Drumbeat: November 23, 2010

Michigan to curb road projects as gas tax revenue shrinks

Michigan could see half of its road construction budget disappear by 2012, taking with it scores of repair projects and thousands of jobs in a state that relies heavily on its freeways.

A freefall in gas tax revenue over the last decade has the Michigan Department of Transportation projecting its repair budget for 2012 to be $626 million, a slice of the $1.4 billion spent in 2010. And Michigan barely escaped the same fate for 2011, said Bill Shreck, MDOT director of communications, when it faced an $84 million shortfall in its effort to qualify for federal matching funds.

"Until the 2011 budget, we were never faced with actually leaving federal money on the table," Shreck said. "We'd move things back and forth and sometimes delay projects, as long they didn't compromise the safety of the public."

Czechs line up oil backup plan

Czech state oil shipper MERO has extended a contract to use spare capacity on the TAL pipeline from Italy to import extra crude oil if supply via the Druzhba link from Russia is halted, the government said today.

What is driving distillate prices north?

What is driving distillate prices northwards? The question has clear cut answer in line with the market fundamentals and macro economic realities.

China fuel shortage sparks alarm

China is hoarding fuel supplies as it braces for a cold winter and looks to diversify its energy means in a move that could spell price rises for key trading partner, Burma.

Burma is one of Southeast Asia’s most reliant nations on fuel imports, according to Wong Aung from the Shwe Gas Movement. He estimates that imports from Thailand, India, Singapore and Indonesia, as well as China, at times account for 90 percent of the country’s fuel usage.

China punishes firms for diesel price rigging

BEIJING (Reuters) - China on Tuesday ordered authorities to seize revenues from some local oil refineries and wholesale fuel dealers for artificially propping up diesel prices, part of an effort to control prices and fight a diesel supply crunch.

The powerful National Development & Reform Commission (NDRC) said on its website (www.ndrc.gov.cn) that oil dealers including some affiliated to state oil firms were selling diesel above the state-set ceilings, causing disarray in the market.

China Orders Restoration of Power Supply to Residents

China, the world’s biggest energy consumer, ordered resumption of power supply to residences after some local governments shut generating plants and limited electricity use by households to meet an energy-saving goal.

“This is a wrong practice that has not only affected the lives of ordinary people but also disrupted operations at the nation’s power grid,” the State Council, or Cabinet, said in a statement posted on the central government’s website today. “This has to be corrected.”

A Chinese diesel crunch

If you were wondering why distillate spreads improved over the last month in Europe, apparently there has been a unique demand situation heading over from Asia — prominently China — as well as Latin America.

Govt: subsidized fuel supply still sufficient

Indonesia has set 36.5 million kilo liters of subsidized fuel this year, but demand is predicted to increase.

The Downstream Oil and Gas Regulatory Body (BPH Migas) said earlier that subsidized fuel oil consumption in the year ended October 31, 2010 reached 31.662 million kiloliters, accounting for 86.92 percent of the quota of 36.5 million kiloliters.

OMSA Urges Salazar to 'End Rhetoric, Begin to Act'

Members of the Offshore Marine Service Association (OMSA) met Nov. 22, in Houma, Louisiana, with U.S. Secretary of the Interior Ken Salazar to discuss ongoing challenges affecting the offshore oil and gas industry. Industry urged a clearly defined roadmap for obtaining shallow and deepwater drilling permits in order to get this vital industry back to work before additional strategic energy assets are mobilized to foreign offshore markets.

Analysis: Energy Industry Faces Higher Levels of Working Capital

The degree of working capital tied up by the oil and gas industry has grown substantially over the past six years, according to Ernst & Young's report, Cash in the Barrel: Benchmarking and analysis of working capital management in the oil and gas industry.

FACTBOX-South Africa's power generation plans

(Reuters) - South African power utility Eskom reported a surge in first-half profit on Tuesday, boosted by higher power tariffs, and said it had secured the necessary funding to build much-needed power plants.

Economical Coal Running Out, Prices to Soar, Nature Reports

Economic global coal reserves will run out faster than expected because of overly optimistic estimates and accelerating demand, leading to a surge in prices, Nature magazine reported in its Nov. 18 issue.

“The inevitable result of soaring demand and dwindling supply will be rising coal prices globally, even in nations that are currently self-sufficient in the resources,” Richard Heinberg and David Findley, fellows at the Post-Carbon Institute in Santa Rosa, California wrote in an article in the magazine. “Energy policies relying on cheap coal have no future.”

Brazil Petrobras Starts Work On $3.3 Billion Ethanol Pipeline

RIO DE JANEIRO -(Dow Jones)- Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, started work Tuesday on a $3.3 billion pipeline project that will link sugar cane fields to the country's industrial hub.

The 850 kilometer pipeline will have the capacity to transport 21 million cubic meters of ethanol per year, starting in north central Brazil's Goias state to Minas Gerais and Sao Paulo states. The pipeline is expected to be completed by 2014.

A National Lab Develops Grid Controls to Handle Renewable Energy

The intermittent nature of wind and solar power now make the grid operators' world more complex. The looming emergence of electric vehicles and the need for ways to store more electricity and to get electricity consumers to reduce peak demands will add still more complexities, Imhoff said. "The grid is going to be changing a lot over the next 10 years. We want to anticipate that and to some extent, to guide it. Right now, I think we're kind of backing into the future," he said.

Peak energy? What peak energy?

Man did not stop building wooden ships because of a shortage of trees. He stopped because he had developed the technology to build ships made of steel instead.

Man did not stop using horse drawn transport because of a concerted government campaign to reduce the piles of steaming horse manure in our cities by introducing a special Equine Transport Tax. He did so because private entrepreneurs invented the internal combustion engine.

In Search of Answers about Economic Growth

...You have to wonder why the pursuit of growth goes largely unquestioned in a world facing climate destabilization, mounting environmental damages from ill-conceived business decisions (e.g., BP’s oil spill in the Gulf of Mexico), and sometimes violent competition over limited energy and material resources. Why are nations so committed to increasing production and consumption? Why are they so taken with the idea of growing bigger economies?

The answer has to do with the dilemma of economic growth, which Tim Jackson has described superbly in his book, Prosperity without Growth. On one side of the dilemma, economic growth is undermining ecological systems – the very systems that support life on the planet (and in so doing, form the foundation of the economy). On the other side, failure to grow the economy leads to job losses and causes instability in social systems.

Poverty And Energy Prices Soaring In Tandem In California

In September the state of California hit a new high in food stamp benefits, crossing the 6 billion dollar mark on an annualized basis. Over the past year in California alone the total number recipients of the federal SNAP program (supplemental nutritional assistance program) rose by 16.3%. In many of the big counties of California however, food stamp usage rose even faster.

As previous readers of this blog understand, it’s useful to look at the car dependent regions of southern California as they are emblematic of the state’s post peak-oil, economic breakdown. After all the food stamp program is really a food and energy program, which frees up household cash for gasoline. In San Bernardino County, for example, with its population of two million the number of SNAP recipients has now crossed the 300,000 level. Yes, a full 15% of that county is now on food stamps.

Crude Oil Falls as Europe Debt Concerns Outweigh Supply Decline Forecast

Oil declined in New York as concern that Europe’s debt crisis will hurt economic growth outweighed forecasts that U.S. crude stockpiles dropped last week.

U.S. crude inventories declined 2 million barrels, or 0.6 percent, in the seven days ended Nov. 19 from 357.6 million a week earlier, according to the median of 11 analyst estimates before an Energy Department report tomorrow. Yields on Spanish and Portuguese debt rose, indicating that Ireland’s plan to seek a rescue risks escalating the crisis to the southern Europe nations with large budget deficits.

OPEC unlikely to change quota at Dec meeting-Qatar

DOHA (Reuters) - OPEC is not likely to change its production quotas at its next meeting in December in Ecuador if oil prices remain at current levels, Qatari Energy Minister Abdullah al-Attiyah said on Tuesday.

"If it (prices) continues as it is, I don't think they (OPEC ministers) will do anything," Attiyah told reporters in the industrial hub of Ras Laffan. He did not give an exact price level.

Oil Supply Drops in Survey as U.S. Refinery Demand Climbs

U.S. crude-oil supplies probably dropped to their lowest level in three months as refinery demand increased with the end of seasonal maintenance, a Bloomberg News survey showed.

Inventories declined 2 million barrels, or 0.6 percent, in the seven days ended Nov. 19 from 357.6 million a week earlier, according to the median of 11 analyst estimates before an Energy Department report tomorrow. It would be a third week of declines and leave stockpiles at the lowest level since Aug. 13. Nine of the respondents forecast a decrease and two predicted a gain.

Higher costs, more frustrations forecast for holiday travels

Analysts say fuel prices are rising partly because investors and speculators have moved strongly into crude oil, especially after the Federal Reserve announced Nov. 5 that it's launching a $600 billion bond-buying program known as quantitative easing.

"This is unusual, to see rising prices heading into the Thanksgiving Day holiday," says Tom Kloza, chief oil analyst at Oil Price Information Service. "There are a lot more people who are rushing to buy oil because they see oil as the best hedge against inflation and the best hedge against the weak dollar."

U.S.-to-U.K. LNG Shipment Last Week May Mark New Trade Link, JPMorgan Says

A delivery of liquefied natural gas to the U.K. from the U.S. last week was the first such consignment since 1959 and may mark the start of a new trade link between the markets, JPMorgan Cazenove said.

The LNG tanker Maersk Meridian delivered an initial shipment of the fuel to the Isle of Grain terminal, east of London, from the Sabine Pass terminal in the U.S., National Grid Plc said Nov. 19. The fuel had been reloaded at the U.S. terminal, JPMorgan Cazenove analyst Fred Lucas said in a report dated yesterday.

Venezuelan Black Sea Oil Route Threatens European Supplies, Transneft Says

Deliveries of Venezuelan crude to Belarus from the Black Sea may pose a threat to Russian oil supplies bound for central Europe, Russia’s pipeline operator OAO Transneft said.

Transneft is preparing a letter to the European Union explaining the situation, Igor Dyomin, a Transneft spokesman, said by telephone in Moscow. “The decision has increased risks to Russian oil deliveries to Europe,” he said.

