Drumbeat: October 25, 2010

IEA: Unclear If Oil Reserve Growth Will Contribute to Future Supply

Recent increases in oil reserves in Iraq, Iran and Venezuela are "good news," but it remains unclear whether they will contribute to future supply, Nobuo Tanaka, executive director of the International Energy Agency, or IEA, said Monday.

"To have more reserves is certainly good news, because it gives us a more precise prediction of costs and necessary investments," Tanaka told Dow Jones Newswires at an energy conference in Moscow. "But the issue is how much investments will happen to develop these reserves, how this will increase production capacity.

"Until then, we're not sure whether it will contribute to future supply," Tanaka said.

Richard continues to weaken as it heads into Gulf

CANCUN, Mexico (Reuters) - Tropical Storm Richard weakened to a tropical depression on Monday as it moved across northern Guatemala and headed to Mexico's Bay of Campeche, where it was expected to dissipate by Wednesday.

The storm is expected to pass near the platforms that produce the bulk of Mexico's 2.6 million barrels per day of crude oil on Tuesday, but state oil monopoly Pemex said it was only taking usual precautions and all operations were normal.

Rotting garbage, fuel shortage: Strikes costing France millions

PARIS—France’s massive strikes are costing the national economy up to €400 million ($557 million) each day, the French finance minister said Monday as workers continued to block oil refineries and trash incinerators to protest a plan to raise the retirement age to 62.

Rotting piles of garbage — now at nearly 9,000 tons — are becoming a health hazard in the Mediterranean city of Marseille, which has been hit hard on land and at sea. Striking dockers at France’s largest port are intermittently blocking ships trying to unload fuel there.

French fuel depots cleared of protesters

All of France's 200 fuel supply depots have been cleared of strikers protesting against the government's pension reforms, according to an oil industry lobby.

In a separate development, workers at three of France's 12 oil refineries have voted to end their strikes.

Widespread fuel shortages have affected one in three petrol stations.

France begins to import gasoline as strike bites

PARIS (Reuters) - A vessel has unloaded gasoline at a port in northern France in a rare import of the fuel to the country and another ship is scheduled to deliver more, industry sources said on Monday, amid supply shortage due to prolonged strikes in the oil sector.

The MT Ledastern came from Britain to offload 11,000 cubic metres of gasoline -- roughly about 25,000-30,000 tonnes -- at Rouen on Saturday, one shipping source said on Monday.

BP Won't Be Quitting US Or Deep Water Drilling - CEO

BP won't quit its businesses in the U.S. and must keep drilling for oil in deep water in the Gulf of Mexico despite the damage to its reputation wrought by the huge oil spill there this summer, the company's new Chief Executive Robert Dudley said Monday.

In a robust defense of BP's response to the oil spill and its ability to drill safely in the Gulf of Mexico in the future, Dudley also blamed the media for fearmongering and igniting a "political firestorm" that, "threatened the very existence of our company."

Uphill task for US to help Pak set up nuclear energy plants due to trust deficit: Carmela

It will be a very difficult task for the United States to help Pakistan set up nuclear energy plants for solving its energy crisis, as the latter's history of attempted nuclear proliferation to Libya and North Korea has created a trust deficit about the country amongst the international community, US Consul General in Lahore, Carmela Conroy, has said.

Pakistan’s donors seek 200% hike in power prices

The Friends of Democratic Pakistan (FoDP) group of donors has proposed three options, including an incredible 200% tariff increase, which they say can help steer Islamabad out of its energy crisis within three years.

Power, petroleum ministries to be merged

ISLAMABAD: With the oil import bill estimated to increase by about 300 per cent to $38 billion by 2015, the government has concurred with the Friends of Democratic Pakistan (FoDP) to merge the ministries of power and petroleum and their sectoral regulators for an integrated solution to the energy crisis.

The government has also agreed to substantially increase power tariff for domestic consumers using over 300 units per month to bring it on a par with the average tariff for industrial and commercial consumers.

Price spiral takes food items out of common man’s reach

A report compiled and released by the Federal Bureau of Statistics this month shows that food inflation has increased to 21.24 per cent in September in comparison to last year’s. Prices of non-perishable food items have surged by 16.04 per cent and those of perishable items by 53.86 per cent.

A recent report jointly published by the UN Food and Agriculture Organisation and World Food Programme provides further evidence to the increasing levels of poverty in the country. It says Asia and the Pacific has become the region with the most under-nourished people (578 million) and Pakistan is among those seven countries where two-thirds of the world’s under nourished live.

Green-auto owners resent fuel shortage

CHANDIGARH: Even a year after UT stopped issuing permits to non-LPG autos in the city, it has failed to ensure proper supply of fuel for the over 1,500 green autos. Long serpentine queues can be seen at the two filling stations in Sector 21 and 34.

Speed up natural gas use

On a recent trip from Abu Dhabi to Dubai, I was very pleased to see two natural gas filling dispensers at a service station for vehicles using gas as an alternative to liquid fuels. But I was equally disappointed because the station was jammed with cars filling up petrol while there were none lining up for natural gas.

Is Energy Efficiency Blue, Red or Both?

My colleague John Rudolf pointed out to me that Kansas performed similarly to other states in the middle of the country and in particular, states that voted Republican in the last three presidential elections. in fact, all of the Top 10 states in energy efficiency were blue:

Solar seen key to Gulf's renewables effort

(Reuters) - Promoting solar energy in the Gulf, which has one of the world's biggest carbon footprints, will be a priority for the International Renewable Energy Agency (IRENA), its new interim director-general said.

Kurt Cobb: Chicken Little, peak oil and Y2K

At the recent conference of the Association for the Study of Peak Oil & Gas-USA in Washington, D.C., an unknown person hired two people to dress as Chicken Little and walk around outside the conference venue.

The trouble with Chicken Little is that he neither had a practical plan to address the problem of the falling sky nor the sense to discern the intentions of Foxy Loxy who ultimately devoured Chicken Little and his friends before they could reach the king to tell him that the sky is falling. As such, Chicken Little gives us poor guidance about the effect that the efforts of those involved in the peak oil movement will likely have. A better analogy would be the so-called Y2K problem.

Oil and The Death of Globalization

Canadian Economist Jeff Rubin is known for his prescient calls in the oil markets over the past few decades. His most recent book, Why Your World is About to Get a Whole Lot Smaller, explains why continuously rising oil prices will mean the end of globalization.

We caught up with Rubin at the Global Wealth Management seminar in Copenhagen to talk about how rising oil prices will affect everything from home loans to the price of Salmon.

The “Good New Days” in a Non-Growing Economy

Many people, as they begin to consider the problems with pursuing perpetual growth, ask with some trepidation what a non-growing economy (i.e., a steady state economy) would look like. Having lived life embedded in a growing economy, they find themselves fearful of a transition away from growth. This fear is primarily based on experience with failed growth economies – the social unrest associated with recessions and depressions. Such fear should not be taken lightly, but a steady state economy is not the bogeyman. Economist Peter Victor has shown through his modeling efforts that we can have a non-growing economy that achieves full employment, virtually eliminates poverty, reduces carbon dioxide emissions to sustainable levels, and avoids overwhelming debt. And we have a collection of intriguing policy ideas for creating a sustainable, fair and efficient economy. Knowledge of these ideas should go a long way toward putting the fears to rest.

Bill McKibben: Have we hit those 'limits to growth'?

Forty years ago, a team of scientists at the Massachusetts Institute of Technology raised the first warnings about possible "limits to growth."

If human beings didn't slow the expansion of the size of our populations and economies, they predicted, sometime in the ensuing 100 years we would more or less fall off a cliff: Our environmental troubles would get so bad that our economies, and our civilization, would start to become unworkable.

For most of the four decades since, that analysis has drawn scorn. People insisted that human beings could keep our enterprise expanding forever — increases in knowledge would always trump a degrading physical world. We'd never run out of, say, oil — or if we did, we'd invent some substitute and just carry on as before.

In the last few years, though, those scientists are starting to look more prescient. We do seem — in one realm after another — to be bumping up against limits.

Interview: Bracing For A Warmer Future With Bill McKibben

When you wrote your first book, “The End of Nature,” twenty years ago, did you imagine that climate change would reach such a dangerous climax? Or did you hope that the science would set us straight?

Well, I was 27 at the time, so I thought: people will read my book and get to work and solve the problem. A little naive! I think we have all underestimated the determination of the fossil fuel industry to fight any real change, even if it means courting real danger for the whole planet.

Brazil Plans a Price on Oil to Accelerate Climate Efforts

Brazil expects to see its lowest rates of illegal deforestation since 1988 by the end of this year.

Minister of Environment Izabella Teixeira said the government will reduce the annual chopping and burning of the Amazon rainforest to between 4,000 and 5,000 square kilometers. The figures will be announced in the run-up to this year's U.N. climate change conference in Cancun, Mexico, this December.

Inventor hopes rail idea gets noticed

Nanaimo inventor Frank Illguth designed a hydrogen-powered monorail system he said would make high-speed train service proposed between Vancouver and Portland faster and greener.

Economist charts new oil realities

JEFF Rubin says he believes that regardless of the scientific debate about how much oil might be left in the ground, its price will continue to escalate -- maybe even back to $100-plus per barrel level in a matter of weeks.

For 26 years Rubin was chief economist for the CIBC, until he published a book in 2009 (recently revised and updated) called Why Your World is About to Get a Whole Lot Smaller about how world economies are going to change as the price of oil goes up.

Not surprisingly, the publication of that book required his resignation from the bank.

Oil nearing $83 as dollar drops after G-20 meeting

If crude rises much higher it will spark inflation, which regional policymakers will seek to quell with interest rate hikes and capital controls, which would in turn trigger an economic slowdown, said Frederic Neumann, co-head of Asian Economics Research at HSBC.

"Energy prices are crucial," Neumann said. "If oil heads to $100 per barrel, or higher still, you'll know that it's back to 2008 and another bust."

China's Energy Demand Growth May Slow Further on Efforts to Curb Economy

China’s energy demand may slow further as the government takes steps to meet conservation targets and to cool the world’s fastest-growing economy.

China considering new oil pricing mechanism: top economic planner

BEIJING (Xinhua) -- China's top economic planner, the National Development and Reform Commission (NDRC), said Monday that a new and more transparent pricing mechanism for refined oil products could be announced this year.

Supertankers Face Two-Year Losing Streak as Frontline Shuns Oil

Supertanker owners are facing the longest stretch of unprofitable rates in 17 years as the supply of new vessels increases nine times faster than demand for oil.

U.S. Gasoline Advances 5.23 Cents to $2.82 a Gallon

The average price for regular gasoline at U.S. filling stations rose 5.23 cents to $2.8237 a gallon, according to a survey.

The price covers the two-week period ended Oct. 22 and is determined from data provided by 2,500 filling stations nationwide to Trilby Lundberg, an independent gasoline analyst in Camarillo, California.

Hedge Funds Lift Gasoline Bets a 7th Week on French Strike

Hedge funds raised their bullish bets on gasoline for a seventh straight week on speculation that a French labor strike will curtail European exports to the U.S.

French Fuel Service-Station Disruption to Worsen on Sunday Delivery Halt

Shortages at French fuel service stations will worsen today after insufficient deliveries yesterday, the refiners’ group Union Francaise des Industries Petrolieres said, as oil industry workers are striking to oppose the government plan to raise the retirement age.

“We didn’t supply much” yesterday “so the situation will be more difficult for everyone,” Jean-Louis Schilansky, head of the UFIP told Agence France-Presse yesterday. “And as we’ve given fuel in priority to highway stations, the rest will suffer a bit more during the day,” he added. Supplies were further reduced because truck drivers transporting fuel in France aren’t allowed to drive on Sundays, Schilansky said.

France Gets a Foretaste of a World After Peak Oil

"It's like apocalypse time," to quote a friend, on the situation in France. While much of the world ponders what can be done to avoid peak oil, instability of our transportation systems, and breakdowns of national security, France is making a trial run. If you have been watching the news, you know that the disruptions in France stem from protests against the government's proposal to raise the retirement age to 62. But for people living and working in France, the effects could be a foretaste of the world when oil runs out. Having an unavoidable commitment in Paris this week, this author can report the experience first-hand. It is not a promising picture.

Shell Hires Glencore Trader Bensen Ho to Expand China Oil-Product Sales

Royal Dutch Shell Plc, Europe’s biggest oil company, hired its first trader in mainland China to increase oil-product transactions with state companies including China Petroleum & Chemical Corp. and PetroChina Co.

The End of Oil's Golden Age

One can argue that the world would be very different from what it is today if we hadn’t found crude oil and invented how to leverage this very convenient and relatively cheap energy source. The energy density of oil derivatives such as gasoline is superior to any other substance in liquid or gas form. That’s why majority of cars are propelled either by gasoline or diesel and airplanes use kerosene.

Also, approximately 15% of oil is used to make asphalt, plastics and wide variety of critical chemical products.

Therefore, crude oil plays a key role in the modern globalized world economy. It has truly enabled a golden age for those that can afford to leverage it.

Gas exporters study OPEC for natgas market model

MOSCOW (Reuters) - Gas-producing countries are studying OPEC's experience as they try to build a global natural gas market, the head of the recently-launched Gas Exporting Countries Forum (GECF) said on Monday.

Leonid Bokhanovsky told reporters the group was set to propose a gas market model based on OPEC experience.

GECF, whose members hold about 70 percent of the world's conventional gas reserves, could be seeking to have more control over supply and demand and, eventually, gas prices.

Shell slashes $18bn from Kashagan costs

Royal Dutch Shell has radically simplified the design of the Kashagan oil development, slashing $18bn (£11.5bn) from the cost of the second phase of development as it strives to make the project economically viable.

Iran says to sign $5 bln gas deal with foreign firm

(Reuters) - Iran will soon sign a $5 billion contract with a foreign company to develop its offshore Farzad-B gas field, the Oil Ministry's website SHANA said on Monday.

The report did not name the company, but India's state-run Oil and Natural Gas Corpration Limited heads a consortium which has exclusive exploration rights for the offshore Farsi block of which the Farzad-B gas field is part.

BP slams media, rivals over spill fears

BP PLC’s BP-N new chief executive officer said its rivals and the media had helped cause a climate of fear during the summer when the oil giant’s blown-out Gulf of Mexico well caused the worst ever oil spill in the United States.

The comments represented the latest volley in BP’s battle to rebuild its battered reputation by taking a harder line with those who have blamed the disaster on a safety culture at BP that, they said, put cost-saving before safety.

BP sells 4 Gulf of Mexico fields for $650 million

LONDON – BP says it has sold its stake in four mature oil and gas fields in the Gulf of Mexico to Marubeni Oil and Gas for $650 million (euro466 million).

The oil company has been selling assets to raise cash to pay for the damage caused by the disastrous blowout of its Macondo well in the Gulf of Mexico.

Should BP’s Money Go Where the Oil Didn’t?

IN late April, a week after the BP oil spill began, Keith Overton had an alarming encounter with one of his employees here at the TradeWinds Resort. The guy — an engineer who had worked at the hotel for a dozen years — had just spoken with his mother, who lives in Bosnia, and the conversation went like this:

“Are you going to be fired?” she asked.

“Fired?” the son replied. “Why would I get fired?”

“Because your beach is covered with oil,” she said.

Actually, there wasn’t a drop of oil anywhere in sight. Not then, not in the months that followed and not now. This barrier-island city and snowbird haven is hundreds of miles from the nearest land befouled by the collapse of the Deepwater Horizon platform and the epic gusher it left behind.

Toyota's global vehicle output falls in September

Toyota's global production fell in September for the first time in a year, while rivals Honda and Nissan increased output thanks to strong demand in China.

It Must be Peak Oil Driving Saudis to Solar

As oil supplies decline, Saudi Arabia’s own electricity is becoming expensive. By one estimate, it’s as much as 25 cents a kilowatt-hour, at wholesale. Saudi Arabia gets all of its electricity from the oil field. Flared gas provides 45%, heavy fuel oil provides 13%, diesel; 22% and crude provides the remaining 20%. So as oil prices rise, its domestic desalination and electricity costs rise too.

But the kingdom has solar insolation that is the envy of the world. So the Governor of the state power company ECRA (Saudi Electricity and Cogeneration Regulatory Authority) is hoping to get state approval for incentives to help solar begin to power some of the kingdom’s 50,000 megawatt electricity needs, according to ArabNews.

Peak oil and the energy issue

Chris Martenson, a respected consultant on energy, no longer feels we even have the luxury of wondering if cost will increase; he is clear after attending the recent Association for the Study of Peak Oil and Gas (ASPO) in Washington, D.C. this October, that only the military is seriously paying attention to the projection that Peak Oil - maximum production-might occur 2012 (players with less rosy assessments think traditional oil production peaked two years ago), and there is no plan B for the subsequent supply crunch on oil. Typical of stock exchange mechanisms, some will benefit from the fall!

Days Of Oil And Roses

The oil companies must surely know that when global oil production drops to half of peak production, we’ll all be living in a pretty good reconstruction of the Middle Ages, or at the very least a good reconstruction of a novel by Charles Dickens. In plain English, there won’t be any modern world to invest in. For that matter, in the near future there won’t be any use for money at all, except as a rather poor material for starting campfires. All that can be done is to retire, buy a so-called hobby farm in the lower subarctic, and hope there’s enough canned beans in the kitchen to keep the kids alive for a few years. (Well, okay, the burned-out middle-aged exec might be long alienated from the kids anyway.)

Book review: Welcome to a strange, new-old world

Provided you make it out the other side of the apocalypse, what is it about today that you'll miss the most? In James Howard Kunstler's new novel, "The Witch of Hebron," which is set "in the not-distant future," a minor character known as the hermit mentally rhapsodizes over a long-gone pleasure, "the gigantic batter-dipped, deep-fried sweet onion he used to order on weekend nights in the old times" at the "Outback restaurant." There are onions aplenty in "The Witch of Hebron" — one recurring bit of black humor revolves around a dead onion-wagon driver — but it's not the produce that's lacking, it's the process.

Uttering the "C" Word

I was intrigued to learn that authors from three politically disparate think tanks--American Enterprise Institute, Brookings, and Breakthrough Institute--had recently published a report on how to foster deployment of clean energy technology. For those of you who don't know, AEI's most well-known in energy/climate circles for receiving millions of dollars from the oil industry to foment doubt about anthropogenic global warming. So it's interesting to see someone from AEI as a co-author of this report.

More management needed at IRENA

The International Renewable Energy Agency (IRENA) was suffering a management vacuum before the recent departure of its top official and must address its management problems to meet a growing agenda, a representative of Japan's delegation to the agency said yesterday.

India Billionaires Go On Buying Spree in `Last Frontier' Africa

Indian billionaire Ravi Ruia flew to Africa every month for the past 18 months, buying coal mines in Mozambique, half an oil refinery in Kenya and a call center in South Africa for his Essar Group.

Bicycles, Unchained and Grease-Free

Belt-driven systems were first used primarily on single-speed mountain bikes but are now appearing on multigeared commuter and city bikes as well, said Larry Wallach, manager of the Sid’s Bikes store in the Chelsea neighborhood of Manhattan.

“They last much longer than chains, and are quiet and clean,” Mr. Wallach said. “In a perfect world, everyone would probably use them because they require less maintenance.”

Bottle Ban? What Ban? Supervisors May Ask

The city’s 11 current supervisors and their staff members have guzzled $4,387 worth of bottled water since the ban on using city money to buy bottled water went into effect.

Petrobras signs $1.2 bln ethanol deal with Tereos

(Reuters) - Brazil's state-run oil giant Petrobras said on Monday it signed a 2.1 billion-real ($1.23 billion) agreement with Tereos International to secure the supply of ethanol.

