Australia than in other countries?

Not necessarily - you generally need some family tie (or be an investor with $1m plus) to get preferential treatment.

There are some well known cases of British families going back through their history to find an ancestor sent out as a convict, and then claiming that!

If you have spent much time on Old Blighty, the idea of sunshine and beaches, and a country whose cricket and rugby teams actually win, is pretty appealing.

LOL: I've only spent a little time there, and the weather actually happened to be fine, though I was told I was lucky. As to beaches, they're surely appealing, at least until the Australian Nanny State tries to scare you out of your wits about going anywhere near them for any length of time at all for fear of dying the very same afternoon of "cancer". Then again, the Brits have a fairly noxious nanny state of their own, so maybe it'd be break-even on that...

PaulS, just to clarify, "Old Blighty" means Britain, so I was saying that if you have spent time/lived there, then Aust is pretty appealing (and yes, they did actually get a few days of sunshine, in 1780 or something like, I believe) But if you have spent time in Oz itself, then you can understand the appeal.. If you ever are in Sydney and get the chance to have fish and chips at Doyle's restaurant in Watson's bay, looking back at the harbour, bridge, yachts etc, then you'll get it.

There is some justification to the skin cancer thing - australia has the highest rate of incidence in the world. My father has had numerous cancers burned off his nose, ear, and back. Something to do with our pale British ancestor skin..

Funny story about Brits and Australian beaches. They all think we go to the beach on Xmas day, because we can. In fact, most Aust families have a British style Xmas dinner at home (roast lamb/chicken/turkey/pork/ham/beef/ all of above) The most ridiculous thing, really, to have a hot roast dinner at 2pm on a stinkin' hot summer day, but that's the tradition. The you go to the beach on Boxing day. But the Brits think we eat seafood on Bondi Beach on Xmas day, so that's what they do. There are typically 10,000 of them there on Xmas Day (all the young louts, mostly) they carry out couches, garbage bins full of beer and ice, buckets of prawns (shrimp) etc, get drunk, sunburnt and trash the place.

"'Old Blighty'" means Britain". Yes, I see I wasn't quite clear, but I understood that; it's in Britain that I was told that the fine weather was a matter of luck, hence the hankering for sunnier climes... something about overcast and damp being more usual...

Australia? ... that amazes me. Hotter than Hades half the year, serious water issues - and a noxious nanny state, what with stuff like the Great Australian Firewall proposal.

Australia has many attractions indeed, and the climate is in fact one of them, if you choose carefully. But climate change threatens to make the hot dry parts hotter and drier, and that is a major issue indeed.

The country's biggest problem is a combination of rapidly increasing population, and the concentration of almost all those people in large coastal cities. While about 80% of the continent is uninhabitable (well, not literally - perhaps 60% is physically so - with at least another 20% economically so) we will continue to see the sprawl of large metropolitan conurbations in the south-east crescent. And as part of that, house prices in the large cities are astronomical.

The second biggest problem is water security over the long term - and the competition between increasing urban populations, and large-scale irrigated or river-fed agribusiness. This issue is not going away, despite recent relief from 13 years of drought. The third big problem is the "Dutch Disease" syndrome, and the degree to which the robust, healthy economic climate is tied to mineral exports to Asia - mostly China. So while China roars along, so do we, hanging on tightly to the flapping tiger's tail ... and unemployment remains under control - the Reserve Bank keeps raising interest rates to keep the lid on things.

But overall - it is a very nice place - where you can swim in safe clean warm water most of the year, enjoy wonderful and cheap food, drink the water straight out of the tap, find a decent home, send your kids to a good local school, and walk the streets safely at night. And if "noxious nanny state" means a long tradition of fairly mild middle-of-the-road governments at both state and federal level, most will take it; Australians like their politicians to be mild - anything too passionate, ideological, or flag-waving gets short shrift. Perhaps visit some time (but not in January - it's too hot!).

Has anyone noticed that Gordon Brown has a slight resemblance to George Lazenby (007)?

Cool down a bit, you are almost incoherent. Actually, this is a mutually beneficial arbitrage that AVOIDS big bailouts of banks. Germany and other more stable countries will, in effect, borrow money cheaply and lend it to Greece at much higher interest rates, earning billions in arbitrage profits. Only if Greece really defaults will the lenders lose money. They can reasonably expect Greece will not default.

Good points, but somehow I can't get the image out of my head of a bunch of sinking ships bailing water into whatever ship is riding least low in the water.

I got the same image. More realistic if you imagine them as slave-galleys.

There is a possibility that this will not work, of course. In theory, it's not that hard to balance a budget and start chipping away at the debt, but politically, I guess it is very hard to get the necessary support. Leftists always think somebody else should pay.

"Leftists always think somebody else should pay." - only partisanship can generate such stupidity. Can you name the Leftists at Enron/AIG/Lehmans who borrowed themselves to oblivion? What about those great hero's of the US Right, Reagan, Bush I & Bush II - they each added much more to US foreign debt than Clinton or Ford did. Your FauxNews fallacies are an embarrassment here.

Most Leftists at least know that trashing the Commons is stupid, whereas for Rightists it is standard operating practice. Guess which is the shortest route to extinction.

Non sequitur. I'm talking about voters and demonstrators. Leftist voters all over the world wants somebody else to pay for the leftists benefits, right?

To take one example out of thousands, Sweden's left party's congress demanded the other day we go from a 40 hour work day to a 30 hour workday with full pay. Almost everybody on the right, however, realize that this isn't possible. Leftist, however, often think that it is. They think that if you just tax rich people more, or socialise businesses, enough money would come their way so they could work 25% less with no change in income or benefits.

The Greek protesters are about the same. They think the common Greek citizen didn't benefit from the borrowing and now they think somebody else should pay. But they did benefit and nobody else can pay.

You really come across as a far right loony. Your characterisation of "leftist voters", be they in Sweden or Greece, is about as accurate as anything Rush Limbaugh might come up with. What's the Swedish for "Tea Party" again? Te Fest?

My examples were quite concrete, don't you think? So it's quite easy to prove me wrong - for instance prove that the Swedish left party didn't actually do what I said they did. Here is their own official announcement of it - perhaps you can run it through an auto-translator?

(They also want to legislate about the right to full-time employment, so anyone that is part-time employed shall have the right to work full time.)

"Tea-party" is simply called "teparty" in Swedish. It may be kind of an Anglicism, but so is lots of Swedish words.

Corporations all over the world want somebody else to pay for corporate benefits.

There, fixed that for you.

Yes, most everybody would like somebody else to pay for them. But leftists actually vote for it.

Silly leftists, actually voting.

Corporations get to buy politicians outright, none of this silly voting business.

Jeppen... everyone else seems to be disagreeing with you here, but I think you are spot on with this. Everybody wants the benefits (social security, national defense, unemployment ins, national health care etc.) but no one wants to pay the taxes to substain the level of benefits they desire. Instead of cutting back on benefits, or raising taxes, they eternally borrow the money from someone else and then protest when their decades of bad financial management finally brings the house of cards toppling down.

Cool down a bit, you are almost incoherent. Actually, this is a mutually beneficial arbitrage that AVOIDS big bailouts of banks. Germany and other more stable countries will, in effect, borrow money cheaply and lend it to Greece at much higher interest rates, earning billions in arbitrage profits. Only if Greece really defaults will the lenders lose money. They can reasonably expect Greece will not default.

Mutually beneficial???

Which f***** planet are you on? This is thievery by the banksters plain and simple. The whole construct of the debt-based, fiat currency is crumbling. The only thing the rich have left is the Law of Property and by God that ain't going to last long. A sharpened dagger will overcome a 'written law' any day.

Wait for the last Hurrah. Where we are at right now in Europe is basically where we were 70 years ago.

The only thing which ever holds an otherwise violent man back from committing violence is if he knows his labour is worth something and his sweat can be saved, i.e. there is a stable store of wealth for him to drip his sweat into. What Europe is doing - and shamefully Britain too - is to please current creditors now at the expense of those who most need a currency to mean something. It is shameful, wrong and evil. The 'Elite' are doing for themselves and leaving the rest to rot.

I am 34 years old. In my life time there will be another major war in Europe. Mark my words.

What is shameful, wrong and evil here is your propaganda.

Stoneleigh seems to be predicting the same thing.

Dunno about the timing, but in the long run, I suspect neither the EU nor the US will hold together.

"Germany and other more stable countries will, in effect, borrow money cheaply and lend it to Greece at much higher interest rates, earning billions in arbitrage profits."

Borrow from whom???????

Paid back how???? When?????

More "magic" money.

More "kicking the can".

From many different sources, for instance German pension funds. Pay back by balancing the budget, getting a small surplus and growing. When? Well, starting perhaps 2012 or 2013. Nothing magic. It has been done before.

"They can reasonably expect Greece will not default."
Oh really?

Greece has been in default for a substantial amount of its modern history as an independent country


Got anymore of what you're smoking?

The situation is a bit different now, so I think they will manage. But of course we can't be certain that the Greek will act sensibly enough.

How exactly is Greece or any other indebted country supposed to pay back their debt as oil declines?

If the economy contracts "only" at the same rate oil production declines, there won't be the profit to pay it back. (See Estimating the Economic Impacts of Peak Oil http://postpeakliving.com/blog/aangel/estimating-economic-impacts-peak-oil and particularly Hirsch's paper.)

Following that chain of logic, of course, neglects to consider that the whole system has an inherent design flaw:


And if, as I believe, we have a major and global economic discontinuity to get the virtual "wealth" back in some sort of alignment with the "real" wealth, there certainly won't be the money to pay it back.

But I'm open to hearing how you believe this ultimate situation is in any way avoidable at this point.

What profit? National debt is repaid by having more taxes than spending for a while.

I simply believe in BAU. I think peak conventional oil will be somewhere between 2005 and 2020, but I don't think that will pose any major problem. We'll conserve some energy and transit to alternatives in an orderly fashion by way of market forces.

"The situation is a bit different now, so I think they will manage. But of course we can't be certain that the Greek will act sensibly enough."

The markets, the money lenders HATE uncertainty, you give precious little reason why Greece should behave differently.
Since you express such optimism, consider loaning them YOUR money.

Haven't I read somewhere today that the package should shore up the Eurozone for a couple of years? mmm... more time bought for the Casino Capitilism model and TPTB to get their lifeboats launched, while the populace sinks under their manufactured debt.

Torches and pitchforks should be the order of the day but sadly its only when they awake one morning in serfdom that the majority will 'wake' up.

Seems some of the Greek agree with you that violence and strikes are the best ways to deal with a history of living beyond your means. To me, it seems not such a good idea.

As my Professor of Philosophy taught us: When we say we, we always lie.
It is not the same Greeks who are living beyond their means and the rabble that set fire to the bank where three women workers died, and stoned and fire-bombed the Police, who are also workers.
It is very easy looking for afar to think of people from another country as an homogeneous mass, all thinking alike and with one head, all acting alike. It is far from that.

In Greece the Asset-owning Class (lets call the Upper Class and the real Middle Class that) do not pay taxes, or pay very little.
Doctors with private practices, their own homes, villas and yacht declare 12,000 a year -the rent of the surgery is more than that.
The NY Times denounced that in the posh hills around Athens 324 residents declared they owned a pool. When the authorities studied satellite photographs of those rich neighborhoods they counted 16,974 pools there.

