Drumbeat: October 30, 2010

Coal Industry Spending to Sway Next Congress

WASHINGTON — The coal industry, facing a host of new health and safety regulations, is spending millions of dollars in lobbying and campaign donations this year to influence the makeup of the next Congress in hopes of derailing what one industry official called an Obama administration “regulatory jihad.”

Political spending by the coal industry is on track to exceed that of the 2008 cycle, when the presidency was at stake and Congress appeared determined to move forward with a national energy policy designed to address climate change by cutting back on the use of coal and petroleum.

Crude Oil Prices Fall as Dollar Strengthens, Curbing Appeal of Commodities

Crude oil fell as the dollar rose against the euro, reducing the appeal of raw materials as an alternative investment.

Bleak winter lies ahead as energy firm raises prices

Households are being braced for a fresh round of energy bill increases after Scottish and Southern Energy raised its gas prices by nearly 10%.

SSE, which owns Scottish Hydro, blamed the 9.4% rise – coming into effect on December 1 – on a 25% increase in the wholesale price of gas this year.

London Oil Futures Will Fail at $85, May Target $78: Technical Analysis

Crude oil futures traded in London will fail to advance beyond $85 a barrel and may drop toward a pair of moving averages near $78, according to technical analysis by Commerzbank AG.

Betting Big on Natural Gas

Exxon Mobil is the biggest publicly traded company in the world, but its stock price has been lagging over the last year chiefly because a lot of people wonder why it’s making such a big bet on natural gas.

Exxon Mobil spent $41 billion a year ago to acquire XTO Energy, doubling its natural gas reserves. And it is building up a massive liquefied natural gas capacity around the globe. Too bad for Exxon Mobil that a gas glut in the United States and elsewhere is causing gas prices to tank, and a boom in shale drilling promises moderate prices for years to come.

I caught up with William M. Colton, the company’s vice president for corporate strategic planning, late Friday afternoon and asked him about natural gas. I got an earful of passionate praise for the product that Exxon Mobil has staked so much on.

Iran to sue over European refusal to refuel planes

AFP - Iran is taking legal action in The Hague against global oil majors who are refusing to refuel its Europe-bound flights under US pressure, a top aviation official said on Saturday.

"Iran, through appropriate channels, is taking legal measures and the issue has been raised in The Hague tribunal and lawyers have been appointed to pursue the issue," Farhad Parvaresh, chief executive of state carrier Iran Air, was quoted as saying on official news agency IRNA.

Sudan may offer equity stakes to Indian oil firms

NEW DELHI (Reuters) - Sudan may offer equity stakes to Indian oil firms in its four exploration blocks, the country's energy minister Lual A Deng said on Saturday.

"There is a possibility. We are open to giving more oil to India and encourage the Indian government to invest in Sudan," Deng said, when asked if his country would offer stakes in new exploration blocks to Indian firms.

Reliance Industries Profit Jumps 28% as Gas Output, Refining Earnings Rise

Reliance Industries Ltd., India’s biggest company by market value, posted its highest quarterly profit since 2007 after growing fuel demand boosted refining earnings and natural gas production rose.

Keystone Pipeline An Incendiary Issue In U.S.

The smouldering battle over TransCanada Inc.' s 2,700-kilometre pipeline was reignited in Washington yesterday as a group of 11 Democratic senators expressed grave concerns about the controversial proposal.

The Calgary-based company's pipeline extension would transport oil from northern Alberta to the Gulf Coast of Texas, and the senators warned approval of the project would commit the United States to "significantly increase" its dependence on high-carbon Canadian fuel for decades.

Pros and cons of oil and gas development in the community

CHEYENNE -- If the Niobrara oil shale play turns out the way industry officials hope, it will bring jobs and money to southeast Wyoming and to the state.

But development also will put pressure on municipal and county services. That prompts concerns for public health and housing and increased truck traffic, said some who talked Friday about its potential impacts.

Shell, Alaska borough plan joint science studies

ANCHORAGE, Alaska - Shell Alaska and the North Slope Borough announced Thursday they will collaborate on scientific research aimed at concerns about petroleum drilling on Alaska's Arctic Ocean outer continental shelf.

Nigeria: Shipper confirms weapons came from Iran

LAGOS, Nigeria (AP) - A weapons cache containing artillery rockets seized by Nigerian security agents at the West African nation's busiest port originally came from Iran, an international shipping company said Saturday.

The confirmation by CMA CGM, an international cargo shipper based in France, comes after Israeli officials accused Iran of trying to sneak the shipment into the Hamas-controlled Gaza Strip. By unloading the weapons in Nigeria, it suggests Iran sought to perhaps truck the weapons through Africa to slide around an embargo now in place in Gaza.

Is the Move to Hybrids Hyped?

How popular will electric and hybrid cars be in 10 years? Depends on whom you ask.

GE to Place Order for `Tens of Thousands' of Electric Vehicles

General Electric Co. may jump-start the electric-vehicle industry with an order that Chief Executive Officer Jeffrey Immelt said will be the largest in history.

GE, whose power-generation equipment provides a third of the world’s electricity, will order “tens of thousands” of the vehicles in about a week, Immelt said yesterday in a speech in London, without giving a total or identifying a manufacturer.

Warp Speed for Risky Solar Ventures

In an article in Friday’s paper, I write about the solar thermal power plant building boom now under way in California’s Mojave Desert. The looming expiration of crucial federal financial support for the multibillion-dollar projects, though, could turn the boom to bust.

But that hasn’t deterred California regulators, who on Thursday approved the seventh large-scale solar thermal farm since late August.

Spain Gets 907 Solar Installations to Accept Lower Price in Amnesty Plan

Spain, seeking to hold down electricity prices, convinced 907 solar-power installations to receive lower subsidized rates in return for avoiding investigations over permit violations.

The solar parks, with a combined 64.6 megawatts in capacity, will avoid investigation of whether they illegally earned the highest subsidized rates, or feed-in tariffs, the Industry Ministry said today in a statement.

