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Drumbeat: May 21, 2010
Posted by Leanan on May 21, 2010 - 10:16am
US natgas rig count rises unexpectedly-Baker Hughes
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States rose unexpectedly this week to a level just shy of the 14-month high hit in mid-April, according to a report on Friday by oil services firm Baker Hughes in Houston.The gas-directed rig count had declined in three of the previous four reports, and the gain came as a surprise to many traders who reasoned that low gas prices in the $4 per million British thermal units area were no longer offering a strong incentive to drill.
"My pulse doesn't race to the weekly rig count number, but there are certainly a lot of rigs working, and too many holes in the ground turns into excess supply," said Tim Evans, energy analyst at Citi Futures Perspective in New York.
Bolivia to take lesson from Norway oil strategy
Bolivian President Evo Morales says he's using a visit to Norway to learn how the oil-rich welfare state manages its petroleum resources.Morales said Thursday he's drawn to the "significant progress Norway has made in its energy sector."
Agency issues warning letter to BP Alaska
JUNEAU, Alaska (AP) -- A federal pipeline agency last month issued a warning letter to BP Exploration Alaska surrounding the company's handling of certain corrosion issues affecting its Endicott Pipeline.The letter, by the federal Pipeline and Hazardous Materials Safety Administration, stems from a 2009 inspection of the pipeline at Prudhoe Bay.
The letter says BP failed during that process to provide records showing it was guarding against corrosion. It also said signs of atmospheric corrosion were found during the inspection and that BP did not provide records showing they'd monitored for those problems.
As BP struggles to control oil leaking into the Gulf of Mexico from a blowout at the Deepwater Horizon rig a month ago, another company is working to prevent a blowout in Europe.Statoil, the Norwegian oil giant, is battling recurrent pressure problems this month at its Gullfaks C oil well in the North Sea. They forced a partial evacuation of the drilling platform this week.
BP has delayed trying a top kill to cap the Macondo well that is spilling oil into the US Gulf.BP operations boss Doug Suttles estimated today that the earliest BP would try the pumping heavy drilling mud into the well to kill it would be Tuesday.
BP May Owe U.S. $1 Million a Day in Royalties on Spilled Oil
(Bloomberg) -- BP Plc, already facing billions of dollars in clean-up costs and liability claims, may owe the U.S. government as much as $1.1 million a day in royalties on the oil gushing from its leaking well in the Gulf of Mexico.The drilling lease with the Minerals Management Service for the Macondo well that blew up last month calls for BP to pay a royalty fee of 18.75 percent on the value of oil or natural gas “lost or wasted” if a leak is due to the company’s negligence.
Gulf oil spill effects to reach Arctic and Europe, expert says
Washington (CNN) -- The damaging effects of the massive oil spill in the Gulf of Mexico will be felt all the way to Europe and the Arctic, a top scientist told a congressional panel Friday."This is not just a regional issue for the wildlife," said Carl Safina, the president of the Blue Ocean Institute. Safina, who recently returned from the Gulf Coast region, presented several photographs, including one of an oil-covered bird.
"There will be a nest empty in Newfoundland," Safina said, noting common migratory patterns. Safina warned that multiple forms of marine life in the Atlantic Ocean "come into the Gulf to breed."
By 2050, emissions from planes are expected to become one of the largest contributors to global warming, says the Royal Commission on Environmental Pollution, an independent group of scientists in England. Story continues below ↓advertisement | your ad hereThat's why researchers at MIT are designing a completely new type of airplane for NASA that will enable greener airplanes to take flight before 2050.
Can you cycle to the office? Today is Bike-to-Work Day
Happy Bike-to-Work Day! If bicycling is a feasible commuting option, the American League of Bicyclists encourages you to try it today.
Kurt Cobb: The Wages of Complexity
While accusations continue to fly back and forth about who is to blame for the massive oil spill in the Gulf of Mexico and investigations commence into the recent wild one-day gyration in the American stock markets, the real culprit stands quietly and in plain sight in the corner: Complexity....Joseph Tainter, author of The Collapse of Complex Societies, the seminal work on the fall of entire civilizations, explains that increases in complexity in a society are natural responses to challenges to survival. For a time, sometimes a long time, increased complexity succeeds in aiding the expansion and success of a society. The primary manifestations are the ever greater division of labor (often in the form of additional layers of managers, technical experts and government regulators) and the ever greater technical complexity of the methods and devices deployed. No doubt the response to the Gulf of Mexico oil spill will be to implement additional regulations and mandate more safety equipment such as remote shutoff devices that enable rig operators to activate blowout preventers even if a rig must be abandoned or ends up destroyed. The Deepwater Horizon rig operated with no such device.
But there comes a time, Tainter cautions, when the returns from additional complexity begin to diminish and ultimately turn negative--that is, additional complexity can result in a reduction of resources, safety, security and other measures of societal well-being. When he wrote his book in 1988, Tainter already believed that our global society was experiencing diminishing returns on additional complexity. Might we now be reaching the point where additional complexity brings negative returns?
It's the end of the world, again
As luck would have it, I spent the better part of the past year researching a book about expert predictions and so I have several shelves full of books written by environmentalists who said the population is too big to feed, economic growth is unsustainable, natural processes are overwhelmed, oil and other resources are running out, and that we have passed the point of no return. Collapse is inevitable, they said. And coming soon.Some of these books are of recent vintage. But most date from the late 1960s and early 1970s, the Golden Age of the jeremiad. Several are older than that. Harrison Brown's The Challenge of Man's Future was published in 1954. Our Plundered Planet by Fairfield Osborn and The Road to Survival by William Vogt were both published in 1948, both became international best-sellers, and both made a big impression on a teenager named Paul Ehrlich -- who would grow up to write The Population Bomb in 1968 and be the Bill McKibben of the 1970s.
And let's not forget the original gloomster, Thomas Robert Malthus, whose magnum opus demonstrated conclusively that collapse was inevitable and coming soon. It was published in 1798.
Congressional Bill Proposes Quadrupling Oil Tax
U.S. congressional negotiators on Thursday proposed quadrupling an oil tax that finances a federal oil-spill trust fund, the latest fallout for the industry following a vast oil spill in the Gulf of Mexico.The tax would increase to 32 cents a barrel, from 8 cents currently, under a plan worked out between House and Senate tax-writing committees. The Oil Spill Liability Trust Fund is a source of funding for oil-spill cleanups.
Japan imports 30,000 mt of bunker fuel in May on supply shortage
Tokyo (Platts)- Japan, typically an exporter of high sulfur fuel oil, is importing around 30,000 mt of the fuel for the bunker market for May as lower refinery operating rates in the country have tightened supply, trade sources said Friday.
Coal shortage slows down cement expansion
Expansion of cement production capacities in the southern states is likely to be slower than expected due to shortage in coal supplies, the main fuel.
Petsec Plans to Boost Oil Reserves
Despite the global sharemarket uncertainty and tumbling energy prices, Mr Fern reiterated earlier forecasts of natural gas prices ranging between US $4 and US $5 per thousand cubic feet (Mcf) during 2010 and 2011."The decline in natural gas prices from 2008 levels has caused a 60 percent reduction in drilling and development service costs from the peak of 2007/2008," he said.
Conflict of Interest Worries Raised in Spill Tests
Local environmental officials throughout the Gulf Coast are feverishly collecting water, sediment and marine animal tissue samples that will be used in the coming months to help track pollution levels resulting from the Deepwater Horizon oil spill.Hundreds of millions of dollars are at stake, since those readings will be used by the federal government and courts to establish liability claims against BP. But the laboratory that officials have chosen to process virtually all of the samples is part of an oil and gas services company in Texas that counts oil firms, including BP, among its biggest clients.
Spill May Force Long-term Rise in Insurance Cost
In the wake of last month's Deepwater Horizon disaster in the Gulf of Mexico, insurers that had focused in recent years on the possibility of a hurricane sinking an offshore platform are reconsidering the risk of drilling even when the skies are clear.The price to insure offshore rigs will almost certainly rise as the accident's cost to the insurance industry becomes clearer. Premiums may remain permanently higher if the investigation of the disaster reveals previously unknown dangers, or if the inevitable legal wrangling breaks new ground in assigning blame more broadly than insurers expected.
Oil spill: How much is a pelican worth?
NEW YORK (CNNMoney.com) -- Just how much is a dead pelican worth? BP is about to find out.As the owner of the still-leaking oil well in the Gulf of Mexico, the oil giant will pay billions of dollars in damages, much of which will compensate for the birds, fish, mammals and plants that are killed by the accident.
Analysis - BP's Success Continues Despite Tragedy
BP, one of six supermajors, is the third largest oil company in the world. The company is also the leading operator in the deepwater GOM, producing over 400,000 b/d from operated fields including Thunder Horse, Atlantis, and Mad Dog, and holds interests in non-operated fields including Mars and Ursa. BP also holds the largest number of leases in the deepwater GOM with more than 650 leases in waters deeper than 1,250 ft.
U.S. ship lanes, Gulf ports open despite oil spill
HOUSTON (Reuters) - U.S. shipping lanes and ports on the Gulf of Mexico remained open Friday despite the BP Plc oil spill, officials said.There were no reports of ships needing cleaning, so there were no delays for decontamination, a port and U.S. Coast Guard spokesmen said.
Oil capture rate down to 2,200 barrels at leak: BP
(Reuters) - BP Plc said the amount of crude oil it siphoned from the U.S. Gulf of Mexico leak fell to 2,200 barrels (92,400 gallons/350,000 liters) in the 24-hour period ended at midnight on Thursday."The flow changes, it's not constant," BP spokesman John Curry said on Friday.
Congressman wants Gulf health centers to aid workers hit by oil spill
Washington (CNN) -- Concerned about people who are working to clean up the Gulf oil spill, a Louisiana congressman has asked the White House to set up temporary health care centers along the Gulf Coast to serve volunteers and workers.Democratic U.S. Rep. Charlie Melancon envisions such clinics as providing "medical checkups to people who have come in contact with the oil and assist in monitoring the health effects of the oil leak on south Louisianians."
Act to save UK from electricity shortage
In the 1930s, Winston Churchill was a lone voice as he warned against the dangers of Germany's rearmament and called on Britain to strengthen itself.He was ignored, but proved to be right as Hitler grew his power and eventually started the Second World War.