Stores, small businessmen, repairmen and the like do not give you a receipt so they do not have to declare VAT. More than 20% of the economy is Black Economy and that's not counting prostitution and drugs.

The Greek government (and Papandreu is not innocent of this state of affairs, the Socialists are just the latest to run the government) now take money from anyone with a payslip or a pension on flimsy excuses but the people who really benefit, the Greek Asset Owning Class, are hardly bothered if at all.

So the poor, they are revolting! Indeed, and let's remember that Greece is rotten with foreign agents of every denomination -in one of the photographs, the one with the revolting dog and the stone-throwing young men, you can see at the back a big, fat man with a red T-shirt holding four Molotov cocktails in his hand. Looked like a right Turk to me.

The Greek Conservative government lately was collecting less in taxes than ten years ago, this is what happens when the people who own the country do not fulfill their obligations.
"They voted for them." Yes, I can choose the colors of my chains.
We can choose, everywhere, between two options that have been self-selected in some smoke-filled rooms among people we really know nothing about.

That's a lot of complaints, man. I could talk for just as long of positive sides. And frankly, you don't have an alternative. Sure, Greece must clean up its act and clamp down on corruption and the black market and improve governmental institutions. But at the end of the day, we have seen no working alternative to the combination of capitalism and democracy. You'll still have the rich, an upper-middle class, a political class and so on. You need them all. And the people who have been living beyond their means are not so much the rich as the people overall. Sorry. No free revolution.

July 26, 1953 Havana
November 7, 1917 Moscow
February 11, 1979 Tehran
1581, the Netherlands (the Dutch did it wayyyyyyy before America or France)
July 4, 1776 Philadelphia
July 14, 1789 Paris
August 22,1791 Saint Domingue

There are PLENTY of alternatives to rich people.

Not sure what your point is. I'm saying the Greek public can only improve their situation by working within the democratic/capitalist system and improving it. There isn't an alternative system that is better and revolutions won't improve things.

I think that was only true in the age of expansion. Colonialism and then the Fossil Fuel Fiesta. Capitalism is very good for exploiting resources quickly. It's not so good in a situation where resources are genuinely constrained.

Yes it is. And it does any such transition exceptionally well.

Totally disagree.

Capitalism depends on growth. We're looking at a future of "de-growth," which capitalism is ill-equipped to handle.

No, capitalism does not depend on growth.

Yes, it does, as Mike Hearn explains here.

No, he doesn't.

Markets are soaring on this news. The question is whether it will work.

Maybe the question is more like, how long will countries or groups of countries have the credit to continue these bailouts?

Everytime there is a bailout it represents sweet music to the markets, that in turn rise once more. But obviously there must be a limit to indebtedness, which is apparently determined by way of debt vs. annual GDP. That seems like an interesting way to figure it. Afterall, annual gross domestic product, the amount of money moving in the economy each year, cannot be used to pay off debt - only revenue, taxes can. So I'm fuzzy on how GDP became the measuring stick, but it is nice to know there is some way to judge what is a lot of debt.

Gail, you've talked many times about as we have moved past peak oil, credit is diminishing. So, how do you view all these trillions that keep being borrowed? Do you see a future end to the ability to solve problems by simply borrowing more money?

Along these lines in the news this morning is Fannie Mae panhandling for more money as a result of continuing mortgage defaults.

HOMES MAY 10, 2010, 11:27 A.M. ET Fannie Mae Needs $8.4 Billion More in Aid after First-Quarter Loss.

If every quarter has that many losses, then 8.4 x 4 qtrs = 33.6 billion est. annual losses. But there's also Freddie Mac. What are their losses as well. I just don't see this situation getting better, but if someone's got a magic bullet, I'd love to hear it.

I consider all of this borrowing a way to try to kick the can down the road a little farther. I can't see any way that it will be successful long term. I suppose, there is a chance it might work for a few months to a year or two.

A comment from an Oil Drum staff member from staff members group:

If the solution to this crisis was simply central banks printing money, it would have been over long ago. The problem is still solvency. If there is no solvency, central banks can only inflate primary money supply (what banks speculate with) but not the supply getting to the real economy. So while impressive, it also is a big hand raise saying 'we can't pay our bills'.

As always the devil is in the details. I'm sure all the finance ministers in countries like Spain, Portugal made a show of how strong they were and very quickly are going to make a show of how weak they are (i.e. get the money from EFUND first). In the end, we will have a global currency - we might have different shapes and colors but everyone is in bed together until it breaks (none of the BRICs could allow euro/pound/dollar to go under as then we face consequences of massive credit contraction, which we are not ready to do.

... it might work for a few months to a year or two.

I wonder if that is what the PTB expect and want. There are 27 nations in the EU, but apparently only the 16 Euro countries are on the hook. So is the UK part of the deal? If not, why the strong comments here?

The 16 EU members that have adopted the euro currency will provide loan guarantees to the tune of $569 billion. Such a fund would significantly increase the degree to which many European nations assume responsibility for one another's financial health, knitting them together in a closer economic union that might make some nations squirm.

Additionally, the IMF pledged $321 billion in loans, bringing the aid package total to about $968 billion.

from http://articles.latimes.com/2010/may/09/world/la-fg-eu-finance-20100510

In any case, I doubt that having other nations borrow to guarantee your loans will be much help overall. Sort of robbing Peter to pay Paul, and all. End result, as near as I can figure, is that the other 15 nations become weaker. Politically, the impact is going to be bad for those who agreed. Witness the situation in Germany.



The situation is that the 16 euro-currency bloc are contributing more (and are able to draw from the fund), but the general european community, whose budget comes from contributions from the wider group of 27 countries, is also making a contribution. So the UK is contributing, but at a lower proportion than, say, Germany which is in the core 16.


The Canary is Dead

Tis not! It's resting...

Monty Python - Dead Parrot Canary


The question is whether it will work.

Columnist Greg Hunter doesn't think so.

The Canary is Dead

You can use the “canary in a coal mine” metaphor to describe the situation in today’s financial world. Greece is the canary. The poisonous gas is debt. Greece has just keeled over, and the rest of the world is running scared. That’s why the Dow was down 1,000 points at one time yesterday! Oh yes, there was talk of “unregulated high frequency computerized trading” and “bad trades,” but make no mistake, the market is worried about massive amounts of sour debt at all levels around the globe.

And this morning there is the euphoria that the canary has been revived, Greece is alive and well. Well, not exactly completely well but not likely to die anyway soon. But the underlying fear is that others have caught the same virus that almost killed Greece.

So what is it going to take to “fix” the debt mess the world finds itself in today? Well, first of all, there really is no “fix” because the debt problem is just way, way too huge. According to the Bank of International Settlements, the debt ball in the world today is $600 trillion.

Ron P.

Ron -- makes one wonder if the canary ever knows what they are volunteering for. In hind sight I suppose many outside of Greece could say they saw the potential for that country and others to be a trip wire. If one were paranoid they might even think some of the EU actually anticipated such an outcome and saw Greece as a "point man". Observing what is going on today might offer some of those leaders the political capital to force changes in their own country's policies that would not have been possible otherwise. Then again, that may be giving politicians too much credit.

An aside: I once tried to volunteer to be a canary. In the late 80's the oil patch was dead and I was bored and broke. The Texas Army Guard was recruiting for their NBC unit (Nuclear-Biological-Chemical warfare unit). The unit didn't deploy such weapons; their job was to detect and ID them in the field. My background was perfect but missed the deadline by a few days. And guess what was one of the first units deployed after Iraq invaded Kuwait? I would have gotten one wish: not being bored. And yes, the unofficial emblem of the unit was a yellow canary patch.

I have never been that bored.

I figured I was just going to be a weekend warrior consumer. As been said many times before: "Never thought about that (Iraq) possibility". Think how much fun it looked like at the time: go play in the woods with the guys from time to time and the bonus of learning how to make nerve agents in my garage. And I heard the unit was eventually stationed on the front lines with a French Legionaire unit...heard those guys really know how to party. Every now and then I still wonder...what if?

I guess that the canary is about as much alive as the parrot in the classic Monty Python skit.

Just one more doomed attempt to ward off the inevitable global economic crash.

One person's debt is another person's asset.
Perhaps an alternative way of looking at "exess debt" is that there are too many currency units around visaviz actual economic output (however that is expressed). In other words, the stock (as in stock vs flow) counterpart of inflation?


Another big story that seems to have gotten buried on the back pages. Are we getting numb to the disaster porn?

UPDATE 3-Russia says mine blasts kill 31, 59 trapped:


I also notice the story

OECD Leading Indicators Point to Slowdown

"OECD composite leading indicators ... point to a slowdown in the pace of economic activity," the think-tank said. "In most OECD countries signs of slowing growth are tentative, but stronger signals have appeared in France and Italy, and some evidence of a potential halt in expansion is emerging in China and Brazil."

IMO, it is reemergence of the slowdown is what will really make debt repayment difficult. If China stops its huge growth or there are slowdowns elsewhere, the trend is likely to be more debt defaults.

Something Martin Wolf (Financial Times) was discussing on CNN yesterday, regarding the PIIGS, was that he wasn't as concerned about Italy because they are having some success at transitioning to a "no-growth" economy, a balancing act of sorts. I found this interesting since we have discussed the need to do this globally, as a result of Peak Oil and "Peak Credit". I got the sense that that their transition initiatives are intentional.

An interesting article from Wolf: "The challenge of halting the financial doomsday machine"


edit: Whoops! Paywall kicked in. I accessed it from here:


Whether or not the transition is intentional, it still makes the ability to pay back debt with interest very poor. You notice that Italy is part of the PIIGS. I suppose reducing population can help the GDP per capita numbers, but one still has the problems of businesses and the government not being able to raise revenue / taxes adequately. Also, any state run pension /social security plan is difficult to fund, unless one can keep the younger population up.

The full problems of a "no growth" economy trying to work within our current system have not yet fully played out in Italy.

What are their other options? Knowing the Italians, perhaps they've decided to "lay back and enjoy it", considering their history.


Do you have a link to the CNN piece? Couldn't find it.


From Yours Truly: Disaster in Gulf foretells the future

While doing some genealogical research, my brother Ben discovered that two of our great-great-grandfathers were "oil pumpers" -- in northwest Ohio of all places. Today, Toledo and its environs do not inspire images of gushing oil wells, but in the early 20th century this was a booming part of the United States. Think Rockefeller and Standard Oil of Ohio.

At the time, the nearby Lima oilfield was the largest ever discovered, at a whopping 300 million barrels. Geology Professor Mark J. Camp, whom I had the privilege of taking a class with long ago, has "written the book" on the obsolete Ohio oil industry for the "Images of America" series. It is full of old photographs of burning oil rigs and huge, lightning-struck storage tanks going up in black smoke.

Today, there are virtually no producing wells in northwest Ohio.

Congrats on your editorial publication. Nothing new for this crowd, but hopefully a few more Maine residents will start to add it all up. So are you an ag worker, or an English adjunct, maybe a prior life? The latter should help your writing editorials, unless you are solely of lit background.

... and, on the automotive front:
Another Low-Cost Car Comes to India Market

France’s Renault and its partner, the Nissan Motor Company of Japan, and Bajaj Auto, India’s second-largest motorcycle manufacturer, announced details of a low-cost city car coming to the Indian market in 2012. The goal: to take the fight to the Tata Nano, a jellybean-shaped sedan with a starting price of about $2,200.