Google's Wind-Power Grid Would Benefit From Disputed U.S. Rule

A U.S. proposal that may improve prospects for a $5 billion undersea wind-power grid backed by Google Inc. is sparking a fight between utilities and companies developing renewable energy.

U.S. Coal Plants' Growth Beat Wind Energy in Third Quarter, Group Says

U.S. power-plant developers added 395 megawatts of wind power in the third quarter, the slowest growth since 2007, reversing a trend of clean energy outpacing coal, according to the American Wind Energy Association.

U.S. Nuclear Plants Get the Iraq Treatment

The International Atomic Energy Agency, perhaps best known to Americans for inspecting nuclear sites in Iraq, has spent the last two weeks in the United States. Rather than Tuwaitha, the notorious facility south of Baghdad, it has been passing time in Peach Bottom, Pa., and Lower Alloways Creek, N.J. And in general, it liked what it saw, said Jukka Laaksonen, director general of Finland’s nuclear safety authority and the head of the delegation.

Nigeria: Italian firm acknowledged oil line attack

YENAGOA, Nigeria - Italian oil firm Eni SpA says a pipeline carrying some of its crude out of Nigeria's oil-rich southern delta has erupted after an "act of sabotage."

The oil firm says the pipeline attack, which occurred either Thursday night or Friday morning, has cut production by 4,000 barrels of oil a day. Of those barrels, Eni says 800 each day are their share. It could not be immediately confirmed whose supplies were also affected.

Anadarko may turn over drill cuttings

Anadarko Petroleum Corp. on Friday asked a judge in New Orleans for permission to turn over drill cuttings from BP's blown-out well in the Gulf of Mexico after they were sought in a subpoena by federal investigators probing causes of the worst-ever U.S. marine oil spill.

New book confirms greed, power and cover-up are BP trademarks

The Deepwater Horizon debacle of 2010 will no doubt lead to a plethora of books being published, each hoping to captivate readers. One of the first on the scene has set a high bar, a hard-hitting behind-the-scenes look written by an industry insider.

Disaster on the Horizon, by Bob Cavnar, shows no partial treatments to either the industry he loves and works in nor to an American political system overflowing with oil industry lobbyists, campaign contributions and the ever-present failed leadership.

Time To End Career Politicians and Royalty Network In Congress

On the practical side, they refuse to enforce our laws. They don’t see the need, for example, a 10 cent deposit/return container law for bottles, cans and plastic—despite the 75 percent waste and trashing of containers—that contribute to the Great Pacific Garbage Patch and endless litter across our country. Nor do they understand the horrific waste of energy and resources to continuously mine and scour the Earth for more metals. They failed to engage an energy conservation law for vehicles as Peak Oil became apparent 30 years ago. The list grows while they dither and dawdle, and shilly and shally! They fail, because of their longevity, age and lack of creative connection to the 21st century or royalty status to work for the good of our society. Virtually all of them grow rich while we pay for all their boondoggles—and we grow poorer—as well as die in their falsely initiated and protracted wars.

Wilshire route picked for L.A. subway extension

Development of a long-awaited subway link from downtown Los Angeles to the traffic-tangled Westside took a giant step Thursday when county transportation officials approved a general route along job- and population-heavy Wilshire Boulevard.

The 10-0 decision by the L.A. County Metropolitan Transportation Authority board was quickly hailed as "historic" by First Vice Chairman and L.A. Mayor Antonio Villaraigosa, perhaps the foremost advocate for building a so-called subway to the sea.

Delusions, dollars and climate

If you were going to pick a single issue whose treatment exemplifies the forces at work in this midterm election, the best choice would be one over which there's been relatively little contention — climate change.

That's not because there is any broad agreement among the candidates on the severity of global warming or human activity's contribution to it. To the contrary, the question seldom has been discussed in this campaign because views on it have become utterly politicized.

Recession cut level of California's carbon cap

Lower pollution levels brought on by California's struggling economy have prompted the state to ratchet down its proposed cap on greenhouse gas emissions for 2012.

On Friday, the California Air Resources Board unveiled new regulations for its cap-and-trade program, which places limits on the amount of carbon that the state's largest oil refineries and power companies can emit.

Re: Delusions, dollars and climate

The folks who started the Tea Party Movement may not have been against the science of Global Warming, but their efforts have been co-opted by the Republicans and their fossil fuel allies. Sad to say, that's the way politics in America works. The two major parties will attempt to capture the latest hot issues as their own, even though the politicians have no real commitment to any particular cause. The name of the game is to attract as many people who are interested in a particular issue as possible, while not alienating the rest of your voting base. In the end, the politician who wins will have just one more vote than his/her opponent.

Of course, now that corporations can spend rather freely to promote their agenda, what appears as a "hot issue" to the public might just be the result of a disinformation campaign and the organizations might also be bogus astroturf front groups. The WSJ story linked to above might even be a whitewash effort. With so much disinformation around, especially on the internet, there's no way to discern truth and no accountability for lies...

E. Swanson

You might recall this Guardian article from a few days ago:


It looks to me as though the tea folk were a Rovean creation from the beginning.

a Rovean creation from the beginning.

Plenty of groups over the years had used the tea party motiff. Claims of "starting this tea party" have been made by the Libertarian party of Illinois and a group of "9/11 truthers" who in 2006 tossed 'symbolic 9/11 reports' into the harbor. Neither of those groups would have a whole lotta love to be a Rovain tool.

Matters little who has started it. Who's got the keys now matter far more. And in 3 days they'll fade into the background....never to resurface if some "better" "marketing message" shows up.

no accountability for lies

And how is that new?

How much accountability is there for the actions of "leadership lies"? Its not like the Internet has resulted in a sudden no accountability state.

(and just because I've not posted the link today....)

Overhead and profit-taking in the carbon offsets system eats up about 70 percent of what is spent on carbon offsets, according to a report from UK-based Carbon Retirement report.

