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Drumbeat: June 16, 2010
Posted by Leanan on June 16, 2010 - 10:27am
BP agrees to $20-billion fund for spill victims
BP will set aside $20-billion to pay the victims of the massive oil spill in the Gulf, senior administration officials said Wednesday, a move made under pressure by the White House as the company copes with causing the worst environmental disaster in U.S. history.The independent fund will be led by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks. In his current role, Mr. Feinberg is known as Obama's “pay czar,” setting salary limits for companies getting the most aid from a $700-billion government bailout fund.
Mr. Obama was to announce the deal in a Rose Garden statement later Wednesday after wrapping up a meeting with BP executives at the White House.
On BP, it's Simmons vs. Simmons
The divergence of opinions between Simmons & Co. and its founder might seem puzzling. But it's not all too surprising, given that Simmons is no longer with the firm and is known as an outspoken (and sometimes controversial) industry expert who made a name for himself with his 2005 book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.Still, the firm has struggled to separate its analysts' views from those of its founder, who has been making regular rounds on the media circuit since the spill. And what has transpired can only be described as an awkward distance between Simmons & Co. and Simmons himself.
"It's sort of hard to have his name on the door," said Anthony P. Banham, vice chairman of Simmons & Co., about Simmons' recent comments. "We respect his views but they're not the views of the firm."
Report: Lawmakers Shed BP, Transocean Holdings
At least four lawmakers on Capitol Hill have shed their holdings in BP or Transocean Ltd. since 2008, the Center for Public Integrity has found.
BP Swaps Rise to Record at 40% Odds of Default
(Bloomberg) -- Credit investors are pricing in an almost 40 percent chance BP Plc will default within five years as it tangles with the Obama administration over cleanup costs and claims for the biggest oil spill in U.S. history.
Could Dorset - the county of Thomas Hardy, rolling chalk hills and the rugged Jurassic Coast - be about to follow Saudi Arabia and Texas and become a big-league player in the oil business?Over the past few years there has been an oil rush in continental Europe, with major oil fields discovered in Germany and Poland. And now the UK - specifically Dorset - could be about to follow suit.
Aramco sees Moneefa pumping 900,00 bpd by 2024
State oil giant Saudi Aramco does not expect its giant 900,000 barrels per day Moneefa project to pump at full volume until January 2024, according to the company's annual review.The start up date for the project of 2013 was unchanged.
Aramco had previously said that the Moneefa development would be completed in 2015.
In its annual review, released on Tuesday, Amramco said: "The offshore Moneefa increment is scheduled to begin production of 500,000 bpd of Arabian Heavy crude oil by June 2013 and will ultimately produce 900,000 bpd by January 2024."
Aramco slowed work at Moneefa as it looked to cut costs on oil service contracts at the field and across its energy projects in the wake of the global economic slowdown.
US drill ban to make $1.6bn hit on E&P spend
The moratorium on new deepwater projects in the US Gulf of Mexico will cut planned spending on exploration and production projects by about $1.6 billion from previous forecasts, according to a Barclays Capital survey of oil companies.
The Dangers and Difficulties of 'Bottom Kill'
BP has only one arrow left in its quiver, a method known as 'bottom kill.' The idea is for relief wells to stop the gushing oil from below, but the technical challenges are formidable. Past experiences show that the oil may continue flowing into late autumn.
More accidents await with President Obama’s errant energy policies
President Obama triumphantly entered office with the popular promise of moving the United States to a cleaner energy basis, but his actions to date, along with those of the Congress, have promoted two types of dangerous energy developments: off-shore oil drilling and nuclear reactors. Nuclear expert Harvey Wasserman highlighted the dual dangers by noting, “As BP’s ghastly gusher assaults the Gulf of Mexico, a tornado has forced a shutdown of the Fermi 2 atomic reactor at the site of a 1966 melt-down that nearly irradiated the entire Great Lakes Region.”These two recent events bring the reality of energy subsidies, especially in the form of liability limits, sharply into focus. The public should be suspicious of gigantic energy projects like deepwater oil drilling and nuclear reactors that are labeled “safe,” but enjoy liability protections from the extraordinary damages they can cause.
Richard Heinberg: A Tepid Plea for Unspecified Change
Last night's presidential speech on the Gulf oil spill had been pre-billed by the Washington Post as Barack Obama's "Jimmy Carter moment." But reading any of Carter's speeches (a good one to start with is that of April 18, 1977) side by side with last night's bromide is an invitation to nostalgia and bitter disappointment.
The population can dwindle quite rapidly, but this too is often imperceptible. Large swaths of the landscape become depopulated, but that is not noticed by anyone because nobody goes there any more. When births exceed deaths, population increases exponentially. When deaths exceed births, population declines exponentially. There are always some maternities, and there are always some funerals; the change in the ratio of the two is not something that can be directly perceived. Societal extinction doesn't make any noise when it finally happens. Survivors simply move on. Non-survivors might as well have not existed, and the more gullible survivors come to believe the extravagant ruins they left behind to have been the work of extraterrestrials.
Shaun Chamberlin on Stoneleigh’s peak oil/finance talk at the 2010 Transition Network Conference
Including the extensive Q&A session her talk lasted virtually three hours and covered a lot of ground, starting from a good runthrough of the ‘peak energy’ situation, but quickly focusing in on finance, as she believes that this is the factor that will most dramatically shape our immediate future. Notably, the talk attracted almost half the attendees of the Transition Conference, despite the numerous other Open Space sessions taking place at the same time.
Murky future seen for clean energy
"(The spill) was a reaffirmation of some truths about energy extraction," said John Quealy, a clean technology analyst at Canadian investment bank Canaccord Genuity."We are moving toward harder-to-extract sources of petroleum and natural gas that carry higher risk, and we see that playing out in the Gulf Coast."
Even the nuclear sector -- long-tarnished by its own catastrophic accidents -- voiced cautious hope of a resurgence not seen since the Arab oil embargo of the 1970s, when it muscled crude out of the electricity generation sector.
But instead of rushing toward solar, wind or biofuels since the spill, investors have been quietly walking away.
Rifkin: Europe, the laboratory of the world
When prices hit $147 a barrel - world prices went through the roof - inflation soared and purchasing power plummeted. In July 2008, the economic engine of the second industrial revolution shut down. That was the economic earthquake. The collapse of financial markets 60 days later was the after-shock.This is what I call peak civilisation and it’s an end game for the second industrial revolution.
As you know, leaders are dealing with the after shock: the financial bubble. As long as they are all dealing with this, they are not grasping the historic importance of what is happening.
A 1990 bill signed by the first President Bush forced coal plants to buy permits if they were going to emit the sulfur dioxide that caused acid rain. With the price of emissions suddenly higher, the plants looked for innovative ways to reduce pollution — and succeeded more rapidly and cheaply than experts had predicted.This history is the basic argument for putting a price on carbon today, and the next several weeks are likely to determine whether that happens. The chances of Congress’s passing a permit — or cap-and-trade — system that applies to the whole economy are low. But it could still create a version that covered power plants, if not factories and transportation. That would be no small thing.
Iran says to set terms for any new nuclear talks
(Reuters) - Iran is ready to resume stalled nuclear talks with major powers if terms Tehran will announce soon are met, President Mahmoud Ahmadinejad said on Wednesday, a week after the oil producer was hit by a new round of sanctions.
BP’s Options to Limit Liability From the Oil Spill
As the oil spill in the Gulf of Mexico worsens, the financial markets are rife with speculation about BP’s next steps to control its growing liabilities — a pot that the oil giant has further stirred by hiring investment advisers to assist it in managing these liabilities.This speculation runs the gamut from insolvency to a takeover to a $20 billion escrow account to administer claims from the oil spill. But just how realistic are any of these options? Here is a brief analysis:
Statoil Terminates Rig Contracts
Norwegian state-controlled oil major Statoil ASA responded to the U.S. moratorium on offshore drilling by suspending its contracts for two drilling rigs in the Gulf of Mexico. The rigs belong to Transocean Ltd. and Maersk Drilling.
