Drumbeat: December 13, 2010

Fears of hacked eagles halts key wind projects

APPLE VALLEY, California — Fears that whirling wind turbines could slaughter protected golden eagles have halted progress on a key piece of the federal government's push to increase renewable energy on public lands, stalling plans for billions of dollars in wind farm developments.

The U.S. Bureau of Land Management suspended issuing wind permits on public land indefinitely this summer after wildlife officials invoked a decades-old law for protecting eagles, according to interviews and documents obtained by The Associated Press.

The restriction has stymied efforts to "fast-track" approvals for four of the seven most promising wind energy proposals in the nation, including all three in California.

Stable LNG supply behind Russia deal

Japan's latest move to join hands with Russia in building a liquefied natural gas plant in the Russian Far Eastern port of Vladivostok is aimed at ensuring a stable supply of LNG from that country.

A planned agreement between Japan and Russia to carry out such a joint project is greatly significant in that the deal would enable this country to secure a multitude of LNG suppliers, instead of its current heavy reliance on the Asian and Oceanian regions for LNG supplies. The move would shore up the nation's energy security, according to observers.

Brazil's Petrobras To Tap Credit Markets In 2011 - CFO

RIO DE JANEIRO -(Dow Jones)- Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, plans to tap global credit markets next year, adding to the cash horde the company raised in the world's largest share offer earlier this year.

"We are going to raise money from the market," Chief Financial Officer Almir Barbassa said.

Canadian oil sands firms team up on tailings study

CALGARY, Alberta Dec 13 (Reuters) - Canada's oil sands developers, stung by controversy over the environmental impact of their toxic waste ponds, said on Monday they agreed to collaborate on research into speeding up reclamation of the northern Alberta land they cover.

The move comes after Syncrude Canada, one of the largest developers, was found guilty in the 2008 deaths of 1,600 ducks in a tailings pond, an incident that brought the issue into the international spotlight.

They Haven’t Learned

The oil industry, its lobbyists and its Congressional allies are predictably furious at the Obama administration’s decision not to allow exploratory oil drilling in the eastern Gulf of Mexico and off the Atlantic coast. The decision was unquestionably the right one.

The Shadow War

Someone is killing Iran’s nuclear scientists. But a computer worm may be the scarier threat.

Ukraine to open Chernobyl area to tourists in 2011

KIEV, Ukraine – Want a better understanding of the world's worst nuclear disaster? Come tour the Chernobyl nuclear power plant.

Beginning next year, Ukraine plans to open up the sealed zone around the Chernobyl reactor to visitors who wish to learn more about the tragedy that occurred nearly a quarter of a century ago, the Emergency Situations Ministry said Monday.

Silver lining in dark economic times: Recycling rates soar

For the past three years, Mark Schwede has been coming to Ranch Town Recycling in San Jose's Willow Glen neighborhood, dropping off cans and bottles every couple of months to make a few extra bucks.

As the economy worsened, he began to notice a change.

"Before, it was mostly people with shopping carts," he said. "Now you're seeing nicer cars here."

Exxon CEO says global oil markets well supplied

RAS LAFFAN, Qatar, (Reuters) - Exxon Mobil Corp Chief Executive Rex Tillerson said on Monday global oil markets are well-supplied.

"Inventory levels are still very healthy in the U.S. and other OECD (Organisation for Economic Co-operation and Development) countries," Tillerson told reporters at an event in Qatar's industrial city of Ras Laffan.

"You still have OPEC (Organization of the Petroleum Exporting Countries) with spare capacity of something like 6 million barrels per day. I would say there's plenty of supply," he said.

UK Looks To Qatar To Meet Rising Gas Demand - UK Energy Min

DOHA (Zawya Dow Jones)--The U.K. will import more Qatari gas over the coming years as domestic supplies of the fuel dwindle and it looks to boost energy security amid fears about relying too heavily on Russia, the country's energy minister said Monday.

In an interview with Zawya Dow Jones Monday U.K. energy minister Charles Hendry said the U.K. currently imports 12% of its gas from the Gulf Arab state of Qatar and this figure would rise in the coming years.

Enbridge's Line 6A resumes oil shipments

CALGARY, Alberta (Reuters) - Enbridge Inc said it resumed oil shipments on its 670,000 barrel per day Line 6A pipeline late on Sunday, five days after shutting the conduit for safety testing.

Shell Rejected by High Court on $54 Million Award in Oklahoma Lease Case

The U.S. Supreme Court rejected a Royal Dutch Shell Plc unit’s appeal of a $54 million punitive damage award in a decades-old Oklahoma dispute over oil and gas profits.

Declining to consider putting tighter restrictions on damages, the justices today left intact an Oklahoma state court decision that said the award was within constitutional bounds.

Feinberg Said to Offer Oil-Spill Victims Fast-Track Compensation Process

Kenneth Feinberg, administrator of the $20 billion BP Plc oil-spill claims fund who has been faulted for slow payments to victims, will offer a quicker process to final compensation.

Russia should make offshore operations laws stricter says deputy PM

Russia needs to strengthen its legislation on development of the coastal shelf by oil companies, Deputy Prime Minister Igor Sechin said on Monday.

"In most countries, legislation covering shelf operations is much stricter (than in Russia). We need to modernize and alter the legislation," Sechin said.

The new hungry: College-educated, middle-class cope with food insecurity

Feeding America said 36 percent of the people who get food from its soup kitchens and pantries have at least one employed person in their household. While rural and urban areas continue to require the most assistance, several food bank workers say the need in suburban areas has risen more quickly.

Has OPEC built enough capacity during the lean years?

(Reuters) - With oil prices near $90 a barrel for the first time in two years, one of the biggest questions for analysts is has the Organization of the Petroleum Exporting Countries assembled enough spare capacity to quench over-heated markets this time?

At least five major banks including Goldman Sachs, Societe Generale and JP Morgan raised their mid or long-term oil price forecasts last week, betting on faster than expected oil demand growth slashing the world's buffer supplies within two to three years.

The most bullish forecast came from Goldman Sachs, the largest investment bank in commodities. The bank's energy analysts warned that if their projections for global oil demand growth of over 2 million barrels per day (bpd) in both 2011 and 2012 prove correct, OPEC spare capacity could quickly be exhausted.

The Myth of Peak Oil Demand and the Example of Loma Prieta

The demand-shift response to the Quake of ’89 is actually a helpful narrative to understand larger demand-shifts now taking place in the global oil markets. And, the story also helps to clarify the primacy of supply, and how demand is only inelastic up to certain barriers. Yes, it’s true that Bay area drivers used many highways and roadways that were affected in the quake: right up until the time they collapsed.

OPEC Cheating Most Since 2004 as $100 Oil Heralds More Supply

OPEC is breaching its production limits the most in six years, signaling the world’s biggest suppliers are ready to pump more crude next year as oil rallies toward $100 a barrel.

Crude Rises as China Imports More Oil, Increases Refining Rates to Record

Crude advanced after a government report showed Chinese refineries ran at record rates last month, signaling oil demand will continue to increase in the world’s largest energy user.

Futures gained as much as 1.5 percent, rising with global equity markets. China’s refiners increased crude processing to a record in November, according to the China Mainland Marketing Research Co., which compiles data for the National Bureau of Statistics. The Organization of Petroleum Exporting Countries maintained production quotas at a Dec. 11 meeting.

“We could be heading for a year-end rally, as the general outlook is good,” said Roland Stenzel, a crude-oil trader at E&T Energie Handelsgesellschaft mbH in Vienna. “Fundamentals from Asia are much better than the U.S.”

A Secretive Banking Elite Rules Trading in Derivatives

Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer’s home heating-oil company in Westchester County, north of New York City.

This fall, many of Mr. Singer’s customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.

But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices — and his customers’ prices — could be, he says, because banks don’t disclose fees associated with the derivatives.

Contango Reverses as Oil Producers Sell Near $90 a Barrel

Oil producers increased sales for the first time in four weeks to lock in profits near $90 a barrel, reversing a two-year contango and raising speculation that stockpiles will decline.

Saudi Arabia Said to Cut Naphtha Exports to Asia on Refinery Maintenance

Saudi Arabian Oil Co., the world’s biggest state-owned oil company, may reduce naphtha exports to Asia next year because of refinery maintenance, said buyers who were notified of the company’s plans during supply talks.

U.K. Natural Gas for First Quarter Falls as More LNG Tankers Are Expected

U.K. natural gas for delivery next quarter declined as more liquefied gas carriers headed to the U.K. and Belgium. Power for delivery tomorrow rose on forecast increased demand.

The port of Milford Haven in south Wales will receive two additional LNG deliveries this month, according to its website. Belgium’s Zeebrugge terminal, linked to the U.K. by pipeline, will also get a shipment, shipping data show.

South African Coal Prices May Extend Rally Two-Year High on European Cold

Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, may extend gains from a two-year high as cold weather in Europe boosts demand for the fuel.

Factbox: OPEC ministerial comments at Quito meeting

QUITO (Reuters) – OPEC agreed to maintain current oil production levels at its meeting on Saturday while Saudi Arabia reiterated that $70-$80 a barrel was its favored price for crude.

The group scheduled its next meeting for June 2 to discuss production policy.

Below are comments from OPEC ministers and officials at the Saturday meeting:

New York governor halts gas "fracking" until July

NEW YORK (Reuters) – New York Governor David Paterson on Saturday halted a controversial form of natural gas drilling in the state until July and ruled no such drilling take place until environmental regulators deem it safe.

The industry and environmentalists -- normally rivals on the issue -- both applauded Paterson's executive order, which stops all horizontal, high-volume hydraulic fracturing, or "fracking," while calling for further study of that method's impact on drinking water.

Detroit’s Monsters Thrive on a Diet of Cheap Gas

CARACAS, Venezuela — Ascending the narrow streets that wind through this city’s hillside slums, the graffiti steadily gets more radical and anti-American, repeatedly proclaiming “Yankees go home!” amid murals denouncing President Obama and Secretary of State Hillary Rodham Clinton.

But at the same time, the cars get bigger — as in ’70s-style, gas-guzzling, Starsky-and-Hutch, Ford-Gran-Torino big — and American.

Transparency: How Much Does the United States Subsidize Energy

The government spends billions of dollars to support the energy industry, which allows it to make energy cheaper than it should cost on the open market. These subsidies—either in the form of tax breaks or direct funding—favor some types of energy over others, giving our country a skewed sense of what each gallon of gas or wind-powered electron costs. This is a look at where the government directed its subsidy dollars from 2002 to 2008.

Robert Bryce: Lame-Duck Bailouts for Ethanol and Wind?

Ethanol is the Frankenfuel of the energy business, a subsidy-devouring monster that cannot be killed, no matter how great the political opposition. Farm-state senators have apparently succeeded in adding an extension of the ethanol tax credit, which is scheduled to expire at the end of the year, to the tax bill now working its way through Congress.

While that news is disheartening enough, the wind-energy business — the electricity sector’s equivalent of the ethanol scam — may also be winning in its effort to garner more federal subsidies. It is pushing lame-duck legislators to extend a part of the stimulus package known as the Section 1603 tax credit, which gives cash directly to wind-project developers. But what the wind boosters really need to keep their struggling business afloat is a mandate requiring the production of renewable electricity — at least 15 percent by 2020. And some Democratic senators are pushing a bill that would do just that.

Indonesia may import more fuel following subsidy ban

Indonesia's state oil and gas firm PT Pertamina said that the government's plan to cut oil subsidies next year would force the firm to import massive quantities of high-octane fuel in the year to meet rising demand, local media reported Monday.

Starting from January first, subsidized Premium fuel would be off limits to private car owners in Jakarta and the whole of Java and Bali from July 1. Drivers would have to buy higher-octane Pertamax fuel at 6,500 rupiah (some 0.72 U.S. dollar) a litter, almost 50 percent more expensive than Premium, the Jakarta Globe said.

Philippines to be hit by power cuts in 2011 - Energy chief

MANILA, Philippines - The main island of Luzon could face power cuts next year, with supply possibly hitting critical levels before around 2,700 megawatts from new coal plants come on stream from 2013, the energy secretary said on Monday.

The capital Manila -- home to at least 10 million Filipinos and where many foreign outsourcing companies operate -- will be hit hard by the outages, with peak demand projected to hit 7,900 MW next year in the whole island, 300 MW higher than this year's peak demand.

Abu Dhabi signs oil and gas deal with Yemen

DOHA // Mubadala Oil and Gas and the Yemen Company for Investments in Oil and Minerals (YICOM) have signed an agreement to co-operate on oil and gas exploration and production in Yemen.

The two state-owned companies signed the agreement yesterday in Sana'a, the capital of Yemen, in the presence of Amir al Aydarus, the country's oil and minerals minister. It covers information sharing and a plan to assess potential joint projects including the redevelopment and expansion of Yemeni fields plagued by declining oil and gas output.

Turkmens Open New Gas Export Market After Agreement on Trans-Afghan Pipe

Turkmenistan has moved closer to opening another market for its natural gas reserves after signing an agreement for a pipeline to India via Afghanistan.

GE to buy UK oil pipemaker Wellstream for $1.3 billion

LONDON (Reuters) – General Electric Co has agreed to buy British oil drilling pipe-maker Wellstream Holdings Plc for 800 million pounds ($1.3 billion), as GE continues its push into the offshore oil services industry.

The deal is the latest in a series of GE buys in the oil services sector in recent years and shows that, despite the BP oil spill in the Gulf of Mexico this summer, the industry expects deep water drilling to continue apace.

RWE Guarantees German Power Supplies This Week Following Strike Threat

RWE AG said there won’t be any power disruptions this week related to planned strike action at Germany’s second-largest utility.

“We can guarantee electricity supply for our customers,” RWE spokesman Juergen Frech said in an interview, declining to comment on wage negotiations between the two sides.

Egypt, ADFD sign $50m loan deal for power plant

Egypt's Energy and Electricity Ministry said the Abu Dhabi Fund for Development (ADFD) has granted the Egyptian government a $50m loan for constructing and developing a power station in Banha, Arabianbusiness reported.

Pike River Appoints Receivers After 29 Die in New Zealand Coal Mine Blast

Pike River Coal Co., owner of a New Zealand coal mine where 29 miners died after blasts last month, had receivers appointed after telling major creditors it’s unlikely to be able to repay loans.

Uranium Spot Market Trading Volume Climbs to Record on Rising Asian Demand

The volume of uranium sold in the spot market, used by utilities to have material delivered within a year and by investors to speculate on the price of the fuel, hit a record this year on Asian demand.

Nigeria takes over ex-militant camps in oil delta

PORT HARCOURT, Nigeria (Reuters) - A former Nigerian militant leader handed eight camps in the Niger Delta to the military over the weekend, part of efforts to prevent new gangs emerging in the oil region after last year's amnesty.

Ateke Tom is the latest former militant leader to surrender his camps after accepting the amnesty, which was partly brokered by President Goodluck Jonathan last August and brought more than a year of relative peace in Africa's biggest oil and gas industry.

Iraqi Kurd leader says Kirkuk belongs to Kurdistan

ARBIL, Iraq, Dec 11 (Reuter) – Iraqi Kurdish leader Masoud Barzani said Saturday that his semi-autonomous region has the right to self-determination and to the disputed city of Kirkuk, which is located above some of Iraq's largest oil reserves.

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.

India woos Russian oil and gas investors

MOSCOW (Reuters) - India has invited Russia to explore its hydrocarbon reserves as Asia's third-largest oil consumer seeks less dependence on oil and gas imports and looks to attract more investment in its energy sector.

India is also interested in increasing its participation in the development of Russia's vast oil and gas reserves.

Russian spy gets job with oil company Rosneft - report

(Reuters) - One of the Russian spies deported from the United States in a Cold-War style spy swap in July has been named an advisor at Russia's largest oil company, state-owned Rosneft, Kommersant reported on Monday.

$7.6bn TAPI gas pipeline project comes back to life

ASHGABAT: Pakistan on Saturday joined Turkmenistan, Afghanistan and India in signing the long-awaited over $7.6 billion gas pipeline project to help it meet its sharply rising industrial and domestic demands.

China elbows its way into discussions over Arctic future

There was little fanfare at the end of last month when the China National Petroleum Corp. (CNPC) signed a long-term cooperation agreement with Russia's most experienced company on shipping oil and gas through the Arctic, Sovcomflot (SCF).

However, this deal is but the latest in accumulating indications of a Chinese strategy to elbow its way into the opportunities for both shipping and resource development afforded by expectations of the melting Arctic ice cap.

Clearing the air on electric cars

NEW YORK (CNNMoney.com) -- Ever since electric cars began commanding headlines a few years back, some have questioned whether the vehicles are really better for the environment.

Kazakhs Say Germany's Pure Nature May Invest $1.3 Billion in Hydropower

Germany’s Pure Nature Energy GmbH may invest 1 billion euros ($1.32 billion) to construct small hydropower plants in Kazakhstan, central Asia’s biggest oil producer, the Industry and New Technologies Ministry said.

Farming with hydrogen power

Along with its hydrogen-powered NH2 electric tractor, New Holland has delivered a promise of the “energy independent farm”—a concept that may be reality sooner than you think.

The NH2 is an early wavelet in a tsunami of electric-powered vehicles rolling off drawing boards around the world.

Kurt Cobb: Why you should read The Biochar Solution

First, you should know that I have an allergy to anything that smacks of geoengineering. And the use of biochar--charred organic matter that can improve soil fertility--to address climate change by interring carbon in farmland on a mass scale strikes me as one of the largest geoengineering projects ever conceived. I always ask, "What will the unintended consequences be? Can we be sure that those consequences won't simply present a new set of problems, possibly catastrophic ones?"

Fortunately, Albert Bates, author of The Biochar Solution, takes these questions seriously and offers a measured endorsement of biochar as one of an array of strategies for responding to climate change. Even in the forward Vandana Shiva warns that "[b]y shifting our concern from growing the green mantle of the earth to making charcoal, biochar solutions risk repeating the mistakes of industrial agriculture."

UN boost for UAE carbon capture bid

A new UN agreement could pave the way for multibillion-dollar plans to build a carbon capture network in the UAE.

But energy companies still have to wait to learn the exact shape of the UN carbon credit programme, including how much credit could ultimately be available.

Cancún Agreement Signals a New Pragmatism in Global Climate Policy

In the end, it came down to Bolivia. The South American country — whose President Evo Morales was one of the few world leaders to attend this meeting — had raised angry objections throughout the two-week-long U.N. climate-change summit in Cancún, Mexico. On Friday night, with the draft texts of an agreement prepared and every other nation ready for a deal, Bolivia wouldn't budge. "We reject this document," Bolivia's U.N. Ambassador Pablo Solon told the assembled representatives of more than 190 nations at the final plenary session, "and therefore there is no consensus for its adoption."

Climate deal does little but prep for future talks

Lowered expectations to the rescue.

Global climate negotiators put the best face on the modest agreements they reached at the just-concluded talks in Cancun, Mexico, to tackle the problem of worldwide carbon emissions.

Climate Deal Decades Away as `Dysfunctional' U.S. Delays Cap

With President Barack Obama struggling to salvage his energy agenda and richer and poorer nations in conflict over extending Kyoto’s emission limits, a new worldwide climate treaty may be 20 years away, said Tim Wirth, who in 1997 led the U.S. delegation in Kyoto, Japan. Such a delay endangers the future of $2.7 billion a year in pollution credits sold under a UN program based on the Kyoto agreement.

“We have a dysfunctional Congress and an administration without policy,” Wirth, a former Democratic senator from Colorado, said in an interview during two weeks of UN climate talks in Cancun, Mexico. “The U.S. doesn’t have an energy strategy. You can’t sign up to an international treaty unless you know what you are going to do at home.”

Climate Talks Might Need a Profit Motive

More business engagement is the key to unlocking real progress, said Yvo de Boer, who stepped down this year as executive secretary of the U.N. Framework Convention on Climate Change.

Clean-technology profits could illustrate the opportunities from a global climate deal and persuade negotiators from China and the United States, the world’s top two emitters of heat-trapping gases, to cooperate.

“We’re trying to get away from a zero-sum logic,” Robert B. Zoellick, president of the World Bank, said in an interview. “From my own experience in trade negotiations, if you see it as one guy wins, the other guy loses, you’re going to have a hard time getting a deal, frankly, because nobody wants to go home the loser.”

Why We Might Fight, 2011 Edition

Countries thirst for oil, compete for minerals and confront climate change. The American military, with surprising allies, worries that these issues represent a new source of conflict.

Russia pumped out half of it's oil and does not expect to find any large oil fields any time soon:

Google translation from Russian:

Original (in Russian):

Thanks for that article and translation HiFi. There are different views of Russia's future oil production, here are just three of them from very recent news articles.

Russian Oil & Gas Sector Headed for Major Shakeup

You see, Moscow has energy problems. The main Russian area for oil-and gas-extractions is declining. Actually, "collapsing" would be a better word.

This is a very mature basin and estimated to be dropping in output by 7% a year. Most of the more than 150,000 operating wells are working at less than 35% of peak production.

Something's gotta give.

Oil production in Russia to hit record high

By the end of 2010, Russia's total oil output for the year is expected to reach 504.8 million tons, Shmatko said.

Shmatko forecast that for the next few years Russia would produce 500 million tons of oil annually.

OPEC Raises 2011 Forecast for Non-OPEC Supply on Russia, China

Russia is the world’s largest crude producer with daily output of more than 10 million barrels. Its reserves will allow it to sustain that level for the next 40 years, its Energy Minister Sergei Shmatko said in October. OPEC added 70,000 barrels a day to its forecast for Russia next year.

Okay, the first article says Russian oil production is about to collapse. The second article says production will hold at 500 million tons per year or almost 10 million bp/d for the next few years. And the last article says production will hold at 10 million bp/d for the next 40 years.

Take your pick. But 10 million bp/d for 40 years comes to 146 billion barrels. That over twice the proven reserves Russia claims to have and two and one half times what Oil & Gas Journal says they have. And it is absurd to say that any country could reach a plateau and remain on that plateau for forty years.