China takes steps to guarantee domestic oil supply

BEIJING - China's Ministry of Commerce (MOC) on Monday told local bureaus to ensure ample supply of fuel amid rising inflation.

Local commerce authorities should "coordinate oil producers to increase production to meet demand, and reasonably allocate resources to keep prices stable," the MOC said in a statement posted on its website.

Nigerian militants claim attack on oil pipeline

LAGOS, Nigeria—A militant group claims to have attacked an oil pipeline in Nigeria that transports crude to the Warri oil refinery in the restive delta.

A statement sent Tuesday by the Movement for the Emancipation of the Niger Delta says the group destroyed the Obidi-Refinery pipeline on Sunday. The group also threatened to carry out more attacks in coming days to bring attention to the "underlying causes of agitation in the Niger Delta."

Shell Says Nigerian Force Majeure Affects December, January Bonny Loadings

Nigeria’s Bonny Light crude for loading loaded in December and January will be affected by a force majeure declared by Royal Dutch Shell Plc on Nov. 19 after a pipeline leak, a company spokesman said.

“We investigated and discovered that the leaks were caused by crude theft”, Precious Okolobo, Shell’s spokesman in Nigeria, said by phone from Lagos. Repairs on the Trans Niger Pipeline “are progressing but I can’t confirm when they will be completed”.

Venezuela touts major offshore natural gas find

CARACAS, Venezuela – Venezuela is touting a vast natural gas discovery off its coast, a project that President Hugo Chavez says will help turn the oil-exporting country into a major global gas producer.

Venezuela sees success vs Exxon, ConocoPhillips

(Reuters) - Venezuela foresees a successful end in 2011 or 2012 to battles over "rude" compensation claims by Exxon Mobil Corp and ConocoPhillips, Energy Minister Rafael Ramirez said on Monday.

"We'll probably have news on that in 2011-2012," he told reporters of the U.S. majors' demands for payment for assets nationalized by the South American nation three years ago.

PTTEP Buys Stake in Statoil Sands Venture for $2.28 Billion

PTT Exploration & Production Pcl agreed to buy a 40 percent stake in Statoil ASA’s oil sands project in Canada for $2.28 billion in the biggest acquisition by a Thai company.

Russia sees no China gas price deal until mid-2011

(Reuters) - Moscow and Beijing are unlikely to agree on the price of Russian gas supplies to China before the middle of next year, Russian Deputy Prime Minister Igor Sechin said on Tuesday.

Dynegy Scraps Takeover by Blackstone, Seeks Other Bids

“Dynegy continues to face challenges, many of which are beyond its control, including low and declining commodity prices and continued economic weakness,” Williamson said in a Nov. 8 statement. No higher offers for the company emerged during a monthlong shopping period that ended in September.

Qatar Petroleum weighs carbon gas oilfield boost

Qatar Petroleum (QP) is considering pumping carbon dioxide into its biggest oil deposit to reverse declining output from the ageing field.

The project could also be among the first in the Middle East to capture waste carbon dioxide on an industrial scale and store it underground, reducing the carbon footprint of one of the world's biggest per capita emitters of the greenhouse gas that has been most closely linked with man-made global warming.

PetroChina Parent's Overseas Production May be 50% of Total by End-2015

China National Petroleum Corp., the country’s biggest oil and gas producer, said it expects overseas output to account for half of its overall production by the end of 2015.

Norwegian Economy Shrinks Unexpectedly In Q3

(RTTNews) - The Norwegian economy contracted unexpectedly in the third quarter due to a substantial slowdown in oil and gas extraction.

Greenpeace activists scale oil rig off Mexico

MEXICO CITY (AFP) – Four Greenpeace activists on Monday scaled a Mexican off-shore oil rig to protest against global reliance on fossil fuels ahead of a UN conference on climate change, the group said.

Pictures posted on the environmentalist group's website showed a banner reading "Go Beyond Oil" hanging from the "Centenario" oil rig, and the group said its activists had climbed 39 meters (yards) above the water to hang it.

Anti-piracy force nets 16 suspected Somali pirates

NAIROBI, Kenya — The European Union's anti-piracy naval force said Tuesday that they have caught 16 suspected Somali pirates in the past five days with the help of the Seychelles Coast Guard.

Also on Tuesday, the Polish captain of an oil tanker said gun-wielding pirates boarded his ship and fired shots in an attempt to hijack the vessel, but failed to capture the ship in the attack off the coast of Oman.

High-speed rail projects land in tug of war between governors

When the Obama administration rolled out its initial investment to create a high-speed rail system across the U.S. in January, the program was hailed as a pivotal piece of the most significant upgrade of the nation's transportation system since the interstate highway network.

But the program — along with the jobs it could create, environmentalists' desires to ease auto pollution and some travelers' hopes of eventually hopping a fast train in the nation's heartland — may have hit a speed bump after this month's elections.

Obama Bolsters U.S. Hybrid Auto Sales in Waning Consumer Market

President Barack Obama’s administration has bought almost a fourth of the Ford Motor Co. and General Motors Co. hybrid vehicles sold since he took office, accelerating federal purchases as consumer demand wanes.

Nissan Says Its Electric Leaf Gets Equivalent of 99 M.P.G.

DETROIT — The federal government has rated the Nissan Leaf, the battery-powered car scheduled to go on sale next month in five states, as getting the fuel equivalent of 99 miles a gallon, Nissan said Monday.

Should Nations Bankroll Coal Plants Overseas?

Citizens in India and China have the right to economic development and an upwardly mobile lifestyle, of course. But should pension funds and banks that have guidelines for sustainability at home be promoting the use of coal overseas? Or should that investment be targeting cleaner energy alternatives in emerging economies like India’s?

Some environmentalists liken sending coal to China or investing in coal plants in India to banning heroin at home but investing in poppies overseas.

Gas-to-liquid plant cleaner, but still a gamble

When Qatar Petroleum and Royal Dutch Shell start their Pearl gas-to-liquids (GTL) plant next spring, it will be the biggest of its kind in the world, as well as the most expensive.

Technical Problems Set Back Iranian Nuclear Effort

Officials close to the U.N.'s International Atomic Energy Agency say technical problems are slowing down Iran's nuclear program.

The officials said Monday Tehran has removed hundreds of its centrifuges used to enrich uranium at its nuclear facility in Nantaz. They say thousands of the approximately 8,500 centrifuges in the facility are running below their capacity or are shut down.

Nuclear experts say the Stuxnet computer worm may have disrupted the Iranian centrifuges and caused them to spin out of control.

Iran: Computer worm didn't harm nuclear program

TEHRAN, Iran – Iran's nuclear chief said Tuesday that the malicious computer worm known as Stuxnet has not harmed the country's atomic program and accused the West of being behind a failed sabotage attempt.

After the Nuclear Plant Powers Down

ZION, Ill. — Twelve years ago, Commonwealth Edison found itself in a bind.

The Zion Station, its twin-unit nuclear reactor here, was no longer profitable. But the company could not afford to tear it down: the cost of dismantling the vast steel and concrete building, with multiple areas of radioactive contamination, would exceed $1 billion, double what it had cost to build the reactors in the 1970s. Nor could Commonwealth Edison walk away from the plant, because of the contamination.

Cape Wind Takes a Step Forward

Massachusetts utility regulators on Monday approved a contract under which a utility will buy half the electricity produced by Cape Wind, the proposed wind farm to be built in Nantucket Sound off the coast of Cape Cod, bringing the project substantially closer to construction.

The decision to allow the sale to National Grid — a British company that owns several utilities in the Northeast, including Massachusetts — comes after a five-month proceeding that involved 23 parties. The decision itself runs 300 pages.

Indonesia's billion-dollar forest deal in danger

JAKARTA (AFP) - Greenpeace on Tuesday warned that a billion-dollar deal between Norway and Indonesia to cut carbon emissions from deforestation is in danger of being hijacked by timber and oil palm companies.

The environmental group said "notorious industrial rainforest destroyers" such as palm oil and pulp producers intended to manipulate the funds to subsidise further conversion of natural forests to plantations.

Growing a Forest, and Harvesting Jobs

Zapotec Indians in Mexico have become exemplars of community forest ownership and management.

Climate Change Forces Farmers to Find Alternative Livelihoods

Based on the global symptoms of climate change, some Indonesian farmers now seemed to be looking for alternative sources of income to adapt to the surrounding conditions that have changed.

Surono is also looking for alternative income sources other than rice crops, such as breeding ducks, which is considered not affected by climate change.

From California, a Game Plan on Climate Change

As the push for national and international policies to arrest climate change was running into one obstacle after another, a separate discussion was coming to the fore: how to adapt to it.

New York State and California are creating blueprints for how governments should plan, and pay for, a wholesale retreat from the shoreline in anticipation of a possible rise in sea level of three or four feet or more by 2100.

Climate change scepticism is about more than just science

Several decades of social psychological research have shown that on any number of topics – from capital punishment, to gun control, to nanotechnologies – people squeeze new evidence through powerful social and cultural filters. Pouring facts into this filter system does not necessarily produce consensus – and it can even cause attitudes to polarise.

Bjorn Lomborg: Cancun summit wheel-spinning

How do we bring down the cost of green energy? Think about the last great technological revolution that changed the world — the digital one. We didn't promote the scientific breakthroughs that wound up putting PCs in hundreds of millions of homes by making slide rules and typewriters more expensive. Rather, it was the result of massive investments in research and development in areas such as solid-state physics and computer science. Why aren't we doing the same with green energy technologies?

New EPA rules for carbon dioxide storage

WASHINGTON — The Obama administration is imposing new rules to protect drinking water and track the amount of carbon dioxide stored underground by “clean coal’’ technology.

China says is world's top greenhouse gas emitter

(Reuters) - China acknowledged on Tuesday it is the world's biggest emitter of greenhouse gases stoking global warming, confirming what scientists have said for years but defending its right to keep growing emissions.

Study links lower carbon emissions to recession

Worldwide emissions of carbon dioxide, widely blamed as the chief cause of global warming, dropped from 2008 to 2009, largely because of the global economic slowdown, according to a study released Sunday. It was the first decline since the late 1990s.