Norway, Sovereigns Lose $5 Billion on BP After Spill
(Bloomberg) -- The governments of Norway, Kuwait, China and Singapore have lost 3.4 billion pounds ($5 billion) on BP Plc’s share slide since the Gulf of Mexico oil spill started in April, data compiled by Bloomberg show.
Orkla to Shut Energy, Emission Hedge Funds This Month
(Bloomberg) -- Orkla Finans AS, in the industry’s latest retreat, made a “strategic decision” to close its 85 million-euro ($105 million) Energy Fund and Carbon Fund.Orkla’s energy fund, which traded commodities including Nordic and German electricity, natural gas and emission permits, lost 12 percent this year through April. The specialist carbon fund gained 3.1 percent, according to data on Bloomberg.
A Gas Mileage Bonus From Aluminum
Stricter gas mileage requirements may be a headache for car manufacturers, but the aluminum industry views them as good news.In the last few years, car makers have switched from steel to aluminum for wheels, hoods, transmission cases, heat exchangers like radiators, and other components.
With tougher standards looming, the aluminum industry is taking aim at the basic shell and skeleton of the car, known in the industry as the “body in white.”
Reliance Industries Said to Plan Bid for Power Plant
(Bloomberg) -- Reliance Industries Ltd., India’s biggest company by market value, plans to build at least one power plant in the country, marking the oil company’s entry in commercial electricity generation, two company officials said.
Alaska Polar Bear Habitat Plan: State Official Objects To Ban Due To Impact On Oil Industry
ANCHORAGE, Alaska — The federal plan for designating more than 187,000 square miles as polar bear critical habitat is too large and will lead to huge, unnecessary costs for Alaska's petroleum industry, opponents of the proposal told the U.S. Fish and Wildlife Service Tuesday night.
Jeff Rubin - America's oil supply: What's Plan B?
America’s Plan A for the future of its oil supply was shaky to start with. Hurricanes, and the devastation they’ve brought to offshore oil platforms in the Gulf of Mexico, had already put the kibosh on earlier dreams of reversing the nearly 40-year decline in domestic oil production. Ironically, oil production in the Gulf had climbed back to pre-Katrina levels only months before the blowout at the deep-water Macondo well became America’s all-time worst environmental disaster.President Obama won’t lift the moratorium on deep-water drilling until the Macondo gusher is, at minimum, fully capped. But whether he lifts it after that may not matter. BP has already lost over 40 per cent of its market capitalization. If Chapter 11 bankruptcy protection is the ultimate sanctuary from the staggering economic and environmental costs the firm will face, how eager will other oil companies be to follow in its deep-water footsteps?
Time and again, polls show large majorities support change, but they won't pay a dime for it. Corporations can pay. Or governments. Whatever. Just make sure they get their cheap gas, dammit.In 1985, after a decade of steadily rising oil prices and steadily improving energy efficiency, the price of oil plummeted and American politicians refused to set a tax floor to ensure that the transition away from an oil-based economy would continue. It was obviously the right thing to do and if it had been done the world would be a much better place today. But it wasn't done because people wouldn't support it. Cheap gas is a human right, after all.
Obama sets battle plan on oil spill, energy reform
WASHINGTON (Reuters) – President Barack Obama on Tuesday laid out what he called a battle plan to tackle the BP oil spill and exhorted Americans in warlike terms to embark on a mission to reduce their reliance on fossil fuels.The president used the solemn setting of the Oval Office for a televised address to counter criticism he has not shown enough leadership in America's worst environmental crisis but offered few specifics on how he intended to get the job done.
Factbox: Main points from Obama's Oval Office speech
WASHINGTON (Reuters) – President Barack Obama spoke about the BP oil spill in a speech from the Oval Office on Tuesday evening, laying out a "battle plan" for going forward.Here are some key points Obama raised in the televised address to the nation.
Obama's Oval Office Speech Translated Says "Drill Baby Drill"
Tearing away the rhetoric and reassurances from President Obama's Oval Office speech on the BP oil spill one is left with a sense his biggest message was Peak Oil is nearly upon us because we are running out of oil, but worse, there is nothing to replace it with, so we still need to "drill baby drill" despite the now obvious catastrophic risks.Normally when a United States president addresses the nation from the Oval Office it is to announce something of grave significance to the nation such as a war. President Obama's first use of this White House tradition was no different, but the enemy he seemed to be declaring war on was Peak Oil.
Obama's Oval Office speech fizzles
At one point I thought the president was about to do what I'd hoped for, unrealistically, this afternoon – explain why he was wrong to drop his opposition to expanded offshore oil drilling, and recommit to his old position. He didn't. He only said that he had endorsed opening up more offshore drilling "under the assurance that it would be absolutely safe –- that the proper technology would be in place and the necessary precautions would be taken. That obviously was not the case in the Deepwater Horizon rig, and I want to know why." He then committed to a National Commission to study the disaster and explore what new environmental protections are needed. (If he paid any attention to the House Energy Committee's grilling of top oil industry execs today, he'd know the industry has no idea to cope with a disaster of this magnitude.)
I Didn’t Watch The President’s Speech...
Never letting a crisis go to waste, however, the President now seeks to use the oil spill as a vehicle for his energy plan. What discussions concerning the theory of “peak oil” have to do with this matter is anyone’s guess; the President has every right to pursue an energy policy, but isn’t the cleanup of the Gulf coast slightly more pressing than the latest legislative obsession since health care “reform” got passed? Talk of the burgeoning green economy is just that, and while those working in that economy are wished all the best, they probably should not be buying houses in the south of France just yet. Cap and trade is a lousy way to regulate emissions, as anyone familiar with the subject knows. A better approach is a carbon tax–particularly one based on actual warming trends–but of course, the Obama Administration simply will not go there.
Obama's Curiously Flat Gulf Speech
Somewhere between Pensacola and the Oval Office, the oil spill in the Gulf of Mexico went from an “assault” to an “epidemic”—and President Obama went from commander-in-chief to surgeon general. In Florida, he had referred to the disaster as an "assault" and spoke, at an Army post, in military terms, but by the time he got home he had changed the analogy to a medical matter.And that, in short, is why his speech to the nation fell so flat even as he delivered it.
Barack Obama Embraces His Inner Jimmy Carter
Perhaps it is because his chief speechwriter has spent the crisis playing beer pong in Georgetown bars. Perhaps it is because while embracing peak oil, the oil spill never piqued his blue state interests since it affected red states.Whatever the reason, Barack Obama gave the most depressing Oval Office speech since Jimmy Carter’s malaise speech. He didn’t just embrace defeat, he wore it on his suit as a substitute for an argyle sweater. He tried to sound upbeat in the way a cop in a movie might sound when his partner lay mortally wounded and the cop needs to get the partner’s wife to the hospital without letting her know her husband is dying. It was a false optimism with Barack Obama distracting Americans in a game of three card monte.
The President’s Oil Spill Speech
The American Petroleum Institute forecasts that if the drilling ban continues, more than 120,000 jobs could be lost in the Gulf Coast and key resources abandoned or moved elsewhere. European nations including the United Kingdom and Norway do not intend to likewise cripple their domestic oil industries, but have decided not only to allow offshore oil drilling to continue, but also to sell leases to new drilling locations. The President is also wrong to say we are headed towards peak oil and that we’re soon going to run out.
The Gulf oil crisis, say White House aides, is at an "inflection point." That's why President Obama chose this moment to deliver his first Oval Office address. If you've forgotten this term from calculus, it means "turning point." But it's not a dramatic change in direction where the tires squeal—if you're driving an S, it's the moment when the steering wheel is straight. It means the situation is less bad than it used to be.Something similar can be said of the president's 20-minute speech: It wasn't as bad as it could have been.
Obama to demand BP pay for oil spill damage
WASHINGTON/LONDON (Reuters) – U.S. President Barack Obama, seeking to demonstrate strong leadership on the Gulf of Mexico oil spill, will demand on Wednesday that BP set aside billions of dollars to pay damages from the catastrophe.
