Drumbeat: June 14, 2010

Gulf spill may lead to higher oil

The US moratorium on offshore drilling may set the stage for a much higher oil prices in a few years time. The Gulf of Mexico (GOM) makes up approximately 25 percent of the world's deep/ultra deep offshore oil. In fact, more new oil was produced last year from fields in the US GOM than any other region in the world.

By placing a moratorium on deepwater drilling the naturally steep decline rates of deepwater oil wells will result in much lower production by 2011. Morgan Stanley estimates that if GOM drilling is permanently banned, production from the GOM would be virtually zero in a four- to five-year period.

Bernstein Research estimates if the moratorium remains in effect for a year it would cut global oil supplies by 500,000 barrels a day between 2013 and 2017.

Special Report - Deepwater spills and short attention spans

Until the Deepwater Horizon rig drilling BP Plc's Macondo well off Louisiana blew up in April, Ixtoc was the only catastrophic oil spill at sea that was not caused by a tanker accident or sabotage.

That disaster made plain what could go wrong in deepwater drilling. After all, it took Mexico's state oil company Pemex 297 days and the drilling of two special relief wells -- the industry's slow moving but only certain fix for blowouts -- to intersect and cap the raging Ixtoc well, located in 150 feet (50 metres) of water.

But a review of hundreds of pages of U.S. government documents related to the Ixtoc spill, as well as interviews with many experts, shows that regulators for years downplayed the possibility of a similar disaster occurring in the United States.

BP stock drops another 9%

NEW YORK (CNNMoney.com) -- BP's stock dropped 9% Monday morning -- the 56th day of the oil spill - as the oil giant geared up for another brutal week in the Gulf and on Capitol Hill.

US oil spill: Mapping the oil slick

Thousands of gallons of oil has been leaking into the Gulf of Mexico since the Deepwater Horizon oil rig disaster on 20 April 2010.

For BP, breaking up is hard to do

That’s the corporate structure of BP, according to Citigroup, who supposedly went to the trouble of flow-charting the oil firm in response to client enquiries.

Understandably, given the recent rhetoric from President Obama, they want to know whether BP could firewall its US business.

And the answer to that question is that it would be very difficult, if not impossible.

BP has resources to clean up oil spill - Huhne

(Reuters) - BP is strong enough to cope with the financial consequences of cleaning up the oil spill in the Gulf of Mexico, British Energy and Climate Change Secretary Chris Huhne told parliament on Monday.

"BP remains a strong company. Although its share price has fallen sharply since April, the company has the financial resources to put right the damage," Huhne said.

BP and the vortex of fear

With BP’s share price taking another beating on Monday – it finished 9.3 per cent lower in London – JPMorgan has been drawing clients’ attention to cross current circularity – a situation whereby equity and credit markets look at each other for pricing information, apparently

Now, this is important, the bank says, because there is a risk a lower BP share price triggers a higher CDS spread and vice-versa as each security re-prices off the other, potentially creating a self feeding vortex of fear.

Lawmakers to BP: Put up $20 billion

NEW YORK (CNNMoney.com) -- BP: Kick up $20 billion to pay for the recent oil spill in the Gulf region. And make it snappy.

That's the message Senate majority leader Harry Reid and members of the Senate Democratic Caucus sent to BP CEO Tony Hayward in a letter on Monday.

Total CEO: Big Oil on Big Oil

FORTUNE -- As CEO of Total, the French oil giant that is the world's fifth largest publicly traded oil and gas company, Christophe de Margerie reigns an empire with operations in 130 countries -- including some of the most politically sensitive ones, like Myanmar and Sudan -- and nearly 100,000 employees. Their boss is known for his colorful comments and straight-talking manner, but lately he's taken a more somber tone.

De Margerie sat down with Fortune during the International Economic Forum of the Americas' Conference of Montreal on June 7 to discuss the Gulf Coast oil spill and what the future holds for his industry.

Whither the dead bird, tar ball and oily boom?

When the official Deepwater Horizon response website each day updates the status of the monumental Gulf oil spill cleanup effort — the miles of new boom deployed, the millions of gallons of oily water collected and the army of workers sent to scour beaches for tar balls and injured or dead wildlife — it is describing only the first steps along a long road.

That’s because the recovery sets in motion a lengthy and elaborate process designed to safely dispose of a wide array of hazardous materials. Even bird and turtle carcasses face a lengthy journey before they reach their final resting places.

Could oil-eating microbes save the Gulf?

Lyons and his colleagues hope that during the next 6 months, their bioreactor will help to rapidly evolve a population of superefficient oil-eating bacteria ideally suited to the conditions of the Gulf of Mexico. Later this year, the company plans to spray the bacteria over the Gulf’s oil-covered waters. But Evolugate is facing long odds. In peer-reviewed scientific studies, seeding oil spills with microbes has never helped the cleanup process, and microbiologists who worked on the Exxon Valdez spill off the coast of Alaska doubt that the outcome will be different this time.

California's legendary oil spill

The Lakeview gusher of 1910 spewed 378 million gallons of oil in Kern County scrubland, far more than the gulf spill wreaking havoc today.

Hurricanes could bust Gulf oil pipelines

Hurricanes roaring across the Gulf of Mexico create strong enough underwater waves to dig up and potentially bust open oil pipelines that run across the ocean floor, according to a new study that recorded the currents created by the massive storms.

Enjoy low gas prices while they last

It looks like the nearly six-week run in lower gasoline prices is just about over.

Gasoline prices have dropped about 8 percent since hitting $2.93 per gallon on May 6 on the back of lower oil prices. Pump prices fell 0.3 cent to a national average of $2.698 a gallon Monday, according to AAA, Wright Express and Oil Price Information Service.

Kurdistan Should Resume Oil Exports, Minister Says

(Bloomberg) -- The Kurdish areas of northern Iraq should resume oil exports “immediately,” without waiting for clearance from the finance ministry, Iraqi Oil Minister Hussain Al-Shahristani said.

Kurdistan should not wait for an agreement on payments to foreign companies before resuming oil exports, he said in an interview in Baghdad today.

“We have informed them that they should resume oil exports immediately, and we are surprised at their reluctance to do so,” he said.

Norway wealth fund rises to $437 bln in May

(Reuters) - Norway's sovereign wealth fund rose by 1.60 percent in May to a preliminary 2.802 trillion Norwegian crowns ($436.6 billion) from 2.758 trillion at the end of April, central bank data showed on Monday.

Give your home a break while on vacation

As you pack up the kids and head out the door for your well-deserved summer vacation, don't forget to give your home an energy break as well.

Europe’s New Wind Power Rivals Gas

The amount of power generated by new wind turbines in the European Union this year will be about the same as the amount from new gas plants, according to the European Wind Energy Association, an industry group.

Solar struggles in U.S. market

It sounds so simple: Take a clean, free and endlessly renewable resource — the sun — and use it to power your homes and businesses.

Yet even as the Gulf oil disaster offers yet another reminder of the drawbacks of fossil fuels, solar power remains on the fringes of the energy industry, especially here in the United States.

New Hampshire Takes Carbon Auction Funds to Plug Budget Hole

(Bloomberg) -- New Hampshire will use money raised by auctioning carbon dioxide permits in the U.S. Northeast’s cap-and-trade program to help close the state’s $295 million budget shortfall.

Drilling Rules Hit Trans-Alaska Pipeline

The federal government's new wariness about offshore drilling in the wake of the Gulf of Mexico oil spill is dimming what may be the best hope for extending the life of the Trans-Alaska Pipeline, a crucial artery supplying one-quarter of the West Coast's oil.

The 800-mile pipeline, owned by a BP-led consortium, carries about 670,000 barrels of oil a day -- 13% of U.S. production -- from Alaska's North Slope the length of the state to Port Valdez. From there it is sent by tanker to refineries in Washington and California.

That is a lot less than the two million barrels a day the pipeline carried at its peak back in 1988, because of a rapid -- and probably permanent -- decline in Alaska's onshore oil production.

Volumes may fall low enough to halt operations by the middle of the next decade without an expensive modification of the pipeline to handle less oil. At a reduced flow, oil in the pipeline can freeze or form into a waxy buildup, raising the risk of interruptions and spills.

Japan, Saudi Arabia reach oil storage deal

Saudi Arabia will store 3.8 million barrels of crude oil in Japan, helping the Pacific nation stock up its reserves while giving the top oil exporter better access to Asian markets.

The well-flagged deal between Japan's trade ministry and state oil firm Saudi Aramco would see the crude start arriving later this year at the Okinawa Oil Base (OCC), according to a trade ministry statement.

Battle to control oil industry continues

RIYADH: The Opec is turning 50. And what a journey it has been - turbulent, topsy-turvy and of changing fortunes. Yet perseverance has paid off. Today oil producers to an extent are controlling their own destiny. And Opec has played a significant role in it.

The rise of Opec is tied to a shifting balance of power from the multinational oil companies to the oil producing countries. It came into being at a juncture when oil industry was in almost total control of the so called ‘Seven Sisters’ – US Standard Oil, Standard Oil Company of New York, Standard Oil of California, Gulf Oil and Texaco – along with the Shell and the Anglo-Persian Oil Company.

Gulf countries facing shortage of gas: report

The hydrocarbon-rich Gulf countries are facing shortage of gas and might find themselves in a position where they have to import the fuel, a new report said.

Although the global economic slump has reduced the need for gas in most regions, demand in the Gulf Cooperation Council (GCC) for power generation has outpaced the region's gas exploration and production.

"Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates are facing a reversal of a decades-old status quo: an increasing gas shortage in the region amid a significant supply overhang in the rest of the world," said the report.

"As a result, GCC find themselves in uncharted territory, an almost contradictory position of having to import gas, when they have exported gas for decades," according to the report by Booz and Company.

Armed ethnic clashes rage in Kyrgyzstan; thousands flee

(CNN) -- Tens of thousands of Uzbeks are fleeing ethnic violence in southern Kyrgyzstan amid what one aid official described Sunday as a "humanitarian catastrophe," according to the International Committee of the Red Cross.

...Kyrgyzstan hosts a U.S. military transport base that is vital for supplying its troops in Afghanistan. It also has a Russian military base and strategically important natural gas pipelines.

Exxon, Chevron Seek Reprieve From ‘Crucifixion’ in U.S. Gulf

(Bloomberg) -- Exxon Mobil Corp., Chevron Corp. and ConocoPhillips, the largest U.S. oil companies, will ask lawmakers not to punish them for the human and environmental damage inflicted by BP Plc’s oil spill in the Gulf of Mexico.

US turned down Britain’s offer to help clean up BP oil rig spill

A high-level British offer of help to clean up the Gulf of Mexico oil spill was rebuffed by America shortly after the accident, fuelling fresh fears of political tension between the two countries over the disaster.

BP may face charges, but execs likely won’t

Plans for a federal criminal investigation into the Gulf of Mexico oil spill may evoke visions of oil industry executives lined up in handcuffs for a perp walk into the federal courthouse.

But bringing criminal charges against individuals is difficult in such environmental cases, say legal experts, particularly against high-level executives removed from day-to-day operations.

BP oil spill may not be capped until Christmas, expert warns

One of the world's leading authorities on oil well management has warned it could take until Christmas to cap the Gulf of Mexico spill that is devastating the southern coast of America – and BP's reputation.

Nansen Saleri, a Gulf drilling expert, said he hoped BP would meet its August timetable for capping the blown-out well, but made it clear success was not certain.

"I know it is a frightening assessment but everyone should be prepared for a worst-case scenario, and that could mean a Christmas timeframe," said Saleri, chief executive of the consultancy group Quantum Reservoir Impact. "The probable outcome is much better but the technological challenges … are enormous."

Deepwater Drilling Ban to Face House Test

DALLAS — U.S. Rep. Pete Olson, R-Sugar Land, announced Saturday that he would file legislation early this week that would rescind the Obama administration's six-month ban on deep-water offshore oil drilling.

The moratorium “is turning a tragedy into a nightmare,” Olson said, flanked by Republican House colleagues Kevin Brady of The Woodlands, Mike McCaul of Austin and Joe Barton of Ennis, at a news conference at the state Republican convention in Dallas.

Mexicans still haunted by 1979 Ixtoc spill

If the worried inhabitants of the southern coast of the US wonder what long-term effects the BP oil spill will have on their livelihoods and the environment, they could come to the Mexican state of Campeche to find answers.

Maybe the price at the gas pump is not the total cost

BP and Transocean, the drilling operator on the Deepwater Horizon, have a spotted history around the globe. In the 1930s and 1940s, offshore wells were at maximum depths of 15 to 20 feet below the water's surface. As recently as 1994, the record depth for water drilling was about 3,300 feet. By 2000, it was about 5,000 feet and today is more than 10,000 feet. This advancement is mostly because of improved computer technology.

However, the technology of emergency management in cases like this one has not changed much in the past 30 years. This is the most profitable industry in the history of humanity and it disturbingly has, at best, a strangely myopic view of its safety obligations.

Obama Compares Gulf of Mexico Oil Spill to 9/11

While the Obama administration has fended off comparisons between its response to the Gulf of Mexico oil spill and the Bush administration's response to Hurricane Katrina, the president is not averse to making comparisons with the worst terrorist attack on American soil.

In an interview with Politico.com's Roger Simon on Friday, Mr. Obama likened the effect upon the national psyche of what may become the largest oil spill in history with that of 9/11.

We're for transparency

The Deepwater Horizon incident, and the oil spill that has followed, is a terrible tragedy for the families and friends of those who lost their lives, and for the people living in communities all along the Gulf Coast. It should never have happened. We're working around the clock to stop the flow of oil, protect the shore, clean up the damage and restore the Gulf Coast. We also want to ensure that a tragedy like this never happens again.

