Drumbeat: December 22, 2010

African Farmers Displaced as Investors Move In

Across Africa and the developing world, a new global land rush is gobbling up large expanses of arable land. Despite their ageless traditions, stunned villagers are discovering that African governments typically own their land and have been leasing it, often at bargain prices, to private investors and foreign governments for decades to come.

Organizations like the United Nations and the World Bank say the practice, if done equitably, could help feed the growing global population by introducing large-scale commercial farming to places without it.

But others condemn the deals as neocolonial land grabs that destroy villages, uproot tens of thousands of farmers and create a volatile mass of landless poor. Making matters worse, they contend, much of the food is bound for wealthier nations.

U.S. natgas rig count falls 10 to 931-Baker Hughes

NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States slid by 10 this week to 931, oil services firm Baker Hughes said on Wednesday.

Kurt Cobb: Will shale gas turn out to be an energy sink?

The environmental and health horrors associated with shale gas drilling are now in the news on a daily basis. But I have begun to think about the issue in another way. All of these externalized costs have an energy cost. And, the toxic fracturing fluid--millions of gallons of which are pumped into each and every shale gas well--will stretch out the time frame during which such costs are borne. No one knows what will happen to the half of that fluid which never returns to the surface during operations. There is concern that it could migrate to drinking water aquifers and destroy the drinking water not just for the few who happen to live near a drilling site, but for people living in huge swaths of the United States by polluting water sources for large cities such as New York.

Asian buyers still knocking on UK oil firms' doors

(Reuters) - Bankers and analysts expect acquisition-hungry Asian national oil companies (NOCs) to come drilling for more targets on the London Stock Exchange next year.

Do Oil Price Spikes Cause Recessions?

Okay, I have to admit, I didn’t come up with the theory that major recessions are, in part, caused by spikes in the price of oil.

The idea as I originally heard it comes from Jeff Rubin, an energy analyst and former Canadian investment banker.

How many bbl/day will $490 billion buy?

Global exploration and production spending is expected to rise 11% to $490 billion in 2011. The increase will be driven by gains in Latin America, the Middle East, North Africa and Southeast Asia. Supermajors will show the largest increases. The big six including BP, Chevron, ConocoPhillips, ExxonMobil, Royal Dutch Shell and Total will increase spending by 18% in the aggregate.Much of the increase is related to liquefied natural gas projects. Pemex and Petrobras will drive Latin American spend.

Pemex says does not expect hit to products supply after pipeline explosion

Houston (Platts) - Pemex said Monday it does not expect its refined products supply to be negatively affected after an explosion at a 30-inch-diameter crude pipeline that brings feedstock to the Tula refinery.

The national refining system, particularly the Tula, Hidalgo, refinery, has sufficient supply of crude to continue its normal production, the state oil company said in a statement on its website.

Saudi Aramco LPG exports to fall 24% in 2011 to 6.5 million mt

Singapore (Platts) - Saudi Aramco's LPG export for 2011 will slump 23.5% to anywhere between 6 million mt and 6.5 million mt as it diverts product to meet local demand, term customers and trade sources said Tuesday.

The Middle Eastern oil giant is expected to close 2010 with total exports of anywhere between 8 million mt and 8.5 million mt, in line with the volumes it shipped out in 2009.

Insurers Join for Well Policies

A new consortium announced Tuesday aims to provide stronger insurance coverage for U.S. deep-water drilling amid congressional proposals to boost liability limits after this year's Gulf of Mexico oil spill.

Suncor slapped with fine for river discharge

(Reuters) - Suncor Energy Inc (SU.TO) has been ordered to pay C$200,000 ($198,000) in fines after pleading guilty to charges of releasing effluent into an Alberta river during construction of an oil sands mine in 2008.

Halliburton pays $35m to Nigeria over graft case

LAGOS, Nigeria — Halliburton says that Nigeria has withdrawn charges against Halliburton and executives including former U.S. Vice President Dick Cheney after a $35 million settlement.

Halliburton said in a statement Tuesday that it had agreed to pay $35 million to the Nigerian government over "allegations of improper payments to government officials in Nigeria."

Homeowners warned as heating oil thefts rise

The national shortage of heating oil is leading to an increase in thefts, Avon and Somerset Police force has warned.

The force is warning people to ensure their fuel is secure after several oil tanks in south Somerset were targeted by thieves.

Heating oil has become a much sought-after commodity of late due to the high price and low supply throughout the UK.

Concerns for fuel poverty among the elderly

Concerns are mounting that the icy conditions will have a devastating effect on those suffering from fuel poverty, especially the elderly, according to the North West Pensioners’ Association.

China's Hubei rations power amid coal shortage

BEIJING (Reuters) - Central China's Hubei province started rationing power supplies to some users from Wednesday, following similar moves by neighbouring Henan and northern Shanxi and Shaanxi provinces as coal stocks at power plants dwindled.

Hubei Grid Corp would cut 20 million kilowatt hours (kwh) of power to energy intensive companies and small chemical makers today, the Changjiang Times reported on Wednesday.

China Reduces Diesel Exports to Lowest in 22 Months

(Bloomberg) -- China, the world’s largest energy user, reduced net diesel exports to the lowest in 22 months in November as the nation battled a domestic shortage.

TVA: Electricy demand on Dec. 14 broke record

KNOXVILLE, Tenn. (AP) -- The Tennessee Valley Authority set a record high December demand for electricity at 8 a.m. on Dec. 14.

A TVA statement Tuesday said the peak load of 31,436 megawatts was the highest for December in TVA history.

Saudi Electricity eyes more private participation

KHOBAR, Saudi Arabia (Reuters) - Saudi Electricity Co (SEC) may involve private firms in building more power plants to feed big consumers such as state oil giant Saudi Aramco, SEC's chief executive said on Tuesday.

10 electric cars you can buy in 2011

Not so long ago, electric vehicles were woeful. They were fringe models sometimes with no back seat, a short driving range or no amenities, or they were exorbitantly expensive converted gasoline-powered cars.

The idea of visiting a nearby car showroom to buy an electric car from a car company that might still be in business a year down the road was unheard of, until now. The first modern, mainstream electric vehicles are coming to market in 2011. Here are some of the options that will really, truly be available to car shoppers in most areas of the country in the next year ahead.

U.S. challenges China subsidies for wind power

WASHINGTON — The United States Wednesday accused China of illegally subsidizing the production of wind power equipment and asked for talks at the World Trade Organization, the first step in filing a trade case

Plan to switch to solar energy gathers steam

Karachi - On the pattern of the developed countries, Sindh Environment and Alternate Energy Department is planning to introduce solar stoves and cooking utensils, including solar pressure cookers, in the province to cut down on the use of natural gas for cooking and heating purposes.

Top 10 peak oil stories of 2010

The biggest stories of the year were financial. But you could say that the continuing Great Recession, the deficit debate, and more and more mortgage defaults were really stories of energy-driven economic crisis.

This year also had plenty of big stories directly on energy, including some breakthroughs on peak oil. Here are our top picks. It's a highly subjective list; so please chime in with any stories you think we left off.

Energy and climate books I read in 2010

Here is a selection of sustainable energy and climate change books I read in 2010. I’ve provided a few sentence summary of each book (from my perspective) and a Rating out of 5.

James Hansen: A conversation with Bill McKibben

The paperback version of my book Storms of My Grandchildren: The Truth About the Coming Climate Catastrophe and Our last Chance to Save Humanity is now available. It includes, as an added section, a conversation between organizer Bill McKibben and me. Much of that Q&A is below. As was (and is) the case with the hardback and other formats of the book, all royalties go to 350.org. As I mention in the book, 350.org has demonstrated the most effective and responsible leadership in the public struggle for climate justice.

Christmas plan for a peak oil pilgrim

4. Pass on the ‘Tacky Lights’ tours.

You are just gonna poo-poo it and make people upset, all the while stuck in the microcosmic confines of an SUV full of overfed frenemies and family.

Afghan official says Iran bans fuel exports

KABUL, Afghanistan (AP) -- Iran has banned fuel exports to Afghanistan, stranding about 3,000 fuel trucks at the border and driving up wholesale prices for the refined products ahead of what many Afghans fear will be a blistery winter in their oil-poor nation, officials said Wednesday.

Although Tehran has not officially confirmed the move, it appears to reflect Iran's concern that the fuel is being funneled to NATO forces fighting the Taliban.

Nigeria shuts refineries after pipeline attacks

ABUJA (Reuters) - Nigeria's state-oil company said on Wednesday three of the country's four refineries were not operating because pipelines feeding the facilities were damaged in militant sabotage attacks.

The Nigerian National Petroleum Corporation (NNPC) said vandalism of pipelines led it to shut down the Warri, Kaduna and Port Harcourt refineries but it did not say how long they had been out of action.

Snohvit offline 'indefinitely'

Norwegian giant Statoil has shut in the Snohvit liquefied natural gas plant for an unknown length of time, pinning the blame for the shutdown on "unspecified technical problems".

2nd phase of China-Kazakhstan gas pipeline begins construction

BEIJING -- The China National Petroleum Corp. (CNPC) disclosed Wednesday that the second phase of the China-Kazakhstan gas pipeline has begun construction in Kazakhstan.

Indonesia says will consider more incentives for oil investors

(Reuters) - Indonesia will consider offering more incentives to foreign investors to encourage oil and gas projects but will not agree to every demand made, an official said on Wednesday.

Ottawa told to establish oil-sands monitor

Canada lacks a world-class environmental monitoring system for the oil sands and one should be established under Ottawa's watch with funding from energy companies, an advisory panel of scientists commissioned by the federal government said Tuesday.

Jordan moves to exploit its oil shale

Jordan is pressing ahead with a plan to supply 14 per cent of its energy needs from oil shale, becoming only the second country in the world to exploit the unconventional fuel source commercially.

By 2020, oil shale could be the country's biggest energy source, even as Amman pursues large-scale wind and solar development and plans to build the Levant region's first civilian nuclear power plant. Jordan has the fourth-largest oil shale accumulation in the world. The 40 billion to 70 billion tonne resource, underlying as much as 60 per cent of the country's land surface, may contain the equivalent of 100 billion barrels of oil, according to the UK firm Jordan Energy and Mining, which is one of three companies holding 40-year oil shale concessions in the kingdom.

US embassy cables: Ireland grappling with climate change and energy

The Irish government is developing policy measures to deal with environment/energy concerns, including climate change, energy security, and power generation and distribution. A lack of indigenous energy resources has focused the government on a mix of energy efficiency and renewable power sources. The Irish government has not written off traditional fossil fuels, having "fast-tracked" the approval process for an LNG regasification terminal. It remains hopeful that significant gas fields will be uncovered in the North Atlantic. While planned additional electricity generating capacity looks sufficient to meet rising demand, the government will need to significantly upgrade the transmission system. A strong sense of urgency to tackle these issues, however, is lacking.

Congress Waddles Ahead on Cleaning Up Diesel Fuel

On Tuesday, presumably one of the last days of the 111th Congress, the House gave final passage to a five-year extension of the Diesel Emissions Reduction Act, which aims to clean up old diesel engines. The bill authorizes the $500 million in spending over the next five years but does not actually appropriate any money; that is a battle for the next Congress.

Kuwait moves to clean up oil lakes

Two decades after Iraqi troops invaded Kuwait and set fire to its oil wells, the emirate is finally coming to grips with cleaning up the toxic oil lakes left behind.

After Oil Spill Crisis, a Protector Keeps Watch

The BP oil spill of 2010 has come and gone, mostly. The cleanup armies have been reduced to platoons, the oil company’s public-relations blitz has lost its apologetic urgency, and you have to know where to look to find any remnants of the catastrophe. But Albertine Kimble, protector of these waters, is still here; she has neither forgotten nor forgiven.

She is not an oil rigger, or an oysterman, or a shrimper. She is the coastal program manager for Plaquemines Parish, tending to its wounded banks. She is also the parish itself, rooted generations-deep in its soft soil, an outdoorswoman living in a remote mobile home raised nine feet off the ground by creosote poles and galvanized girders.

Icelandic clean energy solution in the desert

Iceland's president says the UAE could be the first of many countries in the Middle East to develop geothermal resources.

Singapore in tough environmental balancing act

With a land area smaller than that of New York City, Singapore has no space among its five million citizens for wind farms, while it is devoid of hydro and geothermal power sources.

"We are dependent on fossil fuels because our small size severely limits our ability to switch to alternative energies," the National Environment Agency (NEA) said in a statement to AFP.

Dr. David Fleming: a tribute

'The next oil shock?', Fleming's April 1999 article for Prospect magazine, argued that the International Energy Agency's (IEA) most recent report represented a coded message, warning of an impending energy crunch with potentially profound impacts. After publication, to Fleming's surprise, Fatih Birol - the future Chief Economist of the IEA - suggested a meeting, at which Birol intimated that 'you are right... there are maybe six people in the world who understand this'. This encounter gave greater impetus to Fleming's drive to see an effective energy rationing scheme put in place. Having first published on his TEQs scheme in 1996, 2008 saw a UK Government funded pre-feasibility study into the idea, which will be followed by the All Party Parliamentary Group on Peak Oil's report in January 2011.

America's Childlike Desire to Avoid Making Trade-Offs

America has not yet grown up because it refuses to make any adult trade-offs that require sacrificing one desire to bring another desire within reach, or matching reality with competing demands. Energy offers a cogent example.

Jeff Rubin: EIA’s forecast is an energy fantasy land

The recently released base case that will be used in the coming Annual Energy Outlook 2011 from the U.S. Department of Energy’s Energy Information Administration (EIA) paints a future of cheap and abundant energy for the U.S. economy over the next quarter of a century. But its underlying assumptions are no more credible than those that underpinned the equally optimistic forecasts released by the International Energy Agency.

Oil rises above $90 amid US crude supply drop

SINGAPORE – Oil prices rose above $90 a barrel Wednesday in Asia after a report showed U.S. crude supplies dropped more than expected for a second week, which suggests demand is improving.

Oil to Reach $100 on OPEC Capacity Drop, Goldman Says

(Bloomberg) -- A drop in OPEC spare production capacity will signal a “second stage” in the oil market’s recovery, lifting crude higher than $100 a barrel by the second half of 2011, according to Goldman Sachs Group Inc.

The Organization of Petroleum Exporting Countries will supply more oil, reducing its spare capacity, as global inventory levels “normalize” from an overhang cause by the recession, the bank said in its 2011 commodities outlook dated yesterday. The 12-member group, which pumps about 40 percent of the world’s crude, said at a Dec. 11 meeting it will maintain production targets at levels agreed in December 2008.

Fuel-Oil Loss in Asia Set to Jump to Two-Year High on Glut

Refining losses from producing fuel oil in Asia may widen 30 percent to the most in two years in the next month as an increase in crude processing leads to a glut.

The loss from turning crude into the fuel, the so-called crack spread, may rise to $13 a barrel by the end of January from about $10 this month, a Bloomberg News survey of four traders showed. The last time it was at that level was in November 2008, when crude traded below $60 a barrel, compared with almost $90 today, according to data compiled by Bloomberg.

Gasoline up on tight Northeast supply

Gasoline futures gained yesterday, as a problem at a refinery in the Caribbean contributed to tight supplies in the heavily populated Northeast and promised to help keep pump prices up heading into the New Year.

China Raises Gasoline Prices for Third Time This Year as Crude Costs Jump

China raised gasoline and diesel prices today by less than half of what crude oil has gained in the past month as the world’s fastest-growing major economy seeks to contain inflation.

Japan's November Imports of Crude Oil, LNG Increase, Finance Ministry Says

Japan’s crude oil imports rose 5.8 percent in November to 18.8 million kiloliters from a year earlier, the finance ministry said in a preliminary report today.

Oil imports to China set to slow in 2011

China's appetite for oil may ease next year as the government takes steps to tackle inflation and work on expanding refineries slows, Bloomberg news reported Tuesday.

China may import 5.1 million barrels a day in 2011, up 6.3 percent from this year, according to the average of six analyst estimates in a Bloomberg survey. That compares with a 20 percent jump so far in 2010.

Delta, American May Have to Raise Fares as Oil Climbs Toward $100 a Barrel

Delta Air Lines Inc., American Airlines and other large U.S. carriers may be poised to boost fares with fuel surcharges as crude oil moves closer to $100 a barrel.

“Every dollar that fuel rises erodes their earnings,” said Jim Corridore, a Standard & Poor’s equity analyst in New York. “It’s not good news to see fuel prices back up. Once we start approaching $100 a barrel, you’ll start to see fuel surcharges come back.”

Why the oil price could go a lot higher from here

I subscribe to 'Peak Oil' theory by the way. This is the idea that there is a finite amount of oil in the world, and at a certain point we will be consuming more than we can readily produce. Indeed, judging by all the deep-water exploration that goes on, it's probably fair to say that the easy-to-find oil is already long gone.

However, the inexorable rise you see in the chart above is as much a result of the declining purchasing power of money as it is of oil 'running out'.

‘A big noise about nothing’

When people refuse to look beyond their own noses, or the jumping stallion on their sports car, they can contradict whatever you say about the state of the world. Why is this a problem? Because the rich and powerful, who sit behind the closed glass doors of a boardroom or the windscreen of their motor car, tend to have loud voices and, because of their position, many poorer people aspire to that state and therefore listen to their false proclamations. “Peak Oil is just a big noise about nothing,” some of the people I meet tell me.

Signs of the Peak: Oil and Gas M&A

I submit it's not high oil prices that's driving M&A; but rather a decline in discoveries of easily accessible oil.

These deals didn't include drillers of easy-to-get-to stuff. Every single one involved a company that has expertise in getting energy from hard-to-reach places.

Enbridge forced to ration pipe capacity

Enbridge Inc. was forced to ration capacity again on its oil pipeline system, as shippers clamoured to move barrels out of Western Canada and the company conducted testing following ruptures last summer. Enbridge, which carries the bulk of Canada's oil exports to the United States, said on Tuesday five of its pipelines in the U.S. Midwest were overbooked for January shipments, extending a string of months in which it has had to ration space.

Iran deploys police as gas prices go up

(CNN) -- Police manned gas stations, some cab drivers raised fares and several residents complained privately after gas and oil prices rose in Iran this week when the country cut subsidies to bolster the nation's sagging economy.

A day after the cuts went into effect Sunday, the government deployed security forces to several major gas stations in the capital city, Tehran, to offset the threat of potential protests.

Witnesses told CNN they saw up to 20 police officers at three major gas stations in central and northern Tehran.

Iraq's Oil Output Up By 100,000 B/D To 2.5 Million B/D - New Oil Min

Iraq's crude oil production increased by 100,000 barrels a day to 2.5 million barrels a day from Wednesday, the newly appointed oil minister said Wednesday.

Abdul Kareem Luaiby, who was sworn in as new Iraqi oil minister Tuesday, said that the 100,000 barrels a day come from the southern Rumaila and Zubair oil fields which are being developed by international oil companies.

Spring Deluge at Australian Coal Mines Will Force Gains in Global Prices

Record rain and floods in north eastern Australia are disrupting coal output from Xstrata Plc and Rio Tinto Group mines. With more storms coming, prices are forecast to jump from the world’s biggest exporter of the fuel.

“It never stops raining,” said Peter Maguire, mayor of Queensland state’s Central Highlands Regional Council, home to Xstrata’s Rolleston mine, Rio’s Kestrel operation and BHP Billiton Ltd.’s Blackwater venture. “It’s forecast to rain until April-May.”

India to Seek Coal Mines in Africa to Plug Shortfalls in Domestic Supplies

India’s Coal Minister Sriprakash Jaiswal said state-run companies will seek deals to buy mines in South Africa, Botswana and Mozambique when he visits the continent next month in a bid to plug a domestic shortfall.

“The top priority is to buy coal mines,” Jaiswal said in an interview in New Delhi yesterday. “We already have two mines in Mozambique and the government is seeking more there and in other countries in Africa.”

China May Spend $1.7 Trillion in Decade on Power Generation, 21st Reports

China, the world’s largest energy user, may spend 11.1 trillion yuan ($1.7 trillion) in the next 10 years building electricity infrastructure, the 21st Century Business Herald reported today, citing a research report by the China Electricity Council.

Partnership, collaboration at root of Research Shop at U of G

Anne Bergen is a PhD student of applied social psychology. She was on the design team for the Research Shop in its early days and now is an embedded researcher with Transition Guelph, a new grassroots group interested in building community resilience in the face of climate change and declining reserves of peak oil by 2030.

Gas prices are poised to rise, Bergen said. The time to prepare is now.

“We want to present a message of hope though,” she said. “Getting people aware is the first step.”

New Hepburn Shire mayor Rod May, from Blampied, wants 'can do' council

Cr May also said climate change and peak oil had both been acknowledged by the council as "potential game changers" and that planning at all levels would need to encompass this phenomena.

Parallels of 'Moby-Dick,' oil industry defined by writer

Petroleum deposits have become the white whale of our time, becoming more difficult and more dangerous to find even as demand increases annually and threatens to explode in the coming years.

For one Westlake Village resident with years of experience as a Wall Street banker and working with the oil industry in Houston, there are many parallels between Melville’s story of “Moby-Dick” in the waning years of the whale oil trade and what is happening now in what he calls the “Petroleum Age” of the past 150 years.