Oil executives say BP didn't meet standards
Big oil industry executives defended the safety of offshore drilling in front of Congress on Tuesday and said common industry standards weren't deployed at the BP-owned well that's caused the worst U.S. oil spill in history."A number of design standards ... were not followed," Rex Tillerson, CEO of ExxonMobil, told a House Energy & Commerce subcommittee. "We would not have drilled" the way they did, he added.
BofA to limit duration of trades with BP
(Reuters) - Bank of America Merrill Lynch has ordered its traders not to enter into oil trades with BP Plc that extend beyond June 2011, a market source familiar with the directive told Reuters.The order to the bank's traders came from a high-level executive and was made on Monday, according to a source familiar with it. It told traders not to engage in trade with BP for contracts beyond one year from this month.
U.S. boosts flow estimate of BP oil leak by 50 percent
HOUSTON (Reuters) – A team of U.S. scientists on Tuesday upped their high-end estimate of the amount of crude oil flowing from BP Plc's stricken Gulf of Mexico well by 50 percent, the second major upward revision in less than a week.The scientists said the "most likely flow rate of oil today" ranges from 35,000 to 60,000 barrels (1.47 million and 2.52 million gallons/5.57 million and 9.54 million liters) per day.
That is a significant jump from the last estimate issued by the Flow Rate Technical Group on June 10 and pegging the well's flow at 20,000 to 40,000 barrels per day.
And those figures were considerably higher than the previous "best estimate" of 12,000-19,000 bpd issued by the flow rate group on May 27.
BP restarts oil capture after ship fire
HOUSTON (Reuters) – BP Plc restarted its Gulf of Mexico oil-capture system on Tuesday nearly five hours after a small fire on the vessel capturing the crude prompted a shutdown.During the shutdown, oil gushed unchecked from the company's ruptured well.
BP Dividend ‘Off the Table’ as Obama Demands Gulf Spill Fund
(Bloomberg) -- BP Plc will suspend its $10 billion dividend as President Barack Obama’s demand to set aside cash for the Gulf of Mexico spill stretches the company’s finances, analysts said.“The dividend is off the table,” said Alastair Syme, an oil and gas analyst at Nomura Holdings Inc. in London. “Until they have some clarity on the costs of the spill, they can’t do anything.”
What can BP afford to pay? Nobody's sure.
NEW YORK (CNNMoney.com) -- In the days immediately after oil began leaking from a well deep below the surface of the Gulf of Mexico, few expected the spill could cripple one of one the biggest energy companies in the world.Now, nearly two months after what has become the worst oil spill in US history, the outlook for BP is unclear and investors are bracing for the worst.
A Real Worst-Case Scenario for BP: 20M Barrels, $560B Damages
Given what we've learned in the last month, I suspect that even current "high-end" estimates will look optimistic in hindsight. My own estimates are much higher than everything else I've seen. Of course, my numbers are really just guesses, like everyone elses. Naturally, I think my numbers are more accurate. With that out of the way, here is my analysis of the worst-case scenario for BP and the Gulf of Mexico.
BP May Continue Drop Beyond 50% Fibonacci: Technical Analysis
Bloomberg) -- BP Plc shares, which have plunged 47 percent since April, breached a key support level that technical analysts who follow Fibonacci retracements say indicates the slide may continue.
Obama names choice to reform oil drilling regulator
WASHINGTON (Reuters) – President Barack Obama chose a former Justice Department official on Tuesday to reform the Minerals Management Service, an agency blamed for lax regulation of offshore drilling ahead of the Gulf of Mexico oil spill.A White House official said Michael Bromwich, a former assistant U.S. attorney and Justice Department inspector general, will not become head of the agency as it will be broken up under the reforms.
Senator: Oil companies must dig relief wells
A U.S. Senator has introduced a bill that would require oil companies to dig emergency relief wells at all new drilling sites off the U.S. coast.Sen. Frank Lautenberg, D-N.J., said Tuesday that the rig explosion that unleashed millions of gallons of oil into the Gulf of Mexico proves that pre-emptive drilling is needed.
Florida hopes to settle BP claims without courts
TALLAHASSEE, Florida (Reuters) – BP Plc has done a poor job settling oil spill claims quickly and efficiently but pursuing the claims in court might be worse, Florida officials said on Tuesday.Governor Charlie Crist and Attorney General Bill McCollum have assembled a panel to map out a comprehensive claims process to recoup state and local government losses from the BP oil spill, which is also affecting Louisiana, Alabama and Mississippi.
BP Oil Spill Lawsuits Spread to States Beyond Gulf Coast
(Bloomberg) -- BP Plc faces more than 225 lawsuits in 11 states as litigation from businesses, individuals and investors continues to increase almost two months after the Deepwater Horizon oil rig exploded.
Disaster in the Gulf: Dead Zones
As more information surfaces, a potentially biblical disaster is unfolding, threatening to make vast parts of the Gulf dead zones, animals and plant species so contaminated and unsafe that Gulf communities may face "the total end of fishing, according to Carl Safina, Blue Water Institute ocean biologist.
Nuclear Device Only Option to Stop Oil Leak : Simmons
Matthew Simmons, founder of the Ocean Energy Institute, talks with Bloomberg’s Lori Rothman about BP Plc’s oil leak in the Gulf of Mexico and his view that the use of a “small-bore nuclear device” is now the “only option” to stop the flow of oil.
Matthew Simmons: The Relief Well Will Fail, And An Undersea Oil Lake May Be Covering 40% Of The Gulf
He's embarrassed by his old firm, Simmons & Co, for upgrading shares of BP, which he think will go to 0.
Accident at BP Rotterdam refinery kills worker
AMSTERDAM (Reuters) – A construction worker was killed at BP's Rotterdam refinery after a wall collapsed on him, a spokesman for the oil major said on Wednesday.
Crude Oil Drops as Stronger Dollar Cuts Demand for Commodities
(Bloomberg) -- Oil dropped from close to a one- month high in New York as a stronger dollar reduced the appeal of commodities to investors.Oil retreated as the U.S. currency rebounded against the euro, limiting crude’s appeal as an inflation hedge. The euro fell as low as $1.2273 from $1.2332 yesterday. A U.S. government report today is expected to say crude inventories declined last week, according to a Bloomberg survey.
Natural Gas Jumps in U.K. Second-Quarter Record
(Bloomberg) -- U.K. natural-gas is headed for its biggest second-quarter rally as European buyers drain fuel at a record pace and North Sea production wanes.
Oil Breaches 200-Day Mean, May Retest Highs: Technical Analysis
(Bloomberg) -- Oil is set to surpass this year’s highs above $87 a barrel after breaching the 200-day moving average yesterday, a “major” chart resistance level, according to Schork Group Inc.
Saudi Aramco added 12 trillion feet of gas in '09, but cut oil output on OPEC quota limits
CAIRO - Saudi Arabia's state-run oil giant says its oil output dropped around a million barrels per day last year, but it boosted its natural gas reserves by over 4 per cent.
Russia warns Belarus of gas cut
Russian President Dmitry Medvedev has warned Belarus that unless it pays off its debts for Russian gas within five days it will face cuts.
Ukraine Mulls Gas Project With Gazprom, Vows Secure Supplies
(Bloomberg) -- Ukraine is “potentially interested” in a joint project of state-run energy company NAK Naftogaz Ukrainy and OAO Gazprom that might include an exchange of assets, Prime Minister Mykola Azarov said.
Unfortunately with the US having reached peak oil in 1970 and the majority of the black-gold reserves that it needed to back its dollar sourced from the Middle East, the region’s wealth could only be recycled back into the US economy by controlling the entire Middle Eastern oil production to transaction chain. Thus, with US government support, Anglo-Saxon oil conglomerates extracted, refined, distributed and sold the oil, strictly in US dollars on the two dollar denominated oil exchanges - New York's NYMEX and London's IPE - before depositing (recycling) the petro-dollars with the major US banks.The petro-dollar recycling plan required the help of both the UK and Wall Street’s big banks and oil companies which effectively acted as “shareholders” in the plan. To the benefit of the UK financial industry, the UK government gained access to the world’s capital flows and became the first “franchisee” guaranteeing that British oil companies and the oil exchange under its jurisdiction fulfilled their part of the plan.
