Drumbeat: October 8, 2010

The energy future will look familiar

Irving, Texas—Published at the apogee of Barack Obama’s apotheosis, the April 2009 issue of Condé Nast Portfolio, a business magazine, faulted ExxonMobil for not joining the green parade, for not investing more in alternative energies, and for not understanding oil’s eclipse as humanity emancipates itself from carbon-based energies. The magazine said “the company’s prospects for the next decade or two are starting to look shaky.”

Later that month, the magazine died. ExxonMobil lives.

It has surpassed Walmart as the U.S. corporation with the largest revenue. Its placid CEO, Rex Tillerson, is Big Oil in a blue suit, his serenity grounded in a certainty: His company can continue providing fossil fuels for a world that for the foreseeable future—at least 20 years—will demand them in ever larger quantities.

“You can’t rise above the facts,” says Tillerson, who was born in Texas’s oil patch: Wichita Falls. His foundational fact is that his company will be “not much different” in 20 years because the energy mix over that span “is not going to be markedly different.” Eighty percent of the world’s energy comes from oil, natural gas, and coal.

World oil shortages would center on liquid fuels, forum told

WASHINGTON, DC, Oct. 8 -- The world could face more of a liquid fuels than crude oil shortage as national economies recover, experts agreed at an Oct. 7 Capitol Hill forum. Global liquid fuels production hit a plateau in mid-2004 where it has generally stayed despite the strongest economic recession in decades, said Robert L. Hirsch, a senior advisor at Management Information Services Inc.

Several nations’ gross domestic products could plunge as a result, he warned at the event cohosted by the Environmental & Energy Study Institute and the Association for the Study of Peak Oil & Gas. “The countries that would be hurt the most would be the ones relying most heavily on imports,” said Hirsch, who wrote a report on possible peak oil impacts for the US Department of Energy.

“It’s a liquid fuels problem, not energy. Anyone who tells you that windmills will help is early in his or her understanding of the issue,” he maintained.

The Great Transition (beyond carbon)

If there is one thing that defines the 21st century, it is the end of oil. But not just oil. Over the coming decades, we face the prospect of terminal depletion of the world’s major mineral energy reserves, with major ramifications for the future of industrial civilization.

Dept. of Interior's Figures Belie Obama - Another Case of Understatement

Only fitting on the day that we get employment data for September (that shows the US still has a long way to go to mend the economic fissures of the most recent recession) that we revisit the impacts that both the actual moratorium on deepwater and the de facto one on shallow-water drilling are having on Gulf-states jobs. The table below summarizes three different studies that provide their assessments of the slowed permitting process for shallow-water operations and the suspension of new drilling along the Outer Continental Shelf in the Gulf of Mexico as well as the Department of Interior's study that it submitted to the federal courts in August.

EPA: No SPCC Extension for Drilling, Production, Workover Facilities

The U.S. Environmental Protection Agency (EPA) is extending the compliance date by one year for certain facilities subject to recent amendments to the Spill Prevention Control and Countermeasure (SPCC) rule. The agency is also announcing that some facilities will not be eligible for the one year extension and will have to comply by the current date of November 10, 2010.

Shell cancels plans to build second upgrader

CALGARY — Royal Dutch Shell PLC has cancelled plans to build a second upgrader near Edmonton.

John Abbott, executive vice president of heavy oil, in a discussion with reporters said the regulatory application was yanked in the "last few days."

Canada oil results to show impact of pipeline woes

CALGARY, Albertav (Reuters) - Third-quarter results at oil producers such as Canadian Natural Resources Ltdvand Cenovus Energy Inc are expected to be pressured by the impact of this summer's pipeline outages, which led to weaker domestic crude prices.

Across Canada's energy sector, companies will generate mixed results, with profit and cash flow improving in many cases from last year but weakening from the second quarter, analysts said.

Analysis: Utica Shale Could Boost Quebec Government Income, Create Jobs

Utica shale gas exploration efforts in Quebec could generate C$278 million per year in revenue for the Quebec government and create at least nearly 5,000 jobs per year by 2015, and generate significant economic benefits going forward, according to a study conducted by independent consulting firm SECOR.

Marseille Oil Port Strike Enters 12th Day, Forcing Refining Plants to Halt

A 12-day-old workers strike at the French port of Marseille, expected to continue through the weekend, will force refiners in the region to start halting production, leading to motor fuel shortages.

At least four refineries may begin to completely shut from this weekend, Jean-Louis Schilansky, Paris-based head of refiners’ organization Union Francaise des Industries Petrolieres, said today in a telephone interview. Fuel supplies may be endangered from Oct. 18, he said.

BP cost-cutting measures are focus of U.S. inquiry into gulf spill

METAIRIE, LA. - There's been a lot of talk about the "safety culture" at BP in the wake of the Deepwater Horizon disaster in the Gulf of Mexico. Now, federal investigators are probing what looks to them like BP's save-money culture.

Feinberg Firm Paid More Than $2.5 Million by BP in 3 1/2 Months

(Bloomberg) -- Kenneth Feinberg and his law firm have been paid more than $2.5 million in 3 1/2 months to administer the $20 billion fund set up by BP Plc to compensate victims of its oil spill in the Gulf of Mexico.

FACTBOX - South Africa's power generation plans

(Reuters) - South Africa expects nuclear and renewable energy to play a more crucial role in plugging its power supply deficit as it seeks to halve its reliance on dirtier coal-fired plants, a draft of a new energy plan showed.

Concerns about a nuclear-powered South Africa

While Energy Minister Dipuo Peters has said that a fleet of six nuclear power stations is on the cards for South Africa, local umbrella group Coalition Against Nuclear Energy (Cane) believes that there are many unanswered questions pertaining to the use of nuclear energy as an answer to South Africa’s electricity crisis.

China highlights climate change efforts

TIANJIN, China (AP) -- As the world's biggest greenhouse gas producer, China was widely seen as an obstacle in the Copenhagen climate summit last year. But while negotiations inched forward, Beijing poured $34.6 billion into clean energy in 2009, nearly double the U.S. investment.

Now, with the Asian giant hosting meetings this week ahead of the next major climate conference in Cancun, China has seized the high ground, touting its green credentials publicly and even lecturing rich nations.

What a scientist didn't tell the New York Times about his study on bee deaths

What the Times article did not explore -- nor did the study disclose -- was the relationship between the study's lead author, Montana bee researcher Dr. Jerry Bromenshenk, and Bayer Crop Science. In recent years Bromenshenk has received a significant research grant from Bayer to study bee pollination. Indeed, before receiving the Bayer funding, Bromenshenk was lined up on the opposite side: He had signed on to serve as an expert witness for beekeepers who brought a class-action lawsuit against Bayer in 2003. He then dropped out and received the grant.

Anti-global warming parties to occur worldwide Sunday

Got plans Sunday? Why not throw a party -- one to fight global warming? A grassroots environmental group, 350.org., is helping to organize what it says will be more 7,000 events in 188 countries for the 10/10/10 Global Work Party.

The fight against clothes line bans

For decades, the clothes line has had an image problem in the US but, ahead of a rally to highlight the benefits of natural drying, is it about to be reclaimed?

Offshore Wind a U.S. Job Boon if Capital Costs Don't Erode Potential - DOE

If politics and economics align, the United States is well-positioned to build massive wind farms off of U.S. coasts and in the Great Lakes to meet a substantial amount of the nation's electricity needs, according to the Department of Energy.

In a 240-page study (pdf) of the potential and barriers for building 54 gigawatts' worth of offshore wind capacity, DOE's National Renewable Energy Laboratory estimates that doing so means the creation of at least 43,000 permanent jobs. Potential exists for $200 billion in economic activity, and government analysts predict 20 jobs would be created for every megawatt produced off of U.S. shores.

The Obama administration appears big on the idea of jump-starting a dormant U.S. offshore wind industry. With the best-known offshore project, off the coast of Cape Cod, Mass., mired in a decadelong regulatory morass, the United States trails Europe and China in the development of projects.

China's Unconventional Energy Hunt in Australia

With its new stake in Arrow Energy, PetroChina plans to mine coal-seam gas and liquefy it for export.

Total, Shell Keep Line Open With Tehran Despite US Claim -Sources

LONDON -(Dow Jones)- Total SA and Royal Dutch Shell PLC discreetly contacted Iranian authorities last week, seeking to reassure the Islamic Republic after telling the U.S. they have no plans for further investments for now, people familiar with the matter said in recent days.

GDF Suez Is Said to Plan Gas-Supply Agreement With China National Offshore

GDF Suez SA, owner of Europe’s biggest natural gas network, plans to sell about 2.5 million metric tons of liquefied natural gas to China National Offshore Oil Corp., according to a person familiar with the agreement.

Schlumberger faces Yemen bribe probe

The US Department of Justice is investigating whether oilfield services giant Schlumberger paid bribes to a consultancy outfit with ties with the Yemeni government.

BP considering shakeup of trading division to counter declining profitability

LONDON (AP) — BP PLC is considering a shake-up of its trading division to focus on emerging markets after a decline in profitability due to a tougher market environment.

BP spokesman Robert Wine said Friday that an overhaul could lead to job losses among the division's 3,500 staff around the world, but no final decisions had yet been made.

Petrobras to Raise $60 Billion in Debt Markets Following Record Share Sale

Petroleo Brasileiro SA, the Brazilian oil company that sold $70 billion of stock last month in the world’s largest offering, plans to now turn to debt markets to raise $60 billion in the next five years to finance investments.

Gulf seafood's falling supply, demand disrupt industry

IRVINGTON, Ala. — Normally, more than 70 workers would cram shoulder-to-shoulder inside the Southern Aire Seafood crab processing plant, scooping out white lump meat from the bellies of Louisiana blue crabs and stuffing them into containers.

On a recent afternoon, only 25 gloved workers pulled meat and dislocated crab claws inside the plant's one-room picking area. Several long aluminum tables stood clean and empty. The crabs were from Virginia, not the Gulf Coast.

A battery beats at the heart of these muscle cars

Low, sleek and blisteringly fast, the Jaguar C-X75 is generating quite a buzz at this month’s Paris Motor Show.

Turning out an astounding 770 horsepower and 1,180 pound-feet of torque, the prototype promises to not only be one of the most powerful street-legal automobiles on the planet but one of the fastest, launching from 0 to 60 in less than 3.4 seconds, on the way to a top speed of 205 mph. That alone might be enough to impress the Parisians thronging to the biennial Mondial de l’Automobile. But what stands out more is that the supercar does it on battery power.

First Buyers of Nissan Leaf Get a Trunkful of Perks

Tax credits, rebate checks, personalized home visits, government giveaways — even customer service calls from top corporate executives.

The first all-electric car from a major auto company, the Nissan Leaf, arrives at dealerships in December, but thousands of Americans are already learning that going electric can come with perks like no other car purchase.

Report: fertilizer overloading Earth's plant life

Fertilizer use has exploded, overloading plants worldwide, likely altering ecosystems for decades to centuries, scientists report Thursday.

In the journal Science, a review led by Donald Canfield of the University of Southern Denmark found that fertilizer use worldwide increased 800% from 1960 to 2000. "Given the rising costs of synthetic fertilizer production, this overuse is not only economically expensive, but also initiates a cascade of large-scale environmental impacts," says the review.

The End of Oil As We Know It

The Association for the Study of Peak Oil and Gas (ASPO-USA) asserted today that the world is facing a significant energy crisis, as the rate of oil production cannot keep pace with demand. The world is consuming four barrels of oil for every one discovered, more than 80 million barrels of oil per day. After 150 years of oil extraction, most major oil exporting nations are well past their supply peaks, defined by scientists as "Peak Oil."

