Drumbeat: January 12, 2011

The Globe's Limitations: How Peak Oil Threatens Economic Growth

In the second video in the series “Peak Oil and a Changing Climate” from The Nation and On The Earth productions, Richard Heinberg, senior fellow with the Post Carbon Institute, discusses how depleting oil supplies threaten the future of global economic growth. According to Heinberg, historically there has been a close correlation between increased energy consumption and economic growth. If the economy starts to recover after the financial crisis and there is an increased demand for oil but not enough supply to keep up with that demand, we may hit a ceiling on what the economy can do.

“What politician is going to be able to standup in front of the American people and tell them the truth?” Heinberg asks. “Every politician is going to want to promise more economic growth and blame the lack of growth on the other political party…. The whole political system starts to get more and more polarized and more and more radical until it just comes apart at the seams.”

The Peak Oil Crisis: Civil Unrest

The real problem, of course, is that without a continually growing source of cheap and abundant energy, such as that provided by fossil fuels, there will never again be significant economic growth in the sense to which we have become accustomed. It is inevitable that we are all going to get much poorer, in a material sense, and this is the great secret of our age that so far few have had the courage to express. The easier path has been Keynesian stimulation of the economy, government bailouts of what were held to be key financial and industrial institutions, and tax cuts to mollify those who believe all problems stem from taxes. These measures were accompanied by endless expressions of hope that things would soon be better.

However, as the real economic situation continues to deteriorate in the midst of so little appreciation of why it is happening, frustrations with the political system grows and grows. In America, we have now had a run of well over 100 years with minimal domestic unrest on the scale of the Civil or Indian wars. This, however, may not continue to be the case much longer. As unemployment grows and people see the standards of living they have always known slipping away, their frustrations can take many forms. Last November as a nation we threw out dozens of politicians and replaced them with new faces equally devoid of any comprehension of the problem or what we as a nation will have to do next in order to survive, much less prosper.

Analysis: Middle East Gas Demand Creates Supply Shortage Fear

Growing domestic consumption of natural gas in the Middle East and a muted and delayed gas supply response has created growing concern that critical gas shortages will occur in many countries in the Middle East and North Africa (MENA) region, according to a Dec. 27 research report by Ali Aissaoui, senior consultant with Arab Petroleum Investments Corporation (APICORP).

While proved reserves are substantial and their dynamic life fairly long, "acceleration of depletion appears to have reached a critical rate for more than half our large sample of countries." Aissaoui noted that Iran, Kuwait, Saudi Arabia, Egypt and the United Arab Emirates (UAE) have continued to replace a large portion of their extracted reserves; however, Qatar, Yemen, Libya, Iraq, Tunisia, Bahrain, Algeria, Oman and Syria have failed to keep pace with production.

Corn pops again

Corn is popping again, thanks to the latest report of dwindling grain supplies.

Corn futures rose 3% Wednesday after the U.S. Agriculture Department predicted corn stocks would fall to their lowest level since 1996.

The report is the latest sign of stretched food supplies at a time when developing country economic growth is fueling seemingly insatiable demand for agricultural goods. The United Nations warned last week of possible food riots as its food price index hit a new peak (see chart, right), above its bubbly 2008 level and doubling its value as recently as 2003.

At least 14 dead in Tunisian riots over rising food prices

Fourteen civilians have been killed in clashes with Tunisian police, official media and the government said, in the worst violence in the country for decades.

The latest incidents, which took place in three towns and were reported on Sunday, were the deadliest in a wave of unrest which has lasted nearly a month.

How oil affects the price of peas in China

Susilo Bambang Yudhoyono, the Indonesian president, has launched a national drive to encourage his countrymen to grow their own chilli peppers. The South Korean government has released emergency supplies of cabbage, pork, mackerel, radish and other staples as part of President Lee Myung-bak’s war on inflation. This week, the Indian cabinet met to discuss the soaring price of onions, an issue reputed to have caused the downfall of two previous administrations. As in 2007-08, the topic of food inflation – even food security – has percolated to the very top of the political agenda.

The Future of Food Riots

If all the food in the world were shared out evenly, there would be enough to go around. That has been true for centuries now: if food was scarce, the problem was that it wasn't in the right place, but there was no global shortage. However, that will not be true much longer.

Price rise likely as ethanol fuel shortage develops

DRIVERS face a shortage of ethanol-blend fuels and the possible closure of pumps at service stations because of the Queensland floods.

The Australian Competition and Consumer Commission yesterday warned that crop losses and disruptions at processing plants could result in widespread shortages of blends such as E10, as well as an increase in price.

Australian Biofuels Association sees no ethanol shortage

Singapore (Platts) - Australia's largest ethanol producer, Manildra, is running at more than 20% above its nameplate capacity, which should cover the shortfall created by the outages of the country's two other ethanol producers, Sucrogen and Dalby entirely, Heather Brodie, chief executive officer of the Biofuels Association of Australia, said Tuesday.

As such, the BAA says that there is no ethanol shortage in Australia.

Coast's food, fuel supplies drop

VITAL supplies of petrol, fruit, vegetables and milk are running low on the Gold Coast as transport from Brisbane is cut by flooding.

Some service stations on the Gold Coast say they have enough supplies only until tonight and do not know where their next delivery will come from, while grocers say the supply of fresh food is running short.

Coal shortage threatens Qld power

People across flood stricken south east Queensland are facing further electricity cuts, as power stations run low on coal stocks.

The floods have closed mines, and cut transport links; including rail lines, leaving power stations struggling to get enough coal.

Pa. State Senator Introduces Marcellus Legislation

State Sen. Gene Yaw said Tuesday that his main legislative accomplishments so far have been in introducing bills related to Marcellus Shale drilling and getting them passed, and he said that will continue to be the main focus of his work in the coming year.

Incoming Pa. Governor Names Judge to Lead State DEP

Gov.-elect Tom Corbett announced a series of key appointments Tuesday, including officials who will advise him as his administration grapples with plans to generate revenue from natural-gas extractors.

W.Va. Drilling Fees May Rise Sharply

An increase in permit fees -- more than 20 times current rates -- could help employ more Marcellus Shale drilling inspectors if components of a joint interim subcommittee bill become law.

China's Guangdong sees power shortages in 1st quarter

BEIJING (Reuters) - Guangdong province, China's largest export hub, may face up to 4 gigawatts of power shortages in the first quarter, the local government said, adding to a list of provinces facing power crunches due to demand, supply or weather issues.

Kazakhstan accuses Kyrgyzstan of unsanctioned siphoning of natural gas

South Kazakhstan is experiencing a shortage of natural gas due to the reduction of supplies from Uzbekistan and “unsanctioned siphoning” of blue fuel by Kyrgyzstan, news agency “Novosti-Kazakhstan” informs KazMunaiGas President Kairgeldy Kabyldin as saying.

Supplies low in remote communities

Remote First Nations dependent upon winter roads in northern Manitoba are getting desperate because of shortages of critical supplies.

Warmer than normal weather means the temporary roads might not open for more than a week yet.

That has caused gas prices in Oxford House, about 950 kilometres northeast of Winnipeg, to soar from $1.25 per litre to $2.49/litre. And they're further expected to jump to nearly $3/litre if the roads don't open soon.