Mr. Bajaj said the car would have better fuel mileage (up to 70 miles per gallon) and lower carbon dioxide emissions than the Tata Nano. The gasoline-powered Nano is capable of roughly 50 m.p.g. in a mix of city and highway driving. Bajaj Auto said it would keep costs to a minimum via extensive parts sharing between the company’s motorcycle and three-wheeler (auto rickshaw) divisions. This marks the first time Bajaj Auto has built a four-wheeled passenger car.

The Nano is expected to hit European markets next year, and Tata asserts the U.S. will also be a target market.

Expect India's petroleum consumption to continue rising on an exponential curve.

Dick Lawrence

Another Low-Cost Car Comes to India Market--Link Update

That link had moved on you I believe, Dick.

The mpg ratings on these little guys are impressive (70 mpg for the Bajaj), but even more significant ,I think, is the vast numbers they are planning to build in a year. As you say there are pretty big PO and ELM implications within these trends. As an older american I can well remember how derided were the lowly VW bug and the Corolla when they first came out.

There are lots of issues in bringing micro cars to U.S. markets. For me the botttom line is this. Given how hard we are hitting our heads on the limits right now with GOM and Upper Big Branch, this is nothing compared to what is coming.

I would much rather see us fighting about how to integrate micro cars into an overall transitional strategy that fighting in Iraq and Afghanistan in order to futily attemp to maintain the current fleet. Just for the record I am an avid cyclist and do not see small ICE cars as a good long term solution.

Pretty soon however some of those 'other arrangements' can look pretty good at least for awhile.

Question: Can the 70MPG Bajaj survive the transition to western/US safety and emissions requirements. The "lowly VW Bug" didn't for long. I love the little cars, but 3 times the mileage with 4 times the emmissions could doom them in the US.

Ghung. Lot's of issuses. The engine development and emmissions I expect to be pretty good with Nissan Daimler and Renault on board, they even will probably be fairly peppy. (Yes the air cooled HO4 in the bug wasn't very clean even in the Subaru with coolant, was it.)

The air bags and bumper height ect will be the breaker. The current pattern had been to allow the vehicles but only sub 35 mph areas and govern or (LSV) legislate to 25 in several states. What will it take for that to change? What will the safety upgrades cost? Good questions.

Add on ABS and all of the junk that Americans "need", weight, costs go up, mileage drops. Ahhh, oh well.

I owned several bugs. My sweet '69 was my favorite. I also owned several "transporters", including 8 of these:


I became quite adept at improving performance and mileage, especially on the 2 litter "pancake". I learned to repair the air flow sensors on the fuel injected models. Made me quite popular. Also converted to carbs and added my own intake manifold heaters. I restored and drove them for years, then sold for a profit. My last one was a Sage Green '78 I restored to showroom condition. Wish I still had her.

I also had a '66 21 window with a 911S engine I wish I had today. She looked stock but could "pop a wheely" on a steep hill :->

I, too, owned many Volkswagens, and my favorite was also a 1969 bug, dark green with a sunroof. I loved that car!

I had a '57 bus, a '65 bug, the '69 bug, and a '74 412. Then my living arrangements changed, and it's been 4WD pickup trucks since then.

But I still miss my '69 bug...

Oh no parallel evolution. Nice pic!

Taking me back a bit. Started with a 57' bug and then a 51' with semaphores and the reserve tank nofuelgauge had a 56' convertible we used on my big SF Chronicle paper route in the late 60's. Bought a 60' 23 window bus in Oregon with the split and slider and full slider top which dumped an engine and almost got me arrested in Vallejo Ca. swapping the engine in a vacant lot. SWAT team, dogs, think I was 17.
Biggest conversion was adapting a 1700 Rabbit into a '71 camper bus mostly to get heat in the minus 20F weather here. Several more. Worked for VW dealer for awhile.

Wish I had them all today too.

The cylinder arrangement, as in inline or horizontally opposed, has zip to do with being 'clean'. Aircooled is problematic in terms of temperature stability but current watercooled HO engines meet LEV standards. A horizontally opposed engine can be thought of as an extreme angle or 180 degree V engine. Or two inlines sharing a common crankshaft.

You could be right today, but the Subaru HO4 was notoriously not clean and it suffered from a consumption limit. I equated it somewhat with the design (keeping two small heads warm out in the airstream with with long exposed ,carbureted, intake runners) and its highly oversquare configuration. Probably got better with FI and ECU's. Incidentally the first Subaru was air cooled.

The temperature on the air cooled VW was difficult to keep constant, warm-up and running. And we probably all know what that means for emissions. VW at least had a heat riser but it usually plugged after a few thousand miles. The engine was sensitive to changes in the outside temp and load. VW had various schemes to try to combat this but the early ones were somewhat primitive and later ones required a pretty complex A.I.R system (nest of snakes) IIRC.

No need to go into all the systems they used to try to combat this problem, but they got better as they also were able to deliver more heat to the occupants. I used to do emissions testing for the dealer. A lot of trouble was when folks did work on them they'd pitch the bellows thermostat or the restriction ring in the cooling fan, but that wasn't the only thing.

If you knew how to drive it you could keep the temp right and get 200k w/o problems but too many #3 exhaust valves got swallowed with folks hammering on them on the hills.

Just keeping to one manufacturer it's easy to see what has happened to car design for the U.S. market.

Original 1953 VW Beetle: under 1800 pounds unloaded.

2010 Golf (its successor): about 3000 pounds unloaded.

Original VW Beetle: top speed 71mph

2010 Golf: top speed 125mph

Original VW Beetle: 0-60mph 27 seconds

2010 Golf: 0-60mph: under 9 seconds

Interestingly, if you get the TDI engine the fuel consumption for the 2010 Golf is about the same as for the 1953 Beetle. And the weight of the 2010 Golf is only about 80 pounds less than the weight of the 1953 Ford Mainline, which was a "full size" car.

Over the last 50 years, cars have nearly doubled in weight and top speed, tripled in acceleration, and use about the same amount of fuel. They have also added many safety features such as air bags, and comfort features such as air conditioning.

They sure have.

2001 Toy Echo Auto 35mpg Curb 2080

2001 Toy Prius " 41mpg Curb 2765 Gen 1

2005 Toy Prius " 45mpg Curb 2900 Gen 2

2010 Toy Prius " 50mpg Curb 3042 Gen 3

That hybrid now has a larger engine and better performance. Modern cars are way nice for comfort and safety. But this is what always happens. The Civic, Sentra, or any of the formerly smaller SUV's have mostly been supersized just like us :)

Either with that hybrid or the TDI it seems to me that it is now very possible to build a production car that gets nearly 100mpg, given the trends you pointed out. But since this is mainly what's offered and, hey the mileage is better anyway, it's easiest to just play along. Besides everybody else is in a big vehicle and if you run into them...

For a really good commentary on the obesity problem of modern cars relating to electrics, check out this story;


"The 2010 Nissan Leaf and Mitsubishi i-MiEV have exactly the same range as the 1908 Fritchle Model A Victoria: 100 miles (160 kilometres) on a single charge"


Quite so. His statement that "we don't need better batteries, we need better cars" is right on the money

Check out the link to the trev.

What is disappointing is that they had a road going protoype on 2005, and it has not progressed beyond that.

Volkswagen has a surprisingly similar concept, which has also not progressed beyond that stage;

Of course, neither of these are new, the original one is still the most eye catching;


The specs really are amazing.
A single cylinder 10hp, 2 stroke engine that is reversible, so you get four forward and revers speeds!
Kerb weight of 500lb, top speed of 56 mph

And then, there is the world record holder for the smallest "car" ever built, the Peel P50, powered by a 49cc engine!
It weighs 130lbs - less than most of its drivers! No reverse gear, so the driver gout out, picked it up and turned it around.


And how do you impress your SUV driving workmates with a car like this? (from wikipedia)

On 28 October 2007, the P50 was featured in a segment of the BBC motoring programme Top Gear on BBC Two, during which the presenter, Jeremy Clarkson, entered the car and drove through central London to work. Clarkson, who is 6 ft 5 in (196 cm) tall, demonstrated that it was possible, although difficult, for tall people to get into the P50. Upon arriving at the BBC, he drove past the car parks, between bollards, to the front of the building, after which he pulled the P50 behind him to his office. He then drove the P50 through the corridors of the office building (including the background of a BBC News 24 live broadcast) and used a standard passenger lift to get to a meeting, which he attended inside the P50. At the end of the meeting Clarkson drove out of the building and stated that, if the car had a reverse gear, it would be the "ultimate in personal mobility".

The forerunner of the electric scooters, but wayyy more cool!

The VW 1 liter I had followed and believe it or not there was an (orange) Peel at our local car museum made on the Isle of Man IIRC.

The other two were new to me. Like the original Messerschmidtt real neat. The tandem seated 3 wheel concepts seem adequate for a lot of basic commuting and delivery. The carbon footprint-fuel or electrical requirements would be minuscule compared to current consumption meaning potentially very low total cost overall.

Today many folks could put together a pretty good LiFePO4 trike or bike pretty easily and charge it from the output of a few solar panels. I've done a few. From there to some fairing work or body isn't insurmountable. Probably it's mostly culture (and physics) holding back more widespread acceptance.

Riding a bike I'm aware of how slowly this will change, unfortunately, I do not expect much will happen and then it may not be pretty. What we could do and what we will do sort of thing....but it's good to have the alternatives when and if it comes around.

The first aircooled Subaru was a two stroke twin as I recall. No relation. The notoriously 'unclean' motor was an attempt to make a late 70's standards meeting engine without resorting to a catalytic converter. The last one was in 1980 - I had one, and it was jetted so goofy that I got about a 15% or better increase in mileage by rejetting richer! The engines were, and still are to a degree, somewhat inefficient, especially at low speeds, due to the hugely oversquare design which keeps the width down and wear low but provides lots of combustion chamber area to bleed off combustion heat.

Be careful when attributing VW's HO problems to the configuration. Lame or accountant limited engineering can be applied to any situation. For example the #3 exhaust valve's problems were directly related to being immediately downwind of the oil cooler. If I could move the cooler and solve the problem where were the factory deep thinkers?

Moving the oil cooler was always one of my first mods. I kept my valves adjusted religiously. It always told me when #3 was fixing to go. Pull the heads and swap 'em out before I sucked a valve.

I once rebuilt the left side in my '66 bus in a snowstorm on the side of I-24 at the top of Monteagle, west of Chattanooga. It was so cold I pulled the engine, pulled it around to the side doors and slid it into the bus using two 2x4s. I got it fixed and back in just as a tow truck showed up to get me out of the way of the snow plows. Fuel line, throttle, a few wires (forget the tin!), fired up first try. I've never been so cold. I used to drive wearing an old Army mummy bag with just my feet sticking out.

Hehe yeah but then you probably guessed I knew that, but that's why it was usually ,but not always #3. The abuse that design took including being set in buses, trucks, jeeps, and wagons is a testament to it's durability. It's interesting how many less than optimal engineering designs just kept reoccurring and working basically. The thing was they tended to get hot on the hills and then cool pretty darn fast going down. Valve stretch fatigue and then break off. If you shifted down going up and then took it easy after the top they lived longer. Mostly due to the air cooling IMVHO.

