Drumbeat: August 26, 2010

Big Oil ticked off at new money law

NEW YORK (CNNMoney.com) -- A new law requiring oil companies to disclose all payments made to governments has sparked a sharp debate, with Big Oil saying it will put it at a big competitive disadvantage.

The law, attached at the last minute to the financial reform bill last month, applies to extractive industries - basically all U.S.-listed oil, gas and mining companies.

Deep-Water Drilling Moratorium No Longer Needed, Panel Probing Spill Says

President Barack Obama can end a moratorium on oil and gas drilling in the Gulf of Mexico under new rules reducing the risk of an uncontrolled spill, according to a report for a panel investigating BP Plc’s blowout.

Rules issued in June by the Interior Department “provide an adequate margin of safety to responsibly allow the resumption of deep-water drilling,” according to the report today from the Bipartisan Policy Center, a Washington-based research group. The rules, if followed by BP, Apache Corp. and other drillers, and enforced by regulators, “will achieve a significant and beneficial reduction of risk.”

Shell tests method to reclaim oil sands waste

Alberta (Reuters) - Royal Dutch Shell Plc said on Thursday it was starting up a demonstration project to test a new method of speeding up reclamation of toxic waste ponds at oil sands operations, a source of tension between oil companies, environmentalists and regulators.

Existing house is remade into green home-of-the-future

A lucky British couple won a free home makoever that reduced their carbon emissions 80% and turned their energy bills into net income.

Fiddling while the Earth burns

No more 'politics as usual' should mean having enough courage to tackle the sickness of mindless consumption.

Why our agricultural empire will fall

In an age of super-sized meals and obesity epidemics, food-shortage doomsday scenarios always seem a little surreal. Backed by half a century of agricultural abundance, it's easy to imagine that cheap food will permanently abound. But in a new book, "Empires of Food," academic Evan Fraser and journalist Andrew Rimas show us that we are not the first advanced civilization to have a hubristic, misplaced confidence that we'll always be fed.

By tracing the rise and fall of a number preindustrial empires, the authors show us just how much trouble we're in. The Romans, the Mesopotamians and the medieval Europeans, for example, all had agricultural systems that, much like ours, were yoked to complex technology and highly specialized trade networks. And each of those societies eventually failed because they hadn't accounted for soil erosion, growing overpopulation and weather changes. Climate change, anyone?

US Interior Dept Defends Decision to Re-Issue Drilling Ban

The U.S. Interior Department is defending its decision to withdraw, revise and re-issue a controversial ban on deep-water drilling after a federal judge questioned the department's ability to change the ban while it was being challenged in court.

Chalmette to shut some units due to poor market conditions

(Reuters) - Exxon Mobil Corp said it will close down some redundant process units at its 196,000 barrel per day refinery in Chalmette, Louisiana due to poor market conditions.

Enbridge pipeline to link Suncor plant

Enbridge Inc. will build a new 95-kilometre connection between Suncor Energy's oil sands plant and the pipeline system serving northern Alberta.

Enbridge says the new Wood Buffalo pipeline will cost $370-million and run parallel to the Athabasca pipeline that Suncor currently uses.

Asia gasoline to USWC, Mexico down sharply on narrowing economics

Singapore (Platts) - The volume of arbitrage gasoline heading from Northeast Asia to Mexico and the US West Coast in September has fallen sharply to an estimated 30,000-70,000 mt (253,500-591,500 barrels), as import demand eases amid expectations of narrowing economics, industry sources said this week. In comparison, about 161,100 mt of gasoline loaded from South Korea and Singapore in August have headed for the USWC and Mexico.

Pemex Sells $1 Billion of Bonds in Third International Offering This Year

Petroleos Mexicanos, the state-owned oil monopoly, sold $1 billion of bonds maturing in 2035, its third dollar debt sale this year.

Pemex, as the Mexico City-based company is known, sold the 6.625 percent bonds to yield 5.975 percent, according to data compiled by Bloomberg. Bank of America Corp. and Credit Suisse Group AG arranged the offering.

On Doomed Rig's Last Day, a Divisive Change of Plan

On April 20 at 10:43 a.m., a young BP PLC engineer sent a 173-word email to colleagues aboard the Deepwater Horizon drilling rig. The email spelled out a recent change to a key safety test that sparked confusion and debate aboard the rig.

Less than 12 hours later, the rig was engulfed in flames so hot they melted steel. Eleven workers were dead.

The worst offshore oil spill in U.S. history had begun.

50 years of OPEC

Interestingly, the emergence of OPEC was triggered by the tempers of the time, the result of a 1960 law instituted by the then American President, Dwight Eisenhower. That law compelled oil quotas on Venezuela and Persian Gulf oil imports in favour of the Canadian and Mexican oil firms. The immediate result was a sharp fall in prices of oil in these regions.

Venezuela reacted by seeking an alliance with Arab oil producing nations as a pre-emptive strategy to maintain the autonomy and profitability of its oil resources. Common interests pulled other oil producing nations together. Economically, the decisions of OPEC continue to have considerable influence on international oil prices. This impact was most felt in the 1973 energy crisis during the Yom Kippur war, which Israel fought against Egypt and Syria. During the 6-day war, OPEC refused to sell oil to western countries as a protest against Israel.

UAE topped energy investment in Iran last year, Germany came second

The United Arab Emirates (UAE) was the single largest investor in sanction-hit Iran's power sector in 2009, according to a report in Emirates 24-7 newspaper.

Iranian President Mahmoud Ahmadinejad speaks during an anti-chemical weapon ceremony in Tehran June 29, 2010.

The UAE companies invested nearly $720 million in energy projects in Iran in 2009, before the latest round of sanctions was slapped on the country, the Dubai-based daily said in a report.

Germany was the second largest foreign direct investor in Iran's energy sector last year, with investment totaling $445 million.

Game resumed: Iran pockets Bushehr and plays on

IT WAS meant as a marker for the world’s readiness to accept Iran’s right to benefit from the peaceful uses of nuclear power, despite its provocative behaviour. By this reasoning, the fuelling this week by Russia of the Bushehr nuclear reactor, Iran’s first power-generating nuclear plant that is due to start supplying electricity to the national grid by year’s end, could help persuade the regime to return to the negotiating table over United Nations demands that it suspend more troubling nuclear work.