NOC may default payment to IOC

KATHMANDU: Nepal Oil Corporation (NOC) today said that the failure in payment to its supplier could lead to a shortage in the petroleum supply very soon. “In the event of failure to make payment to the supplier in time, the supply will be affected,” said Ganesh Dhakal, Nepal Oil Corporation (NOC) board member and spokesperson of the Ministry of Commerce and Supplies (MoCS).

“Either the government has to provide NOC with the requested amount of grant with or without interest or allow further upward revision of the fuel prices."

Punjab gas woes continue

LAHORE - None from the domestic consumers, industrial sector and CNG stations have been satisfied with the Sui Northern Gas Pipelines Limited policy regarding gas supply since the start of the winter season.

On Saturday, owing to mounting demand, the SNGPL had announced unscheduled gas suspension for the industry and CNG stations of the province, yet in a sudden move the company on Monday claimed to have restored gas supply to the industry, however, refused to supply gas to CNG stations, the sources said.

Ill-conceived strategy causes gas shortage

LAHORE: An ill-planned gas connection strategy by the government has resulted into severe gas shortage, as no one, right from domestic to industrial consumers, is happy with it. Particularly, gas supply to the textile industry is at halt since last week, closing down captive power plants (CPPs) installed by the industry to deal with electricity shortage.

Botswana Expects Fuel Shortage Until March, Energy Ministry Says

(Bloomberg) -- Botswana is experiencing a shortage of fuel that will probably continue until March, the Ministry of Minerals, Energy and Water Affairs said.

Lights Fail, Thieves Loot, Heads Roll

Outages continued in the Moscow region on Monday as power companies struggled to restore reliable electricity supplies following a series of blackouts over the holiday period.

The Moscow Region Energy Company, or MOESK, said residents in 18 districts were left without power Monday because of planned maintenance that was scheduled to last from 8 a.m. to 6 p.m. The company said its efforts to get the region back online are being stymied by thieves. MOESK said vandals stole 200 meters of copper wire from the Leninsky district on Sunday.

Costly fuel, local sponsor issues could hit UAE investment

A surge in fuel prices is allying with a long-standing term for national partnership in projects and other factors to obstruct capital flow into the UAE despite its advanced infrastructure and low tax, according to an official study.

Halliburton Disagrees with National Commission's BP Oil Spill Report

Halliburton released a response to the findings of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling contained in its investigation report released to the public on Jan. 11, 2011.

Halliburton disagreed with the report's characterization of the February and April foam stability tests related to the cement pumped on the Macondo well, specifically:

Exxon still scouting for shale oil and gas assets

(Reuters) - Exxon Mobil Corp said on Wednesday that it will continue to look for unconventional assets to buy as it seeks to grow that part of its business following last year's acquistion of XTO Energy.

"We will continue to evaluate acquisitions," Mark Albers, senior vice president for Exxon, told the Goldman Sachs Global Energy Conference.

BP says exploration and production COO to step down

(Reuters) - Oil major BP (BP.L) said in an internal email that Doug Suttles, who last year helped lead the response to the Gulf of Mexico oil spill, was retiring as the company seeks to reshape itself in the wake of the disaster.

Three Policy Changes to Help with Gasoline Prices

Must it always be opposite day in Washington? Petroleum and gasoline prices are surging while the Obama Administration and its allies seem intent on making things worse. Instead of taking actions to increase supplies of petroleum and gasoline, the Administration pursues policies to restrict U.S. access to its own petroleum, ban imports of vast quantities of Canadian oil, and drive up costs of refining.

Looming refinery outages push gasoline, gas oil premiums

Supply tightness and looming refinery outages in the Middle East have kept gasoline and gas oil premiums supported this week, traders said on Wednesday.

Saudi Aramco, state-run Bahrain Petroleum Co (Bapco) and Abu Dhabi National Oil Company (Adnoc) will have partial shutdowns of some of their refineries between mid-January to mid-February.

Saudi Aramco buys up to 360,000 T gasoline -trade

SINGAPORE/KHOBAR, Saudi Arabia Jan 11 (Reuters) - State oil giant Saudi Aramco has sealed a deal to purchase up to 360,000 tonnes of gasoline over six months from BP and Lukoil at below-market prices, industry sources said on Tuesday.

Canadian Natural declares force majeure after fire

CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd (CNQ.TO) has declared force majeure on January shipments of synthetic crude from its Horizon oil sands plant after a fire last week and is still waiting to assess damage from the blaze, company officials said on Wednesday.

The declaration allows the company to be released from its contractual obligations because of an event outside its control.

DME volumes soar

Volumes rose dramatically last year on the Dubai Mercantile Exchange (DME), the UAE's oil futures market, as a cold snap in Europe and growing faith in the global recovery boosted global oil demand.

An average of 12.1 million barrels were delivered through the exchange every month last year, an increase of 34.6 per cent from the year before, the exchange said in its annual report. More than 140 million barrels of crude were delivered for the year.

Russia to auction oil, gas field in Krasnoyarsk region

The Russian government has instructed the Federal Agency for Subsoil Use to auction the Lodochnoye oil and gas field in East Siberia's Krasnoyarsk Territory in the second quarter of 2011, the government said on Wednesday.

The field's oil reserves amount to 31.688 million tons of C1 category oil, 97.358 million tons of C2 category oil, while recoverable reserves stand at 10.503 million tons and 32.649 million tons of C1 and C2 oil respectively, the government said.

Why Rising Bond Yields Mean You Should Buy Japanese Oil Companies

There are billions of reasons why oil prices are rising - maybe trillions. I won’t go into all of them, but very briefly: the better part of 1 billion people in China will begin using more and more oil in the coming decade.

Also, the United States Federal Reserve is printing trillions of dollars to counteract slowed growth. As Energy Economist Jeff Rubin says, “Fiscal stimulus is no substitute for cheap oil.”

The Chinese auto bubble threat

The more than 30% sales growth achieved in China in 2010 -- to more than 18 million vehicles -- is probably unsustainable, especially as government officials are moving to put the breaks on car purchases.

Cracking China’s Power Sector

Any Western company supplying technology, equipment and/or services to the power industry has to consider China’s power sector as a key target market. But, navigating the large, bureaucratic companies that dominate the industry in China, as well as protecting intellectual property, are difficult challenges for even the world’s largest companies.

China’s Galloping Wind Market

A corporation that makes wind-machine components estimates that more than three times as much wind power capacity was installed in China last year than in the United States and that China now constitutes the world’s largest wind energy market.

The report, from the American Superconductor Corporation, which makes wind machine components and licenses other companies to produce such components, said that China might have the largest installed base of wind turbines, about 40,000 megawatts.

No sign of cheaper energy bills despite market privatisation

With E.On raising its gas and electricity prices yesterday, five of the big six energy providers have now announced bill increases in recent weeks (the exception being EDF Energy, for which a rise is no doubt only a matter of time once its price freeze promise expires).

It's a brave move by the energy industry, which is the subject of an ongoing investigation by Ofgem, the sector's regulator, into pricing. The trigger for that inquiry, announced before Christmas, was Ofgem's concern about rising profit margins. For while it is certainly true that the energy companies have seen a dramatic increase in wholesale costs since last spring, particularly in the gas market, where prices have risen by 54% over the past nine months, it is also the case that margins are close to their historical high.