But since you understand the deal I have to tell a short war story. I was courting my now lovely bride of 29 years. She was flying me back and forth on puddle jumpers and the schedule left me with scant time to travel 150 mi to work in the morn. So I was flailing the old bus pretty hard and just over the pass the engine let go. I pulled over ,to a cacophony of sounds, lifted the lid and there amongst the oil was the head of exhaust valve #4 laying directly on that little sheet metal piece outside on top of the engine next to a neat hole in the case below the fuel pump.

Yep sideways, through the piston, slid down the rod boss, one trip around balanced with the crank inside and pop out through the case into the sunlight. I just shook my head and eased it down off the mountain. But before I take too much abuse for tearing up that motor I've got to say marrying her was well worth it.

Ok the weather's nice & I've got to go put my wife's bike together.

Now if they can just keep the dang things from burning up

Ford C-Max plug-in hybrid to be built in Spain
John Fleming, President of Ford Europa Ford "ha presentado el nuevo C-Max, el modelo que está ya produciendo la fábrica de Almussafes, en sustitución del Focus, para toda Europa y "otros mercados"."
John Fleming says the new plug-in C-Max will be available from 2013.

On a related matter and to counter the poison that the British right wing spews here and everywhere, claiming that Spain is broke, and all the PIIGS are living beyond their means and they should get ruined for their own good, and the euro, and the evil EU, Brussels and all that, let me tell you a few true facts generally unknown, even hidden by some people.

If you live in the UK
-you could have your bank account and your mortgage in Santander (a Spanish bank that bought the brand Abbey and two other banks)
-your mobile phone company could be O2, owned by Telefónica from Spain
-your energy bill could be supplied by Scottish power which is owned by Iberdrola from Spain
-If you travel by air you fly with British Airways which is currently at merge process with Iberia. Also, you can depart from Heathrow which is owned by Spain´s Ferrovial, it also runs most other British airports.
-If you go shopping and you are a woman, most probably you go to Zara, a multinational brand of group Inditex wich is owned by Amancio Ortega, one of the richest man in the world, from Spain, of course.
-If you go on holiday, most probably you go to Spain as half of Britons do.

Spain has world class Underground train systems in the following cities:
* Madrid
* Barcelona
* Bilbao
* Valencia
* Sevilla
Several others are in process of construction.

Where are the Underground trains in Manchester, Liverpool, Edinburgh, Glasgow, Leeds and other British cities of world renown?
Nowhere. Only London has Underground.
Oh, yes, Manchester has a trolleybus, I have traveled on it.

I could go on. They have squandered their wealth in raising the value of their homes and now the Oil and Gas are in decline, and they are fond of slagging off other countries to hide their laziness and incompetence.
Yes, believe it or not, Britain is now the laziest country in Europe. The Oil did it to them, same as to any oil emirate.

I only want you to understand that Spain is not mañana country, that we have solutions to our problems and in fact our president just bought lots of Greece debt to help a partner in trouble.

No one should dare tell me anything about Germany helping Spain. Germany, or German companies at any rate, own fully 18% of the Spanish economy. If ever they have to help Spain they will be helping themselves, but it is not the case now.
Perhaps very soon Spain will have to help broke Britain -broke economy, broken society as the new Etonians say. I hope the Spanish rich do it, and so help to keep safe their investments in the UK; it is not my money so I couldn't care less.

Not entirely accurate.

www.wikipedia.org/wiki/Glasgow_Subway Since 1896. I have ridden it.

It is several years since I had to go anywhere near any of the Spanish owned the corporations you list.

I do not know how financially robust Spain is at present, but it has jst gone through a very large property bubble, like several other countries.

You are right about Glasgow, and I was wrong.
I see that it is much smaller than even the Lisbon Subway.
Financially robust! Maybe the rich. The rest of us are financially malarial.

It seems that there's life after a bubble
I do not necessarily believe what our newspapers print, but it says that trade in residential property in Spain went up 9% in March, in comparison with March 2009, that in February it was up 18.7% in comparison with the low point of 2008.
Indeed you are right, 2008 and 2009 were terrible, maybe it is over.

But the banks are not releasing houses on the market at knock-down prices and one must remember the special psychology of the Spanish people. I know about some unemployed who go to Caritas (Catholic aid) to get food packets, and second hand clothes, and with their small dole pay the mortgage to the bank every month. Otherwise they would lose everything.

If the market kept down the Europeans (mostly English and German) who own houses in the Mediterranean would all get ruined, many have lost everything already -think Florida, not very different. Not good for anyone.

The South pole low temp been rising for 3 years.

South Pole Has Warmest Year on Record

I read a couple of weeks ago where some Arctic explorers had woke up one morning to find it raining.

Spring showers are next to non-existent in the High Arctic, so Environment Canada's senior climatologist says he's baffled to hear that it rained near the North Pole this week.


A lot of the comments deny it happened or accept it happens all the time but we just don't know it. The Inuit who live in the region are shocked and I think Climatologists would have a pretty good idea if this happens at all.

Europe kicks can down the road with rescue plan


Dow will see 8,500 before 11,500, Suttmeier Says


Another day, another Trillion Dollar Bailout!


Spotted this one in the Wall Street Urinal this morning. It reads like it was written by an industry PR person:

Shale Gas Will Rock the World

Huge discoveries of natural gas promise to shake up the energy markets and geopolitics. And that's just for starters.

I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy.

To understand why, you have to consider that even before the shale discoveries, natural gas was destined to play a big role in our future. As environmental concerns have grown, nations have leaned more heavily on the fuel, which gives off just half the carbon dioxide of coal. But the rise of gas power seemed likely to doom the world's consumers to a repeat of OPEC, with gas producers like Russia, Iran and Venezuela coming together in a cartel and dictating terms to the rest of the world.

My response, in the Comments section:

An alternative point of view, with several links to other articles:

Shale Gas Shenanigans

“The shale gas boom has been the sole bright spot in America's energy picture, and maybe the only bright spot in the economy as a whole. And what does that bright spot turn out to be? An asset play whereby shale gas producers, conniving with bankers, inflate their own value, hoping to get out while the getting is good.
What else would you expect in 21st century America?”

And another article, featuring Henry Groppe:

A contrarian makes another call – this time, natural gas


"When it comes to predicting the price of oil, Henry Groppe has made a long career out of zigging when others were zagging. So why should he be any different when talking about natural gas?

Mr. Groppe – the octogenarian patriarch of Texas petroleum industry analysts Groppe Long & Littell – doesn't buy the prevailing wisdom that New York Mercantile Exchange natural gas prices are dead in the water, stuck around $4 to $5 (U.S.) per million British thermal units even as demand recovers, awash in supplies and with much more on the way.

No, his analysis (and more than 50 years of experience) tells him that gas inventories are about to get a lot tighter, that new supplies are overstated, and that prices are headed north of $8 by the end of summer.

Why is he so sure he's got it right and most everyone else has it wrong?

Because, he contends, shale gas – the previously unattainable source of vast gas supplies that has been unlocked by new high-tech horizontal drilling advancements – is not the holy grail it's been cracked up to be. Not even close..."

My comments:

Ms. Jaffe has traditionally been skeptical of Peak Oil scenarios, despite examples like the Texas and the North Sea which respectively peaked in 1972 and in 1999, and which have both shown large production declines, despite being developed by private companies, using the best available technology, with virtually no restrictions on drilling.

In other words, Peaks Happen, even in the best of circumstances.

Based on Kenneth Deffeyes’ work, global conventional crude oil reserves in 2005 were at about the same stage of depletion at which the North Sea peaked in 1999 (about 50% depleted in both cases), and despite the fact that annual oil prices climbed from $57 in 2005 to $100 in 2008, we have seen a cumulative shortfall in production between what we would have produced at the 2005 rate and what we actually produced (EIA data).

So, given the fact that crude oil production data support Peak Oil scenarios, I suppose that it is expected that Ms. Jaffe would want to change the subject.

However, the real threat facing the US is that global net oil exports almost certainly peaked in 2005, and net export declines tend to accelerate with time. For example, combined net oil exports from Canada, Mexico and Venezuela fell from 5.0 mbpd in 2004 to 4.0 mbpd in 2008 (a 20% decline in only four years), with the decline continuing in 2009.

Furthermore, recent data show that developing countries like China and India have been outbidding developed countries like the US for declining net oil exports.

but the long-term trend for fossil (and fissile) fuels must surely always be up, since they are finite reserves. So the old technology undermines the new. At some point in the future we will be using renewable energy to produce/process these and other materials,

Actually, we're just as likely to go entirely nuclear. Conventional nuclear last us hundreds of years and breeder technology lasts us forever. And then there is fusion, which may or may not be cheaper than fission. It's probably more environmentally friendly and more sustainable to NOT go renewable.

And then there is fusion,...

No, there is not fusion. Fusion is still in the laboratory stage. The latest efforts involve using a powerful laser to try to fuse a tiny pinch sub-zero H2 and H3. They are nowhere close to getting more power out than power in.

The giant step will be capturing the heat from these efforts and heating massive amounts of liquid salt, which will heat water in a heat exchanger, making steam to turn a turbine to generate electricity.

They are now decades away from success. They have been decades away for decades, and likely always will be.

I am sure you have heard the old cliché; "Don't count your chickens before they hatch". Well don't count your fusion until a working model has been developed. And you are not likely to live that long.

But not to worry, they will keep trying as long as there is government grant money to support their efforts.

Ron P.

We can do fusion, but whether we can ever make it work commercially is unknown. But fission suffices, so it's not that big a problem if fusion don't work out.

So they have fused a tiny speck of hydrogen. That is a far cry from generating power with fusion. And we do know if we can make it work within the next decade or two. No we cannot. We are many years away from a fusion reactor if such a thing is at all possible.

Bottom line: Forget it, it will not happen before the collapse of the world as we know it. And fission will not suffice to save the world. We will not start to build reactors until peak oil slaps us in the face, and by then it will be way too late.

Ron P.

Regarding fusion we'll just have to see. Fission scales well, and we'll have no problem scaling it in the face of peak oil.

Regarding fusion we'll just have to see.

Naw, it will never happen. Fusion will go the way of the hydrogen car. Sooner or later the government will realize they are just pouring money down a rat hold with no possibility of any return. Research firms are always willing to take the governments money but sooner or later the government wises up to their schems.

Fission scales well, and we'll have no problem scaling it in the face of peak oil.

Good Lord man, what planet do you live on? It takes about 10 years just to bring one fission plant on line. To replace petroleum with batteries in electric powered vehicles we would need to build nuclear plants faster than China is building coal powered plants. China is now building about two power stations every week, We will not build one fission plant per year!

Ron P.

Good Lord man, what planet do you live on?

Reading some of Jeppen's responses on this thread I think it's a valid question.

Just ribbing you Jeppen. ;-)

Naw, it will never happen. Fusion will go the way of the hydrogen car.

You can't possibly know that.

It takes about 10 years just to bring one fission plant on line.

Not if we need to do it quicker. Besides, construction parallelize well. Each state can do two at a time at least.

To replace petroleum with batteries in electric powered vehicles we would need to build nuclear plants faster than China is building coal powered plants.

Batteries may be a problem. Getting the electricity is easy. The US 20 million barrels of oil per day is the equivalent of some 12000 TWh thermal energy per year. This you can do with less than 400 reactors. That's not much. Also, short term, you don't need to do it with nuclear from day one, you can mix in some coal, some wind, some natural gas and some increased efficiency to enable nuclear to ramp slower.

You can't possibly know that.

What I do know is that "fusion power" has always been 40 years or further down the road, and likely always will be.