Eighty years on, his grandson Rupert Soames followed in his footsteps in a speech to Scottish Engineering members, warning about the serious consequences of the lack of coherent energy policy in the UK.
Shell's shale gas hunt in Sweden under fire
(Reuters) - Royal Dutch Shell said on Friday it was drilling the second of three wells looking for shale gas in Sweden, where the opposition says it will stop Shell's gas hunt if it wins elections on September 19. The center-left opposition is on course to win the vote according to the latest polls.
Canada set to announce heavy truck emission curbs
(Reuters) - Canada on Friday will announce curbs on greenhouse gas emissions for heavy-duty vehicles like tractor trailers, the Environment Ministry said on Thursday night.
Toyota to partner with electric carmaker Tesla Motors
NEW YORK (CNNMoney.com) -- Toyota Motors will invest $50 million in electric car maker Tesla, the companies announced Thursday, and form a partnership aimed at developing new technology.Tesla also announced plans to purchase part of a plant owned by Toyota in Fremont California, which had been operated as a joint venture between General Motors and Toyota.
Lester Brown: Reclaiming the streets
Cars promise mobility, and in a largely rural setting they provide it. But in an urbanizing world, where more than half of us live in cities, there is an inherent conflict between the automobile and the city. After a point, as their numbers multiply, automobiles provide not mobility but immobility, as well as increased air pollution and the health problems that come with it. Urban transport systems based on a combination of rail lines, bus lines, bicycle pathways, and pedestrian walkways offer the best of all possible worlds in providing mobility, low-cost transportation, and a healthy urban environment.
Fair Food Matters announces 'Eat Local, Kalamazoo' events
"Eat Local, Kalamazoo," a season-long series of free public events all about local food, kicked off on May 4, and the season schedule of events is now available.
AAA predicts jump in Memorial Day travelers
NEW YORK - More Americans will hit the highways and airports over the Memorial Day holiday weekend, but they'll probably spend much less than last year, according to a study released Thursday by AAA.The travel group said about 32.1 million people are expected to take trips during the final weekend in May. About 30.5 million Americans traveled during the same weekend last year.
Oil falls below $70 amid Europe growth fears
Oil prices fell below $70 a barrel Friday amid concerns that Europe's financial crisis may stifle a global economic recovery and depress demand for crude.By early afternoon in Europe, benchmark crude for June delivery was down $1.86 to $68.28 a barrel in electronic trading on the New York Mercantile Exchange. The July contract lost $1.68 to settle at $70.80 a barrel Thursday.
Crude has fallen about 20 percent so far this month after touching an 18-month high of $87.15 on May 3 as investor confidence tumbled amid fears deep government spending cuts in Greece, Spain, Italy and Portugal to stave off a debt default will hurt European economic growth.
Record U.S. Fuel Supply Cools Refining Margins
(Bloomberg) -- U.S. petroleum inventories climbed to the highest level in at least 20 years for the middle of May, driving down the profit margin from refining crude into gasoline and heating oil from a 15-month high.Supplies of oil and all petroleum-based fuels jumped to 1.81 billion barrels in the week ended May 14, the highest stockpiles on a seasonal basis in Energy Department data through 1990. The margin, or crack spread, to process oil into gasoline and heating oil has tumbled 19 percent since last week, the biggest drop since the week ended Nov. 6.
Saras to Benefit From Weaker Euro, Margin Rebound, Moratti Says
(Bloomberg) -- Saras SpA, owner of the largest oil refinery in the Mediterranean, is benefitting from a weaker euro and a rebound in crude-processing margins this quarter.“The refining margins recovery already started in March and it’s likely to continue through the summer with the driving season,” Vice Chairman Angelo Moratti said in an interview at Saras’s headquarters in Milan. The euro’s decline against the dollar is beneficial because Saras pays bills in euros and generates revenue in dollars.
Could water worries scupper shale gas?
Water shortages could pose as great a threat to energy security as political instability or terrorism, leading peak oil theorist Matt Simmons told delegates at the Global Marine Renewable Energy Conference in Seattle, Washington, last month.The energy investment banker, who has long warned of dwindling energy supplies, said concerns about water quality in the US could also bring shale gas exploration and production to a halt. Fraccing operations in the US’s Barnett shale gas field alone will consume some 100 billion gallons of water, he said. ‘Water scarcity poses a far greater risk than energy scarcity. Without water, society dies. Without water, most energy sources stop.’
Natural-Gas Sales Fell a Record 3.4% Last Year, Cedigaz Says
(Bloomberg) -- Global sales of natural gas declined by a record 3.4 percent in 2009 because of the global economic downturn, said Cedigaz, a gas industry association.“This recession marked a halt in the gradual and substantial growth of world gas output recorded since 1998 and was the worst drop ever registered in the global gas business since the beginning of gas market developments worldwide,” according to the statement e-mailed late yesterday.
Statoil Dealing With ‘Unstable Well’ at Gullfaks C
(Bloomberg) -- Statoil ASA partially evacuated platform C at the Gullfaks field in the North Sea after pressure in a well destabilized, shutting production at the facility and the nearby Tordis field.
ONGC Suspends 7 Oil Rigs as Storm Lashes India Coast
(Bloomberg) -- Oil & Natural Gas Corp. stopped work at seven oil rigs in the Bay of Bengal and evacuated staff as tropical cyclone Laila lashed India’s southeastern coast, snapping the anchor of one of the drilling ships.
U.K. North Sea Gas, Oil Fields to Shut for Work Next Month
(Bloomberg) -- Natural-gas and oil fields in the U.K. North Sea will close for planned maintenance next month, cutting pipeline supplies to Britain.
Foes fear long-term 'high-and-wide' corridor
HELENA — Opponents of a Canadian oil giant's plan to use oversized tucks to transport 207 massive oil sands modules along Montana's highways en route to the Alberta's Kearl Lake tar sands region later this year believe the strategy could pave the way for a permanent "high-and-wide" industrial corridor through the state.Concerns about long-term environmental, economic and social impacts have citizens in Montana, Idaho and Alberta raising alarm bells.
Statoil Sells 40% Stake in Brazil Field to Sinochem
(Bloomberg) -- Statoil ASA, Norway’s largest oil and natural gas company, agreed to sell a 40 percent stake in the Brazilian offshore Peregrino field to China’s Sinochem Group for $3.07 billion in cash.The two companies also agreed to jointly seek more opportunities in Brazil and elsewhere, Statoil Chief Executive Officer Helge Lund said in a statement today.
Louisiana marshes hit by Gulf oil slick
VENICE, Louisiana (AFP) – Crude oil oozed into US wetlands Friday as furious Louisiana officials accused BP of destroying fragile marshes and leaving coastal fishing communities in ruin.
Gulf recovered from last big oil spill, but is this one different?
In terms of blowouts, Ixtoc 1 was a monster — until the ongoing BP leak, the largest accidental spill in history. Some 3.3 million barrels of oil gushed over nearly 10 months, spreading an oil slick as far north as Texas, where gooey tar balls washed up on beaches.Surprisingly, Mexican scientists say that Campeche Sound itself recovered rather quickly, and a sizable shrimp industry returned to normal within two years.
A month in, outrage over Gulf oil spill grows
With each passing day, outrage grows. State and local officials say the federal government isn't doing enough. President Barack Obama faults the agency that oversees offshore drilling. Republicans say the Coast Guard and the administration should have done more.A deep, stagnant ooze sat in the middle of a particularly devastated marsh off the Louisiana coast where Emily Guidry Schatzel of the National Wildlife Federation was examining stained reeds.
"This is just heartbreaking," she said with a sigh. "I can't believe it."
Louisiana Sandbar Plan Worries Some Scientists
Louisiana officials are pleading for federal approval to build colossal sandbars outside barrier islands in the Gulf of Mexico to protect the state's vast wetlands from the oil spurting from the Deepwater Horizon rig.
WH asks BP to share more information on spill
WASHINGTON – The White House is asking BP PLC to publicly disclose more information about the Gulf oil spill including measurements of the size of the leak 5,000 feet under the sea and air quality.White House Press Secretary Robert Gibbs said Thursday that the White House is writing to BP asking the company to put that information on its website and be more transparent about its response.
BP Cap Waiver May Be Moot in Light of Potential Safety Lapses
(Bloomberg) -- BP Plc’s pledge to waive a $75 million limit on environmental damages for its Gulf of Mexico oil spill may prove an empty gesture if safety violations played a role in the disaster.
Estimated rate of oil spill no longer holds up
One month after the start of a massive oil spill in the Gulf of Mexico, federal officials said Thursday that oil was gushing out of the ground faster than they had estimated -- and that it would be days before they had a firm handle on the rate.
Iraq May Maintain Growth of 7% This Year, Central Bank Says
(Bloomberg) -- Iraq may maintain an economic growth rate of about 7 percent this year, led by oil, Central Bank Governor Sinan Al-Shabibi said.Growth was about 7 percent as well in 2009, al-Shabibi said in an interview yesterday at an economic conference in Beirut. “Of course oil output is still the main driver,” he said.
Power supply for whole areas of Bangkok expected to resume in 1 to 2 days
The Metropolitan Electricity Authority (MEA) expects to be able to resume electricity supply for the whole area of capital Bangkok by the forthcoming 1 to 2 days, MEA Governor Pornthep Thanyapongchai said Friday.
Australian Adviser Garnaut Urges Changes to Mine Tax
(Bloomberg) -- Ross Garnaut, Australia’s adviser on climate change, called for changes to the planned 40 percent profit tax on resource to maintain the industry’s growth.Garnaut, who designed the government’s emissions trading plan, said the tax should become “neutral,” guaranteeing stability for investors and companies affected such as and Rio Tinto Group. It should allow for offsetting exploration losses and changes need to be made in how it is applied to development and production, he said.
Medvedev joins chorus of disapproval
Russian President Dmitry Medvedev has given his support to bids to halt construction of Gazprom's glass-and-steel skyscraper in St Petersburg's historic city centre, according to reports.
Patent Office Expands Expedited Reviews of ‘Green Technology’
(Bloomberg) -- The U.S. plans to expand a program that reduces by 12 months the processing time for patents on inventions intended to improve the environment.The program is designed to fast-track as many as 3,000 applications related to technology that promotes renewable energy and conservation. The Patent and Trademark Office is broadening the criteria for participation so more applications qualify, according to a notice to be published in the Federal Register today and scheduled to take effect immediately.