Gulf oil spill voted top news story of 2010

NEW YORK – The massive Gulf of Mexico oil spill, triggered by a deadly blast at a rig used by BP, was the top news story of 2010, followed by the divisive health care overhaul, according to The Associated Press' annual poll of U.S. editors and news directors.

How nonprofit journalism is changing the 'news ecosystem'

Today’s msnbc.com story on how a super-toxic second generation of rat poisons is mysteriously seeping into the environment might have remained a buried and unnoticed piece of history if not for a new movement sweeping America: nonprofit journalism. It’s an important force that is likely to become a key part of what folks are calling an evolving “news ecosystem” in this country. Today’s pairing of the efforts of two nonprofit journalism entities with the for-profit msnbc.com is an example of the kind of experimentation that’s becoming common.

New level of Labor cynicism

ACCORDING to a popular theory of a few years ago, the planet was rapidly approaching a moment of "peak oil" -- when the amount of oil able to be extracted finally reaches its maximum and then begins to decline.

Various parties are still locked in dispute as to the accuracy of peak oil thinking, but we already seem to have hit peak ethanol.

An Australia-wide shortage of the cane-derived fuel, which makes up 10 per cent by volume of the E10 petrol/ethanol blend, is driving E10 prices ever upwards.

Automakers sue EPA over plan to sell 15% ethanol gas

Automakers say they are worried the EPA decision would eventually lead to motorists unknowingly filling up their older cars and trucks with E15 and hurting their engines.

Oil-soaked boom from BP spill recycled for GM's Volt

DETROIT, Michigan (AFP) – Oil-soaked boom from the BP spill is being recycled into plastic parts for the plug-in Chevrolet Volt electric car, General Motors said Monday in a bid to boost its "clean and green" image.

Can solar-power startup Solyndra harness the sun's power and beat China at its own game?

Solyndra, a solar startup based in Fremont, Calif., is a test case of what happens when Silicon Valley know-how and money go up against mass-produced Chinese competition. Founded in 2005, the company has been producing and selling solar modules since 2008; for each of those three years, it has exported between 75 percent and 80 percent of its products, the vast majority of which go to Europe—primarily to Germany, and also to France, Spain, and Italy. But Solyndra executives say this is about to change. How the next few years unfold will determine the fortunes of the company and its roughly 1,000 employees, but Solyndra is also the canary in the coal mine for the future of the American solar industry.

Firms look to up solar power presence in India

The initiative by the Sydney-based Solar-Gem to run LED lamps from panels that soak up the sun's rays and store them as electricity in battery units comes as domestic and foreign firms look to India as a growth market for renewable energy.

Huge hydro plant starts operation in Vietnam, says official

HANOI (AFP) – Southeast Asia's largest hydroelectric power station has begun operating to help ease an electricity shortage in fast-growing Vietnam, an official said Monday.

Mayors' group reports rising need for food assistance

The number of Americans needing help to put food on the table is growing, according to city officials and the federal government.

The U.S. Conference of Mayors reported Tuesday that trips to food banks are up 24% this year in all 27 cities it surveyed. Food stamp use is at record levels. And the number of working Americans barely getting by has jumped.

Is organic always the best pick when it comes to buying food?

Are the amounts of pesticide found on conventionally grown foods so low that it doesn't warrant the extra expense that comes with organically grown produce? Are the foods more nutritious? Because organics take relatively more farmland, will the planet be able to support the needed production?

And what do we have in mind when we think organics, anyway? Does it have to be a plate of kale and a side of tofu, or can it be an organic toaster pastry? Is it little, sustainable family farms or big industrial organic farms that supply supermarkets and Walmart?

Rival gas producers Russia, Qatar talk reindeer meat

MOSCOW (Reuters Life!) – When rival energy producers Russia and Qatar talk business, it's no longer only about natural gas -- they're talking reindeer meat, which Russia has promised to export and butcher according to Muslim dietary law.

The prospect of Russia exporting halal reindeer meat products to the desert kingdom first came up last month when the governor of Russia's Arctic Yamal Nenets region, where most of Russia's gas is produced, was in Qatar for investment talks.

UN Carbon Regulator Sees Fast Pace of Credit Supply After November Record

The increased pace of carbon credits flowing from a United Nations-overseen market will be maintained as European Union officials seek improvements to the biggest program for emission offset credits, a senior UN regulator said.

Obama administration takes on climate change in national forests

WASHINGTON - In the absence of comprehensive legislation on climate change, the Obama administration is moving forward with plans to combat the effects of global warming in the nation's increasingly fire-prone national forests.

Beginning this year, all 155 national forests -- including San Bernardino and Cleveland national forests in the Inland area -- must begin to incorporate climate change and its effects into long-term management plans.

Game Theory: Climate Talks Destined to Fail

Just because climate change is a serious problem doesn't mean politicians will come together to actually do something about it, he said. First and foremost, leaders will, by and large, act on what keeps them in power or helps them to get re-elected, and promising their constituents light economic pain now for vaguely understood benefits years into the future isn't a winning formula.

"People have a tendency to slide too easily from the facts of a matter to the political response as if the facts simply dictate what politicians do because politicians are going to do what is good for society," said Bueno de Mesquita. "It's a nice thought; unfortunately, it's not how it happens. Politicians are out for politicians."

A Scientist, His Work and a Climate Reckoning

As the political debate drags on, the mute gray boxes atop Mauna Loa keep spitting out their numbers, providing a reality check: not only is the carbon dioxide level rising relentlessly, but the pace of that rise is accelerating over time.

“Nature doesn’t care how hard we tried,” Jeffrey D. Sachs, the Columbia University economist, said at a recent seminar. “Nature cares how high the parts per million mount. This is running away.”

More on Iran:

Petrol queues getting worse everyday - Tehran September, 2010

"Economists Say Iran Subsidy Plan A Weapon Of Political Control
A long-awaited radical overhaul of Iran's economy that has seen the scrapping of state subsidies is being used to punish and intimidate opponents of President Mahmud Ahmadinejad, analysts say.

Individuals and families deemed politically suspect or disloyal to Ahmadinejad's government are reportedly being denied cash handouts brought in to replace the extensive subsidy regime."

Iran Braces Itself: Subsidy Elimination Announced As SWAT Teams Hit The Street

On my web site www.crudeoilpeak.com, in the "Global Peak" menu, click on "Iran" or use this direct link


Dr. Bakhtiari's presentation to the Australian Senate hearing on oil supplies in Sydney in July 2006

Rest his soul in peace.

The lines at gas stations haven't changed since then, of course: Iran Tabriz 11pm Dec 18, 2010 Petrol Price Hike/a>. 23.91% of their vehicle fleet is NG according to International Association for Natural Gas Vehicles (IANGV) with 500 fueling stations, yet petroleum consumption climbs inexorably upward.

This figure for their fleet is the most dubious the IANGV provides - they can't give a figure for the total yet give a percentage of NGVs somehow, which is a suspiciously round 1 million.

I know this is a bit off topic, but, Peak Oil may result in even worse problems, should our "leaders" ignore the START Treaty.
Regarding the START Treaty here’s a few relevant quotes:

“War is stupid, cruel and costly. Yet, wars have persisted. In the name of self-defense, nations have paid the human price and, spurred on by fear and competition, have continued to accept the burdens of armaments, the size and cost of which grow ever more fantastic...”

“In the past, when military machines grew to such a size or awesomeness as to create arrogance in the powers possessing them, these powers by domineering acts sometimes drove other nations, in despair or utter hopelessness, to resort to force...”

“Men have come to realize that the best interest of all, no matter how mutually hostile their ideologies, might be served by agreeing upon controlled (emphasis in original) reductions of armaments. If nations, large and small, feel compelled to produce costly weapons of war because of alleged or genuine fear of attack, these fears would be lessened and costs markedly reduced if trustworthy agreements on levels of military power could be achieved....Psychologically, the effect would be to diminish the influence of military might in international issues...”

“The problem has compounded with the increase in the destructive power of weapons and in the improved means of delivering them. Atomic and hydrogen bombs and long-range ballistic missiles, preposterously destructive, have so enormously increased mutual apprehensions that effective measures toward universal disarmament are essential in achieving a world of security – at least of reducing the fear of global cataclysm and the practical extinction of civilization...”

“Of the various presidential tasks to which I early determined to devote my energies, none transcended in importance that of trying to devise practical and acceptable means to lighten the burdens of armaments and to lessen the likelihood of war. Any progress would be an important step toward the ultimate goal of establishing a universal peace with justice and freedom.”

Dwight D Eisenhower , chapter XX, “Waging Peace, 1956-1961” (Doubleday, 1965)
E. Swanson

Progress doesn't march backwards. When it tries it trips and hits it's head on the pavement.

Things have progressed too far for the Empire to power down the military industrial complex.

Not only would that collapse the economy and create high double digit unemployment but the "Blowback" from much of Empires past actions would ramp up big time, Israel would feel even more isolated and threatened and feel the need to strike out.

We most likely would loose our dollar supremacy and world reserve currency status which that alone would bring on much of the doomer scenarios bantered about on the internets.

At this point I don't see any way out of the trajectory we are on and it wasn't the neo-cons that got us in this position. They just recognized the reality of the situation. Either we crank up our military superiority or all hell breaks loose.

Don't get me wrong I do not go along with any of this. I am out of the game and getting closer to living like the average rural Mexican as fast as I can, but I represent one tenth of one tenth of a % of the population so I don't tout this process as admirable. In fact most believe it is deplorable. People ask what can we do? Tell them to do LESS.

Progress doesn't march backwards. When it tries it trips and hits it's head on the pavement.

Abandoning our global network of military bases will be easier than people think. As oil independence is thrust upon the U.S. through the coming decade we'll lose interest in many or our military commitments abroad. The Korean peninsula is only our problem because we say it's our problem. It doesn't have to be that way.

NATO is a twisted, ironic joke of a cold war relic. The U.S. no longer has any business on the ground in western Europe.

Israel is a bit different. That special relationship will be among the last to go.

kenny - Wow! "As oil independence is thrust upon the U.S.". I don't know what to say. It's as if we must live in two different universes. Just how do you see us becoming "oil independent" any time soon? I'm not being sarcastic...honest. Even if I don't see the possibility of oil independence as even a remote possibility I'd like to hear your thoughts on the matter.


I think what he means is that the logic of the oil export model means we will be starved of any significant imports -- thus becoming "oil independent" by default as it were.

That's what I suspect also Cat. Sort of like becoming oxygen independent after I choke you to death. LOL. Perhaps he thinks our fellow citizens will just sit by passively while slowly being "freed" of their jobs and life styles. Personally I've seen first hand how bloody we're willing to get our hands when we think we are "in the right"...even at the cost of 60,000 of our military and perhaps more than 1 million civilians. I haven't noticed any dramatc change in our DNA so I see little reason to expect our attitudes about self preservation changing. If that's not a sufficient example: consider the estimated 100 million who died during WWII which IMHO had much of its cause based on economic survival strategies of a few countries.

Empires come and go. America's military hegemony will end unceremoniously with us abandoning our posts around the world, scrapping our navy, etc. We could mothball three quarters of our ships and still float the largest navy in the world.

Q. What are the four largest air forces?

A. The US air force, US army, US marines & US navy.

We need the New START treaty to re-establish mutual verification of U.S./Russian nuclear arsenals, even if the proposed new verification regime is not as robust as the one that has expired.

The point is, there is NO verification regime now, since the 'Moscow Treaty' expired (last year).

One very important fact that almost no one understands outside of the relevant community:

New START does not compel either the Russians or the U.S. to retire or dismantle even one weapon, ever (under this treaty).

The much ballyhooed (or much decried) 'cut' in nuclear arsenals of some 30% is an accounting gimmick.

This cut in Operationally Deployed Strategic Nuclear Weapons (ODSNW)means that weapons are taken off of immediate use status and simply stored, and can be put back into the 'front-line' status rather quickly. Weapons = warheads.

The treaty does limit 'Strategic Delivery Vehicles) SDVs (missiles, bombers), and this limit will result in rather minor modifications to U.S. nuclear forces, but even in this area there seems to be wiggle room to re-arm as each nation sees fit.

Don't let defense hawks sell you on the idea that New START weakens our nuclear arsenal...that is a lie, out and out.

But, if you are interested, please don't take my word for it, go read the source documents, which are unclassified, open distribution, and on-line.

Re: Automakers sue EPA over plan to sell 15% ethanol gas, up top.

Have the complainants done a scientific study to back up their suit or are they suing based on intuition as the article says? Intuition doesn't carry much weight in court.

Automakers say they are worried the EPA decision would eventually lead to motorists unknowingly filling up their older cars and trucks with E15 and hurting their engines.

How do they know that? And even if it is true they should present the study that shows what harm will come as a result. All they have is hearsay stories about engine problems. Engines have had problems since they were invented. Connecting those problems to ethanol is pure speculation without scientific evidence conducted by an unbiased observer.

We have been using ethanol for 30 years. It's been long enough for engine manufacturers to put proper seals and such in engines and fuel systems to be compatible with ethanol.

Cars have been running on ethanol for about as long in Brazil where many of the automakers also have operations. How is it that Brazilian cars can use ethanol, but American cars can't?

The suit will go nowhere just like this one against the EPA:


In its 40-page ruling, the court said oil companies and refiners had plenty of time to meet the EPA's renewable fuel standard and the ethanol law had no provision requiring the EPA to create a "proportionally reduced obligation" for using biofuels.

Thanks for the link, backcreek. As a post-alcoholic I had a good laugh from the repairman's response.

Well I drive a 99 Pontiac and I guarantee you I will not buy the stuff if there is other gasoline available at any price. I already shop around trying to find a gas station without a little sign on their pumps saying "This gasoline contains up to 10 percent ethanol."

Ron P.

If I'm not mistaken, it's law in FL that all gas 'can'/'may' contain up to 10% ethanol. Even 'shall'?

You have to go to marinas catering to boaters here in central Florida to find gas without it.

I've had nothing but trouble with my chainsaw and weed eater this year. I eventually drilled a hole in the air cleaner cover so that I could squirt some starting fluid (ether?) into the space, after which it would start. I was using some gas left in the can for a while, then checked it and found a layer of water/ethanol at the bottom. After carefully separating the two using a milk jug, the saw ran for a while. And that was after tearing down the carbs and adding new gaskets and float diaphragms. The weed eater eventually suffered piston seizure and awaits repair.

Given that additional water added to the mix tends to make the ethanol separate, one could make their own ethanol free fuel for small engines by intentionally adding water to a gallon, then carefully pouring off the gasoline fraction. Last summer, there was a local Shell station that had a sign saying they were selling gasoline without ethanol. Maybe I'll visit them next year when the grass starts to grow again...

E. Swanson

Every boat owner I know will not use any gasoline containing ethanol. Here in Wisconsin Kwik Trip stores carry gasoline without ethanol (its expensive). I know in my Husqvarna I won't burn anything but ethanol-free fuel. I don't use my chainsaw much so it tends to sit...

My beef is that E15 will make my car get even worse gas mileage. I'll be paying the same price and get less miles per tank. Great. Beef prices are already high enough, I'm only guessing that they'll continue that upward trend as we trade food for fuel.

These electric cars can't get her soon enough.

Electric cars will not solve the problem.
We have always known that electric cars do not offer some magic solution to
the sheer kinetic energy required to propel a 2 ton personal car at 60 miles per hour.
However last month we got the answer from Electrical utilities, both licking their chops and simultaneously in dread at electric cars.
It turns out that the Volt, Nissan Leaf, etc actually take as much electricity
as a US house!
We have enough problems getting the houses we already have powered by solar panels -
how is it then going to be feasible to power the equivalent of another two houses
with renewable energy? (personally due to shade trees I cannot do rooftop solar)
Moreover Electric utilities are in a panic because the power drain to recharge
a few $40K electric cars in an affluent neighborhood could shut down the local grid!
Personal electric cars are not the answer.
We already have transit used by literally millions of American daily which ALREADY
uses electricity instead of direct fossil fuels at 5 times the energy efficiency,
capable of carrying 15 times the passengers in the same amount of land, which result
in virtually 0 deaths and injuries annually.
This amazing technology can even be used without individual drivers bumper to bumper
per vehicle with largely automated switching through almost all weather conditions
including blizzards.

It is called a TRAIN!
Either heavy or light rail...

Lets run them!
233,000 miles of already built Rail are sitting mostly unused throughout the USA.
Lets put it back to work saving our oil, providing transit access to the 30% who
cannot drive, and saving greenhouse emissions!

It is called a TRAIN! ... Either heavy or light rail...This amazing technology can even be used without individual drivers bumper to bumper per vehicle with largely automated switching through almost all weather conditions including blizzards.

Hmmm ... I live in the UK, we have quite a good rail network including high speed trains to Europe called Eurostar.

Yesterday there were queues two kilometers long for Eurostar, and all trains in my area were cancelled.


Lets fix the switches. Billions are spent on tracks and trains but each time it snow and cold millions are lost because of small ridiculous problems.

Streetcars use to have a long special purpose iron bar that could be used to switch manually in case of a problem. If problems are common and effect thousands of travelers/customers regularly there should be an emergency plan to keep the system running.

The 'elf'n'safety Nazis would probably never let anyone actually use such an iron bar nowadays... gotta protect stupid people from themselves at any and all cost...

So why talk about it just write a nice report to the 'elf'n'safety Nazis and keep the system running as long as it could be done safe.

I ride the Toronto street cars all the time, and all of them have that iron bar. I've seen them used (very occasionally, probably once every 5 years or so) usually when a car is short-turned and there is a problem.


Whew! Will it ever end? You said you started out in NYC.. you forget that there have long been brake controls available on the cars that any passenger can pull?

And on those exceedingly rare occasions when they did, there was all kinds of hell to pay. Those brake pulls are not meant to be used:

Every subway car in the city is equipped with a placard titled “Emergency Instructions.” The first instruction: “Do not pull the emergency cord.”

(emphasis added.) Those cords were (very slightly) relevant years and years ago, before the MTA locked the doors that allowed people to pass between the cars. Such is the ossified nature of government bureaucracy that the pulls can't be ...er... pulled now that there is no use for them except to injure passengers and flatten wheels.

Hmmm ... I live in the UK, we have quite a good rail network including high speed trains to Europe called Eurostar.

Yesterday there were queues two kilometers long for Eurostar, and all trains in my area were cancelled.

You Brits really need to talk to the Scandinavians about how to operate trains in snowy conditions.

I'm just speaking as a Canadian who has ridden trains in both Britain and Scandinavia. You Brits really don't understand winter. The Scandinavians (and of course we Canadians) do. However, the Scandinavians are closer, and they all speak pretty good English.

To be fair, historically our winters have been far more unpredictable and milder than Scandinavia - at least they know what to prepare for. In recent years we've often had entire winters with no snow at all and temperatures quite a bit above zero (in London at least).

Scandinavian winters are a lot more consistent. I guess the same is true of Canada - at least it is up in Goose Bay which I know reasonably well.

Proving what, exactly?

Transportation in your whole country is screwed up by this weather, with thousands of flights to the continent cancelled.

England's railways could undoubtedly use any number of improvements, but you're hardly showing us that the infrastructure is useless, just because this series of storms has gagged the lines up.

While I agree with Orbit7er's enthusiasm about rail, I also thought his(?) concern over EV's was a bit hysterical. EV's are a great tool, and will answer many needs.. just because they can't 'replace cars' as they are used today doesn't mean they won't prove themselves to be versatile and dependable rides in ways ICE never was. There are already many EV drivers with PV rooftops who can attest to the usefulness of the combo, while grid-charging will have to find it's balances as well..

Not 'Either/Or', but 'Both, and More'

It turns out that the Volt, Nissan Leaf, etc actually take as much electricity as a US house!

No they don't. The Volt can be fully charged from a single 120V outlet in 8 hours. You can't power a house with the electricity from a single 120V plug. Derp.

The pure-electric Leaf uses more . . . but if you charge these vehicles overnight (as you should) then they are actually using spare capacity and thus are not additional load at all!

A couple electric cars does not 'shut down the local grid'. That is garbage. At most, they simply need to upgrade the local transformer. And with modern smart grid systems (or just old fashioned meter reading), the electric company will know where electricity use has gone up and they'll go replace those transformers with bigger ones.

And yes, we do need more electrified public transport but you don't need to crap on electric cars to advocate for electrified public transport . . . the two can be complementary. Drive your EV to the local rail station and then ride the train into the city.

couple electric cars does not 'shut down the local grid'.

Yes, but if everybody in your neighborhood plugged in their electric cars at the same time, you could probably go out and watch a pretty spectacular electrical fire light up the sky as your neighborhood transformer substation burst into flames.

That's assuming the giant air-blast circuit breakers didn't trip properly, and one or more of them established an electric arc across the gap. Most likely you would just watch all the lights go out.

I'm not saying that is what will happen. I'm just saying that is what could happen if your friendly local utility and various government agencies didn't think this through in detail. And you do trust your utility company and the government, don't you?

120V for 8 hours sounds a little weak. 120 volt * 32 ampere = 3840 watt and I am not sure if this large fuses are common for 120 volt. I work with battery chargers for electric fork lifts and they are usually 3-phase and higher power.

