Drumbeat: May 18, 2010

BP And Goldman Sachs Sued For Oil Fraud

Dozens of small oil and gas producers across Oklahoma and the Midwest are suing Goldman Sachs, BP and ConocoPhillips, claiming the defendants conspired to defraud them out of proceeds for crude oil they delivered just before the collapse of Oklahoma-based pipeline giant Semgroup in the summer of 2008.

With this lawsuit, filed in Oklahoma district court, we're one step closer to finding out if Goldman Sachs was responsible for helping to goose oil prices to record highs in the summer of 2008 by conspiring against Semgroup in massive crude oil trades.

The pros and cons of 'cheap' oil

Paul Dales, U.S. economist with Capital Economics in Toronto, said that the drop in oil prices should help boost the U.S. economy since consumers will have more disposable income to spend on other things. That's true to a certain extent.

But if oil keeps plummeting, it might be more cause for concern than celebration. Remember the last few months of 2008 and early 2009? Oil prices nose-dived in the wake of the credit crisis.

At the height of the global recession in late 2008, when people were seriously discussing the possibility of it turning into a depression, oil tumbled to almost $30 a barrel and gas prices were around $1.60 a gallon. So yeah, gas was cheap. The trade-off was that everyone feared an economic apocalypse.

Alberta backing oil refinery proposal

The Alberta government is backing a proposal by North West Upgrading and its part owner, Canadian Natural Resources Ltd., to build a new bitumen upgrading refinery in the province's Industrial Heartland, northeast of Edmonton.

The 150,000 barrel-per-day refinery will be built in three stages and include integrated carbon capture and storage technology to cut CO2 emissions, the province said in a Tuesday release.

BP's Atlantis platform being probed -Salazar

WASHINGTON (Reuters) - U.S. Interior Secretary Ken Salazar told a Senate committee on Tuesday that BP's Atlantis oil production platform in the Gulf of Mexico was being investigated, although he did not say whether the government was conducting the probe.

Interior Adopts New Onshore Drilling Rules

Federal land agencies Monday finalized reforms for oil and gas drilling, reforms triggered by development proposals in Utah near sensitive lands close to national parks and archeological treasures.

Interior Secretary Ken Salazar and U.S. Bureau of Land Management Director Bob Abbey said the changes were needed to restore balance to onshore drilling.

Wildlife death toll from oil spill still uncertain

Federal officials say 189 dead sea turtles, birds and other animals have been found along Gulf of Mexico coastlines since a massive oil spill started last month.

The total includes 154 sea turtles, primarily the endangered Kemp's ridley variety, plus 12 dolphins and 23 migratory birds.

But in a phone news conference Tuesday, officials said they don't know how many were killed by oil or chemical dispersants.

Katz Fired From Oil-Spill Team Due to ‘Controversial Writings’

(Bloomberg) -- Jonathan I. Katz, a physics professor at Washington University in St. Louis., said he was fired from the team of scientists chosen by U.S. Energy Secretary Steven Chu to help BP Plc control the oil spill in the Gulf of Mexico.

“Some of Professor Katz’s controversial writings have become a distraction from the critical work of addressing the oil spill,” Stephanie Mueller, a spokeswoman for the Energy Department, said in an e-mail today. “Professor Katz will no longer be involved in the department’s efforts.”

U.S. Govt may delay August Gulf oil lease sale

WASHINGTON (Reuters) - In response to the Gulf oil spill, U.S. Interior Secretary Ken Salazar said his department will consider whether to delay the western Gulf of Mexico oil lease sale scheduled for Aug. 18.

Africa's oil spills are far from U.S. media glare

(Reuters) - Oil gushing from an undersea well in the Gulf of Mexico has damaged BP's reputation and share price but accidents involving other companies in less scrutinized parts of the world have avoided the media glare.

In The Pipeline: Refineries under pressure

The petroleum refining industry is under pressure again with lower margins and over capacity. A few years ago, the opposite was true, which encouraged investors to go quickly into expanding capacity vertically and horizontally.

The financial crisis which started from mid-2008 with its subsequent decline in demand for petroleum products pushed refining margins down and sometimes even in the negative territory.

China set to be Qatar’s top gas buyer

China is to become the biggest customer for Qatar’s natural gas if a new export agreement is concluded.

Qatar is in talks to sell an extra 10m tonnes of liquefied natural gas to China a year and 4m tonnes to India to meet Asia’s thirst for energy to offset slowdowns in the US and Europe.

Iraq Gives Go-Ahead to Kurdish Oil Exports

The Iraqi federal government Tuesday approved a deal that would allow oil exports from oil fields in the semi-autonomous region of Kurdistan in northern Iraq, which have been on hold for the last seven months over a payment row with Baghdad, a cabinet spokesman said.

Fuel shortage

Having no liquid fuel, Bangladesh has to import it of necessity. Finite natural gas (methane) reserves are getting reduced day by day. Meanwhile, proven and possible resources of methane, remain unexplored even today! Coal is there, but we do not extract it, except from one mine-- for so many reasons (or excuses)! In the case of extraction of coal, we ideally define the saying: "Poverty in the land of plenty"! We are shying away from it, be it by shaft or surface mining, while the debate on the subject has continued on and on!

Kidnap and the Energy Industry

Kidnap for ransom remains a critical security concern for energy companies. Employees are often viewed as attractive targets because of the perception that the 'rich' sector will be able to afford a ransom settlement. To counteract the risk, training, site protection and insurance all need to be considered. With proper security measures, companies can maintain business integrity and profitability without compromising the health and safety of employees, even in some of the following kidnap hotspots:

Thailand: Fuel security stepped up after petrol tanker scare

The Energy Ministry says strict security measures are in place at fuel and gas outlets within a 5km radius of Ratchaprasong to stop any attempts to use them to add to the violence.

Peerapol Sakarin, director-general of the Energy Business Department, gave the reassurance after dramatic scenes were shown on TV of protesters trying to set fire to a petrol tanker parked at a PTT petrol station in Bon Kai on Rama IV Road to keep security forces away from their barricade.

Federal government extends area of fishing ban in Gulf of Mexico

Washington (CNN) -- The federal government has shut down fishing in more of the Gulf of Mexico as a result of the massive oil spill there, a government official said Tuesday.

The National Oceanic and Atmospheric Administration has shut down fishing in 19 percent of the Gulf over which the federal government has jurisdiction, NOAA administrator Jane Lubchenco said.

China launches electric taxis for city commuters

China has launched a fleet of electric taxis in booming Shenzhen and is aiming to add more battery-operated vehicles in order to check the impact of global warming.

With the launch of 40 electric taxis Monday, Shenzhen city of southern Guangdong province has become the country's first city to have environment-friendly transport in operation, said Hu Jianping, president of Shenzhen Bus Group (SBG).

Israel solving water shortage

Israel is solving its water shortage. It just dedicated the third of five planned desalination plants. The new one is the largest in the world, producing 33 million gallons a year, 10% of Israel’s needs. It is being located in Hadera, on the Mediterranean coast between Haifa and Tel Aviv. The plant is divided into two independently operating halves on an 18-acre site.

Miners Dying Faster From Black Lung Disease

As the demand for coal increases in the face of America’s swelling energy consumption, coalminers are rapidly falling victim to black lung disease, a direct result of the toxic air they endure day in and out. In fact, while most Americans equate black lung with 1930s depression-era images, according to the Centers for Disease Control (CDC), black lung disease or advanced pneumoconiosis has caused more than 10,000 deaths during the past decade. Since 1995, the prevalence of black lung has doubled among those who participated in the Coal Worker’s Health Surveillance Program of the National Institute for Occupational Safety and Health (NIOSH) in Atlanta, Ga., and who have been coal miners for more than 20 years.

Also, miners are suffering at a younger age, with some as young as 39 showing advanced cases of the disease, according to NIOSH.

The Wow Factory

Of course, plenty of glass-and-steel towers are going up where 100-year-old bricks and mortar once stood. But James Howard Kunstler, the author of ‘‘The Geography of Nowhere,’’ thinks there’s ‘‘a reluctance to tear down such impressive structures. We recognize their magnificence as sheer monumental structures, not to mention investments, plus their historical significance. So we avidly seek some reassignment.’’

Resurrecting the decrepit also meets the needs of eco-minded globe-trotters. ‘‘Anytime you can build up density in a city,’’ explains David Owen, author of ‘‘Green Metropolis,’’ ‘‘you’re putting the people who live and travel there closer to their destinations, and increasing foot traffic and transit use.’’ And it deepens the connection to the history of a place for residents and visitors. Says the trend forecaster Gerald Celente: ‘‘It isn’t green, it isn’t eco; it’s simply smart.’’

The post-apocalypse movies we'd like to see

Movies about the future are important. If you agree with that last sentence, feel free to skip ahead a few paragraphs – but if you are sceptical, I’ll lay out my case.

Carolyn Baker: Is there rehab for this oil overdose? Black tar has just taken on a whole new meaning

We can argue about whether BP and other oil giants are ramping up drilling due to the end of cheap and abundant oil on this planet or simply because of greed and a voracious obsession with profits. To engage in that kind of debate, however, is to ignore the most fundamental issue at the root of this disaster. Corporate culture, media, politicians, and the misguided American public are all failing to grasp the issue, and I suggest, are behaving like enablers responding to an addict's fatal overdose, as well as failing to recognize the extent to which they themselves are addicts.

Let me clarify: The addict is the oblivious citizen of industrial civilization who delusionally demands that he/she must at all costs maintain a lifestyle made possible by cheap hydrocarbon energy. That citizen overdosed on April 20, 2010 and may have taken the planet to their grave with them.

Doomsayers Beware, a Bright Future Beckons

Progress this century could be impeded by politics, wars, plagues or climate change, but Dr. Ridley argues that, as usual, the “apocaholics” are overstating the risks and underestimating innovative responses.

“The modern world is a history of ideas meeting, mixing, mating and mutating,” Dr. Ridley writes. “And the reason that economic growth has accelerated so in the past two centuries is down to the fact that ideas have been mixing more than ever before.”

Our progress is unsustainable, he argues, only if we stifle innovation and trade, the way China and other empires did in the past. Is that possible? Well, European countries are already banning technologies based on the precautionary principle requiring advance proof that they’re risk-free. Americans are turning more protectionist and advocating byzantine restrictions like carbon tariffs. Globalization is denounced by affluent Westerners preaching a return to self-sufficiency.

But with new hubs of innovation emerging elsewhere, and with ideas spreading faster than ever on the Internet, Dr. Ridley expects bottom-up innovators to prevail. His prediction for the rest of the century: “Prosperity spreads, technology progresses, poverty declines, disease retreats, fecundity falls, happiness increases, violence atrophies, freedom grows, knowledge flourishes, the environment improves and wilderness expands.”

The EPA option likely to live to fight another day

As people following the issue know, the only serious chance that a climate-change bill has to pass is that the business community gets so scared or tired of the EPA bluntly regulating carbon that they ask Congress to fashion a more workable solution. Lisa Murkowski, a Republican Senator who professes deep concern about global warming and deep opposition to anything anyone might to do stop it, has predictably worked up a bill to bar the EPA from acting, thus removing the last, best hope of a climate-change bill.

