Drumbeat: November 26, 2010
Posted by Leanan on November 26, 2010 - 10:17am
Foiled Saudi Qaeda cells were recruiting, goverment says
Turki said the attackers belonged to 19 al Qaeda cells and were planning to target government facilities, security officials and journalists in the kingdom. He gave no names of targets.When asked whether they had also targeted oil installations in Saudi Arabia, the world's top oil exporter, he said: "We cannot exclude this. Investigations are ongoing."
The television channel al Arabiya reported that the kingdom had also foiled plans to attack Saudi oil installations.
In the blink of an eye, the United States has rocked the once-sleepy natural gas market. Since the 1950s, American energy companies have drilled into massive formations of shale rock to get at the natural gas trapped beneath them, but historically these shale gas ventures required large cash investments to access a relatively unpopular fuel. In the last few years, however, shale gas has suddenly become much more profitable, thanks to three factors: The discovery of large reserves of this low-emissions fuel, tweaks to a process called hydraulic fracturing ("fracking" for short), and improvements in drilling that allow one well to access a reserve in multiple directions. The sudden surge in the supply of natural gas has driven prices down around the world and sparked countries throughout Asia and Europe to develop their own shale gas reserves.
Mexico's Pemex October Crude Production 2.582 Mln B/D
MEXICO CITY (Dow Jones)--Mexican state oil monopoly Petroleos Mexicanos, or Pemex, said Thursday that it produced 2.571 million barrels a day of crude oil in October, unchanged from September but down from 2.602 million barrels a day in the year-ago month.Pemex said October's production, of which 55% was heavy crude, brought the year-to-date average to 2.582 million barrels a day, compared with 2.607 million in the first 10 months of 2009. Exports averaged 1.377 million barrels a day last month, up from September and from a year ago. Exports, most of which go to the U.S., averaged 1.321 million barrels a day in the first 10 months of the year.
Pemex approves incentive-based oil contracts
Pemex, Mexico’s state oil monopoly and one of the largest integrated oil companies in the world, has approved a new type of incentive-based contract that aims to boost production in maturing oil fields in the Gulf of Mexico.The contracts, known as “integrated service contracts”, which will be awarded for three fields in the south of the country, will eventually be rolled out for deepwater fields where the majority of the country’s reserves are thought to lie.
Musings: Separating Wheat from The Chaff of Unconventionals
Increasingly, petroleum industry executives are speaking out about the significance of the unconventional hydrocarbon resources in this country, although they do not always agree about the longer term outlook for the resources. In some cases we question the extrapolations speakers are making about the importance of unconventional resources in the nation’s long-range energy mix and, for that matter, the world’s mix.
Statoil lifts CFR Asia LPG premium in mopping up 220,000 mt Dec LPG
Singapore (Platts) - Norway's Statoil has sent CFR Singapore-Japan LPG premiums soaring as it mopped up 220,000 mt of refrigerated LPG from the spot market so far this month.Even as the CFR premium, to Saudi Aramco's December LPG contract price, for December arrival evenly split cargoes has risen from the mid-$40s/mt to well over the $50s/mt over 2-3 weeks, the highest premium Statoil paid for a similar cargo is in the mid-$80's/mt, data showed.
China diesel shortage may end in December
BEIJING -- China's diesel storage is likely to end in late December, National Business Daily reported Thursday. The newspaper cited sources from China National Petroleum Corporation (CNPC) and China Petroleum and Chemical Corporation (Sinopec), the two biggest petroleum enterprises in the country.China's refined oil products reserves have witnessed a dramatic decline since August. The stock of diesel dropped 8.6 percent in September month-on-month and 10.7 percent in October. In addition, the stock of refined oil products has plunged to 14 million tons as of the end of October, while the normal level is about 17 million tons, said Liao Kaishun, an analyst at C1 Energy. Diesel storage has dropped to about 6.25 million tons versus a normal level of 9 million tons, Liao added.
Wang, the husband, told police that they were pumping diesel from one of their three vehicles in order to prevent thieves from taking it. They had been hit by diesel thieves several times during previous days and lost about 2,000 yuan ($300) worth of fuel.So to prevent history from repeating itself, the couple pumped it out every night and poured it back in the morning. It all took about an hour each time. Wang blamed it on a recent diesel shortage.
The Philippines - Shell: 35 gasoline stations temporarily shut down due to pipeline closure
As the Batangas-Manila fuel pipeline is still shut down, some 35 gasoline stations of Pilipinas Shell Petroleum Corp. had to be temporarily closed down due to the shortage of petroleum products.Even though the company has resorted to transporting fuel via trucks, Shell admitted it is having problems with the delivery because of the heavy traffic in the metropolis, according to a Balitanghali report on Friday.
Nippon Yusen to Buy Knutsen Stake to Get Shuttle Tankers for Deep-Sea Oil
Nippon Yusen K.K. will buy a 50 percent stake in Knutsen Offshore Tankers ASA to expand into deep-sea oil transport in countries including Brazil.
Russia oil export via Ukraine to rise to 18.5 mln T
(Reuters) - Russian oil export through Ukraine will be increased to 18.5 million tonnes from 17.3 million tonnes in 2009, Ukraine's President Viktor Yanukovich said on Friday after signing an agreement with Moscow.
Declare ‘squandered’ South African coal a ‘strategic’ mineral, say protagonists
Coal is seen as the climate-change culprit, but that, say coal protagonists, is because it is burned so wastefully without much regard for the myriad of other contributions that coal can make to the economy.They want carbon capture and storage (CSS) technology to clean up its energy image, and then they want the remaining 60% of coal’s attributes to be used to build the economy of Southern Africa.
They say it can create a lot of wealth and generate many jobs if the full length of its value chain is exploited.
Norway hands $2.3B to Statkraft for renewables
The cash injection, which needs Parliament's approval, will go toward Statkraft's 82 billion kroner plan to invest in renewables -- primarily hydropower, wind power and district heating -- in Europe, South America and Asia.
Kenya seeks sites for nuclear power plant
(Reuters) - Kenya is seeking sites for the construction of a nuclear power plant along its coast, its energy minister said in a government notice on Friday.
Energy and immigration: Global warming and declining oil production will drive more Mexicans to the United States
Sophisticated scientific models suggest that Mexico is expected to be hit hard by climate change. Drought and shifts in land use and agriculture are likely to take place. And, as climate change diminishes crop yields and places ever more pressure on limited resources, the rate of immigration to the United States will only increase. A recent paper published by the Proceedings of the National Academy of Sciences predicts that the factors related to climate change will lead to millions of new immigrants from Mexico over the coming decades.But that’s just one part of the equation. We also must consider how a declining energy sector in Mexico will impact the economy.
Consider Petróleos Mexicanos (Pemex), Mexico’s state-owned petroleum company that produces crude, natural gas, and petroleum products. Pemex is also the government’s greatest source of income, responsible for financing 40 percent of the federal budget. The Mexican constitution limits foreign investment in oil production and Mexico’s history celebrates government ownership of the industry. This approach has worked for many years, but now Mexico is past peak oil. Crude production has fallen due to maturing oil fields (mainly the Cantarell field, the world’s second-largest oil field), and is not likely to recover to pre-peak levels without a significant amount of outside assistance.
Oil: Beyond the Barrel - And Over the Cliff
As the price of oil climbs through $85 a barrel, it reminds me of the explanations flying around a little over two years ago as oil went to this level for the first time. "It's all the funds chasing the hot commodity - the only game in town" was the refrain. It's all a bubble and we will have stable oil at $35 soon - that's what Steve Forbes and many others said. But now, as oil goes through $85, it's not the only game in town. In fact, it's been the dog underperforming just about everything. No desperate performance chasing mania is driving the price of oil today as we threaten $100 again. Could those peak oil nuts be right? Could the Great Recession be camouflaging a real supply peaking process?
A peak into the human well being equation
The man who invented the term “Peak Oil” delivered a lecture at Melbourne University on Wednesday night declaring that: “fossil fuel energy does the work we don’t like doing ourselves” and “without energy there can be no economic growth”.Kjell Aleklett, Professor of Physics at Uppsala University in Sweden and President of the Association for the Study of Peak Oil and Gas (ASPO), believes that oil, gas and coal are reaching peak production, which is set to leave the world with a deficit of energy relative to future demand.
Oil Drops From Near a One-Week High on Concern Ireland Crisis May Spread
Oil fell from near a one-week high in London amid concern that Ireland’s debt crisis will spread to Portugal and Spain, limiting economic growth and diminishing fuel demand.Brent futures slipped as the euro dropped to a two-month low against the dollar, curbing investor demand for commodities priced in the U.S. currency. North Korea’s state news agency warned its confrontation with South Korea could lead to war, sending equities lower. The MSCI Asia Pacific Index headed toward its biggest loss in two weeks.
Fuel-Oil Premium in Asia to Increase Fivefold in Survey: Energy Markets
Rising Chinese demand for energy that’s helped push shipping costs higher may lead to a fivefold increase in the premium of Asian December fuel oil over January.