The study, published in the journal Nature Geoscience, is part of the annual carbon budget update from the Global Carbon Project, a group of emissions experts and economists from several international environmental organizations.

Degrees of Separation From Climate Goals

Even if all countries fully lived up to promises made last December in Copenhagen, the increase in global average temperatures would stay well above the target set, an assessment shows.

Weakening ice sheet could protect itself from the sea

The vast ice sheets of the Antarctic may be more stable than we thought, because a key piece of physics has been overlooked.

Climate Change Math in Treaties Flawed by Suspect Calculations

...Nisbet says the world puts too much faith in government estimates of carbon dioxide, methane and other heat-trapping gases blamed for climate change, Bloomberg Markets magazine reports in its January issue. That’s because companies and countries base emissions calculations on the raw materials that go into a factory or power plant; they don’t check the pollution that comes out.

Next climate warming report will be dramatically worse: UN

UNITED NATIONS (AFP) – United Nations leaders will demand "concrete results" from the looming Cancun climate summit as global warming is accelerating, a top UN organizer of the event said Monday.

Robert Orr, UN under secretary general for planning, said the next Intergovernmental Panel on Climate Change report on global warming will be much worse than the last one.

Re: Iran: Computer worm didn't harm nuclear program

Separately, an IAEA member country official suggested the worm could cause further damage to Iran's nuclear program. The official asked for anonymity because his information was privileged.

He cited a Western intelligence report suggesting that Stuxnet had infected the control system of Iran's Bushehr power reactor and would be activated once the Russian-built facility goes on line in a few months.

Stuxnet would interfere with control of "basic parameters" such as temperature and pressure control and neutron flow, that could result in the meltdown of the reactor, raising the specter of a possible explosion, he said.

That had better be nonsense designed to slow Iran down. If there's a variant of Stuxnet just waiting to blow up Bushehr when it's full of Russian engineers then we have a problem. To put it mildly.

Another reason to go low-tech; besides, low-tech has a lower CO2 footprint.

Being a bit of a SciFi geek, I always think of Battlestar Galactica in these situations.

From http://en.battlestarwiki.org/wiki/Cylon_computer_virus:

In the second Cylon War, the Cylons use a slightly different means of electronic infiltration, after their espionage determined that Colonial use of computer technology has become widespread once again, 40 years after the first war. However, instead of using viruses, backdoors are planted in the Command Navigation Program, the operating system used by the Colonial military, by a human-looking agent.

These exploits make it possible to remotely shut down all computers on Colonial warships and fighters, without a possibly lengthy period of time to bypass a computer's defenses.

Because Galactica continued its "no networks" historical tradition, the Cylons could not overcome the battlestar by electronic subversion, and are forced to directly attack the ship. While Galactica's last Viper Mark VII squadron (which used the CNP) is compromised and destroyed, Galactica has, by happenstance, a squadron of Viper Mark II fighters in its museum, which, as similar to or identical to the Cylon War-era Vipers, are impervious to CNP compromise. The Mark IIs give Galactica sufficient defenses until it is able to rearm itself at Ragnar Anchorage (Miniseries).

Although only a work of fiction, there are definite lessons to be learned from the story especially in regards to more greatly-networked system like Smart Grids.

If computer worms can melt or damage nuclear power plants, there must be a lot of very worried people in power plants all over the world. Maybe the coal or wind power industry or Gazprom is behind it, not Israel after all. Maybe the next James Bond film will feature an evil organization of computer scientists plotting to destroy the world...

it is indeed worrying because computers control the servo's that control flow valves and the like. i was hoping they would not be dumb enough to unleash this in such a way that it would cause a Chernobyl look alike in iran killing and sickening many human beings, but i guess i was wrong.

You're falling victim to hyperbole. This worm was specifically targeting centrifuges, by simply slowing them occasionally, which spoils the separation. A pity it was discovered and publicized so quickly.

Stuxnet requires specific variable-frequency drives (frequency converter drives) on the system. It only attacks systems with variable-frequency drives from two specific vendors: Vacon based in Finland and Fararo Payabased in Iran. It monitors the frequency and only attacks systems that run between 807Hz and 1210Hz which is very high and only used in particular industrial applications. Stuxnet then modifies the output frequency for a short interval of time to 1410Hz and then to 2Hz and then to 1064Hz and thus affects the operation of the connected motors.


Of course, the basic virus vector is still valid, and a minor change could attack many other industries. People are right to be concerned. Having your computer network down for a day or two due to a virus sucks, but having your power plant burn up would suck worse.

Why is it a pity it was discovered? Iran is an historically peaceful nation and has a legal right to pursue nuclear power just like any other country in the world.

I think it is ironic that Germany, which clearly demonstrated an interest in large-scale killing and global war, was allowed to pursue nuclear research and start building nuclear reactors right after WWII while Iran, which has never pursued genocide as a public policy, is somehow morally unsuited.

It is well advertised that Iran supplies missiles to Hezbollah, that Iranian leaders espouse the destruction of the nation of Israel, and they also routinely position themselves opposite the US on world issues. If they see my country as an adversary, I will gladly reciprocate, and hope their every pursuit ends poorly. I am not so deluded to think the current King of the Hill will persist forever, but I am sure I don't want an Islamic state to be the world-power successor. After all, I have daughters.

“Iran is ready to transfer nuclear know-how to the Islamic countries due to their need.”

Legality is a pointless term on nation-state levels -- each nation can do exactly what they can get away with doing, and Iran is expert at walking that line. They understand this perfectly, but it's a dangerous game (just ask Saddam). Pakistan played the game better, to the detriment of India. Iranian leaders don't only want nuclear energy for electricity, but for military power, just like any nation with visions of ascension would. Iran has had a huge leg up with oil, and understandably would like that power growth to continue.

“Of course, they will use whatever they have in their hand, which is the U.N. Security Council, and our nation has the means to defend and obtain its own rights. Do not doubt that our people will not lose.”

What is your definition of a "public policy", given these quotes?

“There is no doubt that the new wave (of attacks) in Palestine will wipe off this stigma (Israel) from the face of the Islamic world, ... The World without Zionism.”

“As the Imam said, Israel must be wiped off the map,”

These quotes are from Ahmadinajad. Why would you have somebody like him as a spokesman if you wanted to viewed kindly by the rest of the world?

Not this again.

Ahmadinajad did not say that. The idiom doesn't even exist in Persian.

Mea culpa. I apologize for feeding the rhetoric with inaccuracy.

I understand Leanan's dislike for these Iran versus Israel/USA flame outs.

So I'll keep it short. Leaders of various countries are not so stupid as to directly speak their minds. They speak in codes. Obama does it. Ahmadinejad does it. They all do it. The question is what do the coded words mean? There are different perspectives.

When Neville Chamberlain came back from his meeting with Hitler and said "Peace in our times," he was right! Except that it was the Rest in Peace (RIP) kind of peace that many millions of people got.

Coded words for cod like bait biters.

Maybe you are unfamiliar with Europe, but Germany is a Christian nation (almost 100% in the 1940's) and they killed more Jews than Iran would be able to kill if they had nuclear weapons.

But don't let facts get in the way of your ideology.

People are people, and you won't find me defending Germany, either.

People will kill each other with hoes and sticks if guns aren't available. The trouble with nukes is that they are small and hard to defend against, so non-proliferation is the obvious goal, at least for those who already have them. The issue is more pointed as we head into an era of collapsing resources, and military action is only to be expected.

It does more than spoil the separation. It seems to be designed to vary the frequency so that it stresses them so much that they are damaged. But slowly, so it's not immediately noticed.

A far cry from blowing up a nuclear power plant, but it can cause physical damage.

Which is why I found it interesting that Iran has had to replace the centrifuges, if the reports are true.

Read Langner's blog. According to him - and he's the man when it comes to this topic - there's zero possibility of accessing the reactor core via Stuxnet. However the generator can be screwed up. There's a lot of hysteria about Stuxnet. Langner, being a security guy, is doing his bit to keep the pot boiling - he's just talking his book. He does admit there are probably only ten people on the planet with the knowledge needed to create Stuxnet. And three of them work for him.

My candidate is Russia. They sell the Iranians the plant and then sabotage it. Too beautiful! Now they get to sell them a replacement generator and a bunch of new centrifuges. Nobody but Iran wants them to have nuclear weapons.

Re: Gas-to-liquid plant cleaner, but still a gamble

Huge cost overruns are likely if either GTL or CTL are ramped up rapidly. So it's hard to predict what the cost per gallon will eventually be - but it will most likely be higher than anyone expects. Another unknown - how much the price of NG and/or coal will go up due to increased demand.

Anyone care to guess what the cost per barrel of liquid fuel equivalent will eventually be using either GTL or CTL? My ballpark guess is $160/barrel. Here in the USA that would mean gas prices of around $6.00/gallon - bad, not the end of the world. $12.00/gallon would be a different story. Either way air travel would be greatly impacted and EV's would make a lot more sense. The housing market will crash again.

MY Guess: $430.05/gallon.

P.S. What do I get if I'm right?

I don't think you'll have to worry about being right.

$37/bbl for the pearl project. economics depend on size. the subject is covered in robert rapier's post of 11-17-2010.

No mention of your $37/bbl in RR's article.
This simple calculation gives over $60/bbl:

- current price of nat. gas (US) is $4.20/mm BTU (close to world price as US is now exporting some NLG according to the article up top)

- $4.20/mm BTU of nat. gas x 96mm BTU per ton of liquid produced = $403.2/ton

- about 6.6 bbl per metric ton (depends on what liquid is produced) divided into $403/ton gives $60/bbl.

Qatar would be wiser to forgo building these plants and trade NLG to Saudi Arabia in exchange for oil. SA could burn the gas to make electricity or use it as feedstock in their newly built chemical plants to make polymers and fertilizer.

the $37/bbl gives credit for the ngls produced along with methane.

Qatar would be wiser to forgo building these plants and trade NLG to Saudi Arabia in exchange for oil.