Bonuses can be a good thing - if they're linked to carbon emissions

Growing numbers of firms are linking executive remuneration to environmental performance – Andrew Williams investigates those companies pioneering the concept of carbon bonuses.

US must do more to fight tropical deforestation: NGOs

WASHINGTON (AFP) – Environmental leaders pleaded Monday for greater US government commitment to helping preserve the world's endangered tropical rainforests, which are seen as key in the global fight against climate change.

"Tropical deforestation is a major contributor to global warming. It contributes about 15 percent of all greenhouse emissions according to most recent estimates," said Douglas Boucher of the Union of Concerned Scientists and chairman of the tropical forest and climate coalition, speaking to reporters.

The Anthropocene Debate: Marking Humanity’s Impact

Is human activity altering the planet on a scale comparable to major geological events of the past? Scientists are now considering whether to officially designate a new geological epoch to reflect the changes that homo sapiens have wrought: the Anthropocene.

China Asked to Measure Emissions in Latest UN Draft Treaty

(Bloomberg) -- The latest draft United Nations climate treaty calls on large developing nations such as China and India to measure and verify their efforts to reduce greenhouse gas emissions, a key U.S. demand for a deal.

Mediterranean climate change threatens health

OSLO (Agencies): People in cities around the Mediterranean including Athens, Rome and Marseilles are likely to suffer most in Europe from ever more scorching heatwaves this century caused by climate change, scientists said on Sunday.

Growing problem needs radical ideas

The nation must completely rethink where and how it grows its food, a prominent scientist and NSW government adviser says.

John Williams, head of the NSW Natural Resources Commission, said we must shift production from the dry inland to the coast and stop development from devouring farms around our cities and large towns.

''With climate change we should have more food produced where more reliable rain is, rather than in the drier country,'' Dr Williams said. ''We have to get it in balance with what the poor old rivers can afford.''

The lessons of climate history: implications for post-carbon agriculture

Populous civilizations require agriculture. Agriculture requires climatic stability. Industrial civilization is rapidly eroding climatic stability. This can’t end well. But…there’s some stuff we can do, and we have to try. So shut off your damn computer, get outside, and start building some agricultural resiliency!

Oil, risk and technology: Choices we need to make

From plastics to supermarkets, and from globalised industry supply chains to the layout of our towns and cities, almost every aspect of human life has been radically altered over the past 150 years by oil.

Although cheap and plentiful oil has given many people choices and freedoms that never existed before, our addiction has been costly, measured in increased air and water pollution, rampant land use change, overharvesting of our seas, increasing greenhouse gas emissions and consequent climate change, acid rain and urban sprawl.

After 150 years, and with the Gulf of Mexico being the latest place where a major oil spill threatens nature and people in predictable and unpredictable ways, it is time to look again at the technologies and risks involved in getting the oil to which our societies are addicted.

Fallout From the Gulf Oil Spill

LONDON — When the congressional hearings are forgotten and the catastrophe in the Gulf of Mexico has dropped from the headlines, the most surprising thing about the spill of millions of gallons of oil may be what it does not change about the business of BP and the rest of its often-vilified industry.

Disaster Plans Lacking at Deep Rigs

A huge jolt convulsed an oil rig in the Gulf of Mexico. The pipe down to the well on the ocean floor, more than a mile below, snapped in two. Workers battled a toxic spill.

That was 2003—seven years before last month's Deepwater Horizon disaster, which killed 11 people and sent crude spewing into the sea. And in 2004, managers of BP PLC, the oil giant involved in both incidents, warned in a trade journal that the company wasn't prepared for the long-term, round-the-clock task of dealing with a deep-sea spill.

It still isn't, as Deepwater Horizon demonstrates and as BP's chief executive, Tony Hayward said recently. It's "probably true" that BP didn't do enough planning in advance of the disaster, Mr. Hayward said. There are some capabilities, he said, "that we could have available to deploy instantly, rather than creating as we go."

‘Need to clean up’ energy agency, Salazar says

WASHINGTON - Facing pressure from lawmakers and President Barack Obama, Interior Secretary Ken Salazar on Tuesday told senators that the "collective responsibility" to make sure the Gulf oil disaster is never repeated starts with his department, and specifically, the agency that regulates offshore drilling.

"We need to clean up that house," Salazar said at a hearing, referring to the Minerals Management Service.

Asked if the MMS had properly regulated the blowout preventers like the one that failed on the Deepwater Horizon rig, Salazar said: "No."

$10 bln oil liability cap not enough: Senator Reid

(Reuters) - A proposed cap of $10 billion in liability for oil companies to cover damages from oil spills is "inadequate," U.S. Senate Majority Leader Harry Reid said on Monday.

Democrats have introduced legislation that would raise the current $75 million liability cap to $10 billion per company for each incident. Reid urged fast action on raising the cap, saying that $75 million was "clearly insufficient" but, "I certainly think a $10 billion cap is inadequate."

Lawyers lining up for class-action suits over oil spill

On April 21, with the Deepwater Horizon drilling rig still in flames, John W. Degravelles and a group of other lawyers sued for damages. In the first of at least 88 suits filed since the disaster, they were seeking compensation for the widow of a Transocean worker who went missing and is presumed dead.

Deep coral in path of Gulf oil plumes

NEW ORLEANS - Delicate coral reefs already have been tainted by plumes of crude oil spewing into the Gulf of Mexico, including a sensitive area that federal officials had tried to protect from drilling and other dangers.

And marine scientists are worried even more of the deep-sea reefs could be damaged as the thick goo creeps into two powerful Gulf currents. The oil has seeped into areas that are essential to underwater life, and the reefs tend to be an indicator for sea health: when creatures in the reefs thrive, so do other marine life.

Q. and A.: Tending to His Bayou Constituents

Charlie Melancon represents the Third Congressional District of Louisiana, which covers much of the state’s rural southeast. This region of bayous, wetlands, rivers and estuaries, where many earn their living through commercial fishing, is now directly threatened by the huge oil slick hovering just off the coast of the Gulf of Mexico.

Mr. Melancon, a Democrat, also sits on the Energy and Commerce Committee, which has jurisdiction over oil exploration and production. We spoke with him by phone about the Deepwater Horizon blowout, its impact on the people of his district and the future of offshore drilling in the gulf. Responses have been edited for brevity and clarity.

Clinton touts deal on Iran sanctions

WASHINGTON - Secretary of State Hillary Rodham Clinton said Tuesday the United States has agreed with China, Russia and other major powers on a proposal for "strong" new sanctions against Iran's nuclear program.

Clinton told a Senate committee that the five permanent members of the Security Council — Britain, China, France, Russia and the U.S. — along with Germany would send a new draft sanctions resolution to the entire council later Tuesday, capping months of painstaking negotiations.

Russia weighs East Siberia oil tax

Russia may start applying export duties on oil produced in East Siberia as early as July, according to reports.

"We believe we could begin from July," Deputy Finance Minister Sergei Shatalov told Russian news agencies ahead of consultations between Finance Minister Alexei Kudrin and the energy ministry.

"We want to have at least a preliminary accord".

Origin Sees No ‘Driver’ for Queensland LNG Mergers

(Bloomberg) -- Origin Energy Ltd., ConocoPhillips’ partner in a A$35 billion ($31 billion) liquefied natural gas venture in Australia’s Queensland state, said it doesn’t see a “driver” that will prompt mergers between rival projects.

“Its time has not yet come,” Managing Director Grant King told reporters in Brisbane. “That doesn’t mean it won’t. There’s a fascination with consolidation, but it’s not the right time to be fascinated.”

Hoaxers target Shell with bogus Nigeria news

(Reuters) - Hoaxers targeted oil and gas major Royal Dutch Shell Plc on Monday, sending a bogus statement to news organisations about the company's operations in Nigeria.

The e-mail, complete with Shell logo and links to genuine websites including Shell's own, as well as to Shell's customary footnotes about forward-looking statements, said the company planned to halt deepwater drilling off the coast of Nigeria.

Report warns of oil sands impacts

CALGARY - Investors face growing environmental, financial and social risks unless developers of Canada's oil sands come up with clearer plans to deal with carbon emissions, water use and land reclamation, a report concluded yesterday.

The study, written by Risk-Metrics Group, said oil sands projects require crude prices of at least US$65 a barrel, and possibly more than US$95 a barrel, to justify US$120-billion in planned expansions over the next 10 years.

Stop knocking oil sands, Quebec told

MONTREAL - The former head of Quebec's largest employer group says the province has to bury its criticism of Alberta's oil sands because much of it is based on myths and ignores the fact that the resource generates wealth for all of Canada.

China to buy 7 Brazil transmission firms - reports

RIO DE JANEIRO (Reuters) - China's state-run electricity grid firm has agreed to buy seven Brazilian transmission companies from Plena Transmissoras for 3.1 billion reais ($1.72 billion), local media reported on Tuesday.

Plena, controlled by a group of Spanish energy firms, will sell seven of its 12 transmission divisions to State Grid Corp of China, according to the business daily Valor Economico, which cited a Plena official.

Nissan Predicts Challenge When Electric-Car Incentives Are Cut

(Bloomberg) -- Nissan Motor Co., the Japanese automaker struggling to make its Leaf electric car affordable, says it expects governments to begin phasing out incentives in three years, denying consumers the full benefit of cost savings from bigger scale and better technology.

Governments won't provide sales subsidies indefinitely and may begin a phase-out when current commitments expire in three years, Nissan Senior Vice President Simon Thomas said today in an interview in London, where he announced European prices for the Leaf electric car.

Range Rover hybrid confirmed

Land Rover has confirmed that it will be testing its first diesel hybrid by the end of 2010.

With Solar Valley project, China embarks on bold green technology mission

DEZHOU, CHINA -- Uprooting the last traces of rural life on the edge of this northern Chinese city, laborers with chain saws spent a recent morning cutting down trees to make way for a hulking factory. A big red banner trumpeted the future for what used to be farmland: "The Biggest Solar Energy Production Base in the Whole World."

Climate change: Four futures

As the debate over the climate bill heats up, there's one rule of thumb that may help you keep your bearings as the rhetoric becomes more gaseous and the weeds grow ever higher around the facts.

It's this: There are, in the end, only four possible futures here.

Peter Tertzakian: Possible non-OPEC oil supply surge to put pressure on prices?

We’re in an era when no assumptions can be taken for granted. For example, a few years ago we assumed that North American natural gas production was in gradual decline, a notion that was quickly put to rest with the onslaught of shale gas by the end of the decade.

Around the same time we assumed that US oil consumption would keep growing on the back of progressively bigger and heavier SUVs and the pursuit of longer and more congested commutes to work – another notion that was challenged around 2007, when US gas guzzling peaked and started a gradual downward trend. And we used to assume that oil supply among non-OPEC producers – notably exporters like Russia, Brazil and Norway – wouldn’t grow by more than a few hundred thousand barrels-a-day, per year, if at all. But now that latter assumption is open to a reality check as well.

Oil major model challenged by shift to gas

Oil majors have shifted towards natural gas as the world's best oil territory is increasingly off limits, but the trend raises big questions about their future profitability and business model.