Could This Lump Power the Planet?

Scientists at Lawrence Livermore National Lab are betting $3.5 billion in taxpayer money on a tiny pellet that could produce an endless supply of safe, clean energy. For some, that's hard to swallow.

Yes, they are betting taxpayer money. And as long as they are funded by by taxpayer money they will continue to tinker with this or that fusion scheme. And fusion power will always be 40 years away.

The joke is that fusion energy is only 40 years away, and will always be only 40 years away.

And no, fission reactors cannot be build on the fast track, unless you skimp and save and endanger the lives of millions of people. 400 reactors? Are you kidding me. When are we going to start building those 400 reactors? If we started one per week it would take 4 years just to get started and at least 14 years to complete. But we will not start building one per week, not this year, not the next year or the next. Given the delay in starting such projects it would be 20 years before the first plant came on line.

Peak oil is here now. Anything 20 years down the road cannot possibly be counted as something that will help.

Ron P.

You don't endanger many lives by bypassing lots of red tape and unnecessary security surrounding nuclear power. On the contrary, you'll save a lot of lives as the alternatives are bad. As I said, you can build very, very fast if there is a need. Compare with the wartime economy of the 40-ies. 400 reactors can be built for $2 trillion, which is 14% of annual US GDP. Spread it over 10 years and you need to devote 1.4% of GDP. That says something about the small scale of the problem.

If peak oil was in 2005, doesn't that show that PO is no big deal?

If peak oil was in 2005, doesn't that show that PO is no big deal?

Jeppen, this depends on in which country one lives and if you still have a job.

I don't think the subprime crisis was PO related.

I don't think the subprime crisis was PO related.

But high oilprices certainly damage the economy, so Peak Oil has severe consequences. And that allready only with oilproduction on a plateau.
If you want to read about oilprice and the connection with the economy I advise the book "the next economy (from mass economy to information economy)" from Paul Hawken, and of course the articles from Gail.

To replace petroleum with batteries in electric powered vehicles we would need to build nuclear plants faster than China is building coal powered plants.

Wrong Ron. Most electric cars will be charged at night when power demand is lower.
Besides, refining oil uses a lot of electricity. Look at www.evnut.com/gasoline_oil.htm

The electricity used in CA to extract and refine oil for gasoline (11,000 Gwh) would be enough to power 4 million full function electric cars.
11000 million kWh / 0.25 kWh per mile /11000 miles per year per car = 4 million E cars
Adding the natural gas used to refine oil for gasoline, 1,061 million therms, we could get enough power to run another 5 million electric cars.

Wrong Ron. Most electric cars will be charged at night when power demand is lower.

Gracious man, have done the math? The conversion of electricity into oil terms is straightforward: one barrel of oil contains the energy equivalent of 1.64 megawatt-hours of electricity. Assuming that only 70 percent of a barrel of oil is used for transportation fuel it would take about 1,000 new 1,000 megawatt plants to charge all those batteries, if you charged around the clock. But since you are charging only at night it would take about 2,000 one thousand megawatt plants. That is assuming that the electrical/battery car is 100 percent efficient. Given that there are great losses in the battery charging and discharging process, along with other heat losses, it would take at least 3,000 new plants.

There are only 2,776 power plants in the United States. We would have to more than double our electrical power generating capacity if we were to convert to battery/electric vehicles.

Ron P.

Gracious man, have done the math?

What about the math in the example of California ? Refining oil needs tremendous amounts of electricity, something I read last year also. The point with charging at night is that existing power plants have the possibility to increase output then.

That's one way to do the math. However, if we build that much generating capacity, we would not only be using it at night, and you don't need to take away penalties for battery charging and so on, as electrical transportation, source-to-wheels, are as energy efficient as petroleum use, import-to-wheels. So you'd only need 40% extra plants.

One other way to look at it is this: The Tesla Roadster use significantly less than 2 kWh/10 km, plug-to-wheel. If you drive it 20,000 km per year, you'd need 4 MWh per year. That is about 1/2000-th of a wind turbine installation costing $5 million. So, assuming the wind turbine lasts as long as the car, you could pay $2500 to participate in a wind collective when you buy your car to get fuel for its entire life. Perhaps $3000 including turbine maintenance, insurance and so on. $150/year, I guess that is cheap even for you yanks?

As I said, the problem is battery costs and battery life. Nothing would change the world like a really, really good and cheap battery.

The problem is neither battery costs nor life. The problem is that the cars are too big and heavy, and drivers and mfrs are trying to give them gasoline like performance. You can get that performance, but at a severe cost.

A better solution is smaller, lighter cars, with lower (but still acceptable) performance specs.

Good comparison of how little things have progressed here;

Henry Ford made the model T a success by making it simple, small, and affordable - not by trying to be all things to all people as the current EV's are.
I will happily trade some space and performance for being electric.

I had heard that Europe and China were looking at going back to the moon..

for H3 ?????


3He, actually.

Dateline 2048, The Moon

A 3He well being dug by the TransLunar rig Receeding Horizons under contract with British Helium blew out today, gushing 3He everywhere and causing an environmental catastrophe in the Sea of Tranquility. It will take days for rescue crews and remediation teams to reach the site because, after all, it's on the moon.

LOL! Brilliant!

CEO of Exxon on now on cnbc talk about peak oil

grrrrrrrrrrrrrrrrr, Rex Tillerson, CEO of Exxon just said, as technology improves were able to exploit more oil, he doesn't believe in PO because he says u have to know how much u have to believe in PO and we keep finding more, techno cornucopian at its finest. Simmons on now/


"Contrary to the theory, oil production shows no signs of a peak. . . Oil is a finite resource, but because it is so incredibly large, a peak will not occur this year, next year, or for decades to come"

ExxonMobil Advertisement in New York Times, June 2, 2006

Extrapolating current 2010 price and production data, it would appear that global crude oil production will have been at or below the 2005 rate for five years, while annual oil prices will have exceeded the 2005 rate for all five years.

Oil is a finite resource, but because it is so incredibly large, a peak will not occur...

Do they intentionally ignore facts, or what? Yes, we don't know exactly how much will eventually be discovered. PO, though, is based on discoveries are not keeping up with useage. At least I think that is what it says, or have I been dreaming that?

No... that is what Peak Oil is about. We discover 1/3 what we use in a year... otherwise we would have to say that, "Hey! We discovered some new fields in the US of A last year, and this year... I guess our oil hasn't peaked yet, eh?"

The other part, blithely ignored, is that it gets more expensive to obtain the rest of the oil. At some point, it gets too expensive to obtain the rest of the oil, and a bunch of it stays in the ground, forever.

Simmons et al are the dreamers here. Not TOD.


"Contrary to the theory, oil production shows no signs of a peak [We are working hard to make sure you do not see the signs]. . . Oil is a finite resource, but because it is so incredibly [Incredible means unbelievable] large, a peak will not occur this year, next year, or for decades to come [correct because it occurred in the past]"

Have pity on them... when one gets so, so high on that PEAK, one's brains begins to suffer from oxygen starvation. It's obvious that they are unable to even turn their necks so as to see that PEAK behind them.

Hmmm, I do beleive that I don't believe in oil company stocks (anymore... that is).

Re: Biotech in Africa: 'A shortage of maize means a shortage of food', uptop.

I often point out that corn for the most part is not human food and bash those who insist on calling it food. Well in Kenya it is human food for the poor who can not afford any thing else.

But from an American perspective it makes no difference. Those poor consumers in Kenya do not have the money to buy imported American corn (which is mostly biotech anyway).

American corn should not be exported to countries like Kenya. They have a local corn economy where competition from cheap American corn would devastate local corn growers, just as happened in Mexico.

American corn growers and those who think corn is human food should respect the African corn economy and let it be. Africans should produce the corn being used for human food not Americans.

Exporting American corn to help feed Africa's hungry is shortsighted. It does more harm than good.

"corn...is not human food"

More idiocy from the x. What else do we expect? Self-serving much?

you need to do some research
commodity corn is only human food after it's been rendered
Coke, Coors, Cows
And X is absolutely correct about keeping our subsidized corn out their markets

Yes, straight corn meal can cause beriberi if not treated. I'm not sure of the chemistry, but the early conquistadores found out the hard way when they didn't soak their corn meal like the Native American Indians did.

Masa nixtamalera, harina, etc.:

To make masa de harina, field corn (or maize) is dried and then treated in a solution of lime or ash and water, also called slaked lime. This loosens the hulls from the kernels and softens the corn. In addition, the lime reacts with the corn so that the nutrient niacin can be assimilated by the digestive tract...

So next time you have corn bread, corn flakes, corn chips...remind yourself that "corn is not human food."

Raw meat and eggs can cause illness too, but that doesn't mean it's not human food.

The fact is we have chosen to grow lots of corn that is mostly good for animal fodder, but we could choose to grow corn and other grains that could be fed to humans.

x is being disingenuous.

Oh dear, not so fast. What's mainly grown in the Corn Belt is field corn, not people-food. That stuff is assuredly not what's sold by farmers markets and roadside stands for use at the afternoon barbecue. It's not eaten directly in great quantities; maybe you can get an ear from a local farmer and observe why.

On the other hand, both arable land and food supplies are at least somewhat fungible. It follows that, at the margin, converting even nearly-inedible field corn to fuel can be expected to raise the price of foods that are not field corn. This partial fungibility is the point that X, along with others, never quite wants to admit.

Then again, fungibility is a matter of economics, so we need to cut X a little bit of slack. Sure, X's Congresscritter grasps it in the context of corn, even though Congresscritters routinely fail to grasp economic points in all contexts where they'd rather not. But then again, Congresscritters are not so different from TODers or anyone else. Remember that economics is sufficiently hated in these threads - because it inconveniences starry-eyed idealists by casting great doubt on their quixotic schemes for instant social and (ironically) economic Utopia - that it's not always understood as well as it ought to be.

Truckers Favorite is white corn. Open pollen. This is NOT branded as food grade. It was what we once grew in abudance in our fields. We grew no special corn in the gardens you see. No sweet corn then that I recall.

I am eating some right now. Makes fine cornbread and grits.

Yankees! Don't know much.

Most 'field corn' goes to ADM and the others who process it into food products such as HFCS and remove much of the goodness of the corn grain along the way. Such as lysine, etc. I rather believe they sell what is left as 'food' products but not sure. You can google it up yourself.

You can eat the field corn (#2 yellow dent)farmers grow now but I would prefer to not do that since its all GMO for the most part and I prefer to not take that chance.

But I have filled 5 gal buckets right out of the combine,just last year in fact, dried it down to 10% and later ground it to meal and baked corn bread with it. Tasted quite good but for those raised on store-brought you might find it very different. Moist vs dry,etc.

BUT I far prefer my own Truckers Fav Open Pollen.

Down in North Carolina where I used to buy my meal they prefer yellow and make no big deal about where it comes from. "Old Mill of Guilford"..water ground. North Oak Ridge , North Carolina.

They DO NOT treat it but I use lye for my own grits and meal. Just a run of water through wood ashes, then soak it.

I will concede that some farmers up north will grow white corn just for the food market but its hell to deal with the elevators for they might nor might not take it or deal you a lot of trouble with pricing and other factors. Shoe Peg canned corn comes to mind.


I agree with you.

From a Kenyan perspective, see:

I often point out that corn for the most part is not human food and bash those who insist on calling it food.