So we know that Energy Minister Sergei Shmatko is blowing smoke in that last article. But he is the same guy who in the second article says they will remain on that plateau for a few years. When is he telling the truth? I would suspect that the first article is way closer to the real truth. Russian production reached a new post Soviet high in October and November but has already started to decline in December. I expect their production to start to decline in 2011. But that is just my opinion.

But I find it interesting that even Russia's Energy Minister says that Russia cannot increase production above 2010 levels, only that they can hold what they have now. I mean if they have enough oil to hold at current levels for 40 years then one would think they could jack up production next year by at least 10 percent or about one million barrels per day.

Ron P.


I greatly appreciate your contributions to this site, in particular your diligence in digging up pertinent data. And I have little doubt that Russia is approaching or at their peak. But it seems premature to say that they have 'started to decline' based on a single month to month data point.

I agree Clifman, and I make no such assumption. But their oil production for the first 12 days in December has declined significantly. That may be due to the export tax that went up December 1st, I don't know. But the point is they did hit a new record high in October and November but that record high will not continue through December.

That was my point. That was my only point. Well... my only point concerning near term Russian oil production anyway. However I believe, just my belief mind you, that Russian oil production will start to decline near the end of next year and continue to decline just as US oil production did after 1970.

Ron P.

Speaking of Russia: Our laboratory's client of this morning was a post-doc from the far east-side of Russia, near Vladivostok. I won't bore you with the geeky details of what our lab does, but my conversation with Anton was quite enlightening. He is the first person to come into our facility who knew what Peak Oil is. Not only that, he says, matter-of-factly, "we were taught about it in high school". I was so stunned I sat in silence for a second or two. "Taught Peak Oil? In high school?". "Yes". "You mean, Hubbert's Peak, global production and all that?" "Yes".

Anton likes being in the U.S., although he says his friends back home make a lot more money than he. There is no market for EVs in Russia, he says. And he says that more than 70% of Russia's economy depends upon oil.

I have friends who think that the USSR collapsed because the U.S. outspent them on our military (!). When presented with the facts (in this case, the collapse of Iranian oil production following their revolution in 1979, and Reagan's "request" to KSA to increase production in return for more military protection for the kingdom, and the subsequent collapse of the price of oil, leading to the collapse of the Soviet Union), I get a flat stare.

I know I've oversimplified "The Great Game" in this context, so please correct/edify me. I am still amazed that the Russians are teaching their students these topics that are so vital to an understanding of how our world works. Just Amazing.


Wow. I wonder if that's typical of Russian education?

I'm blatantly teaching it this year and it is starting to become somewhat accepted in my circle. Some are uncomfortable, but it is more and more in the MSM these days. Parents do not complain.

All schools in BC were just sent the green film (FUEL) Josh Tikkel? the veggie van....and it contains an interview with Matt S and C Campbell. My students more than accept it, and even tease me with gifts of toy oil barrels, etc.


They're showing interviews with Matt Savinar in schools now? OMFG. "Rarely is the question asked: is our children learning?"

That would be Matthew Simmons. The other Matt. Schools frown on astrology and being told to f off if you don't like it. :-)

I thought that the reason that the USSR collapsed was that under Breshnev there had been very little renewal at the upper echelons of the political establishment -- the Politburo was characterized as being ossified and sclerotic, a group of old men, close-minded and set in doctrinaire ways. Besides political rigidity, this led to economic stagnation at home and military overreach abroad, particularly in Afghanistan. After the brief tenures of Andropov and Chernenko, Gorbachev attempted to retrieve the situation, but unwisely attempted political and economic reform at the same time, leading to the collapse (which the Chinese wisely avoided).

If you consider the leadership in Washington, the foregoing theory is not too comforting.

Gorbatjov introduced the concept of "freedom of speach". Then people could talk openly about how bad everything was in USSR compared to the west. Then they run out of money. After that, nothing can save an empire.

Which is why the Chinese approach of limiting political reform while first working or economic reorganization and reform worked a lot better. The Chinese have been open to foreign technology and business, but they have ignored foreign politicians and economists (and Nobel Prize committees). By not listening to the Jeffrey Sachs types, they've saved themselves at least a decade of economic chaos.

Good point. Maybe if we could all learn to stop listening to economists, we'd all be getting on much better.

Right:-) What do economists know? We should listen to plumbers for economic advice, because at least they can stop leaks.

If all the economists in the world were laid end to end, they wouldn't reach any conclusion.
George Bernard Shaw

If you are to listen to an economist, choose wisely.

Uh huh.. I can't help but see Wile Coyote, going farther and farther back in his slingshot saddle, because he knows he doesn't want to go that other way!

Clearly, contact with the west's cupcakes hasn't helped to erase the idea of democratic reforms in the minds of Chinese people. A black-swan event will be like an alarm clock over there.

There would probably be a period of chaos, out of which a democratically elected nationalist demagogue would emerge. After all, a democratically elected government needs to identify a scapegoat on which to blame its shortcomings in order to maintain the support of the people by deflecting their ire outward.

I suspect that Democratic and Socially centered societies are part of a swell of tides that come and go. We've gotten a range of them over the years, and they crumble into protectionism and dictatorship or imperial or colonial status (same thing, sort of- external dictator).. and back again.

The big breakers that crash dramatically on the rocks get all the good press.. but it's all just water and physics.

I suppose Socrates and Mossadeq are having a drink up there and watching the tides roll in and out.

Wait am I confused. Are we discussing local peak. The Soviets peaked Russia a while back, no?

Academically speaking Russia already peaked.

a) The argument now if whether Russia can increase production significantly.

From what I see the answer is "no."

b) The next questions are whether Russia is set to decline and when?

Wait am I confused. Are we discussing local peak. The Soviets peaked Russia a while back, no?

No. The former Soviet Union, way back in 1988, production for that year, an average of 12,053,000 barrels per day of C+C. That was the peak until this year. But the Soviet Union does not exist now. The Soviet Union included Kazakhstan and Azerbaijan as well as a few other small producers. Above I was discussing only Russia.

The question is, did Russia produce more in 1988 than they did this year? I have no idea because they did not separate FSR production into different states. But combined, Kazakhstan, Azerbaijan and Russia will produce more, on average this year than the FSU produced in 1988. So even if you are looking at the entire Former Soviet Union, the peak, so far, is 2010 not 1988! So technically speaking Russia has not already peaked. So far, this year, the three FSU main producers combined have averaged 12,217,000 barrels per day of C+C. That will increase slightly by the end of the year.
Hope you are not confused anymore.

Now to your argument, (a). The answer is no, even the Russian energy minister says that they cannot produce more oil than they are producing right now.

Your next question, (b), the EIA says Russia peaks this year. Their Short Term Energy outlook has Russia producing 10.11 mb/d in 2010 and 9.96 mb/d in 2011. That is all liquids, not C+C.
This is one time that I agree with the EIA.

Ron P.

Ha, you are right if the prior peak of the Soviet Union included the break aways. I see. How silly of me to assume that.

In any case, the near term is the key, since everything is relative and the past is the past.

Thus Russia is set to decline, and they were the last bright spot we had.

Russia is trying to produce in Siberia and the arctic, which seem hard and slow to develop -- ***a sign they are in decline or headed that way.

Who else (what other Nation) is big enough to extend the oil peak further out?

Are we left with Iraq then? What is their immediate term/longer term trajectory?

If Russia is producing more than ever before now, but November output is higher than December, then November is Peak Oil Russia. Should they manage to crank up the production above the November values, then that is the new date.

"Always in motion the future is".

Looks like these guys where right on spot:


Has OPEC built enough capacity during the lean years?

...after ramping its production capabilities to 12.5 million bpd in 2009...

On what basis is this statement made? Does Saudi Arabia actually claim to have 12.5 mbpd capacity? I thought that was stated as a goal at some point but I don't remember seeing it claimed as achieved.

Any clarification would be appreciated.

I thought that this article and the following, "OPEC Cheating Most Since 2004 as $100 Oil Heralds More Supply," were remarkable BAU summaries of MSM thinking about oil supplies. The possibility that various OPEC countries can't increase their production is not something that is considered to be possible--at least not in public anyway*. The only real question is to what degree various OPEC countries can increase their production.

*As I outlined in my "Iron Triangle" thesis, I think that the "Enron Effect" is a big factor, i.e., a lot of people know that we are in trouble, but their income is dependent on the conventional wisdom assumption that a virtually infinite rate of increase in our consumption of a finite fossil fuel resource base is no problem:

"Iron Triangle" Essay

The possibility that various OPEC countries can't increase their production is not something that is considered to be possible--at least not in public anyway

I believe this inability/unwillingness to accept limits is at the heart of the tea party movement. People are hankering of the good old days and will accept any prophet who says they can have them back. In the meantime, anything but the real cause is fair game for scapegoating. Question: what happens when reality ultimately sets in? I expect unprecedented social upheaval in its ugliest form.

ps, WT -- I wonder what happens when the auto, housing, finance sectors die and we are left with a "two sided" triangle -- just oil companies and media. I think we are halfway there now.

Well, our local paper had an article about a local dealership investing $20 million in improvements over in their Honda dealership, and the article noted that this a common occurrence elsewhere:

Surprisingly, perhaps, they're not alone in making that kind of decision, according to some auto industry analysts. "There's a lot of it going on across the country right now," said Sheldon Sandler, a New Jersey investment banker and auto dealership consultant. "There's confidence that the future of Honda is bright. The cost of building and refurbishing facilities is low. It's a good time to invest."

Read more: http://www.star-telegram.com/2010/12/12/2698862/fort-worth-dealership-ow...

I don't think that the the various parties in the "Iron Triangle" are getting together in a smoke filled room and deciding to move forward with a common "Party On Dude" message, but I do think that a lot of members in the "Iron Triangle" have decided that it is in their (short term) financial self-interest to promote the Infinite Energy Supply/Party On Dude message.

Update: ExxonMobil contributes to the "Party On Dude" message: Exxon CEO says global oil markets well supplied (uptop)

Question: what happens when reality ultimately sets in? I expect unprecedented social upheaval in its ugliest form.

To answer that question read the NYT article linked above titled "Detroit’s Monsters Thrive on a Diet of Cheap Gas".

Venezuela is a microcosm of what I'm quite sure we will see happening in the USA, I think we can just watch what happens there when the price of gasoline doubles and reaches $0.20 per gallon. It will be a repeat of the riots that happened there in the late 1980s.

This quote to me suggests that Venezuelans are perhaps only slightly less delusional than American Tea Party members...

“I find it hard to believe that the Americans would let Pontiac expire like that,” said Oswaldo Valdes, 21, a university student who owns a 1970 Pontiac Grand Prix. “In this country, this great automobile has decades of life ahead of it.”

He is right of course, it will make a great chicken coup or flower planter in his front yard...

" ...it will make a great chicken coup or flower planter in his front yard..."

I saw some folks that were using an old AMC Pacer (with the huge windshield) as a food dehydrator. Worked great.

You forgot Greenhouse. Use the auto glass to make a greenhouse!

I almost died laughing at those muscle cars in S. America.

Good grief. Talk about chewing up oil supplies as fasta s possible $0.10 a gallon.

Fuel Economy is not the driving economic factor behind car choice in Venezuela.

1) Can it survive the roads? Potholes, bad patch jobs, unpaved "short cuts etc", fender-bender type collisions are frequent.

2) Can you get it fixed? Replacement parts sometimes take a long time to order in (months, a year, longer). Also, do you know enough about it to make sure the mechanic really did fix it?

3) What can you fit in it? A lot of big old cars are used as "por puestos" or by-the seat taxi/buses. And by seat they mean the space your rear-end occupies after being compressed by your fellow passengers.

4) Can you buy it? Gas is cheap, but cars are expensive and bank loans are more difficult to get. Lots of dealers have month long waiting lists and re-sale values often stay flat or increase with time.

5) Is it safe? That means will it attract the attention of police and thieves? Its not good to look too poor or too rich

If the Venezuelan government decided to raise fuel prices I am not certain it would affect car choice as much as in other countries. The rich who regularly pay large sums to frequent locales that exclude the poor will simply add a new grumble to their list and hand over the cash necessary to fuel their SUV. The poor might drive less, but they won't be rushing out to buy a new fuel efficient car any time soon.

I get it. Venezuelan is a socialist welfare state. The state is paying people to drive inefficient cars basically by subsidizing the price of fuel.

I just thought it was hilarious that these inefficient antiques were so popular there.

I mean any car from the 80-90s era would be far more efficient and cheaper to operate, but that incentive is thrown out the window with $0.10 gasoline. lol. These 80-90s models are not very new either.

My father is pretty much right wing, and he attends tea party rallies, however he became conscious that fossil fuels are finite resources before it was mainstream knowledge and hip. He's also pro legalization.

Enough with the stereotyping.

Oswaldo's Grand Prix will make some quality scrap to be melted down and made into components for a nuclear power plant ;)

The biggest and most common issue I have seen coming from tea party members is that we have to stop spending more than we have. What is delusional about that?

I'll believe it when I see it.

"spending" and what we "have"
--both of those are delusions

Money is printed out of thin air and given to those deemed "deserving" of it (i.e. hedge fund CEOs)

What "we" have includes what the top 2% have --and they ain't loosening their grip on it.
Tea partiers are delusioned into thinking they are or soon will be one of the top 2%
Good luck with that one
Ain't going to happen

Interview with Sadad al Husseini - “The Facts Are There”

Question: In Saudi Arabia, is 12.5 million barrels a day now sustainable and is there a plan to expand capacity beyond that?

Sadad: Saudi Arabia has a very credible and professional record in terms of declaring capacity and meeting its production targets. When the Kingdom announced a target of 12.5 million barrels of capacity, they actually committed funds to develop that capacity and we’ve seen them now commissioning those: 250,000 additional barrels in Shaybah; 1.2 million barrels in Khurais; 500,000 in Khursaniyah; 900,000 coming on stream in a couple of years in Manifa.


I suspect that the new Saudi production coming on line will be analogous to the new production that came on line in the North Sea after 1999. Sam Foucher noted that the oil industry did a very good job of bringing new North Sea oil fields on line from 1999 on. North Sea fields whose first full year of production was in 1999 or later had a production peak in 2005 of about one mbpd, versus the 1999 total production rate of about six mbpd.

As I said, an outstanding job in the North Sea, for which the industry deserves credit. By adding new production that was equivalent to about one-sixth of the 1999 rate, the industry managed to keep the overall post-1999 production decline rate down to 4.8%/year (C+C, EIA).

Thanks, elwood. Appreciate the response.

I add up those numbers and get a total of 2.85 mpbd added. If the total then is 12.5 mbpd, that means their base capability is 9.86 mbpd as of 2009. So, in what appears to be a very short time, they increased their production capacity by 30% by my math. That sounds pretty amazing, if true. Of course, manifa isn't producing yet (am I right about that?) Take manifa out and the increase is 1.95 mbpd. Still an impressive 18% production increase, if true.

But as we have seen recently, SA has indicated a desire to keep oil in the $70 - $80 a barrel range, yet have also indicated they have no plans to increase production to protect that range. So if they went to the trouble and investment to create this huge cushion, why wouldn't they be using it?

But pretty much as soon as oil eclipsed $80, the Saudis began stating that the acceptable range was $80-$90, or even $100. Which, as Darwinian & WT frequently point out, indicates that they have little ability to influence price by tapping any significant spare capacity.

I've read in several places that some of the new "capacity" that SA has is of such a poor grade that it needs extra refining, but they have canceled the refinery to do it.

Sadad: Saudi Arabia has a very credible and professional record in terms of declaring capacity and meeting its production targets.

Hahahaha. Some decades ago they declared: "if the world needs 15 mbd from us we will deliver that." So elwoodelmore, if you so profoundly did your own investigation, you should mention that also.

"if the world needs 15 mbd from us we will deliver that."

do you have a reference for that ?

husseini was interviewed in '09, i thought that was clear.

investigation ? my research has been focused on saudi arabia's oil and gas reserves and the various claims that have been posted here on essentially a daily basis. most of these claims appear to have originated in the 'twilight' zone.

Well, I have learned, that it is not allowed for muslims to drink alcohol. But being abroad it seems to be a different story. In this story Al Naimi shocks his environment by claiming that KSA has now 1.2 trillion barrels of proven reserves.

WASHINGTON, 29 April 2004 — Officials from Saudi Arabia’s oil industry and the international petroleum organizations shocked a gathering of foreign policy experts in Washington yesterday with an announcement that the Kingdom’s previous estimate of 261 billion barrels of recoverable petroleum has now more than tripled, to 1.2 trillion barrels. Additionally, Saudi Arabia’s key oil and finance ministers assured the audience — which included US Federal Reserve Chairman Alan Greenspan — that the Kingdom has the capability to quickly double its oil output and sustain such a production surge for as long as 50 years.

I think the question regarding the 15 mbd claim is answered. And as always in life, there is immediately the next question.
Elwood, how can You anything this guy talks take for granted ?
WT - Never claim again that KSA reserves are not depleting. We are dealing with the fastest depleting reserves the world has ever seen. The approach is called reverse engeneering on abiotic oil.

Elwood, how can You anything this guy talks take for granted ?

i didn't quote al naimi and i have no more idea than you do where the alleged claim of 1.2 gb reserves comes from. saudi aramco has never claimed 1.2 gb reserves in their annual review.

maybe he was drunk, maybe the reporter was drunk, maybe al naimi misquoted or was misquoted. some separation of chaffe from straw is needed.

do you have a reference for that ?

I don't save or print all the articles I read, but I'm sure I read that someone there claimed it a long time ago.

my research has been focused on saudi arabia's oil and gas reserves and the various claims that have been posted here on essentially a daily basis. most of these claims appear to have originated in the 'twilight' zone.

This year a spokesman (forgot his name) has admitted that they need all the possible efforts to keep declinepercentages from their long producing giants low. So if they lose yearly 500.000 from their old giants, the few mbd from recently started fieldproduction compensates only for a few years to come.

OPEC Cheating Most Since 2004 as $100 Oil Heralds More Supply

OPEC is breaching its production limits the most in six years, signaling the world’s biggest suppliers are ready to pump more crude next year as oil rallies toward $100 a barrel.

OK, how does this make sense? The fact that they are ignoring production limits now means that they will be able to produce even more in the future? The fact that they are cheating today says nothing about their ability to produce more tomorrow. How about a more realistic interpretation -- they are now cheating at the limits of their ability and couldn't cheat more no matter what the price. In fact, if the price goes higher, the incentive to produce at full capacity diminishes as they will be getting more income from what they are producing. If the price goes high enough, they may feel even more comfortable cutting back production. The presumed linkage between higher price always leading to higher production should be left in the Econ 101 classroom where it belongs.


The people who write these stories believe that they are the center of (their) Universe... that being the case, OF COURSE EVERYONE ELSE WILL SPARE NO EFFORT TO EXTRACT more oil FOR THEM.

I think this shows that OPEC is half of a cartel. When global demand declined in 2008, they successfully reigned in production to maintain about $70-$80 a barrel, after a brief dip to $30 , about 3 times the previous stable price. Through a combination of media and market manipulation they have sustained this price range for about 2 years, as demand bottomed out and has now recovered. However, as the market begins to price in expected continued growth in Chindian demand, OPEC is unable to control the price on the upside, and is priming the media not to expect it. They hope that this will short circuit the price spike of 2007 enough to prevent such a sharp dip when failure to supply triggers the next global financial bubble to pop.

To be explicit: Most OPEC nations are pumping flat out: they are completely ignoring their quotas. Maybe three countries have measurable spare capacity, and only SA has enough to influence the market. They made up more than 50% of the production cut on the downside. They could increase production a little, but they are keeping their powder dry. If they try to hold a price as they did in 2003-2005, they will quickly max out production and the lie will be given to their spare capacity figures.

All true, but KSA is playing a dangerous game of saying they have huge spare capacity but showing no willingness to use it. As calls for OPEC to increase production grow in coming months, Washington will feel pressure from voters to get KSA to use the spare production they say they have. What then? If KSA doesn't increase production it will be viewed either as an admission that they don't have it or a direct assault on the US consumer. Either way they lose.

So, as you say, they seem to be floating incoherent messages about not producing because of insecurity of demand or such nonsense. But it won't work. The public view of KSA as the holder of unlimited oil is so firmly entrenched that I don't see people accepting any excuses.

My guess is that KSA will promise to increase production, but won't actually. They might skooch things up a tad, but not enough. That's what they did in early 2008. Fortunately for them, the world economy fell apart and KSA was spared having to confront their lack of follow through. I don't think it will happen so conveniently next time.

It is not if, but when, the world economy falls apart again. China is as dependant on 10% exponential growth as the US was, to stop its own property based bubble popping. The global financial economy left the physical economy in the dust decades ago. It will not take many months of $150 oil (or even less, next time) to pop the next bubble. As long as Joe Sixpack does not make the connection, it can be rinse and repeat until ELM overwhelms the rest of OPEC.

Recession Lasting Until 2018 Worth Exploring

Japan is the master of muddling along, decade after decade, with little growth to show for it. And Sakakibara was a key player when Japan faced everything from the Asian crisis to Russia’s default to the onset of deflation to a banking collapse that saw the demise of Yamaichi Securities Co.

So, when an economist with Sakakibara’s background says “the world is set for a long-term structural slump reminiscent of the 1870s” when average global annual growth was about 1 percent, I can’t help but listen. The reason for the slowdown? Governments are putting fiscal austerity ahead of restoring stable growth.

I dunno. It does seem like the economy's picking up right now. Who knows if it will last, though.

In some ways it does seem like things are better. But I wonder if that isn't due to us getting used to the new normal. In reality, seems to me we are just doing the bottom bounce. Any slight uptick seems big when you are at the bottom of the well.

King - thaT's exactly the point we bounced around a few weeks ago: Since 2005-7 GDP appears to be on a plateau. So the quesion is whether the current uptick is a return to continued improvement or just one more mole hill on the plateau before we slide back into another shallow hole? Lots of opinions but I haven't seen anyone offer a solid story to support either interpretaTion. Just a matter of wait and see IMHO.

I'll stick my neck out and make a couple of predictions:
1. By July 4, 2011 the stock market, as measured by the Standard & Poors 500 stock index, will decline at least thirty percent from the current level, and
2. This major decline in the stock market will trigger a moderate, and possibly a severe recession, with unemployment going above the 10% level.