Obama aims for better mileage years into future
WASHINGTON - Looking to a day when cars and trucks use far less gasoline or none at all, President Barack Obama plans to order the government to prepare fuel efficiency standards for many years from now and renew its focus on electric-powered vehicles.Obama is also asking federal agencies to extend a national fuel-efficiency program to big rig and work trucks for the first time, beginning in 2014.
The Way We Green to sketch future policy
The City of Edmonton will spend the next year collecting input from people and formulating a plan on how to deal with future environmental challenges. This project, called The Way We Green, will look at everything from our water supply to air quality and food security.The plan will find the environmental balances the city needs to strike in order for Edmonton to endure for the coming decades, Coun. Don Iveson told a news conference Thursday.
Japan power firms spend 23 pct less on CO2 credits
TOKYO (Reuters) - Japan's 10 power companies spent 23 percent less on carbon credits last financial year due to a fall in market prices and also because some firms tapped a less costly type of credit from East European countries.
Australian Climate Law Delay Stalls Carbon-Storing Forest Plans
(Bloomberg) -- Carbon Conscious Ltd., an Australian company that plants gum-trees to absorb greenhouse gas emissions, said demand from customers for forests has stalled after the nation shelved climate-change laws.
Kerry, Pickens let bygones be bygones
WASHINGTON — Call them the odd couple of climate change.Six years ago, oilman T. Boone Pickens paid millions to support TV ads run by Swift Boat Veterans for Truth, a group that attacked Democrat John Kerry's Vietnam War record in the 2004 presidential campaign.
This week, the Texas oilman visited Kerry to endorse a sweeping climate change bill the Massachusetts senator is pushing in the Senate.
Warmer winters chill ice fishing
LAKE PLACID -- Ice fishing on Lake Champlain has a long history.But the ice surface is gradually vanishing, sending a message on climate change as it disappears, according to a report presented Thursday at the annual conference of the Adirondack Research Consortium.
Climate Change Hits the Oceans
When scientists say the planet is warming, they usually point to rising air temperatures as proof. That's reasonable enough, especially since the warmth of the air temperature affects us directly so we feel the change the scientists are measuring. But it's also misleading: while the lower atmosphere has been gradually warming over the past 50 years, it happens unevenly, rising sharply for a year or two or even ten, then flattening out. That stutterstep pattern is due to relatively short-lived effects on top of the general warming — an El Nino current in the Pacific making things warmer, for example, or a volcanic eruption like 1991's Mt. Pinatubo producing a cloud of dust that makes things cooler. Over time, these cancel out, but it can be tempting — though incorrect — to think a temporary flattening means global warming has stopped.To get a measure of what's truly going on, scientists look to the oceans — slow to heat up, slow to cool down, and thus less prone to short-term variations.
As oceans get warmer, Congress is facing heat
On the same day that climate researchers reported strong new evidence that the temperatures of the world's oceans are on the rise, teams of America's leading scientists Wednesday called on Congress to face the urgent problem of global warming by raising the cost of greenhouse gas emissions to U.S. industry.The reality of the planet's changing climate was underscored by a new report on ocean temperatures that combined years of conflicting data into what researchers say is a realistic picture of ocean warming and the National Academy of Sciences, which released three major reports on the science behind the climate problem and the urgency with which it must be faced.
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How long could the crude oil spill byproducts hang around? Longer than you may think:
http://mobjectivist.blogspot.com/2010/05/waste-half-life.html
As usual, entropy rules.
Basically, the asphalt hangs around, while the lighter fractions degrade quickly. Benzene likely degrades quite quickly.
Doesn't a person really need to know which pieces do what?
Depends on what you mean by quickly. Aliphatic hydrocarbons biodegrade more quickly than aromatics (of which benzene is one), and benzene is a rather stable aromatic. To paraphrase Keynes, though: in the long run, we are all biodegraded.
It would be more correct to say that the lighter fractions evaporate quickly.
Joules the Chemist
My state function is better than your state function, eh?
The varying biodegradation rates for oil fractions might have the appearance of something stochastic, but there are chemical reasons why some things break down faster than others.
Biodegradation of a mixture is a rather messy affair, and difficult to measure. Isolates break down differently than when mixed - which seems odd from a purely entropic standpoint.
Crude oil itself is a biodegradation mixture. Have you looked at its composition, entropically speaking?
The beauty of the maximum entropy principle is that you don't have to know much more than an average breakdown rate. Because of the variety, both in terms of complexity and disorder, around this average value you can usually count on the principle holding.
An individual reaction may not be stochastic but the combination of many reactants will make it appear to follow that law.
i'm not sure i buy that idea 100 % when applied to hydrocarbon mixtures. i am saying that a compositional analysis doesn't generally result in an accurate prediction of gas/oil equilibrium over anything except a narrow range of pressure and temperature.
http://www.telegraph.co.uk/finance/comment/jeffrandall/7746806/Whatever-...
Whatever Germany does, the euro as we know it is dead
Angela Merkel's ban on short-selling is just a distraction from the horror to come
The Leap 2020 folks think the euro will be just fine. Of course, they also predicted that the dollar would collapse last summer, and here we are going on a year past the deadline.
The Europeans on staff at TOD don't seem to think the euro is in trouble. Me, I think it is. I think some countries will be booted out, or some leave voluntarily. It can't go on.
If one tends towards an Austrian POV - both are in trouble because both are fiat.
The FRN is doomed over time due to being based on debt and that debt used to be able to be serviced via cheap energy.
The WSJ is reporting German Parliament Approves Euro-Zone Bailout
So apparently the proposed bail out is still going along.
According to zFacts.com, in roughly 12 days the US Federal debt will reach the $13 trillion threshold and increasing at a $4 billion a day rate. Added to that debt is the residual toxic debt at the FED, Fannie,Freddie and FHA. Given that mortgage foreclosure is understated now, with maybe 5 million added over the next three years with U 6 unemployment at 17% I disagree, but with respect, to the value of the US dollar going forward. The European VAT tax and high gas taxes provides a tax base that we do not have.
The fact that the dollar looks good to people right now is a testament to how bad the Euro looks to people at the moment, and not any inherent strength of the dollar. Its not that the dollar or the financial future of the US looks good, its that there doesn't seem to be another major currency alternative.
Exactly. The dollar is the prettiest horse at the glue factory.
As Ilargi/Stoneleigh pointed out yesterday, German policy is to drive down the Euro to somewhere close to the $1.10 - $1.15 range.
Get blinded by the dust the tires are kicking up if you want, but you'd see more by focusing on the drivetrain, German engineered quality, of course.
Sure, but correct me if I'm wrong: From the worker's perspective, "beggar thy neighbor" monetary policy is a double-edged sword. Your exports may become more attractive to the rest of the world but at the same time, you are telling the world that your work force is overpaid.
This business of driving down one's own currency in order to export more easily seems to work, at least for certain segments of the economy.If the dollar falls and Catepillar makes a lot of sales overseas as a result, this is fine for the company and its employees, but not so good for me-I like to buy some imported goods occasionally with dollars earned within the domestic economy, and I must pay a lot more for my imported goods.
In the end it seems as if this currency manipulation game must be one that can only be described as a race to the bottom.
Of course it works in terms of gaining a short term advantage.
But in the end, when all is said and done,what good is it going to do Germany to earn a lot of dollars if we drive down the dollar because they drove down the Euro and they drive down the Euro some more.....and we drive down the dollar some more.....
Of course if you want to look at this as a knife or sword fight, and you are willing to bleed a little in hopes of causing your opponent to bleed a LOT MORE , and thus winning the fight.....maybe it makes sense.
Somebody set me straight in theoretical terms.
You pretty much got it except that for us to buy their goods if they are not buying our more expensive goods they have to lend us the money to do it. I.e they have to give us back the money we sent them before to buy more goods. We get marked as a debtor and them as a creditor.
If you don't care which we don't then you want to stronger currency so you get lots of free stuff as long as they keep giving you the money back to buy more.
Probably best to think of it as your drinking partner racing you to get drunk and buying your beers for you than a sword fight.
Work until people actually want to get paid then it becomes a bit of a issue.
Leanan,
Very well said!
Whats important is the relative value of fiat currencies vs assets. Right now assets are falling in general vs fiat currencies making them more valuable. Extreme leverage is still available albeit in a market with extreme volatility. Thus making large piles of cash making risky bets is still possible. Hard money is needed to fuel leverage plays. I have ti imagine practically nothing is going into long term basic investment in infrastructure or production etc. This lack of investment actually allows more money to go into speculative investments.
So its a grand casino at the top sitting on a worn out economy. If so then the real question is what is meaningful ? By this I mean if the economy is effectively topped out for intrinsic reasons no amount of financial games can cause growth in general they simply increase debt levels or result in destruction of wealth.
No telling how long it can go on as its really just play acting now. I guess it will run until it become clear to the majority that no real growth is possible and that could take a while. However is its a farce the house of cards can come crashing down at any moment.
So there is nothing really there the intrinsic reason fiat currencies work which is mild inflation and steady growth has failed thus all debt based currencies have already failed we simply don't have replacements since prices are still based on ready access to credit aka debt. The correct financial model for this sort of situation which is to allow assets values to fall to their cash clearing prices so they can act as a store of wealth can't happen as long as the governments provide liquidity.
And we can't have any real growth as we have overcapacity throughout the real economy.
So the stable store of wealth prices if you will are well below the current casino price scheme and we are unable to create true stores of wealth to transition off our debt based fiat money. Nothing intrinsically wrong with fiat but money needs to be stabilized in productive enterprises with no debt and in general the total amount of money needs to probably shrink dramatically.
Thus its a sort of twilight zone period where its hard to attach meaning to anything.
For example consider interest rates which are at historic lows. However say you buy a house now for 400k 10% down and its losing 30k a year in value your real interest rates are astronomical. I'm not even sure how to convert such a situation to effective interest. The problem is your sitting on unrealized losses that may have to be realized by force at some point in the future. The mix of continued use of amortization with losses like this are simply nasty. True valuations are close to the cash clearing prices and no one wants to admit it. Thus the twilight zone economy situation. Delaying tactics such as running huge government deficits can't change the fact that the intrinsic support for fiat has already failed.
Whats important in my mind is do we really have the resources to support even this fiasco ?