An Energy Epiphany: Staying Home Is Cheap

I just got my e-mail and I learned that between Jan. 2 and Jan. 8, my wife, 5-year-old daughter and I spent $23.12 on our home electricity. That is $9.68 more than we spent the week before, when we were mostly away on vacation. So, roughly speaking, running the refrigerator and all our gadgets cost us nearly half as much as we spent on electricity being home and cooking (we have an electric stove), washing clothes, watching television, listening to our stereo system and enjoying all the other wonders of modern life. Being home costs roughly $2 a day in electricity!

Bill McKibben on 'The Economics of Happiness'

Money isn’t happiness — but can environmentalism bring more joy? The link between a greener lifestyle and greener happiness is one many environmentalists are exploring right now, with initiatives like the No Impact Experiment inviting people to discover how sustainable living can bring more sustainable joys.

Passionate ambivalence and conspicuous indifference: The case against (but also for) renewable energy

When the average American, at least those who are somewhat conscious of global warming and the finite nature of oil, closes his or her eyes and imagines the future, this future is one that looks pretty much like the present, except for the omnipresent solar panels, wind turbines, and electric cars. It seems likely that the futuristic design of the turbines we see today is not only a matter of the engineering needs. At any rate, the emergence of a city-owned wind garden (we might call it) gives the impression that we are finally on our way to this clean, green, and entirely prosperous, new world order. It gives the impression that we are finally making the switch from our coal-fired power plants to something clean and renewable. It gives the impression that our leaders are on top of things. Thus a project like this not only risks being an empty symbolic gesture; it has the potential to be down right hazardous to the important project of creating a realistic view of the future.

The great carbon commitment

From growing energy demands to legal implications, two of our London speakers present their views on the CRC ‘tax’, and what it means for the data center industry.

Venezuela raises oil reserves, Chavez says

CARACAS, Venezuela (AP) -- President Hugo Chavez said Venezuela has dramatically increased its oil reserves and is now the world leader. Some experts, however, said the new figures are inflated and that Venezuela's oil industry is suffering serious problems.

Chavez said Tuesday night that officials certified vast deposits of heavy crude in the Orinoco River basin in December, and that "we have reached 253 billion" barrels of oil.

Propane, Ethane Price Gains Deepen Natural Gas Supply Glut

Rising prices for natural gas byproducts such as propane, which touched an 11-month high this week, are encouraging energy companies to boost gas output even after the market’s biggest annual slide since 2008.

Propane, a liquid used in home heating and outdoor grills, has surged 42 percent since reaching last year’s low on July 12. Ethane, used as a feedstock in the production of plastics, has climbed 40 percent from a 2010 low on June 23.

Shipping Rates Poised to Plunge 31% on Glut Off Australia

A 20-mile-long line of commodity carriers off Queensland, suffering its worst floods in a half- century, means less income for owners already reeling from the biggest slump in freight rates in more than two years.

There are 132 vessels floating off the Australian state, which accounts for about 50 percent of the global seaborne supply of coal used in steelmaking, data collected by AISLive and compiled by Bloomberg show. Ships will wait at least 22 days to load, the longest delays since April, according to Truro, England-based Global Ports, which tracks the industry.

Saudi Aramco's Vela Adds Double-Hulled Crude Tanker to its VLCC Fleet

Saudi Aramco, the world’s largest state-owned oil company, said a new very large crude carrier entered service with its tanker-operating subsidiary Vela International Marine Ltd.

UK steps up North Sea oil and gas inspections

Britain is stepping up the number of annual inspections of oil and gas installations in the North Sea as part of a continuing response to the Gulf of Mexico oil spill, the government said Tuesday.

Norway exports 97.3 bln cm of gas to Europe in 2010

(Reuters) - North Sea infrastructure operator Gassco said on Wednesday that it piped 97.3 billion cubic metres of gas from Norway to other European countries in 2010, some 700,000 cubic metres more than the year before.

Norwegian gas meets almost 20 percent of overall European Union consumption, with higher levels in the UK and Germany, Gassco said.

Azerbaijan to boost gas supplies to Iran

(Reuters) - Ajerbaijan will more than double gas supplies to Iran to 1 billion cubic metres per year under a five-year deal signed on Wednesday, Azeri state energy firm SOCAR said.

Ghana sells first oil to ExxonMobil

Ghana, the latest entrant to the club of African oil producers, has sold its first oil exports to ExxonMobil.

Currency war warning for UAE

Escalating global currency wars could result in further trade barriers against the UAE's airline and petrochemical industries, an adviser to the Central Bank has warned.

To avoid further turmoil, the IMF needs to police currency adjustments, says Dr David Dodge, a former Canadian central bank governor. Concern about trade barriers being erected was a "real issue", he said.

Turnout in Southern Sudan vote passes 60 percent

JUBA, Sudan — More than 60% of registered voters already have cast ballots in an independence referendum, crossing the threshold needed for the vote to be valid if it creates the new country of Southern Sudan as expected, a southern official said Wednesday.

The south's secession would split Africa's largest country in two and deprive the north of most of its oil fields, though Sudanese President Omar al-Bashir has said he will let the south go peacefully.

Kuwaiti PM on First Trip to Iraq Since Gulf War

Kuwait's prime minister is on his first visit to Iraq since Iraqi forces invaded its oil-rich southern neighbor in 1990.

Kuwaiti Prime Minister Sheikh Nasser al-Muhammad al-Sabah arrived with his delegation in Baghdad Wednesday for talks with Iraqi officials, including Prime Minister Nouri al-Maliki and Foreign Minister Hoshyar Zebari. Officials described the atmosphere as "positive" as the leaders worked to mend the long-strained ties between the two nations.

Lebanon's government falls as Hezbollah pulls out

BEIRUT (AP) — Lebanon's year-old unity government collapsed Wednesday after Hezbollah ministers and their allies resigned over tensions stemming from a U.N.-backed tribunal investigating the 2005 assassination of former Prime Minister Rafik Hariri.

The walkout ushers in the country's worst political crisis since 2008 in one of the most volatile corners of the Middle East.

Yemen suspends oil minister

Yemeni President Ali Abdullah Saleh suspended his oil minister and the head of a state oil company today, citing fuel shortages that sparked public grumbling over long lines at petrol stations, according to state-run media.

Japan 2010 nuclear plant usage rises to 4-yr high

TOKYO (Reuters) - The average nuclear power plant utilisation rate at Japan's 10 nuclear power companies rose to a four-year high of 68.3 percent in 2010, Reuters calculations based on trade ministry's data showed on Tuesday, helped by the restart of Tokyo Electric Power's (9501.T) two reactors hit by a major quake in 2007.

The run rate, which rose from 64.7 percent in 2009, has recovered to near a 2006 high of 70.2 percent, before the rate dropped due to earthquake-related shutdowns at plants including TEPCO's Kashiwazaki-Kariwa plant in 2007.

‘10 nuclear plants planned to deal with energy crisis’

KARACHI: In order to cope with growing electricity crisis, ten nuclear power plants would be set up in the country by the year 2030, said Chairman Pakistan Atomic Energy Commission (PAEC) Dr Ansar Parvez on Tuesday.

Why the Alaska pipeline breakdown is a peak oil problem

You know that the Alaska oil pipeline is currently shut down due to a leak, but one thing that's getting lost in this story is that this is not just an unpredictable mechanical problem.

