Drumbeat: December 29, 2010

The Peak Oil Crisis: 2011 – A Pivotal Year?

Wall Street is getting nervous. As oil prices continue to creep up and as more evidence accumulates that the age of ever-growing energy production and economic growth is coming to an end, a specter is haunting the great investment banks and brokerage houses of New York. For five years now Wall Street and its chorus in the financial media have ignored or denied that global oil production has reached a plateau after 150 years of steady growth. Those who did admit to a problem were quick to assert that the markets would find substitutes first in the form of endless quantities of coal waiting to be exploited and more recently 100 years' worth of shale gas would come seamlessly to the rescue.

The nervousness of course is that once global energy production starts to decline, capitalism as we have known it for the last few centuries will no longer be the same. While some new form of an economic system will evolve, the transition is likely to be long and painful. Many, if not most, jobs in the financial industry will simply melt away. Hence, for many, putting off the fateful day when we have to admit the inevitable is much preferred solution.

Steve LeVine: The electric car age just got a little closer

For the last year, Deutsche Bank's Paul Sankey, one of the best long-range energy minds on Wall Street, has been distributing a series of provocative, deeply researched, and forward-looking notes to clients under titles like "The Peak Oil Market" and "The End of the Oil Age." Last week, Sankey produced a sixth note called "2011 and Beyond -- A Reality Check." Among the takeaways: As of 2010, the new electric car age is coming upon us faster than expected -- far beyond this year's conspicuous arrival of the General Motors Volt and Nissan Leaf, and the race among the world's industrial nations to dominate this technology. Converging even more rapidly, says Sankey, are far higher oil and gasoline prices, starting in 2012. Such shifts could have enormous geopolitical ramifications -- as a consequence, some countries will become poorer, and some richer, with corresponding impacts on their global influence.

Oil bulls may have to pull in their horns

NEW YORK — Oil bulls are once again kicking up dust. The intensifying struggle to lift output, they say, will collide with the insatiable thirst of an expanding Asia to push oil above $100 a barrel. In fact, the cost of crude may be held down by a halving of demand growth as producers from Russia to Africa via Brazil ramp up supply.

Recent years have been humbling for oil bulls. In 2008 Goldman Sachs was arguing that crude would have risen to between $150 and $200 a barrel by now. Since then the notion of peak oil on which many such forecasts were based has taken a battering. Rather than bumping up against the limits of available oil — as peak theorists expected — drillers have uncovered an embarrassment of mineral riches. And this happened to occur just as hunger for oil slackened amid a deepening global recession.

Peak Oil Is Coming, Courtesy of Political Incompetence

According to the International Energy Administration worldwide demand for crude oil imports is growing at a rate of 1.5-1.6% a year. When you combine this growth in demand with a major cut in 20-25% of world exports you have makings of what Rick calls, “a MAJOR price dislocation.”

This is something I’ve yet to hear anywhere else, especially in the mainstream media. All talk of higher oil prices that I’ve seen focuses on speculation on Wall Street (true), the view that the world is running out of oil (false), or the view that war in the Middle East will disrupt supplies (probably will be true). Nowhere is anyone talking about a cut in exports due to government misallocation of resources.

Bolivians protest fuel price increases

(CNN) -- Teachers protested for a second day Tuesday and bus drivers staged a partial strike as the general Bolivian population expressed indignation at a sharp spike in gasoline and diesel prices.

Over the weekend, the government announced the end to gas subsidies that kept the price at Bolivian pumps artificially low. The end of the subsidies resulted in an increase of up to 73% for gas and more than 80% for diesel.

Doing things the Putin way

NOBODY expected Mikhail Khodorkovsky and Platon Lebedev, the former controlling shareholders of the Yukos oil company, to be acquitted, just as nobody believed they were guilty of stealing oil and laundering the proceeds. But there was some hope, however irrational, that Viktor Danilkin, the judge presiding over their trial, might find the courage to resist political pressure and deliver justice.

U.S. senators push to slow oilsands pipeline project

WASHINGTON — A group of 11 Democratic senators on Friday expressed grave concerns about a controversial proposal by Calgary-based TransCanada to construct a 2,700-kilometre-long pipeline to transport oil from northern Alberta to the Gulf Coast of Texas, warning approval of the project would commit the U.S. to “significantly increase” its dependence on high-carbon Canadian fuel for decades.

Writing to Secretary of State Hillary Clinton, the senators urged the Obama administration not to rush into a decision about the pipeline nor to “pre-judge” the outcome of an ongoing environmental review of its impact.

Global oil wealth to rise by 2trn barrels

New technology in the future could boost the world's proven oil resources by nearly two trillion barrels but more than five times of these quantities could remain inaccessible, according to Saudi Aramco.

Although the current global oil reserves in place are estimated at 14 trillion barrels, only about 1.2 trillion can be recovered, said Khaled Al Buraik, executive director of the government-controlled Saudi Aramco

Speaking at a seminar in Riyadh, Buraik said the quantity of oil extracted so far worldwide does not exceed one trillion barrels.

"Advanced technology in hydrocarbon production could add around two trillion barrels to the existing proven crude reserves in the near future," he said in his address, published by Saudi newspapers on Monday.

Oil Industry's Spending to Rise in Hunt for Energy

The global oil industry, far from chastened by the catastrophic spill in the U.S. Gulf of Mexico, is planning record spending next year, including a large amount for deep-water development.

From giants Saudi Aramco and Exxon Mobil Corp. to five-person wildcat outfits, the industry plans to spend nearly a half-trillion dollars next year to find and extract oil and natural gas, according to a new survey by investment bank Barclays Capital.

For the first time in several years, large Western oil companies are leading the industry's charge, increasing their budgets faster than the state-run national oil companies that have dominated spending in recent years.

Buenos Aires swelters amid heat wave, power outages

Buenos Aires – A blistering heat wave, power outages and a fuel shortage added up Tuesday to a second day of hellish conditions in Greater Buenos Aires, home to about a quarter of Argentina's 40 million people.

Families face £100 extra in petrol costs

Motorists face sharp increases in petrol prices in the new year as two tax rises coincide with an increase in the cost of oil, motoring groups have warned.

Iran refuses India oil sales on RBI's terms - sources

(Reuters) - National Iranian Oil Co (NIOC) has refused to accept payments for oil supplies to India without the Reserve Bank of India's (RBI) guarantee, sources with direct knowledge of the matter told Reuters on Wednesday.

Oil crisis looms as RBI stifles Iran oil imports

New Delhi: India may face fuel supply shortage next month after Reserve Bank of India (RBI) stopped facilitating payments for Iranian crude imports, which make up for 12% of the nation’s oil needs.

RBI’s sudden move, which came without either the oil industry or the government being consulted, would mean that the nation cannot import 10 million barrels of crude oil contracted from Iran for January, a replacement of which cannot be found easily.

LPG association asks producers to rationalise prices

KARACHI: The LPG Association of Pakistan requests all the producers, particularly the public sector to rationalise their prices in January as the Saudi Aramco Contract price is expected to rise by $40-50 per ton during the next month, a statement said on Monday.

77% car owners in Pakistan use CNG as fuel

ISLAMABAD: More than three fourth of all Pakistani car owners (77%) claim that they use CNG as fuel and 81% of them claim that they are facing problems with regard to its supply, a survey conducted by Gilani Research Foundation-Gallup Pakistan says.

Perpetual crisis: Fuel shortage hits Gilgit hard

GILGIT: A shortage of diesel in Gilgit is compounding people’s misery, who are already faced with persistent power outages and freezing cold.

Criticising the government for inaction, people contacted by this correspondent agreed that owners of petrol pumps and oil tankers are colluding to earn extraordinary profits.

Subsidized fuels stock safe until mid-January

State oil and gas firm PT Pertamina says Indonesia’s stocks of subsidized fuels are secure until mid January.

...Pertamina, he added, had also coordinated with the Energy and Mineral Resources Ministry to set up a task force to supervise fuel consumption across the country.

“The task-force will directly report to us if a fuel shortage occurs and we'll supply the necessary fuels as soon as possible directly to prevent prices from rising,” Basuki said.

Bangladesh to explore gas in restive hill region

DHAKA — Bangladesh has invited some of the world's leading state-owned gas giants to help explore its insurgency-hit southeastern hill tracts region, an official said Tuesday.

The Chittagong Hill Tracts (CHT) region makes up one-tenth of the South Asian country's landmass but has been largely left unexplored due to a decades-long insurgency involving mainly Buddhist tribal groups.

'Let them do it!': Chavez dares U.S. to cut ties

CARACAS, Venezuela — Venezuelan President Hugo Chavez dared the United States to expel his ambassador or cut off diplomatic ties in retaliation for his rejection of Washington's choice for ambassador to Caracas.

Tensions have been growing over Chavez's refusal to accept American diplomat Larry Palmer and also over U.S. criticisms of a legislative offensive by the president's congressional allies. Lawmakers have granted Chavez expanded powers to enact laws by decree for the next year and a half, a change that opponents condemn as antidemocratic.

Robert Hirsch on "The Impending World Energy Mess"

Robert Hirsch made waves as the 2005 author of what became known simply as the Hirsch Report, the first study funded by the US government on peak oil and its consequences. The experience of writing that report left him shaken at the consequences of peak oil. Now he says that in the next 2-5 years we'll see world oil production permanently decline, a phenomenon "unlike anything faced by modern civilization."

He talks about his new book, written with the same co-authors, The Impending World Energy Mess: What it is and what it means to YOU! It's available at locally owned, independent bookstores.

Top 10 peak oil books of 2010

Having read enough books with Hubbert curves and charts of barrels-per-day to last us until the second Bristol Palin administration, we're now into powerful stories that explore peak oil through suspense, romance and humanity. But so you won't feel guilty having so much fun at the expense of the whole premise of industrial civilization, we've thrown in some more fact-y tomes too. Peak oil stalwarts from James Howard Kunstler to Richard Heinberg to Robert Hirsch made the list along with some surprising newcomers.

25,000 new planes needed by 2029

Around 25,000 new passenger planes will be needed over the next 20 years, aircraft company Airbus has forecast.

These planes will have a value of around £1,880 billion, with 10,000 of the new planes replacing older and "less-green" aircraft.

The other 15,000 will be to accommodate passenger growth, said Airbus whose planes' wings are built in the UK.

Energy: Can We Run Out of Oil and Other Natural Resources?

The reality is that we are in uncharted waters. The world has never, ever seen anything like the rise of major developing countries like China and India—over a billion people growing into the middle class, demanding meat, cars, planes, electricity. Just because we proved smart enough to innovate our way out of periods of past growth doesn't mean we'll be able to handle a world with 9 billion plus people by 2050, most of them richer than now. We may already see that impact on the U.S., which will likely have to dig its way out of recession with the added burden of high energy prices thanks to healthy demand from the developing world.

Bull vs. Bear: How high will oil go in 2011?

So where will oil go in 2011? Will it surpass the psychologically significant $100 mark at a time when demand for oil from most emerging economies is expected to rise? Or will it retreat as China tries to rein in growth amid worries over inflation?

Here's a look at the bull and bear arguments for the black gold next year.

Crude Falls From Near a 26-Month High on Pessimism About U.S. Stockpiles

Oil declined from levels near a 26- month high in New York on speculation the economic recovery in the U.S. isn’t fast enough to clear up excess fuel supplies in the world’s biggest crude consumer.

Futures slipped as much as 0.8 percent after a report yesterday showed an unexpected decline in U.S. consumer confidence. The Energy Department may say tomorrow that gasoline stockpiles increased for a fourth week.

ANALYSIS - OPEC caution on output may help bring back $100 oil

LONDON (Reuters) - Oil has burst above top exporter Saudi Arabia's preferred $70-$80 range and yet OPEC is unlikely to stop the rally, helping to prepare the way for the market to bound above $100 a barrel.

At meetings this month -- a full conference of the Organization of the Petroleum Exporting Countries in Quito and talks among Arab oil ministers in Cairo -- oil producers stood by OPEC's two-year-old set of output curbs.

Oil Poised for $97 on Bullish Flag Breakout, Kase Says: Technical Analysis

Crude oil may rise to $97.90 a barrel after breaking higher from a “bullish flag” formation, according to a technical analysis by Kase & Company Inc.

February crude futures rising from the flag formation last week was “the most important factor” for the projected gain, said Dean Rogers, an analyst at the Albuquerque, New Mexico- based consulting firm. “The move up may be choppy, especially during the low-volume holiday week, but should test $94 over the next few weeks.”

Fears for petrol prices as oil hits two-year high

Hard-pressed UK consumers look set to be hit by further increases in fuel costs in 2011 after the price of crude oil touched its highest level for more than two years on London's futures market yesterday.

The rise in the price of crude oil is being driven in part by comments over the weekend by the Arab group within the Organisation of the Petroleum Exporting Countries, which said that all its members were unlikely to meet until June to discuss quotas.

Hedge Funds Bet Natural Gas Will Decline in Warm New Year

Hedge funds raised bearish natural gas bets by the most since October on forecasts that higher- than-normal temperatures in the first weeks of the New Year will reduce demand for the heating fuel.

Liquid gas expands to fill Britain's energy gap

Virtual pipeline that ships LNG around the world is growing in importance – and reducing the UK's reliance on Russia. But it can't insulate the gas supply from disruption.

Japan's November LNG Import Bill Increases 6% After Crude Oil Prices Gain

Japan, the world’s biggest importer of liquefied natural gas, paid 6 percent more for the fuel in November compared with a year earlier as oil costs climbed.

Are Oil Prices Are About To Wake Up To Peak-Production Realities?

Somehow the government is sticking with an outlook that sees crude prices not hitting triple digits until 2015.

It is an estimate that would get smirks on Wall Street and get you laughed out of the room at the peak oil conference in D.C.

Just look at the chart on right to see why.

Russia Cuts Light Oil-Product Taxes to Spur Refining of High-Value Fuels

Russia will begin lowering the export tax on light oil products such as gasoline while increasing the levy on heavy crude products to encourage domestic production of higher-value fuels.

Top 10 energy picks for 2011

Demand for oil will continue to rise as developing economies in Asia and elsewhere fuel their rapid growth. Here's how to play a bullish outlook on oil.

Desire Petroleum Falls in London After Finding No Oil in Jacinta Prospect

Desire Petroleum Plc, the U.K. energy explorer, plunged in London trading after saying it found no hydrocarbons in the Jacinta Prospect off the Falkland Islands.

The shares fell as much as 17 percent to 50 pence as of 9:18 a.m. local time.

QR National Says Queensland Rain, Train's Derailment Hurt Exports of Coal

QR National Ltd., Australia’s largest coal transporter by rail, expects deliveries to be “adversely” affected for at least this month and next after rain and a derailment forced track closures in Queensland.

The wet weather and flooding is “hampering access to the track and hence recovery efforts,” Brisbane-based QR said in a statement today. Queensland Premier Anna Bligh cut short her Christmas vacation to oversee the response to the floods, she said in a statement.

Petrobras says Lula well in Tupi has 6.5 bln boe

(Reuters) - Brazilian state oil company Petrobras said Wednesday its Lula well, in the Tupi area in the deep water offshore region known as the subsalt, has recoverable reserves of 6.5 billion barrels of oil equivalent.

It also said in a securities filing that its Cernambi well, in Iracema field, has 1.8 billion barrels of recoverable oil.

Brazil to replace oil rigs with 'underwater cities'

Traditional oil rigs will be replaced with “underwater cities” within a decade under ambitious plans being drawn up by Petrobras, Brazil’s state-owned energy group.

Saudi Aramco's 400,000 Barrel-a-Day Yanbu Refinery to Start Output in 2014

Saudi Aramco, the world’s largest state-owned oil company, said its planned refinery in the industrial city of Yanbu will start production in 2014.

The refinery will process 400,000 barrels of heavy crude a day to produce diesel and gasoline with byproducts of sulfur and petroleum coke, the company said on its website yesterday.

A Lower-Carbon Route to Replacing Oil

A more important difference, though, could be the energy needed for conversion from the natural hydrocarbon molecule, methane, to the synthetic one, ethylene. In Siluria’s process, using a new kind of catalyst, that conversion gives off heat instead of requiring it.

Producing the fuel gas required by a Fischer Tropsch process is “rather brute force,’’ said Alex Tkachenko, Siluria’s president. Using a catalyst that produces a bigger hydrocarbon without going through the fuel gas stage is “more elegant,’’ he said.

Iraqi Kurds push for recognition of oil deals

Iraqi Kurds are pushing the central government to recognize oil contracts they signed with international companies, insisting the self-ruled region will not resume oil exports until Baghdad accepts the deals.

Iran Gasoline Consumption Down 20% Year-On-Year After Subsidy Cut

LONDON -(Dow Jones)- Iran's gasoline consumption has fallen by 20% on a year-on-year basis since a four-fold increase in prices came into force, a top Iranian oil official said Wednesday, as a broad overhaul of subsidies hit oil-products use.

The gasoline subsidy cut comes after after a U.S. ban this summer on the country's gasoline imports. Feared riots against the rise have not materialized so far amid cash payments to compensate the less well-off and heavy police presence.

Iran blames weather on gas use rise

TEHRAN (UPI) -- Natural gas consumption for all sectors of the Iranian economy is up about 1 percent for the last part of December because of cold weather, the government said.