Overhead and profit-taking in the carbon offsets system eats up about 70 percent of what is spent on carbon offsets, according to a report from UK-based Carbon Retirement report.

And you continually flog that one example as if it were a law of nature that any attempt to reduce emissions will be co-opted by the financial vultures. That was simple offsets, in one place. Attempts to prevent emissions in the first place can be made to work better. You seem to be sold on the idea, that since the bad guys managed to corrupt the first attempt, that we should give up and let them have their way (no limits). That way lies climate destruction.

Attempts to prevent emissions in the first place can be made to work better

Can you please highlight one or more jurisdictions that have reduced overall CO2 emissions deliberately? I would be interested in how they did it.

The closest would be any nations that are reducing emissions due to a poor economy.

You may find individuals who are, as an example, making biochar and burying the char to see how it adds to their soil and thusly lock away that Carbon for a few years.

Can you please highlight one or more jurisdictions that have reduced overall CO2 emissions deliberately? I would be interested in how they did it.

Germany, Spain, Portugal, Norway, Denmark, Switzerland.... Solar, solar, solar, hydro, wind, hydro, respectively. Could have used more coal or oil and less of these bad renewables, but their elected officials apparently wouldn't take bribes like normal politicians do.

France. I don't know what the actual emissions trajectory is, but their per capita net emissions are roughly a third of a typical nation of their wealth. Also New Zealand has got theirs pretty low. But, as lumina states, it probably requires some level of resistance to the normal political bribes.

And you continually flog that one example

When I can find more, I'll post 'em.

any attempt to reduce emissions will be co-opted by the financial vultures.

Any attempt will have to have the heavy hand of the Government and that hand is, in part, directed by the investment banker class.

Exactly how does one navigate the ship between the Planctae of Investment bankers, business models that are based on government force, and the other ills.

You seem to be sold on the idea, that since the bad guys managed to corrupt the first attempt, that we should give up and let them have their way (no limits).

What I'm hoping is that the people pimp'n Carbon reduction will come up with a plan that doesn't waste 70% of the effort.

And its sad that the defense is either 'they have to take 70% or else no change will happen' or 'its less than 1% of the take of the investment bankers so its not a big deal'

And what percentage of "overhead" would be acceptable?

There are always more ways to fail than there are to succeed.
Since the future of the climate depends on finding a way to succeed maybe we need
to try another path

The folks who started the Tea Party Movement may not have been against the science of Global Warming, but their efforts have been co-opted

Except that it was started with money from the likes of the Koch brothers. That was one of the things they wanted to accomplish.

there's no way to discern truth and no accountability for lies...

I'm not so sure about the former, but the later is unfortunately true. I claim a country that doesn't care about truth is lost.

I don't know hoe much the internet is the main battleground. Everyday I get a couple of inches of slich political adds, containing mostly viscious lies. And the phone keeps ringing off the hoo, with various campaigns trying to sell their product. Given the cost of slicj 4couple brochures, I'd bet the spending on this election is something like $100 per household. If we could just capture that money stream for something worthwhile, rather than politically motivated disinformation we could accomplish a lot. Instead, I think we are heading for a very bad outcome.

Someone was asking yesterday about the difference between US all liquids production and US crude oil production, so I made this little graph:

Crude and condensate is the blue part at the bottom, and is what has traditionally been called oil. It is the part with the highest energy content.

The next item shown is MTBE. MTBE (made primarily from natural gas, I believe) was added to Gasoline as an "oxygenate", and later ethanol was substituted and expanded in quantity. There is a trivial amount of other biofuels (purple), but it is too small to see.

Natural gas plant liquids come from natural gas, and are mainly ethane, propane, and butane. The amount has recently increased, with the rise in natural gas production. All of these are gases at room temperature, and have less energy content than oil.

"Expansion" refers to the refinery expansion that occurs when long chain hydrocarbons are cracked (and natural gas is added). This happens to imported oil as much (or more) than to US produced oil. But since it is our process, and our natural gas, we take credit for the gain in volume. (I calculated this amount by subtraction. If there is something I left out, let me know, and I can adjust it.)

When people talk about one-third of US oil production coming from the Gulf of Mexico, they are talking about the Crude and Condensate portion at the bottom in blue.

Any chance of graphing actual energy (BTU) production rather than barrels (or is this BOE)?

How would one measure the BUT content of "refinery process gain"?

I think it has to be barrels not BOE. BOE is only used when non-liquid fuels are involved in the total, stuff that you cannot measure in actual barrels.

Ron P.

"How would one measure the BUT content of "refinery process gain"? "

I can measure mine by how quickly my wife kicks me out of bed ;-)

It would seem like refinery gain would be available in other countries as well, but I am not sure that other countries take credit for it. Does anyone know about this?

At one time, we had most of the refineries, so it wasn't an issue.

I am not sure whether they do or not, but I would bet most do not. I know that Russia does not because they measure everything in tons. There is no gain in weight from the refinery, only volume.

And I meant BTU not BUT. Before I typed the message I was thinking of the joke about the air conditioner salesman who asked the lady how many BTUs she needed. She said that she needed enough BTUs to cool two BUTs as big as TUBs. So I confused BUTs with BTUs but not TUBs. ;-)

Ron P.

I'm happy that your sense of humor is intact, Ron :->

Natural gas plant liquids come from natural gas, and are mainly ethane, propane, and butane. The amount has recently increased, with the rise in natural gas production. All of these are gases at room temperature, and have less energy content than oil.

I was under the impression (perhaps falsely) that shale gas is mostly dry gas with few NGL's. If that is correct, and most of the new natural gas production is dry shale gas, then why would NGL's rise?

My interest is mostly in propane (heating fuel) which has been running at the bottom of the normal range on the weekly reports when all the rest of petroleum products are in the middle to above the normal range.
I have been wishing for a long time that someone with expertise in the NGL's (propane in particular) would do an article for TOD on this area.