This situation has been foreseen for years as Alaska oil production dwindles. Dwindling oil production means lower pressure inside the pipeline -- lower pressure than what was anticipated when it was built -- and thus more opportunity for structural breaks such as this one.

Jeff Rubin: If shale is a game changer, why do producers seek oil?

Curious, isn’t it, how some of the largest shale gas producers seem to be drilling more for oil these days? According to Baker Hughes Inc., a major oil services company, last week the number of natural gas rigs operating in the U.S. fell for a fifth consecutive week to a 10-month low.

Just as the rest of the world seems set to emulate the American engineering breakthrough for harvesting shale gas, it looks like North American producers are scaling back. Do they know something that others don’t about this supposed game-changer for world gas supply?

E.P.A. Puts Off Regulating Biomass for Now

Acknowledging large unknowns about the atmospheric impact of burning large amounts of plant waste and other biological materials, the Environmental Protection Agency announced on Wednesday that it would delay for three years any greenhouse gas permitting requirements for biomass.

The agency is under intense political and legal scrutiny over its plans to regulate climate-altering gases from industrial sources, and the biomass announcement appears to be another signal that it is following what officials have described as a moderate, common-sense approach to regulation.

Electric motorcycles used as stealth crime-fighting tool

Electric vehicles are often touted for their energy efficiency, but some California police officers see another attribute: stealth crime-fighting tool.

Masdar shelves plan for Abu Dhabi solar plant

Masdar, the Abu Dhabi Government's clean energy company, has shelved plans to make solar panels in the emirate because of a lack of local demand.

Food foragers find fun and cash amid the wild fungi

Hunting may get more attention as a primal human endeavor, but for Connie Green, there's something even deeper and older: gathering.

"I think it triggers something in people's brains that we're hard-wired for," she says. It "involves the joy of finding food, and it's really quite beyond our control in some way."

NOAA: 2010 tied for Earth's warmest year on record

2010 tied with 2005 as the warmest year of the global surface temperature record, according to data released Wednesday by the National Climatic Data Center. Records began in 1880. The Earth's temperature was 1.12 degrees F above the 20th-century average, which was the same as 2005.

It was the 34th-consecutive year that the global temperature was above average, according to the data center. The last below-average year was 1976.

Australia's Record Rains Squeeze World Coal Supplies as Scientists Study Climate Pattern

Australia's torrential rains are driving up global coal prices, as flood damage to the resource-rich northeastern state of Queensland raises fresh questions about the storms' connections to global warming and climate patterns in the Asia-Pacific region.

Prices for export coal used to produce electricity and for making steel in Asia are hitting new highs, as Queensland's largest coal mines remain closed and railroad companies grapple with mudslides.

Scientists see climate change link to Australian floods

SINGAPORE (Reuters) – Climate change has likely intensified the monsoon rains that have triggered record floods in Australia's Queensland state, scientists said on Wednesday, with several months of heavy rain and storms still to come.

But while scientists say a warmer world is predicted to lead to more intense droughts and floods, it wasn't yet possible to say if climate change would trigger stronger La Nina and El Nino weather patterns that can cause weather chaos across the globe.

Smaller glaciers, not giant ice caps, tipped to push sea levels up

That climate scientists looking into rising sea levels are currently directing their research at the massive ice caps of the Arctic and the Antarctic is hardly surprising. After all, it is estimated the West Antarctica region alone – a mass of land the size of Greenland and home to natural behemoths such as the Pink Island Glacier – is responsible for ten per cent of the global sea level rises seen over the past few years.

However, the findings of a new study suggest that it will be the 'melt off' from smaller mountain glaciers and inland ice caps, rather than from the world's biggest ice shelves, that will drive sea level increases over the coming decades. This new research, which was carried out the University of British Columbia, saw a team of climatologists develop a simulation capable of modelling anticipated volume loss and melt off from some 120,000 sites around the world between now and 120,000. Unlike previously-developed models, this time around the scientists made an effort to achieve detailed projections per region instead of merely focusing on wider trends.

Chamber's top energy official: Time for 'unemotional' talk about energy costs

The U.S. Chamber of Commerce’s top energy official is calling on policymakers to have a “very adult and unemotional” conversation about the nation’s energy priorities in light of the country’s economic troubles.

Karen Harbert, president of the Chamber’s Institute for 21st Century Energy, in a wide-ranging interview with The Hill late last month said members of Congress should rethink attempts to set aside large amounts of money for the research and development of nascent energy technologies like wind and solar at the expense of conventional forms of energy like oil.

Tougher Rules Urged for Offshore Drilling

WASHINGTON — The presidential panel investigating the 2010 oil spill in the Gulf of Mexico recommended on Tuesday that Congress approve substantial new spending and sweeping new regulations for offshore oil operations at a time when the appetite for both is low.

Trans-Alaska Pipeline Temporary Restart Begins as Bypass May Take 5 Days

Alyeska Pipeline Service Co. will need at least five days to build and install a bypass on the Trans-Alaska Pipeline System as its seeks to restart the link carrying 15 percent of U.S. crude output after a Jan. 8 leak.

Construction of the piping will take about four days while installation will add 36 hours, according to a statement by the operator and state and federal regulators yesterday. Alyeska has temporarily resumed the system to prevent the buildup of ice and debris that may have accumulated after the flow of oil stopped.

Oil hovers above $91 amid US gasoline supply jump

SINGAPORE – Oil prices hovered above $91 a barrel Wednesday in Asia after a report showed U.S. gasoline supplies rose more than expected, suggesting demand may have slowed.

OPEC Doesn't Need Emergency Meeting as Oil Advances Above $90, Iran Says

OPEC has no reason to call an emergency meeting even as oil climbs above $90 a barrel because the market is well-balanced and doesn’t need further supply, Iran’s OPEC governor said.

“Oil at $90 is not an extraordinary situation,” Mohammad Ali Khatibi said by phone from Tehran today. “There are some temporary supply issues, but stocks are high and there is no permanent shortage in supply.”

Brent oil hits 27-month high at $98; $100 in view

LONDON (Reuters) - Brent crude oil rose to $98 a barrel on Wednesday for the first time in 27 months as production shutdowns and growing global demand raised expectations of tighter supplies.

A gas leak forced two Norwegian oilfields to be shut down briefly. The Trans Alaska Pipeline, which ships about 12 percent of U.S. crude output, was shut on Saturday because of a leak, although it has been allowed to resume "limited operations."

China Oil-Product Imports May Decline as Growth, Demand Slow, CNPC Says

China’s net imports of oil products may fall 23 percent this year as the world’s fastest-growing economy slows and domestic refiners expand capacity, according to the research unit of China National Petroleum Corp.

Peter Tertzakian: What the Canadian oil and gas industry should be watching in 2011

CALGARY - Our calendars have flipped to 2011, but the market chatter hasn’t really changed: China’s insatiable appetite for commodities, European debt, a sputtering U.S. economy, environmental issues, peak oil and the North American gas glut. But plenty could change or start to change in this New Year.

Here are 11 big issues that stakeholders in the Canadian oil and gas industry should be watching in 2011:

Shell to Stop Fuel Output at Hamburg Refinery for Conversion to Terminal

Royal Dutch Shell Plc said it plans to stop fuel production at its Hamburg refinery and turn it into a terminal. Shell issued a statement in German on its website today, saying it had failed to find a buyer for the plant following a two-year search.