Indian, Iranian bankers to meet on payment row

New Delhi (PTI) Top officials of Reserve Bank of India, whose decision to bar dollar and euro payments for imports from Iran may hit crude oil imports, will meet their Iranian counterparts later this week to resolve the issue.

Iran corruption claims stoke political infighting

DUBAI, United Arab Emirates – Corruption charges against one of Mahmoud Ahmadinejad's most trusted political advisers provided the latest evidence of deep rifts within the Iranian president's own conservative political camp.

The challenge by Ahmadinejad's rivals — one of them the head of the judiciary — could set the tone for a bitter fight leading up to the next big political moment in Iran, parliamentary elections less than a year away.

Report: US military pushing for new Pakistan raids

WASHINGTON – American commanders in Afghanistan are pushing to expand special operations raids into tribal areas of Pakistan where Islamist militants are known to find refuge, according to a newspaper report.

Harper's Christmas Special: The myth of how fortress North America will boost Canadian exports to the U.S.

The Harperites refuse to acknowledge the two crucial realities of our time, peak oil and climate change. Experts across a range of fields, from geology to geo-economics and the U.S. military, say that world petroleum production will peak in the next few years and then will began an inexorable decline. The rise of China, India, Brazil and other countries coincides with peak oil. Their soaring demand for petroleum means that oil prices, with fluctuations along the way, are headed higher. Get ready for gasoline prices of $3.00, then $3.50 and $4.00 a litre. They're coming.

Robert Rapier: My Top 10 Energy Related Stories of 2010

Here are my choices for the Top 10 energy related stories of 2010. I can’t remember having such a difficult time squeezing this list down to 10 stories, because there were many important energy stories for 2010. It was hard to cut some of them from the Top 10; so hard that I almost did a Top 15. But I made some difficult choices, and offer my views on the 10 most important energy stories of 2010.

Gas and oil prices are rising. Do you really know why?

What happens when oil wells start producing less oil? And they will. This is a question being asked at the highest levels of government all over the world every day. The oil disaster in the Gulf of Mexico propelled global concern for the topic. It may not be headline news anymore, but gas prices surely are, and if you live in the Northeast and heat with oil, your oil bill is probably looking quite a bit different than it did this time last year.

Jeff Rubin: Will car sales rebound to salvage U.S. ethanol targets?

Despite a last-ditch attempt by Senator Dianne Feinstein and others to end the subsidies, the Senate decided to fork out more pork barrel funds to corn farmers and, by extension, to firms like Monsanto and Archer Daniels Midland for another year.

But don’t count on U.S. ethanol production ever coming even close to reaching that lofty target of 36 billion gallons per year. If the return of fiscal sanity to Washington doesn’t undercut its life-sustaining subsidies, an aborted recovery in motor vehicle sales will soon put the kibosh on future production growth.

Road rage in India growing along with economy

While Indian police keep no specific numbers on traffic-related assaults, officers interviewed agree that road rage is on the rise, fueled by the country's economic boom and the masses of new vehicles it is adding to the already crowded roads.

Roughly 10 million cars, buses, trucks, scooters and motorbikes crowd New Delhi's potholed roads every day, causing long traffic jams, gridlock — and frayed tempers.

Paris To Test Banning Gas-Guzzlers (Yes, SUVs!) In City Core

Why are many European carmakers now planning to build electric vehicles? Because many European cities are widely expected to ban high-emissions vehicles from their city cores over the next decade--perhaps even vehicles with any emissions at all.

Now, Paris may be the first city to experiment with such a policy. Next year, it will begin to test restrictions on vehicles that emit more than a certain amount of carbon dioxide (CO2) per kilometer--the measure of a car's contribution to greenhouse gases.

Feinberg strikes deals to settle oil spill claims

HOUSTON (Reuters) – The administrator of BP Plc's $20 billion compensation fund has paid $43 million to residents of the U.S. Gulf Coast who agree not to sue the company for damages stemming from the nation's worst offshore oil spill.

BP's spill costs look manageable 8 months later

NEW YORK (AP) -- As the Gulf oil spill gushed out of control, BP's financial liabilities seemed big enough to sink the company. No more.

Cleanup, government fines, lawsuits, legal fees and damage claims will likely exceed the $40 billion that BP has publicly estimated, according to an Associated Press analysis. But they'll be far below the highest estimates made over the summer by legal experts and prominent Wall Street banks, such as Goldman Sachs, which said costs could near $200 billion.

Ohio and New York state pensions named plaintiffs in BP case

NEW YORK (Reuters) – State pension funds in Ohio and New York were named lead plaintiffs in a shareholder suit against BP Plc that alleges losses due to the Gulf Coast oil spill, according to a U.S. district court ruling.

The case seeks damages for investors that bought shares of BP or American depository receipts of the company from 2005 through 2010.

Australian rare earths miner leaps on China cuts

SYDNEY (AFP) – Australian rare earths miner Lynas on Wednesday said China had slashed its exports quota for the lucrative metals used in flat screens and hybrid cars, driving a 12 percent jump in its share price.

Lynas said China had cut export guidance for the first half of 2011 by about 35 percent to 14,446 tonnes, significantly reducing world supplies of the resource critical to digital-age goods such as iPods and plasma TVs.

UAE urged to tap solar power

The UAE is on the list of states with high carbon footprint. Sea water desalination plants and reliance of fossil fuels have catapulted the Emirates on the list of carbon dioxide polluters.

Solar firm SpectraWatt to close plant

WICCOPEE – SpectraWatt Inc. announced today that it will begin some layoffs of workers at its solar cell plant here. A formal filing with the state said "plant closing" will affect as many as 117 workers.

The company, in a short news release, said, “This action is undertaken in response to deteriorating market conditions resulting from a harsher-than-usual European winter causing a large drop-off in demand for solar cells."

Buffett's Energy Unit Orders 258 Siemens Wind Turbines for Iowa Projects

MidAmerican Energy Holdings Co., the power unit of Warren Buffett’s Berkshire Hathaway Inc., will expand wind-generation capacity by purchasing 258 turbines from Siemens AG and acquiring a project under development in Iowa.

Vestas 2010 China orders hit high in 2010

COPENHAGEN (Reuters) - Danish wind turbine maker Vestas said its orders from China this year reached a record high as the country invests more heavily in clean energy, including wind power.

The case against nuclear energy

BEFORE the Malaysian government takes the country down the path towards nuclear energy, every citizen must decide if nuclear power is the right choice for the nation.

For some, the threat of climate change and peak oil has produced a false choice between either going nuclear or suffering unabated global warming. But Malaysia, and indeed, the rest of the world, has an increasing number of clean and renewable energy options to choose from, such as solar, wind, tidal and wave.

Nuclear Builders Keep Their Options Open

Nuclear companies may not be certain they want to build, but they are doing the groundwork anyway.

Maine Residents Get $6,000 to Store Wind as Slow Heating

A collaboration between a wind company and a thermal energy storage company will cut Maine heating bills in half and show the way to a national model for how renewable power can cut dependence on oil.

Stephen Leeb: Beware of Underestimating China

Being less complacent, China has been first to recognize the danger of resource shortages down the road. Many of China's elite have backgrounds in engineering and science. Peak oil and Peak Coal have been seriously discussed by Chinese scientists in academic journals, which government leaders actually read. China understands its need to segue into alternative energy as it urbanizes 400 million people. The nation has gone from nowhere to having the world's largest production of wind and solar energy. Wind power growth has been increasing by 100% a year. If China realizes even a fraction of its plans, it will become number one in nuclear energy as well. China's emphasis on growing real industries is one reason it survived the 2008 financial crisis better than the West.

A global food fight that's going to get worse

Brace yourself: The neo-Malthusians will soon be in full cry, warning that population is outrunning the world's food supply. And in this debate, there's no middle ground - some experts tell us we are drowning in surpluses, while others warn that imminent starvation looms as a result of diminishing cultivable land, water shortages, unsustainable/unhealthful hybrids and the impending loss of cheap petrochemical fertilizers.

Compassionate Resistance - Part 2 - Being Resourceful

In order to successfully engage in a Compassionate Resistance movement, we need to know that we can survive as a community without being dependent on resources the elite control, such as gasoline and processed food. We need to relearn those skills our mothers learned from their mothers: how to grow vegetables in the backyard without Miracle Grow -- how to make (or at least mend and alter) clothes" how to cook up a healthy meal with whatever ingredients we have on hand" how to collect and save water" how to compost" how to raise chickens and goats" the list goes on and on.

Idea #7: Revive the Root Cellar

I still remember the goosebumpy feeling I'd get whenever I tiptoed into my grandparents' cellar as a kid. It only took a minute to grab a can of pop or a jar of homemade pickles off the shelf, but I knew there was a risk of running into a freshly killed deer hanging up in a dark corner, or, in my child's imagination, possibly something worse.

Now, I admire the cellar in all of its cold, dank, cave-like glory. My grandma still stores apples, onions, potatoes, carrots, homemade canned goods, sauerkraut and yes, wild game down there, and her place is where I want to be if disaster strikes.

Northern Ireland faces mounting water crisis

BELFAST, Northern Ireland – Frustration and fears of disease mounted in Northern Ireland Wednesday as tens of thousands of people were left without water after much of the supply drained away through broken pipes following a deep freeze and a sudden thaw.

Japan's Government Fudges Start of Carbon Trading Amid Industry Opposition

Japan’s government took a step back from plans to start carbon trading in 2013 amid opposition from industries that say emission-trading rules would add to costs and limit their ability to compete against rivals in China and India who don’t face the same restrictions.

Farmers, pecan growers say coal plant kills plants

BASTROP, Texas – Along a stretch of Highway 21, in a pastoral, hilly region of Texas, is a vegetative wasteland. Trees are barren, or covered in gray, dying foliage and peeling bark. Fallen, dead limbs litter the ground where pecan growers and ranchers have watched trees die slow, agonizing deaths.

Visible above the horizon is what many plant specialists, environmentalists and scientists believe to be the culprit: the Fayette Power Project — a coal-fired power plant for nearly 30 years has operated mostly without equipment designed to decrease emissions of sulfur dioxide, a component of acid rain.

There is a dangerous man afoot in the U.S. running around the country touting his new book and claiming that U.S. oil production can return to its peak in the 70s if only government would get off the oil industry's backs and eliminate restrictions on oil drilling. The former CEO of Shell is clever in that he wraps up this message in a package of conservation, alternative energy, and carbon caps. He was on CNN last night delivering this message and the interviewers pretty much bought his message hook, line, and sinker.

I don't think it is a coincidence that this dangerous man is trumpeting his message right as the new congress takes power. And this will be the message that the likes of Sarah Palin (energy expert) will use in their attempt to grabs the reins of presidential power.

While I was aware that peak oil has not really reached the main stream, I was shocked at the level of ignorance and lack of skepticism displayed by the interviewers. I consider one of them, Eliot Spitzer, to be a very smart and astute man, but sorely lacking knowledge in this area.

Is there some way we could get one of the folks here on the show to counter this cornucopianism?

Message delivered: Peak Oil is the fault of the government and the greenies. One wonders why the administration of W Bush couldn't fix this problem. Never fear. Sarah can tweet her way to energy independence and refudiate the peak oilers.

Hofmeister has been repeating this same blather all year. To be fair, Spitzer asked a couple of pointed questions though the (opening) segment was short and no rebutting guest was featured.


Hofmeister on Fox, in June (Hannity Warning!):


Interestingly, Hofmeister is in favor of increased fuel/carbon taxes, money to be used for carbon sequestration and to further develop domestic capacity.

Message delivered: Peak Oil is the fault of the government and the greenies.

Tell him to argue that with the U.S. Joint Forces Command’s Joint Operating Environment Report 2010.

Here's the summary conclusion on Energy from those 'Socialistic Greenies' of the J.O.E.
(emphasis mine)

Energy Summary
To generate the energy required worldwide by the 2030s would require us to find an additional 1.4 MBD every year until then.

During the next twenty-five years, coal, oil, and natural gas will remain indispensable to meet energy requirements. The discovery rate for new petroleum and gas fields over the past two decades (with the possible exception of Brazil) provides little reason for optimism that future efforts will find major new fields. At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. Energy production and distribution infrastructure must see significant new investment if energy demand is to be satisfied at a cost compatible with economic growth and prosperity. Efficient hybrid, electric, and flex-fuel vehicles will likely dominate light-duty vehicle sales by 2035 and much of the growth in gasoline demand may be met through increases in biofuels production. Renewed interest in nuclear power and green energy sources such as solar power, wind, or geothermal may blunt rising prices for fossil fuels should business interest become actual investment. However, capital costs in some power-generation and distribution sectors are also rising, reflecting global demand for alternative energy sources and hindering their ability to compete effectively with relatively cheap fossil fuels. Fossil fuels will very likely remain the predominant energy source going forward.

It's easy to tell the difference between an optimist and a pessimist; but it's difficult to recognize a pessimist from a realist.

Link up top: ANALYSIS - OPEC caution on output may help bring back $100 oil

"If it goes to $100 due to speculation, OPEC will not move," OPEC Secretary General Abdullah al-Badri said this month. He also said the organization did not want oil to rise that far.

Errr... If oil goes to $100 how will we know whether it was speculation or demand that drove it to that price? Well, I am sure OPEC will tell us which one was the culprit. ;-)

Ron P.

July, 2006: Saudi cut offers proof that price is independent of supply and demand

London: Oil power Saudi Arabia has offered the most compelling proof yet that record high prices are divorced from the realities of supply and demand. . .

"There is absolutely no relationship between price and supply and demand," Saudi Oil Minister Ali Al Naimi noted. He told pan-Arab newspaper Al Hayat in early June that crude oil was worth no more than $50 a barrel based on fundamentals.

Ron, I always thought that the price when the futures contract closes is the price people are paying to take delivery of the oil, the true market price. If it was only speculation future prices would plummet the day the contract closes.

Actually it did happen except it was a price spike not a plummet your free to draw your own conclusions.

Perhaps its time people started seriously reviewing the thesis that OPEC cut production back to hold prices up.

I'd argue that at the very least my own view that large amounts of oil stored during the crisis and then some was the primary driving force in keeping prices down at least has some merit.

If so then exactly whats happening in OPEC should at the very least be questioned ?

And last but not least given the complete lack of public pressure on OPEC to increase production and acceptance of relatively high prices despite the economic downturn what is the real position of the worlds governments on peak oil ?

Simply considering that perhaps the situation was the reverse and it was not and attempt to keep prices up but hold them down opens up a pandora box of questions. Personally I was of the opinion that such questions would never be answered or at the least the truth if it does come to light it would be decades in the future.

However now with Wiki-Leaks I can only wonder if we might not see something sooner than later either confirming or refuting my speculation. One thing thats struck me so far about the leaks esp all the US cables is that oil is barely mentioned.

Obviously a concerted attempt to hold down oil prices implies a tinfoil indeed leadfoil hat level conspiracy !

Turns out I'm not the only one ...


Perhaps we will get the really hot information when WikiLeaks begins releasing, as promised, its files on banks and multinational corporations which would presumably include communications with oil companies.

But in the absence thus far (and correct me if I'm wrong) of any significant oil-related diplomatic and/or military analyses among the leaks, allow me to provide some declassified -- but rarely seen -- documents of my own,

So we have a situation where OPEC is supposedly consolidated and able to maintain a high price for oil. The political implications are immense its the number one political event of the century. How long before OPEC uses this clout to pressure the US on a wide range of political issues from Israel to Iran and even Russia ?

At any point they could recreate the original embargo with the twist of a knob. Yet zilch ?
No concern about OPEC's new found cartel powers over a critical resource ?

I doubt seriously that I've guessed everything right given the situation if I'm even close beyond the basics then its pure luck or simply logical deduction either one works and they are not all that different as in either case a critical guess or deduction could readily be destroyed as facts emerge.

Regardless its important to raise the needed questions.

Has OPEC successfully managed to create a cartel bolstering oil supply and our governments done nothing despite the obvious political implications ?

Or is the real situation something quite different if so then what because if OPEC really is not a cartel then they did not hold oil prices up something else is happening.

Even if you don't assume some conspiracy either publicly by OPEC or privately in consuming nations the rebound in oil prices following the economic collapse suggests oil supplies are far more tenuous then most believe. So even the choice of lack of a real cartel and lack of any comprehensive attempt to control prices downwards does not give a pleasing answer.

Perhaps you can take the position that OPEC's real plans are to cut production to ensure a price floor but never increase it no matter how high prices go ?

Fine but at some point one has to wonder just a little bit about the nature of these cuts and what the agenda is ? And that returns you to the lack of political concern about OPEC's real agenda ??

No matter what you think blindly believing OPEC made substantial cuts and plans to support a price band is in my opinion no longer acceptable and any alternative solution presents its own set of uncomfortable conclusions.


Did you see this article on Wikileaks and Energy Co's?


WikiLeaks has so far only released a tiny fraction of the 251,287 leaked U.S. embassy cables it holds, but readers are already getting a glimpse into how the world’s largest oil companies do business. Some are insightful, others embarrassing and all of them show just how important and how much money there is in the energy business.

and this one?


'Shell and the government of Nigeria are two sides of the same coin,' said Celestine AkpoBari, of Social Action Nigeria.

'Shell is everywhere. They have an eye and an ear in every ministry of Nigeria.

Damaging leaked documents show Yemen's president to be working closely with the U.S.