I think 120V would be pretty marginal for recharging electric cars. 240V would be more practical, although they would need an electrician to install it for them, and that does cost a bit of money.

Three-phase would not be a bad idea, but can you imagine bringing 3-phase power into every house in a neighborhood? Not a bad idea, but a bit of a conceptual leap for homeowners, who wouldn't have a clue what you are talking about.

At worst (including charging losses), you need 12.5 KWH hours to charge the Volt. With a 12 amp circuit, that is 120V * 12A = 1440 watt. 12,500 watt-hours/1440 watts = 8.7 hours.

I suspect those forklifts you work don't have swappable batteries so they want them to charge real fast. Hence the 3-phase power system for fast-charging.

12.5 KWh could be used to run a 12.5kW = 15 horsepower engine for one hour. Most have cars have motor with at least between 50 - 100 horsepower. I think it is to little energy.

I say it may be enough for a lawn mover http://farspeed.en.alibaba.com/product/51243655-50233224/18_5HP_Lawn_Mow...

The Chevy Volt has a 111 KW motor. The Nissan Leaf has an 80 KW motor.

I assume that these are maximums, and that they are using a small percentage of this power most of the time. I don't know what that percentage would be, for example, cruising at 60mph.

If I consider just wind resistance, we get power = Cv *Rho *V**3 *A.
Cv*A is the effective cross sectional area (actual cross section times the drag coefficient), I'll take this to be a meter squared (I think its probably too large).
Rho is about a gram per liter, 1000 liters per meter cubed, leaves 1KG per meter cubed. 60mph is 26.75 meters/second. If I did it right I get 19Kilowatts to maintain this speed. Even for an ICE vehicle at highway speeds wind resistance is probably half of the power requirement, for an electric vehicle it will be a lot higher, because we have minimal engine/transmission losses. So we need maybe 20KWatts to maintain highway speed. That would give us a range of 60miles if we had 20KWhours in the battery. So I think this
numbers must be in the ballpark.

I think your equation is a bit off. It should be:

1/2 * Rho * CD * Area * V3

Try your calculations with that one. (Of course, you might have defined away that factor of 1/2 by including it in the definition of CV)...

E. Swanson

Yes, but the Volt is a plug-in hybrid.

A true EV, the Nissan Leaf would require 16 hours to recharge from a standard 120 volt outlet. With a 240 outlet you can recharge it in 8 hours, which is more practical. With a 440 volt 3-phase faster charger you could recharge it in 30 minutes, but you don't normally find that kind of service in a residential neighborhood.

Unfortunately, as noted elsewhere, even with the 240 charger the car would have the current draw of a typical small house while it is recharging. With the 440 volt fast charger it would be closer to the current draw of a small factory.

I think people are seriously underestimating the load these things would put on the electrical system. It wouldn't be as simple as plugging in the electric lawnmower.

It wouldn't be as simple as plugging in the electric lawnmower.

If I charged at 3Kilowatts (a bit over 12amps at 240volts), I could charge a 24KWhr battery in 8hours. In my house the electric dryer draws roughly 5KW. The AC when running draws 5KW , and the electric oven draws at least 3KW. So with
modern appliances I can easily demand 13KW. During summer heat waves I've seen an average 24hour power demand of 3500watts (although I've added insulation and shading since). But in any case, a daily car recharging is smaller than my maximum 24hour use by a factor of two to three. So I don't think its a huge issue. The danger for the utility would be if they get a cluster of electric cars on the same transformer. Since anyone planning on charging a car is financially motivated to contact the utility to get cheaper nighttime time of use rates for charging, they should be well aware of the pending demand changes.

If it was plugin hybrid, like the Volt, I might well have an agreement with the utility, that says I get a rate break in exchange for not being able to charge during say the hottest two or three days/nights of the year. It would be worth my while to use gasoline on those few days in order to save on my power bills the rest of the year. And it would be worth it for the utility to be able to shed that part of its demand.

The Nissan Leaf charger is actually 30 amps at 240 volts, and the current draw is 5.2 kW, so it's slightly more than your electric clothes dryer.

The only thing is, it requires 8 hours to recharge the battery, so it would be like running your clothes dryer 8 hours a day, every day, winter and summer.

It's not that it can't be done, it's just that it is a very significant additional load on the grid if everyone has an electric car. The electrical grid in many places is not that robust, so there could be problems in certain areas. I'm thinking of California in particular.

It only requires 8 hours to charge the battery if you use the entire range of the car (70-100 miles). The average US daily driving distance is much less than that.

It only requires 8 hours to charge the battery if you use the entire range of the car (70-100 miles). The average US daily driving distance is much less than that.

Isn't it better for the lifetime of the battery to charge it completely most of the times ?

The average American drives about 13,000 miles per year. The EPA rates the range of the Leaf at only 73 miles on average. That means the average American would fully recharge their Leaf 178 times per year, or about every 2 days.

More likely they would recharge it from 50% every single day, and the car would spend 4 hours on the charger every day, 365 days per year. And keep in mind this is a 40 amp 240 volt dedicated circuit, not your average 15 amp 120 volt domestic plug.

I think the proponents of this solution are grossly underestimating the additional load this would put on the electrical grid. It's not technically infeasible - I could put in the circuit myself for about $100 in parts, and the average electrician should only charge $1000 to $2000, but it's what happens on the other side of your main circuit breaker panel that is the problem.


Actually Orbiter isn't as far off with his statement as you first may think.

While you can't power a house (as is currently thought) with a single 120v plug, if you take the power that is consumed by fully utilizing a 20A 120V plug for 8hrs, you come scarily close to what a modest home would consume in a 24hr period.

kWh = A × V / 1000 × t = 120v x 20a /1000 x 8 hrs = approx 19.2kWh. If your house isn't operating an air conditioner, that is well within what a household could keep their consumption under.

Typical US household uses around 30kWh/day (calculated from data here: http://www.eia.doe.gov/ask/electricity_faqs.asp)

However if we take a slightly more conservative usage approach (European data - Scotland for below example)

Listed below are some examples of the varying levels of [annual] electricity consumption from household to household.
Source : http://www.esru.strath.ac.uk/EandE/Web_sites/01-02/RE_info/hec.htm
1. Working Couple - 4,117 kWh electricity
2. Single Person - 3,084 kWh electricity
3. Family with two children - 5,480 kWh electricity
(Parents working, children at school)

Those rates in kWh/day are approximately:
1. 11.3
2. 8.44
3. 15.01

These kinds of usages are well within a modest household's ability to reach here in Canada, so I'm sure you can reach them in the US. If you told people their electricity bill was going to double, I know many that would have a heart attack. Not only that, once you start putting that kind of guaranteed usage into the hands of your electricity provider, how many people have complete faith in their utility to keep rates at the current, or near current, levels?


Wouldn't a significant increase in night time useage then cause a price signal that indicates an increased value in what was previously 'off peak' usage? How many electric vehicles would it take before this price signal would become obvious to electricity suppliers (resulting in significantly increased off peak rates)?

A rough WAG could be that if one out of every 20 households switched to electric cars, could that not effectively double a community's 'off peak' usage? That is merely 5% uptake of the electric car. What happens at 10%?

The Nissan Leaf has a 24 KWH battery . . . so even if you fill it from dead empty to full, that is still less than the 30KWH average you listed. And that would only occur if you completely drained your battery which you won't do most of the time.

If told most people that their electricity bill will double but they will NEVER have to buy gasoline, they would jump at the deal if they ran the numbers. Most electric utilities are regulated so they can't just jack up rates like crazy. So those lines of argument are moot.

In theory, EVs could cause electricity prices to DROP. Why? Because the utility companies would be able to pay down their capital costs much faster when they have more rate-paying electricity consumption 24 hours a day. I certainly don't predict any price drops but that has a better logic than the price going up.

There are definitely some technical things that will need to be addressed . . . the utility companies are ready, willing, and able to handle them. That is why they have all sorts of programs for EVs . . . they are installing public chargers, they are offering special EV owner rates, they are installing smart-meters, they are buying EVs for their own fleets, etc. I'm sure they wouldn't be doing that if they dreaded the thought of EVs. s

24000 watt hours/8hours = 3000watts

3000 watts/ 120volts = 24 amps

Just looking at some numbers here.

Many electric water heaters use more than twice this. Some residential tankless electric water heaters use three 40 amp circuits at 240 volts (9.6 kw).

Battery charging is not linear. The battery voltage is raised to the optimum charging voltage (bulk charge) and held there by reducing the charge rate (absorption charge) then reduced to a finish charge (float charge). Trying to 'pack' a charge into a battery will cause it to overheat and eventually cause a fire or explosion. The charge rate is at maximum charge only during the first fraction (25%?) of the total charge time. Chargers can be built to sense line voltage. If the line voltage drops below a set point, the charger can reduce the charge rate until line voltage rises.

My point is that those of you who think charging alot of car batteries is going to fry the local grid are just wrong. If this were the case then the grid would fry every morning when families are taking showers, cooking with electric stoves, running hair dryers, toasters, microwaves, coffee pots, air conditioning, electric heaters, etc., etc.

Your local electric utility would love to sell you the kwhs. If need be, they would change out the residential transformers and up the distribution voltage, something they did here recently due to their promoting 'all electric' homes, increased construction, and larger homes requiring 300+ amp service.

The question IMO is: will there be moneys available to increase generation and transmission capacity. Electric cars won't be the only load competing for electricity as fossil fuel availability declines. Electric rail, commuter and intercity transit, increased industrial use as trade balances crumble, all will stress the grid from the top down. As natural gas becomes more expensive, many loads may be switched to the grid. Our electrical woes will be due to production/transmission issues rather than local distribution to consumers.

will there be moneys available to increase generation and transmission capacity.

In my view, that's the wrong concern.

There will be plenty of electricity generation capacity unused as the economy contracts.

Note that many utilities have already seen usage drops and have had to raise rates because of the drop in revenue. They must keep paying off the debt, after all.

I posted links several months ago but a quick google will turn up more. Use 'electric utilities raise rates' to see how many utilities are looking at rate increases as consumption goes down.

Hi André,

There has been a steady drop in provincial demand over the past several years. A stagnant economy and price elasticity are likely responsible for most of the decline, with increased energy efficiency and various DSM initiatives helping to accelerate the trend.

In 2007, 2008 and 2009, total demand stood at 12.7, 12.5 and 12.0 TWh respectively, and at this point, it looks like 2010 will follow suit. This is occurring at a time when virtually all new home construction is all-electric and a growing number of oil heated homes are likewise converting to electric heat.


In economic terms, the long-term elasticity of oil demand is quite high and people can and will switch from oil to another fuel source, if the price dictates and they are given enough time. The people who think otherwise don't understand economics and/or human behavior.

The thing is, consumers probably will not be given enough time, so they should switch ASAP rather than waiting for the fuel oil bill to come in, and realizing at that time they cannot afford it.


At a $1.00 or more a litre*, a tank fill can easily exceed $700.00 or $800.00, and most fuel oil suppliers require a minimum delivery of 300 to 500 litres. For those on limited or fixed incomes, the pain is often unbearable.

Although I'm reluctant to recommend electric heat, a litre of fuel oil provides between 7 to 9 kWh of heat depending upon the efficiency of the home's heating system (potentially less in the case of forced air systems after taking into consideration duct losses), and at a $1.00 per litre, this puts the cost of oil heat between 11 and 14-cents per kWh(e). Electricity, locally, is currently selling at just under 12-cents per kWh, so electric resistance could be a cost-effective alternative for homes with older, less efficient heating systems, especially if you can zone heat. Do whatever you can to minimize your home's heating requirements and get off oil as quickly as you can.


* See: http://www.kentmarketingservices.com/dnn/PriceDataReports.aspx?vp_url=/d...

Well, ThereinHalifax, I can understand why at 12 cents/kWh people would be reluctant to put in electric heat. However, the people on oil heat who are paying $800 to fill their tanks might have to remortgage their houses to fill the tanks the next time if world oil prices go to the levels they might achieve on the next big price spike.

With natural gas trading at $4/GJ (or Mcf, your choice), gas might have been a better choice. Gas is currently 1/3 or less of the price of oil on an energy-equivalent basis.

I don't really understand why the Nova Scotia government didn't contrive to divert a little of that Sable Island gas offshore Nova Scotia to There in Halifax as a side-effect of keeping New York supplied. It's all a matter of regional politics, I guess.

It's just that here in Alberta we are awfully darn good at finessing these things to our advantage. At this current point in time we're selling the oil to the US and using the gas ourselves. Personally, I can heat my house using natural gas, electricity, or wood, but this winter, natural gas has by far the best economics.

As it happens the foundations of my house sit on the biggest deposit of anthracite coal west of Pennsylvania, but nobody cares. The coal mines are all shut down. It's just uneconomic.

Well, natural gas is not quite the bargain it is out west. Our local distributor, Heritage Gas, charges a fixed monthly account fee of $18.00 and the cost per GJ is currently pegged at $11.97 (http://www.heritagegas.com/residential/residential-rates.html). This cost is reset each month and will be increasing 12 per cent come January 1st (http://www.metronews.ca/halifax/local/article/722530--heritage-gas-consu...). Little wonder Heritage Gas has fewer than 3,000 customers province-wide -- in these parts, a high efficiency heat pump has natural gas beat hands down.


If 1 in 20 Americas gave a flip about energy consumptions you would have an argument. This argument in any case was disproved a while back. Smart metering and night charging are obvious solutions for many folks. I think the counter-argument was that a green neighborhood (if such a place exists) could maybe hypothetically get a few families on the same transformer charging EVs and have a problem. OK. And is this hypothetical problem one constrained by theoretical physics. No. Can it be solved? Yes. What are we arguing about?

In any case, I bet less than 1 in 100 even care about EVs today and not many of those can buy the limited edition runs of the cars, since they do not exist.

The worse case I see is that the AC will need to be turned off when things get interesting. God knows when Americans will be interested. Without AC, the electric demand is not even close to being a problem. What uses electric in your house -- your dryer, refrigerator, not much, maybe you have electric water, a hair dryer, a vacuum cleaner?

It is the future. Electric is better than walking. LOL.

If 1 in 20 Americas gave a flip about energy consumptions you would have an argument.

If their neighborhood transformer trips out on thermal overload, the ratio would would be closer to 20 in 20. Particularly if it is a hot day on which they hoped to use their house A/C.

It is the future. Electric is better than walking.

Personally, I think walking is much healthier for you. And the way things are going it may be your only option.

"While you can't power a house (as is currently thought) with a single 120v plug, if you take the power that is consumed by fully utilizing a 20A 120V plug for 8hrs, you come scarily close to what a modest home would consume in a 24hr period."

I was about to do the math, good thing I read ahead. Even allowing for a 15 A load so you had a safety margin you could keep the appliances and lights on, just not all at once.

In this 1950's subdivision, all the houses have 200 A services. Half of them have welders on 30A 240 V circuits already. We'll never even notice the extra load. If there is a problem it will be the dead of winter when all the baseboards are going as well. But since the clothes dryer will be off, I think there is enough margin even then. At worst, I'd need a timer to cut the water heater off while the car is charging.

In this 1950's subdivision, all the houses have 200 A services.

If I understood the discussion correctly, nobody was saying the droplines to the houses were going to melt. Nobody ever draws the full 200A, or if they do it's a brief surge. According to this, "In 2008, the average annual electricity consumption for a U.S. residential utility customer was 11,040 kWh." That's about 1260 watts on average, or 10.5A on average. So the 200A capacity is generally massive overkill, even allowing for heavy short-term loads like stoves or air conditioner compressors. It is absolutely not a reliable guide to what the EV effects might be at the power poles and beyond. If the (say) Leaf battery holds 24kWh, and a household only uses half of that each day, that's 500 watts on average, so they raise their electricity consumption by 40%. Or maybe 80% if they have two cars.

So the real question becomes the one already touched on, can the creaky old electrical grid handle a 40% to 80% increment, on top of "normal" growth - will the money be spent to upgrade it in a timely manner, or are we going to see more exploding transformers in the near future, and blackouts eventually. Most of the grid beyond the dropline is not built to a standard anything remotely like 20x overkill relative to the average load, which is why it's so twitchy on hot summer days. So at a minimum, we must expect the 'system' to "notice" a 40% to 80% increment, even though the dropline to the house, sized with massive overkill, certainly will not.

I'm guessing the buyers of the new ev's are healed enough financally to install a NG powered generator to rcharge the ev plus have the added benefit of emergency power?

If they can afford to install a NG powered generator, they can also afford to install a NG compressor, and if they can afford to buy an EV, they can also afford to convert their car to CNG fuel.

It eliminates the step of burning the NG in a power plant and delivering it to the house. You burn it in the car directly and eliminate the energy-inefficient and costly middle part of the process.

It also gets rid of the heavy (600 lb in the Leaf) and costly battery, and extends the range of the vehicle considerably. The Leaf is rated by the EPA to have a range of only 73 miles. CNG cars can also be dual-fuel. When you run out of NG, you switch to gasoline and keep on driving.

I think the promoters of the EV are totally focussed on making the EV solution work, and are ignoring the fact that there there are a lot of other options available, many of which are cheaper and more efficient.

Why can't we do both err all of the above.

Nonintuitively, that middle part of the process (burning the fuel in a power plant and delivering it to the house) is actually more efficient than burning it directly in the car. The internal combustion engine is very inefficent because is does not convert the heat into work - as a power plant does. I've seen a figure quoted that you will actually get 40% more mileage if you convert the fuel into electricity and use an electric motor compared to burning the fuel directly in an ICE in your car. Even when the loss of the power grid is taken into account.

you will actually get 40% more mileage if you convert the fuel into electricity and use an electric motor compared to burning the fuel directly in an ICE in your car

That doesn't sound right. (But then again, maybe I'm missing something?)

As a general rule of thermodynamics, every conversion from one form to the next of energy has to be less that 100% efficient.

When you use an EV, someone upstream on your grid had to burn fuel, convert the heat energy to mechanical energy and then to electricity, run it through lossy wires and then you converted it again into chemical energy (your battery) before finally reconverting it to electricity for use by your electric motor (which converts electricity into mechanical energy). That's a lot of lossy conversions.

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As a general rule of thermodynamics, every conversion from one form to the next of energy has to be less that 100% efficient.

Such is true, and that is why there is no way that burning NG in a power plant, delivering it to the house via the grid, and recharging the batteries in the car is more efficient than burning it directly in the car - at least if the house is already connected to the NG system.

There are two ways to approach this. One is to use physics, the other is to use economics. Either way the electric car does not make sense. People are trying to fuzzify the issues to arrive at the conclusion that the electric car is the cheapest, most energy efficient solution, but the numbers just don't justify that no matter how you evaluate it (except under unusual conditions).

I think the only solution is to teach more math, science, and economics in school.

Obviously the PTB decided electric was the way to go. I would assume both GM/Nissan/Ford would have plenty of inside knowledge of the pluses and minuses of both NG and pure electric compared to a few clowns on the internet?

Not all electricity is produced by NG. Around here its mainly coal, with some nuclear/wind mixed in for good measure.

I like to heat my home with NG.

200Amps is nice. Lots of houses still have 100Amp service or even less. You pretty much need at least 200 Amp service if you want a level-2 charging system. That is going to be a headache for a lot of people.

I think building codes should be adopted now to mandate at least conduit for EV charging systems in every new home & apartment complex. Not a mandate of a full charging system, just a mandate of some cheap tubing such that it will be easy to add one later.

Speculawyer said: You can't power a house with the electricity from a single 120V plug.

Well, actually you could, if you take the trouble to spread the load out over the 24 hours in a day. For example, I use about 150 kilowatt-hours each month at my small house. Spread that out evenly over the 768 hours in a month, and the average load is about 200 watts, or less than one amp on a 120v circuit.

Ooops! Excuse the little math error please. I meant to say less than TWO amps on a 120 volt circuit.

You can edit your comment, as long as no one (including you) has replied to it yet.

150 kWh would be enough to charge the Nissan Leaf 24 kWh battery about six times each month. If you could make one full charge last for five days it would you would use twice as much electricity. If this representative huge amount of extra generation capacity is needed.

I do not know the number but would guess that production of natural gas and coal have to rise maybe with 50% or that half of the gasoline currently used have to be used for electricity generation. It may still save huge amounts of energy simply because electric power generation in large power plants are a lot more efficient than ordinary motors in cars

Moreover Electric utilities are in a panic because the power drain to recharge a few $40K electric cars in an affluent neighborhood could shut down the local grid!

Even when charged in the night ?

Actually . . . yes. Many transformers operate on a day/night duty cycle. They work hard all day but at night they have less load and have a chance to literally cool off a bit. If they are given a sustained 24/7 load, they may end up failing due to overload.

That said, it really isn't a big problem. EV adoption will be slow and the electric companies will have plenty of time & warning to upgrade as necessary. And they will gladly do so . . . they are ecstatic about having electricity usage on a more sustained 24 hour basis since this reduces the amount of idle capacity that sits around and makes no money when usage is low. There will be a few transformers that blow due to some electric companies not paying enough attention when some EVs arrive. Of course that occasionally happens already when people add swimming pools & air conditioners. People that try to make this into some issue are just looking for any excuse to whine about EVs. If it was really a problem, the electric companies would complain . . . but instead they are salivating at the upcoming EVs. They are doing all sorts of programs to help support their adoption.