The deal will bring Petrobras a step closer to reaching its goal of becoming a leading player in the global biofuels sector.

Nagoya 2010: weighing up the risks and benefits of biofuels development

Water could determine the degree to which bioenergy can contribute to combating climate change by reducing the world's reliance on fossil fuels, the United Nations Environment Programme (UNEP) said in an Issue Paper presented at the Convention on Biodiversity meeting (CBD COP10) in Nagoya, Japan, today.

Increasing water demand for biofuels production in areas where water is already scarce could increase environmental and social pressures, the paper entitled Water and Bioenergy, stated.

The lie of the land

The anger over plans for water cuts along the Murray-Darling Basin underlines how the issues of water, climate change and the environment play out in country and city.

Antarctic snowfall linked to south-western drought

Increased snowfall in the Antarctic has been linked to drought in south-western Australia.

Obama aims to toughen big-vehicle mileage rules

WASHINGTON — Future tractor-trailers, school buses, delivery vans, garbage trucks, and heavy-duty pickup trucks would have to use less energy under fuel-efficiency rules proposed by the Obama administration — the first ever for such vehicles.

The Environmental Protection Agency and the Transportation Department are moving ahead with a proposal for medium- and heavy-duty trucks, beginning with those sold in the 2014 model year and into the 2018 model year.

Calculating Commitment to the Climate

The amounts being pledged to help poor countries adapt to climate change are much lower than many experts say is necessary.

Gates, Grin, Cameron Pay to Fight Oil Companies Over California Carbon Law

Clean-energy investors and environmentalists in California raised $11.9 million in the past two weeks to snuff out a challenge to the state’s global-warming laws backed by oil refiners Tesoro Corp. and Valero Energy Corp.

Australian business heads push for carbon tax

A sense of gloom continues to hang over negotiations for a new and binding global agreement on cutting greenhouse gas emissions. Talks last week between the climate envoys from Washington and Beijing seemed to reinforce that pessimism by failing to achieve a breakthrough ahead of the next UN climate summit at Cancun, Mexico, beginning in late November. But some experts say it is irrelevant that there's no international deal because countries are acting anyway. And a new Australian study suggests that despite different formulations for their individual pledges, they are all pledging to do a similar thing.

"Utilitarian economists, skeletons of schoolmasters, Commissioners of Fact, genteel and used-up infidels, gabblers of many little dog's-eared creeds, the poor you will have always with you. Cultivate in them, while there is yet time, the utmost graces of the fancies and affections, to adorn their lives so much in need of ornament; or, in the day of your triumph, when romance is utterly driven out of their souls, and they and a bare existence stand face to face, Reality will take a wolfish turn, and make an end of you!" - Charles Dickens, Hard Times, Book II, Chapter VI

A blast from the past - perhaps some of those past commentaries will be of use to understand our future.

I'm coming to the conclusion that people don't really care about the future. They're really just preoccupied with the fashion of the day, absorbed by their individual interests, distracted by a dizzying torrent of information and a cacophony of communications. Conditioned to believe constant change is normality, how could they envision a future to be anything other than the same carpet of constant change. In reality they've no sense of future, just a continuation of today.

I think people can't really choose to make any big changes even if those changes would help them in the long run. In the short run, we have to eat and compete today, keep the paycheck coming. Sure there are better long term prospects in more rural areas but now that is not true.

This came out today in the Portuguese newspaper Económico. I haven't had time to translate it but I provide a Google translator link for it. Basically the CEO of the Portuguese oil company, GALP, is stressing the importance of oil stating it as the support for mankind's well being. He also states that it should be complimented instead of substituted.

Oil is the support for the well being of mankind

To quote a bit from the translated article:

Hydrocarbons are currently responsible for supplying 80% of primary energy worldwide.

To respond to rapid world population growth, which according to projections by the International Energy Agency will increase from six billion to nine billion by 2050, "all energies are essential to meet this challenge. That is why we have to allocate resources so that they are competitive, "notes the CEO of Galp

"Many people say that we must liberate ourselves from the slavery of oil, but it is thanks to it that we maintain the current standards of quality of life. Oil is the support of the welfare of mankind," he adds.

Ferreira de Oliveira also recalled the contribution of the oil industry to the phenomenon of globalization, "which allowed the transport of goods and services, such as telecommunications have enabled the globalization of money."

Thank you Gail for adding that quote.

"Many people say that we must liberate ourselves from the slavery of oil, but it is thanks to it that we maintain the current standards of quality of life. Oil is the support of the welfare of mankind," he adds.

And therein lies the rub! If the frog jumps out of the relative but very temporary and illusory safety of his pot of water because it is starting to get uncomfortable as the temperature rises, the stork will quickly gobble him up! We are damned if we do and damned if we don't.

I say we must jump out now before we are slowly boiled to certain death. It's true that it's a stork eat frog world out there... Let's take our chances with the damned stork, there really is no other choice!

"You're looking fine today, oil."
Perhaps you meant complemented, rather than complimented.

Yes, that's what I meant. Although I see no problem in complimenting oil either :)

A Citizen's Guide to an Oil Free Economy

Foreword & Chapter 1 - Electrified Railroads

by Alan S. Drake

On the ASPO-USA website. Your comments and critique are appreciated.


Best Hopes !


PS: In the body of the paper I introduce what I believe is a new concept, Energy Saved on Energy Invested. This is the counterpart to ERoEI (Energy Returned on Energy Invested).

Jumping right in, Alan.

From the forward:

... and not the current “Hunt for Miracles” that Secretary of Energy Chu has so aptly described his department’s Advanced Projects Research.

Should this read :

... and not the current “Hunt for Miracles” that Secretary of Energy Chu has so aptly described [ in ] his department’s Advanced Projects Research.


and not the current “Hunt for Miracles” [, as] Secretary of Energy Chu has so aptly described his department’s Advanced Projects Research.

Sorry. I used to proofread dissertations for my Dad's PhD candidates. I can't help myself. Back to the read....

Hi Allen,

Thank you for your untiring commitment and for all the work you have done and continue to do!

The relatively modest energy required to electrify and expand the railroads, the 20 to 1 improvement in energy efficiency and the long life of the infrastructure gives some truly astounding ESoEI numbers. Some rough calculations show ESoEI can approach 1,000 to 1 returns.

As the supply of energy becomes a growing problem, getting close to a 300 to 1 payback, or even a 50 or 20 to 1 return, will become essential economic strategies. By comparison, boiling tar out of sand has about a 4 to 1 ERoEI and corn ethanol has less than 2 to 1 ERoEI return.

Without revealing too much about your personal involvement with TPTB do you see a change in the wind (pun intended) with regards the actual investment scenario beginning to shift away from promoting more traditional BAU supporting infrastructure such as highways, roads and airports and moving instead into long term energy and financial savings based on energy invested in projects such as the electrification of our already existing railway system.

Or do we still have a very long downward spiral to ride before there is some light at the end of that tunnel?

Best hopes!


This morning, a couple of hours ago, a "major NGO" in the US sent a detailed proposal that would involve myself and others in detailing and modeling just such plans. They propose using such detailed plans in both lobbying and educating the public.

IMHO, they have the horsepower to make a dent. With allies, they could change public policy, and public awareness, significantly, but over time. They have done it before.

On another track, elements of the national defense "establishment" are beginning to notice and pay attention to viable mitigation strategies.

I missed half of ASPO-DC because I had better things to do :-)

Best Hopes for Hope,


Any discussion about hybridizing current diesel/electric locomotives for transitional purposes, so that they can run on electrified rail when/where available?

Some informal discussions with one manufacturer, but focused on new build hybrid locos.


I realize that there would be a large weight penalty, but it seems like this would be a requirement during a transition. Also, would it be more cost effective to retrofit current D/E locomotives while developing (or aquiring from abroad) more modern/efficient all electric locos, and perhaps detachable generating cars to power them over yet-to-be-electrified rail? Will it make more sense to stop and swap out locomotives?

Just some thoughts.

An expansion of rail freight will require new locos.

Old locos wear out and are replaced every year.

ATM, the industry sees a slower rate of electrification that will allow growth & natural attrition to not require conversion of used diesel-electric locos. I foresee a faster pace.

From an operational POV, loco switchouts should coincide with crew changes (i.e. 400+ miles of electrified track for all electric locos OR hybrids over shorter stretches of electrified track).

One hypothesis is two all electric locos plus one hybrid on, say, the 2,217 mile Transcon (LA to Chicago, a likely early electrification target). If an electrification problem develops along the way, the hybrid can keep the train moving over the bad stretch. Good if the cargo is perishable. Dead heading an old d-e loco "just in case" is another option.

Best Hopes,


PS: I ran into a 1920s New York Times article on Swiss railroad electrification. After one major project was completed (memory, about half electrified) the Swiss were going to pause and let "attrition" reduce the # of steam locos before electrifying more lines.

"the Swiss were going to pause and let "attrition" reduce the # of steam locos before electrifying more lines."

We don't have time for "pause", IMO.

BTW, whatever happened to "The Urgency of Now"?

We need rail electrification and we need more transmission lines. Why not combine the two? Let's put some ingenuity towards a design that can accommodate the transmission lines in tight areas.

145 kV class XLPE power cable is pretty routine these days - or 245 kV if you like.

The transmission could be overhead in open areas and convert over to power cable in tight spaces. The catenary system could carry what would look like big conduits to run the cable.

At first this sounds much more expensive, but when all the costs of running transmission through tight areas (i.e. urban) the comparative costs are not that far off.

And forget path redundancy, we don't have that luxury anymore except in remote, open areas.

Sorry I haven't read your draft yet, got bill payin' work to do.

Running transmission lines on rail ROW was part of the theme of my older piece "Multiple Birds - One Silver BB".


Best Hopes for Proper Priorities (work over Peak Oil reading, REALLY !!),


This is precisely something that came up as having been investigated by BC Hydro when I suggested to the local rail authority that electrification really was a feasible option. BC Hydro wanted to use them as a transmission line for the Island. (about 300km)

Good, so this has been looked at before by BC Hydro. I'm sure the rail company (BC Rail) came up with all sorts of reasons why it couldn't happen.

But hang onto your seats, you may see something along these lines coming soon to BC - and with partial assistance from Alan.

I missed half of ASPO-DC because I had better things to do :-)

More power to ya! >;^)


Thanks for what you're doing with this Alan - your perserverance is definitely inspirational...

I'm wondering though what kind of repercussions you see as far as support for "Change" and "Hope" in this area once the Tea Party et al. stampedes thru the election next week and starts to latch on to this as it being just another "big government" program...

Do you have any sense as to whether your project might enjoy bi-partisan support even when the attacks start to come from the lunatic fringe regarding it being a socialist plan put forth by the liberal "elites" to take away their "freedoms" to drive their cars ?

The national defense angle you point to might be the element that they can't argue with - might be pretty difficult for them to paint the military as "socialists" - although I have full faith in them that they surely would try if it really came down to it...

Good luck,


According to reports, oil & coal interests (Koch, BP, etc.) are major funders of the Tea Party. If so, perhaps another hurdle.

I really do NOT know ! All I can do is appeal to those who have the national interest, and their enlightened self interest, foremost.

Best Hopes for the Power of Good Ideas,


At some point - gasoline will spike again - the economy will break down again - unemployment will raise again - tea party/daily kos's members will become "outraged" again - yadda yadda - new clowns will replace the old ones

And the play will not put any oil in ground - people will notice the play seems to be irrelevant to the reality of daily life, irrelevant on who was sent to Congress or White House - at that point some will notice that area's that have existing rail are working better then places that do not

the Tea Party. If so, perhaps another hurdle.

You are asking for change and an admission of the ending of the car transport system.

Tea Party or not, you'd see opposition.

Who knows - a new party tied to getting energy to grow the economy.

Heading Out, Dr. David Summers, got an advance draft to review (one of several dozen people).

His review is at


Best Hopes,


In your paper, you say -- "The reasons for the efficiency advantage of electric rail rest on basic physics. Steel rolling on steel has about one-fifth of the friction of rubber on concrete or asphalt and electric motors are almost three times as energy efficient as diesel engines."

When I've ridden passenger trains I've been impressed by the amount of mass per passenger in rail cars. A little casual googling would seem to indicate that the weight per passenger for rail cars is about twice that of intercity busses.

The steel wheel and dynamics of steel wheel on rail probably account for part of the massive trucks. The undercarriage must also be strong enough to transmit towing forces from the engine and more importantly, to transmit compressive forces due to engine dynamic braking. Finally, the weight of the undercarriage lowers the center of gravity to ensure stability of a car that is much taller and wider than the width of the track. A passenger railcar today resembles a flat car with a passenger compartment built on it.

For freight cars, the ratio of freight weight to unladen car weight is high enough so that the efficiency is not very much impaired. However, for passenger cars, this would appear to be an important factor in comparing passenger rail to bus or auto energy efficiency.

Are there other techniques, such as lightweight self-propelled automated cars that can be electronically linked instead of physically coupled, that would allow much lighter passenger rail cars?

Also, regarding passenger railcar weight (emphasis added) --

The tilting carriages are based upon Bombardier's earlier LRC trains used on VIA Rail rather than the TGV's articulated trailers, and the locomotives and passenger cars are much heavier than those of the TGV in order to meet the United States Federal Railroad Administration's different approach to rail crash standards.[31] The Tier II crash standards, adopted in 1999, have also resulted in the passenger cars being designed without steps and trapdoors, which means that the trainsets can only serve stations with high-level platforms—this currently restricts them to lines with high-level platforms such as the Northeast Corridor.

From http://en.wikipedia.org/wiki/Acela_Express

US passenger rail cars are much heavier than EU or Japanese pax rail cars. Over there, they use crumple zones (like the front & rear of autos), although some people sit in the crumple areas (not so good for those individuals).

The US has a 800,000 lb crush test. The car must only bend and not collapse under 400 tons of pressure. So deaths and injuries in US cars come from sudden deceleration and impacts on the interior.

OTOH, no passenger has died on a high speed train in Japan since they started in 1968.

If US passenger cars do not mix with freight, the 800,000 lb test is not required (hence Light Rail).

Personally, I would like to see a top to bottom overhaul of US safety standards (major obstacles going over 79 mph for example). Most standards date from the 1930s.


From the reference in the wiki article -- How the FRA is Regulating Passenger Rail Out of Existence

Then, in 1999 with Acela planning fully underway, the FRA pulled the rug out by issuing regulations for high-speed rail service requiring trains to withstand 800,000 pounds force without deformation. The 800,000 figure is an arbitrary number dating back to the 1920s; this mandate has since been increased to 1 million pounds.
The buffering requirement confounded Bombadier. Train weight is of crucial importance as it affects the amount of track wear, noise, and energy costs. To meet the buffering regulation, the train would have to be significantly bulked-up. The result was a highspeed train nearly twice as heavy as its European counterparts. As such, the Acela has been described variously as a tank-on-wheels and a bank-vault-on-wheels. Indeed, an overweight train like Acela would be banned from the European high speed rail network.
Because the extra weight put so much strain on the train body (which was never designed to handle such loads) trainsets suffered excessive wheel wear, cracks in the yaw damper and brake rotors, and other problems which can probably never be completely fixed. Whereas the original contract called for trains to run 400,000 miles between equipment failures, the Acela can barely manage 20,000 miles.

In the paper, I toned this down to Steps should be taken to reduce costs and speed construction wherever it is reasonable to do so.

I call for a number of revolutions already ! Once political will is developed, then revising regulations to serve national goals becomes easier.

Best Hopes for Better Regulations,


Are there other techniques, such as lightweight self-propelled automated cars that can be electronically linked instead of physically coupled, that would allow much lighter passenger rail cars?

Of course there are, that would be things like the Vancouver Skytrain


But donl;t get caught up in the "automated" part, the key thing is to keep the trains lightweight, which, as Alan points out, you canl;t do if they are running on the same lines as freight trains.

BUT, if they are on their own lines, then there are many possibilities. Here is the "lightest" train system I have yet seen;

This train weighs 13tons, including it's own engine and flywheel hybrid system, and can carry up to 60 people, that is 215kg/person. A Honda Civic with four people on board is 275kg/person.
The Parry is light enough that it can use 30 lb rail instead of the 120lb rail needed for heavy rail. They have a "carpet track" system that allows it to be laid, and removed, easily, so the underground utilities do not need to be relocated from under tracks.

This is not a high speed or long distance solution, but it is a light, cheap to build and run urban alternative.
If we are going to have a major increase in commuter rail, it needs to be cheap to build, or it will simply not get built!
More details at http://www.parrypeoplemovers.com

The 1923/24 streetcars 3 blocks from me on St. Charles carry a few more people (54 seats plus standees) and weight 42,000 lbs. Power from overhead wire and not flywheels/on board engines.



Yes, when you don;t have to make freight train vehicles to carry people, you can do it much better.
I notice the new trains from Bombardier, like the Flexity, have a fully loaded weight of 275kg/passenger.

I like the Parry because it was specifically designed to make use of disused main lines, many of which would need major rehabilitation to carry a heavy train. Without the expense adding electrification, it is cost effective to run services on these lines. The 60pax car pictured is about $700k - if that isn;t the cheapest way to get rolling, it's gotta be close

The flywheel system would also allow it to run on electricity by being "charged" at the stops, if they are less than about 1km apart. Then you only need power at the stops, and do not need overhead pickup along the way. This removes a major aesthetic barrier (and cost) to doing what I call "neighborhood rail" .

I particularly like their "carpet track" system (http://www.parrypeoplemovers.com/holdfast_tramwaytrack.htm)

The whole concept was developed by a civil engineer, his aim being that by keeping everything light, the civil engineering, and thus cost, involved in building new tracks is greatly minimised - I agree wholeheartedly with that statement.

Here in Vancouver, when they did the Flexity trial during the Winter Olympics, they spent $9m to rehabilitate a 1 mile length of existing track (concrete sleepers, etc)- using the carpet track system they could have laid several miles of new track for less cost.
The Flexity project was going to be $90 for a 2mile project (build and electrify one mile of new track, two train, maint facility etc etc. So expensive that it was not done, and likely wont. This train could be up and running for less than 10% of that. Not as sexy, to be sure, but at least it can be done.

There has been some discussion of ultra light trams, particularly in the UK.

One example.


More later if I have time.


That article also references Sustraco, whose website is mainly filled with Parry pictures.
Clearly, they are having a hard time getting going - Parry has only built a handful of its railcars.
it is almost as if no decision makers will take them seriously.

I am always amazed at the cost numbers for these rail projects - in real terms, were any of the rail projects at the turn of the century this expensive?

What I would like to see there is the government at least inviting Parry/Sustraco/anyone else, to put their proposals forward as to how they would do it, for less than these budgets. Tell them they have X $, and let them come up with their plan. This business of continual cost overruns will ensure very few new projects get built.

The SMART train in Sonoma county is another example of a cadillac system where a chevy will do. The dreamers have gotten hold of the plan, and it is going to cost $590m, to use a line that is already in use for freight. There are grand plans for architectural wonder stations, beautiful 80 mph trains (for the 5 miles between stations) etc. For far less than that they could have utilitarian system running, that people could afford to ride, sooner.

Some people need to lower their bar, to a point that can actually be afforded - perfect is the enemy of good.

I am a fan of lowest life cycle cost/passenger. not lowest first cost.

So self propelled is almost never the way to go.

Volume of construction is, IMHO, the key to lower costs.

The French plan to build 1,500 km of new tram lines this decade (in almost every town of 100,000 or more) for 22 billion euros. And France has short annual work hours (August for example).