In the battle against the country's Al Qaeda network, Ali Abdullah said he would lie to his people.

'We'll continue saying the bombs are ours, not yours,' Saleh told General David Petraeus, then head of U.S. Central Command, on January 2, according to one of the cables.

'They have people on the payroll in every community, which is why they get away with everything. They are more powerful than the Nigerian government.'

(I think I buried a sidebar into this quote.. but it seems relevant to the article.. sorry, rushing along right now.

'The truth is out there'
Bob (Aka Agent Scully)

Prediction for 2011

It will get worse

I will bet $1m on it.

We will continue to consume the principal of our finite natural resource allotment.

We will continue to pollute the biosphere.

Greed and corruption will increase & continue to dominate.

Population will continue to increase by 75,000,000. + or -.

Theres more but I'm done.

Re: Jeff Rubin: Will car sales rebound to salvage U.S. ethanol targets?, up top.

Leanan is throwing me raw meat today.

Since when do car sales have anything to do with ethanol production?

2010 car sales are millions of units below what they were during the peak years before the crash even with the modest recovery this year.

Yet ethanol production recently set a new record. Ethanol opponents like to erect a straw man argument that ethanol will never replace oil. Of course not. We do not have to replace oil. All we have to do is replace the decline in oil production as Peak Oil kicks in.

Apparently Jeff Rubin has joined Al Gore in swallowing the EROEI/Net Energy Kool Aid. If EROEI/Net Energy meant anything, we would not have electricity. Energy form is more important than EROEI.

When energy is processed to change its form, there can be an increase in usefulness that off sets low EROEI/Net Energy numbers.
This is true with electricity and ethanol.

Corn and natural gas can not be used by the vehicle infrastructure just as the computer infrastructure can not use coal and natural gas without their first being changed into a useful form of energy, electricity.

It matters not that that there is an energy loss in this form change.
The usefulness of electricity is so great that it outweighs the loss.
The same is true of ethanol for the vehicle infrastructure.

As for his attack on ethanol subsidies. It is very disappointing in that he doesn't even mention oil subsidies and oil is supposedly his area of expertise. It makes one wonder how he can ignore such a big elephant in the room. He must have his eyes closed or purposely looking away.

Ethanol subsidies passed the Congress because all that Senator Grassley had to do was ask if oil subsidies were also on the table. When ethanol opponents said they were, the oil lobby sprang into action to protect its subsidies.

Within a matter of days, we learned that the ethanol subsidies would be renewed for a year. This is not the first time Grassley has performed this trick. He knows it works. That is how he gets re-elected. His slogan in the last campaign was "Grassley Works".

Iowans have learned that all you need to do if ethanol subsidies are threatened is to threaten oil subsidies in return and low and behold ethanol subsides are renewed.

Oil has more to lose by loss of subsidies than ethanol. About $70 billion vs. $6 billion for ethanol.

One wonders why ethanol opponents and their lackeys in the media concentrate on the $6 billion and not the $70 billion when looking for things to cut.

I'm sorry to see Jeff Rubin join this bunch. He doesn't know what he is talking about when it comes to ethanol. He should stick to oil analysis.

With corn at $6.65 / bushel, that is about $2.46/gallon of ethanol for the feedstock alone, using a 2.7 gallons per bushel conversion rate.

...or thought of another way, that's 2.7 gal. x 13.2 billion bu. of corn in 2009 = 35.6 billion gallons of etOH or less than 26% or US gasoline usage in 2009. Given that ethanol contains only two-thirds the energy of an equivalent amount of gasoline, etOH doesn't look like much of a solution. But we've already been over this...

CBOT Corn Review: Climbs 10th Day In A Row On Supply Outlook

Traders are looking for signs that demand is waning at the higher price levels, but haven't found it yet, analysts added.

Hot, dry weather in South America remains a focus of the market. The crop in Argentina, the world's second-biggest exporter, is threatened by the drought, and a mediocre crop there will be ill-timed, as supplies in the U.S. and around the world are already tight.

Corn's value as a feedstock for making proteins will exceed its value as a feedstock for making ethanol.

Corn's value as a feedstock for making proteins will exceed its value as a feedstock for making ethanol.

Unfortunately, mandates don't have any respect for value.

Compared with other sources of ethanol, corn will be priced out of the market. Even Grassley won't be able to subsidize corn ethanol enough to keep it economically viable in the face of growing world demand for food.

There's no such thing as "priced out of the market".  The law mandates a certain amount of ethanol in fuel, regardless of price.

A question E-P: the feds might require they sell an eth. blend but exactly how is the law written? Are refiners required to make eth. even if they don't have the facility to do so? Are the fuel retailers required to pay what ever the eth. producers want to charge? IOW if there is to be money lost who has the bear the brunt of it? If the eth. makers can't pass thru the higher cost by law maybe we won't see any eth. refineries. Just curious who is mandated to do exactly what.

The law as written requires X billion gallons of ethanol per year.  This is why we have the big to-do over E15 fuel, because there isn't enough gasoline being sold to meet the mandatory quantity with E10.

They simply reduce the mandates as they will for future non corn ethanol.

Some interesting observations in the WSJ article on the South American drought:

Crops Threatened by Heat in South America

Smaller harvests also raise concerns that governments could limit crop exports rather than risk higher inflation or even food shortages, because of the threat of political unrest. Crop prices spiked several months ago when a drought led Russia to ban wheat exports, and Argentina already controls some crop exports.

India this week announced plans to help consumers cope with high food prices by selling additional grains at subsidized rates and maintaining a ban on pulse exports.

Has anyone looked into the price of gasoline at the pump vs. the financial status (i.e. price of houses) of communies next to the gas stations? A few people have mentioned a connection (which seems to be confirmed per my own observations) but I would prefer some independent confirmation.


I live in Bettendorf, IA, which is very middle class. As I mentioned yesterday, gas behind my house is $3.14. I work on the west end of Davenport, which is a relatively lower class area. Gas at the nearest Shell station is $2.99. To me, this makes perfect sense. Actually it seems almost unfair to the people in the lower classes as this constitutes a greater percentage of their income.

On the west end, $2.99 may account for about a third of a persons hourly income. For me, gas is about a sixth of my hourly income, and in some of the more affluent portions of the Quad Cities it may only be about a twentieth of their income!

So you can easily see that gas would have to be more expensive in affluent communities due to increased competition in those areas.

However, the difference in price can't be too great or else the Bettendorf soccer moms would drive to the west end to fill up.

It's a delicate balance, I reckon.

The last time I looked at the US Census Bureau figures, they estimated that a household with income at the 10th percentile spent 16% of that income on energy, a household at the median income level spent 6%, and a household at the 90th percentile spent 3%.

The biggest problem with a carbon tax — probably the simplest way to raise energy prices and discourage its use — is that it's extremely painful for the poor. Lots of different proposals have been made for mitigating that effect. But no single refund mechanism catches all of the poor, and once you start offsetting the higher prices with increased income from other sources, how much you reduce usage becomes more problematic. Additionally, the poor are the ones with the least ability to make capital changes (different car, more insulation) to improve efficiency.

Well I'm going to get brutal here.

Why should the poor have access to energy ? About the only use case that should be supported is for cooking to prevent deforestation and heating in cold climates.

People might not like such and attitude but food/clothing/shelter support should in my opinion be the baseline.
Any other support for the poor should be questioned.

Now with that said you should also not hinder poor people trying to make a living. This means zoning laws should be dramatically relaxed and even building codes to a point. Yes it means our cities would take on the look of many second and third world nations but so what ? That squalor allows the poor to make their own way without need for support or significant amounts of fossil fuels.

I'm not condoning shanty towns indeed I'd urge that the wealthy support clean durable dwelling, water supplies, electricity, heating, food and basic security. It does not have to be outright squalor but on the other side poverty does not have to be aggressively hidden at great cost. No real reason that the poorer neighborhoods could not for example maintain their own security. We have neighborhood watches in suburbia where people watch grass grow.

And perhaps we would be forced to reconsider our drug and prostitution laws so that poor neighborhoods are not overrun with vice like they are now. Thats not to say you can get rid of it but simply that you need to make these issues less destructive of poor communities.

And yes it probably means allowing things like street food vendors of questionable sanitary conditions. But let the buyer beware. Anyone selling tainted food would likely be driven out of business in a hurry.

My point is that with a little bit of work the poor can readily live decent lives with basic security and without using large amounts of fossil fuels. Its different from America today and with work hopefully different from the slums of Asia but still ok. Obviously easy access to birth control and pensions and education would be important.

In fact I could readily see such regions become the home of poor young people just starting out taking advantage of the cheap living conditions. Something much closer to your typical student slums around universities instead of some inner city slum. People from all walks of life that for various reasons need to live cheaply would take advantage of theses sorts of living arrangements.

Everyone except the upper middle class and rich if you think about it. Sure people eventually want nicer conditions and better homes well the above gives them time to save and grow their personal abilities to achieve it.
Hiding them in a web of subsidies that stop the moment they manage to get even slightly ahead is not the solution.

Its not some utopia its real life and its neither good nor bad however I'd argue it provides dignity of life which is sorely missing in this world.

memmel,you might check the latest stats on the burbs for the first time the number of people living at the poverty level has hit 50% in the burbs.I'm waiting for a big shift by stores to move back to the center of cities just the move would double customers base.As cost of road repair get delayed there is an added cost to living in the burbs.And the modern burb increase travel time by 40% over the old grid system of streets.And service repairs for homes will increase the farther out you go.

Ohh things will eventually change because they have too. What I'm talking about is frugal living.
As far as your statement about the burbs. Consider if someone down on their luck started a small convenience store in their home or planted the front yard and started drying the clothes on a close-line because they where now poor.
All hell would break loose.

We have very few places in the US where people can practice what I call frugal living if they wish or need too.
I'm not saying its pretty but that should not result in it being effectively banned.

By the time we relent I'd argue any chance that frugal living could help stabilize the US will be lost the line between allowing people to live frugally and fetid teeming slums is narrow and easily crossed.

Define poverty. A while back the UK considered that if you did not own at least one television and took a foreign vacation each year you were classed as poor. There were some other things of a similar ilk in the definition but I forget what they were now.


This is a plan I thought of some 4 years ago as gas prices were rising, it seems the most practical means of reducing gas consumption without impacting the lower income folks.

I believe an additional $2 tax on a gallon of gas is very necessary. Our current consumption of 140 billion gallons of gas per year would generate 280 billion dollars of Taxes. The 7.65% payroll tax paid by employees would be removed on the first $ 50,000 of earned income. The 7.65% paid by employers would remain and the self-employed would only pay 7.65% on the first $50,000.

After $50K of earned income there would be an incremental increase in pay-roll taxes up to the current 7.65%. The 7.65% would extend out to the current max cap on earned income and could be extended as is currently being done to insure sufficient funds to meet our currently projected requirements. Each working person would then receive an additional $765 for each $10K of earned income to compensate for the tax on 382 gallons of gas or about 8000 miles of avg. mileage or 40k miles for $50K or more. There certainly would be an incentive to save on gas and have more to spend on the family. Of course old farts like me with no earned income and who do most of the voting would object, as would the very rich, and all the self serving congress-folks beholding to their lobbyists.

Then we should also incrementally increase the tax on over the road and through the air commercial diesel consumption, to provide additional incentives for passenger rail traffic. That won’t happen until we are short of diesel.
How much do you suppose both would reduce our current 21 million barrel/day of crude consumption?

This was written some 4 years ago and at that time westtexas was advocating a similar program.

EDITORIAL - Energy as the game-changer

Mr Golding must find something(s) that can, in relatively short order, transform the competitiveness of Jamaican producers, compared to their Caribbean and hemispheric counterparts.

The administration may be close to a critical part of that answer with its tender for 480 megawatts for power-generating capacity, if it predicates the programme on national economic self-interest rather than special-interest ideology.

In other words, any decision on new power plants must rest primarily on a fuel source whose availability is assured and will deliver energy cheaper than others. Put another way, the key determinant should be the ultimate price of energy to consumers, rather than the kind of fuel to be used.

Since DBs are no longer daily, this one flew under Leanan's radar. After reading this gem:

Of course, new technologies for the extraction of gas from shale, much of it from the deep ocean bed, will perhaps, over time, enhance the availability of LNG, especially as the cost of the technology falls.

I felt I had to respond to the editor and linked to the following two articles on TOD:

Renewable and fossil electricity generation costs compared
EIA Annual Energy Outlook 2011: Don’t Worry, Be Happy.

It seems I have my work cut out for me next year. This is not going to be easy.

Alan from the islands

Dec. 29, 2010 8:00 a.m. | Appleton - Appleton police have told local gas-station owners they will no longer respond to reports of customers who drive off without paying.

Police said their resources are too limited to respond to such calls. Police Lt. Kelly Gady said gas-station owners are now responsible for collecting their own debts from drivers who pump but don't pay.

Gady said most cases turn out to be honest mistakes or problems with credit-card readers, not intentional theft.

The Post-Crescent of Appleton reported that the new procedure has been in place since Dec. 1. It requires station operators to use the plate number to obtain the vehicle-registration information, and then follow up with the driver.


Wonder how common this is right now?

There was an article in our local paper yesterday about how local police will stop responding to non emergency calls, an example given would be a bike theft.

At the station where I usually buy my gas, the pumps have all been pre-pay for at least a couple of years. Until your credit card is authorized, or you go inside and leave cash, the pump won't dispense gasoline. I asked once, and the pump software was modified so the cashier inside can tell it to shut off after $10 or $20 or whatever amount cash customers have left. This in a solidly middle-class suburb.

It's a rare day I bump into a station that is not prepay.

This is to prevent drive-offs, and here pumps have been pay-at-the-pump for many years. With low margins on gas, the drive-offs destroy profitability. Pre-pay makes it profitable again.

My station has a pump-start card, if you prefer to pay in cash afterwards. Basically you provide recourse in the event that you drive off, and they let you fill up as you like.

"Pre-pay makes it profitable again."

Though most folks that pre-pay cash don't fill up. I'm not sure what effect that has on profits. My local station folks just look out the window, see it's me and turn on the pump. Ethanol free as well :-)

The owner of local store/gas station where I used to live had a standard line for people who inadvertently pumped more than they intended. "If you don't use it, bring it back." Of course there were never any takers.

Even before the spike in prices, the trend was toward pay at the pump. Customers like it, because it's faster.

I confess, I've been known to pull into a gas station, then leave if it's not pay at the pump, because it's such a hassle to pay inside.

Hmmm, I always pay inside.
Pay, then pump, then go back inside for my change;-)
I'll only pay for gas with cash; same for groceries and all weekly expenses.

After what happened to me last week, I am inclined to follow your lead. I payed at the pump for $7.80 worth of unleaded gas. Later, when checking my bank statement online, I noticed that the station had charged me $100. Thankfully I kept the receipt. The station owners blamed the mixup on the card reader.

Later, when checking my bank statement online, I noticed that the station had charged me $100. Thankfully I kept the receipt. The station owners blamed the mixup on the card reader.

You can bet if the store owner gives you your money back without a fuss, they were trying to rip you off - absolutely guaranteed ripoff. It just happened to be exactly 100 dollars?! How does a hundred dollars get charged from a card reader when it rang up 7.80?! I could see 8.70, or 78.00, but a 100? Stores use to be very trustworthy, but in recent years I've seen all sorts of gimmicks.

1. Rang up a video rental, but I wasn't renting a movie. Not even a sorry, just handed me the 3 bucks. The video rental was a whole seperate key.

2. Double charged for a whole chicken, then wryly smiled when caught and refunded the money.

3. Baggers at grocery stores (watch for this one) put the stuff they want in the cubby holes that hold the bags, then retrieve it later for themselves. It's always a bag of nuts, or some kind of snack food. Never a jar of mayonnaise or something big. They do it while you're distracted paying for the groceries.

4. Shortchanging. This happens in Scotland something fierce!!! 5 pounds change for a 10. 1 pound change for a 5. You catch them and they never apologize. They won't even look at you. You can yell at them for doing it for the umpteenth time, but they just blankley stare off like nothing's going on.

Stores use to be very honest, but more and more I'm seeing all sorts of ripoff tactics. But if a customer steals food, oh I'm sure that's another matter altogether and jail probably awaits that person. But if you catch them, there's no repercussions. They just claim it was a mistake, like the 100 they temporarily stole from you. But thanks for the tip, because I'll know now to check my statements against the receipts.

When I had my own business and paid via direct debit I had £14,000 deducted from my account instead of £140 by one company. It took over a week to sort out. After that experience I cancelled all direct debits and paid by cheque only.

As earning an honest profit has got increasingly difficult, the trend now for many years has been to catch customers via hidden charges or the small print on contracts. Producers giving a reduced amount of product but in the same packaging is another. Not to mention incredibly complicated promotions, routine short changing or forgetting to reduce the price at the till and the forever deteriorating quality of goods. Plus many more I'm sure which essentially involve getting the customer to hand over money for something of zero cost and thus giving the company a profit. Crime, legal or otherwise is the only profitable business these days it seems and its gone global.

Plausible deniability is all one needs to get away with almost anything these days where systems errors can net a company millions in additional profit. But my favourite for cynicism is the setting up of worthy charities with slick advertising and then feeding from the flow of money in the form of generous pay, expenses and perks.