Real GDP per capita has been going nowhere for at least ten years. Real disposable income per capita for the bottom 90% of the income distribution has been declining for at least ten years.

The way I see the next five years is similar to the stagflation of the nineteen seventies--but worse. Monetizing the deficits, as the Fed is enthusiastically doing, will within a year lead to substantial increases in the rate of inflation--at the same time that real GDP stagnates or falls.

So, what do you do with your assets under this scenario?

I keep all my financial assets in TIPs, Treasury Inflation Protected securities.

Don, when you predict (even cautiously), I listen. Can you elaborate on the basis for your first prediction (30% drop in DJIA)?

The stock market is grossly overvalued; earnings projections are much too rosy. Also, I expect interest rates to rise over the next six months. Why? Because when the Fed eases money (QE1, QE2, QE3) there are two opposing effects. The immediate and short-term effect is the Keynes Effect: Supply a greater amount of money and the price of money (i.e. the interest rate) tends to fall, other things staying the same.

But other things do not stay the same. Quantitative easing causes expectations of inflation to increase, and when expectations of inflation increase, nominal interest rates also increase. This longer run effect is called the Fisher Effect (after the American economist, Irving Fisher), and over time it dominates the Keynes effect. Thus, over time a very easy monetary policy will substantially increase the rate of inflationary expectations and hence interest rates, especially long-term interest rates.

The one sure way to cause a market crash is to increase interest rates. The Fed does not want to increase interest rates, but it is already happening to some extent. If interest rates increase just a couple of percentage points, that will probably be enough to crash the stock market.

The Fed won't touch interest rates while growth is low. And, they will keep up the QE, perhaps adding a third round?

The book, Zombie Economics, touched on the Fisher Effect, and seemed negative on it. My copy seems to have found legs, and I cannot recall the exact reason he cited, but Prof. Quiggin discounts most theories. To him, neither fresh water nor salt water hold water, I guess.

My worry is what happens when China's bubble pops, and they sell our notes and stop buying more. Who is going to be purchasing Treasuries? The Fed, I guess.

I did some TIPS also, several years ago; my conservative friends said I was nuts.


I disagree with some things. Here is what I think will happen (is happening):

1. The bond market is imploding. I am surprised that this has received so little attention.
2. Commodities, gold, food, are the new currency (US $ is toast) and they will skyrocket.
3. Good quality stocks (Dow Jones) will skyrocket.
4. Real estate will crash completely. I think a new top is real estate is decades away.
5. Next to real estate or any asset bought with borrowed money, TIPs are probably the worst investment you can make since the government gets to decide what "inflation" is.
6. It will be much worse than the seventies; this time there will be no wage/cost spiral; just cost spiral.

Some very good points there.

Previously I have been making some market forecasts here, but I thought that the new focused Oil Drum we won't be doing much of that. But it seems to be allowed today, so I'll offer some thoughts.

Posters may remember about last August 10 that I said the market would start rising for at least three months, which was the total opposite prediction of a few well known posters here. Well I am still pretty much 'all in' the market now - especially energy and natural resource stocks, and I have been giving friends and family the same advice.

Of course the bond market collapse is worrying, however I think most of the damage in 2010 is finished and that won't be holding the market back for the remainder. Unfortunately at some point we will see probably what will be a combined dollar and more severe bond collapse, which may also happen at the same time as the coming oil price 'superspike'. Needless to say, those circumstances will make investing difficult.

I don't know when the next crisis will start, so I understand why some are very skeptical about investing. I suggest that at least for now, investors go into 'value' funds - usually these would large, quality Dow Jones type stocks paying higher than average dividends and having siginificant physical assets with a low amount of debt or debt with low interest rates locked in.

It does seem like the economy's picking up right now.

You can't be serious! There are over 40 million US citizens currently on food stamps. To keep that in perspective the population of Canada is only 34 million.

I'm serious. "Getting better" is not the same thing as "good."

AP analysis: Economic stress falls to 18-month low

Job gains around the country offset higher foreclosures and helped reduce the nation's economic stress in October to an 18-month low, according to The Associated Press' monthly analysis.

Stress fell in 56 percent of the roughly 3,100 U.S. counties analyzed and in 28 of the states, the AP's Economic Stress Index shows.

I'm serious. "Getting better" is not the same thing as "good."

I'm sorry but I just can't buy it. It's purely wishful thinking and MSM spin at best and outright lies at worst.
Getting a momentary pulse after suffering cardiac arrest doesn't rise to the level of 'better' in my book.


The unemployment rate doesn’t count so-called "discouraged workers," those who have not looked for a

job for a year. It doesn’t include those who stopped looking for a job four weeks prior to the survey (termed "marginally attached workers"). Nor does it include either those who are working part time but want full time work or people who are working more than one job.

To get a better handle on the true number of unemployed, we calculated a broader unemployment rate, one that includes all of these underemployed workers.

We used a variety of government data, from the Census to the Bureau of Labor Statistics. We then combined this data using a methodology developed by the Virginia Economic Development Partnership.

The new rate is the sum of underemployed workers plus the unemployed, all divided by the total civilian labor force. We call it the “U2” rate, not because it is endorsed by Bono, but because it combines two “U's” — underemployed and unemployed workers.

That article and chart only goes up to 2009. The improvement, such as it is, seems to have started recently, so would not be reflected in that data.

Here's a graph from ShadowStats which gives a similar result which is up to date. I think one must conclude that the economy isn't really improving, as far as employment is concerned. The US Government data showing an increase in employment appears to be too small to keep up with population growth. Then too, how many of the new jobs pay as much as the jobs which have been lost, including benefits.

I know only too well how hard it is to find work. When I was seriously trying to find work, there were often 15 or 20 applicants for the jobs I applied for and those were the jobs I thought I could fit into. Having 2 engineering degrees, I thought that I would be considered over qualified for many positions, such as computer programmer, truck driver or construction laborer. I eventually gave up trying...

E. Swanson

Still looks to me like there's been an improvement recently.

Should be interesting to see how retail sales shape up. Seems like people are spending more, if only from "frugality fatigue."

Nominal GDP is above pre-recession levels. Constant dollar GDP is almost back to pre-recession levels, and will likely be there in another quarter or two.


How about real per capita disposable income? How is that doing compared to prerecessionary levels? Answer: It is down. If you look just at the bottom 90% of income earners, real per capita disposable income is down even more.

I think one must take the government employment figures with a proverbial grain of salt. Here's the BLS description of the way the employment data is collected. The
BLS picks some 60,000 households to survey. One big problem with this approach is that the households must exist for the periof of the survey, therefore, the people living there must have enough income or other source of money to keep the household going. Also, I think the households must also have a phone contact, since they might be called on occasion.

Households (and people) who are not able to maintain a fixed residence simply will not be counted as they wouldn't be selected for interview. This may skew the statistical data in some subtle ways, since the results of the household survey are presumed to apply to the entire country. How many people now rely on temporary living situations and use cell phones for communication? It's not 1940 any more...

E. Swanson

AT&T and other major phone companies are starting to stop the residental sections of their phonebooks, why? the internet can help you find people faster, and cost. Problem, if they don't have internet, or don't have a land line, it still does not matter, you can't find them online either.

I know of only a few people that have land lines, they are people who own their own homes, everyone else has a cell phone and the numbers change all the time.

This is the not the survey says, of the previous years, things are changing faster than the gov't is likely to keep up with. People hear the rosy numbers, and look at the bag of groceries they just got from the food bank, or paid more for from the store, and shake their heads at how out of touch DC is.

The media wants their to be a rosy future, as it is dependant on rosy futures just as much. No rosy future, no buying ad revenue.

I don't trust the figures I keep seeing of a rosy rainbow, I just do not see it.

BioWebScape designs for a better fed and housed world.

I like to read http://dshort.com for overall economic trends. I do not understand all of the indicators, but am learning.

That site's graphs do show that the S&P500, for example, is approaching within 20% of the most recent big peak:

The S&P 500 closed the day essentially flat (up 0.06 points), but, nevertheless, that's a new interim high. The index is 83.4% above the March 9 2009 closing low, which puts it 20.7% below the nominal all-time high of October 2007.


Ok! Here's the official unemployment figures for the period up to November 2010 and it is still rising not decreasing.


The number of unemployed persons was 15.1 million in November. The unemployment rate edged up
to 9.8 percent; it was 9.6 percent in each of the prior 3 months. (See table A-1.)

In November 08 the official unemployment rate was at 7%.

Outside of small pockets and specialized sectors there is no economic recovery in the US as a whole. Given what we know about the relationship to cheap energy as a driving force in the US economy that shouldn't come as a great surprise.

Unemployment is flat to slightly declining, despite the Novemer data.

For the 25 years 1949-1973, the unemployment rate was a low 4.8% on average.
For the 20 years 1974-1993. the unemployment rate averaged 7.0%, including the years 1982-3 when it averaged 9.65%.
For the 15 years 1994-2008, the unemployment rate averaged 5.1%.

I could see a decade or two of unemployment in the 9% range, given the US economy's relative position in global trade.

Data for 1948 to present is from http://data.bls.gov/PDQ/servlet/SurveyOutputServlet

So Mag says it's rising, Merril says its declining--I'll split the difference and say it is essentially flat for the last few months, the very slight fluctuations over that period probably being statistically insignificant.

The unemployment rate, paradoxically, often rises as the job market improves. That's because people who had given up on finding a job start looking again.

I'm not sure the unemployment rate, per say, matters as much as we think it does. After all...and this really is a key point...unemployment is, always, a political matter - if the state wanted, it could act as the "employer as last resort" and ensure full employment, at all times.

It doesn't do this for a variety of complicated reasons, many of which make sense. But, strictly speaking, unemployment really is political, just like everything else.

Even when unemployment was low before 2008, was this country on the right track? Were we on the upswing, creating a bright future, and things were getting better? Most definitely not. We were building houses in the middle of nowhere, letting the rich get away with murder, and basically setting ourselves up for a crash.

So unemployment is really just another piece of the puzzle. What we can be pretty confident of is that we now have structural unemployment, no political will to correct it, which will likely lead to further poverty/crime down the line, which will eat into budgets, with, again, no political will to cut into deficits, and then when the economy gets "better" oil prices will go higher which will crash the system again, leading to greater unemployment, etc. etc. ad infinitum.

We also can surmise, for example, that functioning industrialized societies invest their surpluses in the health and education of their children. This is no longer happening in the U.S. Instead, we keep our grannies on vents, let our kids get fat, and put them into debt slavery as the price for wanting to go to college or own a home.

The U.S. IMHO, cares about unemployment about as much as it does about any number of things of which nothing is being done: illegal immigration, chronic deficits, income inequality, rising healthcare costs, oil import dependency, financial corruption, endless war in the M.E.

It's sad to say, but we live in a country in which the priority is for bankers to be able to get bonuses, not for ordinary people to be employed in their area of expertise.

Witness our most recent political stunt: more handouts for the unemployed (as opposed to jobs), more tax breaks for the wealthy.

So putting together the puzzle you can really sense the decline. And it's a shame because America is such an amazing country.

fm, you are arguing that the economy is dead. you have decided that all statistics and information to the contrary represent some sort of globally-devised conspiratorial propaganda campaign. as such, you are shouting down positive news/views as lies and highlighting negative news/views. you are inside your own echo-chamber, and i suggest you get out asap.

if 1 in 5 is un- or under-employed, that means, 4 in 5 are fully employed. this does not suggest the economy is dead.

the economy will not recover "as a whole". in all likelihood, if there is a substantial recovery, specialized sectors will drive growth and investment and confidence, and others will then follow suit. at the very best, it will take several years for the country to crawl out of the crater the debt crisis left behind.

And how is a partial recovery a recovery then?

A recovery for a few is not sustainable if the government is required to feed and house and clothe the unemployed remainder which are increasing in numbers.

You cannot possibly call this growth if the means to growth is paying people for free to eat and drink and live in subsidized housing units.

Is the Federal deficit decreasing?

Then GDP rises with increasing deficits are kind of tricky accounting gimmicks which inevitably signal significant failure in the growth market paradigm.

just as different sectors of an economy grow, stagnate, or shrink over time, a recovery happens when one sector drives growth in another. for example, new auto sales decline but used sales and auto mechanic workloads rise spurring parts suppliers to manufacture more spare parts.

adaptation and economic change takes time. it's not as if a switch will be flipped and the economy entire will burst to life. in fact, the closest thing to that 'switch' is the federal funds rate, but bernanke already switched it to the 'on' position, and... nothing happened. corporations continue to hold their wads.

the story is not over, and of course, it's much easier to predict the past.

(sorry, sgage.)

Is your shift key broken? Capitalizing the first word of each sentence is a convention for a good reason. C'mon, give it a try, it's not that hard! Or are you trying to make some sort of a statement? Or are you just too cool? It really helps readability - I'm not trying to be a jerk.

Maybe Bert only has one hand :-0

email, blogs and the internet changed all sorts of communicative etiquette (think: wtshtf, omg, lmfao). i write professionally. i tend to use lower case when i'm just blabbing about this or that. it has nothing to do with coolness... it's informality, so readers know i am shooting the breeze and will excuse my haste and associated grammatical errors, bluntness, etc.

you are not being a jerk. when little things like this get under your skin though, perhaps you should check to see if your 'control' key is stuck.

I'm going to ask you all to use correct spelling and punctuation, if you're able. We don't want "textspeak" to take over here. Sgage is right, capitalizing the first letter of sentence makes it easier to read.

This isn't the place for "blabbing about this and that" anyway.

Below are some excerpts from this Drumbeat. You seem to be providing a bit of "blabbing about this and that" and along with a smidge of "textspeak". What gives, Leanan?

-- "Getting better" is not the same thing as "good."

-- Bad things can get better. It's a perfectly standard use of English.

-- OTOH...banks are sending out 10 times as many new credit card applications as they did last year.

-- Pro sports seem to be doing pretty well.

-- And "on the ground" - people just seem more optimistic.

But no matter. I'll pipe down. Happy hols, all!

If you would please capitalize the first letter of each sentence, your writing would be much more readable. Thanks!

fm, you are arguing that the economy is dead. you have decided that all statistics and information to the contrary represent some sort of globally-devised conspiratorial propaganda campaign. as such, you are shouting down positive news/views as lies and highlighting negative news/views. you are inside your own echo-chamber, and i suggest you get out asap.

I appreciate the suggestion, I'm not shouting down anything. I just think I'm a realist observing the big picture and yes I tend to be extremely skeptical of the so called positive news/views propaganda coming out of Washington via the MSM. To be clear if 20% of Americans are unemployed to the other 80% everything still seems to be fine and dandy but for the 20% who are unemployed the economy is indeed dead for all practical purposes.

Unfortunately I'm not seeing much improvement on the ground. At least in my corner of the world I still see more and more small local businesses being boarded up, I see the foreclosure signs and overgrown lawns down the street, I see more homeless people wandering the streets and granted this is anecdotal but it seems every time I'm at the checkout counter at the supermarket recently, the person in front of me is having a problem with their government issued food stamp card.

Maybe the economy isn't quite dead yet but I think we could safely say that as far as the average Joe is concerned, it is gravely ill to say the least. Wishful thinking notwithstanding. Then again, my echo-chamber doesn't include too many bankers or Wall Street types.

Reading this thread it is clear to me that some of you need to get out more.

My brother helps run a large food pantry for his Church, one of the largest in the area. He used to think I was an alarmist, especially about the economy, but he recently told me that I've been dead right all along. The good news is that donations are up at the pantry. The bad news is that they have been overwhelmed by need and have run short of basic items several times. Volunteers are spending their own money to replenish stocks of canned goods, flour, milk, etc. What scares my Brother is that many of the folks frequenting the food pantry are the elderly middle class folks he's known for years. He thought they were "set for life".

I drove to Atlanta Friday to pick up a free furnace from an aquaintance who upgraded to a higher efficiency system. The unit I got is only 4 years old. I had planned to install it in my home as a backup to our radiant floor. Methinks I'll donate it to someone who needs it more than we do.

I took the long way home north from Atlanta through some areas that I haven't been to for a while. The number of closed businesses, properties seemingly abandoned, developements boarded, clearly in forclosure, all a reminder of how far some have fallen. Several stores and gas stations that seemed to be thriving last year, gone. For Sale signs everywhere. Another sureal roadtrip.

Yet, folks still running around in their big cars as if they don't notice. Perhaps they can't afford to. After all, the system will work it out eventually. Most folks are still working (somewhere), and paying their bills (most of them). Yet there's something spooky about the cup-half-full mentality that seems to predominate.

When asked about the big picture, I'm inclined to agree with Kunstler:

......with money-making activity shifted from producing things of value into a runaway Wall Street machine dedicated to something-for-nothing rentier exploitation of interest rate differentials, arbitrages, short-sales, outright swindles, and other activities based on no creation of value whatsoever. While capital piles up in the salons of Central Park West and the cigar cellars of the Hamptons, social capital hemorrhages every day as masses of formerly-working Americans forego the acquisition of any useful skills, or forget old ones, or opt to lose themselves in the transports of methadrine, "reality" TV, and tattoo art. To put it perhaps a bit indelicately, our sh@t is falling apart.

[edited for TOD acceptability]
BTW, when did JHK start worrying about being "indelicate"?

I suggest that folks take a trip to rural Mississippi or West Virginia. Get off of the Interstates and just poke around a bit. Forget the official numbers; they are digital rationalisations of reality.

No one's set for life with 0% interest rates.

you have decided that all statistics and information to the contrary represent some sort of globally-devised conspiratorial propaganda campaign. as such, you are shouting down positive news/views as lies and highlighting negative news/views. you are inside your own echo-chamber, and i suggest you get out asap.

Save that text. You could post it twenty times a day. The irony is that there are mirror image echo chambers on both side of all of these issues calling the other side echo chambers.

Confirmation bias is very powerful.

Still, it can't get 'better' if it is not good. The progression is: "Good, Better, Best."

I maintain the Economy is bad. It may have become less bad. In our world, the real economy is "bad, worse, worst." Movement from these can only be called, improvement, as you said. The improvement is very selective... rich people are having it pretty damned good. For them, maybe it is better.

I keep hearing from my conservative friends that the workers are not important... but they cannot explain to me who is going to be buying stuff if the workers don't have money.

I am watching, and very concerned with what I see. Spin at the highest levels, while reality gets out of hand. I predict that the volume will increase in the near future... more frantic, wilder claims.


That's silly. Bad things can get better. It's a perfectly standard use of English.

I don't think the improvement is selective, so much as it's spotty. Some geographical areas are doing better than others, and jobs are more plentiful in some fields than others.

YAbut I don't think you will be able to/should count on that. A "sucker rally". Your mileage may vary.

I think I've made it clear that I'm not counting on it.

Some people will get "suckered" into thinking things are better, when they should be dis-investing themselves from the "squid" hahaha! Some will think they can "game it" for a while longer.... I still use a credit card occasionally and I use (dirty dirty) cash, so I play for a bit longer... AND I surf the interwebz for that dopamine kick when I should be doing something more ummm useful. BTW, What is your property worth? ~;)

This isn't about investments. (I've been out of the market for awhile now.)

Rather, it's about the economy, and the immediate effects it will have. If the economy really is rebounding, even if only temporarily, then we can expect oil prices to rise.

no one said or argued that things are good, fm, but there are signs that some indicators may have bottomed and are turning up a bit.

that said, the imminent reckoning for state and local budgets in 2011 worries me. it's very immediate, very nuts-and-bolts, and very big.

The graphs on all economic charts would have been heding upwards for at least the last six months, had the oil prices been low, say below 50 USD, for the whole time. Now it takes longer time with a higher resistance from the higher oil prices. My speculation is that we never realy will see it turn, as any move upwards drags oil prices with it, so that we are pretty much stuck where we are now. Untill global production finally goes into decline.

If home prices decline next year another 10% or so, as projected, I don't see how the economy is getting better.

Which local government folks will be eliminated or discarded?

Streets and transportation.
Public safety, medical, fire and police.

All state budget problems stem from pensions for the above in any case. Getting rid of these jobs and paying the retired to live it up is dim witted of course. Unless you think the future is not worth it.

Cutting schools is like borrowing from the future so the past can live it up as well.

These are the choices. Either use the future to make the present prosperous or cut the pensions along with the services.

Selecting the youngest generations to pay for the oldest is the worst kind of theft and indicative of a much greater problem with our civilization.

Don't know if this has already been posted, but here is, IMO, a very good essay by Michael Cain, on the ongoing and upcoming state and local budget problems, using Texas as an example. This was posted on Gail's blog:

Oil limits lead to state budget squeezes

For much of the last two years, newspaper headlines have regularly declared that state governments are facing a budget crisis. Those declarations are absolutely true. However, few voters have an idea of what that statement really means because they know relatively little about how their state government spends money, or how the budget is put together. I am confident of the accuracy of that statement because as a member of a state legislative budget staff, I helped with new member orientation every two years, and incoming members of the legislature were often clueless. Budget work can be deadly dull, and the mainstream media seldom covers the details. This essay provides an accessible (and hopefully interesting) look into the possible consequences of the budget crises on state government spending. . . .

Examples usually make things clearer. I’ll use the Texas state budget for this purpose. It’s not the state budget that I know best, but there are four reasons for using it. First, Texas is a large state in terms of population as well as area. Large states often function as leaders: the choices made by large states may restrict other states’ options. Second, the Texas state budget is already lean; Texas ranks among the states spending the least on a per-capita basis. Third, Texas’ conservative state government has become even more conservative as a result of the recent elections. Texas Monthly magazine says that this may be the most conservative government that Texas has ever elected. This is a legislature whose members ran on a promise not to raise taxes, and with a natural inclination to cut government spending. Fourth, the conservative shift that occurred in Texas also occurred, to a lesser degree, in Congress. If the trend continues in 2012, today’s Texas may be an indicator of future Congressional attitudes.

Which local government folks will be eliminated or discarded?

It won't be the bureaucracy or officers or officers' staff or trappings of luxury.