U.K. to Cut Barriers to Nuclear Power, Minister Says
(Bloomberg) -- Nuclear power can play a key role in the U.K.’s future energy mix, Minister Charles Hendry told executives from Electricite de France SA, Centrica Plc and other utilities.While the new coalition government won’t subsidize the industry, it will remove regulatory barriers and encourage nuclear power by establishing a minimum price for carbon, the energy minister said at the Nuclear Industry Forum in London.
New Zealand: Time for cross-party talks on peak oil
President Obama's statement today that the world is running out of places to drill oil, confirms the need for political parties in Aotearoa to start cross party talks on the global peak oil crisis, Maori Party energy and climate change spokesperson Rahui Katene says."The time has come for all political parties to come together and take action on what we are going to do about the global oil crisis and how it will affect this nation," Mrs Katene said.
Transition San Lorenzo Valley Becomes US' 69th Official Transition Initiative
Transition US is excited to announce that Transition San Lorenzo Valley has become the 69th official Transition Initiative in the United States. Transition Initiatives start when a small collection of motivated individuals within a community come together with a shared concern: how can our community respond to the challenges and opportunities of peak oil, climate change and the economic crisis? This small team of people begins by forming an initiating group and then adopts the Transition Model with the intention of engaging a significant proportion of the people in their community to kick off a Transition Initiative.
In a world of abundance, food waste is a crime
What does the U.S. have in common with countries in sub-Saharan Africa?Both waste large, obscene amounts of food. Better knowledge and technology would reduce food waste, deter environmental damage and, especially in that region of the African continent, reduce the number of people who go hungry each day.
Is it time to say goodbye cool world?
What hope is there for a deal on climate change based on science? The answer seems to be "not much".Climate negotiators meeting over the past two weeks in Bonn, Germany, enjoyed a new spirit of bonhomie as they worked to heal the rifts created by the failure of UN talks in Copenhagen, Denmark, last December. At the close of talks on 11 June, they believed they were back on track to deliver a new climate agreement by the end of 2011.
But diplomatic harmony has come at a price: sacrificing a cool future for planet Earth.
Climate Bill Lacks Momentum Even After BP Spill, Democrats Say
(Bloomberg) -- The BP Plc oil spill in the Gulf of Mexico is unlikely to create enough momentum to pass a comprehensive climate bill sought by President Barack Obama, say leading Senate Democrats.Many Democrats don’t want to vote in this election year on whether to cap the greenhouse-gas emissions linked to climate change, saying they prefer to work in the coming months on legislation directly responding to the spill.
“The climate bill isn’t going to stop the oil leak,” said Senator Dianne Feinstein, a California Democrat. “The first thing you have to do is stop the oil leak.”
EPA finds Senate climate bill affordable
WASHINGTON (Reuters) – U.S. environmental regulators said on Tuesday the climate and energy bill in the Senate would only add slightly to average household costs, but the finding was not expected to boost chances for the legislation that would cap greenhouse gas emissions.The climate bill unveiled last month by Senators John Kerry, a Democrat, and Joseph Lieberman, an independent, would cost households an average of $79 to $146 per year through 2050, the Environmental Protection Agency said in an economic analysis.
US greens say climate overhaul means massive jobs boost
WASHINGTON (AFP) – New rules to cap US carbon emissions and promote clean energy could create as many as 540,000 US jobs a year, a green group claimed Tuesday, as the BP oil spill fueled debate over reform.With the massive Gulf of Mexico slick pushing energy reform to the top of the US political agenda, ClimateWorks -- a climate lobby group -- said reforms could also help the struggling US economy.
UK can purge all carbon emissions by 2030: Report
LONDON: Britain can eliminate all its carbon emissions by 2030 by overhauling its power supply, national diet and transport, a report by the UK's Centre for Alternative Technology said on Wednesday.The blueprint to fight climate change did not require a "hair shirt, survivalist rejection of modernity," said author Rob Hopkins, founder of Britain's Transition Towns movement.
When Global Warming Comes Calling
This six-part articles dwells on several environmental issues namely global warming, water vitality, ecosystems, biodiversity and Green Economy.
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Re: Just don't raise gas prices
So, we are told, the public doesn't want taxes to raise the price of oil and it's products. But the public does want to do something about climate change. Ergo, the only remaining choice is an allocation system, i.e., carbon rationing to limit emissions by both industry and the final consumer ...
E. Swanson
Some proposed that the fees for carbon emission permits could be used to compensate consumers for the anticipated rise in the price of energy, gasoline and electricity particularly. Seems unsustainable to me in the long term - like Venezuela or Iran's deep subsidies on motor fuels.
I agree. Rebating some or all of a carbon tax would defeat the purpose of having the tax, IMHO. If a carbon tax is to have a real, long term impact, it must hurt enough to make people change their ways of doing everything. Worse, the tax would need to increase faster than inflation, if the impact is to increase in time, which would be a recipe for failure, as the political pressure to repeal the tax would also grow with time.
E. Swanson
One way or another, it would be temporary. Viewed that way, it's a good thing.
If there's money to be made by cutting consumption, people will do it..especially poor people. I think it would be a good way to encourage people to prepare for the lower-energy future...before it's a matter of life or death.
Right.
There's lots of poor people, more every day.
So there is a lot of money to be made from cutting consumption. I just can't see it as all bad -- poor doesn't really have to mean degraded, it just usually turns out that way. There should be plenty of energy and water for a decent living for a lot of poor people, but trying to divide it up in some sort of reasonable way has always a bit of a problem.
Everyone hopes it will be different this time -- but my "green" friends are still drinking bottled water and drinking coffee out of styrofoam cups, so I would say the odds are rather long.
I don't think it's actually going to happen.
But that wasn't the question I was addressing.
I think you were addressing carbon rationing in some fashion -- did I misread your comment?
A carbon tax would depress demand for useless carbon-based products like styrofoam and plastic water bottles.
But I agree, it isn't going to happen.
I think a carbon tax would be the best way to ration carbon, along with a rebate to every consumer. Best as in most effective and fairest.
I don't know how much it would depress demand for plastic water bottles. I suspect those buying them could afford a price increase. (Look at the people willing to pay $7 for a bottle of water at a baseball game...when there are free water fountains at the ballpark.)
But I think it would encourage those vulnerable to change their situations so they are less so. This is not the kind of thing the average person can do overnight (buy a different car, move to a different place, get a different job). A tax with rebate would encourage change at a realistic rate.
The problem with a carbon tax (or cap-and-trade, which would hit the consumer the same way as a tax) is that the people with the most money would simply continue to do as before. One's individual energy consumption tends to be a function of their income. However, as income increases, spending directly to buy energy as a percentage of income drops. That's because the consumption has become is indirect, i.e., consumption in the form of goods and services, not gallons of oil, tons of coal or equivalent. So, the consumption of those goods may well continue, as the market price also includes a large component of labor cost and labor cost may go down as the average worker gets paid less in a permanent recession which might result from a stiff increase in the price of carbon. The little guy would essentially be priced out of the market under that scenario, leaving the well off to continue BAU.
A direct rationing system would hit the big consumers the most and they are likely to be the people who can pay for the systems which do not rely on carbon fuels. Of course, one might expect that those with the money would not willingly allow such a rational system to be adopted...
E. Swanson
I don't think it would work unless everything that emitted carbon was taxed. It couldn't just be gasoline.
Yes, that would be the basic concept.
E. Swanson
>> unless everything that emitted carbon was taxed
Cows, people, dogs, squirrels, dolphins, oceans (currently a sink but could reverse to a source), termites, roads, ... that's a lot of taxes!
Have to set a reasonable boundry on "everything", but in general yes a simple carbon tax is by far the fairest & most efficent method to reduce carbon emissions. From a collections standpoint, far easier & more politically viable to collect at original source of production of the fuel (or import point) than trying to tax end user directly.