For Iran, however, Bushehr symbolises something altogether different: the fruits of defiance.

Green Energy: Why We're Still Not Using It

The United States expends a lot of energy studying green energy. There's no shortage of ideas. For example, San Francisco considered installing giant turbines under the Golden Gate Bridge and harnessing tidal power to generate electricity. There are all kinds of research projects, coalitions and advocacy groups touting renewable energy, but the country is still heavily reliant on fossil fuels. Only 7% of energy consumed is from renewable sources. So why haven't we made more progress and what can be done to change the numbers?

The simple future beyond oil: The convergence of our economic and ecological futures and the importance of change

We are living through “interesting times”; credit crises, recession and rising debt threaten to destabilise nation states. Whilst reckless bankers and traders might have a certain amount of responsibility, if we are to understand the larger processes that are driving these trends we need to stand back and look at the human system as a whole. Change is inevitable – it's one of the implications of the Laws of Thermodynamics. What we need to understand is the way human ecology works within these natural physical processes, how the contradictions between human systems and these natural processes define what is “unsustainable”, and what this means for our future as we adjust to the natural limitations of our environment.

Palm Oil to Climb as Demand Outstrips Production, Godrej's Mistry Predicts

Palm oil must jump at least 19 percent to discourage imports by India and China, the world’s largest consumers, as production will be little changed this year, according to Godrej International Ltd.

Ramesh raises alarm against Bio-fuel for food security

NEW DELHI (Commodity Online): The Union Environment Minister Jairam Ramesh today raised alarm against the use of bio-fuels in the automobiles citing the food security concerns in the country.

Making sure we get it right on biofuels

While numerous efforts are underway to bring biofuels made from non-food sources into the marketplace, today America’s principle biofuel crop is corn. And as Purdue economist and author of a recent study on land use emissions Wally Tyner says: “With almost a third of the U.S. corn crop today going to ethanol, it is simply not credible to argue that there are no land use change implications of corn ethanol.”

With So Much Oil & Natural Gas, is Biofuel a Viable Mideast Fuel Option?

When it comes to producing large quantities of biomass fuel in the Middle East, the big question is how serious this technology can become in a region that still contains a large portion of the world’s remaining petroleum supplies, and where new fields of natural gas are being discovered in the Mediterranean Sea, Persian Gulf, and other locations.

John Michael Greer: The care and feeding of time machines

The distinction between intensive and extensive food plant production discussed in last week’s post has implications that go well beyond the obvious. When you garden a backyard or a few acres intensively, you can spare the time, energy, and resources to do things you can’t do on an extensive farm of a few hundred acres, and the payback can be spectacular.

Drawing a roadmap to sustainable food, and sustainable practices

There’s never been a better or more crucial time for business leaders to accelerate the adoption of sustainability principles by fully engaging in the process. An incredible number of companies are doing good work but what really counts at the end of the day is transparency, accountability and involvement at every level of the business. The “talk-do” index, as we’ve come to call it, is a key measure — making sure change is on a systemic basis versus something shallow, on the surface.

Who built the electric car?

McCubbin's Firefly contains 11 12-volt lead acid batteries, each weighing around 25 kg (56 pounds). Together, these batteries give the Firefly a range of around 35 kilometres on one charge.

The car is highway legal (ICBC has a category for electric vehicles) with two emergency battery shut-offs and a crash sensor. McCubbin can easily get the vehicle up to 85 km/h on the highway with its 19 horsepower DC motor. Unlike a gas car, an electric motor develops maximum torque when stalled/starting, so although the motor is only rated 19 hp when it gets up to speed, the motor is rated at 87 hp when starting!

BP frozen out of Arctic oil drilling race

BP has been forced to abandon hopes of drilling in the Arctic, currently the centre of a new oil rush, owing to its tarnished reputation after the Gulf of Mexico spill.

The company confirmed tonight that it was no longer trying to win an exploration licence in Greenland, despite earlier reports of its interest. "We are not participating in the bid round," said a spokesman at BP's London headquarters, who declined to discuss its reasons for the reverse.

The setback, which follows the announcement this week of a major find in the region by British rival Cairn Energy, is the first sign that the Gulf of Mexico disaster may have permanently damaged BP's ability to operate – not just in US waters, but in other environmentally sensitive parts of the world.

Oil Rises for Second Day as Stocks Gain on Speculation Prices Fell Too Far

Oil rose for a second day in New York, buoyed by advancing equity markets and speculation that crude’s 7 percent drop this month has been excessive relative to the economic outlook.

Refining Margins' 51% Decline May Worsen as China Slows

The combination of slowing Chinese economic growth and expanding refineries means this year’s 51 percent decline in profit margins from turning crude into gasoline, diesel and kerosene is poised to worsen.

PetroChina Profit Misses Estimates as Government Controls Curb Price Gains

Profit growth at PetroChina Co., Asia’s biggest company by market value, slumped in the second quarter after government controls on gasoline and diesel tariffs curbed gains from higher crude oil prices.

U.S. Winter Will Be Warmest in Five Years, Forecaster MDA Federal Says

The U.S. will have its warmest winter in five years, which will reduce demand for natural gas, according to forecaster MDA Federal Inc.

Shell Moves Sakhalin LNG Manager to Australia to Build Project

Royal Dutch Shell Plc has brought the former manager of Sakhalin-2, Russia’s first liquefied natural gas project, to Australia to oversee development of a proposed venture that may cost more than $20 billion.

UK and Norway team up to tap North Sea potential

The UK and Norway yesterday agreed to step up levels of co-operation between the two countries as they each attempt to re-establish the North Sea as one of the world's leading energy hubs.

Former Chief of Drilling Agency Says New Inspection System Is Needed

S. Elizabeth Birnbaum, the former head of the Minerals Management Service who resigned under pressure a month after the blowout of BP’s well in the Gulf of Mexico, said Wednesday that the offshore drilling oversight agency needed a thorough overhaul of its regulations, inspection procedures and culture.

Engineer says he warned BP over deepwater well

A Halliburton engineer has testified he warned BP its design for the Macondo well was flawed.

The deepwater exploration well, which had struck oil in the Gulf of Mexico, would be susceptible to surges of natural gas without changes to the design, testified Jesse Gagliano, a shore-based technical adviser assigned by Halliburton to work with BP.