I think the shale gas plays vary. Arthur Berman says, in his post earlier this week:

Concerns about the logic of ongoing gas-directed drilling while prices collapse have been partly diffused by a shift to liquids-rich plays like the Eagle Ford Shale in Texas.

But even when companies drill to get liquids, they get more gas. And I understand that companies generally have to drill to keep their leases--they can't sit on them too long, or they will lose them. So companies are getting gas they really don't want at this price.

This will sound a little picky but by industry nomenclature the Eagleford Shale is not shale gas play. The ES isn’t even considered an unconventional play. It’s a fractured reservoir play. Essentially all the oil/NG produced is found in the fracture system. In a shale gas play the NG produced is held in natural fractures, some in pore spaces, and most is adsorbed onto the organic material. The gas in the fractures is produced immediately; the gas adsorbed onto organic material is released as the formation pressure is drawn down by the well. It’s the adsorbed NG that makes the SG unconventional. Once the fractures in the ES are drained production ceases. Plays like the ES are not uncommon. Over 20 years ago the Austin Chalk (only several 100’ different in depth than the ES) was the hottest play in Texas with thousands of horizontal wells drilled and frac’d. No different than what's going on in the ES today. And NG in the ES isn’t a new concept: companies have been trying to produce the ES NG for over 30 years. What is new is that we discovered a small area of the ES that has a high oil yield. None of the operators in the play are drilling for NG...it's the oil. Some of the ES wells in this area produce 5 to 7 their value from the oil as the NG. The AC as well as dozens of other formations Texas (that were developed in the 50’s and 60’s) are also a shale for the most part but the clay sized particles are made of calcium carbonate and not silica (like quartz) like the SG plays (although much of the Haynesville Shale is also a carbonate rock).

The main point isn’t so much the technical difference between the ES and the SG reservoirs but that the ES isn’t some big new discovery of a profitable SG play. It's a fractured shale play no different than dozens of others that have been developed for over 40 years. They just found a new sweet spot.

haynesville produces dry non-associated gas.

barnett produces dry non associated gas in some areas, condensate and non-associated gas in other areas and possibly oil and associated gas in still other areas.

eagleford shale produces dry non associated gas, condensate with non-associated gas and oil with associated gas. marcellus apparently produces a rich (a significant fraction of ngls)non-associated gas. probably some condensate too. of the others, i know not.

a fraction of all gas production is associated gas production. oil production and therefore associated gas production is also increasing.

non-associated gas reservoirs:

a "dry gas" reservoir contains very little to zero ngls.

gas produced from a gas/condensate reservoir will contain a significant fraction of ngls.

associated gas:

associated gas will normally contain a significant fraction of ngls.

This post may seem a little absurd, but I am writing it anyway since it contains a question I can not get answered on my own.

In 1974 the James Bond movie "The man with the golden gun" was released. Wikipedia describes this film as "set in the face of the 1973 energy crisis, a dominant theme in the script — Britain had still not yet fully overcome the crisis when the film was released in December 1974."

Indeed there is a scene in the movie (appr. 40 min. from the start) where Bond and his boss "M" are talking about the stolen "Solex" (some "device which can harness the power of the sun"). "M" - in the German version of the film, which I have, says:

"Ja - ich kenne das Thema. Kohle- und Ölvorräte sind bald verbraucht, Uran wäre zu gefährlich, geothermische und Gezeitenkraftwerke sind zu kostspielig, das weiss ich doch längst alles."

("Yes, I know the issue well. Coal and oil will soon run out, uranium would be too hazardous, geothermical and tidal power plants are too expensive, I have known all that for a long time.")

The film offers no answers to the question how electricity should replace fossil fuels especially for transportation, and a "Solex" as I knew it in 1974 was quite a different thing. But yet the above quote caught my attention. The movie was produced at the time of the arab oil embargo which caused considerable economic trouble. So a possible statement of "M" in that scene could have been 'blackmailing of western nations by muslim rogue states' or so. But instead of this he speaks of "running out oil supplies".

My question is: does anybody have access to the original english version of this film? Could he/she confirm what they talk about in that particular scene? I cannot find such a thing as the text book of that film. (I agree, of course, that a piece of entertainment media is not really meaningful in the discussion about peak oil. But the point in time is interesting IMO.)


I don't have an answer to your question, but I recommend watching 'Three Days of the Condor' if you haven't yet seen it.

I have a CD from the Dutch musician Solex, and the claim is that she took the name from the French manufacturer of mopeds.

So maybe the Bond movie was predicting the rise of mopeds and electrically-assisted bicycles?

The Solex e-bike plays a prominent role in the Tati film "Mon Oncle":


A quick google search gives you the text you are looking for:

"Coal and oil will soon be depleted. Uranium's too dangerous..."


From the script:

A multimillionaire.
Head of Hai Fat Enterprises.

All legitimate, as far as we know.

What did Gibson
propose bargaining with?

A solex. Claimed it was %/ efficient.

lf he developed a solar cell that efficient,
he solved the energy crisis.

So you've told me.

Coal and oil will soon be depleted.
Uranium's too dangerous.

Geothermal and tidal control
too expensive. l know all that.

- Where's the solex now?
- Solex agitato r, sir.

The essential unit to convert
radiation from the sun into electricity
on an industrial basis. lt's only that size

lt won't take long to check out Gibson's
efficiency claim. This is exciting!


Thanks for this. They were really talking about oil 'running out' in the original film. And thanks for the other recommendations.

I can not answer your question about the film but peak oil and other finite world shortages were well known in the 70's. In fact I studied the problem in the early 50's as a college engineering problem given to us by an ROTC proffessor. About the only difference between then and now is technical advances and discoveries pushed the critical peak dates back. The basic resource problem is still the same but now we can add excessive population, financial collapse and a really soft bunch of people that won't get off their butts to do much to mitigate the above. BTW: I agree with Todd.


Thanks, I needed that. At least I'm not a majority of one :-)


You are not alone Todd.

There is still far too much complacency.