BP says it's baring all; facts say something else

When a CNN camera crew tried to talk to workers cleaning oil-drenched birds on the Gulf Coast last Thursday, it was turned away by a man from the Louisiana State Animal Response Team, a group that says it's working with BP to help wildlife. Never mind that the crew had federal permission to visit the site. "I make the final call," the man said brusquely.

Not far away, on Grand Isle, La., a reporter from New Orleans' WDSU-TV was barred from interviewing cleanup workers. "I can tell you where to go because I am employed to keep this beach safe," a private guard said, even though the beach is public.

Why Obama Needs a Healthy BP

Obama and BP are locked in a deadly, messy transatlantic dance. The U.S., deeply in debt and facing a voter rebellion over that fact, needs as many billions as it can siphon from London-based BP to pay for the cleanup of the Gulf of Mexico. The cleanup could cost tens of not hundreds of billions of dollars over the next decade.

But Obama, who told POLITICO on Friday that the spill "echoes 9/11" because of the way it will shape policy for years to come, doesn't want to unduly weaken, let alone destroy, the company for that very reason. It's stock price already battered, its market value down nearly 50 percent since the accident, BP would face yet another pumelling if it refused (or said it was unable) to pay the dividend, which, after all, is based of profits made before the April spill.

Obama Was Against It Before He Was for It

On March 31, three weeks before the Deepwater Horizon exploded, President Obama announced the end of a longstanding federal ban on offshore drilling in the Atlantic and eastern Gulf of Mexico. “It turns out,” he said April 2, “that oil rigs today generally don’t cause spills.” That ill-timed policy shift, which gave way a drilling moratorium as the BP catastrophe unfolded, had its roots in the 2008 presidential campaign. What follows is excerpted from The Climate War: True Believers, Power Brokers, and the Fight to Save the Earth, by Bloomberg BusinessWeek Deputy Editor Eric Pooley.

Kunstler: Fierce Urgency

It all comes down to one thing: the world is mismanaging contraction. The world will not solve the problems of massive over-complexity with more complexity. But scaling down is apparently not an option, though it will happen whether we participate or not. The USA is like Herman Melville's Bartleby the Scrivener who, when asked to do anything, replied, "I prefer not to." His preference led him to a pauper's grave.

Massive spill forces fossil fuels rethinking

Is it possible to energize our civilization without fear? Fear of oil spills and oil wars, fear of nuclear meltdowns and nuclear waste, fear of global warming and polluted air and water?

It is, according to Amory Lovins of the Rocky Mountain Institute (RMI), among the world's most respected authorities on alternative energy strategies.

Kevin Rudd's carbon pledge error

SINCE BP first announced the disastrous oil spill in the Gulf of Mexico on April 21, what President Barack Obama is calling the biggest environmental disaster in US history has seen BP's share price fall from about 650 pence to a low of 366p on Thursday of last week, a fall of 43 per cent.

In a similar time, many Australian clean energy stocks have fallen by a similar amount. Since April 23, shares in carbon sink company Carbon Conscious have fallen by 51 per cent, geothermal energy developer Geodynamics by 42 per cent, hot water company Quantum Energy by 33 per cent, wind energy generator Infigen by 29 per cent, bioenergy developer AnaeCo by 29 per cent, and geothermal company Hot Rock by 28 per cent.

So what have these companies done to be compared to BP? Are they behind a great environmental disaster in Australia? Certainly not. But an environmental disaster is unfolding here and the clean energy sector is among the victims.

Power outages threaten Vietnam's industry

Hanoi - A rash of blackouts threatens to hurt Vietnamese export industries, and authorities are unsure when the power outages will end, business executives and officials said Monday.

The power shortage is caused by droughts that have reduced hydroelectric capacity, as well as rapidly rising demand and inefficient use of energy.

Indian officials hope to lift blockade in 'jeweled land'

New Delhi, India (CNN) -- A two-month blockade by ethnic tribes that stripped the luster from a "jeweled land" in a remote northeastern corner of India may be ending soon, a top Indian official said Friday.

More than 2 million people were fast running out of food, fuel and life-saving drugs in Manipur state amid a blockade of vital roadways in place since mid-April.

EU wind power grows steadily, funding issue looms

(Reuters) - Investment in new European wind farms is likely to hold steady in 2010, adding a further 13 percent to capacity, but funding problems cloud the outlook, the European Wind Energy Association (EWEA) said on Monday.

A better way to take salt out of seawater

Shuaibah 3 is just one of several large desalination facilities in Saudi Arabia that get their power from oil-fired generation stations. “The World Bank estimates that the Middle East will need roughly another 50 to 60 billion cubic feet (1.42 to 1.7 billion cubic metres) of water annually over the next 10 to 15 years to meet the region’s burgeoning water demand,” writes Rubin. “Desalinating that immense volume of water could ultimately require the use of a million barrels of oil per day.”

This is why a company like Saltworks is so important. It has figured out a new process that can cut the energy demands of a desalination plant by more than half, and in some cases by as much as 80 per cent. Ben Sparrow, the mechanical engineer who co-founded Saltworks in 2008, says a small pilot plant is already operating in Vancouver that can process 1 cubic metre of ocean water a day.

Hansen: What will Des Moines look like in 100 years?

A hundred years from now, the cheapest bus ticket from Des Moines to Chicago will cost closer to $200, or maybe even $2,000, than $2.

Seeing how the average worker will make more than a million dollars a year - inflation has an upside - scraping together the fare won't be much of a problem.

Yes, it will be great to be alive in 2110, unless you live on a coast that gets washed away by the rising sea. Speaking of climate change, in 100 years, will the KCCI-TV weather beacon constantly flash red for "warmer weather ahead"?

Tanker Rates to Gain 43% as China Oil Buoys Frontline

(Bloomberg) -- Supertanker rates are poised to surge to a two-year high by December as China’s demand for oil sends ships the equivalent of 11 extra times around the globe in a month.

The 31 percent jump in China’s imports increased return journeys for supertankers to about 1.13 million miles in April, or 284,000 miles more than a year ago, based on customs data and voyage lengths. Daily rates may reach $100,000 by December, said Rikard Vabo, an analyst at Fearnley Fonds ASA, whose November recommendation to buy shares of Frontline Ltd., the biggest supertanker operator, earned 49 percent. His prediction for freight is 43 percent higher than the June 11 price of $70,025.

China, the engine of the global economic recovery, is going further to get oil, with Angola a bigger provider than Saudi Arabia this year. Longer journeys combined with what the International Energy Agency says will be record consumption in 2010 are driving shipping demand even as forward freight agreements show prices will average $44,944 for the third quarter and $45,466 in the fourth.

Crude Oil Rises on Forecasts That U.S. Recovery Is Under Way

(Bloomberg) -- Crude oil advanced in New York to trade above $75 on speculation growth in the U.S. economy will boost fuel demand from the world’s biggest energy consumer.

Oil climbed for the fourth time in five days as European equity indexes advanced before reports this week that may show U.S. factories churned out more goods last month and the cost of living declined. These may point to a manufacturing-led recovery without inflation, according to a Bloomberg News survey of economists. The dollar dropped to its lowest level against the euro in more than a week, bolstering the appeal of commodities.

Hedge Funds Cutting Bullish Oil Futures Bets

(Bloomberg) -- Hedge funds cut their bets on higher oil-futures prices to a 10-month low as U.S. economic reports signaled fuel demand is diminishing.

Gas prices continue their fall

CAMARILLO, Calif. - The average price of regular gasoline in the United States has dropped more than 11 cents over a three-week period to $2.72.

That's according to the national Lundberg Survey of fuel prices released Sunday.

Chavez suggests naming PDVSA "Socialist Petroleum"

CARACAS (Reuters) – President Hugo Chavez on Sunday proposed changing the name of one of the world's largest oil companies and a major supplier of crude to the United States, Venezuela's state-run PDVSA, to Socialist Venezuelan Petroleum.

China pipeline ready for Russian oil - agency

(Reuters) - China is ready to receive Russian crude oil after completing the construction of a 927-km crude oil pipeline to the border city of Mohe in the northeast, official news agency Xinhua reported on Monday.

BP's Gulf oil spill costs now at $1.6 billion

NEW ORLEANS -- BP's costs for responding to the massive oil spill in the Gulf of Mexico have risen to $1.6 billion.

According to a company news release, that includes new $25 million grants the British oil giant has given to Florida, Alabama and Mississippi. It also includes the first $60 million for a project to build barrier islands off the Louisiana coast. The estimate does not include future costs for scores of lawsuits already filed for damages.

BP oil spill costs jump as directors meet

LONDON (AFP) – BP said on Monday that the cost of sorting out the Gulf of Mexico oil spill had jumped to about 1.6 billion dollars (1.3 billion euros) for the embattled British energy group.

The news came ahead of a meeting of BP directors in London, due at 1200 GMT, to discuss whether to suspend payment of a shareholder dividend amid US pressure to do so in the wake of the oil spill disaster.

BP May Lose U.S. Oil Leases, Contracts as Gulf Spill Punishment

(Bloomberg) -- BP Plc may lose control of its U.S. oil and natural gas wells and be barred from doing business with the federal government as punishment for the worst oil spill in U.S. history, industry and regulatory analysts said.

President Barack Obama and lawmakers are debating penalties that would cripple the company’s ability to do business in the U.S. as public outrage intensifies. In addition to BP’s culpability in the Gulf of Mexico spill, a 2005 explosion at BP’s Texas City refinery that killed 15 workers and a 2006 pipeline leak that dumped 200,000 gallons of crude at Prudhoe Bay, Alaska, will figure in the debate, said Michael Wara, associate professor of environmental law at Stanford University in Palo Alto, California.

Obama Plans First Oval Office Speech to Put Pressure on BP

WASHINGTON — President Obama will use his first Oval Office speech Tuesday night to outline a plan to legally compel BP to create an escrow account to compensate businesses and individuals for their losses from the oil spill in the Gulf of Mexico, administration officials said on Sunday.

Obama leadership on BP spill faces testing week

WASHINGTON/LONDON (Reuters) – Barack Obama's leadership of the Gulf of Mexico oil spill faces key tests this week as the U.S. president gives his first national address on the disaster and meets top BP executives for the first time.

With America's largest-ever environmental disaster nearing the two-month mark, Obama will press BP executives to set up an escrow account to pay damage claims by individuals and businesses hurt by the oil spill disaster.

BP Speeds up Containment Plan for Gulf Oil Spill

(CBS/AP) Facing increasing pressure from the White House, BP has stepped up its efforts to contain the oil leaking into the Gulf of Mexico, an administration official told CBS Radio News White House correspondent Peter Maer.

BP Crisis Wipes $19 Billion From Energy Bonds

(Bloomberg) -- The biggest oil spill in U.S. history has wiped about $19 billion off the value of energy company bonds as investors bet increasing regulation will curb revenue and profits.

In Case of Storm, Spill Containment and Relief Drilling Could Be Suspended

BP may finally be achieving success in capturing oil from its runaway well in the Gulf of Mexico, and relief wells are on pace to permanently stem the flow this summer, but a formidable obstacle still looms: the weather.

BP Spill May Be ‘Opportunity in Disguise’ for Oil-Rig Makers

(Bloomberg) -- Heightened U.S. scrutiny of offshore drilling after the BP Plc spill, the worst in the nation’s history, may spur oil companies to replace aging rigs with new platforms made in South Korea and Singapore.

The Ahab Parallax: ‘Moby Dick’ and the Spill

A specially outfitted ship ventures into deep ocean waters in search of oil, increasingly difficult to find. Lines of authority aboard the ship become tangled. Ambition outstrips ability. The unpredictable forces of nature rear up, and death and destruction follow in their wake. “Some fell flat on their faces,” an eyewitness reported of the stricken crew. “Through the breach, they heard the waters pour.”

The words could well have been spoken by a survivor of the doomed oil rig Deepwater Horizon, which exploded in the Gulf of Mexico in April, killing 11 men and leading to the largest oil spill in United States history. But they come instead, of course, from that wordy, wayward Manhattanite we know as Ishmael, whose own doomed vessel, the whaler Pequod, sailed only through the pages of “Moby-Dick.”

Obama on fourth visit to Gulf oil spill region

WASHINGTON (AFP) – President Barack Obama sets off Monday on a fourth visit to states stricken by the Gulf of Mexico oil spill in a sign of the seriousness of the disaster both for the country and his presidency.

BP deploys deepsea sensors to better measure spill

NEW ORLEANS – BP mounted a more aggressive response to the oil spill in the Gulf of Mexico on Sunday as it started deploying undersea sensors to better measure the ferocious flow of crude while drawing up new plans to meet a government demand that it speed up the containment effort ahead of President Barack Obama's visit to the coast.

Impoverished by oil spill, still waiting for a check from BP

HOUMA, Louisiana (AFP) – Impoverished by the massive oil spill which has closed huge swaths of the Gulf of Mexico to fishing and washed away tourists, people here are growing increasingly frustrated with the long wait for compensation from BP.

Barataria estuary now ground zero in oil spill

BARATARIA BAY, La. – The meandering sand dunes and bird islands of Barataria Bay have become the epicenter of the environmental disaster spewing from BP's offshore well. And fishermen are bitter.

Oil-caked birds, stranded sea turtles, globs of gooey brown crude on beaches, coated crabs and mats of tar have been found throughout the inlets and mangroves that dot the bay. The oil has smothered this watery otherworld with a rainbow sheen and is threatening the complex web of wetlands, marshes and bayous that make up this national treasure.