China cracks down on diesel overcharging amid shortage
The National Development and Reform Commission (NDRC), China's economic planner and price regulator, said Friday it has asked local governments to crack down on some gas stations selling diesel above the state-set prices.
Cuba deal boosts China's Latin American oil plans
HAVANA (Reuters) – China is taking another great leap forward in its Latin American energy plans, raising Cuba's energy importance in the process, with a deal to lead a $6 billion refinery expansion project on the communist island, experts said this week.The project, to be funded mostly by China's Eximbank, is the latest of several significant moves in the region for the Asian power as it continues to expand its global influence.
Why China is an energy consumption hog
NEW YORK (CNNMoney.com) -- Over the next 15 years China is expected to build the equivalent of 10 New York Citys.That's a lot of concrete and steel, and it goes a long way in explaining why the country is using so much energy.
Roads, bridges, rail lines, skyscrapers and factories all take tons of concrete, steel, chemicals and glass.
Coal India Plans U.S., Australian Mine Acquisitions to Meet Import Demand
Coal India Ltd., the world’s largest producer of the fuel, is studying the acquisition of five mines in the U.S., Australia and Indonesia to meet the country’s demand for the fuel, Chairman Partha Bhattacharyya said.
Saudi Arabia arrests 149 al-Qaeda terrorism suspects
Riyadh - Saudi Arabia has arrested 149 alleged member of al- Qaeda terrorist rings over the last eight months, the kingdom's Interior Ministry said Friday.
Charles Okah charged over Nigeria oil kidnaps
The brother of Nigerian militant Henry Okah has been charged with kidnapping nine foreign oil workers this year.
Shell Ramping Up Nigeria Oil Production After Completing Pipeline Repairs
Royal Dutch Shell Plc’s Nigerian unit is “ramping up” its Bonny Light crude production and exports after completing repairs on a pipeline ruptured by oil thieves, Precious Okolobo, spokesman for the company in Nigeria, said by phone from Lagos today.
Final draft of Iraq gas deal with Shell within 10 days
BASRA, Iraq (Reuters) – The final draft of Iraq's multibillion-dollar deal with Royal Dutch Shell to capture flared gas at southern oilfields will be completed within 10 days, a senior Iraqi oil official said on Friday.The $12 billion deal, which includes Japan's Mitsubishi, involves capturing associated natural gas produced at fields near the oil hub of Basra, including Rumaila.
Energy firms probed over soaring profits
The price hikes of energy suppliers will come under fresh scrutiny after the industry watchdog today announced it is to investigate profit margins that have soared 38%.UK energy suppliers will hand over their accounts to Ofgem, who claim that the average margin on a standard dual-fuel tariff has risen from £65 to £90 since September.
Putin Says Lithuania's Unbundling Plan for Gazprom's Lietuvos Is `Robbery'
Russian Prime Minister Vladimir Putin said Lithuania’s unbundling plan for gas utility Lietuvos Dujos AB, in which OAO Gazprom is a majority shareholder, is “robbery.”“Our companies and their German partners in Lithuania legally acquired part of the assets in the pipeline system,” Putin said at a business forum in Berlin today. “Now, citing this third energy package, they’re getting thrown out. What’s that about? What kind of robbery is that?”
Oil-rich south Sudan weighs cost of progress
BENTIU, Sudan (AFP) – South Sudan officials are concerned at the environmental damage being caused by the oil industry and are promising a tough new line if the oil-rich region gains independence next year.Their potentially rich but grossly underdeveloped region is in a quandary. Its desperately poor people, mostly subsistence farmers and cattle grazers, need oil money but officials say livelihoods are being threatened by pollution.
Alaska gov: Interior’s climate-change polar bear decision hinders oil drilling
Alaska Gov. Sean Parnell (R) is slamming the Interior Department’s designation of large Arctic regions as “critical habitat” for polar bears threatened by climate change, alleging the decision will slow oil-and-gas drilling.
Pennsylvania investigating spill at Marcellus Shale natural gas well site
State officials were investigating a leak of drilling wastewater at a natural gas well site in north-central Pennsylvania that polluted a stream and a spring, a Department of Environmental Protection spokesman said Tuesday, Nov. 23.A department inspector discovered the leak last week while visiting a producing well owned by XTO Energy Inc. in Lycoming County, where the company is tapping into the vast Marcellus Shale gas reserve.
California adding 4 more gas pipeline inspectors
SAN FRANCISCO – Under pressure since a deadly natural gas explosion, California regulators said they would immediately hire four more pipeline safety inspectors.
The city is empty.Vast skyscrapers and office buildings sit idle and unoccupied, workers finding no reason to be there since they lost their jobs. Cars are abandoned on the street, withering and rusting away with the passing of the seasons.
The sole remaining residents are gaunt, zombie-like figures, bodies ravaged by hunger, unable to transport themselves elsewhere because they can't afford to fuel the cars that would drive them away. Like in a George Romero film, they wander aimlessly, desperate for the last scraps of food that will allow them to carry on a fruitless, myopic existence.
This is, we're told, similar to the future that awaits us after Peak Oil, the point at which oil extraction reaches its maximum level and then begins to decline. High oil prices are to follow and rise exponentially, bringing economic devastation because the resource has a hand in almost everything we buy.
We can all choose to make change
As a community, we can make interpretive choices. If we insist our problems are permanent, general and personal, we’ll be too discouraged to effectively plan for the future. But we can also choose to see them as temporary, specific and impersonal.Greenhouse gas emissions are not a character flaw; they’re a cognitive-behavioral choice subject to analysis and change. We can learn to live carbon-zero. We don’t have to do it for the whole world, just here. We don’t have to do it overnight, we just have to keep steadily walking the walk without giving up.
When fields yield to houses per hectare
Urbanisation will put our food supplies under pressure.
UAE signs nuclear pact with UK
The UAE Government signed a nuclear co-operation agreement with the UK yesterday, furthering its strategy of cementing its own programme's legitimacy with the help of established nuclear powers.
Finland's Fortum to cooperate with Russian Rosatom
HELSINKI—Finnish utility Fortum Corp. has signed a deal for nuclear cooperation with Russia's Rosatom in international markets.
New Mexico utility to combine solar power, batteries for energy storage project
ALBUQUERQUE, N.M. (AP) — New Mexico's largest electric utility is teaming up with federal scientists and researchers at two colleges to develop a way for managing solar energy so it can be accessed when it's most needed, rather than only when the sun shines.
Many Britons off colour after catching solar fever
The winter blues are fast approaching and the public is asking if the government is acting responsibly as it strives to go green when the country is so much in the redThe British are not a happy lot at the moment. Understandably. Many will lose their jobs soon, victims of huge public spending cuts and value-added tax rises in January. On top of that, the winter blues are just about to kick in.
So the outbreak of solar fever within the rural community, driven by renewable energy companies, is a ray of sunshine amid the gloom.
Suzlon May Make Turbines for China's Offshore Wind-Power Market by 2013
Suzlon Energy Ltd., India’s largest wind-turbine maker, plans production for Chinese offshore wind projects within three years to tap a market that may provide 5,000 megawatts of orders a year, Chairman Tulsi Tanti said.“The current target plan is to start in 2013,” Tanti said in a phone interview. The Ahmedabad-based company is looking for a Chinese partner to build offshore wind projects, he said.
Too Much Doom & Gloom is Not Why People Stopped Believing in Climate Change
The explanation seems simple enough: the economy has been in the tank and partisanship has been on the rise. This study indicates that people's acceptance of climate change tends to rise and fall with the economy.
Prescott calls for voluntary climate change agreement
Lord Prescott today called on countries to agree on principles for voluntarily fighting climate change amid widespread recognition that a legally-binding deal on global warming will not be struck at the upcoming UN talks in Mexico.The former deputy prime minister, who was involved in negotiating the original climate treaty in Kyoto, warned the legal framework for tackling climate change was "falling apart" and that countries should be allowed to go ahead with their voluntary schemes, based on basic principles of fairness and transparency.
Chinese farmers struggle with climate change
In northwest China, farmers count the costs of a changing climate in lost crops, dry wells and lives weighed down by poverty.
Africa: Making a Case for Nutrition
Johannesburg — In another four decades, higher average global temperatures will lead to water stress, causing food production and access to fall, which will drive an additional 24 million children into hunger, says a study by the International Food Policy Research Institute (IFPRI).This forewarning should move the world towards being forearmed, according to the UN Standing Committee on Nutrition (SCN), a forum comprising UN agencies, NGOs and academics, which has been running a campaign to influence negotiators ahead of the UN climate talks from 29 November to 10 December, in Cancun, Mexico.
South Africa is in one of the regions most susceptible and vulnerable to climate change and is already suffering the effects of global warming. The department of environmental affairs says that South Africa's sea level is rising, its rainfall patterns have changed, the average land and sea surface temperatures have increased and the frequency and intensity of extreme weather events have increased.
Africa: Millions of Africans at Risk From Sea Level Rise
More than 25 per cent of Africa's population of about one billion people lives within 100 km from the coast. With climate change, many will be at risk from sea level rise and coastal flooding over the coming decades.According to the new UN-HABITAT report, State of African Cities 2010, Africa will suffer disproportionately from the negative effects of climate change despite contributing less than 5 per cent of global green house emissions.