Hungary vehicle fuel consumption falls more than 9% in 2010

Vehicle fuel consumption in Hungary fell 9.4% to 2.959 billion litres in 2010 from a year earlier, data compiled by the Hungarian Petroleum Association (MASZ) show.

Sales of petrol fell 12.9% to 1.368 billion litres. Sales of diesel were down 6.2% at 1.591 billion litres.

Proposal for higher buildings in downtown Vancouver criticized in advance of city vote

Randy Chatterjee voiced concerns about the energy costs of high-rise buildings.

“These things use about 10 times more energy to heat than the low-rise houses that some of us like,” he said.

“There’s no way around it, these things are dinosaurs. Whether you believe in peak oil or just the higher prices of energy, these things are a disaster waiting to happen.”

Outlook 2011: Irreversible Upward Pressures

Peak oil is the point at which the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This has already happened in the US, Alaska and the North Sea. In the next few years Mexico will become an importer of oil and the US will lose its third largest supplier. Our fragile, highly indebted economy relies on this land based cheap oil to continue and it cannot withstand the shock of transitioning to more expensive alternatives. In September of 2010 a German military think tank reported that the German government is taking the threat of peak oil seriously and preparing accordingly. Numerous studies around the world have concluded that we are very close to peak oil production, which will be accelerated due to gulf drilling bans.

This will lead to higher price inflation for most goods. This will be another blow to the fragile US economy, which currently pays less for oil and gas than any of the first world countries. When added to the effects of the waning strength of the petrodollar the results will be devastating.

Hedge funds bet on $100-a-barrel oil

It's not just oil traders who are fueling the price of crude, but financial traders too.

Global (news) hedge funds and market speculators have pumped millions of pounds into oil futures pushing the number of contracts held by financial traders to a four year high.

Clarium Slumps 90% From Peak After Thiel Hedge Fund Has Third Losing Year

“We succeeded in trading the peak oil-driven macro environment in the first half of the year, but then gave back our gains in the second half by underestimating the speed and ferocity of collapse,” he said in a December 2008 letter.

Thiel said in the letter that the “peak oil” theory would remain relevant in the coming years because the 2008 recession would cut investments in alternative energy. He also said deflation would be a risk in the coming years, along with stagflation.

Oil Can Be Another Inflation Hedge

I would argue that oil is far too low and is probably being held down by the ongoing recession that is containing the demand for all petroleum-based products (from gasoline and diesel to plastics of all kinds). Once demand recovers, we will see the underlying true price of oil and I would expect a return of the gold/oil ratio to its 100-year trendline of 10. Historically, oil was paid for in gold, not in paper currency and the trend is back toward that standard. And, oil is not only consumed commercially but the "peak-oil" phenomenon predicts that it is being depleted and the supply could be half what it is today within the next 20 years.

Graham Corp.: In the Sweet Spot of the Energy Bull-Market

The country has seen steady oil depletion over the past seven years. Cantarell, its mega-field, has become the textbook example of Peak Oil.

According to Mexican Energy Minister Georgina Kessel, output will likely average 2.55 million barrels a day in 2011, down from 2.58 million in 2010. In her December 6th address she went on to assure the audience that, “From there on, we’ll continue to increase, very gradually, our production.”

Analysts are not so sanguine. Alejandra Leon, an analyst with Cambridge Energy Research Associates, based in Mexico City, responded to the report saying that Pemex “was betting in the implementation of new contracts to revert the falling production.” She estimates that Pemex won’t be able to stop output declines until 2018. New innovative techniques will be needed but investment has been slow to move.

Edward Guinness: A Portfolio Approach to Alternative Energy

The skeptics about peak oil claim that we will always continue to discover new sources of oil and gas (O&G) and, therefore, shouldn't worry about dwindling reserves. We've seen peak oil production in the U.S. and a number of other countries. No large fields have been discovered in the last 10 years that compare with the major OPEC fields. Our view is that the world will be able to keep increasing production in the near term, but that will lead to increasing prices. Ultimately, we will see peak production—though that could be extended as higher O&G prices make more marginal reserves viable. But whatever happens, we think that rising fossil fuel prices are highly likely.

Will Green Energy Crush Oil Investment Returns?

As oil continues to skyrocket to nearly $100/barrel, alternative energy companies might slash into the profits of oil titans and provide the most lucrative investment for 2011 and beyond.

Preparing for Energy Battle

An energy battle is brewing... and the giants of the world's energy armies are preparing.

I often write about connecting the dots of events going on around you. Here are some events from the past few months you should be keenly aware of.

Those who put the pieces together could be in for serious market profits this year.

New Zealand: Can you sink a rainbow?

The days of cheap oil are certainly drawing to a close, many believe we are nearing, or have already hit, peak oil. Would this drive potentially powerful countries like China to generate less of its new power using fossil fuels? Surely, the only other possible response in the short-term is to import as much energy in the form of oil, coal and natural gas as they can, driving the price of oil further up. The other option is to increase domestic production, but with this there are significant risks—peak oil isn’t a theory, it is a geological fact. Oil resources are not infinite and at some point we'll reach the stage where half of the resources are gone, which means supply will never satisfy the demand. Although there are other fossil fuels that we can turn to in the future, like methane hydrates, these are even worse for the environment than conventional fossil fuels, much like the increasingly exploited, hard-to-reach oil sources, like tar-sands and extreme deep-sea deposits. Extracting these may pose risks on the scale of what we recently saw in the Gulf of Mexico.

How to Prepare for a Post-Peak World: Part I

A couple of years ago, I was having dinner with some colleagues. We were talking about Peak Oil and the best way to prepare for a post-Peak world.

We made a list of things we'll need and have updated this list over the years... but one of the items on that list has not changed.

And that's a hunting rifle.

You see, today, hunting is not typically considered a poor-man's sport. Hunting gear, guns, ammunition — it's all pretty expensive. But what happens when hunting turns from a recreational endeavor to an absolute necessity?

Detroit Auto Show 2011: Where is My Tree-Hugging Minivan?

A couple of months ago, I tweeted the following: “tree huggers with three kids (oxymoron?), car recs please?”

I got zero responses.

While that may have to do with the fact that I don’t have a lot of tree-huggers with three kids following me on Twitter, I think it also has to do with the fact that there aren’t a whole lot of vehicles to recommend. Cars are either fuel-efficient or they hold 6+ passengers. But not both. Or barely both.

Small cars a priority: Marchionne

DETROIT – Chrysler, seen by many as the Big Car guy on the auto industry block, says it is working on a compact vehicle to fill a gaping hole in its lineup and a smaller minivan to combat rivals nipping at its industry leading models.

Stress, Pollution and Poverty: A Vicious Cycle?

The Environmental Protection Agency has awarded $7 million in grants to researchers to study the cumulative health impact of pollutants like mercury and lead and social factors like stress and poor nutrition in several low-income communities, the agency said Tuesday.

EU to Assess Its Post-2012 Commitment to Kyoto Protocol, Delbeke Says


Global Warming and the English Language

Uncertainty is not evidence. It neither proves nor disproves anything. Let’s be honest about this.