And all these years I've been growing long ears of it in my garden and sticking them into my mouth.

Silly me.

Don't really want a piece of this debate but do we all realize how much corn syrup we consume every year in this country? Try walking down every isle of the supermarket and not finding dozens of items containing CS. But who knows: maybe they discovered an abiotic source of CS.

Couple times a year I can get Coke made with Cane Sugar and not Corn Syrup. Damn thats good stuff.

I think that's produced for the Kosher market and has a yellow cap

12 ounce glass bottles of Coca-Cola are stocked in Albertson's supermarket in the cold case every day of the year in Albuquerque...these are Hecho en Mexico with cane sugar. $1.29 a bottle, have one every month or so to have 'The Real Thing'...12 oz..real sugar...glass bottle...cool to ~ 33 degrees F...(careful, don't break the glass!)...pretty refreshing, taken in small quantities...I usually drink about half and share the rest with someone in my family.

Not to be a nitpicker but you do realize that high fructose corn syrup is 55% Fructose/45% Glucose whereas cane sugar is 50% Fructose/50% Glucose... I tend to find it amusing that people get all up in arms about HFCS, and yet have no problem with cane sugar, or think that honey (~39% Fructose/~32% Glucose by weight, similar ratio to HFCS) is somehow a "health food". The reality is that sugar in all of its delicious forms is unhealthy.

"The American Chemical Society conference in 2007 noted that alarmingly high levels of something called reactive carbonyls are in HFCS. They are known to cause tissue damage and are also found in high levels in people with diabetes."

The production of HFCS is a closely held secret by the producers. Likely ADM is the biggest. Michael Pollan was denied access to a corporation that was producing it.

How can the USDA guarantee a product that is produced secretly? Do people not have a right to know what happens within the factory food mills?

All can be found via google of course.

You can also google 'reactive carbonyls' which brings up many hits even though the article states no hits were found.

That stuff most assuredly isn't field corn, which is the great bulk of the crop. So no, you haven't been growing what X is talking about.

Except x didn't say "field corn," did he?

And if I eat beef, I am eating field corn after all.

This is a silly thread.

Yes, but cows, chickens and hogs eat corn, and people eat those. If you are a hog producer, and the price of corn went way up, you would be in a world of hurt.

Another point is that if the price of field corn went way up, farmers would plant less of the other stuff that people do directly eat.

"Yes, but cows, chickens and hogs eat corn"
And that is another can of worms

I ate field corn daily for over 13 years just like most all the native peoples of the American continent did for centuries.

I still eat it regularly ... tonight in fact

Most folks do not understand corn ... as shown above ...

thanks for the reply
I can only guess what your having for dinner, canned corn? frozen corn? tortillas? corn bread? whiskey?
Here's a snippet Ill. ed. dept.
‐When sweet corn is harvested, it is picked from the field and then sold by the grower at 
local markets or sent to packers where it is processed. 
‐Sweet corn is used for human consumption but in different forms. It can be eaten fresh 
right off the cob, from a can, or even frozen. 
‐Field corn, on the other hand, has many different uses. After it is harvested, it is usually 
stored at a local grain elevator or on a farm’s bin site, which holds the corn and dries it. ‐
‐From storage at either the elevator or a bin site, corn is taken to many different places 
depending on what it is going to be used for.  
‐Some corn is taken to feed mills and other locations where livestock feed can be made.  
‐Also, a lot of the corn goes to ethanol plants so that it can be made into fuel for people 
to use.  
‐Some corn is also sent to barges on local rivers where it travels down rivers and may 
eventually end up on its way to other countries. 
‐The rest of the corn is sent to various processing plants where it can be made into all 
kinds of products and many of which you would never think of. For example, corn can 
make crayons, chips, vitamins, paint, plastic, and it also can be made into high fructose 
corn syrup, which is in MANY foods. 

Yes .. daily

Soaked/Germinated baked cornbread or flat bread with beans and vegetables of many varieties

tonight is Field Corn waffles with pinto beans

well, that sounds delicious

In the mountians of the south east where I live, and all thru small farm country in the American south, or what used to be small farm country, corn is a staple food, consumed directly, in the form of corn bread, grits, and hominy.

We have homemade from scratch corn bread at least three or four times a week because we REALLY like it.When I was a kid, we had it every day, twice, dinner and supper, because it was and remains really cheap.

Breakfast was always accompanied by either biscuits or more often "wheat bread"-which is what the locals called, and still call, a single giant biscuit or loaf, really.Making a large round thin loaf rather than individual biscuits saves a couple of minutes prep time.

Incidentally most people have never had good corn bread, or even passable corn bread, and have no idea what they are missing.I have never-NEVER- had good corn bread in a restaurant, and I have never had good corn bread as a guest, except in old country women's homes.

What is generally known as field corn is actually delicious boiled or microwaved on the cob, but the harvest window is VERY short, not over 24 to 48 hours, and the the shelf life of such corn is only a few hours,max, as far as the sweet flavor is concerned.Hence most people do not even realize it can be eaten fresh.

I am no fan of gmo corn, but considering I breathe coal fumes,and drink recycled water occasionallywhich is contaminated with trace levels of dozens of noxious chemicals, and indulge in some fast food occasionally,and ride in automobiles,ad infitium, I can't see any real reason to get excited about gmo corn, from the personal health pov.

AS A MATTER OF PRINCIPLE, or drawing a line in the dirt, I am sympathetic to the arguments of the anti gmo faction.As a practical matter, I believe gmo is one of our last and best hopes in respect to feeding the world and cutting way down on the use of expensive synthetic pesticides.The technology also offers some reasonable hope of significantly cutting down on the use of manufactured or mined fertilizers and diesel fuel.

Of course my rational conservative thinking brain says the world is going to starve anyway,and the humane and safest thing to do is minimize the long term suffering and let what must be, be.

But my liberal CHRISTIAN derived value system says we must do what we can to prevent it, even at the expense of much more potential suffering later.

Nothing's simple about these big issues, except the sound bite sized thinking of the general public.

I lived in South America as a kid, while my dad was on a research project there. The local women would sell fresh corn on the cob at the side of the road. I loved it. It was "field corn," not the supersweet varieties Americans are used to, but it was delicious. They sold it roasted or raw. I preferred roasted, but liked it raw, too.

But you're right, it was only good fresh.

From what I've heard, livestock don't really do very well on corn-based "livestock feed". It just makes them fat and sickly. Also it causes cows (and possibly pigs, I'm not sure) to emit significant quantities of methane. But hey, thanks to corn subsidies, it's totally cheap!

How do we get oil? [from Fake Science]

For those who may have missed out prior discussion on the thread yesterday regarding the European debt crisis and subsequent bailout, at least for now, it turned into a fascinating discussion, a better discussion than you will find in most of the financial publications, it was on the lower end of comments string the May 9th Drumbeat,

To repeat the contention made by me yesterday: The European Union overlords had no choice but to come to the aid of Greece, soon Portugal, and then we will see where Spain, Poland, Slovenia, and some of the other weaker Europeans economies stand...we can kick, we can shout, we can cry our eyes out, but Europe simply had to put a stop on the shorting of Europes weaker economies or they would have went down the tubes to default and the whole reason for existance of the Euro Union and currency would have been called into question...no one wants an insurance policy that doesn't pay when you need it to, not after putting up with the regulation and oversight of the insurer.

Some folks here are talking about 3 or 5 or 10 years down the road, "kicking the ball down the road" I think Gail called it, but for Europe, this crisis is NOW, and they will have to worry (as we will given our similiar situation) about the longer term later...the key was to fend off the predatory pack of bond speculators NOW.

Two things seem clear to me: I don't see 1 trillion Euros as enough over the longer view, but it was probably all the European governments could muster without causing more public discontent and unrest than has already been seen (they can somewhat discreetly raise those numbers later, as we will have to do with FreddieMac and FannieMae), and I don't see the "shorting" attacks stopping at Greece, Portugal or Spain. I think these were simply test cases in many ways, to prod for weakness. Several more Euopean economies have weaker balance sheets than the targets of the speculator attacks, and any smell of blood will draw the wolfpack in...the truth is that most of the Euro 16 members would not be allowed to join today if the original Maastricht Treaty protocals were actually enforcable, in fact even some of the core founders of the Union would be jeopardy of being expelled.

Secondly, the talk of European commitments on such things as global warming, international aid, pulling in and "rationalizing" in new applying members seems to be all out the window...the European Union will for some time into the future be running on "safety mode", with most of the higher features of the system disabled. The quesion is, will the wolfpack investors see weaker better targets to attack somewhere else in the world and for the moment allow Europe to flee injured but not dead while they go after even weaker prey, or will they relentlessly stay on Europe until she is dimantled? Who will the next target be?


The talk of "predatory speculators", "wolf pack" and "prey" is really disturbing. Do YOU want to lend your own money to the Greek government at a 5% interest rate? No? Why then are you talking in those terms about those who are willing to lend the money, but require an interest rate that balance the big risk they are taking?

How on Earth can you liken investors, individually choosing to keep their money instead of lending it (with low interest rates and big risks), to a wolf pack throwing themselves at a weak prey? Nothing good can come of such hateful and uncivilized speech.

The individual investor is not the issue. As for as "hateful" and "uncivilized", I feel no guilt when I am discussing the manulative hedge funds, derivitives traders and the hynchmen for the speculator class, they launched this attack upon the populations of the world, I didn't. by the way, I didn't coin the term, it was used very publicly by a European finance minister just yesterday in describing Europe's desperation bid to fend off the speculators.

Investing is fine, I do it, I am all for it. Not investing is fine, if investors feel Europe or the U.S. are unsafe then don't invest their money their and withdraw the money along with the influence it buys. But the wolfpack class is NOT using their money.

After the collapse of Glass Steagall, the big banks, brokerages and hedge funds were turned loose on the world with the biggest pile of PUBLIC INSURED MONEY in world history to run as predators all over the world. The big banks could use the deposits of the biggest wealth class in history, the savings of the worlds baby boom generation to first talk up and then leverage upward the worlds economies, and then at the first sign of overleverage, switch to the othe side of the bet and talk these same economies down and pull investment and play them short. It is essentially like fattening a pig up for slaughter, and doing it on GOVERNMENT INSURED MONEY. If they win, they make trillions, if they loose, you get TARP and the European bailout and all the rest, YOU pay so the wolf pack can keep playing. It is a bet the speculator cannot loose, while the wreckage and suffering the wolfpack leaves behind must be cleaned up by someone else.

When I use the term wolfpack, and predator I am actually cleaning my language up from what I would like to say...and make no mistake, the wolfpack class would view the term as a badge of honor, because even if you do not like wolves, they earn fear and respect by their predatory skills...

But MAKE NO MISTAKE: We are not dealing here with the humble old bond holder who plays the game straight...we are dealing with a class that has set the table in their favor so that they cannot lose, only the nations and the populations of the nations they attack and bleed suffer. This is NOT you fathers investing style, this is a whole new world...


Quit insulting wolves. Wolves tend to be lean and hungry and work very hard for their prey. They are part of the balance of nature.

tstreet, my bad, your right, giving the example of the speculator class as an example of the at least dignified killing of the wolf (which unlike the predatory class, at least does not seem to attack for the enjoyment of it and then boast about their conquests as "Lords of the Universe" is very unfair to the wolf. Given that, if I am under attack by wolves, despite my respect for them, I will still feel compelled to do what it takes to attempt to defend myself.