The profitability of gas has been undermined by huge reserves of shale gas and a supply glut after recession knocked a deep dent into industrial demand.

Money illusion and 'real backwardation' in oil

For inflation of more than 2 percent, averaged over five years, the market is offering investors the opportunity to buy forward crude futures for less than today's spot oil price, in real terms. There are three possible explanations for this strange state of affairs:

(a) The market expects oil prices to fall in real terms over the next five years (because supply remains ample or demand is expected to fall as conservation and substitution bite into consumption). In this scenario, peak oil is a myth. Prices will actually drift lower (in real terms) as previous shortages dissipate.

(b) The market is assuming inflation will remain low (less than 1.75 percent over the next half-decade). The economy might even suffer deflation. Sluggish growth and surplus capacity will ensure prices rise slowly, even decline. In a low-growth, deflationary environment, demand for oil, and oil prices, are unlikely to rise much.

(c) The market is mis-valuing far forward contracts, marking them too low to fully reflect the compounded effect of rising prices over five years.

Oil Rebounds From Five-Month Low on Forecast of Growing Demand

(Bloomberg) -- Crude oil rose after dipping below $70 a barrel to a five-month low in New York yesterday, on forecasts that demand is picking up in the U.S.

Oil snapped five days of losses before a U.S. Energy Department report tomorrow that’s forecast to show refinery operating rates increased and gasoline inventories dropped as summer driving season approaches. Yesterday, futures fell 2.1 percent on concern Europe’s sovereign-debt crisis may derail the global economic recovery and reduce consumption.

Cushing Glut Weakens U.S. Crude Against Brent

(Bloomberg) -- Oil for July delivery in New York is weakening relative to London contracts as inventories at the U.S. storage hub rise to record levels.

India: Govt to review fuel pricing in June - govt source

NEW DELHI (Reuters) – The government will review its fuel pricing system next month and may allow state-run firms like Oil and Natural Gas Corp to gradually raise the price of natural gas to level charged by Reliance Industries, a top government official said.

A panel of ministers headed by Finance Minister Pranab Mukherjee would meet in the first week of June to consider changes in the system in which the government sets the price of petrol, diesel, cooking gas and kerosene, the official, who did not want to be identified, told reporters.

Tropical Cyclone Laila Churns Across India’s Bay of Bengal

(Bloomberg) -- Tropical cyclone Laila churned across the Bay of Bengal, the site of India’s biggest natural gas field, and was forecast to reach hurricane strength before making landfall late on May 20 in Andhra Pradesh on the east coast.

Exxon in Talks to Sell Australian Filling Stations

(Bloomberg) -- Exxon Mobil Corp. is in talks to sell its Australian service stations after a proposed A$300 million ($262 million) deal with Caltex Australia Ltd. was blocked by a regulator.

“It’s not our business model,” Exxon Mobil Australia Chairman John Dashwood said in an interview in Brisbane today. “I guess the distinction I make is, are you an oil and gas company or are you a groceries company? The industry has changed to the point where the two meld, and some have used the shop to move fuel. We’re not in the business of being a shop.”

Sinopec wary of high cost of Saudi refinery investment

China's Sinopec Corp said on Tuesday it has not yet entered formal discussions with Saudi Aramco over investing in the giant Yanbu refinery in Saudi Arabia, due to concerns about the high investment cost there.

"A 400,000 bpd (barrels per day) refinery costs around 30 billion yuan ($4.4 billion) in China, but would require 50 billion yuan investment in Saudi Arabia. We are concerned about the returns on investment," Sinopec Corp Chairman Su Shulin told reporters.

Sinopec May Sell $6.3 Billion of Bonds for Expansion

(Bloomberg) -- China Petroleum & Chemical Corp. may sell as much as 43 billion yuan ($6.3 billion) of bonds to fund upgrades of refineries and petrochemical plants to meet rising demand in the world’s fastest-growing major economy.

BP prepares for ‘top kill' to plug well

BP is siphoning up to 1,000 barrels of oil a day from the undersea leak in the Gulf of Mexico and hopes to double that while workers close in on another attempt to shut down the well for good.

Key oil oversight official steps down following spill

WASHINGTON (AFP) – Chris Oynes, a top official overseeing offshore energy for the US Minerals Management Service -- an agency blamed for lax inspection in the Gulf of Mexico oil spill -- announced his retirement Monday, his agency said.

"After 35 years of service he will be retiring from the agency," an official at the Department of the Interior, which includes MMS, told AFP on condition of anonymity.

Political fallout grows from Gulf spill

NEW ORLEANS, Louisiana (AFP) – The interior secretary faces lawmakers Tuesday over a huge and growing Gulf oil spill that engineers are struggling to control and scientists fear could threaten Florida's coral reefs.

U.S. to probe spill as BP says more oil contained

HOUSTON/COCODRIE, Louisiana (Reuters) – Energy giant BP said on Tuesday it was now able to siphon off about 40 percent of the oil gushing from a ruptured well in the Gulf of Mexico but has not been able to stop the leak, as President Barack Obama is to create a commission to probe the spill.

BP's progress in capturing more oil through a tube inserted by undersea robots into the mangled "riser" pipe of the well came amid new evidence that a powerful sea current in the Gulf was pushing the crude closer to the U.S. Eastern seaboard.

BP chief says oil leak impact 'very modest'

LONDON (AFP) – British energy group BP said Tuesday the Gulf of Mexico leak will have only a "very modest" environmental impact, adding that its engineers are siphoning up twice as much oil as previously thought.

BP chief says oil spill will not halt industry

FRANKFURT (AFP) – The head of BP, Tony Hayward, said Tuesday in an interview that its massive oil spill in the Gulf of Mexico will change the industry but not stop it.

"The United States and the world need this oil," Hayward told the daily Frankfurter Allgemeine Zeitung (FAZ). "Almost 30 percent of US oil production comes from the Gulf of Mexico," he added.

"That is why I think this accident will change the oil industry but not stop it" from developing offshore resources, Hayward said.

BP, Deepwater Drillers Unprepared for Oil Leaks, Lieberman Says

(Bloomberg) -- Regulators under Interior Secretary Ken Salazar failed to require deepwater drillers including BP Plc to show how they would control leaks like the well gushing at least 5,000 barrels of oil a day into the Gulf of Mexico, U.S. Senator Joseph Lieberman said.

The BP Oil Spill: Unexpected Consequences

In the Gulf oil spill, two big lapses have combined into a perfect storm of irresponsibility. First, the black hole in drilling standards highlighted by my colleague Elliot Clark of Corporate Responsibility Magazine. Second, the reality that BP had no contingency plan for a catastrophic blowout. but will nevertheless be partially rescued by government clean-up operations and court limits on plaintiff settlements. That perfect storm will result in two mammoth, unexpected financial consequences.

Spill reinforces oil bad will for American Indians

"If you see pictures from the sky, how many haphazard cuts were made in the land, it blows your mind," said Patty Ferguson, a member of the Pointe-Au-Chien tribe. "We weren't just fishermen. We raised crops, we had wells. We can't anymore because of the salt water intrusion."

As companies intensified their search for petroleum in the 20th century, communities where the Choctaw, Chitimacha, Houma, Attakapas and Biloxi tribes married Europeans in the 1800s have seen their way of life disappear.

"This is not a two-week story, but a hundred-year story," said Michael Dardar, historian with the United Houma Nation tribe. "Coastal erosion, land loss and more vulnerability to hurricanes and flooding all trace back to this century of unchecked economic development."

Louisiana shrimpers glum despite oil leak progress

COCODRIE, Louisiana (Reuters) – News that energy giant BP has made progress in curbing the flow of oil gushing from the floor of the Gulf of Mexico did little to lighten the mood of downtrodden fisherman along Louisiana's coast on Monday.

"They should have plugged it up in the first place," said Drake Dupre, 48, a gray-bearded shrimp boat captain in the Terrebonne Parish village of Chauvin, as he hosed down his vessel. "They're doing all this stupid stuff first."

Gesturing to his docked trawler, named for his son, Drake Paul, he added ruefully, "Beautiful boat like this -- probably have to cut it up for scrap."

12 ways to cash in on the 'collapse of Eaarth'

After quoting a 2003 Pentagon report -- "as the planet's carrying capacity shrinks, an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge" -- McKibben offers three sane solutions: Cut carbon emissions, reduce our obsession with economic growth and return to sustainable local farming. But while agreeing in his New York Times review, even advocate Paul Greenberg sees little chance of McKibben's ideas changing opinions or reversing the destiny of Eaarth:

"In the absence of some overarching authority, a kind of ecologically minded Lenin," McKibben's solutions "will remain hipster lifestyle choices rather than global game changers." But eventually, says Greenberg, "Eaarth itself will be that ecological Lenin, a harsh environmental dictator that will force us to bend to new rules."

Current financial system at heart of global woes

Paul Krugman, the Nobel Prize-winning economist, says that a global collapse may have been averted. A recession, however, is almost certain while a deep and long depression is possible. The question now frequently asked is: has the market reached the bottom yet? It seems there is still much more downside to the markets, judging by the size of the derivatives bubble, a gargantuan $561 trillion or 10 times the global output of the real economy.

But at the heart of our economic woes is a financial system that is based on endless economic growth driven by a debt-based money system of compound interest and fractional reserve banking. Unfortunately, exponential economic growth is not sustainable on a finite planet with finite resources. Our current money system whereby 95 percent of our money supply is issued in the form of loans from private banks, where only the principal is created but never the interest, leads to a scarcity of money in circulation. This system is fundamentally dependent on perpetual lending and new money creation for its own sustenance.

Start changes before energy crisis forces them

Most of us are aware that we should drastically lessen our impact on our planet, but we do nothing.

No crystal ball is needed to see where humanity is collectively heading.

Diminishing crude oil reserves will be the next thing to affect us. The most accessible deposits are gone. Recent news shows what desperate lengths humanity is prepared to go to for the remainder.

Peru resumes oil auction amid optimism

LIMA (UPI) -- Peru returned to oil auctions in a strong signal to the market it would seek to clean up the scandal-ridden national hydrocarbons industry.

The new bidding process involves 25 new blocks, mostly in the Amazonian forest region and is likely to be followed by more auctions later.

Scientists Weigh Use of Bacteria for Cleaner Fossil Fuel Production

Much of the world's oil reserves lies in giant tar sand stretches in places like Alberta and Venezuela. While the oil industry uses an energy-intensive and fairly dirty process to make steam to cook the oil out of the tar sands, underground bacteria simply eat the crude oil and break it down into methane, or natural gas.

Drax Sees ‘Very Strong’ Forward Power Sales Position

(Bloomberg) -- Drax Group Plc, the owner of western Europe’s biggest coal-fired power plant, said it is benefitting from a “very strong” position in forward electricity sales as commodity markets “remain challenging.”

An energy commodity more vital than crude oil

Coal may be the last thing on earth that many investors would consider putting a dime into.

But the world is on course to transition back to coal. You may wish it wasn’t the case, but it’s inevitable. Coal isn’t as clean of a fuel source as other options - but there is room for clean coal technologies to improve, and I believe they will. Investors should have a position in coal companies to be able to profit from the transition - or risk being left behind.