I recently read a book called Auto Mania: Cars, Consumers and the Environment. The author, Tom McCarthy, goes into the details involved in letting gasoline become the standard fuel back in the early 1900s. Many people wanted a renewable fuel, such as ethanol, derived from grain, because they feared eventually running out of petroleum. There was legislation to remove a national ethanol tax. Some in Washington and in Detroit tried to promote the idea. But it seems that gasoline was always cheaper and easier to get hold of and it prevailed. EROI I guess. Back then farming was done with horses and a lot of manual labor and EROI would have been not nearly as good as gasoline from Texas gushers. And I suppose ethanol has always been trailing oil`s EROI even now....especially now!

Oil seemed like a magical blessing......now maybe it seems like a terrible curse? But in nature there is always a balance and two sides to everything...........

pi - So true...like the old line: "The best of times...the worst of times". One could pick any anecdote to support either position. Somewhat like the gun ownership issue. Yes...w/o oil we wouldn't be looking at the potential catastrophic affects of global warming. OTOH most historians agree that had the giant East Texas Oil Field not been discovered the outcome of WWII may have been every different: we might all be speaking German and there wouldn't be a Jew, mentally ill or person of color left roaming the planet. Be nice to have just the positive benefit of any new technology without the downside. Maybe next time around human nature will designed differently.

The Germans were defeated by Russia, not Texas oil. Read Albert Speer's history of the war. He was Hitler's minister of armaments and the only Nazi who pleaded guilty at Nuremburg. Or read "Russian At War" by Alexander Werth, a Russian ex-patriate who had no sympathy with the Soviets. Or just look at the casualty figures.

The primary result, and perhaps the purpose, of American fighting in Europe was to prevent Soviet domination of the whole continent.


More Monolithic Thinking at TOD. Don't let a complex situation get you muddled, just discount the factors that aren't part of your thesis.

(The statement was 'without East Texas oil, the outcome would likely have been very different..')

jok - Not exactly sure what your point was but to correct you the statement was "the outcome of WWII may have been every different". As you do correctly point out it's not easy to take complex situations and boil them down to absolutes. More minutia: some historians credit the development of the air born proximaty fuse as a significant factor in defeating the Axis powers. Not very relevant to the conversation but I do enjoy tossing out opinions of un-named "historians". They do carry such weight. LOL.

RE: Keystone Pipeline An Incendiary Issue In U.S.

Buy oil from Canada, buy oil from Iran or stop driving SUVs.

That's all there is to it, I am afraid

Ever since reading the Thursday edition of the Automatic Earth, I have been stuck at Youtube watching clips about money and debt and all that kind of stuff.

I have had in the works a science fiction storyline for some time now that walks through the idea of a super material rich dude that wants to help humanity get out of the pickle they are in. His author though, does not know what would happen if something like this would turn up on the world stage.

I asked in email a few days ago something along these lines, so now I am posting the questions here, you can either email me, the address is in my profile, or post here, as it does pretain to peak oil and peak everything else.

The fellow in the story has a device that can extract single elements from the earth's crust without digging it all up and moving it and etc etc. IE he couldn't extract the oil out of the ground because it is not a single element. But he can go into a gold rich ore area and extract the gold, moving it to his lab, the spaces left behind are replaced by the air in his lab, ( the fictional part of the story ).

But here is the real world part of the storyline. What would happen to the world's economy if he started infusing this new gold into the markets?

I had the idea of exchanging some of this gold with Japan and China for US T bonds (but I am still shy of knowing what I'd do with them once I got them (maybe pay off his tax hits with this or something like that).

From my research the earth does have the wealth in the crust of all this extra gold, we just can't mine it now because of the problems with costs and getting at the small veins of gold rich ore. Even if some areas only have 1/1-billionth of a ratio of gold to other elements, the (fictional device) can still extract the tiny bits and over time from a whole cubic mile of crust get a rather nice amount of gold out of them.

Some of the YouTube videos I have been watching have rehashed the "Money is Debt" idea and all that. But others have talked about community money, or Local currencys so doing away with the Federal Money might not be such a big deal if the local groups have gotten a foothold by the time the Gold starts hitting the world stage.

At present there is about 170,000 tons of gold in the system, So what would bringing 4 to 20 times that amount into the world do to things?

Thanks for any help you can give me in trying to understand the local impacts as well as the world wide ramafications.

BioWebScape Designs for a better fed and housed world, aka Author at Large.

Ps, I still think there is a sustainable arrangement we all can make with ourselves and the planet, it just might be anything like what we are living in right now, though getting from there to here, or here to there as the case is, won't be easy. No matter how much money you have, you are still made up of elements only found on earth and will dust be turned to again.

That's... odd! I invoked matter transmission in a thread today, too.

I know someone who got taken in a gold deal. The gold was there, in the ground he bought, but scattered in a zillion tiny places.

I do believe our money is now based on Coor's beer. I don't think gold availability would do much here except hold the price back from hitting $30,000/oz or so, so soon. And our Jacksons root the evil of the world, yes? Or, more precisely, in the foreign exchange market, the dollar is the world's primary reserve currency. We just happen to use it here to buy our cheesy-puffs, politicians, and other everyday essentials.

I've read that if you hit a material with an electron beam, the matter will flow back up the beam path. Adding some bending magnets might provide a means of sorting the individual atoms by their atomic weight: the gold flies off the curve sooner than the lithium. Or, just use the beam to take the material apart and then admit the debris to a mass-spectrometer.
Pretty song:

I am not realy worried how the gold gets into the story, I am though looking for what effect it will have if it got used in the world we currently have.

I want to have a bit of realism in a science fiction story. I mean I could just make it all up in my head, but the realism gives it a bit of a hold on the here and now, something to tie in the real world events that are happening all around the reader.