"We are at the point of no return," stated Jim Baldauf, President of ASPO-USA. "While global demand is accelerating, worldwide oil supplies have reached a plateau and are now in decline. The era of low-cost, easy-to-get oil has come to an end, a moment of historic significance and one fraught with danger. The Gulf of Mexico disaster occurred because the quest for new supplies requires that we drill miles beneath the ocean surface. Without affordable energy to drive our economy, we can expect price spikes and economic crisis to be the new normal. The debate about Peak Oil is over; it is time for bold action. If we do not change our current approach, we will see tremendous global repercussions."

Peak oil study group's Baldauf discusses policy options

Should Congress address peak oil in its next energy package? What are the policy options for minimizing the impact of a potentially shrinking supply of oil? During today's OnPoint, Jim Baldauf, co-founder and president of the Association for the Study of Peak Oil and Gas, discusses the economic and geopolitical impacts of peak oil. He gives his take on the United States' policy options for addressing a peak and weighs in on the ongoing debate over production numbers.

Peak Oil Is Here: What Should We Do?

Predictions about peak oil are dispiriting, to say the least. The Hirsch Report, commissioned by the Department of Energy in 2005, said peak oil would be abrupt, soon and catastrophic for world economies, particularly the United States.

But, as environmental blog Treehugger points out, predictions of peak oil don't need to be portraits of famine and chaos. M. King Hubbert, the man who originally, and accurately, predicted that oil production would peak in the U.S. in 1965, didn't see peak oil as a necessary apocalypse, just the point when we would have to transition to more sustainable forms of energy, like solar.

Bianca Jagger: Now Is the Time to Move Beyond Petroleum

Our addiction to oil is dangerous and unsustainable. Our oil supply is finite, and the dwindling reserves simply cannot cope with our ever increasing demand. To compensate for the diminishing supply, oil companies have been attempting to reach reserves in deeper and more dangerous waters - often with environmentally catastrophic consequences.

Professor: Less oil could affect life quality

Arthur Winer, professor of environmental health services at UCLA, briefed the council on the implications of the peak oil production for Laguna Beach. He also briefed San Diego Gas & Electric spokesman Duane Cave on smart electric meters that will be installed by the utility.

Winer, speaking on behalf of the Environmental Committee, said oil production is starting to decline in the United States and in 90% of all other oil-producing countries.

The drop may threaten residents' quality of life, essential services and the tourist industry, which is an economic necessity for Laguna to thrive, Winer said.

Crude Futures Fall, Head for Weekly Decline, Before U.S. Payroll Report

Oil declined as the dollar advanced against the euro, recovering from yesterday’s nine-month low, before a report today that may show unemployment in the U.S. increased last month.

Futures headed for their first weekly decline in three weeks. A government report today may show the U.S. jobless rate rose for a second consecutive month in September, according to a Bloomberg News survey.

“The dollar has strengthened since early morning and this is keeping the downtrend in oil going,” said Alexander Ridgers, head of commodities at London-based CMC Markets, which handles more than $150 million a day in U.S. crude contracts.

Oil May Fall as U.S. Inventories Climb, Consumption Drops, Survey Shows

“Inventories are higher than a year ago, even when adjusting for demand, yet prices are a good $10 higher,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “There’s just not the demand to justify the recent rally in prices.”

Price, Yen Access May Hit Japan's Iran Oil Imports -Cosmo

TOKYO -(Dow Jones)- The relatively high price of Iran's crude oil may be a reason for reduced sales in Japan, and volumes could fall even further if Japanese banks reduce credit lines for companies doing business with Iran, a senior Japanese refining company official said Friday.

"What we are worried about is Japanese banks' possible scaling down of credit lines," Masayoshi Ishino, an executive officer at Cosmo Oil Co. (5007.TO), said.

U.K. Gas to Fall From Double U.S. Price on Qatar

U.K. natural gas may be poised to lose its biggest premium in 19 months against New York-traded supplies as Qatar begins projects to export liquefied fuel.

The Middle East emirate, the world’s biggest liquefied natural gas producer, said Oct. 6 it plans to start two plants by February, boosting export capacity by 15.6 million metric tons, or about 25 percent of annual U.K. consumption. Qatar also restarted as many as six units that were shut earlier this year for maintenance amid a glut of the fuel.

Kuwait Petroleum Reaches Price Agreement With Some Contract Naphtha Buyers

Kuwait Petroleum Corp., the biggest Middle East exporter of oil products to Asia, reached a price agreement with some buyers for its one-year naphtha supply contract, two traders said today.

Barclays Hires Ex-Goldman Sachs Energy Banker for Japan Hedging

Barclays Plc hired former Goldman Sachs Group Inc. oil banker Yumi Hiramoto to meet demand from Japanese refiners and trading houses for hedging commodities.

Hiramoto, 27, joined Barclays Capital Japan Ltd.’s commodities division yesterday, Tokyo-based spokeswoman Marina Totsuka said. She takes charge of oil and natural gas derivatives sales, said two people with direct knowledge of the matter, declining to be identified because her job specification hasn’t been made public.

Brazilian president inaugurates Petrobras' oil platform

Brazil's President Luiz Inacio Lula da Silva inaugurated a new floating platform of state-controlled oil and gas giant Petrobras on Thursday.

Essar Energy May Buy Overseas Oil Refinery, Terminal to Boost Fuel Exports

Essar Energy Plc, India’s second- largest non-state refiner, may buy a refinery or storage facilities overseas to help boost exports of cleaner-burning fuels to be produced when its west coast plant is expanded.

Norway’s output dives in September

Norway's oil production fell to a preliminary 1.572 million barrels per day on average in September from actual production of about 1.603 million barrels in August.

Production of natural gas fell to a preliminary 5.7 billion cubic metres in September from about 6 billion cubic metres in August.

Paris Oil Drillers Target 100 Billion Barrels Near Brie, Wine

Pierre Henry farms wheat and corn east of Paris in an area famous for its Brie cheese. The next big hit might be crude oil.

Henry’s farm, 78 kilometers (49 miles) from the French capital, sits atop what geologists call the Paris Basin, an area bordering Champagne and Chablis vineyards that struck oil in 1958. Henry leased a field to Exxon Mobil Corp. in 1985, which drilled wells that have pumped for a quarter century.

These days Vermilion Energy Inc., Toreador Resources Corp. and partner Hess Corp. are targeting a bigger prize, oil trapped in Paris Basin shale rock that was previously too hard to tap. Techniques developed to pulverize rock and release petroleum have revolutionized exploration and boosted U.S. natural gas production 20 percent since 2006. Vermilion said it has had “positive” results so far in the area.

Yemen attacks show al-Qaeda shift

SANA'A, Yemen - Militants fired a rocket-propelled grenade at a British Embassy vehicle on Wednesday and a Frenchman working for an Austrian Oil company was shot dead by a security guard in a pair of attacks that have heightened security fears in a country facing a growing insurgency.

Blackout alert

South Africa will face rolling blackouts from 2011 until 2016 -- like those seen in 2008 -- if drastic action is not taken to introduce independent power producers and rapidly increase energy efficiency.

100s evacuate downtown South Bend after gas leak

SOUTH BEND, Ind. – Authorities have shut off a gas leak almost four hours after a break in a high-pressure natural gas line forced hundreds of people to evacuate buildings in downtown South Bend.

Stricken Chemical Tanker in Atlantic Will Be Towed Into Port

The YM Uranus, a chemical tanker that took on water off northwestern France, will be towed to port, France’s maritime agency for the Atlantic Ocean said.

“The ship is about to be towed and teams on board have started” removing water from the vessel, Magali Chaillou, a spokeswoman for the Prefecture Maritime, said by phone. Towing lines have been attached and the operation should start shortly, she said at 10:50 a.m. London time. The exact cargo and its risk to the environment are being investigated, she added.

EU energy chief plans deepwater drilling ban

BRUSSELS (Reuters) – Europe's energy chief will next week call for a temporary ban on new deepwater drilling for oil until a probe is completed into the causes of BP's spill in the Gulf of Mexico, a draft document shows.

Oil-drilling countries questioned whether Brussels authorities should intrude for the first time in a sector that has traditionally been controlled at a national level.

Oil spill report sketches anatomy of a flawed US response in Gulf

The Obama administration lagged in its initial response to the BP oil spill, played down spill projections, ultimately overreacted, and injected politics into the spill response, according to a report by President Obama's own oil spill commission.

Doubts Raised About BP Study

HOUSTON—BP PLC's lawyers helped prepare its internal investigation into its Gulf of Mexico drilling disaster, according to the report's lead author, raising questions about the study's impartiality.

The report, led by Mark Bly, was presented by BP as an impartial investigation into what caused the April 20 explosion, which killed 11 workers and caused the worst offshore oil spill in U.S. history. But outside experts have been skeptical, saying its conclusions seemed convenient for BP's legal position.

Russian "scallop garden" will monitor pollution

(Reuters) - Some prefer them grilled or steamed, but Russian scientists will now use sea scallops to monitor pollution levels at a Pacific oil terminal.

An enormous sea scallop garden will be set up at the end of this month in Russia's Far East Kozmino Bay, eight time zones east of Moscow. It will be the first Russian port to use mollusks as a water-monitoring instrument.

Site in Hungary Was Listed as Risky

BUDAPEST — The storage pond filled with caustic alumina-processing waste that burst and inundated several Hungarian villages this week was on a 2006 watch list of more than 150 industrial sites that were at risk for accidents that could contaminate the Danube River, according to an environmental group.

Premier: China won't block rare earth exports

SHANGHAI – China is not using its control over supplies of rare earth — exotic metals crucial in advanced manufacturing — as a diplomatic "bargaining chip," state media quoted Premier Wen Jiabao as saying during a visit to Europe.

Recent reports that Beijing had temporarily suspended shipments to Japan of the metallic elements, used in computer disk drives, hybrid car components and other high-tech products, has drawn attention to China's near monopoly on the materials.

France, Japan and the USA to cooperate on fast reactor demos

The Japan Atomic Energy Agency (JAEA), the French Atomic Energy Commission (CEA), and the US Department of Energy (DOE) have signed a memorandum of understanding to cooperate on the development of prototype/demonstration sodium-cooled fast reactors (SFRs).

New Study Names Honda as the Greenest Automaker

Honda has the greenest vehicles in the United States, with Toyota and Hyundai tying for second place, according to a study released on Thursday by the Union of Concerned Scientists, a nonprofit advocacy group.

The results were calculated using the predicted impact of the automakers’ fleets on global warming — based largely on miles per gallon -– as well as the smog-forming emissions of the engines.

A sparky new motor

The first mass-market electric cars are arriving in showrooms. They represent a big gamble for carmakers.

Beacon tracks ice island off Canadian coast

The Canadian Ice Service, the federal agency that monitors the state of the Northwest Passage and other Arctic shipping lanes, has successfully deposited a satellite beacon on an ice island that broke away from Greenland in August and is now drifting in two pieces in waters off Nunavut's Ellesmere Island.

The glacier break created Petermann Ice Island 2010 -- launching a journey expected to last years and one that could menace offshore oil platforms in Atlantic Canada.

Africa: Unclean Development Mechanism

Funding of climate change-related projects has led to the further commoditisation of Africa's land and natural resources while exploiting African labour to extract the surplus for Western accumulation. Proponents of this development paradigm have introduced a discourse that views Africa's land as degraded, marginal and of limited economic value. To facilitate 'economic use by foreign firms', thousands of hectares of land are being leased (in some cases sold) in the name of ensuring lasting land regeneration and conservation of natural resources, therefore deriving economic benefit.

Maldives President Installs Solar Roof

Maldivian leaders have long been out front on climate, and, in the case of Nasheed, on non-polluting energy choices, mainly because the nation, with hardly any land more than eight feet above sea level, is particularly vulnerable should seas rise several feet by the end of the century.

Waste pickers offer climate change solution

There are about 15 million people in cities across the developing world who survive by collecting rubbish, according to the Global Anti-Incinerator Alliance (GAIA), a non-government organisation that brought Khodave to China.

People such as Khodave can play an important role in combating climate change because they cheaply and efficiently gather materials such as paper, metal and organic waste, then sort them and send them off for recycling.