Everything from crabbing to bait fishing is shutting down, and the anger on the bayou is palpable.

Obama tells Britain no hard feelings over spill

LONDON – President Barack Obama reassured Prime Minister David Cameron on Saturday that his frustration over the mammoth oil spill in the Gulf of Mexico is not an attack on Britain as the two leaders tried to soothe trans-Atlantic tensions over the disaster.

After BP cleans up the oil, it has to clean up its image

BP's name now is inextricably linked with the worst man-made environmental disaster in U.S. history. No amount of public relations razzle-dazzle can change that reality.

And while oil still is pouring into the Gulf of Mexico, almost any step that even seems like PR has a risk of backfiring.

"They've created a Frankenstein of a PR problem," says Howard Rubenstein, the New York publicist who cleans up PR messes for some of the nation's top companies, executives and celebrities. "They tried to minimize it at the beginning, but you can't do that in a crisis of this magnitude."

The Saga of the Anglo-Iranian Oil Company (Better Known as BP)

That’s right – BP was originally called the Anglo-Iranian Oil Company. It adopted the name British Petroleum in 1954. The story of BP is really the story of British aggression and imperialism. As in India, Hong Kong, Ireland, Singapore, and America, the British had their imperialistic eyes on the Middle East. In fact, it was a British civil servant that drew the borders of Iraq and Kuwait and other countries in the region with no regard to tribal history but with all regards to exploiting oil. As in India, Ireland, and elsewhere the rule was always “divide and conquer”. Religion was a very useful tool for the British. More often than not the people of whatever country being economically devoured would fall prey to this tactic.

But religion never mattered to the British. All they were after was the loot. And this is exactly why BP is responsible for the largest ecological disaster in U.S. history. But before I explain how and why, let us take a brief look at some oil history.

Thomas L. Friedman: This Time Is Different

We cannot fix what ails America unless we look honestly at our own roles in creating our own problems. We — both parties — created an awful set of incentives that encouraged our best students to go to Wall Street to create crazy financial instruments instead of to Silicon Valley to create new products that improve people’s lives. We — both parties — created massive tax incentives and cheap money to make home mortgages available to people who really didn’t have the means to sustain them. And we — both parties — sent BP out in the gulf to get us as much oil as possible at the cheapest price. (Of course, we expected them to take care, but when you’re drilling for oil beneath 5,000 feet of water, stuff happens.)

As Pogo would say, we have met the enemy and he is us.

The Niger delta: some perspective to the BP oil spill

The response to the Deepwater Horizon oil spill in the Gulf of Mexico has, understandably for such a catastrophe, been huge -- from international condemnation of BP, to a narrowly-missed diplomatic row between Britain and the US.

No-one denies that the oil spill is a disaster that is having a devastating effect on ecosystems in the affected areas, as well as on the fishing and tourism industries. But what about a little proportion?

Bhopal Gas victims plea to Obama for action against UCC

Seeking justice for the victims of the Bhopal Gas Tragedy of 1984, its survivors have started a signature campaign for a memorandum to be sent to US President Barack Obama against Union Carbide Corporation (UCC).

"Your (Obama) tough stand against British Petroleum for the oil spill in the Gulf of Mexico is worthy of emulation by other governments around the world and the same yardstick should be applied to the Bhopal Gas tragedy involving a US company," the memorandum, scripted by, Bhopal Gas Peedit Mahila Udyog Sangathan, an NGO working for the disaster victims, said.

Official: Oil spill hasn't reached Great Salt Lake

SALT LAKE CITY – Emergency workers believe they have stopped a 21,000-gallon oil leak from reaching the environmentally sensitive Great Salt Lake, one of the West's most important inland water bodies for migratory birds that use it as a place to rest, eat and breed.

But the spill has taken a toll on wildlife at area creeks and ponds, coating about 300 birds with oil and possibly threatening an endangered fish.

The leak began Friday night when an underground Chevron Corp. pipeline in the mountains near the University of Utah broke. The breach sent oil into a creek that flows through neighborhoods, into a popular Salt Lake City park, and ultimately into the Jordan River, which flows into the Great Salt Lake.

Pak says will welcome India joining pipeline project

A day after sealing final pacts with Iran on a long-talked gas pipeline, Pakistan today said it will welcome India joining the project and will guarantee safe delivery of the fuel.

With New Delhi boycotting talks on Iran-Pakistan-India pipeline over pricing and security concerns, Iran and Pakistan yesterday signed government guarantees - the last of a series of agreements - that commits the Islamic republic to supply its eastern neighbour with natural gas from 2014.

Twilight of the Coal Era?

The electricity market is in the doldrums, but the market for new generating stations that use natural gas is going strong, industry experts say. Why? Because gas is beginning to replace coal, according to Randy H. Zwirn, president of the Siemens Power Generation Group.

Shale Gas 'Revolution' Could Turn Out to Be Mammoth Spin Job

Among other things, my excursions in the blogosphere have convinced me that certain people are hard at work trying to convince the television and ‘blog’ audiences in the U.S. that their energy troubles are almost over because of the huge amounts of shale gas that – ostensibly – can be economically extracted in various parts of that country. Moreover, if this turns out to be true, then it is likely that the same could apply to many other parts of the world, since the shale gas phenomenon is largely a matter of technological improvements that can be easily transferred between countries or continents. At the same time it should never be forgotten that what some observers call the shale gas ‘revolution’ might turn out to be no more than one of those mammoth ‘spin’ jobs that are mainly concerned with increasing somebody’s money and power. Personally, for reasons given below, I remain sceptical to a large part of the shale gas song-and-dance, but admittedly I could be completely wrong. I certainly hope that I am.

Wind turbines set out to conquer Sweden's great north

MARKBYGDEN, Sweden (AFP) – While community opposition often blocks or hampers new wind power projects, Sweden has managed to break ground for Europe's largest wind park counting more than 1,000 giant turbines, with barely a whisper of protest.

The secret? The giant Markbygden wind farm -- covering more than 500 square kilometres, or the equivalent of five times the size of Paris -- is being built in a virtually uninhabited, desolate stretch of Sweden's great north.

Goldwind Shelves $1.2 Billion Hong Kong Share Sale

(Bloomberg) -- Xinjiang Goldwind Science & Technology Co. shelved a plan to raise as much as HK$9.09 billion ($1.2 billion) in a share sale in Hong Kong, citing poor market conditions.

The Chinese wind-turbine maker won’t proceed “in light of the deterioration in market conditions and recent unexpected and excessive market volatility,” Goldwind said in a statement to the Hong Kong stock exchange today. A sale would be “inadvisable” at this time, the company said.

IEA Urges Governments, Industry to Advance CO2 Storage Projects

(Bloomberg) -- Governments and industry should boost efforts to deploy carbon capture and storage projects that reduce emissions of the greenhouse gas and help fight global warming, the International Energy Agency said in a report.

Atlantic Graphical Tropical Weather Outlook


This has been upgraded to a 60% chance from a 10% chance just yesterday. This is all we need. If this thing does become a hurricane, and hits the Gulf....

Ron P

Smile! Watch the birdie!

E. Swanson


Don't worry Florida will save the day! I know, I live there...
xkcd, Upcoming Hurricanes.

Uh, Illinois has it too easy ? We got tornadoes, dude ;)

Actually, where I am, microburst thunderstorms regularly flood basements. Believe it or not, I pull out the sandbags when it rains heavily...

Ok, I know that isn't exactly hurricane weather.

This early in the season, they tend to track far south, don't they?

If this thing does become a hurricane, and hits the Gulf....

That's a couple of awfully big ifs for a low that isn't even a tropical depression at the moment and is thousands of miles away from the Gulf. Let's not get too carried away over this just yet.

That's a couple of awfully big ifs for a low that isn't even a tropical depression at the moment

If you read Jeffs blog it sounds like 92L is pretty much boxed in. Too far south to get enough boost from the corriolis force, and strong sheer to tear it apart if it moves north. Sure it might manage to grab the first name on the list, but its prospects are actually pretty dim.

It has now been downgraded to only a 40 percent chance of developing into a hurricane in the next 48 hours, from a 60 percent chance this morning.

Ron P.

I would say that there is a 100% chance that at least one major hurricane will strike the gulf region over the next 3 years. What BP fails to clean up, nature will finish the job.

Would you raise your eyebrows if none happened over the next 3 years?

perception is reality - remember that Public Relations is just the renamed Propaganda.


“I call these things ‘White Guy in a Tie’ events,” a Canadian friend of a friend named Jake told me during the recruitment pitch he gave me in Beijing, where I live. “Basically, you put on a suit, shake some hands, and make some money. We’ll be in ‘quality control,’ but nobody’s gonna be doing any quality control.

And to show that things are as they ever were:
(Source: Labor's Untold Story, by Richard O. Boyer and Herbert M. Morais, published by United Electrical, Radio & Machine Workers of America, NY, 1955/1979.)

The following remarks were apparently made by John Swinton in 1880, then the preeminent New York journalist, probably one night in during that same year. Swinton was the guest of honour at a banquet given him by the leaders of his craft. Someone who knew neither the press nor Swinton offered a toast to the independent press. Swinton outraged his colleagues by replying:

"There is no such thing, at this date of the world's history, in America, as an independent press. You know it and I know it.

"There is not one of you who dares to write your honest opinions, and if you did, you know beforehand that it would never appear in print. I am paid weekly for keeping my honest opinion out of the paper I am connected with. Others of you are paid similar salaries for similar things, and any of you who would be so foolish as to write honest opinions would be out on the streets looking for another job. If I allowed my honest opinions to appear in one issue of my paper, before twenty-four hours my occupation would be gone.

"The business of the journalists is to destroy the truth, to lie outright, to pervert, to vilify, to fawn at the feet of mammon, and to sell his country and his race for his daily bread. You know it and I know it, and what folly is this toasting an independent press?

"We are the tools and vassals of rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities and our lives are all the property of other men. We are intellectual prostitutes."

Eric, I have no idea what the situation was in 1880 but I would submit that it is not the case today that the press is completely controlled. Sure a lot of journalist are prostitutes to those who pay their salaries. But many are not. It is just not correct to insinuate that it is the job of ALL journalists is to destroy the truth, to lie outright, to pervert, to vilify, to fawn at the feet of mammon, and to sell his country and his race for his daily bread. In as much as this may be the case for many journalists it is not the case for the majority of journalists.

Do you really believe that Rush Limbaugh is not speaking his true convictions when he spouts his garbage on radio? And what about Keith Olbermann of MSNBC? What he says is the exact opposite of what many of his colleagues are saying. Who is dictating who?

Then you have the widely read blogs like the Huffington Post. I think the folks who write there are also speaking their true convictions. Then there is Karl Denninger. Just who is telling him what to write?

Because of the internet and the now many, many TV and radio outlets, it is impossible for one line of propaganda to be given out by the government or industry and have all journalists spout that line together.

Hell, even you yourself prove that is not the case by posting your true thoughts on this list. We are all journalists on this list because our words are read by perhaps thousands of others.

Cynicism rolls easily off the tongue of those who wish to criticize everyone they disagree with. The truth is a bit more complicated.

Ron P.

I have no doubt journalists are often expressing their real opinions in their selection of what is news. The journalists are themselves selected by "the system" for having, inherently, the "right viewpoint". US news is censored not by restricting what is reported but by having so much reported that an incredible noise level is created. Only voices loud enough, well placed enough, echoed and repeated enough are effective. You don't have to silence someone if you can drown them out.

But by the same token people choose what they wish to listen to or watch on TV. Fox news and MSNBC usually give opposing viewpoints. That is what one says the other usually says the exact opposite. Just who is dictating who?

And on radio you can find every viewpoint under the sun? There is no official line on talk radio. True, there are more ultra right wing stations than liberal stations but still every viewpoint is represented. Also on the TV talk shows, they usually have people who give opposing viewpoints. On CNN they will usually have one from one party and one from the other. They will both try to talk louder and faster than the other to push their point to the top.

And don't forget we live in the age of the internet. More and more people get their news from the net these days. And everyone reads the blogs. Chris Martenson has his blog and so does Karl Denninger and many more like those guys.

Bottom line, there is no official line anywhere, there are only separate opinions and everyone is trying to shout down the other. Neither the government nor industry dictates what they say. That is my point. It is cynical and a bit paranoid to claim that every journalists' voice is dictated by someone else.

Ron P.

Bottom line, there is no official line anywhere,

Then what is the purpose of ambassadors, The Office of Communications Director at The White House or all the heads of Public Relations in various firms?

Strikes me there are plenty of 'official lines' all over the place.

That is my point. It is cynical and a bit paranoid to claim that every journalists' voice is dictated by someone else.

Considering your example includes Rush Limbaugh as 'a journalist' - seems "we" need to come to an agreement on what 'a journalist' is.

As for every - by defining things with an absolute it's quite easy to build a straw man that one can knock down later. As you are doing.

All of us are rather trapped by our own individual experience. Hard to know what is going on. Certain things stick in my mind. On public radio before the invasion of Iraq I remember one of those two sided presentations: one politician saying we should attack now, another saying we should work on getting UN backing. The idea that killing people has drawbacks was not brought up.

one politician saying we should attack now, another saying we should work on getting UN backing. The idea that killing people has drawbacks was not brought up.

I think you are putting your own spin on things Gloom Dad. This was not the only debate on radio or TV. No, there were hundreds of such debates and many brought up the point that the invasion would cause the deaths of thousands of Iraqi deaths, civilian deaths and US deaths. I heard such objections over and over by many people.