In another story ages ago, I had aliens moving vast blocks of polar ice into the deserts of the world to geo-engineer earth to a climate more like their own. Something we seem to be doing with our own brand of climate change, looking at Sea Ice data recently. It was a work of fiction that had climate change hopped up on steriods, as it were. It was written way back when Clinton was in the white house. I have it in a file cabinet in a folder, all printed out and still waiting for the finishing touchs.

I'd like to know if it would even be possible for things to change in this world, if something like this fictional story were to take place.

Matter transportation is not the story, it is just a side note and I only mentioned it, to let you know I hadn't just created the gold out of iron atoms, although I've written that kind of story in the past, I didn't want to just copy an old idea. Maybe I need to make friends with a few federal reserve bankers, and see what they think.

BioWebScape Designs for a better fed and housed world, even if we have to do it the hard way and wait till all the bankers are gone.

check out aluminium - the States mad medals out of it that were worth a fortune at the time. Then we got a cheap way the extract the metal.

Cheap as chips now.

Price falls but I can't see much of a utility for a soft yellow metal other than decoration - tie that with Inca gold ( on copper ).

That should give you the idea of what the effects would be of cheap gold.

It wouldn't be money any more - think of the opposition to that from Governments with hordes of the stuff!

moneytery collapse comes to mind as well.


Actually, gold is a very useful industrial metal the result of it's unique properties. It is an excellent conductor of electricity and thermal energy, thus is widely used in the electronics industry. It does not corrode or form oxides. It is highly malleable, which is why it can be used in very thin layers as "gold leaf". It also is a very good reflector, which is one reason some satellites are covered with it. As a result of it's properties, a large fraction of yearly gold production is actually consumed in for industrial applications. There is even an industrial effort to recover gold from spent electronics, which provides employment for workers. Money, on the other hand, should have no intrinsic value, since money in today's world is nothing more than a form of debit...

E. Swanson

But here is the real world part of the storyline. What would happen to the world's economy if he started infusing this new gold into the markets?

Because historically gold was often used as a basis for money, many people are confused by the difference between the two. Money is a medium of financial exchange; gold is just a pretty yellow metal.

The advantages of gold as the basis of a money system are that 1) it is rare, 2) the supply cannot be expanded very rapidly, and 3) it is hard to destroy - most of the gold ever produced is still in storage somewhere.

However, if you add large amounts of gold to the reserve, you will destroy one of its advantages as a base for the money system - the difficulty in creating more. The result would be "gold inflation". You would need more and more gold to buy fewer goods and services. It would be exactly equivalent to indescriminate printing of paper money - minting of large numbers of worthless gold coins.

This actually happened in Spain after they discovered large amounts of gold in the New World. It caused gold inflation in Spain, the value of gold coins fell in relation to the goods and services they would buy, and the result was inflation in the Spanish economy - although people didn't recognize it as such because economics was not well understood at the time.

The main beneficiaries of the Spanish gold inflation were the British. The Spanish used their surplus gold to buy manufactured goods from Britain, British manufacturing took off, and Spanish manufacturing collapsed. Britain became wealthy, Spain became poor, and most of the gold ended up in the hands of British industrialists. And then the Spanish said, "What happened? We found the gold and the British got rich!???" Sending the Armada to England to fix the problem by bringing back the gold was a poor response.

Other things can be used as the basis of a money system. Silver has also been popular in the past, but one of the best bases was tobacco. At one time the money supplies of some American colonies were based on tobacco. The advantage of this was that currency inflation was self-correcting. If the value of tobacco fell too low, people would put it in their pipes and burn it, the surplus money would be destroyed, and the value of the currency would return to normal.

Something similar occurred in Europe after WWII - cigarettes replaced paper money as the currency of choice. Nobody would accept worthless paper money, but cigarettes were always good because if all else failed, people would smoke them and reduce the size of the money supply.

Self-igniting paper money that would catch fire and burn up if there was too much of it around would serve the same purpose. Just a little chip in each bill that senses the total number of other bills in circulation and causes random ignition if the count is too high. I always thought that would be a good basis for a science fiction story.

But in reality having a competent and independent central bank to manage the supply is a more practical solution, although one not always achieved. The temptation to solve fiscal problems by printing or borrowing money is always too strong for politicians. They might call it "Quantitative Easing" rather than "printing worthless money", but the net effect is the same.

I've wondered about a cash system based on something like polonium-210 which decays in about five days. http://en.wikipedia.org/wiki/Polonium-210

Spend it or lose it! (Of course, keeping it in your hand too long may have other negative consequences :-o

138 days, please read your source.


Everybody, thanks.

The problem is that Gold as it stands today, there is only a few grams per person on the planet. If you got it to where, paper or plastic electronic money and gold were on the same scale/value. Wouldn't the gold standard be better than what we have today?

WE already have people that want a one world currency, in this case couldn't I make it gold in my story?

As to gold being useful several of you know what the usefulness of the stuff is, and some of you learned that gold is not just a pretty metal. When you can pound it so thin you can see through it, you have gotten loads of glass related applications right there.

The reason they use it in orbit is that it does not oxidize, high orbit has free O atoms running around waiting to oxidize metal, gold foil prevents damage to your craft.

I once worked for a company that recycled gold from electronics, they did it on Saturday under lock and key.

Right now the world spot market has notes that can't be repaid in gold if they are cashed in, not that some of them were even written to get gold back if you cashed them in. There was talk that China wanted it's citizens to buy gold to save, and then they'd tie their money to a gold standard and viola, they have control of the gold in people's hoards.

But with only so much gold out there, I can't see that being to practical. My figures put it around 19 grams per person on earth, at current supplies. No need to have one country hoard it, I'd guess that the US does not have a lot in it's vaults either.

Anyway, thanks, food for thought.

BioWebScape Designs for a better fed and housed world,

Wouldn't the gold standard be better than what we have today?


Whatever so called "commodity" you try to fix the price of "money to, be it Gold, or Oil or Unobtainium, it would be an illusion.

"Money" is not intended to be a guarantee of delivery to the bearer of a certain amount of commodity.