Missing Piece in Oil Rig Inquiry: Who Was in Charge?

HOUSTON — Even after dozens of witnesses, a hundred hours of testimony and three months of investigation, a chairman of a federal panel exploring the Deepwater Horizon disaster admitted Wednesday that he still lacked a simple fact: Who was the top authority on the oil rig when it exploded?

After the Leak, Restoring the Gulf Coast

This week, a coalition of dozens of environmental and social justice groups, led by Oxfam America, released a report calling for billions in financing for ecosystem restoration, storm protection and community development along the Gulf Coast.

“On the five-year anniversary of Katrina and the devastating 2005 hurricane season, it’s well past time for the nation to commit to a true restoration vision and plan for the central gulf, long the nation’s energy sacrifice zone,” Aaron Viles, campaign director for the Gulf Restoration Network, which co-authored the report, said in a statement.

No plan set for pipeline dent

The company that owns the crude oil pipeline that burst last month in mid-Michigan has no time line for repairing a dented section of pipe beneath the St. Clair River at Marysville, despite a congresswoman's concerns that any spill there could be "simply catastrophic" to metro Detroit's drinking water supply and the environment.

Nigeria announces power grid sale, repair

LAGOS, Nigeria (AP) -- Nigeria's president announced a multi-billion-dollar plan Thursday to repair and privatize the oil-rich nation's decrepit national power grid that forces people to rely on private generators to provide electricity.

President Goodluck Jonathan said the nation would sell off the state-run Power Holding Company of Nigeria and workers at the state-run power company would receive "generous" severance package.

Iran has material for 1-2 atom bombs: ex-IAEA aide

(Reuters) - Iran has stockpiled enough low-enriched uranium for 1-2 nuclear arms but it would not make sense for it to cross the bomb-making threshold with only this amount, a former top U.N. nuclear official was quoted as saying.

New Greatest Generation is needed

Today, our country faces daunting challenges which are greater than anything we’ve seen since the Great Depression and World War II. Our economy is stalled, with high unemployment and five to six applicants for every job opening. Our infrastructure is corroding, with many roads, bridges, water and sewer systems in need of repair or replacement. Our energy, transportation and land-use systems are rapidly becoming obsolete in a world facing peak oil and catastrophic climate change. Our health care system is inefficient and increasingly unsustainable. And an increasing portion of our economy is based on “financial services,” rather than on production of useful goods. And the extent of income inequality is greater than at any time since before the Great Depression of the 30s.

‘Green’ commute for bus-less school

Green Ways to School is a new campaign launched in January. Funded through a grant from the Marin Community Foundation’s Climate Change Initiative, the campaign consists of a new Web-based SchoolPool trip-matching program (The SchoolPool Marin program helps families find others in their neighborhood to carpool, walk, bike or take the bus together to and from school), and contests and promotions that encourage students and their parents to find Green Ways to School.

Severn Trent's `Concrete Cow' Is First U.K. Crop-Fed Generator

Severn Trent Plc started generating electricity from the U.K.’s first commercial-scale crop-fed power plant as the utility seeks to lower its carbon emissions by using an emerging form of renewable power.

The company’s Severn Trent Water unit began supplying the national power grid from a gas-fueled turbine at a site near Nottingham, Gill Dickinson, a company spokeswoman, said in a telephone interview. The gas comes from anaerobic digestion towers, which use micro-organisms to break down corn and wheat.

California Approves First U.S. Thermal Solar Plant

California regulators on Wednesday approved a license for the nation’s first large-scale solar thermal power plant in two decades.

The licensing of the 250-megawatt Beacon Solar Energy Project after a two-and-a-half-year environmental review comes as several other big solar farms are set to receive approval from the California Energy Commission in the next month.

Could a superbee from Swindon save the world?

Will Swindon be remembered as the home of a major breakthrough in halting the global decline of the honeybee? Ron Hoskins, a 79-year-old beekeeper from the town, has spent the last 18 years looking for a bee that is resistant to the parasite blamed for killing billions worldwide. And yesterday he claimed that his superbee could assure the future of the insect that pollinates around a third of everything we eat.

EPA to cruise lines: No dumping sewage off California coast

The U.S. Environmental Protection Agency today proposed a rule forbidding cruise ships from dumping sewage off the California coast.

Riverside Park Plans Composting Restroom

The bathroom, which would compost sewage to fertilize park greenery and use solar panels to power the complex, is being designed to operate without causing carbon dioxide emissions, which contribute to global warming. In addition to producing fertilizer instead of sewage, composting toilets typically use little or no water (about three ounces) compared with three and a half gallons per conventional toilet flush.

Archaeologists find new clues why the Maya left

The whole idea of a widespread catastrophic collapse of the classic Maya is overstated, Alexander says, suggesting centers likely went through many cycles of building, abandonment and reuse.

Texas fights global-warming power grab

The state's slogan is "Don't mess with Texas." But the federal Environmental Protection Agency (EPA) is doing just that, and at stake is whether the Obama administration can impose its global-warming agenda without a vote of Congress.

Exhibit envisions a Kansas City altered by climate change

Kansas City conceptual artist Tim Brown is preparing for future calamity.

In “Floodplain Refugee Housing, Kansas City 2050-2100,” a thought-provoking exhibit at the Writers Place, Brown proposes a solution to the possible refugee problem brought about by climate change and the flooding of the Earth’s coastal areas. Twelve black-and-white photocopies mounted to plywood panels imagine buildings that take environmental issues into account and make efficient use of space.

It's a Communication Challenge, Not a Scientific Challenge

Even if you're Al Gore (and maybe especially if you're Al Gore), I caution you against arguing the science of climate change. You cannot change the mind of a global warming skeptic by citing scientific facts. The reason is simple; resistance isn't grounded in facts. Instead, it's grounded in emotion, political ideology and perceived financial self-interest.

Dr. Fatih Birol’s words of warning: Melting permafrost, cheap oil and the end of the world as we know it

Greenhouse gases are heating up the earth’s atmosphere and, as a result, global weather conditions now seem to have gone truly haywire. Temperatures are unusually high in certain places, while rain in other places is causing unprecedented floods and loss of life. Pakistan, China, North Korea, and Niger are now threatened with floods such as they’ve never seen before. In view of the rise in temperature, some scientists even predict that there will be no more summer ice in the Arctic by 2030. And where will all that water go then?