Well, you should feel guilt, but I see now that you have no clue whatsoever of what you are talking about, which is kind of an excuse, I guess. The finance minister you borrowed the term from, btw, is probably the Swedish, Anders Borg, who knows better but is intellectually dishonest b/c he thinks it helps his party fend off the socialists in the fall elections.

What matters to Greece is that their bonds don't sell well, and that's because the risk is too high. Greece falsified their accounts and borrowed a lot with the help of that fraud, and now you are yelling at the top of your lungs about some conspiracy by the "predatory class" and fault bankers b/c governments won't let their companies fail. Why don't you go ahead and call them jews while you're at it? I'm a bit disgusted here, but please don't let that stop you from making yet another hate speech.

(Speculators may move in tandem, but they don't plan concerted "attacks" where they "fatten the pig up for slaughter" and so on. That's just crazy talk.)


Very well said, Sir!

What we NEED, not that we will ever have it, is capitalism well and truly regulated by a govt willing to look after the interests of the people and the country.

What we have is a govt owned and operated by the worst form of capitalists , allowed to run wild.

Maybe the mild form of socialism, the form popular in Europe, will eventually triumph here in the US as a result of the recent excesses of big biz/ big banking.Else we will probably either crash(likely imo) or descend into a modern state of fuedalism.

Maybe the mild form of socialism, the form popular in Europe, will eventually triumph here in the US as a result of the recent excesses of big biz/ big banking.Else we will probably either crash(likely imo) or descend into a modern state of fuedalism.

Yeah, maybe like the form of socialism they have in Greece... I hear thats working out really well right now.

Well put. I don't claim to understand the details of the EU, or the local economies of each of the EU countries, but I do follow the workings of the ECB very closely.

Contrary to what many might have believed, the ECB basically held the money base steady from about July to March. Or in other words, it had a relatively conservative policy as compared to the the dramatically expansionary actions of the Fed from March 2009 to March 2010.

Ironically by adapting a relatively conservative position it may have contributed to, or even desired, rising interest rates in Europe. Since the dollar has been depreciated at a more rapid rate (by inflation, and more subtly, by backing the dollar with illiquid, undesirable assets of failed financial firms), it makes no sense to me that the Euro should be falling this much in exchange value.

Therefore the wolfpack theory, or more broadly speaking, market momentum is in control. This creates an immeadiate crisis that has to be dealt with.

Frankly there is a point where speculation steps over line and becomes economically destructive. Do I have to explain to anyone here that the US housing bubble made the country worse off, not better? So it is with excessive currency speculation.

I feel no guilt when I am discussing the manulative hedge funds, derivitives traders and the hynchmen for the speculator class, they launched this attack upon the populations of the world

(italics mine)

They "launched this attack" by forcing those poor innocent Greeks to spend more money than they were willing to raise in taxes? Ah yes, those nasty speculators foisted off their unecessaary loans onto the backs of the Greeks, who didn't even want to borrow the money in the first place... C'mon, think about it.

No country is forced to live beyond their means... it is a sign of the collective stupidity of mankind that so many countries do. Very few countries, rich or poor, actually bother to balance their budgets, or pay off their long term debts. Eventually, every borrower comes to the day where no one in their right mind wants to loan them money anymore, because the borrower already owes more money than they can realistically pay back. Anyone who lends money to such a basketcase takes the risk that the borrower will just wave the middle finger, cry bankruptcy, and walk away from the debt. The more that a debtor borrows, the more likely the debtor will default, and thus the higher interest rate that they will have to pay in order to entice lenders to give them more money. When the day finally arrives where no one is willing to loan them more money, they moan and whine and cry about how "unfair" life is, and how hard things are going to be for them now that they no longer have access to unearned money, and boo hoo, woe is me.

The fact is, the entire problem is self-derived, and they only have themselves to blame. Sure, Greece is the story of the moment, but the fact is, almost everyone reading this blog lives in a country that can look forward to this exact sort of thing happening in their own country in the future. England, France, Germany, the US, Australia, Canada, etc, we are all living on borrowed time, and eventually, our debts are going to come due as well. Try not to whine about the evil speculators when the chickens come home to roost in your own government... the true blame goes to your government for living beyond its means.

Runeshade says

"they moan and whine and cry about how "unfair" life is, and how hard things are going to be for them now that they no longer have access to unearned money, and boo hoo, woe is me."

Yes, the poor working class waiters and garbage collectors and hotel workers sadly do not have TARP, and the European Union and the IMF to run to for protection when things don't go their way...instead the poor bastards down at street level just do without while their governments preach "austerity" so they can spoon the money to the richest speculator class in the known history of the world.


Jeppen: Are you familiar with the dark side of the market, under the general heading of derivatives? The wolfpack is betting a lot of money that Greece will default no matter who loans them the money or whatever the percentage rate. It can be the same company (bank) on both sides of the argument. I'll loan you a million but I will insure it for two million.

I wonder if I can insure my neighbors house against a possible fire for a couple hundred thousand?

Greece don't sell derivatives, so it doesn't matter much to Greece what the "wolfpack" is betting.

Yes, the same bank is usually on both sides. If you lend Greece money, you better hedge that bet with some leveraged money on Greece going bankrupt. It's simply an insurance that spreads risk and enables the loan. Without such instruments, risks and thus interest rates would be even higher.

Don't forget though, that you can take out insurance without owning the bond, i.e. nobody checks that you hold the underlying bond when you enter a CDS, effectively allowing you to naked short the bond.

jeppen says,

"Greece don't sell derivatives, so it doesn't matter much to Greece what the "wolfpack" is betting"

Oh to the contrary, it matters EVERYTHING TO Greece and to Europe what the wolfpack is betting. We saw this same tactic used in the American housing market:

Let us say you have a house valued at $100,000 and you owe $80,000. The talking heads on the financial networks and in the news magazines and web sites begin talking house values down..."those people bought houses they can't afford, they lied to the lender, the market is hugely over-valued" etc. The housing market begins to slide backward. Your $100,000 house is now considered by the bank to be worth $60,000, so instead of $20,000 dollars in equity you are now $20,000 under water! You personally may be in great financial shape, and you have bought no derivatives, you have been playing the game straight, but you are now negative net equity and probably negative net worth now with a declining credit rating through no action of your own. Oh, and did you read the fine print of your mortgage agreement, the part that says you must maintain collateral value of equal value to the amount you owe or (a) your mortgage rates can be raised (the bank has a right to protect itself, right?) or (b) your loan can be called in for full payment immediately or within 90 days? (hey, its a contractual obligation and you failed to honor it!)

Now imagine this same thing happening to a whole nation...with the actions of others your nation is declared "insolvent" and your nation is now sub-prime. Just when your nation can least afford it, you must pay higher and higher bond rates to borrow money, something the investors know you cannot possibly afford, but they do not care, because they are now selling your bonds short and talking them down (do you think those guys go on the financial networks and talk things up or down as a public service? Do you really believe that?)

Now imagine it happening to a whole continent. Does anyone remember only a year or so ago when the Euro was going to become the new "reserve currency of the world" because it was so stable and strong? And now the talking heads are saying "there may not be a euro zone to discuss" and the European community is essentially insolvent (hee, hee, I am only joking, they say...:-)

What the wolfpack says about Greece means everything to the Greeks...they will SUFFER at street level from this onslaught...as will the rest of Europe if they cannot raise the will and the money to defend themselves.

I long ago questioned the value of the Euro, but was pretty much laughed off any discussion board I brought the subject up on...okay fine, but my friends and I at least have nothing directly invested in Europe, but of course that will not buy us protection...as we have seen above, not being involved by choice does not mean you are not involved in the economy)

Bonds are more powerful than bombs, and whether the Europeans know it or not (the smart ones do know it) they are in a financial war. Europe risks losing all the effort they have made at rationalization and union for the last 60 years if they cannot defend themselves against this attack. This should cause no cheer among Americans...the two most bloody wars we were involved in the last century centered around an unstable Europe.

"But for a few distinctions, a thousand cities were lost." Albert Camus, referring to WWII


Interesting view of the mortgage crisis... incorrect IMHO, but interesting none the less.

Here is the scoop. Using your example you bought the house for $100,000 with a fixed rate loan of $80,000. Next, the market crashes, your home value goes down to $60,000, but as you said, you are personally in great shape otherwise. So, what happens to your payment.. oh yeah, NOTHING. As long as you keep making your same mortgage payment, and you remain in the same house, at the end of your fixed rate term, you will own the house... same as if the house went up in value to $200,000. What the house is worth on the open market at any given moment is TOTALLY IRRELEVENT unless your are trying to sell it at that moment.

No bank is going to call in your loan if you are making your payments, I doubt thats even legal unless you got some REALLY weird loan. Nor is the bank able to jack up your fixed rate... thats the very definition of fixed rate. They won't send an assessor over to your house either, there would be no point to do so because they can't do anything to you as long as you continue to make your payments.

The people who lost/are losing houses during this housing crisis either:
1) Borrowed more than they could afford to pay back
2) Borrowed using a VARIABLE rate mortgage, especially one with a super low teaser rate.
3) Borrowed with some funky "interest only" type loan that eventually reset to a market rate (gambling that the house value, and/or their income would rise significantly)
4) Moved out and had to sell a few years after buying at a higher price.
4) Lost their job or had a financial/medical catastrophy happen to them

1-3 are borrower financial errors, possibly encouraged (but by no means required) by the bank, 4 is the nature of any investment and only group #5 are the ones that truely got a raw deal through no fault of their own (though obvoiusly not the banks fault either). Once again, in the end, the bank might give you the rope (loan), but you are the one who chooses to hang yourself with it. (Again, except #5)

Runeshade, on this I am going to concede for the moment until I can find more in black and white...I have seen such letters but as you point out, I do not KNOW for a fact that the borrower had not gotten behind on their mortgage. I was told by them they were not, but I have no proof of that, so I will not accept their contention without proof.

As to your contention about fixed rates, I know they cannot be changed but I know that for most of the home purchasing public (at least in my area) they are almost impossible to obtain. I do know personally about this, I have tried.

Just to be sure then, am I understanding you correctly that all the blame for the credit and housing and sovereign debt defaults in the world are the fault of the borrowers and the lenders are in no way at fault for not establishing the validity of the trillions of dollars of loans they were making, nor for assuring the value of the colateral securing these loans? Just wanting to make sure, because if that is the case, I want to lobby for the nationalization of the financial sector, the current owners are so mentally deficient so as to be dangerous...:-)


I rent. :-)


As to your contention about fixed rates, I know they cannot be changed but I know that for most of the home purchasing public (at least in my area) they are almost impossible to obtain.

Here is the rub... if a fixed rate is almost impossible for a person to obtain, it is because that person is attempting to borrow more money than the bank/lender believes that that person will be able to realistically pay back. If you can't get the fixed rate, you can't afford the loan, according to historically acceptable benchmarks for responsible lending/borrowing.

So, whats a person, or a bank for that matter, to do when you are talking about an unaffordable area like New York City or the San Fran Bay area? My advice for the person would be... move. Seriously. (I grew up south of San Fran myself, and left the state as soon as I was able to live independantly) If you can't afford to live in the area, find a place where you afford a fixed rate mortgage on a nice piece of property and not waste your entire income trying to hang on to an extremely expensive piece of property that you can't realistically afford. You'll get a much nicer house for way less money.