SRI LANKA: Record rains increase urgency of climate change adaptation

COLOMBO (IRIN) - Ongoing storms have dumped more rain in one eastern district of Sri Lanka than witnessed in a century, according to the country's Disaster Management Centre (DMC). Nationwide, storms have hit some two million people in the past seven months and hastened climate adaptation plans already under way, according to the government.

National climate scientist WL Sumathipala said recent storm activity had sped up the timetable to help residents cope with changing weather. "We have looked at weather patterns for a long period of time and it is only now that we are ready to make scientifically supported statements about climate change."

Link up top: Trans-Alaska Pipeline Temporary Restart Begins as Bypass May Take 5 Days

I have been searching the links on this all morning and I think, but cannot confirm, that the pipeline is being started with it still leaking. They are pumping at a reduced rate though I can find nothing that says what that rate is. They were worried that a pig, stuck somewhere right between two pumping stations, might freeze in place. Water seeps out of the oil and would freeze in the pipeline, locking the pig in place. That would be a mild disaster if that happened.

So they are just pumping the oil at a reduced rate while they build the bypass. When the bypass is complete they will then stop production and cut the line at both ends of the concrete encased leaky pipeline and cut the bypass in. They should have recovered the pig by then, reducing the risk.

Anyway that is my take on what is happening from my reading of several links on the subject. If someone has another take please post it.

Ron P.

So this could be literally a problem of a stuck pig! ;-)

No more OT than random puns:

The first part of the Nation series "Peak Oil and Climate Change" is now on line, with our boy Richard Heinberg:


I'd be interested in what people think.

We have already seen this one and discussed it thoroughly on January 8th. However the next of "The Nation" series on the subject is out.

The Globe's Limitations: How Peak Oil Threatens Economic Growth

In the second video in the series “Peak Oil and a Changing Climate” from The Nation and On The Earth productions, Richard Heinberg, senior fellow with the Post Carbon Institute, discusses how depleting oil supplies threaten the future of global economic growth. According to Heinberg, historically there has been a close correlation between increased energy consumption and economic growth. If the economy starts to recover after the financial crisis and there is an increased demand for oil but not enough supply to keep up with that demand, we may hit a ceiling on what the economy can do.

Ron P.

On 4 april 2009 there was an article published by Aleklett:

Not enough oil for the G20 package / Oljan räcker inte till G20-paketet


They intend to remove the pig at Pump Station 8. Nowhere in any official information do they state what the flow rate will be that I can find but I assume it is the lowest flow-rate they reckon they need. Hopefully we will see updates from BP etc on their updated field output. As of the latest update it would still appear to be 5% so perhaps that is close to the pipeline flow-rate during the temporary restart. Some earlier media reports had said that the pipeline was flowing at 5% of capacity since the shutdown but what was actually happening was that 5% of production as being stored onsite until the tanks filled up.

Official incident page at http://www.dec.state.ak.us/spar/perp/response/sum_fy11/110108301/1101083...

Unified Command is awaiting regulatory approval on a plan to briefly restart the
pipeline for an interim period to increase temperatures in tanks and the pipeline,
and reduce the potential for freezing or cold crude conditions.
o This would move the cleaning pig to a location where it won’t risk pump
station equipment. Crews at Pump Station 8 could trap the pig between
two valves in the mainline and route crude oil around using bypass piping.
o This will help prevent reaching capacity of the Pump Station 1 tanks,
which would halt production.

And yes as far as I can see the pipeline is still leaking into the pump building. If the same configuration of pipes in concrete leading to/from the pump-room is in use at other stations I'd want to know the conditions of these pipes at other pump stations.

Strikes me that they are going for what they calculate to be the least worse option rather than the definitively safest. I hope they have done their calculations correctly. You wouldn't get me anywhere near an active pump station leaking hundreds of gallons of crude into the basement from a pipe encased in concrete in an unknown condition.

The WSJ article said they didn't know how much flow they could achieve. Just that they would try for as much as possible.

Presumably Bob standing in the basement will shout to drop the pressure when he's up to his neck in crude :)

Possibly they have had time to install a sump pump?

I know next to nothing about crude oil pipelines, but speaking as a rolling stone type with lots of interesting experiences in various industries, since I worked intermittently for years as a mechanic on emergency and maintainence shutdowns, I'm sure that the guys who are be going in to make the repairs will approach this job in basically the same frame of mind that a cop, fireman, or soldier faces any busy day.

They will be doing something potentially very dangerous, but since they are pros,the odds of walking away no more than tired and dirty at the end of the day are actually excellent.

I have worked on many crews doing dangerous emergency work,as it pays very well and is short term work. I have never personally seen any body get seriously hurt on such a job-although I know of a couple that got hurt really bad COMMUTING to and from the job sites.

Of course statistically speaking, the injury and death rates are comparatively high in such careers.

The rate of flow thru the pipeline is a function of the pressure drop along the distance between pumping stations. Thus, cutting the flow means cutting the pressure at the outlet of pump station #1 where the leak is. The flow thru the leak is also a function of pressure, so cutting the rate of flow will also reduce the rate of leakage. It would appear that the rate of leakage was relatively small when noticed, thus, operating the station at lower flow/lower pressure would also reduce the rate of leakage.

It would be reasonable to think that the pipeline might be operated at a lower pressure for short periods to heat the oil inside the insulated pipe line, thus maintaining the oil temperature such that normal flow might be quickly resumed, once the bypass is constructed. The newly leaked oil could be recovered as easily as that previously leaked, especially as the quantity would be much less...

E. Swanson

Increased viscosity due to cooling of crude will mean that higher pressures will be required to move the oil, especially at the pump station outlets. As I posted Monday, this will test the condition of these sections of the pipeline. Great care will be required to restart/increase flow without overpressurizing aging sections of pipeline. Best hopes for engineers and techs keeping close watch on their gages. I wouldn't be surprised if more leaks occur.



From Alaska_geo's link, below:

As of Tuesday, the temperature of oil in the pipeline was 32 degrees in places and expected to drop a couple of degrees a day.

Asked whether water in the lines already was freezing, Egan said, "I think trying to restart today was to avoid that."

Read more: http://www.adn.com/2011/01/11/1643546/temporary-pipeline-restart-under.h...

We have been fortunate that temperatures have so fare been relatively mild. Part of the problem with a prolonged shutdown is that besides damage to TAPS itself, there is the risk of extensive damage within the oilfields. The oil in the main pipeline has had most water removed, so the most serious risk seems to be around the pigs. However, within the field, many producing wells make a significant water (and gas) cut. This oil/gas/water mixture is carried by smaller pipelines within the field to processing centers where (most) of the water and gas is separated and then reinjected into the field to maintain pressure. When shut down in cold weather, this water can freeze.

For temporary shutdowns of the whole field, production is reduced to a minimum (the 5% solution) and the oil goes into tanks at Pump Station 1. Obviously this only works for a limited time. In the normal course of operations, when an individual well or pipeline within the field needs to be shut down for maintenance, they are freeze protected by filling them with diesel and/or methanol. Normally this only involves a few wells or pipelines at any given time. As one might imagine, trying to freeze protect all of Prudhoe is a huge job. Actually in this case it's even worse than that, since ALL of the N. Slope fields need to be freeze protected. The alternative is to recirculate oil from some wells and reinject it into others. There are plans to handle emergency shutdowns, and both options are being used, but it takes time. A temporary, limited restart of TAPS (while the damaged section is bypassed) reduces the need to freeze protect the fields, and gets at least some oil to Valdez.