Ron P.

When all that remains is opinion, there is no room for facts. The flow of information is effectively staunched.

That statement, DurangoKid, is only opinion and contains not a single fact.

Ron P.

Do you really believe that Rush Limbaugh is not speaking his true convictions when he spouts his garbage on radio?

If I cared enough to spend hours digging around on the internet I'm sure I could find the instances where Mr. Limbaugh backtracked on some statement with "it was a joke people".

So no, I don't think he's speaking his 'true convictions' - he's speaking to an audience telling them what they want to hear.

"I'm not a hater, not one of the angry radio guys. I'm an entertainer with a conservative agenda who wouldn't have 20 million listeners if I spewed venom. Yet you liberals lump me in with all the others,"

Hell, even you yourself prove that is not the case by posting your true thoughts on this list.

Do I?

completely majority

Words like completely are able to be refuted as they are absolutes - as I've pointed out in many of your posts. Majority - for that is a majority anything over 50%

How about 'what is a journalist'? Plenty of people will argue either side of 'is Rush Limbaugh a journalist or an entrainer' Are Blogs journalism?

it is impossible for one line of propaganda

But quite easy it seems to have anyone who's posted something that does not follow "the party line" to be called a "conspiracy theorist".

Do you really believe that Rush Limbaugh is not speaking his true convictions when he spouts his garbage on radio?

As true as his crocodile tears.

Above every courthouse door it should be cut in stone that the truth is complicated,and that honest people can come and often as not do come honestly to totally different conclusions when examining the same evidence.

One thing that really frustrates me is that even here on TOD, most participants all too often tend to see only one side of a question, and fail to consider the contrary evidence, or the side effects of putting thier schemes into effect.

A few days ago somebody thought I had been snookered by the antiimmigrantion camp;this is patently not so.

I was simply pointing out the facts which are seldom mentioned by the people who are in favor of allowing more people into the country, especially people who lack the skills needed in the high tech work place.We have a much more than AMPLE supply of poorly educated would be workers already, including some of my relatives.

As a matter of fact nearly everybody I know is in one or the other of the two major political camps, and reflexively defends or supports the positions collectively held by his camp, even when he knows nothing about the issue other than that his in group has taken a given side.

Thus a liberal will fail to consider the down side of uncontrolled immigration, and a conservative likewise will see none of the benefits if he is opposed;other conservatives who believe in growth and bau will support immigration while like the liberal failing to consider the downside or even acknowledging that there is a downside.

Most of the msm are in house prostitutes but Ron is right;there is more than ample free press available to meet the needs of those willing to make use of it.

But somebody who reads only one paper, or none, and depends on tv for his information can be lead around like a little child-by either political camp.

One of the points I have repeatedly made is that people depend on the media for their information and that the media is privately owned and tends (rather strongly in my opinion) to present a picture of the world that is to the advantage of the owners. People don't tend to notice this since they have pretty much settled into the "official reality" presented by those interests. With the exception of fossil fuel energy issues, I find that true of TOD. I depend on TOD for those issues, other sources for economics and politics.

Eric, I have no idea what the situation was in 1880 but I would submit that it is not the case today that the press is completely controlled. Sure a lot of journalist are prostitutes to those who pay their salaries. But many are not. It is just not correct to insinuate that it is the job of ALL journalists is to destroy the truth, to lie outright, to pervert, to vilify, to fawn at the feet of mammon, and to sell his country and his race for his daily bread. In as much as this may be the case for many journalists it is not the case for the majority of journalists.

The American press of 1880 was controlled much like today - via the Propaganda Model:


Journalists who speak with conviction have been indoctrinated by a system that requires its members to be true believers. The system weeds out those who have convictions about the "wrong" ideas.

It may seem that the weeding-out process requires a "system" of salaries and editors and media multinationals - so the Internet would at first appear to be free. Surprisingly (to me at first) it is not! People self-organize on the Internet into narrowly-focused forums that weed out "off-topic" information and ban "trolls." On Denninger's forum, for example, "peak oil" is "off-topic" and its believers are "trolls."

This makes the Internet truly awesome for totally free speech about narrowly defined topics. It does however result in a "pigeonhole effect" where each narrowly defined topic lives in a separate universe, with almost no opportunity for crosstalk.

Bmcnett, the Wikipedia piece you posted implies that the press controls not that the press is controlled. I have no doubt that the article is mostly correct, the press, or TV stations like Fox, tries to indoctrinate the public. But we also have other TV stations trying to do the exact opposite.

Journalists who speak with conviction have been indoctrinated by a system that requires its members to be true believers. The system weeds out those who have convictions about the "wrong" ideas.

Hell, everyone is trying to indoctrinate everyone else to their way of thinking. If you wish to see people who have been indoctrinated just witness a bunch of religious fundamentalist. Indoctrination is what most parents try to do to their children. Every person with an idealism or an extreme political point of view is trying to indoctrinate anyone who will listen to them. And of course Fox, or MSNBC hires journalist who parrot their idealism. Just what would you expect anyway? That is just the way the world works, learn to live with it.

And as far as Denninger goes, hell it is his blog, it is his free press and it reflects his and only his point of view. So he don't like peak oil, well Chris Martenson devotes half his blog to energy issues. It is his blog and he can devote space to whatever pleases him. The only free press is the one you own and both Denninger and Chris Martenson have their own personal free press.

Ron P.

That is just the way the world works, learn to live with it.

If I had explained that the Earth rotates around the sun, would have told me to "learn to live with it?" The Propaganda Model is a pretty good explanation for how media works. Good explanations don't bother me.

And as far as Denninger goes, hell it is his blog, it is his free press and it reflects his and only his point of view. So he don't like peak oil, well Chris Martenson devotes half his blog to energy issues. It is his blog and he can devote space to whatever pleases him. The only free press is the one you own and both Denninger and Chris Martenson have their own personal free press.

My point exactly - on the Internet everyone owns a free press. Scarcity of materiel is not an organizing principle here. That's why it's okay for Denninger to erase any mention of peak oil from his forum and perma-ban the people who mention it. And, this erects a wall between people who like his financial analysis, and people who like The Oil Drum. It can make it difficult for people to participate in both realms.

I don't think there's anything we can do about these facts, even if I had a better way in mind, which I don't.

via the Propaganda Model

History is interesting - who ya gonna believe?

One website claims
"The Great Influenza” John M. Barry, Viking, 2002 pps300-301

“He had created a vast propaganda machine, an internal spy network, a bond-selling apparatus extending to the level of residential city blocks, He had even succeeded in stifling free speech, in the summer of 1918 arresting and imprisoning- some for prison terms longer than ten years- not just radical labor leaders and editors of German-language newspapers but powerful men, even a congressman.”

This is about 1918 and Wilson.

More history - Willi Münzenberg

One of the modern masters of such media control was the German Communist from whom Joseph Goebbels learned his trade, Willi Münzenberg. Münzenberg was not only the inventor of spin, he was also the first person who perfected the art of creating a network of opinion-forming journalists who propagated views which were germane to the needs of the Communist Party in Germany and to the Soviet Union. He also made a huge fortune in the process, since he amassed a considerable media empire from which he creamed off the profits.
.... The key relevance of Münzenberg for our own day is this: he understood the key importance of influencing opinion-formers. He targeted especially intellectuals, taking the view that intellectuals were especially easy to influence because they were so vain. His contacts included many of the great literary figures of the 1930s, a large number of whom were encouraged by him to support the Republicans in the Spanish civil war and to make that into a cause-célèbre of Communist anti-fascism.

And no one has said 'Hey Eric you called PR Propaganda' (so either everyone knew it or no one felt the need to question)

In the BBC documentary Century of the Self, an elderly Bernays explained how he rebranded his field of endeavour, "propaganda," as "public relations."

The 1928 VS 1945 books.

with almost no opportunity for crosstalk.

And yet here with Drumbeats this happens.

Good info, thanks. The documentary about Bernay here http://video.google.com/videoplay?docid=6718420906413643126#

Yes, the *comments* on the drumbeats are the best daily news on the Internet. I come here several times a day for them.

intellectuals were especially easy to influence because they were so vain.

This reminds me of what left-leaning types I know are up to. The ones with money are buying "carbon neutral" and "organic" toys, and the ones without money are making fun of Tea Partiers who spell poorly. Both activities seem to appeal to vanity.

BP doing more coverup-

Orange Beach, Alabama -- While President Obama insists that the federal government is firmly in control of the response to BP's spill in the Gulf, people in coastal communities where I visited last week in Louisiana and Alabama know an inconvenient truth: BP -- not our president -- controls the response. In fact, people on the ground say things are out of control in the gulf.

Even worse, as my latest week of adventures illustrate, BP is using federal agencies to shield itself from public accountability.

For example, while flying on a small plane from New Orleans to Orange Beach, the pilot suddenly exclaimed, "Look at that!" The thin red line marking the federal flight restrictions of 3,000 feet over the oiled Gulf region had just jumped to include the coastal barrier islands off Alabama. "There's only one reason for that," the pilot said. "BP doesn't want the media taking pictures of oil on the beaches. You should see the oil that's about six miles off the coast," he said grimly. We looked down at the wavy orange boom surrounding the islands below us. The pilot shook his head. "There's no way those booms are going to stop what's offshore from hitting those beaches."....

With oil undisputedly hitting the beaches and the number of dead wildlife mounting, BP is switching tactics. In Orange Beach, people told me BP wouldn't let them collect carcasses. Instead, the company was raking up carcasses of oiled seabirds. "The heads separate from the bodies," one upset resident told me. "There's no way those birds are going to be autopsied. BP is destroying evidence!"

The body count of affected wildlife is crucial to prove the harm caused by the spill, and also serves as an invaluable tool to evaluate damages to public property - the dolphins, sea turtles, whales, sea birds, fish, and more, that are owned by the American public. Disappeared body counts means disappeared damages - and disappeared liability for BP. BP should not be collecting carcasses. The job should be given to NOAA, a federal agency, and volunteers, as was done during the Exxon Valdez oil spill in Alaska.

Full article by Riki Ott at http://www.alternet.org/module/printversion/147185

I think you have it wrong. BP controls the attempted response. The oil and nature control the real long term response.

You appear to not have gotten the point, it is not about BP controlling the attempted response or oil and nature controling the long term response. That is one issue. This is about a different aspect. This is about BP controlling the evidence for how much harm they have done in an attempt to limit their liability and to try at present to control anti BP public opinion.

New Report - Sustainable Energy Security: Strategic Risks and Opportunities for Business, produced jointly by Chatham House and Lloyd's, reveals multiple vulnerabilities in our current energy system and urges both business strategists and government policy-makers to take into account a range of encroaching risks and be bold in making plans for a more resilient and low carbon energy future.

This report, jointly produced by Lloyd’s 360 Risk Insight programme and Chatham House, should cause all risk managers to pause. What it outlines, in stark detail, is that we have entered a period of deep uncertainty in how we will source energy for power, heat and mobility, and how much we will have to pay for it.

Is this any different from the normal volatility of the oil or gas markets? Yes, it is. Today, a number of pressures are combining: constraints on ‘easy to access’ oil; the environmental and political urgency of reducing carbon dioxide emissions; and a sharp rise in energy demand from the Asian economies, particularly China.

Thanks for that reference. Worth a read.

They miss many things, but at least they have some handle on the impact on business structures. They are not really up with peak oil, but do say a supply crunch around 2013, with prices over $200 per barrel is possible.

In particular they suggest that the food industry currently doesn't get preferential access to fuel, I hope they are wrong.

They are right and wrong, diesel fuel for farm use is exempt from many taxes so it is economically preferred, otherwise there is nothing.

Expect that to change if it becomes a problem down the line, but not before it is an obvious problem.

This blog has links to ROV video and claims that it is evidence of leaks on the Gulf floor. I can't make heads or tails of this, but maybe some of you that have been studying the BP ROV feeds can.


BP is building a camp for spill clean up workers as reported in a CNN video (link below). They say in the video that this is to have workers near the spill. However the spill is not in one location. And locals who need work cleaning up because they are out of work due to the spill have homes in the area. So is this for migrant workers (who don't complain as much and may have a harder time getting compensation if they get ill) or is this to keep the locals away from journalists and under control? Or both.

CNN reports from the Gulf, near the Louisiana coast, where BP is building a temporary city to house 1,500 oil spill clean up workers. The location features army-style bunk housing, laundry and dining facilities, and even 24-hour police to enforce order, including the site's "no alcohol" rule. BP says the city could remain in operation anywhere from three to six months. We couldn't quite put our fingers on it, but there seems to be something a little creepy about this new BP city. Also, we couldn't help but wonder, how much oil and energy is it going to take to power this massive operation?

WATCH BP builds a city on the Gulf - CNN video at: http://www.huffingtonpost.com/2010/06/11/bp-builds-city-for-oil-sp_n_609...

I report from my Town of Gulf Shores, they are shipping workers in like it is Kuwait.

Yet, here I sit on my ass getting a BP check. I could out oil spill clean anyone on that trailer. They are working for a check. I would be working for my grandchildren.

This thing is going to cost 100 times $1.6 billion. That is just BP's number.

Have you seen what workers they are bringing in? My guess is that they will be migrants who will be glad for a check, unaware about health risks, and shipped back to country of origin when this is done where it will be hard for them to collect damages for health harms. Also sequestered and patrolled they will not be talking to the press.

Middle aged unemployed people from 100 miles north. Migrant workers maybe, but it looked like a mixed group of Americans. No Spanish needed.