Time to blame climate change for extreme weather?

IT IS time to start asking the hard questions. Countless people in flood-stricken Pakistan have lost families and livelihoods. Who can they hold responsible and turn to for reparations?

Less than a decade ago, these questions would have been dismissed outright. "Many scientists at the time said that you can never blame an individual weather event on climate change," says Myles Allen of the University of Oxford. But a small meeting of scientists in Colorado last week - organised by the US National Oceanic and Atmospheric Administration, the UK Foreign and Commonwealth Office and the UK Met Office's Hadley Centre, among others - suggests the tide is turning.

Huge ice chunk breaks off Ellesmere Island

A large parcel of ice has fractured from a massive ice shelf on Ellesmere Island in Nunavut, marking the third known case of Arctic ice loss this summer alone.

The chunk of ice, which scientists estimate is roughly the size of Bermuda, broke away from the Ward Hunt Ice Shelf on the island's northern coast around Aug. 18, according to NASA satellite imagery.

Nova Scotia Power's coal-dependence will lead to power rate increases, report concludes

HALIFAX - Nova Scotia Power Inc.'s dependence on dirty coal-fired electricity will likely force power rate increases and boost risk for the utility's parent company, Emera Inc., concludes a new report.

The report, compiled by Beacon Securities, examines how Atlantic Canada's two publicly-listed utilities, Emera (TSX:EMA) and Fortis Inc. (TSX:FTS), will be impacted by government-enforced renewable energy targets.

For Nova Scotia Power the prognosis is not rosy, concludes Philip Bassil, an analyst with Beacon Securities, a Halifax-based investment dealer.

Currently, Nova Scotia Power generates nearly 85 per cent of its electricity from cheap but dirty fossil fuels - primarily imported coal. In fact, Nova Scotia is the most coal-dependent province in Canada, Bassil notes.

See: http://nbbusinessjournal.canadaeast.com/journal/article/1191211


NSP looks to the future

Nova Scotia Power is on the prowl for new sources of natural gas to replace the dwindling supplies from the offshore.

The utility has been in discussions with potential producers of coal-bed methane in Nova Scotia and shale gas developers in New Brunswick, according to documents filed with the provincial Utility and Review Board.


The use of natural gas to generate electricity will become an increasingly important component of Nova Scotia Power’s effort to comply with government regulations requiring a reduction in the amount of greenhouse gases that power-generating stations can belch into the atmosphere.

Nova Scotia Power is responsible for about half of the province’s greenhouse gas emissions of 10 million tonnes a year. The government wants the utility to cut its emissions by 25 per cent by 2020.

See: http://thechronicleherald.ca/Business/1198694.html

Best hopes for turning this ship around quickly.


Huge losses put federal flood insurance plan in the red

In Wilkinson County, Miss., a home has been flooded 34 times since 1978.

Extraordinary as the damage may be, even more extraordinary is that an insurer has paid claims every time, required no flood proofing, never raised premiums after a claim and vowed to continue insuring the house. Forever.

The home's value is $69,900. Yet the total insurance payments are nearly 10 times that: $663,000.

I wonder how long before they start requiring people to move to higher ground before they get the payout.

Around here the gov't could have bought every property that flooded and razed them for less than building the flood control systems, yet that was still considered cheaper and more politically viable than paying for re-flooding.

I would make it simpler -- don't issue Fed flood insurance to new construction in flood plains, and make the buyout clause the only form of payout.

Observation on the world of small business:

I don't know if this even matters anymore, but I've heard of two cases - second hand - where "new money" will pay over the market price to buy commercial real-estate.

1. Either these people don't know the value of money & cost of doing business;
2. or, they have accumulated so much money that it doesn't really matter to them;
3. or, I'm losing it and all this stuff I see isn't making any sense to me anymore.

Personally, #3 is making the most sense to me.

Is it just the cost of labor and real estate in NYC or does a composting restroom facility really need to cost $6.1 million?

'Jingle Mail': Developers Are Giving Up On Properties
What Commercial Landlords and Chamillionaire Have in Common

Residential mortgage lenders say that commercial lending is different, and that homeowners shouldn’t get any ideas about walking away simply because they owe more than their home is worth.

Translation: Do as we say; not as we do.

They are still actively building here in southwest WI.

I see 8 new condo type places being built...
The university (UW-L) is building a huge dorm...
I see new houses still popping up...
The hospital (Gunderson Lutheran) here is building a small windfarm, a generator at the landfill and is building a huge new addition...
The competition (Mayo Clinic) here is building a huge building of their own for nursing students...

There must be a lot of demand or these guys have nothing else to do with their money.

Here in my corner of the East coast, the commercial property vacancy rate seems to be 25-30%. Doesn't look like it's going to change anywhere soon.

From the WSJ article

Of the $1.4 trillion of commercial-real-estate debt coming due by the end of 2014, roughly 52% is attached to properties that are underwater, according to debt-analysis company Trepp LLC. And as the economic recovery sputters, owners of struggling properties are realizing a big property-value rebound isn't imminent.

The commerce department reports statistics for 4 regions, Northeast, Midwest, South and West. During the boom, the South and West were building many more single-family houses than were the Northeast and Midwest. Most of the bust is in the South and especially the West regions.

My take is that in the Northeast and Midwest, builders are still filling in vacant lots in established developments and building apartment/condos, while new developments of single-family houses are pretty much mothballed. There are also teardown/rebuilds going on. While the pace is certainly slower than in earlier years, it is not reduced nearly as much as in the other two regions, where homebuilding was a much bigger factor in their economies.

In Phoenix, 25% of the labor force was in construction at peak. When I pointed out the risk (less construction > fewer construction workers > less housing demand > less construction), I was told that they were all Mexicans living many people to a house and the feedback effect would be minimal.

What is not sustainable will not last,


It's doubtful whether Arizona, Nevada and Florida will ever come back to anything like before.

Climate change will dry up Arizona and Nevada water supplies. It will increase hurricane risks in the south.

Retirees in the north have fewer defined benefit pensions, and their 401Ks have been severely diminished. Their house values are also down, even if not as much. In many cases they will be housing their unemployed or marginally employed kids and their families. So the number moving to the sunbelt retirement communities will be way down from previously.