Japan revives push for climate bill, outlook unclear

(Reuters) - Japan's government agreed on Friday to resurrect a climate bill calling for an emissions trading system and an environment tax, but it remains unclear if the legislation will be enacted in a divided parliament.

Poor Prospects for New Climate Meeting

WASHINGTON — With wounds still raw from the chaotic United Nations climate conference in Copenhagen last December, negotiators are making final preparations for next month’s meeting in Cancún, Mexico, in a surly mood and with little hope for progress.

There is no chance of completing a binding global treaty to reduce emissions of climate-altering gases, few if any heads of state are planning to attend, and there are no major new initiatives on the agenda. Copenhagen was crippled by an excess of expectation. Cancún is suffering from the opposite.

Warmer, wetter weather has crops on the move

DES MOINES, IA (AP) - Experts say warmer and wetter weather in parts of the Midwest and Northeast have helped farmers grow corn, soybeans and other crops in regions that once were too dry or cold.

Bruce Babcock, an Iowa State University agriculture economist, says in the Midwest, soybean production is expanding north and the cornbelt is expanding north and west because of earlier planting dates and later fall freezes.

Climate Change Threatens Global Rice

Climate change is cutting deeply into yields from so-called Miracle Rice, which is credited with keeping millions from starvation across Asia, according to Dr Shaobing Peng, a research scientist with the International Rice Research Institute in Los Banos, Philippines.

Yields from IR8, which was developed in the 1960s by the IRRI, have dropped by about 15 percent, according to a research team led by Dr Peng whose study was printed in the current edition of Field Crops Research.

Food prices may soar due to global warming

LONDON: Large-scale crop failures are likely to become more common in the wake of climate change and lead to spiralling prices.

Rising temperatures could trigger events such as the wheat crisis in Russia this summer which pushed up food prices, researchers from the Universities of Leeds, Exter and the Met Office said.

Scientists warned that rising temperatures would make crops mature more quickly, reducing their yield, while extreme temperatures could also significantly reduce yields, according to the journal Environmental Research Letters.

Ethanol 2.0: Pay reduced subsidies directly to ethanol producers.

But will mandates be enough to get oil companies to comply without incentives? They could just sit on their hands if they are not going to be compensated for use of their blending, distribution and sales facilities.

They are fighting E-15 already. They make most of their income from refining and distributing imported oil and without the blenders credit why should they bother with ethanol which competes with imported oil?



Much of the language championed by the governors’ coalition was spelled out by Klobuchar and Johnson as early as July, when they wrote Vilsack asking for the administration's position, and spelling out their legislative proposal. The senators had proposed a five-year tax credit for domestic ethanol producers that would be half of the current 45-cent level; eliminating the import tariff and stepping up the credit for ethanol producers that used advance technologies or renewable energy to reduce their carbon footprint.

Senators and Representatives from oil states are not going to buy it. Senators from ethanol states have a tough fight ahead. Oil has more money behind it than ethanol and will get what it wants in the end.

They have succeeded in making ethanol subsidies an issue while oil subsidies go ignored and untouched.

Ethanol 2.0 may just be a negotiating tactic to get them to back off.

Facing loss of their blenders credit, it just might work.

Oil interests and ethanol opponents are under the delusion that the blenders credit benefits only ethanol which they hate. By eliminating the blenders credit and paying half of its cost directly to ethanol producers, oil interests may see the light.

They will be left with a mandate for ethanol, a competitive product, with no compensation and paying higher taxes.

Meanwhile ethanol producers will continue to be subsidized albeit at a lower rate from the taxpayer point of view. Ethanol producers will love it since they will see the money directly rather than second hand in market prices which are notoriously fickle.

I can just see the glee in the eyes of those who thought this up. Ain’t politics fun.

Today's jobs report was much worse than expected.

NEW YORK (CNNMoney.com) -- The job market suffered another blow last month, as business hiring dwindled and the government continued to shed workers.

Overall, the economy lost a total of 95,000 jobs in September, the Labor Department reported Friday, far worse than expected and down from the previous month, when employers shed 57,000 jobs.

A record 30% of unemployed out of work at least a year

A record 30% — or 4.4 million — of the nation's 14.7 million unemployed workers were out of work at least a year in August, up from 23% in December, according to an analysis of Bureau of Labor Statistics data released Thursday by Pew Economic Policy Group. The figures are not seasonally adjusted.

...The data underscore a harsh reality: Many of the long-term unemployed will struggle to find work even after the job market picks up, and some will never work again.

And this article from USA Today reports that there's a new class of renters: people who can afford to buy, maybe even owned in the past, but prefer to rent.

Since the real estate bubble burst, the American dream of homeownership has fizzled.

A growing number of Americans, called a new class of renters, can afford to buy a home but are renting by choice, says Tara-Nicholle Nelson, consumer educator at Trulia.com.

It really was a mixed bag. While the topline number was much worse than expected, private job creation was better than expected. The drop off was in government jobs (republicans should be thrilled). Everybody now expects the fed to do some more quantitative easing.

private job creation was better than expected.

According to who?

The government said private employers added 64,000 workers last month, short of the 75,000 economists expected.


All the articles I've read said both numbers were disappointing. The private payrolls number was lower than expected, and lower than in previous months.

According to the Federal Government, we add about 412,500 workers each month (reflecting a population growth of 1.5% per annum). Even at 1.1%, we would need 250,000 jobs to employ all the new workers. So, how does anyone figure that 64,000 private jobs (even with net zero government workers) is a good thing?


Which just goes to prove once again 'the market can stay illogical longer than you can stay solvent'. Note the DOW is up 75 or so with 15 minutes to go based on the news that unemployment is high, 30% over a year and about a million each month now are falling off the '99 week' end of benefits or just quit looking.

Next we will hear that the administration is allowing a bank bill to go through that will 'streamline' the forclosure process.

Supposedly, the reason the Dow jumped is that the bad jobs report is being viewed as a guarantee that there's more stimulus coming.

"the market" is a smoke and mirrors con job - If the market moves the nattering nebons of marketism have to say SOMETHING, even if it has no connection to the lack of humans investing and how the investing is dueling computer algorithms.

The real reason is that the Bush Tax Cuts will expire in January and then you'll see some real gloom on Wall Street.
What's keeping the market up are the banks gambling in the market, as in, "Make hay while the sun shines, boys"!

It's Potemkin Capitalism.

But for Main Street it's already grim. A stock market boom won't help Joe Sixpack and that's all that will come from extending Bush's Fake Tax Cuts.

Trickle down has never worked.
Without a real Krugman-style stimulus which conservatives abhor, the US is finished.
Let's just hope that Peak Oil sinks the world before the USA is utterly humiliated.

“If the Confederacy fails, there should be written on its tombstone: Died of a Theory.” Jefferson Davis

The word I hear is that the halt in foreclosures is in order to allow the banksters to cut a deal with the local law makers to permit no documentation cases to proceed.

In other words, they are loading the system to make them easier, and want to wait until the fix is in.


I think it's going to take more than local lawmakers to fix this mess.

It's a catastrophe. People who thought they bought houses are finding that the title's not clear, and they may not own what they thought they bought.

Who's going to want to buy a house when that could happen?

Who's going to want to buy a house when that could happen?

That is why you go to the court and ask for a quiet title.
(might not be a bad plan for any land you now have title to - that way it cuts off future claims.)

If you have a mortgage I'd suggest you entertain the idea of suing for fraud. Hit them before they skip town with your cash and can't give you a clear title.

For a sales pitch as to why you might want to get an audit and what that audit will do for ya:
(and I ask if you do get the place free and clear you take one months of payments and send it to TOD for TOD operation.)

I'm on hold, for sure.

With the rumors of houses with clear title getting stolen through the foreclosure process there's no way to be sure that any house you buy right now is really clear.

I`m amazed at this news. Entropy rears its head again. By "streamlining" the whole mortgage approval and subsequent investment process the USA created fast money, fast energy availability and even faster entropy as a result. Huge swathes of previously productive farmland first became suburban McMansions (not as useful in the coming solar-based economy as farm land and woods). Then the McMansions, because the titles are under dispute---perhaps literally forever---, will be permanently unavailable as anything at all, even housing. Who knew people could take land, like a piece of tissue paper, crumple it up and throw it away in the garbage forever? But the US has once again innovated a whole new way to speed up the workings of the 2nd Law. Bravo!!

Almost like the land is contaminated with stupid from what we have done to it.

because the titles are under dispute---perhaps literally forever---, will be permanently unavailable as anything at all, even housing.

Now lets not be that hasty here.

3 avenues of redress exist with the 1st one I'll list being beyond the pale, yet quite traditional.

Force. You can use force of arms to hold the land. Its how America got founded. (ok, ok. Force and then a papering over with law. Occasionaly just paper or even bead based land grabs)

The other 2 are:

Quiet title. In effect you ask the court to say "matters not what may be the paper trail - at this point forward you are now the undisputed owner." Presidential decree gets you what is called a land patent and issuing a land patent could also be used to establish the ownership claims.

Invoking Admiralty Law (vs common law) - ever heard the phrase "Possession is 9/10ths of the law"? That comes from "the law of the sea" I've not seen land successfully claimed under this form of law in courtroom transcripts.


Rather than be gloomy and give the banks the power - I say you should look at the crisis as opportunity. Embrace their fraud by going to the court, demanding that the court see the fraud for what it is, pay you for the fraud and give you quiet title. Screw 'em with paperwork...they'd do the same to you.

I cannot imagine that anyone really believes this is some kind of victory of the public over the banks. Look at the pattern of the last several years, and it is clear that the banks will get what they want. The problem here is only that it's a bit too public (it was supposed to slip through quietly), and the timing is bad right before an election. It will be corrected soon enough.

Alice in wonderland. Up is down. Down is up. One theory posited is that the silver lining is that there will be more quantitative easing. Others believe that the market is undervalued and that we should expect good earnings numbers in the future. So what if we have massive unemployment? Others point to the probability that we will have total gridlock in congress. As if we didn't already. And besides, if business can continue to cut costs by laying off workers and/or moving jobs overseas, what's the problem. The bottom line will rule even if that bottom line is not employing American workers. Oh yeh. And then there is the theory that we will not raise anybody's taxes. That will make it all better.

I'm tempted to say that this is a good time to go short. Really,really short. But then I would only say that if I thought I really,truly understood the market.

One thing is for sure. There is very little relationship between Wall Street and what is left of so called main street. The fat cats could use some liposuction.

I posted about August 10, and three times since, that the stock market is going to go up, for up to three months. Yes, I am following my own advice, and yes, I still expect the market to go up until to maybe as far as mid-November.

Peak oil and even a credit collapse don't necessarily lead to a stock market collapse. Zimbabwe, with hyperinflation, had the best stock market of all in local currency terms. The news today about foreclosure problems is actually very bad, and will cause billions in losses for the economy and the US government. However the fact is that the Federal Reserve has bought, or plans to buy, so many Treasury bonds that it has pushed down interest rates to a very low level - making the stock market an attractive alternative.

If you like, you can call it smoke and mirrors, in fact, I've been calling the phantom value of the dollar as being held up by smoke and mirrors for years. Unless you have no assets what so ever denominated in dollars, then you are a part of this game too.

Why would the market go down after November?

It may not go down, depending on the actions of the Federal Reserve in November.

My personal expectation is that there is an 80% chance the Fed will start a more accommodating policy in November, although the scope of that is hard to guess at.

If the incremental change in policy is none or small, then the market will go down, although I don't think much (less than 10%).

Basically as long as interest rate are very low, I don't think there will be a serious decline in the market.

My warning, as before, is that a sudden drop in the US dollar's value (measured either against gold and/or other major currencies) may lead to a rise in interest rates, and then a fall in the stock market.

Scientists and Soldiers Solve a Bee Mystery.

A fungus tag-teaming with a virus have apparently interacted to cause the problem [colony collapse], according to a paper by Army scientists in Maryland and bee experts in Montana in the online science journal PLoS One.