Of course not. In fact, if you are part of the "in-crowd", you may just find a whole new group, department or even division created in order that you can move up. I observed this several times when I was employed by the State of Tennessee.

Also in TN, the bureau staff, which contributes nothing but (mis) management takes 17% off of each Division's budget, leaving less for inspections and compliance efforts.

I, for one, would love to hear what are people's favorite 'Canaries' for gauging the State of Things.

I think my 'addiction' to the Oil Drum is to have a place with some global eyeballs that can help me keep getting 'a sense of the room' .. and yet, it seems to me there might be easier metrics to base this on. I'm aware of the difficulty in GDP numbers and the official Unemployment counts..

There must be some good notions among all you smart TOD folks that can help keep our eyes on Metrics that Matter.. I think Fred points to one. What are some others that show us a few more parts of the 'Elephant'??

Credit Card Debt? Commercial Sports Ticket sales? A loaf of bread as a percentage of an hour's work? (for the First percentile, the fiftieth percentile and the 99th?) Homeless Families Stats? Utility customers in arrears or blacked out? (Big one up here in the NorthEast..)


Cost of energy is a key indicator. As energy rises faster and consumes more GDP then we can no long buy other goods and services.

Declines are obvious in Cable TV subscriptions and in DVD/video sales. That is not looking good for disposable income to me.

Food stamps is a key indicator.

Declines in schools and educational are becoming noticeable.

Lack of cooperation in our government implies a general problem -- money used to be able to solve our differences in government in the old days -- now we are guessing who is peter and who is paul so we can rob peter to pay paul -- and that leads to nasty gridlock in my view.

Lets examine the price of Gold. Not good. Holding gold means you have little faith in typical securities investments for example.

Economy is stagnating at best. Declining modestly probably.

Anyone saw the 60 minutes where an entire town in Iowa is vanishing. Anyone calling that positive Growth is nutter.


Vanishing small towns in America is just another metric that capital and investments are depreciating rapidly imho.

Finally, the reduction of consumer debt is not actually debt that is being paid down. That debt is being written off due to default. When debt is removed from a credit based economy is spells economic contraction as well.

Credit card debt has fallen, but mostly because of charge offs. OTOH...banks are sending out 10 times as many new credit card applications as they did last year.

Pro sports seem to be doing pretty well. Baseball contracts have rebounded after a 2008 that was so bad the players' union accused the teams of collusion.

And "on the ground" - people just seem more optimistic. They're more willing to spend. They have jobs, when before they didn't. They're starting their own businesses. They're buying homes.

I don't know if it will last. I think there's more pain to come in housing, and the government cutbacks, from state and city layoffs to less federal stimulus, may be quite a headwind next year. But for now, we've got a little bounce going.

I hope for a semi-recovery myself for the time being -- but I want to know when to liquidate by stocks and mutual fund.

So banks are sending out applications... how many are responding? Is consumer credit on the upswing?

How many apps were sent out last year? What is the present FICO requirement? How about interest rates on those new cards?

Are they sending cards out to those college students who cannot find work? And, whose jobs, when the do find them, pay so little that they cannot pay rent, purchase an automobile, and certainly cannot support a family? Wonderful! Let's milk those kids some more... they need to get used to it!

Meanwhile we continue to squander our heritage on useless plastic junk! And computer games. My view of the future... in the US, 250 Million people sitting on their butts, getting fatter, and playing WOW, or watching Dancing with the Stars, or some such. All their income goes for payments on the 96 inch 3=D HDTV ... and that is the rosey view. Reality says they have no income... they steal enough to buy drugs, and that is their fantasy game.

State run lotteries (when I was a kid, people went to jail for 20 yrs plus for numbers running), racetracks, gambling cruises, all with "proceeds go to public education" are advertised on TV, and Billboards, in magazines, etc., to keep everyone's hopes up. The mathematically challenged play the government games, and vote against tax increases for billionaires. The far right and far left duke it out in public while the corporaticions in office laugh all the way to the bank. And we;re worried about Peak Oil causing the crash? Shoot, Leanan, that crash is built right in to what I am watching.

What will cause the crash? I don't know, but I suspect it will be some apparently minor thing. Maybe something some wealthy politician or CEO says, like, "Let them eat cake." Who knows? I wish I didn't care. but those grandkids - well, I have to try to do something for them. I just wish I knew what would help them.


Thanks craig you just put words to all my worries as well ;-)

What on earth can the little guy do for his little kids and grandkids in the face of this insanity?

The best thing any of us can do for our small children and grandchildren is to share our practical knowledge with them. Try to help them get more out of school; look at and correct their math homework. If we know how to do some useful chore that isn't too dangerous, let the child participate in the activity. If you are skilled at bartering, try to get the child interested in bartering. Go for walks with children, and identify the trees, the birds, the animals, the stars at night. Play with your child or grandchild. Fly kites with them. If you sail, take them sailing. If you fly an airplane, take them flying. Children like to DO things; they are not all addicts to Facebook or to computer games. And whatever else you do, read to your child or grandchild; buy them books, too. Choose your Christmas gifts to children with care. For example, I'm giving my six year old and youngest granddaughter a compound bow suitable to her age, because her father is a skilled bow hunter, and her older sister is already pretty good with bow and arrow. Hunting and fishing are skills that can be taught to children at surprisingly early ages. My second granddaughter was an efficient fisherwoman at age four, though she needed help getting the hook out of the fish's mouth until she was six or seven years old.
Kids are fascinated with gardens and like to grow things.


Good post, Don. I spent over an hour with my 8-yr old grandson, helping him with his homework last evening! It was very rewarding! I was able to use praise, and help him to use his own intelligence to do the work by encouragement. I hope that all the grandkids learn to take responsibility for themselves and their actions, and to learn to be productive. Eventually self supporting would be nice!

And, you know that God does not deduct from your alloted years, the time you spend fishing.



Don't forget about encouraging charitable giving (especially of time) and groups such as the Boy/Girl Scouts.

My wife and I make it a point each year to get involved in the church's Christmas Basket effort with our children and talk with them about why it is important. We've also brought them with us to inner-city ministries charitable events.

Even if you aren't a Christian, there are groups / programs worth supporting.

4-H is another good group to get kids involved with. My eldest granddaughter is interested in raising rabbits, and interests such as these should be encouraged.

You are right about the Boy and Girl Scouts, but let's not forget about Campfire Girls. All my three daughters were Campfire Girls; they were much more active than the Girl Scouts in my area.

For some reason, kids like to go ice fishing; we have a lot of that in Minnesota. A Rappala (fish filleting knife) makes a good gift to a child who is old enough to use one. Everybody should learn how to fillet a fish. And an ice-fishing rig is quite inexpensive.

As we move past Peak Oil I hope that we shall be able to more and more combine productive activity with pleasant activity. Many crafts offer this opportunity.

Absolutely correct, Don. We don't have Campfire Girls here in Middle TN, but they should definitely be on the list if they are available in your area.

Christmas this year is going to be heavily outdoor-related (backpacks, compasses etc.) and they already have knives, tents and sleeping bags. Another bonus in gifts like this is that they encourage family times in natural situations; something that could be invaluable if anyone has to fall back on lower - tech times / situations.

You are 100% correct that it is good for family members to interact and do outdoor or gardening tasks together. All to often, family members in today's society become isolated from one another--not even coming together for family breakfasts and dinners, for example.

They aren't giving credit to people who don't have the ability to pay. Amusingly, among their targets as good customers are people who have bad credit because of "strategic default" - walking away from their mortgages because they didn't want to pay, not because they couldn't.

Heh. So much for the theory that such people would be punished by never being able to get credit. I knew it - banks don't care about your morality, they only care if they can make money off you.

Yup. And they should take care - those folks who strategically defaulted on their houses will strategically default on their new loans as well.


In states like California, strategic defaults are completely legal and there is no reason that the defaulter would not qualify for a credit card.

In CA, a first mortgage to purchase a primary residence is "non-recourse" and secured only by the value of the property that is mortgaged. The mortgage lender has no legal claim against any of the borrowers other property. So if the house is worth less than the balance of the mortgage amount, the borrower can walk away from the property and let the lender claim the property. The lender cannot get a judgement agains the borrower for the difference between the foreclosure proceeds and the unpaid principle of the mortgage.

The borrower may have a job, other investments, and other real estate, and the borrower need not go through bankruptcy.

The borrower isn't necessarily a bad credit risk for a credit card issuer.

They can't. Credit card debt is different. If you default, they can sue you, and garnishee your wages or other assets.

These people are financially savvy, and quite well off. They won't be able to declare bankruptcy and have their credit card debt wiped away. I doubt they'll even try to default on credit card debt. And the banks know this.

I work with a lawyer/consultant who specializes in 'asset preservation' and who might disagree. For the most part, though, without his assistance they would have to pay their credit cards.

OTOH, they would already have them, nes paz? And if the did not, would they likely be signing on now?

In Texas, credit default may hurt your credit, but it is almost impossible to collect from debtors who walk away. Easy to get judgments, but impractical.


I would guess that's because most people who default on credit card debt don't have enough assets to be worth pursuing.

People who walk away from mortgages are in a different class altogether.

I know some people in California who would disagree as well. They did walk away, but only because the could do nothing else. They have no assets, and in fact one of them whom I know very well is now working, well after retirement age. Remember, Leanan, this was a sub-prime crisis. The worst impact happened to the people who should never have been accepted as borrowers. The wealthy? Well, maybe a few did strategic defaults... and for sure a few middle class people who tried to game the system bolted as well. But mostly, it was poor people, and they are not the ones the banks want as new credit card holders.


Well, exactly. People who lost their homes because they couldn't pay are not "strategic defaulters." "Walk away," "jingle mail," etc. imply the person had a choice. They chose not to pay, rather than couldn't pay.

I did fill for bankrupcy in California using a lawyer (paid only 330$ since I had a legal insurance) to eliminate all my credit card debt and hospital bills... about 20,000 $. Shortly after, I got bunch of adds of the style "Congratulation for your bankrupcy, if you want a loan to buy a car, you can contact us" as well as new offer from credit card companies including one that I defaulted on!
After all, once you filled for bankrupcy, you cannot do it again for at least 7 years, so during that time you cannot wiggle out of the new debt, at least not that easilly. And I had a good job and was paying all my bills on time... till I stopped.
I also did strategic default on my house since I knew in advance that I would not be able to keep my job and will had to move. I stopped paying 6 months before moving out and the bank did not bother me and does not seem interested in getting the house even after I told them I was moving out.
Doing so I got rid of all my debts and it is perfectly legal in California. I'm now in France and here it is almost impossible to get rid of debts through bankrupcy.

Good question jokuhl. Just my simple view but unemployment, especially in absolute numbers, seems the most meaningful. The obvious: the more unemployed the greater cost of social support, less tax revenue, probably lower salaries leading to even less tax/Social Security payments. Granted all the pieces are connected to some degree with various feed back loops interacting. But even if businesses are producing more and are having better profits that's only good news for them and their employees. But if we sit here for the next 5 or 8 years with 10% unemployment (or worse) society as whole will be all the less prepared IMHO to deal with PO when it really starts to inflict serious damage.

Food stamp usage is one my favorite "canaries." It continues to grow every month.

On the one hand, it's both necessary and brilliant: it's immoral and horrific to have people starve, and by giving them something they can use to purchase food at established businesses, you avoid the image and negative connotation of "soup lines."

On the other hand, it's symptomatic of a society with a profound sickness at its core. Fat people, without jobs, on food stamps. Does not exactly bode well for the future.

"Fintrends" shows inflation bumping along at around 1%, essentially flat, and possibly falling slightly.


It doesn't look much like recovery.

Day to day expenses like food, energy and clothing must not matter much to their inflation calcs.

FT has a section on the "global food crisis" today.


Inflation has become a joke.

Not counted are the most volitile segments... food, energy, clothing. Also, those are the most important items – things that all must purchase in order to live, nay to exist.

Other things are counted. Like the cost of boats, cars and televisions. Other than autos, these are all discretionary spending, and automobile should be as well.

So. If you are one of the wealthy 2%, you are doing pretty good. Your purchase costs are staying relatively stable; your taxes are staying insanely low; your income and wealth are growing (19% last year!). Not a bad deal, for you.

For most however, things are not so good. 20%+ are unemployed (notwithstanding the lie in the MSM that unemployment is 9.8%), and those folks are being supported by some of the 80% still working, and whose pay has dropped.

Things are getting better, though. We hit the bottom, and may have 'bounced.' Employment has increased a bit, but not as much as population, so unemployment actually has risen. Pay levels have dropped. Small businesses are dying, housing is in a protracted slump, with more foreclosures in the offing. Prices have risen slightly, as sales have dropped off. I surmise that statistic is because the only people purchasing housing today are the wealthy who can still qualify for loans, or make cash payments. Of course, this creates a whole new real estate bubble, but so what? Things are getting better, aren't they? For the wealthy, of course, but then who else counts?

Yes, indeed, Pangloss. God is in His Heaven, and all is well in this, the best of all possible worlds.


I dunno. It does seem like the economy's picking up right now.

Just how far can the economy pick up without a growth in energy, primarily oil, supplies? And does the ever rising oil prices have any affect on the economy? Everyone seems to be ignoring the energy factor.

Here is a PDF article on that very subject. Though it is dated, 2003, the theory still holds.

Energy and Economic Growth.

This article surveys the relation between energy and economic growth and more generally the role of energy in economic production. While business and financial economists pay significant attention to the impact of oil and other energy prices on economic activity, the mainstream theory of economic growth pays little or no attention to the role of energy or other natural resources in promoting or enabling economic growth. Resource and ecological economists have criticised this theory on a number of grounds, especially the implications of thermodynamics for economic production and the long-term prospects of the economy.

Figure 4 in this PDF shows a direct relationship between GDP and primary energy use. However the chart goes only through 1995. But the point is there is a direct relationship and that relationship cannot be escaped.

Bottom line, GDP will start to grow again when energy use starts to grow again. We will see jumps and fall backs in the GDP but it will not start to grow again, permanently, when the oil supply starts to grow again, permanently. But if the oil supply starts to drop instead then the GDP, and likewise the economy in general, will do likewise.

Ron P.

Bottom line, GDP will start to grow again when energy use starts to grow again.

For the past six months I've watched as a developer has been clearing the land across the street from me and begun putting in a new road and eventually houses. It's probably the only new housing development in the area, but on a prime piece of land overlooking the Hudson River, so they will probably sell.

The point is that all the work has been done by a handful of men with oil-fed machines. The economic value of their output is directly correlated to the amount of oil based fuel they use. The relationship couldn't be more clear. True, construction is particularly energy intensive compared to other occupations, but no form of work in our current economy is free from the tether to oil. I know that's preaching to the choir, but the importance for interpreting GDP is significant.

GDP is a number that is fudged in a number of ways. If you really want to know how the economy is doing, follow the oil. At least, until we get a new economy, which won't be anytime soon.

I wonder, some times, whether GDP won't grow a bunch as oil runs out. Production will become more dependent on labor, which will become more expensive as a result (more demand = higher cost). Thus, more money will change hands, and GDP will go up.

Frankly, I don't have much faith in GDP as an economic indicator - we don't really know what, exactly, it measures, in terms of value. Just consider, a flooding situation is in progress... there are three houses in the impacted area. For two houses, the owners pack up their car and leave. The third owner pays $10,000 for berms and sandbags, and pumps. His home is saved. The others are lost, at a cost of $250,000 each. Which home owner made the greatest contribution?

Oh, and to makes matters worse, the two who left are paid $247,500 by their insurance companies, net loss to them of $2,500. The guy who save his house pays $10K out of pocket and the insurance company doesn't pay a dime.

[[true story, btw, from the annals of a major US insurance company]]


Ron - I think your statement highlights why we'll be chasing our tales for a while over economic growth IMHO. Just like an inability to pick a specific date for the exact moment of PO due to an undulating plateau, we may have an analogous situation with GPD. Maybe 20 years from now we can point to those specific points on either curve and say "There you go". Right now all we have is a wide spread of opinions.


While I think it was a typo, your phrase "chasing our tales" couldn't be more appropriate. Because right now we are a country chasing after the stories we have told ourselves for decades -- stories of national superiority, economic superiority, every kind of superiority. For the most part, Americans carry these stories in the depths of their souls and that is why I wonder what social impact will be unleashed when those stories are found wanting.

GDP is a myth. When someone has an auto accident, GDP goes up due to the medical care provided, body shop work done, etc. GDP goes up with a jail is built or a bomber is constructed or when someone is paid to show up for a patronage job that does nothing. GDP doesn't distinguish between bad and good. As a homeowner, GDP includes the rent that I would be paying if I weren't a homeowner (it imputes rental income for home owners). It's subject to revision and manipulation and redefinition. It's a sham as are most statistics the government puts out.

When I want to know what's happening, I just open my eyes. I don't need a weatherman to know which way the wind blows.

Spot on, Kingfish. If you haven't seen it, allow me to recommend the documentary What a Way to Go: Life at the End of Empire, which deconstructs the cultural stories you speak of (and more). It's narration begins, "I was born into stories..."

This is a comment I made to a local paper some 2 years past.

"Did you know if your home is paid for, the government considers what you would pay in rent for that home as part of GDP. This is referred to as an imputation. Total GDP imputations make up more than 2 trillion of GDP

Also part of GDP is considered hedonics. That means if you bought a PC and paid $500 for it this year that same PC last year would have cost $750 because it is more efficient than last years PC. So GDP is calculated at 750 not the $500 you paid. Hedonics makes up more than 2 trillion of current GDP.

Imputations and hedonics makes up more than 4 trillion of current GDP. Government also has very efficient ways of distorting CPI and Unemployment. If you study CPI and GDP you will find the calculations they use are inverse or contrary to each other to obtain the desired results."

GDP translated into english goes "the sum of all money that changes owner in a country in a year".

It has nothing to do with value creation.

As an example, nothing raises GDP short term as a full scale war.

The first 2.5% of GDP is hedonics basically.

King - sometimes I'm that clever...soemtimes I'm that sloppy. I'll just let the mystery fester for a while. I understand what you mean about GDP. The absolute value is meaningless to me. But we can watch the trend line change. Of course that assumes they don't change the paramters. Na...why would they do that? That would almost be like lying.

A festering mystery? Sounds appetizing! :)

It does seem like the economy's picking up right now. Who knows if it will last, though.

I think the key word there is 'seem' and the caveat sentence at the end is paramount. I certainly hope some random upticks of metrics mean better times. But after seeing so many 'green shoots' whither away, I now tend to assume various upticks are merely part of bouncing along the bottom. There certainly are indicators that will give promising signals . . . but then the price of oil rises along with them and that oil price just strangles all recovery attempts. :-/

I worry we are stuck in permanent 70's & early-80's stagflation.

The parallels with the '70-'80s period also bothers me. However, the economy is less dependent on oil now -- we get more GDP per barrel of oil than back then.

The really new thing is what I'd call the "Democratization of Know-How". "Know-How" is all the specialized skills and knowledge that make skilled labor skilled and professional workers professional. Besides the information that people receive in formal education, there is a lot of on-the-job training, specialist documents, and internal practices and procedures that businesses and organizations provide to their members. In addition, there is know-how about processes and procedures and generally "the right way to do things" that get transmitted from one employee to another without ever being written down.

The internet and the web began the explosion of communication of know how. The yards long bookshelf of parts specifications that an engineer might have received were now on-line from the supplier's web site. The druggists Merck Index was now on line. And millions of enthusiasts for almost everything were putting up information from how to tune your car to recipies for you favorite food.

Now social media will also come into play with communication between individuals and within groups. This expands the "shop talk" that transmitted the "right way to do things" to a wider and wider community.

The result of this is that know how is more widely distributed both across organizational and national boundaries. More and more people possess the know how to do various jobs. The value of specialized and esoteric knowledge is going down, and with it, the value of labor is deflating.

However, the economy is less dependent on oil now -- we get more GDP per barrel of oil than back then.

Which means we that every barrel of oil we lack has MORE impact on the economy, every $ of increase in price has MORE impact on the economy, not less. The economy is no less dependent on oil that it has been. We may get more GDP (which is a crap measure of economic wellbeing) per barrel, but the GDP we do get is still totally dependent on oil. Think it through...

If you are running a bakery, and you are consuming less sugar now than before, are you better able to weather a rise in the price of sugar?

Bogus analogy. We get more GDP per barrel maybe, but every unit of GDP is still totally dependent on it. Think it through.

Merril, the bakery is useing more, not less, sugar than before. We only get more cookies out of every bag than before. But we use more of it now.

Try to see it this way; if we get more stuff done out of one barrel of oil, than more stuff is dependant on that barrel. If we lose it, we would have to stop doing more stuf to compensate the loss.

Furthermore, with cheap labor inputs from Asia. Labor quality decreases further in a global sense.

I know a glass manufacturing engineer who examined/oversaw plants being installed in China. While in the US, these plants would use more sophisticated robotics and control systems, but in China they want more people/more labor involved with lower skill levels.

Thus use more Chinese/asian folks to do the jobs performed in higher tech plants in US with few people, since labor is so darn cheap.

On the home front, I am troubled by people that are surprised when I say that I installed my own plumbing or my own storage space or fixed my vacuum or wired my outlets for lighting or the relocation of an appliance. Others say, "How do you know these things?" I say, "I read about them in books, or I go on line."

Do people not understand the utility of the library or the internet?

Very troubling but yes I agree we are becoming both specialized in understanding how to use a WWW web browser but absolutely inept in repairing a power outlet or fixing a leaky sink.

The larger number of Asian folks participating in the less-automated process may use better motor skills, attention to detail, real-time decision making, and independent judgement than does the small number of US folks monitoring the highly automated process.

Therefore, the actual know-how x people on a global basis may be higher with the work moved to Asia. So I'm not sure that "Labor quality decreases further in a global sense".

But I'm focusing on know-how, which matters a lot, and not on education, which is of less importance, especially in the sense of a typical Western education which was geared towards developing the managerial/bureaucratic class.

China’s Army of Graduates Struggles for Jobs

In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced 830,000 graduates a year. Last May, that number was more than six million and rising.
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.