Peabody Looks Elsewhere After Macarthur Rejects Bid

(Bloomberg) -- Peabody Energy Corp., the largest U.S. coal producer, will seek other investment opportunities after Macarthur Coal Ltd. rejected its reduced A$3.8 billion ($3.3 billion) takeover offer.

'Dark Ages' of dirty fuel will be remembered

The Upper Big Branch mine explosion. TVA's coal ash lagoon disaster. The Deepwater Horizon blowout. In years to come these events will stand as epitaphs for the end of the Dark Ages of dirty fuel -- the moment when Americans saw the (sun)light and committed themselves to lose their addiction to fossil fuels. The death toll connected to living a fossil fuel-oriented life is palpable. One need only look at the U.S. deaths this year alone in mine explosions (31) offshore rig blowouts (12) and coal ash disasters (TBA -- suspected cancer, liver damage and nervous-system disorders). The death toll worldwide this year is probably closer to over 1000 dead.

If we add to the equation the people who die as a direct consequence of dirty fuel, the true price is shocking.

Glencore’s Profit Doubles on Commodity Price Rebound

(Bloomberg) -- Glencore International AG, the world’s largest commodity trader, said first-quarter profit more than doubled after a rebound in metal and energy prices.

Megacity to kick off new BMW sub-brand lineup of radical electric vehicles, some sporty

It's the Megacity that will officially launch a lineup of future electric vehicles from BMW. The Megacity is more than just another electric car, it's part of an entire sub-brand that the company will launch featuring nothing but radical electric vehicles. The sub-brand will feature some sporty electric offerings that promise to deliver on the brand's "Ultimate Driving Machine" slogan. Autocar reports that we can expect the yet-to-be-named sub-brand of EVs to feature a "new design language" that draws some styling cues from mainstream BMW models.

Mitsubishi Electric launches 'smart grid' pilot project

TOKYO (AFP) – Mitsubishi Electric launched Monday a "smart grid" pilot project that aims to boost the stability of electricity supplied from weather-dependent sources such as solar and wind power.

The Japanese giant said it would invest seven billion yen (76 million dollars) by March 2012 in facilities in its domestic production centres to test how to maintain stable power from fluctuating renewable energies.

Massachusetts: F.A.A. Clears Wind Farm

One of the last remaining hurdles to a proposed wind farm off Cape Cod was cleared Monday when the Federal Aviation Administration said the farm’s developer, Cape Wind, had agreed to fix the air traffic control radar system at nearby Otis Air Force Base.

In Poland, Dalkia launches its largest ever biomass project

WARSAW (AFP) – Dalkia, owned by French energy giant EDF and Veolia Environnement, on Monday said it would build two biomass generators in Poland worth 70 million euros by 2012, in its largest-ever biomass project.

Digging deeper

And something else has come up: the depletion of reserves of some metals due to growing global demand, as has been researched by professor Tom Graedel from Yale University, Swedish geoscientist Harald Sverdrup, Diederen and others. Analysis of the USGS data on reserves show that metals such as silver, copper and tin will be depleted in 20 years.

But this is a heavily debated topic. Some experts say the data on reserves is incomplete as it is expensive to prove the reserves because it requires the drilling and testing of ore for extraction rates. Others, such as Ugo Bardi from the University of Florence, and Diederen, claim that, “mining of metals will be affected by peak oil”. In their opinion, resources cannot be turned into reserves because energy will be too expensive.

Iran Deal Defended by Brazil; U.S., Allies Skeptical

(Bloomberg) -- The U.S. and its European allies expressed skepticism about Iran’s agreement to swap enriched uranium for nuclear fuel, even as other nations on the United Nations Security Council said the deal may defuse tensions.

“This creates an absolutely new situation,” said Brazilian Foreign Minister Celso Amorim in radio comments recorded yesterday in Tehran. Brazil, working with Turkey, brokered an arrangement that Amorim said “totally attended” to questions from nations seeking tougher sanctions on Iran.

Non-profit Panera cafe: Take what you need, pay what you can

Imagine walking into a Panera Bread and picking out anything you wanted to eat or drink — then, at the end of the line, instead of handing your money to a cashier, you faced a donation box.

What would you do if you knew that some of the money you placed in the box would be used to train at-risk youths or to feed folks lacking funds to feed themselves?

That's what Panera Bread is trying to find out this week in an outside-the-box experiment in St. Louis. It's a concept that has never been tested by a restaurant chain — and that marks a new career for Ron Shaich, who stepped down as Panera's CEO last week.

Crews fish out lost nets to save trapped wildlife

Beneath the frigid waters of Washington state's Puget Sound, thousands of abandoned nets once used by fishermen to trap salmon by their gills keep working.

They now indiscriminately catch marine life. With no one to pull up the plastic nets, captured animals can't escape and become bait for other creatures to enter the nets.

Al Gore takes on BP oil crisis, global warming in Monterey

MONTEREY — Protesters and supporters greeted former U.S. Vice President Al Gore in downtown Monterey on Monday as the Nobel Peace Prize winner came to answer the question: "Can we save the planet that sustains us?"

No clear-cut answers were forthcoming, however, although Gore shared his thoughts on current environmental policies, ideas for decreasing carbon dioxide emissions, and what the average American can do to help combat global warming.

Figueres, New Head of UN Climate Talks, Foresees Deal

(Bloomberg) -- Christiana Figueres of Costa Rica, named today to lead the United Nations global warming talks, said she’s sure there will be an international treaty to limit climate change during her three-year term in office.

“I am 100 percent certain,” Figueres, 53, said in a telephone interview. She said her immediate goal is a series of “confidence-building” measures to ease friction between industrialized and developing nations before formal negotiations scheduled to begin in November in Cancun, Mexico.

Arctic team reports unusual conditions near Pole

A group of British explorers just back from a 60-day trip to the North Pole said Monday they had encountered unusual conditions, including ice sheets that drifted far faster than they had expected.

The three-member team walked across the frozen Arctic Ocean to study the impact of increased carbon dioxide absorption by the sea, which could make the water more acidic and put crucial food chains under pressure.

Warmest April Global Temperature on Record, NOAA Says

ScienceDaily — The combined global land and ocean surface temperature was the warmest on record for both April and for the period from January-April, according to NOAA. Additionally, last month's average ocean surface temperature was the warmest on record for any April, and the global land surface temperature was the third warmest on record.

Just have to behold in wonder the rabid denialism. "Light sheen", what a joke. Have these clowns even seen the consistency of the oil? Perhaps they should watch the 60 minutes piece a few times and let their slow brains assimilate the information. It's not a kerosene spill.

The recent statement by BP about the minor effects of the spill clearly identify the propaganda game being played here. Sad to see NOAA personnel have to dance to this tune. Magical, mysterious, unknown plumes that they are not sure are oil. So these must occur on other occasions, right? Perhaps they are shrimp swarms.

I wonder if the GOM spill is going to have consequences for the development of Tupi and deep water fields like it.


It will free up rigs from the GoM.

And Brazil will be more careful in future drilling.


Peter Tertzakian: Possible non-OPEC oil supply surge to put pressure on prices? (uptop)

And we used to assume that oil supply among non-OPEC producers – notably exporters like Russia, Brazil and Norway – wouldn’t grow by more than a few hundred thousand barrels-a-day, per year, if at all. But now that latter assumption is open to a reality check as well.

Russia showed a net export decline in 2008, with a year over year increase in 2009, probably back to about the same net export level as 2007.

Brazil, through 2008, was a net importer, but their 2009 production was probably approximately equal to their consumption.

Norway has shown several years of declining net oil exports.

This is part of a cacophony of media noise designed to steer the oil price downward. Even the BP oil spill has exerted a downward pressure on the price. Expect gasoline lines in the future, reality can't be wished and talked away.

Did you guys even read the article?

The guy wrote a book about peak oil. Do you really think he's now decided that oil production will never decline?

He clearly says that the increase is temporary.

I read the article Leanan:

Yet when oil prices do rise again, the non-OPEC production surge of 2009 and 2010 should serve as a reminder that we must always challenge the assumption that oil production can’t rise or be substituted. In other words, the supply side of the energy industry can respond unexpectedly – just ask anybody in the North American natural gas business.

The message I take away form that is that non-OPEC supply side can respond unexpectedly just as did North American natural gas. In other words we are fools to think that non-OPEC production is anywhere near the peak. As oil prices do rise again, non-OPEC production will surge again.

Ron P.

He's not saying we're fools to think production is at its peak.

Just that it's unpredictable, and there may be a year or two when it rises unexpectedly. He's talking about short-term prices.

IMO, he's right. If there's anything we should have learned from the past five years or so, it's that supply, demand, and prices are unpredictable.

Nothing Albert Einstein wrote or said was as significant as his advice to question authority.

And before the dim-witted get all woody, he wasn't a libertarian.

If there is anything we've learned over the last few and many years, short term fluctuations lead people to be complacent about the mid and long term. We will do nothing to inconvenience anyone in the short term; therefore we will suffer major inconvenience in the long term.

And isn't it great that instead of being more dependent upon opec sources, we can become more dependent upon non opec sources?

The article will not be read in the nuanced way that you have read it. And besides, so what? Tomorrow morning I will have plenty of gas. Whoopeee!!!

The article will not be read in the nuanced way that you have read it.

Obviously here it isn't.

But I think it would be by most readers. Tertzakian is a peak oiler. He has a regular column in that paper, and people are familiar with his views, through the paper and his peak oil book.

IMO, it's really unfair to take the paragraph Darwinian picked and extrapolate it to mean we're nowhere near peak oil. Tertzakian clearly believes nothing of the kind.

Why not quote this paragraph:

To be sure, data points from only two years shouldn’t make us rush to believe that world oil is undergoing a shale gas type surge in productive capacity. In fact, it’s not. Analysis strongly suggests that the production surge in 2009 and 2010 will not repeat; in other words, non-OPEC oil output is not expected to grow in 2011 and the foreseeable future. So, against a backdrop of resurgent demand from emerging economies that means that a bias to higher oil prices over the next 12 to 24 months remains (notwithstanding another economic meltdown).

And I found this paragraph interesting:

Breaking it down, the largest increments of new non-OPEC oil came from four sources: 1) The US Gulf of Mexico; 2) Russian and Central Asia; and 3) Latin America. It may surprise some to know that the fourth, phantom source of supply came from biofuels, which are treated by the International Energy Agency (IEA) as oil products (even though they are technically oil substitutes). As for Canada and the oil sands, the production growth from Alberta’s bitumen resources was offset domestically by declines in mature, conventionally produced oil fields, so our net contribution to new non-OPEC supply in 2009 was essentially zero barrels.

"It may surprise some to know that the fourth, phantom source of supply came from biofuels, which are treated by the International Energy Agency (IEA) as oil products (even though they are technically oil substitutes)."

Ahh, the obfuscation deepens (IEA's, not T's). It's bad enough to include biofuels in "Total Liquids" even though, with an EROIE below at or below 1, this is a very dangerous sort of double counting.