Very interesting. Looks like our workforce is beginning to learn what life is like in a third world country.

The article:

Shale Gas 'Revolution' Could Turn Out to Be Mammoth Spin Job

Pollution from fracking and increased contaminated water sources may stop this gas surge before it is allowed to really increase in production. There have been several television and radio programs in the last few weeks that have portrayed the nightmares of people being muscled around by companies intent on drilling. After the BP spill, there may well be a mustering anger by people who previously had little recourse.

What would you do if a company started to drill on your land with the backing of 60% of your neighbours? (I know what I would do)

NG is quickly becoming a panacea for all our energy woes as oil declines. It may be a very dirty life-ring.


I tried to read that article, but the writing was so horrible I couldn't make out what the guy was trying to say. He seemed to change direction a few times in the middle of each paragraph.

Let me translate it :)

No thanks :) :0

AFGHANISTAN - The real reason the US is there.......LITHIUM.

Americans discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, including iron, copper, cobalt, gold and critical industrial metals like lithium, according to the report. The Times quoted a Pentagon memo as saying Afghanistan could become the "Saudi Arabia of lithium," a key raw material in the manufacture of batteries for laptops and cell phones.

Oh, there you go with your conspiracy theories again. Next you will be saying we went into Iraq to control middle east oil flows and that we want to bomb Iran for the same reason.


This article I think:


very interesting.


True, and the US already controls South America. Afghanistan is a net addition to the natural resources of the US.

True, and the US already controls South America.

With the likes of Hugo Chavez, and Evo Morales our control is getting slipperier and slipperier. If you want to maintain control over foreign resources a good strategy would be to dedge your bets elsewhere.

It's only good for the Legions and the Auxiliaries.
But while the United States and other North Atlantic Treaty Organization countries are providing the bulk of the security for Afghanistan -- U.S. troop levels are set to rise to 100,000 by year's end -- the firms that are profiting from the resource boom are primarily Chinese, and to a lesser extent, Russian.

Lithium isn't the critical material for building lots of electric cars. The largest previously-known supply, in Bolivia, isn't being exploited at all. Rare earth elements for the permanent magnets in high-efficiency motor/generator units are more important. China has most of the reserves of REE. The New York Times article about resources in Afghanistan suggests that there's a small recent discovery of rare earth elements there.

There's some discussion of this story in yesterday's DrumBeat.

Geography rules. These resources will be essentially grabbed by China. The fate of resource rich third world countries is not very inspiring. Poor Afghanistan.

The irony of spending so much oil (via the military) to "defend" the lithium.

Flying back from Washington, D.C. last night, having spent a weekend with 20 frustrated peak oil experts and activists, I was in need of some inspiration. For five hours I watched TED talk videos. Especially enlightening was Dan Gilbert's presentation which explains why we will be just as happy with less oil: http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.html.

Debbie, I did not live through the Great Depression but my dad did. He always described it as a time of great misery. You know, bread lines, starving children and all that.

However you are probably right that people could be just as happy with less oil. But what about less food. Do you think people will be just as happy if they have to eat fried dough for every meal as many did during the Great Depression. And what about those who do not have enough fried dough to eat?

Please forgive me if I don't share your opinions that we will be just as happy with less oil, because less oil will mean less everything else... including less food, clothing and shelter.

Ron P.

because less oil will mean less everything else... including less food, clothing and shelter.

There are a lot of countries that use much less oil than the U.S. and have enough food, etc. But of course you refer to the consequences of less oil for the economy. A few more oil price spikes followed by steps down on the staircase, this maybe even happening without price spikes. And convinced that most who lose their job won't find other work, for example in the energy-transition sectors.

My mother and father told me their experiences about the 1930s depression, and they reported it was an most unpeasant time. It seems that they did eventualy grow use to the poor conditions, and perhaps because they were not adults then, they mostly adpated fairly readily.

It would be very difficult to imagine going from the internet/cell phone age back to the 1930s lifestyle, because even if I personally mentally adjust to going back in time, I don't think most will - and they will likely be rather depressed or angry about their situation.

the 1930s depression, and they reported it was an most unpeasant time

Of the many quotes on the Depression experience I would have put unpeasant quite low :)

I hope you and others will find some time to watch the video to better understand not just my comment but Gilbert's research on "synthetic" happiness. Fascinating stuff.

I can't help but be reminded of my grandmother, born in 1883 into a world without automobiles, electricity, or indoor plumbing. Was she happy? Absolutely and for more than 100 years. And yes, even in 1883 there were many people living on the planet who had more and less food, more and less clothing, and more and less shelter than she. Irrespective of whether there is misery in nature (because that is inevitable in all natural systems), humans will still be synthesizing their own happiness relative to their conditions. In my opinion we do too much projecting of our feelings into a future that is unknowable.

The misery meme has grown old for me, does not motivate action, and leads us where. Of course, everyone is in a different place in their lives and minds and clearly every TOD reader has their own reasons for coming here. I come here for the interesting tidbits of creativity and inspiration that occasionally bubble up through the doomer porn. And I try occasionally to return the favor to other like-minded individuals.

I have older relatives who fall into two camps on the Great Depression.

Camp 1: "It was a horrible time... (followed multiple stories of hardship).

Camp 2: "We were poor before and didn't notice much difference..".(followed by stories similar to Camp 1 but with less dire perspective).

(again, this thread strikes me as "bargaining" - as a group we might be able to help each other cope)

Camp 3: "We lost almost everything but gained much more. It was a time of cleansing and self-discovery. We also discovered that we needed each other more than the material goods that wealth provides. It is what created the 'greatest generation'."

My Grandfather told me that he was successful prior to the depression. He was on the fast track. His later successes would have had much less meaning if the depression and war had never happened. It reafirmed his sense of responsibility to others and to the society which made his successes possible.

He died when I was 13. He would be deeply saddened and disgusted at what we have become.

Lately, I despair that these lessons in humility and perspective will be lost on a population consumed by hubris, superficialities and material greed.

Debbie, the world your grandmother lived in is lone gone and will never return. When she was born in 1883 the world had less than one quarter of its current population. The world has more than tripled in my lifetime, (since 1938). My point is that the demise of fossil fuels will not simply mean a return to those days. The demise of fossil fuels will mean that the population must return to the level of those days. And that Debbie, is where the misery factor comes in.

In my opinion we do too much projecting of our feelings into a future that is unknowable.

Debbie, there is a lot of things about the future that is unknowable. But there are some things that are knowable. We can calculate, with some degree of accuracy, the amount of food and biofuel that can be produced without fossil fuel. And we can calculate that there will not be enough to feed 7 billion people.

But of course we can pretend that we don’t know anything of the sort. We can pretend that technology will somehow fix everything. Or we can believe that God will provide and go on about our merry way.

The misery meme has grown old for me,

The prospect of misery in a world without fossil fuel is only a meme eh? Well hell, who believes in silly memes. Of course there will be no misery when fossil fuel goes away, we can all eat crabgrass. I just hope there is enough crabgrass to feed 7 billion people.

Ron P.

Debbie's not the only one tired of "we're all going to die" discussions. We can only be the change we want to see in the world. We cannot cure all its ills, we can only get off our butts and do something. Or, as Debbie put it recently, "do some awsome shit".

I have been impressed recently with the amount a person actually can accomplish when they set their minds to it. Whole bunches of people are getting off their butts and doing.

World population growth is actually slacking off. One billion increase 1990 - 2000, 0.7 billion increase 2000 -2010. Population growth has to drop below linear before population can peak, by golly, it has.

I'm off to get my tomatoes and cucumbers in.

Hamster, if you don't like posts that deal with the consequences of the eventual demise of fossil fuels then don't read them, and for God's sake, don't reply to them. But that is one of the subjects often discussed on this site. Debating what will happen or what will not happen as fossil fuels decline is one of the primary subjects discussed on this site. That is one of the reasons this site exist. So please don't bellyache when someone brings the subject up.

Ron P.

Like Ron, I was also born in 1938. I hate to be blunt but he is right and you all are wrong. Why is that people who have never even had peripheral personal contact with what occurred during the Depression argue that it wasn't that bad? I know in the case of my mom and dad that on one occasion the only food they had was a can of peaches with no idea of when they would have more food. We had relatives living in basements. My dad's father lost his business and went from lower rich to upper poor and never recovered. My entire life has been impacted by what these people went through.

Yes, people made do and there were some bright spots. But it won't be like that this time around when there will only be less and less.


Debating what will happen or what will not happen as fossil fuels decline is one of the primary subjects discussed on this site.

Actually, you don't give much room for a debate. You just write most things in a way as if they are facts.
If Aleklett's prediction comes true, then in 2030 there is only 11% less 'total liquid' production, so there doesn't seem to be an imminent threat to foodproduction and transportation. Remains the biggest threat for this and the next decades: a lot more hungry people because of an economic collapse. If this happens remains to be seen.

Han, I am not the only one debating here. Regardless of what you think of my posts, others have other opinions. Different opinions are the debate, not just what I think! This is everyone's site, not just my site.

If Aleklett's prediction comes true, then in 2030 there is only 11% less 'total liquid' production, so there doesn't seem to be an imminent threat to foodproduction and transportation.

Yes and most here think Aleklett's prediction is not even remotely close. That is what we do here Han, we debate different opinions.

Ron P.

Regardless of what you think of my posts, others have other opinions.

Your posts are among the favorites and one of the few I read when I have little time. But sometimes you seem to ignore things, for example when it is written that a lot of electricity is available for EV's when oilrefineries close down.

And I will continue to ignore some things. I cannot possibly be an expert on everything. I have the things I follow very closely and the things I do not follow at all.

But as far as electric vehicles replacing internal combustion engines is concerned, I just don't buy it. You must have missed some of my posts as I have written on this many times before, but not recently.

I simply do not believe, in the long run, that electricity from renewables can possibly replace the internal combustion engine.

Long threads, special threads by Gail, have been posted on this subject. I cannot possibly, in one short post, give all the reasons that I think electricity and EVs will replace gasoline powered engines. I would yield to those far more familiar with the subject to debunk the silly notion that we can simply change to renewables, or other so-called alternatives such as solar and wind generated electricity and a fleet of battery powered cars, trucks, tractors, planes and trains. (I cannot help but laugh as I think of such a scenario.) So I yield to someone who has studied the subject far deeper than I:


Ron P.

From the Hirsch rapport:

Such a shift in public preferences is unpredictable, so electric vehicles cannot now be projected as a significant offset to future gasoline use

you seem to ignore things, for example when it is written that a lot of electricity is available for EV's when oilrefineries close down.

Others here (and elsewhere - the internet is a big place) have noted that the oil input for cars is a small part of the car picture.

The materials and labor for roads are an important part. Cities across the nation have budget shortfalls that translate to the road reapair/replacement exceeding the lifespans of the roads.

Also consider westexas's Export Land Model, which predicts that declines in oil imports to the U.S. will be modest at first, but then after a few years the rate of decline in imports increases substantially. After Peak, exports are "front end loaded" so that most of the oil that is ever going to be exported is in the first several years, and after that the decline is quite rapid.

I do not know why the ELM has not received a great deal more attention than it has already on TOD.

Roughly speaking, US oil use is running about 1.2 million barrels, or about 6% less than about 2.5 years ago when the recession started. It's no coincidence that imports are also down very closely by the same amount.

This seems to be proof that ELM is in effect. The interesting thing about this is that the drop in oil use occurred during a period of wildly fluctuating oil market prices. Price seems to have only a marginal effect on supply and demand.

The results of ELM are great, due to the close relationship of oil to the US economy. Huge job losses followed right along with the drop in oil use.

No, the decline in oil imports by the U.S. does not tend to support ELM, because over the past three years there has been a large decline in real U.S. GDP and hence also in the demand for oil products. Despite this fact, I do believe that ELM is correct. I'm not so sure about ELM2.

I didn’t explain myself very thoroughly, but due to lack of time, I will say simply that it may be a chicken or egg issue. The recession started at the end of 2007, before oil hit its peak. Mostly the surge to record high prices for oil was driven by increasing demand from China. The high price was the mechanism that caused US demand to drop so that additional supplies could go to China. The drop in oil use was coincident with a rapidly falling US economy.

Of course there were other factors at work, and you and others may perceive a different cause and effect than I do.

Hmm I'd be careful.

I use VMT as the closet thing to correct for the US as far as oil consumption goes.


Over most of the period oil usage in the US has been flat to falling with oil prices rising.
The period where you had both falling VMT and falling oil prices is actually the outlier.

Now looking at imports.

We can see that they do a fairly good job of mirroring each other within reason.

I don't think this is really ELM as ELM is back loaded becoming and increasing issue later in time.

I think the system if you will was "glitched". I won't go into my long drawn out reasoning I've posted it before and I'm sure you have read it.

The key point is if ELM is right and if oil production is in decline and if the recent VMT trend is correct in that we have hit our inelastic limit aka demand will have to be pushed lower via much higher prices then we should be hitting the real trends or have already hit them. This makes the recent surge in imports all the more interesting as if so its sort of a last ditch effort to keep things going for a bit longer. Thats of course assuming its the end of my glitch period. We should be entering the point where ELM and inelastic demand become a big issue.

This is the other thing I watch closely the baltic dirty tanker index.


My glitch period is fairly clear if you look at this. In any case if this last peak is the last one before ELM hits in earnest the we should see rising oil prices with BIDY remaining weak. Does not matter if oil prices rise if there is no oil to move BIDY won't go up.

Now it will of course be forced higher to some extent simply to cover bunker costs so its not a perfect indicator you have to include the fact that rising oil prices will work to force it up. However if oil for export is really weak this effect should not allow BIDY to recover well.