They didn't write the warning 'Caveat Emptor' in an ancient language because it's a new problem.. but I have little doubt it's sparking up a bunch extra lately.

But the big thieves are sniggering at this penny-ante stuff.

As easy as it is to point fingers at the gas station owner, I doubt that the station had anything to do with it.

The way that pay at the pump works, at every station, is that when you swipe your card, the pump "reserves" a certain amount of money on your card. It works this way because there is no way to predict how much gas you are going to be buying. If you bought $100 of gas and your card would only support $47.42, you can't exactly put the "extra" gas back.

The amount held in reserve is like a loan against your credit card. $100 and $120 are very common amounts to reserve. Sometimes people with big RVs, etc, have to purchase their gas in 2 consecutive transactions due to this reserve limit.

After you finish the transaction, the loan/reserve is paid back and the actual dollar value of the transaction get processed. If you checked your statement online on the same day, you might just see the $100 reserve transaction and not the actual true dollar transaction, which might not get posted until a bit later. Only if it was several days later would it be questionable.

I doubt the gas station owner did anything to resolve the issue you had, it was probably fixed automatically. Unless, of course, the station gave you CASH back, which would be highly questionable. Next time you get gas, at this station, or any other, see if the same thing happens. If so, watch the transaction, it should resolve without you or anyone else lifting a finger.

As for the desirability of paying cash, I think not. When I use my Amazon.com card at a gas station, I get 2% cash back. (3% at Amazon, 1% at most other places). In other words, at $3 a gallon, I'm paying the equivilent of 6 cents less per gallon of gas than you are. (Some people are getting as much as a 15 cent per gallon discount on gas by using their branded credit card (Exxon Card 15 cents less per gallon, Shell Card 5% discount, Chevron 10 cents per gallon discount, etc.) at an appropriate station. Also, my credit card company is giving me a 30 day interest free loan (since I pay my balance in full each month), whereas you have to come up with the money right now, or even PAY a fee to use your debit card. Further, if I think I'm getting ripped off, I can contest the charge. Good luck in trying to get cash back from someone who actually does cheat you. Even better, if someone steals my card, I'm not liable for the charges... if your cash gets stolen, its just gone, *poof* and if your debit/PIN is taken, you're just screwed.

So... if you aren't currently aren't using a rebate credit card when you fill up, you are choosing to pay MORE for your gas (and other purchases) than if you used credit! You also are NEVER paying a transaction fee, like you often have to when you use Debit. (Why would you PAY to access your own money when you could use your credit card for no charge?) This all depends on paying off your balance in full each month, of course. If you don't pay off your balance each month however, this is all null and void because then you are getting hosed paying a ton of interest. Reward credit cards are the best deal around as long as you pay off that balance each month. No balance = no interest = unbeatable deal/free money.

I too like to buy gasoline at stores that provide discounts for credit card purchases. For instance, much of the gas I buy is from Kroger which discounts the advertised price between $0.03 and $0.10 depending on the amount of groceries I buy and having a Kroger credit card. Since my family and I prefer to shop at Kroger, this adds up to a significant savings over the long term.

I called my bank the moment I found out about the error and disputed the charge. Because it was a debit card that I used to pay for the fuel, the bank has refunded $92.20 into my checking account.

However, the station, or at least the fuel dispenser, had everything to do with the screw up. It appears that the card reader did not close out the transaction after my purchase. What I mean is that I pumped gas at 9:30 PM and went in the store to retrieve the receipt because I did not receive a receipt outside. The cashier provided a receipt that indicated a transaction of $7.80. How many of you trust that once you receive a receipt that shows a sale the transaction is closed? I know I did.

Since my last post I've spoken twice more with the owner and learned some additional details. Their records showed that $100 was charged to my card at 1:00 AM, one hour after the station had closed for the night and more than three hours after I had left. It's pretty obvious to me that several people were able to dispense gas from that pump and my debit card was charged until the $100 max transaction amount was reached.

Would any of this mess happened if I had payed in cash? No way.

The lessons for me are that I plan to reevaluate using credit cards for the majority of my retail purchases and verify that the amount I'm charged equals what is deducted from my bank account. KEEP YOUR RECEIPTS.

Well, down here I tell the girl or guy at the pump to put in a hundred pesos. They put it in and I give them a hundred pesos, maybe an extra 5 if they cleaned my windscreen. Seems to work quite well ;)


the transaction was probably authorized for $100 and somehow the sale didn't cancel the authorization.

i once got a charge for $75 in addition to the $$ something i actualy used. the bank and retailer quickly corrected the problem and the $75 was the authorization amount. i wonder what would have happened if i hadn't caught the mistake.


I'm with you. I rarely ever go into a conveinience store or gas station anymore. The only thing they have that I want is gasoline. I was actually surprised when pay at the pump became widely adopted. Years ago when I worked for a convenience store I was told that the only reason we sell gas is to get more people into the store. Big gulps was where the money was at!

They were forced to. Most of my friends refuse to use gas stations without pay at the pump, and I suspect they're typical. I saw all the local gas stations either have to upgrade or go out of business - before the oil price spike.

They even have those EZ-Pass like devices that let you pay automatically, without having to mess around with credit cards. People are in a hurry.

The reverse is true in the UK, those stations that tried to push pay-at-the-pump found most people stuck with the usual, and the 'press this if you are paying inside' was a confusion. In Australia its virtually unknown, in part due to the money off coupons that predominate.

At the same time, in the UK and Australia, the conversion of the petrol station into local convenience store continues to accelerate.

I wonder if it is anything to do with fuel efficiency, cost of fillup, or just sociability?

I saw a documentary on petrol stations in the UK. Basically they hardly make any money at all on the fuel - the income all comes from the confectionery etc. bought in-store.

Cigarettes and lottery tickets are the big items now, along with snacks and drinks.


Here in my little town in Wisconsin you can just push the cash button on the keypad thing and pay after you pump. I guess its just a Kwik Trip thing. I would imagine this will change as more Police Depts tell them they aren't going to deal with theft.

Maybe we can get together and form a Kwik Trip Posse.

Stricly non-profit and all volunteer of course. Might have to register with the US Attorney General for special "Non-Terrorist Local Civil Security Unit" permits...

Re: Robert's top 10 energy stories

I admit to a bias towards policy-related things, and US policy in particular. I would have put things in a quite different order.

China becoming the world's largest energy consumer is number one in my list. I really don't think the Gulf disaster will have a long-term effect. But the US is no longer the world's marginal oil consumer, and it is hard to overestimate the long-term importance of the fact that oil prices on the global market will be based on what the Chinese economy can bear, rather than the US. Of course, all of us who say that will look silly if, as some forecast, the Chinese economy collapses next year.

Not on his list, but on mine, is the cumulative bits and pieces that indicate that meaningful limits on carbon dioxide emissions are likely dead for the next few to several years. Multiple countries admitted they wouldn't be able to meet their obligations under the Kyoto Protocol. Several countries, not just the US, have delayed emissions trading implementation. The Cancun meetings were a wipe-out.

Re: Bull vs. Bear: How high will oil go in 2011?

Here's a scenario. Many have speculated that high oil prices triggered the pending credit-collapse and resulting recession in the West (US and Europe). Many have speculated that there is a similar financial crisis pending in China. Will an oil price spike in 2011 trigger the pending crisis in China? Note the diesel shortages in that country earlier this year. Is China's economy as dependent on oil as those in the West? If there is a collapse in China's economy and a related drop in oil demand, will prices drop as sharply as they did in the winter 2008-2009? (I believe that China uses less oil than Europe or the West both in national and per capita terms; on the face of it, I expect it is slightly more resilient and won't drive the marginal swings as hard, but ...)

In the mid run, I expect a rise in oil prices before demand is either permanently destroyed and/or substitutes deployed. But I expect a bumpy ride.

Well, my girlfriend dumped me, in part because we're so different - I worry about global warming, the financial crisis, the failure of political institutions, - and she thinks it will all work itself out. And she's more materialistic (and can afford to be) - I tend to look askance at the huge piles of stuff she buys, I'm forced in to being frugal by circumstances, and I'm baffled by displays of wealth, which she indulges in. Another TOD relationship casualty, I guess. Where's the peak-oil dating website?

Good riddance, I say (though it's a bit cold to be sleeping alone :-(

You may have better luck here: http://ethicalsingles.com/

Our girls and guys are concerned about the environment, including pollution, save the rainforest, energy conservation, renewable energy, climate change, anti-nuclear, organic, global warming, environment sustainability, toxins, recycling, environmental destruction, nuclear power, CND, timber sourcing, carbon emissions and reducing the carbon footprint.

"Join now; it's free!"

Thanks! Yeah, we're probably better off apart. I've been doing some volunteer work with a local community gardening group, and been investigating local sustainability groups to join, to at least find some like-minded folks.

That's the way to do it. When you join a community group, every woman there who is single gets the opportunity to check you out, without her risking anything, and without you even noticing. Then, if you start dating, you've both already taken care of the most awkward steps -- she'll already have some evidence that you're not an axe murderer.

A truly ethical meeting site wouldn't contribute to the global overpopulation problem.

LOL :)

Good one. Can I suggest a few monasteries :)

When was the last time you met a Puritan ?

I've never really been a big fan of groups that somehow expect to change the system. Thats not that it can't happen from time to time it does. But both Ghandi and Martin Luther King and the fall of Aparthied where supported by the chance of a much better lifestyle for the sufferers.

I'm not aware of a successful social movement that offered both a lower standard of living and some sort of freedom.
Even the Amish and Quakers basically offer a different variant of wealth for their people not poverty.

This is about money but you can see its also about children because one of the big pluses of life for many is children. They are certainly a form of wealth in the general sense. Indeed only when material goods overwhelm the desire for children do you see falling birth rates.

I'm not convinced yet that humanity can ever solve this problem without everyone being effectively wealthy which of course means starting from a low population and high resources.

Indeed the time after the black plague in Europe is and exception to the rule but that was not some social movement.

The lack of success of alternative lifestyles historically should be reviewed critically. Something basic seems to eventually be missing for many people. Somehow overtime they simply cannot give people what they want.

This is important because it should be obvious from history that no matter how bad things are a few are always capable of carving out a decent lifestyle. The pyramid schemes always work day in and day out. No matter how steep the slope a ladder of have's vs have not's with more wealth at each level always works. The success rate is 100%.
Sure periodically one group of scoundrels is replaced with another but so what ?

I think perhaps the real answer is to not try and replace such a scheme but to create one that structurally the most benevolent. I.e don't reject the pyramid but work to make it a virtuous one instead. Make it more of a choice between a Ford vs a Porsche both are practically identical across a wide range of feature sets.

I do think that if you look at history and ignore the historical events you will find that many societies did indeed go through long periods where people where more or less comfortable. I.e the pyramid was relaxed not sharp.
We did not recognize how important these periods are and over time they where lost.

And what I find surprising is no one seems to have really worked on a sort of relaxed pyramid solution where everyone was comfortable and the pressure to rise to the next level minimal.

And safety nets for the poor are not what I'm talking about but a naturally comfortable economic system not one artificially created via taxes and redistribution of wealth.

Education plays and obvious role but there is a lot more to it and from what I can tell the whole concept does not seem explored. Why can't the rich, poor, and middle class work together ? Why does it always seem to be a sort of battle between the classes ? One the rich always win until the poor explode in violence ?

Running out of fuel is a serious problem. For the poor especially.

When Europe was running out of wood, the Kings placed the royal forests under their protection, preventing the poor from harvesting while the Lords were allowed to take what they needed. Including, of course, rabbits, deer, etc., which were likewise denied to the poor.

Of course, it was that limitation of available fuel that created the nightmarish conditions the led to the massive depopulation of Europe... without those conditions Bubonic Plague would not have been able to spread as it did. And, it was the resulting drop in population that enabled the renewal of Western societies, while the discovery of the true utility of and accessibility of coal (and, later, of oil and gas) kept it going, as populations were able to grow exponentially for a while.

This is the real crux of the problem we face in the coming decades. Limitations of fuel supplies, lack of heat, tractor fuels (and food) and easy, cheap transportation, together with our rapidly changing environmental conditions will be a test that may only be resolved by such a depopulation. And, it will be done by nature, in her own time and way.

Past history indicates that as the numbers of folks living in poverty increase, and as those people realize their fate, civil unrest may well make the wealthy uncomfortable as well. As always, I look for a positioning strategy for my grandchildren. Nothing really comes to mind as being failsafe.

And my mantra becomes, as it has been,

"Strange species, homo sapiens. Wonder if they'll be missed."


I think the best positioning strategy is not to have any grandchildren. You won't be around to be of much help to your grandchildren when they grow up.

"Of course, it was that limitation of available fuel that created the nightmarish conditions the led to the massive depopulation of Europe..."

Fuel was probably the lesser part with over population and climate change being the main cause. Poor weather conditions cause crop failures and widespread disease amongst their animals causing frequent famines and malnourishment. It was all down hill for some 30 to 50 years before the Black Death struck. I believe we are more-or-less at a similar point in the multi-century cycle of overshoot and die back that accompanies human development. We are again at a point of overpopulation, declining energy availability and with a changing climate.

The outcome, I believe, will rhyme with the historical precedents.

I don't think it was fuel shortages that caused the depopulation of Europe in the Middle Ages.

I think it was 1) bad sanitation that led to numerous epidemics and plagues, the most prominent of which was the Black Death, 2) climate change in the form of the Little Ice Age that caused crop failures and the deaths of millions due to famine, and 3) incessant wars, which not only killed hundreds of thousands directly, but millions more indirectly through the plagues and famines they caused.

At least some historians link the Black Death and "peak wood."

Contrary to popular belief, medieval people actually liked to wash. They particularly enjoyed soaking in hot tubs and, as late as the mid- thirteenth century, most towns and even villages had public bath houses not unlike the Japanese of today. The conversion of forest into arable land had reduced the supply of wood, however, and the bath houses began to shut down because of the expense of heating the water. They tried using coal, but decided that burning coal gave off unhealthy fumes (They were right, by the way) and abandoned the use of the stuff. By the mid-fourteenth century, only the rich could afford to bathe during the cold winter months, and most of the population was dirty most of the time.

Here are some guys who think population collapse in 1300s was Malthusian in origin and black plague just either helped or came along at the same time.


Malthusian and endogenous or natural disaster as in Leanan's link? I think it was simply overshoot, a mixture of both. A benign climatic period had allowed marginal lands to be brought into agricultural production allowing population to increase. Resources became increasingly scarce as a result but it was the changing climate that brought overshoot to an abrupt end and systemic instability ensued. Eventually the systemic chaos created the conditions for the perfect storm or the "Black Death" which allowed some semblance of stability to return.

So the disaster was both endogenous and exogenous, a human bubble pricked by nature. Although, if nature hadn't intervened, the bubble would have still burst due to endogenous reasons. Which is where we are now, waiting either for the random intervention of nature or the gradual degradation and collapse due to chaotic internal system dynamics.

Lack of (good)fertilizers and bad or no infrastructure (roads) were also causes of famines in the Middle ages in Europe I read in a history book.

Right now in the U.S. we are near a peak with respect to vast income inequality. The wealth at the top is garnered under a financial system that has little to do with merit or with necessity with respect to the overall welfare of the society. The pyramid needs to be seriously flattened. The system is not working with respect to providing money to the real economy.

I have no idea what you are talking about with respect to a naturally comfortable economic system. In the absence of such of an economy, we have redistribution which should be done at a much higher rate. We could start by not providing so much money to the financial system which no longer services the needs of the economy or those people who would like to have a job to get them out of their poverty.

The system has been changing for centuries and has changed radically during my life time. This was in no small part due to the kind of people that you are apparently not a fan of. One of the next great changes, hopefully, will be in the financial system. This system is bringing down the U.S. for the service of a few and the detriment to the many.

I think its tough to imagine a comfortable system concept given how wildly distorted our current system is.
First by technology, then energy and finally by financial wizardry.

Its almost impossible to consider a case where concentration of wealth leads fairly rapidly to instability or stagnation. Perhaps and example of a comfortable pyramid would help.

Consider a social/economic system were the disparity in wealth was assured to simply be 4X.

Using houses and cars. Assume the lowest level owned a home that was 1000 sqft and one car then the top level would have 4000 sqft house and four cars. Disparity is not removed and the wealthy are obviously wealthy and the poor poorer however I think you can see that the social inequality is minimal yet the rewards for success ample.

You have and incentive to strive for the top its better but also its not to bad if you don't make it. Those at the top would obviously be driven to raise the bottom if they want the 4X based society to move higher.

For such a society for the top to say double its standard of living to eight cars and a 8000 sqft house it would have to ensure the bottom had a 2000 sqft house and two cars. A society that managed to create a 4X lifestyle would then collectively move together.

Indeed its doubtful that it makes sense for the top to move higher after a certain point such a society would find that striving for eight cars and a 8000 sqft house simply made no sense. I'd argue instead it probably would head towards a 3X differential. Intrinsically it would have little desire to move the top up to keep a 4X differential.
The top in such a society would in general not have such desires. It would not see anything wrong with a 4X differential in income however it would in my opinion naturally move towards lessing not increasing the difference.

All I've done is simply propose that you develop a society that simply naturally capped wealth differentials and used real wealth in the form of homes and cars to express this. Creating this coupling seems to be all thats needed.