If we do then we are probably looking at a fairly long drawn out deflationary scenario with money slowly converting to productive assets over time. If not then even the above situation is unstable. If our resource base is really dwindling then we simply cannot even play the games we are playing for long.
So we shall see.
so true:
"True valuations are close to the cash clearing prices and no one wants to admit it. "
with respect to housing prices in my area of the UK, heck prob. rest of the UK and the States.
brought to mind spike Millgans sketches on Q8 with the politicians shuffling off stage left, muttering
" what do we do now ,what do we do now..........."
Forbin
forbin - totally agree wrt housing in the UK. Here in East Sussex I can still only dream of buying a tiny one bedroom box. The 'market' reckons the 'value' is about £160,000 even after the recent 'correction'. Banks now will not lend unless you have 10% down payment, but if you want the best interest rates you ideally should have 25%. So even a 10% deposit on a £160,000 box would require £16,000 in savings. Once all the fees are included you would reasonably need £20,000 in savings. No one I know has the ability to save that sort of cash, and still afford to live in the South. The only possibility is to be gifted the money by family/parents which would of course come out of their retirement savings. The typical rental value for this type of one bedroom box is about £650 per month. And this is only for a squalid one bedroom box. Great for raising a family in! Trying to buy a three bedroom house with a small garden and you are talking £250,000 and a deposit of at least one year's pre-tax income.
And all this after the supposed 'correction'. There is no way that property is either valued correctly in the 'market' at the moment nor valued fairly and morally correct. Ten years ago the same one bedroom box was on the market for just £65,000 which was well within reach of a first time buyer trying to get on the property ladder. The problem is that a lot of property was bought as buy-to-let investments and the landlords are stuck with it. They can't afford to take a hit so they put it on the market at ridiculous prices.
When I hear the triumphant tone of voice by the newsreaders when the announce that 'the property market was up over April by 1.1% blah blah blah' I want to kick the bloody television out the window. The last bloody thing we need is rising property prices leading us into la-la land of Utopian bliss. What we need is government stipulated maximum prices for property within type and area. And anyone who has two or more houses should have to pay ten times the amount of council tax on the second homes. One home is a human right. The second is a luxury and they should be made to contribute to social housing via hefty increases in their council tax.
There was an interesting commentary posted the other day on The Automatic Earth regarding the housing situation in Ireland. Your description of the situation in Britain sounds like a close parallel. Around here, where many new houses have been constructed as second homes for vacation or retirement, there appear to be many more houses than buyers at present. During the last of the bubble period, land prices went ballistic.
Worse, there were many developments which should not have been done and some which were intentional fraud. There's now a hangover of lots in developments which were not completed which are available for much less than the first sales price. I've bought two of them out of foreclosure at quite low prices, which I hope to sell if the economy recovers somewhat. I'll make money even if I sell them for only 1/4 the price at the height of the bubble. Of course, if the price of oil (and thus gasoline and diesel) jumps up again, these places out in the country will not be viable...
E. Swanson
Pretty much the same situation in the US. "They" have managed to slow down the financial collapse effectively leaving the situation untenable. Thus absolutely no way does the current financial situation come close to reflecting reality. Under this a deeper look suggests at them minimum recessions as far as you can see and more realistically a long drawn out depression. However this view exists only in the context of a already warped financial situation that requires people to be smart enough to see it or take a fatal plunge if you will. All kinds of losses have yet to be cleared. You mention all these landlords well I assure you many are bleeding cash day in and day out and the moment they throw in the towel their losses will just start to be booked.
If we are short resources then I'm arguing that resources will steadily move in front if you will the slowed financial crash as the rates seem to be fairly dramatically different. Even if this means for example that oil prices say end the year 10-20% higher than right now say around 90 or so look to next year and the year after that its moving much faster than the financial world is clearing its debts and losses. I'm not sure how commodity and food prices work through the economy but lets say they are increasing at 20% per year and this works into say a 1-2% or so reduction in wealth that can be spent on other goods and services if not more. Attempts to hold the financial situation steady is causing a divergence to open up. Indeed this year we have seen prices for oil rise over 50% thus the divergence right now is perhaps 5-10% worse than it was at the start of the year.
And in a sense this is based on the previous fair price not the current inflated one and does not even reflect recession pricing. Basically things went from being 50% over valued to say 55% over valued or something like that. If you throw in estimates of pricing during a deep recession its closer to 60% or higher with rising commodity prices feeding the flames.
Sorry this simply is not stable. Its still simply insane no matter how you slice and dice it.
We would be having problems with commodity prices even if things were back down to a normal recession situation coming off a smaller bubble.
Its simply to messed up to be predictive.
This approach has a number of serious downsides as well. Firstly, £650pm on a property "worth" £165,000 is only 4.7% gross return - and when you take out costs (council rates, insurance, maintenance, loan interest), it would be even more modest (setting aside unrealised capital gain).
So if you then penalise landlords even further, either rents will increase steeply, or money will flow out of the investment property market, leaving renters even less choice within various price brackets. Some economists argue infatuation with property (in Anglo countries at least - UK, USA, Australia, etc) means capital is used up in unproductive ways, while it could be used "better". Economists would say such things, because they know nothing about the real world.
In countries where quite a large proportion of the population rent rather than own a home, investment in property contributes to a valuable, in fact vital, social policy outcome - housing availability (and more choice) for a lot of people who cannot afford to buy a home. Social housing programs funded by government is another approach, but it is generally aimed at the most marginalised people in a community. A lot of working / middle class people want or need to rent, but will never get social (public) housing.
And from a selfish point of view (as a multiple landlord for many years) - the last ten years has seen our investment properties perform better than the stock markets, and other places to build retirement wealth. Plus we have had happy tenants living in much better homes than they could afford to buy. And quite often they wish to rent anyway, having only a 1-3 year time horizon in that community or region.
Well in a sense its not renters vs buyers driving up prices but bankers willing to allow borrowing on ever looser terms. If terms where stricter then you would get "cheap" houses and happy renters for all.
The problem is rents and mortgages vs income ratios not rent vs own. To keep these down you need to encourage savings and large down payments. For landlords this often means larger down payments than what and owner would be required. Nothing nasty about it but if your paying more down then and owner planing to live there you can rent your place for less than they do and this ensures you won't default and also helps owners with smaller equity stakes to sell as they cannot rent at market rates easily.
The key is focusing on large equity stakes for everyone this is what stabilizes a housing market. And if you have a decent equity stake and you think prices are to low well you rent the place out so things tend to balance out and you don't put your house up for sale. Require 40% down and you don't ever have a housing bubble. Probably results in kids staying with their parents longer or renting longer but so friggin what makes for a better society in the long run if people have to work and save to get what they want and the housing stock is better utilized and better cared for as it should be. People are proud of their homes and want to by quality when they can finally buy. More people will choose to stay in their hometowns and inherit vs moving if possible etc. Devaluation via inflation would be frowned upon as its real effects on savers would be obvious etc.
I disagree with that strongly - very few people can afford 40% deposit ("down") - even when prices are reasonable, let alone when they are bubbling. You wind up with a whole lot of young middle class either sponging off their parents (not a good social outcome) - or renting forever in the areas they want to live in (also not good).
Otherwise a lot of what you say is fine - I was just responding to the point up above where someone wanted to penalise those who own more than one property. That leads to bad social outcomes, as I explained, since the available rental market dries up. The reality is that once you own one property, getting 2,3,4 etc is not that hard - the challenge is getting young people and young families into their first affordable home.
My bigger concern (certainly in the Australian big-city context) is that affordable housing is right out on the fringes - 40-60km from the city and sometimes more. These people are basically trading equity in their cheaper land & homes for VERY long commutes, and probably a dire social environment, long term. And they do not seem to factor in that over the next 10-20 years, their fuel costs (and commutes) are just going to get worse.
Germany has a 40% down requirement.
http://www.thefreelibrary.com/Mortgage+bond+and+MBS+market+development+i...
I don't really care where people "want to live" thats not the point the point is financial stability.
This is all about money and not about how people feel. Owning a home is a privilege and responsibility not a right if nothing else simply because a significant amount of resources go into building a home.
As far as people not being able to afford a home with 40% down well I'd imagine prices would be significantly lower and 40% would be similar to say 30% at todays prices. i.e prices would probably be on average a bit lower. People with money would have plenty of renters and the real estate investments secure.
And it would be as close to 100% stable as you could get.
That's very Stalinist of you - "where people want to live" is what it is ALL about - financial stability is not a social outcome at all!
And I would like to see the detail of this comparison - the number of young people in Germany (under 30, say) who buy a home with a genuine 40% deposit, (a) without a parental inheritance, and (b) in a part of the world that most of us would think reasonable - ie, in a vibrant city environment, and not out in the boondocks.
Its simple prudence my friend not stalinism. And yes a contribution to the down payment from the parents is almost always needed. So even after the parents buy a home they have to continue to save for their children.
In general most Germans rent at least when they are younger. Many take lower paying jobs in the smaller towns to get a chance at owning a home. Causes nasty side effects like have small towns with vibrant communities of all ages and a functional local economy we would not want things like that to happen.
Btw steep down payments are a part of many cultures some western nations are the exception not the rule. The same basic situation applies in India and China. With 20%-40% down payments the norm.
When banks actually made loans on homes and held them similar stringent rules applied even in the west.
Historically a lot of the relaxation of the rules had to do with the combination of the end of WWII and the follow on boomer generation.
I will note that Germany was able to integrate East Germany without a tremendous change in their rules for purchasing homes so you don't have too. Indeed if you dig into the US you find that the way the GI bill which funded the post war housing boom was distributed was incredibly corrupt favoring new construction over existing construction leading to the gutting of our cities in the US and the expansion of suburbia.
There is really nothing good about whats happened once you dig in and understand how things have worked.
It fairly quickly and early on turned into a grand ponzi scheme with so many people playing it came to be considered normal. Until we finally have reached to point that they we are actually running out of players both because of the cost of getting into the game now and the simple demographic situation of aging baby boomers.
The evolution of housing in England is of course different to some extent but the basics are the same along with Canada and Australia etc.
You can certainly still have bubbles China and even India are experiencing housing bubbles right not its not by any means impossible indeed the US had one preceding the depression even with 50% down payment requirements. Its not a cure all by any means but speculators are burning a lot of their own and their families money in the process something that burns itself out sooner than later with far smaller losses to the public.