World May Post Warmest Year on Record as U.K. Met Office Adjusts Data
World temperatures in 2010 may be the warmest on record, the U.K. Met Office said, as it plans to calibrate a decade of data to account for newer sensors.
Scary new best friend for politicians
HERE'S cold comfort. It would be impossible, according to the Swedish energy expert Kjell Aleklett, for us to emit enough greenhouse gas to warm the planet by six degrees: we don't have enough oil, coal or gas to burn.''All the emissions scenarios that have been put forward over the last 10 years are wrong,'' says Aleklett, professor of physics at the University of Uppsala and the world president of the Association for the Study of Peak Oil.
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In regards to the article up top, Fuel-Oil Premium in Asia to Increase Fivefold, does anyone understand why Mexico's oil sent to China contains 2% or more water?
if mexico or venezuela are shipping 'bad oil', it is because the purchaser is not adequately monitoring the quality. oil is easy to separate from water, but sometimes the last few % can be difficult. the methods used to lower the water content are principally chemical, heat and gravity. these take time and effort.
the us pipeline qualtity standard is 0.2%.
"Get me that load NOW, pronto, dont reprocess it first, load it and ship." Somebody is a tad desperate?
Thanks all. It would appear then that China was in a bit of a hurry.
We'll know in a few weeks if that Mexico cargo was orginally intended for shipment to the US, if and when US oil imports from Mexico fall back.
Mexico gave us (the US) an unusually high amount of imports last week, which were just enough imports to help reach the 9.0 mbpd mark - basically the lowest amount of imports needed to keep overall commericial inventories more or less stable:
http://www.eia.gov/dnav/pet/pet_move_wimpc_s1_w.htm
Charles, they are talking crude oil here, directly from the field, through the Oil Water Separator then to the storage tanks and finally to the tanker ship. The reason Mexican oil contains 2 percent water or more is that their oil water seperator is likely old and not very efficient. Or it could be that they are just pushing the crude through it too fast because they don't have enough separators to handle all their crude.
Ron P.
"Bailout Fatigue," on several different levels and in several different areas, is going to be more of a factor in the next couple of years. Here in the US, states with small projected deficits or surpluses will resent the federal government bailing out states with large deficits, and ultimately, at some point foreign creditors will presumably decide that they don't want to lend money to the US in order for us to continue to consume beyond our ability to cash flow our consumption.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8160999...
EU rescue costs start to threaten Germany itself
The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.
I hope that people who prefer an intelligent interpretation of evidence are taking the time to keep up with Paul Krugman's column and blog:
http://www.nytimes.com/2010/11/26/opinion/26krugman.html?_r=1&hp
It always strikes me as something more than ironic that persons who have learned to distrust the CERA & clones interpretation of oil production data are all too willing to succumb to the equivalent of these self-styled wise people in the field of economics and finance.
Hey doomers, Krugman is getting increasingly glum, he is even using the term 'doomed', though not because we are approaching oil liberation day:
The blogpost develops this thesis at:
http://krugman.blogs.nytimes.com/2010/11/26/the-instability-of-moderatio...
I still think he doesn't get it. Neither central banks nor government policy can fix this mess.
I do not think that high oil prices caused the housing bubble to burst. It was going to happen eventually, oil prices or no oil prices.
However, I think the reason the housing bubble inflated had something to do with peak oil. It was the result of trying to create perpetual exponential growth on a finite planet.
If you choose to work with a narrow definition of growth which implies a growing use of limited materials then you might be able to speculate as you do.
But your definition would be wrong.
The system, which by the way I do not see as desirable for many reasons, but which I acknowledge is what we are presented with and what we must work with, does not require the continued expansion of the consumption of natural resources: it requires the continued expansion of utility. That the public is convinced that utility is mostly available through the consumption of limited material resources is a result of socialization (read: upbringing, social integration, shaping the plastic brain...).
Madison Ave has found it richly profitable to exploit this process. Hence both great sex and the open road come with the new car. Families are happy at MacDonalds. And so on.
If I may be so bold as to assume that you continue to waste your time reading Denninger and the like, I will also be so bold as to suggest that you pick up the classics from Aristotle through A Smith to the brightest people thinking and writing about economics today. And that does include Krugman, as well as Stiglitz, deLong, Galbraith, Sen, and many others, none of which quite fit the mold of mainstream and cornucopian neo-classical economist so regularly decried at TOD.
Finally, and frankly, if you don't think that government policy is going to play a, if not the, central role, in 'fixing this mess', then you are abandoning all hope for justice, and if enough people who like you have the talent to make a small difference in the shape of things also give up on the public policy process, then you will get rule by thugs. To be followed by chaotic resistance. To be followed by repression.
I think that's a trap, though. As Homer-Dixon points out, it makes systems less resilient, more fragile. It's also inherently limited.
The serial bubbles of the past few decades, I suspect, are proof that we aren't going to all get rich selling each other insurance. In the end, it does come down to physical resources.
I think we're going to get that anyway.
Except for the chaotic resistance part. People just don't seem to care enough for that.
In the end it does not come down to non-renewable physical resources, though some such as iron can be doled out for millenia, and need not concern us.
I've read all of Homer-Dixon's books, attended lectures, and spoken with him. I must have missed something along the way.
In any case, I would love to continue this discussion, but carpentry calls and I have to return to building things out of renewable resources, and little bit of iron and carbon. Assuming future generations are taught that water is the body's friend and the building's enemy, these structures should last for centuries.
Leanan,
You are correct: Krugman does not "get it." He has been immersed since the age of eighteen or nineteen in the fallacious doctrine that:
1. the market will find a way do deal with the scarcity of any resource input, and therefore
2. limited resources are not a problem. BAU will solve any resource problems.
Interestingly enough, Keynes never made that mistake. He knew fossil fuels were a "one time" thing. See for example the multivolume biography of Keynes by Skidelsky for the evolution and development of Keynes's thought.
I think most economists call Krugman a neo-Keynesian or a New Keynesian. The original is much better than Krugman. Keynes was an excellent writer, and it is (IMO) worthwhile reading his complete works. Note that Keynes himself had been heavily influenced by Jeavons, and his concern for Britain running out of coal.
The inevitable outcome for many local, state and national governments is that they will default on many of their debts and obligations--including, in many cases, pensions and health care promised to current and future retirees.
Do I hear echoes of Michael Lynch: 'Technology will inevitably allow for the exploitation of trillions of barrels of hydrocarbons'.
The obligations are not those of the state; the obligation is of one generation to another, of one citizen to another. In modern industrial societies, the state is the most rational and efficient means to facilitate these obligations, hence government directed universal health care costs the economy less and delivers better health outcomes and old people bereft of loving children of means are able to eat.
In the narrow case of the contractual duty of governments to provide pensions and health care to former and current employees, I suggest that 'defaulting' will be rare indeed. Marx may have dreamt of the state withering away, but in the context of any social order this side of hunting and gathering, it remains with us out of need. Nothing will erode the capacity of any government faster than losing its best people because it has become an unreliable employer.
Regarding the Lynch analogy, quite the contrary. Absent massive central bank monetization of federal debt--with unrestricted grants of the newly created money being handed to local and state governments--many of the local and state governments are not going to be able to pay their bills. Of course, this is already happening in some states, e.g., Illinois:
http://www.campaignforillinoisfuture.org/state-not-paying-bills-social-s...
State not paying bills, social services struggle to survive
I do think that there will be something of an "Export Land" effect in regard to government services and spending, to-wit, the easier to cut areas will see hugely disproportionate cuts in spending, relative to the decline in revenue.
Westexas,
IMHO, the Federal government will bail out the states indefinitely--by printing more money. Such is the political path of least resistance, even for conservative Republicans. Many states (e.g. California) have Republican governors. These Republican (and Democratic and Independent) governors will use all the political pressure they can muster to get bailouts. My conjecture is that this pressure will overwhelm those who resist bailing out the states.
Not for much longer, governor elect Jerry Brown is a democrat and a former governor.
I don't know whether or not K is necessarily a "self styled wise person", especially because he is just laying out the analysis as he sees it. I don't think you can put him in the same camp as CERA since they are profiting as a result of their ever optimistic analysis.
If you have a specific critique of K's latest column, I would like to hear it because the question of whether or not banks should be bailed out is one of continuing controversy and a matter of dispute between economists and others.
He makes the case that while Iceland just let their banks fail, they are actually a bit better off than Ireland despite their massive defaults.
In the U.S., the Fed and the government chose to provide tens of billions for the banks. This has apparently worked out quite well for wall street and especially those in the financial community. Profits are at a record level but this does not seem to have trickled down to the middle class and the poor. It has not made a dent in unuemployment but has resulted in even more income inequality in the U.S.
Krugman may be wrong but I think he deserves criticism on the merits, not merely an assumption that he is some kind of a shill for powerful interests like the oil companies.
I just don't see the equivalence that you assert between Krugman and CERA. But I am willing to listen.
Hmmm. Was I that confusing? Krugman is my Westexas of the world of economics, not perfect, but very insightful, with a gift for shapeseeing.
On the other hand, Westexas appears to be kneeling at the alter of the CERA's of economics, such as are regularly found at the Telegraph.
My reading of Krugman, Delong and similar, is that the bailouts were very well designed from the technical standpoint, i.e. they did arrest the collapse to great dpression like levels. Given the serious political constraints (we should be spending big time of energy transition infrastructure for example), they did about as well as possible. By that I mean by the narrow minded metric of economic distress avoided divided by the net cost to the taxpayer was/is quite favorable. But, tha scale was not enough,and any fall to a significantly lower level than precrash is going to feel awful, and bring discredit to the ideas behind the partial mitigation. The other beef I have with their approach is the optics. The belief that we are shoveling mountains of money at the banksters is very widespread and corrosive. This distrust fuels all sorts of anti-government reactionary stuff. So just when we will need a strong government sector the most, to spearhead the post-carbon transition, we risk having a small government run by people who have a viseral hatred of any government intervention in the economy.
Krugman is extremely intelligent. His intelligence is not at issue. As I see it, Krugman is a prisoner of his education in graduate school. That is where he got all his good ideas and also his bad ideas, such as having the Fed annouce they are going to inflate the U.S. dollar 25% at 5% per year for five years. This recommendation results directly from what he learned in journal articles over the past forty years and especially what he learned in graduate seminars.
Just a minor semantic quibble. He advocates inflating the price of goods and services which would deflate, not inflate the value of the dollar. This is based on his judgement that we need people to spend and not hang on to their increasingly less valuable dollars. Neither Krugman nor the Fed wants us in cash; it is just that he advocates a more radical approach.
I do not pretend to know whether Krugman's ideas in this area would be successful. In addition, it appears that the Fed's plan to decrease long term treasury rates is having the reverse effect, at least so far. Krugman would argue that their QE2 approach is too modest, that the market is not impressed and would only be impressed if they announced something outrageous.
Beyond that, I do not think that Keynesian or any other traditional fiscal or monetary approach is adequate given the international nature of our predicament, and the energy,resource, and environmental constraints that will dictate long term growth.
My only real problem with Krugman is that he, thus far, has not really dealt with the limits to growth issue. But then that critique applies to almost all economists.
There are plenty of economists who have not succumbed to the "Growth is the answer, never mind the questions" menatality.
What Krugman cannot understand (because of his conventional education and reading limited to mainstream economists) is that lack of demand is NOT the fundamental problem. The most fundamental problem is the beginning of the end of the fossil-fuel era. Krugman just does not get this. He has blinders put on him by his profs when he was a student and by his colleagues now that he is a Nobel Laureate and big-time NY TIMES columnist.
Read Boulding or the many economists who are part of the steady-state economics movement. Or read Leontieff. Or read Keynes or Marx. Despite fatal errors, Marx had a grand vision of political-economic-historical-sociological-philosophic data being integrated into a whole. He failed, of course, but it was a grand failure. To date, nobody has been as great a synthesizer as Marx; nobody has had the balls to do what Marx tried to do.
I have read everything I could get my hands on by Boulding. He was the subject of my senior thesis. Also lucky enough to take a couple of courses by him at the University of Colorado. SRO.
Apparently, my education was not conventional in that we were discussing these issues at my college back in the early 70s. And these discussions were in economics courses. Perhaps my education was more unusual than I realized.
It is hard to believe that Krugman is not aware of these issues, including steady state economics. Surely, he is a well read man. I guess this is another case of a very smart man suffering from a blind spot.
Krugman has expertise in economic geography. He has evidently spent a lot of time thinking about where people should be situated spatially. He has also written on self-organization. These kinds of topics appeal to analytical minds and they almost go beyond economics. In the engineering stuff I work on not necessarily related to economics, his name pops up occasionally.
This is a typical example of how scientists view Krugman:
http://cscs.umich.edu/~crshalizi/reviews/self-organizing-economy/
I'm not at all convinced this is true. He is pretty clsoe to deLong, and I am convinced he is aware of resource depletion/ LTG issues, I certainly keep posing comments on his blog (as do several others). While it is not their primary focus, I think they have some grasp of the basic facts.
http://www.bloomberg.com/news/2010-11-24/china-builds-french-designed-nu...
Say what you want about the Chinese, but man do they get things done! No messing around in that country. Fast and cheap.
"Fast, cheap, good.....pick two." Attributed to Red Adair.
I'd propose that the Chinese seem to do things fast and good. Cheap is a relative term, having a different basepoint in China, where labour inputs (well trained, highly motivated by competition and non union) are only a fraction of those we're used to. It's a factor not only on the direct labour of construction, but also the labour component of all the cement, steel, etc. used.
They built the two Quinshan CANDU reactors in 46 months from first shovel to first criticality almost ten years ago, and even though they're among the more complex reactors to operate, have had no problems we've heard of.
This is good news for the planet, to the extent that China can supply its demand for electricity using nuclear plants vice coal plants.
Yes, I know they are doing both.
Perhaps they can turn their talents to mass production of PV and wind turbines and LED lighting as well to an even greater extent than they do presently.
They should use a goodly portion of their wealth to build out quality infrastructure.
I wouldn't count thousands of miles of 'Interstate'-like road for millions of cars as 'quality infrastructure, though...hope they go hog wild with rail.
I recall a story about a year ago of a recently built bridge in China collapsing because the builders had put no rebar in the concrete. I'm sure that some of the people involved lost their heads, but likely it was the kind of randomly distributed excuse for justice that we are experiencing more and more in the US.
My impression is that there are many currents flowing in this insane 'great leap forward' and that, while there may be spectacular successes (such as simply keeping ~1.3 billion people fed), there will also be spectacular failures. I think the Chinese leadership has a tiger by the tail and scared sh*tless of either turning loose or of clamping down too hard. China seems to embody a lot of the extremes of how humans operate on this beleaguered planet.
So,mymomishot,you are a China admirer.Not surprising,I suppose,considering you have Asiatic links.
I suggest thay you take a step back from your preconceived notions and take a long hard look at China - their history,their present situation and the likely prognosis.You may save yourself some disappointment.
Ireland's Relief Proves Fleeting as `Day of Reckoning' Nears
Thinking the unthinkable — euro zone breakup
Meanwhile, in the US, retailers are downright ecstatic. They're expecting sales to be up, and people to spend more on discretionary items, not just necessities.
"people to spend more on discretionary items, not just necessities.
"
....and they're doing it with cash, many avoiding credit:
Are folks conscious of our overall debt crisis, or is their credit maxed out?
"Are folks conscious of our overall debt crisis, or is their credit maxed out?"
Yes.
Since Krugman was invoked above, I'll point out that this is the part he doesn't get. The number of people remaining who still could take on and service more debt than they already have is not sufficient to maintain the economy. His 'zero interest rate policy' has crushed the incomes of the retired people, who would be happy to spend it. The CPI numbers, being cooked for political advantage by both parties have eliminated increases in Social Security payments for those same retirees.
The result is what you see about you.
Oh, although I don't blame this on Krugman, other liberal policies have stopped the ability of the Federal Government to respond with the 1930's style public works programs. It takes years to get through the Environmental Impact Statement process. And more years to fight off the Greens/NIMBYs in court. Can you imagine the uproar that would result if the government announced it was going to hire thousands of people to exterminate the Gooseberry in 2011?
http://www.conifers.org/pi/pin/blstrust.htm
"Starting with an annual expenditure of $300,000 in 1932, the western rust control effort grew to $1.2 million in Public Works Administration (PWA) dollars. In 1934 the eradication effort received an infusion of PWA and Civilian Conservation Corps (CCC) workers. These programs, together with regular appropriations, put 13,000 men to work in the "War Against Ribes." By 1935 the CCC in the Inland Northwest alone employed 7,000 men. From 1930 to 1946, a work force averaging 2,500 men annually would dig, bulldoze, and spray Ribes shrubs on over 2.5 million acres of the 5 million-acre Inland Northwest white pine forest. All told they destroyed 444 million Ribes plants."
If the Obama-messiah was serious about putting people to work, he would submit a proposal to congress for a 5 year moratorium on the Endangered Species Act, the Environmental Policy Act, and anything else that keeps infrastructure from getting built. Build, baby, build, if you will. He would also start selling federal land used to site renewable energy projects instead of leasing it. (this would also help local governments as they would increase the tax base.) Locally here, some people with 50 year leases have discovered the federal government wants them gone, and is not renewing the lease. This is not the sort of action that encourages people to invest for the long haul.
By the way, I went and looked it up;
"http://www.dot.state.ak.us/stwddes/desenviron/assets/pdf/resources/nepareviewtime.pdf"
"In addition, in 1994 the General Accounting Office (GAO) reviewed 76 projects with EISs completed between 1988 and 1993 (5). The average time from NOI to ROD was about 4.5 years. This figure is consistent with the Berger Group data. At the request of the American Association of State Highway and Transportation Officials (AASHTO), in 2003 TransTech Management, Inc. surveyed 31 state departments of transportation about their most recent final EIS document (8). They found a median time taken from NOI to ROD of 3.7 years, ranging from just over two years to almost 12 years."
NOI is Notice of Intent, ROD is Record of Decision.
So if you were wondering why there were no public works projects are going on to save the economy, the first of them should be clearing the EIS process in 2011. The last ones will be approved in time for the 2020 elections. The bulk of them should be approved in 2013.
While looking for this, I found an article about a car ferry in Hawaii that was stopped until they completed an EIS. This one would be a quicky as such things go, only 9 to 18 months for approval.
We are in the middle of an extinction event. It seems prudent to me to protect as much of the natural ecosystem that is left as possible. When it's gone, all the "public works" in the world wont save us.
If you have a problem with the environmental protection, might I suggest a move to China. They seem to share your distaste for clean water to drink, and clean air to breathe. I don't know how your children's children will survive, but perhaps you will be long dead by then; so Fµck em'!
Yep, this PVguy is just spouting reactionary garbage. There would be all sorts of support for sending out teams to eradicate various invasive species.
The main thing keeping any '30's style work programs getting going is of course the rabid anti-government folk in the Repub ranks. Pguy knows this, of course, but is desperately and bizarrely trying to blame anything and everything on liberals (as if there are any left), environmentalist, and NIMBYs (as if we shouldn't give a hoot what happens in are back yards--much less to the planet as a whole).
If we have any concern for future generations, at least including our own children, trading permanent extinction extending forever into the future and other unfixable environmental impacts for moving a highway or bridge project forward in time a couple of years seems unbelievably short-sighted and selfish. Which, of course, does not mean that President Palin will not implement it. When the fossil fuels are gone, most of the infrastructure projects will be useless, but intact ecosystems will be critical to survival.
"Intact ecosystems" might support on the order of 0.5% of the current population, if even that, eking out worthless beast-like existences as top predators. That's one reason why much of the vast middle section of the USA, as well as large swaths of Canada, are not "intact ecosystems", but have been modified beyond recognition into farm lands. So the simple truth is we've been "surviving" without "intact ecosystems" for a very long time now. In much of Europe, they've been surviving without them for far longer, millennia. So if you wish to promote some sort of irrational religious affinity for "intact ecosystems", you'll be needing some other argument. If the button that got pushed is some other one instead, it probably just doesn't matter.
Paul, you still breathing air, drinking water?
Your hymn to the artful and artificial Blue Heaven we've devised doesn't mean Mother Nature is now absent, just that we've pulled the Polyester Fleece over our own eyes so we don't have to acknowledge that WE are also part of this currently fractured and limping environmental multiplex, and if we knock out a few hundred more pollenator species or air and water-filtering forest regions, then maybe some of the worshippers of the 'cultivated world' such as yourself might have to acknowledge that it's HER smile that keeps your clocks ticking.
We are wearing some cute Robo-masks so we can pretend we stand apart from the Natural systems of the earth, but Mother isn't in the slightest bit fooled by it. Only us.. silly Hobbits!
Bob
I remembered an article on Myanmar I read today at NYT. The govt and a corporation will build a huge (3 Manhattan land areas worth) industrial complex on pristine Myanmar shore. They will send 5,000 rice farmers living sustainably in villages off the land to do this. There will be coal power plants, factories, petrochemical plants, deep water supertanker shipping port.
As a way to stop this madness, let us hope that the financing breaks down as the euro collapses and sends another "Lehman shock" style financial shock wave through the world. That is the only hope left! I guess it will be called the "Euro shock". It is probably only 2 months away, I am guessing. That might be long enough to save this Myanmar coastline.
People with capital and money, it seems, truly getting desperate for something viable to invest it in where they can still make an income---I mean a return on their investment. Let us hope they run out of aspirations and targets sooner rather than later.
The massive port complex planned for Myanmar is being funded by the Chinese and built by Thais.
This is a product of the Chinese obsession with getting a West-facing deep water port and the need of Myanmar's generals to bribe their Thai neighbors.
Nobody is looking at returns on capital. This is not a good example of capitalism run wild - in fact it is the opposite.
Every human who breathes is dependent on intact ecosystems where photosynthesis produces oxygen and recycles carbon dioxide. Without these "free" ecosystem services human life would quickly stop.
We can quibble about the definition of "intact" but no human lives without support from natural biological services.
I can't tell who you are railing against. It sounds like a good description of the religious Dominionist. When they succeed in playing out gOD's instructions to fruition, all they have left is nothing.
This reminds me of the (uncredited, so I assume it's his) introductory quote of a Wendel Berry book:
"We thought we were getting something for nothing,
But we were getting nothing for everything."
Poor PaulS seems to be getting more foaming-at-the-mouth with every post these days. He used to make occasional sense, at least.
Thanks, that is a keeper quote.
PaulS-
Just watched a PBS show on the Tall Grass Prairie... Its basically a cornfield now.
The problem is population and over consumption. Ethanol should be banned, grass fed meats only and all agriculture moved to the Sahara (we'll flood the desert with desalinated water from Thorium reactors...Israel will teach us how to grow under plastic in the desert). Everything will be flash frozen and shipped to the US on giant high speed nuclear powered cargo ships.
The wild will take over the cornfields and we'll (TOD members) teach people how to hunt (with strict rules/regulations/TSA pat downs).
Anyone still with me?
Forest can retake areas of MN/WI...the Mississippi will run clearer...no more fertilizers killing the GOM. Animals will flourish, and frolic... The bees will buzz again.
"trading permanent extinction extending forever into the future and other unfixable environmental impacts for moving a highway or bridge project forward in time a couple of years seems unbelievably short-sighted and selfish."
But that is the trade off. I've read no end of wailing about the lack of great federal programs to provide jobs on this blog. But when someone comes up and says "we could build a ..." there is a instant counterstorm of "Oh no, we can't do that! What are you thinking?"
The Kennedys fight the windmills off Cape Cod, the Save the desert crowd wants every tortoise accounted for, Pelosi is locking up desert "to save it" as fast as she can while saying how much she supports renewable energy on the other.
We went from not enough regulation when I was a kid in the 1960's (and the papermills pretty much deoxygenated the Wisconsin River) to so much regulation you can't do anything without years of paperwork first. Since you are supposed to get the paperwork done first, then build the plant, you might miss your market opportunity before the plant goes online. That plays heck with your business plan.
So rather than add that risk to the pot as well, you don't build here in the US. You go to China/Malaysia/elsewhere where you can get it built sooner rather than later. And the US loses out on another batch of jobs and tax revenue.
Patrick Lucey, governor of Wisconsin in the 1970's had a dream where he would run the industry out of the state, and then the tourists would flock into pristine forests and lakes and spend like maniacs. It didn't work. He blew out the local economy, and a large batch of HS graduates ended up in the military (including me) as there was little employment left. A whole lot of people became "from Wisconsin" back then. I can see the same thing playing out on a national scale right now, just somewhat more slowly. But where does one bail out to this time?
Why don't we attach a turbine to Lincoln's nose. I heard there are good updrafts on Mt.Rushmore.
I can't stand Limbaugh talking points.
So you actually know about the problems, yet you engage in viciously partisan imagery that you know well will inflame the populace that only work with emotions? Might as well light a smoke bomb in a movie theater.
We can only hope the new alignment of the site will limit such posts by the likes of Pguy (and PS for that matter). It just so baldly mere partisan bitterness. Really awful to see on these forums.
If there really are a significant number of people who only work with emotions I'm not sure I like society's chances.
All human beings work on the basis of emotions.
We can't help it.
It's the way Evolution shaped our genetically defined brain organ. (D'oh)
Is there such a thing as purely rational (emotion free) thinking?
I don't see how that can be possible.
Maybe a Vulcan walks amongst us.
As to the percentage of the population that bases their decisions more on emotion than on rational thought, that number is probably a significantly high one. However, the metrics do not exist (IMHO) for quantifying that percentage.
(A while back I looked up how many people are trained in and work in a "science"-based part of the US economy. The number was surprisingly low. About 2% IIRC.)
I'm no Vulcan. I have no support for it but I believe thoughts probably start with emotions. It's the "only" bit that I had not really imagined. Even if the "only" means "mostly" or so, it seems insufficiently rational. If our minds don't contain some kind of Senate chamber of sober second thought, constantly elected by a bipartisan (bihemisphere?) feedback loop of rational reflection then how can we really learn from experience (and not just our own)?
One of the side trips I took after learning about Peak Oil was to study the human brain.
The idea that there will be blood and PO was a "no brainer" for me.
What shocked me was the reaction of friends and family.
Their eyes glazed over.
Why?
I wanted to know why.
So I started picking up books on neuroscience.
I am in no way yet a brain surgeon.
However, this much I did learn: we are not who and what we think we are. The brain is primed for delusional thinking. It has many thoughts that scientifically have been proven to be wrong and yet those thoughts persist. You'll probably want an example. Take "me" as an example. We each say "I" and "me" and believe the referred to mini-me is in charge of the whole brain and body system. That turns out to be a delusion. "You" are not you. Something else and more powerful is in control. "You" just don't stay aware of the in-control "it" and keep fooling yourself into believing "you" are in charge. It's bizarre but there are numerous scientific experiments that prove it. That's just the tip of the iceberg.
Is this like self-1 and self-2 in Timothy Gallwey's Inner Game of Tennis?
Can you provide links to some introductory reading?
A book that details some of this is The Naked Brain by Dr. R(?) sorry forgot author's name
Also, for a very crude grasp of the issues, google "triune brain" which theory is wrong but nonetheless gives a crude idea of some of the issues as seen from pt. of view of evolutionary neuroscince
I posted elsewhere about Helen Caldicott's inability to recognize the merits of nuclear fission. I remember her talking about men who had reptilian forebrains or something and were therefore no good at recognizing the perils of nuclear fission because of some reason like all they wanted was power. I'm guessing she may have been influenced by triune brain theory (and may have gotten it as wrong as her grasp of nuclear physics).
Edit: Not to fall into the trap of caring what people think as opposed to objecting to what they do, the other group of people I can't really understand is the predatory rich. Is it really rational to continually attempt to reduce the standard of living of the middle class? Sometimes they do seem like reptiles, although of course that probably just demeans reptiles.
The battle there is between people who supposedly have "limbic" dominated brains versus those that have "reptile" dominated brains.
But as I forewarned, the triune approach to understanding the brain, while valid at some crude level, takes one down the wrong road to understanding what is ultimately going on.
From a neuroscience point of view, Plato was sort of right.
The true Universe exists outside of our individual brains.
However, as individuals, we each generate internal models inside out brains based on the sights, sounds, smells, etc. that are projected like vague shadows into our individual brains.
We interact with the outside world based on our internal models.
Everyone has a different set of "models" inside their brain. --Welcome to the Tower of Babel.
Some choose to model the external world predominantly from an "economic" point of view.
Some, from a religious POV.
Some, from a scientific POV.
And so on.
_________
I don't know if "choose" is a proper word to use because how much choice did you have when you were born as to what culture you would be exposed to?
Most of my understanding of philosophy comes from reading Zen and the art of motorcycle maintenance. Hume thought (I think) we are a blank slate - nothing without experience; Kant thought we had a priori tendencies - so HAL, if he's Kantian, would dream.
With that said, your attempt to understand Helen Caldicott and why she thinks the way she does (about the safety of nuclear energy, or whatever) is an example of you trying to model another person. What could possibly be going on inside her head? Why does she behave as she does? Don't feel out of place with this, we all try to create models in our heads of how other people operate.
(Right now, I'm thinking you look and act like Spike Lee but I have no idea why that crazy notion entered my head.)
So anyway, the neuroscience book I was thinking about was this one: The Naked Brain
If you do get it, look up the part about mimicry neurons.
I know Spike Lee makes movies but I don't know anything else about him.
I was actually attempting to criticize what Helen Caldicott said, not what she thought. Initially I did not include the bit about possible delusion in my post but then I edited it in later in an attempt to demonstrate my ability to be fair.
If you have seen my relatively few posts before on this board, I am very pro-nuke, and further I am really dismayed by doomerism. I think there is a political reason to be doomerish, since there is some mindset going on that I don't understand, but not technically. Technically I think we have (and have had for some number of decades at least post WWII) the knowledge of how - really how, not just some lab idea but including how in the real world - to make this world sustainable. When JHK &c make their pronouncements that we must step down, I am torn - yes perhaps that will happen due to political (triune?) reasons I can't fathom, but it shouldn't, because we know how to make it better.
Whoops. My bad. My brain somehow converted Passenger 66 into Passenger 57 and Snipes in Lee. Sorry.
Shows you how the brain can play tricks on itself.
Yeah, I saw your little exchange with Sailorman
The bottom line is that Caldicott has her model of the world, where in her model the tiniest amount of isotope in cow milk automatically leads to destruction of the human race (AWKI -as we knew it).
And then you have your model where you may say, come on, man up; what's a teeny tiny one radioactive atom inside the huge body of a karate fighting hero man going to do? It's too small to do anything!
Who is right?
I don't know.
My model says you each have a finite possibility of being right.
The world is full of uncertainties.
I don't know about you; but I wouldn't want a nuke plant in my back yard (NIMBY) or even 100 miles up wind of where I live.
The more you know about certain technologies, the less "magical" they become and the more problematic they become.
If nuke was such a wonderful, solves-all-our-problems thing then the power utilities would have been pounding Congress with lobbying efforts to kill the NRC and to let a 1000 nuke plants blossom here in the good ole' USA. But the too-cheap-to-meter thing never panned out --for a host of complex reasons.
I can only refer you to various blogs, inhabited by people smarter than me.
bravenewclimate
nucleargreen
and this letter from James Hansen
http://www.columbia.edu/~jeh1/mailings/2008/20081121_Obama.pdf
On the energy side of things, we know how to fix it.
It's only the biodiversity side of things that I don't know exactly how to fix. And just because I don't know that doesn't mean that someone doesn't know.
Hey, we all have much to learn
... and many miles to walk before we sleep :-)
Used to go twice a year to Wisconsin. Once for the Birkie and once for the Fat Tire festival. Thank you Gov. Lucey.
"Lucey also recommended additional funding for tourism, which spurred development throughout the state. Two examples were the expansion of the Wisconsin Department of Natural Resources park system and the Mt. Telemark Resort in Cable, Wisconsin. Since 1974, Cable and Mt. Telemark hosts the American Birkebeiner each year, the largest cross-country ski race in North America."
So that is how "he would run the industry out of the state". What a devilish plan.
Hope you feel better, PV, having gotten all of that off of your chest. Maybe you should go join the feeding frenzy; bring your plastic.
My comment about shoppers using cash was geared toward the mindset of the shopping public; where they see the economy going, not how to fix it. Since I don't think it can be fixed, advice on dealing with it may be more useful.
I'd say that just going and taking away the blankey of the EPA would not bode well for the US.
Just a few miles to the east of here there is a swampland, watershed area, without the EPA we'd be just a few voices locally trying to stave off building on that land. Then again who needs another store selling more things none of us wants to buy.
I know you were railing against the nimbys that won't let you scour the earth for energy sources, but some places just should be left to hang on a few more years as nature preserves.
Mankind has always gone about killing other creatures, and itself to get a better place to live on the other side of the fence, as it looks great and green over there. We have likely killed off thousands of species all on our own.
But just killing them willy nilly with what we know now, that we do not know about how these plants and animals could help us, is a crime. Just because we might not now life in a totally wild world, does not allow us to mow down the rest of the planet and say we are due it because we don't want to conserve or do with less energy.
Are you willing to bet your future or the future of your childern's childern that your actions won't be seen as a crime for all ages, against them?
Here I am trying hard to do away with monoculture grass yards and I have to fight people that should know better too.
Charles,
BioWebScape Designs for a better fed and housed world, without destroying the rest of the world to do it.
PVguy, you have a lot of good things to say. I'd drop derrogatory terms like Obama-messiah, as that turns off the very people who would most benefit from your observations. It is certainly true that as a nation we have tied ourselves up in paperwork, which leads to a lot of makework and planning delay in the creation of new infrastructure. This does need to be addressed. I don't think moratoriums on EIS etc. are the way to go -and there would be a serious politcal backlash from some quarters if this was rammed through. Trying to get regulation and documentation right is not an easy thing. But it is an issue that needs a lot of thought about the tradeoffs.
Hey peakers, I haven't had time to visit lately. What is the current thinking on the timing of the next economic step down? I see here that the U.S. is trying to go back to normal consumption mode. The Euro-Zone is worried about too much dept, and the Euro is now loosing ground on the dollar. China is chugging along. All of these factors seam to be playing out in a way that contains the oil price in the $80s. Is anything going to change this equation in 2011?
You may want to check out Steve from Virginia's last couple of posts, if only just for fun:
http://www.theoildrum.com/node/7138#comment-746649
and:
http://www.theoildrum.com/node/7134/746441
I don’t speak for anyone but myself, especially since there is still some major disagreement here at TOD as to mostly how fast and when the world economy will decline after PO. There doesn’t seem to be much disagreement that the world economy is headed lower eventually, and most all humans will experience a lower standard of consumer goods based living.
But broadly speaking in my view, world oil production (including all liquids) is still holding up, and may continue to do so into early 2011. The problem after that is that it appears world oil demand will overtake world oil supply, which will slowly run down available inventories, and lead to higher oil prices. When we actually see those higher prices, it will slow down economic growth in the US. On the other hand, the rate of growth in China and India can overcome some degree of oil price increases without much economic effect.
Austerity measures in Europe, in general, will slow economic growth there, but not enough to slow down the world economy significantly.
The biggest coming “black swan” or “wild card” is a future panic out of the US dollar – but I don’t know if that will be in a few months or a few years. When that occurs, the world economy will move yet another notch lower for a while. It still may even recover after that, if we are not on the downslope of the oil supply curve by then.
One comment as far as oil production goes storage has played a huge role in 2008-2010. Not production. From slow steaming tankers to offshore storage to a massive expansion of onshore storage. China SPR, expansion of storage at Cushing etc.
Next at the very least it seems obvious that the worlds governments are sensitive to the effects of high oil prices on the economy.
What this sensitivity means is open to interpretation. However given the moves of the Fed and others regarding monetary policy what might be happening in regards to commodities and esp oil could be practically anything. From nothing to a full range of tin foil hat conspiracy theories. Given the price spike in 2008 I tend to doubt that nothing is being done about oil. Indeed at the very least we have OPEC claims of substantial spare capacity and support for a price band that seems to steadily go higher. There has to be some politics involved in the acceptance of at least the illusion of a price band maintained by OPEC.
Given we basically know nothing about whats really going on except to accept OPEC claims at face value since it seems fairly obvious that the price band claims are born out in real world oil prices what else can you do ?
This is important because eventually whatever is happening in oil surely bleeds through to general monetary policy. OPEC as a central part of the world economy is going to suffer if it starts unraveling. They may well see high oil prices in fiat currencies but then how much will these currencies be worth in the future ? Indeed given economic policy today how far out is the future ?
I'd argue if the world was awash in fairly cheap oil as claimed that it could readily be leveraged to provide real growth and thence monetary inflation. Cheap oil has fueled the global economy for decades. No real reason why medium priced oil in ample supply could not literally act as the fuel to cause inflationary growth.
My point is fairly simple look at whats not happening then question what is happening. Given the latent demand in China and India and indeed the whole world for oil. OPEC has no worries about markets the would would happily consume every barrel shipped. At first perhaps some relatively low prices would be needed to get demand growing robustly again but there after the impact of rising oil prices should be manageable. The world economy readily handled a fairly fast move in prices from 2003-2008. Certainly a slower paced move in prices could be handled better. The potential demand is there OPEC could make its market and within reason manage price expectations.
As a return to inflation occurred the financial markets would calm and we would be looking at decades of growth.
Thats not happening and what is happening is opaque esp for oil how this is related to whats going on in the financial world is unknown.
My opinion is oil and money are tightly intertwined you can't treat them as separate entities. If so then the fact that what exactly is going on with oil is somewhat hidden is not nearly as big and issue as it seems. You don't have to know the details watching financials is sufficient to extrapolate a reasonable model of oil supply.
And finally as far as I can tell it seems obvious that our financial system is no longer functional I'd argue that our oil supply can't be in much better shape the interesting question is of you buy this then what is wrong with our oil supply ?
So in the end I think all the evidence points towards something being wrong what exactly is hard to determine but I'd say the preponderance of the evidence points towards issues. Simply assuming oil is readily available at a price sufficient to ensure growth
is enough to point out there seems to be a problem.
Thus the first step is to at least recognize that something is wrong. I think you do but its important to back up a bit and look at whats happening. Heck just consider if we where setting around discussing this issue in 2002 and I predicted the events that unfolded you would say I was insane and the oil supply had peaked.
Indeed if I told you in 2002 that OPEC would in 2010-2011 withhold millions of barrels of supply to protect a price range of 80-90 dollar oil you would have been calling the insane asylum to have me committed. If I added QE1-QE2 etc on top then you would have simply run out of fear for your own life.
Yet many people buy this argument ?
Broadly speaking, OPEC exports have increased slightly in 2010 over 2009 (see below), although it’s very hard to tell the amount of storage OPEC has and how it is used.
http://www.bloomberg.com/news/2010-11-25/opec-to-raise-exports-0-7-on-wi...
The fact that major Mideast OPEC exporters have had fairly even exports month-by-month this year can mean one or two things: they had existing domestic storage before 2010 to even out exports or their current output is sufficient for current exports. OPEC’s land based storage is not a subject that appears to be discussed much, if at all outside of TOD, well even here – what do we really know about whether OPEC has oil in storage or not?
If it were not for a significant previous withdrawal of floating oil storage of maybe roughly 50 million barrels that came into the US during 2010, mostly in the Spring and summer, the oil supply situation in the US may have been viewed markedly different by now. Since floating storage is now relatively low, something like that is unlikely to occur in 2011, based upon recent shipping reports.
So unless world economic growth falters soon, what I saying is that OPEC will have to show us its cards in 2011, and if it really has any unused capacity or domestic storage, because the world is planning on using more oil in 2011 than in 2010.
In these circumstances, even predicting what will happen one year from now is difficult.
As far as I know quite a bit of OPEC's export numbers are derived from OilMovements data.
This data is not peer reviewed. We have this magic void of general Asian imports and China and particular. My point is there simply is no way to even resolve tracking data. At least from general public information. Not a problem I guess unless your interested in verifying the data.
Heck simply getting the total DWT of the existing active tanker fleet is difficult.
The problem is the scrapping and conversion rate. Its hard to know when a tanker is taken off the market. Important obviously because of the rapid conversion to double hull tankers on most routes. You also need to factor in slow steaming.
My point is simply determining the actual tanker shipping capacity is very difficult.
Case in point consider the sharp increase in the early 2000's. Its not clear to me we even had the tanker fleet to actually ship and almost 10mbd increase in oil production.
I've found no way to get a consistent set of data assuming all supposedly reliable sources are indeed reliable. And to be clear that does not mean that the data is necessarily false simply it does not seem self consistent to me. In some cases the inconsistencies are obvious enough that they are addressed publicly. But the model if you will that comes out of collating public data over the last several years is simply bizarre. The official story line if you will changes repeatedly.
So be careful in betting on anything that has to do with OPEC export claims unless you can verify those ships are actually showing up to your own satisfaction. I have been unable to find enough consistent data to even decide if I can trust OPEC export claims in general much less the value.
And just to close in general as far as I can tell enough data is missing that you cannot create a self consistent set of "facts" without making some fairly large unprovable assumptions. Regardless of the nature of the assumptions. The ones I make that I feel are self consistent are startling and worse I find it difficult to come up with any model that fits public data.
In other words, we probably reached peak-reliable-data some time ago (at least as far as OPEC goes, and probably for much other oil data).
Good points. I haven't seen what would called a formal study of OM data to see if their reported exports show up as imports somewhere else, but as far as the US goes, it is very hard to match up OM information with US imports. Possible there are good explanations for this - bad weather, slow steaming, maybe even threats of pirates. In sum, no one is bothering to confirm the OPEC export information - if so, why are we not talking about it here?
BOYCOTT CHINA!
The trade deficit with China is at an all time high!
http://www.census.gov/foreign-trade/balance/c5700.html#2010
I'm sure Europe is doing no better.
As far as I can see nobody in North America will go without energy or food.
I'm happy to see a radical devaluation of the dollar.
But a nice trade war would be okay too.
GO BEN!!!!!!!!!!!!!
(QE@,3,4...)
Voters hammer Irish government
The Euro needs to be put down with a lethal injection as does the IMF.I hope the Irish,instead of emigrating,have the cojones to do the deed.
Notice how the myopic and corporate media frame the issues: "nightmare scenario" of Euro zone breakup.
Nightmare for whom exactly? Big bankers? Brussels bureaucrats?
The euro is 10 years old for pete's sake! I don't exactly recall the European masses starving in 1998. Going back to national currencies would be a boon for most of the people of Europe.
The real nightmare scenario, and endgame, remains dissolution of the U.S. I still think it's a long ways off, but it's unmentionable as far as the media goes.
There is no clean way to go back. In technical terms we would say the system has significant hysteresis, and trying to retrace the path that got you where you are today cannot take you back to the starting point. The chaos of the transition is the "nightmare scenario".
If this is true, it's totally ridiculous. How can one's economic situation change one's ability to think rationally. Have we really evolved this way?
I think we have. We have a strong tendency to believe what we want to believe. And if we're worried about the economy, we're less open to ideas that might lead to increased prices or lost jobs. After all, someone who is willing to poison the earth for future generations - their own children - just to keep their job and their lifestyle is evil. Much easier to think we're not really doing any harm.
I fear the same might be true of peak oil. People who are struggling aren't going to want to hear that it's geology that's making oil expensive, not environmentalists or greedy oil companies.
Leanan
Out of curiousity, why did my comment disappear? Is it not allowed to have "canard" and "climate change" in the same sentence? I'm agnostic about climate change but I'd like to think it's an open topic. Just wondering.
I'll answer this time, but next time, please contact me privately with questions like this.
I removed the thread because it was getting tedious and ugly, generating heat, not light.
I don't think we can ban all discussion of climate change, because it's so intimately entwined with energy policy. However, this isn't the place for arguments about whether climate change is happening and if it's caused by humans. Let RealClimate handle that.
What I find interesting and relevant about climate change:
1) Policy: climate change is really the only way to talk about energy policy these days
2) Effects: Climate change may have big impacts on how we adapt to peak oil. What will happen and where is definitely relevant.
3) Similarities to peak oil: If peak oil ever becomes as accepted as climate change, peak oilers can expect to get the same treatment from the BAU crowd, so it's worth paying attention.
Leanan; your open response is appreciated in that it helps some of us refine our understanding of new limits while commenting on TOD. I too find frequent tit-for-tat threads tedious; when I find the tone of a post/thread objectionable, the best response is to not respond.
BTW, any word on Nates big announcemnt?
I don't know what's become of Nate. He was traveling, so maybe he got unexpectedly delayed or something.
Thanks. I agree with your assessment.
RealClimate can't come close to handling the analysis of CO2 forcing function due to man-made emissions. It will be a long time before they figure out how the fossil fuel production arc intersects with rising CO2 levels.
http://mobjectivist.blogspot.com/2010/04/fat-tail-in-co2-persistence.html
http://mobjectivist.blogspot.com/2010/05/how-shock-model-analysis-relate...
I don't expect them to do this kind of analysis anytime soon.
Web,
As usual, I agree with you. But is the implication that TOD should still include major discussion of anthropogenic climate change?
I think not. A narrower focus is highly desirable for TOD.
Who estimates the CO2 emissions in the future? This is clearly something that needs to be continually addressed.
All those people knowledgeable about the subject who also think that we haven't reached a tipping point will agree with me on this one.
If in fact the world's conventional oil production has peaked, then the discussion about energy supply must turn to the alternatives. Central to that discussion must be a consideration of the impacts of the various alternatives in an effort to pick the best long term options. Anthropogenic climate change is likely to be a major long term result of some of those options, particularly coal, and thus must be considered in the deliberation.
One reason that our previous experience with the toxic emissions of automobiles is that these weren't thought to be a major problem or were ignored when the choice was made to develop cities based on the automobile. As a result, we've had more than 50 years of problems with air pollution, which then required considerable effort to mitigate. The impacts of AGW are likely to be much more widespread and less apparent to individual humans, thus much more difficult to address. I hope TOD will continue to include discussion of AGW, since we know that there are many people whose perspective is strictly their own profit and the rest of the world be damned. If mankind causes the climate to shift into a different state, such as a return to Ice Age conditions, all humanity will suffer the consequences...
E. Swanson
Sounds like a good policy to me. RealClimate does the same to the Nuclear issue, they've banned it as off topic because it generates lots of heat and little light. I would submit, that climate change, should be discussable, but only on certain designated days. That way we can still air the issues, but not be distracted by them for the other six days of the week (or whatever the interval is).
I am not surprised that people think this way since it has always been this way and probably always will be until climate change obviously and directly affects people's livelihoods. Even then, there will be a period of denial. The interesting question for me, however, is why certain people, including many on this site, are able to objectively analyze climate change even though they may not necessarily be in great economic circumstances.
For me personally, my view of the situation could be an accident of my history, a function of what I was exposed to in my college years 40 years ago. The irony is that my first exposure to global warming theory was in an economics course.
Yes we have really evolved to think this way.
I apologize for the long quote but I think that completely sums it up. So now you know why no one wants to listen to you when you try to tell them about peak oil, or especially when you try to tell them about the consequences of peak oil.
Ron P.
There's also the appalling flaw in human perception called "inattentional blindess," where people literally do not see something that is plainly there, but which they are not expecting to see.
A whole book was written about it, The Invisible Gorilla.
The conscious mind can only pay attention to one thing at a time. It can cut back and forth between Things in a spilt second, but it only does one thing at a time. It's how we are wired. The more we focus, the less open we are to distraction.
Perhaps better results if they'd used backcountry woodsmen rather than Harvard undergrads as test subjects?
Maybe it is rational. To know for sure, one would need time and information to go deeply into the study and figure out exactly what loaded questions they asked of whom, how they asked them, and what surprises occurred as that played out.
One issue might be what constitutes "acceptance", i.e. what price is one willing to pay now for an abstract benefit that might or might not be received in the far future. If everyone is feeling flush and prosperous, they might also feel able to afford a higher price.* But if food for tonight's dinner, or having a place to live past the end of the month, is at issue, then that trumps remote, abstract concerns - and well it should, since one must first survive the here and now, in order ever to get to the future.
By the way, another big issue with willingness to pay is that people may tell pollsters and professors that they're willing to pay a lot more than, in fact, they really are, in order to feel good about themselves. So one really ought not to be shocked when actions in the real world fall well short of what seemed politically possible according to polls and studies.
* and as I've said before, if the nature of the price is structured to enable them to feel that they are thumping cost-free upon evil, wicked "corporations", rather than thumping upon themselves, so much the better. They may well be vehemently unwilling to leave the car at home and ride the bicycle somewhere - but OK with allowing government regulators to make the car so complicated and expensive that they are priced out of it and onto the very same bicycle, so long as the regulatory process makes satisfactory thumping noises while concealing itself as the source of the ruinous expense.
People do get it; well at least one ski bum a.k.a. dirtbag.
My local coffee shops carries Bomb Snow Magazine which has an article on skiing and Peak Oil in their latest issue. Peak Oil was the center issue of the article!!
This is an example of people in the least expected circle knowing a great deal more than say a NY Times columnist.
Interesting. Is it up at their web site yet?
I think there are lot of younger people out there who saw "The Matrix" at an impressionable age, followed by the Dot Com Crash, the Iraq War and now the Housing Bubble Crash and Great Recession. From my interactions with folks in their 20's and 30's, I think a lot of them know that "Business As Usual" is a sham and they don't have any particular expectations about its continuation.
This is in their latest issue, which is not available online yet (bombsnow.com), I think.
He goes on, and he is not sanguine about alternatives.
Germany passes law on extending the lifespans of nuclear power plants
http://latimesblogs.latimes.com/technology/2010/11/nasa-green-plane-tech...
"NASA’s goal is to develop technology that would enable future aircraft to burn 50% less fuel than current models, cut harmful emissions in half and shrink the geographic areas affected by obnoxious airport noise by 83%."
This article and others like it look outwardly encouraging to folks outside of the aviation community, but I am somewhat more pessimistic.
A co-worker of mine in the AF (who was at the time a successful private stock market player) quipped 'An airline is the perfect way to make a million dollars...out of a hundred million".
Airlines have been hanging on by their fingernails for decades...we are seeing the inevitable consolidation of the industry...even European governments who have placed great purchase in the prestige of having a national carrier have started to let go and let them die or merge with other nation's airlines.
I have been reading about blended wing/body airliner/air lifters for over twenty years, with the attendant ultra-high-bypass turbo-fans, open-rotor engines, super-light almost all-composite structures and bodies, etc.
The reality is, has been, and will be that airlines are airline manufacturers are very conservative in adopting new material and designs...the more radical, the more leery they are.
Progress has been, and will be, incremental, not revolutionary.
The current crop of 737-700/800/900s, 777s, and the up-coming 787s, as well as the current and near-future Airbus lineups, as well as the up-coming C-series from Bombardier and the Embraer counterparts will be flying for decades to come.
Airliners are very expensive and the airlines will fly the heck out of the ones they buy before considering new ones, and the new ones had better offer a significant improvement over the ones they have.
Boeing and Airbus have pushed back in-service dates for their narrow-body replacements (A320/737) until at least the early 2020s...by then the oil supply situation might make it painfully obvious that revolutionary improvements will be needed...but the inevitable sharp contraction in air travel by then will make it very difficult to finance new, radically more efficient airliners...a death spiral in airline passenger volume will likely result.
Hopefully we will see more trains in our future for in-country transportation.
The World, for most, will become rounder and larger (I'm quoting some other person here...good come-back to Thomas Friedman)
Around 1948, the WEEKLY READER had a photo of a flying wing and commentary saying or implying that these flying wings would dominate aviation within about ten years.
Getting timing right is the hardest thing to do in making predictions.
While reading in the NYTimes I came across this article, and thinking about what we talked about recently in a campfire about being a billionaire, linked to this article.
Not all of us would likely become billionaires but some of us could be this guy, having a business sold, of which he is part of, getting a nice nest egg. What would we do with the new found wealth.
Back in 1998 I don't think I'd ahve ended up much different than this guy, I was married at the time to a lady who knew how to spend money fast, faster than I could make it. But now, I can see good uses for the money, and might be able to hold on to a lot more of it over time.
You'll notice that the Martins didn't spend any of the money on others, besides family, nor did they really think to far in advance about where they'd be in 10 years. But now they are back to being almost poor. easy come easy go.
Lest I think that I couldn't do it the same way, I know that if I had a lot of money it'd have to be kept away from me, for a while, so I'd not spend a lot of it. I wonder how many people of the Dot Com years still have their millions?
http://www.nytimes.com/2010/11/26/business/26fall.html?pagewanted=1
Charles,
BioWebScape Designs for a better fed and housed world,
Hopefully I could save some for my own non-profit.
From time to time I read an article about lottery winners, and a shocking percentage go bankrupt with a few years. Of course I suspect lottery winners are somewhat selfselected -i.e. they predonimnately come from people that buy lots of lottery tickets. But I suspect that human nature means that this result is pretty common.
A surprising many acquire wealth. Few keep it through three generations. Indeed, relatively few keep newfound wealth within their own lifetimes.
Now I imagine those who borrowed money to get in to the dotcom boom are now borrowing even more money to buy silver. They will be sorry, once again. Speculative markets fueled by borrowed money invariably crash.
In the book, "The Time Machine" (and movie), the human race divides into clearly distinguishable predator and prey sub-species.
In real life, the prey are those who have money and the predators camouflage themselves as your "friends".
A rich man with many friends is soon poor and without any.