Indeed although I picked 4X because it seemed naturally comfortable the intrinsic argument only requires the coupling and the expectation that in time once the system was coupled the differential would fall.

You could easily do so today and couple the maximum wealth right now with the bottom. The differential is insane at the moment with Bill gates and others worth billions. Perhaps one part of the coupling would be simply getting those that are way over the top to disperse their excessive wealth to lower the initial disparity.

If we assume that the average income for as the bottom say 25k see.


And the top income is say capped at 500 million annually with 10x income or 5 billion in assets then if I did my math right the ratio is 200000X for this pyramid or ridiculous. A long way from my 4X comfortable example and indeed I suspect I forced many of the wealthiest to significantly reduce their income but its a start. Even reducing the ratio to a 1000:1 by transfer of wealth from the top to bottom would make a dramatic difference even though its a still a long way from my comfortable scenario.

Indeed I think its clear using this approach just how distorted our current situation is from any meaningful accumulation of wealth that actually gives a significant difference in your standard of living.

By this I mean owing 10 or more Mansions simply does not result in any realistic increase in true wealth. You literally cannot utilize that many mansions. Indeed you probably seldom visit most of them. Many of the super rich don't even visit half the properties they own for personal use much less live in them for any extended period of time so that they could be considered homes. Being super rich simply does not make any difference past a certain point.
Indeed the very rich that invest in many houses are as homeless as any beggar on the street as perhaps none of the buildings really become homes for them. I don't know why they play the game up to that level I think simply because they can. I'd suspect if we could actually figure out a way to create a finite wealth pyramid that the truly rich would have no problem joining such a construct. It would actually give them a valid reason to quite playing when they obviously had more than enough. They can retire in style and redirect their energies towards compression of the pyramid. The top would be well defined.

And obviously I don't think the poor would disagree :)

And last but not least I now realize growing up in the south that this sort of compressed pyramid was actually fairly common in the small southern agricultural towns. By no means was it a 4X one I envision but the actual income gap was surprisingly small with the wealthiest people in the towns worth perhaps 1 million dollars with yearly incomes around a few 100k and the poorest making 2-5k. This was back in the 1970's. Crazily enough these towns which at the time I considered to have a serious concentration of wealth had perhaps a 1000:1 ratio if not less some perhaps more like 100:1 in some towns. Compared to many places today it was nothing.

Hopefully this helps explain what I'm saying about relaxed or natural pyramids income ratios seem to be the best way to explain it. Nothing intrinsically wrong with disparity or a pyramid its when the gulf between the bottom and top becomes to wide to bridge that real problems happen. Indeed with this approach you can see that it does not really matter how far the bottom moves up its the gulf itself that matters.

In fact I think that this is the fatal mistake America has made. We have seen many move up the material wealth ladder over time to afforded more cars and bigger houses yet at the same time the gulf between the poor and rich has exploded exponentially. This widening is itself a signal that the supposed wealth is not real and was not earned and eventually will disappear. Indeed I think this concept of a sort of maximum sustainable wealth differential is real and can be used to discern if your economic system is stable or unstable.

If so we obviously really really screwed up in the US.

"All I've done is simply propose that you develop a society that simply naturally capped wealth differentials..."

Sure, whatever. And I simply propose we develop pigs that can simply naturally fly, so we can ride them to work if and when it comes to pose real problems to drive cars. But seriously, this looks so "simple" that in order to enforce it, it might not be enough to make every adult a bureaucrat, inasmuch as people always find ways to game the living daylights out of such things...

Now we are getting somewhere you see the problem is not rational thought i.e with a bit of thought its fairly easy to come up with a society structure based on some pretty simple principles. As and example checks and balances written into the US Constitution. Sure you can game the system but all you needed to do was adhere to the spirit of the law and your fine. Sure it could be subverted almost any social structure can be subverted indeed probably all.

Thats why I wonder if Homo Sapiens will last not that our species will die out but it seems to me that we have a bit more evolving to do. By this I mean we may well suffer collectively from a destructive genetic condition.

As far as I can tell for the most part we are collectively insane. Perhaps its our life spans which are both too long and too short. Perhaps the baggage from our animal ancestry. If your a fan of science fiction then consider how hard it is for a carnivore species to develop true intelligence even though they are technically often closest.

Omnivores might be able to make the leap more often but they are by nature a bit psycho part wild carnivorous beast part pastoral. Our genetic heritage has not come close to keeping up with our rapid industrialization we are still genetically half intelligent cunning beasts.

To create a stable society we have to look deeply into ourselves and our own problems indeed I think they go very deep all the way down to our species genetic heritage or more correctly baggage.

Somehow we have to tame ourselves I don't think we know enough now to do it correctly but I also think that as long as technology exists over time we will develop a real understanding of what we are. Once we do then perhaps we can make the right decisions about how we should evolve and take control of our species. I mentioned life spans because if you think about it if people lived for 500 years or more then obviously we would not be so quick to exploit our natural resources. If they where shorter then perhaps the accumulated wealth would transfer to younger generations fast enough and the time to accumulate so short that we would at least be different.

It interesting that our life spans seem to match well with the ability to exploit a resource and be dead before the full consequences are felt. I don't think its a simple coincidence instead I suspect we engage in activities that actually ensure payback or costs are deferred beyond your natural lifespan. We intrinsically select goals that fit our lifespans or more correctly into our grandchildrens lives some for good some for worse.

So I don't disagree your response simply shows we have a lot of problems to solve. And I might as well add it here while I'm on the subject the whole response to peak oil and global warming is a glaring example of just how sick our species is in the collective. Any attempt at creating a rational, sustainable and comfortable society is well beyond our abilities. As a species we are sick and suffer from serious genetic and social flaws until we recognize this and really work to fix them we will go no where. One day I think we will have no choice but to confront and solve our issues I just hope that we don't destroy the planet in the process.

She dumped you because she is programmed to act that way;ask any biologist who hasn't been brainwashed into political correctness.


It was not her fault, but yours, for not being either strong and athletic and very good looking, or else financially well off.

We guys are programmed too, but differently;we go mostly for the long legs, big breasts, small waists, and pouty lips sort of stuff of course.

Seek a girlfriend who is either your financial peer , or preferably your inferior in that respect, and your odds of luck in love will be much improved;or alternatively, seek out a woman with brains and money who is less than physically attractive, and you might well win her as most men are too dumb to pay much attention to anything except thier hormones.

Two very attractive and intelligent and basically very decent women left me after they figured out that I was not going to toe the bau line-regular job, necktie, a bigger house and nicer car,etc- for them over the long term.

Their intellects insist on equality but their mid brain insists on an alpha male;and it is a very rare human, of either sex, whose neocortex is in charge. ;)

Now that I am old, my neocortex is finally able to over rule my hormones, but unfortunately I am now so unattractive as to be of interest only to women at death's door. :(

I don't know whether to laugh or cry at this post :-)

Pretty much spot on for the majority of people (of course there are always exceptions).

Reminds me of one of my very attractive girl mates who always jokes to me: "Call me when you get rich".

I'm pretty sure it's only a half-joke too..

Sorry to hear about that - it sounds like it wasn't a terribly good match in the first place.

My wife is fairly PO-aware - she is reading Rubin's book right now and is really enjoying it, and as a birthday present she paid for the registration for me to attend the ASPO meeting. People go through phases in their lives however - years ago my wife worked in retail at some high-end boutique that sold some fancy designer junk to people who probably ought not buy it in the first place. She still speaks of the stuff as if it had some inherent value because of the designer label, but she doesn't buy any of the stuff any more either.

I think the key though is to find things in life that give you joy that don't involve buying junk or using lots of fossil fuels. Some of them are directly productive (like gardening or canning fruits and vegetables) - others are productive insofar as they help you to maintain a more positive outlook (playing with the cat, telling jokes, or singing a song to yourself). And once you have found these things, then find someone to share it with you.

People who go deep down the doomer rabbit-hole oftentimes get kind of depressed, and can become paralyzed into inaction - that is not only unproductive, but it is hard on personal relationships.

Where's the peak-oil dating website?

Some put the date at 2005
Others at 2008

[ i.mage.+]

Oh! You meant the other kind of dating?

Remember: opposites attract.

Re: Maine Residents Get $6,000 to Store Wind as Slow Heating

Summerside, PEI's municipally-owned utility is launching its own ETS heating scheme to flatten their load curve and to mop up excess wind energy during periods of low demand. Wind energy which currently supplies roughly half the city's electricity needs will also help power the city's municipal fleet.

Summerside stores the wind

To provide pinpoint control of the furnaces, and allow them to be charged any time that there is excess wind power, Summerside is running fibre-optic cable into each home that signs up for the program, and will remotely govern each furnace’s power absorption.

“If we can take some of our load off the day, and put it on the off-peak [times], it will flatten our curve and allow a more efficient purchase of energy at all times,” Mr. Murphy said.

About 100 test homes could be online by the end of the year, he said, and in the following months the program will be expanded to many more, focusing on newly constructed homes or existing houses that now heat with oil.


But Summerside isn’t stopping there.

It has also held discussions with some automotive firms about using the city as a test site for electric vehicles – which themselves can act as power storage devices if they are charged up during off-peak periods. Already, the town is starting to retrofit its own vehicles for electric use.

See: http://www.theglobeandmail.com/report-on-business/industry-news/energy-a...

The ETS units will be sold by the city at reduced cost or furnished on a lease to own basis. The electricity will be priced at 8-cents per kWh and this rate will be locked-in for a minimum of five years. That's about a one-third savings over fuel oil which is now selling for a $1.00 per litre.

Initially, the plan calls for 500 homes to be converted over to ETS heating and for additional wind capacity to be added as more systems are installed. Nearly 90 per cent of all PEI homes are heated by oil, so this is a critical step in reducing the province's dependence on imported energy.


How high is the operating temp, I wonder? Seems like the sodium storage with a phase change would offer better energy density?

A low-temp solution that was compatible with solar would be better still. I don't think I've seen one that is commercially viable yet, though...other than adding a bunch of thermal mass to your house. Unfortunately a brick-skinned house like mine has the thermal mass OUTSIDE the insulation.

Hi Paleo,

The inner core temperature is controlled by the outdoor reset, but it can reportedly exceed 750°C. Heat storage capacity for residential room units generally runs between 20 to 40 kWh, and for central forced air and hydronic systems it's typically 120 to 240 kWh.

The beauty of the two-way fibre-optic control system is that these units can be recharged/topped-up at anytime, day or night, as opposed to a designated/fixed off-peak period (e.g., 23h00 to 07h00), and the ones with diminished reserves can be given higher priority. This should minimize the risk of run-out and it could potentially allow for smaller systems to be installed. Luckily for us, space heating demands are generally greatest during the times when excess wind energy is most likely to be available, i.e., on cold, blustery days.


"A low-temp solution that was compatible with solar would be better still."

A simple large water tank with resistive heaters can store a lot of BTU's. Our 450 gal. tank is the sink for several inputs. Wood heat, solar thermal and solar electric dump-loads all contribute. DHW and zoned radiant floor heat are the beneficiaries of this lower temp/high volume storage. Zoning is another way to vary load use. We keep the bathroom floors very warm in winter (oh so nice!) and bedrooms cooler, living spaces moderate. If the tank temp gets too warm (155f degree setpoint). The controller priority setting sends the heat to living spaces first, bedrooms next, storing it in the slab. I recommend anyone contemplating new construction or major remodeling consider this type of system. There are many ways to heat water.

Wow, that sounds like a great system.

I'm curious what the draw is from the resistive heaters, can you give a rough estimate of the contribution from the sources you listed?

You mentioned a high setpoint, are the heaters used to maintain a low setpoint? What temp?

What are your thoughts on water heater heat pumps? I'm not sure what the advantage is for gas compression cycle over electrical resistance heating, but I've seen estimates of 2-3 heating units for each unit of electricity with heat pumps.

I'm curious because I've been toying with the idea of a greenhouse system similar to what you describe, storing excess heat during the day in high volume low temp water tanks and slowly releasing at night in underfloor radiant.


Hi G,
your setup sounds like mine. I use ~ 6-8 cords of wood to heat our house (5600 sqft - 2 units, in southern BC, Canada). The total floorspace is radiant floor heated. Bathrooms warm, bedrooms colder - every room with thermostats. In winter I can use the heating system for DHW. The house has double insulated walls with 21" of blow-in insulation for the ceiling.
I used heat efficient windows and I have also solar thermal heating on the roof (evacuated tubes - unfortunately the BC weather is not always cooperating - to many cloudy days on the coast line!).

At current weather I light the boiler only 2 - 3 times a week.

1000 gal water tank as heat sink. Because of this setup my boiler burns exceptional clean and efficient. I clean ashes out of the burn chamber twice a year only and could get away with cleaning the chimney every other year or longer!

I had to design the system myself. My contractor declared me insane, LOL.

The setup of the controls I had to do myself also. Not many plumbers around here who would bother with it.

Yes, the initial costs are higher, but the comfort in the house and the cost to run it are well worth the investment, IMHO, especially in light of what is coming.


What sort of tanks do you guys use, spin moulded polyethylene or something else?


I used an old scrap metal 1000 gal Propane tank (CAN$ 400.-) which I modified myself. Tanks in that size range (500 - 1000 gal) are normally very expensive. The limiting factor is mostly your wallet, LOL.

The propane tank needed adjusting: Legs to stand it upright, some connections welded shut, etc, but nothing major. I double insulated it on the outside with a final layer of water heater insulation (silvery outside looks very professional!)

Off course the stratification of the stored hot water inside the propane tank is not as optimal as in a professional tank with build in heat exchangers, but the savings between the two choices goes a long way!

I did a lot of reading before buying: very useful website:
Wood heat

The writer, John Siegenthaler, P.E., is very knowledgeable when it comes to wood heating.


Thanks, I know where there is a stock of those :) Do you use these with indirect/anti-freeze or protect them against internal corrosion?


Been meaning to reply but our ISP went down here. I actually tried to post a response farther up but hit save without copying first and lost the whole thing. Arrrggghhh!

Anyway, I'm using a poly tank like this:

If you shop around you can save a lot of money. Be sure to check the temp rating. I wrapped mine in layers of silver mylar bubble insulation, framed it into a plywood enclosure and blew in cellulose insulation. I set the tank on 4" of blue foam board.

Because of the moderate temp range I'm not using glycol. I use standard boiler treatment for corrosion control. I change my water every 2-3 years and add new boiler treatment. I also use bronze and stainless pumps, avoid steel or iron pipe. CPVC and PEX work fine for fittings. While this is an open system (the vent is only a small 1/4" fitting) I've had no problem with corrosion.

Thanks for the information to both of you. I've been rolling a few ideas around, in my head, for day/night heat/cool control. Here we don't have issues of freezing but finding out how people have tackled these issues helps.


Just to round out your catalog of ideas, there is a type of homebuilt tank that is familiar to those doing DIY, Low-Budget systems, which consists of a heavy-framed Ply and 2x4 Box, lined with Rigid foam Insulation and then a big sheet of EPDM Rubber Membrane to make it hold water. Usu. the Inputs and outputs come in at the open top, and there's an Insul Lid that covers the thing, thicker=better.

One Guy had a variation using a large sheet of metal bolted into a standing tube shape, and the EPDM inside that, etc..

Find many such plans and tutorials here ... www.builditsolar.com

one specific example.. http://www.builditsolar.com/Experimental/PEXColDHW/Overview.htm#TankHX


That PE/PEX spiral idea is useful, thanks.


I had to use anti-freeze because my boiler and storage tank is in a separate, unheated, building (woodshed) beside the house with underground running pipes. Keeps the mess and smoke outside - besides insurance issues!

Corrosion should also not be a problem because the tank is in a closed loop with heat-exchanger (if something leaks inside the house I didn't want to clean up 1000gal of dirty water, LOL), therefore the oxygen necessary for corrosion is gone in a short period of time.

The only problem I had so far (4 years) is the PH level in the fluid.


Some time ago I read about a plan to use electric immersion water heaters in a similar way to this - very interesting to find an enterprising utility actually doing it!

Domestic water heaters would seem like a good fit and, unlike ETS, can be utilized for load control year round. A home fitted with a 400-litre cylinder and equipped with an anti-scalding value could potentially absorb 10.0 or more kWh of surplus energy within a swing of 25°C or so, or some 2.0 to 2.5 hours of discretionary runtime at 4.5 kW. Storage capacity would increase by a third or more which would also permit many of these tanks to coast through periods of peak demand or reduced wind capacity.

One other side benefit: legionella control. According to Hydro-Quebec, even when tank temperatures are set to 60°C, one out of every four electric water heaters in that province are contaminated by legionella bacteria (source: http://www.hydroquebec.com/advice_hot_water/index.html), so boosting tank temperatures a couple hours every other day would have a positive bactericidal effect.


It's surprising how many opportunities there are for load control when you look, isn't it?

This is why I laugh at the pessmists about the future of the grid.  There are too many opportunities for arbitrage of expensive on-demand power vs. cheap time-delayed power for the system to fail as easily as they claim.

According to this article
the cost per KWh of the AECL bid was 5c/KWh.
The proposal you report costs 8c/KWh for the ETS use of the electricity.
Someone in the decision making system in Ontario has decided nuclear is needed because they are going to spend 33B more on nuclear in Ontario.
I think you have been anti-nuclear in some of your posts in the past but I'd like to know if I've understood - do you think nuclear is not cost-effective?