Counting biofuels as oil products is just an out and out lie. I am beginning to wonder (well, not just beginning, actually) if anything that comes out of these agencies is remotely reliable if they are willing to make such baldfaced fabrications on this point.

It seems to be turning out that the most useful thing about biofuels is that they provide cover to obscure the fact of PO with creative graphing and other deceptive figures.

Yes. (And Tertzakian is not in favor, either.) Counting biofuels is double counting, and I hadn't realized it was that significant.

Counting biofuels is double counting

And of course why are we counting those barrels used to produce barrels? Which gets us back to the issue of net energy. Which gets us to the real issue which is that peak oil cannot be conceived of as a single metric. Which is why I hold that the only useful concept is that of a peak oil era, characterised by multiple aspects, none of which can be definitively positioned in time and space, but all of which can be discerned, more or less vaguely, more or less acutely.
They include peak conventional oil production, peak net exports, peak net energy from oil...

In the end, the price signal carries most information. The price signal allows us to date the beginning of the peak oil era to the end of the second millenium of the common era, more or less.

Paul Dales kinda gets it. Dr. "Ridley' doesn't. How sad.

Every time the oil price returns to its trading range (declines) is value relationship to the US dollar is amplified. The dollar is a defacto hard currency backed by crude oil.

Traders around the world are seeking dollars, dumping currencies and unwinding carry trades to either gain dollars (to gain fuel) or avoid FX losses to the charging dollar. The dollar's exchange strength is self- reinforcing as the more valuable dollar attracts investors because it is 'going up'.

Buying dollars means other things are sold including stocks and overseas bonds (Greece, Portugal) and oil. Yes, oil is being sold to gain dollars. The dollar/crude value cycle is also self- reinforcing.

Exchange value is a perception. I can perceive it. I bet others are starting to perceive it, too. When enough do the dollars will vanish from circulation. Oil is valuable, so are dollars that are proxies for oil.

Oil as a thing is valuable in and of itself. It is sufficiently expensive in real terms that commerce levered from it is less valuable than the same oil is as a stand- alone commodity. Depletion makes commodity- oil even more valuable in real terms. The decline in oil- driven commerce is certainly perceivable. Domestic US energy- based commerce has been declinng for ten years, replaced by finance 'products' and speculation in real estate and derivatives. The pricing of oil supported commerce completely out of business must be considered. This would follow the trend of oil costs pricing commerce dependent upon <$20, then <$30, then <$40 oil out of business or out of the USA years ago.

What's missed is the exchange value transmitted through dollars drives deflation rather than deflation driving the dollar's exchange value. At issue is the mispricing of inputs. Conventional economic analysis focuses on mispricing of risk. False input pricing is a risk as well.

The lower the dollar price goes the harder the dollar gets and the more deflationary destruction it is able to wreak. Fuel prices will be low but dollars to pay them will be impossible to find. There is a self- supporting cycle that amplifies this process as well. (Fisher)

I wouldn't be surprised if USDA food stamps don't become a US currency, but not to buy fuel.

Keep in mind that oil price may fall in nominal terms but will constantly increase in real terms.

I don't agree about the price signal. The price went up to $150 a barrel, then down to $30. What does that tell us about peak oil?

But the average annual oil price, which is far more indicative of what consumers actually pay and what producers actually receive, has been above the $57 that we saw in 2005, for 2006-2009 inclusive and for 2010 to date.

What if Stoneleigh's scenario comes to pass: oil at $10/barrel, because no one can afford it even at that price? If that happens, would you see that as proving that peak oil is a crock?

I have asked her a couple of times what she is forecasting for an average annual low before prices start climbing to her longer term target of around $500 (around five years from now if memory serves), but I haven't heard back from her.

In any case, clearly we have seen, and we will continue to see, some fluctuations in demand, but despite the fact that all post-2005 annual oil prices (so far at least) have exceeded the $57 that we saw in 2005, average annual global crude oil production has not exceeded the 2005 rate (so far at least).

My point was that he cited three examples of non-OPEC exporters, Russia, Brazil & Norway, while discussing rising non-OPEC production.

Based on annual data, Russia has basically been on a plateau for three years, with total liquids production of 9.9 mbpd in 2007, 9.8 mbpd in 2008, and 9.9 mbpd in 2009 (EIA). As of 2008, Brazil was still a net oil importer. And Norway appears to be in terminal decline.

The EIA shows combined net exports for the three countries of 9.3 mbpd in 2007, falling to 9.0 mbpd in 2008. Based on EIA production data, if we assume flat combined consumption their net exports in 2009 were about 9.1 mbpd.

I think that is a correct understanding but it once again creates (or reminds us of) the old problem: Timing. In investing and planning for the future, timing is everything. Being wrong with your timing is as bad as being completely wrong in your assumptions. This is why all bets, ALL BETS, must be hedged, and again, not the "hedge fund" type of mock hedging but real hedging, planning as best as possible for any possible contingency. The doom talk is now everywhere...doom may indeed be down the road, but how far down the road? Be careful of assumptions about facts, but also about timing. Ask yourself constantly if you could be wrong...(I am positive in the long view, as you folks know, but that doesn't keep me from being 100% in bonds and cash right now...in uncertain times, the availability of ready cash can be your best friend.


Link up top: Peter Tertzakian: Possible non-OPEC oil supply surge to put pressure on prices?

Mr. Tertzakian seems to think that because non-OPEC production increased in 2009 and 2010 that the trend will continue. However even the chart he posted shows non-OPEC production declining in 2011.

This is in line with what both the EIA and the IEA are expecting. Both agencies have historically been overly optimistic with their predictions in the past are now predicting that non-OPEC, all liquids, will peak in 2010.

There is a very good reason for their pessimism. The rise in non-OPEC production has been largely from the three largest non-OPEC producers, Russia, USA, and China. All three are expected to peak this year, (a post Katrina peak for the USA), and decline next year.

Also, the 2010 increase so far is not likely to hold. Maintenance season is coming up for the North Sea and Norway has scheduled to have a few months of excessive maintenance down time. US production is expected to decline in the second half of the year and Russian production has already peaked for the year. China is also at peak right now and will likely decline fro the rest of the year.

Ron P.

Edit: Sorry WT, I was typing while you were posting. Otherwise I would have posted as a reply to your post.

It seems like to make a billion barrels Thunder horse would have had to made 250 K forecasted peak for quite some time. Now it is zero (down for maintenance) which makes a large impact on the 09 and 10 additions above. And wasn't Atlantis set to increase by 400k or something, I wouldn't hold my breath.


Great minds think alike.

My favorite story about Brazil was a Bloomberg article a year or so ago about Brazill, still a net oil importer, taking market share away from OPEC.

In any case, the last year that EIA currently shows for net exports is 2008, and they show that combined net exports from Russia, Brazil and Norway fell from about 9.3 mbpd in 2007 to 9.0 mbpd in 2008. They probably showed a combined year over year increase in 2009.

But I have frequently pointed out the disconnect between slow initial net export decline rates versus extremely high Cumulative Net Oil Export (CNOE) depletion rates. Indonesia went from a final production peak in 1996 to net importer status in 2004, but they showed a year over year increase in net exports in 1998. However, in 1998 they shipped something like 25% of post-1996 CNOE.


Any idea what accounts for the 2009 spike in production? Could it be the delayed result of the pre-2009 exploration frenzy? If so, then the expected decline would appear to indicate that the benefit was short lived, no?


Mostly it was megaprojects in the US and Russia that came on line in 2009. US Gulf of Mexico production increased 400 kb/d from 2008 to 2009. Russia had the huge Vankor field come on line in mid 2009. Also Russia, thru 2009, was drilling between 5,000 and 6,000 new wells per year, most of them in their older fields. The existing wells in their old giant fields are declining in excess of 19 percent per year but by punching a lot more holes in those old fields they have managed to keep the decline rates lower.

Russian Oil and Gas Industry Surprises Analysts

There are plenty of projects in Russia, both, new projects and existing brownfield projects. Russia is a very mature producer. If you exclude all the drilling activity taking place every year, then Russian organic decline in production is close to 19%. To compensate for that organic decline, Russia drills somewhere between 5,000 and 6,000 wells every year...

Therefore, next year there will be a lot fewer fields coming on stream; in the absence of new incentives to put more money to work to grow Russian oil production, it will naturally start declining, with organic decline rates of around 19% and growing.

Russian production peaked in March but has declined only slightly since then. But it is only a matter of time before those new projects cannot keep up with that 19 percent and growing decline.

Ron P.

"Current financial system at heart of global woes"

Gail and others have often commented that it may well be the financing of energy discoveries and other financial limitations that may prove more deadly than consumption/supply pressures.

I think it is interesting many assume that oil companies will automatically choose to produce oil just because a reserve is supposedly there. Unless the company is nationalized, their first responsibility is to their shareholders, who may be anyone and from everywhere. Companies are not beholden to a country of origin or that country's energy needs. Maybe it used to be that way, but it sure doesn't seem to be that way in 2010.

After all, does it not often seem that the Govt. is run for companies to prosper, and never the other way around?

In light of the BP fiasco, and the ramifications of future offshore drilling, (including penalties and accusations), I wouldn't take it for granted that anyone will jump to the political "drill baby drill". Furthermore, financial problems will only make this more difficult.

Respectfully, Paul

There a number of things that have to be in place for the oil companies to produce the oil that they are showing as reserves.

1 . A high enough oil price to make production profitable.
2. A regulatory system that encourages oil production--doesn't ban offshore drilling, for example.
3. Tax rates that are low enough, so that when put together with the price, the company can make an adequate profit.
4. An international trade system that is working well enough so that the oil company can get international workers and parts that are sourced internationally.
5. A credit system that will allow borrowing at reasonable interest rates. (Even if the oil company is able to finance new investment with cash flow, it depends on many subcontractors that depend on debt markets.)
6. Reasonable political stability.
7. A financial system that works well enough to pay workers and contractors.
8. An operating electrical system, if the oil is going to be shipped in pipelines, or even refined in refineries.
9. Availability of liability insurance. If the limit is $10 billion or more, this may be a problem for many oil companies.
10. Availability of food and water for workers.

We take these things for granted now, but if things get messed up in one way or another, they may not all be in place. Even something as simple as an insurance problem may reduce the number of companies willing to drill for oil.

Could you make a list of the things that have to be in place for Russia to maintain a viable space program?

Lots of vodka ?

Its gotta be a factor :)

This has to be Memmel's shortest post by two orders of magnitude. I hope Memmel is OK.


Ever been to a small shop in rural Russia? They may not have much, but they will NEVER run out of vodka!

Yesterday's Toronto Star: mention of a peer-reviewed paper describing a large-scale survey of Canada's EGS (enhanced geothermal systems) potential. Ironically, Alberta, site of the tar sands projects, is identified as one of the better jurisdictions for EGS.


Canada could technically meet all its electricity needs and dramatically lower greenhouse-gas emissions if it moved aggressively to develop enhanced geothermal power projects, according to the first comprehensive assessment of the country’s deep geothermal resources.