And in the end thats the real problem I have no desire to pay for others to choose to buy where they want to live its not a social contract that I should be forced to make its fairly obvious now that everyone is forced to pay to support this social program regardless of if they benefited or not. And we really don't yet know what the real bill will be and probably won't for decades.
Shelter should have never ever become the domain of speculation and social engineering in the end doing so is simply wrong.
In countries which do not have a very developed credit system the effective downpayment is closer to 100%. Even in Mexico until recently getting a mortgage was very, very hard. Or think of India where credit for consumers is generally hard to come by.
The whole idea the homeownership is desirable for a large part of the population is questionable, or at least has some pretty good counter arguments.
Homeownership without a liquid market to buy and sell in, with low transaction costs has the potential to demobilize the labor force because it is simply too expensive to buy/sell in order to take a job beyond commuting distance.
It also implicitly presupposes that housing prices are at least stable, if not are increasing over the applicable horizon of analysis. Otherwise, as Memmel pointed out, the effective interest rate goes skywards and the net worth of the homeowner is potentially significantly impaired.
Renting gives one a lot of optionality visa viz owning, and options have value.
Even on a cash basis renting tends to be cheaper than buying on a per square foot basis.
Rgds
WeekendPeak
This could be subject to a long discussion, and I need to confine my views to the Australian context, but I would argue that the family home ("shelter") has long been a form of wealth accumulation that is untaxed, fairly risk-free, and also doing a lot for social amenity - people like to own a property, rather than being a tenant of someone else - with all the restrictions, and lack of long-term tenure. You might want to paint all the walls purple, or plant fruit-trees, or build a shed ... and many people live in three or four different properties during their working lives - buy and sell.
To pick up Weekend's point, in our major cities (where real estate is very expensive), it has long been the case that you could rent a place that was far grander than you could buy it. And over a life-time, the cost of that living space can be less - especially if you started with only 10-20% deposit on a mortgage. It requires some discipline to bank the difference for decades, so that you are building an asset base for retirement outside of your family home. Because the reality remains that retirees can enjoy their retirement far better if and when they own a home free and clear of debt. In many cases they sell that expensive home, and move to a different location not tied to the commuter burbs - a beach, the country, seniors village, whatever.
But in any case, we are certainly selling down our modest investment portfolio, because (a) I think there is a bubble that must deflate - not burst - soon, and (b) having wealth in pension funds is much more tax-effective once you stop full-time work. But buying investment property was the best thing we ever did, to now fund a retirement lifestyle - but there again, Australia has never had a genuine real estate downturn, and certainly never a burst bubble. Demand remains too strong, and banking regulations have always been tougher than in the US.
Haven't read it yet, but any book that starts out by quoting The Onion is worth a read:
It would seem that betting on the share market, or currencies, or futures, or gold - are much more guilty of this than the housing market. The housing bubbles didn't burst because house prices were too high - many other factors were in play.
One must take this from the standpoint of a anti Euro ideology. This may be closer to the truth:
If this proves to be the case, it looks like Germany wins the war. Only sixty years later...
All of Germany's recent actions have to be put into the context of trade competition. Obama said he wanted to see US exports double and his team have been trying to lower the value of the USD. Germany, either the first or the second largest exporter in the world said, you're a nice guy O, a huge improvement on the idiot who previously led the US, but no you can't have our markets.
A little controlled chaos in Europe, a little slap across the bare butts of the naked short sellers and voila, the Euro is down and the USD up.
Germany wins this round.
This is a win win for Germany the faster the Euro falls the more competitive, they become, the better it is for German Exports. Being part of the weak Euro group is the best thing that could happen to them. If they go back too the Mark it will only appreciate because of the strength of the German economy, and they would lose competitiveness.
That seems about right from my vantage point in France. The Brits are in bigtime denial---
many having lost their retire-in-the-cheap-sunny-south pounds in Icelandic Bank scams.
They're returning to UK if their funds are in or linked to Sterling. It's painful.
I find that as long as I don't think like a trader my Euros look better than my $.
Just MHO as a pimple on the face of the dying world.
Thought this chart looked interesting. Problem banks go from 90 to 775 in only two years.
Problem bank list hits 775
Ron P.
I have to wonder how many banks are weak or close to problem bank status.
The reason is assuming the economy has probably flat lined and real estate is a big part of the problem the list of banks that should join the problem list over the next 2-3 years is probably 2x-3x whats listed now.
Given the rate we are closing them its a sort of perpetual motion machine as bad banks that are left open in a sense sap customers from banks that could develop a stable balance sheet. And of course pile on losses making closure more and more expensive over time.
So I think this "shadow inventory" of weak institutions is probably far more important if its as large as I think then things are just now getting warmed up and we have a long long way to go unless we get a V shaped recovery.
So the overall distribution of the relative health of banks would be a killer stat and I suspect its a tip of the iceberg situation.
Use history as a guide.
Check out the timelines for problems during the Great depression in teh 1930's. The Stock Crash was in '29 but the bottom, including bank failures, if memory serves was '32/'33 timeframe.
So in my mind our problems in 2010 are around what was seen in 1931. Problems are not the same but the linkage between problems will follow similar timelines.
We have another year or so before people throw in the towel and realize we can't salvage everything prior to 2008. Once we hit bottom then we can think about stability and recovery. We are not there yet.
Yes but ...
Its not 1931 any more nearer the start of the industrial revolution and oil age.
I agree that in general the financial world is following a somewhat similar pattern however times have indeed changed. This "classic" depression is on top of a world thats "full" or depleted if you will and intrinsically straining at the limits of capacity even with the financial problems.
Its the interplay of theses financial woes which I agree puts us well in line with the 1930's and the real fact we have not accounted for decades of resource extraction in the interm along of course with population growth.
I'm not sure we really have a good model for how these will interact going forward. It won't be good thats for sure but also its hard for me to see how things end. Its a real battle I think between the financial situation and the resource situation. Excess production capacity and a massive debt overhang and a failed banking system vs billions of people simply trying to live in a world with limited resources.
I think right now the plan if there is one is to a assume time will heal everything we just need to keep going. Over time the natural creating of goods and services and steady correction if you will will eventually result in things stabilizing perhaps. Barring another world war we can imagine that if the Great Depression had simply ran a natural course then it would have been the 1940's or 1950's before the world recovered so at least another 10-20 years of financial morass. This fits really well with the way things look today and of course nuclear weapons etc make another world war or even large scale war difficult to execute.
But 10-20 years of painful scrapping along does not fit in my mind with where I think we are on a resource basis not just oil but fishing stocks, water etc etc. At the moment these deeper more fundamental problems are in my opinion simply hidden by the financial issues.
Thus I don't believe the current financial landscape is reflective of the real situation. Certainly its pricing in a long recovery now but its still anticipating a recovery at some point in the future.
I personally don't believe we have 10-20 years left to sort of wander around if you will economically.
Although it may well be early and I think current events are not over yet if we assume that we are actually exiting our latest mini-crisis for the time being then you will note that Oil did not go to 30 this time around or at least not yet. And to be clear the bottom may well not be in yet. If it is and we may well not know for weeks then financial crisis are becoming less and less effective at shrinking the intrinsic economy and its demand for basic raw materials to simply function.
If this thesis is true then there is a sort of crossing event in my opinion where billions of people simply trying to stay alive overwhelms the banking fiasco which is playing out on a longer timescale if you will. Indeed we seem to be oscillating between resources vs money right now which suggest if there is a crossing event its imminent. I think its happening now however thats a guess but if we are in a sense seeing intrinsic demand interacting with money games then it makes sense that we are close if you will to hitting the resource wall probably a few years at most but not 10-20.
So we should I think see a sort of transition event away from our inability to service long term debt and the resulting deflationary forces to a more fundamental situation of simple survival at something close to our current economic level. Debt issues become irrelevant outside of how they effect your competitiveness for resources right now.
To me this means that as financial institutions implode the remaining ones are not made stronger via survival syndrome if you will because demand for debt is falling faster than the financial world is imploding its moving to slow. The reason is to many people are going into survival mode not interested in debt but simply trying to stay alive at the highest short term standard of living they can obtain.
Perhaps the fact that oil prices have risen over the last few years while its becoming obvious that little has happened on the banking front to really fix things highlights the fact that these two forces are moving at different speeds with resources running substantially faster. Certainly for a time outright collapse was averted in the financial sector but non of its intrinsic problems have been solved indeed they are probably worse today. Oil prices have more than doubled while the financial world has at best remained sort of frozen in time.
One more doubling of oil prices over a year would clearly put us back into the danger zone I don't see any intrinsic reason for things to stop now at some magic price point whatever has been steadily driving up oil prices over the last few years has not gone away and its not moving that slow either.
I don't of course no the outcome but I think its a safe bet to assume we will see things happen over the next few years that simply don't have any historical precedent we simply have never run a global economy deep in debt into a resource constrained situation. Its in my opinion the first time this has occurred with to many large variables being unique and thus making historical comparisons dangerous.
Thus in the end the fact that the banking and financial sectors are indicating another Depression means that they are simply fundamentally wrong about whats really going on. Bad enough that thats what they are indicating but worse is the fact that with my thesis this financial forecast is basically and utterly wrong. We are not going into a depression its different this time and worse but its not yet clear what the real outcome is.
http://en.wikipedia.org/wiki/Great_Depression
The parallels to today are uncany...
Only thing is, unlike the 1930's, there will be no cheap energy to bail us out. No fast growth. My prediction remains: the US (and most other countries - it IS a World economy, after all) will default or begin printing money like crazy, resulting in either catastrophic failure or hyperinflation. Neither is a good case to consider; crazy times ahead!
Even now, the price of oil continues to fall, perhaps due to German efforts to counter O's purported intent to debase the greenback. Does anyone in TOD know at what level new drilling shuts down?
Craig
Wow, well put.
Hi Darwinian,
This is one scary graph.
Will somebody who is seriously into this stuff make a few remarks about just how shaky a bank must be to land on this list?
I'm guessing that most of them are small banks out on a rotten commercial real estate limb.???
How the global oil watchdog failed its mission (2/3)
Act II – The shadow of the US
"As revealed by Dr. Colin Campbell, when the 1999 article of Prospect was published, “the IEA evidently got into serious trouble”1. So what happened behind the walls of the International Energy Agency?"
http://petrole.blog.lemonde.fr/2010/05/20/how-the-global-oil-watchdog-fa...