The American system of allocation of funding by queue (wait long enough and most projects drop out) is designed for a very high % to consultants and high costs for the projects built.


For a high use city line, supplied electric is indeed the way to go, but there are for lighter use lines it seems a very expensive add on - though I am not sure why it must be so expensive. For a light duty, light train, the power requirement should be in the same order as fora couple of trolley buses, and the electric supply for those is not as expensive as for rail - though I think it has harder circumstances (spanning up to 6 lane roads instead of one or two tracks, intersections etc)

My view is that a bus a is better than a car, a self propelled train is better than a bus, and an electric train is best of all. But if self propelled rather than electric makes the difference between the project going ahead or not, I will vote self propelled every time. It is still 20x more efficient than cars, or buses and once the service is there, and being used, it can be electrified later (and this should of course be allowed for in the design).

I have to agree about the funding queue system (I have been through it for water/sewer treatment projects). Everyone spends a whole lot of time preparing grant applications, and everyone knows to ask for more than what you really want, so you can bargain down. Then the gov spends a whole lot of time evaluating all the proposals (more consultants), before deciding who gets what, and often that decision is influenced by politics.
Collectively, there has been a lot of time and money spent before the first shovel hits the ground, and much of it by places that don't get any of the funding.

It is a bit simpler with water/sewer than transit - the model should have been that each city/county gets X amount, per year, on the basis of population, and that's it. if they need more, tax their own people, or better yet, find better ways to run their systems (use less water, and save the expansions costs). But at least they have a known funding stream and time and money is not wasted on preparing 10 grant applications for each one received, and the one received is not always the one that needs to be done first.

I have been a long time critic of Transit Palaces. Extra cost, very few extra riders IMHO.

Others think that potential riders will be attracted to granite curbs, mosaics, public art and these factors will give mass transit an upscale image. I counter that these factors may affect a few casual riders, but cleanliness attracts daily riders. Few other amenities do.

OTOH, speed and reliability do impact ridership and costs. Most transit costs are hourly. Faster trains mean fewer trains for the same volume of pax. Fewer trains require fewer crew, less cleaning at night, less inspection and generally repair.

Faster also means significantly more revenue as more pax are attracted.

I prefer lowest life cycle cost/passenger, not lowest first cost for "something".


I have been a long time critic of Transit Palaces. Extra cost, very few extra riders IMHO.
Agreed, for the most part. I do say most part because I do not have a problem with one stations, usually the grand central, being something nice and special.
But the suburban stations do not need to be a palace, they just need to be a weather protection.
OTOH, speed and reliability do impact ridership and costs. Most transit costs are hourly. Faster trains mean fewer trains for the same volume of pax. Fewer trains require fewer crew, less cleaning at night, less inspection and generally repair.

Faster also means significantly more revenue as more pax are attracted.

I do agree with this, but only to a point. Costs, both capital and operating, increase exponentially with speed - at some stage, the the cost of making the track + trains suitable for higher speeds exceeds the benefit obtained. The Sonoma project involves hundreds of millions for track upgrades to save a few minutes of travel time - I am not convinced it is worth it.

Also, if there is a trade off to be made between faster trains, and greater frequency, for an urban setting, I will opt for frequency. A train that gets you there three minutes faster is no good if you had to wait ten minutes longer for it. This is not to say trains should be painfully slow, but they do not need to be "fast" (in urban settings) - frequency and reliability are more important IMO.

I am not convinced that most costs are hourly either - here are Calgary's operating costs;
Vehicle Maintenance costs: $13.9M (2006)
Station Maintenance costs: $2.8M (2006)
Right of Way Maintenance costs: $2.9M (2006)
Signals Maintenance costs: $2.4M (2006)
Average annual power costs: $4.8M (2006)
Annual LRV Operator wages: $6.0M (includes fringe benefits of 21.57%) (2006)

The only real hourly cost here is operator wages.
If they had faster, and fewer, trains, then they would have less trains to maintain (though the trains are more expensive to buy, and possibly to maintain), and slightly less operators. they would pay slightl;y more for power, and all the other costs would remain the same, though track maint might increase
Vehicle maint is the biggest -but will the saving from fewer trains offset the cost of more expensive trains, and more expensive track and track maintenance to handle them?

In 2006, Calgary's system cost $36m to operate, while Vancouver's skytrain (which is driverless) cost $80m to operate, and carried less passengers!

I prefer lowest life cycle cost/passenger, not lowest first cost for "something".
I would prefer that too, but the reality often is that first cost is the determining factor, and the first cost for some of these proposed systems is off the charts.
If you can't have the lowest life cycle cost, but you can have a cheaper "something", will you then choose to have nothing at all?

I look at Calgary's system as a cheaper "something", it doesn't go everywhere, it is not the fastest trains, it still has level crossings, it does not run right next to/underneath shopping centres, it does not have huge park and rides, or beautiful stations. But it does do what it was intended to do, and does it for far less cost than most others.
If for a new system today,I also had to give up electric and go self propelled, for now, I would accept that compromise too.

I think the reality is that we have to come up with cheaper ways to do it - the fact that so few rail projects are being done is testament to that. France has come up with a cheaper way, of course - standardise and do lots of it, but for some reason I can't see that happening here - every city seems to choose different types of trains, designed by different people etc, resulting in lots of "one offs"

Anyway, that said, I am sure I am not telling you anything you don;t know, and don;t deal with on a daily basis. I do hope you are able to get some things happening, though it must feel like you are always swimming against the tide.

Several goods points.

However, vehicle maintenance is per hour of operation.

One can find examples of where faster operation has dramatic capital cost increases, and modest time savings.

For example, with 1 mile station spacing, top speeds >50 mph do little good. With 5 mile spacing (see SMART in Marin as I understand), the impact is greater.

The maintenance savings on electric motors is large enough to cost justify electrification in most cases. Then add fuel savings, time savings (avg -15%) and attractiveness (no diesel smells, exhaust).

I see the billions spent on roads ($1.2 billion to add two lanes over the Mississippi River outside New Orleans) and I am willing to avoid "carving sticks to beat ourselves with later".

St. Louis went with short stations and failed to buy the land for later lengthening of the platform. And DC Metro went with 8 car stations, now approaching that limit.

As far as standardization goes, I would make new Light Rail of subway systems chose one of a short list of existing city specs. Light Rail - Dallas or Portland versions, Subway - DC Metro, one of NYC specs (they have a couple) or joint Baltimore/Miami specs (those two ordered same model).

This should meet local requirements (Dallas cars are wider than Portland) and create some viable standardization, at least in new systems.

Best Hopes for Better Priorities,


PS: I know people that "swam upstream" for several decades before succeeding. George Tyson in Baltimore, George Isaacs in Minneapolis, and Darrell Clarke for LA's Expo Line. Dave Dobbs and Lyndon Henry still struggle on in Austin.

Stations need to be large enough for people to wait without crowding. Be clean light and airy but provide shelter from the elements. Rapid access in and out, ample ticket purchase points with ease of checking fares. Beyond basic facilities any excess is simply..........excess. I think one problem is that politicians rate themselves on the cost of a project. If the same project can be done for $50mm or $200mm then the $200mm one is favoured as it sounds so much better for the politician even if it provides no extra benefit.


If the same project can be done for $50mm or $200mm then the $200mm one is favoured as it sounds so much better for the politician even if it provides no extra benefit.

That is exactly what is happening with the SMART train - $590 for a train that uses rail line that already exists and can run trains today!

The stations for this operation do not need to be big - the trains are only two car trains - Same of passengers as an articulated bus! (with standing passengers). If you want airy, just build a roof and no walls, pretty easy access too!

The operations plan for this one is here;

Some highlights;
Expected daily traffic - 5000 passengers
Staff - 107+contractors
Annual operating cost $18m
Daily train operating hours 37.5
Hourly operating cost per train = $1930(!)
Operating cost per passenger = $14

I don;t know what the fares will be I'll bet they are less than $14, so this will not even cover its operating cost, much less recover any capital, or pay for future train replacement, etc.

They want 80mph trains, which means substantial upgrades to the line, replacement of sections of 70lb rail with 113, straightening some curves, etc - hundreds of millions. But the line can take freight traffic today, and could take 50mph passenger trains.

The longest track section, at the northern end of the line, that will only have 4 trains/day, is 17 miles. The rest is 53 miles, average 4,3 miles between the 12 stations, and many of these sections have speed limits imposed by the track conditions, that can;t be changed.
The most frequent service, from Santa Rosa to Larkspur, (40 miles, 58 minutes). Upping the speed from 60 to 80mph has saved, at best, five minutes (if all 40 miles were at 80mph the saving would be ten minutes), but at huge capital cost. The northern section, only traveled four times day, also only saves five minutes, at best.

If they applied some Calgary Transit thinking here (what is the most effective use of the limited capital $) they could have a train running today (instead of projected date of 2014) , at a price people could afford, without needing massive subsidy from everyone else in the two counties (they levied a sales tax increase to raise the capital budget).

i would gladly take an extra five minutes of travel time for that.

The proponents of this project think they are doing a great service to those who cannot afford to drive, but in reality, they are not. By making the project so expensive, they have not only divided the community, but most of the capital money will leave the counties and not come back. And for those who ride the train, the fares will be such that they are not saving money - they *may* save some time, but what is the value of five minutes?

A pragmatic approach will result in more of these projects being done - this Cadillac approach results in less.

Exactly. Whatever happened to competition driving down prices? If they want to compete with other transport then they need to keep costs down. The system needs to move a lot of people at a low price to succeed, high speeds between closely spaced stations are a waste of time and energy due to the constant acceleration and deceleration. My comments on platforms relate to time spent in the UK. A connecting bus service that did not connect with peak trains. Over expensive parking with no security. Trying to cram through entrances and queuing up at the lone ticket machine as the other was broken and there was no need for ticket staff as they had machines (never mind if you wanted to go somewhere not on the machine). Platforms packed like sardine cans, since 2 trains did not arrive, and trying to stay behind the yellow line that warned you not to get too close to trains that could suck you off the platform. Dark dingy platforms where you dared not touch anything lest you get covered with grime or worse. Platforms with no protection against driving rain and snow. Each area will have its own particular needs but the basics are the same, just adapted.


BP is spilling more than oil in US waters. It seems to be a major supporter for the Tea Party and the Denialosphere:


Tea Party climate change deniers funded by BP and other major polluters
Midterm election campaigns of Tea Party favourites DeMint and Inhofe have received over $240,000

BP and several other big European companies are funding the midterm election campaigns of Tea Party favourites who deny the existence of global warming or oppose Barack Obama's energy agenda, the Guardian has learned.

An analysis of campaign finance by Climate Action Network Europe (Cane) found nearly 80% of campaign donations from a number of major European firms were directed towards senators who blocked action on climate change. These included incumbents who have been embraced by the Tea Party such as Jim DeMint, a Republican from South Carolina, and the notorious climate change denier James Inhofe, a Republican from Oklahoma.

The report, released tomorrow, used information on the Open Secrets.org database to track what it called a co-ordinated attempt by some of Europe's biggest polluters to influence the US midterms. It said: "The European companies are funding almost exclusively Senate candidates who have been outspoken in their opposition to comprehensive climate policy in the US and candidates who actively deny the scientific consensus that climate change is happening and is caused by people."

Budget Problems Deep in the Heart of Texas

(Texas) Legislature likely to cut deep to meet possible $25 billion budget gap

AUSTIN – Texas faces a budget crisis of truly daunting proportions, with lawmakers likely to cut sacrosanct programs such as education for the first time in memory and to lay off hundreds if not thousands of state workers and public university employees.

Texas' GOP leaders, their eyes on the Nov. 2 election, have played down the problem's size, even as the hole in the next two-year cycle has grown in recent weeks to as much as $24 billion to $25 billion. That's about 25 percent of current spending.

The gap is now proportionately larger than the deficit California recently closed with cuts and fee increases, its fourth dose of budget misery since September 2008.

I talked before about "Net Export Math" and government budgets, especially state & local. Just as oil exporting countries, showing falling production, generally have a net export decline rate that is in excess of their production decline rate, the pattern that we will tend to see is that the rate of decline in government aid and services to citizens will exceed the rate of decline in government revenue.

Take Texas as example, and let's assume two year projected spending of $100 billion versus projected revenue of $75 billion. For the sake of argument, let's assume that $50 billion in spending is non-discretionary and can't be cut. Under this scenario, a 25% reduction in revenue would result in a 50% reduction in discretionary spending (primarily aid and services to citizens).

I bet we will see some new and improved Bill White attack ads on Perry this week.John

Wasn't Texas claiming to be in good shape not too long ago?

The most recent Texas budget was only balanced because of federal stimulus money. I think that it's pretty hard to find a local or state government that is not having budget problems.

Last thing i read was everyone was moving to Texas because of how good it was down there. Maybe too many showed up? Still trying to point everyone I know south to reduce the local population :)

my - I suspect it's more of a relativity issue. Texas has been doing much better than other states. I think one stat was that Texas added more new jobs than something like the next 10 states combined. OTOH we've had an increase in unemployment...just not as bad as many. A good bit of state revenue comes from oil/NG royalties which fund the state colleges. That's been something of a rollercoaster ride these last few years. But like every other govt they've used borrowed money to give a better appearance. But, just like with everyone else, eventually them chickens come home to roost. And that's what we're starting to see now.

I recently co-chaired an Eco Fest in Wimberley, Texas where the subject of our last presentation was the findings of a paper published by the UT School of Architecture's Center for Sustainable Development, Reinventing the Texas Triangle... http://soa.utexas.edu/files/csd/ReinventingTexasTriangle.pdf

The Texas triangle (San Antonio, Austin, DFW, Houston) is one of eleven megaregions in the USA. From the Regional Challenges section:

The Texas Triangle Megaregion is expected to grow, as history suggests, by an additional 10 million people over the next 40+ years. This vast growth presents three key challenges.

First, consumption pressure will be significant on land, water and other natural resources. It is projected that two of the five largest aquifers in the region will have less than 45 percent of their reservoirs remaining by 2050.

Second, the region’s population will become more diverse, with a large amount of international in-migration posing challenging demands for employment, education, health care and other services.

A third challenge is mobility. National mobility studies show that all of the four metro areas in the Texas Triangle have been among the nation’s top congested regions in the past two decades.

Apparently, migrating Hispanics will make up the largest part of the population growth.

By 2040, the Hispanic population in Texas is projected to grow exponentially compared to the total population (Figure 8). Along with the diversity in race, the State of Texas also has a higher poverty concentration than the entire United States.

Ummm, exponential growth in a state that has a higher poverty concentration than the entire United States. Personally, I don't think Texas (or any other state, for that matter) is capable of handling the population increases and the demands such will have on employment, transportation, housing (read: development), health care and education.

And for Alan Drake, I just cringed when I read the brief history of passenger rail.

The Texas Triangle has three sides measuring 271, 198 and 241 miles in ground distance... About 130 years ago, passenger and freight trains connected the major triangle cities with each other. It was the train connection that boosted the initial growth of the settlements.

According to Barry Popik (2007), a New York City etymologist, the term “Texas Triangle” appeared as early as 1936 when the Missouri Pacific (MoPac) Railroad announced its new overnight services from St. Louis and Memphis to Dallas, Fort Worth, Houston, Austin and San
Antonio... “The Texas Triangle” was one of MoPac’s premier named services, the “Sunshine Special” service.

Today the Texas Triangle train service no longer operates. Only limited Amtrak connections exist and these trains are slow as freight is given preference over passengers on the rail lines. Three interstate highways (I-35, I-45 and I-10) have assumed the role of providing inter-city connections and delineating the triangle.

One of the bright spots the report sees is that it (the megaregion) is entirely contained within the boundaries of a single state. That looks good on paper and that's about it. Out of the five cities, Dallas is the only one with any passenger rail to speak of. Talk is cheap and there has been lots of it regarding connecting the triangle with p.rail.

The sheer magnitude of necessary changes being bandied about is enough to keep it from happening. We're having a difficult time right now trying to educate the locals about water issues, while road bonds are being pushed by developer-backed politicians. Growth equals good, therefore, growth it is. Sigh.

That's hilarious MMIH - that's exactly what I've been doing for years... anytime anyone moans and complains to me about NY taxes, NY weather, NY jobs, etc etc. I always do my best to show them the door by talking up other places (mostly places I've never even been to but know that others have left NY State for)... Texas, Florida and the Carolinas were very much in vogue over the past 20 years and many, many did leave - which was great news as far as I was concerned. With what's coming our way we need to off-load as many whiners as possible and the further south they go the better IMHO. Unfortunately over the past few years (particularly since the financial crisis started) I've noticed a slow trickle back toward the north... Apparently the grass isn't ALWAYS greener outside of NY.

Well, you can certainly take pride in what kind of ball team you bought for over $200 million this season versus $55 million for a team down south.

Meanwhile, on the budget front, as noted above, troubles abound for most local and state governments:

A clear choice ahead for New York's future

ALBANY — Ask any political leader, business group or public union, and they all agree New York is at a critical juncture. The state faces budget gaps of at least $37 billion over the next three years, and state spending is far outpacing revenue.

County and city governments are proposing budgets with layoffs and service cuts — on top of the ones they've already made. Upstate is suffering from population losses, struggling urban cores and a dwindling manufacturing base.

Meanwhile, the cost of living in New York continues to rise, putting further strain on its population and economic base. The Tax Foundation last month showed that Monroe County has the highest percentage of taxes paid compared with home values in the country.

$200 million ball team ? - I have no idea what you're talking about :) Actually no fan of the Yankees here... follow the Mets a bit more - I find it much less stressful to root for a team reliably out of the playoffs by the 4th of July each year ;)

Certainly didn't mean to imply that NYS doesn't have HUGE problems... just that many a know-it-all from my neck of the woods has flown the coop for the south to discover that EVERYWHERE is in trouble or is swiftly headed in that direction (as you frequently remind us).


p.s. Go Giants !

Of course, I have opined that the fact that the Rangers are in the World Series is in and of itself evidence that The End of the World is at hand.

In any case, what is surprising to me is the size of the projected Texas deficit, given the fact that per capita state government spending in Texas is already the lowest in the country. From the DMN article up the thread:

The options are few when it comes to finding $25 billion in the state's budget. Texas already ranks 50th nationally in per-capita state spending, so big cuts will have to come from essential services.

Well, since I'm originally from Western New York the only true sign that the apocalypse is upon us would be if my Buffalo Bills won a Super Bowl.

Fortunately for all of us they are off to a rousing 0-6 start - so unless there is a truly epic turnaround we should be around for another season at least...

The point with all these spending cuts is that this is the failure of government by design... an engineered takedown to "shrink it down and drown it..." as old Grover said... or in the Orwellian speak of my current newspaper describing my county executive's strategy - the republicans are merely "rightsizing" various departments and agencies. It's really the oldest trick in the book though - continually bleed off the funding of an agency or dept. until it really can no longer function very effectively... then point your finger at it (while continuing to starve the beast)and call for its elimination because of what a lousy job it does ("see they're just wasting you money on these services that don't work anyways..."). I have no doubt that's what's going on in Texas (and most everywhere else) - God forbid we should ever entertain the idea of raising taxes to make essential services less necessary... nope, let's continually cut cut cut until the problem just goes away or at least goes sowewhere else.

Mayor Landrieu of New Orleans is proposing an increase in property taxes and an $8/month hike in the garbage fee to pay for better and more city services.

Since efficiency is up and corruption is way down, he is getting some support.


Well, there is ONE alternative that NEVER seems to be up for discussion. Instead of laying off people, and cutting (essential) services, how about cutting the pay rates of govt employees instead.