Make no mistake though - areas of the northeast are being hit hard by this - it may have lagged a little bit around here but I've recently noticed a significant increase in "commercial" type equipment with for sale signs in front yards around here. This includes contractor vans, pick-ups, trailers, tools, supplies (windows, siding, gutters etc.) - I'm definitely seeing more and more of this as the summer goes along. People are also unloading ATVs, boats, jet-skis, Harleys etc.

On a recent trip I saw more "donate your boat to charity" road signs than I recall. That's probably not a good sign. And the tax deduction might not be worth much if you don't have much income.

However, it might be a good time to buy a boat.

My office is in a low rise commercial office park. My floor was fully occupied when I moved in several years ago, with about 8 tenants. There are three tenants left, including me, and I am moving out in September (I am moving my office into a house we are moving to). On some days, I don't see anyone else in the hallway all day long. Partly because of how empty the building is and partly because of some experiences with aggressive panhandlers, I've started keeping my office door locked at all times.

10 years ago there were probably 50 to 100 thousand bank employees in hundreds of office buildings around the country processing paper checks. Most of this is gone with imaging of checks and reduced use of checks in favor of electonic transfers, credit cards, and debit cards.

Business process automation has been going through an intermediate stage, where processes involved sending transactions to workstations for human decision making and interfacing with paper in partially automated processes. As automation becomes complete, the people can be taken out of the process, with savings of salaries, floor space and occupancy costs, workstations and furniture, etc. It also reduces the amount of servers and disks needed, since you no longer have to create all those display transactions, input editing, etc. Servers talk to other servers more efficiently.

You only want to interface business processes with the customer, and employee interfacing with a customers, or an employee interfacing with a physical process.

The demand for a lot of clerical/adminstrative office space is not coming back. Think of the office tower as a logical extension of the file cabinet. Its function was to house the file cabinets, book shelves, and the people who shuffled paper from desk to desk via the internal mail system as they manually processed business transactions.

The panhandlers aren't those folks who used to work on the rest of the floor, are they?

Regarding finding a superbee, this is another case of solving the wrong problem. The problem is not with the honey bee disappearing, but rather with monoculture. Monoculture is what necessitates a pollinator that can be moved about - with a variety of plants a host of pollinators will be available year round to handle any pollination. With monoculture any stay at home pollinator is given a few weeks of food and then starvation, thus hives are transported from crop to crop and fed inbetween. This also stresses them and makes them more vulnerable to pesticide exposure.

I have seen very few honey bees this year. Everything I grow however has had plenty of pollinators. Right now my garlic chives are blooming. Being white and having multiple blooms it is easy to observe the pollinators. I find them stunning. Little tiny bees and wasps about the size of common ants are there in multitudes. All sorts of colorful wasps turn up. Meanwhile various butterflies and moths add to the general garden pollination.

Since I do a continuous mulch garden, with no plowing or rototilling I can mix perennials with annuals. I can also let some things self seed. Early pollinators get fed from the delicate tiny white blooms on the self seeding chickweed (which also provides greens for the chickens). Pink Candle Celosia and Cockscomb started as a bit of flowery decoration, but are both edible and augment chicken green, and attract a multitude of pollinators. My maypops (passion flower) have lovely blooms that attract a large bee and feed that bee all year as well as provide a delightful fruit in the fall. The increasingly sparse showing of honeybees is of no import to a garden that is full of flowers spring, summer, fall.

"The increasingly sparse showing of honeybees is of no import to a garden that is full of flowers spring, summer, fall."

It is if you have any intention of producting honey.

I don't eat refined sugar, whether refined by bees or humans. We humans really don't need refined sugar, but we do need a steady supply of some sort of carbohydrates, proteins, vitamins and minerals. We can do without the honey bee but we do need food from pollinated crops.

BTW Honeybee that is used for honey production in the US is actually a European import.

I've just listened to this interview with Richard Heinberg


Recommend it to all, but you should probably remove all sharp objects and pad your computer screen as you will want to punch something. There is an hilarious clip of a bloke called Tom Bower who is a British writer. I say hilarious but it is actually quite tragic. Then someone phones in and says that Petrobras has discovered as much as 100 billion barrels of oil off the Brazilian coast (correct) and that it is 'enough to last the world 100-150 years' and that it is more oil than 'Saudi Arabia, Iraq and Iran have ever had combined'. (lunacy)

Mr Heinberg, I salute you! You have the patience of a Saint.

Well worth a listen

If I had a barrel of oil for every time some new discovery is breathlessly touted as having "more oil than Saudi Arabia ever produced..."

Well, I'd have "more oil than Saudi Arabia ever produced..."


Poet tries to revive cellulosic ethanol by changing its feedstock. It still won’t work. Infrastructure matters. The in place infrastructure for corn is what makes corn ethanol possible.


Switching to bales of corn stover still leaves the question of quality standards and storage unanswered. It some ways it makes it worse. Bales pick up a lot of dirt and what not. They are labor intensive and require different trucks than grain.

What Poet is going to do with cellulosic ethanol in a saturated ethanol market due to the blending cap is the big question.

Exporting it is the only answer I can think of.

Yet more show and tell about renewable energy infrastructure around here:

A year ago the Freedom Fuels bio diesel plant in Mason City bit the bankruptcy
dust .

But the plant is still there and appears will be born again
under new ownership by Soy Energy.

It can produce 30 million gallons of bio diesel
per year.

It uses soy oil from the AGP crushing operation a couple of miles east of the plant on 105 and the new owners plan also using corn oil.

Iowa Traction Railway is a tiny operation running on electricity.

I noted the 80 year old locomotive at Iowa Traction (electric locos last longer).

Since Pearl Brewery shut down in San Antonio (they has 90+ y/o electric locos shuttling to their brewery) the other electric freight only# RRs in the USA are and Black Mesa & Lake Powell and the Deseret Western. Both haul coal from the mine to the power plant and are isolated from the rest of the rail system.

The Long Island RR, AMtrak's Northeast Corridor, and Harrisburg-Philadelphia frequently haul freight, but often with diesel locos under wire. Passenger service is generally electrified on these lines (15% quicker time tables plus operating savings).

Meanwhile China is electrifying an additional 20,000 km of rail lines and France has made it a national goal to electrify 100% by 2025.