Instead it is a nebulous promise that society will somehow give you "value" commensurate with the value you contributed when you last sold something or worked or otherwise exchanged something for the "money" thing.

"Money" is automatically created out of thin air any time someone writes up an IOU.
An equal amount of commodity cannot be conjured up out of thin air at the moment the "money" is conjured up. That would violate the laws of physics (conservation of mass). Money has no mass. It is an abstraction, often one represented by bits inside a computer.

Speaking of gold and monetary collapse, here is an article that makes for interesting reading:


'The scary actual U.S. government debt'

Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”

Prof. Kotlikoff doesn’t trust government accounting, or government regulation. The official vocabulary (deficit, debt, transfer payment, tax, borrowing), he says, is vulnerable to official manipulation and off-the-books deceit. He calls it “Enron accounting.” He also calls it a lie.

But Prof. Kotlikoff’s economic genre isn’t the Western. It’s the horror story – “and scarier,” one reviewer of his book suggests, than Stephen King.

Think this guy is a quack? Well, check out his resume'.

Prof. Kotlikoff is a noted economist. He is a research associate at the U.S. National Bureau of Economic Research. He is a former senior economist with then-president Ronald Reagan’s Council of Economic Advisers. He has served as a consultant with governments around the world. He is the author (or co-author) of 14 books: Jimmy Stewart Is Dead (2010), his most recent book, explains his recommendations for reform.

If the debt is this huge, then it would seem at some future juncture we are headed for hyper-inflation in order to minimize that sizable figure.

Prof. Kotlikoff has written or co-authored quite a few books, including books entitled Simulating the privatization of Social Security in general equilibrium and Spend 'Til the End: Raising Your Living Standard in Today's Economy and When You Retire. Since some would point out that our present situation began with Ronnie RayGun's free market philosophy, which Prof. Kotlikoff probably helped formulate, it might be that he is partially responsible for the present mess. Without reading his book(s), I wonder if he has any understanding of energy economics, instead taking the typical economist view that the energy necessary to run the economy in future will just magically appear...

E. Swanson

It did occur to me that since he was part of the Reagen Admin., he may have a political agenda. Even if he is wrong about the total debt though, even at 13.7 trillion http://zfacts.com/p/461.html , which is 60% of GDP, there is great danger in piling up debt this fast without a remedy. When Bush junior was instituted as prez by the Supreme Court in 2000, the debt was 5.4 trillion and dropping. Since then it has gone to its current 13.7 in a little over 10 years. That's an average of 830,000,000,000. added per year to the national debt. Just like Europe, the US will need to address austerity measures at some point.

However, as we swing to the right in this upcoming election, there will be demands for tax cuts but probably little if any reduction in spending. Thus the debt will rise even higher.

Do you have a suggestion for a remedy?

Cut the 'National Security' (MIC, including DHS and the intelligence agencies) budget by 15% over the next five years.

Cut all other government spending by 10% over the next five years.

Let the GW Bush tax cuts expire.

Phase in a $5/gallon gasoline and diesel tax over the next ten years.

Phase out the mortgage interest tax deduction over the next ten years.

Phase in a 20% national VAT over the next ten years, reducing income tax commensurately.

Eliminate Medicare Part-D and the new Health care plan and either let folks fend for themselves or institute a single-payer national hearth care plan, capping admin expenses at no more than 4% land implementing severe cost controls, including rationing/triage of care if need be.

Eliminate any Medicare or Universal health care for the third or higher child in any family.

Deport as many people residing illegally in the U.S. as possible, and implement very tight border security.

I'm right there with you on those suggestions, particularly letting the Bush tax cuts expire. However, 5 a gallon seems way too high and my wife and I are pretty use to that mortgage deduction bit - we like it.

Phase in a $5/gallon gasoline and diesel tax over the next ten years.

Phase out the mortgage interest tax deduction over the next ten years.

But good for you for taking a moment to make some suggestions. Trouble is those fat cats on Capitol hill that benefit from first being a politician, then as a lobbyist are only interested in their own wealth building and not what is best for us. As long as that corrupt system remains in place, we are stuck.

Peak Earl,

Thank you for your contribution to these important questions!

I thought for a minute and typed out some ideas...I doubt that I have the best answers...but it would be nice to hear people and their elected politicians actually have an informed, intelligent conversation about these kinds of highly important societal policy choices.

The fuel tax idea intent is to encourage people to adopt much more efficient vehicles and to ration their driving habits. Perhaps people would walk, ride bikes, and car-ride-share more. In the meanwhile, the tax would raise some money to pay the the reduced and re-prioritized government services such as we think we need. Five bucks over 10 years would amount to 50 cents per year...enough to get people's attention, slow-enough phase-in to allow people to plan their future courses of action for a predictable future state...

Same with the mortgage interest deduction....perhaps that would help deflate over-priced homes and lessen the chance of future bubbles. Maybe the saving in that deduction could be re-directed to tax incentives for super-insulating, retrofitting high-efficience furnaces and applicnces, installing PV for residences, etc.

The numbers are malleable in these proposals...my thinking was along the lines of shared sacrifices.

I forgot to add: legalize marijuana. I never have partaken myself, but I see little difference between MJ and booze or tobacco. I have an occasional glass of wine or good bottle of beer. Seems to me that MJ prohibition costs a lot in police enforcement dollars, may be selectively enforced by class and race, and the possibility exists that it could be sold and regulated (substantial fines for selling to minors, like booze and smokes)and taxed like booze and cancer-sticks/cancer-chew.

Just some ideas...I do think that the MIC cannot be cut w/o shared non-MIC cut-pain. I think the only way to implement austerity and try to 'balance the books' is for everyone to give at the office and accept some goring of their sacred cows.

Keep on Keeping on!

The fuel tax must be increased no doubt, in part because the roads are looking pretty bad, but to reduce unwanted driving true. But 5 bucks a gallon would drive the economy into the tank. How about a buck. But we can differ on that one.