See Temporary pipeline restart under way for a bit more discussion. Also see After shutting down Saturday, trans-Alaska pipeline ready to move oil -- for now .

The downslope of production is not nearly as much fun as the upslope. I suspect that a lot of what is considered to be "Excess Capacity" worldwide consists of what Matt Simmons called "Oil stained brine."

I haven't seen anything else new that is not above, except maybe this from the Anchorage Daily News (adn.com):


Oil field operators were directed to cut production to 5 percent of normal, or about 30,000 barrels a day. The limited amount of oil has been stored in two holding tanks at the pump station.

But the two tanks, which together hold only two-thirds of the 630,000 barrels produced on a normal day, were filling up. They'd be at capacity before the damaged area could be sealed off and a new 157-foot bypass line is built, according to the state Department of Environmental Conservation . Just fabricating the new piping in Fairbanks is expected to take several more days, DEC said.

If the tanks reached their capacity, all North Slope production would have to be shut down, risking cold weather damage to wells and pipes, as well as the trans-Alaska pipeline itself, according to DEC.

If I am understanding this correctly then, the pipeline will essentially have to be shut down again at some point soon - with possible dire consequences to the oil fields and pipeline.

Elsewhere, some West Coast refiners report they will have to scale back operations as soon as one week from today.

I note in the WSJ article Alaska Oil Pipeline Restarts

Mr. Hartig said he also was concerned about the Prudhoe Bay oilfield. If the pipeline system is down so long that storage facilities fill up, oil companies could be forced to shut in production completely, which could cause oil wells to freeze, creating new problems, he said.

"It's a big deal to shut in that field in the wintertime," Mr. Hartig said. "We're talking about hundreds of wells and 100,000 miles of pipeline."

That's because they restarted the pipeline with a hole in it! Looks like a flow rate of about 150 gallons/hour into the basement since restart. And presumably that rate will only increase with time.

Link up top: How to Prepare for a Post-Peak World: Part I

I believe that in a post-Peak world, hunting will, in fact, move from recreation to necessity.

I really get depressed when I read stuff like that. Hunting will be necessary but will be an option only for a very short time. After only a few years every wild thing in the country, and almost every country in the world, will be killed for food. We will literally eat the songbirds out of the trees.

Starving Irish...

songbirds were hunted and killed in large numbers, and the blood of cows would be salted or fried.

Ron P.

Can't get much more doomerish than that. Have you ever seen the movie 'The Road'? It's one of my favorites. Your scenario described above reminds me of it. I really think you'd like it.

Yes I saw "The Road", great movie. I try to watch all the post apocalypse movies. Some are great and some are trash. "The Postman", I thought, was very good but it got bad reviews. The Book of Eli got great reviews and I thought it was trash. Eli was Denzel Washington:

A post-apocalyptic tale, in which a lone man fights his way across America in order to protect a sacred book that holds the secrets to saving humankind.

And that book was The King James Bible. And it holds the secrets to saving humankind? Give me a break. Oh, and I almost forgot, Eli was protected during his journey by none other than God himself. With protection like that how could he not have made it?

Ron P.

Unfortunarely I agree w/you Ron about TBOE. Always enjoy Denzel especially in action flicks but the payoff in the movie was very disappointing. Perhaps if I were religeous it would have worked better.

Sounds like "Knowing".

Boy was that a stinker - very few films make be angry, but that one managed it.

I actually thought Eli was pretty good; I give it 3 1/2 out of 5, though it wasn't as good as A Boy and His Dog, especially the ending ;-)

Have avoided Eli for precisely the reason's Ron cited. But have to agree that A Boy and His Dog is among the very best post apocalypse films. I would also include in that top list (in no particular order);

Logan's Run
Mad Max 2: The Road Warrior
On the Beach (1959 version)
The Postman
The Quiet Earth

There is another related category - dystopian comedies. Things like "Brazil" and "Idiocracy".

I didn't find the biblical overtones in Eli offputting; certainly not enough to reject it outright. I enjoyed The Stand alot (M O O N, that spells collapse) as well, and I'm not particularly spiritual, in a good-vs-evil sense. The action scenes in Eli are good (if you're into that) and the scrounging/survival segments were very well done. I especially liked "George and Martha", the sweet old cannibals. I thought that having a well armed geriatric pair who weren't above eating (and sharing) their dead enemies was a nice touch. At least they posted a NO TRESPASSING sign ;-)

For those who haven't seen it: A Boy And His Dog

In Florida and most of the US I concede that is a possibility. However...In very remote, high latitude or high altitude environments game animals can endure.

My father experienced the depression in the hills of NE WA St. When i would remark at all the old abandoned ramshackle buildings he would tell me of how people once tried to scratch a living out of those places and the hills were full of homesteads.
And yes, the local deer population got pretty well depleted.
But higher up, back in the mountains, on the Forest Service property, the mule deer population did well.

My point is that hunting expeditions have an opportunity cost, and in the absence of cheap fossil fuels...
Even desperately poor people inured to cold and hardship cannot endure the conditions that many game animals favor.

Take away snowmobiles, ATV's and maintained roads and you are back to traplines, hound hunting, and bait stations. It becomes a game of wits and game has a chance.
I would expect many game species to recover nicely in a post-peak world.


Good points. However, when looking back to the depression era for guidance it's important remember that:
1. We now have 2.5 times more mouths to feed in the U.S.
2. Many more people were involved in farming in the 1930's. The kind of farming that didn't use huge inputs of fossil fuels.
3. In the 1930's we had ample supplies of fossil fuels.

I agree that game in the remotest and harshest regions will probably do OK but, IMO, truly remote country in the U.S. is in short supply today.

You have a good point-about game recovering (EVENTUALLY) in a post peak world.

But as a practical matter, in places where there are a lot of people, it is not likely that anything as big as a rat will be easily found after the first year or so of an industrial collapse.

I foresee the post collapse resurgence of one basically obsolete farm career niche-that of the shepherd in the fields.

But instead of a crook and a dog, the new era shepherd is going to use night vision glasses and a big bore rifle-a semiautomatic, or, if he can put his hands on one, fully automatic military weapon.

Of all the things that will eventually wear out and not be repairable, good firearms will be among the last;unless a gun is used for extensive training or extensive target practice, it is almost certain to last for centuries, if cared for. ammunition, properly stored, has an indefinite shelf life-possibly well over a century, certainly over fifty years.

Ammo will in my estimation be the poor man's silver coins post collapse.

But it won't be of much use for hunting in most places.

It occurs to me that things could work out in such a fashion that meat would be quite plentiful sometime after a major dieoff-at least in places like the south eastern US.

There are lots of streams , and many millions of acres of cropland that might not be be cultivated due to a lack of fuel,draft animals, spare parts,fertilizer,etc, and a working distribution system.

Maintaining such land, once cleared, in pasture, is a relatively simple job, and one that can be in the last resort taken care of by hand.In my youth, it was considered an honest day's work to mow an acre of steep hillside orchard with a scythe, a job typically done twice a year.