Best Hopes for the USA,


US Federal Spending on Highways vs. Transit

Left out from the analysis is that the vast majority of federal transit aid is to buy new buses every 12 years. Very little to anything permanent and long lasting like Urban Rail. Hence the truly minimal; additions to Urban Rail since 1950.


Best Hopes for swapping %,


BTW, stimulus funding had $29 billion for roads and $8 billion for rail (mainly inter-city) and this was touted as a MAJOR investment in rail.

Abandoned boats litter waters in tough economy

In California, where regulators say thousands of boats litter state waters, a program in the pending state budget would allow owners to turn in boats without penalty. Denise Peterson, the state's boating law enforcement manager, hopes the $150,000-a-year program will reduce the number of newly abandoned vessels so $500,000 allotted for removal can go to vessels that have already been abandoned. Removal costs up to $300 per foot of hull length, says Gloria Sandoval, spokeswoman for the state Department of Boating and Waterways.

On the bright side...someone looking to use the Orlov plan for collapse might find a bargain.

On the bright side...someone looking to use the Orlov plan for collapse might find a bargain.

I was thinking the same thing. We are at the beginning of the Great Asset Selloff. Lots of things will be a bargain for those with hard cash.

Can't they put them up for auction? There has got to be some kind of market for them.

Are boats basically free now? The boat-build biz has to be nearly dead then. Why not just pick-up a free abandoned boat and put a few bucks into fixing it up. Re-use & recycle!

Most of these boats are too small to live on. Think of a 22 foot boat with a vee berth and portapotty.

They have often been neglected for years, have busted lifelines and a foul smelling bilge.

If you want a boat, go to any marina and they will sell you one for peanuts. Saves them having to pay for breaking them. The usual deal is: you can have it, but must take it away, forever. Boats which have trailers are valuable because they do not need expensive berth space.

Oh yeah, any money needed will be more than a few bucks. Still, if you have plenty of time and muscle, it can be done

Fun and satisfying though they are, any boat is a hole in the water waiting to be filled with money.

The two happiest days in a boaters life: the day you buy it and the day you sell it.

I've often wondered how much capital is tied up in boats and yachts around the world.

A lot less than 3 years ago, given a look at CraigsList and mark-to-market accounting.

Most of these boats are too small to live on.

Here's a picture of the bow of the SS Fmagyar Maru leaving port just a few days ago.

SS FMagyar

Later in the day she rides at anchor at an undisclosed dive site while the captain and entire crew enjoy the waters.

Afternoon dive

I interpret this as classic 'wants versus needs'

When things were in growth mode, those that had means, got such things, as they could indulge their wants.

Now that they cannot afford them, they get abandoned.

It seems human nature is that when things are growing 'greed is good.' When things are bad 'less is more.'

I`ll turn the conversation from boats to cars. But the theme---dizzying consumption occurring simultaneously---is the same.

Did anyone read the NYT article about the all the men from the Persian Gulf bringing their extremely expensive rare sports cars to London for the summer? For these rich Arab people, $15,000 to fly the car one way is just peanuts. They drag race at night when the roads are quiet. Often they park illegally. They are in London to get away from the 130 degree heat of the summer months back in UAE, Oman, etc.

All that is fine. (Or not, I mean acually I couldn`t care less what they do with their stupid cars. I hope they don`t injure anyone, of course!.)


If their hedonistic actions are all part of a system (and they are), this behavior tells me it is, globally speaking, the summer of 2008 all over again. The party is underway! (This time a lot of people cannot attend the party, since they are broke. Those poor people in the USA living on food stamps and residing in their cars, for example. Also many of the people who jettisoned their boats cannot attend this party.)

But still, a lot of people CAN attend this system-crash of a whirlwind winding-down, end of prosperity party. Mostly they are not Americans this time.

I think many of them are Arab people with direct access to oil profits.

The over-the-top behavior (their cars in London) I am reading about in the NYT truly scares me because it is the kind of excess that ends only with a crash....and I do not mean a car crash, however horrible one might be. I mean some sort of economic crash.

Somehow I think the crash is going to start somewhere, not in the Arab oil-producing states, but it will put an end to the expensive auto party in London.

And the young men will be trying to jettison their expensive toys---their Lamborghinis etc.---with the same fervor as the boat owners ditching their boats.

Poverty-stricken former gazillionaires---the market for their expensive product has been destroyed--------now there is a scary thought!

And yet, who can say "that is impossible!!"

Re: Texas fights global-warming power grab

I am often amused by conservative rants, in which the law and the proper interpretation of it is what they say it is, which frequently conflicts with both the plain language of the law and court interpretations. Texas conservatives seem to do the outrage over federal laws particularly well.

"Obama's EPA" is charged with overreaching the provisions of the Clean Air Act to regulate greenhouse gases. In fact, the EPA has no choice at this point, absent an act of Congress changing the law. The Supreme Court has ruled that greenhouse gases are pollutants under the language of the law, and absent compelling scientific evidence that they are harmless, must be regulated. Bush's EPA, of course, offered up its version of such evidence during the case, and the Court found it inadequate. A bill that would have excluded carbon dioxide from the Clean Air Act was introduced in Congress, and lost.

The language in the Clean Air Act about state regulation is quite clear. The EPA may, at its discretion, allow state regulations to stand if they are more stringent than EPA regulations on the pollutants. The classic case has been California's regulations on tailpipe emissions, which have always been tougher than the federal standards. Now that the EPA is regulating carbon dioxide, it has exercised the authority Congress granted it and has chosen to override the Texas statutes. It may be an unpopular move in Texas, but to argue that the EPA doesn't have that authority is just silly.

I particularly like the statement near the end that "Washington is trying to... force Texas to ignore our state laws...". Ever hear of the Supremacy Clause of the US Constitution?

Gov'ts pick and choose which laws to enforce. They seem to have plenty of choice.

Like enforcing borders and deporting arrested illegals, for example.

Or investigating and prosecuting corruption in banking.

Yes-And while statues say THIS or THAT, top level bueracrats running agencies such as the EPA answer to a great degree to the White House and congress critters.

And THEY in turn answer to campaign donors and voters.

In the end, whether the regulations are enforced in Texas will depend to some considerable extent on how far the current administration is willing to push the issue in the face of the next election cycle or two.