NLG ? i think you meant lng. why the he11 would saudi arabia want to trade oil for lng ?

i have an idea for a new board game - arm chair king abdulla.

Yes I meant LNG, was typing too fast.

Good luck with marketing your board game.

I read here at TOD that nearly all of KSA's electricity is produced with oil - if you want a link I will search for it. Burning nat gas in combined cycle power plant (are you familiar with that technology) are 60% efficient. So if KSA could sell oil at $80 per barrel and get the same BTU's in natural gas for equivilent of $40, then it makes sense to build or convert power plants to use nat. gas.

Furthermore, have you ever heard of SABIC? If you have some background on this company's endeavors you would know why KSA needs more natural gas and perhaps you would not use the word "he11" in your comments.


Flared gas provides 45%, heavy fuel oil provides 13%, diesel; 22% and crude provides the remaining 20%.

the 'crude oil' part is condensate. saudi prefers to burn condensate because it is not subject to opec quotas and does not put additional oil on the market.

saudi arabia made a decision to develope their petrochem industry, selling higher value products. as a result, saudi arabia exports n gas in the form of fertilizer and methanol, sabic claim they are the largest exporter of dap and methanol.

Can you elaborate on the burning of condensate? If condensate is not subject to quotas it would make sense to sell the condensates and burn the oil. I assume internal consumption is not subject to quotas.

If it is $37/barrel then why are we not doing this now?

Or are there GTL plants going up all over? That is pretty much 'a sure thing' investment wise if you are right.

$37/barrel based on current us gas price. gtl depends on the economy of scale, so unless there is a massive amount of gas, it will never even be considered, imo.

shell invested $ 19 billion in the pearl project.

Yes, they could lock in prices of 90$ plus using the futures markets - and produce for $37. Let's go into business - just lend me a couple of billion. The real story is less appealing, referring to the huge Pearl gas-to-liquids plant:

"Even so, The Wall Street Journal called the venture "one of the most expensive gambles on clean fuel in the history of the energy industry". That is because of a price-tag that has ballooned over six years to nearly four times Shell's $5bn estimate."


i don't doubt it. the market will find a way to equilibrate the price differential between ng and crude oil, imo. one of the reasons, given the amount of ng known worldwide, i find rabid doomers so comical.

My ballpark guess is $160/barrel.

Any reasonaing behind that guess you'd be willing to share? The one really good use for GTL is (or could) be stranded NG, that would otherwise be left in the ground. But, I have no idea of the cost. GTL, can sell at a premium, because it is cleaner burning, but I doubt the market will support a large premium for GTL at any scale.

I'm thinking 5 or more years from now - ng prices should be much higher than now, perhaps triple where they are now (assuming oil production is declining, by that time, at 2% or more per year). Also, because of the frenzy to build GTL and CTL capital costs will be much higher. I'm guessing at least $160 oil - capped only by GTL and CTL and by a stagnant or declining world GNP. Maybe time to move to Canada, which will be booming because of oil sands.

The truth about California
Commentary: Maligned state is actually saving the rest of us
California bails us out. It has been bailing out the rest of America since, oh, about 1849 — before it even joined the union.

Californians are so productive that every year they send billions of dollars in surplus dollars to the rest of America. Year after year they have sent vastly more in federal taxes than they ever get back in federal spending.

California isn't our Greece, it's our Germany. It isn't Little Orphan Annie. It's Daddy Warbucks.


The conservative-leaning Tax Foundation, which tracks the data, calls this surplus a "fiscal transfer." I call it a bailout.


Here is an interesting chart and table, per capita state spending spending for 2008:


I knew Texas was last, at around $3,400 per person, but what is surprising is the #1 spender, Alaska, at about $18,000 per person. California came in at $5,300.

Of course, the big problem is the "official" unemployment rate. Here it is by state (California at 12.4%):


If we round upward from 9.5%, then 16 states (inclusive of D.C.) have double digit unemployment rates.

In any case, with the GOP takeover of the House (and with the federal government's own enormous budget problems), it would appear that the probability of getting additional federal money for state and local governments is very low. IMO, of all the problems that we are facing in the US in the short term, the upcoming cutbacks in state and local spending in the next two years will have the biggest impact on the country (e.g., check out article about Michigan uptop).

- Doesn't the GM bailout provide the model?

- Hammer the bondholders in exchange for some union concessions.

- Six months later back to BAU.

- What else can be done?

No problemo.


You know . . . that is not a bad idea. California should declare bankruptcy. Toss out all the existing police, fire, nurse, govt worker, prison worker, and other union contracts. Give all the holders of bonds a hair cut. And start over.

Meanwhile, back at the mansion, the deserving rich are counting their dough:

Corporate Profits Were the Highest on Record Last Quarter

The nation’s workers may be struggling, but American companies just had their best quarter ever.

American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.


I keep thinking about all the nonsense muttered by some about how government deficits and debt is the problem, and is going to destroy us all. You can't spend money you don't have, cry one crowd with a high proportion of people who are always looking for ways to maintain the economic system's natural tendency to concentrate wealth. Money is witchcraft, shout another group, it is not backed by anything real and is disappearing. Burn the witches, go back to the good ol' days: we were poor, but we had each other, they cry in anger and confused desparation.

Knowledge base to earth, come in earth. Here's what we've learned: debt is savings, savings is debt. The economy is not short of money. The economy is short of investment, because it's sitting in corporate bank accounts. Moreover the corporations have little reason to invest because part of their existing productive capacity is idle. As long as the money is sitting in corporate bank accounts, it is not moving through government accounts or household accounts. When that money sitting in record amounts in corporate bank accounts is, through the carrot and stick combo, made to move through the economy, government and private sector debts become manageable.

It is particularly important that government (taken together in federal systems) remains in a deficit and debt position, because as history has shown, whenever it moves into a surplus position, it drags down the economy. Government surplus equals private sector debt and undermines the investment and renewal process. While it is not impossible for government to make good investment decisions, especially on the social reproduction front (education, health, etc), this pathway commonly produces a less efficient employment of resources on the social production front (food, housing, goods manufacturing).

What government has to do, in addition to actively counter-balancing the system's tendency to concentrate wealth and reduce the equality of opportunity, is to wield the carrot and the stick, the push and pull device.

Bill Gates has identified a carbon tax an appropriate push and pull device, a way to move money from corporate bank accounts into productive investments, which as most will recognize is the exact opposite of the position held by those 'invested' in the status quo.

Learned readers of TOD will understand that government action that leads to investment in means to decrease the use of fossil fuels while increasing utility (measured crudely by GDP) is wise indeed, especially given the hard evidence of fossil fuel depletion and the increasing evidence and increasingly firm consensus regarding climate change.

Alaska is a peculiar case, and 2008 (the year used in the linked spending table) was a peculiar year even for Alaska. Some of the "spending" is the annual dividend paid from the Alaska Permanent Fund (accumulated oil tax revenues). Various circumstances result in their receiving very large amounts of federal dollars that get channeled through the state budget -- about $13K per capita. Some of the factors: large population of Native Americans, large military facilities, other large federal land holdings, underbuilt infrastructure.

Tracking the linked table back to its original source, it appears that local spending of local tax revenue is not included. The split between local/state revenues and spending can vary widely from one state to another. For example, while Texas is 50th in per-capita state spending, it's 43rd in combined state/local per-capita tax revenue (which will reflect ranks for combined spending pretty well). Alaska has pretty minimalist local government, so the state budget probably includes spending that is not included in many states. Possibly interesting side note: in 1977, Alaska had the 2nd highest direct state/local tax rates in the country; in 2008, they had the lowest; while it lasts, it's nice to have a commodity that lets you tax the hell out of people in other states :^)

The conservative-leaning Tax Foundation, which tracks the data, calls this surplus a "fiscal transfer." I call it a bailout.

I think a current term to use is 'transfer of wealth' or better yet 'welfare'. That is a nice jab at the T-partiers who think California is a complete disaster while they are enjoying welfare from us.

That said, Sacramento is a dysfunctional nightmare. GOPers that refuse completely reasonable tax increases, Dems that refuse completely reasonable program cuts, a public that want tax cuts AND generous government programs, and ballot initiative system that ties the state government in knots with restrictions on what they can spend on.

Re: Poverty And Energy Prices Soaring In Tandem In California

For those who don't follow developments in the SNAP (Food Stamp) program on a regular basis:

  • Just by way of background, SNAP is a federally funded program which states are required to administer. Unlike unemployment insurance or Medicaid, there's no opt-out provision for the states. In normal times, the feds pay the states' administrative costs up to 5% of the amount of benefits paid. States are required to keep electronic records with specified audit hooks.
  • In both 2008 and 2009, Congress relaxed the qualifying requirements. Those changes would have increased the number of people eligible for benefits even without a recession. As a point of comparison, in normal times about 9% of the US population lives in households that are eligible.
  • In both 2009 and 2010, Congress increased federal funding for state administration of the program. In at least some states, part of the additional administrative money has gone into advertising. The ads I've seen/heard seem to be focused on "help your elderly relatives get on the program".
  • In many states, applying for assistance is still a demeaning process. An overworked civil servant is going to poke into your household finances in some detail. They're going to demand paper documentation for some things. And they're going to rush brusquely through the process, because they're in trouble if they don't complete enough applications each day. In some areas, the number of applications that need to be processed has tripled since 2007, with little or no increase in staff.

I know this has been mentioned before but is Rembrant given up on the the Oilwatch monthly ?

I found it valuable and miss it.


I wonder if it is connected in any way with this announcement at Rembrandt's home Peak Oil forum. (Google translate)

Forum peakoil.nl closed

Forum peakoil.nl closed

September 28, 2010. Contributed by Siem Vaessen.

As most of you that have heard by now, is the forum for some time close to peak oil. This is partly a technical problem, but is in line with the wishes of the government to stop using the forum to communicate. This forum is formally closed. We'll find a short term archive function of the open forum so that all data generated is still seen, in other words: it is not of the disappeared.

"in line with the wishes of the government to stop using the forum to communicate."???

What's that all about??

The Oilwatch Monthly may return in the future in a different format. I halted publication as Im occupied with some other matters at the moment. Currently aiming for a restart around January.