Exactly how that combination kills bees remains uncertain, the scientists said — a subject for the next round of research. But there are solid clues: both the virus and the fungus proliferate in cool, damp weather, and both do their dirty work in the bee gut, suggesting that insect nutrition is somehow compromised. NYT

As a former (read "failed") beekeeper, it's nice to hear this problem is on its way to being resolved.

As a hard-core Darwinian, I get a strange satisfaction from seeing confirmation that, as always, the Red Queen is the Mistress of the Universe.

One problem i have with honeybees... They aren't NATIVE to N America. I worry a lot more about local bumblee bees and other smaller bees, both of which seem to be in healthy numbers, at least in my yard. I don't believe i've seen a honeybee this year, but i do know i've had excellent pollination, even very early with the apricots, when honeybees wouldn't have even gotten out of bed.

It doesn't mean i don't care that the honeybees are in peril, i just think that our native species are much more important, not to mention better pollinators in crappy wx conditions.

Edit: One thing i do want to mention is Iowa. Before man decided to make it a cornfield to feed his fat @ss, it must have been just full of bees and birds and all types of insects. Sad stuff.

Earthworms also aren't native to North America. Some are, but a lot the ones beloved by gardeners are introduced.

Some forests depend on leaf litter, and if worms eat it, the plants can't survive.


You're right. I only learned that recently when a Wisconsin outdoor magazine ran an article about them and the fact they are spreading into the northern forests of this state. Not to mention the non native bird species that have taken over (robins/sparrows) this area.

Eat more tree crops and less grains people!

No, North America did have worms.

They just don't DO a whole lot. Ever seen the green tint-ed worms? They are native.

One of the things that I have wondered about with the bee problems is the practice of trucking the bee colonies all over the USA from crop to crop to crop.
This practice (according to my local bee keeper) has to weaken the bee colonies. It is also a very good vector for spreading bee diseases and other bee problems.
I would like to it made illegal to truck bee colonies all over the USA. They should raise the bees where they need them and keep them there year around.

The bee keeper that has hives located on my rural Minnesota farm had a very good year for honey production. The hives on my farm stay there all the time and are never moved.
I think I'll go spread some of my fresh comb honey on some buttered toast. MMmmmmm
(I get paid in honey only for having the hives located on my farm. It's better than money!)

This practice (according to my local bee keeper) has to weaken the bee colonies. It is also a very good vector for spreading bee diseases and other bee problems.

Movement causes stress. And yes, the spreading of disease vectors.

The 'natural' movement tries to help by things like top bar hives. If you take a standard Lanthoth hive and put a simple triangle at the top, the bees will draw out comb as they wish.

I would like to it made illegal to truck bee colonies all over the USA. They should raise the bees where they need them and keep them there year around.

Not gonna happen. $1000 to get started in 'keeping - a hive is $200-$400, $65 for a nuc. Now the bees need to re-coop that cost at $2.00 a lbs for honey. Ask the 'keepers on your land how much it costs.....

Not to mention many 'keepers in the northern states overwinter in Florida/where it is warm.

Not just that...commercial hives are inbred. Just as other domesticated animals, they've been bred for certain traits. (Such as large body size, because big bees are better pollinators.) Their genetic diversity has suffered.

Such as large body size, because big bees are better pollinators.

I'm gonna say no here.

A bigger body size means more honey in the bee gut and more honey means more $ from your hive.

How they've gotten the bigger size is instead of a 4.9 MM cell size they made a 5.1 mm cell size. It then takes a few extra days for the bees to grow - a few extra days that mites seem to prefer. (Seems 'commercial' bees will go back to the 'wild' cell size if you allow 'em to draw out comb.)

Hence the all drone comb to attract mites - what society of all women want them thar free loading drones?

A bigger body size means more honey in the bee gut and more honey means more $ from your hive.

Except for the small fact that honey is not manufactured in the bee gut.

How do honeybees make honey?

The physical change involves the removal of water, which is accomplished by externally manipulating nectar in the mouth parts and then placing small droplets on the upper side of cells and fanning the wings to increase air movement and carry away excess moisture.

Bees do have a honey pouch, sometimes called a "honey stomach" but this "stomach" is not the bee's real stomach and is not part of the digestive tract. The honey never enters the bee's gut. Except, of course, the honey that the bee uses for food. This food exits the bee as crap, not honey.

How do Bees Make Honey?

Ron P.

The physical change involves the removal of water, which is accomplished by externally manipulating nectar in the mouth parts and then placing small droplets on the upper side of cells and fanning the wings to increase air movement and carry away excess moisture.

And Ron, as long as you are caring about correctness - I'll point out that various enzymes in the 'honey stomach' help convert the nectar into honey.

(now to dig up a link to support my statement)

Raw honey contains the following enzymes: diastase, invertase, catalase, glucose oxidase, acid phosphatase and inulase, which aid in digestion and assimilation. Diastase and invertase have received the most attention and study of all the enzymes. They’re introduced to the honey by the bees and their presence varies.

Thus honey is not just dehydrated nectar.

My only objection Eric, was your use of the word "gut". There are no guts involved in the generation of honey and the "honey stomach" is not part of the digestive tract. Saying that honey is formed in the "gut" might give some the impression that honey is bee excrement.

You are correct honey is not just dehydrated nectar. No one, to my knowledge, made the claim that it was.

Ron P.

Saying that honey is formed in the "gut" might give some the impression that honey is bee excrement.

More bee vomit than bee crap, tis true. Yet, if I squeeze a bee, honey stomach or digestive stomach are parts of the guts which would ooze out. And enzyme exposure is a digestion process - digestion is something "guts" do. (but hey - so does raw pineapple.....when you eat that you are also digesting your mouth with its enzymes.)

As long as you seek to correct the record and give the correct impression, just talking about physical changes does not give a complete story to anyone who doesn't click on the link and yet is reading TOD.

No one, to my knowledge, made the claim that it was.

You may wish to re-parse what you said then:

removal of water, which is accomplished by externally manipulating nectar in the mouth parts and then placing small droplets on the upper side of cells and fanning the wings to increase air movement and carry away excess moisture

Removal of water is commonly called dehydration. And you did post the above, and made no mention of the chemical change.

You could have opted to include the enzyme part, but instead opted to only discuss the dehydration portion.

If no one opted to read the link - sure looks like the claim is dehydration.

As always, I've enjoyed our exchange which allows the fuller exploration of the minutiae of some topic thus expanding TOD readers knowledge.

(and in a post peak hard-to-get sugar world honey is a far better choice than say the historic lead based sweetener. )

In the interest of you all seeing over the top sugar claims I present:

1600's = 7 lb/52 wk = 0.135 lb/wk; = 17.46 tsp/wk; = 2.50 tsp/day
1850's = 52 lb/52wk = 1.0 lb/wk.; = 129.7 tsp/wk ; = 18.53 tsp/day
2003 = 150 lb/52wk = 3.0 lb/wk. ; = 389.1 tsp/wk ; = 55.59 tsp/day! [ 0.43 lb/day!]

Other excess sugar quotes in case you are trying to kick the sugar habit:

It’s thought that the Arab armies started indulging in its sedative and tranquilizing properties and that this consumption may have contributed to their downfall. Soldiers chew the sugar cane, are reported to have “soldier’s disease” and become gluttonous and less courageous. They experience bleeding gums, hemorrhagic skin spots, and swollen legs. .....As sugar consumption goes up, fatal diseases increase. ......
The processing of sugar follows the same trail as the opium poppy. It has habit forming sensory pleasures just as heroin, opium, and alcohol.

You may wish to re-parse what you said then:

Okay Eric, perhaps you are not familiar with the protocol for "blockquotes". When I, or anyone else, put's something in blockquotes, it is never something I am saying! I was quoting from the link I posted.

Anyway, the link did not say that was all there was to making honey, and I did not make that claim either.

Ron P.

virus and the fungus proliferate in cool, damp weather

Next up - Temp and airflow control in hives to keep them warmer and less damp.

suggesting that insect nutrition is somehow compromised

*coff* BT *coff*

And in other news:
* Michigan to make it illegal for people to build farms on their land in Detroit?

It would be really convenient for the crop science and pesticide manufacturers if someone could show a link, however tenuous, between colony collapse and some or other organism.

That way, the crop science companies could keep producing pesticides, as well as an anti-microbial/anti-viral for control of the suspected organism.


The link has been shown in the negative;lots of colonies have failed that were not exposed any particular pesticide or combination of pesticides.

Several months ago I posted my opinion here that the cause of colony collapse would be found to be some newly discovered or previously unstudied virus or other organism that has evolved in such a way as to be lethal to bees.

The practice of hauling bees from place to place explains why it spread so far and so fast.

"The link has been shown in the negative"

Please post your references for that.

' "Nicotine Bees" Population Restored With Neonicotinoids Ban

Following France and Germany, last year the Italian Agriculture Ministry suspended the use of a class of pesticides, nicotine-based neonicotinoids, as a "precautionary measure." The compelling results - restored bee populations - prompted the government to uphold the ban. Yesterday, copies of the film 'Nicotine Bees' were delivered to the US Congress explaining the pesticide's connection to Colony Collapse Disorder. Despite the evidence, why does CCD remain a 'mystery' in the US? '


'Although varroasis (infections from mites) and other pathologies are found at other times of the year, suspending neurotoxic insecticides improved the situation significantly. Francesco Panella, President of the Italian Association of Beekepers, says: "On behalf of beegrowers working in a countryside dominated by maize crops, I wrote to the Minister of Agriculture to confirm the great news, for once: thanks to the suspension of the bee-killing seed coating, the hives in the Po Valley are flourishing again."

Not true in Southern Italy, where bee mortality was high in citrus groves, which were sprayed with neonicotinoids, also used in vineyards and other crops. The new law has been challenged by the agrochemical industry but the Italian government upheld the ban.'

And here's more from Germany :-

"Unequivocal evidence of pesticide poisoning"

Walter Haefeker, president of the European Professional Beekeepers Association, reporting to Chemical and Engineering News said [1], “Beekeepers in the region started finding piles of dead bees at the entrance of hives in early May, right around the time corn seeding takes place.”

"It's a real bee emergency,” said Manfred Hederer, president of the German Professional Beekeepers' Association told The Guardian [2], “50-60 percent of the bees have died on average and some beekeepers have lost all their hives.”

The incriminating evidence was so convincing that a press release from the Julius Kuehn Institute (JKI), the German federal agricultural research agency, stated: “It can unequivocally be concluded that a poisoning of the bees is due to the rub-off of the pesticide ingredient clothianidin from the corn seeds.”

Tests on dead bees showed that 99 percent had a build-up of clothianidin.(sold in Europe under the trade name Poncho) produced by Bayer CropScience, approved for use in Germany in 2004, and with some restrictions in the US in 2003. "


Postscript : It should also be pointed out that one of the characteristics of CCD hives was that the bees were just missing - there were no dead bodies in the hive. In other words, they died somewhere away from the hive, in the field. A characteristic more associable with poisoning than disease. One of the key characteristics of neonicotinoid pesticides is the ability to disrupt neural pathways - in other words, so the bees could "forget" their way home, thereby dying in the field.

Since the missing bodies could not be autopsied, obviously researchers could only work with insects they could obtain in the hive. They found a substantial "cocktail" of organisms and pesticide residues in the hives.

It would be really convenient for the crop science and pesticide manufacturers if someone could show a link, however tenuous, between colony collapse and some or other organism.

It would be really convenient for bee product manufacturers if someone could show a link between honey and human nutrition.

I'm so sick of conspiratorial thinking.

What's "convenient" for crop science and pesticide manufacturers is the fact that evolution keeps outwitting us, thus continuing the market for remedies.

"I'm so sick of conspiratorial thinking."

Remember the corporate executives who said smoking doesn't cause cancer ?

Here's a copy of pages from the Congressional record of them lying to Congress.