If Obama wants the issue to go away quietly in order to protect his party and the rest of his agenda, it will be worked out mostly in favor of the Texas status quo.

Texas is a big state with a lot of congress critters, a lot of donors, and a lot of voters.

Texas is a big state with a lot of congress critters, a lot of donors, and a lot of voters.

As are California and New York, both of which are strongly in favor of the federal regulations. Both were among the states that petitioned the Supreme Court to find that the EPA must regulate greenhouse gases in general, and tailpipe emissions of them in particular. Both have, I believe, petitioned to be allowed to argue in favor of the EPA plan in the lawsuit that Texas, Alabama and Virginia have currently filed.

I know I'm considered out on the lunatic fringe when I say this, but I'm convinced that sometime between 25 and 50 years from now, the 11 western states (plus Hawaii and Alaska, who will have little choice) will petition to leave the Union, and the eastern states will let them go. I've started working on a book explaining why I think so. The classic "states rights" complaints will, I think, have little to do with it -- the most important issues will be directly and indirectly energy related.

It seems possible that the East will fragment further. Texas regularly threatens, at least informally, to go its own separate way.

Texas is a big state with a lot of congress critters, a lot of donors, and a lot of voters.

As are California and New York, both of which are strongly in favor

The (political) solution is to visibly pass the regulation, but as quietly as possible let Texas cheat.

Passing the legisloation and then EVERYBODY cheating is the classic solution.

I haven't spent any time on this issue at all, but I suspect that California and New York see some partisan advantage in a race to the bottom for thier own business and industry.

Texas has a very good reason for being a big emitter-lots of heavy industry of the petroluem type.

We have off shored a hell of a lot of our pollution problems.

Maybe we can offshore whatever remains of heavy industry in Texas.That oughta satisfy New York and California.

Californians are in some ways consumnate hypocrites, as when they preen about thier progress in cleaning up thier energy supply- done in larger part by importing it from next door; the smokestacks and cooling towers are conveniently out of sight over the eastern horizon.

I'm all for cleaning up the environment, but let us be realistic about the true costs, and why some states are cleaner than others.

OFM I pretty much enjoy your writing about a lot of stuff but you know squat about California, its energy use or the people.

I know what I have read here, in several major newspapers, and in a few very reputable science and nature oriented magazines.

I'm a reading junkie, and I get my money's worth out of my dsl and my library cards..;)

By the way I also read some conservative publications which occasionally publish hard data seldom seen in most mainstream media.

California and New York are admirable places in many respects with many fine people,BUT a lot of our problems are due to California and New York style business and politics.

You seem to harbor great ill feelings towards the folks in NY and CA...

Not ill feelings to the people, but ill predictions for the states. Gotta admit, from the press those states rate pretty high on the fiscal hypocrisy scale.

New York would prosper if we returned full force to our agricultural roots and we would likely do better than average in a true powerdown scenario - this state was the original breadbasket of the country. Unfortunately, at every turn the people of the state have been swindled by developers and Wall Street (not a good NY product)- thank god for this latest crash - it has finally at least slowed the consumption of fertile farmland for McMansion building.

The fiscal problems in this state are largely due to the fact that TPB tried to force NY into embracing the high-tech propoganda while abandoning our roots. It was the worst kind of trying to "create' an economy out of nothing rather than using what nature gave us - a temperate climate (and with AGW even longer growing seasons), plentiful water, fertile glacial soil. We have a revitalized canal system with associated footpaths paralleling the Erie Canal across nearly the entire state and we're also actively installing a significant number of wind farms.

All things being equal I'd take NY in a heartbeat over Texas (or virtually any southern state). In fact, I actively encourage people to leave the state - the high taxes here make everyone crazy... some of us suck it up and deal, but many many others flee to the tax havens and "grass is greener" side of the fence represented by the south. Curiously, more and more I've noticed that people are starting to trickle back here...

mac - Little by little Texas is shutting down the petrochemical industry. If it weren't for some industry friendly regulators we would probably being importing most of our liquid fuel by now. At the same time China is gaining more control not only over oil production but refining also. IMHO the future isn't that difficult to predict. When crude supplies get tight we run on our fuel inventory to smooth the system out. When we run tight on refined products we've got no back up plan other than high prices, shortages and panic. Just imagine the extreme possibilty: we have the SPR as a back up but have to ship the crude to overseas refineries for processing. Not likely to happen soon. But....

mac - There's also this rather strange rumor that's beginning to circulate around Texas: supposedly some of our politicians are trying to develop a split system for complying with the fed rules. Those plants supplying 'exports' to states such as CA and NY will have to reduce their emissions to levels required by those states and thus allow higher levels for plants producing products sold in Texas. Thus the net pollution will follow fed guidelines. Just means products shipped to other states will be that much more expensive.

The thought is if those states that want cleaner air then they can pay for it. IMHO the rumor is just your basic Texas big hat BS. But, as you often imply, get folks mad enough and they will make changes you once thought were impossible.

"New York's population density has environmental benefits and dangers. It facilitates the highest mass transit use in the United States, but also concentrates pollution. Gasoline consumption in the city is at the rate the national average was in the 1920s,[1] and greenhouse gas emissions are a fraction of the national average, at 7.1 metric tons per person per year, below San Francisco, at 11.2 metric tons, and the national average, at 24.5 metric tons.[2] New York City accounts for only 1% of United States greenhouse gas emissions while housing 2.7% of its population.[2]"

The newest Consumer Metrics Institute Daily Growth Index shows disturbing data that the economy could be about to tank even harder than in 2008. The Automatic Earth has a summary:


This graphic tells a lot of the story:

(Original from http://dshort.com/articles/Consumer-Metrics-Growth-Index.html)


Interesting. It's actually the this graph that has the comparison to 2008. A much slower, but longer, decline.

I'm thinking that a longer and slower decline indicates a depressive trend as compared to the quicker and more steep decline of a recession. But then, I'm no "economist". ;-)


Can you give us your take on the survival prospects for gas drillers in today's environment of next month futures prices below $4. The seasonal forecast for a warmer winter cannot be helping you guys.

And what about those high-frequency trading cowboys who showed up earlier this month up at the long end of the gas futures chain? Do daily swings (millisecond actually) of $2 in the long dated futures have any impact on drillers like yourself.