A 10% pay (and benefits) cut , instead of a 10% staffing reduction will achieve the same budget cut, but maintain service. In fact, it is improving the efficiency of service delivery.

The public service unions, and employees will scream, of course, but if they don;t like it they can leave and take their chances in the private sector, where average wages have been declining for the last couple of years, assuming your job still exists.

Maintaining the status quo is NOT an option as there are simply less tax producers (private sector workers) to support the tax consumers (gov workers)

Offer the employees either a 10% pay cut, or a 10% chance of losing their job (by lottery, not seniority, etc) and see which way they vote.

Well,Paul Nash,if you want to dig an even deeper hole for yourself and everybody else that is a surefire way to go about it.Paycuts mean less spending means more business going bust means more unemployment.

Pretty obvious that you don't see yourself as being personally adversely affected by this vicious circle.Don't be so sure.

Thirra, If more spending was truly the solution, then the government could just print money/run deficits, and give it out as stimulus. Which they have already done, and it has achieved little.

If we accept your theory, then you are advocating for higher taxes to support higher wages for gov employees?

Paying government employees too much could be argued to be another version of "stimulus" I suppose, but it is not a good one. They may spend more money, but how much of that spending remains in the local economy? if I pay higher taxes so my municipal government can pay its employees more, very little of that spending remains here, but ALL the taxes to pay fir it came from here? At the provincial/State level,
a bit more of the spending remains, but still all the taxes were local. At the federal level, even more of the money stays in the country, but not all,, yet all the taxes came from here.

But, if the government cuts an equivalent amount from their pay, and everyone's taxes, then everyone, not just govt employees, can decide what to do with their extra money.

I pay taxes to have the government provide essential services, not pay it's people to enjoy a higher standard of living than everyone who is paying for it.

What happens then- companies and pack up shop and move elsewhere, because they cannot afford those taxes. That is why manufacturing businesses are leaving California. Some are going to other states, but some are going overseas, and some closing down altogether.

A high tax environment is a terrible place to base your company, better to move it elsewhere, and try to service the customers in the high tax places from there.

You are missing the point that ALL of the wages of government employees are, by definition, ultimately paid by non government employees, and companies. Right now, there are less of those tax paying people and companies, and the ones remaining are carrying a higher burden, of supporting the gov employees, and the unemployed.

Cutting the pay of first year school teachers from $50 to $45 k is not the end of the world, but it might help the mother who works at supermarket feed her kid who is in that teachers school.
What we see instead, is cutting staff levels, after school programs etc. so the teacher is getting paid the same, but the parents are now getting less for their taxes.

That is great that the teacher can still spend more, but the parents can now spend less - just how is that win-win situation?

The culture of entitlement is insidious - you have to earn what you get, and you have to realise that things are only worth what the buyers are willing/able to pay - and that includes government services. Should I be paying $25/hr for the garbage guys, plus the same again in retirement benefits, when a private contractor can do the job for half that? A teacher on $20/hr can do just as good a job on $18 - and then the parents might just be able to afford new shoes for the kids - gov employees are not the only ones who can spend.

Government wages are

ultimately paid by non government employees

You do realize government employees pay taxes as well, right?

Yes, of course. if the govt employee earns X and pays, back 1/3 X in taxes, that only leaves 2/3X to be paid for by non government. Assuming the private employees get paid the same (on average) then in this "economy), you need two private, each paying 1/3X in tax, per government employee.

But what happens when the recession hits, and the two private employees now only earn 0.9X each? The tax revenue goes down to 0.9*0.6=0.54X.

But the gov employee is getting a net of 0.6X, and we have a 0.06X deficit. This can be made up by government borrowing from somewhere external, making a real deficit. keeping in mind the two private employees are the only net tax payers, so they will, ultimately, will have to pay back the deficit, with interest.

The alternative, is the gov employee takes a 10% pay cut, to 0.9X. They still pay 1.3 in tax, of course, so their net pay is now 0.54X .

So, in the second case, everyone is sharing the pain equally, there is no deficit, and no money wasted on interest, so more of what is spent is retained locally, and the economy will recover sooner.
I think that is a "fair"solution

There are some interesting historical precedents of what happens when the people have to keep paying taxes they can't afford so that governments can live better than they do. The American Revolution being the most prominent!

@ Paul Nash

You are missing the point that ALL of the wages of government employees are, by definition, ultimately paid by non government employees, and companies.

The conventional assumption underlying this statement - and indeed the toxic form of economics responsible for the position we are in - is that all taxes necessarily fall on earned income, and that the only income which is 'earned' is that in the private sector.

I confess I find it difficult to understand that when a nurse is employed in the public sector he/she is 'unproductive' and a drain on wealth creators, whereas the minute she goes to work for a 'for profit' hospital she magically becomes 'productive'. Or that when a factory employing 100 people is automated then the sole remaining employee who switches it on and off is magically almost infinitely 'productive', whereas the investment which made it possible is not.

It all comes down to the definition of 'productive', of course, and what is meant by that is 'productive of private profit'.

From the perspective of a shareholder, the entrepreneur; the supplier; the service to the customer; the staff and even the management are all simply costs to be cut.

The reality is that there is qualitatively no difference between a tax demand and an invoice, and that it is the landlord and the shareholder who are 'unproductive' from the perspective of the true wealth creators who exist in public and private sectors alike.

So much for the rant.

The point I am getting to is that taxation of earned income should be drastically reduced and replaced by levies on the unearned income from privileged property rights such as exclusive use of land, non renewables and knowledge; and of course from the privilege of 'free' limitation of liability enjoyed by investors in joint stock corporations.

Chris, I do not disagree with you that a major shift in taxation from earned to unearned income, and to taxing consumption, would make a major difference.

For an employer, the costs of payroll tax, health care, and then the wages themselves are crushing - no wonder so many businesses are relocating.

For the record, I see no difference in the "productivity" (that actual amount of productive goods/services produced) of a government nurse, teacher or garbage worker to a private one. What I am saying is that today, we are paying more for the government provision of such services, through the higher wages, pension, benefits, and, in some cases, "no layoff" provisions written into the collective bargaining.

You do not need to pay someone $60k/yr, plus pension etc, to empty garbage cans in the parks. If government continues to pay too much, eventually they are forced to cut back or eliminate certain services, and then everyone loses.
A nearby town could no longer afford to have a library and a professional librarian, so the library closed. A group of volunteers started a new one, but they can't get any funding from the local gov, as the union rules are that only professional librarians can be employed. So the town has a second rate library, and people have to give up their time for free, and the librarian that was employed is now unemployed (and on EI benefits) because she can;t get a job anywhere else - libraries elsewhere are shedding staff, not hiring.

The only "benefit" here is that the muni government has more money in it's pocket, but the town, the volunteers and the librarian all are worse off. A reasonable pay cut to the librarian, which she was willing to take, and some other cutbacks on book/periodical purchases, would have kept the library open, but the union wouldn't have it, as they were worried it would set a precedent.

Somewhere between the fully paid, pension etc etc, and the people volunteering (=working for zero pay/benefits) to avoid having to close, is a happy medium.

There are many, many private industry people getting paid less to do the same than they were a few years ago - government employees should not have automatic immunity

I assume you would be as aggressive in demanding a 10% wage cut from police, firemen, and prison guards as you would from teachers and trash collectors?
I think the point is important because the perception is that conservatives use the threat of spending cuts to defund programs of which they disapprove, while its BAU for programs of which they do approve, ie law & order, defense, etc.
I would think that principled conservatives would realize they have a credibility problem here after the Bush and Reagan legacy and would want to stress that, yes, it is ALL on the table.
"Cut gov't spending" becomes code for 'vouchers' and 'union busting' and it is fair to suspect the arguments are being advanced in bad faith.
Fiscal discipline, yes. Abandoning the vulnerable and unilaterally breaking contracts, no.

Sldulin, (glad I don;t have to try to pronounce that!), yes, I would be applying that across the board, all employees, all levels, no exceptions.

Agreed that in the past it has been used to advance other agendas. My agenda here is to reduce gov spending, with out reducing service provision.

The problem there is, that it breaks contracts, and some of those contracts were written under circumstances very different to today. Should a town go broke, or be cutting back on police so that it can pay the retired firemen, who earn more than the young active ones? The government is paying more for one guy to not deliver a service than it is for the guy who does deliver the service.
With the sawmill closed, the biggest tax payer, do they then tax everyone else more (and all the remaining local business are now less/un profitable) to pay the retired firemen?
With families leaving because the mill closed, the school has less kids - do they cut back the teachers (who won;t get jobs elsewhere) and combine classes from different years, or pay the teachers less, and have smaller classes in each year?

There is less wealth to spread around, and everyone not employed by government is in hard times, and possibly being asked to pay more taxes so those employed by government (or retired from it) can carry on as if nothing had changed. That is just not sustainable, but it is happening, in many places. Eventually, something will have to give, it won;t be pleasant, but it has to be dealt with sooner or later.

Offer the employees either a 10% pay cut, or a 10% chance of losing their job (by lottery, not seniority, etc) and see which way they vote.

Many have their paychecks totally allocated to stuff like mortgages and car loans, so a ten percent cut would throw them over the edge. Then a ten percent pay cut doesn't reduce the employers cost by ten percent, since there is a lot of other overhead that is hard to cut proportionately or at all. Health care is the most obvious but far from the only one. I also think you will get an adverse selection effect, start cutting pay, and the most likely employees to fly the coup for greener pastures are the more competant ones. So you end up with a win-win for the libertarians, government shrinks, and becomes more obviously disfunctional.

Many have their paychecks totally allocated to stuff like mortgages and car loans, so a ten percent cut would throw them over the edge.

Well, that is equally true of many more people in the private sector, who have lost their jobs or had pay cuts, and were not entitle to taxpayer support for the difference.

I agree about health care and other costs, and have no problems with the health care industry taking a 10% pay cut too - they can probably afford it better than any other.

I also think you will get an adverse selection effect, start cutting pay, and the most likely employees to fly the coup for greener pastures are the more competant ones.

Just what "greener pastures" would those be, right now? If the schoolteacher doesn't like it, where else will they get a teaching job? Same for the fireman, garbage collector, parks and gardens guy, etc etc. yes, some administrators and other well trained gov employees might get work elsewhere, but that better paying option has always been available - most don;t take it because they value their job security.

Right now, if you were to conduct a random survey of how many people would walk away from their job if they had to take a 10% cut, I'll bet that not many would do so. What sensible family person would give up their job, and job security, to avoid a 10% pay cut, and to then have no job and take their chances finding one? There are not that many jobs to be had today.

In fact, many in the private sector have had to take a 10% cut or more, in the form of reduced hours - ask a building contractor, taxi driver etc.

The point is, in recessionary times, there is less wealth to go around, but if gov employees are not part of that, then everyone else is taking the hit for them - the Orwellian case of "some being more equal than others".


Your arguments here are a bit cynical and lack a true accounting of "capital".

For example, a public school teacher, public college, et al. produce millions of citizens (highly educated) that produce patents, ideas, etc. in the private sector.

Was the private sector capital therefore not due to public investment?

You fail to realize that public sector creates the necessary infrastructure to produce wealth in the private sector.

In any case, you may or may not refute my claim with the usual -- "well all those roads, water works, a system of laws, bridges and schools should have been from Corp. X, Y and Z."

o.k. On that point, you are plain wrong. Without these critical infrastructure there will be no capital investment in the first place.

Why do you think we do not invest into Africa? Because they lack stable governments and quality infrastructures. Who would build them? what should be the standard practice? Who owns the land? Who keeps track of what? A private corporation. Well maybe that private corp is really the same thing as a govt. ;-) lol

You fail to realize that public sector creates the necessary infrastructure to produce wealth in the private sector.

Not at all - I am not suggesting that infrastructure investments are not made - i have not said anywhere, anything about closing things or not investing. I am not suggesting that schools close, or be privatised. What I am saying is that rather than reduce the level of service in this recession, by laying off school staff (happening as we speak) reduce the level of pay and maintain service. Kids still have to be educated, and they will be better educated with more, slightly less paid teachers, than less slightly higher paid ones.
Which is the better result for the kids?

Read the papers and you will see everywhere talk about cutting this or that service, to save money, so the level of government services being provided IS decreasing. I would rather have more lower paid road crews filling more potholes than fewer, higher paid ones, filling fewer potholes. They do not need to be paid $60k + benefits+ pension etc. A 10% cut to $54k will not put them in the poorhouse, but it *will* lead to more potholes being filled - that *is* investing in infrastructure, just getting better value for money, not less.

We'd all be better off. If the Banksters took 10% off of our mortgage inflation payments and then the State could safely furlough staff by 10%.

Without the banks taking a loss in the FALSE property valuations then the cut in income to workers is ludicrous.

I have been treated as following. Purchased house in property spike (yes my first house and I regret it), received furlough for 10%, no significant pay increases in 2 years, pension contribution expected to increase dramatically by 2-3 fold, meaning another 5% loss in pay. Dental bene and medical bene expected to be reduced with higher premiums of course.

Meanwhile same expenses, higher fuel/food, and the same excessive mortgage payment.

I understand how to cut waste in my life and I have, but the line on the Glen Beck show is that I should have my job axed shows you the real problem out there.

Who should educate our children -- cause in my state prison guards make as much money as an entry-level educator?

Maybe prison staff should educate the kids. This is our future. One of decay and waste.

We'd all be better off. If the Banksters took 10% off of our mortgage inflation payments and then the State could safely furlough staff by 10%.

Well, yes, I won;t disagree with that. Same as I think the bank bailout money would have ben better paid as a rebate to all the population, and let it "evaporate up" instead of "trickle down"

Difference, is, buying the house was your choice, you may or may not benefit from your decision (and I am in a not dissimilar situation) The tax burden of public sector employees falls on everyone, and in the case of municipal ones, paid by property taxes, it is irrespective of personal income.

What I think is the biggest problem is not just the pay rates, but the very generous retirement benefits, which ultimately mean that the governments will be paying more for people who are not working, than those who are (see my LA example below to Leanan) - that is unsustainable.

The culture of entitlement, be it city workers or bankers, is squeezing the lifelblood out of the economy, while those who are not entitled, are paying for those who are - that can only go on for so long.

The public benefit of public sector employees falls on the entire public as it should, my friend.

How much should my pay be cut, since it was already cut at least 15%?

Tell me what my pay should be then.

Provide me with a better number than 15%. 50%, 75% maybe 100%. I work for free then ;-) Will you feed and clothe my children and family then and at the same time get a free education for yourself.

You are in the "Something for nothing crowd". Please respect the complexity of the situation a little more.

At some point, another round of foreclosure will affect the market again. Cause I will need to move. I did not anticipate a 30% loss in pay over 5 years. Who did? LOL.

Ask this question of yourself and then type a post back on my situation.

Note: I am just starting out. I have not exploited the system for 30 years for benefits and salary increases and retirement at age 58. I am on the lower edge and entry level. Consider it for yourself.

Oct, if your pay has been cut 15%, in the same job, then you have already shouldered your share of the burden. However, there are many, many more gov employees that have had little or no cuts, and in some cases, increases.
Worse still, of course are the pensions - paying more to people who don;t work and paying less to people who do.

I am not in the something for nothing crowd - but I am in the crowd of do not waste money by paying too much for things, or taking on future obligations.

I have been self employed for most of the last 12 yrs (I am only 41) and I do not have the parachute of a government pension etc etc. The only retirement saving I can have is what I save from my post tax income, and that has not been much for most of those years.
I have to create the work for every dollar I make, and have very little job security. Yet I am paying taxes so that some can have lots of job security and comfortable retirement, at my expense.
In your case, you pay has been cut also to fund the obligations to those that have gone before you - if you are taking the 15% pay cut, I hope everyone else in your system, and it s retirees, have done the same - though I suspect that is not the case.

Most businesses need to react to the needs of their customer base - many have recognised their customers can't afford what they used to - hence the "sale" signs in every shop window. It would be nice if government could recognise that their customers can't afford what they used to pay either.
Every business struggles with the problem of how to keep costs down while providing the same service/product - governments are cutting services for the same cost. I think that is the wrong approach- cut the costs, not the services.

And do not take on the "retirement risk" - the defined benefit pensions plans place the taxpayer at huge risk. Governments job is to provide important services -planning for retirement is up to individuals


I know you are a good guy.

I am just sensitive on this subject.

We are all doing our best in an energy depleted world (at least we are trying -- some of us).

Unfortunately we are just screwed. maybe the next collapse will cause states to default.

My feeling is that the youngest workers will get the least. At least that has been how things are shaking out since 2007. Retired people are protected to some extent since they are older and vote more often than we do.

we will survive.

Of course the younger people will get shafted - they always do!
There are less young people being hired not only because of budget cuts, but because the older ones are staying in their jobs longer - France in reverse!
Much of the retirees money will end up going on medical care - we have exponentially increasing health care costs, for later life care - it is the best real world example of diminishing marginal returns I can think of.
But when it comes to the individual, or their elderly parents, who is going to voluntarily turn away care/treatment because it is too expensive?
So there will be this gradual transfer of wealth not from the older generation to their children, but to the health care industry.
And their children, (or grandchildren) are the ones who are struggling to get jobs (unless they work in health care).

As a young person, I do not mind working hard for someone else' benefit (i.e. my employer), but when young people are denied the chance to work at all, then society has a problem.

There will be some tough adjustments ahead, and my view is that many of the "entitlements" simply cannot be fulfilled.

"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world." --Thomas Jefferson to A. L. C. Destutt de Tracy, 1820

more great jefferson quotes here - wish some of the current crop of government would read this;


Kids still have to be educated, and they will be better educated with more, slightly less paid teachers, than less slightly higher paid ones.

Slightly less paid, slightly less motivated...

The best teachers I ever had were not motivated by money, they were motivated because they loved teaching children(or adults). If a teacher is only motivated by the money, they are in the wrong job.

The number one complaint I hear from teachers is class sizes. During a teachers dispute some years ago, when teachers were demanding a 10% reduction in class sizes, the education minister said they could have it tomorrow - but it came with a 10% pay cut, to hire 10% more teachers. Sounds like a good solution, to what the teachers said was their biggest problem. You can imagine the response of the teachers union to that one.

That said, schools are cutting programs left and right and centre as we speak, so the kids are getting less education as it is. Should they get a reduced standard of education so that the teachers can be slightly more motivated?

Of course, as Oct points out, junior teachers today are not the reason why schools have a funding crunch. It is the older and retired ones, still being paid for.

When the country has a shrinking pie, which we do, everyone has to take a smaller piece, gov workers included. It seems a lot of attention is focussed on how to maintain their piece of pie, rather than on how to make the pie bigger, or to live better on the smaller pie - either way, the status quo simply can't last - city governments on the verge of bankruptcy is evidence of that.

Cutting salaries unilaterally is not legal.

My guess is that instead of that, they'll hold salaries at the current level (and hope inflation lowers them). Also, they'll cut salaries and benefits for new employees and encourage older ones to retire. Far easier to do that, politically and legally, than to cut existing employees' salaries.

Cutting salaries is only illegal if there is some contract or something that prohibits it. If that means wait until the next round of bargaining, then so be it. I have been in the room, as an employee, when the choice has been 10% cut or 10% retrenchment - it is not pleasant. Then, I took a voluntary retrenchment - if I had a family, and it was today, not ten yrs ago, I would probably take the 10% cut rather than join the job seekers.

Your Hawaii example is exactly the wrong way to go. The teachers pay is cut 20%, the kids get less education, and the parents then have a problem. Much better to cut pay 10% and keep the kids at school.