That one got me. I assumed that geo needed some hot spots for an exchange system. As far as I know, Alberta is a pretty quiet zone, although the coast has numerous hot springs and active geo thermal sites. Of course there is no population anywhere near....Hyland River area (Yukon), Hot Springs cove, Bute Inlet, Meziadan, Iskut area, etc. Garibaldi is a dormant volcano, but...........

Maybe the key word is enhanced, other than that.... Maybe I'd better reread the article.

Describing Canada as part of the Pacific "Ring of Fire" is somewhat misleading. I would describe it as being in the "quiet zone" of the ring of fire. There's nothing of a volcanic nature going on at the moment.

B.C. has a lot of undeveloped hydroelectric sites, so I would think they would develop them first. Their latest plan is to put another dam on the Peace River, which is pretty straightforward since they've already got a dam upstream of it.

Alberta is rather thoroughly tectonically inactive, and the hot spots are very, very deep. It does, however, have a couple of major undeveloped hydro sites on the northern rivers, and lots of wind power potential in the south. Nuclear is also an option since some of the world's biggest uranium deposits are next door in Saskatchewan.

This article, though, is in a Toronto publication, and Ontario is in a quandary. It has run out of hydro sites. Its nuclear program is not doing very well, and its reactors have reached their "best before" date. It has been falling back on coal-burning power plants, but they are burning high-sulfur U.S. coal and have few pollution controls, so they are polluting the air of southern Ontario.

However, note the following in the article: "At 10 kilometres we can expect EGS temperatures in the 150 to 200 degrees C range across most of Canada, except some areas of the Canadian shield," (italics mine). Ontario is mostly Canadian shield, so you would expect it to be one of the worst places in Canada for geothermal power.

It's the usual Canadian thing. Ontario journalists are focussed on their own problems, without considering that the solutions will not work for them, and the places that they will work (i.e. Western Canada) don't need them.

It's just a lack of planning. If they had settled the country from West to East, rather than East to West, most of the people would have settled in the resource-rich half and wouldn't have all these problems.

Ontario's nuclear experience points to issues other than nuclear. Nobody can excuse the $14 billion (1980 dollars) mess called Darlington. This price was between 3 and 4 times too much for the size of reactor plant. The result of the past mismanagement and corruption combined with nuclear-phobia has put Ontario up the creek without a paddle.

I am all for wind and solar (lots of roof space on individual residences that could be tapped). But how long will it take to ramp these alternatives up? I don't see much of an effort even with the recent wind power projects. The current Ontario government thought it could replace the coal power plants with gas fired ones. But this went nowhere probably because the supply isn't so rosy. Time to get a grip and build new nuclear power plants.

"mismanagement and corruption combined with nuclear-phobia"

Ummmm, do you see a causal relationship here? Wouldn't you be a bit phobic if you knew the folks running these potential poison machines were hopelessly corrupt and inept?

If we are going to start to talk about poisons then chemicals are top of the list. Radiation from nuclear "waste" sitting in water pools at nuclear power plants is not even a blip on the health radar. Worry about all the carcinogens spewed by the burning of fossil fuels and the production of plastics and pesticides. For some reason there is endless chirping about Chernobyl (which was NOT an accident, but a crime) but the petrochemical industry and coal power plants (which also produce lots more radiation emissions than nuclear power plants) get a pass. And I am forgetting the CO2 aspect that is the mother of all human disasters in the making.

That's one long blip.

And the whole industry is, of course, a crime against the future.

And, of course, again, nuclear is not CO2 neutral--mining the ore, transporting it, breaking it down from the huge diffuse ore to the tiny amounts of pure produce, processing it further, building the plants decommissioning the plants, burying the waste.........

These are all HUGELY carbon intensive activities. But the nuke industry (which you are part of???) does not want you to think of these things.

And of course the effects last, in any kind of human terms---for f'n ever.

What language will you write the warning signs in that will go above the radiation dumps that will be intelligible to all and sundry in 100, 1000, 10,000, 100,000 ...... years??????

Or to put it another way: Go ahead and build all the power plants in these locations you want, but wait until you try to build the transmission lines! Makes it all rather moot...

I did some investigation into geothermal because I was under the uninformed opinion that it should be abundant and viable in BC. I've been to a few of the hot spring locations and there are plenty in the province. But, geothermal is a lot more complicated and risky that it appears (pun warning) on the surface. The viable and operating geothermal plants extract superheated water from the ground just like any other natural resource and they deplete just like any other natural resource.

Enhanced geothermal is fraught with complications and geological challenges. It can also take a lot of water. Or if it can be made to work, it will probably be in a very few geological formations.

At this point in my layman's opinion the only way to get it to work is to develop a closed loop system that circulates the fluid through the near surface heat zone. Essentially a group of directionally drilled wells from two sides and lined with a top side piping manifold. One big heat exchanger. But, the irony is these near surface hot zones are in relatively unstable geological formations and the development could be quite risky.

A note on the East-West or West-East settlement of Canada. It was settled in the resource abundant areas first which happened to be beaver. Remember, Canada was the consolation prize between England and France for sugar. Oil, gas, uranium, potash!? Who are you, Jules Vern?

I find the article on geothermal power in Canada somewhat bizarre, because Canada generates 60% of its electricity from hydro and is the worlds largest producer of hydroelectric power. Nuclear power contributes an additional 16%, so over 75% of Canadian electricity production is already greenhouse-gas emission free.

I think that geothermal power would be among the most expensive alternatives available to Canadians, given the vast natural resources of the country. There are lots of ways to generate electricity that are cheaper and more practical. Wind power leaps to mind as something that works particularly well in Alberta.

It appears to be a solution without a problem.

Yesterday's article talks quite a bit about unconventional geothermal, which it calls enhanced geothermal systems (EGS). According to the article,

EGS is more complex. These “enhanced” projects must be engineered to create the conditions required for generating power. Subsurface rock must be hydraulically fractured to create cracks that water can travel through. An outside source of water is also required, adding to the cost of the venture.

Under the EGS scenario, water is pumped into a well and forced to seep into cracks and pores in the rock, where the temperature is ideally above 150 degrees C. The water absorbs the heat in the rock and is pumped back to the surface through a return well. Heat exchangers then extract the heat from the water to create steam, which turns an electricity-generating turbine. The water is then pumped back underground as part of a continuous cycle.

I asked Oil Drum staff members whether this was something we should have an article about, and the answer I got back was basically that no one has yet found a way to do this economically. A lot of folks have worked on this EGS, but at this point it is too expensive for consideration. The existence of EGS would extend the range of geothermal, but the approach needs improvement to be a viable alternative.

In the EGS project in California they pumped (IIRC) about 100 million litres of water into the fractured rock formation and lost over half of it. Oops! Not to be too critical, but graduates of the Homer Simpson School of Engineering and Geophysics?

(Also, the ideal rock formations for the heat source happen to be granite. Not the easiest to frac I've been told).

Entropy wins every time...

But again, let's wrap this all up in the energy project viability bundle again because it appears regardless of energy source the four horsemen of the energy apocalypse decline are still in the rodeo. Reserves, Finance, Nationalism, and Net Energy don't seem to discriminate, even for hydro power.

Site C, hydro electric, co-located with an existing river dam system, a no brainer, gotta be relatively cheap. Yet, current price will be 0.16/kWh which is right around the current price for natural gas generation. Who wudda thunk it, eh?

What's the real common denominator here?

Analyst: Legislate green goals
Province’s electricity plan won’t work if it’s only voluntary, think-tank warns

The Dexter government’s new electricity plan for quadrupling the amount of green energy over the next decade could fail without legislative teeth, says Tim Weis, of the Pembina Institute in Ottawa.

"Voluntary compliance doesn’t typically yield the results that you are hoping for," Weis said in a telephone interview Monday.


Though the first electricity from the $6-billion Lower Churchill Falls project is years away, Nova Scotia wants to be able to access the green energy to meet tougher provincial environmental laws.

Newfoundland and Labrador’s energy company, Nalcor, plans to begin producing more electricity from the Churchill River by 2015 — enough to light all the homes in Atlantic Canada plus parts of Ontario — using two sites.

Nalcor has said Cape Breton could possibly be a place to land a proposed multibillion-dollar subsea cable from Lower Churchill.

See: http://thechronicleherald.ca/Business/1182940.html

Wind + tidal + Lower Churchill Falls + aggressive DSM + TOU metering/smart grid technology = a better energy future for this province.


Carrot and Stick, works every time. Couple sound FIT and TOU policies. And my favorite, price energy conservation at, or near the marginal price of new power. Now that's incentive! Because, no! (duh!), voluntary measures don't work and never have. My own little metric is this appeals to the altruistic 5%.

One thing that does seem to be taking off in the BBC (Beautiful British Columbia - ha! Got you Brits), is the implementation of an Energy Manager with the salary highly subsidized by BC Hydro for the first two years. Looks like one has to install the wetware before the hardware and software. Were having meetings this week on Power Smart energy efficiency projects. There are four of five large energy consumers in the area that are implementing this.

We'll be looking at 500-900 HP pumps and crushers in the 2,000-7,000 HP range, along with the other typical pump, air compressor, and conveyor systems studies (I hope).

Best of luck, BC, with your forthcoming meetings; I hope they're productive and that the savings derived thereof are substantial.


Paul, I notice you didn;t mention wave power. Not sure if that was a deliberate omission, but if it was then I think you are on the right track.

I didn't even know this 2.5MW wave power project in Australia even existed, but now, thanks to a good storm, it doesn't anymore..


The only wave energy system that really works is a surfboard!

Hi Paul,

I tend to agree. We experience violent storm surges from time to time that are powerful enough to take out roadways, wharfs and board walks. I'm not even sure how undersea turbines such as the one currently being tested in the Bay of Fundy will hold up over the long haul. In all likelihood, tidal will remain a relatively small part of the overall mix.


With any of these things that are permanently in the weather, you have to design for "maximum survival conditions" that are typically an order of magnitude more powerful than the operating condition (same applies to offshore oil rigs). It is only a matter of time until this condition is exceeded.
With the wave system they had, I would have though it prudent to pull it into harbour for a big storm, same as any ship would. But, that is also when they generate the most energy - it's a fine line, and that makes for a risky business.

At least with tidal power it is a predictable cycle and current speed. Still, these are the niche of the niche for electricity generation, i find it hard to believe they will ever get close even to what PV is today.

Re: Arctic team reports unusual conditions near Pole

Great article. Real scary description of what's happening "on the ground" so to speak. Not only that, but the annual melt season is well underway. The latest sea-ice extent data is indicating a rapid decline, approaching the extent seen in 2007 which produced a record minimum at the end of the season. Maybe that thin sea-ice noted in the article is melting more quickly than the historically thicker multi-year sea-ice.

A few months ago, the denialist camp was claiming that the sea-ice "recovered", what ever that means. Will they also shout about a new record minimum, if such is the result of this year's melt season. Some how, I don't think they will be opening their mouths to let the truth out, especially not before an election...

E. Swanson

Record heat recorded for Africa's greatest lake

Africa's deepest lake is warming at an "unprecedented" rate thanks to man-made climate change, scientists have warned. Lake Tanganyika, which stretches from Burundi and DR Congo on its northern shores to southern Tanzania and Zambia, is the second largest lake in the world by volume.