Unfortunately, the public is smart enough to figure out that higher tax = higher prices, and therefore will promptly throw out any politician proposing anything in these terms. Thus we end up with a cumbersome cap-and-trade proposal spiked with special interest exemptions and bribes that won't do much of anything (except fund pet projects) until next decade, and congressmen can say with a straight face it won't increase the price of gasoline at the pump. Allowing "credits" and offsets and trading of emissions is just a sideshow allowing certain special interest parties to game the system to make more money at the expense of the less politically connected.
Which gets us back to basically doing nothing in fact while pretending to be "solving" Climate Change, which I see as much more likely than Americans agreeing to rationing...
It's imports that would be most difficult. Anything produced in the country would be taxed if you taxed fuel and electricity. Taxing imports, though...that would be difficult logistically and politically.
Jeff Rubin is behind it, though.
Tariffs on imports is how the Federal government in the USA was originally supported. There is no doubt or question of the legal authority to set those tariffs to whatever level is deemed necessary for whatever reason will fly with Congress.
The only reason to keep them low is to encourage burning other country's reserves first.
a simple carbon tax is by far the fairest & most efficent method to reduce carbon emissions.
No, its the fastest way to line others pockets.
For every $1 spent on the actual carbon reduction, $1 goes to the bankers like Godman Sachs. Only 30% goes to the actual reduction, 70% is "overhead".
I think you miss the main mechanism by which a carbon tax works.
The point of a carbon tax is to artificially raise the price of carbon-containing fuels so that non-carbon-emitting energy sources have a competitive advantage. As long as the market is otherwise free to move this will result in increased use of non-CO2-emitting enrgy sources.
The money goes straight to the government (which can then spend it on left-handed spanners for the Air Force, since standard ambidextrous spanners aren't good enough for them). Any of the collected money that the government might dedicate to CO2 emission reduction beyond that is icing on the cake, and even if it all goes into bankers' pockets the tax itself provides the incentive to move to cleaner energy sources.
That's what we almost got here in OZ with the CPRS: a cap-n-trade system with massive compensation to polluters, slightly-excess compensation to households (compensation was slightly more than the projected cost increases), and blatant exemptions to selected industry (agriculture). To add insult to injury, any attempt in the future by a Government to reduce GHG emissions would have resulted in even more compensation!
We were saved from this farce by the Liberal-National opposition (who, these days, have nothing to do with liberalism, apart from blind devotion to 'free markets'), led by a borderline fundamentalist Christian who thinks Climate Change is "crap".
Even then, the CPRS wouldn't have actually reduced emissions at all: all the 'savings' came from paying poor, undeveloped countries to further reduce their own emissions!
Ironically, the Labor Party, who came up with the CPRS in the first place, blame The Greens for not passing it through the Senate, despite the fact that even if the Greens had abandoned their principles and voted for the slouts-in-the-trough CPRS, couldn't have passed it anyway, as Labor would still have needed the support of Xenophon (Independent) and Fielding (Family First evangelical Christian nutjob - his nutjobness doesn't necessarilly have anything to do with him being a Christian, but meerly to the fact he has NFI about anything - who also doesn't 'believe' in AGCC), unless two Senators from the LNP had crossed the floor (two ultimately did, but would they have if Labor had the support of Greens/Independent/FF?).
Lefty that I am, I consider that to be a feature not a bug. Sure if Larry Ellison wants to waste fuel flying a fighter jet for fun, he can still do it -and pay more for the priveledge. But all players have a choice, more money (by using less), or just keep wasting energy and paying money to the thiftyminded. It amounts to a net transfer of wealth from the wasteful to the thrifty. And I bet the poorer classes will be thriftier than the richer ones. Also politically, the well connected (unless they own oil) are not too threatened by this, as they would be by rationing.
Cutting consumption will do nothing. We need to STOP consumption.
Most people will not hear you, and will continue to talk past you.
You are offering them a bargain they cannot refuse, but they will continue to refuse until they can't.
Jeff Rubin in the article above:
What if that economy can't run on 15 million or less barrels per day?
And Peak Supply does not "define" Peak Demand. It places a ceiling on demand, but demand can fall to such an extent that supplies remain in excess for ... who knows how long.
There are many unexamined assumptions in our bargaining.
Yes, I agree on all. I keep talking though. :^)
Many of my friends think it will be no fun. Fun? Yes, we are simple. We want all the fun and no of the no fun.
That's a good question snarlin. With that much less energy, oil, will the wheels of the economic engine sputter and go kaput? It would seem plausible from the standpoint that not enough tax revenue will be generated to maintain infrastructure and pay interest on debt, pensions, etc. Right now the roads of America seem to be disintegrating before my well traveled eyes. But drop available oil by a substantial amount and forget it. It stops working. The economic system requires a certain amount of imput to maintain itself, and without it the complexity will vanish leaving in its wake some sort of collapse. Exactly how that will play out or look like when it happens escapes me though. Guess we'll find out when the time comes.
Earl, I've asked myself many times, and probably have posted the question here once or twice: "What useage of oil is critical to sustaining our current economy?" When the supply runs down, and increasing costs dampen demand, there is some base line that will have to be met. Probably defined by production, processing and transportation of food, I would guess.
To my mind, that would trump even pharmaceuticals, though I admit that the very wealthy would be able, for a while, to pay for a small amount of medical products. For the po' folks, though, no such luck. "Die, Baby, Die" Still, that would mean that fuel for tractors, and for transportation of food would remain until fairly late in the game. When you go to market and there have been no deliveries for a week or two, well, that is how you will know we are truly in the end game.
Reading that SA will be pumping 900 KB/day from their new fields does not inspire much confidence. I mean, how much will their older fields deplete in the meantime? that is, what, just over 1 percent of daily production today?
No, sir, the triage should have begun years, or decades ago. Now is already too late. Never mind that Americans don't want to hear about it and will kill any messanger who trys to make them aware.
Still, I will have to agree with the idea that the decline could be too close to us, and to difficult to admit to, so that between refusal to see and the relativity of time, it may be, if noticed, at least unacknowledged.
Besst hopes for cheap gas.
Craig
Peak Earl and Zaphod, it sounds like "minimum operating levels" have been on your minds too.
When do the wheels come off ??? Maybe they are starting to come off now. (this reminds me - I need to replace a ball-joint in my car... the obvious symptom was the grossly uneven tire tread wear... our leaders keep ignoring the obvious symptoms... )
No one knows how high a tax is necessary to have a particular impact. Due to the inelasticity of demand for gas, it would probably take an extremely high tax to make much of an impact. This is why rationing is the preferred alternative, or a cap and trade system for consumers, if you will. If one is provided gasoline credits, one can choose to use those credits, buy more credits from other consumers, or sell those credits. Those who are frugal with gasoline can win two ways, they will pay less for gas and they will receive some extra income from selling their credits. Those who do not own autos, for whatever reason, which includes a lot of the poor, could actually do quite well under this scenario. The poor and others could even use some of the income from the gas credits to take mass transit or buy an alternative vehicle like a bike, electric bike, scooter or an electric scooter.
Anyway, the goal is to use less gas and, therefore, less oil. But virtually no politician has the cojones to actually come out and set a goal for oil use. I think the goal should be to cut our use by at least 50%, at least initially. The ultimate goal for oil use should be near zero, at least for transportation.
Taxes just reward the person who cuts his/her consumption once, the foregone taxes not paid. Rationed credits benefit the frugal twice and penalize the non frugal twice. Both rewards and disincentives would be greater; therefore rationing would be more effective.
President Obama, unfortunately, showed what he is made of last night -- not much, another President made of straw. Consequently, we will continue to stumble and bumble towards energy and climate Armageddon.
You are conflating the short run and the long run. In the short run the price elasticity of demand for gasoline is very low (The demand curve is almost vertical in the vicinity of the existing price.) Over time, a long run of several years, the price elasticity of gasoline appears to be about unitary. In other words, the demand curve for gasoline over the long run approaches a rectangular hyperbola.
Also at very high prices even the short run price elasticity of demand increases.
There has been a lot of research in economics over the past forty years on the price elasticity of demand for gasoline.