I agree that they will cut pay benefits for the young people, and that is what it happening - the young people suffer so their elders can hold on to what they have. But what is not happening is cutting pay/benefits for the older staff. The older staff have seniority, so if there are layoffs, the youngest (cheapest) staff leave and the school is left with the most expensive staff - it is a terrible system.
The old staff will sue if they are laid off within sight of their retirement packages, and theirin lies the largest problem - creating these huge golden parachutes in the first place - it has to stop.
The current generation of younger people will (generally) have less than their parents. The teachers of tomorrow will get less pay and benefits than those of today - there is simply less wealth to go around. Painful a that is, it is a reality that needs to be faced.

Cutting salaries is only illegal if there is some contract or something that prohibits it. If that means wait until the next round of bargaining, then so be it.

IME, there usually is. Often a concession given in previous negotiations, in lieu of raises. Sometimes the courts have determined that the old contract holds until a new one is signed.

10% is probably too much to ask. Especially with the way seniority works. They'll lay off some middle manager, and he'll bump someone more junior, until finally some kid making minimum wage filling potholes gets the boot. The unions kind of figure the young people won't stay, anyway, since traditionally the pay has been so much better in the private sector. So they'll screw over the newbies in favor of the lifers.

I believe at least one state employee union accepted a 3% cut to avoid layoffs. That's probably in the neighborhood of what's reasonable to ask for.

Remember, most people don't think this is different from any other recession. They see no reason for drastic measures. Things will have to get a heck of a lot worse before they do.

The difference with the public sector, of course, is that the operation concerned (schools, fire, etc) will continue. With the private sector, there is a real risk that the operation will fold. If need be employees will take a bigger haircut to keep the operation going, but that is not an issue with most public sector operations.

It is one of the worst features of unions, in my view, that seniority always wins. Who stays and goes should actually be a management decision. For an entity that must continue, like schools, keeping all the senior staff is not only more expensive, but at some point will lead to an imbalance of age and experience, when they all retire at the same time. That unions don;t really care about that but management (and parents) certainly should.

It is obvious that many people don;t think this is different, and the message they are always getting from government is that things are about to get better, so why should they believe that drastic action is necessary. But the finances of cities and states paint a different picture - I think most of them are in much worse shape than in previous recessions.
Private industry will/has reorganise to a lower level of activity, which means less tax revenue for the cities/states, who, so far have not taken the really tough steps to get to a lower lever of spending. Their recession may last longer than everyone else's.

In California, they furloughed the professors to save money, but they do not touch the real issue until very recently -- the pensions. Now since about 1990 (early 1990s) they did not contribute to pension funds. Now suddenly that will increase (in the range of 5% of pay). So the effect of 7% furlough and 5% pension addition is 12% paycut basically.

They said that because the market was doing so well and the fund was overfunded (lol) that they could stop contributing in the 1990s.

See the previous generation did not save for its own retirement -- but they contributed less than their fair share.

they never ever lower the amount received in these schemes. LOL

This is the central problem. The mistake of the 90s was to believe that the DOW was going to be 30K by 2020, which is ludicrous.

I need a beer and/or a shot of morphine.

they never ever lower the amount received in these schemes. LOL

There is the problem - the "defined benefit" pension, where you are guaranteed a payment of X regardless of what the fund/markets actually do. It leads to all sorts of system gaming by the fund managers, pulling stunts like you described, because the system is "overperforming". That, quite simply, should be illegal. It also puts the gov/company on the hook to pay X regardless of the ability to pay, and the gov/company should not have to speculate on the future like this.

The better way is the defined contribution fund, where you put in X, and when you retire, you get paid out. The retiree is free to reinvest however they see fit. In Australia they have approved "rollover" investments, where, you can reinvest it in privately managed funds, or certified bank accounts, etc, with no tax penalty. If you are under 65 and take the money, you pay income tax. After 65 the tax rules change though I can;t remember the specifics.

But the key point is the liability for retired employees no longer rests with their former employer, and this is as it should be. Then the company/govt can focus on its future, which means retaining and training younger staff, not letting them go because you are paying the retired staff - there is zero benefit to the customers of any organisation from that approach.

We are going to see a new type of "haves" and "have nots",, those who the defined payment government pensions, and those who have not, but are paying for, or suffering reduced services, to pay for those that have. This ends up being government for government, not for the people.

At some point, the people will express this at the polls, which is exactly what happened in Toronto. The new mayors campaign slogan was to "stop the gravy train at city hall", to cut all sorts of wasteful spending, untendered contracts, make work projects etc, to reduce the burden the city is placing on the people - he won handily.

I expect we will see lots more of that - the cities have little choice.

Hawaii tried furloughing teachers on Fridays. It didn't go over well...with the parents. In fact, it ended early because the parents were tired of trying to find child care for Fridays.

I think the real issue is that a 10% cut for government employees is a drop in the bucket. The California furloughs cut paychecks almost 15%, but didn't make much difference in the bottom line, because employee salaries are not that big a part of the budget.

Unfortunately, you are correct, but it is a start, and it bursts the bubble that gov wages/benefits are "untouchable."
The elephant in the room, of course, is pension obligations.
The City of LA, for example, showed the French how its really done, by offering police and firefighters a "3% at 50", where they could retire at 50 with 3% of final year salary for each year served.
These pension obligations now consume 8.7% of the city's budget, and in five year will be 19%.
That is oin in five tax dollars to support people who are not actually providing any service to the city, so inevitably, cuts will be made to thaose who are serving the city, to pay for this.

full story here;

Clearly, I am not the only person with this point of view.
Last night, the City of Toronto elected a new mayor, David Ford, who ran on platform of, among other things, reducing wages paid for city jobs, and city contracted jobs;

I hope and expect to see more of this.

Pensions are a problem but how on earth did they manage to make Police so darn important, because my teaching pension is easy to exploit by the state, but they never ever touch the police pensions. LOL.

My car was broken into in front of my house and the ignition was destroyed, but it took local police like 2 hours to respond. lol. hard at work eh?

Look we are screwed and no one can stop it, but at least teaching children today is something that does real work. Retired police officers are not going to help matters much except consume disproportionate resources.

Heck they don't even work when they are past 58. LMAO. I know they deserve it.

Once the cities begin to default and the states default then the police pensions can be renegotiated. Until then it is cut cut cut the folks under 40, since we are negotiable to society.

I've noticed a slow trickle back toward the north...

That's OK, I kinda like my beach when it's a little less crowded... Though I don't have anything in particular against New York either, I lived there for many years, heck, my son was even born in Manhattan.

I have a hunch that the grass won't be all that much greener for those who are moving back up north either, or anywhere else they might try to move to. I think the grass will be pretty much equally brown from here on out most everywhere.

I grew up and am currently living in DFW.

I've long believed Texas would eventually follow California's path...too many people move in to enjoy the good life, then the good life disappears.

What is interesting is how declining net energy weakens large, complex structures, as opposed to increasing net energy, which allows the formation of such structures in the first place.

Which is exactly why you see so many problems for big structures, like the U.S., and even states like California, Texas, New York, Illinois.

But you won't necessarily have a better life in say Arkansas or Rhode Island. But there's a good chance you will face less political upheaval, because these are small structures which are less complex to begin with, and don't face too much population pressure.

These are the reasons why I eventually want to move to a medium size city in a medium size state/province. This allows the best chance of continuation of BAU life, without facing either the deterioration of complex structures, or the isolation of living in the boondocks.

Five years ago, I proposed and helped organize a symposium at SMU featuring Matt Simmons and Jim Kunstler (the MSM of course totally ignored the whole thing). In any case, I picked Jim up at the airport and took him on a tour (showing him our isolated outposts of New Urbanism among the suburban wasteland), and it was probably the most entertaining car ride of my life. Jim instantly adopted an exaggerated Southern accent and launched into a profanity laced running commentary on "Big D." As we approached the High Five complex (a massive local freeway interchange), even Jim was impressed by the scale of our monument to automobiles, saying "That is one big mother------g freeway."

Either Texas is bankrupt, or California isn't. Whch one is it gonna be?

Strictly speaking the question is which state will be the first to default on its debt and/or pension obligations, since states can't file for bankruptcy. As I said previously, most governments in OECD countries are in a race to the edge of the fiscal cliff, where we will see a "Thelma and Louise" moment.

Re: Bicycles, Unchained and Grease-Free

I get tired of the latest cycling gizmo inventor thinking they have made a revolutionary transport breakthrough.

The problem of bicycle chains is entirely due to the fashion for dereailier (sp) gears. Before them,
bicycles had either a single speed or hub gears, and the chain was entirely covered by a metal (or now, plastic) casing.

The chain was entirely protected from the environment. It needed greasing at most once a year, never put grease on your clothes, was 98% efficient, and lasted for ever.

That is the design on my bicycle. I won't be changing it.

Of course, there are radical designs that are far more efficient for some modes of cycle transport. They are recumbents or HPVs. They were so much more efficient that they were globally banned from cycle racing in 1935 as the design was considered cheating. It put back cycling technology by 50 years at least.

I recently bought a recumbent tricycle with hub gearing. I will never go back to derailleurs. Best hopes for human powered vehicles being a big part of our future and soon.

Has anyone tried a bike with a CVT like this?


Also, any links to studies of frictional losses, belts vs. chains?
I found lots of claims for both.

I think i saw a Trek with a belt instead of a chain. I thought it was cool, but not sure how it would hold up over time (have done no research on this lately). Belts in cars seem to work pretty good, so i doubt there would be many issues. Even timing belts can go 120K+ miles.

I have a Miyata (now 12 years old) with a belt. It has never needed any signifiant maintenane at all and I`ve ridden it thousands of kilometers. I would say the belt makes it lighter. The frame is just lighter somehow than a normal bike. So it`s an easy bike to use. I would always buy a belt driven bike in the future.

There are a range of hub gears available, with between 3 and 14 ratios, depending on the weight and cost. I find 7 ratios is fine for most normal 2 wheeled cycling. For a heavier, 3-wheeled cycle either a 14 speed hub, or 2 hubs run in series will give you a bigger range of ratios than you could ever use. The benefits of CVT giving you infinite ratios will be more than offset by the cost, unreliability, and internal friction of such a device.

Hub gears should last forever.

Hello Ralph,

Do you have any experience and thoughts about electric motor hubs and battery types for bikes? The A123 Batteries are suppose to have a 7,000+ cycle life using LiFeP6 chemistry but a local dealer is using Lithium Manganese and is only achieving about 1,000 cycles. I've been thinking of reentering the cycle commute but 15 miles one way is a hefty distance for a pencil pusher nearing retirement.

Modern electric cycles are wonderful for the less energetic cyclist, but I have no use for one at present. I know little about modern batteries, the only one I have tried has been lead-acid powered.

I'm looking for actual efficiency numbers/tests. It would be easy to test variously configured designs and get real data as to which system is the most efficient for different human powered platforms. I haven't been able to find much on this. Of course, there are other factors to consider (weight, durability, maint. etc.) which need study as well. Is there a meters per calorie rating system for pedal powered vehicles? Just some thoughts.

While it seems that the tried and true chain and sprocket drive on bikes is very efficient....

In the best test, the chain drive posted an energy efficiency score of 98.6 percent, meaning less than 2 percent of the power used to turn the front sprocket was lost while being transmitted to the rear one. Even the worst test turned in a respectable 81 percent efficiency score.

.......I would think more studies could be done.

The fashion in the UK has now gone into reverse, with single speed 'fixed wheel' bikes being ridden by macho young men. These have no gears, no freewheel, no brakes, no fenders, no suspension, a light weight frame, and your feet are strapped to the pedals. If you stop pedalling, the bike stops.

Great for distance training, and wonderfully light, but a bit of hazard in busy town centres.

It seems like bikes now have way more gears than they need. My bike has 21 gears (3 in front, 7 in back). I have never gone off of the middle gear in front, and have only used the middle five gears in back.

Agreed. It is just a selling point to put more gears on a bicycle. Either the weight goes up, or the strength and durability goes down. My town bike has 4 gears. I would prefer a lower gear for steep hills or a faster get-away from the lights, but I don't don't use all the ratios on my 7 speed bike.

It depends where you live. My commute to work is 7 miles each way, and the touring bike I now use, a Dawes Horizon with derailleur gears, 3 x 8, is by far the best I have used. I use all the gears and the complete gear range as I have several large hills. The gear change is smooth and seamless in the main with small steps between gears.

I also have a hybrid with a Shimano 7 speed hub gear and hub brakes which I used for some months. It is OK, and the lack of maintenance is great, but it is heavy, the change is clunky, and I stopped using it to commute because it is very difficult to remove the rear wheel at the roadside to mend punctures, and there is also the risk of losing bits. 3 speed hubs do not have the gear range I need. Derailleur gears are light and cheap, and yes there are drawbacks with chains needing replacement after 6-9 months and cassettes after 18 months, and you need to clean the chain every 10 days or so.

I would love a Rohloff hub geared bike, but they cost 1800 pounds and upwards, compared with the 550 I paid for my tourer.

Some people need them. I use the lowest gears of my 24-speed on the way to work (two steep hills). Not the two highest, though.

Here’s a little primer on bicycle “gears”. Multiplying the number of rings on the chainwheel (front sprocket) by the number of cogs on the rear cluster (cassette nowdays) does not give a true picture of the number of “gears” on a bike. It is necessary to figure out the gear inches for each ratio, and when this is done there are usually several that are so close together to be practically the same from a riding standpoint.

The gear inches are computed by dividing the number of chainwheel teeth by the number of cluster teeth and multiplying by the wheel diameter for each possible combination. On my bike, which is a 28 speed (3 front x 8 rear) I have effectively 17 “gears”. Also, the number of practical ratios is reduced by the route of the chain over the cogs – you usually don’t use the extremes (largest chainwheel to largest cog) as it runs the chain at an extreme angle, usually creating a good amount of chain noise in the process.

Since most of my riding is on level ground for short distances, I use mainly the middle chainwheel and 6 center cogs.

It is important to have a large range -at least if you cycle in challenging terrain. The exact number you have in between isn't all that crucial, unless you are trying to highly optimize race performance.

A storm system coming out of the Rockies is set to deepen rapidly across the midwest during the next 48hrs. This type of thing is somewhat rare (every 10 years?)...something similar to the Nov 1998 wind event (on the bluff here in La Crosse, a 93mph gust sheared a flag pole). Think of it as a land hurricane with pressure down to 960mb or possibly lower as it moves north into Canada.

I wonder for you wind nuts, if we will see some record amts of electricity produced or will those wind machines up here be shut down? We're talking sustained 40mph winds across the entire region with gusts to 60+... Can the wind machines handle this?


The brown is all a high wind watch/warning... Should be fun to watch unfold.

The GE 1.5 MW wind turbines (60 Hz versions) have cut-out speeds of 25 meters/sec (55.9 mph).


Links to specs for 2 & 3 MW units are on the left side.

Best Hopes for Good Wind,


Looking over at Vestas, it looks like 25 m/s is the norm for most of the big turbines. The 3MW is rated at 12 m/s... so lets double that and power output would be?

Going to be some massive power produced by these machines this week.

With frequent gusts or sustained winds above the cut-out speed the turbines will shut down.

Wind storms are not necessarily good for harvesting wind energy.

On the other hand, any farms in the zones on the edges of that area will be cranking at maximum.  Partially feathered blades mean negligible wind-shadow effect.

Even if these storms were once-a-year events, they wouldn't mean much for total production.  The major difference is that if we had good storage systems, they'd probably be full by the time things shut down, and fill up again afterward.

Wind storms are not necessarily good for harvesting wind energy.

Even if the turbines were built to take advantage of a gale, the odds are that the transmission system wouldn't have been sized to take the power. And damage to the turbines probably increases substantially with wind speed, it may be more economically advantageous for the WT operator to park all their turbines for the duration, rather then risk damage.

It's probably the storm that ended here in northern CA. The winds were high (but not as high as the ones you quote) and we got 8.4" of rain - most of it Saturday night/Sunday before dawn. FWIW I'm about 200 miles north of SF in the Coast Range Mountains.


This pig is coming in even stronger on the new GFS run. This could set new pressure (low) records in Minnesota. I can see a lot of damage if the winds makes it to the surface.

Lake Superior...28ft waves in the forecast!!!


Gordon Lightfoot, call your office.

Gordon Lightfoot, call your office.

The gales of November come early!

Man, would I like to be in Montreal Harbour or Wawa to see this one. Those waves are heading right for those areas. Between Batchewana Bay and Chippewa Point is the area where they figured the Edmund Fitzgerald went down. There's some wind turbines at Chippewa.

I used to be the EE responsible for the transmission and substations in those areas. We traveled to some generating sites by snowmobile ;-)

Great Lakes Shipwreck Museum

It is very worthwhile visiting. The have the bell from the Edmund Fitzgerald on display. They also have displays and media about the many other Great Lakes shipwrecks.

My ex-wife is from Sault Ste. Marie and they lived down by the St. Mary's River during that time. The morning after she was walking along the river and came across a foot locker from the Edmund Fitzgerald. As a kid, she gave it to her next-door neighbour.

Wonder where it is now...?


Probability of severe weather within 25 miles of a point.
Hatched Area: 10% or greater probability of significant severe within 25 miles of a point.

1227 PM CDT MON OCT 25 2010

VALID 261200Z - 271200Z


Animated GFS run at http://www.weatheronline.co.uk/cgi-bin/expertcharts?LANG=en&MENU=0000000...

I remember looking at the progs (then forgetting about it since I don't live there now). Could be interesting. Have the trees already dropped their fall leaves? Trees without leaves don't catch the wind quite as bad and should be less likely to be damaged.

Re: Shell slashes $18bn from Kashagan costs
A few years ago I happened to be over at ConocoPhillips and I heard a senior manager (who had previously worked at Kashagan) joking that the staff over there privately referred to the project as "The Cash Is Gone!".

UK Strategic Defence and Security Review pp 50,51,52


Some interesting snippets here on Energy Security from the heart of UK govt, so it couldnt be more mainstream:

"The UK faces a range of risks related to our ability to access secure, diverse and affordable supplies of energy, which are essential to economic stability and growth. These include political instability in key energy countries, insufficient investment in states that supply energy, and imperfections in the functioning of global and UK markets. As the box below suggests, these risks are likely to intensify over the coming years, due to our growing dependence on imports of fossil fuels at the same time that global demand and competition for energy is increasing"

"We will reprioritise bilateral diplomatic relationships, giving key supplier states a stronger focus"

"work overseas, using diplomatic, military, intelligence and economic activity to mitigate disruption to the transit of energy supplies"

"We will also work with states and groupings of countries that use the most energy – for example, US, China, India, Russia and the EU – in support of actions that reduce their oil and gas demand"

"improve the Government’s ability to consider and tackle the range of risks associated with other resources, such as key mineral components important for particular industries (e.g. rare earth metals which are crucial for some low carbon technologies), water and food"

Thanks for pointing this out.

We will....introduce measures to promote low carbon energy and energy efficiency, including through a new ‘Green Deal’ to reduce household energy demand and the establishment of a ‘smart grid’ which will improve the interaction between generators and consumers of electricity to deliver more sustainable, diverse and secure supplies;

Please Mr.Cameron, can I have a bit of the Trident nuclear deterrent budget to train people in home insulation?


Link up top: Days Of Oil And Roses

The real issue, however, is that of oil decline. Estimates of the annual rate of decline range from about 3 to 12 percent, but it seems the consensus is about 6 percent (Hook, Hirsch, & Aleklett, 2009). At 6 percent, oil production will fall to 50 percent of peak production soon after 2020. The implications of this have not sunk in. There is only enough time to sell the urban mansion and buy something more secluded. (Those without urban mansions can do as they please.)