In any case this and a lot more make me think we are exiting what I call the glitch period and whatever the real situation is with oil will become increasingly clear over the coming months. If the recent spike in imports was a hail mary and BIDY so far seems to indicate it was then the fundamental trends should assert. If not still the same result the fundamental trends should become clear.

Basically from now on out for everything to work as claimed in all the rest of the public data oil prices will need to remain flat to falling with imports now tracking flat or more correctly with VMT. BIDY should move the same.

So either the system has stabilized and basically all official statements are right or they are wrong.

The glitch was a glitch ELM is roaring along and I'd add that I'm right and we hit inelastic demand.
But again things start or indeed may have already started now.

According to BIDY the last ditch save attempt started on 12/24/09. A number of surges along a higher base have kept oil prices in check.

So lets see what the next few months bring. Already we have seen and attempt to introduce another "glitch" with the EU debt crisis but that seems to have failed. I expect life to get increasingly interesting over the coming months.

I think U.S. real GDP is going to decline in the near future (say next two years) and that oil prices will tend to follow down the decreasing GDP.

Some claim a six million bpd excess capacity in oil for the whole world. I don't believe that number, but my guess is that the true number is about half of that six. Thus I do not see ELM kicking in over the next year or two. But sooner or later, of course, ELM will bite us.

Some quick thoughts.

The euro crisis has perversely acted to increase US oil product demand, at least if May's large increase in usage over last year is any guide.

However the pickup in imports this last few months, I consider to be the delayed effect of the US outbidding other countries earlier this year when the price of oil rose to near $90. Since world output hadn't changed, these extra imports came from somewhere else that normally got them.

Over the longer term however, I agree that it takes very substantial changes in price to have the effect of reducing demand. So if I am correct, the price should rise quite rapidly this summer. If it doesn't, then there are other supply-demand issues that I am not seeing.

In general, however, I view the price of oil as largely seperate from the inflation/deflation debate.

Over the last few weeks I have been picking from wild grown dewberry and blackberry vines. No fossil Fuels used in their production. If I had a few more hands and could have picked all that were available we'd have gallons of them. No we couldn't survive on them only. But while out there, I saw several of food plants, just growing wild in the areas that no one much goes to.

The Oak tree across the street produced enough acorns last year to feed half the street. Most of them got wasted.

My dad and mom grew up during the depression, and though they feel it was hard they seem to have gotten out of it a happy attitude rather than a negative one. There are several people that go to my church that are over 80, I guess I'll have to ask them how they felt about the Depression.

Ask kids today if they are happy, and you might get a lot of answers that they aren't. It seems to me that every generation someone will say they are not happy with something going on, or not going on.

The blackberries will be getting ripe soon, and they will be buckets and buckets of them. Sorry I can't stay gloomy.

BioWebScape designs for a better fed and housed future,

I saw several of food plants, just growing wild in the areas that no one much goes to.

As things go downhill - the wild plants will get selected. So will the animals.

And like in many fossil fuel poor locations - the woody plants will be used for fuel for cooking and heat.

Pray for passive solar homes/solar cooking.


The TED talk is about The paradox of Choice, I think it helps with a lot of what we talk about in this thread.

It might even help to think about how happy we are. And in what kind of fish bowl we see ourselves. (see the video for an explaination.)

BioWebScape designs for a better fed and housed future, where choices are few but good.

Hugs from Arkansas.


We're not all that happy the way things are anyway. Study after study has that the average happiness of middle and upper class Americans is lower than that of Mauritanian goat herders living in mud huts. The important stuff is not stuff.

There are a lot of folks out there who are pleased that the work of their hands has meaning, something more noticeable in an era of declining stuff. What I find really interesting is that a surprising number of people are looking forward to their craftsman skills having social and economic value. For example, I've met people who want to ditch the cubicle and run a neighborhood grocery store, make furniture in their garage, make a viable income from their metal working hobby, etc. None of these business models work right now. They are having mixed feelings about the ongoing major economic restructuring: scary stuff, but also perhaps opportunity to do work with more meaning.

I tend to stray away from worry, I like to be happy to much. I may rant and rave a bit form time to time, but in the end, I just let it all go and get back to a calm place. Head outside in the cool of the night and listen to the night noises.

It was sweaty hot today while picking blackberrys, there were several different culitvars of them, some that I'd guess are dewberrys, but were tall like blackberries. But either way, I picked them just the same. What stuck me is that I could have picked almost twice as much if I had longer arms, or could get into the ditches better. Lots of bugs out there eating on them, and in one field the leaf hoppers were jumping with every step I took. A mocking bird was telling me at one point to leave his berry patch alone, just sitting up in a tree about 4 feet away holding out his sign "Go Home Human".

Happy is as happy does. My parents were dirt poor, but happy, they picked a lot of wild foods, did a lot of share cropping and hand picking farm labor on my Mom's side, and Oil feild work on my Dad's. They might have been poor, but they never lacked for food. I don't know what the city folks ate, but country folks ate off the land, and both my parent's could shoot rifles and hunted as kids/teens.

I don't know what the future will hold, but I will try to stay happy even if I don't have anything to eat, not likely as the wild world is really full of food if you know what is edible or not.

hugs to make you happy,
BioWebScape designs for a better fed and housed future.

Happiness has a lot to do with attitude. Here is Alexander Solzhenitzen (Cancer Ward):

It is not the level of prosperity that makes for happiness but the kinship of heart to heart and the way we look at the world. A man is happy so long as he chooses to be happy and nothing can stop him.

As you may recall Solzhenitzen was imprisoned for years by the Soviets in Siberian labor camps. After that he was exiled. He went through cancer. He knows whereof he speaks.

Yes, some people will be upset at having to give certain things up as we wean ourselves from oil. But it need not result in "less happiness" - unless some people decide to have a pity party. But I think many, many people will reach inside, find inner strength, creativity, fellow-feeling and even happiness. Personally I'd urge us to do that.

Mark Twain said something like, "most people are about as happy as they make up their mind to be".
My Dad used to tell me many stories of Minnesota in the Depression. The phrase, "we always had lots to eat, just didn't have any money" is well remembered. My mom was from poor New Brunswick and didn't talk about it much other than to say she had one pair of rubber gum boots for shoes and it was cold cold cold. It wasn't good.

I don't think it is doomer porn to express a fear of rapid decline. I do have faith in human spirit and ingenuity; as well as a fear of possible widespread violence. We'll just do our best.


The phrase, "we always had lots to eat, just didn't have any money"

And back then you didn't have county staffers who were willing to condem a building due to paint peeling from metal siding. (Yup. Because of peeling paint the county was willing to condem) You didn't have the parasitic loads of taxes, insurance, electricity (and other energy), and even a debatable code compliance. If 'Internet access is a human right' gets traction, it can be added to the (some) code compliance and telephone side of the ledger.

Take insurance - has doubled and tripled just so the people running the insurance firms can cover their losses in the commercial real estate market/make sure the CEO is paid.

You'll be sure not to have any money just to make sure the people at the top of the pyramid 'scheme' are kept well fed.

This might be a bit unethical, but I had an idea for the USGov/BP to raise private funds for saving/rebuilding the GOM ecosystem. They could bottle some of the crude they've recovered and sell it for $10 a pop. All proceeds would go to cleanup/restoration efforts.

"Get a piece of history and help save the GOM."

It appears something similar to this is already happening!


Check it out.

Right on. I didn't think the USGov/BP would allow anyone else to collect samples like that and sell it off, but I guess some group is doing it.

Researching http://horizonrelief.org and not seeing that they are a nonprofit org. Also wonder how they guarantee that donated funds get to where they promise. I think a lot of us TODers would be more than happy to donate with certain assurances.

If Alan vouched for them, this would be acceptable to me.

Sensors to measure the oil flow? After telling us for nearly 2 months there was no way to measure? And only after scientists have agreed a humongous amount is spilling? Will wonders never cease...

Russia’s Central bank announced on Monday that starting from this month it is tying the Rouble exchange rate to the oil price.

The US Dollar has been pegged to oil for quite some time. Not officially, of course, but in reality. You want to know about inflation, keep an eye on the price of oil.

Of course, like all currency settings, people will try to game it. That is one reason that naked short selling should be a crime. One of the few for which perhaps the death sentence would be appropriate. Selling out the future for immediate person gain. But then, again, that is what our new capitalism has come to represent. Greed is good and all that rot.


I agree that the dollar has been pegged to oil since the early seventies. This does not make rising oil prices an inflation indicator, however. Rather the opposite; as the price of oil rises, it sucks dollars out of the U.S. economy, which is deflationary. The consumer price rises which follow as the increased price of oil filters through the economy as raised prices for finished products mimics symptoms of inflation, but strictly speaking, is not inflation. At least not if one adheres to the definition of inflation as being an increasing money supply chasing too few goods and services.

I would argue that we have been in a deflationary cycle for at least three years, with primary forms of wealth (equities, homes) decreasing in value while total M3 decreases and "hard currencies" (gold, oil) increase in value.

But what do I know?:)

The great majority of economists define inflation and deflation in terms of price level indexes--not the supply of money. Only economists who follow the school of thought known as Austrian economics define inflation and deflation in terms of the money supply. theautomaticearth.blogspot.com is a follower of the Austrian school of thought. For definitions, pick up an old economics textbook cheap and check out their definitions. This is far more reliable than going to Wikipedia.

While I am not Austrian, I have spent a lot of time reading the literature and have certain sympathies for this view.


Yes, Don, I'm aware of that.
And indeed, I'm a close follower of Stoneleigh's views on the autoearth as well as the Austrians.
I think they are a lot closer to the truth than the majority of economists today.

For me the most compelling "missing piece" in current economic thinking is the compulsion to view oil and gold as commodities. This is a mistake. True, they both USED to be commodities, but now they are asserting their rightful place as hard currencies. If they are viewed for what they really are (hard currencies of the natural world with real and finite limits to supply) then everything starts to make much more sense (at least to me). This way of looking at things even explains silver's sluggishness in keeping up with the gold price; silver is still functioning in the market place as a commodity. This will change, watch for silver to start acting like a currency in the near future.

I'm aware that maybe most people will disagree with me and that's okay:)

Rather the opposite; as the price of oil rises, it sucks dollars out of the U.S. economy, which is deflationary.

Very astute Jabberwock. I hadn't thought of it that way, but that seems to be the case.

Why anger towards BP is largely misplaced
by Erik Lindberg
Like anyone who gives a damn about anything, I too have been watching the BP oil spill with horror. It is becoming increasingly clear that this is well on its way to becoming an unprecedented ecological disaster for North America, perhaps our Chernobyl. At the least, it is likely to have environmental ramifications for decades to come and may prove to be a watershed moment in American energy policy as the images of futile technological efforts to stop the leak begin to inhabit our collective consciousness alongside the terrible images of ruined wetlands and the gruesome wildlife casualties we have inflicted.
But I have also experienced growing horror as I witness the inadequacy of our public debate about oil, energy, and the environment. True, the media has done a decent enough job of broadcasting unvarnished images of the depths and scope of this ecological tragedy, and has been willing to hold both BPs and the governments feet to the fire. But a broader discussion of oil and energy, at least one that demonstrates a basic understanding of either the economy and geology of energy, has been negligently absent.

Looks like that discussion may be on its way:


And about time too...

Thomas Friedman has only captured a part of the story. The other part involves overpopulation, and our stubborn refusal, as a race, to put it in check. Not that this is anything new. Consider what Isaac Asimov said so long ago (yet so recently):

Bill Moyers: "What do you see happening to the idea of dignity to human species if this population growth continues at its present rate?"

Isaac Asimov: "It's going to destroy it all. I use what I call my bathroom metaphor. If two people live in an apartment, and there are two bathrooms, then both have what I call freedom of the bathroom, go to the bathroom any time you want, and stay as long as you want to for whatever you need. And this to my way is ideal. And everyone believes in the freedom of the bathroom. It should be right there in the Constitution. But if you have 20 people in the apartment and two bathrooms, no matter how much every person believes in freedom of the bathroom, there is no such thing. You have to set up, you have to set up times for each person, you have to bang at the door, aren't you through yet, and so on. And in the same way, democracy cannot survive overpopulation. Human dignity cannot survive it. Convenience and decency cannot survive it. As you put more and more people onto the world, the value of life not only declines, but it disappears. It doesn't matter if someone dies."

Overpopulation = overcrowding, and to stress. It leads to overshoot in sustainability. And, yet, population, peak oil, and the inevitable decline is not even mentioned in 'polite society.' Instead the MSM seeks popularity... as Ron said, they are not actively lying or involved in conspiracy. They are just trying to make a living, and IMO it is the selection process that is destroying the integrity of the press.

Isaac often wrote of the population explosion, especially in his anthologies. Frequently he concluded with the questions: "Isn't anybody listening? Doesn't anybody care?"



As the Oil Drum quote often reads:

"If kindness and comfort are, as I suspect, the results of an energy surplus, then, as the supply contracts, we could be expected to start fighting once again like cats in a sack. In the presence of entropy, virtue might be impossible."

As human beings we are presented with choices. Undoubtedly we will see some trying to grab what they can. But we will also see others focused on the greater good of the group. And as a society we can steer ourselves one way or another. I hope we can rise to the occasion and not sink to our lowest level. And I personally intend to advocate for the higher rather than the lower level of functioning.

There is such a thing as a self-fulfilling prophecy. So let's try and get people focused on coping skills and that includes pulling together for the good of everyone. And I don't mean just the good of America.