The 420-mile-long finger of water in south-central Africa is now warmer than at any point in the last 1,500 years, according to research published in the journal Nature Geoscience, and the consequences could be dire for the 10 million people who live around it and depend on its fisheries.


Your link for sea ice is great. Viewed from last Feb, it looks like the Arctic was poised to rocket thru the average. Now it's the converse. Nothing like treading on thin ice. I think it broke on them, that the denialists won't be bringing up that argument again.

Thin ice is there and looks like you can step on it, but its folly to think you can step on it, till you test it. Part of my childhood was spent living in Iceland. We were told that if we saw tundra between two rocks, not to trust that it was solid ground, we could fall through and break something. I took the advice and begain my adventures of rock jumping, later rock climbing.

I know from reading the climbing stories of others that the world's ice feilds are changing faster and faster, something is up.

We live in a time of change that we just do not have the experience to handle. We are the authors of that change, and we stick our heads in the sand hoping things will be better in the years to come, only to get told time and again, that it won't be.

We are all walking on thin ice, time to string ourselves together and get a good floation device on everyone, and hand out the ice axes, just in case we fall in.

BioWebScape designs for a better fed and housed future.

"We are all walking on thin ice, time to string ourselves together and get a good floation device on everyone, and hand out the ice axes, just in case we fall in."

Nice use of the metaphor. Sounds like a book title waiting to happen?

I have the bad habit of creating book titles, then writing a story around the title. On my blog, there is a story called "Dead Mann" I've only uploaded the first 7 chapters, but the whole book idea was a story title flash, with opening scene. I thought about it some more and wrote a whole series around it.

My notes and series titles are stored in boxes in a shed right now, so don't look for the story to make it online. You can e.mail me if you are interested and hear more about it.

I only wish I could download the stories I have stored in my head in picture format. The other day my mom was reminding me I always had a wild imagination as a kid. She was telling someone else the story, of when she asked me how I thought it all up. My reply was "I have a computer in my head!" My dad worked on the early computer and radio systems in the military, so I knew what they were when I was younger.

I am afraid though the thin ice story above would be a sad one.

BioWebScape designs for a better fed and housed future.

Paul Farrell: 12 ways to cash in on the 'collapse of Eaarth'

Farrell's commentary on MarketWatch isn't about making money. It's about how to survive the impending problems facing mankind, such as climate change, peak oil and population growth. Farrell has become a Doomer, which would seem to be a bit out of place at MarketWatch, which is an online parallel to the Wall Street Journal. If only the WSJ Editorial writers had a clue about Eaarth's future. Better yet, one might hope that the Editors would actually write about it instead of parroting the party line...

E. Swanson

one might hope that the Editors would actually write about it instead of parroting the party line...

They don't parrot the party line, they write it.

Fascinating three-part story in the LA Times that starts here. It's about a blue-eyed Californian who wonders about his unusual surname. He grew up thinking it was Italian, but eventually discovered that it was Bantu. He descended from an African slave.

At one point, he notes that his family was still dirt-poor after being in the US for 300 years, and hints that their mixed ancestry might be to blame. They didn't make the jump to middle class until they moved to California in the 1940s.

No doubt racism was a factor, but I wonder how easy it was to achieve the American Dream before the fossil fuel fiesta. Laura Ingalls Wilder and her family had money troubles all her life, until she hit it big with her books. Even when the government was giving away land to anyone willing to farm it.

The LA Times article also mentions how difficult it was to keep children in school, when they were needed to work and help support the family. Some of the authors' relatives remember sharecropping, and moving whenever the farmer demanded the kids stay out of school to work.

No doubt racism was a factor, but I wonder how easy it was to achieve the American Dream before the fossil fuel fiesta. Laura Ingalls Wilder and her family had money troubles all her life, until she hit it big with her books. Even when the government was giving away land to anyone willing to farm it.

My family history is the Australian Dream, rather than the American Dream. I wasn't easy, even without racism. My great-grandfather, an English farmworker, migrated with his family to New South Wales about 140 years ago, and took up the offer of free land.

A hundred years ago, his oldest son, my grandfather, was supporting his family as a worker on a railway construction project. The farm had been lost during a drought. But by 1913, his oldest son (my uncle) was attending high school, the first person in the family to do so. He went on to become the first person in the family to attend a university, and the first to graduate. But not the last. All but the youngest of the six surviving children graduated from the University of Sydney. This is still before the "fossil fuel fiesta" really started.

Then came the Great Depression. In the middle 1930s my grandfather (with the help of my father, who was a schoolteacher and recently widowed) was struggling to make put food on the table for himself, his wife, his youngest son and daughter, and my sister. A family story has him plowing the vegetable garden with a single-furrow plow pulled by his 15-year-old grandson and commenting that he had never imagined being so poor as to be reduced to this.

The extended family really started to prosper in the 1950s. There was no oil production in Australia yet, but cheap oil from the Middle East and the Far East was flowing into Australia. My mother got a job when I started school, and we got a new (to us) car only 18 years old, then a refrigerator, an electric stove, and finally a new house. I and my brother, and most of my cousins, graduated from universities. In our generation there were two doctors, a dentist, a veterinarian, an entomologist, an agronomist, two geoscientists, a professional pianist-organist, a minister and several schoolteachers. We traveled and worked all over the world.

But the next generation, those who grew up in times of prosperity, does not have anywhere near the same success, and this is not only because the Australian Dream has started to fray on the edges. I think to a large extent the family values, particularly putting a high value on education, have been undermined by popular culture. Keeping children in school could be done eighty years ago: my uncle rode a bike ten miles, then took a train twenty miles to attend high school at first; the family moved twenty miles closer to the high school the following year when his sister started there. Today, only the really motivated ones go beyond high school, regardless of their parent's wishes.

Interesting. In my family, my parents were the first in their families to go to college. My grandparents were very intelligent and motivated - I look at some of the things my grandfathers built, and am amazed at their ingenuity - but both dropped out of school before high school. My dad's family was very proud when he went to college, but didn't support him when he went for his MS and PhD. They thought the BS was enough, and he should work and raise a family instead of getting more schooling. In my generation, almost everyone has a college degree, and many have advanced degrees - PhDs, JDs, MD, DDS, DVM. I have no idea how the next generation will turn out. They are all very young - babes in arms to elementary school. There also aren't that many of them. Everyone married and had kids in my parents' generation, but in my generation, many of us have chosen not to marry, not to have kids, or to have fewer kids than our parents had.

For the attention of British residents:


BBC's 'Crude Britannia' is an absolutely must see. Three hour-long documentary series about the North Sea. Fascinating and highly informative. An excellent series.

It is available on BBC iPlayer to British residents, but the link above might work worldwide too. The final episode has not been released yet.

The top article listing the 561 Trillion dollars in derivatives, has me scratching my head. How can something like that happen, that averages out to be over $4,000 per acre of the earths surface land and water combined. Or $80,000 per person alive figuring 7 billion of us. Or Just too much for the average person to wrap their brains around.

Now I figure from what I have read, it's like I can bet that I'll die in the next 2 days, or I could bet that I live for a year, or I could bet that I live to 70, and each of those bets get counted in the total number in the market. I never took Economics in college, so bare with me.

I just don't understand how the whole system got started in the first place, and now how it could have anything like those kinds of monies tied into them.

BioWebScape designs for a better fed and housed future.

Now I figure from what I have read, it's like I can bet that I'll die in the next 2 days, or I could bet that I live for a year, or I could bet that I live to 70, and each of those bets get counted in the total number in the market.

Correct, the $561T is the sum of the face value of all the bets that have been placed. At least as I understand it, the "face value" is sometimes overstated. For example, an interest-rate swap on $100B in bonds is counted as $100B, even though the net payments between the parties will probably be only a small fraction of that. As deals cascade, that $100B may be counted many times.

I just don't understand how the whole system got started in the first place, and now how it could have anything like those kinds of monies tied into them.

Some sorts of derivatives are useful. An interest-rate swap allows a bond holder to convert a bond that pays a variable rate into a bond that pays a fixed (guaranteed) rate without doing anything to the bond. There are any number of circumstances where the transfer of risk that happens in an interest-rate swap may be valuable. Large banks use interest-rate swaps to manage cash flows, get around foreign exchange restrictions, etc. The large majority of derivatives out there are interest-rate swaps of some sort. As mentioned above, the very large sums are due to counting the principal many times.

Here's a thought-provoking challenge to those (including myself) inclined toward pessimistic views of the future. I disagree with the following prediction of Dr. Ridley (The Rational Optimist) that, as a result of human innovation and the global spread of ideas through the internet, this century will see that:

Prosperity spreads, technology progresses, poverty declines, disease retreats, fecundity falls, happiness increases, violence atrophies, freedom grows, knowledge flourishes, the environment improves and wilderness expands.

Nevertheless, I enjoy the long historical perspective (80,000 years) which includes such nuggets as:

Empires bought stability at the price of creating a parasitic court; monotheistic religions bought social cohesion at the expense of a parasitic priestly class; nationalism bought power at the expense of a parasitic military; socialism bought equality at the price of a parasitic bureaucracy; capitalism bought efficiency at the price of parasitic financiers.

See Doomsayers Beware.

So according to that last, we should have very stable, cohesive, militaristic and finance-oriented society. Hmmmm. Maybe he's onto something.

...capitalism bought efficiency at the price of parasitic financiers.

my goal is to skip the capitalism part and go right to being a parasitic financier.

my goal is to skip the capitalism part and go right to being a parasitic financier.

Only problem is finding a stable host nowadays.

True anecdote: My grandfather who was a physician used to tell a story about a patient, well along in years, who had been discovered to have a rather large tapeworm.
It seems that his health went into serious decline shortly after its removal.

My grandfather's theory was that he had been in stable symbiosis with his parasite for a long time, the parasite probably made up for his high fat diet, when they removed it everything was thrown out of whack, his cholesterol level went way up and he suffered a massive stroke and he died.

Of course its probably better to never let the parasite take hold in the first place, live within your means, exercise and eat a healthy diet...

lol !

...who had been discovered to have a rather large tapeworm.
...,exercise and eat a healthy diet...

a healthy diet that would include some castor beans from time to time, i assume.

This is the same Matt Ridley who, as chairman of the bank (ex building society) in the UK, Northern Rock plc presided over its ambitious expansion and subsequent crash and burn and rescue by UK taxpayers. I don't suppose his publisher put that on the book jacket. The reader might wonder why he didn't see that one coming.

The talk begins, "the growth engine is showing negative numbers:


Now the talk is gold, at the highest end of the range is the end place to hide,as we run out of hiding places...hmmmm, only time will tell.


I went "short" silver today.

So strange you just posted that, because I was going here to suggest maybe we are in another period of contraction, but not so obvious a one as what happened in 08.

Oil is at 69.24!


And the Dow is down another 125! with 1/2 hour to go until the closing bell, and dropping as we speak.


This time the price of oil is slowly dropping as the market does, and I suppose we are expected to wait until it hits that magic number where the price is low enough to initiate economic improvement. It's starting to become a tiresome game of cat and mouse. The cat being the price of oil and the mouse is us running around trying to pay our bills.