I don't understand why Peter Goodchild is saying such a thing or why Counter Currents is publishing it. Oil is not going to decline at 6 percent. The average decline rate of all mature fields is about 6.5 percent but all fields are not declining. And, there are a few new fields coming on line every year.

Right now the decline rate is about zero. That is enough new fields are coming on line right now to balance out the decline rate. Soon, in about two years, the decline rate will sneak above the new production rate and we will start to decline, first about one or one half percent per year, then one to two percent and perhaps by 2015 or 2016 we will be declining at a rate of above 3 percent per year.

There is no predicting what will happen then. The economy will play a big part, but I expect hoarding will be the largest factor. With oil prices above $80, many countries, even Saudi Arabia, may decide that they can hold 20 percent of their production off line because the high price of oil gives them enough to run their economy by exporting only 5 million barrels per day. All other exporting countries are likely to do likewise.

Ron P.

Right now the decline rate is about zero. That is enough new fields are coming on line right now to balance out the decline rate.

The actual shape of the global peak event is in my opinion a really interesting issue.
It sounds to me like your predicting about a 10 year plateau event assuming we hit it in 2005. One could argue given this time link and the current prices that this will spur aggressive development of remaining projects at least extending the plateau and ensuring and even shallower decline rate say perhaps 1% when we finally come off.

I'd argue that it might be more realistic to assume 2020 as when decline reaches 3%. We have heavy oil deposits which can be brought online in the interm Iraq should finally ramp up over the same period etc. Basically using you numbers I'd argue we should get a global peak not unlike the US peak where Alaska came on line slowing overall US decline. And of course you have the various deep water projects.

Substantial increases in overall production are probably not going to happen but the undulating plateau seems more reasonable.

On the economic front it makes sense to assume the global economy would basically muddle through following a similar path. Any growth would lead to very high oil prices stalling the economy. If it shrinks too much we get low oil prices which spur the economy. As long as it does not collapse defaulted debt will be slowly bled out of the system resulting in a more robust financial system increasingly able to handle this flat economy.

Other solutions are certainly possible but I'd argue if one accepts that we are on plateau now and we accept all the public data at face value then it makes sense that the plateau would last quite a bit longer than your suggesting and the initial decline rate will be less than 3% for some time.

Next if your going to do this then at least some of the recent reserve increases from OPEC should be included which pushes final decline even further out.

You tend towards and undulating plateau potentially out to 2030 in line with what CERA has suggested.


I don't agree because I don't believe the data however if you do I'd argue that the CERA estimate is far more likely to be correct then what your presenting. Even if they get the rates wrong on unconventional resources all this does is lower the height of the plateau it does not change its overall form that much, your still looking out past 2020 before decline becomes and issue.

Indeed the fact that it seems demand has dampened production to below capacity and is likely to do so for some time actually shifts final peak even further out as high but flat prices and weak demand ensure conventional oil is not used up as fast and unconventional comes on line at a rate that ensures spare capacity remains in the system.

Last but not least oil usage efficiency can be increased esp over what looks to be a 20-30 year time span of effectively flat oil supply this is more than enough time for turnover in the auto industry to shift fuel economy higher esp as it becomes obvious that we won't return to the old oil price regime and 70-80 is the new normal.

If we then except the recent OPEC reserve increases at face value and except Iraq peak production estimates but not their timing then when we finally come off the plateau may well be even later than 2030 as substantial spare capacity remains in the system even past this date. Of course this buys even more time for consumption to increase in efficiency and silver bullet technical advances and other technically feasible changes to the transportation network become even more likely thus even when peak is finally reached its impact will be muted as the infrastructure for alternatives will be well advanced at that point.

The bottom line is if I believed the data then I'd have to believe CERA except recognizing that they are projecting capacity additions not actual production which is dependent on demand. Indeed if the demand existed right now the world should easily be able to produce at a new peak rate surpassing the last peak easily.

If you believe the data.

Memmel, I really don't know what to make of your post. Half the time it appears you are joking and half the time you seem serious.

Next if your going to do this then at least some of the recent reserve increases from OPEC should be included which pushes final decline even further out.

Do what? Yes, I do accept the data that we are on plateau that has lasted almost six years. And yes I do expect it to continue for a couple of more years before we begin the slow decline. And no I do not believe those silly OPEC reserve numbers, not to mention their recent increases.

The production data is all I have. We have production data from the EIA, from the IEA and from various other sources including OPEC's Oil Market Report giving OPEC production numbers. Do you actually believe that I am going to say: "Naw, I don't believe a word of it, I believe world oil production is now declining at 6 percent per year"? No, I am not going to say that.

But then I do not believe the data is all that accurate either. I have said as much many times in the past. But I do not believe they are deliberately lying just to hide the fact that oil production is dropping like a rock. (A six percent drop is dropping like a rock.) If oil production was actually dropping even half that fast it would be obvious, there would be no way to hide it.

There is no reason to believe CERA about anything because they are predicting what will happen in the future, not what is happening right now. There is no reason to bring CERA into this discussion whatsoever. And what on earth do recent increases in OPEC's paper barrels have to do with anything? All I said was that we have a zero decline rate right now. How on earth can you drag OPEC paper barrels into that statement? Are you just trying to be sarcastic? What is your point?

Bottom line: Yes oil production has been on a plateau for almost 6 years. Yes, I do believe it will start to decline in a couple of years and yes I do believe the data supplied by the EIA is their best honest guess and not really all that far off though it is far from 100% accurate.

Ron P.

Half the time it appears you are joking and half the time you seem serious.

Indeed. And memmel's posts are not consistent either, at least not during the 2 years that I read TOD. Agreed, there is some uncertainty, so it is easy to write a story and end with: or not, time will tell.

In my opinion memmel is consistent. His post in this thread is just saying what he doesn't believe though.

From my reading, Memmel believes it most likely that true crude production has been declining at maybe 1-2% per year for several years now and that rate may now be accelerating. This happens to be consistent with the "Peek inside the Peak" mysterious "Best In Class highly regarded confidential supply model" snapshot slides posted by Matt Simmons.

Of course we are all free to believe Simmons made the slides up and that Memmel is misguided.

As Han said, Memmel always ends his posts with the equivalent of "it could go either way". He is very consistent in his inconsistency.

From my reading, Memmel believes it most likely that true crude production has been declining at maybe 1-2% per year for several years now and that rate may now be accelerating.

I really don't think it would be possible to hide that kind of decline for several years and it would be impossible to hide it if the decline started to accelerate. Who would be declining all this much. Many nations publish their production numbers, Norway and Mexico for example. Several firms publish OPEC production numbers, Platts, MEES, etc. And they all pretty well agree if their averages is taken over a year. In other words if one was fudging then their numbers would soon be so far from the others that it would be very noticeable.

The decline would accumulate and after five years or so the numbers would be would be three or four million barrels or or thereabouts below the reported numbers. Who would be producing three or four million barrels per day less than the EIA is reporting?

No, in my opinion it simply could not be done. The reported numbers can only get so far off before it becomes obvious.

Ron P.

I find it very interesting that tankers rates (see article up top) have plunged tremendously in 2010.

While indeed some new tankers came into service this year, the existing tankers were running slower to save fuel. So the new tankers this year is only a marginal factor in causing tanker rates to plunge.

Therefore I think the key conclusions that we can make are that 1. the number of tankers used as storage has fallen and 2. net exports are falling - or some combination of the two.

There are many reports that offshore storage has been greatly reduced - except for Iranian oil near Iran and perhaps waiting to unload in French ports. But even so, that still would not cause tanker rates to plunge this far.

So my conclusion is there are less exports now as compared with earlier this year. That does not necessarily mean total oil production has fallen off its plateau, but that there are just less exports being shipped.

If tankers rates stay down, then yes, it will be getting obvious something has changed.

The Oil Shock Model is essentially what is called a "compartment" analysis which looks at probability flow of oil between various compartments. When you analyze the flow between the primary stages then you get a model that looks like the diagram to the right.

But at a finer level, the stages can expand tremendously. The problem is that there is not much volume in any of these compartments so that they cannot effect any long term trends. However they can provide short term capacitance in prolonging a plateau. This is easy to figure out by hand as the time constant it can extend is essentially the "volume in transit" divided bt "the rate of consumption" or Volume/Rate.

Actually about 8-10mbd right now lowest I'd think would be 6mbd. And yes I'm consistent as far as I know. We have had 140 dollar a barrel oil and the world economy in the deepest recession ever depression depending on how you look at it and oil is still over 70 a barrel all because of a plateau ?

As far as what I think well at first if we where on a plateau and at time I did believe the data I argued we would likely fall off rapidly aka shark fin. When I figured out a way to guesstimate the decline using C02 I came up with a basically linear decline of 1mbd over the last 7 years or so. I still think the arguments behind the shark fin are correct although even back the exactly how we decline right around peak are not clear. It makes a lot more sense given the technical advances that at first they would limit the decline to a few percent esp as prices increased making known oil resources that where difficult to extract profitable. Think a lot of horizontal wells in fields where they would not have been profitable. ROCKMAN from one of his posts seems to be doing this now.
You still eventually of course hit the cliff aka steep drop zone where decline rates accelerate rapidly from 1-2% to say 6%+ dunno really what they go too but high.

BTW you don't have to look at oil only US NG should follow the same pattern with UNG production a very shallow initial decline rate for a few years then a rapid fall. The time scales for US UNG should be substantially shorter than for the world. Perhaps UNG has already started its accelerated decline who knows ? Maybe its still at peak dunno. Regardless if the basic concepts are right about how technology or the super straw effect behaves then I think the curves will be similar with a slow decline followed by a rapid drop.

Now of course you can pick any scenario from the above up to believing everything thats been offered by the authorities but with what justification ? Why is your picks better than others ? What data do you keep what data do you throw. In the end I found no justification for believing most of the data outside of Norway. Not the US not Britain and certainly not the rest. Norway has the only data set that stands up to scrutiny. However thats not enough data to extrapolate to world production.

Can I be wrong ? Certainly I could be having thrown out effectively all the data I was left with playing games with C02 to try and get something for the world.

Problem is once I was done I'd argue a 1% or so decline in oil production over the last 7 years are so is entirely consistent with the current economic state. In my opinion it makes a lot more sense than a plateau. I'm quite comfortable with the result being plausible.
Now of course this means everyone is basically lying their ass off which is what I was concerned about in the first place.
Come up with another way to check peak oil. Another approach I used was looking at the sulfur market but its also shown pricing moves consistent with falling oil production. Asphalt is another I've considered also bunker fuel. The price moves of these "cheap" side products generally follow the conclusion that production is falling and has been for a while.

Of course products like Asphalt are local markets and sensitive to economic down turn Bunker fuel is global but also sensitive i.e high oil prices grinding down the economy will reduce demand for bunker fuel itself dampening its price signal.

I've proposed on many occasions that people should consider looking at secondary factors to see if they support the official numbers.
I'd have to imagine that if people tried they could come up with other things we have numbers for that are coupled to oil production.
Food ? Well food prices also became both high and volatile. Many of course will move up and down not only based on oil supply but also on the secondary economic impact of high priced oil. Imperfect probably but hey its worth a try.

Now back to where is the oil ? Lets take your 4mbd what happened to it why is it not obvious as you state. Well first I'd argue the price spike was a tad obvious but still where is the missing oil ?
One place I suspect its hidden is in the claims of rapid increases in internal consumption from producing countries. Obviously if they are in decline then the the rate of increase in internal oil consumption was significantly lower. My best guess is its generally linear with population after looking at a lot of countries. Either slowly increasing or flat. Once you assume many producing countries saw either flat internal demand or at best a steady linear increase you get yourself several mbpd of missing oil 2-3 actually. Next consumption in the poorest nations has probably really declined since the rapid price increases started. They don't use a lot of oil in the first place but in aggregate it adds up. The exact value is uncertain but 500kbd-1mbd is probably a fair guess.

Now the OECD has published real declines in consumption dunno exactly what these are but in total easily good enough for 2-3mbd themselves.

The two outliers are of course China and India well peak oil does not no boundaries so China's internal production is probably also in decline thus rising imports would be offsetting internal production declines. Everybody is gaga over all the new cars flooding China and India however the US was able to expand its car fleet significantly with little change in consumption. And of course I could have the basics right and be off a bit no telling what my error term is but 1mbd would not be surprising. China and India could well have seen a real 1mbd increase in imports and it would still be consistent with and overall decline of at least 4bmd. Perhaps the decline rates of Chinese fields are still low or they have managed to offset production problems with more aggressive technology no real telling. I doubt they have seen dramatic increases in internal production. I lived in China and spent a month in India my own personal observations are consistent with flat consumption to slightly rising consumption being perfectly valid. I did not see anything that suggest that such and assumption was horribly wrong. The consumption pattern in both countries is quite different from the US and very similar. Cars are status symbols and luxury items. Few people actually drive them daily instead they continue to rely on public transport a lot of the time. Given the traffic gridlock in these countries driving is no faster and often slower than public transport so there is a very practical reason to not drive. Only the top managers seemed to always drive often having drivers. Simply assuming US style usage patterns is wrong. In Europe people drive more often but again many car owners still rely on public transport for their daily commute.
If they do drive they often carpool and generally seem to have a shorter commute than the US. Diesel and Gasoline are expensive in Europe and expensive relative to wages in India and China it not shocking that their consumption patters differ even if car ownership rates are rising or equivalent to the US.

So could I be right sure I don't see why not all it means is that basically everyone is lying about the oil situation thats so what ?

Looking forward however if I am right then there is a limit at some point demand gets increasingly inelastic lying does no good. Again exactly where that limit is is unknown but I have to imagine we are probably getting very close. Depletion does not stop. Again I don't know for sure where we are but I suspect we have already entered the accelerated decline phase with decline rates starting to increase.

Or to finish and remain perfectly inconsistent I'm wrong. However if I am then I have a difficult time throwing out any of the public data anymore. I don't think trying to partially accept the public data is correct. Either its all right are its all wrong. You don't accept production numbers from KSA then reject their reserve claims. Either the source is reliable or its not. Why believe one and not the other ? Its all or nothing and therefore its either I'm close to the right answer or CERA is. I no longer believe that attempts at middle ground arguments via partially accepting the public data are valid. Could I be wrong again sure but without real data transparency its hard to know. Which is what lead me to do my best to come up with a reasonable independent estimate in the first place.

And last but not least.

Several firms publish OPEC production numbers, Platts, MEES, etc. And they all pretty well agree if their averages is taken over a year. In other words if one was fudging then their numbers would soon be so far from the others that it would be very noticeable.

And where do the numbers come from for OPEC that Platts etc publish ?
I think you will find if your willing to dig that a lot of the data is replicated from official numbers for all the worlds producers including gasp the US no one has enough raw data to reconstruct production numbers for any country outside of the governments.
Simmons was entirely correct in observing that until there is real transparency the truth will never be known.
Lacking that and not even trying to construct alternative measures means your estimates are in my opinion no better than CERA's.

Right or wrong at least I tried and I stand by my results until they are proven wrong with real and plausible trustworthy data.
Lacking that then I'm fundamentally wrong and CERA who supposedly has the data is right and attempts presented on the oil drum to partially accept public data are simply wrong because the data filtering is almost certainly wrong. You just as well pick a scenario out of a hat any could be right.

Until people get serious about constructing independent alternative indicators for oil production we will never know until it really is to obvious to hide.

And where do the numbers come from for OPEC that Platts etc publish ?
I think you will find if your willing to dig that a lot of the data is replicated from official numbers for all the worlds producers including gasp the US no one has enough raw data to reconstruct production numbers for any country outside of the governments.

You are saying that the OPEC numbers come from the OPEC members themselves! Now I know you are out in left field. OPEC does not publish any numbers except what they get from their "secondary sources". In fact Venezuela is constantly complaining that their number are being under reported. They say they are producing over half a million barrels more than they are being given credit for.

No, they get their numbers from counting tankers, import data and a little guessing. It is absurd to think that Saudi Arabia and the other nations are feeding them the numbers.

Ron P.

I recall a news story posted on TOD a few years ago that said that OPEC had sent a team to Venezuela and they agreed that using the same standards applied to Middle East OPEC countries that Venezuelan production should be recorded as considerably higher than that actually reported (agreeing with Chavez). If this is true it could just as easily imply they know their own production is over-reported (as Simmons claimed) as it could that Venezuela production is under-reported.

This nonsense of mysterious methods and "secondary sources" does not fill me with confidence.

CERA has recently produced this report, which suggests there will be no peak until at least 2030.

It's behind a paywall - anyone have access to it, and if so, any comments?

'Peak Oil' Postponed Again, Part 1: Liquids Production Capacity to 2030


"France Gets a Foretaste of a World After Peak Oil "

That is a great article. But I am not so sure the author is correct when he says:

" This time, the chaos is temporary; but it does not require much imagination to see that when fuel runs out, the economy and daily life we know will quickly collapse.

The current chaos might be temporary, or not. Now that the global financial system is starting to collapse, the conditions in France might become the new normal, with "temporary" periods of relief.

Just like all those individual "99ers" (individual post-99 weeks unemployment), many nations have been holding out hope that they could weather this "recession." Some with advanced degrees and excellent resumes might have had good reason for their hope, but they still ended up homeless and are still unemployed.

How many nations are going to run out of their "99 weeks" of benefits (bailout money from the US Fed and IMF and European Union, etc, etc). (Edit - how many states and cities are going to run out of their "benefits"? who will keep buying their garbage bonds ???)

I still don't know what I was waiting for
And my time was running wild
A million dead-end streets
Every time I thought I'd got it made
It seemed the taste was not so sweet..

Ch-Ch-Ch Changes... (time to face the strain)...

Regarding France Gets a Foretaste of a World After Peak Oil, the impact is what I would expect if there is a major fuel shortage--actual gaps in supply--rather than very high prices. (It is hard to believe any government would allow very high prices to ration supply.) When we had gasoline outages in the Atlanta, Georgia area in September 2008 because of hurricanes, it was pretty similar.

In this case, the cause of the outage is clearly a labor dispute, so I doubt anyone has really learned from it, though.

Labor strikes affect French electric trains, but not oil shortages.

CDG has excellent train service.

A step by step photo guide.



The fact this outage is caused by the labor dispute is interesting.

What happens when governments around the world are forced to make real austerity measures (maybe sooner than most expect) ?

They can't avoid it. The global financial world won't be able to pretend much longer.

And like you note, even after the strikes in 2000, and the Atlanta experience, it does not appear that anyone (with the exception of Britain) has really learned from these experiences.

Re. Jeff Rubin quote in "Economist charts new oil realities" above:

"Economic recovery will mean triple-digit oil which will then snuff out growth and oil will go back down to $40 as demand falls," he said.

What if there is no economic recovery and oil goes back down to $40 as demand falls?

"The only way to get out of that cycle is to find a way to grow at triple-digit oil. We have to re-engineer the economy. I'm pretty optimistic that will happen not because Harper or Obama get it.

But because at the end of the day we will not have any other economic choice."

But "at the end of the day we will not have any other economic choice" than to "find a way to grow at triple-digit oil ????

Oh I think there are lots of other "choices" but they may not be the ones anyone but the military has planned for.

Let us forget trying to find a way to grow; let us find a way to survive tolerably without growth. Growth must stop when one has eaten oneself out of house and home. In any event, I think we are going to go a downward spiral after the election. This is when people wake up to the fact that this is not all Obama's fault.

I think we are going to go a downward spiral after the election. This is when people wake up to the fact that this is not all Obama's fault.