The bank in these areas, on the other hand, has the unfortunate choice of almost never granting loans for these areas, as few people realistically qualify for the loans, or breaking sensible lending rules and hope that the borrower will find a way to make the payments. Maybe the borrower will take on a housemate, or their parents will move in and give them a bit of money, or maybe that borrower will make some extra sacrifices in order to make their house payments. Rather than taking a lot of flak for not granting enough loans (discrimination!), the banks just made the loans and hoped they would work out. If the loan didn't work out, they figured the value of the underlying property would cover the mortgage... at least they gave you the chance to make it work.

Just to be sure then, am I understanding you correctly that all the blame for the credit and housing and sovereign debt defaults in the world are the fault of the borrowers and the lenders are in no way at fault for not establishing the validity of the trillions of dollars of loans they were making, nor for assuring the value of the colateral securing these loans?

Its a bit much to say ALL of the blame lies with the borrower. There are plenty of loans that never should have been granted at all. The problem is that brokers made and profited from extremely high-risk loans, and then were able to sell them off to others, pocketing the big initial loan fees and foisting the real risks off on someone else. All that would have been required would be to not allow, or legislate a high cost on, the "selling" of that loan to someone else. You make the loan, you take the risk...

However, even with that being said, there is still PLENTY of blame left for borrowers who take out debt beyond their means... be it individuals, counties, states, or nations. In the case of individual mortgages, if you make $50K a year or less, you should KNOW that you can't afford a house that costs over 500K. Responsible borrowing is one of the most important life-skills you could ever learn, unfortunately, its rarely taught (obviously). No one ever forces you to take out a loan, in the end it is always the borrowers choice whether they accept the risks of taking that loan for the potential future benefits that they might obtain from the asset that loan makes available to them.

It doesn't matter to the Greek what investors are betting on derivatives. It does matter what they feel the risk is regarding Greek bonds - I guess you guys really hate the rating agencies that set junk rating on Greek bonds?


So far, the talking heads who spread the message for the speculator class are still talking Europe down: Roubini of Roubine Global Economics calls Greece "effectively insolvent" and says he was only joking when in late April of this year, Roubini said "in a few days, there might not be a euro zone for us to discuss," at the Milken Conference.

Rich Suttmeier chief market strategist at ValuEngine.com, is calling for a further 25% decline in U.S. home prices, and that IMF money going to Europe is "coming out of our own pockets", referring to the citizens of the U.S. He is stressing that Germany in particular will NOT contribute more, and this package is "it", there will not be the political will to deliver more.

If this trillion doesn't fix it, and Suttmeier and Roubini are correct, the question becomes who can last longer, the wolfpack bond speculators selling and talking Europe down, or the European Union, which has pretty much went "all in" with this 'shock and awe" campaign, and if they lose, as Roubini said in his little "joke" which helped dismantle Europe, there will indeed be no European Zone to discuss.


A couple of thoughts I've gleaned from the blogosphere
1. The EU will come out of this better than the US simply because they are dealing with the inevitable before anyone else

2. Greece should just withdraw from the EU and start printing Dracma's (SP) revalue it against the Euro And eventually Greece would resume it's traditional role, a great place to vacation on the cheap.
#2 seems like the best deal for the Greek peeps so it probably aint gonna happen

Excellent analysis RC, as I agree.
These people are looking for a easy kill, and the rewards that it brings.
Capitalism rewards sociopaths, but it is not alone.
Short term rewards have provided evolutionary fitness, but are now a liability.
W need a economic relationship that does not reward this behavior.

On the 25 of March 2010, Glen Sweetnam, director of the International, Economic and Greenhouse Gas division at the EIA made some strong comments on Peak Oil:

Soon after, the journalist who interviewed him asked the DOE if they would comment on his declarations. The journalist had to wait 2 weeks before receiving a “no comment” from the DOE...

According to a senior official quoted by the journalist (anonymously) the DOE refused to comment on the information because it could have major consequences if they were seen as supporting it (e.g. financial panic).

I read that today:

“A few weeks after the joint force report came out, there was speculation that the DOE had endorsed peak oil theory after Glen Sweetnam, former director of the International, Economic and Greenhouse Gas division of the DOE’s Energy Information Administration (EIA), told French paper Le Monde that, "if the investment is not there," world oil production could enter a "decline" by 2011.
Sweetnam has since left the EIA on a yearlong reassignment: a development unrelated to the interview he gave Le Monde, according to Lauren Mayne, a liquid fuels analyst at the agency.

“unrelated”, really?

Ms. Nehemiah Scudder Interview:

Sarah Palin: American Law Should Be 'Based On The God Of The Bible And The Ten Commandments'

Hmm, that sounds a lot like Sharia law.

Westex, you're giving me nightmares.....

The lady doth protest too much considering how like those al Quedans she is...

Good luck getting Congress to pass that part about adultry - or rather no adultry.

JP Morgan Under Civil/Criminal Investigation for Trades in Silver Pit

It seems the friendly (honest) neighborhood bankers at JP Morgan have attracted the attention of the Commodities Futures Trade Commission and the Department of Justice's Antitrust Division because of JPMorgan's apparent involvement in suppressing the price of silver by "shorting" the precious metal. Regulators are pulling trading tickets on JPMorgan’s precious metals moves on all the exchanges (
London Bullion Market Association's (LBMA) exchange, - physical delivery market, and the New York Mercantile Exchange (Nymex) - future paper derivative trades) as part of the investigation. Reported earlier Here

Captain Renault: I'm shocked, shocked to find that gambling is going on in here! - Casablanca (1942)

I know that some of the way out 'sell' stops got tripped Thursday on the 'computer glitch' and I'll bet today a lot of 'buy' stops got taken out with a +404 DJIA. Tomorrow, who will be there of their own volition? Some of the hedge funds just about have to be in the market because they need 8% growth and the are about 4% back YTD.

I am concerned that some funds representing average 401k types got whipsawed pretty good by this. A pensioner may expect that since the market is close to where it was previously they are maintaining just fine and may get a shock if they happen to see their next quarterly. Isn't this likely?

Chances are the flash traders who had access to the market caught a lot of traditional managers flat during times that trading was halted on the exchange floor but continued electronically. Next session bingo the market ,opens up 400, is still 750 points away from the last place they saw it and they got stopped out by the free fall much much lower. Certainly at least it looked this way to retail investors.

It's a real crap shoot, access is unequal, outsiders lack knowledge, there are Madoff and Enron style land mines around, valuations are still presupposing growth, and then this systemic convulsion. Does anyone really feel that stock investments are secure anymore? Somehow 'do your due diligence' just doesn't cut it.

xburb, to your concern, I just moved all money invested over to a bond fund about a half hour ago...my main broker Fidelity is having a management change up, the European Union is basically being pronounced as all but dead (assuring they will in fact be all but dead since it is the bond and hedge fund managers doing the talking) and the U.S. is sure to get sucked backwards for awhile until we see how an essentially insolvent Europe can function. It is possible there will be a flight to safety by those getting out of Europe before the tent falls in on them, but I doubt it will come to the U.S. stock market, more likely bonds and interestingly, American real estate.

The EU is now in danger of the same sort of power vacuum the former Soviet Union was in just after the collapse of the U.S.S.R and nations and companies in Europe will now have to establish new financial and political relations and organization fast. The European headquarters in Brussels is now essentially a forum, a symbol, and not much more. It has lost almost all credibility and even if it can limp back out of the grave, everyone knows it is a terminal case...we just don't know when.


RC, I don't blame you. I'm pretty much there too, not many paper assets anyway. Even if there is a flight to quality I generally sleep better off this roller coaster.

BTW many thanks for your sustained commentary on the banking bailout and debt crises. Much appreciated.

Oil priced in Euro's

Since the Euro has lost a lot of value against the dollar, the Europeans must be feeling higher oil prices. 80$ oil at $1.28/Euro = 62.5 Euro/barrel as opposed to 80$ oil at $1.50/Euro = 53.33 Euro/barrel. So that is an increase in the price of ~17%.

Exactly as Steve from Virginia has been saying for some time now.

say, here's a comment which is almost certainly inappropriate for some reason or another, but I suppose the worst that can happen is that it be deleted...??

For those of you TOD readers who may have nurtured the notion of having your own website, blog, etc and cool unique domain name, I'll note that until they come to their senses, the web company 1and1.com seems to be offering a free 1-year .com website with no strings attached that I can see... and I just did it.

While "something for nothing" is not a bad deal any way you slice it, as part of that "free" price, you get not only the odd .com domain you might want, but they don't charge extra for "private" registration as most do. And they throw in a tool to allow even non-html users to construct a 5-page flash website at no cost.

So those of you who may have wanted "overshoot2015.com" or something similar, here you go.

I'm not affiliated with them, just passing along a good deal to the gang.



The cycle begins again...

You may be right Ron. I couldn't believe this story that just came out on a link from Google news.


FOREX-Euro falls as market doubts rescue package

The euro fell on Tuesday as the relief effects of an emergency aid package to prevent the spread of a European debt crisis dissipated and focus switched back to structural problems plaguing the euro zone.

The EU just got finished tossing another trillion at the fiscal problems facing their club med southern friends, it's only a day later and the Euro fell on Tuesday trading in Europe.

I watched CNBC some this afternoon, and there was a debate between two people as to whether the Euro should have gone up on Monday's trading after the announcement of the bailout. One was saying he didn't expect it to, and the other was saying it is a bad sign it ended the day with no increase in value. He continued, it pointed to problems with the Euro, and he speculated it would continue to drop in value all the way down to 115 per dollar.

I thought for sure they had nipped all their problems in the bud with the trillion borrowed, but maybe at this juncture, anymore debt just illustrates to investors the financial precariousness and weakness of the EU and its currency.

It's interesting to note too, that our resident economic specialist, Gail, posted early today the question of whether the EU bailout would work. I thought surely she meant in the long run, but her question of whether it would work in the short term may have been spot on.

It's starting to look like we are on the edge of another world economic downturn. By that I mean sometime in the next four to eight months vs. years. China is headed towards a bubble bursting real estate market, the EU has obvious problems and US data is still mixed, with some saying we are facing a slowing of the economy. It feels like the edge of a steep downslope. I hope my half empty glass is in reality half full. Time will tell.

Earl, the most dangerous sentence in the Forex article is this one...

"Moody's Investors Service on Monday said it may still downgrade Portugal and Greece's rating could fall to as low as junk grade." [ID:nN10227186]

Of course Moody's and everyone else know that many funds, endowments, insurance funds and annuities funds cannot by the terms of their charter hold junk grade bonds in their portfolio...just the whiff of such a Moody's pronouncement is deadly to Greece being able to raise money in the private sector, and now Portugal is badly wounded as well...next Spain? And how well do the "club med" nations of Europe compare to some of the former east block nations who did not even exist as nations a couple of decades ago?

I assumed Gail meant in the longer term, because she like many were referring to Europe "kicking the can down the road". If that was the goal, they seem to have kicked it only a few inches down the road. European Union and the Euro currency are now in a fight for their survival. The goal must be to somehow re-establish credibility and re-establish the authority of the European Community, (the Greeks who were rioting in the streets were not rioting in defense of the EU but were rioting for Greece alone-could you get anyone to march into the street to defend the EU right now?) but at this point I am hard put to see how they are going to do it.


Yes, we shall see just how far the can gets kicked down the road. Fascinating stuff.