Many transformers operate on a day/night duty cycle. They work hard all day but at night they have less load and have a chance to literally cool off a bit. If they are given a sustained 24/7 load, they may end up failing due to overload.

Thats true even at the street distribution level. We had problems a few years back because PG&E thought it (the weather) colled down at night, (sometimes it stays at or above 80F), and our transformer keep shutting down (they do have protective thermal breakers). They finally relented and replaced it with a more thermally robust one.

The electric utilities will soon be struggling to stave off bankruptcy.

Assume that our future looks something like Hirsch's prediction:

Best Case Mitigation

and the economy contracts at least twenty percent before it stabilizes (for a while, anyway), there will be plenty of excess power generation and transmission capacity.

Many people are worried about needing to build out more electricity infrastructure and it's the wrong concern.

We should be concerned more about how we keep the electric utilities financially viable and operating during a rapidly contracting economy.

Y'all are focusing too much on the technology and not enough on how the financial system and the economy in general is going to impact things.

I agree a decline in oil supply is likely to cause a decline in electricity demand, and this is likely to put a strain on the financial condition of electric companies. Governments are not likely to be in a condition to bail electric utilities out, making the situation worse.

I think it is very easy to work on solving the wrong problem. It is easy to think that the big issue is finding more electrical capacity for utilities. The big issue really is finding more cheap electrical capacity. (This is as big an issue as finding cheap oil, not just any old oil.) If electric prices end up increasing, demand is likely to decrease, leading to less need for capacity, not more, and bond defaults.

Whats interesting is this brings up one of the most obvious results of peak oil. Extreme overcapacity in upstream operations while the commodity itself is expensive. Refinery margins will in general collapse post of the time. Shipping would be in excess. Some pipelines would face utilization issues etc.

Eventually you would see numerous refineries shutdown.

Wait all this has already happened :)

Utilities needs to be carefull about their debt but I realy hope that they invest for the post peak oil era.

There are fairly large inestments and reinvestments being done in Sweden, I think that we currently are in the fourth electricity boom. The first one were the original small scale electrification, that infrastructure were renewed decades ago and a lot of the small scale hydro is abandoned. The second boom were large scale hydro, electrified railways and high tension interconnects creating a national grid, almost all of it execpt dams will be renewed within a decade if BAU continues. The third boom were nuclear power and redundancy in the high tension grid, here are parts being replaces as nuclear powerplants get life lenght extensions and the 1970:s high tension switchyards are being replaced due to development of new more reliable technology that also is more compact and cheaper when building new switchyards.

The forth investment boom on top of the reinvestments are wind power with large scale grid investments and high tension lines and interconnects for power trading within the nordic countries and with our southern and eastern neighbours. The electricity customers lost if nobody pays good money for pulp and paper can then be compensated by exporting hydro, wind and nuclear electricity to coal importers and that ought to give a cash flow to keep things running and our neigbours homes lit and critical and profitable industries running while society adapts to a shortage of fossil fuels.

I am also sure that having plenty of electricity in the post peak oil future is the best possible position for an industrialised society. I realy like that our utilities and our neighbours utilities are investing heavily and it is good even if the economy crashes and is reset since this is the kind of asset that an economy is built on. Powerplants and wires are along with fields and farms, forests and papermi... biorefineries, schools and industries better then piles of worthless gold. (I know about the service economy and love services but it do ultimately depend on physical assets. )

Even when charged in the night ?

Well, there is the issue that the utility companies rely on low demand to allow their transformers to cool down overnight. If they don't cool down overnight and are still hot when everyone turns on their coffee maker in the morning? ... well, have you ever seen a transformer fire?

So, don't think that overnight recharging is a total panacea. It might not be that simple. Upgrading the electric system might cost you a lot of money (the electric utilities are not going to do it for free.)

I will suspect that the whole-house air conditioners the affluent use will draw more amps during the day then the overnight chargers will.

In regards to cooling, nighttime temperatures are usually lower, too. So nighttime transformer cooling unlikely to be an issue.

Not too worried, becuase if hybrid car adoption is only 2% of US cars, I am sure 1% adoption rate (optimistically) of EVs will give plenty of learning time to utilities and owners.

I own a home with whole-house air conditioning. I consider myself poor. Maybe I shouldn't?

Any mechanic who works a lot on older cars and trucks or small engines will be glad to tell you as many horror stories as you like concerning ethanol and gasoline blended at ten percent.

I have recently disassembled and cleaned the carburetor on our olderr Ford engine that powers our orchard sprayer-the metal insides of the Holley carburetor are badly pitted- older guys tell me they never in their entire careers saw such corrosion until the advent of ethanol.

Among my other modest accomplishments, I was once upon a time a fulltime small engine mechanic for a couple of years, and I still fix a lot of them for use on the farm and for our nieghbors and family.

When I see fuel lines and carburetors turned to mush from ethanol, I just tell the owner to scrap the machine if it is a cheaper model-only commercial grade engines are worth the costs of the repairs.

Lots of people are finding it necessary to replace the gasoline tanks in their older cars and trucks too-way, way too many.

But I have no doubt that new equipment can be built to run on e15-if the manufacturer is willing to spend the money.

Ethanol is a very bad deal for everybody except those making money out of it-we would be far better off cutting our oil dependence by simply tightening up fuel economy standards and or raising fuel taxes.

The ethanol subsidies are nothing in effect but a back door fuel tax anyway-just as mandated health insurance is a backdoor tax.

People who are healthy will be forced to pay more for policies because the folks who are less healthy will be able to buy at below market (for them ) prices;it would be far more honest and efficient to just institute a health tax and avoid the salesmen and most of the quadruple paperwork,running the system like medicare or social security.

The situation with ethanol is analogous;the only benefit to ethanol is that it may (or may not, but probably does) in effect turn some coal and natural gas into a liquid fuel.

But after the large quantities of gasoline and diesel used up in producing the coal, natural gas, fertilizer,etc, that are input into the growing the corn and the distillation/distribution process, and allowing for the low energy density of ethanol, it is highly questionable whether the gain in liquid fuel is worth the costs.

deliberately adding water sounds like a risky trick....you will remove most of the ethanol, (I think....have to sort out the partitioning), but you will guarantee having water saturated gasoline. Maybe you could do the separation at very cold temperatures to encourage separation, but you will still very likely hit some hard to break solubility.

On that note....my chainsaws hate regular gas...I assume from the ehtanol. Pieces swell (stupid plastic fill caps). A buddy insists on going to the marina and getting the "pure" gas they still sell. Others pay the premium for avgas. More expensive, but for tools that only use a pint, that's only ~25 cents.

We have been using ethanol for 30 years. It's been long enough for engine manufacturers to put proper seals and such in engines and fuel systems to be compatible with ethanol.

They kind of assumed you would use less than 10% alcohol in the fuel, so they could continue to use plastic parts in the fuel system. Alcohol tends to dissolve the plastic, so if you use more than 10% alcohol, you have to replace all the cheap plastic parts with more expensive materials, and it becomes more expensive to build the engine.

Also, carburetors are kind of dumb devices. They don't compensate for the different heat properties of the fuel. If you want something that can compensate for varying fuel mixtures, you need to use electronic fuel injection, and the manufacturers thought it would be rather expensive to use electronic fuel injection in a lawnmower or chainsaw. If you put too much alcohol into the fuel, the engine runs too hot and it's bye-bye pistons and bearings.

The automobile manufacturers also resisted putting more expensive fuel systems into their cheaper cars and trucks. First, it's the cost of replacing all the cheap plastic parts with more expensive materials so the alcohol doesn't dissolve them, and second it's all the extra sensors and computer logic needed to figure out how to handle the varying fuel mixtures. If you get the calibration wrong you can burn up the engine. In the older cars and trucks the calibration will be wrong.

and second it's all the extra sensors and computer logic needed to figure out how to handle the varying fuel mixtures. If you get the calibration wrong you can burn up the engine. In the older cars and trucks the calibration will be wrong.

You are correct about the extra sensors and computer logic to deal with varying ratios. My 2001 unmodified Toyota Prius with 180,000 total miles, and 80,000 miles (after warranty expiration) running primarily on self-blended mixes averaging 50%-60% ethanol is evidence that the engines will not burn up. The mileage is lower because of the lower energy content, but I know where the hell it came from, such as in this picture, as the ethanol I'm putting in my car came from the ethanol plant (you can see the steam plume) in the background.

What's really funny is because I've been doing this so long, the computer fuel trim logic has adjusted enough that if I put in a tank of regular gas the check engine light comes on. Its the changes in mixture from one tank to another that burn up engines, not the ethanol itself. (At least in a properly designed closed loop feedback control system with working oxygen sensors)

Just don't tell Toyota that. I understand that ethanol use over 10% will void your warrantee.

The Prius in the photo is a pre-2004 model, so the warranty has already expired.

I think there are two valid points in the discussion.

The first is that many vehicles assume a certain maximum ethanol concentration, and use parts that can resist the 10% or less.

The second is that most modern fuel injected cars use oxygen sensors in the exhaust to measure lean/rich and adjust the mixture _within_a_certain_range_.

If the car's electronics are E85 compatible, then the fuel injectors, drive electronics, and fuel delivery hardware (the parts the fuel flows in) and computer are designed to work with a high ethanol concentration.

Other non E85 cars may not.

There are plenty of plastics that could be used. Given the quantity of plastic in total I doubt that the increased cost would be much at all, I do mean cents not dollars. But it would mean not being able to use the cheapest possible to maximise margins.


March 29, 2010 - Household Vehicle-Miles of Travel by Trip Purpose
About 1/3 of vehicle miles are work related. Perhaps another 1/3 are necessary personal business.

The last 1/3 are non-essential purposes like casual shopping, religious, sporting, and entertainment events, vacation travel, visiting friends/relatives, social/recreational, etc. These can easily be cut back as the price of gas goes up.

You say it's easy, but you try living with your wife after giving up on the trips to her mother's house!

In 1977 it broke down thus:

Earning a Living 33.2
Family and Personal Business 31.7
Civic, Educational, and Religious 6.4
Social and Recreational 19.2
Other 9.5

The more things change etc etc. I looked for stats on increased use of MT in the wake of the price spike 30 years ago - not really. People adopt this measure, pardon the pun, in a transitory manner. 1977 Nationwide Personal Transportation Survey

Cutting back on "non-essential" by a third will trash the economy by a third. Every single one of those non-essential activities involves an economic transaction, even if it's simply paying for the petrol used.

The economy is the sum of all the economic transactions which take place. Fewer economic transactions = smaller economy = fewer jobs.

Jutland, you're assuming that people can only undertake economic transactions when they make a journey to somewhere by car. If you stop and think for a moment you'll realise that's simply not true.

Two quick cases in point:

1. Car traffic has been falling in London for several years now, despite the fact that it is the most prosperous part of the UK, and its population has been growing. People still shop, eat in restaurants and go to work, but fewer use a car to do those things.

2. In the recent spell of snowy weather, it's been difficult for people to drive to supermarkets. As a result, local convenience stores have been very busy, as those purchases are transferred to places that can be reached on foot.

Economic activity existed before cheap car travel and will exist after it ends.


1. Car traffic has been falling in London for several years now, despite the fact that it is the most prosperous part of the UK, and its population has been growing.

London depends on the 'rest of the world' for prosperity. Local traffic is only a minor factor of importance.

London depends on the 'rest of the world' for prosperity. Local traffic is only a minor factor of importance.

Such is true. The old saying in India was that "Only mad dogs and Englishmen go out in the midday sun". The same is true about driving in London, but the drivers are mad Englishmen.

I don't know why anybody drives in London - you would have to be completely crazy to do it. The street system makes no sense whatsoever. OTOH, the "Tube" and walking will get you almost anywhere. The maps of the Underground system are remarkably clear and understandable, and on the surface you can navigate by Postal Code (conveniently marked on the sides of buildings) because the street signs will just mislead you.

The only thing was that most Englishmen seemed to be quite confused about how their system functioned. When I was consulting in London, there were about a dozen Englishmen who asked me for directions, and the generic American accent that most of us Canadians speak didn't put them off at all. Most likely the difference was that I had a map and they didn't.

I wonder how many will find the local shopping more convenient and stick with it?


Not many will find that affordable, as long as the economy stays in the tank and convenience stores price-gouge as shamelessly as they do (and as they must, since they lack some of the economies of scale.)

There does not need to be a huge price difference. Here a lot of prices are the same in supermarkets and the corner shop. Even the chain pharmacias are not that different. While it is true that the supermarkets do have offer wars a lot of the local shops get good deals from the local producers. Today, from my locals, I picked up milk, same as the super, picked up oranges 1/2 the price at the super. Start fighting gouging.


I was surfing some articles and came across this passage from Virginia statehouse delegate Bob Marshall:

In that same report, Marshall made an argument against birth control that would seem to undercut the case he now makes about gays in the military. "In Florida, retirees are working at McDonald's because there's not enough kids to do it," he told the reporter, decrying the US's plummeting birthrate. "Military and economic security are severely jeopardized by the serious population drop in this country."


Wow, I do not know where to start...maybe with the prediction that U.S. population will top 400M circa 2050?

I guess all those extra people will come into existence as senior citizens.

And yes, I understand that a significant amount of this predicted population increase is predicted to come from immigrants, likely mostly illegal immigrants.

But that doesn't stop me from being amazed that this guy went on to say that the U.S. is jeopardized by a serious population drop (and he is speaking of now, not some hypothetical doomer future scenario).

I imagine this fellow isn't down with PO or LTG or anything like that...we need to breed more youg'uns to fill the ranks of all the corporate Mcjobs, all while we have an official unemployment rate verging on 10% and a much higher actual unemployment/underemployment rate.

Honestly, folks of Virginia, do you study the ideas of the folks you elect?

You've got to read between the lines.

What Bob Marshall means to say is that there are not enough white kids being born, because those pesky liberal, educated middle class whites who want to keep themselves and their kids well off are using birth control and only having 1 to 2 kids later in life.

Mexicans, Asians, and blacks don't count in his book.

He wants the United States filled with working class whites breeding like rabbits, so their offspring can be the useful servants of American Empire and bring coffers to the churches.

But you see, that hasn't happened for, well, going on 40 years now.

So the Mexicans and Asians are recruited into the U.S. by TPTB, higher than Bob Marshall in the U.S. Senate (where he aspired to be) so the economy can grow and the imperial project can continue, forever.

He's obviously a blithering idiot. The notion that somehow retirees are impressed into jobs because of a lack of youngsters is incredible.

Don't blame me, I didn't vote for the dude.

It's a mixed bag in Virginia, where many are reactionaries. The Governor and Attorney General fall into this category, along with many past political figures and current Congresspersons.

Tom Whipple lives in Falls Church, Virginia.

Sez Whipple mentioning yet another Virginian:

A few weeks ago Virginia's U.S. Senator Mark Warner noted that the global warming debate was not so much a scientific one as it was religious. On one side were the apostles of science and on the other was the "American way of life."

When Election Day came, it was no contest - the American way of life won hands down and numerous veteran politicians were sent packing. In state after state, "cap and trade" was widely perceived as the implacable enemy of all Americans hold dear - prosperity and economic growth.

When Election Day came, it was no contest - the American way of life won hands down and numerous veteran politicians were sent packing. In state after state, "cap and trade" was widely perceived as the implacable enemy of all Americans hold dear - prosperity and economic growth.

Unfortunately 'Nature' has voted against the American way of life... and her vote is the only one that really counts. She has some serious budget and spending cuts planned that are going to put a bit of a damper on all that prosperity and growth. And not only in Virginia!

From above article "Is organic always the best pick when it comes to buying food?"

"Both methods of production provide us with equally safe and nutritious food," says Curtis Miller of the American Farm Bureau Foundation in Washington D.C., which represents both conventional and organic farmers.

Thanks for the rational discourse Mr. Miller. Miller, Obama, (add any US politician name here), spineless, re-election biased demagogues. Ask not what your country can do for you, ask how likely it is that the sheeple will re-elect you.

CO2 Your indignation is understandable and obviously with merit. But Miller is not an elected official. Even worse he probably spends most of his time lobbying. He states support for both types of agriculture because there are significant farmers of both persuasion in the Farm Bureau, all paying dues. I think they have between three and four million members.

Unfortunately, it's not rational. There are several outright incorrect statements in the above. Part of the problem, of course, is these guys are talking from a point of ignorance, but that is their error.

First, organic is more nutritious.

"An independent review of the evidence found that organic crops had significantly higher levels of all 21 nutrients analysed compared with conventional produce including vitamin C (27% more), magnesium (29% more), iron (21% more) and phosphorous (14% more). Organic spinach, lettuce, cabbage and potatoes showed particularly high levels of minerals. 37"


Not only small scale, and more:


Organic costs more:

Of course it does! Where are the economies of scale? Organic is still a small portion of total. In reality, it is no more expensive when all things are equal. 1. Regenerative agriculture can be done with much less water due to building soil over time which adds organic material which leads to much higher water content, as well as heavy mulching. 2. No expense for fertilizers and pesticides.

There is zero advantage for industrial ag over regenerative, while regenerative is preferable to industrial in every instance. I welcome rebuttal.

If you must rely on BS to "win" an argument, perhaps you shouldn't be arguing at all.

Is organic that much more expensive at the farm gate or does the mark up occur as it goes on up the line to the store?


More strong evidence this past week in the “abundance vs. mirage” debate over whether shale gas is going to be an economic bonanza or bust:

1) The EIA came out with its annual update of future reserves and production and, lo and behold, the 2011 estimate of technically recoverable shale gas reserves is more than double the 2010 estimate, up from 347 trillion cubic feet to 827 TCF. Meanwhile, their estimate of annual shale gas production in 2035 also doubled, jumping from 6 TCF to 12 TCF. (And yes, I do understand that EIA estimates of anything are not exactly reliable. Nevertheless, a doubling of their estimate in one year is probably indicative of direction.)

2) Carl Icahn plunked down a cool $946 million to up his stake in Chesapeake Energy, the largest shale gas producer, to 38.6 million shares, or 5.8 percent of the company. As one of the more savvy value-oriented investors in the oil and gas space, Icahn is not known for wasting his money on uneconomic or worthless assets.

3) Talisman Energy agreed to sell to South Africa’s SASOL a 50% interest in 51,000 net acres in the Montney Shale play in Canada for slightly more than $1 billion. That represents a price of nearly $40,000 per acre. In addition, the two parties agreed to study the feasibility of a 34,000 bpd GTL plant that would convert some of this shale gas to liquid fuels using SASOL’s expertise. (Along with the recent announcements of efforts to convert some U.S. LNG import facilities to export facilities, this represents another sign that enterprising companies are going to find ways to monetize abundant gas supplies into robust and economically viable end-use markets.)

Catman - A number of points about your points. First, “technically recoverable shale gas reserves “ has nothing to do with how much NG will ever be produced from those formations. There are trillions of ounces of “technically recoverable” gold reserves in the ocean today. Yet no one is producing any today nor is anyone planning to do so: costs more to do then even $1400/ounce can justify. How many of those TCF will be produced is dependent upon the price of NG. At $15/mcf that number is very big. At $3.80/mcf…not nearly that much. And an unknown amount of that technically recoverable NG won't be economic even at 10X the current price. Don't know how much but a certain percentage for sure.

Carl Icahn - I worked for him for a brief time after Carl’s hostile take over my little oil company back in the 90’s. His acquisition of Chesapeake had little to do with future SG drilling IMHO: most of CHK SG leases will expire long before they can be drilled. He bought his position because CHK stock was busted and he picked it up cheap for the cash flow. Same reason ExxonMobil bought XTO…cheap cash flow/reserve acquisition. ExxonMobil had the cash reserves to buy 1 million acres of SG leases anytime they wanted to. They didn’t need to pay a premium for XTO’s leases. They got existing producing reserves/cash flow on the cheap. Happens every time there's a bust in the oil patch: the strong buy out the weak for their cash flow/reserves. Historically this is the lowest cost reserve acquisition. I.E. a lot cheaper than drilling for oil/NG. Even more so today IMHO with the ever decreasing number of viable drilling opportunities.

Talisman - That one I don’t know about. But I can tell you that with that lease costs along with the drilling cost I doubt much if any of those drill site are economic to develop today. Maybe the GTL plant is their leverage. OTOH they might be able to buy existing NG production cheaper than what it will cost them to develop that Canadian acreage…maybe…don’t know enough about that play. Are they making a bad investment? Obviously they don’t think so. OTOH Devon didn’t think they were making a bad investment in E Texas SG drilling when they spent over $2 billion drilling in this play. And that effort essentially destroyed one of the largest independent oil companies in the US. A bit of proof that huge capex investments don’t necessarily mean they are good investments. IMHO with this one we’ll have to wait a few years to see how it all shakes out. Time may prove them to be one of the smartest players in the game...or one of the dumbest.


I understand that "technically recoverable reserves" don't say anything about what can be economically produced; you don't address the second part of the EIA prediction though -- that actual shale gas production will be 12 TCF annually by 2035, or twice as much as they predicted last year. By definition, if this gas is going to be produced, then it is economic.