Well then of course--all corporate actions are instances of malfeasance.

Representativeness Error

In judging items, we compare them to a prototype or representative idea and tend to see them as typical or atypical according to how they match up with our model.


It is denial to continue to defend the ubiquitous use of pesticides, particularly those whose deleterious side effects have been amply demonstrated. example, DDT.

Postcript : In case you didn't think neonicotinoids could affect human beings, a Japanese study has measured residual amounts of nicotinoids in vegetables.

"A rapid and simple extraction method for the simultaneous analysis of five neonicotinoid insecticides has been developed. Twelve different fruit and vegetable matrixes were extracted with methanol and cleaned up using a graphitized carbon solid phase extraction cartridge loading with a 20% methanol solution. The concentrated eluate after methanol elution was then analyzed for pesticide residues by liquid chromatography/mass spectrometry in the APCI positive mode. The five pesticides including nitenpyram, thiamethoxam, imidacloprid, acetamiprid, and thiacloprid were recovered at 70−95% at spike levels of 0.1 and 1 mg/kg in bell pepper, cucumber, eggplant, grape, grapefruit, Japanese radish, peach, pear, potato, rice, and tomato. "


It is denial to continue to defend the ubiquitous use of pesticides, particularly those whose deleterious side effects have been amply demonstrated. example, DDT.

Instead of taking heed of the "representativeness error," you simply ignored the link and committed the same error.

"Pesticides" is a categorical term, and the "defense" thereof requires one to specify WHICH pesticide and at WHICH dose.

You cite DDT as a representative pesticide, perhaps because to you pesticide = evil.

I have no idea what "good" or "evil" have to do with it - they are human religious constructs - I read scientific papers, and make my own observations of the real world, and draw my conclusions from those.

What is abundantly clear is that nature abhors a vacuum. No matter how many niches we try to "control" or eliminate with chemicals, all we will succeed in doing is creating holes evolutionary processes will try to fill.

It isn't likely we will like the results, and future generations will not have the energy resources to deal with them.

Better to stop trying to kill everything that bothers you as a solution, and work in concert with what is out there right now. It's an art, which, apparently, has been lost in the process of "progress".

Personally, I can say I use no chemicals whatsoever in my yard.I have had a very successful year for raspberries, strawberries, carrots, potatoes, beans, peppers, tomatoes, cucumbers and cherries. I had a dismal year for apricots due to worms, and peaches due to squirrels. But then, I don't depend on apricots or peaches. Broccoli and lettuce were ok, cabbage and spinach were not.

The melons and squashes got powdery mildew and yields were low. However, my bees did ok, and honey yields were good, considering the strange weather conditions we experienced this year.

What is apparent is that my backyard "ecosystem" works sufficiently well to provide a home for many kinds of animals up and down the evolutionary "tree", while also providing me with an adequate harvest. This is likely to be a far more stable state of affairs that the current situation, where we try to pick off certain species here and there to protect others for our own benefit.

I sat outside this afternoon, enjoying an incredible fall day, and things around me were *alive*. Unlike a sprayed cornfield, which is about as alive as astroturf.

I'd rather be preparing for a world where chemicals made from oil are no longer readily available, by widely diversifying what I plant, than sitting there waiting for them to show up and be SOL.

Oh, wait... you think the chemicals will just keep showing up...

As a follow-up, let me post here excerpts from a report on CNN Money/Fortune on Thursday.

"What a scientist didn't tell the New York Times about his study on bee deaths"

"A cheer must have gone up at Bayer on Thursday when a front-page New York Times article, under the headline "Scientists and Soldiers Solve a Bee Mystery," described how a newly released study pinpoints a different cause for the die-off: "a fungus tag-teaming with a virus." The study, written in collaboration with Army scientists at the Edgewood Chemical Biological Center outside Baltimore, analyzed the proteins of afflicted bees using a new Army software system. The Bayer pesticides, however, go unmentioned.

What the Times article did not explore -- nor did the study disclose -- was the relationship between the study's lead author, Montana bee researcher Dr. Jerry Bromenshenk, and Bayer Crop Science. In recent years Bromenshenk has received a significant research grant from Bayer to study bee pollination. Indeed, before receiving the Bayer funding, Bromenshenk was lined up on the opposite side: He had signed on to serve as an expert witness for beekeepers who brought a class-action lawsuit against Bayer in 2003. He then dropped out and received the grant.

Bromenshenk's company, Bee Alert Technology, which is developing hand-held acoustic scanners that use sound to detect various bee ailments, will profit more from a finding that disease, and not pesticides, is harming bees. Two years ago Bromenshenk acknowledged as much to me when I was reporting on the possible neonicotinoid/CCD connection for Conde Nast Portfolio magazine, which folded before I completed my reporting."


Overall, a shoddy piece of journalism by the NYT, short on real facts and very damaging to beekeepers.

Look up. That story is posted up top.

Sorry - must have missed that - late to the conversation, I guess.

Here's another article, however, from one source devoted to bee science :-


"High Levels of Miticides and Agrochemicals in North American Apiaries: Implications for Honey Bee Health"

"Recent declines in honey bees for crop pollination threaten fruit, nut, vegetable and seed production in the United States. A broad survey of pesticide residues was conducted on samples from migratory and other beekeepers across 23 states, one Canadian province and several agricultural cropping systems during the 2007–08 growing seasons....

....The 98 pesticides and metabolites detected in mixtures up to 214 ppm in bee pollen alone represents a remarkably high level for toxicants in the brood and adult food of this primary pollinator. This represents over half of the maximum individual pesticide incidences ever reported for apiaries. While exposure to many of these neurotoxicants elicits acute and sublethal reductions in honey bee fitness, the effects of these materials in combinations and their direct association with CCD or declining bee health remains to be determined."


Worth reading the entire paper if one is interested in factual research findings.

This is in the comments at the end :-

"Implications for regulatory policy to minimize pesticide risks for pollinators"

"The widespread occurrence of multiple residues, some at toxic levels for single compounds, and the lack of any scientific literature on the biological consequences of combinations of pesticides, argues strongly for urgent changes in regulatory policies regarding pesticide registration and monitoring procedures as they relate to pollinator safety. This further calls for emergency funding to address the myriad holes in our scientific understanding of pesticide consequences for pollinators. The relegation of bee toxicity for registered compounds to impact only label warnings, and the underestimation of systemic pesticide hazards to bees in the registration process may well have contributed to widespread pesticide contamination of pollen, the primary food source of our major pollinator. Is risking the $14 billion contribution of pollinators to our food system really worth lack of action?"

Christie Halts Train Tunnel, Citing Its Cost

The largest public transit project in the nation, a commuter train tunnel under the Hudson River to Manhattan, was halted on Thursday by Gov. Chris Christie of New Jersey because, he said, the state could not afford its share of the project’s rising cost.
Mr. Christie’s decision stunned other government officials and advocates of public transportation because work on the tunnel was under way and $3 billion of federal financing had already been arranged — more money than had been committed to any other transit project in America.
The governor, a Republican, said he decided to withdraw his support for the project on Thursday after hearing from state transportation officials that the project would cost at least $2.5 billion more than its original price of $8.7 billion. He said that New Jersey would have been responsible for the overrun and that he could not put the taxpayers of the state “on what would be a never-ending hook.”

The $2.5 billion overrun was the low estimate of the overrun. More likely a $5 billion overrun, bringing the state of NJ's part of the project to around $8 billion for a two track tunnel from Secaucus to Manhattan.

NY State and City have no skin in the game.

Manhattan is in a very awkward geographical position with respect to transportation. The Hudson is a pretty big river bridged only by the George Washington and Verazano bridges in the NYC part of the river. The Brooklyn Bridge across the East River was a triumph of civil engineering when it was completed.

A better strategy would be to move more businesses to NJ.

Good-bye USA, it was sometimes nice knowing you, when you were young and brash, and actually able to get a thing or two accomplished. I know some will say that penis enlargement is the way back to glory, to standing tall in the world again. These folks have yet to understand the IED.

I know it's a hard truth to take, but really your problem is dementia, a decline in your mental faculties.

But right now there’s just one century-old rail tunnel linking New Jersey and New York — and it’s running close to capacity. The need for another tunnel couldn’t be more obvious.

So last year the project began. Of the $8.7 billion in planned funding, less than a third was to come from the State of New Jersey; the rest would come, in roughly equal amounts, from the independent Port Authority of New York and New Jersey and from the federal government. Even if costs were to rise substantially, as they often do on big projects, it was a very good deal for the state.

But Mr. Christie killed it anyway.

News reports suggest that his immediate goal was to shift funds to local road projects and existing rail repairs. There were, however, much better ways to raise those funds, such as an increase in the state’s relatively low gasoline taxes — and bear in mind that whatever motorists gain from low gas taxes will be at least partly undone by pain from the canceled project in the form of growing congestion and traffic delays. But, no, in modern America, no tax increase can ever be justified, for any reason.

So this was a terrible, shortsighted move from New Jersey’s point of view. But that’s not the whole cost. Canceling the tunnel was also a blow to national hopes of recovery, part of a pattern of penny-pinching that has played a large role in our continuing economic stagnation.


And more discussion of the matter recently at Krugman's blog: http://krugman.blogs.nytimes.com/

Maybe it's time to consider the possibility that the concentration people and businesses located in the immediate area has reached a saturation point such that further growth simply is not truly in the interest anybody but the immediate community that would be making use of the new tunnels.

Some time back we had a hot discussion here on TOD about Tainter's theory of complexity reaching levels at which it produces a negative marginal return.

I suggest that the general public in the state of New Jersey and the rest of the US would likely earn a negative marginal return on this investment.

I would like for anyone anywhere to explain to me why it is in the interest of this country to spend billions more further concentrating our fast vanishing wealth into the hands of the bau establishment's home turf, the finance district of NYC..

Do we really need more of the sort of product this industry has been producing over the last couple of decades?If not, we shouldn't be subsidizing it!

If they want a tunnel, and they finance it themselves, locally, fine.I would rather see my tax dollars spent on something useful to the wider general public-such as subsidies for the renewables industries or conservation and efficiency initiatives.

I followed city politics for a long time when I lived in a city.It soon became obvious to me that virtually all decisions involving spending large sums of money were mostly decided by the vested interest groups I came to refer to as the "downtown landlords association", rather than by the far larger remainder of the city.

Such cabals have had a lot to do with so many of our cities failing while shiny new subsidized buildings were rising downtown.

Hello Old Farmer. In case you missed the movie, rail is about conservation and efficiency.

But go ahead and spend 'your' money on penis enlargement. Other countries will pursue smart macro-eoonomics to ensure their successful transitions as fossil fuel supplies become scarcer. It is to them, the rest of us will turn for leadership.

It is so sad, however, to see the extent to which the micro-economics of firm and household management confuses your understanding of macro-economics.

You have to hand it to the likes of Limbaugh. Their efforts to dumb down America have worked.

Wow, I didn't notice where he said he was againt rail. I took it that he just didn't think this particular $13+ billion project was what he wanted his money spent on. How much rail could $13 billion build in other places as opposed to a line built primarily to haul commuters to Wall Street?

You must be a Wall Street trader yourself to have put out such a harsh reply.

I generally oppose rail projects but really additional rail for Manhattan was the IDEAL application.
Manhattan is the most densely populated city in the the US and cars simply don't work there.
Rail certainly wouldn't work in the wilds of western Kentucky.

OFM is really defending ignorant Republican gasbag Christy who is posturing for a presiential run at 2012.

Canceling expensive difficult projects passes for heroism amongst the teabaggers.

The USA is apparently incapable to doing great things which is the end result of conservative ideology.

That and ex-witches(Christine O'Donnell) running for high office.

Their efforts to dumb down America have worked.

While you can heap plenty of blame at Rush and others, you have a school system made to get you people suited for industrial labor, not independent thought. As the song lyrics said "roses are red and green leaves are green, there is no need to see flowers any other way then the way they always have been seen".