Not if the rebates are NOT proportional to use, and the consumer is rational. Lets say I get a $1000 rebate, and gas goes up $1 a gallon. If I can figure out how to use less than before I make a profit. So hopefully people would be incentivized to become more efficient. The whole idea behind tax and rebate is to change the indivduals marginal cost to consume without sinking him.
Everybody should read the Rifkin article in it's entire length.
It's a very important way at looking at things, and it's the way out of the whole mess we are in at the moment.
The Germans are on the move, The Spanish, The Britts, and the Scandinavians.
At he moment the first steps to create a big "intergrid" between Norway, Germany, Britain, Sweeden and Denmark have been taken, and we allready exchange electricety between each other.
When theres a lot of wind, Denmark exports lots og electricity to Germany, Norway and Sweeden, and when theres not so much wind Norway exports electricity from Hydro, and Germany from Nuclear and solar.
The concept outlined in the article could also apply to North America - just look to Europe and see how to do it.
http://www.euractiv.com/en/priorities/rifkin-interview-495262
"The concept outlined in the article could also apply to North America - just look to Europe and see how to do it."
Alas, the healthcare reform process glaringly illuminated how unpatriotic many Americans seem to find the idea of borrowing great ideas that work from Europe. We don't have to live this way, when it comes to healthcare or anything else. And yet, Americans seem to stubbornly defend a status quo that doesn't work for the sake of business (profits) as usual. Quite discouraging, really.
This country's reactive rather than proactive policy-making is a huge problem - although our post-crisis response is also rather absymal. As is the delusional clinging to deregulation and free markets gone amuk even in the face of the consequences of that philosophy in any sector you can name. As is our worship of big money and corporations that don't give damn about anything except their own profits. As is our consistent national preference for short-term gratification over long-term well-being. All of which Europe seems to be better moderating than we are managing to do.
It's time for this country to grow up. We aren't an adolescent nation any more - and can't afford to continue these mentalities. I wish I was optimistic that we could put politics aside and evolve.
I cant remember where I read this but I recall the discussion of the "American dream".
Theres a good reason why Americans dont like taxing wealthy folks or big corporations, why they tolerate the constant corporate raping: One day they still think that might be them in the corner office...
Americans have not awaken to the reality of the last 30 years, but still imagine a country so brimming with opportunity that every street corner hot dog vendor could tomorrow be the next wall street mogul. Why do you think Joe the Plumber was a such a feast for the media? He's the poster child of the "American dream". A self made business owner doing something simple trying to get rich.
George Carlin was right when he said "Theres a reason its called the American Dream, because you have to be asleep to believe it".
What has Rifkins article to do with taxes?
Did anybody read it? I think, it's a very important article, outlining a way of transforming western comminities/countries til sustaineble energy instead of fossilfuels.
pre drill relief wells ? and relief wells for relief wells too ?
istm every well is a relief well.
BTW, the definition of insanity is doing the same thing over and over again and expecting different results.
I'd recommend learning the difference between an aphorism and a definition. (Sorry, but one of the things that really annoys me is people who take a perfectly reasonable argument and try and give it spurious "extra weight" by appearing to be more scientific/medical.)
http://www.sarcasmsociety.com/
/sarcasm
Link up top: Obama's Oval Office Speech Translated Says "Drill Baby Drill"
Now why is that a contradiction in terms? The world is running out of oil. That is true. We will be reliant upon oil for quite some time. That is also true. No contradiction whatsoever. True, we will have a lot less oil to rely on but we will still be relying on what we do have.
Well at least Mr. Fowler got that part right. No contradiction there.
Ron P.
To quote the president:
http://www.whitehouse.gov/the-press-office/remarks-president-nation-bp-o...
I think this is the right approach. Peak oil is not referenced as any kind of new realization. Instead, we are invited to view the 90s as an aberration. We figured it out in the 70s and early 80s. Ignored it for a couple of decades and now have to once again confront the hard facts.
Ron, maybe he suggesting that it is a contradiction to say you are going to continue to be reliant on something that is "running out."
Maybe he does not assume we will be able to rely on oil for "quite some time."
The world is running out of cheap oil. The oil is there for those who are willing to pay for it.
"The oil is there for those who are willing to pay for it."
That does not seem like a good assumption. In the past we find there are times when something is not available "at any price."
Now that is expensive! ;)
aardy -- I might agree with the "we're only running out of cheap oil" if the time frame were offered. After 35 years involved in oil/NG exploration/development my view is that we're also running out of expensive oil. Granted there has been significant discoveries in various Deep Water basins over the last 10 years but these plays have physical limits. If no operator has identified a viable prospect in the GOM DW 10 or so years down the road then it doesn't matter what the price of oil is. A dry hole loses money even at $400/bbl. Every major oil play that's on its last leg today was once "bright new future".
But then there is another qualification: "The oil is there for those who are willing to pay for it." Pay for it with what? If global oil production fell to half of what it is today the could the US still pay the price to supply our needs? Perhaps. But the price wouldn't be in $'s. It would be in blood. That of our military and those who attempted to not "share" the resource with us. The price would be the loss of our national dignity to use whatever power we have to usurp even a greater percentage of global consumption than we do today. I still believe that eventually the USA and China will cooperate on some level to make sure their economies prosper as best as possible in a post-PO world. And that will mean less for the balance of the world.
"we're running out of "expensive oil" too."
And yes, what time frame, what is defined as "cheap" now vs later, whose 'demand' is met and whose demand goes unmet, and the means of getting it. Assuming there is a means to get it, as you rightly point out.
It sounds like Obama did not muster the troops last night...
I don't know if I even want to assume the US will be one of the countries deciding who gets what beyond a few years from now.
aardy -- Are you in the EU? Think I remember that. If you are here's some advice: don't ever underestimate what the USA will do to maintain BAU. Saddam made that mistake. Don't you. And remember...that's from one of the nicest Texans you'll ever meet.
No Rockman, I'm in the US, midwest.
I agree about not under estimating what we - the US - will do to maintain our brand of BAU. But I don't assume our "leaders" will be able to maintain this brand of BAU. I think our leaders will fail miserably, but I have no idea when.
Saddam was a flea on the wall and the rest of the world was still mostly fat and happy. The game board is changing and I don't know how the pieces of the former Global Village break during this on-going collapse.
"I think our leaders will fail miserably, but I have no idea when."
Really? [looks around]... Really?
LMAO - no kidding. The failure process is in progress, and it looks pretty miserable already.
But we are still in the early innings.
It's politics. Failure isn't an option, it's standard equipment.
Willing and ABLE
Actually some products rely on volume to be affordable for even the richest of the rich. If only the top say 1 million people in the world can afford some form of more costly oil, is that enough to support the extraction of that oil? How much would gasoline cost if we were only producing it for 1 million people in the world? If the middle class become poor how rich can the rich be? If folks become so poor that even Walmart is out of reach for them how much money can the owners make? The rich actually need the rest of humanity to support them, they just refuse to know it.
Dunsmuir bikes-only lane officially opens today
The Dunsmuir viaduct as well as the parallel Georgia viaduct are the only portions that were ever built of a planned freeway system into downtown Vancouver. Luckily, the rest of this freeway system was never completed.
This section of bike path is part of a multi-year project to add 55 km of bike lanes to Vancouver. Not everyone likes it. Some local businesses complain that blocking motor-vehicle lanes hurts their sales. Other claim that no-one actually uses the bike lanes and that it creates more pollution because it slows automobiles traffic down and causes more idling.
I personally believe that the opposite happens, that taking out vehicle lanes reduces both traffic and pollution. Taking out automobile lanes hasn't been tried at a large scale anywhere in North America yet, but I think people will be pleasantly surprised by the result.
A Gas Mileage Bonus From Aluminum
Not to mention a bonus from corrosion and fatigue. Translates to faster replacement of product.
6061T6
Very highly stressed suspension components have been made out of aluminum for years. Corvettes have had aluminum suspension arms since 1984. Modern alloys are amazing metals. Look up 7075-T6.
We've already got that in spades with plastic cooling system parts that are guaranteed to fail.