But the supply of those trained in accounting, finance and computer programming now seems limitless, and their value has plunged. Between 2003 and 2009, the average starting salary for migrant laborers grew by nearly 80 percent; during the same period, starting pay for college graduates stayed the same, although their wages actually decreased if inflation is taken into account.

PS -- long ago I had an assignment to evaluate how technicians were troubleshooting a particular system. What I found was that there was lots of documentation and a few training courses on how specific subsystems worked and about how to use specific test equipment. However, the knowledge of how the system as a whole worked, what the commonest problems were, how to go about progressively diagnosing what was wrong, and the best procedures to use for repair were not written down or made available in training. They were communicated from experienced technicians to the new technicians by informal discussions and on-the-job training. In some cases the supervisors and managers were not aware of this information.

That's why social media will be so important in the further spread of know-how. The way most people find out how to fix a leaky faucet is by talking to a friend who knows how -- not by reading a book or looking it up on the web.

My job relies on day-to-day troubleshooting. If I cannot teach people to trouble-shoot their problems, then I failed in my view.

It is a very creative skill to possess too.

When procedure X fails to work, then I suggest Y and they want to try X a few more times (since doing that is easier than developing Y in the near term). Well maybe they didnt do X right the first time, o.k. great, and then the second time it works out, but more often than not doing Y is always better, because you get to eliminate X as possible for now, narrowing down the possible solutions.

Of course, broadening the possible solutions requires creativity. Troubleshooting is very important and requires careful consideration of alternative explanations and possible senarios. It is the highest form of work in my view.

You want troubleshooters and not mindless operators in the workforce.

Here is to hoping.

Lucky for me, my dad was a master of several trades, not limited to the mechanical worlds. He was a trained Chef, trained electronics repair person, could build almost anything with wood, repair his own car, fix a faucet, and the list goes on and on. If it comes to something that breaks in the house, he is likely to fix it himself, or at least know how to fix it, even if he might have to have outside help to do so.

But I am with you on the thought that people seem overwhelmed when something breaks in the house that they panic. I buy books on things that I like to know more about, like mason work, or greenhouse design, or gardening, or bread making or cheese making, or any number of other topics.

The general fix-it man will get his money's worth in the years to come, I hope.

BioWebScape Designs for a better fed and housed world.

Just the other day I was talking with the neighbors and I mentioned that on my todo list was to get a couple of starting capacitors to keep as spares for the HVAC systems. They looked at me like I had two heads. And yet if you had to pay a contractor to replace those things you would pay through the nose.

Even when I do have a contractor come over to do something, I pay close attention to what it is that they actually need to do. For example, we had dents in the garage door that needed to be pounded out. I couldn't figure out how to get the foam panels out without breaking or shredding them, but these guys knew the tricks.

The US economy "on the ground" is improving.....no doubt about it. This will continue for at least the short term.

The federal debt situation, however, is beyond bad and worsening with the latest tax cut deal.

But there is no predicting accurately when people will lose confidence in the government's ability to service its debt without inflating. We do know, however, what it will look like as it happens. It will happen slowly then extremely suddenly.

Tax package may threaten U.S. top-notch credit rating—Moody's
Package's negative effects on finances may outweigh the positive effects

I have a brother now looking for work. I know several people who are only in a house, as couch surfers, not as renters or owners (a mortgage is just as bad as renting if you can't pay for it, you still loose the place to stay( but might owe more money).

Prices for food have been the topic around here, as they go up and incomes don't, more money goes to food and less to other things. Other things are other people's jobs hanging in the balance.

We might just be feeling good because we aren't out of a job, and there is cheer in that. But I deal with a lot of people who are barely holding their own, and most are still pinched for funds. Asking them, they don't see light at the end of the tunnel.

The stories up top about more middle class getting food help, does not bode well for the upswing. Sooner or later, they will have to have jobs, or risk being homeless, which will not be good for anyone, least of all them. Each person not in a job, is one more nail in the coffin of yet another job down the line. Get too many people without work, it is a hard hard slog back to better levels of employment, and cities and countys will be pushed to breaking limits as to their own spending on helping the out of work people as services go unpaid due to lack of taxes collected.

WE are in a snow storm, and though someone turned a light on, and it is brighter in here, the storm is still blowing snow around, and few people really understand that we are not out of the woods yet, and one little slip, could push us back into the darkness.

And it could be bad weather, or a road side bomb, or just about anything right now. What if China were to hickup next year, what if a virus were to outbreak somewhere? things that can't be seen, loom in the dark woods, and we aren't in a secure place right now to handle them.

Just be warned, to get your ducks in a row if you still have the ability to make your ends meet today, tomorrow it might be different.

Fair warning.
BioWebScape Designs for a better fed and housed world.

Just be warned, to get your ducks in a row if you still have the ability to make your ends meet today, tomorrow it might be different.

Very apt post CEO. I was at Safeway the other day getting about a 100 bucks of food. While waiting in line I started to get very self conscious, because everyone else was buying one meal's worth. Really, like one guy with one pizza, one woman with one tv dinner, and so on. One couple had three items (one of them a bottle of hard booze) and they were 2nd to my several bags worth. I later thought about that and realized some day it won't be possible without risking life and limb. If the current situation continues then at some future point in time a bunch of people will roll me for the food, and I'll be told by the police that it was stupid to buy so much food at one time.

I agree with your post regarding any kind of oddity could end this so called recovery in a flash. Right now oil is about 88 and holding steady close to 90 now, and the recovery is just starting to take flight. So what happens in a year when things are really rolling and oil hits say 110 a barrel. Do things still look rosey? At what point will the wheels come off and we all get the 08 recession blues again.

Can you imagine the reaction people will have when it happens again? Oh, and it will happen again, of that I'm certain. But at least being peak oil savvy will save me from not understanding why.

Like you said, get your ducks in a row...

I was at Safeway the other day getting about a 100 bucks of food. While waiting in line I started to get very self conscious, because everyone else was buying one meal's worth. Really, like one guy with one pizza, one woman with one tv dinner, and so on

People need to seriously learn how to cook. Buying pre-prepared foods is a very expensive way to go. One can live very cheaply, foodwise, buying the raw ingredients such as beans and rice, and a small amount of meat (chicken is usually cheap) rather than ready-made pizzas or TV dinners.

I realize this may sound preachy, but it's another example of how entrenched into popular consciousness certain lifestyles become. Victims of economic depression are often their own worst enemies by simply not realizing the choices they may have.

"...everyone else was buying one meal's worth"

That has to get a bit costly, driving to the Safeway (those are good-sized stores, there's not exactly one on every corner, right?) every day, unless it just happens to be right on your way to work...

10+, ET!

And, check out the packaging of prepared foods. All using plastic! Between energy cost for processing, and transportation, and packaging, all in all a very oil intensive way to go.

"We have met the enemy, and he is us."


Knowledge is useful. Last crash I was able to liquidate all of my securities before mortgage debts got ugly and the bus came apart in 2008.

That got me going on using my bike to save a little gas money. And i started my garden to grow some food for fun and as education for the kids. While these efforts do not make much money, in time my fruit trees will be pumping and my garden well planned to make produce for the spring, summer, and fall. I already grew a summer's worth of apples, plums, beans, lemons, lettuce, greens, tomatoes, and squash with minimal effort. No oranges yet ;-( We give away plum jelly for free to friends and family.

My neighbors think I am weird, but they have to go to Safeway more than I do. Well in times like these it is best to link hobbies to something useful. Hoping for the best.

I still shop most days of the week (at least 4 to 5 times per week). For me it is a learned experience pass down from my mother who happens to live most of her life in the "old country". In fact the majority of the world still do this today. It is incredibly and unconsciously ritualistic. It is a habit for most and a great place to socialize. Granted in this country Safeway is a horrible place to do so, but if you live in a small town where you have locally support groceries, it is possible. I know my butcher and cashiers and talk to them quite often. I see people at work, bars, gym, and friends all the time in the store. However, I do buy rice and pasta in bulk, but this is very infrequent. I am not defending frozen pizza and tv dinners.

I think the Safeway and Krogers experience is rather sterile and devoid of any social interaction. It is like walking into a warehouse lid with fluorescence lighting. In there you pile on your perishable and can food in bulk, and then check out with perhaps a thank you for your cashier. You know that it is only because of refrigeration in the last 70 years that created this IMHO peculiar experience.

I enjoy and take pleasure in the daily ritual of grocery shopping. It affords me a chance to mingle with my neighbors.

Cinch - Maybe it varies with where your Krogers is located. I'm on first name basis with most of my Kroger hands. I normally get a big smile when the meat counter and seafood counter ladies see me. But then I'm a smart ass that goes out of his way to tease/make them laugh. Heck, as soon as the seafood lady sees me she starts loading a bag with mussels if there in. Maybe it because I live in a smaller burg outside of Houston but I don't think so. Maybe it's because long ago I learned how to get folks to interact friendly with me: interact friendly with them first. Maybe it's just a Texas or southern thing. I've heard all my life about Yankees being cold and aloof but I never real bought into that based on my limited experiences.

There's definitely some truth in it, (crotchety Yankees, that is,) but not enough. As usual, Devil's in the details. (and He summers in Bar Harbor!)

"Spend part of your life in NYC, but leave before it makes you too hard. Spend part of your life in Southern California, but leave before it makes you too soft.." (attrib. to Kurt Cobain, IIRC)

I'd wonder how many people in the line you were standing in do their shopping everyday because they fail to plan their meals and shop one meal at a time. My wife and I shop monthly for somethings and weekly for others. We sit down and plan our meals for the week before heading to the grocery store. By doing this we both know what's on the menu and we can plan accordingly. For example, if I know that we're having burritos for dinner tomorrow, I can cook the dried beans tonight after dinner while we're all hanging out or after the kids are in bed. With a little planning we've avoided the "need" to pay for processed/canned beans that you might expect to see someone buying after work for dinner in a few hours.

Note that the people he observed were buying food just for themselves. I think people who live alone are more likely to buy food one meal at a time. It may not even be lack of planning; they just decide they're too tired or busy to cook whatever it is they had planned, and buy something instead. You're less likely to do this if you have a family to feed.

However, I'm reminded of that article awhile back, that argued that cooking at home is not the greenest option for a single person. It recommended eating at a restaurant, because less energy was consumed by cooking in bulk. It also suggested that frozen food might be greener than fresh, local food, since it could be processed in bulk and shipped by slow boat. I wonder if all that plastic packaging might be balanced out by the efficiencies of mass production.

It is probably greener, in the environmental sense. In the monetary sense, though, cooking your own and buying less often is more likely to be the better to.

Ideally, all that plastic wrap and packaging would be eliminated by using local produce. As a practical matter, most will go ahead and buy that family meal from Stouffer's, or stop by Boston Market. At least some times.

Knowing and acknowledging that makes one hesitant to 'cast the first stone,' doesn't it?


Slow cooking beans in an electric crock pot on low heat (75-100 Watts). It is a light bulb or two (if you have twisties). No problem.

I like farmer stands and local. I am into the local economy rather than the global food corp. I talk to the growers, and it is fun. The stuff is grown close by and brought in on large trucks (not quite semi trailers) in a fairly organized operation here. Kids love it.

Do uncooked salads and fresh fruit as often as you can so the only processing mainly is cutting with a knife -- take a little stress out on a melon.

Frozen is good. A few frozen dinner -- prepackaged things are fine -- but in moderation you will save some money. Kids love the peas and corn.

In any case, cooking in bulk and eating leftovers is the best option for time and cooking energy I presume.

For example a Grade A organic whole chicken is $12, but a bunch of processed chicken breast for the same weight will soak you. The chicken lasts a week in terms of meat and soup. The more processing/cooking you do the cheaper it is -- on the other hand, cooking takes time.

The article was from Europe - Switzerland or Sweden, I think. I assume they have the typical European style fridges, and therefore can't buy or cook in bulk. And also that restaurants probably aren't far away, perhaps even walking distance.

The problem with fresh foods is that they are often flown in (at least in Europe in the winter).

The calculations might be different on this side of the pond, home of huge fridges and freezers, and often long drives to Wal-Mart or restaurants.

Still...community cooking facilities was the way people often solved the problem of the energy required for food preparation in the past. And sometimes community eating, as well. If you have too much food, and can't easily preserve it, one of the ways to "bank" it is to feed your friends and neighbors, so they'll owe you when they have a surplus.

Yes, my friend from Germany says his mother's fridge is a half-sized one and it fed 3 hungry boys somehow. It was generally packed to the gills he said.

I like restaurants in general, especially in Switzerland.

I do like the idea of feeding friends nearby. We need to do that more often.

The idea of determining how much energy goes into shipping, processing and cooking food, then refrigerating left-overs and then reheating is quite complex. The car trip length and frequency is likely also a interesting factor. Makes my head spin. Need to read about it.

I imagine we spend a lot of energy doing all those operations.

I've recently been playing with solar cooking and beans cook very well. They like the long low heat. Rice is another.


Kuwaiti opposition MPs file to quiz premier

KUWAIT CITY — The Gulf state of Kuwait Monday appeared headed for a new political crisis after three opposition MPs filed a motion to question the prime minister in parliament over a police crackdown.

Al Jazeera TV says Kuwait shuts its offices

CAIRO — Kuwait has shut the offices of the Al Jazeera television network in the country and withdrawn its accreditation after it gave airtime to an opposition lawmaker in defiance of government warnings.

Inspired by the ApocaDocs 2010 Year In Review, Desdemona arbitrarily picks twelve of the most profoundly doom-laden stories of 2010.

January – Ice-capped roof of world turns to desert

Scientists warn of ecological catastrophe across Asia as glaciers melt and the continent's great rivers dry up. ...

The Twelve Doomiest Stories of 2010

Regarding Farming with hydrogen power, above, I own a New Holland, (great little tractor, sips fuel) and had heard of New Holland's work on fuel cell powered equipment. Seems like a great solution on the surface until one considers the costs. Prices of farm equipment already put many farmers into the credit slave bracket; very expensive.

How expensive will fuel (and food) need to become before it makes sense to adopt this new technology and the equipment required to produce and store hydrogen? Add to this the rising costs of fertilizer, water, processing and transport, this seems like another case of "if only we could afford this".

I once came accross an article explaining that the inevitable leaks in a hydrogen powered transportation system would lead to massive ozone destruction, I assume because hydrogen would readily steal the third oxygen atom in an ozone molecule. If that is in fact the case, running a hydrogen powered infrastructure is one of the most dangerous options available to us. Anyone out there with a better chemistry background than I that could comment on whether or not this is in fact the case?

I am a mechanical engineer but have some knowledge of chemistry. The hydrogen-oxygen reaction takes such a small amount of activation energy (heat at certain pressure to cause reaction that brings lower energy state molecule and releases energy in the process) that the hydrogen (H2) freed due to leaks will easily combine with free oxygen (O2) at atmotspheric pressure and in the presence of sunlight. No need to worry about the H2 molecules surviving long enough to cause any AGW or ozone depleation effect, they soon convert to H2O.

The biggest problem with hydrogen as I see it is the ability to store/transport it and the cost to make it from PV or wind power. Infrastructure costs would be huge and I believe unaffordable for most farmers.

The hydrogen-oxygen reaction takes such a small amount of activation energy

In the absence of a catalyst, that is not true. Hydrogen and Oxygen gases do not readily react. The reaction mechanism is rather complex:


and requires breaking the H-H bond and/or the O=O bond (436 and 498 kJ/mol respectively). This is not going to happen readily in the atmosphere.

For some discussion about the implications of leaking hydrogen, see:


Before someone gets hurt trying to prove this, one tenth of a millijoule is enough to light hydrogen in air from our testing at work. A typical walking on carpet static charge is about 30 millijoules.

And it gets worse;

"It takes a minimum of 0.017 mJ at a hydrogen concentration of around 22 to 26%." that is 1/58 of a millijoule.


Hydrogen goes boom with very little encouragement. The only way the hydrogen economy is going to work is using methanol as the carrier. Then it's easy.

And yes, I work a chemical plant where we make and pump the stuff around. And we have LEL meters all over, as well as IR and UV flame detectors. H2 under pressure must be treated with great respect and serious paranoia.

I agree that releasing hydrogen in an enclosed space (with oxygen present) is not a happy thing to do. I was commenting more on the reactivity out in the open atmosphere (i.e. with no flying carpets or suspended platinum catalysts).

I think that a more sensible solution for farms will be Farmers' Coop Biodiesel operations, where small biodiesel plants provide fuel for a group of farmers, which would allow farmers to continue to use their existing diesel powered farm equipment. Of course Rudolph Diesel originally designed his engine so that it would run off vegetable oil, allowing farmers to mechanize their operations, without relying on petroleum.

The EROEI for draft animals is much higher than biodiesel, particularly considering that they can utilize cellulosic material (which has much greater yields per acre than soy beans). The "fuel crops" are also much easier to grow, as pasture rarely needs tillage and also provides excellent carbon sequestration compared with tilled acreage. Pasture also eliminates the need for intensive chemical application. In a future where gas-based fertilizers are in short supply (and which should never be used at all imho), they also provide a nice source of fertility.

Sure -- it'll require more farmers. But a rural renaissance is a good thing as I see it. Most farm acreage has become a sterile industrial desert where people no longer have neighbors (due to the massive farm sizes required to pay for the massive equipment), and where most anyone who has studied the issue is afraid to drink the water.

Fielding enough draft animals, related equipment, and farmers who know how to farm this way, to replace (even a fraction of) our current level of fossil fuel based production will never happen.

Perhaps after the big reset .......

Perhaps I'm just dreaming... but I'm quite certain that the promoters of continued industrial farming are dreamers as well, whether that's hydrogen, ethanol (smirk!) or biodiesel fueled agriculture. Changing the flavor of industrial farming doesn't help much, imho. It's responsible in large part for destroying our atmosphere, our oceans, and our water. Probably the most expensive and poorly executed endeavor ever undertaken, when all the long term costs are factored in; effectively a theft of present and future generations. I could continue on with the inferior nutritional quality of the industrially farmed products (and our associated health problems as a result), but I'll leave it for now.

Learning to use draft horses isn't particularly difficult -- I've done it. No, I'm not as proficient as someone who's been doing it for decades, but I was able to make the switch and be doing what needed to be done within a year's time. There's loads of expertise in the Amish communities throughout the midwest, and they're making new experts like gangbusters (large family size).

Draft sized horses are ideal for farm work, but were never the norm through the 1800's. The wealthy farmers used them, but the regular farmers typically used multi-purpose horses such as old style morgans or cross breeds that could also pull a wagon to town with some degree of speed. We've got loads of grass-eating yard ornaments in this country that could finally be put to good use.

Yair...I'll squeeze in here fellers, you may find this relevant. Our "Circleworker" concept provides a unique means of undertaking high precision agriculture with draught animals.

Of particular importance is the fact that the beasts only have to be trained to pull the machine and to start and stop to voice commands...in some ways even more convenient than the existing electric motor and control system.

There are advantages for THE ANIMAL. First off, assuming that an implement (such as the illustrated plow)is started at the outside and works inward then the load decreases as the hours pass...in addition it would be quite simple to rig up a canopy so the animal is always working in the shade.

A machine intended for animal propulsion would be of much simpler construction and, currently we are constructing a lighter modular version of the same concept that could be pulled by a lightweight pony or donky.

I can't seem to post an active link but if you paste this into your browser I think it should work fine.

I liked your circle crop-grower. It is very clever. Now with animal power options or electric or traditional tractor -- you have a nicely adaptable system.

That is a really interesting system. I've been gardening for about 30 years. Getting things organized spatially counts for a lot. I like the precision and the economy.

If it works out with the small electric drive, I think you may have a winner.

Thanks Scrub Puller for posting this, and for working on the Circleworker.

Can you tell us how it indexes as it rotates? Does it make a single radial jump every rotation (so that the plantings are in concentric circles, like a bullseye pattern) or does it continually move outward as it rotates (so that the plantings are in a spiral pattern)?

If it makes a spiral pattern, is the indexing method a long lead screw or Acme threaded rod (like a lathe uses)?

Can the whole thing be moved to work a neighboring circle space? How does that happen? Do you just pull it with a tractor? Doesn't it run over all the crops you just worked?

Yair...hello Greg in MO. The indexing is pretty crude...we just have a winch drum mounted on the centre post with a drum circumference equal to the width of the implement.

That is to say one complete rotation will move the implement inward or outward in a spiral pattern at a distance equal to the circumference of the drum. Works pretty good but only suitable for preplanting tillage, it's not accurate enough for working down established rows of crop which are established in concentric bulls eye pattern circles.

With practice it will take about seven ten minutes to shift from circle to circle. The outer end is latched onto a secondry pivot point, the inner pivot disconnected and a second motor/engine traverses the unit in semi-circle to align with the centre post of the second circle. There is a single wheel track through the crop.

Much of the design work centred around developing the mechanism to allow this to be a hassel free operation. As many circles may be worked as required and given reasonably flat terrain the unit will also "end drive" its self at a walking pace to work at a different location.

Thanks for your interest.

Maybe you could pirate the control circuitry from a portable CD player, and then just treat each crop as a song track!

It should work very well for beans, which I've heard are the 'musical fruit'..

With that said, I think we're in for a major "reset" either way. My hope is that a renewed use of draft animals might soften the landing somewhat. Certainly moreso than a continued reliance on the extreme complexity (and thus extreme vulnerability) required to sustain industrial farming methods.

There are other issues too. Most farm equipment requires use of a PTO (power take off). While you can buy a horse-drawn sulky with a PTO, I believe in many cases you cannot generate enough RPM's to drive the equipment...bailing hay, for example, would seem to be out of the question...and draft horses eat a lot of hay! I've seen the Amish plowing with eight horses in harness, so you can get a lot of power for plowing and hauling where just a three point hitch is required. I've seen applications using a horse-drawn sulky with VW diesel engine to power the PTO. Scalability issue again...the equipment to do this just doesn't exist in sufficient supply...nor do the draft horses. (Its nice they do reproduce, though!) (Two of my neighbors have experience using teams of horses, so I'm at least in good shape there!)

yes, most *tractor powered* equipment does require a pto - but there is loads of equipment (even tractor powered) which doesn't. Most PTO equipment has a ground driven alternative, whether that's a baler, a rake, a manure spreader, or a mower. The equipment we produced for horse drawn use circa 1940 is excellent -- made to last and nearly bomb proof. Some amish shops are still making great stuff, but none of them have figured out that fuel scarcity may cause their powered units to stop running.