Albert Einstein said "The history of scientific and technical discovery teaches us the human race is poor in independent thinking and creative imagination. Even when the external and scientific requirements for the birth of an idea have long been there, it generally needs an external stimulus to make it actually happen; man has, so to speak, to stumble right up against the thing before the right idea comes. "

Plenty of claims about how TV is a vast wasteland, bypasses cognitive filters, or even the refresh rate triggers certain responses in humans. Depending on what research/data/speaker you choose to believe, of course.

And as said elsewhere today - IF they knew what was going on they'd change their behavior. Going somewhere that re-enforces your worldview is comforting...being held down by the man means your personal repression is then not your fault.

I wonder how long it will be before the entrances of this new tunnel would be under water? Do you think it would be paid off before then?


If you can point out ONE comment I have ever made here , or anywhere else, in advocating ANYTHING that can be described even remotely, metaphorically, as penis enlargement, I will withdraw my immediate observation that you are sadly lacking in good manners..and perhaps not even half so well informed as you seem to think you are.

This is after all a forum that usually takes into consideration the big picture;yes, if you limit the picture to the immediate area, this tunnel just MIGHT be a good thing;it might NOT, in terms of the bigger picture and the rest of the country.

Biofuels might be a good thing;I believe the consensus among people who understand the subject is that corn ethanol is a very bad thing.But we are saddled with it now because a large part of the well intentioned but ill informed public mindlessly lined up as cheerleaders for it.

If there is a consensus forming as to our economic future, it seems to me that it includes a very strong possibility that such concentrations of people as exist in that immediate area are going to be in one hell of a fix insofar as earning a living is concerned;the "product" produced by Manhattan is pure poison to anyone who is both politically and ecologically aware.it is also getting to be a glut on the market.Some of us have noticed the effects of the excesses of the banking industry over the last few years haven't been very good for the average hick citizen out in the boonies-meaning outside the NY metropolotan area to the locals there.I know whereof i speak, as I was once married to a delightful young woman from Yonkers, and her Daddy owned a restaurant in Manhattan.

In case you don't know what is produced there, it's mostly financial ponzi schemes of one sort or another.Advertising.Super high comsumption life style enhancement type business make thier homes there.

It is also the product of the establishment big biz people ( that you seem to think) that have ME hoodwinked.According to a recent piece in the New Yorker, Gold in Sacks, probably the most profitable and certainly one of the most callous and dangerous businesses in history, got thier new skyscraper courtesy of the taxpayer.Now they want a new transit system too!

I suggest that you have a lot to learn, and not too long left to learn it, before such projects are left unfinished half built due to economic collapse.it is perfectly safe to say that WHATEVER the costs and schedule are projected to be, the eventual cost and time frame will be at least double to triple, given local politics.Google the history of the BIG DIG if you need enlightenment in this respect.

The same amount of money, spent well , would probably buy ten times as much mass transit elsewhere.

I refer you to paul Nash's description of the Calgary system posted within the last couple of days, and my followup comment.

I don't suppose you would find it possible to get your head around the idea that while the bau interests such as the major business and real estate owners will profit handsomely from such a possible boondoggle, not to mention the construction workers-I was once a unionized construction worker by the way- and contractors, the rest of us might be in the position of all the very large majority of citizens in a city with a fine new tax paid football stadium who never go to football games.The people who own businesses in the immediate vicinity, and thier employees benefit;everybody else gets to enjoy a little enforced dry sex with the tax collecter.

The stadiums have not paid thier way, and if they had, it would have been because of fostering MORE growth and MORE highways and driving and near purposeless travel..

If there is any place in America where the "growth forever " model is about to, or already has, hit the wall, it is probably right where the fat cats want this tunnel built.

I have posted dozens of comments in favor of mass transit,etc, over the last year, and simply state that sometimes such schemes are good for the locals but economic poison for every one else.

Your problem is that you are essentially a very shallow thinker and reflexively support or oppose things without thinking them thru or considering the possibility that we might need to cast a skeptical eye on proposals to spend a few billion here and a few billion there without considering such concepts as opportunity costs.

I do realize that there are some serious manufacturing industries located in New Jersey, but I seriously doubt that much of the output is needed in Manhattan.

Maybe we should consider the possibility that since real estate prices in Manhattan/ nearbyNJ area are so high that only a relativel handful of people can afford to live there, we should simply let the market rebalance itself;I can't think of a single kind of business located in the area that can't be relocated to some place where space and transportation are not at such extreme premiums, with no loss to the larger economy.When a few big businesses move OUT, that will make room for a few tens of thousands of workers to MOVE IN, thereby negating the need to cross the river twice a day.

I'm a realist.You're a cheerleader.

Good on you,Mac.I was considering having a piece of Toil for that bit of cheek but I reckoned you were more than capable of defending yourself in your own inimitable fashion.

As for you,Toil,you seem to be having unhealthy sexually related thoughts.Have you considered therapy,my boy?

You mystify me sometimes.

A rail tunnel offering a parallel route to the PATH tunnel and the Grand Central Tunnel is a worthy piece of infrastructure for the East Coast, not just for the city.

I am all for being resourceful, but what Christie is doing is fear-based backtracking, and demagogueing..

' NY is overly complex.' Dya think? Sure it is. But every city is being rebuilt constantly. A new rail tunnel is a move in the right direction, both for flows and for type of transportation.

Construction contracting with NYC and Urban NJ is going to be sausage-making at its worst. (is there a pun there?) But that's not a reason to stop the projects. It's a reason to clean up contracting and sweetheart-construction projects. Be my guest, go for it. But cut the unnecessary projects. Why would you cut rail?

Hi Johkul,

I am not advocating cutting rail;I am advocating spending our money wisely.It would imo go a lot farther and benefit a lot more people to a far greater degree spent elsewhere-quite possibly on rail!See my response above.


Here in Vancouver, prior to the Olympics, the city completed a brand new 12 mile train line, which involved tunneling underneath False Creek and half of the city, and the remainder built elevated. Not as long as the water crossing for the NJ project, but the whole project was done for $2bn (Canadian)

The Channel tunnel linking France and Britain is a 32 mile tunnel under the english Channel (23miles of water) and was built for a cost of $20bn (1994 $), and this tunnel had to be built to handle trains at 100mph.

What is going on here that this project is costing so much? For any project, there is a point where the cost will exceed the benefit and this would seem to have passed that point.

This money could have done a lot more benefit, for a lot more people, elsewhere.
I agree wholeheartedly that if the local people want to do this (or any infrastructure project) then they should ask themselves if they are prepared to wear a tax to pay for it. If they are not, why should the rest of the State or the country (as represented by the Fed's share).

The proposed high speed rail between LA and SF, at $43bn, is an equal waste of money.

When people perceive that someone else is paying for what they get, they always want cadillac solutions. What is needed here is a base model Chevy solution - then you can afford to do more of them.

For better or worse, a railroad tunnel parallel to PATH etc. will have fairly little to do with the East Coast as a whole, or with anything at all other than the commute into Manhattan. After all, once any train enters Manhattan, it has essentially reached a dead end.

Since the residents of the City tend not to give a rat's about access to New Jersey, which they tend to see as some sort of outpost of Mars, the only substantial question is whether New Jersey folks who commute in (plus the odd Beltway Bandit who takes Amtrak up to the City once in a blue moon) want the Federal taxpayer to pay for their trip (answer: "yes, of course - doesn't everyone".) Beyond that, it lacks broader implications. It's simply an unimportant local tempest in a teapot and in that respect at least, OFM has nailed it.

Manhattan is a dead end?

It is a major Global hub, Paul. It's a focal transportation center for the east coast and the Atlantic. And Manhattan is chock full of Jerseyites who very much DO give a rat's butt about themselves.. Flow into and out of a City center is what a city is ALL about.

The volume of commuters coming into Grand Central from the Garden State is Staggering, and regardless of the snarky attitudes Razzed across the Hudson that are great comic-relief for much of the Nation, the Industrial Metro sections of the Jersey Side and the spread of suburbs outside it are essentially indistinguishable from the goings on of Metro NYC.

Try again.

I'm still not sure what they actually produce, up there in NYC. Fiat money? Gaudy clothes that end up being made overseas? Soap operas? Great hotdogs and pizza! Yeah, that's it! It seems like a poor ROI though.

Yes, absolutely. Manhattan is a dead end. The trains terminate there. Before you changed the subject just now, you had said:

A rail tunnel offering a parallel route to the PATH tunnel and the Grand Central Tunnel is a worthy piece of infrastructure for the East Coast, not just for the city.

Balderdash. The tunnel is strictly a local issue. It's possibly a worthy piece of infrastructure for the Jersey suburbanites and conceivably for some of the downtown, mainly Wall Street businesses. It has practically nothing to do with the rest of the East Coast.

It's simply not anyone else's problem. It's not my problem. It's probably not your problem. Period. So if the locals, i.e. the Jerseyites, care about it, then let them pay for it, although as noted in the more recent comments, the price seemed tremendously, absurdly, over the odds. And if they don't want it at the ridiculously extortionate price, well, so what?

I would like for anyone anywhere to explain to me why it is in the interest of this country to spend billions more further concentrating our fast vanishing wealth into the hands of the bau establishment's home turf, the finance district of NYC.

Well said, OFM.

It's not well said. It's ignorant and prejudicial. New Jersey is more densely populated than any country in Europe. A lot more rail is needed. A lot more public spending on the infrastructure of the future is needed and will benefit everyone, everywhere in the US. But oh no, let's not talk about the real economics of the interred tunnel, let's talk about our dislike of the financial elite, some of whom live in NYC. And worse, let's talk about public spending as though it's money disappearing into a black hole.

Try to get your head around the real problems: insufficient investment, while the private sector sits on trillions; insufficient taxation of the wealthy; fear of the boogeyman, etcetera

"Ignorant and prejudicial" are in the mind of the beholder.

Investment we most definitely need;boondoggles we don't;the private sector sitting on the trillions you referred to makes its home on Manhattan.

If they, and the people of New Jersey who commute across the river want another bridge or tunnel, they are more than capable of paying for it themselves.You can bet that the governor or that state thought long and hard about what ALL the people of the state who would have to pay for it think about such expenditures;he and his party are interested in winning elections.

There is essentially no technical or physical reason for a place for Manhattan to exist anymore, given the ability we now have to move information around freely, cheaply, and at the speed of light.

Up until now, the process of hollowing out the local economies of other cities and communities in search of ever cheaper rent, taxes, and labor , has proceeded apace almost uninhibited;and if there IS a nexus of power from which this process has been more or less guided,it can be reasonably argued that it is Manhattan.

So far the banker thieves have hung together, and they have thumbed thier noses at the rest of us as we watched our livelihoods shipped overseas.The exodus from places such as Manhattan, with its exorbitant expenses, would best be described by Ross Perot's great sucking drain sound but for one reason.

Why should a business choose to be located, or to remain located, in such a place, with the incredibly high operating costs involved, when its customers are virtually and literally all or almost all of them , somewhere else ?

The only real reason I can think of has more to do with having a seat at the table where the big investment banks carve up the rest of us for lunch than anything else.

This isn't about right and left in American politics.The bankers own both wings of the American political spectrum.

This isn't about taxes per se, or energy , or efficiency, or anything else, primarily, excepting one thing-an opportunity to grab a huge chunk of money for the benefit of a handful of super rich businesses, the mostly very well paid commuters who work there, and the construction industry of which I was once a part.If I were young again and in the right local, I could make a hundred and twenty five large without even a high school diploma on such a project for ten years at least.

Only an idiot would categorically argue that such projects should not be debated on thier individual merits and costs, which is essentially what you are doing.

I am not opposed to mass transit.

I am opposed to spending ten billion plus for the near exclusive benefit of super rich businesses and thier employees who have to commute on a crowded highway.We just don't have that kind of money to pee away anymore.

They are free to move-both the businesses and the employees.