As to the closure of the ASPO Netherlands (peakoil.nl) forum that was a decision by the board of the foundation. Has nothing to do with the "government" as that is a bad translation.


hello Rembrant,

thanks for finding the time to reply. I do hope you find the time to restart Oilwatch Monthly - I always looked forward to it coming out.



I second the concern voiced by others about getting more of that good ol' Oilwatch Monthly. it's been a great service, people really appreciate the work you're doing.

that goes for everyone active at TOD. keep up the good work, y'all!

Jeff Rubin has an article posted today on The Huffington Post.
Even the International Energy Agency Forecasts Peak Oil

The optimism typically found in the International Energy Agency's annual World Energy Outlook report is strangely missing this year. Instead, the IEA is taking a far more sober perspective on the world's oil-consuming future due to our ever-greater reliance on costly unconventional oil sources.

The Huffington Post is the same blog that often brings us Raymond J. Learsy who coined the term Peak Oil Pranksters. Though they have published pro peak oil articles before, I haven't seen Learsy article since August. Perhaps Arianna Huffington has become a peak oil convert. But I think what she is doing is what she does on “Left, Right & Center,” public radio’s popular political roundtable program, and that is she tries to look at very side of the story.

I had no idea Ms. Huffington had a degree in economics. This makes it interesting. Arianna Huffington

Originally from Greece, she moved to England when she was 16 and graduated from Cambridge University with an M.A. in economics. At 21, she became president of the famed debating society, the Cambridge Union.

Ron P.

We know for sure that U.S. energy consumption peaked in 2007 and that per capita energy consumption in the U.S. has collapsed to levels not seen since 1967 or 1968. If U.S. absolute energy consumption can regain 2007 levels and hold steady for the next 30 years, when the U.S. population hits 400 million, per capita energy consumption should drop to about the 1960 level. That doesn't seem too horribly bad. Fuel efficiency, increased productivity and industrial energy efficiency, residential and commercial energy efficiency improvements should be able to cover that gap.

If however, the total energy supply continues to fall in the U.S., per capita energy consumption could drop us back into an early 20th century energy lifestyle within a generation. Of course, even if we drop back to 250 million btus per capita, we'd still be higher than the Chinese 58.9 million btus per capita in 2007.

We'll pass the Chinese on the way up, on our way down, maybe within 15 years.

15 years? Wow! Are you ever the wide eyed optimist.

But I really don't think so. I am of the opinion that the Chinese economy will collapse sooner and much harder than that of the US. Of course the collapse of either ultimately means the collapse of both. The only question to remain is how long after the collapse of the Chinese economy does the US economy collapse... or vise versa. And it will not take anywhere near 15 years. About 5, or less would be my guess.

China's House of Cards That article was published in 2007 but you can Google Chinese House of Cards and get dozens more much later such articles.

However there are many other nations with very fragile economies, Ireland, Greece, Spain, Portugal, etc. etc. The question is who will collapse first.

Ron P.

Sorry, I edited that before your post. If Chinese per capita energy consumption is still under 70 million btus, U.S. per capita consumption will have to fall a lot farther beyond 1949 levels to go lower.

On the plus side, the U.S. *only* needs 123 quadrillion btus to maintain 2009 per capita energy consumption levels for a population of 400 million.

Kenny, per capita energy consumption will be just a sidebar to the collapse. Other things will be more to the forefront when the collapse happens. The most important thing, in my opinion, will be the constant rising unemployment rate, in every nation, not just the US and China.

But when either the US or China collapses all other nations will fall like a row of dominos.

Ron P.

I wonder which nations will go first? Jason Brasted had an interesting graph of energy use vs % of agricultural workers. The thing that stuck me was the steepness of the cliff along the left hand side and how many countries are on that very steep slope. A very tiny reduction in the amount of fossil fuels moves them a long ways back down the graph.


On the other hand, changes in energy availability are likely to impact those of us on the high-energy-use axis more profoundly. At least we have a long ways to go before there won't be energy for agriculture. One could almost say it is impossible to use a lot of energy per-capita with a farming populace -- to use a lot, you have to stratify your economy.

With higher prices probably a slosh toward the left is inevitable. A shift toward the origin would be unlikely, it would seem, though that is perhaps the best goal.

In strategic planning, this graph illustrates a "valley of death" model where to go from rural farming populace to urbane technological state you have to somehow transition through a diversified poor state. Arguably, it will go that same way the other way -- before you can become a nation of subsistence farmers, you must first let go of your energy excesses?

A diagram of the same nations 100 and 200 years ago would be most interesting.

HuffPo is basically a news aggregator. They publish a huge variety of articles, from the major wire services to obscure bloggers. It's a crapshoot.

In regards to the article up top, Oil Supply Drops In Survey , about oil inventories – it is a fairly good assessment of the upcoming oil inventory reports this week, with the exception of the projections of oil inventories.

The issue of falling crude imports into the US, for the most part (excluding TOD), seems to be a non-existent discussion. The oil analysts survey seem to presume that US oil imports are going to return to almost the average for 2010 – 9.0 million barrels per day – from les than 8 mbpd these last two weeks. They may well be correct for this week, but in the longer view, the tide has turned and there is significant reason to believe that US imports of crude have already entered in to a long term decline. One simple reason, China and India are importing more – and they can out bid the US for those marginal supplies, being they are more efficient with each barrel of oil.

At some point, probably not far into 2011, there will be a growing realization that allowing the oil markets to function solely based on price will no longer be an economically viable idea. I’m not sure how we transition from ‘free markets’ to intervention, such as US government allocation of individual state oil/product supplies and export restrictions, but it will be interesting to see how that develops.

That is most interesting to hear.

I am wondering about other countries....will they also find it harder to keep imports of oil coming in, as their economies weaken and they can`t bid competitively anymore against other stronger countries?

I guess Ireland would be weak. And Greece.

Or the rest of the Eurozone?

And how about Korea?

And Japan?

I think this idea of weakening economies that are too tapped-out to devote more income to oil imports is interesting. It is my feeling as I watch one store after another shut down in this town I live in....sure, the oil that was going to supply the store can now be used by someone else who is more efficient. Probably someone in India or China, which is fine with me. (the sooner things and people go back to living with nature the better.) But at the same time, the people who own the shut-down boarded-up real estate get nothing anymore and have no prospects to rent out their property---so how can they buy anything except the most basic items.

I do notice fewer cars on the road---and smaller ones at that.

Is it all leading to gas stations that fail to find supply in 2011?

The plot thickens!!

I always appreciate your comments regarding the state of the oil trade. But when you say: One simple reason, China and India are importing more – and they can out bid the US for those marginal supplies, being they are more efficient with each barrel of oil, I think you are in error.

It is not, I would expect a thorough analysis to reveal, that Greater Chindia is more efficient with each barrel of oil, but rather is more efficient with barrels consumed on the margin. To wit: there are industries in the US whose efficiency is second to none and who will be able to purchase oil at virtually any price, but the US can't, for example, sustain a widespread passenger free transport sector.

This from the API today.


After oil prices received some support from the expectations that weekly oil inventory reports would show lower crude stocks, U.S. crude stocks were reported to have unexpectedly increased 5.2 million barrels on rising imports in the week to Nov. 19, industry group the American Petroleum Institute reported late on Tuesday.

The API said gasoline stocks fell 499,000 barrels and distillate stocks fell 311,000 barrels, the API said.

Crude prices extended losses slightly after the release.

U.S. crude oil stockpiles were expected to have fallen 2.1 million barrels in the week to Nov. 19, according to a Reuters analyst survey.

Must read!!

Just came across the recent work of Prof. Tim Garrett at the University of Utah.

He has written 2 papers showing a clear relationship between energy, wealth, and CO2 emissions. The ideas are so compelling and profound that I think his work should be a featured TOD post.

Summary here:

Papers here:

Video of talk he gave here:

His first article got my attention for two reasons that, to some extent at least, overlap with topics that TOD deals with.

I had previously pondered if it made any sense to ask whether money, measured in currency units, really had any actual physical dimensions associated with it, dimensions as in dimensional analysis. Garret seems to have empirically answered this question with a Yes by combining simple thermodynamic arguments with economic statistics. The dimension of accumulated wealth or capital is energy, and the dimension of flowing capital is power, a flow as in the amount of capital produced or exchanged per year.

His constant, lambda, relating customary units expressing wealth to other customary units expressing energy is about 10 mW/$US (expressed with 1990 $US).

The second point: when he looks at the boundary between the thermodynamic engine of Civilization and the environment, he treats exchanges between Civilization and the environment in terms of free energy flows, in particular using Gibb's free energy to simultaneously capture energy and matter and entropy changes.

Free energy seems to be the natural way to, for example, look at the net benefit of fossil fuel extraction and use to Civilization. It helps straighten out the ad hoc klunkiness of using instead, for example, EROEI or whatnot because it includes the matter flows and entropy. It certainly avoids some of the gobbledygook one wades into with "exergy" and its brethren.

Because Garret seems to have successfully connected thermodynamics to some economic variables, there may be reasonable hope to apply free energy analysis to the industry of energy production and use.

The dimension of accumulated wealth or capital is energy, and the dimension of flowing capital is power, a flow as in the amount of capital produced or exchanged per year.

Not sure but you may be wrong here. I think he is saying that total accumulated capital is proportional to power (energy per time). In other words, money equals power. This I think is the key insight that differentiates his work from previous work, and is why a simple drop in GDP is insufficient to fix global warming. We actually need civilization (ie most accumulated wealth) to vaporize to address global warming. Or we need to decarbonize at an extreme rate (one nuclear plant per day) which we may not be able to afford.

It took me a while to get this. But essentially all built capital needs continuous power to maintain it. This means we need a lot more energy than one might conclude by only looking at GDP.

If I understand it, he is just returning to the most primitive economic model eg 'the more coal I dig the richer I am' etc so 'dig=wealth'. It ignores the finite quantities of land, sea, soil etc when he says pop reduction does not help. He just bypasses the concept that at some pop level, life is sustainable on solar input and rock attrition. Of course once all the land is eroded, that's another problem...

He was also interviewed on Radio Ecoshock in February.