Though there are ground driven balers, the simple solution is to use a hay-loader to put up loose hay, as was commonly done up until WWII. I've been doing that with our team of two Belgians. Yes -- it's somewhat more work that baled hay -- but as problematic as most balers are, I think I may almost be saving time by not constantly working on the silly things. It also gives you more options for drying -- you can put it up slightly damp if you have the room to spread it out, whereas baled hay in the same situation would be a loss. The hay quality is also better -- fewer cut ends, and much better leaf retention. Our ground driven hay rake/tedder works great -- just as well as our old pto driven model -- and better in some respects. It doesn't shred the alfalfa to a pulp if you pause somewhere, for instance.

yes, most *tractor powered* equipment does require a pto - but there is loads of equipment (even tractor powered) which doesn't. Most PTO equipment has a ground driven alternative, whether that's a baler, a rake, a manure spreader, or a mower. The equipment we produced for horse drawn use circa 1940 is excellent -- made to last and nearly bomb proof. Some amish shops are still making great stuff, but none of them have figured out that fuel scarcity may cause their powered units to stop running.

Though there are ground driven balers, the simple solution is to use a hay-loader to put up loose hay, as was commonly done up until WWII. I've been doing that with our team of two Belgians. Yes -- it's somewhat more work that baled hay -- but as problematic as most balers are, I think I may almost be saving time by not constantly working on the silly things. It also gives you more options for drying -- you can put it up slightly damp if you have the room to spread it out, whereas baled hay in the same situation would be a loss. The hay quality is also better -- fewer cut ends, and much better leaf retention. Our ground driven hay rake/tedder works great -- just as well as our old pto driven model -- and better in some respects. It doesn't shred the alfalfa to a pulp if you pause somewhere, for instance.

I'm not disagreeing. My point is there is a huge investment by farmers in current equipment which is PTO based. I collect websites that manufacture horse-drawn farm equipment. It isn't cheap. So we are looking at a significant "Hirsch-type" transition event requiring time and money.

I agree, BC

Hirsch is always reminding us of scale and infrastructure: our reluctance to abandon our current investments, and the investment required for the new replacements.
Every farm has is own infrastructure: the tractors, trucks, wagons and implements that sit in our barnyards (plus those horse-drawn relics, rusting in the fence-rows.
With net farm income so low for most farmers, it is a struggle to simply continue farming, much less consider the investment of money and time required to make a major shift in production practices.

Hirsch has often called for rationing, and the two sectors that he usually prioritizes are the military and farmers. I think he is correct: the amount of work that a tractor and implements can generate is phenomenal (and highly visible when we're done).
I agree with Jeff... on-farm biodiesel is possible, but something has to give: all those farmers who are working off-farm, plus doing chores before & after work, will now have to attend to their own fuel production system as well (after they've been able to convince their banker to loan them the money to get the equipment).
I also agree with the horse advocates, but only to a point. Horses can indeed do a great job with light-duty tasks like seeding, harrowing and raking, but when it comes to plowing, baling, auguring & elevating, and pulling grain-wagons, we need tractors and their wondrous PTOs.

We must keep in mind also that on-farm energy is a small percentage of energy used in the food supply chain. Food produced on farms will not be of much benefit (other than to the farm family and their immediate neighbours) without sufficient affordable energy in the other links in the chain (processing, canning/packaging, distribution, refrigeration, retailing).
The real tragedy here may originate in the unwillingness (inability) of our Ag departments to even examine PO/"end of cheap fossil fuels" and its implications for feeding our continent. Ironically, the first book on PO is probably "Beyond Oil" (1986, 306 pgs), which focused on agri-food. I've yet to encounter a gov't Ag person who was already familiar with it.

I have plenty of experience with draft horses (I used a big Percheron to get my firewood from my woodlot for many years). I know lots of people around here that log and farm with them - and this is not Amish country or anything like that. I'm talking central NH. In the last decade or so the membership of the Granite State Draft Horse Association has ballooned. The knowledge is there, all over the place - it ain't rocket science (though it requires some heart). There are Draft Horse days and auctions all over New England.

It wasn't that long ago that all the food in this country was produced using draft animals. You would be amazed at the scale of some of the operations - not talking little boutique farms, I'm talking amber waves of grain. It can be done.

But it's a very different paradigm, no doubt about it.

And it wasn't long ago that all the food was produced without draft animals.

Draft animals require calories also.

Yes, grass/hay.

Don't they pay you back with horse poop though? ;-)

Surely they do! IMO, best fertilizer there is...

There is still ENTROPY

Most efficient is sun to plant to human

I am not a vegetarian but a plant diet is the most efficient.

2.5 acres/adult for 15000 calories per week

Bull-wheel drive serves most onboard needs for power short of threshing or high-pressure baling. I grew up with ground-drive hay mowers, binders, potatoe planter and digger, manure spreader, grain seed drill, corn planter, pretty much whatever was needed. Hay was handled loose with dump rake, manual pitchfork onto a wagon, and horse-pulled crane-hayfork into the barn loft.

Biggest problem with those systems was that the machinery was practically impossible to move any distance, because the big drive wheels were built very rigid and with deep cleats for traction. All the acerage they worked on had to be in a single block, normally not very large, eg. 160 to 320 acres. It will take an incredibly high number of those types of operations to feed this world. I'd venture "impossible".

Feeding this world, using industrial techniques (diesel tractors, monster farms, anhydrous ammonia fertilizer) is impossible; smaller farms (the 160 to 320 acre ones) would not be much worse, and could be better, and the need for farm labor would increase and take a few unemployed off the rolls. The real problem is that there are far more people than our planet can sustain absent cheap fossil fuels. Since it is a given that fossil fuels are finite, at some point numbers will come down. The only real questions: when and how much.

I have heard sustainability numbers ranging from 750 million to 1.5 billion. I don't know of any study that shows more than that, but am open for an education on the subject.

And, of course, the really dicey problem is how to get numbers down. Do we cooperate, or does nature do it to us? And, how do we behave towards one another as the drawdown takes place?

The next fifteen or twenty years will be interesting, at least. Maybe not much fun, though.


Who do you think will go first? Some of us will be spectators for some time, as I'd imagine the overcrowded areas (Bay of Bengal) will start to experience the die-off though this won't impact the oil consumption too much, but then as Russia begins to decline and cut off supplies to Poland and the Eastern Bloc countries - a few harshs winter and the more fortunate of us will pity and pray for the dying of those countries entirely dependent on oil, and of course, the consumerist UK will be stranded and there'll be deaths to reckon with there as well.

Will the world go out with a whimper, or with a bang? What happens to Hawaii, will it be a paradise as it is isolated yet large enough to sustain some of the remaining population? Will it be possible to be sipping on Pina Coladas, eating sugar cane and pineapples while the terrors of cannibalism sweep across North America?

... while the terrors of cannibalism sweep across North America

Have you been watching re-runs of "The Road"?

No reruns, yet, but yeah, _The Road_ was great!

The key indicator for farming with draft animals would be FROFI (Food Return On Food Invested) rather than EROEI. The ratio is not that good - about 4:1. Draft animals eat up a lot of the crop they are helping to produce. That is one reason they are not used much any more - they are rather inefficient.

The ratio for running farm equipment on straight vegetable oil is significantly better, probably as good as 10:1. And diesel engines can be made to run on straight vegetable oil with a few modifications that are within the mechanical skills of most farmers.

Draft animals can and do eat grains, but it's not particularly healthy for them, nor is it prudent (with the possible exception being periods of extreme use). Pasture and hay provide 99% of the needs of our draft team, which is in excellent health. This holds true for horses, mules, or oxen. Pasture and hay are also excellent for allowing soil to rejuvenate and sequester carbon (by increasing organic matter, which improves fertility and water retention dramatically). Continuously tilled soils invariably decline in fertility, and cannot be sustained. Thus having pasture not only enhances the tilled crops (such as grains), nor does it truly detract from available food supplies on a long term basis.

In our case, we have about 15 acres of pasture on shale soil that is not suitable for cultivation. We also have about 10 acres "flood plain" which is very rich and produces good hay but can't be tilled. So...horses and goats and such can make use of the land that isn't otherwise productive.

Pimentel and Patzek give biodiesel EROEI a zero and I've yet to hear of a farm operating at a profit on such fuel. Plus diesel engines don't make more baby diesel engines.

True, ANL
I agree that biodiesel (like ethanol) seems marginal in terms of EROEI, though I think that on-farm fuel generation (biodiesel and methane) has potential.
Meanwhile, horses have babies but they certainly can't put out much PTO torque, which has many important applications... farmers need high-output sources of energy, or we will have problems on an unprecedented scale.

As I've posted, I'm a fan of biodiesel; I use recycled biodiesel when I can get it. One problem with biodiesel is a water use issue:



According to this chart, biodiesel has a very poor water/BTU ratio, worse than ethanol. No easy answers. Biodiesel production also requires alot of methanol, though much of it can be recovered.

I still like the idea of biodiesel coops alot. If there is good water availability and inputs can be sourced locally, it seems to make sense.

Chart from VA Tech, sourced from this article:


I would really doubt the water use figure for natural gas at 3 gal/mm BTU. If one takes into account all the fouled water supplies from illegal dumping of "frac" water and contaminated wells from shale gas well leaks, the figure may be much higher.

Hydrogen alone is a technical toy, IMHO, as a costly and difficult transport media for electricity.

Using ammonia as the transport, either alone or as liquid or solid urea, is a much better approach. The infrastructure already exists, it can be used for fertilizer, ICE, or fuel-cell applications, and progress on electricity-only synthesis (including reversible cycles) is moving past the lab.

There is no reason that a farm in windy territory could not have wind turbines on the corners of the property to generate ammonia for tractors to farm the middle. Scalable ammonia synthesis would be a superb application of stranded wind, and any excess beyond local use capacity could be shipped to power plants near urban consumers.

A guy used to post here by the name Stranded Wind. I don't know that his pilot plant ever got off the ground, but I do not believe the technical hurdles remaining for ammonia syntheses were large, especially compared to native hydrogen infrastructure needs.

I think the wind/ammonia/stranded wind guy has a facebook account now, as well as a blog.

There's also the Ammonia Fuel Network.

E. Swanson

Rich people have no idea what you're thinking

Wondering why your fat cat boss seems so clueless about why you don’t want to work extra shifts during the holidays? It could be because he can’t understand the dour looks you keep throwing his way.

Upper-class people are less adept at reading other people's emotions than their lower-class counterparts, according to a new study published in the journal Psychological Science.

Maybe we're all going to get a lesson in empathy. Supposedly, during the Great Depression, views on the poor softened, because there were so many people who wanted to work but couldn't get jobs.

An interesting conclusion that the lack of empathy is a consequence of being wealthy and not needing t ask others for help - which seems to be total conjecture. Maybe it's not a consequence, but rather an intrinsic characteristic of those who tend to become wealthy.

Asperger's syndrome is the key to wealth?

LOL! My thoughts exactly!

No Merrill,

psychopathy is the key to wealth. :-)

Actually, the term for the wealthy today would be, "sociopathic psychopaths." Just a psychopath would not do what they are doing!


As we consider a conversattion about 'others' being empathetic, particularly around a group that's easy to stereotype like 'The Rich'.. let's keep an eye on the level of 'failed empathy' we see right here, and in so many other internet discussions to even a far greater degree.. and think about how much there might be a very strong correlation between all sorts isolation and a 'failure to empathize'.

My own thought is that easy money like easy energy - are both tools that have made it appealing for us to build and sustain divisions, safe rooms, comfort zones, cones of silence even within our immediate families. (Think walkmans and DVD players on car trips, for example.. my wife still gets us to sing dopey songs together, and the benefits are clear, after my initial resistance has been breached) Be Careful Casting them Stones..

.. Warren Buffett has been getting slammed roundly by the 'Make no Sacrifice Brigades' for his insistence that the wealthy need to be willing to pay their fair share. The Audacity!

Anybody know what Warren Buffet considers to be a correct "progression scale" for taxes? I'd estimate his concepts and mine should match up fairly closely.

My point was that the article jumps from the thing that was actually measured (accurately or not) to a completely unsupported conjecture about why it would be so. Your guess might also be valid.

I hear you.

I didn't mean to make it sound like you were concluding that.. should have made the reply to Leanan's post, I suppose. I was just hoping the thread wasn't going to turn into a reactive bash-fest. Had my fill of that, lately.

The subsidy chart up top looks like something an ethanol advocate might post, showing a huge subsidy for FF compared to ethanol. I would like to see the same chart based on energy produced such as BTU or BOE. That would give a much better picture of subsidies. Of course the categories might not be comparable?

The real issue is, what counts as a subsidy. If Microsoft, an oil company, and any other company, all get the same tax break, is that specifically a fossil-fuel subsidy, or is it just yet another of millions of absurd complexities of the tax system? We'll never settle that question.

Using the numbers from the chart, the ethanol "subsidy" (whatever that means) is 24% of the fossil fuel "subsidy" (whatever that means.) Considering that the energy contribution of ethanol is vanishingly small as compared to that of all fossil fuels, even on a gross basis, never mind net, this tells us that the taxpayers have been very badly snookered. But that's normal, so what's new?

As a crude analysis (including pun) during 2009 according to EIA the US produced 0.259 billion barrels of ethanol and about 1.9 billion barrels of crude. From the chart ethanol got $2.4 billion per year over the 7 year period and FF got $10.02 per year.

It looks to me like $9.27 went for each barrel of ethanol and $5.27 for each barrel of crude oil in 2009, ignoring the difference in energy.

Well, maybe, except that the image says it pertains to subsidies for all fossil fuels, not just for domestically produced crude oil. So the effective subsidy ratio for ethanol versus gasoline is probably quite a bit larger than 9:5.

I would call ethanol a refined product from its base commodities which are corn, ng and ammonia and diesel et al.

Compare refined gasoline product to ethanol per barrel. Not sure exactly how to do that. But that should make the best comparison.

Maybe: Obtain the amount of gasoline produced in the US from US oil and use that to compare to the ethanol prices.

Also since an oxygenate is required in gasoline (anti-knock agent) then you'd should consider that in the comparison as well.

Cheap Russian hybrid to get 67 miles per gallon:


It's actually not a hybrid. Makers of that car state that it's not a hybrid as they see hybrids filled with inefficiencies.

It can run on either gasoline (almost any kind) or natural gas (there are two fuel tanks). There is a small (rotary) engine that uses fossil fuel to generate electricity. They state that it's a new design of rotary engine that is both very efficient and durable (they claim service, oil change?, only every 30k miles). Electricity is stored in high capacity capacitors not lithium-ion batteries. This makes this car more economical and capacitors last a very long time (compared to lithium ion batteries). The electric engine is sending power to all 4 wheels (I guess there are 4 electric motors then). Only 3% of weight is metal, the rest is composite plastic - apparently very strong. No transmission, very few parts overall, tiny engine, small exterior with spacious interior (due to very few parts), huge acceleration.

Reminds me of the first Hybrid Car design I ever saw. It was from a car show in the early 90's, and was from Volvo or maybe Saab, using a high-speed turbine on a single, direct driveshaft to an alternator (or generator..?), and electric from there on in.

Never heard about it again.. always wondered if they got stuck on Noise issues or possibly gyroscopic problems, with this hi-speed rotation at the heart of the beast. I don't know the state of micro-turbine development either.. but at the time, the simplicity sounded really smart.

Anybody ever heard of this approach? (Do Hybrid-diesel Loco's use Turbines or ICE?)


Yes a microturbine could be fueled with any fuel too in principle.

This has been proposed several times and used on cargo ships:


The concept works but has several practical problems:


The question of range

While the Vision will extend its range via a 3-cylinder turbodeisel engine, it’s possible that other EVs in the not-too-distant future may use a micro gas turbine... like the ones made by Bladon Jets. Executive Chairman Paul Barrett provided information on his company’s product, which he said is considerably smaller, lighter and more efficient than conventional internal combustion range-extending engines. He explained that past attempts at incorporating similar devices into cars failed, because the engineers had tried to drive the wheels directly with the turbines, and there simply wasn’t enough torque. His product, however, uses gasoline (or theoretically any other fuel) to generate electricity, which in turn powers the car’s primary electric motor.

SARTRE Car Platoon Road Tests to Begin

The Safe Road Trains for the Environment (SARTRE) project in Europe has begun to integrate software and hardware into two vehicles that will be used in its first on-road tests before the end of the year. The project's researchers are developing a wireless system that will enable vehicles on public roads to join in a platoon, or a semi-autonomous road train of vehicles, with a professional driver at the front. Vehicles would be able to join and leave the platoon at any point. However, while in the platoon, the vehicles will become part of the train. A computer will take over steering, braking, and acceleration, and drivers will be able do other activities such as eat breakfast, read a book, operate their computer, or talk on their phone. The lead vehicle in the platoon would follow a set route and speed. SARTRE, a three-year project working toward a five-vehicle convoy over the next two years, will help validate the sensors, actuators, and control system developed for the project. However, the researchers say that a fully operational system is likely another decade away. They say that such a system would improve traffic flow, reduce journey times, save fuel, and reduce traffic accidents.

Sounds just like taking a train, only with no way to walk to a restroom!

I can't say I haven't chewed over ideas like this too, but quickly abandon them when the old devil 'Failure Modes' jumps in there and starts painting the wonderful pile-ups that will be possible when that 'unsinkable' wireless control system comes to work with a slight sniffle one day, or a little black road ice manages to work faster than the 'failsafe slippage algorhythm' that was written to respond to it.

There's a reason train cars are built to handle a lot of crushing loads, end to end. I can still imagine having 'Car-Cars' on a train, but have to think the price to use one would be pretty outrageous. Bike/Ebike/Scooter-Cars could make more sense.. probably look like a long row of stables.. roll on from one side of the train and off the other..?

I have to wonder what Jean-Paul Sartre would have thought about that...

Paul - I suspect JP would repeat himself:"To be. Not to seem." Or in this case to be energy efficient...not to seem to be energy efficient. I'm not really much into philosophy but I read those words of his years ago and try to keep them in the back of my mind as I go through life.

This is, a joke? Right?

What lame brain, overpaid, government subsidized, moron, thought this waste of taxpayer funds up?

When will this sort of technological masturbation ever end?

The collapse won't be soon enough, to flush this type of thinking down the toilet of technology. It's called a "TRAIN"......idiots.

Choose wisely.

The Martian

Martian, you are sounding tense. Have a drink and relax. Technology saves earthlings everyday! Imagine all the facebook posts that may be made while in this car train system!

Guess we can kiss CCS good-bye

Earthshaking possibilities may limit underground storage of carbon dioxide

Storing massive amounts of carbon dioxide underground in an effort to combat global warming may not be easy to do because of the potential for triggering small- to moderate-sized earthquakes, according to Stanford geophysicist Mark Zoback.

...The other complication, Zoback said, is that for sequestration to make a significant contribution to reducing carbon dioxide emissions, the volume of gas injected into reservoirs annually would have to be almost the same as the amount of fluid now being produced by the oil and gas industry each year. This would likely require thousands of injection sites around the world.

"Think about how many wells and pipelines and how much infrastructure has been developed to exploit oil and gas resources over the last hundred years," he said. "You need something of comparable scale and volume for carbon dioxide sequestration."

I think he underestimates the infrastructure and sequestration volume by several fold.

I don't really think it much matters. We are obviously not going to do anything about CO2 emissions until it is far too late; by then the limits of oil and gas as well as coal will be upon us, and without our doing anything intentional, emissions will perforce go down!

Meanwhile, whatever damage we have done will be done... if that causes feedback loops and all the rest envisioned by the environmental community, so be it. If it causes our demise as a species, well... there was a buck to be made, wasn't there? I mean, ya gotta make it before the raise yer taxes, right? And, who can stop that?


New methods to examine the potential of concentrating thermal solar power

The operation of CSP power plants and their interaction with electric loads, by time of day and season, were analyzed to determine how this technology could be realistically incorporated into energy-economic models. A key characteristic of CSP power plants is their ability to supply reliable power through the use of a low-cost backup option referred to as hybrid plants, whereby natural gas, or even biomass, can be combusted in a low-cost boiler or heating unit to supply power on cloudy days.

Plant performance depended on two key parameters: the number of cloudy days in which power plants cannot operate, and the average amount of sunshine on operational days. This research showed that an accurate characterization of the number of such "no operational" days is key to a realistic characterization of this technology.

New Scientist (paper issue or paid subscription) has an article

Salty solar plant stores sun's heat
The plentiful sunshine of southern Spain is being harvested to generate electricity day and night
"A new Spanish project, the Gemasolar power tower near Sevilla may have solved the problem of storing the heat at night. The 19 MW tower will be the first in the world to use a mixture of molten salts (sodium and potassium nitrates) to transfer heat from the receiver on top of the tower to a heat exchanger.
The Gemasolar plant is expected to be able to run for 15 hours without sunlight.
Some 50 more solar thermal plants are planned."

Cheap mirrors called linear Fresnel reflectors an alternative to parabolic through systems.
A 5 MW Fresnel plant is now operating in Bakersfield, CA, and a 30 MW plant is due to be built in Murcia, Spain by 2012

Nitrates, oxidisers. They are going to need to be careful with corrosion. These salts also decompose when heated though I don't know if these plants will get to those temperatures but it does impose limits.


It's not often you see a Polar Vortex forecast over the UK...

Not quite the Day after Tomorrow, but close enough to get the locals attention. It could hang around for some 4 days, Thursday thru Sunday, according to another forecast...

E. Swanson

Miami, FL is heading for the low to mid 30F's... I believe 35F is the record low for tomorrow which could be in jeopardy. Blame the VERY -AO...

Hope Britain can stay warm. Just remember one thing......its only December!!!

-10F here right now... I jogged in it earlier tonite. Not bad, dress in layers.

What's odd is that tonight (Tuesday) it's 3 degrees Celsius and raining in Nuuk, the capital of Greenland. Moreover, the local forecast is announcing the next chance of snow is Saturday.