WASHINGTON — President Barack Obama called for first-ever mileage and emissions standards for big rig and work trucks Friday, seeking to limit pollution from the large vehicles that contribute a big share of it.
With a presidential memorandum signed in the Rose Garden, Obama also ordered federal agencies that have already brought out new standards for cars and light trucks for the 2012-2016 model years to begin work on even stronger rules for 2017 and beyond.
http://www.huffingtonpost.com/2010/05/21/obama-fuel-efficiency_n_584547....
Poor Bolivia. The Norwegian oil fortune has been placed in papers all over. Probably quite useful as toilet paper once the crisis hits. If Bolivia follows this strategy, which worked good inthe glorious past with continous economic and energy growth, I wish them good luck. My pension is blown, anyway.
RE: It's the end of the world, again
This is just flat-out wrong. Anyone who has read The Limits to Growth knows that the "baseline" scenario shows continued growth and relative prosperity well into the first decades of the 21st century. The authors only caveat to the contrary was that their model doesn't account for wars and other political and economic upheaval, which might make even that BAU scenario somewhat optimistic.
Furthermore, the authors of LTG went to great pains to explain that they were NOT making precise predictions, but simply running "what if?" scenarios with the help of a computer simulation. The stated goal of LTG, which should be of interest to anyone studying resource depletion and global ecological overshoot, was to better understand the dynamics of population, pollution, resources, and capital.
As such, the author of this article is correct that the fascination with precise predictions is futile at best, if not outright counterproductive for all the reasons given, and in my experience it is something the peak-oil crowd in particular has a weakness for. Witness the fact that you rarely see mentioned in the vast volumes of commentary on Old Man Hubbert the fact that he explicitly gave a range of possible URR for world oil supplies, essentially asking "what if there is 2 trillion BBL instead of 1.5?".
The chilling answer, which should strike fear into the heart of anyone who dismisses the entire subject as "doomsaying", is that it makes little difference to the resulting trajectory of discovery and production, moving the peak by only a few years at best.
The authors of LTG came to much the same conclusion, as their own dozen or so "what if?" scenarios showed that even if given the most wildly optimistic assumptions about stupendous breakthroughs in technologies for food production, resource extraction, recycling, conservation, population planning, and pollution mitigation, all implemented with the worldwide support of policy makers at lightning speed and with minimal cost, we would still face the consequences already in the pipe from our last 20 odd years of global ecological overshoot.
No one is predicting that the world will burn down tomorrow, obviously the future can't be known, but like any prudent homeowner who buys insurance shouldn't we at least be prepared for the consequences if it did?
Cheers,
Jerry
I've read a lot of these sorts of articles in the last few years. They always start the same way:
Question to Mr. Dan Gardner: How many societies -- both large and small -- have suffered just the sort of collapse you mockingly describe? Thousands? Tens of thousands? Yet the author knows that this time "it is different."
When your whole life has been lived inside a bubble, you tend to take a lot for granted, I suppose.
Most ag commodities have been falling with oil lately. Up a little today, but here's something that may give soft wheat a push.
Huge grasshopper outbreak projected in Northwest
http://www.spokesman.com/stories/2010/may/21/huge-grasshopper-outbreak-p...
"Scientists are also warning of a possible outbreak of what is commonly known as the “Mormon Cricket,” an insect that doesn’t fly, but travels in tight packs and devours everything in its path.
“So this would be like biblical, where when they come through an area, they just start eating everything,” Zack said. “There are massive numbers of them, and then when they exit that area, pretty much anything green is gone.”"
Hide your daughters. Male Mormons are sex-crazed.
I'm going to steer clear detailed discussions of the crickets and army ants and African bees and so forth today, but we need not worry too much about them over the short term-that's what insecticides are for.The crickets will not cause the price of corm or wheat to spike noticeably.
I have a hard time understanding why ag commodities are as cheap as they are , currently, although the cyclic nature of the markets, combined with the recent crash putting a lot of down pressure on inputs, is probably explanation enough.
But all the long term trends are such that the prices of farm commodities have nowhere to go in the long run except up.The supply of good farm land is declining steadily, and the fossil inputs farmers are dependent upon are depleting likewise, while the population is still going up.
Add in the likelihood that ag products will be increasingly used as substitutes for products generally made today from petroleum or natural gas,water shortages,.............
I don't understand how ag commodities are priced either. Who sets prices? Farmers? I think not.
No doubt you've heard the one about the farmer who won the 3 million dollar lottery. The local news media came around to interview him. They asked him what he was planning to do with his millions.
He replied "I guess I'll just keep farming until it runs out".
"But all the long term trends are such that the prices of farm commodities have nowhere to go in the long run except up.The supply of good farm land is declining steadily, and the fossil inputs farmers are dependent upon are depleting likewise, while the population is still going up."
I've heard that argument for too many decades, it seemed just as valid then as now. But it hasn't happened. Each time there's an extraordinary spike, everybody races in to plant that crop, then crash, and in the next year or two, the price is worse considering the intervening inflation. The argument is theoretically valid, but you can't say when. Maybe it's the low barriers to entry for a given crop, or that anyone can relieve demand in their yard, or the amount of food waste in the system, or huge surpluses we've run (still massive amounts in the fuel corridor), or a new techno fix comes along to rocket yields, you name it, but the price is still pitifully low. What scares me is when industrial agriculture hits Africa big time. With all the capital flooding in from China and the Middle East, it won't be long.
Until its not.
Whats important are the spikes not numerous factors that allowed food prices to fall again. Each time one of these play a role and become entrenched we still eventually see prices spike again. Foods are definitely different from oil in their market behavior but the result is the same regardless of what happens price spike again and again.
To some extent we see a similar situation in renewable energy with volatile prices causing havoc.
The fact that so far its been price spikes which means the price eventually fell is no assurance that it always will. The spikes themselves indicate to me that we are consistently touching the edge of you will.
For food at least I think it will take a serious of bad years to send us into a real shortage but all it takes is for us to get behind if you will for a couple of years and be unable to expand enough to cover shortages. The spikes suggest that such a situation is possible because they suggest we are straining the limits of our food supply and repeatedly.
Now I don't see food itself being a serious issue in the short term in the sense of serious shortages that many envision but I can easily see it getting pretty expensive with a permanent deficit developing. Obviously right now this can be fairly easily met by consuming less meat and more grains directly but such a shift would be price driven and require a real underlying deficit in food that makes the BAU case untenable.
So I think we are in a sense fairly far away from outright shortages if we assume that rising grain prices result in falling meat consumption.
Indeed it may well be reduced consumption of meat with the associated windfall in grains that drives the volatility right now. Every time grains get expensive meat generally goes up more people cut back on meat and since the conversion of grains to meat is so inefficient we have sufficient grains along with simply expansion of planting etc.
The question is what price is needed to stop the global rise in meat consumption ?
When not if this finally stops growing we are probably finally reaching the point that real food availability is and issue as it will be price driven.
Certainly oil prices will also play a big role as most people focus on the raw crop prices but our food is effectively manufactured with processing playing a large role in its price. Assuming that fuel costs will play a role and that some sort of multi year crop failure has happened one has to wonder how resilient the system will be. Simply cutting back on meat consumption is probably not enough under certain conditions.
One scenario I've considered is perhaps the weak link is not grain at all. The world fisheries are under serious stress and fish/shrimp protein is important in many parts of the world a collapse of the world fisheries will force people to utilize land animals more to meet their protein needs this will obviously stress our grain supply.
Heck the oil disaster in the Gulf if it wipes out the regional fishery could be enough to cause sufficient pressure on grains because of a move to cheaper meat to cause problems. One has to imagine it would also result in heavier fishing in other parts of the world or expansion of fish farming operations which rely on grain for part of the feed. I'm not saying its sufficient it may or may not be but my best guess scenario is its collapse of the worlds fisheries that eventually puts us in a bind we cannot easily escape.
http://www.greenfacts.org/en/fisheries/l-2/06-fish-consumption.htm
Barring any catastrophic events I'd argue the food supply is probably sufficient however I'm not convinced its ample enough to handle a significant amount of stress and rising oil prices, collapsing fisheries and perhaps even global warming along with relentless population growth pretty much ensure that over time the potential for a catastrophic event to cause a sort of feedback loop that puts us in a stressed food supply situation is possible.
Again to be clear we literally have plenty of fat that can be removed but it won't be unless prices slow the growth of animal/fish protein consumption.
After peak pig :)
We then finally enter the period where basic food supplies are probably under permanent stress.
When and how this happens is anyones guess but one has to think its probably no longer some distant factor in the far future. Heck rising use of biofuels alone add yet another dynamic that stresses food supplies.
I don't see a simple direct lack of grain itself being a issue in the short term but also I see no reason for this to be the only reason we can end up having shortages plenty of other factors are large enough to cause the grain supply to become problematic.
The spikes do indicate we are touching the edge, but for a given season. It's been happening all throughout history, and will continue. We can all envision a scenario whereby a cascade of events creates a worldwide catastrophe, but when?
Well exactly thats the problem with food. The big one will look like all the ones before it you its also very much a rear view mirror thing just like peak oil.
As I said I think the indicator will be when we see the amount of protein coming from fish and animals start to decline that when we know we hit peak food. Once we start going back to a more vegetarian diet because of cost then I'd argue the food supply is permanently strained. Thats why I think it will be something like fish stocks or something else similar not grains directly that force us over the peak if you will.
We would be effectively competing with cows for grain at that point.
Certainly its not a bad thing to lower the amount of protein coming from animals but we will do it for all the wrong reasons. Once this starts we are steadily and literally eating away our buffer against flux in the harvest. One of the benefits of eating animals is if the harvest is bad you can slaughter and eat the cow and then eat the grain it would have eaten. Thus the animals act as a buffer.
Indeed you generally find and yes I know generalizations are bad that starvation is a problem in regions where people have very little meat in their diets i.e they are already directly consuming what the land can produce and seldom throw grain away feeding animals.
Thats by no means suggesting people should eat meat at the levels we do now but there are good reasons why we have generally kept a mixed diet in most cultures even after thousands of years of agriculture.
Even in India it seems that the minority of the people are pure vegetarian about 30% or so.
http://en.wikipedia.org/wiki/History_of_vegetarianism
That article is a bit slanted but my point is that as far as I know pure vegetarianism seems to have always been a minority across all cultures I know of. I suspect cultures that reached the point where to much of the population was forced into vegetarianism because of scarcity eventually collapsed via a serious famine.