From my experience, watching the behavior of politicians over the years in my neck of the woods, I think we can expect to see things deteriorate after the US elections. Since I expect that, like politicians in just about all democracies would behave, the US administration is probably pulling out all the stops to paint as rosy a picture as it can running up to the elections.

After the elections, both sides have two years to try and create an environment in which they will win/their opponents will lose the next election.The incumbents cannot maintain the heroic efforts they are making to make things look good(not as bad as they really are) so, the reality of the situation will probably be revealed after the elections. That has been a consistent pattern in my neck of the woods and it's perfectly logical that this would be the case.

Alan from the islands


After the election there will not be any reason to paint a better picture of how things are; the dynamic will be to bring on the holocaust, get it over with, and then in 2012 point to the improving economy and take credit for it.

This applies to both parties since we will have a divided government.


Please explain to me why you do not believe we are already circling the drain.

But "at the end of the day we will not have any other economic choice" than to "find a way to grow at triple-digit oil ????

Growth with triple digit oil prices? I usually agree with Rubin, but not this time. We're barely treading water with oil at 78-82, but if it goes higher than 100 then it's back to a deep recession again. He says we have to find a way to grow, but how? He doesn't explain how. I suppose though when someone is communicating with so many people there's an obligation to society's need for positive outcomes to spin a positive direction. That way he can draw them in for the next installment.

Earl - You bring up a point I touched on last week. I finally noticed how fixated some folks became with increases in GDP as opposed to the absolute value. I dug up the numbers (http://www.measuringworth.com/usgdp/) and they seemed to explain clearly the disconnect between the "we're out of the recession" cheers and the "why are some many folks still hurting" gloom. The web site offers GDP in various metric forms: nominal, real, per capita, etc. You can chart the GDP in anytime frame you like but the bottom line: GDP, depending on which metric you pick, hit a plateau between 2005 and 2007. Actually even worse than a plateau: GDP, in absolute value, fell from 2008 to 2009. There have been minor dips over the decades but GDP has not dropped this much in absolute value in over 60 years at a minimum.

The MSM may be hyping that GDP is up X% over the last quarter or two but it's still below the previous years. But IMHO it seems to explain perfectly why we may technically be coming out of a recession but unemployment is still high: the economy has improved but the output is still lower than it was a year or two ago. If the economy is generating less output then how could there be a demand for more workers? Especially true if you beleive the numbers indicating an increase in employee efficiency (fewer working doing more output). Many may try to predict this plateau will remain while others will argue we'll begin climbing again. But I don't have a guess other than the possibility that GDP may follow a plateau similar to the one some folks see for PO. There does seem to be some logic to such a projection if one buys into the relationship between economic growth and oil prices.

There have been minor dips over the decades but GDP has not dropped this much in absolute value in over 60 years at a minimum.

Thanks for the link Rockman. Very interesting the huge drop in 09 (the biggest in 60 years!), in contrast the US govt's announcement that the recession ended in June 09. I was bewildered when I heard that announcement. Oh really?! Whether under Bush jr. or Obama, what we get from the Feds is whatever they want us to think rather than reality.

There was a link Snarlin Aardvark posted yesterday in which an economist, Gary Shilling, on video was saying that usually treasuries are going up or stocks are going up, but not usually both like they both are now. Treasuries are purchased when there is uncertainty, and stocks when risk is considered low. So he said we'll find out soon enough which group is correct, and his opinion was treasuries were correct and the stock market would soon go through a correction.

Along these lines there was a discussion on CNBC today about blogs. I suppose this is a blog? Anyway, one person was saying they are negative in their perspective of what is happening to the economy, whereas the other person said MSM did not predict the housing crunch, but blogs did. He said that's why a lot of notable people go to blogs to get a different viewpoint, including Bernanke!

ROCKMAN one of the most chilling conclusions I came to a while back was about conserving oil.
Sure you have the EV's and electric trains but the one that became obvious was to force and increasing percentage of your population first into poverty and then into desperate poverty. It works incredibly well of course it means your GDP falls from its peak but the remaining people that did not get pushed over the edge do pretty well.

You know me and I'm saying I suspect this is exactly the path the US took and I don't think we where alone in maying that decision. Better off for everyone to simply throw a few overboard now and again out of the sinking ship.

The only silver lining if there is one is eventually you reach infrastructure limits aka Mississippi/Detroit and further impoverishment does not significantly reduce consumption until you change your infrastructure. Its not clear to me that you can actually afford the transition at that point however.

Back to GDP if you simply eliminate the 12% or more unemployed and their families from being counted I think you will find that those that remain are still doing OK at the current GDP level. So for now at least it worked albeit with a bit of a debt problem.
We did the same thing back in the 2000 peak and crash and we left a lot of people permanently on the sidelines of the economy back then.

I suspect we will do it again and again as long as we can get away with it. Eventually of course you will have social strife but this will simply justify a further stripping of democracy.

I of course don't like this approach but its one that was both surprisingly powerful and surprisingly easy to do indeed it was the best all around solution if you don't mind being a bastard and can handle the resulting debt problem.

For those at the top the resulting fall in wages and collapse of weaker/smaller competitors probably means not only the same amount of wealth going to the remaining rich but even more for a while. Numerically of course the biggest change is at the bottom but its also a slice up the entire pyramid taking out several that used to be on top. They might lose little of the wealth they accumulated but they won't be accumulating any more. The remaining players are supported by a working base quite willing to take lower wages.

As with everything going on right now such actions will work till they don't. I could see one more round and perhaps even one more after that but past that I don't think this approach works anymore. At some point the masses of unemployed and underemployed result in a fundamental change in the society aka you go second then third world. Generally of course resulting in even greater concentration of wealth in those that remain at the top.

Whats sad for me at least is that if this scenario is true then even if alternatives have a chance they don't. If the first world is reduced to second/third world oil consumption patterns and the rest of the world reduced to god knows what we really don't have to change anything. You no longer need alternatives to oil. What alternative energy solutions are implemented at best lessen the suffering of people with little or nothing. The US could easily finally be energy independent esp if you simply included ethanol production.

Assume the US becomes similar to Mexico for example the population is a little over 100 million and the oil consumption is about 2mbd actually a bit less.

US population is a bit over 300 million so simply multiply by 3 and US consumption is 6mbpd. So perhaps some small imports even at that point but nothing like what we have today.

As long as you don't have a problem turning the US into something like Mexico today then you can see peak oil is not a problem. And there are plenty of super wealthy people in Mexico. Indeed oil production would have to fall for a long time before the US one of the wealthiest nations in the world is finally reduced to Mexico like demographics.

The point is as long as your willing to take this path then its the most obvious answer to peak oil. Of course you would want to impoverish your citizens in batches along the way to prevent destabilization until its to your benefit.

A recession every few years with no real recovery would have us at Mexican levels within I'd guess about 12-30 years or so. Of course the society would probably destabilize before you actually hit that level so my guess that another recession and perhaps one more is about it. The rest of the decline would be in some sort of police state like situation. So perhaps six years or left a social upheaval then the final downward conversion.

Whats interesting however is of course as the US faltered the rest of the world probably would also freeing up even more oil overall.
Europe almost certainly would go down with the US. China without trading partners would blow up. Good chance however that above ground factors would result in a significant drop in world exports so its not clear exactly how much the US would actually benefit.
There does seem to be the potential for a sort of sweet spot before we descended all the way down. Does not change the overall path simply means the US could perhaps see the creation of a large yet manageable underclass and still function. Right now we have about 40 million or so people living in poverty. We could well see another stable point with 100-150 million or 50% of the population poverty stricken and oil consumption down to say 8mbd unemployment hovering around 20% and underemployment about 50%. Better than Mexico yes but not the US we know today. Does not change the final outcome nor the fact that this approach is and excellent solution to peak oil.
Simmering at the above level allows time to justify conversion to a police state as problems become widespread.

So I think there is a way out of peak oil and it does result in many riding bicycles just they won't be to happy about it.

An all too likely scenario. There are many corollaries I suppose, but your basic premise has the ring of truth, or rather, high probability.

If your grammar and prose were more mainstream, you'd probably have a very popular blog site.

Thanks for this vision of the future. I doubt anyone could prevent it from happening. Great doomer porn

Europe does fine with $7-8 gasoline and has for years. But they only use 13 barrels per capita.

He says we have to find a way to grow, but how? He doesn't explain how.

In his book, he does explain how - just use less oil! Stop using it for wasteful, marginally productive purposes.

Keep in mind that US/Canada can halve their per capita oil consumption, will be using about what Europe does today. And a halving would bring US oil consumption to the level that can be supplied by US+Canada+Mexico

Accepting a Euro lifestyle (and Euro fuel prices of $7/gallon) in return for "oil independence" and a stable economy in $100+ oil is a pretty good trade IMO.

Even a 1/3 reduction in per capita oil, brings us to the level of Australia, which has a more American style economy.

If people are prepared to downsize their personal vehicles, and do a bit less annual driving, a 25% reduction in oil usage can be made for no other changes - going from a big vehicle to a smaller one (and/or a diesel one) is hardly a radical lifestyle change.

Hi Paul. The "how" cannot be explained by "just use less oil" - that is very much easier said than done.

I think you hit the nail on the head when you said, "If people are prepared to downsize..." - it is the "if," how, who and when, etc.

Consider Leanan's Link above, "The “Good New Days” in a Non-Growing Economy."

The key part - the process of getting to the "Good New Days" - is barely touched upon in this introductory paragraph, and then it is off discussing the good new world:

The Scenario of a Steady State Economy

Imagine that we are a ten years down the road. In the intervening time leading up to today, social and economic snafus (e.g., unemployment, stock market downturns, banking crises, crime, and wildly fluctuating energy prices) have shaken people up pretty badly. Environmental miseries, such as continuing climate destabilization and agricultural failures, have awoken people to the consequences of unmindful economic growth. Culture began to adjust, and citizens demanded sweeping economic reforms and changes in how we interact within both local and global communities.

"First it pay the bills, then it gets their "good new days," Said Mother Nature, looking down into the pit, hose in hand... :)

Well, "just use less oil" is the objective, and Rubin went into specifics. He did say that the US need only to look at Europe to see how its done - very high fuel prices + lots of transit. $7/gal gas is a great incentive to downsize and drive less, and a great incentive to not waste the stuff unnecessarily - Europe does not go snowmobiling, atv'ing, motor racing etc nearly as much as here.

He summed it up by saying the world of the future would be more like our grandparents - cars were relatively expensive, as was air travel. difference then is that train travel was widely available, in N. America that is no longer the case, and high oil prices are not guaranteed to make it return.

Th "if" will be for most people, when they have no other reasonable choice. For now, someone with an inefficient vehicle is better off to keep it and just pay the fuel cost, then spend $25 on a Prius - they won't get their money back, even if they could afford it. If they lease it , the net monthly spend will likely be higher than they are today.

For the individual, conserving money is where its at, and until gas is over $5/gal, it is not worth spending money to save it. Incentives for new vehicles are a waste as those who need to save the money, can;t afford new vehicles (except bicycles - i would support a subsidy for road going electric bikes and scooters!). The "cash for clunkers" should simply pay out for retiring the old vehicle, regardless of whether a new one is bought.
For new the CAFE standards need to be aggressively increased, and an annual road tax based on the fuel efficiency rating of the vehicle.
Finally, align the diesel emissions standards to that of Europe, to allow all those diesel cars (many made by the US automakers) on the roads here.

There are other things that can be done too, but the above list can all be implemented now, does not require new technology, new EV charging stations, etc etc

It does require some leadership though, and that peaked long before oil did!

I think you are right about the peak in leadership. And I do not expect a sudden surge in competence from our government anytime soon.

All those measures would get lost or mangled beyond usefulness in Congress. And Congress might come back to work next month preoccupied with the economic collapse-in-progress.

The Transition will happen to us, but I don't think it will follow anyone's Plan Bs.

Unfortunately you are right that congress would mangle the initiatives, they can;t help themselves. Which is too bad, because, in some cases, all it needs is intelligent rules, and then people and companies will get to work. The emissions requirements for diesels being a prime case. There are many, many, fuel efficient diesel vehicles, of all sizes, that are not sold here purely for that reason.
It may protect a few local vehicle making jobs but it is costing more oil each day than is imported from Saudi Arabia.

No oil is ever wasted, economically. Every single last drop of the stuff has at some point been bought and sold, and has therefore contributed to the economy. All oil forms part of an economic transaction, and the prpose we use the oil for is irrelevant. Even if all I do is drive round and round a car park at night, burning lovely rubber smoke from my tyres, that oil is still not wasted, because it helps to keep a petrol pump guy in a job. It helps to keep the tyre guys in jobs too.

If we cut back on "wasted" oil then those people lose their jobs.

Economists seem to think there is "useful" oil and "wasted" oil. But there is just oil. If the USA cuts back its oil use by 25% then it cuts back its economy by 25% too.

Is it better for you, and your society, in the longterm, to have bought this weekend a few new high-quality garden tools,
OR to have made a roundtrip to the next amusement park?
It is possible that both are really advantegeous, it depends on the assumptions you do. So you need to state the assumptions to reach your conclusion...

"No oil is ever wasted, economically. "

Which is precisely why these blinders need to be identified as such..

It's also why GDP can't delineate between a Jolly Holiday, a Durable Goods' Acquisition, and a Car Wreck, provided they create the same amounts of financial activity.

Even if all I do is drive round and round a car park at night, burning lovely rubber smoke from my tyres, that oil is still not wasted, because it helps to keep a petrol pump guy in a job. It helps to keep the tyre guys in jobs too.

While this is true, there is only a *minimal* amount of what you spend that keeps these people in jobs. Look at a modern pay at the pump gas station, it will have just one or two people working to sell thousands of gallons a day. It does create some very few jobs, and some at the refinery, but, taxes aside, 85% of the money spent , on imported oil, leaves the country.

That same oil, instead of being used for saturday night burnouts, can be used to run an excavator, a tractor/harvester or a train, or whatever - they will produce further economic benefits that the burnouts do not.

if you don;t doubt that, economically, some uses are more important that others, take a look at the oil rationing during WW2. Productive things like agriculture and construction got oil, and personal transport was rationed.
In a more modern context, look at what happens when oil goes to $5. The burnouts will decrease, as will unneccessary trips. Oil is still used for planes, trains and driving to work as these enable economic activity, so there is a return on the value of the oil used. The burnouts produce no (economic) return for the driver.

If the USA cuts back its oil use by 25% then it cuts back its economy by 25% too.
That is quite a statement - the US economy is 100% oil?

Lets take a look at motor gasoline use, and economy, as measured by gdp;

Interesting eh? From 2003 to 2007, gasoline use decreased by 22%, while the economy increased by 31 %.
in 2003, it took 28 units of gasoline per unit of GDP, but by 2007 it was 17 units of gasoline per unit of GDP.
So, the economy has changed such that it can produce twice the value from the same amount of oil
So I would say that cutting back on oil use has no definitive correlation to GDP.


Interesting eh? From 2003 to 2007, gasoline use decreased by 22%

Your figures for gasoline are complete nonsense. Gasoline is listed as roughly between 60 million and 50 million gallons per day which is between 1.43 and 1.2 million barrels per day. Actual US gasoline use is getting on for 10 million barrels per day and it did not decrease between 2003 and 2007 by 22% - that's just insane.

In 2003 gasoline use was 8.935 mb/day and this increased to 9.286 mb/day by 2007 - an increase of 4%

And the US GDP increase was not 31% in constant dollars over the same period. It was closer to 25% according to the figures I've looked up. Plus most of that was due to financial games which are now falling apart. Current US GDP (2010 Q2) is still below the level of 2007 Q4 in constant dollars.

So if I have this straight, then we can create "jobs" by hiring people to hold the hose which injects oil into an incinerator pit and someone else to hold the lighter...

I would guess that this would be a nice try at Perpetual Motion, all we would need is Perpetual Oil. The folks who believe in that also seem to be expecting to be lifted heavenward any second too...

Triple digit oil prices are almost a certainty with the price (in US dollars) reflecting the decline in your currency. Here in Australia we are looking at the AU dollar going better than parity. I suppose if the USD takes a real plunge it will stave off deflation in the US and one benefit is it would allow you to effectively cut your public employee (and retirees) wages and entitlements just by freezing them without the necessity of actual pay cuts or breaking of agreements. Of course it could easily get out of hand as the USD plunges (Wiemar style)and you get parity with hellhole countries like Zimbabwe. Then the ex-cops and others getting six figure pensions will be able to maybe buy a box of tissues.

we will not have any other economic choice" than to "find a way to grow at triple-digit oil ????

Oh I think we will figure it out. The problem is that the lag time between "getin religion", and "getin results" is likely to be several years. Plenty of time for damage to accumulate.

There was a fantastic episode on "60 Minutes" last night. You can read about it here and watch the episode if you have a high speed connection.

99 Weeks: When Unemployment Benefits Run Out

The economic jam we're in has topped even the Great Depression in one respect: never have we had a recession this deep with a recovery this flat. Unemployment has been at nine and a half percent or above for 14 months...

Asked what she meant by stiff competition, Rose explained, "There's a lot of people, speaking of the county. I had applied to those clerk positions. There's actually four positions that were open. I found there were over 2,000 people that applied for those four positions."

Rose is one of at least a million and a half Americans who've exhausted their unemployment checks.

This is one of the most alarming episodes I have ever seen on 60 Minutes, and I catch it every Sunday night.

Ron P.

That was a good episode, Kudos to 60 Minutes.

And now go read today's Denninger, Mish, The Big Picture etc etc to see what the MSM (60 Miniutes and the rest) should have for follow-ups to that "alarming episode."

"This sucker could go down"
G.W., 2008

I still think the best solution to this problem is a shorter work week. Spread what work there is around, and also give people free time to learn skills they'll need for the new economy.

I agree in theory, but how is that accomplished?

It seems like a needed first step would be some type of national health insurance, since that is a larged "fixed" cost of employment.

You need to find a way to either make it in the employers best interests to do this, or a way of enforcing it through dictate somehow.

I think the next logical step is direct Government employment - there is a lot of work that needs to be done, and a lot of people who need work to do. Of course, people may not like to do the work that needs to be done.

"I think the next logical step is direct Government employment"

In a sense that has been going on for a long time in the form of bubbles. Money has been printed up in the form of credit and allowed to flood the economy creating bubbles which mimic economic activity and job creation. As this faux system of economic growth has now run its course unemployment has exploded, even though ever greater amounts of money is being created and pushed into the economy (or at least into the financial system).

The real problem is that there is little in the way of real productivity or real economic activity or real capital creation for people to do as all the real work is done by machines. People have been gainfully employed in fantasy jobs (aka. services) created by credit expansion and the consequent bubbles. When the bubbles pop the nation's workforce is left in a "Wile E. Coyote" moment of suspended animation waiting for gravity to take hold.

I still think the best solution to this problem is a shorter work week. Spread what work there is around, and also give people free time to learn skills they'll need for the new economy.

This statement reminds me of what France attempted to do with a 35 hours work week, I was living and running a business in France at the time; and for intents and purposes this experiment was a major disaster, it created no new jobs and incited many businesses to outsource outside of the country; at our company it forced us to either pay those who worked longer overtime or hire people for 12 hours a week; of course no one wanted to work 12 hours a week; so we ended up with the same staff at significantly higher cost; which in the end deprived us of funds that we could have used make additional investments in our business, thus creating real economic activity and creating real new jobs.

Those who believe in dividing the work week seems to think that work is one big fixed pie that can be divided among people; but work is not generated this way, work itself generates work; if you provide the right conditions and allow businesses to operate efficiently the economy will generate much more jobs than the forced hiring of people, or forced division of labour.


No doubt, it's impossible as long globalization rules.