Greenland and Europe have traded weather this December.

What's odd is that tonight (Tuesday) it's 3 degrees Celsius and raining in Nuuk, the capital of Greenland.

Dang! That's warmer than the overnight low forecast for the greater Miami area. If the humidity wasn't so low we might have gotten snow. To put that in perspective the Gulf stream at 27 degrees Celsius is only about 12 miles from my front door and there is a real chance the temperature will dip below freezing where I am. That's nuts!

Well, were not that cold but, checking back in Wunderground, this is the coldest December we've had for the last 10 years (didn't go back further). Started wearing a jumper and thinking about throwing a blanket over the duvet.


To go by the seasonal averages found at the link, that's only around 6C above average for this time of year, which is substantial, but far from being remarkable. The summers may be cold, but according to this, the winters seem milder (for both average and record temperature) than in most of the US northern tier. If the wind is westerly it would come from over the sea; if it is easterly it would come down from high altitude over the ice sheet and would heat up (relatively speaking) from compression. Apparently the (known) all-time record high of 72F occurred in January. So it's an unusual climate.

To go by the seasonal averages found at the link, that's only around 6C above average for this time of year, which is substantial, but far from being remarkable.

PaulS, your point is valid, agreed, but what is remarkable is that big blob of orange/yellow over western Greenland and that big blob of purple/blue over Great Britain and northern Europe.

As FMagyar points out, too, similar temperatures are prevailing in Miami tonight as Nuuk.

Combine together the variations from the norm found throughout the northern hemisphere (particularly areas bordering the North Atlantic), the weather this December appears to be pretty mixed up.

(PS, PaulS no pun intended, the weather data shown by your link indicates that there are only an average 12 days per year where the temperature falls below 0 F or -17C. That's is indeed milder than one would expect considering the latitude and arctic currents. Heat pumps might actually be effective there for a good portion of the year.)

US diplomat Richard Holbrooke dies


Whatever your view of American Empire, he was one of the good guys, an intellect who saw through the BS.



Always enjoyed his upfront honesty.

Group wants plug-in cars to hit Calif. mainstream

The first-ever Nissan Leaf, a mass-market, all-electric car, was delivered to a customer in Redwood City, Calif., over the weekend.

Meanwhile, the first 150 Chevrolet Volts left a Detroit auto plant on Monday and were expected to arrive in California showrooms in the coming days.


In the later part of November, I explained why I believed that through the rest of 2010, US oil inventories would basically falling most or every week, at a faster rate than normal seasonal trends (mostly due to falling imports). I’ve noticed that in the past few weeks, most energy analysts appeared to have come around to that idea too:

Oil Trades Near Four-Day High Before Report That May Show Stocks Declined

By Alexander Kwiatkowski - Dec 13, 2010 8:03 PM ET

Oil traded near the highest close in four days before a report that may show U.S. crude supplies fell to the lowest in five months.

U.S. oil stockpiles fell 2.6 million barrels in the seven days to Dec. 10, according to the median of 11 analysts’ estimates. Gasoline inventories probably increased for a fourth week, gaining 2 million barrels last week from 214 million, according to the survey.

Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably slipped 1 million barrels from 160.2 million. Six of the respondents forecast a decline, four projected a gain and one said there was no change.


One more or less obvious reason why oil stocks may fall is that one Enbridge pipeline carrying oil into the US from Canada remained out of service most of last week (news link up top). This may have reduced imports 1 million barrels or more for the week. There was also a minor weather problem that may have delayed some Mexican oil exports.

Elsewhere varied shipping reports do not indicate any pickup in large tanker traffic heading towards the US, and if anything, imports near the end of year (excluding Mexico and Canada) may even fall. Early in the new year, shipments out of Nigeria look particularly poor – although that may be a temporary problem.

The problem is that despite the fact that China’s refineries ran at record rates in November, they still needed more oil in December to stabilize their overall supplies at a more reasonable level. So China’s oil demand in the early new year may wane a little, but so far, available information indicates that China’s December oil demand has continued strong throughout the entire month.

China is essentially taking supply away from the US and other countries, making the US fall short of the 9.0 mbpd or so of oil it needs to import daily just to maintain the current level of economic activity.

Therefore we may still be in the midst of a mini price spike, which may be only a shadow of the price super-spike we might see further into 2011 if the world economy continues improving.

9.9 MBD net oil and product imports is the number to stay even (hat-tip to pup55). The 4-week average has been under that since mid-September.

9.8 MBD was the year-to-date average for 2010 and inventories were roughly even at that rate. A slight increase in demand over the past few months gives a slightly higher import level needed.

With the optimistic EIA predicting falling inventories throughout 2011, I don't think import levels are going back up.

Thanks. I think it was the Wall Street Journal that recently ran an article about how the US was steadily increasing its exports, yes exports, of refined products like gasoline and diesel.

So to be precise, we should be looking at net overall imports and exports including products. However as others have noted, the EIA's export figures don't appear to be reliable on a week to week basis. Possibly this partially accounts for those monthly, and sometimes weekly, adjustments the EIA keeps making.

Anyway, no it doesn't look like overall net imports of oil/products will be going up in 2011.

Here is an update on the Enbridge pipeline system; Enbridge is expected to clear backlogs by early January:

Enbridge working to clear oil backlog
Reuters December 14, 2010 2:55

CALGARY - Enbridge Inc. (TSX:ENB) has fixed most of the problems that caused repeated shutdowns of its U.S. oil pipeline network over the past five months and expects to clear a backlog of Canadian oil waiting for shipment by early January, the company’s CEO said on Tuesday.

Pat Daniel said Enbridge, whose pipelines carry the bulk of Canada’s oil exports to the United States, compressed the inspection schedule for its U.S. lines following the July rupture of a Michigan pipeline. That work is nearly done and the company expects to clear up the glut of oil that has depressed Canadian spot crude prices.

“We hope to work through most of the backlog in December and the first bit of January,” he said.


Well, it's a dark and stormy night in our little corner of the world, even more so for the 80,000+ NSP customers currently without power as heavy rains and high winds of up to 140 kph pound much of the province. The number of reported outages has been steadily rising all evening, and as at 02h45 AST, 84,801 customers are without service (for real time updates, see: http://www.nspower.ca/en/home/residential/outageinformation/liveoutagema...). Touch wood, our lights have been holding steady, although they flicker and dim from time to time. OASIS is showing a sizable drop in load -- total provincial demand including exports to neighbouring New Brunswick is now just 1,010.6 MW.

The line crews will be working hard to keep up with this storm as the worst may be yet to come. A heartfelt thanks to these men and women and a safe return home when your work is done.


Local Production, Local Distribution, Local Consumption.

All the great technology for massive power distribution, overcome by a little storm? Maybe it's time to think in another direction about energy and get off the technology Merry-go-round? Such a waste of time and resources at NSP. How many of those 80,000 have an emergency preparedness plan? For 1 day, 1 week, 1 month, 1 year?

Only when it all falls down, will they open their eyes to a new way of living.

Choose wisely.

The Martian

Heard on this morning's news :-

"Helicopters Used To Save Fla. Crop From Rare Chill"

"Dozens of helicopters are whirring above Florida's valuable and sensitive veggie crops, an unusual approach by farmers worried that an uncommon freeze could wipe out their harvests.

The choppers hover low over green bean and sweet corn fields, moving back and forth in the early morning hours to push warmer air closer to the plants — and, the farmers hope, save the plants from a deadly frost.

Farmers are especially nervous because an 11-day freeze in January wiped out many crops, from corn to kumquats. Florida is the largest winter producer of sweet corn in the U.S. — the kind people eat."


Talk about energy intensive agriculture.....

The farmers were also watering the crops again last night.

A freezing morning around Tampa Bay but not as cold as predicted

Water managers meet Tuesday to vote on regulations to restrict the amount of water farmers can use to protect their crops during freezes. A record cold spell in January prompted massive groundwater pumping to protect strawberry plants, resulting in hundreds of dry wells and dozens of sinkholes. Six dry wells were reported last week after two overnight freezes.

I mentioned this Florida freeze last week. Kudos to me for seeing this far in advance :)

Ft. Lauderdale was 34F (tied record) and Key West was 50F (tied record)... Tonite looks even worse for many because the winds will not be blowing.

Right now the dewpoint (measure of moisture) is 10F. That is insane for S. FL. Almost unheard of. A dew point you might find in Phoenix, but not Miami.

moving back and forth in the early morning hours to push warmer air closer to the plants

the helicopters heat the air by compressing it. that is how the chinook helicopter got its name.

Nah. The direct heating effect would be very small, way too much ventilation. And: "The name 'Chinook' alludes to the Chinook people of the Pacific Northwest." (Not to the weather phenomenon, which in North America also happens to be named after them, and is often called a foehn elsewhere.)

way too much ventilation.

but the damn thing lifts off anyhow.

It doesn't lift off by compressing air. The rotors are airfoils, like wings, that generate lift via Bernoulli's Principle, just like a wing on an airplane.

Still, if you draw a freebody diagram it is obvious that the air must suspend the weight of the craft, so for every pound of lift there is a pound of pressure downward SOMEWHERE.

I imagine the net effect is mostly to create air velocity, as anyone who has ever been close to rotor wash can attest. Certainly most of the engine's fuel energy ends up as heated air.

Seems like an exceedingly expensive way to generate heat and move air, though.

The air is not suspending the weight of the helicopter. Helicopters (and airplanes) fly via Bernoulli's Principle caused by air rushing over the airfoil, be it a wing or a rotor blade.

The aircraft flies because of a pressure differential created by the shape of the airfoil - it is literally sucked upward. There are not any pounds of downward pressure on the air column.

Just look up Bernoulli's Principle - it's not that hard to understand.

then a centrifigual compressor doesnt work either, does it ?

Why are you all forgetting that the air will expand again and cool?


The helicopter blades are coated with a special radioactive material that causes the air to become hot forever. ;-)

paleocon has it right. the fuel burned either produces useful work or is exhausted as waste heat.

the helicopter extracts heat from the air above the airfoils by lowering the pressure(expanding the air) and adds heat by compressing the air below. thereafter, the air expands and transfers its heat to the ground, plants and surrounding air.

adds heat by compressing the air below. thereafter, the air expands and transfers its heat to the ground

Um, the expansion will cool the air again. If the compression/expansion cycle is perfect(no losses) you will get back to the same temperature you started from. Why not just accept the much simpler explanation of bringing air down from the higher, warmer air layer to the ground.


Um, the expansion will cool the air again

yes, the compressed air expands(cools) and transfers heat to objects near the ground. i think i already explained that. heat flows downhill temperaturewise.

i dont believe the object of this exercise is to change the weather, only to move air (and the heat it contains) around , temporarily add heat to the air and hopefully keep the oranges from freezing.

Why not just accept the much simpler explanation of bringing air down from the higher, warmer air layer to the ground.

that is part of it, but why not accept that compressing air adds heat and expanding air looses heat and burning fuel adds heat too.

the temperature gradient above the ground is not that great either and the helicopters don't fly high enough to take advantage of much of a temperature differential.

yes, the condition may exist where a 'layer' of warmer air is just within helicopter distance. there could also be a 'layer' of colder air. i doubt the farmer measures the temperature gradient and decide that it is economical to order a helicopter because he detects a 'layer' of warm air. hell, he just gives it a try and sometimes it works. i assume there have been cases where the helicopter treatment wasn't enough.

huh ? a wing or a sail or an airfoil work the same way: increase pressure on one side and decrease pressure on the other.

those air molecules beneath the airfoil dont just dissapear, they crowd together. my name for that is compression.

the helicopters heat the air by compressing it. that is how the chinook helicopter got its name.

Helicopters and wind machines protect crops from freezing by preventing air stratification and moving warm air at higher altitudes down to ground level.

The CH-47 Chinook helicopter is named after the Chinook Indians of the Pacific Northwest.

The US Army has an official policy of naming helicopters after Indians tribes, chiefs or terms - Army Regulation (AR) 70-28, dated 4 April 1969. Other helicopters named after Indians:
UH-1 Iroquois
UH-60 Blackhawk
OH-58 Kiowa
OV-1 Mohawk
AH-64 Apache
AH-66 Commanche
OH-6 Cayuse
CH-54 Tarhe
OV-1 Mohawk
UH-19 Chickasaw
UH-34 Choctaw
OH-13 Sioux
OH-23 Raven
CH-21 Shawnee.

The sole exception is the Cobra helicopter. However, after it was named, the Indian tribes complained and said that naming military helicopters after warlike Indian tribes was a compliment, so the Army went back to naming helicopters after Indians.

compressing air adds heat to the air(period).

Yes, but a helicopter doesn't compress air to any significant degree. It gets most of its lift from Bernoulli's Principle.

Many explanations for the generation of lift (on airfoils, propeller blades, etc.) can be found; but some of these explanations can be misleading, and some are false.

See: Lift (force) for a more complete explanation of what is going on.

The fact is that wind machines and helicopters (which are a form of wind machine) are efficient in preventing plants from freezing mostly because they break up air stratification and prevent thermal inversion from allowing cold air to sink to the ground in a cold snap.

If you just want to heat the air, there are much more efficient air heaters than a helicopter.

If you just want to heat the air, there are much more efficient air heaters than a helicopter.

and if you just want to move the air around, there are much more efficient fans than a helicopter.

Indeed there are, and in places where frost is more common, they use them. The apple orchards here in the northeast have wind machines to protect against freezing. But it's not economical in places where freezing temps are rare, so they use helicopters instead.

yeah, the forgotten element here is probably the heat generated by friction from the air blowing around.

I doubt that's significant. The point is to mix the air to keep it from stratifying, with the cold air settling at ground level. Google it - you're wrong on this one.

November retail sales up more than expected

WASHINGTON — Sales at U.S. retailers rose more than expected in November as consumers splurged on clothing and other items at the start of the holiday season and receipts at gasoline stations surged, more evidence the economic recovery gathered steam in the fourth quarter.

The Commerce Department said on Tuesday total retail sales increased 0.8 percent, advancing for a fifth straight month. Sales for October were revised up to 1.7 percent from a previously reported 1.2 percent gain.

I wonder if that surge at gasoline stations is increased demand, or just increased prices.

No doubt related...Americans have stopped saving and returned to spending.

As I've commmented before, this recession isn't a bust, but a step. A game of musical chairs and the music has started again. Minus a couple chairs. Those 10%, or whatever stat you prefer, won't be playing again. In recessions past, the unemployed never quite return to their old income levels, save a few individuals, they now scrounge, become part of a lower rung of society. The bottom is ballooning. The music that other 90% makes seems just as loud though.

I suspect that most of the increase on spending for gasoline was due to price increases rather than people driving more. It will be a few weeks, I think, before the data is available to separate out the two components of increased spending. "Retail sales up!" sounds good. But what if most of that "up" is just increased prices for gasoline and food? Then the news is bad.

The headline numbers for any economic statistic are often highly misleading. One has to wait for the data and then go behind and beyond the headline number.

CNN Money is reporting that, indeed, fuel prices account for much of the retail gain, increased clothing costs as well. While Wall St. sees the increase as a good thing, retailers like Best Buy aren't seeing the money (sales off 3.3%). My take is that folks are buying mostly necessities like fuel and clothing, and prices are up for these things. Gotten themselves to the discretionary side of the economy, they have.

Much ado about not-so-much, IMO. The markets these days will take any tidbit and run with it

...retailers like Best Buy aren't seeing the money (sales off 3.3%).

The high end retailers, Nieman Marcus, Nordstrom, etc., are doing pretty well. The low end, not so good. Volume discounters and price discounters, like Sam's Club,Wal-Mart, Costco and Target are doing well. The reasons are pretty clear. The middle class is going, 'poof.'


There is something to that, but I don't think that was Best Buy's major problem. I think they lost out to online sales, which are booming this season.

The conversion of broadcast TV to digital and the dropping prices of flat screen TVs pulled in a lot of customers previously. Everyone already has a DVD. Notebooks provided some relief from the dropping prices of PCs, but recently netbooks, smartphones and pads have eroded prices for computing and web browsing. Digital still and video cameras are mature products being eroded by cell phones and Flip. GPS prices are sliding, even as the screens get bigger. New products like BluRay and 3D either aren't selling as well or are too immature.

Best Buy needs an new $1500 to $3000 must have electronic gizmo to sell in order to support their bricks and mortar business. Looking at their circulars, they are filled with too many under $100 items.

But frankly, I don't see what that next gadget is (and if I did, I'd be Steve Jobs!).

The other sector that is doing well is the so-called dollar stores:


Sales have surged at most of the major dollar chains -- including Family Dollar, Dollar Tree and Dollar General -- as more shoppers look for deep discounts on pantry staples and household basics, as well as the occasional pair of flip-flops or Hannah Montana hand sanitizer.

And it's not just low-income families looking to make ends meet. Nearly half of American shoppers visit one of these discounters in a given month . . .

havent seen this one posted:

Saudi Aramco Selects GE for $500 Million Expansion Agreements

SHAYBAH, Saudi Arabia today announced it has been selected by Saudi Aramco, the state-owned national oil company, for agreements totaling nearly $500 million to supply a broad range of equipment and services for an expansion of the Shaybah gas-oil processing facilities. The project is expected to enable Saudi Aramco to enhance its oil recovery efforts and spur further economic growth in Saudi Arabia.


Canadians warned to rein in borrowing on cheap money before it's too late

It's hard to believe that Canadians are now more indebted than Americans. The government that ecouraged us to spend by giving us cheap credit and lax lending standards is now telling us we shouldn't have borrowed so much money. Next up, the gravity-defying Canadian housing bubble is finally about to pop, followed by a US style recession.

It's even harder to believe Canadians are now the #1 out-of-state buyers of houses in Arizona, having pushed Californians out of that position.

I don't think it's terribly prudent, but it is not hard to do. Just re-mortgage your house in Canada, go down to Arizona, and make some bank a cash offer on a foreclosed house in Phoenix.

With the Canadian dollar trading at 99 cents American, US houses in some distressed states seem awfully cheap to Canadians.

Hard to say. Canada's a frozen socialist wasteland and maybe boomer retirees want to enjoy their twilight years in relative freedom and warmth. And if they stay for five years then can qualify for the Medicare entitlement.

The suckers are the young and middle aged Canadians going into massive debt to buy overpriced homes in their own country.

...although some analysts don't believe the debt load problem is as serious as it appears:

Personal debt not as bad as it looks

Not to play down those significant risks, BMO Nesbitt Burns questions whether the state of family finances are as bad as they would appear.

"While debt has risen to record heights, so too have financial assets, due to a rebound in equities and an underlying rise in savings," said deputy chief economist Douglas Porter. "Taking these factors into account, as well as the recovery in Canadian full-time employment, leads to the conclusion that household finances are not nearly as weakened as the dire headlines would suggest."

Gas drilling tactic fuels a boom and health concerns

SHREVEPORT, La. — Residents here rejoiced two years ago when gas companies poked into a mammoth natural gas deposit 2 miles under their homes, sparking a modern-day gold rush.

The companies offered residents tens of thousands of dollars an acre to drill on their land, enriching some folks overnight in this rural corner of northwestern Louisiana.

Then cows started to die. Methane seeped into the drinking water. Homes were evacuated when natural gas escaped uncontrollably from a wellhead.

A good article Leanan...thanks. A couple of clarifications: the poisoned cows died from drinking improperly disposed frac fluid and not directly from the fracing process itself. Surface pollution has been a problem with all industries in the country for over a century. That was a point I made to our Yankee cousins: Stop focusing on the actual fracing process...little chance of hurting anything. But those nasty frac fluids are produced back and hauled away to disposal sites. That's the operation that has huge potential to damage the environment and hurt folks. And the folks evaced due to the blow out wasn't frac related per se. Such accidents have happened for decades and are truly a shame. Remember BP? They weren't drilling shale gas and fracing. Following safe drilling protocols SG wells are no more dangerous than any other.

I also think it's a good idea for our Yankee cousins to have a moratorium on fracing for a while. Not so much that fracing is all that dangerous but from I've learned of oil/NG regs in those states they were very unprepared for the drilling surge. I made the comment some time ago that those regulators should have spent a month in Austin with our Rail Road Commission and modeled their regs along the lines of ours in Texas. We have had a very checkered history with the oil patch in Texas and have learned how to moderate it for mutual benefit. The folks up north need to learn the same ASAP.

Re: "Available" Net Oil Exports (available to non-Chindia net importers)

If we look at total* global net oil exports, and subtract out Chindia's** combined net oil imports, we get the the following "Available" Net Oil Exports for 2005 to 2009 (and rate of change relative to 2005):

2005: 40.8 mbpd
2006: 40.5 (-0.7%/year)
2007: 39.1 (-2.1%/year)
2008: 38.6 (-1.8%/year)
2009: 35.5 (-3.5%/year)

*2005 net oil exporters with 100,000 bpd or more of net exports (99%+ of global net exports, BP, with minor EIA inputs)

**The rationale for combining China & India is that they are both showing very rapid rates of increase in net oil imports

Linear Regression
Y = A + B * X
A=2550 ± 550
B=-1.25 ± 0.27 (million bbl/year loss to chindia)
P=0.02 (significant)

Time to zero if fit to all the data: 28 years
Time to zero if fit to just last 4 years: 23 years

Can we get the data for 2010?

I bet we are now accelerating as China takes advantage of the weak US economy.

My estimate for 2010 based on extrapolating data from the Oil Watch Monthly and Trends in Oil Supply (TOD: Europe) is 35.5 mb/d of oil exports minus Chindia's take or effectively flat from '09 - '10.

I used a growth in Chindia's oil import from '09-'10 from 8.1 to 9.5 mb/d; export country consumption increase from 18.0 to 18.8 mb/d and with a total growth in world oil exports of about 1.4 mb/d.

I think we need to see the rest of the year though. As gas prices go up, it means China is sucking up supplies -- just like 2008.

Yes, I would like to see the final numbers for the year but clearly the indications are that oil supply (including exports) is up year-over-year while demand for it is up even more, hence pushing up prices.