Unfortunately, what is good for Americans often is bad for the Chinese or the Nigerians or whovever, and vice versa. For example, both the Eurozone and China are trying to export their unemployment to the U.S. by artificially devaluing their currencies against the dollar. This is a "beggar thy neighbor" policy just like those that were put into place by most countries during the Great Depression. We are not all one people, alas. When push comes to shove, Americans will follow an "America first!" set of policies. Other countries will behave similarly.

It is kind of like the Prisoner's Dilemma game in which people get trapped into working against the mutual interest of one another in order to minimize their maximum regret.

When push comes to shove, Americans will follow an "America first!" set of policies. Other countries will behave similarly.

nationalism 'sells'. So does racism. Any US vs THEM really. About the only time one grouping steps outside their normal group is classism as expressed by money.

"Feed the poor and get rich or feed the rich and get poor.” may not be the best example of classism-crossing but books like nickeled and dimed to death express one class working over another class for a few quid.

Damn, I hate to admit that I agree with Eric, but this time I feel I must. Oh well, even a blind squirrel will find an acorn once in awhile. ;-)

Ron P.

If you'd like I'll put in for the Capt. Obvious merit badge award for 20100614. If it helps - water is wet and there is oil in the Gulf of Mexico.

(Oh, and - anyone know of web sites tracking the impact on food supply in places like Cuba or Mexico or .... from the BP 'hey we found oil in the Gulf' event?)

Class conflict will worsen as the middle class disappears and the great majority of people suffer severe downward social mobility. It is reasonable to also expect more racial and ethnic conflict in a declining society. When the economic pie was growing, everybody (or almost everybody) could get a bigger piece. Now the pie is shrinking, and fighting will intensify to gain the best of the smaller pieces of pie that will be available in the future.

Collective behavior will increase, and it is contagious. (Riots, mobs, mass hysteria)

The future looks bleak--and then it will be bleaker.

Kunstler (this morning) : The future attempts to regulate undersea oil drilling will send many companies to do their thing in other parts of the world where nobody gives a shit what you do offshore as long as you pony up the royalties to the grifters in charge onshore. America is going to lose a whole lot more of its own oil production. Smaller companies may shut down altogether from the cost of complying with new safety rules and an inability to get insurance.

The inability to get insurance (or increased cost)  applies to operators of all sizes - any firm that seeks to expand operations in less regulated parts of the world would likely have to do so without insurance. This in turn would make raising capital a formidable challenge.

Later in his post, Kunstler sticks his neck out and is predicting this Summer as the time for a reckoning - when the universal failure to manage The Big Unwind hits the proverbial fan.

There was testimony by insurance specialists before Congress last Friday that said insurance rates for drillers already is up as much as 50%, with reductions on the amount insurers woudl cover. I am not an insuarnce specialist but my guess that is only the beginning once they see the magintude of potential liabilities from just one well.

Small companies will leavethe GOM unless they can get some type of arrangement where a larger company guarantees their potential liability.

Even before the recent debacle, oil drillers were slow to liekly oil sources - mostly due to equipment limitations and rising costs.

I do not dispute that insurance costs are rising dramatically and -- in conjunction with disasters like the one currently playing out in the Gulf of Mexico -- may well cause either a temporary or permanent shut-in of reserves.

I do however dispute that the oil companies will simply relocate to less regulated parts of the world. Most known oil reserves are either already being developed or are in production, it is not like moving to a less regulated part of the world will bring new fields into existence.

My guess is there will be attrition combined with a small amount of relocation.

Small companies will leave the GOM unless they can get some type of arrangement where a larger company guarantees their potential liability.

Do you think companies that relocate away from the GOM will find it easier or more difficult to raise capital if the area they relocate to is less regulated?

If my memory serves me correctly, about this time last year Kunster was confidently predicting that the summer of 2009 was going to be the time of undoing, or some other doom.

Yes, that is why I used the phrase "sticking his neck out". Some people ridicule Kunstler for making predictions that do not pan out. In particular his stating that there was enormous potential for the Year-2000 transition to result in a substantial loss of "life as we know it". He was absolutely correct to state the enormity of the potential cascade and he was also correct about the timing. The global effort that went into addressing Y2K probably dwarfed everything that preceded it - the Manhattan project, the Apollo moon shot, you name it.

Some might argue that the frequency of Kunstler's predictions will make him out to be like a broken clock, twice a day it will show the correct time.

Personally, I think his metaphor of "the long emergency" is spot on and his writing style appeals to my black sense of humor - so I am happy to extend considerable latitude to his timing. In addition I think there is a good chance he is right. We are in the eye of the storm and Summer is a much easier time to deal with.

When Summer ends, the nightmare begins.

The inability to get insurance (or increased cost) applies to operators of all sizes - any firm that seeks to expand operations in less regulated parts of the world would likely have to do so without insurance.

Not sure if this is a good example, but I seem to remember the same argument being applied when California was debating requiring mandatory auto insurance.

Now, many years later, seems plenty of insured drivers in California....

The insured / uninsured motorist, is something of a digression and not necessarily a valid analogy. But still, in the context of general collapse, there are aspects worthy of consideration, for example:

Consider if cities or states start to impound the vehicles of drivers caught driving without valid insurance, with the intention of later selling them. What happens if the resale market evaporates or the resale prices are so low that it does not cover the cost of impound and storage?

In a "significant" collapse some motorists may prefer to lose their current vehicle, if they think that for $1,000 they can trade-up. Behavior of that type ought to emerge in a slow crash scenario.

The answers are not far away.

Applying George Soros' reflexivity theory to the oil market helps explain why oil prices do not reflect the fundamentals of Peak Oil.

Just insert oil markets for financial markets:

First, financial markets, far from accurately reflecting all the available knowledge, always provide a distorted view of reality. This is the principle of fallibility. The degree of distortion may vary from time to time. Sometimes it’s quite insignificant, at other times it is quite pronounced. When there is a significant divergence between market prices and the underlying reality I speak of far from equilibrium conditions. That is where we are now.

Second, financial markets do not play a purely passive role; they can also affect the so-called fundamentals they are supposed to reflect. These two functions that financial markets perform work in opposite directions. In the passive or cognitive function, the fundamentals are supposed to determine market prices. In the active or manipulative function market, prices find ways of influencing the fundamentals. When both functions operate at the same time, they interfere with each other. The supposedly independent variable of one function is the dependent variable of the other, so that neither function has a truly independent variable. As a result, neither market prices nor the underlying reality is fully determined. Both suffer from an element of uncertainty that cannot be quantified. I call the interaction between the two functions reflexivity. Frank Knight recognized and explicated this element of unquantifiable uncertainty in a book published in 1921, but the Efficient Market Hypothesis and Rational Expectation Theory have deliberately ignored it. That is what made them so misleading.

Reflexivity sets up a feedback loop between market valuations and the so-called fundamentals which are being valued. The feedback can be either positive or negative. Negative feedback brings market prices and the underlying reality closer together. In other words, negative feedback is self-correcting. It can go on forever, and if the underlying reality remains unchanged, it may eventually lead to an equilibrium in which market prices accurately reflect the fundamentals. By contrast, a positive feedback is self-reinforcing. It cannot go on forever because eventually, market prices would become so far removed from reality that market participants would have to recognize them as unrealistic. When that tipping point is reached, the process becomes self-reinforcing in the opposite direction. That is how financial markets produce boom-bust phenomena or bubbles. Bubbles are not the only manifestations of reflexivity, but they are the most spectacular.


Stocks Party Like It's 2009, but Soros Sees Ghosts of the '30s


Has anyone read this story?

"Scientists Warn Gulf of Mexico Seafloor Fractured Beyond Repair"

It's posted at Beforeitsnews dot com.

This sounds big. Any comment?

Old news nonsense(6-10), nothing to see here. Move on.

And you can provide proof where?

Inflation commodities and interest rates.


Very nice quote of course Mauldin does not get it.

Incidentally, this is exactly the train Rudolf von Havenstein found himself on as President of the Reichsbank during the German hyperinflation. According to Liaquat Ahamed's work on von Havenstein's dilemma, in his majestic book ‘Lords of Finance' " ... were he to refuse to print the money necessary to finance the deficit, he risked causing a sharp rise in interest rates as the government scrambled to borrow from every source. The mass unemployment that would ensue, he believed, would bring on a domestic economic and political crisis, which in Germany's [then] fragile state might precipitate a real political convulsion."

This is what I claim limited oil supplies will actually induce. If they print and they will it will only send oil prices soaring futher crippling the economy and force up interest rates for governments.

As pressure on interest rates goes higher the government is forced to print to cover its debt and bank debt. This puts pressure on oil prices as the status quo is maintained. Defaults are written off just because it does not result in hyperinflation or even general inflation does not mean its not crippling.

I argue oil forces us into the scenario Germany tried to avoid and ended up with Hitler.
We are headed down the path they feared to tread.

I agree that interest rates would rise in that sitaution, however I believe that governments benefit greatly by lag times. Economists have shown that it takes up to two years for the effects of new money to change the rate of inflation. As inflation accelerates and government policies become better known, this lag time would probably drop off sharply.

It's quite surprising then that current US interest rates are so low. The reason I say surprising is that the US is sucking more money into the US than is available for investment from the entire world. Partly this money shortage has been temporarily met by the Fed printing up more than $1 trillion in new money, but I suspect that derivitives are also involved here in creating the perception the US deficit can be financed when in reality the US shouldn't really be able to finance the deficit at current interest rates without issuing new money to buy debt (not that that will succeed in the long run).

Basically once we leave the island of interest rate stability higher interest rates will throw a monkey wrench in to the whole financial system. I don't expect this to happen until we are back above $100 oil.

Yes but to be clear these are interest rates rising effectively on risk not to quell inflation its very different from what people are used to. Look at Greece right now for example.

As far as 100 dollar oil goes its a bit of a chicken and egg issue if interest rates start going up on default risk I think we will see 100 dollar oil plus as this is mistaken by many for inflation. While if oil goes to 100 this will be seen as inflation risk and push up interest rates leading to risk of default.

My point is that the real bet will be that the US will default in and expensive oil environment because it cannot print. Yet this situation will be confused with monetary inflation which its not. If anything whats really interesting is back in the 70's/80's it looks like the US successfully pulled off this sort of scenario disguising it as "stagflation". They actually pushed interest rates skyward during a recession and pulled of the play of the century. It was a brilliant and desperate gambit and I think only really possible because at the time most US debt was held in the US. The more I understand about the 1970's/1980's the more I realize how utterly brillant the US was. The only problem with the game they decided to play was that it eventually resulted in certain death at some far distant point in the future.

This of course brings us back to the present. If the economy takes off or oil scarcity makes it look like the economy is taking off regardless of how it plays out rising interest rates implode the US as any sudden growth in economic activity would be a bubble not real and oil scarcity does not add to wealth.

They cannot in my opinion make the same play as they did in the 1970's/1980's. Sooner or later something will show up offering yield making it impossible to keep treasury rates low without blantant printing which won't keep treasury rates low by definition.

We are locked in a perfect conundrum. I don't think they can pull off a 1970's/1980's style interest rate shock its impossible.
Printing just leads to hyperinflation.

What interesting is this leaves for at least a bit only one way out. Print enough to keep the system from collapsing but allow Deflation of debt to continue at a controlled rate and hope like hell we have enough oil to keep prices relatively low.

Eventually of course the US will be forced to stop printing but even after that it will need to continue steady state until outstanding GOV debt is brought into balance.

Whats interesting is this solution is really simply conversion to a steady state economy with management of the resulting debt collapse trying to convert it to a very long term thing. Its in my opinion the only thing they can do for a long time any other move fails.

Indeed its exactly what we did to handle the South American debt crisis recapitalize the banks and then allow time to heal the wounds.


In 1982, many of the banks hit by the Latin American debt crisis were effectively insolvent. Paul Volcker, as the then-Chairman of the Federal Reserve—charged with overseeing the banking system—effectively cast a blind eye on this banking insolvency.

Volcker’s reasoning seems to have been that the US banks were not broke—they were just getting temporarily squeezed. Volcker seems to have concluded that time would heal the balance sheet wounds caused by the Latin American defaults. Therefore, to hold the banks to the letter of the accounting rules would likely drive one or more of them broke, to no useful purpose—and it could potentially cause a bank panic and general financial crisis. But to pretend (for a while) that all was right with the US banks would avoid a potential panic—so long as the crisis sorted itself out and the banks repaired themselves by writing off and renegotiating their toxic Latin American debt.

Also by steadily increasing US interest rates during this period the US managed to ensure it never was short on cash.
It all tied together in a weird and wonderful way.

I personally think it worked because of the formation of petrodollar recycling.

However now we have the big ugly try it again and you gotta a problem. Because of the massive bubble in housing no way can you boost interest rates and no way can you keep them low forever. For housing at least your talking 15-20 years of effectively zero interest rates before you come close to getting enough equity to handle rising rates.

We literally need a 30 year plan were basically nothing changes much from today except that unemployment rates trend downwards overtime.
A baby boomers retire we should get a natural boost on this side. So at least 5-10 years of status quo and believe it or not I'd say a healthy dose of immigration to soak up the excess housing units.

Thats where Japan messed up they where unwilling to open their country to migrants to offset their aging population problem.

But all this is so long term vs oil. Escape from our current predicament unscathed would take decades and would need reasonably cheap oil all along the way.

If oil is really getting ready to blow then its problems now and fast. However its important to understand that the US does not have a problem with allowing debts to default and real long term recessions. As long as the banks are recapitalized despite defaulting loans we live to fight another day. We don't have to inflate to erase all debt just enough to make banking profitable with the allowance they can hide their debts.