We could argue about Icahn all day long (I have also had direct contacts with him) but the fact is that he doesn't typically buy into companies that aren't worth anything. If Berman's argument that shale gas is and will continue to be uneconomic was true, Icahan simply wouldn't be buying into Chesapeake because this company is a huge bet on the future of shale gas.

As for Talisman, I'm a shareholder and can assure you they are a big believer in the future of shale gas plays. In fact, they've been selling off mature oilier properties to buy into North American shale gas in the Montney, Marcellus, and Utica shales plays. I'm a bit surprised you haven't heard of the Montney. It's just south of the Horn River Basin where all the big boys are piling in and by all accounts it's a damnn big gas find, with Encana alone saying they have 60 TCF of gas in their properties there.

Finally, if Devon was destroyed by East Texas shale gas, I'm at a loss to understand why the stock is trading at $76 today, up from less than $20 a decade ago, and why they have also just recently made big divestitures in the GOM and elsewhere in order to re-invest in onshore shale gas properties. I don't know about you but I consider stocks that quadruple in ten years success stories, not "destroyed" companies.

Cat - I can be unusually emphatic about how much SG will be produced in 2035: no one can even come close to predicting that number. At least not with any credibility what so ever IMHO. To predict how much NG from any source will be produced in 2035 you have to know what the demand will be. If the world is in recession at that time much less NG will be produced because demand will be reduced just like we saw recently. And if that recession has been going on for a while then NG drilling would likely to have diminished also. If someone thinks 12 TCF of SG will be produced in 2035 then it should be easy for them to tell us how many SG wells will be drilled between 2030 and 2035. After all SG wells deplete very quickly so most of the SG production in 2035 must have been drilled in the previous 5 years. So the validity of the 12 TCF is fully dependent upon knowing the NG demand and price as well as drilling activity (which will be dependent upon the number of companies still in the biz and how much capex they have available). IOW everyone is capable of predicting how much NG from any source will be produced in the future. All they have to do is know exactly what the demand, price and industry activity will be in the previous 10 years or so. Heck...my 11 yo daughter could do that just as accurately as anyone else. BTW: the very best (not the average, mind you) SG wells drilled during the boom recovered 2 bcf the first year. That means during 3034 about 6,000 of the very best SG wells need to be drilled. Given the average drill time per SG wells is around 3 months then it wil take about 1,500 rigs to drill those wells in one year. Or basicly the great majority of rigs in existance today. Certainly possible if the drilling companies have the incentive to build all those new rigs...existing rigs today will be long worn out and gone by 2034. OTOH if NG is selling for $25/mcf (2010 price) then we might see a lot more than 12 TCF produced. Then again have you seen anyone predicting a 600% increase in NG prices by that time?

As far as Icahn’s purchase of CHK stock as part of his SG play I suppose you and Carl missed the press release from the CEO of CHK a month or so ago: Not only is CHK completely out of the SG drilling biz they are not going after any NG plays. They will strictly be going after oil. Icahn has made many smart moves but that doesn’t prove his acquisition of a position in CHK is one of them. But it may be a great investment. But if it is it will have nothing to do with the SG plays. So we don’t have an argument about why he bought CHK: they are not in the SG drilling biz.

BTW: he lost his ass as a result of taking over my company. He won a battle to take over a company whose reserves didn’t amount anything. He had to file bankruptcy for the company and liquidate what little assets they had. Carl didn’t realize the value of any company with very limited assets is it’s staff. And in our case the staff he didn’t fire quit shortly there after. And thus he was left with a company with no drilling potential because we were all had left, a $100 million bond coming due they couldn’t pay $1 on and a big chunk of plugging liability for some crappy offshore fields. Needless to say this is not a project you’ll find on his resume.

Talisman: I’ve heard of the Montney but don’t know nearly enough to characterize its economics. So any details you can contribute would be appreciated. For instance how many SG rigs does Talisman have drilling now? How much acreage have they leased? What are the typical expire dates of those leases? That would be usefull info for anyone you might have inspired to buy into your company. I also disagree with Art: there are economic SG wells to be drilled today. Just not nearly as many as when NG hit $13/mcf. As far as Devon’s stock price I’ll let you quiz Wall Street about that. I didn’t say their stock was destroyed (although at $76/share they are down almost 40% from their high a few years ago…that would have been the time to sell all your $20 shares). So it may have quadrupled in the last 10 years but they lost almost half their value in the last 3 years as result of SG drilling while at the same time finding huge amounts of oil reserves in DW GOM and Bz….none of which they own today. BTW: I bought my position in Devon when it dropped below $40/share a few years ago because I knew they were worth a good bit more. Sold at $72 and pocketed a nice 35% return. The stock has been pretty flat since then. BTW: did you catch the press release from the Devon CEO a month or so ago? Essenetially he said that even if NG prices were to rebound strongly it won't be of much help to his company. He explained that most of the SG wells they drilled during the boom have greatly depleted with a rather limited amount of reserves left to produce.

Devon, as a company, is just a skeleton of their former self. Massive lay offs along with selling all their high value assets like DW Brazil. Leases which are likely to be the last leases any foreign company will be able to own in this biggest oil play on the planet today. The Bz govt won’t even let Petrobras lease any more right now. They also sold off their DW GOM...some of the biggest oil discoveries in the US in the last 40 years. I know those fields...sat on a number of them when they were being drilled. All they have is a few sweet spots left drilling in the E Texas SG play (remember I agreed that Art was wrong about no economic SG drilling left) and a small piece of a Canadian tar sand field. Their stock might be a great investment: they laid off hundreds of expensive (and one of the most talented groups I've ever worked with) staff and sold billions of $’s of assets to pay off their huge debt load. But they are far from being what they once were: by some measures the second largest independent company in the USA.

I hope I haven't overwhelmed you with facts. But I've been in the oil patch for 35 years and have been very involved with many of these plays as well as being intimately involved with some of the major players we've been chatting about. Difficult to ignore what I live and breath every waking hour of the day.


Icahn has a reputation of leaving companies worse off than when he arrived. He goes in with the intention of filling his pockets then gets out when he has done that or is it looks like he will fail. The score board for companies he has touched speaks for itself. Yahoo is a recent example. Your experience does not surprise me at all.


NAOM - Carl doesn't get the whole credit. Our selfish management did their share to destroy company value by throwing in an ill concieved poisen pill. Their primary goal was to preserve their salaries and not the company's viability. It literally became a battle between the two sides over who was going to captain the Titantic after it hit the berg. My engineer and I increased company production by 400% in just 12 months utilizing horizontal wells. That effort combined with a few savvy production acquisitions increased the stock value over 10X in just 4 years. Carl saw those results and we became his second hostile oil company effort. Some how Carl couldn't figure out it was the human input that that made the company successful..not just punching a hole in ground anywhere you felt like it. After a couple of years they brought me back as a consultant since I knew where the potential lay hidden. I generated 6 drilling projects which could have saved the company. The new management liked the prospects and were going to drill them but Carl canned them before I could present the projects to him. I don't know how the talent factor fits in other industries but over the last 35 years I found that probably less than 20% of the explorationists can consistantly find oil/NG at a profit. It has been just that difficult to do. Carl, just like many experienced oil patch managements I've worked with, thought that all you had to do was fill some offices with bodies and drill your way to success. Not unlike many in the "drill, baby, drill" gang we hear from these days.

Carl, just like many experienced [fill in the blank] managements I've worked with, thought that all you had to do was fill some offices with bodies and [fill in the blank] your way to success.

Seems like we could call that the modern MBA mantra, or something of the kind...

Exactly. It must have been gutting to get those sort of results then watch what came next. Look at Yahoo now, massive layoffs. Compare that to their rival Google. Google has steadily taken on new staff concentrating on quality. Google has leveraged their people to drive the company forward. Icahn tried corporate juggling at Yahoo and left it worse than before. The issues of his other acquisitions was examined at another place and the records of the before/after on companies was very poor with companies ending up in a much worse state. His goal has been to build his personal fortune without regard for what happens to the companies he touches.


Talisman: I’ve heard of the Montney but don’t know nearly enough to characterize its economics.

With gas at $4/mcf they can't possibly be making money on it. Most likely Talisman is just drilling wells to keep the leases from expiring, in anticipation of a future price increase. Once you have a producing well on it, the land is yours regardless of whether you actually produce the gas or not. Nothing in the lease agreements says you have to produce it at a loss during a period of low prices.

It's their partner Sasol that I'm not too sure about. Maybe they've just got too much money and don't know what to do with it. The gas-to-liquids plant they're proposing doesn't make much sense, either. Although I'm not a big believer in EROEI as an economic indicator, the EROEI of GTL is something like 0.6, which can't be very economic. By contrast if they just pipelined the NG to the nearby oil sands in Alberta, and used it as fuel in an oil sands project, they could have an EROEI of 6.0

Of course at $4/mcf the oil sands producer would be making all the money, and they would be making none, so maybe that is the rational behind the GTL plant. Lose money on the gas and make it up selling diesel fuel.

I bow to your knowledge base Rocky. But I did have my doubts bout the economics. I also wondered about pipeline capacity. I now it has improved with the Express. Do they typically have shutin royalty requirements in the Rockies? Fairly common in Texas and La. Not usually a lot of money but the operators does pay to keep a well shut in.

TransCanada Pipelines is building a 36 inch pipeline into the Montney Shale region which will connect it to TransCanada's Alberta Pipeline System. The Alberta Pipeline System probably has enough capacity for most practical purposes.

TransCanada Alberta Pipeline System connects to TransCanada's Canadian Mainline System, which runs to the Quebec/Vermont Border, and to its Foothills System, which ultimately delivers gas to the US Midwest, Pacific Northwest, California and Nevada.

The competing Alliance Pipeline System also extends into the area and runs from there to Chicago.

The leases would be written with the British Columbia government. I don't know the details of them, but they probably would not have shutin royalty requirements. Regardless, Talisman is not exactly short of money to pay them.


Thanks as always for your thoughts and comments. I’ll make just a few comments.
Regarding stats on the Montney, Talisman holds about 271,000 acres in several developments up there, held under 10-15 year leases. They project a contingent resource of 44 TCF on this acreage, have current production of 50 mmcf/d and spent about $450 million on their capital program there in 2010, including an 8 well pilot program in a new development. The piece they are JVing with Staoil is 57,000 net acres, where they see a contingent resource of 9 TCF and have four rigs running. For their 5 wells with more than 200 days of production data they show a decline curve modeling about 7 BCF per well.

Regarding Chesapeake, I am indeed aware of the shift to oil, but methinks it is a bit of an overstatement to say they are no longer drilling shale gas wells. In fact, as of a couple weeks ago, they still had 96 rigs drilling gas wells, or about two-thirds of their rig fleet, and there is no doubt that most of those are drilling horizontal wells in shale gas plays. It’s true that they will be shifting more and more of those rigs to their new oil and NGL rich plays over the next few years as they drill enough wells to HBP their shale gas leases and that they are not out there looking to drill new gas wells that they don’t need to drill. But to say they are “completely out of the shale gas biz” is certainly an overstatement.

I defer to your judgment on what Devon is and could have been -- it’s not a company I’ve spent a lot of time analyzing.

Cat - Those long term lease make a huge difference. Even US fed leases typically run only 5 years. Those hot private leases that were going for many thousands of $'s per acre were just 3 to 5 years terms. Even more important many leases had high rentals: for instance pay $3.2 million for a 640 acre lease ($5,000/ac) and every year on the aniversary of that lease you pay another $3.2 million if you haven't drilled the lease. And another $3.2 million every year after you don't drill. These rentals are what really crippled many US SG players: they couldn't justify paying big rentals while waiting (praying) for NG prices to recover.

Not sure how the CHK rig numbers play out. Being out of the SG biz wasn't my statement: it's almost verbatem what their CEO said. And not just SG but all NG plays were off the table...strictly playing for oil. Again, his words...not mine.

A 7 bcf URR is impressive compared to many of the US SG plays. Many down here were looking more like half that amount. But the numbers you offer don't seem too profitable. If I understand you right they are doing 50,000 mcf/day. Even assuming that's net NG after royalty and a $4/mcf price it looks like it will take over 6 years to payout that $450 million assuming the wells don't decline at all during those 6 years...a very poor assumption IMHO based upon the high decline rates seen in all the other SG plays. But I also get the impression that they've spent more than $450 million since you state that was just what they sent in one year. Maybe I don't have the numbers correct but it sounds like more like 10 years payout. Not so hot: you can buy exising NG production in the US today for around 5-7 years payout...at most. We bought a few NG wells 6 months ago for a 22 month payout. An exceptional deal because of the circumstances (a desparite former SG player) and not typical. Have they ever stated exactly what their cost is per mcf developed? Might be close to what NG is selling for today but that's where those long term lease kick in: 5 or so years from today NG might be selling for twice the current price. OTOH many of their SG wells producing this year will be significantly depleted in 5 years.

If they project 44 tcf on that lease block and have an average URR of 7 bcf then they have to drill over 6,200 wells to fully recover those reserves. Just a rough guess but at $5 million/well that represents a capex of $32 billion just for the wells. Certainly doable if they have deep enough pockets. Possibly why they teamed up with the Norwigians. But I'm not familiar with the term "contingent resource". Is that the amount of NG inplace? Technicaly recoverable? Economicly recoverable? You probably have more detailed numbers available to you so do they give the total cycle cost to develop one mcf of NG? In the end that's the more meaningful stat to me...gives some sense of the play's sensitivity to NG prices. For instance it was costing Devon around $6/mcf to recover SG in E Texas. Needless to say when NG fell below $4/mcf most of their SG acreage became undrillable.

From the details on pipe line expansion Rocky offered it doesn't sound like an outlet for the NG is going to be as big a problem as I had suspected. Back in '08 some of the Rockie Mnt opertors were taking as little as $0.75/mcf due to very limited pipeline capacity.

Rockman - I was looking over Talisman's web site, and as Catman says the leases are 10-15 years, so lease expiry is not the driving force. However, Talisman only drilled about 16 wells in the Montney Shale last year, so they're obviously not in a hurry.

15 year leases are rather generous, but I guess it's whatever the BC government wants to do. They obviously are willing to wait for their money. I'm more used to 5 year leases, where you're always under pressure to drill it or lose it.

Talisman claims their breakeven costs in the Montney are $4/Mcf, and since the market price is around $4/Mcf, I guess they're breaking even. There's a lot of gas at that price. As you noticed, Canadian shale gas plays are large compared to US ones. And it's not really shale gas - the Montney is kind of a sandstone so the permeability and porosity are better than you would expect.

I think the real driving force is that Talisman has too much cash and doesn't know what to do with it. Their cash flow is from their North Sea oil fields, but there's no point in drilling any more wells in the North Sea because it's fully developed. So, they're sinking the money into shale gas and hoping prices improve in the long term. It will take 10 years before their North Sea oil production drops off significantly, so they've got time to wait.

The pipelines are there or being built to take the gas out to anywhere from California to New York, and in addition there is the proposed LNG terminal at Kitimat which would allow them to export it to Asia. However, at current prices the economics are marginal - which is probably why they are doing the JV with Sasol to build a GTL plant and convert it to diesel fuel. As you may have noticed, China is short of diesel fuel.

The trick with the rising cost of production is dropping EROeI and falling EROeI means shrinking economy.

Carnegie Mellon has a neat bit of software that lets you determine the amount and type of energy used in each economic sector to produce a $ of goods sold. http://www.eiolca.net/ This includes all fuel burned, but also all the energy in the steel, labor, trucks, buildings, etc used by the petroleum industry. (It is really fun to see the amount of livestock food consumed by the petroleum industry indirectly by all those hungry oil hands eating hamburgers!)

I reworked the CM numbers to get the energy per $ invested by the industry (oil and gas prices bounce around too much for selling price to be very helpful). What I calculated is about 24megaJoules per $(2002) invested.

So why does this matter? Because at $12/Mcf to produce natural gas the industry is using 1/3 (30%) of the energy in the natural gas to get the gas. Over most of history that number has been less than 2%. That does count separation at the gas plant, but not transport or storage energy usage, or losses at point of usage.

Basically, any economy powered by $12/Mcf gas will be forced to shrink by 1/3 its current size (which it is now doing) or become 30% more efficient to compensate. I agree, there will be a lot of natural gas at higher prices. But I also think people should brace for one hell of a downward step in lifestyle, as more and more steel, labor, fuel, etc need to go into primary energy production.

We are in for a lot of ups and downs as rising costs of production keep putting the economy into recession, cause NG prices to fall, eventually recover, and repeat the cycle.

Oil Supplies in U.S. Fell 5.8 Million Barrels Last Week, API Report Shows:



Larger Than Expected BOE Drawdown Sends Crude Off To The $100/Barrel Races:


... and the Baltic Dry Index is plummeting:



Go back to that link and scroll down to where you can pick a time frame. The five year view provides a different picture. There was a steep decline in 2008 and the index as muddled along much as the economy over the past 2 years.

Summary of Weekly Petroleum Data for the Week Ending December 17, 2010

U.S. crude oil refinery inputs averaged 14.9 million barrels per day during the week ending December 17, 48 thousand barrels per day below the previous week’s average. Refineries operated at 87.7 percent of their operable capacity last week. Gasoline production increased last week, averaging 9.5 million barrels per day. Distillate fuel production increased last week, averaging 4.6 million barrels per day.

U.S. crude oil imports averaged 8.7 million barrels per day last week, up by 1.1 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.5 million barrels per day, 479 thousand barrels per day above the same fourweek period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.0 million barrels per day. Distillate fuel imports averaged 217 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.3 million barrels from the previous week. At 340.7 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 2.4 million barrels last week and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 0.6 million barrels and are just above the upper limit of the average range for this time of year. Propane/propylene inventories decreased by 3.5 million barrels last week and are in the lower half of the average range. Total commercial petroleum inventories decreased by 6.0 million barrels last week.

As we have seen frequently in recent weeks, oil inventories dropped faster than most all energy analysts expected. Analysts are still blaming the 18 million barrel fall in oil inventories over the last four weeks on year inventory adjustments for tax considerations. In general, this has occurred because US demand is higher than expected and overall imports have been lower than recent trends. So we are still in the midst of oil supply squeeze - that has resulted in what I dubbed a ‘mini-spike’ in prices. Few thought that as the price of oil past $80, and now $90, that US oil and product demand would be increasing – but that is exactly what is happening.

Oil imports snapped back smartly from last weeks’ low levels – aided greatly by Canada and Mexico. Imports from Canada increased by about 3 million barrels last week, recovering from an Enbridge pipeline break earlier in December. The same amount of suspended oil imports due to the break were also about 3 million barrels. Imports from Mexico were the highest in a number of weeks, apparently in response to weather delayed imports the prior week. There were also no shipping reports last week of China unexpectedly getting an oil cargo from Mexico otherwise intended for the US.

Oil product imports also increased sharply last week, but the increase in products was for the less used ones: propane, residual fuel, and ‘other oils’. Going forward, recent reports indicate that distillate and gasoline imports may actually fall in the next few weeks.

Overall US product demand, up 4.1% in the latest four weeks as compared to last year, continues to beat the expectations of the EIA. The most recent estimate of the short term demand projections of the EIA, issued on December 7, is still well behind actual consumption trends – as their estimates have been for most all the second half of 2010. If the EIA is right about 2011, where gasoline consumption grows by 0.8 percent, and distillate fuel consumption increases by 1.7 percent, net oil and product imports will have to be maintained at the high level we have seen only in the most recent week. It’s not clear in the longer term if the US will be able to maintain a level of oil and product imports needed for economic growth – that is without paying even higher prices for oil, as it competes with China to secure the dwindling amount of marginal supplies available.

Note: The EIA has announced that its next weekly oil report will be issued on Thursday, December 30 at 11:00 AM.

Peter Beutel's comments from about four months ago:

August, 2010 (Peter Beutel): Oil Should Be Around $10 a Barrel

The price of a barrel of oil would be closer to $10 if the commodity wasn't traded as an investment instrument, given the record-high levels of U.S. oil inventories, Peter Beutel, president of Cameron Hanover, told CNBC Monday. "I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn't be anywhere near where it is," Beutel said.

"We have so much oil right now, more than we've had in 27 years. Why is it 27 years? Because that's how far our records go back. It's probably the most in 50 or 100 years," he added.

Some further thoughts:

Reports today from oil analysts, and stock analysts like Gartman and Schork, continue to state that the year-end plunge in oil inventories was mostly planned – due to tax planning for the avoidance of taxes on the unrealized appreciation of inventory. If so, one would presume that oil imports would pick up early in the New Year, following normal seasonal patterns. US oil imports actually did have a very good month in January 2010 after a poor December 2009, but that appears unlikely to reoccur in 2011, if OPEC oil tanker tracker, Oil Movements, is right – it does not see any pickup in OPEC imports into the US early on in 2011. Further, shipping reports for VLCCs indicate most all of oil exports from the Mideast in the next weeks are headed for the Far East, indicating the surge in Chinese oil demand starting in later November 2010 has not moderated much.

Elsewhere, despite gasoline supplies in the Northeast stabilizing last week, the Colonial Pipeline will still be fully allocated, that is shipping the maximum amount of gasoline, into the second week of 2011.

LOL read below :)

Its towards the end of January when life will get verrry interesting.