The Aluminum won't bring any of the rest of the car into worse condition, and the reduced weight means less stress (and fatigue) on suspension parts.
As well, aluminum corrodes more slowly than the steel that is the current main structural component, so I'd say it is all win except the price.
Several cars are already made this way. Mostly luxury cars.
One notable exception and standout example is the original landrover. The skin of the body is aluminum or aluminium :) The bodys last for years, although its possible with the mix of metals to set up a little galvanic corrosion. generally its the steel chassis that rusts first. The body is so long lasting that people often patch the chassis or just buy a new one and keep going.
Legend has it that they chose aluminium because in the post war years they had plenty laying around when aircraft production ceased. Turned out to be a winning idea.
Summary of Weekly Petroleum Data for the Week Ending June 11, 2010
Oil Is Steady as U.S. Supplies Gain, Refiners Curb Operations
IMO what the latest report confirms is that we are still on the oil production plateau that began in 2005. I do wonder how much longer we will stay on that plateau and would be delighted to see your opinion and also that of various petroleum geologists and engineers.
This week, oil imports curiously were maintained at a high level (looking at 2010 only), which I find curious because world oil supplies have roughly leveled out since late March. It now appears that most of the recent import increase was from Canada. However I don't know why this is so, especially since upper Midwest refiners are undergoing more maintenance lately than usual - so the extra (tar sands) oil is basically just piling up. The Midwest oil inventory increase accounted for 100% of this week's total 1.7 million barrel oil inventory gain (and also accounted for the decline in refinery uitilization). But this does confirm my observation that less oil is reaching the US lately from OPEC, more specifically higher quality oil is not reaching the US but lower quality oil is.
But perhaps the most important question this week is - just why is US distillate demand up an eye popping 12% over last year? There are three explanations for this: 1) some degree of economic recovery 2) a fall off in distillate imports from Europe (which seems to be more a matter of price than supply) and 3) maybe most significantly, a big worldwide pickup in demand from maritime uses. Maritime use has picked up due to new mostly worldwide clean air requirements, but also due to increased tanker traffic and longer oil tanker shipping routes as compared to 2009.
I strongly suspect that the EIA figures are significantly under-reporting distillate exports, and if so, they may also be over-reporting distillate inventories. There are some inconsistencies in the weekly figures that support my theory, as product inventories appear to be growing faster than they should based upon the amount of oil processed. In addition, the EIA basically does not bother to add and compare its supply and use accounts each week to check for errors, but usually only goes back and corrects the amounts for its monthly report (then plugs the corrections in to the latest weekly report).
None the less, a 6% overall gain in US oil demand over last year is nothing to sneeze at, and if this continues, it also signifies that worldwide oil demand is growing and that the price of oil could go higher - despite generally adequate levels of US inventories.
Charles,
It is interesting to notice that U.S. oil demand (and hence consumption of oil products) has increased faster--much faster--than growth in U.S. real GDP over the past year.
I wonder what accounts for that fact.
Don,
I'm not sure what data series you're looking at. The EIA shows that US oil consumption has been dropping year-over-year (until just the last couple months showed a bit of growth). The first 3 months of 2010 are .08% down from 2009.
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTUPUS2...
On the other hand, 1st quarter GDP is up by what, 4% over last year 1st quarter?
.08 percent is less than one percent--that's just noise in the statistical data. Recently (see earlier comments on this thread) oil imports and oil consumption have been increasing. We cannot have much increase in real GDP without increasing our consumption of oil products. People seem to be driving more this summer than last summer, and airline miles also seem to be increasing this summer as more people travel. The decline of the Euro and the British pound against the dollar makes overseas travel substantially cheaper for Americans this summer than it was last summer, and hence more people travel to Europe and Britain from the U.S.
If you looked at total employment only, which is down considerably from even one year ago, you might easily conclude that total oil product demand should be down - as economists and others have shown a strong coorelation between the economy and oil use.
Therefore it is quite surprising that oil demand is actually increasing well ahead of the economy. There may be two (or more) reasons for this - first the increase in diesel demand may be the truckers and producers of goods have had more business as products and supplies are moved into position with expectations of a stronger consumer economy. But also, as you say, there appears to be much more of a willingness to travel - including traveling by air.
I am not any kind of expert on analysing the efficiency of energy use, but it appears that we have become less efficient in oil use over the last year. It would be interesting if someone could affirmative prove this was due to falling EROEI or some other factor. Falling EROEI is indicated by increased imports of tar sand oil from Canada and less light sweet crude from the KSA, but maybe suburbia in general has become less efficient - that is people may be travelling further just to get the same amount of work or play accomplished.
Frugality fatigue?
The USA is two countries in one space, the "upper income" and the rest.
.08 percent is less than one percent--that's just noise in the statistical data.
Sure. My point was that's not an increase.
Recently (see earlier comments on this thread) oil imports and oil consumption have been increasing.
Yes, there are some reports of increase. OTOH, these are preliminary, and just for the last few months. If you look at the data I provided, you'll see that US consumption dropped quite sharply in the last couple of years - much more sharply than GDP.
We cannot have much increase in real GDP without increasing our consumption of oil products.
This is only very loosely true. Take a look at the last quarter of 2009: oil consumption increased only 1% over the previous quarter, while GDP rose 5.6%. GDP can grow while oil consumption stays flat or drops. Industrial/commercial users can substitute natural gas for oil for process heat applications; they can shift from trucks to rail; drivers can choose to take vacations closer to home.
In the long-term a causal association between GDP and oil doesn't exist at all. Most of the correlation in the past has been in the other direction: changes in economic activity caused changes in oil consumption. Now, that loose correlation between GDP and oil consumption exists together with a secular long-term decline in oil consumption. Reductions in oil consumption can and are happening at the same time that economic activity increases.
We don't need oil for prosperity.
Lockheed Matin - A Violent Definition of Green
A nice video piece exposing greenwash hypocrisy.
http://www.vimeo.com/12613450
I love the baby steps the Lokheed Martin employees are taking in the video. Or at least the baby steps they claim to be taking ("I write on both sides of the paper"). It sounds like a Dilbert cartoon.
I also like the editing to show the contrast between the "Supply Side" employees (military personnel) and the "Demand Side" employees in suits and air-conditioned buildings?
Green is our latest "bargain" and it's already nothing but a fashionable facade.
This just in:
Matthew R. Simmons Retires as Chairman Emeritus of Simmons & Company International to Dedicate his Full Attention to The Ocean Energy Institute | Business Wire
Think his disagreement with his old company on the value of BP had anything to do with this?
My guess is that he didn't retire; he was probably fired.
I think it's small coincidence following his high-profile glossolalia on the gulf spill.
It's amazing to me how robust a good reputation can be. The stuff he's saying makes pretty much no sense, yet still I have people asking me if he can be right in all his claims. No. He can't be. Next.
He was chairman emeritus, in a non-paid position, and had not run Simmons International for years. Kind of hard to "fire" him though they could agree to sever any remaining relationship.
Greenish, hello. "Nuke it" is not a good option in YHO? Simmons was on MSNBC. Just saw his YouTube clip from Bloomberg. Your "glossolalia" comment above is the only one on it I've seen here so far.
There's been quite a bit of discussion, but it's spread out over several weeks, since he's been saying it for awhile.
$20 billion is a "drop in the barrel"!
More like 10 times that much is really needed.
Lost business alone, will be equal or greater than the cleanup.
Fishing, tourism, boating, real estate, on and on......
All future profits of BP for the next 20 years should be turned over.
Problem is -
Most of the money will go to greedy criminals who take it by means of corruption, bribes, corporate theft, etc.
Cool one, I agree. Note that BP agreed quite quickly and BP stock prices are UP this AM. Here is one take on it which seems likely to be true
Full article at http://www.wsws.org/articles/2010/jun2010/spil-j17.shtml
Independent Evaluation Finds Homeowners Extremely Satisfied With NEEA's Northwest Ductless Heat Pump Pilot Program
Pilot project expands product availability, installation goal exceeded by 35 percent
See: http://www.prnewswire.com/news-releases/independent-evaluation-finds-hom...