Nearly 20 per cent of the electricity consumed on Prince Edward Island is supplied by the Point Lepreau NGS located in neighbouring New Brunswick, and according to the Province, wind is already cost-competitive with nuclear -- both being in the range of 8-cents per kWh (source: http://www.gov.pe.ca/photos/original/wind_energy.pdf).

Going forward, it looks like wind will hold the upper hand. In March 2008, Point Lepreau was taken off-line to undergo a mid-life refurbishment. The original cost was an estimated $1.4 billion and the return to service date, September 2009. As it now stands, the project is three years behind schedule and a billion dollars over budget, and it seems the situation continues to deteriorate with each passing month.

So do I think nuclear is cost-effective? In a word, no.


p14 of the quoted report
refers to
"feed-in tariff rate for wind power which is in the 8 cent a kwh range."
Is that the same thing as a straight rate? Also the previous post referred to 8c/kWh for ETS use not general use.
Is all this a straight general use rate?

I'm aware, generally speaking, of the Point Lepreau refurbishment fiasco. As far as I can make out, someone failed, deliberately or otherwise, to take a well engineered approach to what was necessary to do the job of replacing the calandria tubes right the first time. As far as I can see, the same mistakes have not been made in Korea or the Bruce reactors, so it is not a necessary cost of CANDU refurbishment.

Assuming this rate schedule is up-to-date, the urban residential rate is 10.33¢ per kWh for first 1,200 kWh per month and 8.01¢ for each kWh thereafter.

Source: http://www.city.summerside.pe.ca/files/Municipal_rsp_manual_march_20_06.pdf

Another plus: the City of Summerside's four 3.0 MW turbines generate a $1 million a year in net revenue which is re-invested in the local community as opposed to sent out-of-province.


I guess I can't separate out the rates (cost) for the wind power from the rates quoted.
I couldn't see in the document quoted how it is determined that the turbines generate local revenue. I suppose any local power plant that earns more revenue than it costs is generating local revenue. Hopefully this will also be true for the new nuclear investment in Ontario.
I guess I always have trouble with this kind of thinking - is electricity production supposed to be a profitable business or is it supposed to be a service. Either way you want it to cost as little as possible.

"The total project cost of both Phase One and Phase Two is $30 million."
30 million
"it is expected to displace, annually, 30.6GWH’s of electricity when the wind farm is fully developed."
capacity factor = 30.6/105.120
or equivalent to 12*.291=3.49MW
so it costs 30/3.49
=$8.59/W to build, comparable to the cost of nuclear build.

Well I guess if the grid can take all the power the windfarm generates, the numbers so far make it about equivalent to nuclear on cost.
I think you need nuclear for large baseload though.

I couldn't see in the document quoted how it is determined that the turbines generate local revenue. I suppose any local power plant that earns more revenue than it costs is generating local revenue.

The revenue figure I mentioned was pulled from the following CBC News story:

The $30-million wind farm is also providing a net amount of about $1 million a year for the municipality, said Malcolm Miller, director of financial services.

"That goes into general municipal revenues so it can be used for the benefit of everyone in the city," he said.

"That's the amount of dollars which are not going off Island to purchase energy from someone else's facility."

Source: http://www.cbc.ca/canada/prince-edward-island/story/2010/04/05/pei-summe...

In the original Globe and Mail article linked above, we're told that "[a]t the same time, any profits from the electric utility can be directly plowed into community improvements. Already, funds from the power system are used to pay the mortgage on a pricey new recreation centre in Summerside."

Again, much better to have these earnings re-invested in the local community than shipped out-of-province, especially if it displaces more costly fuel oil.

Well I guess if the grid can take all the power the windfarm generates, the numbers so far make it about equivalent to nuclear on cost.

Not to put too fine a point on it, but AECL's most recent estimate at $10,800.00 per kW is 25 per cent higher and it's reasonable to expect that the final price tag could be even steeper given that they have no real-world experience with this latest CANDU design and that their past cost estimates have been somewhat optimistic, if I may say so.

The Ontario government put its nuclear power plans on hold last month because the bid from Atomic Energy of Canada Ltd., the only "compliant" one received, was more than three times higher than what the province expected to pay, the Star has learned.


AECL's $26 billion bid was based on the construction of two 1,200-megawatt Advanced Candu Reactors, working out to $10,800 per kilowatt of power capacity.

Source: http://www.thestar.com/comment/columnists/article/665644


Actually, figuring a 90% capacity factor, the cost per kilowatt is higher again, more like 13000/kW. OTOH, that includes a lot of infrastructure. A third or fourth reactor installed in the same place would have a cost per kilowatt much lower than 10800/kW.
The point of Idaho Samizdat's article was the capital cost was guaranteed not to exceed the bid cost, so the electricity cost to the consumer was guaranteed under the deal to be 5c/kWh. It's the guarantee that made the capital cost of the plant so high but still the unit electricity cost is low.
Wrt to wind turbines, you note I said "if all the power can be taken by the grid" - AFAIK that usually doesn't happen, so the capacity factor of wind is lower again, moving the capital cost per watt of capacity higher.
ISOs generally give wind a capacity credit of only about 12% (I'd have to find the posting on BraveNewClimate that said that for a reference). I don't actually know about this stuff, but I guess it takes the kind of clever "storage" type usage of the power such as you quoted to really use the power. But it means you can't really expect to get all your power from wind without adding some more expense for storage or backup technology, and if you're excluding fossil fuel backups then AFAIK you're talking about relatively untried stuff.

The point of Idaho Samizdat's article was the capital cost was guaranteed not to exceed the bid cost, so the electricity cost to the consumer was guaranteed under the deal to be 5c/kWh. It's the guarantee that made the capital cost of the plant so high but still the unit electricity cost is low.

Well, in the case of AECL, a guaranteed price simply transfers any cost overruns onto federal taxpayers which means that all Canadians share the pain equally.

Wrt to wind turbines, you note I said "if all the power can be taken by the grid" - AFAIK that usually doesn't happen, so the capacity factor of wind is lower again, moving the capital cost per watt of capacity higher.

As I understand it, any wind energy in excess of the utility's needs is exported to New Brunswick or sold to Maritime Electric. I don't know how much revenue these sales generate, but it obviously makes more sense to use this surplus wind to display fuel oil than to sell it to a neighbouring utility at a steep discount.

Summerside has a peak and minimum demand of 21 MW and 11 MW respectively (minimum demand during the critical winter months when wind resources are at their greatest is presumably higher). Five hundred homes consisting of a mix of room and central FHA/hydronic ETS systems could potentially absorb an additional 5 to 6 MW of production over an eight hour period; here, of course, this load can be easily notched up or down and spread out over a 24-hour period as conditions warrant.

Interestingly, with regards to annual output, Natural Resources Canada puts the output of these four turbines at 38.33 GWh/year or 1.25x higher than that of Infrastructure Canada.

Source: http://canmetenergy-canmetenergie.nrcan-rncan.gc.ca/fichier.php/codectec...


AFAIK the feds were pretty adamant they would not rescue AECL from this bid, and with Harper in charge I think that would be the case, although if Harper were not in charge in the future I could not rely on that circumstance. But, without knowing for sure, I thought in this case the contract was pretty stern - AECL had to stick to the price.
I don't think I can dispute that wind turbines could work for a small place, like Summerside, although I maintain my reservation that if you really look at the costs, wind is not cheaper than nuclear.
For large scale power, I don't see how renewables can compete with nuclear, if nuclear is done properly.

From what I've read, I get the impression that Harper would like to show AECL the door (e.g., http://www.theglobeandmail.com/news/national/aecls-future-in-doubt-as-on...) and, frankly, who could blame him. Nonetheless, at the end of the day, be it ratepayers or taxpayers, someone has to pick-up the tab and I would be shocked if this new reactor design could be delivered on budget. An internal Natural Resources Canada document suggesting that "[t]here is the risk there could be large cost overruns” certainly offers little comfort (source: http://www.ctv.ca/CTVNews/Canada/20090609/ont_nukes_090609/).

I don't think I can dispute that wind turbines could work for a small place, like Summerside, although I maintain my reservation that if you really look at the costs, wind is not cheaper than nuclear.

I would welcome a thorough and honest accounting of both options. We do know that for a relatively modest $30 million dollar investment, the City of Summerside is generating between 30 and 38 GWh of electricity each year and earning $1 million in net profit, and compared to NB Power's experience with Point Lepreau, that seems like a pretty good deal.


The ridiculously high bid is a consequence of Ontario's ridiculous terms and conditions.  Remember, this is the same province which waited until Pickering B was closed for repairs to create a new nuclear control board and required the repairs to wait until it had written the rules!

Any industry can be regulated to death by a hostile government.  Nuclear is no exception.

Hi E-P,

Just curious; what were the terms and conditions you found ridiculous?


I haven't read them, but all the major nuclear vendors in the world appear to have and all refused to bid (except for the Canadian vendor, which was required to).

I haven't read them, but all the major nuclear vendors in the world appear to have and all refused to bid (except for the Canadian vendor, which was required to).

I'm not sure I follow. According to World Nuclear News, four vendors were invited to participate in the bidding process -- Areva, AECL, GE-Hitachi and Westinghouse -- and all but GE-Hitachi submitted final bids.

Source: http://www.world-nuclear-news.org/newsarticle.aspx?id=24762


Areva and Westinghouse withdrew their bids before the end, citing nothing much, presumably because they didn't have to.
The general feeling is that between Ontario and the Feds, the bid was designed to deter rather than elicit real participation.
You are against nuclear. Nuclear does not have to cost this much. I would go further - it should not cost this much, and there is something wrong when bids must cost this much. I really think nuclear is safe, clean and necessary. But you have to look into it to come to this conclusion, because there is much that on the surface portends against nuclear power. Looking deeper, I would say we live in a universe which contains such miracles as beta-decay, and we are fools to ignore these miracles.

Areva and Westinghouse withdrew their bids before the end, citing nothing much, presumably because they didn't have to.

According to this February 27, 2009 Communiqué from Infrastructure Ontario bids were received from the three firms I've identified above.

TORONTO – Infrastructure Ontario has received the proposal (bid) submissions from AREVA NP, Atomic Energy of Canada Limited and Westinghouse Electric Company for the Nuclear Procurement Project Request for Proposals (RFP).

The three proposals to build a new, two-unit nuclear power plant at Ontario Power Generation’s Darlington site were received today by the 2:00 pm deadline.

Source: http://www.infrastructureontario.ca/en/news/io_news/2009/feb2709/Media%2...

You are against nuclear. Nuclear does not have to cost this much. I would go further - it should not cost this much, and there is something wrong when bids must cost this much.

Might be a good option elsewhere, but with AECL's hands firmly at the helm, it's impossible for me to embrace nuclear power in this country. AECL has no credibility in my eyes.


I found this:
"Westinghouse withdraws from Ontario reactor bidding
Submitted by OCAA on Thu, 11/27/2008 - 05:00."
I think the circumstances were such that any bids were rather tentative.
I know my cite is earlier than your cite.

That news report turned out to be false.

See: http://toronto.ctv.ca/servlet/an/local/CTVNews/20081127/ont_nukes_081127...


So should I revise my estimation that you are against nuclear and rather put it that you are perhaps in the same camp as AlanFromBigEasy that nuclear could be a good option if it were done properly? I certainly should not make unfair characterisations.
If you are not wholly against nuclear do you have in mind any particulars of how it should be employed?

I wish I could provide you an unqualified yes or no, but I don't know enough about the technology and the industry to make that call. As it stands now, my preference is for aggressive conservation/DSM, combined with renewables (small hydro, wind, solar, tidal, biomass, etc.) and industrial co-gen.


Thank you for your answers to my questions.
I am pro-nuclear because I think it is the only thing that provides cheap clean baseload. I also think it is a kind of miracle that we should not ignore. It remains difficult for me to see how renewables can power the planet alone and certainly not at a cost that could match nuclear if nuclear is not bedevilled by such a poor show as Pt Lepreau.
I am not in the nuclear industry (although if I could have my time over I think I would have liked to have been). I know a few people who know a thing or two about nuclear, including an ex-fusion PHD, and the sense is that the likes of Joe Romm are being unrealistic about the capability of renewables to do the whole job in comparison to nuclear. If we lived in a universe that did not contain nuclear then sure we would need to make to with renewables (ignoring the fact that the sun is a nuclear furnace). But we don't have to AFAICS. We do need to put in place effective non-greenhouse-gas systems ASAP, and nuclear can sideline fossil fuels faster than anything - which is why France went that way.
Well, thanks again for your replies and here's wishing for a good new year, despite the many and varied indications to the contrary.

My thanks to you as well and your points are well taken; what's appropriate or feasible in Atlantic Canada may not be true for Ontario or elsewhere. Nuclear power may very well play an important role in our energy future, but our experience to date in this country has been less than stellar, hence my dubiety/scepticism.

My best wishes to you and our fellow TOD'ers for the new year. Let me raise a virtual pint to everyone's good health.


I know a local food bank that could not possibly afford something like this:

Strapped Cities Hit Nonprofits With Fees

Facing budget gaps and an aversion to new debt and taxes, states and local governments are slapping residents with an array of new fees—and some are applying them to nonprofits.

At a group called the National Council of Nonprofits, Tim Delaney, chief executive, says, "Governments are taking their public burdens and putting them on the backs of nonprofits, at a time when the demand for our services is skyrocketing."

Mayor Parker is holding her ground. "If we take away one broad category, somebody else will have to pay significantly more," she says. "It's a zero-sum game." ...

The outcome came as a jolt to Greg Meyers, president of the board of the Houston Independent School District, which includes 300 schools. Mr. Meyers says schools will have to lay off 50 to 70 teachers or raise taxes to pay their share—$3 million to $4 million a year.

That's $10k+/year, per school!

I have a different view on taxing churches, especially the mega-churches that are essentially corporations with 6-7 figure compensations for their leadership and defacto for-profit, hundred plus acre campuses. A discussion for another venue perhaps.

All not-for-profits simply disburse their profits as salaries rather than dividends.

True. So do partnerships. And C-corporations pass all through to the owners. So what? They should pay taxes like everyone else. In Texas they tax partnerships, corporations, etc., (since they brag on their 'no income tax' status). For our nation to continue all should be expected to, and should in fact, pay their fair share, for what they use and demand from the polis.

I know, the power to tax is the power to destroy. However, so long as it is the same tax that others pay, and is not discriminatory (higher than other businesses' or religions') they should be okay.

Also, real estate taxes can be levied based on the value of the land for its highest use. Just like if I owned it. Churches require fire protection, police protection, etc., and traffic controls, just like any other business. In fact, they need more than many! They are set up to make money for their owners. They should pay their share of taxes!

My church, your church, his church, her church, and their churches. All of them.

And all of the other tax free, not for profit institutions should pay as well. Based on income to the entity, then based on value of property and land.

Let 'em pay for what they use. Megachurches should pay megataxes!


It's a worthy debate, but maybe we should just start by taxing the super wealthy again, just for starters, say, and see where that gets us.

Don't Ministers pay income tax?

Don't Ministers pay income tax?

What? Are you kidding?


Read this summary from a tax preparer who did a local priests taxes, and feel your wallet cringe.

The minister gets paid from his church, from which he received cash of $105,000 in 2009. He received a W-2 with wages of $40,000 and a "housing allowance" of $65,000. First, ministers, along with other state workers, are allowed to elect out of social security and Medicare. By electing out, they don't have to pay into the programs and they don't ever get to draw from the programs either.

Next, of his housing allowance of $65,000, he only has to recognize as income the portion that he did not spend on ANYTHING related to his house. So, he can essentially deduct mortgage interest, mortgage principal, taxes, utilities, HOA fees, insurance, furniture, appliances, silverware, napkins, gardeners, soap, towels, etc, etc, etc from his income. Normal people can only deduct their interest and property taxes. So, after all of his expenses, he only had to recognize about $9,000 of his housing allowance as income, for a total income of $49,000 ($40,000 in wages and $9,000 of excess housing allowance).

Next, even though he already deducted all of his housing expenses, including interest and property taxes, he still gets to use Schedule A like everyone else. So he is able to deduct his mortgage interest and property taxes again. (Technically, the first time was just an exclusion from income, so he's not getting double deductions. But essentially he is. The end result is a double deduction).

Final tax bill for Mr Holy-Come-to-Jesus: $740, on an income of $105,000. Final bill for a secular citizen of equal financial status: $18,826.

So the US subsidizes the rich and the pious. Does anyone else see something wrong here?

Holy cow!

From Wikipedia:

The Establishment Clause of the First Amendment prohibits the establishment of a national religion by the Congress or the preference of one religion over another, non-religion over religion, or religion over non-religion.

Originally, the First Amendment only applied to the federal government. Subsequently, McCollum v. Board of Education, 333 U.S. 203 (1948) incorporated certain select provisions. However, it was not until the middle to late twentieth century that the Supreme Court began to interpret the Establishment and Free Exercise Clauses in such a manner as to restrict the promotion of religion by state governments.

In the Board of Education of Kiryas Joel Village School District v. Grumet, 512 U.S. 687 (1994), Justice David Souter, writing for the majority, concluded that "government should not prefer one religion to another, or religion to irreligion."[2]

So much for government not expressing a preference for religious activities/functions.