FSU oil production hit a record recently and it looks like Saudi Arabia is currently producing at about 8.4 mb/d (number from Nov). Plus the rest of OPEC is significantly above their quotas. Will they approach their oil output just prior to the price collapse in late '08 or are they bumping up against their current capacity as many of us think?

I think 2011 will be telling at least if the world's economy as a whole continues to at least nominally improve. That would keep the demand pressure up and we will see how much if any additional(export) oil comes on the market.

Well if they can increase production then we spread out the pain over more years at least. When will the insatiable China-monster abate. Did you see the images of the ghost cities below? http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12

The consequences of the BP spill have been pushed aside. Those consequences are far more serious than has been acknowledged. Try this:

In September 2010 at the mouth of the Mississippi river massive fish and other creatures were found dead; we know now this was the initial damage due to the BP Oil Spill. Updates are not in the national news much these days, but there is a great deal to be concerned about. At Florida Oil Spill Law a whole series of articles documenting the fallout. Here’s one:

There is little sign of life. “It looks like everything’s dead,” University of Georgia professor Samantha Joye said. … The ocean floor appears to be littered with twigs, but Joye points out that they are actually dead worms and that Alvin is sitting on top of what is considered an 80-square mile kill zone. …

Aboard the Alvin Thursday, Joye said she saw “about three to four inches of material.”
The devastation, she said, could last “years or decades.” ….“It’s still there and it’s going to degrade very slowly,” she said. …

But 5,000 feet down, the oil appears to be everywhere. The government estimates that less than 25 percent of the oil remains, but these scientists say it’s not gone, just settled at the bottom of the ocean. …

She told ABC News in September that samples taken from the ocean floor consistently show oil contamination.

“We’re finding it everywhere that we’ve looked. The oil is not gone,” Joye in September. “It’s in places where nobody has looked for it.”

Yeah, they will dust this under the rug and pat you on the back and tell you to buy an SUV. Mr. Smith the environment is not critical -- only your non-negotiable lifestyle matters. It is sickening and no one pays for the environmental damage at the pump -- only the local fishing economies which will see this damage down the road.

Any word on the condition of the Tuna breeding grounds?

I didn't dare to try following the massive threads on BP this summer, not for lack of caring.. but will someone be able to clarify whether the 'dispersants' are chemicals capable of making the Oils sink like this? Was that their function? Get it out of sight?


but will someone be able to clarify whether the 'dispersants' are chemicals capable of making the Oils sink like this? Was that their function? Get it out of sight?

Yeah, pretty much!

First of all the dispersants themselves are highly toxic to marine organisms at the base of the marine food chain.


BP’s use of Corexit 9500 on the oil before it rises to the surface seems to be a deliberate attempt to mask the poison, to cover up that it continues to flow out from the ocean’s floor, while making it impossible to recover. In short, BP and Exxon want to spread the toxic oil throughout the oceans of the world, pollute everywhere, rather than allow it to be seen coming to shore where BP would have to pay for its containment and clean-up. It’s our job to keep them from getting away with sweeping this ugly mess under the surface.

Stormy, you seem to be one of the very few people here who is even aware of this issue. To be honest I've given up trying to discuss this at all. Too few people seem to grasp the implications of how complex systems such as deep sea ecosystems interact with multiple food webs. Out of sight out of mind... nothing to see in the sea here folks move along now... How are we even going to be able to assess the true value of what has been destroyed? When are we going to see people going to jail for these crimes against the environment?!

One word : tragical !

Here is a videolink to the story http://abcnews.go.com/US/exclusive-submarine-dive-finds-oil-dead-sea-lif...


What's the Drumbeat schedule moving forward? Are you following a set schedule of days or are you just posting it when you've got the gumption to deal with it?

Nate requested a M-W-F-S schedule, and that's what I'm doing.

However Nate said it was mainly at your request.


We will also (largely due to request of Leanan, but also consistent with "smaller print", will go down to 3-4 Drumbeats per week, instead of 7.

As explained further down in the thread, there was a bit of a misunderstanding. There was general agreement that fewer keyposts meant there should be fewer Drumbeats as well, or this would turn into a news site. In any case, I was talking about the schedule - what day the Drumbeats appear, not the move to a smaller, quieter site.

Grassley sees extension of ethanol/bio diesel subsidies passing both Houses of Congress:


A typical hypocrit. He's on the 'government intervention & subsidies are bad!' bandwagon . . . EXCEPT WHEN THEY ARE IN MY STATE!

The Human Toll of America's New Ghost Towns

Our piece from Florida explores a different kind of dream: an uncompleted "Italian resort themed" suburban neighborhood that's now filled with cows. In order to save on taxes in the now-unprofitable real estate venture, the area's developer had the area reclassified as farmland and moved in livestock. As for the people who live there, the swanky neighborhood they signed on for is now a barbed-wire bonanza.

Actually, that doesn't sound all that bad. I'd rather have cows as neighbors than people. ;-)

No one would care, except that it drives down property values. That's the only important thing, isn't it?

I mean, cows eat grass, so the grass has to grow. Unmowed lawns next door are 'bad.' And, those cows can have a certain, barnyardy shall we say, aroma. Also bad. It wouldn't bother me a bit - I always thought the farm odors were great. My wife, now. She's with the "barnyard is bad" bunch.


I attended a "subdivision" meeting a few weeks ago. Our entire subdivision consists of 6 homes. Anyway, I was concerned that they might complain about my horses when out of the blue our newest neighbor asked "anyone object to me keeping a cow in my yard"? I threw all my support behind the young couple. Any subdivision with a cow is not going to be overly concerned with horses!

Fabulous, and good for the young couple! I much prefer hearing moos over the constant buzz of lawnmowers on a saturday morning. This may turn a few off , but I much rather prefer the smell of farm animals over the smell of unburnt gasoline coming from 2-strokes engines.

It's incredible that 2-stroke engines have not been banned in residential areas. All the so-called concern about air quality is a joke. Is it too much to mandate 4-strokes? They are much quieter and don't spew so many carcinogens. People living in rural areas are lucky.

The only two strokes I've seen lately have been chainsaw, weed wackers, and those little roto-tillers. And those latter are shifting to four strokes. For chainsaws and weed wackers that are expected to work more than 100 feet from the house, there is no substitute for a two stroke engine.

All the new outboards (including mine) are now four strokes as well. That was a welcome improvement.

I guess this is one of those cardio arythmia days in which we post our own articles. Here's an interesting one on Antarctica melt with a video underneath the article about algae ethanol.


'Antarctic Melting as Deep Ocean Heat Rises'

Global warming is sneaky. For more than a century it has been hiding large amounts of excess heat in the world's deep seas. Now that heat is coming to the surface again in one of the worst possible places: Antarctica.

New analyses of the heat content of the waters off Western Antarctic Peninsula are now showing a clear and exponential increase in warming waters undermining the sea ice, raising air temperatures, melting glaciers and wiping out entire penguin colonies.

What the rising water heat means, he said, is that even if humanity got organized and soon stopped emitting greenhouse gases, there is already too much heat in the oceans to stop a lot of impacts -- like the melting of a huge amount of Antarctic ice.

Now that the upwelling deep sea water is the clear cause of the melting ice shelf, rather than summer melt water, as had been thought in the past, it's a question of how winds will change in a warming world and whether they will drive more warm water into the ice shelves.

That last part there about how winds will change made me think of the recent wind direction change in the Artic circumpolar winds, which are now blowing down into Europe - mostly the UK of late. Those winds had only dropped down like they are now three times in 160 years!

One of the main aspects relating to global warming is 'thermal inertia', the lag time between increased amounts of GHG leading to increased ocean temperature, and its later impact on the worlds weather. Well, this article is notification that it's coming home to roost in Antarctica - the worst possible place it could occur, because 90% of the world's freshwater is locked up in that ice sheet.

As for algae ethanol, the big question is cost per gallon to the customer. If it's low enough, then it can be a viable way to move away from crude, but if its too high then the economy cannot grow or even stay even.

As we all know from renewables like wind and solar, competing with FF is about hitting the right price point.


Nothing wrong with rolling our own DrumBeat posts.

Here's a Peak Oil related editorial by the Brooks brother (New York Times):

Ben Franklin’s Nation [=USA + Industrial Revolution]

It starts in 1810, when the nations of the world were clumped on the bottom left-hand side of the chart because they had low income and low life expectancy. Then the industrial revolution kicks in and the nations of the West surge upward and to the right as they get richer and healthier. By 1948, it’s like a race, with the United States out front and the other nations of the world stretched in a long tail behind.

We've come to a fork in the road. Let's see ... which one should we take?

This one Walkable neighborhoods richer in social capital, study finds

Living in an area where amenities of daily life – groceries, playgrounds, post offices, libraries and restaurants – are within walking distance promotes healthy lifestyles and has positive implications for the environment, research has established. Now, new research from the University of New Hampshire has linked walkable neighborhoods with an increase in social benefits as well.

"We found that neighborhoods that are more walkable had higher levels of social capital such as trust among neighbors and participation in community events," ...

or this one Study shows post-9/11 security zones blight landscape

A decade after the 9/11 attacks, significant parts of America's most prominent downtowns remain largely sealed off as 'security zones,' but a newly published study by University of Colorado Denver professor Jeremy Németh says this has led to blighted landscapes, limited public access and a need for a new approach to urban planning.

Hans Rosling Shows You 200 Years of Global Growth in 4 Minutes

A professor of international health in Sweden, Rosling has a long history of exploring the facts and figures that surround our changing world. In the short segment of the BBC series below, Rosling gives one of his most famous lectures with a new twist. Using 120,000+ bits of data and augmented reality, the exuberant professor takes us through the last 200 years of global history and its uneven growth of wealth and health. No one makes statistics sound quite as awe-inspiring as Rosling. Check out the video and see what I mean.

Now, if we could just get Hans to do the next 200 years...

Rosling’s review of the past 200 years leaves me rather optimistic about the years ahead. As he has outlined elsewhere, there are serious problems facing us in regards to exponential population growth and global health. Yet there are also solutions to humanity’s grand challenges of poverty, health, energy, etc. Demonstrations like this one could help broader audiences not only grasp the seriousness of the situation, but have hope that we can improve the world with out policies and technologies. As Rosling shows, the world is always changing and our beliefs must change with it.

As I watched the video, I thought of the diddly, "Early to bed, early to rise, makes you healthy, wealthy and wise." Must be a lot of early sleepers and risers these days:-)

The fault line in the reasoning is simple: what has come before is prologue for what comes after. Only thing is, the solutions to "humanity's grand" challenge of "energy" is limited when trying to find an adequate replacement for the access, portability, safety, fire-power, and versatility of oil.

When the global "black gold, Texas tea" production curve begins to slope off, expect the bouncing balls dropping to make the post 1918 blip on the chart look positively rosy.

Every time you tell them: "But this time it is different",

they reply, "Yeah, yeah, I've heard that one before also".

Perhaps this time will be different. Why? Well, the 'progress' we have made during the last 100 years has mostly been associated with creative use of oil. For some things, such as energy, oil is fungible with NG, Coal, Nukes, wind, solar, etc. There are more than a few for which they may not be.

Pharmaceuticals, for instance... plastics, synthetic fabrics, optics and electronics are made with all of these.

Of course, some of the fungible alternatives are themselves in short supply. None, so far as I am aware, are infinite, at least not on this planet. Natural gas is used as feedstock for commercial fertilizers. Yes, coal can be gasified, and that can substitute. But, coal is also finite.

And, for the rest of our progress, oil contributes at least. Energy for transportation, which in turn delivers the coal we use for electricity, to say nothing of the food we eat. And, energy for factory farms in the form of diesel fuel. Also, though synthetics can deliver here as well, lubricants, hydraulic fluids, and solvents come to mind. Replacement of oil is much more difficult because of the many manifestations of oil use we find. A point that John Michael Greer makes so well in The Long Descent.

Does anyone know of a good one-stop site that covers use of each fossil fuel? Or one for each?

In any event, ratcheting back will be most difficult. And, one hopes that Greer is a better prophet than James Howard Kunstler.


Snow chaos: Supplies are low, but the sheep are happy

Sliding through snowy villages in search of provisions, Adam Nicolson is struck by the resilience of country people and their animals.

Modernity isn’t very good at disruption. It doesn’t have enough elasticity in it. And so when the snow lands on modern systems, they break. The only reason that 60 people had to spend most of Tuesday night in the cold, unheated and unlit carriages of three trains between Orpington and Sevenoaks was because of the ice on the third rail. The trains couldn’t pick up any electricity through it. And the reason that thousands of people spent hours stuck yesterday afternoon on the M25 and the A2 in north Kent was because of jack-knifing artics. If they had all been coming home in 1810, say, in a fleet of horse-drawn carriages, they would have been fine. The horses could have been given some oats and the jack-knifed stage coaches could have been pushed into the ditch.

It takes weird weather to show us how hopeless we have become. It is as if we have all decided to live in a giant airport, or a hi-tech life-support machine: our lives defined by untold numbers of complex systems that become absurdly tender as soon as their predicted operating conditions throw a wobbly.

...Freya Maynard, ..., reminisced about a scene she had witnessed during the big freeze last year, when “some quite elderly people in Battle, which is not, I have to say, a very happening town, started grabbing the milk off the milk lorry as it pulled into the street”. She said it was “a wrinkly frenzy” and not pretty.

Amazing Satellite Images Of The Ghost Cities Of China

See? Chinese "growth" can continue forever. So what if not everyone can afford the homes? Just build new ones and pay for them with all those American dollars that are worth exactly as much as the towns you build with them.

Amazing! I wonder what the fame investor Jim Rogers think of this. I wonder what the demand for steel and cement will be going forward. And of course I wonder what the demand for oil will be. At some point the build out has to slow and stop - then what? Talk about wasted capital and resources, but I guess it was this or angry unemployed workers by the millions.

Speculative real-estate bubbles always burst. China is no exception. They will go into recession some time next year, and then their imports of oil will diminish considerably. China is not immune to economic fluctuations. Projections of indefinitely continued double-digit economic growth for China are unmitigated balderdash.

They sure are trying to sustain a streak of growth -- holy crapsky -- see those high schools and other facilities and perfectly symmetrical developments. Are there then empty factories nearby that will make consumer goods or stuff to export to the US? What? Makes absolutely no sense to do things like this. Maybe we are in the Matrix as some post said above. I cannot believe my own eyes.

I suspect that Chinese policy makers believe in Chinese exceptionalism: What applies to other countries does not apply to China. But of course this is nonsense. The bigger the bubble, the bigger the bust will be. China could be bogged down in a major recession for years. Remember in the nineteen eighties when the Japanese thought they were supermen? They've had their real-estate bust, and their stagnation period is almost twenty years long at this point.

Recall the article (previous Drumbeat, I think it was) on the hordes of Chinese college graduates who cannot get decent jobs? That is just a harbinger of things to come. China is an overpopulated country with limited resources; their long-term prospects are not good as they rapidly burn up their coal and oil. Most of China is still rural and still very poor. They depend on cheap foreign resources--such as oil and scrap metal--and these are limited in supply. Post-Peak, I do not think China is going to do very well--too many people and too little arable land. Plus, China's population is aging and will continue to age and look more like Japan's population pyramid as time goes by.


Do you know of a civilization that pre-made so many cities before they were needed?

I guess there is the occasional cathedral or temple or pyramid -- but surplus unoccupied housing developments is kind of absurd.

Is this an unprecedented development only made possible by oil and coal?

Reviewing all the world history I've read over the past sixty years, I'm inclined to agree with you that the current case of Chinese overbuilding is unique. And you are quite right to note that it is fueled by cheap coal and cheap oil.

Communist political leaders in China really do not understand capitalism, and its tendency to go to speculative extremes. Plus, China has a horrible horrible problem of extreme rural poverty and lack of land for the peasants to work. So they feel they have to do something--even though the "something" is clearly not sustainable.

"There are over 160 cities in China with population over one million."


Quite so. China's population is over one billion and is growing. Most (More than 51%) of China's people live in grinding rural poverty. How many villages in China, I wonder? Many in urban areas are destitute.

China's "prosperity" has gone to roughly ten percent of its population, just as has U.S. economic growth over the past twenty years gone mostly to the top ten percent.

There was a time seemingly not that long ago when the former Ontario Hydro was, well, hydro -- all 100 per cent of it. That started to change with the commissioning of the Richard L Hearn Generating Station in 1951 and, today, hydro accounts for less than one-quarter of Ontario's electricity supply mix.

By all accounts, Hearn was a mighty impressive complex in its day and in many ways still is; although decommissioned in 1983, its 70 story smokestack and 300 metre long main turbine hall maintain their overshadowing presence on Toronto's waterfront. When the plant was fully completed in 1962, it supplied 1,200 MW of much needed power to the growing urban core (more electricity, in fact, than is being consumed by my home province at this very moment).

There's now a strong possibility that this building will be demolished and that has some preservationists up in arms (see: http://news.nationalpost.com/2010/12/14/heritage-toronto-joins-fight-to-...). It's somewhat odd to think of a former coal-fired power station as a heritage site, but perhaps future generations will look back at this facility with mild amusement or, alternatively, curse it as a fitting testament to our naïveté, or foolhardiness if you prefer.... only time will tell.

No more coal-fired power plants ! (but please save Hearn)


It's somewhat odd to think of a former coal-fired power station as a heritage site

But to mention a famous one that is, there is the decommissioned Battersea Power Station in London, England. It happens to be one of the best-known landmarks in London. It has appeared in numerous movies and TV shows, and on several album covers and music videos.

The station's design proved popular straightaway, and was described as a "temple of power", which ranked equal with St Paul's Cathedral as a London landmark. In a 1939 survey by Architects Journal, a panel of celebrities ranked it as their second favourite building.

However, the Richard L Hearn Generating Station in Toronto probably is not designed in the brick-cathedral style and probably does not have lavish Art Deco interior fittings and decor. I'm just guessing here because I haven't seen it.

Only the British would design a coal-burning power station to be an architectural masterpiece competitive with St. Paul's Cathedral.

As a London resident I can tell you Battersea Power Station works as a landmark on two levels - firstly it has dominated the skyline of a largely low-rise south London for as long as I can remember, and secondly it it reminds train passengers that they are almost at the end of the line - a short walk and you are across the river and in the heart of London. A further walk down the river from Battersea is a second decomissioned power station (Bankside), another impossing brick structure that now houses the Tate Modern gallery.


It's an attractive building O-T and when I return to London I plan to visit it. Although Battersea has more mind share, I prefer Bankside because of its more human scale.

In case you may have missed it, the BBC production The Secret Life of the National Grid has a nice feature on Battersea beginning at the 9:30 mark.

See: http://www.youtube.com/watch?v=5bqRZRmtCLk&NR=1

To view this series on-line, all three episodes are now available on youtube (highly recommended):

Episode One, Part One - Wiring the Nation: http://www.youtube.com/watch?v=ANmQXUZckE4
Episode Two, Part One - Switching On: http://www.youtube.com/watch?v=LhQiE9nCom8
Episode Three, Part One - Pulling the Plug: http://www.youtube.com/watch?v=FhEr5sZWU5s



The architecture has strong Art Deco underpinnings, but it's neither lavish nor ornate and in that sense more in keeping with Torontonian tastes. From various angles, it's a rather handsome structure and I think deserving of preservation.


I'm just guessing again, but it is probably similar to Edmonton's Rossdale Power Plant which is being decommissioned even as we speak.

They are removing all the extraneous buildings and turning the power plant into a heritage site.

They have to keep an archeologist on site during the decommissioning process because of Edmonton's fur trading history (the Hudson Bay Company's Fort Edmonton) and, of course, the presence of the Rossdale Indian Burial Grounds.

Toronto's heritage is more one of hog slaughtering than fur trading, and I doubt there are any Indian burial grounds left, but there is a certain sweep and grandeur to old power plants that remind of us a time when having a coal-burning power plant in the middle of your city was a sign of progress.

Thanks for links, RMG; much appreciated. I had read about this facility but had never seen pictures of it -- good to know it will be spared from the wrecker's ball. Thanks EPCOR !

Nova Scotia Power is in the process of converting its Lower Water St. station into their new corporate head office. However, with the glass curtain facade you won't recognize the structure when completed (not that there was a whole lot to retain, architecturally speaking).

See: http://www.nspower.ca/en/home/community/lowerwaterstreetrelocation/defau...

But from an energy and total resources perspective, it does make sense to reuse and re-purpose existing infrastructure whenever possible, rather than simply tear down and build new.

BTW, not a great video, but you can see some of Hearn's architectural merit from the background shots: http://www.youtube.com/watch?v=NYIlp0X7meo

Best hopes for converting more coal-fired power stations into museums, office spaces and what have you.


It's somewhat odd to think of a former coal-fired power station as a heritage site, but perhaps future generations will look back at this facility with mild amusement or, alternatively, curse it as a fitting testament to our naïveté, or foolhardiness if you prefer.... only time will tell.

Could work as a kind of 'Coal a cost' museum complete with greenhouse gas chambers, they could even have some railway coal cars out back...who knows maybe even a few miner hats on display, decorated with 'coal mit ums' logos next to pictures of coal miners with blackened faces.

Could work as a kind of 'Coal a cost' museum complete with greenhouse gas chambers, they could even have some railway coal cars out back...who knows maybe even a few miner hats on display, decorated with 'coal mit ums' logos next to pictures of coal miners with blackened faces.

It sounds very much like the local coal miner's museum. It's much better to be an historical coal mining town than a current coal mining town.

The only drawback is that you have to sit in the doctor's waiting room next to old coal miners, sucking on their oxygen tanks, talking about the good old days in the mines, and wondering whether a lung transplant would help them.

However, one of them said to me, "After the mines closed, I started smoking. I couldn't smoke while I was mining because they didn't allow us to smoke. The doctor told me that was a stupid thing to do."

Having seen both coal miner's lungs and smoker's lungs (there's an exhibit of dead bodies going around that has to be seen to be believed), I would have to agree with his doctor. Coal miner's lungs look worse than smoker's lungs (miner's lungs look like their faces), but not a lot worse (smoker's lungs look like they've been inhaling tar). And of course there are a lot more smokers than coal miners (except possibly in China).