Cheers,
Paul
I would think the U.S. Northwest has a climate that would lend itself nicely to heat pumps. Never too hot nor too cold. The high satisfaction is likewise understandable.
This got me thinking (always a dangerous thing, I know!): Would the energy savings be as acute in moderate climates like Portland, Oregon? Or, conversely, would the return on investment be higher in areas where there is wider seasonal variation (i.e. with more of a pay off for air conditioning in summer and warmth in winter)?
Paul, you may have answered this question many times on this blog before, if so, please indulge me. I'm curious. Thanks!
Tom
It's an interesting question, Tom. Presumably, the greatest return would be in moderately cold and relatively sunless climates and, in particular, areas with higher than average electricity costs. To be cost effective, you require a reasonably sizeable space heating load; otherwise, passive solar and other internal heat gains (i.e., lighting and appliances) would minimize its contribution.
Our winter this year was relatively mild. Our older main floor heat pump produced an estimated 7,520 kWh and consumed a total of 2,713 kWh (I log it's hours of operation and calculate its heat output based on the hourly temperature for each of these hours, and it's plugged into a power monitor, so I can accurately determine its usage). Thus, our net energy savings this year are a little over 4,800 kWh or $575.00 at current rates. In a more typical winter, our net savings are in the range of 6,000 kWh or some $700.00 to $750.00/year.
I can't accurately determine the heat output of our lower level heat pump because it's a high efficiency inverter model, but it's roughly 1.3x more energy efficient. I'm thinking of replacing the main floor unit with a new Fujitsu that is 1.7x more efficient (HSPF of 12.0 versus 7.2) and giving it away to someone who can put it to good use. Would you be interested, Tom?
Cheers,
Paul
If Tom doesn't jump at that, I've got some fine Maine beers I could bring by sometime!
Wink, Nudge..
Bob
Uhmm, beeeerrr. Oh ye wise Americans surely know all our weaknesses.
There will always be an ice cold Keith's in the refrigerator with your name on it, Bob.
Cheers,
Paul
Yes interested. Details over coffee - free time is becoming available as summer approaches. Though Jokuhl is suggesting Maine beer so I might have some competition. Mr. Kuhl, if you keep it up, you'll be welcome across the Fundy anytime :-D
If I get your drift, Paul, heat pumps are a bigger saving at times when the weather is colder b/c of the volume of energy used. Of course, in really cold weather, it is all a moot point - as some moderation in climate is required. Is it reasonable to say that coastal climates - either east coast or west coast - are better suited for such technology than perhaps other regions?
This is what makes sense to me. Then again, I'm a slow learner.
Cheers!
Tom
Actually, Tom, you're right on the money. Our coastal climate is pretty much ideal as we have a relatively high space heating demand, but we don't experience the deep, sharp, bitter cold of our inland brethren. Too mild, and the potential savings over electric resistance won't justify the additional cost of the hardware and, conversely, too cold, and the efficiency of the heat pump suffers and/or you have to install a larger and thus more costly system to satisfy the higher heat demand.
BTW, it's been 297 days since Scotia Fuels last filled our tank and I'm guessing by the gage that we've used perhaps 120 litres/30 U.S. gallons during the interim. Our rolling twelve month electrical usage as at May 25th stands at 11,969 kWh. We should get that below 11,000 kWh by September and between 9,000 and 10,000 kWh if we swap out the old heat pump with this newer model. [The previous owners used 5,700 litres and 14,000+ kWh in the year prior to our purchase.]
Cheers,
Paul
http://www.google.com/hostednews/ap/article/ALeqM5gBPaHA8wyvhZsKWPW8Uxp3...
'Jobless aid bill hits deficit wall in Senate'
We've painted ourselves into a corner. Think about all the wasted trillions on tax cuts mostly for the wealthy and two wars when B-jr was prez. It's called saving for a rainy day! Well, the savings never took place - instead huge debt was more than doubled from 5.4 to 11.8 trillion in 8 years and now with Obama it is over 13.1 trillion and there is no piggy bank for this rainy day that will not go away.
Obama is between a rock and hard place. Congress doesn't want to anger the populace with even greater debt and Obama is trying to hold on to this paper thin recovery. Can you say Double-Dip?
I wish there was something to suggest, but what can be done? Probably just have to face up to austerity measures just like Europe. Hunker down and hope peak plateau descent doesn't arrive too early.
The only thing that can be done. Cut spending (austerity) and/or raise revenues (tax).
The medicine will have to be administered at some point. Postponing the day of reckoning only makes it worse.
Governments, like people, cannot live forever beyond their means. The political system in the US will find a way to accommodate that reality or fail big time. I suspect the former will happen. Why? B/c as Winston Churchill once wryly pointed out: "America always does the right thing — after exhausting all the other possibilities."
Here's hoping for sensible thinking to prevail.
Then again, I could be wrong:
http://www.youtube.com/watch?v=X0dpj512stM
Cheers!
If it was only that easy, but either one that gets picked has its problems. If austerity is picked, then we probably go into a double dip recession. If taxes are raised its the same thing.
What this article is suggesting is that the only way to avoid the double dip is to have more stimulus, but we can no longer afford to add to the debt. That's why I referred to it as Obama being between a rock and a hard place. There are no simple answers.
Yep! Obama, however, has been in this dilemma since 2008. Everybody knew that the road ahead would not be easy when he was elected.
May be no answers, period. Simple or otherwise. A matter of biting the bullet.
Bingo. And that is why austerity and taxes will be the order of the day. Only a question of timing.
all I can say is "give me my f-ing 99 weeks, you lying, thieving murderers." talk about 'let them eat cake', this is like 'let them eat sewage'.
I would NOT go surfing in any part of the northern GOM coast for awhile.
http://www.msnbc.msn.com/id/37738626/ns/disaster_in_the_gulf
Dragonfly, in the movie Matrix, when that agent is talking to Morpheous in that highrise business office building and he says something to the effect of, Your specie doesn't behave like other organisms that reach an equilibrium with their environment. No, you move to an area and populate it, then run through all it resources and then move on to another area. You are like a virus, a plague that is infesting this planet.
Your post made me think of that scene.
It will "sterilise the gulf" as an EPA acquaintance of mine said.
Karma will fix that imbalance soon. Overshoot always results in die-off.
Overshoot is the 800 pound gorilla that TOD always dances around. It's not worth even attempting to discuss here.
Grayzone,
For once, you are clearly mistaken. Overshoot is discussed at least every week on TOD, and over the past four years and more TOD has had a dozen, perhaps a score, articles on overshoot. Just look at the archives.
Little is known about the feeding habitats of the Louisiana pancake batfish. Perhaps, it slurps the slurry of naturally occurring oil seeps at 1,500 feet. If that is the case, it should do fine.
http://www.cnn.com/2010/US/06/14/gulf.oil.threatened.species/index.html?...
I heard Mike Malloy mention TOD on his talk show tonight...he was talking about an article on TOD by Sharon Astyk (I think) (or maybe it was Sharon on TAE referencing TOD) concerning down-hole fracturing/damage at DWH I pulled into my driveway and didn't hear the rest...
Good job TOD getting air time! I have emailed several radio shows to bring TOD to their attention, and I bet a lot of others have done the same.
If you want TOD's message to reach a wider audience, contact the various radio, TV, and newspaper and Internet media shows and publicize TOD...
Yes, I have been listening to Malloy and he always sneaks in PO references. That's the third TOD reference Malloy has made in the last week. The article he read tonight was by Julia Whitty at MotherJones.com
http://motherjones.com/blue-marble/2010/06/worst-already-true-BP-well-no...
WHT,
Thanks for the clarification...I should have kept listening...but I was on tap to cook dinner!
I think it is a positive development that PO is making its way into more and more media conversations and articles, and also that TOD is being referenced as well.
Maybe someday my wife and children will start to comprehend the evolving energy realities...
Biomass plan under fire
U.S. expert: Not enough information to rush into decision
See: http://thechronicleherald.ca/Business/1187628.html
Personally, I hope this proposal is turned down by the Board.
Burn coal not trees !
Cheers,
Paul