Mortgage deduction - not really needed with the other things mentioned. That is unless an entire overall of the tax system was to take place that makes sense.

Legalize pot - absolutely agree. What's the diff between the violence assoc. with it, vs. alcohol during prohibition. Tax the bajeezas out of it and pay down CA state debt. Just sell the stuff in liquor stores just like jack daniels. The Federal Govt. instead of acting like CA prop 19 is such a bad idea they will fight, why not view it as an experiment. Scientists experiment all the time.

What we see however is gridlock. It's like two big trucks, dems & repubs are pushing against one another gaining no ground. How that can change I have no idea.

Just to add something along these lines of interest, here's an interesting article:


'Capt Bernanke on course for icebergs'

This week Ben Bernanke is likely to announce a new programme of “large-scale asset purchases”. The aim of quantitative easing is to dispel deflation and reduce unemployment.

The fiscal consequences of quantitative easing are also troubling. The financial crisis has put the nation’s finances in disarray. The 2010 US fiscal deficit will be about 9 per cent of GDP. With the Fed ready to monetise a great chunk of the government’s spending, there is even less chance that Washington will exercise fiscal discipline.

The 2010 deficit will be 9% of GDP. That's unsustainable. This country is acting like the Greek govt.

My understanding of the term monetize is to add more money to the money supply, i.e. print up more money to get things moving again, which will reduce the value of the dollar which is inflationary.

I have used the mortgage deduction too, still do. But it's a sacred cow, a middle class sop that has to go. In the first, it's unfair, then it drives the home price up beyond many folks' reach, among others. We used to have a real deduction for medical expenses, which made alot of sense, but as insurance became job inclusive and hence lost the base it had, it was dropped. But it made much sense to me, even the old concept of income averaging. Taxes are based whatever you cram into place without affecting too many voters, and today, there's nothing left that qualifies.

The very last thing we need right now is inflation, but that is what we'll get. It's the only way to handle the debt, save implosion.

The very last thing we need right now is inflation, but that is what we'll get. It's the only way to handle the debt, save implosion.

I Think that's what the Bernanke monetization bit is all about, although they are instead selling it as a way to reduce unemployment. I don't mind the idea of some inflation because our biggest ticket item is the mortgage which is fixed, on a house that has lost 1/2 its value, underwater so to speak. The more inflation the less that tab will hit us, as long as we can increase the price of our goods for our two businesses. If the orders fall off due to inflation, then we're really screwed.

Last night I asked my wife who is adament about remaining in this underwater situation, just how much value would the house have to lose for her to change her mind and walk? She laughed, but wouldn't answer the question. But it is an interesting question for the rest of the homeowners still hanging on.

You make some good points.

My idea with the gas/diesel tax is that, when folks end up driving vehicles which are 3-4 times more fuel efficient (say, 60-80 mpg vice ~ 20 mpg average), and they combine trips and drive a little less, that 5 bucks a gallon has the net effect on their pocketbook of an extra buck oir two a gallon at most.

Your idea of an over-arching overhaul of the tax system is on-target...it should all be re-examined from soup to nuts.

Your idea of an over-arching overhaul of the tax system is on-target...it should all be re-examined from soup to nuts.

Can you imagine how much time and money would be saved if there was a simpler tax system? Every year my wife and I have to finalize all the books for our businesses and sit down together for two days and crunch that thing out. We've got home mortgage, itemization, 2 schedule C's - get your receipts and income statements, Deprecitation, Self employment tax (social security), state tax. Thank goodness for the software 'Tax Cut', but it's still a headache.

In the UK, Aberdeen, Scotland, when I worked on the offshore BP40 rigs in 78-79 for Halliburton, I went into their equivalent of the IRS and asked for their tax forms. He handed me a card about the size of a baseball card with percentages of income and how much got deducted - that was it, nothing else!

Wow...that post-card-size tax return would be great!

I agree that Tax Cut is better than slogging through paper books and forms.

hope your business prospers...and you enjoy your house for a long time.

hope your business prospers...and you enjoy your house for a long time.

Thanks, and the best to you as well with whatever your passion may be.

My idea with the gas/diesel tax is that, when folks end up driving vehicles which are 3-4 times more fuel efficient (say, 60-80 mpg vice ~ 20 mpg average), and they combine trips and drive a little less, that 5 bucks a gallon has the net effect on their pocketbook of an extra buck oir two a gallon at most.

There are many flaws in this idea :

a) Price is a lousy primary control-lever for consumption
(see the last fuel spike, as an example)

b) Not everyone can move overnight to a '3-4 times more fuel efficient' car, and some usages never can.

c) Too large a price hike is actually counter productive: It takes consumers longer to save enough, to buy that '3-4 times more fuel efficient' transport.

So it is much smarter to add an excise tax, the primary use of which is NOT as a control-signal itself, but to give funds to incentivize buyers to the most thrifty vehicles.

This encourages movement, without penalizing those not yet ready to move. It also stimulates new vehicle sales, and encourages companies to compete for those customers.

There were a lot of buyer-steering-controls used in the last fuel crisis, such as much lower registration costs on smaller engines.

$5 gasoline $4 diesel


Good to see some ideas discussed here!

These type of ideas, and other 'big ideas' of course, deserve robust analysis and debate, in order to try to predict and quantify benefits compared to risks, and try to anticipate unintended consequences.

However, that absolutely should not equate to endless gridlock.

I liked the idea for cumulative term limits (12 years, credit for this idea from Frosty Woolridge)and other restriction on elected officials (no lobbying or government contracts, for life, after serving...credit again to Mr. Woolridge for these ideas also).

I also think that we should have publicly-funded elections, with a different voting system, perhaps rank or range voting.

We know that much of what we have been doing isn't working very well.

no lobbying or government contracts, for life, after serving...credit again to Mr. Woolridge for these ideas also

Speaking of which, what happened to Obama's pledge to end lobbying? He got my vote on that but I never heard anything more about it.

Another thing that wasn't delivered...