Please keep in mind that you used the terms penis enlargement,ignorant, and prejudical before I responded with "idiot".

OFM and all -

The ARC tunnel is strictly a NJ Transit Rail tunnel. It deadends in a very deep station to be dug in Manhattan, and is characterized as the tunnel to Macy's basement. There has been controversy about whether people could be evacuated from the staition via two stages of escalators and an intermediate lobby in case of disaster.

I don't know exactly, but the west end is probably well above sea level, since the trains do climb a bit until they enter the tunnel on the west side of the Palisades. Note that there is no service to the cities on the west bank of the Hudson.

There are three "rail" tunnels from Jersey to Manhattan -- the Amtrak tunnel and two PATH tunnels, one to the World Trade Center and one to 31st street.

The tunnel would not help regional rail unless the Portal Bridge Replacement goes forward: http://en.wikipedia.org/wiki/Portal_Bridge

Even then, its benefit would be in taking NJ Transit trains off the Amtrak rails and freeing up capacity. The new tunnel dead ends in the new station beneath the Penn Station. There is no connection to Grand Central.

Even though NJ is on the hook for all cost overruns, the primary beneficiaries seem to be property owners and developers in NYC. Firms have been moving offices to NJ and CT, and these work out well for both NJ and CT. With modern communcations, there is no reason to keep operations in NYC. In fact, due to terrorism concerns, the firms that I'm aware of have moved all data centers out of Manhattan that are not dedicated to serving workstations in NYC buildings. Account processing, transaction processing, automated trading, etc. are elsewhere.

Freight rail in NYC is also a mess. Another hugely expensive tunnel has been proposed to connect Bayonne to Brooklyn in order to get freight to Long Island. The freight yards and rail terminals are a hodgepodge of poorly connected infrastructure originally built by competing companies that has never been rationalized. http://www.panynj.gov/about/cross-harbor.html

Question to Dr. Schlesinger: "Do you think Obama knows about peak oil?"

Response: "There are mysteries in politics (deftly deflecting the question)...if a politician like Dr. Chu (Secretary of Energy) were to discuss oil publicly the stock market would crash."

Aangel, could you give us the source of this exchange? I googled it and came up empty.

Ron P.

It was a live report from the ASPO conference.

Art Berman at the podium to discuss shale gas.

The following are observations, not opinions:
- shale plays are "marginally commercial, at best"
- every play has contracted to 10 or 20% of the geographic area that was originally advertised, thus contracting the reserve estimate correspondingly
- these are *not* low cost plays; the marginal cost is about $7.50
- find these numbers from the SEC 10-K filings
- reserves have been greatly over-stated & 80% of the booked reserves are undeveloped
- 10-Ks show that the value of undeveloped reserves is low
- shareholder equity has consistently been destroyed
- the move to liquid-rich shale plays has poor results so far

About the Potential Gas Committee (PGC):
- "has been misinterpreted" -- we don't have 2000 tcf of gas
- page 2 or 3 the report says the P2 number is 441 tcf; shale gas is about ~116 (not exact number, didn't get it in time)

Of the Barnett Shale, "only two counties are worth anything and not even those."
- even with the core area the well performance is greatly uneven
- public statements by shale gas CEOs are leaving out all their costs: not including interest costs on borrowed money, G&A, dry hole cost and P&A expense (and they even say they are excluding these costs in their statements)
- anything can sound good if you leave out costs!

I wonder how long the "gas glut" will last. Not forever, I know. But few imagined that shale gas would play out as it has. Now, as in the article about France I posted up top says, there's talk about using the same techniques to extract oil.

I'm no technocopian, but I'm seriously wondering if these new techniques will result in pushing the peak out further than we expect. Or at least prolonging the plateau.

Art addressed that obliquely: he said that he's not making a prediction when but "a day of reckoning" will come. My guess is that the game will continue as long as money is available. Charlie just said that people are noticing Art's analysis more and more.

I really got the impression with the discrepancy between the SEC filings ($7.50 cost) and the impression the shale gas companies are leaving investors ("we are low cost drillers") and that they are leaving out all their costs there is a major disconnect between reality and investor perception.

Charlie is just now saying that the analysis is valid in his view that drilling has little/no profit. The gas companies are making their money in other ways (hedging and via their partners with deep pockets).

I guess TOT, Shell, STO, XOM, BP, etc. must be dumb as bricks buying into the shale gas plays at about 10,000 dollars per acre or more. And PXP just the other day paid 9600 dollars per acre for 60,000 acres in the EF. Maybe Art Berman is wrong?

I guess TOT, Shell, STO, XOM, BP, etc. must be dumb as bricks buying into the shale gas plays at about 10,000 dollars per acre or more.

Not actually dumb, just responding to a different set of incentives. The game is to attract shareholder investment with a story of growing reserves and production. Crowd out and chase off the other players. Then hope you are the big dog when the spike in prices hits.

Note that the game has only a little bit to do with how the aggregate economics of the wells look today. While folks at TOD concern themselves with the aggregate economics and the long term effect on supply, individual producers are more concerned with the short term game, and optimizing the profits on the land they acquire.

I have worked for a couple of big oil companies and I wouldn't put it past them that they are dumb as bricks at times. Marathon paid that kind of money to buy into Pieance Basin acreage on top of the Roan Plateau and I am pretty sure that is not working out for them. I think it is more a factor of trying to maintain reserves in a depleting industry, and there are just simply no easy places left to find them.

On the other hand, I do not know much about Art Berman, but from what I am reading here I have to question his motivation somewhat. In aangel's post above he states that Art thinks the "day of reckoning" will come for oil shale producers apparently when they run out of money. What does this mean? Is he implying that these companies are just a scam? Does he not believe that the Bakken in North Dakota is supplying economic oil production? Look at the EIA production figures for North Dakota. The state's oil production has increased by roughly 230,000 BOPD since 2004. This is a increase of 4.5 times. It might not effect peak oil, but to say its uneconomic is just not correct. I am sure there are some companies that are not making economic wells, but there are others that are hitting grand slams.

This is the nature of the business. There are some companies that don't do a very good job. There are some companies that are late to the play and loose money getting in. I am sure this was the case even back when oil was easy to find and it will be a lot bigger issue in the future. There have always been project failurs and uneconomic decisions made. It doesn't mean the companies are running a scam.

It's pretty clear to me that they are running through investor cash at a high rate...the day of reckoning comes to companies all the time in this situation. I live near Silicon Valley — it's very common here for companies to run like hell when they have the initial startup cash then close up shop overnight when they fail to raise the next round.

Seems very possible the same thing is happening here.

During a break at the ASPO meeting I talked briefly to a woman who works for Chesapeake and she said that there are several good reasons why drilling today makes sense:

  1. Companies must drill a lease within 3-5 years in order to hold the lease. Drilling one well locks in ownership of future production from the lease.
  2. Up to 75% of the money they are using is foreign investment looking for a piece of an investment they see as having longer term potential.
  3. Exxon bought XTO not because they wanted to drill in the US. They had been approached by China and Russia looking to see if Exxon had experience in shale gas development. They didn't have much so they bought some in the form of XTO.

It's clear to me after talking to several people at the conference that there are good business reasons for some of these companies to keep drilling even when the gas they produce doesn't pay for current operations.

As usual, things are more complex than they appear on first look.


joe - FYI about the Eagleford SG in S Texas. No operator would pay a high price for positions in this play for the sake of the value of the NG. It's the high oil yield that's driving the play. The revenue of the oil from many of these wells is worth as much as 5X or more than the value of the NG. The NG in the EF was well known 30 years ago...it's nothing new. What's new is the discovery of a section of the trend where the oil yield is several hundred bbls per million cf of NG.

In repsone to Leanan, I don't think it will push the peak out and I doubt that it will significantly prolong the plateau. I just don't think these tight reservoir resource plays can be developed fast enough to add the kind of flow rates to do this. I do think that they will change the shape of the curve on the way down. I believe we will be producing oil for centuries to come. It will just be at much lower rates.

- these are *not* low cost plays; the marginal cost is about $7.50.

Huh? Henry Hub gas futures are at $3.65 this morning, up four cents. But shale gas is costing twice that much to extract? How is this possible?

Ron P.

Simple: they are running through investor cash at an astonishing rate.

Ron - Because they're using generalities for their numbers. Some SG will cost $7.50/mcf to develop. Some twice that. But there are some sweet spots where it's still economic to drill. Devon, back in Jan '09, cut their E Texas SG rig count from 18 to 4 (and paid a $40 million penalty so they could stop drilling). Trust me Devon didn't keep those 4 rigs running because they liked losing money. They still have a few rigs running in the trend today. The hot SG play in Texas right now is the Eagleford Shale. But it isn't worth drilling for at less than $4/mcf. It's the oil yield on these wells that has folks drilling. Some of the wells are producing several hundred bbls of oil per million of of NG. So a 1 million cf NG/day well with 200 bo/mcf has a gross yield about $4,000 of NG and $15,000 of oil per day. But only the shallow portion of the play is that oil rich. If it weren't for the associated oil I doubt there would be one rig drilling the EF today. We've known about the NG in the EF for over 30 years. All that changed is improved completion technology and $75/bbl oil.

Bottmom line: there is no such thing as an average economic value of a SG well. It might make handy sound bites to chat in those terms but little can be infered from it IMHO.

Excluding the NG component, Art puts the estimated mean recoverable reserves for 55 Eagle Ford Shale wells at 55,000 BO per well. He estimates that only 20% of the wells in the play will be commercial, but as he said, it's still early.

There must be a Doonesbury fan here who can post a link to the relevant cartoon.

I remember one in which one of the characters failed to land the ceo job at a dot com because he didn't at first respond that HE TOO could burn thru company cash reserves as fast as most ceos running dot coms at that time.

I hope that Art does a version of this presentation for The Oil Drum. It's very impressive.

Yep, hard to argue with. He showed the source of all his numbers and many were from Chesapeake themselves. It's just that Chesapeake is cherry picking and in some cases outright using the best well results and representing that they are the typical or average result.

Charlie just said he expects "a slaughter" in this industry in the near to mid-term. "I think it's inevitable."

I noticed last year that Art "showed his work" and the gentleman taking the contrary view basically, IMO, did a lot of hand waving.

Rubin calling for >$100 oil next year.

It is only $17.50 away. Just one or two incidents (Chavez nationalizing another project, conflict with Iran, a big hurricane in the Gulf of Mexico, a revived insurgency in Iraq, a tanker attacked by terrorist, another big oil spill, etc.) and we are back above $100/barrel.


Well . . . it would be good for the Nissan Leaf and Chevy Volt.

For all the praise of Art here, has anyone noticed that his own position and numbers seem to keep fudging away from where they were in the past. Last year, he first published stuff on the Haynesville play saying that EURs in the Haynesville would average 1.5 bcfe (Haynesville Sizzle Might Fizzle, April 14, 2009) versus projections of 7.0 by PetroHawk, 6.5 by Chesapeake and 6.0 by Encana. Then, after getting some new data from people, (Haynesville Sizzle or Fizzle: Let's Be Fair, April 21, 2009), he raises his mean EUR estimate to 2.2 bcfe. A few months later, he admits his earlier estimates were too low (A Long Recovery for Natural Gas: Revisiting the Haynesville Shale, June 4, 2009) and says the average for all operators will be 3.6 bcfe.

This year, in his ASPO presentation, he shows a range of type curves resulting in estimates of possible EURs from 2.5 bcfe to 6.5 bcfe and says he doesn't know which one is correct, but that he doubts it's the 6.5 bcfe estimated by Cheseapeake (and others.)

What happened to the 1.5 bcfe number he started with trumpeting last year that got him so much attention? Now it is no longer even in the range of possible outcomes! I suppose he deserves credit for changing his clearly erroneous past opinions, but it's tough to have any confidence in the numbers he is presenting now on the Marcellus. Will they again be "corrected" later?