For as long as I have been cognizant about the topic, I never supported the concept of any level of government excluding certain functions and entities from paying property taxes. Including churches, and any other groups/functions/affiliations which receive a pass.

Where I live, we have a proliferation of resorts that are church run. Some of these have been converted from for profit resorts over the years for obvious reasons. This, of course, reduces the tax base, increases the taxes for everyone else, subsidizes tourists, and makes it more difficult to compete for the profits. The biggest resort,by far, is the YMCA.

Ahhh...sounds like a nagy rakás hülyeség!


I wasn't kidding, and know a few ministers who DO pay theirs, but I can knock myself again for tossing in a distracting sidebar to the main point.

LET'S GET THE RICH TO PAY THEIR FULL TAXES. That they are getting this 'welfare' right NOW is thoroughly obscene.


I guess my point was, that compared to the average Joe, Mr. Minister in the example above IS rich and he ain't payin his fair share. So let's get him to fork it over.

Fair enough, and sorry for yelling.. it looks like I was yelling at you, and of course I didn't mean to.

The trouble with bringing Ministers into it is that 'Religion' always raises so many other distracting irritants to so many people that it again upstages the arguments about how Extremes of Wealth are protected, and every conversation about Oligargy seems to get sidetracked.

Interesting discussion!

Religion is one of the driving forces for much of the bad worldwide situation we have today - and was it for eons! (I don't want to go to much into that - would be a long discussion)

The much maligned Holy Book of Christianity, the Bible, describes organized religion as a whore, sitting on this planets economic/political powers and profiting from it! (Revelation 17:3-6)

But this book also tells how religion will end! (Revelation 18:8)

Off course no pastor likes to hear that!

There is two things which have to change fundamentally, otherwise there is no way out of this mess - even if we discuss the necessary other changes until we are blue in our faces - IMHO


I won't try to claim Religion is not an issue and a huge one, but follow the money.

Who is funnelling more cash across the seas, the Vatican and Megachurches, or the Arms Dealers, Banks, Reinsurers and Energy Companies?

It seems monied interests are very keen to keep out of the limelight, and topics of Sex, Religion, Entertainment, Disasters, Politicians are wonderful tools to turn the tide of a discussion away yet again and let them make/keep money in peace. Trace it back to the East India Company, if you like.. the places where money IS and IS NOT flowing are sure indicators of how this system is being mismanaged, and resources relentlessly exhausted. It's a scorched-earth system that pretends to be 'pro-life'..

"In the middle of the road,
You see the darnest things.
Like fat cats driving around in jeeps through the city,
Wearing big diamond rings and silk suits.
Past corrugated tin shacks holed up with kids and
Man I don't mean a Hampstead nursery.
But when you own a big chunk of the bloody third world,
The babies just come with the scenery." -Pretenders


it is late for this Drumbeat and you probably wont read this, but anyway:

Read this to the end:


and tell me if you think organized religion is not about "BIG" money. That is what religion is all about: "Control", "Money" and "Power"!
This is why the Bible pictures organized religion as a "Harlot", a "Whore", which will be destroyed by TPTB very soon.

Look at their pomp and glory in their churches. With who's money are they build? The money of people who they tricked into believing that there is a God in Heaven who is cruel enough to torment their beloved relatives in Purgatory or Hell and they can help them with money paid to the priest.
Even Martin Luther - who started the Protestant Church - was in the beginning totally against this practice, but later realized that this would be an easy way to get financing for the Church going.

The Bible does NOT teach about such a God - on the contrary - the God of the Bible is a loving, caring God.


What do you think the top marginal rate should be? I suggest we go back to the tax rate during Eisenhower's administration. Right now, hedge fund managers who makes hundreds of millions of dollars per year pay a rate of 15%.

Craig - FYI about the Texas brag about no state income taxes: they don't need an income tax...they do very well on property taxes and other hooks. Last time I saw the stats Texas had the third highest combined individual taxes of all the states. You have to pay a tax to flush your toilet or pour a glass of water in most parts of Texas. And even with that we're about to run head long into a huge state deficit wall ourselves.

As we say in Texas: More hat than stock. IOW big talk without much to back it up.

As we say in Texas: More hat than stock. IOW big talk without much to back it up.

Actually thats what they say about you guys in Oklahoma they just allow you to use it:)
Sorry could not resist I get a big hoot out of Texas/Okie rivalries :)

Actually the dynamics between the big states TX,CA,NY and surrounding states is fascinating.
All kinds of micro import/export law differentials at play around a general dislike of the big boys.

Sometimes I wish Westexas would generalize his import/export land model to include all these interesting cases.
And it fits right into his ELP (economize localize produce) concept. Oil is and obvious one but the friction if
you will between centers of political power and economics aka generalized export land is fascinating.

I think the rapid decline of net exports function is really fascinating. As and example you can look at the white oak forests of NW Arkansas and the pine forests these were exploited to the point of ruin during the 1800's.
Also wood for the steam ships and train boilers. The arrival of steam in America was met with the rapid destruction of a lot of our forest land. Anyway throw export land on top of that and you can have a field day with real life examples of complete export/import land examples and their legacy.

Indeed the only thing that baffles me since I'm from Arkansas is how two Texans can be so insightful you and WT.
I still don't think its possible and I suspect both of you have tainted family trees with some family from neighboring states :)

A real Texan like the state geologist WT is so fond of is incapable of thinking like you guys do :)

Arkansans are of course natural conservationist we recognized a long time ago that we had no choice to conserve or we would run out of deer and ducks to shoot with abandon and our gun racks would go empty shortening our manhood :)

m - No problamo...don't have a dog in that fight. My family tree is screwed up: mother: New Orleans...father Wisc. Born in Detroit and grew up in S La. Your "insightful" brings to mind a chat I just had a couple of weeks ago with my boss. He apologized that our year end bonus wasn't as good as last year's. Told him I didn't think we should have gotten any bonuses this year. We did have a good year but way below our potential (we do represent ourselves as the best of the best). He always get a chuckle out of my brutal honesty. I told him it wasn't so much honesty as the reality of desparation. We all BS some folks sometimes but you should never BS yourself. Unfortunately with human nature being what it is you tend to start beleiving your own BS. And that inevitably leads to bad decisions. I constantly question my analysis to seperate needs (the desparation part) from the reality of the situation.

And that, in a nut shell, is the country's biggest problem: we refuse to see thru the BS out of shear desparation because we don't want to accpet such a dark reality. So many of our policies are based upon what we need to happen as opposed to what capabillities really are. Or, to offer one of my favorite Dirty Harry lines: "A man has to know his limitations". IMHO society is about to come nose to nose with some rather significant limitations and our politicians along with a big chunk of the population don't want to acknowledge our limitations. So we just keep whistling as we walk past that PO graveyard.

And a Happy New Year to all honest folk everywhere. To the rest of you, a big middle finger salute!


"Even if they are worried about bonuses, their egos are involved here," said one dealership manager, who said requests have been filing in for $225,000 crimson red Ferraris and $170,000 Audi R8 convertibles.

Wall Street paid out $20.3 billion in bonuses for 2009, and the numbers for 2010 are expected to be up modestly, according to various estimates, including one from New York's comptroller.

I'm sure they really deserve those bonuses!

Now, now FM...everyone knows a good sheep shearer is worth his weight in gold.

And a Happy New Year to you 2!!!

A juhasznak jol van dolga, FM.




My church, (Unitarian, a local New England parish), is running a food bank that is keeping the wolf from the door for an increasing portion of our city's population. We don't have a parking lot. Our minister is paid very modestly, as is the sexton, and that is the sum total of what we spend in house on salaries. The rest goes to maintain the property. Beyond that, everything goes to the food bank. If the city hit us up for money, we'd fold the next day.

The last thing our region needs is to refight that war. Of course, we don't have megachurches. We're not the ones keeping preachers of the Prosperity Gospel so obscenely prosperous. And the regions that have megachurches will return to a more old-time religion as the price of gas goes up.

How to eat for a $1 a day or REALLY help your local food bank


Ok, this is OT but this is an amazing story of one guy's cheap eating. Besides eating for a buck a day (as a challenge) he donated hundreds of dollars worth of food to his food bank that he got with his buck a day. Here is a way for people to give all year to those who need help.

(A sincere HT to http://www.survivalblog.com for linking this site.)


Edit to add - plus it's a fun read to see how it went each day.

Edit 2 - Let me add one more edit:

Goal: 100 days eating on $1 a day
Money Spent: $76.11
Retail Value of Everything Purchased: $1473.94

I want to add that this isn't shuck and jive.

This evening New York time, the API released its oil inventory report:

U.S. Oil Supplies Rose 3.06 Million Barrels Last Week, API Report Shows
By Mark Shenk - Dec 29, 2010 4:32 PM ET

Crude oil inventories rose 3.06 million barrels last week to 345.1 million, the American Petroleum Institute said today.

Gasoline inventories declined 3.14 million barrels to 216.4 million, the report showed.


If the API is correct, then refiners cut back output more than planned, leading to a build up in crude and a fall in gasoline supplies. This actually makes some sense in view of the reported low gasoline supplies in the southern part of the Midwest based Magellan Pipeline system.

Meanwhile demand for distillates, such as diesel and heating oil, remains strong in the Northeast, leading the Colonial Pipeline to "allocate" deliveries - that is the pipeline is operating at maximum capacity for distillates - for the first 3 weeks of 2011. Gasoline has also been allocated for some weeks now.

12/29/10 Reuters News 01:09:59
December 29, 2010

Colonial allocates main distillate line for Cycle 3

Soma Das in Bangalore

Dec 29 (Reuters) - Colonial Pipeline said it was allocating its main distillate line north of Collins, Mississippi, for Cycle 3, as nominations on its line exceed the company's ability to meet the 5-day lifting cycle.

In a note to shippers sent late Monday, Colonial said it will announce committed and threshold volumes on Dec. 31.

The 3rd cycle begins closing on Tuesday, Jan 4, Colonial said.

Countless Juarez residents flee 'dying city'

While many Juarez residents fleeing the violence seek out more peaceful points in Mexico, others have streamed across the border into El Paso, population 740,000, where apartment vacancies are down and requests for new utility services in recently purchased or rented houses have spiked, according to Mayor John Cook.

Massacres, beheadings, YouTube videos featuring cartel torture sessions and even car bombs are becoming commonplace in Juarez, where more than 3,000 people have been killed this year, according to the federal government, making it among the most dangerous places on earth.

El Paso, by contrast, has had three violent deaths — and one was a murder-suicide.

A city where organized crime is the government...and it didn't turn out like in that Star Trek episode.

And more on Ireland:

Thousands without fresh water in N. Ireland

A big winter freeze followed by a swift thaw left burst mains and pipes across the province, affecting 40,000 homes and businesses in Belfast as well as 77 other towns and villages, NI Water said.

Some people have been left without water for more than a week and others have had sewage flooding their homes.

Just a small taste of the problem unpredictable climate can have on infrastructure. Even people whose pipes are not broken have been affected, because the water utility had to turn off water service to keep the water from leaking away through the broken pipes.

This is a good example of the fragility of our complex systems - can you imagine 9 days or more without a flush toilet, bathing or tap water?


Yes I can imagine it. Hurricane Iniki, on September 11, 1992, cut off our running water for three weeks. Electricity for three months, and we were not the last to get it back. Of course it was a major storm and when half the utility poles on the island are laying on the ground, it is a slow recovery. We washed in the local stream. Use your imagination for the rest.

45,000 residents and 1.5 billion in damages. You do the math. But the biggest problem is that it is an island and so there is no place to go. Homestead could go to Miami, New Orleans to Baton Rouge or Houston or whatever. For us it was deal with whatever you have left. Interesting 1993.
Most of the hotels were too damaged to provide any help. Any house that could still be occupied (1/3 were destroyed) had multiple families.
The rest in tents.

Of course the tourism people on Hawaii did their best to ensure this did not get too much press. Don't want to scare away the golden goose. Can;t say I blame them. It was good to keep the other islands viable.

We were actually lucky that the military infrastructure was able to come to the island and provide emergency support. MREs and RO water stations were lifesavers literally. What will it be like when the backup isn't there?

I got out the day before, back to Maui (I had to get a small plane out of Princeville). I kept pointing out to the boyz that they better watch this one.

x - Sounds like a nice long deer hunting trip some folks in Texas pay thousands of $'s to enjoy. I suppose it depends on one's state of mind. Though I grew up in the nice warm South (getting close to 70F today) I've worked enough in the very cold to appreciate their plight...like -34F with an unheated Porto-potty.

Pretty good article on how hard it is to manipulate the oil market -and also a couple good points on the thought of living without oil.


That is an interesting article.

The only thing I don't like about it is the focus on "profiting" - that is a can of worms that worries me in terms of any mitigation efforts.

I do like this part a lot:

So, if I can make my point any clearer: Oil is so big, so important and so all-encompassing, that it's kind of silly to fine someone or even accuse someone of manipulating the price. It would be like Greenpeace blaming one person who drives too much for melting the polar ice caps.

I've been thinking about the enormity of oil in my life, and to even conceive of how I might survive without oil is nearly impossible.

There's a book out called A Year Without Made in China about one family's effort to live their life without buying anything made in China.

That's a tall order -- and I've been thinking about how someone should write a book called A Year Without Oil -- but after giving it just a few minute's thought, it became clear to me that such a venture would be almost impossible.

... someone should write a book called A Year Without Oil -- but after giving it just a few minute's thought, it became clear to me that such a venture would be almost impossible.

Hmmmm .... I think you will find that rather a large number of humans live without much oil in their lives ... maybe we should try and see how they do it ... I doubt it is very comfortable though if you live very far from the equator. If you don't have access to stored solar energy you must have plenty of the real thing all year round.

The author goes on to say that even writing a book about living without oil would be impossible because he would need oil supplies to write, produce, and distribute the book.

How on earth did the Egyptians and the monks of the middle ages manage? ;)


Papyrus, parchment and calligraphy with quills? Well, at least until Gutenberg came along. Oooh, you meant how did they live without oil, well, you can't really call that living, now can you >;^)

haven't seen this posted:

OPEC output up slightly in December: Reuters survey

Total OPEC supply including Iraq has risen 70,000 bpd, according to the survey.

that equates to 20,000 bpd for iraq according to the survey vs 100,000 bpd claimed by iraq. the iraqi minister may have been refering to a daily rate - vs monthly average.


Jobless claims drop below 400,000 mark

NEW YORK (CNNMoney.com) -- The number of Americans filing for their first week of unemployment benefits fell below 400,000 for the first time in more than two years, pointing to continued improvement in the job market.

The number of initial claims fell to 388,000 in the week ended Dec. 25, down 34,000 from an upwardly revised 422,000 claims filed the week before, the Labor Department said Thursday. That's the lowest level of claims since the week ending July 12, 2008, when there 385,000 initial filings.

Denninger isn't impressed.

I noticed no mention of the fact that the last day of the week was 24 December. One wonders how many people thought to apply on the day before Christmas. I would not be surprised to see a big jump in the numbers for this week, even though Friday is the New Years Eve holiday. Here's a comment from MarketWatch:

Analysts also note that claims are difficult to seasonally adjust near the holidays. Without seasonal adjustment, the initial claims level rose about 25,000.

Next week's post holiday filings might be more interesting...

E. Swanson

And the non-seasonally adjusted figure was 556K one year ago versus 521K now. Not that great an improvement.

And the continual upward adjustments made after the release in the following weeks too. Any metric that is deemed an important indicator of the Nation's health, is so corrupted in an effort to improve sentiment that they've become meaningless.

It reminds of the old saw about not believing your own propaganda and falling for the projected illusion. The whole system is now enthralled with its own manufactured reality and actually believes it to the extent it bases all actions upon it. All you have to do is believe...

An opinion piece on Fox News, regarding "Oil Myths." A selection of the six items follow. It's interesting that the NYT basically advanced similar arguments, at least regarding oil supplies, in their front page story "There will be fuel."

The 6 Myths About Oil

Myth #1: America’s reliance on oil is an “addiction”—an irrational, self-destructive habit.

The Reality: America’s use of oil brings indispensible value to our lives.

Myth #3: Because oil is finite, it will inevitably run out.

The upshot: we will never run out the energy we get from oil--unless we run out of freedom.

Myth #4: Because oil is mostly in other countries, they can cut us off at will and create an economic catastrophe.

Reality: International trade makes our energy supply more secure—and far more affordable.

Incidentally, regarding Myth #4, I posted an item up the thread which noted that several food exporters are cutting off or restricting their exports of some types of food:


And of course the US is itself an example of "Net Export Math." Because of rising domestic consumption, the US stopped (net) exporting oil in 1948, 22 years before our production peaked.

In a nutshell:

To the extent it becomes expensive to extract oil from the earth in sufficient quantities, we can be sure that entrepreneurs will work to make substitute sources of fuel based on legitimately promising technologies, such as natural gas or coal, or that they will seek to create battery-powered vehicles charged with nuclear power or some yet undeveloped technology—to the extent that the government refrains from its policy of heavily restrict mining, drilling, and nuclear technology. It is government policy, not the finite quantity of any given raw material, that is the real threat to future energy supplies.

Oh, boy!

Loose talk of a “climate change catastrophe” evades the fact that industrial energy makes catastrophes non-catastrophic. In Africa, a drought can wipe out hundreds of thousands of lives thanks to that continent’s rejection of capitalism and resultant lack of industrial energy.