Yes, and again this week.

I want to see about updating the megaprojects database. I'd be more than willing to put in a few minutes a day researching a company or two, if others were chipping in as well. What I've seen in the past is that one needn't use any form of coercion with collaborations of this sort, it's quite exciting to be part of a team doing something important, and this is an exceedingly important subject. An example from TOD history would be the Staniford articles on Ghawar, where people like Bob Shaw were putting in hours of effort to dig up documents on the field's status.

How TOD could facilitate this I'm not sure - perhaps dedicated articles on companies with the letters A-D, etc. Or maintain a database aside from the wiki article - I'd rather update a spreadsheet than edit the wiki, which is something I find more than a bit cumbersome. Others don't have a problem with that, I see. Anyhow, any takers?

Lately I've been working again on the megaproject database especially that the IEA WEO 2010 contains a lot of information about some megaprojects up to 2015. This is really a lot of work, not only to add the new projects but also to revise projects already in production.

Great that you're still at it, Sam. Are you maintaining your own spreadsheet for this? I see contributions from you on the 21st of Nov and Oct for the Wiki page, but that seems by and large just housekeeping, if I understand what I'm looking at that is, as I implied I'm not too handy with Wiki editing, and I'm also reallllllllllly sick of looking at Jimmy Wales's mug every time I open a page. It's like an Intertubes version of an NPR pledge drive.

Thinking about this some more, perhaps a dedicated blog would be good for analyzing this stuff. Or just threads in DB broaching the topic of upcoming projects from a handful of companies. I think I'll try that first, and see if anyone's interested. I already have my own megaprojects spreadsheet, and can update that as needed. Someone else can cram the results into the Wiki. Or TOD could fire up its own Wiki, away from Jimmy and his special messages.

For anyone who's reading this and gets the bug, a list of companies was provided in The Oil Drum | Help us List Megaprojects, from 2007. I think. Don't have time to find the precise article with the list. Check site:www.theoildrum.com megaproject - Google Search.

The article uptop "Peak Energy? What Peak Energy?" makes some interesting assertions, among them:

Man did not stop building wooden ships because of a shortage of trees. He stopped because he had developed the technology to build ships made of steel instead.

Huh? This guy knows nothing of even his own Royal Navy's history.

By the end of the 19th century Europe, especially England, had exhausted their supply of suitable trees for shipbuilding. This factor, combined with a structural limit of about 200 ft in length, (which limited the speed to about 14 knots) forced the maritime nations to look elsewhere for building material. As early as 1664, John Evelyn, with the patronage of the newly founded ‘Royal Society’, published ”Discourse of Forest Trees”. This showed that only a very long-term policy of planting would ensure England’s supplies for further generations. In the mid 19th century, the minor reforms that had been introduced came too late to be effective. One hundred years of growth was needed to produce seasoned oak. - Wood Into Iron Ships by Peter Davey (Crew - Barque James Craig)

I've seen variations on this kind of argument many times, here and at energy bulletin. Shorter - "Since there have never been shortages of key resources at any time in the past, we can confidently predict there will be none in the future." Reply - "Actually, shortages in various resources like food, flint, wood, arable land and metallic ores are common throughout history and prehistory." Response - "Shut up."

Somehow when a writer, or speaker, uses disparaging names for others it lowers their status in my mind.

One of the other lies told by Watermelons – when they’re not bleating about the fast-fading ‘crisis’ of “Man-Made Global Warming” ...

Here’s the New York Times: (And would Pravda lie to you about a story so very much counter to its preferred ecotard narrative?)

One of my many beefs with the green movement is its wilful economic illiteracy. I say “wilful” because I can see no other explanation – except, possibly, arrant stupidity...

Yet the energy policy of statist buffoons...

We are all wilfully ignorant, arrantly stupid watermelons and buffoons and the New York Times is Pravda. Does calling people and newspapers by such names strengthen his argument?

Ron P.

A search on "James Delingpole" will tell you all you need to know.

You forgot "bleating . . . ecotard," you economic illiterate!

I was just reading A Reverence for Wood by Eric Sloane - he discusses how the Royal Navy had mast ships to bring appropriate large timbers back to Britain, and how they saw the new world as a timber bonanza since they had depleted all their own. He made some reference to ships being made from recycled building timbers due to a lack of needed new wood.

I once toured a historic site in Cape Breton. They said some of the Scottish settlers brought logs with them, to use as roof timbers. They never imagined that they would land in a place where logs were not scarce and valuable.

I can only imagine what the old growth forests here in Pennsylvania looked like - and without the undergrowth of briers and other invasive junk! Not often one gets a whole unspoiled continent to play in I guess.

I can only imagine what the old growth forests here in Pennsylvania looked like.

In all of central Florida only 3 old growth trees were saved from the loggers. Looking at these 3 trees, now a state park, it is indeed hard to imagine trees that big all over.


The Ho temperate rain forest in Olympic park is like that. The visit much impacted me as a young man traveling the country, and still does to this day. Though the trees are not as impressive as the giant Sequoias, the vibrancy and beauty of this forest is unmatched, IMHO.

Even back then, though, I noted that the biggest trees were stumps and recent falls, as pollution or environmental change was taking a toll. At first I naturally thought "the biggest trees are the oldest, and those are the ones that die." But given many hundreds of years of life, only a tiny fraction should be falling in any decade, yet many more had fallen. You had to really look to find healthy standing trees as large as most of the recent falls. New trees are certainly still growing (taking root in the decaying remains of their recent forefathers), but it is a sad commentary on the world when the stumps are the most magnificent examples of a forest. This is a pattern I have noted many times since then, in forests of every sort.

An old growth forest is a 1000-year re-growth proposition. For those who haven't seen them, such forests can often have a fairly clean floor, unlike the dense, almost impassable scrub growth in new-growth forests around here. Routine small fires coupled with massive mulch and slow undergrowth in the shade keep the floor fairly clear, and many areas are easily walkable. The Ho has some swampy areas and dead-fall can still make traversing a challenge in place.

The world with 100M people in it would be a wondrous place...if you happened to be one of the lucky few. Over population is the key problem facing the world.

When the ship the Great Michael was laid down in 1507 they needed to bring in wood from all over Scotland, and import it from France and the Baltic (according to the Wikipedia entry)


Hi Twilight,

There's also A Forest Journey - the story of wood and civilization, by John Perlin.

Thanks! I have some more meaty books to finish reading - but some are a little boring! This might sneak up to the front of the list.

I was just having a look over at CNBC and an analyst has made a prediction for 2011 that there will be some sort of terrorist cyber attack on the internet or NYSE which will stop stock trading for a week and disrupt travel and other things, so the analyst concluded, "better have some cash on hand".

But if things in the economy would be so disrupted would there be anything to buy?
Or enough to buy, I mean?

Wouldn`t this kind of cyber attack be quite convenient for an elite that needs a bit of breathing room as oil supplies dwindle anyway?

It sounds like the Homeland Security thing, keep people under control and maintain order while slowly withdrawing from the scene. All under perfect political cover.

Of course, after such a cyber attack, we can just imagine all of the restrictions on blogging, etc. that might come about.

I hope I don`t sound too paranoid today.

Nine meals til chaos applies.

Sort of parallels a post made by a commentor over at Automatic Earth explaining that they thought the scans and searches by the TSA in the name of "anti-terrorism" were actually being conducted to get the public more and more used to the idea of travel restrictions - or at least travel that becomes such a hassle as to make people just stay home...

Since I've come to believe that the true motive of anything done by the corporatocracy over the past few years is actually buried somewhere amongst two or three other stated motives then I certainly wouldn't put it past our "officials"...

People try to figure out what the point is, what they're trying to do - when the humiliation and our acceptance of their power to do that to us IS the goal. Hey, it's not that much worse than the last thing, is it? No use in making too big a fuss over such a small change. And before you know it it's 2010 and you realize that Orwell wrote a how-to guide.

I think that, absolutely.

And remember, all these humiliating "inspections" DO NOT APPLY to our elected fearless leaders. They are exempt from these screenings. They glide right through the check points with "expedited service". Hell, these creeps even travel with their own designated security guards if they want (when they stoop to even using commercial airline services, that is).

After all, they are, "High Party Officials, Traveling On Special Matters Of Kremlin".

Thinking about peak coal in China:

When natural gas in Canada peaked it was because drilling costs took a 4x increase in less than 10 years. Gold peaked when it took a 10x production cost increase.

Cheap coal (high EROeI) has been subsidizing oil and gas production in the US via cheap steel. When the cost of coal goes up 4x or more we can expect that subsidy to go away. The two largest energy inputs to drilling are the steel casing and the diesel fuel. The EROeI of US oil and gas will thus drop as steel prices rise (oil prices rising over the long term is kind of a given).

I wonder how many years it takes an increase in energy prices to work itself back around to increasing the cost of producing energy?

I like CERA's analysis of costs for the oil industry. Not sure if there is an equivalent for steel.

IHS Indexes

Jon - I couldn't put a number to that answer but qualitatively I would say not long based on recent history. Back in the spring of '08 before the shale gas plays busted the cost of csg shot through the roof. And that was only if you could find some to buy. In your well planning you couldn't even use a set price for your csg: the mills would not specify a price when you ordered csg. When the csg was ready for delivery they would tell you the price. The operator had a choice: pay the price or not take delivery. There were plenty of other buyers ready to take your order if you opted out. Not only did it run the cost of drilling up significantly but also limited the number of wells drilled. I had several projects that had to be shelved due to very high csg costs. Unlike the old days when you ran csg once you knew you had a commercial discovery, deep NG drilling as well as the SG plays required setting expensive strings of csg before you knew you had anything worth producing. OTOH the costs of diesel typically wasn't as big a factor as csg.

Hey Rockman. I just wanted to say thanks for your posts. They are always enlightening for this white-collar desk-jockey. It boggles my mind that the cost of NG has cratered while the cost of a shale gas well has taken off like a rocket. Have you ever seen anything that backward in the oil patch?