I had just read and was going to reply to the article someone had posted from Drilling Info and the article from ASPO that you had posted, but then they were gone. I thought they were both good articles that covered the topic and brought a lot more detail to the discussion. Why were they removed?

I am sure Art Berman’s analysis has some validity and I fully expect that there will be some companies getting “slaughtered” especially with the current gas price. You also write that Chesapeake “cherry picked” their data to make their results look better, and I do not doubt that at all. In fact I would be very cynical of anything they report. However, and I could be mistaken, I also get the impression that Art Berman seems to have some kind of motivation to prove his side of the story. Therefore, I thought the two articles that were removed brought some good insight to the discussion. Obviously Drilling Info has their own agenda and I assume that Chesapeake is a big client of theirs. However, I though the article made a lot of really good and valid points, and had some good statistical analysis in it.

In conclusion, I am now somewhat skeptical of the Oil Drum staff. It seems like you guys have a point to make that unconventional resources are not economic and if anyone post something against your views then you delete it. I hope this isn’t true.

It had nothing to do with the links. Feel free to repost them if you want to.

"shale plays are "marginally commercial, at best""

I was talking to an engineer for a major engineering consulting company. He said the same thing, which surprised me. He is usually a "We can do something to help your project" type person, as you would expect.

But apparently not on shale oil. He said the best solution is to treat it as high-ash coal, anything else is massively energy-negative, much worse than a coal to liquids plant.

I am sorry but I couldn't let this pass. Maybe you should do some research before you make claims like this. Maybe your friend should, or maybe he is just not much of an engineer and you should not pass on his comments like they are fact.

I don't and never have worked the Bakken myself, but I just spent roughly 30 minutes looking up information on it. In other words its not exactly rocket science to try and figure out what you are talking about before making claims that shale oil is "massively energy-negative". I did a google search on North Dakota Oil and Gas and the top link was to the North Dakota Industrial Commission Oil and Gas Division website. From there it was easy to find actual data on Bakken wells. At this page I found a long list of Middle Bakken wells in North Dakota. I have listed some information on a couple of the better wells below.

FYI all operators have to report information to the state regulatory office that oversees oil and gas production. This information includes basic well design information such as the casing that was run, how it was cemented, completion practices and directional information for non-vertical wells. Operators also have to report production from the wells. This information usually runs several months behind so I am assuming the production data I show below is updated through August 2010. Chances are it is probably not even that up to date.

Anyway here are just two of the wells I found:

EOG drilled the Austin 6-15H in the Parshall field. Its completion date (the day they turned it on) was 4/20/08. Its cumulative production since that date is listed at 577,581 BO. So this well has been on production for a little less than 30 months and the production number is what the well has made in about 28 months. This cumulative production number divided by 30 months and 30.4 days per month gives an average daily production number of 679 BOPD for this well. Again this well has made over half a million barrels of oil in less than two years and it is still producing. I guarantee the energy from 578,000 barrels of oil absolutely dwarfs the amount of energy required to drill, complete, and produce this well. To say this particular shale oil play is massively energy negative has to be one of the most erroneous statements I have ever read on this site.

Another well is the Kannianen 44-33H drilled by Whiting Oil and Gas in the Sanish field. Its completion date is listed as 1/9/10 and its cumulative production is listed at 197,389 BO and 123,139 MCF. This cumulative total was probably produced in about 8 months. This works out to 812 BOPD and 506 MCFD average for the first eight months of production for this well. These are absolutely huge wells. As far as modern day on-shore oil production goes this is probably the best play in the country.

Obviously I picked a couple of the best wells to document. However, there were dozens and dozens of other very successful wells to choose from. In fact most all of the wells in the Parshall and Sanish fields seem to be extremely successful. There also appeared to be many uneconomic wells in the list as I am sure there are many unsuccessful oil-shale plays around the world. However, to make a blanket statement that shale oil is energy negative and much worse than gas to liquids was more than I could take, especially when it was so easy to find data that overwhelmingly proves the statement wrong.

He was talking about this.

Oil shale. Shale Oil is not the correct term and obviously causes confusion. Best simply to say Kerogen thats crystal clear.

Well if it is oil shale as in Kerogen then I definitely have no argument with the low to negative energy return claim. Sorry.

FYI all operators have to report information to the state regulatory office that oversees oil and gas production.

Alas, that worked out so well on 4-20.

Claiming some kind of authority for regulators - should they be given that kind of rhetorical power given how badly and how seeming screwed up MMS seems to be?

(still trying to work out good 'regulators were smoking the good MJ'/4-20 joke. If you've seen good humor using 4-20 as the tie between the BP oil spill and Marijuana smoking regulators failing to do their job do post it)

However, to make a blanket statement

May also be an expression of the idea that "Blanket Statements are ALWAYS wrong." *wink*

shale oil is energy negative

Ahhh, but there is a difference between energy negative, economic negative and operation in an attempt to recover some of the sunk costs of a well. Over the 5+ years of TOD arguments over EROEI get hot and rehashed. and if one were to examine the energy cost of the rig + all other stuff, the energy negative position may be true.

Yet the below is also accepted as a truth:

The “vast,” “immense,” and “unrivaled” deposits of shale buried in Utah and Colorado have the energy density of a baked potato

Consider that baked potato. (it seems one must consider it with butter and sour cream however)
You have photons -> plant -> labor to plant, grow, harvest -> potato!
You have photons -> plants -> cow gut -> cow reproductive system -> milk -> fat seperation/milk exposure to baceria/processing -> placed on potato
And energy to cook the potato.

To get to that 'pound for pound potato more energy than shale' place you don't have to go though many years of burying the organic material to get your energy and the potato solution is replaceable in human timescales. Sure seems like a whole lotta work and in the end - still better than shale oil.

Ok. If it is oil shale as in the vast, immense, and unrivaled deposits of shale in Utah and Colorado, then I am very skeptical that it is energy positive and would not try to argue it. However, if it is shale oil like EOG, Whiting, and others are drilling horizontal wells for in North Dakota then I can't believe anyone could possibly argue that it is not energy positive. The well I pointed out in my previous post has already made something like 577,000 barrels and is still going. This is a single well that has made over half a million barrels of oil! Do you really think there is any possible way they burned up a half a million barrels of oil drilling that well, building its location, etc.?

As for my statement about operators reporting information to the regulator offices I said that because eventually the data on these wells becomes available. Therefore, you can usually find production data for wells in the US. I never said anything about the regulatory officials telling the operators how to run their business. That is a seperate argument altogether.

It looks like there is probably a misunderstanding about what oil shale or shale oil we were talking about. I thought the topic was on horizontal completions into shale formations that FLOW actual oil into the wells. Maybe the topic got confused with and switched over to the Kerogen deposit oil shales were the rock has to be "cooked" before oil will flow, and I did not see the topic switch.

Jim -- I think there is some confusion over the terms used in this discussion. The Bakken wells can be great but that isn’t a shale oil play as most define “shale oil”. The oil produced from the Bakken isn’t coming from the shale matrix per se. It’s coming from fractures in the shale. There have been billions of bbls of oil produced from fractured shale reservoirs around the globe over the last 60 years. Fracture production can deliver huge flow rates and, if the fracture system is extensive, can also have big URR. But as others have pointed out the "oil shale" plays in the Rockies is not oil but kerogen. But more importantly, the kerogen is trapped in the rock matrix. It won’t flow out…it has to be mined. That’s why to date no one has developed a commercial method for extracting the kerogen. Even Shell Oil, the leading player in the SO play, doesn’t think they’ll have a commercial pilot project proven until 2015 at the earliest.

There have been billions of bbls of oil produced from fractured shale reservoirs around the globe over the last 60 years.

Rockman is correct, fractured shale production is nothing new. Back in the day (around 1980 or so) when I worked in the Rockies, we made a decent well (though hardly a barn burner), from fractured shale up in the Powder River Basin. If my aging memory recalls correctly it was from the Mowry. It was accidental....not what we had targeted...but what the hell... we took it. Nowadays, being able to drill horizontal wells, thereby intersecting lots more fractures probably really helps.

So called shale oil was discussed in the book GeoDestinies by Walter Youngquist. There may be an update if and when the Second Edition is finally published. There is also an article by Youngquist in the Hubbert Center Newsletter http://hubbert.mines.edu #98-4.

Grains hit limit lock up this morning. Corn, wheat, oats, soybeans.

And CNBC is reporting that Bank of America has agreed to halt foreclosures in all 50 states.

I assume that the Ukraine limiting wheat and maize exports contributed:


Last year Steve Andrews got a great shot with the chickens. This year when I went out to get a picture there was just one chicken ("Dexter"). I met another one later but haven't gone out to get another picture yet with both of them.


Here is what Dexter is handing out:

Ascent Energy

(click twice to enlarge)

There was no back side to the paper.

BTW, Bianca Jagger now speaking. Apparently she has been tracking peak oil and even talking about it for years. Didn't know but good to hear. She's past the education stage.

I read the paper but don't understand the point. Yes, foreign National Oil companies control most of the oil reserves and are not aggressively extracting it. So? This does not dispute peak oil, it supports peak oil.

Peak oil is all about production flows, not reserves. It doesn't matter how much oil there is . . . if it is not being extracted then we can hit peak oil.

What does he recommend? An invasion of Saudi Arabia?

I'll try to get the second side of the paper today to see what else he says. It seems to me from the first page that he doesn't get it.

Offshore Wind a U.S. Job Boon if Capital Costs Don't Erode Potential - DOE

Steven Chu & the Obama administration should do everything they can to slash regulations, red tape, and road blocks to installing renewables. There is nothing that irks me more than environmentalists who slow down renewable energy projects. Those people should suffer getting a coal plant instead.

Many of these renewable projects already struggle with the economics of the situation, the last thing they need is a lengthy government permitting process.

In fact the DoE should scout various sites and assertively get the permits approved ahead of time. Thus, a company could just get started once they have financing.

spec - No one is holding up offshore wind development in Texas. First offshore wind leases were awarded 3 years ago.


The state of Texas has the right to assign offshore wind leases out 10 miles. Part of the deal when Texas joined the USA back in the day. Whether the economics to support such development are adequate today or not is another question.

Probably more importantly: do people with money expect the finances to justify offshore wind in 5 years when a major project started today would be going on-line.

I would, but I don't have the money...

Jeff Rubin and Bianca Jagger (30 MB MP3) QandA after their Friday lunch keynote speeches at ASPO-USA meeting.

Thank you, thank you, THANK YOU! Please keep them coming if possible. :-)

This is the Fri evening panel summary on energy and finance. Marvelous eloquent summary words by Charles Maxwell near the end. (MP3 (31 MB)

I'm selectively posting to avoid hogging bandwidth.

Post away. This is very on-topic, and it's late in the day.

Thanks for this effort PATF, but there is an UFO "continuously trying to take off" in the background throughout the entire presentation, hard to listen to at times, even when I played around with the EQlizer to get rid of the worst noise/frequencies. (I used Mediaplayer)

Hmmm, nowhere quiet to check before posting; probably due to variable bit rate. I'll try to clean up later when the pace of talks drops off. Bob Hirsch has just finished talking (MP3 54 MB)

And here is the earlier Natural Gas discussion (MP3 81 MB!) w/ Art Berman and Charles Maxwell.

Nice. I can't thank you enough. Cool, words from Charles Maxwell, the "Dean of Energy analysts".

I've shrunk the files to ~25% those listed above, but the noise pickup is a problem w/ this crappy laptop. Can probably be filtered better but not with the software that I have on this machine.

One new career i'm seeing is junk collector. Every trash night a whole slew of familiar vehicles (junky trucks with crappy trailers) come driving around our neighborhood. I thought about it and decided to throw out some old gutter i had laying by the house that i never got around to recycling (probably $20 worth of AL?)...the reason? Lets keep these guys employed! When you think about it, its keeping a lot of junk out of the landfills, although most of the metal is probably sent to China to build high speed rail track and build nuclear power plants.

Chris Martenson about to take the podium.