So let me get this right. Oil prices are rising because of inventory destocking that was planned. This makes
the inventory worth more at year end forcing even more de-stocking ?

Riiiiiiiiiiigth :)

Not that destocking might not be happening I just love the spin.

Well I'm watching BIDY


It might have now peaked it will be 2-3 weeks before we know for sure.

What I'm looking for is BIDY to peak and start to fall over the next say 2-3 weeks and then oil prices head higher.

What this should look like I think is a bit of a surge in imports or at least imports remaining fairly level over the next 2-3 weeks.
Then a fall off with I think BIDY rolling down first.

So if I'm right the current surge is primarily from producer storage and it should peter out within the next 2-3 weeks.
Oil prices will probably start to really flatten out and perhaps even fall a bit.

If I'm right about where I think we are then we should then see a surge to 100-120 say late Jan perhaps.

Basically I think our current situation is pulling down what ever buffers we have in the system. If so then short term things should stabilize but if demand remains I think it sets us up for what I consider our first real serious bidding war for oil in a long time.
Right now I don't think thats whats happening as the higher prices seem to be resulting in some incremental surge in supply.

If my crazy theory that oil prices where held down using OECD/Chinese storage then this state is simply producer storage and I think by sometime in January this will also end. Thus finally setting the stage for simply not enough oil.

There does appear to be a pickup in trans-Atlantic 'dirty' cargo shipping in the past week that has pushed up tanker rates a bit, as you mentioned. It's not clear to me if this represents 1) shipments intended for Europe but could not reach port because of bad weather, so they were sent instead to North America or 2) more shipments of diesel from the US to Europe, to replenish the drawdown in Europe's diesel inventories (which I previously mentioned over the last few weeks). Possibly both reasons are creating some tanker increased demand, with tankers crossing paths in the Atlantic.

Please note I make no claims to be a shipping expert, and it's not clear to me exactly what the net effect of this translantic shipping will affect inventories. For example, US oil inventories may rise but that would be offset by a fall in US diesel inventories.

As far as China goes, their refineries basically ran flat out in November:

Most domestic refiners continued to operate at full or near full capacity in November


The interesting thing is that even while pushing refineries to the limit, product imports increased significantly in November and December. This implies that China is now having great difficulty meeting demand. So in regards to their working inventories, one would assume they just don't have much spare capacity and would be inclined to build up inventories to more comfortable levels.

I think the key is to see how all this plays out over the coming months. So far at least whats happening at the moment seems to be related to a number of imbalances in the global supply situation. Distillate inventories in Europe and China and Gasoline on the US east cost. And I agree low inventories in China and probably also Europe. In the US its probably also at least some oil inventory imbalances with the stockpile at Cushing of little use.

This will either work itself out over the coming months or not. Regardless it will take a few months to mature.

If the rising BIDY is primarly caused from moving around and refining some remaining storage both at consumers and also producers then I expect that shipping rates will flatten and perhaps fall. Obviously costs for tankers is influenced by the price of oil itself so you have to do some discounting of the increase in rates to account for higher bunker fuel costs.

For example the recent rise in BIDY has not kept up with the price.

Compare BIDY now to 2008 when we last hit 90 dollar oil or even the recent price spike so far the response has been the smallest yet for a obvious new high in oil prices.

My opinion is whats happening is we simply are not seeing the volumes of oil being shipped like we used too even in relation to earlier in the year. And its not small. On the BIDY the last peak back in Jan was about 1200 this one so far is 1073
1073/1200 = 0.89 or about 10% lower response even though oil prices are significantly higher. Depending on how you want to correct for the price differences its more say at least 12%.

I've got no way to convert this to oil but heck a simple assumption is we have about 10% less 90 dollar oil moving now than we had back at the start of the year. And way less than we had back in Jan 2008. I'm not saying that daily supply is 10% lower on average but the response to strong prices seems to be about 10% lower. If the demand in Jan resulted in say a 1mbd increase in oil and products being moved then this time its 900kbd.

If I'm right then this should fall off over the next few weeks even as prices rise. I don't think demand now is substantially lower than Jan 2010 indeed its almost certainly higher overall this implies that the current storage/supply logistics problem should worsen substantially by later on in Jan.

What right now seems to be more of a balance problem should turn into a real supply problem. If I'm right even as all this shuffling happens overall inventories of oil should drain down rapidly till shuffling oil and products around simply does no good.

This would mean price would have to rise to kill demand. As far as OPEC goes even if they have spare capacity I don't see them using it until reported US inventories are much lower.
KSA can always surge a bit of unsustainable production so even I feel like they can at least may a show of opening the taps for a short period of time.

Regardless of what they can do I just don't see them doing anything until US inventories have at least fallen to the middle of the five year range or lower. I don't see US oil inventories falling that low without prices hitting 100-120 at the minimum.

If they are capable of producing enough oil to establish a new price band I simply cannot see it being lower than 100-120 range.
And this would be established with overall world oil inventories and esp the US sitting in the middle to lower end of the five year range putting a strong bottom on prices.
I just can't see a lower price band.

If we do see demand start to drop at those prices more likely than not you will see OPEC roll back production some to try and hold a 80-90 range with US inventories remaining in the middle of the five year range.

Regardless I think no matter what its a safe bet that oil will enter the 100-120 range given the way things are now.

Everything I can see right now suggest we are going there.

If OPEC can't really do anything then well oil prices will rise until demand pulls back if they can well I have to believe they will only act once overall inventories have decline quite a bit more. So if OPEC can control prices then over the next few months they will be in the driver seat and high oil inventories will not be a factor.

The Baltic Dry Index (BDI) is a measure of the daily spot price for shipping dry bulk cargo such as coal, iron or and agricultural products. The Y in BDIY, is just Bloomberg's own reference, if I recall correctly.

Oil is considered wet bulk and is not included in the BDI. I do not think there is a reliable wet bulk index.

Unfortunately you don't recall correctly.

The Bloomberg BIDY is not the Baltic Dry Index. That's the BDIY at http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Baltic Dry Index

The BIDY is the Baltic Dirty Tanker Index at http://www.bloomberg.com/apps/quote?ticker=BIDY:IND

Baltic Dirty Tanker Index

The Russian storage is down by 202,500 tons of oil and 21000 tons of oil products.
The data are reported on a weakly basis.,
Last week they were also down. Together some 60,000 tons, if I recall correctly.


Nice summary. Perhaps we will soon call this the great shuffle, because it appears that China’s demand and cold weather in Europe have suddenly caused traditional shipping routes to change – and even reverse.

For example, is the US going to become a net exporter of products? And another question, is the world demanding the same combination of oil products per barrel that refiners can produce, and even if so, won’t increased cross-shipping increase the final consumer cost? Suddenly the closing of various refineries around the country, especially in the northeast US, doesn’t look like such a good idea (although such closures were driven by very low profit margins and possibly some emerging environmental considerations).

Shipping reports today indicate an improvement in oil tanker demand out of the Mideast for the first 10 days of January 2011, as compared with the last 10 days of December - which are usually slower due to Christmas. However tanker tracker, Oil Movements, doesn’t see much if any pickup in net OPEC exports (although not indicated below, slightly higher than early Dec. 2010). They do seem to agree with some other statements I’ve made that oil export surge to China, starting in November, may finally be winding down in January – although still taking away some supplies that may have otherwise went to Europe or North America. If so, we may finally get a break early in 2011 from the ongoing ‘mini-spike’ in prices, to be followed later on into 2011 with more serious supply demand problems. That would be from the US, Europe, and China all trying to restock at the same time to avoid outright shortages later on in the year. This should make for a very interesting 2011, if the world economy holds up somewhere about where it is now.

12/23/10 Reuters News 16:30:28

OPEC exports to fall in 4 weeks to Jan 8 - analyst
LONDON, Dec 23 (Reuters) - Seaborne oil exports by OPEC, excluding Angola and Ecuador, will fall by 50,000 barrels per day (bpd) in the four weeks to Jan. 8, an analyst who estimates future shipments said on Thursday.

Exports from the group will fall to 23.51 million bpd on average from 23.56 million bpd in the four weeks to Dec. 11, UK consultancy Oil Movements said in its latest weekly estimate.

This is the first fall in sailings since the four weeks ending Nov. 27, it added.

"There is always a turn down at the beginning of the year," Roy Mason of Oil Movements said.

"Behind it is a fall off in eastbound sailings, which were at a level that was completely unsustainable."

If anyone knows how to disaggregate actual US domestic distillate demand from the distillate we refine domestically, but then export, I'd really appreciate some guidance on those data points and which EIA document or browser to find them. TIA. -G

Cheers, and thanks. For others who are reading this thread, I think there has been some misdiagnosis of the "resurgence" of US oil demand in 2010. According to the most recent MER from EIA, YTD 2010 petroleum demand in the US is 1.49% above the similar YTD period in 2009. I'd hardly call that a recovery as it's measured from a deep trough. Further, US petroleum demand remains well below 2008 levels.

The US has not discovered a formula to revive domestic demand for petroleum, but, with all the excess refnining capacity we added to existing installations last decade we have indeed discovered a way to "demand" oil imports for the purpose of making products for exports.


If your goal is to keep prices of oil down and you don't have light sweet crude then importing crappy crude and refining it in your excess of complex refineries and then exporting the product does the trick.

1.) You show larger storage levels keeping prices down.
2.) You can hit the end market directly with distillates dampening crude demand.

Works till it does not and I argue you still need some light sweet.

Understand in the very in its all about distillates aka its a diesel world.
No diesel no economy.

Do you mean refinery output is up 1.5%?

Granted that doesn't appear significant by itself, but 2010 started off with falling demand. Demand is significantly higher in the second half of 2010 as compared to the first half, and at times distillate demand a few months ago was running 11% ahead of comparable month last year. Sorry, but I would call that a resurgence.

This doesn't help.
"AUGUSTA — Solar panels were installed behind trees, covered with snow, shaded by a barn or not tilted toward the sun. "

Energy Savings Prove Elusive

Dale McCormick, the director of MSHA, said at the time the alternative energy systems were being installed, public housing was in crisis because of high oil prices.

“We could have managed, monitored this better ... but all hell was breaking loose, it was $4.50 a gallon and we were in crisis, as was the whole world.”

Translation: The sky was falling and we started running around like a bunch of chickens with our heads cut off.
Consequently we now have proof that renewables don't work when installed and used by idiots! Way to go!

BTW as I read the article I just got angrier and angrier!

Here's my question, do these geniuses now think the crisis is over?!

I agree that it's frustrating, Fred. My worry is that they (or in Maine, "we") learn the wrong lessons from this first go-round, first for the State Housing Authority, anyhow.

Sure, they sourced the wrong vendors, or gave them conflicting requests or some-such, and had inexperienced folks taking on tech that they didn't fully understand. Let's hope the conclusion is to learn from the experience, not just to write off the failed tests because they did them wrong.

This was my comment at the Article..

[ "..and we found out that some work and some don’t."

I hope the lessons learned were a little more in-depth than that. Clearly, a system that is installed wrong will give poor results.. but that doesn't disprove the technology. Same thing goes for a system that is operated wrong, or has a design flaw, like the Wind Turbines that shut down and didn't restart properly, or the Noisy equipment that was being turned off by the users.

After the finger-pointing is over, I hope there are folks who are willing to look at the Prototype-program and figure out where there are simply problems that can be done with more care and experience next time.

Energy in Maine is going to be a very serious problem, and we'd better not give up on everything because "We tried it (badly) and it didn't work!" ]


My favorite anecdotal gee-duhh storey was about an appartment complex that installed solar hot water heating (which didn't work). The panels came from Australia, and the doo-doo contractors followed the directions which said to put them of the north side of the building!

OMG, any time a person makes a mistake...lol...and yet no one died because of this, and all the mistakes can be fixed with trivial expense. Hate to point out what happens, on the other hand, when fossil fuel systems fail, people tend to die in a fireball. Recent examples are BP's platform explosion, TX refinery disaster, coal mine explosions, NG line eruption in San Bruno, CA that incinerated 4 people in their own homes.

PV systems can and do cause serious injury if don't know what you are doing especially if you are working with high voltage DC.

An arc fault is a fault in the high voltage wiring of
a PV system that can cause a high-energy discharge
that can potentially trigger a fire in the presence
of combustible material. Arc faults pose fire and
electrocution risks during installation, operation
and maintenance of PV systems.

From the article: "Of the 10, the report found six were poorly installed, including one where the solar panels were put in upside down...".

Upside down? Eh? They're essentially always rectangular and there's nothing inside to spill out, so which way is "upside down"? Oh. Wait a minute. Is that "upside down" as in the active side facing away from the sun and towards the ground? OK, maybe no surprise, just classic government - nothing works: overpaid tenured sloth, obstructionism, and incompetence all around. ROFL if it weren't so sad...

For godz sake PaulS, we all know by now that you hate government. Give it a rest. You're beginning to sound like a 15-year-old who's just discovered Ayn Rand.

It's not like your beloved corporate free-enterprise pals never f##k up. BP and the Gulf spill, classic corporate idiocy. Cut corners on everything. Ignore warnings from your engineers. Only thing that counts is bottom line. Run by bean counters. Incompetence all around. ROFL if it wasn't killing the planet.

"Of the 10, the report found six were poorly installed, including one where the solar panels were put in upside down..."

Were those the Australian ones?


They were solar hot water panels.

So, depending on the fluid path inside the panel, upside down installation could lead to significant flow bypass, and little heat transfer from the panels.


"Stupid is as stupid does." -- Forrest Gump

Just remember, you can't make it fool-proof because fools are so ingenious.

GDP report: Economic growth ticks up to 2.6%

NEW YORK (CNNMoney.com) -- The U.S. economy grew at a slightly faster pace during the third quarter than previously estimated, driven by an increase in business investment, the government said Wednesday.

The report was a disappointment, because the increase was less than expected.

Yuletide Fear: Europe cuts back amid Xmas gloom

Greeks dodge riots to do their Christmas shopping. Italians planning holiday feasts quietly stuff freezers. And the needy in Ireland are literally selling the family silver.

This Christmas, Europeans are hunkering down to an uncertain future, as a debt crisis that erupted last year in Greece flares anew in Ireland, and has quickly threatened to engulf Portugal, Spain, and Italy.

A whole way of life appears to be at stake as Europe's cherished social welfare nets begin to unravel -- and the very survival of the common currency is thrown into doubt.

When Banks Break Into Homes

In Florida, contractors working for Chase Bank used a screwdriver to enter Debra Fischer’s house in Punta Gorda and helped themselves to a laptop, an iPod, a cordless drill, six bottles of wine and a frosty beer, left half-empty on the counter, according to assertions in a lawsuit filed in August. Ms. Fisher was facing foreclosure, but Chase had not yet obtained a court order, her lawyer says.

The break-in was discovered when a Canadian couple renting the house returned from the beach.

Wouldn't it be legal to shoot these bank thugs in the face, especially in FL? I knew the carefree gun laws would come in handy...


Norway's hydro dam reservoirs -entire country- are in unchartered waters right now-

and it will become even more interesting ahead, you know entering winter proper >> January - Mars - (April) and all that

This chart is including Week 50 (2010) and grade of filling is at 51.3% (red line)- Median filling for Week 50 is 75,8 %.
For every 3 buckets of water we normally have, this year around we have only 2. And as the graph shows we rarely go under 20% before spring-thaw comes to our rescue- This spring we will flush our hydro stations with silty and muddy-bottom water.
Eyeballing the red line we may find ourself at ONLY 40% by New Years Eve.

If you like some background to this post- then read this Google "funny" translated article

Merry Christmas to all TODdies ;-)

Hmmm ... long range gas storage in the UK is also in uncharted waters ... we are just a couple of days into winter and rapidly approaching 50% depleted!


Not to rub any salt into UK's NG various 'balancing acts'. but Norway will start her two emergency NG power-plants just past New Year, according to this Google translated article

As you point out below the snow conditions here is a joke this year. Just a few Alpine resorts are open- helped by artificial snow- Otoh, temps to produce syn_snow is perfect :-)

California stole all of Norways rainfall:

An estimated 17 feet (5.2 meters) of snow has fallen at a monitor near the Kern River in California’s Sierra Nevada mountains in less than a week, according to the U.S. Hydrometeorological Prediction Center.

Central and southern California have borne the brunt of a Pacific storm that has dropped rain by the foot in some places, as well as heavy snow in the mountains, forcing officials to call for the evacuation of 2,000 people earlier this week.

“This is definitely a rare occasion for southern California,” Noel Isla, a National Weather Service meteorologist in San Diego, said late yesterday. “The totals in the end will probably be some of the highest in history.”

Tanbark in Los Angeles County recorded 21.58 inches (55 centimeters) of rain as of early today, according to the weather service. Twin Peaks in San Bernardino County measured 21.46 inches as of yesterday, weather service records show.


17 FEET of snow in a week. I can't handle the near record snowfall here of 28.8" this month. Amazing. Lot of flooding problems now too... Cars floating down rivers.

California stole all of Norways rainfall

Da^m%%¤ Yo#. There is no doubt Cali has gotten some of 'our stuff'.

And as for those 17 ft of snow in one week - incredible !!! Hat tip ! Give it another 10 weeks and ___________

My sisiter-in-law has just cancelled her annual cross country skiing holiday to Norway 'cos there isn't enough snow there!

I begin to wonder of Southern Cal will be the one part of the Southwest that will not get drier over the coming decades. Then again, it's all just running off, so without extensive home and business catchment systems, more water falling won't necessarily solve the problem.

LAX: 6.43" (163.3 mm) of rain in the 120 hours ending at 08:53 this morning. That is approximately half the annual average precipitation in less than a week. Given that the region tends to get its rain in focused doses that are widely scattered temporally (in the wet season), this situation is not entirely unusual, but of sufficient magnitude to be quite interesting.



Not only did we get a week of rain here in Los Angeles, but notice the temps? Not very winterly. Not cold at all.

Highs in the 60s F, lows in the 50s F.

Indeed. And along with mid-50s dew points. The conditions surrounding the recent rains looks like the familiar El Nino-fed rain-storms (e.g. tapped into the extra warm and moist mT air that can be present over the tropical east Pacific during El Nino, a la 1997-98), but there is only a La Nina in sight at this time. Very interesting.


Since we're chatting weather just a little update from Houston, Texas: we hit a record high for yeasterday's date - 82F. Thank goodness for global warming: a nice day to go shopping.

And yes..that was sarcasm.

Rockman, you must be a handful! We are having insane "global precipitation" on the west coast. Enjoy the weather.

Will do Oct. We've also had an amazingly dry fall. Usually the cold fronts (when they do zip thru) dump a good bit of rain on us. This year they've been mostly dry. Out west towards San Antono they just issue a burn ban. Normally don't see that happen until August. But I think this may be more of an El Nino/La Nina event.

The US NCDC lists the number of record High Maximum temperatures yesterday as:
New: 89 + Tied: 19 = Total: 108

There were also record High Minimums as well:
New: 81 + Tied: 12 = Total: 93

There were no record low minimums or record low maximums yesterday.

For 21 December, the record high maximums were:
New: 74 + Tied: 22 = Total: 96

The record high minimums were:
New: 110 + Tied: 30 = Total: 140

I wish some of that warmth would slide this way. Here in Western NC, we still have about an inch of ice on our road at the moment from the last round of sleet and freezing rain and the temperature is 24F at 12.45PM. I guess I won't make it to the post office today...

E. Swanson

Sadly most of the water will not be captured but will just go to waste.

California stole all of Norways rainfall:

The truth is finer than that, here in the bay area, we were supposed to have a huge rain week here, but LA "stole" most of it, we got about 2.5inches for the same week (about a whole months worth so not bad), but nothing like had been predicted. Jeff Masters has a good article on it. They call it an atmospheric river. Subtropical moisture from south of Hawaii, hitting a combination of colder air and topography.

Is Lake Mead getting any of this water?

click on "see data" for the precipitation map, then select a timeframe.


Defnitely a lot of rain, but I lived in Tahoe on year where we had heaps o' snow in December, but then it rained all of January before cooling back off for a decent spring. Hey...how did all these rounded boulders get in my yard....I'm a mile from the foothills? (Highly recommend McPhee's "Control of Nature", fwiw)

btw....in the past 10 years my lowest annual rainfall has been 4.5 inches, the highest around 46 inches (Eastern LA county). That's rain, not snow.


Although the shortfall in natural gas isn't much, apparently the U.K. issued a gas balancing alert earlier this week. Per www.gasissues.blogspot.com they are fortunate it's Christmas week so many factories are closed, else the demand would have been higher. Last winter there was some concern whether the gas in storage would have been enough.

There was some discussion of this in the Dec. 18 Drumbeat. Undertow had some pretty graphs.

Thanks! I had missed that earlier discussion. Very good (and pretty) graphs. I'm sure there will be more to come on this as the winter progresses.

Earl - In case you didn't catch it last week: they shipped a load of LNG from Sabine, Texas to England. Granted Sabine is the major NG storage hub in this country but it's still so strange. I've read that LNG takes about $3-4 per mcf to compress and ship across the Atlantic. So delivery is around $8/mcf so some profit to be made I suppose. Might have just been a test run to see if it worked well enough.