It does make you wonder somewhat about South American civilizations we seemed to be more prone to a largely vegetable diet and lacked what we would consider decent meat animals. Perhaps this resulted in the population reaching its stress point too often with no buffer of removing animal protein to tide them over between lean years leading to deeper collapses.
Regardless it seems reasonable that this concept is generally correct and thus peak food should be signaled by falling intake of animal protein for cost reasons. At some point after that once the buffer is removed a previously normal spike in food prices will turn into something more serious.
Looks like India can represent what one would expect-eat what is available. It's always been incredulous to me to consider the amount of feed our domestic pets, and for the US, the $ lavished on their care. Or how about horses, whether or not they ever wear a saddle. Then you get the lengths folks will go to prevent the carcass from even entering a rendering plant. Reminds me of Hindus and cows, but without the religious overbite.
Alot has been written on the protein requirements and excess calories needed to develop a civilization, of the dense nutritional packages found in meat. I'm sure you are aware, and can cite Diamond, others chapter and verse. But what intrigues me is the theories which speculate man evolved from a chaser, that we would literally run our food down. Over the distance, there are few animals with the stamina, endurance of man. It's been put forth we can run anything down-even horses. So we chased the deer and gazelles over the plain till they collapsed from exhaustion, then we didn't need elaborate fangs or claws to kill them. They are nearly dead when we finally arrive. Our numerous sweat glands, lack of hair, all point to shedding heat rapidly. Been a long haul from that to couch potato.
LOL that was funny !!!
I tend to spend most of my time studying the emergence of agriculture and onset of the bronze age. Most people don't know we had a dark age during the bronze age when civilization collapsed around the Mediterranean.
http://en.wikipedia.org/wiki/Bronze_Age_collapse
I'm not the only one.
http://discovermagazine.com/1998/mar/empiresinthedust1420
Obviously despite our advances I don't think things have really changed so there is no real reason to look past this event as similar repeat through history.
I suspect that at each juncture many believed that such a collapse could not happen in these modern times.
Indeed I focus on this era because it was a time of intense technological advance yet the societies failed anyway no silver bullet showed up to save them.
Hi Doug,
When is the big question of course.
I don't know when, nor does anybody else know, exactly when the long term price increases will begin to hit hard,-but they are coming, and they are already beginning to show up in some markets, as for apples-we are getting substantially higher prices, in real terms, than we were a few years ago, but the increases in fertilizer, fuel, pesticides, containers, and machinery costs have eaten up the increase and more.One thing is for sure , however, and that is that as my costs go up, so must my market price, or I will join the ranks of all my neighbors who USED TO grow apples.
Food price increases are already leading to severe problems in many parts of the world;just last week I read an account of an Egyptian tax collector with a steady income and a good side business as a carpenter who in recent times has had to give up buying meat any meat at all for his family except for holidays.This story is quite typical of many parts of the world .
People tend to forget that only a few years ago grain markets were glutted, and the year to year carry over was enormous.The world wide carry over is basically history.One bad year could mean widespread starvation in really poor countries and a forced partial liquidation of the grain sucking livestock and dairy industries in some fairly well to do countries-maybe even in the US.
If feed prices spike sharply and farmers can't sell pork and beef at premium prices in the US , they simply eat the loss and cut back production as fast as possible;this can actually cause meat to be unusually cheap at the supermarket-for a while. A mandated reduction in beef and pork production is therefore highly unlikely here, barring a catastrophic crop failure..
In other countries not so well endowed with highly productive farms, it might be necessary for the govt to step in and force a shutdown of the feed lots and hog houses in order to keep the price of bread within reach of the less affluent part of the population.
Any body who lives in a country heavily dependent on imported food may be looking starvation in the face if bau collapses.
Farmers both small and large can and do run at a loss temporarily a great deal of the time;right now a lot of producers are in big trouble , with their cash flow inadequate to cover current expenses.
This situation tends to correct itself rather abruptly, in a year or two years at most, when producers either go broke or temporarily shut down a good bit of their capacity.Then when prices rise, the profits look really good, and they jump in again flat out, bringing on another price slump.
Wholesale agricultural prices are highly inelastic as a rule, and a small surplus can create a "dump the stuff in a ravine" price crash;and a small shortage can double or even triple wholesale prices just as fast.
The public doesn't really notice this as much as one would think, because a doubling of the wholesale price of a given product may not influence the retail price very much;if apples go from fourteen to twenty eight cents per pound, wholesale, that is the difference between a break even year and a get rich year for me,but to the average shopper it means apples are a dollar 25 or so instead of a dollar nine.
The price swings can be damped down fairly easily for grains, which are easily stored for long periods, if production controls are implemented; but the support prices are usually set high enough to guarantee big surplus carry overs after a few years.We would still probably have large grain stockpiles at this time if price supports were still in place, but they are mostly history, with the exception of sugar.
It may be that the real price production shortfalls and the consequent price increases are still a decade or two away, but my guess is that that we will see them materialize in the very near future, beginning yesterday.
The primary annual variable costs of large scale grain production, fuel and fertilizer, are tightly correlated with oil and natural gas.
The prices of the next level of variable inputs,machinery, which must be replaced periodically, are also highly dependent on ff prices, as the manufacture of machinery is extremely energy intensive.
Land costs,property taxes, and so forth are essentially fixed on an annual basis,regardless of production levels. Of course land rents and prices can and do rise and fall over longer periods.A change in land prices, rents, and taxes however does not mean much in any given year because most farmers either own or rent over longer time frames.
Hey Mac,
Like I said, a good theory, but...
It's been this way for who knows how long. Since ag began I imagine. Always the same. Back a while ago, all you heard was get rid of the surpluses, then we'll get our price. Bunch of different ways tried to do that, from government programs to buyouts to marketing to co-ops but always, you get a handle on it, and everybody jumps in to make a little more. Remember wheat just a few short years ago? up to $24/soft bushel here. Now you can't find 6, but look at the costs. If I recall correctly, $10/box apples was big shakes, then all the Chinese apples entered the export market, and bam, back to 5. Had the highest prices yet for feeder cattle this spring, but I'll bet that won't last long. They came high cause of the herds being pared with the high feed costs 2 yrs ago, and working thru the system so finally cattle stocks are pinched, but won't take long for their crash.
Prices may rise due to cost increases, creating as you said, the neighbor who used to grow apples, but funny thing, with most commodities, once a producer goes out, the land is farmed by someone else in a few short years.
With peak oil, whenever it really takes hold, I see production costs increasing, more spike and fall in prices, individuals going under, but ave price paid to growers will just cover costs. So still the complaint about prices. Yeah, we may eat better than the average Joe, but there will be number of us that won't eat that well.
No comments on the industrialization of African ag?
I just don't see PO having that big of an effect on ag, not in the immediate future. As many have commented, when the crunch really comes, gov will prob allocate fuel and fert that's available or can be produced-N2- for ag. Prices for the consumer may shoot thru the roof, but profit for growers won't change much. What I have maintained, and believe it will crunch growers and consumers much quicker than PO, is climate change. It's not the temps, its the change in ppt patterns. It's a change, unlike someone going broke, or fuel shortages, that society won't remedy.
I can think of one effect, at least for grains. Now that there is a market for fuel ethanol, and a developing one for biomass, there energy value of any crop will set a floor price. This , of course relates to the oil price, but for corn it would appear to be around $3/bu. Anything less than that and the distillers will soak it all up.
Good news for grain growers, but not so for meat producers. Their costs are rising but demand for their product is not.
As more biofuel options become available (cellulosic ethanol, biomass to methanol or electricity), more cropland, both good and marginal, will be put into biofuel production, also limiting supply of grains.
Some biofuel crops, like trees, have minimal oil/fertiliser/pesticide inputs - remember Treeman's operation on Kauai. You harvest once every 5 years, and regrow from the stump. That is so much less work than corn it is not funny. Also, your harvest is not affected by weather, you can harvest any time of year, a "bad year" just means reduced growth for that year, but not a "crop failure" etc etc. Lots of new options for farmers, and that will make the ones that keep growing apples etc more profitable.
So I think it's a good time to be growing plants, but not raising animals.
I can see your floor price for corn developing, if it hasn't. For quite awhile, 50 years?, we haven't seen these spreads between wheat and corn. Wheat wasn't quite double the price of corn, but this ~20-25% difference in price lately is unusual.
On the other hand, I see this as the time for livestock. Just isn't reflected in the price. Don't ask if I think it ever will be, but if you at all subscribe to diminishing fertilizers, too much erosion, a return to more natural production systems, livestock play the definitive role.
BP Gulf of Mexico
Does anybody know the actual psi of the gas/oil mixure coming out of the busted riser? If it's high enough, I'd like to propose that some kid of spinny thing be inserted there that could in turn be hooked up to a generator. The oil gusher could then be used to create electricity which could be fed to a seven-hundred foot tall Godzilla sculpture on a rotating pedestal with laser-shooting eyeballs someplace. I mean, I hate to see an opportunity like this being wasted.
some smart a$$ ponders...."what is a dead pelican worth?".
i ask what are all the pelicans worth if they are all dead? and the whole gulf of mexico also.
hmmm?
priceless.
i would like to see a colorful chart about that.
so the gooberment and bp "underestimated" the oil flow. is that a polite way of saying they lied?
i went to work today. i want to eat. and the town will evict me if i dont pay property taxes.
i sense the collapse is near.
it worth repeating.
the man enslaved to wealth can never be honest.
there is no limit to human greed and folly.
hey! the price of gaz-o-leen just went down another 4 cents. mebbe it will go sub 2 bucks a gallon.
so if we have more gigantic oil spills the oil companies will eventually be paying us to fill up.
mebbe that is the price of a dead pelican.
i live in nj and expect to read about tar balls washing up at cape may.
however upon analysis they will not be from the deep water well.
nothing to see here. move along.
say...where are all the trolls and company shills?
hiding somewhere ashamed i suppose.
i am ashamed of being a member of the so called western civilization.
stick a fork in our buttocks and turn us over. we is done.
Misread as:
"What is a dead politician worth?"
Meanwhile, remember Iceland?
http://beforeitsnews.com/news/47/470/Katla_Volcano_Update_21_May_2010.html
The other one is becoming active.