However, if Jeff Rubin is correct, and peak oil leads to the collapse of globalization, then outsourcing is no longer an issue.

Here in the US, congress did actually pass a 30-hour work week during the Great Depression. FDR vetoed it, because it was socialism (some think his real beef was that it wasn't his idea). Some companies did it on their own, though, notably Kellogg. The workers loved it, even though it meant a corresponding cut in pay.

Ron - That fits with the web site I tossed to Earl above. If you have the time and inclination I would be curious to hear what your analytical eyes see in those charts.

Rockman, I found them all a little alarming but exactly what I expected. The GDP per capits was really a shocker. The Real GDP per capita in 2009 is less than what it was in 2005. For sure the recession was still in full force throughout 2009. I don't think 2010 will show much improvement. But what is really alarming is the nosedive in 2009. That is one huge drop in per capita GDP.

Year	Real GDP 
       per capita Difference from year before
2000	39,750	
2001	39,774	   23
2002	40,107	   333
2003	40,728     621
2004	41,806	 1,079
2005	42,697	   891
2006	43,425	   728
2007	43,926	   501
2008	43,714	  -212
2009	42,247	-1,467

Ron P.

2008 is down only about a half of a percent and 2009 is down only another 3 and one third percent.

Most businessmen and farmers would be ecstatic to have their incomes only drop by these percentages in a bad year.

The handwringing of politicians, economists, and business media types seems excessive. It seems due principally to two factors:

1- salaried employess, especially unionized and/or government employees, have come to regard their jobs as permanent sinecures with ever increasing salaries, and

2- politicians are distressed when they don't have ever increasing tax revenues to dispense as largess to their supporters.

Merril - that's pretty much how I see it also. It's the trend that seems most worrying. I don't think anyone can predict if the trend will continue or if we get back to the good old days. Lots of opinions both ways but any projection will take some serious assumptions that will be based on personal prejudices and not provable facts IMHO. But when I look at the PO projections it's easy to see the parallel. In terms of energy and GDP we may well be heading into a world not seen by anyone living today. One silver lining of working in the oil patch thru the boom/bust cycles over the last 35 years: I take nothing for granted. As soon as times start to get good I begin looking for signs of the end game. We'll see in the next 5 to 10 years if the bulk of the population needs to start doing the same.

It bears repeating that some months ago Dr. Slyvia Earle, along with two other prominent guests during an interview, said (and all agreed) that the path taken during the next ten years will determine if we live or die as a species.

Given our past record, I think I can make a prediction on how well that's gonna' go...

According to zFacts.com, the US National debt, will pass through $13,700,000,000,000 or $13.7 trillion in an hour or so. Also according to zFacts.com, their calculations of what Administrations accumulated the debt determined that over $9.226 trillion are attributable to Republican administrations and the remaining to the Democrats. The trade account deficit is also rising to around $500 billion this year, with almost 30 years of deficit years behind this year. As the National debt is understated by Freddie, Fanny and the FHA plus FED accumulated debt and have made the taxpayer the underwriter and bag holder for residential real estate, plus the fact that the National debt is increasing more at a rate of more than $4 billion a day, weighs heavily on the US dollar and the price of oil which is imported by the US. With city, state and Federal spending around 40% of our entire GNP today, it is hard for me to understand that anyone calls this Country a free enterprise or free market Country.At best the US is a mixed economy. Without a discussion premised on facts, political posturing will not be capable of resolving the debt impasse fairly. Without massive Government spending, the US would be in a huge depression.
Executive compensation is grossly exaggerated given the fact that Government spending is the dominating factor that accounts for their companies growth more than anything else.
Without tax increases, spending cuts will only grow welfare expenses and further depress housing prices, widen the deficits, reduce the value of the dollar and raise the price of commodities including oil. No more can Google or Exxon or billionaires get away with little or no US taxes.

Savinar has closed the LATOC forum.

After weeks of increasingly strange behavior on his part he has shut it down.
Regular posters are regrouping here:
The Tinfoil forum was deemed not appropriate to the new site and now has its own separate site. The link is posted at the above site.

Many posters that left LATOC are returning to the new sites. If you were a frequent poster on LATOC and join the Sustainable Country forum , be sure to 'check-in'. There's a welcoming committee waiting for you.

Wow. Is he planning to keep the rest of his site up and running?

I've lurked at LATOC almost since the beginning and I don't see why Matt shut it down since in many ways LATOC is his mouthpiece and keeps him in the public eye (he may not care about it now but he did for a long time). It's sort of like Ruppert having gone pay per view which has already diminished his presence in my view.

Come on Chimp. What's going on?

Perhaps he feels the fecal matter is gonna hit soon and wants it to be 'gone' as no one likes Cassandra.

Others have timelines like this:

November 3 the Fed, now unshackled by political considerations, makes an unexpected move on rates. Market drops 1,000 Dow points.
November 4: Pelosi and the lame duck democorps announce a huge 'last chance to save America plan' which includes ending phat tax breaks on corporations which export jobs overseas...
November 5: Charges of voting machine errors are claimed by republicorps in key races they lose...election outcome becomes uncertain...
November 6/7 weekend, Israel pops Iran.
November 8 market drops 1,000 in a day as the news of the M.E. rolls around.
November 9, Israel is attacked by Arab forces from Syria and the whole Middle East blows up, some limited use of nukes.
Also that day, terrorists hit France, questioned elections go to court.
November 10, China uses overwhelming force to retake Senkaku islands.
Same day: Russia issues demands on Middle East including nuclear disarmament of Israel.
November 11, N Korea pops off with an invasion of South Korea during the Seoul meetings of the Gee 20.
November 12: A massive tsunami goes from the mid-Pacific rise and sends a wall of water 400-feet high into eastern Australia. Diplomats work to avert World War.
November 12: Something blows up along the India Kashmir border and nukes get tossed by both sides.
November 12: The US and Russia escalate to DEFCON 1.
November 13: Russia is suspected - but no one can prove it of setting off simultaneous EMP devices in space over the USA effectively ending electronic life.
November 14: US is now in the 1890's, only scattered remnants of power remain.

So that is the missing chapter from "One Second After."

I was thinking it was the Iranians or North Koreans...

Anyone else who read the book think that the implication is that Hilary Clinton is the US President some time after the EMP attack? I borrowed the book so don't have it to check off-hand but I seem to remember that the book implies that although she is not mentioned by name. The US Secretary of State is 4th in line.

I don't remember choking to death on my own vomit while reading the book, so I must not have got that impression Hilary existed in the story.

When the main character finally finds out who the US President is he also reacts to the news in a way that suggested Hilary to me :-) Or that's what I recall. Meant to post up at the time but never got round to it. The book does not name the President though as I recall.

It was someone else's vomit

Pretty far-fetched don't you think?

No idea. The technology exits to do it. And dislike for one's fellow man is well known and historic. An EMP pulse would shift worry to a very local and personal level VS asking questions about oil production or how firms resold the same mortgage to many investors or the levels of spending/taxing or international armed conflicts or about the bifurcated mortgages of MERS. (see Carpenter v Longan, 83 U. S. 271 (1872) on what happens when you split the note from the mortgage.) Assuming the mortgage industry has fraud from top to bottom and international investors find out that just SOME of the CDO's were "oversubscribed" - exactly how sympathetic will the international community be to the business and governmental interests of the US of A?

Far fetched would be aliens showing up, saying 'as the Adults in the room you are all gonna stop this stupidity' and then things going well.

The upside - the person who made that list has a history of his exact date/time predictions being wrong. But at the point nukes start flying I'd hope that most of you would consider 'would the leadership class throw a war to avoid dealing with the other problems that could be laid at their feet?'

How much do YOU, dear reader, trust leadership?

You couldn't rule out that last possibility. It's outcome is something that might well be less complicated and much easier to predict (and control) than the way its currently going.

Ah, for the Old Days back when we could just "duck and cover". It wouldn't have been very effective, but we were doing something and had a plan. Don't see too many national "plans" floating around these days (well, for anything)...

Don't rule out the E.Ts, but the bad news is (according to some sources), is that among the handful of species that stop by on a regular basis, NONE of them give a rats patoot about us...

Changes in energy R&D needed to combat climate change

A new assessment of future scenarios that limit the extent of global warming cautions that unless current imbalances in R&D portfolios for the development of new, efficient, and clean energy technologies are redressed, greenhouse gas (GHG) emission reduction targets are unlikely to be met, or met only at considerable costs.

The study identifies energy efficiency as the single most important option for achieving significant and long-term reductions in GHG emissions, accounting for up to 50 percent of the reduction potential across the wide range of scenarios analyzed. However, investment in energy efficiency R&D has typically been less than 10 percent of the overall public sector R&D budget in the countries of the International Energy Agency (IEA). Conversely, although nuclear energy accounts for less than 10 percent of the GHG emission reduction potentials across all scenarios, it has received some 50 percent of the total public investment in energy technology R&D.

Good article.

In other words, we are investing the least in the area with the greatest potential payback, while investing the most in the area with the lowest potential pay back.

What a way to run a planet!

Most people don't realize that nukes still get the lion's share of research money, far more than all renewable alternatives combined, even though nuclear is a mature industry and should be able to stand on its own by now if it were really so great.

Imagine how far along we would be with wind and solar tech (not to mention energy efficiency tech) if we were spending anything like what we are spending on nukes.

The MT Ledastern came from Britain to offload 11,000 cubic metres of gasoline -- roughly about 25,000-30,000 tonnes...

That must be super-heavy gasoline... I guess clueless "reporters" aren't only in the USA...

That must be super-heavy gasoline... I guess clueless "reporters" aren't only in the USA...

No, the actual weight of the gasoline was only about 8000 tonnes but approximately 2/3 of the total weight being off loaded was made up by the heavy duty Leda lined gas cans... >;^)

Obama aims to toughen big-vehicle mileage rules

Medium-duty and heavy-duty trucks are much less fuel-efficient than conventional automobiles; tractor-trailers typically get about 6 to 7 miles per gallon, while work trucks can achieve 10 to 11 miles per gallon. But they still consume about 20 percent of the transportation fuel used in the United States.

If tractor-trailers average 6 to 7 miles per gallon, that makes them a lot more efficient than a Toyota Prius getting 48 miles per gallon. According to a DOT report[PDF], the average load for a tractor-trailer is about 35,000 pounds, so that vehicle averages 114 ton-miles per gallon. The Toyota Prius has a payload capacity of 825 pounds (at least, that's what a Prius forum concludes: Toyota seems reluctant to publish a figure), giving it a fuel economy of 20 ton-miles per gallon. A typical "work truck", the Ford F250, has a maximum payload of 3300 pounds, so its fuel economy works out at 17 ton-miles per gallon: even worse than the Prius, but not much worse. An F250 carrying four large people and half a ton of tools and materials would have a fuel consumption of about 10 ton-miles per gallon, which is a lot better than a Prius carrying one person (about 5 ton-miles per gallon).

All these calculations suggest that the possible improvements in heavy trucks might be quite limited: they are already relatively efficient.

A potential pitfall in the proposed rules is that complying with them might well make heavy trucks more difficult and expensive to repair. That might lead to them being scrapped early rather than being repaired, leading to worse lifetime energy consumption than current vehicles.

The gov is barking up the wrong tree here, as your numbers show. The big trucks are already very fuel efficient and will continue to improve. The commercial transport industry (road, rail, water and air) is the most motivated fuel saving group you will find - they have made great improvements in recent decades - much more than personal automobiles.
The problem for the trucking industry is that tougher rules on emissions (NOx etc), are not only unneccessary, but are actually reducing energy efficiency.
For garbage trucks and school buses, the powertrain companies, like Eaton, are already working away on electric and hydraulic hybrid systems, which are now coming to market - once proven, they will become standard fairly quickly.

The attention needs to be out on the personal vehicle industry.
My first order of business would be to align the diesel emissions standards with Europe, to allow the Euro diesel passenger cars on the roads here.
Levy a road tax (annually) on vehicles based on btu/mile. Ford and GM will quickly work out the best way to beat that is to make diesel versions of all their trucks and SUV's (like the do elsewhere in the world). If all the PU's on the road were to become diesel overnight there would a be a massive fuel saving.

This announcement, and its timing, seems more aimed at getting political support from those who have nothing to do with the trucking industry, and will do little to hasten the work that is already being done, and in the case of excessive emissions requirements, will take it backwards.

"The problem for the trucking industry is that tougher rules on emissions (NOx etc), are not only unneccessary, but are actually reducing energy efficiency."

I don't think the citizens of Long Beach, CA would agree with you.


Actually, they might.

The clean ports program was essentially to stop trucking companies gaming the system, and it has worked.
Keep in mind that the results they have achieved are under existing emissions rules - so do they need to get any tougher?

the real problem is that old trucks that do not come anywhere close to meeting current rules. And it you are a truck company, with some old and some new trucks, you will put the new, more efficient ones on long haul duty, and keep the old ones for in town stuff - exactly the worst location.

If all the trucks met todays emissions standards, the air would be fine, it is the old ones that are the problem here.
But raising them even further is getting to the point of diminishing marginal returns - the complex equipment not only adds expense, but actually reduces mpg.

New electric and hydraulic hybrids make a big difference if city usage, and they achieve this at todays emissions criteria.
tightening them further will only make new trucks even more expensive for no benefit, and ensure the older ones stay on the road even longer.
That does not help the people of Longbeach one bit.

Why can't we have stricter regulations on new trucks AND deal with the legacy fleet at the same time?

Hell, maybe do cash-for-clunkers with trucks.

I just don't understand why people bash things like this which, although not panaceas, are hardly a bad thing in and of themselves.

Really, the people who whine the most about this sort of thing are the industries impacted by the regulations. So I can't help but chalk it all up to conflict of interest. The same sort of FUD that the car companies used to use to try to convince us we couldn't have seat belts or catalytic converters.

Mos, Well, we can but stricter new regulations are now in the range of diminishing marginal returns. It will make new trucks even more expensive to buy and run, so the older ones will get replaced slower.
It is like trying to get the Prius to 60mpg instead of 50, when we still have so many SUV's doing less than 20 - where is the best bang for buck.

I have no problem with a cash for old trucks program, which would achieve something, though i don;t think that would be very popular.

Get rid of the old trucks, and you have gotten rid of 90% of the problem - I think that's a good point to then move on to other problems.

I just see putting even stricter rules as overdoing a problem that has already been solved, and incurring considerable expense in the process. It is a case perfect being the enemy of good enough.
I don;t think we have the luxury of time or capital to chase perfection on on area at the expense of doing nothing in others.

Levy a road tax (annually) on vehicles based on btu/mile. Ford and GM will quickly work out the best way to beat that is to make diesel versions of all their trucks and SUV's (like the do elsewhere in the world). If all the PU's on the road were to become diesel overnight there would a be a massive fuel saving.

If the US auto fleet were to change over to diesel in a big way a couple of things would likely happen:
1. diesel fuel would become much more expensive, likely offsetting (at least economically) any gains in mpg efficiency.
2. gasoline would become much cheaper because demand for it would drop sharply but refineries would still have the lighter fractions of fuel to do something with. Diesel and other heavy fractions AFAIK can be cracked into gasoline or other lighter fractions but I don't think you can go the other direction.

Maybe we could come up with a use for the gasoline that would save money and energy in some other sphere?

EDIT: Maybe there is a way to use some of this CO2 we need to get rid of to turn gasoline into diesel. I'm totally out of my depth here but maybe some folks here who are more expert at the chemistry could shed light on this question.

If the US auto fleet were to change over to diesel in a big way a couple of things would likely happen:
1. diesel fuel would become much more expensive, likely offsetting (at least economically) any gains in mpg efficiency.

Well, it would have to get to 30% difference to get to that point - that is one very large differential, I can't see it getting to that, especially not if oil prices get higher in the future.

What would happen is that diesel vehicles would get cheaper, as there would be much more of them being made/imported

The refineries can tweak their processes to favour diesel, but currently, of course, they don't, but this can change.

The other benefit from going to diesels, is that they are more efficient engines, that can make more efficient use of alternative fuels. A diesel can be co-fuelled (or solely fuelled) with methanol, ethanol, or natural gas, and you then get 30% more miles per gallon for your alternative fuels

For the city commuter that does less than 10k miles per year, a gasoline car will likely remain a cheaper option, but for any business or person that has to do lots of driving, it gives them a cost reducing option that does not presently exist - and reduces overall oil usage.

All these calculations suggest that the possible improvements in heavy trucks might be quite limited: they are already relatively efficient.

Now they just show that drag scales differently than weight and volume. Wind resistance should scale as weight to the 2/3 rds power, all other things being equal, so the semi should be about 12times as efficient as the Prius! By your numbers that would give something like 240 ton-miles per gallon, about double the current value.

Article above: The End of Oil's Golden Age
The article has an interesting graph showing that one needs to sum up the consumption of nearly 100 countries to match the daily oil consumption in the U.S. Among these countries are China and India. In other words, the citizens of the U.S. consume the same amount of oil as 4.8 billion people elsewhere.

In other words, the citizens of the U.S. consume the same amount of oil as 4.8 billion people elsewhere.

This is why I've been saying in a post peak oil world, the US will be the one to watch as we lead any kind of collapse that may occur. Whether other countries follow suit due to a lack of economic activity resulting from a US collapse, is another question, such as China that relies so heavily on selling nik-naks in the US. It seems like history is repeating itself with the fall of Rome, i.e. the US.

Potential advances may be being made regarding car/light vehicle engine efficiencies:





Too bad the U.S. doesn't have the will to develop and field cars which would lead to a fleet average of 50 mpg+.

Government leadership, starting with phasing in increased fuel taxes over a five-year period would be instrumental.

A 50mpg+ car fleet would at least cut our automobile fuel consumption in half.

Worried about Jeveon's Paradox? Raise the fuel taxes even higher.

Revenues could be used not only to maintain roads, but some monies may be left over to fund buses and trains as well.

Even such, I still would be interested in a reputable EV for commuting and running errands in my city. 40 mile range would be more than sufficient for me.

And I would liss goodbye futzing with all the fluids and the leaks involved with their operations...transmission, oil, coolant, brake, power steering...a reliable electric system seems easier to maintain...no more spots in the driveway...

As told to me by a very experienced Physicist/Engineer, the Motto of the American car makers has been "forget the efficiency, just add more horsepower". That worked out really well while the party lasted but now the Butcher is here and he wants his payment...

Interesting article on potential future political developments:


Perhaps just as 'only Nixon could go to China', maybe only the Republicans can lead the way to address PO after 2012?

Here's hoping for bi-partisan agreement on effective policies in the future.

Would Rank Order voting result in a wider variety of people being elected into office?



or is Range Voting a better system?




Some of these alternative (as far as the U.S. goes anyway) voting systems are intriguing...but I fear that most U.S. Americans do not have sufficient math background or the will to learn to make anything different from what we do now possible...

You might want to bring this up at the First Congress of Cascadia... There is no chance of doing away with the electoral college system.

I don't think we should get rid of the electoral college system. Oh, we don't need the actual electors, but the electoral college system is what's saved us from the "tyranny of the majority."

However, we could still try things like ranking the candidates, while still sticking with the electoral college system.

In the US, voting rules in each state are up to the state (within limits).

It would be nice to see a couple of the smaller states actually try working with a system like this, but I suspect that it is more difficult than you might think since even advocates of alternative voting systems can get into fierce disagreements over how to interpret a particular ballot.

I don't know that the public's failure to understand the system is necessarily barrier to implementing it. How many Australians understand how the number they place on the tablecloth sized ballot paper translates into elected senators?

The impediment to change isn't the electorate, it's the interests of the incumbent parties.