End oil speculation permanently.
We need very large scale investments, not oil derivatives.
Stop the madness.

Tried to re-post your link RC, but it didn't work for me either. But it is an interesting article for anyone that wants to type it into file/open.

Interesting stuff..

Hopefully this link will work:



Thanks for fixing the link! :-) I don't know why it didn't take....

Time to short Australia?

An Optimist's example of technological progress:

how long it takes the average worker to pay for an hour of reading light. In ancient Babylon, it took more than 50 hours to pay for that light from a sesame-oil lamp. In 1800, it took more than six hours of work to pay for it from a tallow candle. Today, thanks to the countless specialists producing electricity and compact fluorescent bulbs, it takes less than a second.

Implicit in this example is the availability of cheaper and more abundant sources of energy over time. Ridley fails to address this and concludes that technological innovation will continue to save humanity. After all, “apocaholics” have been wrong throughout history, and today they are simply wrong again.

Implicit in this example is the availability of cheaper and more abundant sources of energy over time.

No, that's not right. Sources of energy were as abundant thousands of years ago, in fact more abundant given our use of fossil fuels in the past couple of centuries. The difference is that the use of our intellectual capabilities has increased our access to these sources of energy. Our intelligence has also allowed us to improve the efficiency of energy conversion, lighting being an excellent example.

I continue to hope that this trend of ever increasing use of energy will stop and be reversed. Peak oil holds great promise in this regard. Everyone deserves to have a shot at the quality of life that my father enjoyed during his 97 years, a quality of life that is just not possible with the level of energy consumption that plagues USland and Euroland today. Honestly, just try to find a place where you can enjoy some peace and quiet without risk of some a-hole driving by or flying by, or turning on a fan or...

I don't know if you are the first person to use the term "apocaholics". If so, congratulations for coming up with an excellent term. If you've got the energy, you might want to start an "apocaholics anonymous" organization. You could make some good dough, if you could get even half of the apocaholics who hang at TOD to pay an enrolment fee.

Moderator: Welcome to Oil Spillers Anonymous. Thanks for coming. First thing we'll do is go around the circle and introduce ourselves. I'm Kevin, your moderator, and I'm here because I once changed my oil back in 1978 and didn't dispose of it in an environmentally-friendly way. I beat myself up over it pretty bad, but I finally found the strength to forgive myself and atone by giving ten percent of my income to the World Wildlife Fund, Earth First, an' groups like that.

Group: Hi, Kevin!

Moderator: And moving on to my left...

Craig: Hi, my name's Craig, and I'm an oil spiller.

Group: Hi, Craig!

Craig: I knocked over a can o' STP 10W-30 and some of it ran into the storm drain. Just sat there and watched it. Feeling helpless to do anything. It's still hard for me to talk about. So I'm mostly hear just to listen. Thanks.

Moderator: Welcome. Next...

Tony: My name's Tony and I'm an oil spiller.

Group: Hi, Tony!

Moderator: I see you're new here. Did you knock over a can of oil, too? It's pretty common and nothing to be ashamed of as long as you clean it up and learn your lesson.

Tony: Well, not exactly. I set up a massive oil rig in the Gulf of Mexico, allowed safety violations to pile up, never complained when federal inspectors didn’t show up as often as they were supposed to, used shoddy materials, ignored warning signs, forced my employees to work faster than they should so I could stem my financial losses, and then the damn thing blew up, killed eleven chaps, sank, and now it's spewing millions and millions and millions...

Moderator: Like Exxon Valdez millions?

Tony: Think bigger! Millions upon tens of millions, old boy. But I probably shouldn’t even be at this meeting, since it really wasn't my fault---at least that's what my lawyers tell me to say. It was those reckless cads at Transocean and Halliburton. They should be here, not me! Ungrateful buggers are trying to hang me out to dry. Well, it won’t work, I tell you! Besides, the dispersants are putting everything back to normal, and we're preparing a burlap sack filled with golf balls to stop the flow of oil. Oh, sure, BP refineries are responsible for 97 percent of America's "egregious willful" OSHA violations. But it's not like it's the biggest oil spill in recorded human history, you know. At least not yet. Everything will be right as rain in a few days, you'll see. It's a relatively small leak compared to the volume of water in the gulf. Just think happy thoughts and it will all...be...BETTUH!!! Why don't people BELIEVE me!!?? It's not FAIR!!!

[Dead silence]
[A fluorescent bulb flickers briefly]
[In the distance, a dog barks]

Moderator: Well. Um... I see. Would anyone care for a doughnut? And then maybe we can have a little discussion about denial...

Source from here.

thanks for the chuckle.

Remember, if they want to get this right they better use Titleist. Nine out of ten pro's do.

I recommend a driver on this hole, it's a long carry...

No, that's not right. Sources of energy were as abundant thousands of years ago, in fact more abundant given our use of fossil fuels in the past couple of centuries. The difference is that the use of our intellectual capabilities has increased our access to these sources of energy. Our intelligence has also allowed us to improve the efficiency of energy conversion, lighting being an excellent example.

Yep. And how did that technological progress come about? Because society had the energy reserves to support people solving physics problems and making technical diagrams by the light of those sesame-oil lamps, gas jets, and incandescent bulbs.

One of the biggest problems with energy scarcity is that the more labor-intensive it becomes to extract energy, the less time and energy you can afford to devote to solving the scarcity problem.

The first two products took time to grow, the sesame seeds take farming and time, and the tallow takes farming and time, not something that is cheap in the long run.

But he forgets that when he talks about a light bulb. Where is the miners, the manufacturing, the transportation costs all worked into the price of the lite bulb.

In my designs for a better fed and housed future, I don't just look at the I got it off a store shelf costs. I try to look at all the costs involved in making something from scratch, or from gathering from the waste stream and reusing it. But even gathering from the waste stream lasts so long, then you have less trash in the system if everyone is using it.

If he had to build the structure of his little light bulb up from scratch he'd go back to using tallow candles.

The imbedded energy in our modern life is bigger than most people think it is, and they tend to forget it, and tend to misquote how hard it would to recreate the things we have now.

BioWebScape designs for a better fed and housed future.

The Goldman story posted above reminds me of the Enron "round tripping" of power that caused electricity price spikes in California.

some of the red necks here are claiming that the deep water gom oil spill is the fault of "them environmentalists" who forced bp, etal to drill in deep water because they wouldn't allow drilling close to shore. i suppose the enviro-terrorist conspiracy isn't getting enough play on radio rush limbaugh for red necks.

Seems like everyone has learned their lessions well in school these days. Someone else did it, and their teachers and parents never seemed to correct them on it.

I admit I use oil, Like to eat meat and use power to post this message.

Hi my name is Charles, I waste oil, the spill is my fault.

BioWebScape designs for a better fed and housed future.

I waste oil, the spill is my fault.

i'm with ya on that, bp coulda shoulda been more careful, but, imo, deep water drilling was/is a disaster waiting to happen.

I'm good with that.
My name is Mike, and I am addicted to oil.

The post-apocalypse movies we'd like to see
by Brian Kaller

Kaller proposes that we develop entertainment that doesn't present a low-energy future as a scary depressing nightmare a-la Mad Max and the Terminator. I like his series ideas, most of which are variants on British formats. The only problem is, TV presents the present as a scary depressing nightmare. CSI...Bones...24...The Nightly News...getting people who are used to explosions and mayhem to watch something that doesn't have explosions and mayhem is the bigger problem.

That said, the presentation of the future as something which can only be horrendous probably is a factor in the denial we see all around us.

I suggest a hybrid: Yellowknife, a one-hour comedy/drama. At some indeterminate time in the future, Uncle Chester, who sits all day in a rocking chair in front of the General Store in picturesque Yellowknife, (which now has the climate of West Virginia), has amusing Petticoat Junction-style hijinks with his very attractive nieces for half the episode, usually involving conning one of them into doing Chester's share of bringing water from the communal well...the other half of the episode is spent telling the neighborhood kids about "the wind down" (in flashback, with explosions and mayhem) and scaring the bejezuz out of them.

I'm having my girl get Telefilm on the line...gotta be some development dollars for this thing...

Not sure how many caught this news that TransOcean is planing to distribute $1 billion in cash to its shareholders even as it fights to limit its liability for the Gulf spill to no more than $75 million. Even if the move was planned before the spill, it would seem like a rather arrogant move at this particular moment in time.

Yahoo News

Fascinating interview with Joel Kotkin, author of the book "The Next Hundred Million" referring to the next 100 million in American population due to arrive by 2050:


Some of his observations:

What do you do with a nation in which 40% of the population is elderly? Where does the energy, the optimism, the new ideas come from? All the demographics indicate a real social and economic problem in the next half century.

The rising influence of immigrants on the very look, taste and feel of America, as the food, aesthetics, and sound of America integrates mass immigration (where most of our younger population will come from) This immigration may be partially able to offset the problem of the aging demographic, but will it be acceptable to the aging population becoming more xenophobic and turning inward?

The "return to the center", both geographically and politically, as the young generation wants practical solutions and are not tightly aligned with either left or right, and the coasts of the nation are overcrowded, the place to find affordable and livable places to live will be in the center of the nation (he mentions my home state of KY as having net import of population for the first time in a half century, compared to our long trend of net export of population).

Lastly, when asked what he felt was America's most serious problem, he said swiftly and directly, "Lack of faith...lack of faith in America, lack of faith in the future...even if everthing else goes well the lack of faith will sink us and pull us down."

Interesting food for thought. (for those fixated on energy, there was no mention of the subject...sorry).


I don't think older people turn xenophobic. Rather, older people now reflect the values of their more conservative generation. Young people aren't going to suddenly change their minds about immigration as they grow older.

I do think people will turn against immigration, but it won't be because they're getting older. It will because there will be more and more awareness that the petri dish is getting full, and there's not enough food and water and jobs and land for everyone.

Also...there was mention of energy.

The sprawl will get smarter, Kotkin writes, with fuel efficient cars and better planned neighbourhoods, but it’s pie in the sky to assume that Americans will turn away from the automobile. Barely 2 per cent of the U.S. uses mass transit on a daily basis. People also want to live close to work, and increasingly jobs are in the suburbs. According to one study Kotkin cites, only about one in five jobs is located within 5 kilometres of the city centre.

good catch! I was referring to the Charlie Rose interview in particular, where I may have missed the remarks about energy, but the observations above are interesting...the idea that the jobs will spread out instead of the population re-concentrating in the city center...interesting stuff...


The U.S. will be a much less educated country due to mass immigration, the Southwest will become an extension of Mexico assuming BAU. I'm not sure why the author assumes "hispanic" is a race, there is a sizable amount of "white" hispanics. The U.S. will look like some sort of poor apartheid state, I'd expect capital flight and human flight out of the country if it is indeed colonized by Central America.

And for those who felt I was too harsh in repeating the term "wolfpack" in relation to the speculative community of hedge funds, bond and derivative traders and arbitrage traders, it seemed somehow like a more flattering term than the most recent one being used, with predictions that they will descend on America in force inside of three years: