Drumbeat: December 11, 2010

Looking east: The Saudis are hedging their bets

CHINA, the world’s second-largest consumer of oil, is poised to buy more Saudi oil than the United States does. Last year it actually did so, though this year’s figures suggest that the Americans may again be level-pegging as the biggest buyer. In the next two years, however, China looks set to become consistently the Saudis’ key customer. Moreover, the Saudis are also now buying more Chinese goods—mostly food, textiles, hardware and heavy industrial stuff—than American ones.

Since he came to the throne in 2005, King Abdullah has adopted a pro-Asian, “look east” trade policy. More than half of Saudi oil now goes to Asia, against around 14%, at the latest count, to the United States. Saudi Aramco, the world’s largest oil company, owns a refinery in Qingdao province and has another, in Fujian, as a joint venture with Sinopec, a Chinese petroleum giant, and ExxonMobil, an American one. Meanwhile, Chinese firms have begun to invest in infrastructure and industry in Saudi Arabia, including in an aluminium smelter in the southern province of Jizan, at a cost of $3 billion. Saudi Arabia now sends students on scholarships to Chinese universities, and some rich Saudis, more used to shopping for Gucci in New York or London, are heading to once-obscure Chinese cities to buy furniture.

Japan, Russia set to tie up on gas plant

Japan and Russia are close to signing an agreement on building a joint liquefied natural gas plant in Vladivostok on the Japan Sea, The Yomiuri Shimbun has learned.

The plant would begin operation in 2017, and produce more than 5 million tons of liquefied natural gas (LNG) a year, informed sources said Friday. The Vladivostok project will allow Japan to procure a significant amount of LNG from Russia's eastern Siberia region, thereby helping stabilize Japan's energy supply, the sources said.

Saudi Oil Minister Al-Naimi Says $70-$80 a Barrel Is a `Good' Oil Price

Saudi Arabian Oil Minister Ali al- Naimi told reporters that $70 to $80 a barrel is a good price for oil. He spoke before ministers from the Organization of Petroleum Exporting Countries began a closed-door meeting in Quito, Ecuador, to decide on OPEC policy and production quotas.

Venezuela Oil Min: OPEC Unlikely To Change Output In '11

QUITO -(Dow Jones)- OPEC is unlikely to change its production ceiling in 2011 even though the price of oil could rise, Venezuela Oil Minister Rafael Ramirez said Saturday.

Angola Oil Min: Oil Markets To Dictate OPEC Output In 2011

QUITO -(Dow Jones)- Any future decision to change OPEC's crude output quotas will depend on global oil market behavior, Angola's oil minister said.

"We cannot change our decision" unless oil markets demand it, said Jose Maria Botelho de Vasconcelos. The Organization of Petroleum Exporting Countries on Saturday kept its oil output ceiling at 24.85 million barrels a day, a level that hasn't changed since late 2008.

Libya Oil Head: Preferred Oil Price $100 A Barrel

QUITO -(Dow Jones)- Libya's top oil official said Saturday that $100 a barrel is a "good price" for oil.

Shokri Ghanem also joined the chorus of ministers going into Saturday's OPEC meeting, saying the group won't change its current self-imposed limits on crude-oil output.

Iran Oil Minister Complains Of Gas Glut, Low LNG Price

QUITO -(Dow Jones)- Iran's oil minister said Saturday he was concerned about oversupply in the global natural gas market, after producers last week warned it could hurt project investments.

Earlier this year, Iran froze the development of several liquefied-natural-gas export schemes in a move seen as result of international sanctions and depressed gas markets.

Another fuel price hike looms

MANILA, Philippines - The public will have to brace for higher fuel prices next week, according to the Department of Energy (DOE).

DOE Undersecretary Jay Layug said oil prices are expected to go up given the higher demand for petroleum in the international market.

Slow Pace Of Coalition Talks Sparks Kyrgyz Crisis Fears

As some in Kyrgyzstan are pointing out, there are important issues that require the attention of a government. The annual winter energy crisis is starting, the food situation this year is tenuous since fires caused Kyrgyzstan's main grain suppliers -- Kazakhstan and Russia -- to cut back on exports this year, and the country has no budget for 2011.

End of consumerism

A change is about to be forced on society because energy consumption pretty much is the economy. And we are about to run short of the cheap energy which has been driving the past century of unchecked economic expansion.

There is this myth going round, says Krumdieck, that with every decade we have grown wealthier because we have collectively become smarter and more productive. If everything is bigger, better, brighter, well, it has been earned.

Yet actually we have just been digging up and burning more fossil fuel. Graph the world's energy consumption against its gross domestic product (GDP) and the two lines track. So get down to the nitty gritty and this is what it has all been about. Converting oil or coal into shoes, hamburgers, cellphones and SUVs.

However, a reckoning is coming. The ecological limits on growth have come into view. Climate change and over- population. But peak oil most immediately.

Gauging how much oil there is (review of When Oil Peaked)

In 2001, building on the geologist M. King Hubbert's prediction that U.S. oil production would peak between 1965 and 1970, Kenneth S. Deffeyes, emeritus professor of geology at Princeton University, predicted in his book "Hubbert's Peak" that world oil production would peak in 2005.

"I've been a Hubbertian since the late 1950s," Mr. Deffeyes writes. "I'm a geologist, with no professional expertise in economics or politics." As a Hubbertian, or "peak oil" person, he numbers himself among "those who think that we have already found most of the world's oil."

Oil rises to near $89 ahead of OPEC meeting

SINGAPORE – Oil prices rose to near $89 a barrel Friday in Asia as traders looked to this weekend's OPEC meeting for any changes to the cartel's crude production policy.

OPEC set for no change despite $90 oil

QUITO - OPEC will not raise oil supplies at a meeting on Saturday, Saudi Oil Minister Ali al-Naimi said, leaving traders to ask what price the group requires to open the taps and prevent fuel inflation hurting global economic recovery.

“Absolutely not,” Naimi told reporters when asked if the Organization of the Petroleum Exporting Countries needed to raise production.

Oil prices are just short of the top end of the $70-$90 a barrel range flagged recently by Naimi as the level consumer nations can cope with, but concern about the potential damage of rising fuel costs on a convalescent world economy is mounting.

Iran sees no increase in OPEC quotas

(Reuters) - The Organisation of the Petroleum Exporting Countries will not increase quotas at a meeting on Saturday in Quito, Iran's oil minister said, a view that chimed with other ministers gathering in the Ecuadorian capital.

"According to the market situation and the economic recession ... and according to the amount of reserves, despite the beginning of the cold season, the prediction is that there will be no change in the quotas and there will be no increase in production," Massoud Mirkazemi told Iranian state TV.

OPEC has No Reason to Change Crude Oil Quotas, Angola's Oil Minister Says

There is no reason for the Organization of Petroleum Exporting Countries to change quotas at a meeting in Ecuador tomorrow, Angola’s oil minister said.

“There is no reason to change production,” Angolan Oil Minister Jose Maria Botelho de Vasconcelos said in Quito, where OPEC ministers will gather. “The situation is stable right now,” and oil at $90 a barrel makes up for a weak dollar.

Berman's Call (video)

BNN speaks to Arthur Berman, Independent Petroleum Geologist and Contributor to The Oil Drum.

Power Output in China Gains at Slowest in 16 Months on Curbs to Industry

China’s electricity output grew at the slowest pace in 16 months in November as the government made last-minute efforts to meet energy saving targets slated to be completed this year.

E.P.A. May Enforce Rules as Suit Proceeds, Court Rules

The United States Circuit Court of Appeals for the District of Columbia on Friday denied an appeal by industry groups to block the Environmental Protection Agency from imposing greenhouse gas regulations early next year.

Inquiry Into Former Interior Secretary Ends

The Justice Department has closed an ethics inquiry into former Interior Secretary Gale Norton, who was accused of using her position to steer lucrative oil leases to Royal Dutch Shell, where she now works.

A power shift for consumers

The reputation of the California Public Utilities Commission badly needs repair. Many residents worry it's too lax when it comes to safety, energy company policies and consumer issues. Just ask the burned-out residents of San Bruno, where a Pacific Gas and Electric pipeline explosion killed nine and destroyed 36 homes in September.

Calif. panel approves 30-year Chevron lease for marine tanker terminal off Los Angeles County

SAN DIEGO (AP) — A state panel on Friday approved Chevron Corp.'s request for a 30-year renewal of its lease for a marine terminal off the Los Angeles County coast where tankers deliver oil by undersea pipes to a refinery on shore.

The 2-1 vote by the California State Lands Commission came despite the objections of environmentalists worried about oil spills and the threat of whales being struck by tankers entering Santa Monica Bay to reach the terminal off the city of El Segundo. Some urged a shorter lease of 10 years.

30 accused of oil spill damage fraud

NEW ORLEANS — Federal authorities say 30 people have now been indicted for allegedly filing fraudulent damage claims for money following the BP oil spill in the Gulf of Mexico.

BP claims fund to offer additional payment

OCEAN SPRINGS, Miss. -- The administrator of the $20 billion BP PLC fund doling out money to Gulf oil spill victims says the program will be offering claimants an additional payment.

U of M's Smil a top global thinker

A Winnipeg author has made the list of Top 100 Global Thinkers in a U.S. highbrow public affairs journal.

Foreign Policy places University of Manitoba scientist Vaclav Smil at No. 49 among those who shape world opinion.

Smil "has led a 30-year career of interdisciplinary contrarianism, writing hundreds of scientific articles and dozens of books attacking sacred cows of Western environmental and geopolitical thought," the magazine said.

"This year alone, he published four books and took on carbon sequestration and peak oil."

Architecture students' term project a first for Vancouver

If you want to know how your neighbourhood can change as your lifestyle needs change, you can find it in this plan. If you want to know how Vancouver can accommodate a growing aging population with an adequate and diverse supply of affordable housing, you'll find it in this plan. If you want to now how we can move about a more heavily populated city when peak oil pushes energy prices to new highs, you'll find it in this plan.

Why Do We Live Where We Do?

I started off my first post explaining how I decided I wanted to live in the city, and several of the comments make points about why urban living might or might not be such a good idea. (Short answer: it depends how soon you expect Peak Oil to completely upend the current reality.) We're all working from the assumption that we can choose where we want to live. But it hasn't always been so easy to choose where to live, and for millions of people the idea of moving to a better place is a dream they might never achieve.

In the developing world, many rural residents migrate to the city because they figure it's their only shot at rising above poverty. It might take years to save up for the move, but it's an investment millions of people are willing to make. China actually has a system, known as hukou, that requires permits for urban residency, so many of the rural migrants who arrive in cities without official permission have a status not unlike that of undocumented immigrants.

Player One: What Is to Become of Us

Where will you be when the apocalypse drops? For the anguished strangers in this novel by the author of “Generation X,” the answer is the cocktail lounge of an airport hotel in Toronto. Karen, a lovelorn divorced mother, is here to meet a man from her online discussion group about peak oil. Rick, the bartender, is a recovering alcoholic who intends to give his life savings to a self-help guru. Luke, a pastor experiencing a crisis of faith, is on the run after stealing from his church.

Petrobras bids for stake in ethanol firm: report

(Reuters) - Brazilian state oil company Petrobras has made an offer of about 3 billion reais ($1.76 billion) to buy 40 percent of ethanol producer ETH in an effort to become the leading player in the biofuels sector, a newspaper reported on Saturday.

Using Waste, Swedish City Cuts Its Fossil Fuel Use

KRISTIANSTAD, Sweden — When this city vowed a decade ago to wean itself from fossil fuels, it was a lofty aspiration, like zero deaths from traffic accidents or the elimination of childhood obesity.

But Kristianstad has already crossed a crucial threshold: the city and surrounding county, with a population of 80,000, essentially use no oil, natural gas or coal to heat homes and businesses, even during the long frigid winters. It is a complete reversal from 20 years ago, when all of their heat came from fossil fuels.

In Cancún, a Roar of Indignation From Bolivia

As the United Nations conference on climate change in Cancún, Mexico, entered its last official day on Friday, one thing was clear: whatever the final outcome, real progress on reining in the emissions responsible for global warming would have to wait for another time.

But even as some diplomats expressed cautious optimism that modest action on small-bore issues like deforestation and emissions verification could be wrung from the negotiations, a bellow of indignation came from the developing world, in the form of remarks at the proceedings by Evo Morales, president of Bolivia.

U.N. climate talks agree on modest package

CANCUN, Mexico (Reuters) – Almost 200 nations agreed on Saturday to modest steps to combat climate change, including a new fund to help poor countries, and put off major disputes until 2011 and beyond.

"This is a new era of international cooperation on climate change," Mexican Foreign Minister Patricia Espinosa told delegates at the end of two weeks of talks after breaking the deadlock between rich and poor countries.

China has just released key indicators for November (electrical generation referenced in a story above) and what jumps out at me is crude oil. China claims November production is now up a whopping 11.8% on November last year. That's roughly an increase of 450,000 barrels per day.

Yes, that's about what it works out to be. This article, China Nov oil output at record; power, steel tick up, says that China's November oil production was 4.26 million barrels per day. That is, I think, all liquids.

At 17.52 million tonnes, crude oil production was slightly lower than October's 17.76 million tonnes, but 2 percent up based on a daily average. November's output was also 11.8 percent up from the same month of 2009.

In November they actually produced slightly less than in October, but more on a daily average because November has one fewer days.

China oil production has been on a real tear lately. But according to the EIA's Short Term Energy Outlook, Table 3b China will produce an average of 4.19 million barrels per day this year and an average of 4.16 mb/d next year. In other words the EIA is saying that China is at her peak right now. Or actually peaked, according to this EIA's STOE link, at 4.33 mb/d in September of 2010.

Ron P.

Yes, that's about what it works out to be. This article, China Nov oil output at record; power, steel tick up, says that China's November oil production was 4.26 million barrels per day. That is, I think, all liquids.

I'm fairly sure that's just crude (and that's what China says it is). On an All liquids basis I think China must be claiming between 4.4 and 4.5 mb/day (4.02 in Nov 2009 according to EIA). Yes I know the EIA projects all liquids to fall to 4.14 in Q4 but that must be revised if they believe Chinese data. The EIA has August all liquids production at 4.3 mb/day and China has reported considerably increased production since then.

Well, I'm pretty sure it is all liquids. Here is what the EIA says China produced all liquids and crude or actually Crude + Condensate. The EIA only has C+C data thru September. The C+C data is from International Petroleum Monthly and the all liquids data is from Short-Term Energy Outlook. Of course there is a question as to how valid the EIA's data is. Well, I really have no idea but from following all data published on the web for the past six years I would say theirs is just as good as anyone else's.

China All Liquids and Crude + Condensate production, 2010, in millions of barrels per day.

China   Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov
All Lqd	4.16   4.13   4.17   4.15   4.19   4.26   4.21   4.25	4.33   4.13   4.15
Crude   3.968  3.938  3.981  3.961  4.040  4.108  4.056  4.104  4.183

The EIA uses, whenever possible, the data published by the producers themselves. For instance their Mexico data and their Norway data is the exact same figures as published on the two web sites Of Mexico and Norway.

Pemex Petroleum Statistics

Norwegian Petroleum Directorate

Ron P.


In September China reported for "Crude Oil" 1719.2 * 10,000 tonnes. Which works out about 4.2mb/day (depending on exact conversion factor) which pretty much matches the EIA's 4.183 in your post above, By November this has increased by about 2% to 1752 (4.28mb/day). So China claims it has added about 80kb/day since September. So the 4.26 (within conversion error of my calculated 4.28) you quote above is definitely just for Crude. Why the EIA thinks that All Liquids is falling massively in October and November is beyond me as reported crude production continues to rise. In fact reported crude production alone is now higher than the EIA's "All Liquids" Projection for November. Just as strange, the EIA's reported crude production in September, from your table above, is higher than projected "All Liquids" for October and November. I just think the EIA can't keep their models up to date with the ever increasing claimed Chinese production.

Okay, let's just watch it for the next few months. I am betting that China oil production will be down slightly in January and then flat for the rest of 2011. China is non-OPEC third largest producer.

The USA, non-OPEC's second largest producer, will be down but only slightly in 2011.

Russia, non-OPEC's largest producer and the largest producer in the world, will be down considerably in 2011. In fact the drop has already started. Since December 1st, Russian production has fallen every day and is now about 200,000 barrels per day below their post Soviet peak in October and November.

I follow Russian production daily, or five days a week here: Russian Oil Production. They publish their production in tons of crude + condensate per day. But they never publish a summary. So I must track it every day. And beginning the first reporting day in December, the 2nd, they have dropped every day. Rosneft took the big plunge Thursday but every day it has been one of them. Well, that is except Lukoil. They have been in a gradual slow decline all year.

Ron P.

I don't watch Russia at all but it seems like the winters would be a bit harsh up there....do they not normally show a drop during the winter time due to weather related shut in?

The legislation to continue tax cuts, extend unemployment payments and forego 2% of the employment tax also has a provision for extending the ethanol tax break and import tarrifs. Anybody have any detail on this?

From End of consumerism, up top:

And once people get over the initial shock, once they have adjusted to the idea of a future of having to live within our ecological means, they will see how it will all work out in the end, she adds, offering another hopefully reassuring smile.

Ha! A period of "adjustment". A bit of an understatement, IMO. I've been working hard for 15 years to do this, trying to move away from the life of being a net "Consumer". This has been my period of adjustment, and I'm still not fully "adjusted". Not even close.

But "it will all work out in the end". You'll see!

I've lived in the boondocks for close to 40 years. During this time I've seen untold numbers of people come here and leave 5-10 years later because they couldn't "adjust." They couldn't adjust to any number of things ranging from "nothing to do" to the reality that the nearest box store is a 60 mile drive each way to spending 2 hours a day hauling their children to and from the school bus stop to getting snowed in a week or two every year.

To believe that people will "adjust" to a new paradigm and find a better life strikes me as naive. Yes, some will but my guess is that most will be PO'd.


It will all work out in the end, just not the way they think of it. No more getting the latest news of Hollywood, no more buying a TV for every room, no more cell phone for all the kids, even the 8 year olds. No more new gadget of the week, or new video game of the month.

No more toilet paper, no more boxed cereal, no more tv dinners, no more fast food, more on that list than I can think of at this time,but the list goes on and on.

As Todd says, it isn't easy for the folks getting back to the old ways to really get back there, most have a glorified idea of it in their heads, and reality bites when you have to live it day to day.

I went a week without bothering with the news, nothing in my life changed much, maybe the rest of the world was failing, but I was okay.

It is all part of making a living arrangement that combines the knowledge of today, but with the materials of yesteryear, could we preserve knowledge the same way as we'd like, if we had to all learn to write on paper we made from plant matter in the washtub out back? Instead of a computer database, that we might not be able to use when the power finally went out, or the computers froze up due to a power flux, or software problems.

I know a few people that have skills to totally live off the land forever, but they make up less than 5% of the people I know, and maybe less than that of the total population. How many of the other 95% would want to go without a consumer culture? Maybe this just leads to ranting about people who still remain clueless to the issues at hand. Hollywood fooling them into thinking that life will look like a TV show, or reality end of the world shows that have been popping up recently.

How do you flim an end of the world TV show anyway, you have to pre stage it so they have something to do, besides sit around drinking beers watching football. There won't be many people living in 100 years that remembers this comment anyway, back to playing mindless games again I guess.

Angst in December.


"No more toilet paper, ... "
I remember using pages torn out of last years Sears Catalog in the outhouse on the farm of one of my aunts years ago. But the supply of throw away paper will be very limited after the collapse. What do you intend to use as a substitute?

There's a plant called "lambs' ears" that has soft, fuzzy leaves. A big patch of that would make a good start as a local substitute for toilet paper for some parts of the country (I'm in NW Georgia, and my yard already has a moderately sized patch of the plant.)

Also Woolly Mullein...use the leaves for TP, and the stalk for a torch.

Dry Sphagnum (http://en.wikipedia.org/wiki/Sphagnum) is very good, some species are even mildly antiseptic, and it speeds up the process of composting.

The No Impact Man had an alternative but he refused to say exactly what it was. I am pretty sure it wasn't paper. I think I know what it was but I don't wish to go there right now.

Lets not forget the Asian solution to this problem. Squat toilets with a basin of water next to it, or in more up to date toilet areas, a small spray nozzle is available. The solution is not ideal for several reasons that I can think of. Mostly one must thoroughly wash their hands afterwards, really really well, to prevent spread of disease. Also one leaves the toilet with a ""wet bottom" feeling. It is no surprise that western sit down toilets and toilet paper is now rapidly replacing the squat version.

As a simple solution, it seems simple enough to include a face towel sized cloth that is used to dry the bottom, which remains clean is it is only used to "dry" the bottom after a proper rinse, and the cloth could be thrown in the daily wash. Mind you, this is in the personal bathroom, certainly not in a shared area. But with such a system, zero toilet paper is used.

I'm Western but when I first realised how they did it in the East I was a little gobsmacked - it seems so obvious to wash that area properly with water. When you think about it, it probably does a much better job than just smearing it around with paper (apologies for the graphic images!).

"I went a week without bothering with the news, nothing in my life changed much, maybe the rest of the world was failing, but I was okay."

Giving up the news junkie habit would be tough for me too, but I do go on week-long camping trips without going mad.

The big limiting factor for me is eyeglasses. But they could make bifocals in Ben Franklin's day, the amount of technology needed to make them can't be that high.

No more 400 W PC:s but an Android mobile phone hooked up to 20" flat screen TV:s and you use both of them for 10 years and replace the connectors a few times before buying new.

News from all over the world but few print outs made at the neighbour who has a high end Xerox laser printer with bulk toner.

Boxed sugary cereal as a traditional holiday treat while eating five kinds of porrige with jam or dried fruits as regular breakfast.

Half as thick and not as soft toilet paper also used as napkins, environmentalists use water.

Reusable rubber cup tampoons.

More localy cooked food at extremely simple and cheap neighbourhood restaurants and a new cafe culture with large TV:s. Often situated next to the bicycle repairman or the local carpenter who makes furniture och house improvements.

Rich districts paint their houses often and replace worn and expensive asphalt with hand set cobblestones and you dont need backhoes to make nice sidewalks.

Lots of people work with driving biogas powered mini busses that often are overloaded with passangers or cargo but it does not matter much since trafic is realy slow to conserve fuel.

You envy the Jones next door for their new carbon fibre frame bicycle.

You are happy and dream about springtime...

Cobble stones dddooo nnnooottt mmmiiixxx with bicycccllleeesss. We have plenty of them around here and I am learning the routes that avoid them.


The fairly large flat stones are ok when well laid.

Ghung - I've also have been ratcheting back my consumerism since my 30's (a combination of not drinking as much and getting married). Not a difficult transition. But some predictors of such transitions not being too difficult only focus on the consumers and not the folks who depend on all that voluntary spending. I won't have much problem cutting back some more. OTOH my ability to earn a living isn't going to be destroyed by this transition. Two sides of the same coin IMHO.

Yeah, Rock. What we're talking about is the powering down of commerce, the money system, et. al. Many (most?) folks will have to find something else to do. People may not handle that too well, especially the specialists.

I wonder what percentage of the population make their living in dispensable sectors. Disposable income often equates to disposable jobs.

One possibility is the return to the one wage-earner family, where the stay at home spouse does childcare, gardening, cooking from scratch...

I think so too....back to basics

We are looking at just such a transition. Tax savings and food savings alone are a significant benefit of a non-working spouse. IF you have a good enough job to support the family. That will be the tricky part.

Ghung - And that’s what depresses the heck out of me some days. As a mental exercise folks should keep a count as they go through a normal weekend: with every interaction imagine if that person's job were completed eliminated for all times. How much would your life style suffer? I've done it a number of times. I think the percentage more than the number would shock many. After all, many interactions are due to some consuming effort. Give up just half your cups at Starbucks, have your fast food meals, half your Wal-Mart purchases, half your nice restaurant meals, half you hobby supplies, half your cosmetics. etc, etc. Not meaning to be cruel but many folks have these lower tier jobs because it's all they can handle. The 20 yo barrister who dropped out of H.S. - what job in the new economy will they be able to handle when half the Starbucks close? We'll still be able to socially support folks to some degree. But for life? Or do we spend $100,000 training/feeding them while they learn how to build solar panels? Even these low level jobs contribute to the tax revenue. Not so much from their paychecks but the lost jobs will represent less business activity which means less taxes.

Collectively we're talking millions more added to those already chronicly un/under employed. As I said…freaking depressing

LOL! A "barrister" is what we would call a lawyer. You mean a "barista"

Sorry, Rockman, I couldn't resist that. The image of the HS drop out lawyer.

But there may very well be lots more low level jobs. Remember that many manufacturing and resource extraction jobs have been replaced by mechanisation and automation. If there is less of that then there will be more opportunities for manual workers.

jj - Just reafirmed that geologists are pore spelers. That's what spell check threw out. Didn't look right but I don't do SB.

I get what you're saying but would you want to train a brista to weld or drive a dump truck? I know it sounds elitist but IMHO we really do have a large segment of society that is trapped by the Peter principle in easily eliminated jobs.

I think jjhman is correct. If it unfolds as you predict, there will be a lot of low-level laborers' jobs. The jobs illegal immigrants do now. The jobs people used to do before there were Starbucks and McDonalds.

Right now, the economics favor automation over human labor, but peak oil will likely change that.

I think the bigger hardship may be white collar workers who have to settle for less, or whose skills are no longer useful. I've heard accounts from WWII Italy, where people who could make or repair things did okay, but office workers starved. Mechanics, seamstresses, carpenters, farmers...they had skills they could trade on the black market. Office workers did not.

Is the future now?

Article from MSNBC about large numbers of newly-minted Chinese college graduates looking for any menial job that pays something...

China’s army of graduates is struggling
Robust economy isn't keeping up as universities churn out professionals


“College essentially provided them with nothing,” said Zhang Ming, a political scientist and vocal critic of China’s education system. “For many young graduates, it’s all about survival. If there was ever an economic crisis, they could be a source of instability.”

In a kind of cruel reversal, China’s old migrant class — uneducated villagers who flocked to factory towns to make goods for export — are now in high demand, with spot labor shortages and tighter government oversight driving up blue-collar wages.

" ...newly-minted Chinese college graduates looking for any menial job that pays something..."

This is, as we've discussed here, happening in the US, though there may be an upside to this. I've noticed that many folks who've spent 16+ years in the education system and graduate into relatively well paying jobs often have unrealistic world views.

I split my college with 10 years of travel, odd jobs and military service, and consider myself to be better for it. Many of my highschool friends who graduated into "careers" and played it safe, seem empty and narrow somehow. They see themselves as being above doing menial jobs to survive, especially growing their own food. This is the primary reason they went to college.

As I suggested above, I don't think they are prepared for any major transition. Their plans are non-negotiable and they will latch onto anything that supports their myth; reject anything/anyone that doesn't.

This is a bit ironic as so many bemoan the fact that the U.S. is behind in the production of college graduates. The truth is most jobs have never really required a college degree although those with degrees were filling those jobs. The really smart people, like Bill Gates, don't need degrees. The jobs aren't there now so it is no surprise that the future will be even worse.

On the other hand, I have to believe that the tons of engineers that China has is making a difference in their ability to build out their infrastructure.

Apparently what China is not doing is absorbing these 'ant colonies' into the PLA (People's Liberation Army).

I remember years ago reading that the Chinese were transitioning the PA into a smaller, more professional force, and were trying to get the PLA out of the business of picking vegetables, sweeping streets, etc.

Which brings us to the U.S.: I wonder how many people would be down on their luck and have their myths shattered if the U.S. MIC were significantly downsized?

Not just the uniformed military, but the legions of DoD Federal civil servants and the armies of contractors? We have lots of scientists and engineers and accountants etc. who would be hard-pressed to make a living if they were jettisoned.

I saw Rand Paul on the TV yesterday and he said he will introduce legislation to only spend what the the U.S.G. takes in each year from taxes, rather than vote to raise the debt ceiling in the Spring.

Great idea...his plan includes a proposal for $500B of spending cuts (he didn't say over what time period though) to get us to PayGo ops.

My big point is: unless we find a way to manufacture much more of what we use here in the U.S., I am at a loss to envision where all these present and to-be unemployed will do for jobs.

One thing I can think of would be to divert monies (after the Rand Paul PayGo budget is implemented) out of the MIC and into building out wind, solar, and nuclear power generation, and the attendant electrical transmission infrastructure. Increasing our rail infrastructure would be another useful pursuit. Meaningful work for the individuals, at a living wage, both for initial construction and for maintenance.


Gee, here is but one of a hal a bazillion examples of things our tax and debt monies are paying for:


A rail gun that the US Navy can put on ships to shoot projectiles at Mach 8 at targets 110 miles away, on ships starting in 2025! Who says we don't have the long-term view! Add to that a new SSBN to replace the Ohio class, one that will last a fair piece of the rest of this century; a new bomber; new hypersonic air-breathing weapons, and on, and on, an on...there is no limit to the Pentagon's grab bag/wish list.

A cogent long term energy policy, including efficiency and conservation as well as renewable resources...naaaw...that is placed in the 'too hard' job jar.

And keep in mind: Almost every one of the very-well-paid MIC minions loudly sings the praises of the 'free market' and decries 'government spending'...right up until the time their cushy paychecks and benefits are threatened,at which time they scream bloody murder.

But those rail guns will surely help feed us and keep us warm in the post-2025 environment...

A command style (my-way-or-the-highway-style) government and lots of funding are the main drivers of infrastructure projects in China.

In the US, there are a lot of political folks against any new infrastructure development. Last I looked a lot of states do not want rail systems and they are breaking up their roads into gravel.

I certainly can agree with the fact that states do not want to be saddled with the costs of expensive high-speed passenger rail systems (I was referring to a more robust slow freight rail network).

I wonder about the true current extent of roads being converted from asphalt to gravel.

Previous TOD posting on this subject seemed to indicate that there a very small number of miles so converted and that news reports of such were overblown.

Everything seems to be hyped and exaggerated = not enough real news to fill the gaping 24/7 maw, I guess, or at least nothing anyone wants to talk about. (1) There was never any high speed rail on the table except possibly in California. The lying politicians just called it that. (2) At least in southern Wisconsin, they'd have to convert a lot of roads back to gravel before they got back even to 1975. For the time being, I doubt that anything truly disruptive is on the table.

Roads to Ruin

Wall Street Journal


The process of removing roads has begun -- as reported in the news. I am just the messenger. And once you break up the roads and plane fare becomes costly. Passenger rail sounds better and better to me, but I think I am a little more forward thinking than most. I am not concerned too much about the 5-10 year horizon myself.

"Altogether there are more than 4,209,835 km of paved roads in the U.S. (including 75,040 km of expressways), and 2,255,964 km of unpaved roads.[15]"

So the numbers cited in the article sound insignificant compared to the very large amount of existing paved road.

And yet they are getting torn up according to the article. Seems governments are going in reverse to me. When I was young roads were being laid all over the place.

The beginning of a trend or a blip. Time will tell of course.

Here's an interesting historical tidbit. In this article http://skyways.lib.ks.us/counties/GW/ is an old map of Greenwood County in Kansas. It dates from the latter part of 1800's. I actually saw that map in the county library in Eureka. What I found interesting is that there were NO roads or highways. There were some named trails for horses or carriages or wagons The way people got around any distance was by railroad which you can see labeled on the map. They were still mostly there in the 1940's. At that time they had self-propelled two car trains they called "doodlebugs." Most of the branch lines have been gone for over half a century.

This is how it could be in the future.

My "1924 Atlas of the World and Gazatteer" by Funk & Wagnalls shows the same railroads on the map of Kansas. In this atlas, the maps of the state have railroads, but no roads or highways shown, presumably because the latter were considered unimportant.

If you look on Google, you can still see remnants of the old railroad rights of way, although it does not appear that there are any active tracks in and out of Eureka, Kansas any more.

In general, many of the railroads shown in 1924 are no longer active, even if the rights of way can still be made out in Google satellite view.

No real argument here. Just wish they would call a thing what it is, namely plain vanilla old-fashioned passenger rail; and not hype hysterically about roads which, at the outer margin, were barely worth paving in the first place. Let's not forget that even the Romans did some paving, so it's not going away entirely. Of course, in the future, bitumen probably won't be used as much, although we've got a huge existing supply for recycling.

Cisco systems released a study about 3 weeks ago asking employees of many companies if they needed to come to an office to do their work and over sixty percent said they could do their work from home which means those jobs could be done anywhere in the world.The following week on CNBC the CEO of a company called Odesk was saying their business was to do just that find employees around the world for companies and the last two yrs growth was 100% per yr. This was my thoughts twenty plus yrs ago that there was not much difference between the factory floor and the office floor except nice carpet and HVAC and as tech progressed the pressures would increase to outsource WCJ.Whitecollar jobs will have increasing pressure like the bluecollar has had over the past couple of decades.

would you want to train a brista to weld or drive a dump truck? I know it sounds elitist but IMHO we really do have a large segment of society that is trapped by the Peter principle in easily eliminated jobs.

Well, that may be true in the Southern US, but if you are a "first nations" person in Northern Canada, it's a whole different job market. If they can learn to weld pipes or drive a 400-ton dump truck, there's a six-digit cheque waiting for them at some resource company's field office.

Oil companies look around and there are not many white people except a few drunken trappers, but a whole lot of native people who could probably be trained and put to work if they could get their minds around the concept of showing up five days a week, every week, and working eight hours in a row without getting drunk.

This comes as a complete shock to the native people because they foolishly assumed that the white guys would discriminate against them. Not really. Management just wants employees who have some sort of education, will show up for work every day, will work hard, and won't do nearly as much cocaine and alcohol as their white employees. Given the amount of money people get paid up there, cocaine is a real problem.

I understand Rocky but there's a big difference between a 20 yo Canadian barister gal and one in, say, California. They get pretty tough up there just from having to deal with drunken butt holes that show up for a late night latte and a cheap feel up. Closest we have in the States are Texas gals IMHO.

Seriously though, even though it will sound elitist again: I'll skip the details but I often deal directly with many of the folks I'm talking about. Folks who's main reason for not having a checking account is because they can't handle the math. Or who miss the first day of work because they either can't read the map I drew for them and/or they are still confused by the concept of "north". More than once I've driven them to a bus stop with a note to show the driver where they need to get off. And these are not slackers or druggies...just nice kids who are as dumb as sticks. Of course there will always be a small group of bums that can't function even during the best of economies. Being related to a number of them I know the type well. Other than occasionally making bail there's not you can do to help them. LOL

Folks who's main reason for not having a checking account is because they can't handle the math.

Well, there is the matter of education. We have had trouble convincing the native people that they really do need a good education to live in the white man's world. However, many of them are catching on. OTOH, there is something of a problem convincing some white men that they need a good education to live in the white man's world. For some reason, they think employers will hire them just because they show up. If they can figure out where to show up.

Or who miss the first day of work because they either can't read the map I drew for them and/or they are still confused by the concept of "north".

OTOH, if their employer asks them "do you think you can find the 8-16 well?" and they can whip out a military grid map and say, "Oh, yeah, it's at grid reference 895356, about 16 kilometers north of here", their job prospects are relatively secure.

I just mention this because I often used military grid maps to find oil company facilities. It seemed the easiest way. I worked for one company that had 750 wells they couldn't find. They asked me to help find them, and I said "Sure, I can download the GPS coordinates of where they are from the databases, but you better take a metal detector to pin them down exactly, and be careful driving around because if you run into a well casing hidden in the tall grass, it could do a lot of damage to the truck."

Pore spelers perhaps, but sometimes good spielers?

I was off reading an end of the world story, I found while reading the comment section of JHK's post of a few weeks ago. I thought of several things that those of us that want to have something set back for a future of doom, might need to have in stock.

Salt. Once long ago it was the go for trade item. Worth almost as much as gold.

If you are land locked and you get stuck where you can't travel you will need to know a lot about living off the land you find yourself on. You'll also get sick as the generations go, if you don't get certain minerals that aren't normally found in plants, like sodium, and iodine.

I have an odd habit, I keep rock salt handy, from the days as a kid I'd suck on a rock of it, not much, just enough and the craving would go away. I don't have high blood pressure, but I have several disorders in my blood.

A survivalist friend has been pushing me to get more geared up, as the times are a changing, as he says. But do we put enough salt and other sea coast minerals up for our long term use, and as a trade good, if trading is done later on?

How many world traveled herbs and spices do you use in everyday live and don't even know that you can't grow them where you live? How many things would you have to rework into a living arrangement if you had to do without screws and nuts and bolts and nails long term? Things like that I have been thinking about as we sort through 30 years worth of my dad's old building maintaince stuff.

Here I have plenty nails and screws and hardware gear, so much so that we could be a hub of a hardware store for a while. But how many people would think about that when they are bugging out to go to higher ground, then want to settle and have to put together things with plant roots, because they don't have any string handy, and forgot to pack the nails and hammer.

Most of this stuff wieghts a ton, isn't going to be easy to move if you on foot, or only have a small cart to move. Just things folks might want to think about when they say they are planning a place in the sticks to get away from it all.

Trade was the lifeblood of most of the world for most of our history, at least the written parts of it. Living in a cave might be great for a while, but later you'll run out of things that trade would be able to give you, least of all news of what is going on, people rarely can go without their gossip, or news stories.

Though I did go newsless, and TODless for a week to try it out.

Interesting experience.

The online book I was talking about is this site...

The page will show the latest chapter, so beware.

BioWebScape Designs for a better fed and housed world. Remember to pack the salt and pepper.

In the pre-refrigeration days, salt was used extensively as meat preservative and this accounted for much of its demand. Extra meat could be stored all year in large hollowed out logs packed with salt. High blood pressure was not on the radar screen at the time but hunger and starvation could sure interfere with a system’s ability to maintain comfortable homeostasis. Salted meat storage was an important adaptation.

The story I linked, to had a bit early on about the group in question running out of salt for cooking their foods. I'd imagine they would also have to go through an adjustment to not knowing spices to use, or wild plants that are herbs and spices in foods. Lots of spices and herbs were part of the first trade routes, things that would add to the plain jane world of living without the local grocery store spice isle.

Pickling and salting was the norm for lots of meat preserving. We still do a fair amount of smoking and pickling of meat, even if we do it on vast scales. I am a son of a chef, and food is never far from my mind, I am well aware of how many people are clueless as to where most of their food comes from.

As with a lot of the things we take for granted, in a slow down doom and gloom time, they will be lost to be relearned the hard way all over again, in the coming centuries. which seems a waste to me. Keeping the knowledge base up is of a high order, as well and being able to feed one's self if you have to live off the land, as a hunter gatherer. In fact if you are a gatherer, you'll have to know a lot more than most people think when talking about it.

Each area will have it's own plants and knowledge base, what you know about the plains, might not be true for the alpin forests, or sea coasts. Now we can move about and see all three regions in a day, or in several days worth of gathering, feed hundreds of people.

You can't live off of mre's for ten years, unless you have a warehouse full of them. Knowing food science should be taught in schools, as a science class. Most of cooking involves chemistry.

BioWebScape designs for and better fed and housed world.

Salt is a flavoring rather than a necessity according to the Eskimo. Explorer Vilhjalmur Stefansson lived among them on a meat-only, salt-free diet for a year.

"Still I kept thinking the boiled fish would taste better if only I had salt... [he gets some] I sprinkled some on my boiled fish, enjoyed it tremendously, and wrote in my diary that it was the best meal I had had all winter. Then I put the can under my pillow, in the Eskimo way of keeping small and treasured things. But at the next meal I had almost finished eating before I remembered the salt. Apparently then my longing for it had been what you might call imaginary. I finished without salt, tried it at one or two meals during the next few days and thereafter left it untouched. When we moved camp the salt remained behind."

Of course, salt is very useful as a preservative in hotter climes.

The Eskimo also have a rather unusual diet compared to most people. They eat mostly meat, and a lot of saltwater fish. They probably get all the minerals they need from their diet. It's herbivores who need salt licks.

Salt is a flavoring rather than a necessity according to the Eskimo. Explorer Vilhjalmur Stefansson lived among them on a meat-only, salt-free diet for a year.

I once worked with a guy who decided that if reducing salt in your diet was good, eliminating it completely was even better.

He ended up in the intensive care unit with acute kidney failure . His doctor told him to never do it again because he nearly died before they figured out what was wrong with him. The fact is that people crave salt because, without it, you will die.

The Eskimos got enough salt from their diet of seal meat that they didn't need to supplement it with table salt. For people living on vegetables in a hot climate where they sweat a lot, adding salt is a necessity. However, in the modern world, most people eat too much salt and very few eat too little.

For people who want to know more (much more) about salt, see: Salt: A World History by Mark Kurlansky.

A substance so valuable it served as currency, salt has influenced the establishment of trade routes and cities, provoked and financed wars, secured empires, and inspired revolutions.

Interesting factoid: The end for British rule in India began when Ghandi walked to the sea shore and picked up a piece of salt, in contravention of a British law which required Indians to buy their salt from Britain. In India's hot climate, salt consumption was a necessity, and Indians didn't think they should have to buy their salt from Britain when, in the intense heat, evaporation caused it to naturally crystallize out of the water on their seashores.

One of those tales where the truth is hidden in the chemistry of the foods being eaten. Fish naturally have salts in thier bodies, the seal's diet is fish, so they have salts in their systems, so would the whale meat. So would sea veggies, be they seaweeds or other foods. Even the polar bear would have salts in their system.

People have not really understood what they were eating for a long time. What happens in the processed foods is that when you steam cook foods you leach out the minerals and you get bland tastes, salts of more than the sodium cloride kind were added back to give food a better mouth feel. But with the advent of more people eating boxed foods, or fast foods, instead of home cooked meals, you have changed the mouth feel.

People think that they need a lot of salt to make something taste right, but you can use herbs and spices to do that as well. Over and over again I read how when you open a can of some veggie, you are supposed to drain the can, you are throwing out several % points of the minerals found in that food, with the processing water, that had leached it out during cooking, which is mostly done in the can( with some foods anyway).

It is true that processed foods do have to many milligrams of salt in them. Somewhere along the way people started eating out of cans and boxes than cooking and the diet health of the nation got out of whack. That is where the slow food and whole foods movements have gotten a foot hold in the anti-industrial food prep business.

It is just another of the things that will change as we get futher down the peak oil downside of the energy hill. Big farms, sending tons of food to a processing plant to get to your fridge in a box of ground and pounded food stuffs, will end and people will crave the old ways of TV dinners and fast food. Only to have to go to a farmers market and buy a basket of mixed veggies and meats and cook it the old old fashioned way, if they even know how to do it.

As I mentioned elsewhere, food chemistry should be taught in the lower grades as a required course, along with how to cook, so that kids, can get by where their own parent's might be lacking in skills.

Cooking a hot dog on the grill is not as good once you find out how a hot is made, LOL.

BioWebScape Designs for a better fed and housed world.

Salt. Once long ago it was the go for trade item. Worth almost as much as gold.

Therefore the word salary is made from salt.

The price of gasoline at my neighborhood Chevron station in the Vancouver area is now CA$1.204/litre = $US4.52/gallon. This is the highest price I've seen since the early fall of 2008. It's also higher than the national average US price in the summer of 2008, which almost killed off the US domestic auto industry. There has however been no noticeable reduction in traffic in Metro Vancouver. Transit ridership numbers are up.

If transit ridership numbers are up, how can there be no noticeable reduction in traffic?

Unless of course, population has increased.

The elephant in the room, unmentionable.

Unless of course, population has increased.

Yes, I think there's something like 40,000 people per year moving into the Vancouver area. We appear to be buying into the infinite growth model.

If transit is 10% of vehicle miles and there is a 10% increase (which is noticeable) this might roughly correspond to a 1% decline in the 90% of traffic which is automotive--and 1% is not noticeable...

If transit is 10% of vehicle miles and there is a 10% increase (which is noticeable) this might roughly correspond to a 1% decline in the 90% of traffic which is automotive

Vancouver is highly atypical in the North American context. Looking at Statistics Canada numbers for Vancouver in the 2001 census, it appears that of the 253,330 people who reported their mode of transportation to work, 163,595 traveled by automobile, 43,625 took public transit, and 42,815 walked or bicycled.

I calculate that as 65% by automobile, 17% by public transit, and 17% walking or bicycling.

Of course, many Americans will have trouble believing those numbers, but anyone familiar with Vancouver will find them highly believable.

The proportion of people using public transit has probably increased since there has been a huge increase in ridership on the Vancouver Skytrain over the last decade. There have also been lots of extra-special taxes levied on gasoline.

Anybody who tries to drive in Vancouver is nuts, and many of the drivers are. It's the only major city in North America with no freeways. Count them, zero.

I calculate that as 65% by automobile, 17% by public transit, and 17% walking or bicycling.

I think your numbers apply only to the City of Vancouver, which has good transit. The transit ratio for the whole metro area is around 13%, and the metro walking/biking ratio is likely much lower than 17%. I can give myself as an example: I live in an inner suburb and most of my employment has been in other sometimes farflung suburbs, which had forced me to drive/carpool to work. Now that I'm working in the City of Vancouver, I'm using transit to get to work simply because it's a viable alternative.

Correct, that is the City of Vancouver, as distinct from Metro Vancouver.

Yeah you must be right.

Numbers can be depressing.

Not only is there That Which Must Never Be Mentioned, but if public transit use is only in the 25% range for its most effective/efficient use, moving residents of the city proper to and from work, then you can increase it substantially, percentagewise, without noticing any improvement in metro area (city plus surroundings) traffic.

If transit ridership numbers are up, how can there be no noticeable reduction in traffic?

The road system is fully saturated. If someone takes the Vancouver Skytrain rather than driving, someone else takes his space on the road. Those who can't find a space on the road and don't want to take the Skytrain just have to stay home. Or ride or bicycle, much better for you

Unless of course, population has increased.

Vancouver is fast becoming the new Hong Kong. Population statistics, 2001 census. Canadian born population: 279,510, foreign born population: 247,635 - Canadian born 53%, foreign born 47%.

We await the 2011 census to see if Canadian-born people are still in the majority in Vancouver - unlike in Toronto where they're definitely not.

Here in Europe, Vancouver is seen as the "european-like" city, with pretty good public transportation, "slow food" movements, very cooperative population and so on. They can maybe have a better encounter with no oil future. Better as Tucson, Phoenix or Chicago...
Simply could it be me thinking too positive.

Yes, I noticed that, too. Fuel prices have been slowly creeping up through the year. Back in 2008, $1.40-1.50/litre appeared to be having a gradual reducing affect on traffic (at least anecdotally) and maybe boosted the popularity of cars like the Smart and Honda Fit. But then the prices crashed (down to ~$0.70/liter in Dec 2008 if I recall correctly). Luxury SUVs continue careen all over town just like before. Guess we will have to wait and see what happens if/when prices climb back up into the $1.40/l or higher range.

I use the bus and light rail often, and currently they are often packed to the point of standing-room-only, especially during typical commute times. Some bus lines, like the 99, are at max capacity. I wonder what riding mass transit will be like under, say, a $2.00-2.50/liter scenario.


Back in 2008, $1.40-1.50/litre appeared to be having a gradual reducing affect on traffic (at least anecdotally)

There was definetely a noticeable reduction in traffic in the summer of 2008. I remember that getting to work was quicker than usual that summer although I've never seen any statistics confirming this. I believe that just a slight reduction in traffic can cause a significant reduction in travel times.

I wonder what riding mass transit will be like under, say, a $2.00-2.50/liter scenario.

Afternoon rush-hour transit today is often shoulder-to-shoulder on many bus/train lines, which I can confirm empirically. For some reason that I've never figured out, the morning rush is always significantly lighter regarding both traffic and transit. At $2.00-2.50/liter, the transit system will be like it is in India, especially since it hasn't expanded enough to accomodate the extra demand.

U.S.A. 2008
$1.40 per liter 1 car for 1/5 passengers

U.S.A. 2018
$4.50 per liter 1 car for 5/5 passengers

There was definetely a noticeable reduction in traffic in the summer of 2008.

There was an even more noticeable reduction during the the Winter Olympics. They should keep that going, it was great, and this is speaking as footslogger during that time.

Just have some London style congestion pricing for downtown, keep Granville and Robson St as public malls, a few (hundred) more buses, and the Skytrain out to UBC and you're done.

It is encouraging to see that mass transport ridership is up in your area. I wish I could say the same for here. I live in Northern Thailand, and about 3 months ago, the powers that be thought of a way to help re-spark the still slow economy. Seeing that car sales are a major indicator of economic activity they addressed this point directly.

I could be slightly off on the figures, but essentially it is now possible to buy a new car with no money down, first payment next year, at zero interest and with a 7 year payment period. Needless to say, the amount of cars sold in the last few months is truly frightening. I estimate 1 in 4 cars is brand new, identifiable by a red temporary license plate, or no plate at all (acceptable for new cars). The traffic has spiked dramatically as the roads were already insufficient for the volume before this economic engine was started. Frightening.

...essentially it is now possible to buy a new car with no money down, first payment next year, at zero interest and with a 7 year payment period. Needless to say, the amount of cars sold in the last few months is truly frightening.

That is essentially the same system that got the United States into its current mortgage default crisis. No money down, low payments at the start, and a ridiculously long payoff period. That is not prudent financial management.

Oil imports into Thailand increased by 103% over the past year from 832,900 barrels per day to 1,695,000 barrels per day. That's a recipe for bankrupting the country given what is going to happen to oil prices in the next year (a rerun of 2008).

The Canadian system is much more rational. Canadians use public transit themselves and sell their surplus oil to the Americans at very high prices. Canada now sells more oil and oil products to the US than it consumes itself, and also sells a rather large number of cars to the US as well.

I was hoping to watch Art Berman's video, but it keeps tripping out after 20 secs and re-starting.
Anyone else tried to watch it?

I watched it and had no problems.

Ron P.

Thanks, Ron
I tried again just now and it played properly the first time, yet I did nothing differently.

Art was clear, concise & knowledgeable on the details, as always.

If one lends creedence to Berman's outlook for NG, betting that NG will fuel the transportation sector for long is a bad play. He gives NG about 20 years, and converting heavy trucks from diesel, as some are proposing, will certainly not help. Better to put our eggs in the electrified rail basket, IMO. When we have to choose between powering the grid, heating our homes or having big trucks haul our stuff everywhere, it will be nice to have some options.

It occurs to me that the discovery of fire will be our downfall. I fear for the trees.

I also fear for the trees. I live in Westchester County, just north of NYC. Westchester is now an expanse of trees, interrupted here and there with highways, towns and shopping malls. But if you go anywhere off the beaten track, for a walk in any park or wildland, even in neighborhoods, you'll find stone walls crisscrossing the land. When we first moved here we were mystified by these walls. They were obviously old and hand made and EVERYWHERE. It turns out that Westchester was the agricultural center for NYC during the Revolutionary War period and through most of the 19th C. Old photos show a landscape that looks more like Iowa than NY with only an occasional single tree or small clump of trees growing along dirt roads traveling through expanses of fields (separated by stone walls) used for growing food. When you think of the population of New York City today compared to that of the 18th C, it's quite easy to imagine a treeless Westchester again, with the trees being cut for firewood and possibly the land returning to agricultural use, not that it would ever be able to serve its old purpose of supplying food for the NYC of today.

Reviving freight rail to the extent that it removes a lot of the need for trucks will not be easy. While long-haul freight rail is in somewhat of a resurgence, a lot of track has been abandonded or converted to rail trail. Much of the local track that remains has not been maintained, and it no longer meets weight and clearance requirements for modern freight cars.

So even with a big buildout of electrified rail, there is still a large requirement for drayage of containers from rail yards to distribution centers, and then for heavy and medium trucks to transport goods to final destinations which are very spread out in most metro areas.

It's not really that big an issue, in vistorian times many towns had the rail yard as the centre of industry & distribution, there is no reason why this cannot be recreated.

Granted it will realistically take decades to achieve.

In the intervening decades, a lot of goods will move up to 100 miles from their origin to a rail yard and from a rail yard to their destination by truck.

About 30 years ago, the old city delivery truck was pushed aside and 18-wheelers started making direct deliveries to fast food restaurants, hardware stores, and other commercial centers. Of course, local streets and intersections were never built for such vehicles.

We might see a return of the smaller delivery trucks as freight distribution systems change. I agree that trucks will switch to a pattern of delivery to and from regional intermodal terminals with rail hubs. The truck driver will finally be home for dinner.

Rails will begin to lose a real money-maker in ocean-borne containerized freight, so some of the rail density patterns will change. Norfolk Southern seems to be looking aggressively at the intermodal terminals already.

And the small local delivery truck is a perfect candidate for electrification.
1) It stays within a relatively small local area and drives less than 100 miles a day.
2) It returns to a central point every night (for charging).
3) It does a lot of city stop & go driving, not long highway driving.

If gas/diesel prices start rising fast, I think you'll see a lot of delivery companies move quickly into electrics. Yes, the upfront costs are high but they've got the capital and credit to make the purchases. And the fuel savings will help pay for the financing. Companies like Fed Ex see this coming and are preparing for it. They are among a coalition of companies that are advocating for more electrification support.

The small delivery truck would also seem to be a perfect candidate for natural gas for the same reason.

Anyone guess how much this would cut demand for gasoline though? 5%? 10%?

Trucks such as the Mitsubishi Fuso cabover box trucks are heavily used in built up areas. These have 4 cylinder diesel engines. http://www.mitfuso.com/pages/model_fe.html

Manhattan and Long Island are heavily dependent on distribution of goods from NJ intermodal yards, since there are no freight rail lines across the Hudson River south of Albany. Since it is a conjested area, small box trucks and large vans are heavily used. You can check the mix of vehicles on a business day at http://www.longislandexchange.com/traffic.php

I believe UPS already uses some Zap trucks for very local deliveries. Our Seattle sail transport CSA uses my little electric Zap truck to meet the sailboat at the city dock, and then bring the produce boxes to the delivery storefront for our customer pickup. Trying to create the least petroleum-dependent model possible. :-) The Port of Seattle offers a free charging station (they have a real electric truck which dwarfs the Zap).

The biggest ongoing cost involved here is actually the insurance, nearly $1000 a year. I insured it, in part, so that people in the community can use it if needed. On a bright note, we have hydro-power here in the Pacific NW so recharging is dirt cheap. And you can't beat the curiosity draw, with its 3 wheels and working dump truck bed, I get questions about it every time I drive it. Most popular comment: "It's so cute, where did you get it?" Second most popular comment: "What's its range?"

Range, however, is only 10 - 15 miles with lead acid batteries, which is more than we need right now (docks are 2 miles away). I plan to upgrade to their lithium-ion battery pack and hope to truly get a 40 mile range.

I grew up outside NYC and keep on eye on what the Port Authority is doing for intermodal transport (their inland transport development). The BNSF/Amtrak railway runs right through the western edge of Ballard, and people are already thinking about either petitioning for an actual stop or longer-term, a spur down to the small port of Shilshole.

"He gives NG about 20 years, ... "
I didn't get the impression that he was making a prediction of how long shale NG would last, but rather he estimates that it will take 20 yrs of operating experience to have reliable models of how production rates will fall over time. If production rates fall quickly for individual wells, we will have these reliable models much sooner, and we will not like what the models tell us.

We already have a good idea of the size of the resource, and it is large. But if each well needs to be reworked or replaced on a 3 to 7 yr schedule, it will take much longer than 20 yrs to deplete the resource. And the operating costs will be high during that whole time.

But I'm not an authority. That is just what I think I heard him say.

Geek - Bubba, we don’t need 20 years to establish a decline rate for SG wells…they are etched in stone today. We have thousands of wells that clearly show the decline model in most of the trends…a very steep decline model. There is no “if” they fall off quick. In fact, everyone knew they would have a steep decline rate. These types of reservoirs(fractured reservoirs) have been drilled for many decades. Folks shouldn’t let the hype from the public companies confuse them…the truth was known by everyone in the oil patch. I’m not exaggerating in the least. More important than a decline model: most of the SG trends have established fairly reliable URR models. With those two models and a current drilling cost/NG price platform it’s very easy know when it’s worthwhile to ramp up most SG plays.

The SG plays will be drilled for ever…as long as NG prices are high enough. Get NG north of $10/mcf and you’ll see a lot of rigs dusted off and put back to work. At less than $4/mcf…not so much.


"I didn't get the impression that he was making a prediction of how long shale NG would last, but rather he estimates that it will take 20 yrs of operating experience to have reliable models of how production rates will fall over time. ....But I'm not an authority. That is just what I think I heard him say."

Perhaps we weren't listening to the same interview. I transcribed what I heard:

...but I think the situation is straightforward and that is we have this illusion that we have a hundred years worth of natural gas because of shale gas, and it's simply just not true. I think we've probably got 20 years at most, counting proved reserves........

Seems pretty "straightforward" to me (though I too am no authority).

Seems pretty "straightforward" to me (though I too am no authority).

Trust me, it's not at all straightforward. It's more or less irrelevant how much natural gas is there, what is relevant is the amount of gas you can afford to produce at current market price using current technology. And you have no good way of predicting what market price will be in the future, or what technology will be used in the future.

Of course I agree, Rocky. My point was that Berman's claim seemed fairly straightforward, not that I agree with it. My technucopian side hopes he's wrong, but my doomer side fears he's not.

Actually, I didn't feel that Berman was being at all candid. There seemed to me to be a notable discordance between words and demeanor. OTOH, my post triggered a very candid and believable assessment of shale gas by Rockman. It was interesting to see and hear Berman because he has a reputation for having worthwhile opinions. But in this case Rockman's opinion is more worthwhile.

I see no contradiction between what Rockman wrote and what Berman said in the video (and what he has said at ASPO-Denver and ASPO-DC).
As for being candid, Art strikes me as a person who is candid and up-front. I see no discordance between his words (which are carefully chosen and which indicate the depth of his understanding) and his demeanor (which is always polite and respectful, even when he is in disagreement).
We need more people like him: veteran insiders who speak the truth.
I certainly put Rockman in the same category.

geek/rick - Do I smell the beginning of a Rockman fan club? LOL. Appreciate the kind words but I'm forced to make a distinction between me and Art et al. I just shoot my mouth off based on my own anecdotal experiences. I try to just lend some qualitatively flavor to the discussion. Other folks on TOD like Art do the number crunching and modeling. IOW the real heavy lifting I have neither the time nor inclination to do. I view the two approaches as complimentary more than competitive.

OTOH if there is a ground swell for the RFC be it known the membership fee can be paid in Blue Bell vouchers.

True, Rock, though I think you're discounting your own contribution.

Your expertise is different from that of Art, but your anecdotal info is just as valuable (and just as interesting).
My point is that you have both worked in the industry, have decades of experience and expertise, and you both speak the truth... a well-informed & practical-minded truth, which is not all that common, and is therefore greatly appreciated.

Thanks Rick but you misunderstood my point. My opinions are much more important (and always correct) than anyone else on TOD. I'm just too lazy to back them up with documentation. That's why I always like to acknowledge the work of the "little people" on TOD. Toss them a little bone for their efforts, ya know.

I know you're just joking around, etc, but I would respond by saying that I think I value your observations more than your opinions, and there is a difference (though not necessarily any contradiction).

As a farmer (and a teacher), I have 35 years of observation to draw from. So do you (and Art), and what we observed are more or less "facts," distorted only by our own perception of the events, which hopefully was not too coloured (in your case, they are "always correct" so you don't even have to worry about even minor distortions).
We all use our past observations as the foundation for various opinions, but I usually prefer to hear someone's first-hand observations (rather than their opinions).
First-hand observations ARE documentation... documentation of the highest order, especially when they come from someone who has an extensive context (ie. experience) for those observed events.

I agree... you do acknowledge the work of the little people like me... your comments are invariably polite and respectful (even during the summer, when TOD had such divergent views on Macondo).

International Petroleum Monthly came out yesterday from the EIA.

I have not had a chance to look at it in much detail. The big step down in the last month's (August's) "All Liquids" production in the previous report disappeared, but not in the way I expected. Much of the increase in August's total liquids production was offset by decreases in for January through July. The year to date average total liquids number is now 86,001,000, compared to 85,980,000 in the November report--a trivial change. So it looks like part of the previous problem was an allocation to month of the liquids other than crude.

Cancun Climate Conundrum in a nutshell (IMO)

Developing countries say the developed countries need to power down so that they can power up.

Developed countries say that the developing countries resources and environment need to be commoditized in order for them to make trillions of dollars over pretending to address climate change.

A no win situation if ever I saw one.

So the World agrees to step on the gas peddle now that the cliff is in sight.

Developed countries say that the developing countries resources and environment need to be commoditized in order for them to make trillions of dollars over pretending to address climate change.

Don;t worry - that is being done in the developed countries also.


70% of the spending on Carbon reduction is not actually going to Carbon reduction - just lining the pockets of the vampire class.

Leanan, has the Campfire been put out permanently?

I have heard answers both ways. Most recently I have heard that there may be Campfire, if the eight reviewers vote that they like a particular Campfire piece.

I don't see a Campfire piece in the queue for today.

Thanks, Gail.

What's there to not like about a Campfire (and how much "camping" do the reviewers do anyway ;-) ?

Iraqi Kurd leader says Kirkuk belongs to Kurdistan

The fate of Kirkuk is one of the main issues of contention between the Kurdish region and the central government in Baghdad, which are locked in disputes over land and some of the world's richest oilfields.

Barzani told a congress of his Kurdistan Democratic Party in Arbil that Kurdistan's right to Kirkuk was non-negotiable.

"The Kurdish identity of Kirkuk is not a matter of bargaining," he said.


The Kirkuk powder keg is bound to explode at some point; the Arabs (especially the Sunni arabs who have no other source of oil) will not give up Kirkuk at any price; and for Kurdistan to be a viable state they need Kirkuk; there will be one bloody battle for this oil field.


Yeah, there is a strong chance of civil war there eventually. There has been unspoken de facto Kurdistan country operating up there. But at some point someone will try to formalize it and the fireworks will begin. I'm sure Turkey will have something to say about the matter.

speculawyer, it is interesting you say that; Barzani talked about formalizing it today:

Iraq Kurd leader seeks right to self-determination

ARBIL, Iraq — Iraqi Kurdish leader Massud Barzani called on Saturday for the right to self-determination for the northern Iraqi region, a move that could lead to a break-up of the country.

His remarks come as Prime Minister-designate Nuri al-Maliki attempts to form a cabinet, with Barzani's bloc expected to obtain several ministries, and the Kurdistan region mired in disputes with the Baghdad government over land and oil.

Speaking at a congress of his Kurdistan Democratic Party, Barzani said "the issue of self-determination," which was considered "a right," would be presented to those attending the conference "to be studied and discussed."

His comments mark the first time Barzani has officially presented the issue to the KDP's congress, with the proposal set to be voted on during the week-long meeting that opened on Saturday.


The Arabs and the Kurds have been fighting it off in that part of the world for decades; my grand mother still talks about the time my grand father was a vet in the army during the king rule in Iraq (earlier in the 20th century when Iraq was still a British protectorate); they would send my grand father to be stationed in Kirkuk as the army undertook operations against the Kurdish rebels; as a matter of fact my grand father even received a letter of recognition from her majesty the queen of England for his services to the British empire.

This is not to mention the kurds-kurds tensions (a checking of the latest batch of wikileaks mentions US serious worry about kurds on kurds violence); and during the 1990s Barzani and Talabani (the 2 major Kurdish factions) were openly at war.

Between the Kurds-Arabs tensions, Sunni-Shia tensions, Kurds-Kurds and Turkmen-Kurds tensions not to mention the regional rivalries those who believe Iraq will be the saviour of world oil production will be sadly mistaken; as has been the history of Iraq since the birth of civilization in Sumer 5000 BC; there will be periods of peace followed by lengthy periods of prolonged conflict, followed by a short period of quite followed by prolonged period of conflict; this is not a region the world can rely upon, not now, not yesterday and not tomorrow.


I am glad I don't have to figure how it might shake out. The Turkish military have long-standing complaints. But now Turkish businesses have made substantial investments in the area. Iran has killed a number of Kurdish political prisoners this year, so will have its own set of concerns. Plus the Kurdish population in Syria...

Not that it's Big Surprise but ...

From Houston Chronicle: OPEC ministers make no change in output

and from Bloomberg: OPEC Maintains Current Oil Quotas at Quito Meeting, Group President Says

MSNBC article describing how many farmers are working other jobs to make ends meet:


From the previous comments posted on TOD, this phenomenon isn't new.

You are correct, this has been going on for a long time. What is 'news' is how things keep going from bad to worse.
Here in Canada, net farm income is at Depression-level for many sectors, especially beef and hogs.
The ongoing supply pinch for diesel has put diesel prices consistently above those for gasoline, with little relief in sight, so we can only expect higher input costs in 2011, with no assurance of recovering those costs from the marketplace.

I can't think of any other sectors where people work such long & dangerous hours, and have so much tied up in investments, yet receive so little, as our farmers and fishermen.
What many people don't know is that there are more farm deaths (half of them kids) than there are deaths of police officers and firemen combined. If we weren't fighting wars, we could probably add in soldiers as well.

We have a convergence of factors, all of which point to imminent trouble with North American food supply: the next generation often doesn't want to farm (and many retirement-age farmers would not wish it on them), much of our best farmland continues to be paved over, corporate control continues to increase (farmers are price-takers), entry investment is huge, etc.
Add to this the larger global concerns (water, phosphorus depletion, peak oil, climate change, loss of genetic diversity, etc) and we really do need to somehow change things, and very, very quickly.

My father-in-law used to say that if he cashed in the farm and put the money in the bank, he'd earn more from interest than he ever made farming. He wasn't joking (but that was in the 1980s, when interest rates were much higher).
On the other hand, if you are losing money (and many hog producers are), even a 1% profit is an improvement.

The more efficient farming became, the more food was produced, and the cheaper the food became. Individual farmers do not seem to be getting wealthy...and I have read that supermarkets operate on rather thin margins...the money must be being made by the food processors (General Mills, Kraft, ConAgra, ADM, etc)? In the meanwhile our basic food inputs, in the name of convenience and 'value added', become made into over-salted, fattening food products which we consume too much of.

And then we Americans throw so much food away...while some folks go hungry.

What are the solutions? More local farmers producing (much less processed) food to be consumed locally?


The things I think about when I try to design a sustainable culture in my planning of BioWebScape Designs, do we have a big farm supplying the food for all of us in the area, or do we have local gardens supplying most things, while a bigger farm supplies the things we can't grow in a yard, or small acre area.

I like pork, but can I get by with only eating it once or twice a year? Eating eggs out of my own chicken coops ( which I don't at this time have), and the occasional rooster youngster that I grow up for meat eating.

It seems we have grown so far away from how our food is produced that few people realize that if the farmer goes out of business like the local hardware store did, they might not be eating anything but the cardboard boxes the last food came in. I support CSAs but they aren't big or numberous enough to support everyone in the area.

WE are truly living in food insecure times and don't really realize it. We see it in the numbers of food stamp housholds on the news, but we don't also see that a lot of places where the food comes from, are also barely making it as well.

In the years to come a food shakeup is sure to be the prime news maker in waiting. All things being equal, we still have to eat.

BioWebScape Designs for a better fed and housed world.

With all the farmer comments that I am seeing around here I am wondering how farm gate prices compare with store prices. Where on the chain does the consumers' dollar end up?


Yair...NAOM. When we were farming we were lucky to get maybe fifteen per cent of chain store price...a little more with handshake agreements with independent store owners.
Farmers are price takers. The carton manufacturer and the plastic bag maker and the rubber band man and the trucking company and the fertilizer agent and the chemical supplier all make the same amount of money out of my crop whether I make five cents or five dollars per unit.

With any product, the final cost to the consumer increases exponentially with the number of steps in the chain. Why? Becasue each new step "adds value" and then puts on a % margin on top of that. So that farmer sells for $1, the the consolidator spends about $0.50 getting all the grain together, storing, delivering, and adds a 20% margin so you are at $1.80. Then a miller buys the grain and millls it flour, costs $0.50, now at$2.30, add 20%margin, you are at $2.76, then the baker buys the flour and the supermarket buys from the baker.

It is easy to get to the point where the raw food is just 10% of what you and I pay.

The current price for wheat the CME is about $270/ton, or $0.27/kg
My local baker says flour costs them $10 for a 20kgsack, so $0.50/kg, almost doubled.
When they bake some bread, they use about 0.3kg to make a 600g loaf. They sell the loaf for $3, and you are getting 0.3kg of flour, so at this point you are paying $10 per kg equivalent, a 30 fold increase in price.

Of course, there is labour, equipment, energy etc in baking bread or any other food process.

But the interesting part is the big companies have huge economies of scale - they buy the ingredients cheaper, use less labour, energy etc per loaf, but at the store, it is more expensive than the in-store baked bread. The difference is the centralised production needs more expensive distribution, as you are distributing perishable bread, not storable flour, there is the corporate overhead, costs for marketing etc etc.
yet the store sells more name brand bread than their own, because a majority of people buy brand, not price.

So while local grown food is great, there is not much scope for local growing of wheat (unless you live in the prairies). But growing is not where the cost is, it is the processing. so if a community buys flour, and then bakes the bread locally, instead of buying the name brand bread, they claim a lot of the value for themselves, and keep that money in their community. They could take it a step further and buy the wheat, but the important point is they have bypassed the big food companies as much as possible. They are buying an easily stored and non perishable product, minimising transport and storage costs, and turning it into the perishable product at the point of use.

Have a a look at all sorts of foods and ask how many could be *prepared* locally, from bulk imported ingredients. If an entire community bought into that approach, I think it would achieve much more than everyone doing backyard gardens and then buying normally for the rest, especially for larger ones.

It doesn't mean everyone has to make their own bread or pasta or whatever, local bakeries are great example of the happy medium between doing it yourself and buying it from Kraft, General Mills, etc

So grown local is best, but food that is prepared (a nicer word for processed) locally is not far behind, and if it is available, something that everyone, even a condo dweller, can participate in.


Thanks for taking the time to give a well-thought-out answer...it is refreshing to hear ideas to make the future better, rather than the oft-repeated dichotomy of:

1) BAU on and on; and
2) Collapse, where everyone scratches out a subsistence living on a couple acres of land.

Your concepts triggered a memory of something I had read on TOD in the past: ELP:


Thanks for the ELP posting... I had not see it.

Thanks also to Paul for his detailed contribution.
I would add that local bakeries usually charge $4-$5 per loaf, but still struggle to stay in business. Here in Canada we have the Wheat Board, which has helped prevent grain dealers from playing off of one farmer against another in order to bid down the price. We also have our Marketing Boards, which ensure that producers receive a fair & steady price based on cost of production.

But all of this pales in comparison with the dominance of the big agibiz players. On the input side (seed & chemicals) we have Monsanto, etc. No-one has worked harder to expose and oppose the activities of these companies than Pat Mooney:

He has worked tirelessly over the decades, first warning of the impending take-over of our seed industry by chemical companies, the loss of genetic diversity, the moves to patent seed, then genes, then bio-engineering of crops, etc.
If you check out ETC's publications, you will see what Pat and his colleagues have been working on.

On the buying end, we have the major packers like Cargill, XL & Tyson and the big grain dealers like Cargill, ADM, etc.
How's this for a home-page:

What is often overlooked in discussions about local food is the ongoing loss of local agri-food infrastructure: slaughter-houses, feed mills, equipment dealers, canneries & processing facilities. Most regions have farmers, and all regions have eaters/consumers, but without these vital facilities it is very difficult for the two to be linked in a significant manner.

Like all infrastructure, it will take time and investment to rebuild what has been dismantled during the past 30 years.
My fear is that we will get caught on both counts: by leaving it too late, and by finding that the resulting crisis causes such economic disruption that there is little money available to kick-start the process.
Finally, we must remember that farmers work with seasons, and a major problem at certain times of the year could mess things up for a calendar year.


Thank for the great information, including links.

The ever-growing consolidation of business and industry is touted by some to be a great thing, but I am not convinced.

Are we on our way to having the Soylent Corporation?

Or the scenario in the movie Rollerball: The World's needs are attended to by an interlocking board of monopoly corporations: Energy, Transportation, Food, etc. while the population is kept in control with bread and circuses and an authoritarian state?

Not too far-fetched, from where I sit.

As energy costs go up, you will probably see more vertical integration in agribusiness and other industries. This will allow better optimization of transportation from production to sales. Companies like WalMart will work with or acquire production companies and then optimize the business. For example, they can go to smaller stores with fewer types of goods per store that are closer to the consumer. They can source foodstuffs from plants closer to their regional distribution hubs to reduce transportation costs.

This won't eliminate the large food processors. But, for example, Kraft may make more different kinds of products in plants closer to WalMart's distribution centers.

On the other hand, why ship whole potatoes from Idaho to Chicago and make the french fries in Chicago? And I don't think you'll see live cattle shipped far from the feedlot to be slaughtered in big cities. Each class of product requires its own economic optimization, which is something that large, vertically integrated companies can achieve.

I think Michael Pollan talks about the value-added food industry in one of his books. Selling the raw food products such as grains or vegetables is a high-competition/low-profit business. Over the years, food companies such as Kraft and others have invested heavily in convincing customers to buy value-added products such as the iconic 'Hamburger Helper', breakfast cereals and so on. Bringing the production of the more processed foods back to a local level would benefit the consumer, of course at the expense of the huge value-added food industry. IMO it would be an overall benefit to society to do this and evolve a great part of the food industry out of business.

Various people have pointed out that we should shop the periphery of super market aisles where the raw foods are sold, and avoid the central areas where the processed food products are sold. People need to once again learn how to cook.

Hi, ET

I agree with everything you've said, except for the bit about selling raw produce as being high-competition, low-profit.
From the farmer's perspective, it's usually low-competition/low-profit. Almost everything we produce has to be sold within a certain time-frame, and the few buyers in any region know that.
The Saint John River Valley in New Brunswick has been "potato country" for over a century.It is also home to McCain's, the world's largest french-fry manufacturer:

McCain's may not have a complete monopoly, but there is no question that its influence in fertilizer, trucking, and of course the purchase of potatoes and other produce sets parameters for the region's farmers.
Potatoes must of course be picked, washed and bagged when they are ready: not before, and not after. They are bulky to store and heavy to move. Purchasers know this, and if most farmers are short on storage capacity and short on cash, they have little choice but to sell quickly.
Cattle move at around 1200 pounds, lambs at around 90, and so on... they have to be moved when ready.
Local sales barns are closing across the continent, which reduces our selling options and increases our transport costs.

The very large meat packers have their own feedlots: when the price goes up, they bring their cattle onto the market (which they already control), thus achieving two objectives: they get top price for their own feedlot cattle, and knock the buying price back down again.

Farmers are not organized, relatively isolated (compared to most work-places), short on cash, working off the farm as well as on, therefore short on energy to attend evening meetings which are intended to better our lot, and few in number (about 2% of the population).
My father-in-law used to complain that for your average box of corn-flakes, the cardboard box cost the company more than the farmer received for the corn (perhaps several times as much, I'm not sure).
Farmers can't win, but in the long run, we won't be the only losers.

Good points, Rick. Do you see any possibilities for organizing farmers more effectively?

Is it time for a new Grange Movement? http://www.u-s-history.com/pages/h854.html

Thanks, Dohboi

No, and no.
re. organizing farmers, we have an increasing gap between a fairly large number of small family farmers who must subsidize their operations with off-farm income, and whose production is often fairly small. Then we have a small number of large farms which produce a great deal.
This excerpt from a recent USDA study explains:
"Most U.S. farms—98 percent in 2007—are family operations, and even the largest farms
are predominantly family run. Large-scale family farms and nonfamily farms account
for 12 percent of U.S farms but 84 percent of the value of production. In contrast, small
family farms make up most of the U.S. farm count but produce a modest share of farm
output. Small farms are less profitable than large-scale farms, on average, and their operator
households tend to rely on off-farm income for their livelihood."

The interests of the two groups of farmers would be very different, even opposed.
The large farms may be economically viable, but I think the long-term viability of some of these operations may be questionable for environmental reasons (soil degradation, aquifer depletion, etc).

As for the Grange Movement, I now know a bit more than I did, thanks to your link.
I noted the point about the hazards of overproduction, which is very true. Hence the merits of Canada's supply management system (for dairy, eggs, chicken & turkeys), which is always under attack by free-traders.

I think the best hope for farmers is in gaining the support of the larger public (whereas the Grangers seem to have gone on the offensive) for mechanisms (like supply management, co-ops, marketing boards, etc) which will allow them to recover their production costs and hopefully even a fair return on their labour & investment.
To Americans, this smacks of socialism.
However, as we enter the era of expensive energy, we may find that many things that have ticked along (albeit in the wrong direction) suddenly stop working, and market forces alone may prove incapable of correcting the situation.
We need foresight now, but USDA and AgCanada still have done no research re. the "end of cheap fossil fuel."
We will need clear direction, strong leadership and decisive & cooperative action when things begin to falter.

There are only a limited number of ways for a business to be highly profitable.
- sell direct to consumer, especially with branding and advertising, (for example, although there are many restaurants, one with a good food, a good name, and a good reputation can charge relatively high prices and be profitable)
- have a legal monopoly bestowed by patents, copyrights, government regulation and licensing, etc. (pharmaceuticals, writers, physicians, lawyers, etc)
- be one of only a few sellers (oligopoly) or buyers (oligopsony) in the market. (ADM, Cargill, Boeing, Caterpillar, etc)

Farmers are none of these.

Some are trying to do the first of these through farmers markets and relationships with restaurants. But it is a lot of work.

Thanks for "oligopsony." It's a new one for me. I'll have try using it a few times and see if anyone else knows it.

Thanks for the thoughtful response.

"I think the best hope for farmers is in gaining the support of the larger public"

Any chance of that happening? Do you mean CSAs and that sort of thing. Mostly urban people are pretty clueless about what goes on in the farm.

"Large-scale family farms and non-family farms account for 12 percent of U.S farms but 84 percent of the value of production."

How about organizing the other 88% of farmers, along with whatever of the 12% that want to come along? Do they represent just to small a part of the market to be effective?

As for socialism, as things fall apart, I think the stigma of this and other terms will start to loose its power among many. (Though dogmatism of a large segment of the US population never ceases to amaze me.)

Thanks, DB
Yes, I do think there is a fair chance of that happening.
I believe that most people have a certain respect for farmers: we are seen as honest, hard-working, civic-minded (helping our neighbours) and probably under-valued, so I do think that most people have some sympathy for our dilemma.
I also think that most citizens would understand that the price which farmers receive is such a small amount of what consumers pay, that our portion could probably be doubled without consumers noticing much of an increase at the check-out counter.I also believe that most urbanites are smart enough to realize that their food originates on someone's farm; therefore if they want their food supply to be assured, they need to support the origin of that supply chain, which is the farmers.

I agree with your prognosis for socialism: I think that many people will see the pitfalls of unfettered free enterprise, and the merits of some degree of public control over things like resources, which really should belong to the public, IMHO.
But then I'm not just Canadian, I consider myself to be a Canadian socialist, in favour of strong public services (like health care and education), higher taxes to pay for them, and strong public control over resources.

I also think that as vital resources like oil & gas start to decline, there will be increasing public support for allocation schemes to ensure that fuel is directed to essential services and not so some rich guy's yacht, just because he is wealthy enough to pay for it.
But I understand why such views are unpopular and why my party (the NDP) rarely wins....

I agree with everything you've said, except for the bit about selling raw produce as being high-competition, low-profit.
From the farmer's perspective, it's usually low-competition/low-profit.

RickM, thanks for the response. I suspect you are correct about the low competition/low profit of most farming operations. It seems that no matter what happens in the marketplace the poor farmer gets screwed. I suppose that the Community Supported Agriculture (CSA) that is going on now might be somewhat better, but I know these folks are certainly not getting rich, or even breaking even in many cases.

Got my first locally raised, grass-fed beef last year and it is really good tasting meat. I'm not going back to supermarket beef after this.

Yair...here in Australia every little town used to have a butcher who slaughtered localy sourced animals and made hams and bacon and his own you-beaut Wurst...and a baker...and a bloke who hand milked a few cows and delivered every morning, maybe with some eggs...and other families had market gardens. Very often there was a boot repairer and so the list goes on...and then the bitumen came and so too the rules and regulations about food handling to keep us "safe".

If we lose the ability to drive up and down that bitumen highway and get rid of some of the regulation B/S things will tend to revert back to a more local economy and we'll all be better for it.

All trade can't be local of course used to have a situation where our government railway ran "fruit trains" to our wholesale state market on designated days.

All the growers took their boxes of paw-paws, mangoes, sweet potatoes or whatever to the station and they were loaded and shipped. Simple and effective...these days there is no rail line to the multi multi million dollar market complex.

I realy appreciate these discussions and, as it happens I find it easier to keep track of the conversation with the reduced drumbeat format. Thanks to all.

Hi, SP

A few quick questions:
Where does "Yair" come from (I presume it's hello in Oz lingo)?
Why "Scrub Puller" (I think of pulling out weeds)?
Where are you in Oz?

Your country has done some excellent work on planning for Liquid Fuel Emergencies, but do many Aussies know about it?
Also, a few of your military officers have done some progressive work on PO, which is very helpful.

Yair...hello RickM. As mentioned on another thread starting a conversation with a drawled out sort of "Yaaiir..." gives you a few moments to get your head around just exactly what it is you want to say.

A sort of an affectation to use it here I suppose but it helps if I want to go back and identify posts on other boards...it's an old bush way of talking and you don't hear it much anymore.

The "Scrub Puller" tag alludes to the fact that I spent many years pulling down scrub with two (sometimes three) Cat. or Allis Chalmers 'dozers linked together with anchor chain.

We are on the Central Queensland coast a little south of coal port Gladstone which is also being developed as a gas export hub.

How has our country done any work on planning for a liquid fuel emergency? That is news to me.


Thanks for the explanations. I still don't get the Yair thing, but then there are many down-under things that are hard to fathom (including the popularity of Foster's beer... I much prefer the darker British ales).

As for pulling scrub, we could use a Cat on our farm, which had been rather neglected before we bought it (1981) and was infested with hawthorn trees. They are an alien species (brought in from Britain, as were many of your pests)... maybe you have them in Oz.
We get several flat tires each year from the thorns, and I've had the odd thorn go right through my boot... once I hobbled for a week.

Yes, your country has done some excellent work on planning for Liquid Fuel Emergencies (LFEs).
Alan Smart and his team at ACIL Tasman were hired 7 years ago to review your LFE legislation and your LFE plan.
Between the Discussion Paper, various consultations and the Final Report, there were about 400 pages of pretty insightful info, none of which is still available (I'm thankful that I kept paper copies).
Then they did a Vulnerability Assessment, which is thankfully available (very comprehensive, 205 pgs):

What your government has done is exactly what should be happening here in North America (but isn't): the US and Canadian plans are decades old and have never been reviewed, yet we are probably the most vulnerable region in the world (long distances, suburban configuration, heavy reliance on cars & trucks, etc).

Hawthorn is excellent for hedgerows. The thorns are very off-putting for animals trying to eat it or pass through it. For the best results you need the services of a good hedger. A well made Hawthorn hedgerow is a thing of art and very resistant.


Yair...Hello again RickM. I was aware of that document and also a senate enquiry in 2006 where the late Dr Bahktiari (?) stated his views...they are just documents.

Our "powers that be" havn't actualy done anything. We don't even have a stragegic oil reserve.

That is helpful info, SP

The situation seems similar to that in the UK, where some very good analysis was done, their emergency act was revamped and a localized model introduced. But what I hear from various authorities over there is the new system is a bit of a "paper shell," without funding for training & implementation.

But the good news is that both UK and Australia have at least done the following:
- flagged liquid fuel emergencies as something to be concerned about
- examined their legislation and identified improvements (and in the UK have enacted them)
- in the case of Australia, conducted a Vulnerability Assessment (my guess is that UK has done one as well, but much of their work is not available to the public)
- realized the problem needs to be addressed primarily at the local level (with a particular focus on preventing panic buying)

Here in North America, there seems to be very little concern, our legislation and our plans have not been reviewed, there seems to be very little awareness of PO, even among emergency planners (and some denial of PO by upper-tier bureaucrats). In the event of an emergency, at least your authorities and the Brits have a set of recommendations which are current and reasonably practical, plus a few people who have already done a good deal of thinking. Over here, authorities may simply be blind-sided, fumbling around with a matter they never bothered to examine (much less do proactive work on).

NZ began working on this a few years ago but their work seems to have stalled, which might make sense if they saw Australia pay for all that work and then let it sit.

Yair...RickM. I can see your point...that is...at least the problem has been recognised.

The head in the sand attitude still prevails though. I have emailed the senate report to various politicians with a polite request for comment and although the tag system shows the document has been recieved and opened I have had NOT ONE reply.

It is difficult for folks in the U.S. and Europe to understand the predicament of regional areas in Australia if the fuel supply becomes unreliable or unbuyable.

I appreciate your comments but I run out of time to look through threads. If appropriate can continue conversation some where in latest Drumbeat

Thanks SP

Thanks for your feedback, earlier, on the farm/consumer price. About what I thought.

Yup, regulations can be a pain. They started a farmers market here and there is about 1 farmer using it. The rest is art, craft, trinkets, 'cafe' stalls and hawkers. People are complaining about the amount of craft stuff and I can see why. I checked to see how to sell home cooked goods and bring in stuff from local farm producers. To sell arts and crafts all you need do is bring your goods and a table. For food/produce you need all the permits on top. To get a permit is a total bureaucratic nightmare. About the only way would be to have an existing business as it would be prohibitive to rely on the return on a market stall. A lot of fruit and veg is produced locally and I can get stuff to the market, linking the small guys up, but the paper trail - arrrrrrrrrrggh!

OTOH, we do get a lot of people driving the streets selling their produce off the back of a pickup. There is a local guy bringing in lorry loads of oranges and other fruit from other states. I buy the oranges at 3 pesos a kilo while the big stores sell at between 7 and 10.

A return to local produce would be well worthwhile for all except the big businesses.



You are correct about the trinket people infiltrating farmers' markets. Another problem is fruit & vegetable dealers who sell stuff that is brought in from hundreds of miles away. Both defeat the purpose of a local farmers' market.
Most farmers can't spend one, two or three days a week running a market stall... the "to do" list on any farm is truly endless. But stall fees can be considerable, so it's tough to go halfway on such arrangements.
You're also right about the regulations: church bake sales, school hot dog days, summer corn roasts & fish fries, etc are all coming under scrutiny.
In an emergency, we may find farmers being hassled for providing food to hungry urbanites because something lacks an inspection certificate. These are all foreseeable issues which should be examined well in advance of an actual problem.

A lot of people around here produce small quantities and sell on the street. I would struggle to produce enough home cooked goods to keep a stall running every day unless I took a shop unit and produced and sold from there (with the regs that would be my easiest, no, least difficult path). My thought was along the lines of middling stuff from the small guys and the market, getting them better prices at the same time as bringing in an income. It looks like too much of a mare, with all the hoops, to try.



I'll probably get yelled at, but I prefer microwave popcorn to making it in a pan. I always stink up the house when i do it that way. I'll only by natural or organic because of the transfat that like to toss in that premade garbage.

I also almost never go into the interior of the store, since i mainly by fresh or frozen... rarely by anything box.

I do think that dried foods make sense. Especially out of season items, like right now i'm eating dried plums vs some South American mush that they ship 8000 miles and try to pass off as fruit :)

I have never liked the smell of (Edit) /pre-packaged/ Microwave popcorn...then one day the stories started hitting the wires about the potential health hazards...


xperts believe when heated in a factory setting, diacetyl produces a toxic and potentially lethal gas. David Michaels, a former assistant secretary of energy, has been studying the issue for the last four years.

"Workers who mix the chemical as a liquid or powder breathe in small amounts of this chemical and it just devastates their lungs," Michaels said.

Now the comfort food is coming under scrutiny from those who want to be sure that ripping open a bag at home is not a hazard.

The Food and Drug Administration has never studied the effects of diacetyl, but Conagra Foods, which makes Orville Reddenbacher, told ABC News that it was confident that everyday use of its popcorn was safe for consumers.

But, I wouldn't worry...I am sure that ConAgra has our best interests in mind.

Edit: It is very good that you do not use pre-packaged, bagged MW popcorn.

BTW, what ever became of the idea of banning BPA in U.S. food containers? I think about that every time I open a can of something and see that white lining...

Ah, no matter, the goods must outweigh the bads, or our watchdog agencies would have BPA pulled from use, right? I wonder what, if anything, Canada or the EU has done?

Multiple commentators who are bullish on natural gas have appeared in the last couple of days. Today Art Berman's talk made it clear that while it is impossible to say for certain at what point prices will rise, at some point production of natural gas at the levels we have seen over the past year or two can no longer be supported in a depressed price scenario. There is a catch-22 here; if prices remain low, there will be downward pressure on supplies as gas drillers decide the return no longer justifies holding onto leases under "drill it or lose it" provisions and a lot less new acreage will be bought up. Until prices rise, there is a risk of long-term supply disruption with the recent growth in unconventional production being quickly depleted without massive ongoing drilling operations. But in my opinion, once prices do rise and begin to reflect the true costs of drilling unconventional wells, the public's enthusiasm for gas will also wane and demand destruction will begin. The first market to be impacted will likely be electricity generation where low gas prices are working to keep alternatives off the market.

The era of natural gas as a "transition fuel" and "alternative" to alternative energy may be ending before it ever really began.

Greed in the natural gas market is eating itself as they over-drill so that no one else can get their nose in on the land.

Reminds me of kids fighting over easter eggs grabbing way more than they need to box out the other kids, generally the younger kids.

I guess natural gas companies are not going to be able to find a cute way to drive up and control prices like they'd want to.

Oh well. I still keep the thermostat at 64 F either way. Enjoying the low monthly payments for a while at least.

WE/OCT - The price of NG stopped supporting much NG drilling 2 years ago…not some time in the future. At the peak prices there were 1,600 rigs drilling. Today there are less than 1,000...about a 40% decrease. Current NG production rates are a result of the explosive shale gas drilling programs. The explosion has fizzled. There are still some SG wells being drilled in sweet spots but even the #1 SG cheerleader, CEO of Chesapeake, has said the play is dead for the most part. He said that not only is CHK not doing any more SG drilling but no NG drilling at all. And they were one of the two most active NG drilling in the US…along with Devon which today is virtual dead in the water. Folks shouldn't let the lag time between drilling and depletion fool them. When NG rebounds so will drilling. But the slow down over the intermediate years years will still show up and won’t be eliminated regardless of how many new wells are drilled.

Greed? Over drilling? Oct, you must be talking about 2 years ago? There is no over drilling going on like there was then. Today NG producers are going under all the time. They just don’t get the press coverage. Fortunately they ”greedily” got out their and over drilled during the SG boom. Fortunate for consumers that is. Thanks to the over drilling and recession NG is about 1/3 the price from the peak. Drive prices up? They were responsible for a good bit of the price crash. If you want to get in on the greedy over drilling going on today I can get you drilling rights on 10’s of million $’s of shale gas leases Monday. And it will cost you not one penny. All you and your partners need do is commit to spend around $6 million to drill your own well on their lease. I’m serious…I can put you or any other Todster in touch with a dozen companies will make that trade. All you’ll have to do is give them a small share of the production. Why? If no one drills those leases son they’ll expire. So if you’re ready to jump on the NG greed train let me know. I can use the finder fee I'll charge those companies.

I'm really keen to see what happens to NG over the next two years.

The problem is that the decline rates coupled with the rapid change in drilling should result in some pretty big oscillation patterns.
High prices drilling boom then low prices collapse etc.

One has to imagine this time around that the drilling boom would be muted and concentrate on known sweet spots. So I'd argue Shale drilling will get more selective and also work to pull down the best parts of the plays first.

Next time around most of these sweet spots are gone rising prices will result in and even more muted boom and less production as the plays are in significantly worse shape.

Next one after that no real boom and I'd argue that production would be flat to declining in general pretty much regardless of price.
The last of the sweet spots basically gone at this point.

Until we hit the next price peak we won't really know the time scale so once it does happen I'd argue we have a pretty good guess at how long Shale plays can offset declines in conventional production. And of course if I have the pattern right.

Thats not to say shale plays won't continue to contribute indeed they will likely become and ever increasing percentage of the total even as they enter the mature phase. The areas outside the sweet spots are huge. Just eventually they will no longer be a source of relatively cheap NG. At some point along the way I'd argue that NG prices would return to tracking closer to oil on a BTU basis. One reason I don't think NG will prove to be a viable alternative to oil in the long run. It may offer a discount but simply not enough to make it a viable cheap alternative.

And also of course obviously the UNG wells are at the extreme of technology. You have pretty much hit the limit as far as decline and production rates go. Lower production rates with the same decline rate probably don't do a lot of good. I tend to doubt that the decline rate problem is solvable. In short I think we basically hit the technical wall.

Memmel - I agree: when we see a big bump up in NG prices I seriously doubts that we’ll see a proportional increase in drilling. A number of obvious reasons: not as many operators in the biz any more; Wall Street won’t be able to hype the public stocks as hard with those bitter memories of shareholders still fresh; lack of equipment…no one building lost/worn out equipment today plus consolidation (i.e. reduction) of the service industry; continued concerns about cheap imported LNG; a general lack of finance available to the industry.

A minor observation: the SG plays were not a source of cheap NG. The cost, particular when related to net present value, was very high. Those SG wells are delivering cheap NG now because of the recession. Much of this NG cost twice as much or more than it’s selling for today. As always: csg flow is king even if you’re selling below your cost.

It’s also important to remember how much DW GOM NG added to the current situation. In the middle of the SG boom the DW Independence Hub came on line at 1 bcf/day. That would be the equivalent of perhaps as many as 300 SG wells coming on line at once. With the DW drilling shut down we’re going to see a lag of at least several years for any significant new potential is added. Though not as short lived as SG production, DW fields typically deplete much faster than those onshore. As far as the next two years I expect little change in the NG situation.

Unlike oil NG drilling/production/trading/importation just doesn't have the velocity that oil has. Just a WAG but I would guess more like 4 to 5 years. And that would be very dependent upon economi recovery.

Unlike oil NG drilling/production/trading/importation just doesn't have the velocity that oil has. Just a WAG but I would guess more like 4 to 5 years. And that would be very dependent upon economi recovery.

Really that long ? That suggest 15 years or so for the cycle to play itself out. On the other hand as far as I know the estimates about decline rates in conventional are still accurate.


Given your 4-5 year estimate and assuming you mean a peak cycle boom to bust then life might get pretty dang interesting.
I think the same thing holds for offshore production.

The problem is it seems to me the cyclic nature of unconventional production will interact badly with the decline in conventional production.

Extremely volatile natural gas prices probably make it a pretty unreliable alternative energy source.
I also have to wonder if the LNG market might also become highly volatile at some future date.

Natural Gas is intrinsically less fungible then oil as we are forced to rely on it in the future I can't help but wonder if
it will prove to have a lot of price volatility. Heck volatility in price seems to be the rule for North American NG for a
while now.

And your 4-5 year estimate looks pretty close to correct.

How exactly are we going to rely for everything on and energy source that seems capable of seeing 50% or more price moves over a period of years ? The volatility is worse in a lot of ways then plain old high prices.

With all that said in the long run using shale and other unconventional plays to make ammonia and other high value products make tons of sense vertical integration to a steady market aka fertilizer makes everything work.

Hi memmel, voloatility exists because that is what financial speculators live off of. If too much natural gas is traded on long-term contracts, there is no place to speculate, and thousands of multiple-pc-screen-staring traders will have nothing to do.

That said, if natural gas is to make a comeback as fuel for base-load NG combined-cycle power plants then utilities must unavoidably buy natural gas on long-term contracts. Let us hope this happens. It will displace a lot of legacy coal power plants that are our number one environmental plague, and it will bring a little bit of much-needed sanity to our whole energy market, that is basicly punching itself with invisible hands daily instead of a healthy once-a-year or so.

Memmel - My 4 - 5 year guess is based partly on my experience in the oil patch with the drilling/production dynamics. NG production capabilities change very slowly…as you point out it’s not nearly as fungible as oil. Both producers and consumers are held hostage by pipe line necessity. The Independence Hub addition of 1 bcf/day over night was truly unprecedented yet it increased domestic production less than 2%. There I feel fairly confident. The other controlling factor will be the economy/demand side. In that aspect I have little confidence in my prediction.

NG has always been volatile short term to some degree by weather conditions. The oil patch is always hoping for that long cold snap. The pipeline limitations then drive the price up. Even though we have long term NG storage the p/l system is still a choke point. Utilities et al can always buy long term contracts to limit such spikes. OTOH imagine what they agreed to pay for future purchases when NG was over $10/mcf and then eventually saw the price drop below $4/mcf. The roller coaster ride is tough on both ends of this deal. When prices run up again significantly, increased NG production will increase but relatively slowly IMHO. Folks see the increase in domestic NG production ramping up several years ago and feel it was caused in the same time frame. It wasn't: it took several years for the pieces to fall into place to drive the drilling increase and then several more years for increased drilling to have an impact. Thus my prediction of any significant gain in NG rates taking a good 5 years once the economy signals a demand increase. And that’s 5 years from when that happens…not 5 years from today.

But the effect of over-drilling 2 years ago is not good for natural gas. That is my point, but maybe it is the way things are with a commodity like natural gas -- a much more robust boom and bust cycle than oil. There was greediness but it led to falling ng pricing. When will NG come back to its 2002 prices? within the year or so?

Can someone explain why oil is able to be held laser-sharp steady today?

I am wondering about total world storage of oil -- how big is it? And are there secret storage areas being used. How much can the military store and could they be used to buffer prices in any way? How much oil possibly could have been saved and stored during the downturn. I assume somehow stored oil and products are being used to keep the market stable in some weird way.

For a true blue commodity what is the price fluctuation percentage % expected based on the market volume and so forth. If we look historically at oil prices, can we examine the noise in oil prices and see if they are losing noise today or gaining noise (volatility).

I know a lot of questions.

Oct - I agree about the over drilling several years ago being disastrous on several levels. I was under contract at Devon working for the drillers who were doing the SG plays. And everyone there knew they were involved in a high speed chase that could end up in a fatal crash if prices collapsed. And that's exactly what happened. Devon had to sell all its high value assets (including a huge DW Brazil position) to just keep the doors open. From the oil patch side folks might find it hard to believe but we would be very happy if there were a way to fix future NG prices. I’ll just pull a number out of the air: $7/mcf. The NG producers would be more than glad to give up the $10+/mcf price spikes in return for also losing the $4-/mcf busts. “Greed” isn’t the worse choice of words but I would go with “pressure”. Public companies are pushed by Wall Street to max short term gains. Comply and your stock value goes up…don’t and they crucify you. It was as much fear as greed: if a CEO doesn’t make Wall Street happy then the board isn’t happy. And CEO’s typically don’t last long when the board isn’t happy. There were virtually no big non-public companies in the shale gas drilling boom. That should tell everyone something about the true profitability of SG. Folks don’t realize that because those companies don’t put out press releases and the MSM doesn’t do it homework.

Questions are good: that’s what TOD is all about IMHO. I’ll let some others jump in on the balance of your post.

I myself would rather have personally seen NG stay at $7 instead of crashing because it is giving some people a false sense of energy security. I guess the nature of the beast is what ensued, and these ripples of boom and bust would propagate out over time until the market and economy adjusted to the new found surplus of gas.

Perhaps the problem may have stemmed from too much wall street cash being thrown at the problem. Now in retrospect a lot of problems may be occurring due to over-investment.

But oil is different. I am assuming the Wall street investment levels are very high for oil.

Now contrast the behavior in US SG to world crude and it is very frightening. Because oil snapped back rather quickly to ~$90 while gas is depressed and lagging. Therefore, one has to assume that oil is in bad shape, because NG should be used with oil in various processes.

If NG does not snap back then we are in deep rut and the gains in the oil market reflect that the rest of the world is sopping up the supplies and oil is having serious trouble meeting demand despite very high levels of investments.

Sounds like there's a need for another Texas Railroad Commission, but for natural gas at the national level. But, these days, such interference in the "free" market is heavily frowned upon. After all, haven't the Tea Party folks and the Palinites been telling us all we need to do is "Drill, Baby, Drill"? These folks will probably be chanting about getting the government off their backs while they are waiting in line for their food stamps...

E. Swanson

Why We Might Fight, 2011 Edition

WASHINGTON — Rare minerals. Food and water. Arable soil. Air-cleansing forests.

In the intellectual heart of the American military and policy-making world, these are emerging not just as environmental issues, but as the potential stuff of conflict in the 21st century.

In some ways, the role of resources in shaping conflict is nothing new. Much as the Spanish conquistadors sought gold, Saddam Hussein fought for Kuwait’s oil. And downstream lands have long worried that neighbors will limit water flowing in the Nile, Euphrates and Jordan.

Now a new field of systematic study is opening within research centers, the Pentagon and intelligence institutions. It assumes that the 21st century will be shaped not just by competitive economic growth, but also by potentially disruptive scarcities — depletion of minerals; desertification of land; pollution or overuse of water; weather changes that kill fish and farms.

Russian Fleet To Focus On Keeping Sea Lanes Open For Oil Shipments

The editors of the military affairs site, “Voennoye obozreniye,” surveyed leading Russian military experts about how they see Russia’s naval policy developing over the next decade. The experts identified four “main directions” in a plan that calls for adding 36 submarines and 40 surface ships (topwar.ru/2646-reforma-flota-glavnaya-ugroza-na-dalnem-vostoke.html).

First, the experts said, the plan is intended to allow Moscow to protect its access to oil and gas reserves as well as other mineral deposits on the continental shelf off of Russia’s shores, something that many Russian commentators have already pointed to in their discussion of that country’s Arctic strategy.

...The new plan, the experts said, is based on the assumption that the United States will no longer play the role of “the most probable opponent.”

"....in a plan that calls for adding 36 submarines ..."

This is an intersting tidbit. I suspect that, like the US, Russia has decommisioned many of its subs designed for under ice operations. I've noticed that some of the later US LA class attack boats seem to have been upgraded to have the capacity to surface through thicker ice, something earlier LA Class boats weren't designed to do.

Some interesting stuff on the subject:


On using the (Canadian claimed) Northwest Passage:


My (perhaps naive) hope is that the BAU PTB will reach the conclusion that large scale attempts at the exploitation of Artic resources will be a bad play. To me, it reeks of cold sweat desperation, though history tells me that if the stuff is there, we'll drill it, pump it, sell it and burn it (or die trying).

In spite of all the bluster by Canadian politicians, it is the USA and Russia that have the most by far in terms of undeveloped Arctic fossil fuel reserves (mostly gas). There is plenty of obfuscation about what a resource conflict is about in the Arctic. Some shelf extension mineral deposits near the North Pole are and will for very long time be a non-issue. As for fossil fuel reserves, there are enough Arctic islands in Russia's possession that its economic zone covers essentially all of the Eurasian Arctic shelf, except for Scandinavia, of course. I have not heard much fuss from the USA about Alaskan or Siberian shelf resources. But Canada has simply nothing to b*tch about since it is not going to get anything out of it and has almost nothing to start with.

"Leaked document shows EPA allowed bee-toxic pesticide despite own scientists’ red flags" - Grist

"It's not just the State and Defense departments that are reeling this month from leaked documents. The Environmental Protection Agency now has some explaining to do, too. In place of dodgy dealings with foreign leaders, this case involves the German agrichemical giant Bayer; a pesticide with an unpronounceable name, clothianidin; and an insect species crucial to food production (as well as a food producer itself), the honeybee. And in lieu of a memo leaked to a globetrotting Australian, this one features a document delivered to a long-time Colorado beekeeper..."

"...An internal EPA memo released Wednesday confirms that the very agency charged with protecting the environment is ignoring the warnings of its own scientists about clothianidin, a pesticide from which Bayer racked up €183 million (about $262 million) in sales in 2009."


The corporate state is alive and well, apparently...

Two weather-related events that make me wonder how we will deal with collapsing infrastructure...

"Amtrak shuts down Washington-Oregon route after mudslide hits tracks"

"Amtrak spokeswoman Vernae Graham said mudslides north of Vancouver, Washington, led to a 48-hour moratorium. The rail lines extending from Eugene, Oregon, north to Vancouver are owned by Burlington Northern Santa Fe Railway, and the Amtrak Cascades train runs along those lines."


"Heavy snow causes Metrodome roof to collapse in Minnesota"

"(CNN) -- A blizzard warning remains in effect in parts of Iowa, Wisconsin and Minnesota where heavy snow caused the roof of the Metrodome in Minneapolis, Minnesota, to collapse, a spokesman for the Minnesota State Patrol said Sunday."


At what point are roof collapses going to go un-repaired ?

"At what point are roof collapses going to go un-repaired ?"

When there's no more Monday Night Football ;-)

It looks like they'll need to find another venue tomorrow night.

I imagine Monday Night Football will continue for a long time....roof design, on the other hand, may have to better take local weather conditions into account. We've become accustomed to building things that have esthetic appeal, often at the expense of functionality. I wonder how long it will take for folks to grasp that.

Here's an idea: Forget the roofs, and the players, coaches, and spectators can enjoy football the old fashioned way: In the elements!

I miss the old Met stadium. I saw the Vikes play there is the freezing cold. Thank god that Green Bay still has the balls to play outside . . . I hope that does not change.

The real idiocy is that they built an inflated dome in MN in the first place.

Did they really think that it would never snow fast enough or hard enough to collapse the dome?

What amazes me is that its been there for nearly 3 decades and this is the 1st time it has collapsed under snow load to my recollection.

No. The Metrodome has collapsed twice before this year, back in the nineteen eighties. It is a mistake of the architectural engineers.

It collapsed in 1983 or 1984 and took four days to fix.

Things going unrepaired or not properly dismantled after governments and companies go bankrupt may be one of the most serious effects of economic collapse. Without any hard facts, I would think the greatest barrier to building sustainable communities will be the cost to demolish and remove toxic relics of our industrialized past. For example, at some point refineries that have been abandoned will become a nightmare for those communities. There should be a required fund that is maintained for the eventual removal of these structures -- of course, some folks would just embezzle the funds or invest in real estate.

There should be a required fund... of course, some folks would just... invest [it] in real estate.

Well, that's the problem in a nutshell, isn't it? If you assume a collapse so severe that this sort of thing can't be handled, then it simply won't be handled (a variant of Stein's law.) In such a scenario, any "required fund" that had been set aside would just evaporate. There would have been no safe place to have put it - not real estate, not currency-denominated instruments, not anything else.

Yep, and it's not just refineries. Nuclear power plants are already hugely expensive to deal with after their productive lives are over. I suspect that before many more go under, society will simply be unable to afford to do anything with them, or with the huge and mounting quantities of radioactive waste being stored around them.

The best thing would have been never to have built any of them.

The next best, to shut them all down now while we still have some cash and resources to deal with them, and not to build any more.

But instead we hear about a glorious new "nuclear renaissance" that is about to save us all from energy depletion.

Give me a break.

Let's not take this out of proportion. The 'roof' of the Metrodome is an inflatable roof that apparently just got too much snow too quickly such that it could not keep enough pressure to keep it up. The roof is not 'broken', they just need to remove some snow and re-inflate.

"The roof is not 'broken', they just need to remove some snow and re-inflate."

According to the latest news, the seams ripped. Too much stress.

Looks like a pretty big hole here:


I doubt their "Handy Andy Domed Roof Patch Kit" is gonna do the job this time.

Watch it happen here:


You can fix anything with duct tape and superglue ;-) I guess the engineers forgot that MN is a northern city with snowfall. Pesky 30 year events always get us.

I imagine when costs are considered they had the option to have a sturdier dome but it would cost x dollars more. I wonder if that math worked out for them?

Wow. My apologies, I stand corrected. I assumed they would have a fail-safe system that would have it automatically deflate instead of risk such rips. I guess that is what I get for assuming smart engineering.

My concern is that it will get worse since the dome is now a bowl. There has to be an immense amount of weight accumulated on this thing. More snow predicted Wed/Thurs. Perhaps they can get it re-inflated by then.

Maybe the Lions and Vikings can merge like Dayton and Hudson.

You'd have one good stadium and possibly one good team if you select the better players from each.

Does this mean that the MN taxpayers will be shelling out for a new stadium?

The Vikings will probably move to Los Angeles as soon as their lease on the Metrodome expires. Unlike the Minnesota Twins--who have a beautiful baseball stadium in a good location (accessible by light rail, the Hiawatha Line)--the Vikings owner and management fumbled when it came to the politics of getting government money to help build a new stadium.

With Peak Oil will come fewer professional sports teams and also more playing within regions instead of against opponents who are 1,000 and 2,000 miles away. Pehaps baseball teams will play opponents for a seven game series instead of the three or four day series that are now typical. I daresay the salaries paid to professional athletes will fall substantially in real terms over the next fifteen years.

"With Peak Oil will come fewer professional sports teams..."

Meh, I dunno. Bread and circuses and all that. Even if the salaries came down from high orbit, they'd still be stratospheric. It's hard to see how transportation costs could even appear on their radar screens anytime soon; the rest of the population would be reduced to using oxcarts long before that happened...

Major League sports used to rely on streetcars (and in New York the Subway) to get the fans to and from stadiums. I do hope streetcars will come back; I have fond memories from the forties of going all over St. Paul in streetcars for a nickel a ride. And, if memory serves, the streetcar lines were profitable. Of course a nickel in 1947 bought as much or more as a dollar would today.

In ancient Rome, the rich were carried by litter bearers to the circuses. Others travelled on foot. I won't be surprised to see bicycle ricshaws on the streets of American cities within fifteen years. (Honolulu also has bicycle ricshaws and has had them for many many years, but they are mainly for the tourists.) Pedicabs--I think that may be what they are called.

We have pedicabs in Washington, DC. A few different services in different areas, I believe. We're also putting in new streetcar lines and expanding the Metrorail system. That is all assuming our mayor-elect Vince Gray doesn't set about to cancel all the plans that have been made - not that he's signaled he would per se, but he hasn't exactly been known as a champion of public transit during his years on the city council, and hasn't been nearly as vocal on the issue as the outgoing Mayor Fenty.

Don, there are a number of bike rickshaws in operation in my neighborhood of Minneapolis (Seward/Cedar-Riverside).


Of course, there is also the bicycle bear truck.


The Cedar Lake Trail is now being extended right under the new stadium and on to the river. It will be interesting to see how much this is used for transport to and from games.


My own paranoia is that the stadiums will soon be used much as they were shortly after the Pinoche coup in Chile.



Cheer up! Minnesota Nice will get us through the decline and collapse to come. Seriously, I do think Minnesota is one of the best two or three states in which to live the next twenty years. We have plenty of water, grow lots of crops, raise lots of turkeys and pigs and dairy cows, have lots of taconite up on the Iron Range, and also we have lots of timber up north. Plus, for transportation we have a good river system.

Minnesota was a good place to live before oil and, I think, will be a good place to live after oil.

Good to hear of all the bicycling in Minneapolis. As I was out for my morning walk today I encountered a bicyclist on the sidewalk. We are Minnesota tough, and the blizzards help to keep down the population of riff-raff.


You forgot that we have a port on one of the Great Lakes!

"Cheer up! Minnesota Nice will get us through ... "
And with AGW the winters will soon be much warmer than in the past! Longer growing season. But maybe more riff-raff :-(

Minnesota? Stay away. Its like Wisconsin, but colder and has less water. :) j/k

I once walked across the Mississippi River. How you ask? During a cold January we wanted to fish a pocket, but had to come from the MN side of the river (Dresback)...so we basically walked right under the I-90 bridge... Looking back at it...probably the stupid thing I've done!

17 inches of snow out of this storm. I need a snowblower.

Major League sports used to rely on streetcars (and in New York the Subway) to get the fans to and from stadiums. I do hope streetcars will come back;

Well, Calgary did bring back the streetcar, in the form of their light rail transit system. It runs past the hockey, football, and baseball stadiums. They have a storage track next to the hockey stadium to keep a couple of trains ready for when the game ends. Then they start moving 3-car trains through the station as fast as possible, 90 seconds apart.

They can move an unbelievable number of people in a very short time if they maximize use of the "crush" space in the cars. The fans are usually in a pretty good mood and don't mind being crammed in cheek to cheek. You just have to keep your hand on your wallet to make sure no one gets it before you reach your stop.

But the Olympics broke the bank. Government deficits rose every year after 1999, peaking at 7.5% of GDP in 2004, the year of the Olympics, thanks in large part to the 9 billion euro price tag for the Games. For a relatively small country like Greece, the cost of hosting the Games equaled roughly 5% of the annual GDP of the country.

Of course, the Olympics didn’t usher in an economic boom. Indeed, in 2005 Greece suffered an Olympic-sized hangover with GDP growth falling to its lowest level in a decade.


Looks like spending on entertainment (videos, DVDs and blue-rays) peaked in 2004 at about $21 billion. Sports cannot be too far behind. Entertainment is entertainment at the end of the day and that budget is shrinking not growing.


Professional sports far from recession proof


Decline in attendance eats into Indians profit


The End of Consumerism article above did not quote its "facts" from a good source.

The CIA's World Factbook does indeed say that their 2009 estimate for United States oil production is 9.056 million barrels per day. (https://www.cia.gov/library/publications/the-world-factbook/geos/us.html)

BP's Statistical Review of World Energy
has the United States producing 7.196 barrels of oil daily in 2009. They specify the figure "Includes crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas where this is recovered separately). Excludes liquid fuels from other sources such as biomass and coal derivatives."

The Department of Energy's Energy Information Administration has their preliminary figure for United States crude oil production in 2009 at 5.310 million barrels per day.

As a first approximation, at least one of these sources is either completely incompentent or is engaged in the practice of disinformation.

At any rate, if you are writing a high school research paper on oil, finding one source and quoting it is probably an adequate job - and a source called the "World Factbook" does sound authoritative. If you are supposed to be writing a more professional commentary on oil, you should be responsible for checking all the sources, understanding what their definitions of "oil" are, and getting at the truth behind its bodyguard of lies (as Winston Churchill phrased it).

The "End of Consumerism" article is just not professional. The general idea may be right, but this presentation of it is at best half-baked.

All these quoted figures are consistent.

The CIA value is the EIA's "Total Oil Supply" and is crude + condensate + ngls + biofuel + refinery gain and is now listed by the EIA as 9.65 mb/day for Q4 2010 (up from 2009).

The BP figure includes ngls but omits biofuels and refinery gain which drops approx 2mb/day from the total supply figure above.

The EIA figure is crude + condensate only (ngls contribute approx 2mb/day to "Total Oil Supply") so drops roughly another 2mb/day from the BP figure.

The most brain-dead opinion piece you'll ever read in a newspaper about the Department of Energy . . . an op-ed by the 'Motor City Mad-man', Ted Nugent.

Pull the plug on DOE

One has to wonder what end zone the Obama administration is running toward by shutting down oil drilling in the Gulf of Mexico for the next seven years.
The oil spill in the Gulf was bad enough, but making decisions that only serve to strangle America and make us even more dependent on foreign oil is much worse. Under the rookie misdirection of President Obama, if Fedzilla were in charge of eye exams, the first thing they would do is stick us in the eye with a sharp stick.

One of the contributing factors for the oil spill was that Fedzilla mandated that oil companies drill in deep water where there is arguably more risk instead of the more pragmatic drilling in shallow water, thereby contributing to the cost of drilling and increasing the risk. Typical of Fedzilla. Make things more risky and more costly and then tell us its for our own good.

I tend to be on the central-left and I try not to get too political on things . . . but seriously now. I can't ignore something so stupid. Yeah sure . . . the Federal government mandated drilling in deep water and stopped shallow water drilling. What? And the areas he 'closed' were closed before he entered office . . . he opened them but then closed them after the spill. And not that his closing made much difference because I doubt Florida would have allowed drilling anyway.

As the famous Steven Colbert statement said, "Reality has a well-know liberal bias." I really think that there would not be such a political divide if people could just agree on a basic set of objective facts about the world.

"Yeah sure . . . the Federal government mandated drilling in deep water and stopped shallow water drilling"

Well, indirectly, yes. When they say you can't drill where there is oil that is easy to get to, (like say ANWR) then you are forced to drill where it's harder and riskier.

What is missing from the left's viewpoint is where exactly we are allowed to drill. I mouse-trapped a liberal nicely once simply by asking him "where are they allowed to drill?" Existing oil fields won't help, drilling where there is no oil won't help, so that leaves...?

The liberal I trapped started saying we should all use less oil so no new drilling is needed, but I pointed out his very plush SUV in the lot (I saw him get out of it when he arrived) and asked when he was going to cut back, and then he abruptly left the conversation. Just another hypocrite.

So, for you honest liberals, where are we allowed to drill? A semi-graceful removal of oil from the energy economy is a 40 year process, if not more, so where do we drill until then?

What would put paid to this continual tit-for tat would be for the Fed Government to open every square inch of the U.S. to oil and NG exploration and production and provide generous tax subsidies to encourage oil companies to fan out and 'get 'er done!

Then use the bully pulpits of the Republican President Palin and Fox News, Rush etc to berate the oil companies to do their patriotic duty and go set conduct widespread and thorough seismic exploration, and drill exploratory wells all over the country...if Yosemite Nat'l Park ad a pool of oil under it, I would say drill there too.

I demand that this policy be enacted at once.

Then we would all see what happens...

So what if Florida and CA folks don't want to drill close to their coasts...forget state's rights, the Fed Gov needs to over-ride all those short-sighted local concerns in order to get all that oil!

Side-note: ANWR has lots of oil that is easy to get to?

OK, I'll bite...do you have a source for that assertion?

If so, great...let us drill there and get as much of that as possible!

Somehow I don't think that the U.S. would end up self-sufficient in oil...and a fuel tax to dive prices to European levels and subsidy of hi-mileage and EV vehicles would likely make our semi-graceful transition from oil much more likely than your drill, baby, drill and no conservation scenario, but I am tired of the meme...environmentalists/liberals, whatever...all need to demand to open every last bit of the U.S. to FF mining to call this bluff.

Well... I would find it easier to defend Florida's "we'll accept only the absolute zero of risk" stance if they had some sort of economy beyond liberally jet-assisted tourism, i.e. pure and wholly expendable oil-guzzling discretionary fluff. Since oil for jet fuel has to come from where it is, rather than where we or they might wish it to be, maybe we should forcibly shut down Florida's airspace and tourism lock stock and barrel until they change their minds.

It seems like "everybody", and especially places like Florida, wants to rely heavily on oil, but "everybody" also wants drilling in new areas forbidden because no risk can ever be accepted. Of course, many such areas will disappoint, and in the long run oil will deplete, at least in the sense of becoming economically infeasible for use as fuel, but one might prefer gradual adaptation to a sudden crash. (For example, I can't even guess what Florida's army of ill-paid bedsheet-changers might be retrained to do, but an orderly transition might work much better for them.)

Long ago, when I was 70yrs younger, Florida had an economy based on mostly orange groves and orange juice. What has become of that, I wonder? Must every bad thing be blamed on public regulation? What about saving some bad things to blame on private greed?

Private greed and wall street never make a mistake they would say. See they'd say that the Fed lowered rates and created a bubble and the congressmen (some democrats likely) allowed houses to be sold to poor people and then the financial markets collapsed. So to that logic all mistakes were on the Fed, policy makers, and Wall Street just had to pump the easy money at something -- wall street was innocent.

So private greed is always squeaky clean ;-)

Of course, many problems could be solved by some changes in personal behavior, but instead we rush to the stores on Black Friday and several people are trampled to death as a result at a couple of different Walmart stores. Nah that wasn't greed -- that was the government's fault for too much taxation. Maybe the store should have had posted the right number of people to control the crowds that they whipped up into a frenzy with the doorbuster items that are in limited supplies, but that would cost more money -- see that is not greedy at all.

Well... I would find it easier to defend Florida's "we'll accept only the absolute zero of risk" stance if they had some sort of economy beyond liberally jet-assisted tourism, i.e. pure and wholly expendable oil-guzzling discretionary fluff.

Thanks but Florida doesn't need your defense.


I don't think Florida is going to be much worse off than much of the rest of the US. See the comparisons of various sectors of the Florida economy as compared to the rest of the US in the PDF I link to above. Believe it or not, while the tourism industry in Florida is obviously a higher percentage of the overall economy than it is for the rest of the US, it still is a relatively minor sector of the overall economy.

(For example, I can't even guess what Florida's army of ill-paid bedsheet-changers might be retrained to do, but an orderly transition might work much better for them.)

Oh I don't know, they might be retrained in the delicate art of recto cranial extraction, a special service, offered to those that might not be currently able to smell the roses due to olfactory impediments.

So how is Florida in the summer without air conditioning--something a lot of people might not be able to afford in the future.

There were plenty of people living in Florida before air conditioning. Obviously we need to revisit how we build our buildings.


Live in an appropriate building. I discovered what a big difference appropriate architecture made because various friends lived in homes that were much better than the one I lived in. One place in particular was a small block of apartments built before air conditioning was common. They had jalousie windows on two sides, to let breezes through. They were only one story, so there was no second story to get hot. They were made of masonry, which helped stabilize temperature extremes.

I currently live in an old building with very thick walls and high ceilings even at the height of summer I rarely have an electric bill of more than $50.00 mainly because I use shades and ceiling fans and very little AC, plus I take cold showers during the summer.

I mouse-trapped a liberal nicely once simply by asking him "where are they allowed to drill?"

Oooh. You are so clever. Obviously if a liberal doesn't know every square inch of land where one can drill their view is wrong. Derp.

How about this . . . Every single square inch that has not been designated as off limits. And that would be the VAST MAJORITY of the country.

And for the record, I'm FOR drilling ANWR provided the government gets a really good royalty rate tied to the market rates and uses the money to fund alt-energy. The main reason I'm for doing so is to just end the brainless paranoid right-wing conspiracy theory of "We would be oil independent if it just wasn't for those dirty tree-hugging liberal hippies who block all oil drilling!" (that it would seem you subscribe to).

If the Federal Government said "You can drill anywhere in the USA you want to.", that would not change matters significantly.

"Every single square inch that has not been designated as off limits."

Not much use drilling randomly in places that are already drained or are already thoroughly drilled. Not much use drilling randomly in places where geological surveys show little or no expectation of finding anything much. Possibly more use drilling in places that look like other places known to have oil, or better yet that look that way and are next door to places known to have oil. So yes, let's get it over with. If the oil's there, then it's there and that's tough. If not, everyone can finally move on.

Sad but true spec...sad but true. I've been up for more than 24 hours dealing with a well in S. La. that has already cost us $12 million instead of the $6.5 million estimate. And now we have to redrill the last 3,000' again. But now we've taken over from our less than competant partner and will hopefully get the job finished properly. Everyone has the right to their opinion but I've looked for oil/NG for over 35 years now. I've got over $300 million in my budget to spend and my biggest problem is finding enough valid prospects to drill. And every prospect I do drill leaves one less out there. As I've pointed out more than once there are many positive reason for expanding drilling as much as is reasonable. But one reason is not to save us from PO...it just won't work. There is oil/NG left to develop in the US if the price is right and done environmentally properly. But save us from PO..a fantasy for a child's bedtime story IMHO.

How do you consider that a 'mouse-trapping' if you buy into peak oil? You toss someone an unanswerable question so you can get points for your team, but allow yourself the hypocrisy of admitting to the guy 'It doesn't matter where we drill, now, we'll be shooting for pocket-change..'

My wife loves it when she can toss me a question that I have no answer for.. enjoy the hollow victory. Meanwhile, what's in your tank?

My off-the-cuff response to someone who wants to "drill here, drill now" is to suggest that they hire someone to drill in their own backyard.

My more serious response is that if there were good places to drill in the U.S., the oil companies would be lobbying for permission to do so. Even if you grant that the oil companies should be allowed to drill everywhere, ultimately it would be a waste of scarce resources, and wasting resources is expensive. The oil companies may be greedy and might take shortcuts, but they aren't stupid. The fact that you don't hear such lobbying for anything besides ANWR basically proves that the oil companies don't believe there to be any oil to be recovered.

I saw a parked car with a "drill here, drill now" sticker on it, and I regretted that I didn't have my battery-powered drill with me.

I mouse-trapped a liberal nicely once simply by asking him "where are they allowed to drill?"

OK . . . quick. Please tells us every single place where they are not allowed to drill. I'm sure you are not hypocrite and you have that memorized. *rollseyes* If that works as logic & argument for you then I fully understand why you fall for whatever Rush, Beck, and Hannity says. (BTW knowing the specific areas has no bearing on whether the policy is good or not.)

A person I know through my business dealings makes ~ $40K/year from his military retirement and ~ $140/year selling contractor services to the MIC.

He loves Ted Nugent...anything that comes out of Ted's (or Rush Limbaugh's, et al) mouths is Gospel truth to him. Everything that my comrade considers wrong and bad in the World is attributable to Demon-crats, now specifically boiled down to the evil figurehead President Obama.

My comrade's attitude is pretty darn widespread amongst all the other contractor and Fed civil servant and military folks I deal with on a regular basis.

Big government/government spending is very bad, government is inherently corrupt and inept and evil...except, magically, when it comes to anything involving the MIC: DoD, DOE, DHS, NSA, CIA, EIEIO (and all their legions of red, white, and blue valiant contractors).

All those folks (in the 'Government Hero' organizations listed above) and their pursuits are largely efficient and honorable and must have our complete blank check and our utter trust...and don't ever ask for a little accountability and sunshine on what they are up to and how they do business...that would be traitorous!

Any inefficiencies or failings of the holy MIC organizations and their employees are of course attributable to insufficient government budgets and overly-restrictive environmental and HR laws, and those pesky un-patriotic accounting standards.

Some of you may think my rant is over the top, but this is what I see every work-day as the overwhelming majority report attitude with most folks I have dealt with in the MIC..for over 22 years. Of course poll after poll shows that the general public is in the same camp: The U.S. military (and by extension, all parts of the MIC) is consistently awarded high marks for trustworthiness etc.

Note: when all is said and done, one must give Limbaugh credit for one thing: he can hold a large audience by talking/ranting solo for, what is it, three 40-minute hours a day, week in and week out, year in and year out. Like him or hate him, that's a mind-boggling skill. I wonder how many writers he has; the norm for, say, late-night seems to be a small army that struggles to come up with a measly daily ten minute dose of material. Since people will watch (or listen to) what they consider to be watchable, I think you have acquired a frustration-for-life.

And yes, I have seen that Federal contracting can truly be an Alice in Wonderland world. However, do note that public attitudes to the effect that a country's military is about the only government branch that can ever get anything done are globally widespread; hence military coups often have public support even if it's not lasting. This may eventually prove to be a downside of perpetual gridlock.

Note: when all is said and done, one must give Limbaugh credit for one thing: he can hold a large audience by talking/ranting solo for, what is it, three 40-minute hours a day, week in and week out, year in and year out. Like him or hate him, that's a mind-boggling skill.

No doubt. Glenn Beck too. They are both radio DJs with high-school educations that have figured out a set of views that they can spew and maintain a big audience who feel better by hearing those views. The truth is completely irrelevant . . . what matters is ratings.

And I give them the same respect that I give Justin Bieber, Britney Spears, Lady Gaga, and others that accomplish the same thing.

So...give the Devil his due, eh?

Fine, I bow to Rush's evil greatness, and weep for the fact that so many people love to listen to him and pay his $400M contract and therefore avoid reality and abandon any hope for changing things for the better.

I also weep for the second point you made: Attitudes that idolize the military will likely lead to Don Sailorman's estimated end-game: Militaries run societies...explicitly.

It would be interesting to see how our children enjoy that state of affairs...

Ay-yup. Sic transit gloria mundi.

I am starting to convince myself that the MIC will last much, much longer than anything else in the Federal Government.

The military is basically already preparing for peak oil induced civic unrest in America, and there may come a time when people will beg for a job in the military.

One does have to question the whole scientific/industrial enterprise if this is the endgame, because it's all for nought, it just allows one group of humans with fancy weapons to exert control and influence over others without those fancy weapons.

The Pentagon is the world's largest socialist (or command) economy. I know some military who are Democrats, but darn few. If memory serves, Eisenhower was a Democrat before he switched to the Republican party in the late nineteen forties. Today, even the privates tend to be Republican. I think this is largely the fault of Democrats, who have done a lot to alienate military and naval forces in the U.S. By nearly monopolizing the votes of the military (and the Military-Industrial Complex), the Republicans have a huge advantage over Democrats.

Let us not forget that it was Eisenhower who first eloquently warned us of the dangers from an expanding military-industrial complex. I'm not sure who coined that phrase, but it would not surprise me if it were one of Ike's speechwriters.

As the production of oil declines, I expect the MIC to be the highest priority when it comes to rationing oil products. The civilian sector will get what is left over after military "needs" are satisfied.

Don, I think there are a few more non-Republicans in the military than you surmise.

The deal is, they keep their mouths shut and their heads down.

Same same, even to a greater degree, for the number of non-religious folks in the military.

Stay in defilade, never pet the cats backwards, conform and get paid.

As for non-hetero folks...well, that should be obvious...I strongly suspect that I have served closely with at least a dozen specific folks in my career...no one ever said so of course, and these people were not stereotypical flamer-gay-acting folks either...just people doing their jobs, some poorly, some in an average manner, and some exceptionally. Talk about staying in defilade.

In the military, if you are not in the majority (esp as tacitly supported by the Command structure), you do your job and STFU.

How does your friend make 40k a year on military retirement? My dad was in 23 years retired a Tech-Sgt, making only about 6-9k a year. Your friend a general or something? We bemoan their retirements like, they didn't put their lives on the line for their careers, or that the oath of office didn't say they had to go where they were told and get shot at by people trying to kill them.

While I am not saying that some things in the MIC are all good and dandy, people forget, that their are people out there in the rest of the world that would just as soon kill you as be your friend. If we had ever been invaded, you might all be singing a different story.

It'd be nice if everywhere in the last 10,000 years people never had a war one, and lived in harmony with each other, but that is not the case, nor will it be in the future.

Ranting off.
BioWebScape Designs for a better fed and housed world, if we can live in peace that is.


Firstly, I'm not saying that military retirees should be denied a retirement check...

My point is to say that my comrade is pretty well off, and is more than willing to go to the mat to keep the MIC alive, as that provides his current non-retirement income.

When did your Dad retire? If it has been a while, then a the times have changed.

I can tell you for a fact that I retired 2.5 years ago as a major (O-4) and my first monthly payment was $38,068 and that it is subject to COLA, so it is a little more now.

My Comrade retired as a Lt Col about 1.5 years before me, so my figure for him was an estimate, and likely a tad low to boot.

Please scroll ~ halfway down the page at this link and look at an E-5 with 20 years of service:


Comes to $16 grand a year or so. You can see that every year the E-5 stays in past 20 results in a higher payout.

Now examine this page for officers please:


You will see that an O-4 in 2009 who retired with 20 years of service grosses 38,148 per year, a tad higher than my first year payout from 2008.

Now for the fun: Please note that an O-6 (Colonel) who stayed in for 30 years and who retired in 2009 grosses $89,196 per year!

And if you know anything, you know there is a very big hurdle between attaining O-6 and attaining General Officer!

A two-button who retired with 30 years of service in 2009 will get $115,056 per year!

I found a blog post which claimed that there were 875 General Officers in the U.S. military in 2004.

This Washington Post article says that the number of GOs has increased by s13% since 1996, and that we have one more 4-button than we did at during 1971 during the Vietnam War, when we had twice the number of troops.

The DoD has become top-heavy, but does that surprise anyone?

Lesson to my story: If you are going to serve in the military and wish to maximize your in-service and retirement paydays, do so as an officer, and get into a field that pays a bonus (such as being a pilot in the USAF, or a linguist, etc. etc.) I made north of $100K when I retired from the AF...and no, bonuses do not figure into one's retirement pay...retirement pay is calculated at one-half of one's //base pay// (not including bonuses) when one retires.

Oh, and how many U.S. wars, police actions, military actions, etc. since WWII have staved off existential threats to the U.S.?

How well did our massive MIC deter the 9/11 attacks?

How much blow-back are we liable to endure due to our running roughshod over the ME (and other parts of the World...actions which don't make it into the press)?

Based on the huge amount of carping I have heard from Fed GS workers lately about the 2-year pay and new hire freeze enacted by the President, rest assured that our force is rather mercenary.

"Mercenary" is not necessarily a bad thing. IMO the military provides the most chances for a talented minority group individual to move up the social mobility ladder. Indeed, throughout history, the military (or naval) service has provided one of the chief paths of upward social mobility.

Look at the emperor Galerius in the ancient Roman empire. At age eighteen he was a shephard with no future except looking after sheep. Then he joined the Roman Army, rose to general and from there to emperor. He was a pretty good emperor, too, one of the last good emperors. (He did have a temper, however.)

Only if we are lucky will we get a military dictator like Julius Caesar. I think some populist demagogue in 2012 or 2016 is more likely to seize power than some General or Admiral. As I've suggested before, we should all read or reread REVOLT IN 2100 by Robert Heinlein, a Navy man.


Now that I know that you are ex-Air Force and concerned about PO, I'm wondering if you would have any observations on a couple of things.
You don't need me to tell you about the huge percentage of the military's oil consumption which goes to the AF. So given the concerns which were raised by Hirsch almost 6 years ago (Feb. 05) and the ongoing research coming from the war colleges, Joint Forces Command, Center for Naval Analyses, etc, one would think that USAF would be all over the PO issue, insisting that we all take quick & effective action to reduce auto dependency, etc.
But they are rather silent on this.

Second, one would think that all services would be aware of the threat which the current oil supply trends present not just for overseas capabilities, but especially for economic chaos and disorder on the home front.

It is this aspect which is stressed by that very thorough German military analysis of PO:

(just wondering if you've examined any of it)

"first monthly payment was $38,068 "
Surely this is a typo. Or some sort of accountant error.

Actually, the DOE has about half its budget dedicated to managing nuclear weapons, defense activities and radioactive waste (including environmental remediation) rather than energy, per se. Here is the DOE budget for 2011...

http://www.mbe.doe.gov/budget/11budget/index.htm#Summary Budget Documents

http://www.mbe.doe.gov/budget/11budget/Content/FY2011Highlights.pdf (PDF warning)

In summary :

Of a $33B budget :-

Atomic Energy Defense Activites : $16B
Including Nuclear Security Administration : $9B

I wonder, what do opponents of funding the DOE recommend we do with the nukes ?

The Department of Energy is a descendent of the Atomic Energy Commission, which was a euphemism for "nuclear bomb factories". Only relatively recently has it taken on a broader role with respect to energy beyond nuclear energy.

Only relatively recently has it [DOE] taken on a broader role with respect to energy beyond nuclear energy.

Depends on your definition of recent. I was at Los Alamos from 79-84, which was/is essentially a DOE laboratory. At that time about half of LASL's (which became LANL) budget was actually energy related stuff, with about half being Nuke weapons related. [And Los Alamos was arguably the premiere N weapons lab]. So its been that way for at least a third of a century.

Recent -- I was thinking of the last 30 years. In the early '80s, how much of the energy research was non-nuclear energy research? Of that, how much was on fossil fuel energy, i.e. the stuff we actually use?

Life on the poverty line: Breadline Britain

Thousands of people will be forced to take charity food handouts or go hungry this winter, as poverty hits people across the country. The spectre of families forced to subsist on charity hampers is so widespread that the Government is to provide food vouchers for the most desperate.
The need for the food parcels was described by campaigners as a throwback to levels of poverty more associated with Dickensian times than Britain in the 21st century.

Those dependent on emergency food boxes, which contain a three-day ration of essentials including tinned meat, fish and fruit, pasta, tea, milk and sugar, has increased from 25,000 two years ago to 60,000, of whom some 20,000 will be children. The organisation estimates that, on current trends, this would swell to 700 food banks feeding 500,000 people by 2015.

Wow, that's terrible.

And the VAT is going to be 20%? Ye gods. How can people afford that?

Ye gods indeed. European taxes have been like that for decades. Once before I told the story of an expat acquaintance who spent a few years in Britain and remarked that the government there took away his income (what with income tax, VAT, 'rates', and NICs) and gave him back just an allowance. On the other hand, they get "free" medical care over there. No need to worry about being financially destroyed by an illness as in the US of A. On the third hand, many are perpetually all but bankrupt anyhow and that's the real reason they may as well not worry. Bottom line: few, if any, free lunches are left on the table for anyone.

[Another variable: I don't know to what extent VAT is applied to which food items in Britain; sometimes, as with US sales taxes, it gets complicated.]

Correct, no VAT on food other than luxury and prepared foods (eg. from restaurants, take-aways, etc.). But as commodities, and in particular food, are going towards another ballistic price spike in 2011 it makes little difference. Basic costs are going to rise regardless.

As the following article shows you are also correct that many are perpetually bankrupt. Most British live hand to mouth while the elite via the Establishment accumulate all the wealth.

Low interest rates failing to rescue British households from £1.45 trillion debts, says Bank of England

The survey paints a deeply troubling picture of a nation still struggling to pay off its debts despite the historically low rate environment. UK consumer borrowings are around £1.45 trillion and have not begun to shrink. The Bank has already warned that more than one in two [why don't they say 50%?] people with "unsecured" debts, such as credit cards or personal loans, are struggling to cope.

Also given that almost all Britons have virtually no choice other than gas, electric or oil for heating and cooking (many new homes have no chimney) they're at the mercy of rising energy prices and currency fluctuations. Your average Briton has no control whatsoever over the essentials in their lives, they're totally dependent on the failing system for everything. And, as a legacy of empire, they've a population which is way too large for the resources available.

I felt awful after reading that article. People running out of food ... no money left. Truly horrific to imagine.

It is a horrible situation, no mistake, but at least our government is able to bail them out.

Try imagining the same in Africa - Darwin's Nightmare: http://video.google.com/videoplay?docid=9039818938732594749#

These are the people I really feel sorry for. It's a travesty that, in this day and age, we still turn a blind eye to the direct consequences of our actions.

I wrote recently on TOD in reply to a report of difficulties in keeping warm in Britain, that we have always treated low-income people badly (same for the mentally ill actually, a lot of latter end up in prison). We have always blamed the poor for 'improvidence', even, or perhaps especially, during the phoney prosperity and rise in private debt of the recent phase of economic globalization to 2007/2008.
We have had income redistribution safety nets but these get even trickier with various crack downs. A lot of the difficulty could be attributed apparently to people's perceptions, across all strata in society, who can not envisage that other people must live differently from themselves. Few are able to distinguish between median income and average income (the former is much lower than the latter, meaning 50% live well below the average income). The well off, particularly seriously high income groups, have no idea what lower income means. Similarly, those below median income mostly do not realize that a great many people have incomes that are multiples of their own, or that other so called 'ordinary' people are routinely much better off. People in work on low incomes have been particularly vulnerable.

An odd fact: student activists I know personally promoting 'food security' have raided large food dumps outside stores for unspoiled packaged food that was recently past its stamped "sell-by-date". They cooked the food and distributed it free but needed to overcome fear of "anything free", and then latterly the stores instructing their staff to deliberately spoil the food before dumping it.

I read something a while back about new, overstocked clothing items being shredded before being put in waste dumpsters, just so people couldn't get free stuff. It's insane.

The store's attorneys would probably not like others distributing their food past the sell-by date - if somebody gets sick for any semi-plausible reason then the store would likely face liability. The better solution might have been to give it away to a soup kitchen on the spoilage date for immediate consumption.

Some stores refuse to donate to soup kitchens and the like, for fear of liability. Just doesn't make sense, from a cost-benefit perspective.

Some stores actually pour bleach over food in their dumpsters, to keep people from eating the discarded food.

Washington, DC - 12/08/2010 - Private investments in G-20 clean power projects could total $2.3 trillion by the end of the decade, according to a report released today by The Pew Charitable Trusts. Massive energy demand and strong clean energy policies will drive investment to Asia, led by China and India. However, by adopting such policies, every G-20 member has the opportunity to attract more private investment in clean power projects and compete more effectively for business in this emerging global industry.


I wonder if this much capital is going to be available for this.

Tonga wants to have 50% renewable energy by 2012


If there is actual political will to achieve such a goal it will be interesting to see how it goes. According to Wikipedia 25% of its 2009 imports were diesel fuel.

What boggles my mind is that the family in the video has 8 candles on their dinner table, flickering in the breeze, and they talk about how they sit in the dark some nights when they can't afford candles. It seems to me that piles of candles in the middle of the table isn't the most efficient way of getting light. Even if you're on a strict budget and can't afford a good oil lamp, a couple candle holders with reflective backing would go a long way.

I use REI candle lanterns with reflectors. I also like the old-fashioned kerosene lanterns--but the ones made in Germany, NOT the crap made in China.

On climate, the elephant that's ignored

"If too little is done, the U.N. science network foresees temperatures rising by up to 6.4 degrees Celsius (11.5 degrees F) by 2100. In a timely reminder of what's at stake, NASA reported last week that the January-November 2010 period was the warmest globally in the 131-year record. "


My vote is for TOD to go back to daily Drumbeats, but make them half as long in articles. Offset the time needed for that by just having one special article once a week.

The daily Drumbeat was the 'Heartbeat' of TOD and now (in my opinion) this site suffers from cardio arythmia. It just doesn't have the same energy, the same dynamic flow. It's lost its quintessential mojo.

Problem is, how do you have a conversation on a topic when people only have an attention-span of one day? By day two or three, new comments are essentially down to zero, and everyone has moved on.

This being the holiday season, we probably have a reduced readership for the next 2 weeks.

Also don't forget the bad weather in the mid-West. There's more to life than just TOD.

Hang in there. The drum beaters will come back.

(If you beat it, they will come --or did that variation on a movie line come out with unintended consequences?)