You're welcome Fox. SG well costs have come down some mostly due to the drop in rig rates. A 40% drop in rig biz will do that. OTOH we've been losing service companies and drilling contractors thru bankruptcies and acquisitions. Always happens after a bust. And that cuts competition and helps to keep costs up. Even worse, it's getting very dificult to get some services in a timely manner: just not that many companies left in the game. A few days ago I tried to buy from Baker Huges (one of the biggies) some down hole equipment for a horizontal well. They had only 750' in inventory...in the entire US. I needed 1,000' and there was another operators that needed some in Jan. Takes 6 to 8 weeks to get new equipment built. Why? They had to move the plant from the US to Dubie due to SEC rules after BH bought another company. I was shocked. Normally BH supplies 100's of thousands of feet of this equipment. Still boggling my mind. But makes Halliburton happy: I'll probably buy the equipment from them.

Yes, Rockman, thank you for your comments. I really appreciate your experience and insight. I think you are right that it does not take much time to round trip EROI back into oil and gas production. I have just started to dig into the question and found this http://www.rug.nl/energyconvention/edc/archive/edc2009/presentations/meg...

that contains some history of gas drilling costs and predictions about future NG drilling costs vs size of the resource base. It is not year clear how they developed these values.

FOR ALL: Take a look at Jon’s link. I have no idea if the analysis is correct but if they can support even a portion it destroys the concept of significant future SG reserves being developed if prices are high enough. The pg 4 chart shows an increase of recoverable gas of only 30% if NG prices increase 500% from $4/mcf to $20/mcf. Even more interesting it shows a much greater rate of increase in recoverable reserves at the low end of the pricing structure. This completely counterintuitive from my experiences.

But then I’m not sure if I’m reading the chart correctly. Is the Ng cost factor the selling price of NG or the finding cost? But there is an even more interesting note on the pg 6 chart: “shale gas is likely to be the lowest cost resource in the U.S. going forward”. Did I miss something? Haven’t we just seen two of the biggest SG players, Chesapeake and Devon, nearly destroyed due to SG development costs greatly exceeding prices in the $5-6 range? Their most shocking statement IMHO: “ In the United States, abundant unconventional resources exist, which can be developed economically at prices at or below $5:00/MMBtu”. This claim makes me wonder if they even bothered to talk to one operator drilling the SG plays. There are some sweet spots that can be developed in all the SG plays at current low prices. But not many based on the drop in rig count (the rig count dropping from over 1,600 to less than 1,000 as NG prices fell below $6/mcf).

The report contains many interesting charts but little or no indication of how they were derived. I wouldn’t dismiss all of their analysis out of hand but some of the claims leave me very puzzled. There's a lot of data but it would be interesting to see what other Todsters can make of it.

It reads like production cost to me. How does today's production cost compare to 2004/2007, if it is much more then the gas won't develop unless prices go up, the curve will be to the left of the 2007 line.


NAOM - I guessing you mean finding costs when you say production cost. To me production cost is the cost to produce a well...typically very low compared to the development cost. Finding cost is a function of how good you are more than anything else. Successful companies are making a profit even with NG below $4/mcf. Unsucessful companies loss money when NG prices are twice what they are today. But finding costs is a post drill/depletion metric. It can't be used to determine what you decide to drill or not.

I think TOD might be having a communication problem in that we're all not using the same meaning for such terms.

I was going from the jist of the article and the note under the graph of 'wellhead' & 'export' so presumed the figures were the price people were paying to get the gas, what they were producing it for, rather than find it. I also considered the market prices people have been talking about around here and would make sense if the cheap easy gas is coming from traditional wells or separated from oil wells. The curve also shows that there is a lot of gas to get through before shale gas becomes competitive, you need to burn through the traditional gas first. For further details please refer to my nym ;)

With the number of people here that are not directly involved in oil a Rockman article synchronising oil and gas terms and processes sounds like a very good idea. I have learned a lot here and a lot of worrying stuff too, your explanations I have always found to be clear and helpful.


NAOM - I try to avoid the lecture mode when it comes to terminology unless it clears up misconceptions/miscommunications. Especially when it come to the slang we use in the oil patch. I get more worried when the discussion of the various processes get confused over terminology glitches. It the case of the article and responses I felt I was getting lost so I figured others might also. Even worse some might be reading incorrectly and not realizing it. The main reason I threw out my original post was to see what others were getting out of the article

I get much more useful info out of TOD then I ever contribute. But I still feel an obligation to keep confusing info from disseminating.

Oil Futures Market Clueless. Traders Follow Herd Toward Backwardation.

That pretty much sums up what I see happening in the oil futures market. The NYMEX Crude Oil futures chain is once again dangerously close to backwardation which would be just the sort weird and inexplicable event that could mark ... what? ... the onset of serious deflation, perhaps?

Here's the chart I follow from the Energy Futures databrowser:

Is it reasonable to assume that a barrel of crude will be selling for $85 per barrel in December of 2011 and remain unchanged in price for the next several years? Even the Dec. 2019 contract is trading for under $90. This just doesn't make any sense if demand is returning in the US and galloping ahead in China at the same time that the IEA projects dwindling supplies. Are traders really buying the "demand destruction" story?

The futures markets are a mysterious beast and I cannot honestly claim to understand them. But I have this gut feeling that the oil futures chain going into backwardation would signal some sort of seismic shift in the global economy. Or perhaps in awareness of what is really happening in the global economy. Despite a belief that it would signal something important, I can't say exactly what I think that important thing is.



Hi Jon

Confused sums it up well. I don't have great answers, but a couple of thoughts to offer:

It is tempting to think of the futures strip in series as a forecast, but it can be misleading thought of this way. Although the contracts can get traded as a strip, each monthly contract is an independent instrument.

The primary purpose of futures contracts out into the future is to help hedge long-term physical positions or contracts. Speculation pushes the near term contracts around to a greater degree than long term.

Seeing a rotation in the strip like what you have described can therefore be a function of increased hedging and speculative activity in the front months (oil=hedge against inflation) combined with declining trading activity further out of the curve. There may be fewer traders with long-term positions or more uncertainty among traders about the future, creating more inertia in long term prices.

Anyone's guess is as good as mine, but that's how I read the trends you are showing.

If you have the volume traded on the long term futures I think that will help you understand whats happening.

Basically right now no one is interested in long term hedges on oil price thus no trades and the prices are just a small delta for the
previous months price back to the present.

My opinion is its simply saying no one is willing to bet on the future price of oil either way the natural chaining is keeping the price flat.

Thats perhaps worse than if they where.

Is it reasonable to assume that a barrel of crude will be selling for $85 per barrel in December of 2011 and remain unchanged in price for the next several years? Even the Dec. 2019 contract is trading for under $90.

Forget about what oil is selling for on a futures contract. Investors are simply 'speculating' that 90 will be low for oil in 2019 and will be able to sell it between now and then to make a profit. It's not a bad bet based on the trajectory of what will happen to oil supply as discussed here on TOD.

What oil futures sell for now has no bearing on what oil will actually sell for in the future.

Why the price of oil is hovering in the same price range for a long period of time and recently dropping is simple supply and demand and the world stock markets. Oil tends to follow stock values. When the Dow was 14,500 the price of oil was at 147. As the Dow dropped to 7,500 oil dropped to 35. Now the dow is around 11,000, the price of oil is around 82. Markets recently have been dropping back some, so oil price does as well. There is a correlation between how well the economy is doing, market index valuations and price of oil.

Also, we are still on a plateau of oil production (since May 05) and will be for an indeterminent time period. There is no advantage to suppliers for the price of oil to go so high it causes demand destruction, so probably like an injured swimmer trying to tread water, the plateau will last as long as suppliers can keep it there. However, in spite of a plateau of oil supply for over 5.5 years, the economic damage is still being felt by governments and the markets. When supply can no longer maintain the plateau and it descends no matter how much non-conventional oil is brought to market, then we will see a magic show of epic proportions. Don't hold your breath, cause it will happen soon enough. Enjoy a surf & turf (so to speak) while they remain available.

About the subject of the very first article, I told my wife last night that I wouldn't be surprised if a surcharge was imposed on electricity for roads as plug-in electric cars became common. Looks like the time for that idea here in Michigan might be sooner than I expected.

Or a mileage charge. That's what a lot of states are pushing. A GPS type device that tracks your car and charges you per mile.

Michigan's first step should be to join the rest of the major states from Maine to Maryland and from New York to Illinois and institute EZPass electronic tolls.

The state would have to institute tolls before it could move on to EZPass. I don't think there's a toll road in the state. Here's what the Michigan Department of Transportation has to say about the subject.

Why doesn’t Michigan have toll roads?

It has not been considered economically feasible as Michigan is off the nation’s heavily used east/west corridors. A system of toll-free highways has been viewed as important to commerce, industry, tourism, and general economic development.

Instituting tolls would be a major change of policy for the state. The situation may get bad enough between 2012 and 2014 to institute tolls, but it will be a fight.

On the other hand, my wife wouldn't mind; she already has an EZPass box from when she lived in Illinois and Wisconsin.

Michigan already has tolls on several bridges and tunnels, four of them to Canada and one to the UP. I-75 from Detroit to Toledo, 23 from Ann Arbor to Toledo, and I-94 from Detroit to Chicago would be good places to start. Illinois has implemented their system using mostly high-speed wickets that do not disrupt the traffic flow. I-355 is a good example.

While they're at it, they might start imposing fees that reflect the actual damage vehicles do to roads. It's a fourth-power law: doubling the weight carried by an axle does 16 times as much damage per pass over the road. If a 3,000 pound two-axle car, weight evenly distributed, does one "unit" of damage, an 80,000 pound semi-trailer rig, with weight evenly distributed over five axles, does 32,400 times as much damage per pass. Using a more typical weight distribution, the factor is close to 50,000. Increasing the weight limit to 100,000 pounds and using a typical weight distribution pushes the factor over 100,000. No state imposes registration fees or fuel taxes that come even close to making the trucks pay for the damage they cause.

More realistically, states could simply acknowledge that the large majority of damage done to their major roads is done by big trucks, which are getting a nearly-free ride relative to the damage they do. Car owners/operators are being forced to subsidize everyone else, since fees/taxes that match the damages done would be passed on in consumer prices for goods delivered by trucks. A much fairer funding mechanism would be to raise the general sales tax and fund roads out of that.