I've read that LNG takes about $3-4 per mcf to compress and ship across the Atlantic

In this case they didn't even have to compress it. Just turned around some imported LNG and sent it our way.

tow - Not completely sure but I think almost all exported LNG is under long term contract. Doing "swaps" to save transport costs is not uncommon though. But I suspect this was a one time deal that might be repeated if it makes the payers adequate profit.

It's bloody cold over here so we need all we can get!

CET (Central England Temperatures) coldest ever Decembers (1C or below). Normal December average 5.1C.

2010 -0.9 (first three weeks of month)
1890 -0.8
1676 -0.5
1788 -0.3
1796 -0.3
1878 -0.3
1874 -0.2
1784 0.3
1981 0.3
1844 0.4
1673 0.5
1678 0.5
1683 0.5
1846 0.5
1870 0.6
1879 0.7
1680 1.0

It should get slightly milder early next week for a bit but by how much and for how long remains uncertain (the atlantic air tries to break through the cold block) so we might not break the all time record for December. However, if you take the four weeks to date rather than calendar month we are already below the December 1890 low over the four week period.

I don't have the month to date average figures for other parts of the UK yet but they will be at or about record December lows as well.

I know our pain tow. Had to run the AC all day Wednesday...Houston hit a record high for that date: 82F. Just miserable. LOL. But I do feel for y'all: one winter working outside in Wyoming with temps occasionally dropping below -25F (and unheated Port-O-Potty) taught this southern boy what real cold was like.

I believe Sabine is a receiving terminal, not a train, so yes, it probably was just a sale of existing LNG.
Most LNG is on longer term contracts but they usually have a 10% over/under clause which leaves some wiggle room. Additionally the "spot" market (not really spot, just contracts inside of 1 year) has been growing in size vs. the term market.


Oil-soaked boom from the BP spill is being recycled into plastic parts for the plug-in Chevrolet Volt electric car, General Motors said Monday in a bid to boost its "clean and green" image.

Wow! That has got to put them in the running for the all time lowest and slimiest misuse, of the already pathetically abused word 'green', for the purposes of pure, unadulterated, mindnumbing corporate propaganda. Edward Bernays would be extremely proud!

Got any other better use for that boom?

At least the volt will (eventually) run on straight hydrous ethanol (E100) with no modifications. So we used a little (recycled) oil to make the car. Big deal, it can move on wind, sunshine, and rain. (wind & solar electric, bioethanol)

I'd call it silly and probably counter-productive since the (even more stupid) reactionaries that hate anything green with just end up even more against the Volt.

But why slimey? Nothing wrong with using recycled materials in your product. Nothing untrue in what they said.

BenjegerdesFarms & speculawyer,

I don't have a problem with recycling the boom or even the Volt. I have a problem with BP and GM pretending to be 'Green'.

It is all relative. And recycling that material is more green than just using virgin oil.

And though the hardcore EVers whine about the Volt, its 25 to 50 miles of pure EV is much greener than a typical car or a hybrid.

But yeah, it is more show than a real substantive effort.

Henry Ford of course knew the utility of reusing scrap material from his lines. Kingsford charcoal was made from wood scraps.

Industry reuses materials all the time. Now we call it green I guess. But it has happened for a while.

Any press on the Volt is demonized from my reading of things. Who are the people against the Volt? LOL. I wonder. Poor Volt. Poor "slightly noisy", "bird-killing", intermittent wind power. Poor CFL bulbs with their mercury. Poor Solar installations that "threaten" desert tortoises. Coal is scott-free, despite its mining safety records, habitat destruction, water pollution, air pollution, ash residues, which are low-level radioactive waste, and its mercury release issue. How can you green-wash coal? LOL -- invent the idea of "clean coal" LMAO -- I know it is cheap -- saves you a little green when pollution and environmental destruction is excluded from the math ;-) Volt, wind, and solar electrical engineers are unrecognized heroes, however. Little positive emphasis on the energy frontiers. I guess the lights will stay on and cars will move with wizards and magic in the future as coal supplies tighten up as the West ships its coal surplus to China to burn making disposable, non-durable consumer goods. LOL.

I give GM credit in this case. The PR is intensely smart. It contrasts BP's corner-cutting accident in the GOM to the making of a car that uses almost no gasoline for most trips. Since the negative energy from the movement against the Volt enjoys its funding from the traditional ______ (insert lobbyist group here), Volt folks probably rather enjoyed this, getting to rub a little salt in their wounds, reminding the public again of BP's reckless conduct. The PR makes the Volt seem like a solution to an oil problem. Minimally, at least the Volt, attempts to get at the core problem of our time -- yes of course with some flaws and short-comings.

The boom was stained with the crude so it was automatically classified as a hazardous material and had to be cleaned and disposed by a certified handler of such materials. Certainly cost more than the value of new material. But still a clever idea: gets a little attention by the public so hopefully the PR value outweighed the extra cost. Even if it gets a few folks thinking about conservation for a few minutes it was worth it IMHO.

Re. the America's Childlike Desire to Avoid Making Trade-Offs article above is certainly correct:

Trade-off time will finally be forced upon us.

At that point, the trade-offs will be much harsher than they would be now. But we don't want to make adult trade-offs; that makes us testy and pouty. Fortunately, Uncle Sam is indulgent; he can borrow trillions every year to give us everything we want--at least for now.

Unfortunately, "at least for now" appears to be over, and Uncle Sam knows is preparing for when we become more than just "testy and pouty":

"The threat has changed ... to worrying about people in the United States, American citizens -- raised here, born here, and who for whatever reason, have decided that they are going to become radicalized and take up arms against the nation in which they were born," (Attorney General Eric Holder) said.

Bring home the troops. We will need them.

Russia Was Misled Over Fuel for U.S. Use, Report Says

MOSCOW — For a number of years ending in April, two Pentagon middleman companies misled the Russian authorities into thinking that the large quantities of jet fuel they were purchasing were for civilian use, not military, apparently with the intention of evading a tariff, a Congressional report scheduled for release on Tuesday concludes.

...Once Russian officials discovered the true identity of the recipient, they cut off supplies, creating a major logistical headache for United States military commanders.

That breakdown forced a major redrawing of supply routes into Afghanistan for jet fuel, which is in chronically short supply in landlocked Afghanistan. It also touched off a major behind-the-scenes diplomatic effort by the Obama administration to rebuild the fuel lines.

The supply system — operated by Red Star and the Mina Corporation, two closely affiliated companies registered in Gibraltar and managed by former United States military officers — accounted for more than half of the jet fuel used in the war, the report said.

And here Can't Anyone at the Defense Department Do Oversight? Anyone at All?

Apparently it was all just an elaborate April fools joke perpetrated by the Russians.

In any case, the Russian Federal Security Service and the Russian Parliament investigated in 2009, the report said, and the trainloads of jet fuel from Gazprom started to dry up, halting altogether on April 1.

I wonder what they might have in mind for April 1st 2011? Whatever it is I'm sure it will be funny...

There's a terrific article in the latest New Yorker magazine entitled The Efficiency Dilemma - If our machines use less energy, will we just use them more?". It's a discussion of the Jevons paradox as it relates to energy policy. The author's conclusion: although it may not be possible to prove Jevons' paradox empirically, no one has yet successfully disproved it either. Behind a paywall, alas, but worth buying a copy. Abstract at http://www.newyorker.com/reporting/2010/12/20/101220fa_fact_owen#ixzz18s...

Jevon's paradox only applies when there is a cheap and plentify energy supply. You can't burn more oil if the oil isn't being pumped out of the ground as fast as it used to be.

There is a related effect, a higher percentage of the oil will be burned in more economicly efficient processes. Just less oil overall. The country (of any size) with by far the least economically efficient use of oil is the USA.

Export Land Model mark 2.

There is another article in the New Yorker entitled "The Truth Wears Off." It is IMO extremely relevant to anyone interested in how Science works (or doesn't work). Unfortunately, behind a paywall.

For some sad entertainment, I suggest reading the various comments to the news stories on the internet about oil hitting a two year high of $90/barrel.

Here check out this AP story on Yahoo!

NEW YORK (AP) -- Oil prices climbed past $90 a barrel on Wednesday as the government reported a drop in the nation's crude supplies. Benchmark oil rose 66 cents to settle at $90.48 on the New York Mercantile Exchange.

In its weekly petroleum report, the Energy Department's Energy Information Administration said crude supplies dropped by 5.3 million barrels last week from the week before. That's more than twice the decline expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. EIA said gasoline supplies grew by more than 2 million barrels.

It is very interesting . . . and very scary . . . to see what Joe Six-pack thinks. Basically, it is a hodge-podge of conspiracy theories:
1) It is the speculators fault! (for running up prices)
2) It is big Oil's fault! (for gouging us)
3) It is Obama's fault! (for not letting us drill)
4) It is the GOP's fault! (for being in bed with big oil)
5) It is the tree-hugger's fault (for not letting us drill!)
6) It is OPEC's fault!
7) China is buying up all the oil for a national reserve!

Sadly and not surprisingly . . . pretty much no one blames themselves for being oil users.

The ones that worry me most are the "it is the tree-hugger's fault" since it is wrong and yet it will be acted upon by people who vote against anyone not for drilling everywhere on the mistaken assumption that will reduce oil prices. "Drill, baby, drill" is going to make a big come-back.

If the Dems had some brains, they would just go ahead and make some deals to open up various places for drilling and get the best deal they can get. Because the only way that conspiracy theory will be killed is by actual drilling. Why not drill in ANWR? Every barrel of crude not drilled out of ANWR is dug up out of the Canadian oil sands which is environmentally much worse. We are going to drill there no matter what, so just get it over with already.

Sometimes you need to satisfy a bonehead that their boneheaded plan doesn't work before being able to get them on board with a real plan.

You left out:

8) It's due to rising demand in our red hot and growing economy

On CNBC this morning, one of the Nimbus cloud talking heads offered up the false choice menu of either A or B where A was:

1) It is the speculators fault! (for running up prices)

and B was:

8) It's due to rising demand in our red hot and growing economy

As you said, we could LOL if it weren't so damn f***ing sad.

Oh . . . I forgot the most popular theory du jour:
9) Oil is going up because of Ben Bernakke and his printing press!

Inflation will occur with increasing money supply . . . but you can't blame this one for any rises in the price of oil that are faster than all other commodities.

The WSJ has voted for number 8:
Oil Back at $90 as Growth Gains Pace

My favorite portion of the WSJ article follows. No worries, the world is "Awash in crude."

Unlike price spikes in 2005 and 2006, the chief culprit isn't a sudden disruption in global crude supplies. The world is now awash in crude: Iraq is expected to substantially raise exports next year, and Saudi Arabia has a secure cushion of production it can turn on at any time.

Oh, how history repeats.


spec - I suspect this is an example of the difference between a projection and a prediction. Anyone with a straight edge can project a consistant trend. Of course the error comes in when the assumption that a trend will continue on it previous consistant path just because it had a consistant path. Sort of how a pen raised turkey views its nice life...until Thanksgiving get close, of course

for safety's sake, don't stand too near that red-hot economy ....

waz dat? a red hot econo-chimney?

Happy Holidays

[ i.mage.+]
[i]= image, [+]= more info

Homo sapiens is a misnomer it appears.

Homo blame-iens is more like it.

I try to anti-blog these things with a peak oil answer, but it is futile. No one ever says -- hey oil depletion may be a problem thanks for pointing that out. Instead they call you a cassandra who believes lies that were cast in the 1970s and "proved" wrong. OMG we are doomed.

Hang in there, Oct!

There are things you can do about the roaring crowds, but outshouting them probably isn't one of them.

Off in quieter corners, build things that work, find people (like here) to have reasonable conversations with, and let's make what plans we can. Bit by bit, things that work will be noticed, and people who are tired of wasting their time will be looking for new solutions.. I think that's the best we can try to do.


.. to whit, my latest great epiphany has been to make breakfast Bacon and Eggs on the Woodstove instead of the Electric range. The woodstove isn't really made for cooking, and it's just supplemental heat on these chilly mornings.. but the wood has been coming in for free, (Neighbor with a company that sees palettes as simply an expensive waste product to get rid of, he drops a pile of them in my driveway, free shipping!) just a little cathartic smashing with an axe and I'm good to go!

Yes, it's a teensy detail, and no long future for that wood source, but the Elec. range is one of the bigger draws in the house.. so I'm glad to keep it turned off, and just simply remember that you can cook food over wood heat! Amazing...

While this may be obvious to those here, this is the main reason why oil is near yearly highs, well this in combination with the fact we are on some type of rolling PO plateau:

Oil demand rose by 3 million barrels a day in the third quarter, led by demand from developing countries


Anyway, I am inclined to agree and to say, you want drilling, you can have drilling - if only to end a tired and deceptive debate over oil reserves.

spec - Speaking for the entire oil patch I readily admit that #2 is absolutely true. We'll tap the crude buyers for every penny we can get out of them. As far as the public companies they are required to do so by SEC laws. For the rest of us privately owned companies it just common sense. We've been slammed for this since the age of the dinosaurs so there's no point in not admitting it. As was said in the movie "Blazing Saddles" - It's good to be King.

And confession is always good for the soul. Now I can sleep peacefully tonight.

Well sure, Rock. But it is free market out there. So if there is some oil available that someone can easily access and put on the market for less than the current market price, then someone will do that to collect the profit. That additional oil onto the market would bring the price down. But that just doesn't seem to happen very often anymore.

So despite your desire to gouge us for as much as you can get, the market just doesn't allow you to do that. The only exception being OPEC and their production quota limits. If they reduce output, the price would go up. But they seem to have relatively high output quotas right now and they seem be cheating a lot right now yet the price is still really high.

spec - You dare disagree with me! NO OIL FOR YOU!!! (spoken with the accent of the Soup Nazi).

Great! Now I've got this image in my head of Gabby Hayes speaking like the soup nazi behind a barrel of oil with a small ladle and a long line of people with little cups waiting for their portion of oil.. Oh, and there's a portrait of Matt Simmons in the background.

A nice Xmas gift FM...thanks

Call the Photo Shop. It will gin one up for you...

E. Swanson

I'm right there, but I'm also seeing Oliver Twist at the front of the line whimpering for 'just a bit more..'

PS, ROCKMAN, "It's good to be the King" was Mel Brooks all right, but I think the line was from him as King Louis in 'History of the World (Pt 1)' .. unless it was both.

If the Dems had some brains, they would just go ahead and make some deals to open up various places for drilling and get the best deal they can get. Because the only way that conspiracy theory will be killed is by actual drilling. Why not drill in ANWR? Every barrel of crude not drilled out of ANWR is dug up out of the Canadian oil sands which is environmentally much worse. We are going to drill there no matter what, so just get it over with already.

Great minds think alike. It seemed we (I doubt my blog comments had anything to do with it), just got Obama to agree to open up more drilling, when BP screwed the pouch. I think DW then made it politically unthinkable (at least for anyone on the left), so we are now stuck with the political dynamic as you see it.

But, given the nature of conspiracy theories, and the sorts of stubborn people who hold them, I don't think a demonstration of the ineffectiveness of drill baby drill would have any real impact.

But, given the nature of conspiracy theories, and the sorts of stubborn people who hold them, I don't think a demonstration of the ineffectiveness of drill baby drill would have any real impact.

Ugh. I just realized that you are completely 100% correct. Just one word: Birthers!

They release the birth certificate with a seal, the state of Hawaii certifies that Obama was born in Hawaii, Hawaii's Republican governor approved of the record, Hillary Clinton's dirt squad found nothing, McCain's dirt squad found nothing, there are notices published in two different Hawaiian newspapers when he was born then . . . yet the birthers STILL do not believe Obama is a natural born US citizen.

So yeah . . . as if opening up drilling would get them to stop thinking that we can't drill our way out of the problem? Nope. It won't happen.

Crap. We are so screwed.

No---not "we are so screwed"----a thousand times no!

We are so lucky.

We will see the end of the icky cars and the endless highways, such a boring color of gray cement. We will see the end of the hideous large corporations and their doublethink, doublespeak...

We will see people start walking, living, interacting again. Not with machines, but with rivers, mountains, fields.

Beautiful colors, nature is varied. We will have clean air again and better water. I am not saying it will happen tomorrow and it might take a hundred years to clear this system away. But anyway, I think we are lucky to be here to see this happening now.

Thanks, Pi!

I hope others can convince themselves to stop saying that we're screwed so much. What you say matters, it affects what you're willing to try and to work towards.

I just go back to Shackleton, and wonder how he and other men in that team kept themselves together for 18 months in Antarctica. They didn't lose a single life, IIRC. Not one. (Unless you count the dogs they had to eat to survive, alas!) Some pretty much lost their senses, sadly, but still, I hope people can keep in mind just how much damage is done with this constant 'certainty of failure'..

.. and on Christmas, even!

Best, Bob

(Ok, Chickening out with Obligatory Disclaimers..
Just in case it sounded like I don't think we're in very serious trouble, I do, and I don't pretend to guess at our chances.. but I just refuse to start out by saying 'Game Over, we're dead' .. )

I think this maybe a little rosy interpretation of nature-based life.

Of course it has it's advantages like clear water and very green trees, but if you ask me (29 year German researcher employed at Fraunhofer - topic energy efficiency of machine tools) i would not go back to the life of the 1500's without physical pressure. I am truely proud of all the knowledge which i have gained - thx to books, the net and others. From my point of view it is a nighmare for me to imagine myself as some illiterate guy how prays to a chimera all day long and working till i'm dead at about 40 - when i'm lucky.

And one more thing: I strongly belive (as Atheist) that any form of higer life has to make some "process" in the long run. I tend to call it "anti-entropy". I know this is not really the case in these days because our society increases the entropy of the universe for shure. But at the end we build some impressive stuff which otherwise will never spill out of a rock (correction: in a infinite universe this happens of course). Just to life "in harmony with mother nature" is of absolute zero value in the long run. Anyway earth is cocked in around 200 million years - and that's nothing.

This does's not mean i suggest some technological utopian vision in the near future or BAU - i strongly belief the games over for shure.

But i have some deep trouble with the idea of some natural "hunter-farmer" typ of human future. I think if that happens we have failed for shure. Maybe this is what happens to most "advanced" forms of higer life / compex societys. But one day one species will make another step of building a strong Artifical Intelligence and finally conquer the universe (as smart robots) - and that's truely a great vision.

Sadly i don't think this species will be humans.

climate change could really mean "game over" for a lot of life forms on the planet, including ours. I think we all might wish we had left those hydrocarbons where they were--in low-entropy land. In a sense by using them the joke has been on us.

Humans had thousands of years functioning well on earth, in other words. OK there was no electricity or automobiles....maybe there were things that we modern people would have found difficult to tolerate. Sure shorter lifespans were part of the deal. But there was no doubt that things could continue, virtually forever. Now we have doubts about that---climate change could really mean a huge extinction event. Plus, because of PO we might be facing a huge economic collapse that might spell suffering for millions. So when the dust settles, was it all worth it? The jury is still out, in a sense. But the argument for indicting fossil fuels seems to be slowly winning people over.

And I think all the machines surrounding us have created a barrier from real nature. In many ways we don't really like having this barrier. Millions of people are on medication for depression and other mental problems....probably they wouldn't notice these problems if they were living more in tune with nature.

Just to life "in harmony with mother nature" is of absolute zero value in the long run. Anyway earth is cocked in around 200 million years - and that's nothing.

I share the exact same feelings, so you're not alone.

I hate the idea of achieving a kind of 'stasis' with no direction and just waiting around until the sun destroys all life.

I really, really hope we can bridge the upcoming energy gap successfully and one day manage to leave the planet permanently. At least the timescale of the universe is likely to be measured in billions of years if not longer. Postpones the inevitable :-)

I hate the idea of achieving a kind of 'stasis' with no direction and just waiting around until the sun destroys all life.

I really, really hope we can bridge the upcoming energy gap successfully and one day manage to leave the planet permanently.

It's not "waiting around", it's called "LIFE". If you can't find meaning in life here on Earth, I suspect giving you access to a few hundred more planets won't help you.

Happiness is not so much getting what you want as being happy with what you've got. And I guarantee you we will never find a planet as hospitable to humans as Earth.

It's not "waiting around", it's called "LIFE". If you can't find meaning in life here on Earth, I suspect giving you access to a few hundred more planets won't help you.

Happiness is not so much getting what you want as being happy with what you've got.

Well, you may be right and you may get more out of life than me. I guess that's what makes existence so intriguing eh? :-)

I'd just like to know what's out there - just curious that's all and I'd find it a shame if we never did go beyond our tiny solar system. Still can't kick that childhood fantasy I guess!

Edit: Plus, for me personally I'm not sure that actually applies - I'm always happiest when I'm on the move, metaphorically and literally - not when I get there. So I guess interstellar exploration holds the same fascination. It's not that I would want more resources but just the act of travelling onwards forever. But each to their own?

And I guarantee you we will never find a planet as hospitable to humans as Earth.

But on this one I don't think you're in a position to make that claim. Unless you've already done a quick fly-by of the untold squibillions of planets out there somewhere...

OK. Good answer. Wanderlust. I can accept that.