In the end if we really are caught with no financial escape and oil shortages are looming then the only possible outcome has to be outside the financial arena. If the current leadership wishes to retain power I'd argue this means war which would allow financial games impossible to play during peacetime. You would have to shock the system but leave command and control in place thats the only shock I can think of that offers escape. Of course I'm late to the party given I was in grade school when the real game was played.

I could be wrong and there could be some other financial wizardy yet possible. Don Sailorman seems to think good old fashioned inflation is still a viable option. I don't intrinsically buy it because historically the inflation we did see was in my opinion a desperate gambit and we had falling interest rates during most of the time that fiat money was being used.


You can see its pretty clear that the sharp spike in interest rates where faked and allowed the falling long term trend to happen.
Otherwise we would have ended in hyperinflation long before now probably in the 1990's. Perhaps the prime rate can actually fall below 2% however the problem is if it gets much lower then we are no longer easily capitalizing the banks. Sure you can drive it lower but then what the banks themselves are not getting recapitalized as the yields on treasuries fall. If oil starts heading up then you will be forced to raise interest rates and higher oil prices and higher interest rates increase the default rate leaving your banks insolvent regardless of if your willing to look the other way.

Sorry for talking in circles if you will I'm just trying to see a way out if we really are short on oil. The only way out without war is that we are not and oil supplies are not a problem. The current prices is because of OPEC and the economy can deal with it. Extend and Pretend is plausible and doable for as long as needed.

As far as oil prices themselves I've yet to see any convincing evidence that the market is very well supplied with oil.
Surprisingly so far at least we have not seen the breakout I'm looking for. Either to 60 and stay there confirming a well supplied market or off too 100+ with the stock market stagnant. And of course treasuries seem to be basically in a holding pattern.

So we continue for yet another day in this twilight zone period. Did we somehow find a new normal ?
I don't think so.

Going along with the Germany scenario, I think that within fifteen years we will be going to large scale conversion of coal into liquids, just as the Germans did during World War II. They proved it can be done: They powered a major modern war with CTL. If they could do it, we will think that we can do it too. Sasol in South Africa has been profitable doing CTL for many years--at the cost of dreadful pollution. Once again, if they can do it, we may well do it too.

Well lets just say we will try ...

I think we will try a lot of things and with each failure desperation will increase leading to ever more outlandish moves.

But don't forget the oil age is really composed of WT iron triangle suburbia, cars and oil. Its not a one legged stool :)

I argue all three legs are getting chopped at and all three have to stay in place. Housing because of the stupid credit bubble is actually the weakest link not oil. Indeed its housing > cars > oil. Expensive solutions to the oil problem don't solve the problem.

I guess we will see 100k government handouts for housing soon. I see the trap we are in very clearly. However as I mentioned in the other post outside of war I don't see a way out. Indeed if you think about it the "Cold War" actually played a large role in us being able to get away with what we have done so far along with fairly cheap oil. Indeed consider what would happen if we pulled out of Iraq and Afghanistan today our economy would implode.

I know the US is going to insane lengths to keep the weakest leg which is housing up but I don't see that it has really been a success.

Whats really funny is as you study this stuff its amazing how much the US has aped Nazi Germany. Indeed its friggin scary how we have tried to take what worked without falling into the trap they fell into.

At least for a while it seems we tried to reject the nasty sides of facism and yet get the upside of a capitalist/banker state.

Politically Correct Fascism :)

Sure its considered bad form to invoke the Nazis but hell from the financial policies to the autobahns we copied everything so if the shoe fits ...

Have you read 1984? If so, you will recall that Big Brother justified harsh totalitarian measures by being in an unending war. Orwell was a prophet.

We could go the Hitler route, or we could go to a version of 1984 with declining oil production forcing declining real GDP. My guess is that our first dictator will be somebody like Huey Long, a man with strong--and probably sincere--populist leanings. Huey Long would not have hesitated to cancel debts to protect "the people." Probably he would also have had the idea of inflating the debt away put to him by his advisers.

Recommended Reading: ALL THE KING'S MEN by Robert Penn Warren. It's a novel about Huey Long, one of the best novels in English during the twentieth century. (I used to date a woman in the Ph.D. program for Comparative Literature--that's how I know such things. I wonder what the job opportunities for Comp Lit Ph.D.s will be in twenty years. Will the departments disappear from universities due to budget cuts? Or will they cut the school of engineering first?)

This may sound a bit strange but I don't really want to know ...

I put a lot of time and effort into trying to understand collapse because I don't think its and area that well understood.
Along with strained complex systems in general. This has helped my come to understand that systems need never reach these critical thresholds. Outside of course of natural catastrophic events. Certainly they can collapse but ecosystems can sustain rich complexity as long as no abrupt change happens.

I don't actually see the end of the middle class as the end of the world or even the collapse of or financial systems. Perhaps because I've traveled a lot and lived in several countries including Vietnam which has about as totalitarian a regime as you can get and still be pals with the US outside of perhaps KSA. I've seen dysfunctional economies reduced for the most part to people trying to stay alive.
And I've also seen that people in such situations enjoy life and except death. What important for me at least is to do my best to extract myself to some place that can withstand the whirlwind. Very much like the peasant working for the ruler of the day yet doing the same thing they did the day before. For now at least for a variety of reasons I've decided to try and stay mobile for a bit longer not quite ready to dig in.

My point is some of this I really don't care about it will go whatever route it goes. My interest right now is on checking my grades against the right answer if you will. Did I basically get everything right did I miss something ?

How things play out over the short term will influence to a large extent the decisions I make over the next couple of years.
I don't have the monster war chest to go off and build my dream hidey hole. I'm going to have to do it the old fashioned way blood sweat and tears. I have determined that there are still places in the US that can effectively be homesteaded with a really modest stake.

However once I make that decision I'm 100% committed and working my ass off :)
For now I'm simply enjoying these last days of what I think is a sort of virtual reality.

I'm not saying I won't keep watching how things go and paying attention only a fool would not. However I'm done with it.

Finally the reason I'm done is to really achieve a sort of ecosystem like complexity seems to require a fundamentally different society from what we have today. I can see how this would work but also see that it seems to be impossible. I think we have so extracted the planets resources that if society falls down substantially it can never go back. Say we have a period of serious strife well after its over then we simply cannot extract the remaining oil, ore, NG resources. In my opinion whats still left in the ground will simply be beyond economic sense for a crippled society. Therefore the next society will effectively have no choice but to take a different route.

It will be literally millions of years before the natural process again create a planet capable of supporting a new 20th century well by then I have to think we would have changed or more likely some descendant species will be around.

So you can see why I just want to sort of roll through what ever happens over the next few years hopefully in a backwater that fares better than most.

Maybe I'm selfish but I can see the potential horror that probably will unfold and simply don't want to have anything to do with it.
Depending on how things go after its over if I make it through then I think I'll probably take a stronger interest as then we will be building whatever is going to be around 1000 years hence and perhaps much longer.

I guess in a lot of ways I might not be a traditional doomer because I do actually see a bright future for humanity once we can no longer exploit the earth and each other and are forced to live in harmony. However between no and then things could get bad beyond comprehension and I just want to let as much of it as possible pass over me.

Anyway sorry for the long post but I just felt what you wrote deserved a bit of a response as I have my limits as to how far I really want to see clearly. And I assure you knowing how easy the US can fall into a vicious totalitarian regime is one of those things I really don't want to spend to much time on. I know it can and I've lived in them and I can see enough thank you :)

Don, actually, Germany in WWII failed to power a modern war with CTL. Despite a huge CTL program supported by nearly limitless supplies of slave labor, the Wehrmacht was struggling with desperate fuel shortages by 1944. The German defeat in the Battle of the Bulge, to name only one example, is generally credited to fuel shortages that made it impossible for German tanks to follow up on their initial breakthroughs of Allied lines. I don't know that anybody's ever done a thorough net energy analysis of the German CTL program, but the fact that they ran so short of fuel suggests that the net energy of the process was certainly low and may have been negative.

Actually in the end both examples of and serious attempts at alternative fuels via the CTL process eventually failed.
And it probably one of the easier ones to implement as it requires practically no infrastructure changes.

I think that alternative energy makes sense as and addition to a generally low energy society. However steam despite its
issues makes as much sense in many use cases. Its fuel flexibility being the primary driver.

I'm also a big fan of solid oxide fuel cells because of this flex fuel capacity and to some extent some diesels.

Wind and solar would have a place. And of course hydro. However in all cases the society would adapt to the fuel not the other way around. Just like we do today for aluminum refining by its very nature we have no choice but to locate aluminum refining near cheap
electric supplies.

I could see a number of alternatives being quite useful in a society which generally was very low energy to being with.

However I think taking a high energy high EROEI and trying to run it off a low EROEI fuel source eventually fails.

My own concept is it fails when it can no longer leverage the infrastructure built with cheap energy. Once it has to replace
existing infrastructure with that derived from expensive low EROEI energy it begins to fail. Obviously in war where everything
is basically consumable you fail fast. South Africa lasted a bit longer.

The actual profitability of Sasol...


Looks questionable and its not clear what role its products for just fuel use play.
One has to imagine that they are marginally profitable if at all.

However you can see that all the value add products using coal as a feedstock may well make sense and be competitive with oil.
The addition of the initial GTL/CTL step in a petrochemical plant is not a huge issue.

But at this point if the economy is small enough petrochemicals from natural feedstocks probably make just as much sense.
Ammonia from hydrogen from a number of organic feedstocks. If coal or NG is readily available then fine also no biggie.



So if one ignores the fuel angle and focus on petrochemicals then the starting materials simply are not a huge issue.
Indeed reasonable scale is achievable either through a process that can be parallelized or via fairly reasonable concentration of the feed stock within a limited area.

About the only thing that has kept the petrochemical industry hooked on petroleum and NG is its so cheap we just burn it.
When this is no longer the case all manner of feedstocks are viable.
Just not for transportation on any large scale.

You are correct. However, CTL allowed Germany to fight a mechanized war with tens of thousands of trucks, tanks, planes, and submarines for five years before the bombing reduced the availability of fuel. Oil was one of the main things that was targeted by the USAF--not so much by the night bombers of the RAF.

On another topic, what do you think of westexas's ELM model?


Could I ask you a question in another direction?

It seems to me pretty clear that wind has higher E-ROI: clearly at least 20:1, and probably about 50:1. It also seems pretty clear that wind is scalable and affordable, and that intermittency can be handled without major problems.

I know that you have increasingly warmed to wind power recently, and yet you still don't seem to see it as being as valuable as I sketch above. So...why do you feel that it can't provide all of the electricity we might need?

I argue oil forces us into the scenario Germany tried to avoid and ended up with Hitler.
We are headed down the path they feared to tread.

So in other words history is repeating itself and out of economic depression and resource depletion, war is the next logical step.

I've been wondering about this and think it's very likely Obama will be a one term president. Not that he won't try hard, but circumstances are such that anyone in that role now will seem ineffectual in response to the dismal situation our economy faces, especially as huge loads of debt need to be rolled over, and unemployment continues to stay high, along with huge state debts.

My guess is people will want someone more agressive with other countries, but also someone they think will be a good businessman that can turn the situation around. It probably cannot be turned around, but people will be looking for the candidate they think can. I vote usually for the Dem, so don't think this person is my pick - but I think Mitt Romney will be the next Prez. He was militarily very aggressive in his speeches during the last primaries, and turned one winter olympics in Utah into a profitable event. He also balanced the books in Massachusetts. So he fits the bill.

However, I also think he will be so overly agressive in his actions towards China regarding their currency, and trade, that things could get testy. How testy we shall see.

Pickup sales picking up and economy hitches a ride


no problem here


If you go to that link, you'll find the latest Arctic ice extent. The Blue Line is 2010 and it is currently at 10.8 million sq. kilometers. The chart is current to about June 12th.

If you look at when the 1979-2000 median black line got down to 10.8, it was close to July 1st. So 2010 is about 19 days ahead of that median line.

The dashed line is 2007. It got down to 10.8 about June 20th. If you stretch the current 2010 line out it looks like it will meet the 2007 dashed line in early July.

If you scroll down that website you'll see another chart showing 2006 as magenta. That year is similar to where 2010 is now and it later goes up above the 2007 line, which 2010 could do also.

If 2010 doesn't break 2007's lowest ice extent point, the denialists will claim the planet is getting much, much colder. What's better: Beating 2007 and shutting them up, but also causing the release of more methane or losing to 2007 and having those ignorant fools spouting off?

Yeah, the denialist are only interested in spreading FUD. Back in March, as the sea-ice extent approached the long term average, they chanted that the sea-ice had "recovered". While the more recent data shows rapid melting, the denialist have already placed the thought that there's no problem into the brains of many more people. Even if we find that the extent at the end of the melt season is less than that of 2007, the denialist seeds have been planted and continues to grow. They are winning the propaganda war with each person who ingests their anti-science rants.

E. Swanson

I am concerned about all the stories being published on the net about this oil disaster and I hope anyone with any real knowledge about it could look into it and explain. Some of the info is as follows:

GAS BUBBLE forming underneath the seafloor

[link to sbeckow.wordpress.com]

BP started drilling earlier this year, even though experts warned against it. The formations under the Gulf could not stand the pressures arising from drilling a deep well. BP went down 20,000 feet, where the pressures are 100,000 psi. Richard maintained that current engineering methods and equipment could not contain that kind of pressure. This was an accident waiting to happen from the moment BP started to drill. (WITH VIDEOS)