The greening of workplaces
Tougher economic times have not slowed companies’ efforts to become more eco-minded
See: http://www.theglobeandmail.com/report-on-business/the-greening-of-workpl...
Cheers,
Paul
Hey Paul,
Good to see I'm not the only one at home on a Friday evening of a long weekend:-) Unfortunately, I'm not going to get much downtime to do gardening until well into next week. Sigh...
The green movement has taken hold locally and nationally in ways unimaginable even twenty or thirty years ago. The connection between ecology and economy has been cemented in the public mind to the extent that companies and corporations are willing to spend money on action programs notwithstanding recessionary times. Enterprises, ever conscious of the tightness of the bottom line, are even more anxious to sign on. I can only guess that events in the GoM will only reinforce the trend.
Curious way that is phrased, because if a company didn't spend anything on climate change before the recession, it can safely say now it's green budget was unaffected by the downturn. I am assuming, however, in most cases an attempt is being made to redress the impact of business on the environment.
All this said, do you think Canadians will get anywhere close to meeting our emission targets? I, for one, am not overly optimistic.
Cheers!
Tom
No question, Tom, we Canadians need to be doing much more and I'm not looking to the feds for leadership. We have a lot of ground to cover and time's running short.
The long weekend looks picture perfect from start to finish. I hope you can take some time off from your busy schedule and relax outside. That's my plan !
Cheers,
Paul
That puzzles me in a way. Yes, Harper is from Calgary. Yes, the Conservatives power base is the oil patch. Yes, he's not likely to do anything that will impede the development of the sacred Tar Sands. But golly gee whiz, Albertans are not bloody likely to switch from the Tories to the Grits so he does have some leeway there. And since the public and the private sector seem to be well ahead of the game, it wouldn't hurt him for brownie points with the city folks (Toronto, Montreal, Ottawa, Vancouver) to do something. After all, these are the very ridings he is going to have to win over if he ever hopes to get a majority government. On many issues, he seems willing to abandon his neo-liberal ideological principles for expediency sake, but not so on the environment. On that front, he is proving to be a stubborn ass.
Here's to individual private actions in the meantime.
Cheers!
Tom
PS: Too many things booked for me this weekend to relax. Hoping to take a few days off around the first of June. I am so, so far behind this year with my gardening!!
Hi Tom,
I suspect Harper may be more concerned about alienating corporate donors, especially if these commitments are viewed as a handicap to business or fiscally imprudent. Ultimately, much of the responsibility rests squarely on our own shoulders as consumers, and we need to make smarter choices and demand better -- get our own affairs in order, be a good example to others, give voice to these concerns and never give up the fight.
Cheers,
Paul
Paul, corporate donations to political parties took a licking with Jean Chretien's electoral reforms in the early 2000s. (Outsiders should be aware this was not borne out of any altruistic, socialistic, liberal, or democratic impulse but was deliberately orchestrated to hamstring politically his successor and frontbench nemesis, Paul Martin. It worked! Damn near bankrupted the Liberal Party of Canada.)
Wouldn't it be more profitable for Stephen Harper to work on increasing the popular vote? This would give him a bigger slice of the tax-payers funding pie.
I can picture his slogan, "Go, cities, go!!"
Harper's a smart lad. Perchance too smart? I do wonder sometimes what his strategy is.
That's true, Tom. The Federal Accountability Act currently limits political donations to any one party to a maximum of $1,100.00 per calendar year. I gather there are ways to work around this such as having each director, officer and/or employee contribute individually. Of course a good chunk of money is raised at the constituency level where such concerns may not capture as much mind share as they do within the larger urban centres.
Cheers,
Paul
Tom/Paul
The part that I don;t get about Harper and his strategy is that the cutting back energy use in Canada (through efficiency, not recession) is good, because that saved energy can then be exported.
The oilsands will carry on regardless, any oil we don;t use is shipped south, so they don't have anything to worry about. But there are lots of other things that can be done, though many of them are in the provincial jurisdiction.
Time of day charging for electricity is top of my list, but I don;t think the Feds can mandate that.
Personally, I am pleased they are not wasting money like Ontario is on egregious feed in tariffs, they generally look for things that actually produce real value.
I think the "stimulus" projects over the last year were (partly) a missed opportunity. They should have beefed up the Eco Energy plan, and make that homeowner renovation tax credit (a good idea that one) dependent upon participating in Eco energy. Giving some funding to program's like Paul's, and stuff like mine (water conservation) would also have been good - employs people now, with benefits indefinitely. The nationwide broadband internet was a good idea, though not done - helps smaller communities be connected and competitive - you could run an international call centre from Inuvik if you have the communication capacity.
And, of course, some more urban transit projects.
My pet project would be a lot of biomass to energy (here in BC) where we have a billion tons(!) of dead wood from beetle kill. If all that could be turned into electricity, it would keep 10,000 MW of generation (roughly BC's existing capacity) fueled for 15 years, and be worth about $100bn, and all carbon free energy!
I guess what I'm saying is there are plenty of projects that reduce energy use, emissions AND increase economic activity. Only those that do all three should be funded, and if they made that clear and then called for projects, they would be inundated. 50% would be useless, 20% marginal, 2% worth doing and 10% truly brilliant.
But, I don;t expect that kind of leadership either, so the country just muddles along, and these trees will end up burning on Nature's terms, not ours...
As opposed to the stimulus package which funded projects 80% useless, 15% marginal, 1% worth doing, and 4% straight-out pork-barreling. Urban transit projects would make sense for efficiency reasons - but highway construction hires more local contractors with work crews spread over rural (and for the Conservatives vote rich) constituencies. Gotta keep dem cars and trucks moving.
Paul, as you say, reduced energy consumption at home will be mitigated likely by increased exports to the United States. Alas, for the foreseeable future, the Albertan energy pump (and shovel) remains in hyper drive.
Here's to personal, provincial and urban action in the meantime. Think globally. Act locally.
Btw, has anyone approached BC Premier Gordon Campbell with the proposal to turn beetle ravaged deadwood into an energy source? My understanding is that the Honourable Mr. Campbell was quite the hippee in his salad days so it may be something that would tug at his youthful idealistic heartstrings. Although, like many of the baby boom generation, he very well could have sold out to yuppydom nirvana long ago.
Cheers!
For the stimulus money, since it was really meant to stimulate, rather than change energy policy, the better approach would have been to give the project portion to the municipalities, on the basis of population, and let them spend it as they see fit. At least then it is spent everywhere, and encourages more local projects. big road projects are great for the big road contractors, but there are lots of municipal maintenance/improvement projects that would have employed carpenters/plumbers electricians/painters that live in the towns and have not much work at present. More effective, but not more politically effective.
As for the wood, BC does have a bioenergy strategy, which involves "developing" some such projects. Of course, in true government style, this will take along time, be directed to certain areas for political reasons, etc. And it will also, inevitably result in "big" projects, which is exactly the wrong way to go. There is 60MW wood fired plant at Williams Lake, near Prince George, been in operation for more than five years. IT has now exhausted all the wood within an economic collection range, so now it will get less economic each year. Better way would be to encourage small, really small plants (50kW to 1MW) that can be done with IC engines and gasification. These can be set up quickly, do not require engineering and permitting and environmental impact statements. They can be operated by two or three people - a couple of guys who run a firewood business and have truck, trailer and chainsaw could easily operate a 200kW plant, and not have to travel very far for wood. If need be, you can pick up and move the operation fairly simply.
All they need to do is offer either ( I can;t believe I'm saying this) a preferential feed in tariff, for the first three years, or some grant/allowance for the start up costs. In Alberta, where there is little wood waste, they off 16c for wood energy, in BC, you get 8.5, and it's a marginal operation (I have been studying this for a while).
Doing 1000 200kW projects would create 200MW, and employ 2000 people, and could be up and running, in towns all across the interior, in one year. Doing a 200MW centralised plant would employ 200 people, take years to build, and would exhaust its local fuel supply at some point.
Scale it up to 10,000MW and you would have 100,000 people employed doing sustainable energy in towns all across the interior - what a great economic opportunity. This is more than the BC lumber industry today, while still not impacting supplies of merchantable lumber, and producing a product that has a guaranteed market, is not susceptible to softwood lumber import restrictions, etc etc.
But, that is far too sensible, and not influencable or controllable by the politicians (or BC Hydro) so it won;t get done. Instead, we spent $350 millio last year on forest fire control, full half of that in beetle kill areas!
I hear you my friend. Politics is the art of the possible. Alas, the sensible and the possible rarely overlap:-o
Smaller projects would be the reasonable thing to do, tho not much publicity in that.
Here's to thinking globally and acting locally.
Cheers!
Tom
Paul, you do a lot of great work. Enjoy.
Thanks, Tom. The volume of work is growing at a rapid clip and the supply of materials has become increasingly problematic, especially as it pertains to 347-volt hardware and fixtures with low-output ballasts; it's frustrating because we have all the bodies we need, but we don't have the physical hardware to keep things running smoothly.
Cheers,
Paul
all brawn no bronze ;-)
I wish you well with finding materials. Cheers!
Hi Tom,
You may be interested to know that I've audited four or five "U" churches in the past month alone, but only two of your sister parishes thus far (the most recent is located in north Dartmouth). We need to generate some good natured inter-faith rivalry to determine who are the better stewards of God's green earth. ;-)
Cheers,
Paul
"I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and energy retrofits happeneth to them all."
Touché, Tom. I'll be expecting to hear good things with the passage of time.
Cheers,
Paul
Only 1 failed bank today but it's a biggie.
http://www.fdic.gov/bank/historical/bank/index.html
peak enlightenment ?
http://www.msnbc.msn.com/id/21134540/vp=37283911�
After this, the idiocracy.
What is wrong with those people?
Our forefathers didn't mean a strict seperation of church and state? Oh really. I thought the two main reasons why people fled Europe for America was economic opportunities and to escape religious persecution. I guess these administators don't know their European history. People fled France, they fled Spain, etc, etc. If a family happened to be associated with the wrong religion in Europe in the 15, 16 & 17 hundreds, you were sent packing, tortured or killed. So our forefathers meant what they stated in the declaration of independence, for there to be a seperation of church and state. I'll go to war over it if they want.
Slave trade is going to be Atlantic triangular trade? Wow! Now it really never happened in the way we thought it did. It was just trading between country's, like wheat, rice, barley or in this case, triangles.