OTOH, if accurate damage-based fees/taxes were imposed, Alan could get all long-haul freight moved to rail as quickly as the railroads could ramp up their capacity.

A point I made indirectly.

I assumed front wheel drive and a high % of total weight on the front tires and then went conservative. "5,000 compact cars do less damage than one fully loaded "18 wheel" truck."

One of several subsidies for trucking.

No property taxes on the ROW and improvements either.

Best Hopes for a more level playing field,


Michigan also seems to have a large number of >80,000 lb haulers on the roads. These have more than 5 axles, sometimes many more.

They'll do this eventually but I don't think it will happen in the next 7 years or so. EVs will be such a small part of the fleet.

Besides . . . it is trucks that should really get nailed with fees since they are what destroy roads with all that weight.

Not that I disagree, but a truckdriver reminded me once,

"If you bought it, a truck brought it.."

So kiss goodbye your 'Supersaver Free Shipping' .. and then some, for all the incidentals we all take for granted.

And then of course, 'Taking them for granted' is a key part of the energy problem.

Leanan, you might want to be more careful with titles. In particular, the first title for this drumbeat (the one that shows above the fold), is misleading.

The title says "Michigan to curb road projects as gas tax revenue shrinks ", but in fact this is a classic PR exercise in drumming up support to avert a problem. It's a risk, not a destiny:

"MDOT is predicting funding losses of $120 million to $160 million per year from 2012 to 2015. If it can't come up with matching funds, it could mean the loss of $575 million to $800 million in federal funds for each of those years.

... Byrnes said she has seen some Republican support despite Snyder's stance on the gas tax.

"I think some of the Republicans see the need for it," she said. "And it was under the administration of Republican Gov. Engler that we had the last gas tax hike, so it's not like the Republicans would be setting a precedent."


OTOH it's an accurate reflection of the actual article title.

So it is. It looks like Leanan just copied the article title, which ought to be a reasonable thing to do (and which is certainly understandable if one is pressed for time).

Unfortunately, newspaper titles are usually written by somebody other than the author, and they're often quite misleading.

In case no one here noticed, the Enbridge pipeline 6B has now been closed for one week after they discovered a “possible anomaly” (their words), which sounds like something from Star Trek to me. Anyway, earlier this year, an extended shutdown of this same pipeline lead some affected refiners to scramble to maintain or substitute supply. For example, they hired gasoline tankers in Europe to drop off gasoline in Portland, ME (which may have been re-shipped from there to lower/eastern Canada and parts of the US near there). Now in the wake of the French port strikes and surging demand from China - putting a new and unusual demand on Europe’s refined product supplies - it remains to be seen just how this latest pipeline disruption will affect supplies in the eastern Great Lakes area.


Enbridge delays restart of Line 6B carrying Canadian crude oil to refiners in the United States and Ontario.

By Dina O'Meara, Calgary Herald November 23, 2010 2:03 PM

CALGARY — Enbridge Inc.has delayed the restart of its Line 6B oil pipeline to the U.S. after an increasing number of anomalies were uncovered following an internal inspection.

The Calgary-based energy and pipeline giant had expected to restart the 290,000 barrel per day capacity line on Wednesday, a week after shutting the line down to conduct visual inspections of the pipe.

The new date for restart of the Griffith, Indian to Sarnia, Ontario line is tentatively American Thanksgiving, said spokeswoman Lorraine Grymala.

Happy American Thanksgiving :)

Very similarly, in this report from Monday, there was another pipeline break near Houston, also occurring about the same time. I am not familiar with this pipeline, so I don’t know how this will affect refineries. In sum these two pipeline problems will probably act to bring about an unwanted increase in oil supplies, and a reduction in product supplies.


Royal Dutch Shell Plc hopes to complete testing and restart its 360,000-barrel-a-day Houma-to- Houston oil pipeline tomorrow, according to a state regulator.

Repairs have been completed, Jean Kelly, a spokeswoman for the Louisiana Department of Environmental Quality, said in a telephone interview.

The conduit, known as the Ho-Ho pipeline system, makes deliveries to refineries in Texas and Louisiana with a combined capacity of more than 1.2 million barrels, according to data compiled by Bloomberg.
The line was shut Nov. 16 after a leak was identified near Vinton, Louisiana, in Calcasieu Parish, according to Shell. About 1,030 barrels of oil spilled from the line, according to an operator estimate, said Damon Hill, a spokesman for the Pipeline and Hazardous Materials Safety Administration, a division of the U.S. Transportation Department.

Enbridge Inc.has delayed the restart of its Line 6B oil pipeline to the U.S. after an increasing number of anomalies were uncovered following an internal inspection.

Interpretation: They pigged the line and found a lot of corrosion and weak spots. They're not going to start it up until they fix them.

This pipeline was built about 60 years ago to carry newly discovered Alberta oil to Ontario, and I don't think they expected it to be in service this long, carry this much oil, or deliver it to the US rather than Ontario. When it was built, Canada imported 90% of its oil from the US, and the goal was for Canada to reduce oil imports from the US. How things have changed since then!

For novices: a "pig" is a mechanical device they send down a pipeline, driven by fluid pressure. They started calling it a "pig" because it squealed as it went down the line. Originally they pigged lines just to clean the deposits off the walls, but nowadays they have "smart pigs" which have sophisticated electronics to inspect pipelines as well as cleaning them.

Saudi Arabia May Double Oil Use by 2023, Cut Exports, ACWA Says

Nov. 23 (Bloomberg) -- Saudi Arabia may double domestic oil use by 2023 as energy demand increases, cutting the amount of crude for export to less than half pumped volumes in two decades, the head of generator ACWA Power International said.

The kingdom consumes about 1.2 million barrels a day of oil and refined products for power generation and about the same amount of crude for processing, ACWA Power Chief Executive Officer Paddy Padmanathan said today at a conference in Abu Dhabi. Unless the government goes ahead with a plan to diversify power-generation sources, crude available for export could slip to 45 percent of the total produced by 2030, he said.

Actually, at Saudi Arabia's 2005 to 2008 rate of increase in their C/P (Consumption/Production) Ratio, which went from 18% in 2005 to 22% in 2008 (BP), by 2030, their C/P ratio would be approaching 100% (which is the demarcation line between net exporter status and net importer status).

Thanks, WT/Jeffrey.

Since I only just now found out Prof. Goose is no longer an editor - ?, I'm ever-more-thankful you're here! And others, (of course). :)

I like the quantification of the qualitatively unimaginable.

TTAC has some fun with EPA Nissan Leaf mileage sticker:


Why does the Nissan Leaf get a 99 MPG from the EPA? After all, you could pour gallons of gasoline into the thing and it wouldn’t budge an inch.

Silliness happens when different forms of energy are compared as in EROEI.

Silliness happens when different forms of energy are compared as in EROEI

Yes, we know - you never fail to post the same silly thing whenever you see it!

You can't compare his previous posts with the current one. They aren't identical, and so cannot be considered comparable.

That's silly. (Intended to be read with a Monty Python accent)

:) :) :)

But to get real silliness you have to add in the "x" factor...

The U.S. sustains its standard of living and preferential trading status b/c other countries of the world treat the greenback as an international means of exchange.

No need to get excited yet... what's a bit of trade between neighbours. However, if Russia and China are serious about reducing U.S. dollar reserves and this becomes a trend, it has the potential to seriously harm U.S. economic hegemony.

All that said, I don't foresee this spreading beyond Sino-Russian relations. Right now, the U.S. dollar is (and is likely to remain) the only fiat money solid enough to facilitate global trade. No one -- not the Chinese nor the Russians -- are going to jeopardize their international trade (and bargaining chips) by abandoning the almighty dollar altogether.

There is no need to use any particular currency for trade whatsoever. The only issue is how fast the substitute currency depreciates. There are plenty of currencies out there right now that are not becoming worthless as fast as the dollar.

It is for central bank reserves where the dollar has been a "gold standard". But thanks to helicopter Ben and his predecessor the dollar is quickly losing its luster. Why would anyone hold dollar reserves if they are going to lose half their value in a few years?

From the Nov 22 2010 issue of Aviation Week and Space Technology:

Article expressing concern by certain researchers that Earth's pole will be warmed by a layer of carbon soot at about 40 km altitude deposited by the estimated 1,000 sub-orbital tourist flights predicted to occur per year by 2020.

1,000 sub-orbital tourist flights per year? Really?

Same magazine issue: The International Air Transport Association (IATA) released a study with several possible scenarios for World air traffic growth by 2050:

scenario 1: 'Unlimited Skies'....continued several percent per year air traffic growth

Final scenario: 'Down to Earth'....seriously constrained air travel due to limited fossil fuels.

My bet is on 'Down to Earth' by 2050, probably before...

Finally: AWST editorially advocates the Senate to ratify New START.

Senator Kyl is leading the charge to not ratify New START unless his demand for EVEN GREATER budget increases for 'the complex' are met...his contribution to the 'let's not let this administration accomplish anything' strategy accomplished this: without New START there are no limits on increasing Russian and U.S. stockpiles, nor is either country now under any inspection/verification regime. That situation has been in effect since last December. WTG, Sen Kyl...

BTW, New START does not mandate either the U.S. or Russia to dismantle even ONE weapon. It would cap 'Operationally Deployed Strategic Weapons' and 'Strategic Delivery Vehicles'.

The cap on the SDVs and the inspection/verification regime would be the major treaty benefits.

Methinks our priorities are out of synch with the most likely decline in oil production by ~2020 if not sooner.

By 2020 the added global warming will be totally insignificant to the warming already going on. The flights will be limited to the rich and influential (that includes talking heads). Maybe a good idea to let them see the Biosphere 1 from above, there is a slim chance it may get them thinking about the mess we are in.


The "rich" are set up to extract money from the masses with global warming.

As noted in past posts - 70% of the spending is "overhead". Goldman Sachs and their ilk take money on a 1:1 ratio for spending on actual carbon reduction.

If the remediation efforts are only 30% effective why should they be supported? Why should the parasites get 70%?