Who is really affected by swings in the futures market? Inquiring minds want to know.


(Chart from the Energy Futures databrowser)

I would add this question about current NG prices. As this graph from the EIA show, stocks of NG are not abnormally high:

So if stored supplies are about the same as in the past for this time of year (actually lower than this time last year), why would the price be dramatically lower? The obvious answer would be demand destruction, but is it possible that demand for NG has dropped that dramatically? And if demand has been destroyed that much, why isn't the amount supplied dropping more than it has?

gas in storage is down 198 bcf from one year ago. an interpretation of this could be: demand exceeds supply by 0.5 bcfd or about 0.9 % overaupply. maybe traders are listening to the long range forecast of a warmer than normal winter.

jonathan - let's break it into two types of players: conventional and the non-conventional like shale gas. The conventional players have opportunities but the only plays that will have any significant are the deep onshore trends and the DW GOM. Such onshore trends typically require 3d seismic. Besides such deep wells being expensive the 3d is even more so. Right now companies like mine are drilling on inventory. With low NG prices new 3d's have been scarce the last two years. When the current inventory of prospects is gone there will be a slump in drilling. My company doesn't generate these prospects....we buy from the generators. Just had a big prospect expo in Houston. Very few new deals...mostly left overs that haven't sold in the last year. Even if NG rebounds in a year there will be at least a 3 to 4 year lag at a minimum before we would see any upturn. It can easily take two years to just shoot a 3d program. As far as DW GOM NG we should expect at least a 3 to 5 year lag with the new circumstamces after the BP accident. Given the high decline rates of the DW fields we will likely see a significant net loss in daily production in this time frame.

There are a few sweet spots in some of the shale gas plays but most don't make economic sense with NG mush below $6/mcf. I'll use Devon as an example since I was on contract with them when prices cratered. In the summer of '08 they were picking up as many drill rigs as possible for the E Texas SG play. Didn't matter what the contract or day rate was. Then just 6 months later, when NG dropped below $6/mcf, they released 14 of the 18 drill rigs they had running in E Texas. And they paid a $40 million penalty to do so. Gives you some sense of the economics involved. I believe they still have several rigs running in the play. There are sweet spots in every play that don’t require a high price to drill. But that doesn’t mean they are of great economic value. And there is a serious clock ticking on all those 100’s of thousands of very high priced mineral leases taken in all the SG plays: typically between 1 to 3 years after a lease is taken it automatically expires if it isn’t drilled. Much was made out of ExxonMobil’s acquisition of some companies with large SG acreage positions. Some felt this indicated XOM's confidence in the future of SG. If that acreage isn't economic for XOM to drill in the next couple of years it will evaporate just like the snow when spring time rolls around. The main reason XOM bought those companies was for their cash flow…cheap new producing reserves IMHO. I suspect most of the SG acres will expire long before XOM or any other company gears back up when NG prices rebound.

And there’s the problem: IMHO it will take at least 2 years of high NG prices to get most of the NG plays cooking again. And then several more years to have any impact. Basically we are coasting along living on cheap inventory that isn’t being replaced. Not difficult to imagine what will happen when demand rebuilds. So even if the see some NG price spikes this winter we shouldn't expect to see a suyrge in NG development in the US IMHO. And don't forget that US companies are stil worried about the impact of imported LNG on their efforts.

gas drilling rigs are up 290 from a year ago, more than a 40% increase. gas drilling rigs were down 7 from the previous week.

the new weekly report should be out today:


and this week's report: 973, down 12 -vs- 699 one year ago.

Thanks for the very clear explanation of the situation. The idea that we are "coasting along living on cheap inventory" fits with my general sense of the situation.

A judge ordered a former Faulkner University student to perform community service and join the military for an Internet post that led to a campus lockdown at the school.

Zachary Lambert, 23, had been charged with making a terrorist threat, a felony, but Thursday agreed to instead plead guilty to harassing communications, a misdemeanor.

Lambert received a suspended three-month sentence and two years probation.

Judge Tracy McCooey told Lambert that he must speak to schoolchildren about the importance of being careful what they say on the Internet. McCooey said she would accompany him for the speaking appearances.

Lambert must complete 50 hours of community service at schools.

He also must join the military as a condition of his probation. Lambert said he has talked to an Army recruiter.

WHAT! Sentenced to JOIN THE US MILITARY? WTH, I thought such things were no longer 'officially' done?
Activated, BOLO you have McVay Jr. coming your way.
From: http://www.montgomeryadvertiser.com/article/20100826/NEWS/100826014/Ex-F...

detective had my brother for strong-armed robbery, back in the day-1964.
gave him the choice of hard time or join the Marines.
that was just how things were done.
so he did two tours of duty in Vietnam, 65-66 and then back 67-68.
had the time of his life.
always liked to be where the action was.
some people are wired that way.
big difference between wild wayward kid sticking a gun in someone's face for party money and someone making 'terrorist threats'.
but maybe the Army has a desk somewhere for Mr. Lambert.

The military is not a rehab colony or a dumping ground for ne'er-do-wells and malcontents.

The military is supposed to be a professional force staffed with volunteers who pass muster on various entry criteria...military operations today are demand more critical thinking, problem solving, and initiative than in times past...

The standards are lower now than they used to be. Can't get all those boots on the ground through stop-loss alone.

And IME, judges are still sentencing young people to military service. As with sldulin's brother, it seems to help many of them.

Unfortunately, the "unwrap and use" military is now what we have. Street smart intercity youth are ideal, as are poor rural youth.

Even the Air Force Academy is immersed in religious delusion.

Hydrogen Explosion Near Rochester Airport

Gates, N.Y.- Monroe County authorities are trying to determine what caused a hydrogen tank explosion near the Rochester International Airport Thursday afternoon.

The explosion happened at the Monroe County Green Alternative Fueling Station on Scottsville Road around 12:45.

The main runway of the airport was closed after the explosion, but was reopened less than two hours later.
Letting the gas burn meant crews had to move a half a mile away, and keep others away from the area.

"We did evacuate all the buildings across the street, all the buildings down towards the Paul Road side and evacuated everything to 390," DeRosa said.

It took about 90 minutes for the hydrogen to burn out. Firefighters then moved in, using foam to put out the remainder of the fire on the two tanker trucks.