As for Earth being the perfect habitat for humans, I consider it self-evident because we evolved here. The temperature, the pressure, the magnetic field, the composition of the atmosphere, the composition of the soils, all the bacteria and other gut-bugs that live inside us and perform functions for us. All perfect for humans. I doubt you will find that anywhere else.

And if you did find a world teeming with life, and could somehow manage to get there, I doubt you would be welcome. The foreign bateria alone would probably take you out (like in War of the Worlds) even if there were no large predators. And it's not entirely clear to me that you could get the proper nutrition from what you found living there unless the place was just. like. earth.

Well, you're probably more than likely right - after all, we did evolve specifically for here.

Still, on the off-chance that there might be a nirvana out there somewhere with all the benefits but without malaria, HIV etc. then we can still hold out an iota of hope!

Anyway, Christmas is very nearly upon us - and for you Scandinavians out there: Merry Christmas already!

"Still, on the off-chance that there might be a nirvana out there somewhere with all the benefits but without malaria, HIV etc. then we can still hold out an iota of hope! "

We would probably end up taking those things with us, although we might be able to leave the ex's behind. (Sure hope the last one does not read that, though.) We might find things worse out there, and since it seems like it will take several generations of us to make a journey, that would be a real bummer. I'd settle for just losing the rite-wing radio myself.

although we might be able to leave the ex's behind.

Well that gave me a chuckle!

We'll never leave orbit, let alone the solar system, unless some really radical change in the US, and humanity's mind-set occurs.

The last Apollo missions were cancelled and the reliability/capability of the Space Shuttle sacrificed for the money thrown away on Vietnam.

With the advent of the endless and even more expensive Bush/Bama Excellent Adventures in Iraqistan, we will be begging rides (with borrowed Chinese cash) from the Russians for the next 10-20 years.

But anyway, I think we are lucky to be here to see this happening now.

Well I'll grant you that we are certainly living in interesting times... as to how lucky some of us may or may not be, during the next hundred years or so, I suggest a little reality check.

Collapse of Complex Societies by Dr. Joseph Tainter 2010

Me, I'm pretty much convinced that most of us are screwed a thousand times over >;^)

"Collapse is the rapid simplification of a society."

Don't mind the billions of dead bodies on the way.

OK, great to see some folks warming up to the idea of calling the bluff, massively and decisively, on the 'Drill, Baby, Drill' crow.

Although there will always be some die-hard-heads, a very-well-publicized national campaign/strategy of opening every square inch of land and ocean and lake bottom in the U.S. to oil and gas exploration and development would grab a lot of peoples' attention.

Taxes could be put on holiday for all exploration in any previously forbidden areas, and the first ten years of exploration could be made tax-free.

Presidents and Congresspeople and pundits could blitz all media throwing the gauntlet down to the oil companies to do their patriotic duty, with the backing of the USG and U.S. people, to go forth and find and develop all that previously off-limits oil and strive to make us self-sufficient in oil. We could have a ribbon-cutting ceremony in ANWR and such.

The USG could demand inputs from all oil companies and academic institutions as well as its own geologists and publish a quarterly report detailing the progress of all discoveries and production efforts, as well as a rolling prediction of likely resources to be found and produced.

USG could advertise this information on a web site which clearly, using simple tables and graphics, depicts daily crude oil imports and domestic production, usage, etc.

Let this PR effort go for at least four years, then some future President can stand up and tell the people how it is, that there is not enough oil in the U.S. to satisfy our needs without depend on foreign oil suppliers...get over it, and now we have to talk about how to live within our means.

Shatter the illusion of the Matrix and move on with reality.

H - No need for the govt to spend millions to tally the results. There are private companies that do it for all drilling in the US. For about a $2,000/year subscription you, the govt or anyone else can go online and get a very nice and concise view of the progress of all the companies drilling in all the trends. Not just in the future but for the last 35 years or so. Typically d/l in Excel format so you play with the data to your heart's content. The only odd ball exception is Kentucky...they don't require companies to report their production. OTH KY doesn't really add much to the national pot.


Great, thank you for great info...all we need now is for the USG to lift the ban on ANWR and all the banned OCS areas and challenge our best and brightest to go forth and explore and produce!

A technical question: I assume that at least small areas in ANWR has been surveyed using various seismic methods (explosives, thumper trucks or whatnot)...but how do the oil companies seismically survey vast swaths of the OCS?

Has there been a tech post on TOD about the methods and technology used to seismically survey the earth for likely oil-bearing formations?

Are gravimetric measurements used?

Has there been any work done to try to use the natural earthquakes which continually occur to image parts of the sub-surface, sort of like a giant CT scan?

If there have been previous tech posts on TOD wrt to these subjects, I would be interested in reading them.

Or is talk about this too proprietary for the couple of experts on TOD to talk about w/o fear of breaking non-disclosure/confidentiality contracts?

H - Just a guess but I think much of ANWR has been shot with seismic. But probably could use some reshooting: seis technology improves a lot over short spans of time. The OCS is actually the easiest/cheapest to shoot. Ships pull the recording devices behind them (as opposed to having to lay them out by hand onshore). The energy source is typically an air gun…like a balloon repeatedly popping. Gravity/magnetics are still used but commonly only in the earliest stages.

Earth quake energy isn’t very useful. There is a very significant geometry requirement between the energy source and the recorders…sorta like doing a bank shot off the backboard of a basketball goal…get the angle wrong and you miss.

Nothing proprietary about most of the seis technology. In fact the companies that shoot seis will be more than glad to make a big Power Point presentation to you with lunch thrown in. LOL. Specific seismic data is usually proprietary but that’s a copy right issue...buy a license to use the data and you can pick up all you can afford. BTW the feds get use of all seis shot on gov’t leases…for free. They also get all the geologic and production data too...also for free. Bottom line there is very little oil patch data that isn’t available (for a price…often cheap) to anyone…companies, govt’s, the public.

As far as more info just Google “seismic exploration” and you’ll be flooded with the very simplistic to the very complex. The huge advance in the last 20 years is 3d vs. 2d seismic data. Essentially it’s just a very dense data field. But it allows a very clear picture of the geology miles below the surface. Sorta like the CT scan you mentioned vs. the old xrays. Has greatly improved the success rate especially for NG reservoirs. OTOH it has eliminated many potential drilling efforts…many companies won’t even review a prospect if there isn’t 3d seis coverage over it. We don’t: 3d seis is expensive but dry holes costs a lot more.


Thank you once again for sharing your personal knowledge with us.

SO, from what you said, I gather that the most modern 3-D seismic scans are good enough to be the deciding factor on whether to drill for a potential play or not.


So then, we merely need to drag the air guns and seismic arrays from behind survey ships over the entirety of the OCS and map it all, then we would have a decent understanding of how much oil in place exists?

When I say /merely/ I heard you loud and clear that 3-D is expensive..I'm sure ships and crews and trained geologists and technicians are expensive..but...mapping the OCS doesn't require inventing warp drive...just money, and we seem adept at magicking that stuff up.

So Uncle Sam entices the oil companies to do just this, by making the whole enterprise a tax writ-off, or even offering tax credits for every square kilometer mapped.

Heck, make sure that every inch is mapped by at least two independent operations to cross-check the data.

Do it, get it over with, and then we would know what was and wasn't out there and could properly scope the 'Drill, Baby, Drill' debate.

H - All of the OCS, including the DW GOM, has had 3d seis shot over it many years ago...in many areas several generations of 3d. The offshore Artic Circle is probably the least shot by a long way. Most of the active onshore trends have had millions of acres shot with 3d. I get the impression that you thought this data didn't exist. But seis doesn't tell you how much oil/NG you have out there. It just hopefully gives you a reason to anticipate it's existance and thus justify drilling for it. At the end of the day only the drill bit finds oil/NG...not seismic, the USGS, politicians, public oil company CEO's nor the talking heads on the evening news. I agree with you: talking about how much oil is/isn't in ANWR or anywhere else is a waste of breath. Drill it or don't drill it. Arguing about it does no one any good.

And all 3d data, except for private shoots, have been analyzed by dozens of companies. Also, just so you know around 98% of all oil companies, including mine, are NOT in favor of drilling ANWR or any other currently out of bounds plays. Simple reason: none of us have any plans to drill in those areas. If they are drilled any oil/NG found will only serve to lower prices (how ever little bit that may be). Remember we exist for one reason: to make a profit. We are not the saviors of the oil/NG consumers on the planet. Just companies that exists for profit motives only. If the world wants an altruistic energy industry they need to pony up a few trillion $'s and get it started. LOL.

Giant oil pipeline in the works from Alberta to the Gulf

Will this pipeline provide real relief?
How many years will it operate before Alberta is run dry?

What will be the impact to the environment?

Will this pipeline provide real relief?

Well, considering that the oil sands are now producing more oil than the entire state of Texas, probably.

How many years will it operate before Alberta is run dry?

At current rates of oil sands production - about 340 years. If Alberta stepped up its oil sands production to equal that of the entire United States rather than just wimpy little Texas - about 85 years.

However, that's assuming that there are no more new technological breakthroughs like the ones we have had in recent years, and that world oil prices stay low rather than rising like they have been doing. Higher prices and better technology would translate into major increases in the reserve size.

You have to realize that Alberta has oil sands resources approximately equal to the world's remaining reserves of conventional oil. The only problems are that the costs are high and the ability to bring new production on line quickly is limited.


My question:

Given the very substantial oil/heavy oil/tar/bitumen/whatever the right words are deposits in Canada and Venezuela, and given the large amount of NG in northern Canada and Alaska:

Would a plausible scenario be that oil (and eventually) NG prices continue to increase, dampening economic growth and spurring greater efficiencies and substitution, and the high price facilitates increased long-term production from these sources to allow a modified BAU for > 100 years, as opposed to the quick crash to 'Olduvai Gorge' that some propose (and even seem to relish the thought of)?

Just wondering out-loud...

I know that PO (as in a substantial and continual and permanent decline in oil production) will come, and that many other LTG factors will likely bite us in the butt, however, I wonder if, come 2020, we will not still be on the 'bumpy plateau', with the declines in 'conventional oil' being made up by slowly but steadily increases in Vz and CA heavy oil production, and some of the per capita shortfall (due to increasing population) being made up for by increasing efficient, doing less (carpooling, etc), slowly but steadily increased use of wind, NG, nuclear, solar, geothermal, etc.

Could this happen, possibly managed behind the scenes by TPTB?

Would a plausible scenario be that oil (and eventually) NG prices continue to increase, dampening economic growth and spurring greater efficiencies and substitution, and the high price facilitates increased long-term production from these sources to allow a modified BAU for > 100 years, as opposed to the quick crash to 'Olduvai Gorge' that some propose (and even seem to relish the thought of)?

That's a very plausible scenario. The "Doomers" seem to overlook the fact that there are a lot of non-conventional energy sources that would be pulled onto the market by high prices, and in addition high prices would cause consumers to use energy more efficiently. The net result would be that supply would equal demand and the crisis would be limited to those who are unable to adapt to the changing economic realities.

If you see the high prices and structural changes coming in advance you can be ready for them, rather than trying to adapt after they have hit. The US has been particularly bad at anticipating the changes, even though its oil production peaked and started to decline 40 years ago. A lot of people are in a state of denial about the fact that oil supplies are getting tighter, prices are rising, and that economic decisions cannot be made assuming oil supplies will stay strong and prices will fall.

You have to plan to follow the supply curve down and the price curve up. Additional non-conventional oil and gas supplies don't change that.

I concur with your thinking on these matters.

What we need is a Republican Party which will stand up and speak plainly to the American people and the World about the realities of the energy situation.

Advertise a new core value of energy efficiency and economy of use as fundamental components of the new patriotism.

Kind of like 'Only Nixon could go to China'.

What are the chances....heck, Nixon would be run out the Party on a rail nowadaze...even someone like Reagan wouldn't be ideologically pure enough for the so-called 'young guns'.

America's a very complicated society, and much bigger than Canada, ensuring our collapse will that much more painful.

Not that Canadians should celebrate. America will bring her down with it.

To give just one minor example: what happens when Americans can't afford to go to NHL games anymore, because nobody can drive there and its too expensive and the Latins don't feel too much affinity for it? The league will fold.

Not that Canada can't adjust but whatever it comes up with will be smaller, more local, less lucrative.

On a more important note, when the American fiat money machine starts to break down, all sorts of bubbles/malinvestments the world over will begin to pop, including the Canadian housing bubble, which will create problems for your banks just as it has for America and Europe.

Moreover, Canada is already facing pressure from immigration, and all bets are off regarding migration if America starts to go down; Americans will start to look to Canada for opportunities and perhaps start to move there in large numbers, replicating the Mexico/U.S. relationship.

I've come to realize peak oil will force the chickens to come home to roost, and nobody knows what's going to happen. One can speculate about localization and all sorts of breakdown in complex structures, which will be a very painful process for those benefiting from such structures, and which will cause all manner of political mayhem.

Perhaps PO will mitigate any supposed migration somewhat...Canadian climate can be a bit harsh come November.

The "Doomers" seem to overlook the fact that there are a lot of non-conventional energy sources that would be pulled onto the market by high prices, and in addition high prices would cause consumers to use energy more efficiently.

Maybe, but there are some problems:
1.High prices that cause significant more efficiency don't last for long because it kills economic growth.
2. The absolute amount of energy from oil used on daily basis is so high that it is difficult not to agree with the mitigation graph posted by aangel.
3. A lot of non-conventional energy projects are cancelled when the economy is suffering.
4. Lack of understanding of the problem by (most) economists and governments.

Good enough for me. Most of that oil sand oil comes right to my local gas station:

The sands of north Alberta — not the Middle East — provide most of the petroleum that becomes gasoline sold in the La Crosse area.

A pipeline channels that Canadian crude to the Flint Hills Resources Pine Bend Refinery in Rosemount, Minn.

La Crosse-based Kwik Trip is among its primary customers. A fleet of 110 tanker trucks ferries gasoline and diesel fuel 24 hours a day from the refinery to the company’s 363 convenience stores in Wisconsin, Minnesota and Iowa.

The Tribune traced petroleum’s path from the forests of Canada to the pumps.

It’s a route that keeps the region from relying on crude oil from overseas. But it also has raised questions about the environmental costs, both to Canada and Wisconsin.


Alabama Town’s Failed Pension Is a Warning

PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

Blimey, we've just soared past $91 according to oil-price.net ($91.37 at time of writing)

That's a 1% jump..

That's a 1% jump..

Crazy, isn't it?! When I wake up every morning, the first thing I do is turn on CNBC with the volume off to watch the rolling ticker, to see the oil price. This morning, my eyes were still fuzzed over, so I had to wait until it rolled over again, because it seemed too strange to believe. After expecting a correction down into the high 80's, there it was, like you stated, a 1% increase in one day!

Fuel here two hours north of SF in CA is 3.25 at the cheapo stations and 3.40-3.50 for regular unleaded at the big chains, like Shell and Chevron. Shades of 08 if you ask me. While the Govt. gave everyone a bonus in tax cuts (even though we are posting the biggest deficits in any govt's history) they ignore at everybody's peril the price of oil. Hello, anyone home at the White House?! Shouldn't you on bended knee to the Saudi's to open the spickets? Where's all that spare capacity we hear so much about?

It's definitely a considerable jump. I also check every day out of habit and can't remember seeing a jump this large for quite a while. It's also sustained as it's still there today ($91.41 atm).

Considering the Saudi's are calling for oil in the range $70-$80 it doesn't seem like their Christmas wishes are being fulfilled right now...

Energy report chills gas, pipeline prospects from Alaska

CALGARY - A recent report by U.S. energy regulators throws TransCanada Corp.'s proposed Alaska natural gas pipeline into question, suggesting shipping Arctic gas south won't economically feasible for at least two decades.

Calgary-based TransCanada and partner ExxonMobil Corp. have been promoting a massive natural gas pipeline to bring prolific North Slope natural gas to southern markets by 2020.

However, high construction costs and low prices will likely shelve the $40-billion project - and its rival the $20-billion Denali pipeline - until 2033 as demand for natural gas in the Lower 48 states is met by cheaper, more accessible volumes, according to the report by the Energy Information Administration.

I've read where the Chinese are being hired to do large projects all over the globe. Why couldn't the same be done in a case like this?

Indeed. Not only will the imported labor work for cheap, but they will even convert to the religion of your choice as needed.

"Some firms would have been put off by the fact that non-Muslims are barred from working in Mecca, so China simply converted hundreds of railway workers to Islam."

Obama to regulate carbon from power plants

US President Barack Obama's administration said Thursday it will regulate greenhouse gas emissions from power plants, after legislation on climate change died in Congress.

The Environmental Protection Agency (EPA) said it would regulate fossil fuel power plants and petroleum refineries -- which together emit nearly 40 percent of US greenhouse gases -- starting in 2012

The EPA did not immediately set a standard, saying it would propose figures in 2011 and finalize them in 2012 after a period of public comment.

Checkout these pundits, the word "supply" is not mentioned even once:

  • http://www.cnbc.com/id/15840232?video=1707319295&play=1
  • Ahhh...the reason I don't watch squawkbox.

    Actually, the guest, Petrowski, seemed pretty open and astute. Pro Carbon Tax, realistic about ethanol and demand. It's that host that needs to get off his soapbox. YEah...the new congress will save us. Anyhoo...a good watch, enlightens one about how the world outside of TOD thinks.

    Well, the guest showed a lot of knowledge of downstream, but didn't touch the crux of the matter, i.e., upstream.

    His point? He wants cheap oil prices forever, to fuel the US ever growing economy.


    Maybe wiki leaks has some information about oil reserves ? until then ....


    Fed board: Keep companies from oil spill evidence

    Federal board says companies too cozy with key piece of oil spill evidence: blowout preventer

    The board wants the testing stopped and for it not to resume until Transocean and Cameron officials are removed from any hands-on role in the examination.


    The 'African Farmers Displaced....' article resonated with the novel I just read, titled:

    2045: A Story of Our Future

    Climate change, poverty, Peak Oil, corporate-government censored media and police state surveillance and control, mind-numbing 'entertainment' distractions provided by the same, scarce and polluted water, pollution in general, desertification, religious fundamentalism, anti-science societal attitudes and mindless consumerism fostered by TPTB, continual war and terrorism (sponsored by TPTB),failing infrastructure, species extinctions,famine, and a general slow collapse of civilization...and underlying everything, over-population.

    After the first 2-3 chapters, the rest of the book is predictable...however, the description of this future World is not unrealistic as it extrapolates current trends.

    The style of its storytelling (from the perspective of a person's travels and experiences) reminded me a little bit of the novel Warday.

    A little bit of 1984, and some themes from Soylent Green and Rollerball.

    A depressing read.

    If we assume that there realy are conspiering TPTB why would they then push "mindless consumerism" when basic resources are getting scarce? It would be an extremely dumb strategy, they ought to push antique 1970:s furniture, recycleable paper propducts and mobile "Apps"...

    It is possible to write a better novell if you assume that there realy are TBTB and they could do other more intresting selfish things.

    Because having people buy lots of stuff makes the rich richer and helps entertain the commoners.

    If you think that the top 1% are apt to worry about the future of humanity, I think not:

    1) They have enough resources to create their own little slices of paradise

    2) As far as worrying about the day when they can no longer do that, then kicks in the idea of IBG, YBG (I'll be gone, You'll be gone).

    In this novel TPTB live a tax and government-free life mainly on three ultra-swank islands on Earth, while making bank from the seething masses selling them everything from the necessities of processed pseudo-food to future versions of I-pads and I-pods and video games (entertain and distract the masses.

    Everything is operated and censored through eight enormous corporations with interlocking staffs...governments basically exist to control the masses and facilitate the big eight running the show.

    Pretty plausible extrapolation of the way things have been evolving, IMO.

    The point is that if you are a psychopath that want too keep people hooked as your servants to live an easy life you need to hook them on something that can be delivered.

    There has been more intresting stories written then an extrapolation of todays craving and delivery of low quality goods. Other good, bad or indifferent things and schemes can fill the same need and make for a story that might be better.

    (I am commiting the sin of talking bad about something I have not read... This is one of the worst things I have ever done on christmas eve. )

    Growing Hypoxic Zones Reduce Habitat for Billfish and Tuna

    ScienceDaily (Dec. 23, 2010)


    New car in Beijing cut by two-thirds to battle traffic


    I fly around Asia a lot. At night you sometimes are hard-pressed to see where the fishing boats end, and the stars begin.

    Not that Asians are the only ones guilty of hunting species to extinction...

    The only thing that will work, in the long run, is to somehow convince people that breeding like rabbits isn't a good idea.

    I'm not going to hold my breath.

    So.. thoughts on the new prototype solar energy harvester?


    From the BBC story:

    The prototype is grossly inefficient, the fuel created harnessing only between 0.7% and 0.8% of the solar energy taken into the vessel.

    Worse yet, that system requires 2 axis tracking in order to produce the high temperatures required, which adds considerably to the cost of the system. If one wants to do tracking, why not make electricity with concentrating PV at efficiencies said to be above 30% or go with a Stirling Cycle???

    E. Swanson

    I agree. It certainly looks like a non-starter. I guess the plus side that they're trying to promote is the transportable fuel, i.e. hydrogen. But personally I think Prof Garvey's underwater compressed air storage containers looked to have a lot more potential for tackling intermittent energy production.