Yeah that's right, it's a 'lifestyle' choice.


I think I agree with Paolo Bacigalupi :

Why did you decide to write a science fiction novel for younger readers?

Paolo Bacigalupi: To be blunt, it's because adults are a waste of oxygen. More and more, it seems that young people are the only ones with any capacity to make real choices about how they live and focus their lives.

We adults seem to be on drooling autopilot, paying our mortgages and buying things like this.

So at some point, you realize you're wasting your breath on them.

The guy speaks sense.

Incidentally, have you read that book? Any good?

I am ordering his book. I'll let you know what my kids and I think. My three teens and I loved "Hunger Games", so maybe we will have another good post-collapse fiction story to discuss.

Here is a free post-collapse fiction story I picked up somewhere (maybe here on TOD). It's very good so far. Like Hunger Games, Survival Ridge has as one of it's main characters a teenaged girl - which goes over well with my girls.

Lovely, thanks for that :-)

Myth # 5 Fox is a news network.

Myth # 5 Fox is a news network.

And that is a massive myth that is changing America for the worse. Their viewers tend to be made up of people that accept what they hear and see as being truth, without questioning it or seeing it for being grossly partisan. The people I've spoken with that watch Fox all adhere to the talking points on that station. Every single one of them believe every single thing they are told on Fox News (opinionated right wing talking points).

MSNBC has left wing talking points, but Countdown and Rachel Maddow do not claim to be news. They are shows. Fox should have to post a slogan at the bottom that reads: 'Fox Right Wing Opinion Broadcast' and it should be on there 24 hours a day in big bold letters.

Fox news could tell their viewers there's enough oil to extract 74 mbd of crude for a billion years and they would accept that information verbatum. That's a scary situation.

In my opinion your opinion of Fox News does not enhance The Oil Drum experience.

Actually, Hank, it does. Because, you see, the strangely slanted non-news items were promulgated by Faux News, in the guise of reality. They are make believe items, and the point being made is that far too many viewers believe Fox has some connection with the general term, 'news station.' Which, of course, they do not.


Everybody chooses their own reality.

Fox News fans have made their choice.

Simple as that.

Sort of reminds me of a Homer Simpson episode: I've made my choice [ i.mage.+]

IMHO you are not even wrong. Fox News spouts nothing but pure unadulterated authoritarian propaganda. It is the antithesis of 'The Oil Drum' experience. Criticizing them is more than fair game.

To come to your opinion of Fox News you either have followed it religiously and how the right wing reacts to it or your opinion is based on hearsay from the likely suspects (MSNBC?). Which is it? Most people here wouldn't be caught dead admitting to having watched Fox News.

Frankly, I find them both exceedingly tiresome as well as the people who comment on them.

My dad has Fox News on 24/7. At least when he's not watching football. I hate Fox News, but not so much that I avoid my family because of it.

Tedious as you may find the MSM, their treatment of energy issues is very much on topic.


Except for the caramel nogut candy covering drooped across it all, parts of what the Faux-in-the-hen-house is saying are valid (to a point).


Under #1:
- Oil powers the industrial farm equipment that brings us abundant food; oil powers the mobile machinery that we need to extract the raw materials like iron, lumber, uranium, or natural gas from the earth. (True)

Under #2:
-- There is zero evidence that any “renewable” can replace oil in any foreseeable future. (True)

Under #3:
-- Since the beginning of the oil industry, oil doomsayers, including prominent geologists, have been claiming that oil was running out, and would soon would run out or go scarce; in every case, oil supplies in general have increased. (Well this one is a stretch)

Read more: http://www.foxnews.com/opinion/2010/12/29/myths-oil/#ixzz19gSrGjOa

As noted up the thread, I thought it interesting that the opinion piece on Fox News (note that it was a guest column), at least in regard to oil supplies, basically made the same point as the recent front page story in the NYT ("There will be fuel"), i.e., that there is plenty of oil out there, no worries.

There is also plenty of water out there.

However, useful consumption of the stuff is a whole other huckleberry.

Under #2: -- There is zero evidence that any “renewable” can replace oil in any foreseeable future. (True)

False. The problem with estimates of what we need to replace oil virtually always use current consumption, but current consumption is suicidal no matter what form of energy we use. The proper calculation is, at least for OECD types, about 30% of current consumption after localizing, reduced consumption, weatherization, localized food production, regenerative agriculture, bio-char, edible forests, and on and on.

Summary of Weekly Petroleum Data for the Week Ending December 24, 2010

U.S. crude oil refinery inputs averaged 14.9 million barrels per day during the week ending December 24, 3 thousand barrels per day above the previous week’s average. Refineries operated at 87.8 percent of their operable capacity last week. Gasoline production decreased last week, averaging 9.3 million barrels per day. Distillate fuel production increased last week, averaging 4.7 million barrels per day.

U.S. crude oil imports averaged 8.8 million barrels per day last week, up by 72 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.6 million barrels per day, 663 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 775 thousand barrels per day. Distillate fuel imports averaged 251 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.3 million barrels from the previous week. At 339.4 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 decreased by 2.3 million barrels last week and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories increased by 0.2 million barrels and are just above the upper limit of the average range for this time of year. Propane/propylene inventories decreased by 2.4 million barrels last week and are in the lower half of the average range. Total commercial petroleum inventories decreased by 9.2 million barrels last week.

And yet again another huge fall in total petroleum inventories. Yet, despite a fall in crude, gasoline and total commercial stocks, WTI has dropped by a dollar in 15 minutes. Madness.

My guess is that some funds are selling to lock in 2010 profits on oil positions.

Then surely they would sell before that report came out? It seems to make no sense to wait a bit and see if they get a bullish EIA report and then sell when they get what appears to be exactly that.

Brent is still above $94 today according to the International Oil and Gas Newspaper.

$92.56 according to CNBC ticker - down about $1.50

And the price of oil is DOWN on this report?

They expected a much larger decline of 2.5 to 3.5 million barrels. Traders were expecting supplies to drop due to "inventory adjustments" for tax purposes (because it's the end of the year).


“The API was a little bit bearish and that caught people by surprise,” said Fred Rigolini, vice president of Paramount Options Inc. in New York and a trader at the New York Mercantile Exchange. “Ahead of the last day of the year, one or two of the big funds may have looked at the API and assumed you’ll see more of a bearish inventory report than expected today.”

So if the API report was a little bearish (crude up 3.06) then the EIA report was far more bullish (crude down 1.3). Bulls, bears, short term manipulation, too much holiday drink. Who knows? :-)

They expected a much larger decline of 2.5 to 3.5 million barrels. Traders were expecting supplies to drop due to "inventory adjustments" for tax purposes (because it's the end of the year).

Apparently the price had risen on the idea of a greater drop than actually occurred, and that led to a small correction. This should be viewed as good news, because it lends credence to the idea that oil price is based on supply & demand, rather than 'speculation'.

Demand for oil products, such as gasoline and diesel, was very strong last week as compared to the prior week – which confirms the MasterCard report of a strong pickup in gasoline demand. This also confirms reports from the Magellan Pipeline system of strong gasoline demand and low supplies. Gasoline supplies are lower in the Midwest where Magellan is located, but have fallen the fastest during the last two months in the Northeast.

Gasoline demand is up 2.9% in the last four weeks, as compared to the same four weeks last year. In November, gasoline demand was actually down 0.5% vs. last year, so there has been quite an improvement in recent weeks.

Oil inventories were supported by an unexplained technical adjustment by the EIA, which raised oil inventories about 2 ¾ million barrels (or if that had not happened, oil inventories would have been down 4 million barrels – which would have been more than expected). Large adjustments are not unusual in the last week of the month, although over time, these unexplained technical adjustments average out.

Compared to the same Christmas week last year, overall oil product demand has grown downright fast – up well more than 1 million barrels of total oil demand. Keep in mind that the EIA was expecting US oil demand to grow only about 150,000 barrels or so in 2010 and also in 2011. As I have mentioned many times, the EIA is well behind reality in predicting US oil demand – which may in part explain the great skepticism that energy analysts have about demand trends and also prices. Curiously though, the EIA does not expect much improvement in total commercial inventories in the first quarter 2011 – even though a vast majority of energy analysts say almost daily the steep year end fall in inventories is nothing to worry about, oil inventories will improve, and 2011 will not be the year of living dangerously low on oil supplies.

Available shipping information from OPEC tanker tracker, Oil Movements, and various field reports do not indicate any significant change in expected OPEC exports during January. Let’s hope so – because US gasoline inventories can not fall much more before we reach minimum operating levels (MOLS), at which point scattered shortages would start developing.

Regarding gasoline inventories, the most commonly used number for the nationwide MOL is 170 mb, and it appears that this is probably accurate. Inventories were down to about 178 mb in September, 2008, because of refinery problems, and as you noted there were definitely supply problems. Here is a September, 2008 article:


Currently we have about 4.6 Days of Supply of gasoline in excess of MOL. In September, 2008, we were down to about one day of supply in excess of MOL nationwide, which of course meant that stations ran out of gas in some areas, as they hit MOL.

The US government has not really bothered to update its official MOLs for years. It took a great deal of searching on my part to find an older MOL report - which by the way was not on the internet. Reminds of how they attempted at first to make the Hirsch report difficult to find on the internet, but that is another story.

Anyway, and unfortunately for us folks in the Northeast, regional and even local MOLs will come into play before the whole country reaches its MOLs. In 2008, a game of shifting supplies around the country generally succeeded, mainly because some supplemental product imports could be delivered to the right places. The US is now importing less product and exporting more. With the Colonial Pipeline running gasoline at maximum capacity to the Northeast for many weeks now, and we still see rapidly falling supplies, regional problems may erupt well before some sort of national emergency is declared.

They've officially said they won't be estimating MOL any more, because it's impossible.

Total commercial petroleum inventories decreased by 9.2 million barrels last week.

I always use this number since I expect what's not refined this week will be refined next week and the other way around and if production decreased there is no refinery shortage.

If this is representative for the world there is no spare production capacity.

I don't know how many people follow the imported flow rates of oil, that the eia publishes weekly, but in the last report they dropped the rate by 500,000 barrels per day for the whole year of 2010. Prior to 12/17, if you averaged all their numbers it showed an mean of 9,711,000 barrels of oil per day imported, which is slightly above last years figure of 9,600,000 barrels per day. Today, if you average the years reports it has dropped to an average of 9,110,000 barrels per day, a downward revision which got no press at all. If you think of the curve mathematically, you will see that the first derivative has been negative for 3 years now. Now before you blame this on the recession. Look at China's import rate which has gone from 0 to 5 million barrels per day in the last 5 years. If there were no supply problems, growth of supply would be increasing in both China, and the U.S. but that is clearly not happening. This is even more troublesome, because the price has risen steadily throughout the year, even as the supply has dropped.

Consumption in the US has been down relative to 2005, and we have recently seen an uptick in US domestic production. But regarding the global supply of net oil exports, here is a summary of our presentation on Peak Oil Vs. Peak Exports:


Our forecast for the US and for many other developed OECD countries is that we are well on our way to becoming free of our dependence on foreign sources of oil–just not in the way that many people anticipated.

Throughout the summer, there was a surge in oil imports, but it has fizzled since about August. It seems like there was a supreme effort to produce oil for export in three different countries, Mexico, Russia, and Saudi Arabia, but supplies have continued to trend down in spite of this, in apparent unison. I've looked at the import flow graphs and have never seen a similar pattern before.

Can you provide a link with examples? I haven't noticed any massive change in crude imports previously reported. Downgrading the whole of 2010 by 0.5 million barrels a day doesn't seem likely and when I check some archive reports, I can't see such a change.

And surely stock levels would have dropped by about 180 million barrels or the "petroleum balance sheet" wouldn't balance unless there was some compensating reduction in demand?

I download the xls file from this site:


then I put in a spreadsheet and average it out over the entire year. The drop did not appear until yesterday.

The EIA provides the YTD average for you every week. It is currently listed as 9.125 mb/day for crude imports (See http://ir.eia.gov/wpsr/overview.pdf ). In the report for the week ending 11/19 it was listed as 9.188 mb/day.

See archives at http://www.eia.gov/oil_gas/petroleum/data_publications/weekly_petroleum_...

These reports are not edited retrospectively.

I have been downloading there xls data for the last year and following the average which showed a significant drop yesterday.

Well I have copies of old weekly reports on my hard disk. I have gone back and checked them and they are identical to the copies currently in the EIA archives. They do not show the change you are seeing. Go and have a look. Now as to the data which you downloaded I can't say. Perhaps there was an error which has been corrected? Could you look at the, old archived reports and see if you can see where they differ from the values you downloaded?

I have seen errors in downloadable data from the EIA website before. Earlier this year they downgraded one month of US production by over 0.5 million barrels per day and then undid the "adjustment" a week later. That was weird.

This might be the result of your averaging technique. If you are calculating a 52 week trailing average (also called a moving average), what you are seeing is a filtered time series. That time series has a phase shift of 1/2 the averaging period, or about 26 seeks. So, your dip downward might actually reflect what appeared in the data 26 weeks ago...

E. Swanson

It's the end of the year as we know it . . .

I learned a fun new word this week: Meatspace. Definition: Not cyberspace, where we all seem to be spending more and more time, but that other place — the real place where we are when we’re not totally absorbed by the internet, texting, Facebook, MySpace and failblog.org. That is to say, the real world. And let me tell you, meatspace is a way scary place.

There’s no instruction manual for meatspace. No shortcuts, no pause button and probably not any do-overs unless (here’s hoping) the Hindus got it right. In meatspace, your avatar is not as cool. It’s probably visually wider, and lacks the cool haircut and hip wardrobe. If you don’t like where you are in cyberspace, you can change it with a click. We are not nearly so lucky in meatspace. We’re kinda stuck here 24/7.

I mention this because I see too many people who tend to live out their lives in cyberspace, and only show up in meatspace to eat and sleep...

Nice aardy...thanks. I especially liked his last comment: "The irony of this rant being nothing but another blog in cyberspace really is funny, isn’t it? Just promise me that at some point this week, you’ll turn off the computer and walk outside...".

I don't save many blog addresses but I did his. Have you read his "Peak at the Devil..."? If so any review to share?

Hi Rock. I have not read it yet, but I am buying it along with Ship Breaker.

I also just added his blog to my favorites bar ;).

aardy - thinking more about "meatspace" I recalled a conversation I had with one of my cohorts several months ago. Re: the BP blowout and the possible influence of too much cyberspace vs. too little meatspace to put into the context of the current thread. The oil patch has clamped onto cyberspace big time. I'm sitting in my office in Houston watching the geological information streaming to me in real time from a well drilling 100 miles away. I've done the same at home with a well drilling in DW off the coast of Brazil. Additionally it's often difficult to reach specific personnel on a rig if they are out and about and not sitting in their office. Thus internet messages are very common.

The point: many in the oil patch have little direct involvement with the actual drilling activity. Many of the younger office hands have had little or no well site experience. I, being an old gray-haired fart, have had much well site experience and have a firm understand of the dynamics on a rig that many today don't. When I read about a well drilling in a poison gas (H2S) I readily remember laying on the ground gasping for breath as the H2S alarm was sounding on the rig. In reality the H2S wasn't affecting me (it was a false alarm) but rather I had gotten knocked down at that precise moment and had the breath knocked out of me. The other geologist, who knew it was a false alarm, couldn't stop laughing at me. I laughed too...but much later. Little experiences like that make it much easier to relate to folks on a rig.

But many office workers, especially upper management, can't. And that can be very dangerous. One can only speculate how this disconnect might have impacted the BO incident. But I've been on more than a few jobs where miscommunication had a potential to be deadly serious. Been run off from more than one gig by refusing to accept such stupidity. I constantly double and triple check with my well site personnel to make sure we're on the same page. Just set up a conference call for tomorrow afternoon on a well getting close to a dangerous interval. Not as good as a face to face but much better than an email message devoid only any emotional context. One thing to read someone's words but the tone in the voice can often deliver a different interpretation of the words. But I've seen more than a few other operators handle the same situation with a document attached to an email. From what I read about the BP incident there a lot of docs emailed and very little telephone conversation.

I just heard a conversation on the radio regarding someone's teenage son, who was very nervous when he actually had to communicate with someone face to face, instead of via texting.

I'm a bit bemused that he's only now discovered a word that's 20 years old, or maybe more. Better late than never.

Debka File has an interesting report this AM.Apparently Saudi Arabia has obtained access to 2 nuclear weapons, with delivery systems, from Pakistan.No doubt a suitable amount of money has changed hands.

This puts a new slant on the gang wars in the 'hood.


So is it true, or is this a headfake? Hopefully we will never find out.

This is when one thinks "we must end our dependence on foreign oil". :-)

Sooner or later, one of these things is gonna go off, and look out world...

Maybe true. But Debka is very pro-Israel, IIRC. I remember a couple of years ago that Iran/Iraq was going to bomb Israel (or vice-versa) and I was extremely worried. Never happened. Just made a fool of myself warning people about it.

Debka is run by Israelis who have a decidedely, er, Mediterrenean approach to journalism. Most of their stories do not pan out, although they do reveal what the players around the Middle East are concerned about.

As to Saudi, let's just say if they are getting nukes, I suggest all Oil Drum readers who work in the oil industry make plans to find work a very, very long distance from Ras Al Tanura.