My maternal grandfather maintained a steep mountain pasture for one or two dairy cows which I estimate was about five acres.He and I could give it it's necessary annual "haircut" in a day by hand, as we just clipped off any undesirable growth such as green briars, seedling trees, and so forth.

I believe that even now, I could maintain a fifty acre pasture entirely by hand by working on it a couple of hours every day.

Livestock can move to market under it's own power-some of the younger ones of us might live to see cowboys driving cattle!

You have a good point-about game recovering (EVENTUALLY) in a post peak world.

Gracious folks, it is not about game it is about species! Many will be completely wiped out. No doubt all other great apes in the world will be wiped out as they become hunted for bush meat. They are just too easy to find and shoot. Elephants and giraffes will likely suffer the same fate.

The rate of extinction is greater today than any time in history except for during the previous five great extinctions. And even the extinction rate during these periods will be surpassed during the collapse. I expect that upwards of 95 percent of all large animals will go extinct and a pretty high percentage of smaller animals. Only those animals that thrive in the forest of the very cold climates of North America, Northern Europe and Siberia are likely to survive.

Ron P.

Gracious folks, it is not about game it is about species! Many will be completely wiped out. No doubt all other great apes in the world will be wiped out as they become hunted for bush meat. They are just too easy to find and shoot. Elephants and giraffes will likely suffer the same fate.

There may be something to be said for relocating some populations of other species into more remote areas, as problematic as that is practically and ecologically. It's a human-created bottleneck event and humans bear the responsibility.

Ironically, any such move will be opposed by conservationists who don't understand the ramifications of the bottleneck and dieback. Still, worth doing.

I think you'd have a problem with that approach, since some animals are adapted to certain migration patterns e.g. elephants, birds, even butterflies like the Monarch.

They cannot be confined to any particular area and still be considered "wild". In effect, you are proposing a large zoo, which, then, has to be managed.

I read a particularly sad sci fi story long ago about how people got infected with some disease that killed canines - all canines. So they relocated the few that were left to a quarantined hideaway in the Arctic, or something like that. Until somebody found them, and that was the end of the dogs.

Conserving wildlife is a systemic issue.

I think you'd have a problem with that approach, since some animals are adapted to certain migration patterns e.g. elephants, birds, even butterflies like the Monarch.

They cannot be confined to any particular area and still be considered "wild". In effect, you are proposing a large zoo, which, then, has to be managed.

There are some people around the world who are working on these ideas.


Pleistocene Park: Return of the Mammoth's Ecosystem

Sergey A. Zimov


Sergey A. Zimov, director of the Northeast Science Station in Cherskii in the Republic of Sakha (Yakutia), received his academic training in geophysics at the Far East State University in Vladivostok, Russia. He subsequently did fieldwork in northern Siberia for the Pacific Institute for Geography, part of the Far East Branch of the Russian Academy of Sciences. In 1980, he organized the science station that he now directs. Research at the center includes studies of global carbon and methane budgets and animal extinctions that occurred in Siberia when the Pleistocene epoch gave way to the ongoing Holocene about 10,000 years ago. In 1989, Zimov initiated a long-term project known as “Pleistocene Park,” which he now is pursuing with a number of partners. The goal of the project is to reconstitute the long-gone ecosystem of the Pleistocene epoch that supported vast populations of large animals including mammoths, horses, reindeer, bison, wolves, and other large predators. If the effort succeeds in the park, Zimov and his co-workers would like to see the ecosystem restored over much larger areas in an effort to stave off what otherwise could be a massive release of carbon that now is sequestered in the permafrost but that could be released into the atmosphere as global temperatures rise. His hunting of mammoth remains in the tundra and his bold vision of controlling and restoring ecosystems have earned him coverage in books, documentaries, and other media.

That report is rather interesting. There's one issue which wasn't mentioned. All those grass lands were likely to have been colder in winter than the mixed woodlands of more recent periods. That's because the lack of those species which stand above the snow would have resulted in a greater albedo for the land when snow covered. Thus, there would be greater reflection of winter sunlight. Also, the large megafauna were rather mobile, and probably migrated with the seasons, so attempting to re-create the conditions would require removing the animals in winter to simulate the effects of migration.

I suspect a similar albedo effect may have happened here in the US, as the forests were cut down and land converted to fields and pastures. That conversion would tend to give colder winters, at least locally, as trees standing above the snow and intercept the sunlight before it reaches the reflective surface, absorbing more sunlight from that fraction which does hit the surface and is reflected.

Before the European population moved to the Western US in the 1800's, the land appeared to be great "wilderness", with heavy forest cover until one reached the Great Plains. But, I think that heavy forest cover was not like what existed in 1491, when the population of Amerindians was much greater and actively managed the landscape with fire. The re-growth of forests in the middle of the 20th Century may have also warmed things a bit. We seem to be in the process of cutting more trees again...

E. Swanson

I think you'd have a problem with that approach, since some animals are adapted to certain migration patterns e.g. elephants, birds, even butterflies like the Monarch.

They cannot be confined to any particular area and still be considered "wild". In effect, you are proposing a large zoo, which, then, has to be managed.

Conserving wildlife is a systemic issue.

As one who has spent nearly 4 decades conserving/saving wildlife populations, I fully agree. Yet when you have, say, mountain gorillas or bonobos which will clearly be killed and eaten to extinction in short order, you face a stark choice: relocation or extinction. Both choices suck, and the latter is easier since it doesn't require getting involved. And yet.

During the human population shrinkage of the coming century, there is basically zero chance that accessible megafauna will survive. There will be a relatively short period of high-population human famine - a few hundred years maybe - and perhaps the species could be re-introduced after that.

I'm sorry to have come to this conclusion, but conservation through the bottleneck will consist of extraordinary measures to the extent that it works at all.

Well, hoping you're wrong with some of that assessment- one of my wee, little hopes is that regardless of our bloated pop. numbers, that a drop in energy availability will make certain parts of the big world harder to access, and that there will be some places to hide from us.. islands in particular, though sea-travel won't be as cut-off as some land access. (To whit, hoping that chainsaw fuel and spare parts are early on the hit list, and the Rainforests can start to regroup and counterattack. (With the Ents help, I suppose..)

I would hope that some areas where we have backfilled wetlands and managed to keep them 'dry'.. that these will also become too costly to maintain, and might be able to revert to marshy habitats again, too. Sadly, the toxins in them might constrain their wildlife potential, but you never know.. nature marches forward unemotionally albeit willfully... it does what it can, and has a way of creeping through and around obstacles.. turning lemons into lemonade.



I hope I'm wrong too, but my conclusions are based on a lot of experience.

one of my wee, little hopes is that regardless of our bloated pop. numbers, that a drop in energy availability will make certain parts of the big world harder to access, and that there will be some places to hide from us.. islands in particular, though sea-travel won't be as cut-off as some land access. (To whit, hoping that chainsaw fuel and spare parts are early on the hit list, and the Rainforests can start to regroup and counterattack. (With the Ents help, I suppose..)

your hope regarding some populations and species becoming "energetically isolated" is clear thinking, and it has been one basis for my own process of triage in interventions over the last couple decades. Some critters are simply hosed and will quickly die in place. Others are, and will remain remote, though they will have to deal with a degraded planet and vandalized climate. And there are a lot which could go either way.

Remote acquisition of wildlife, such as far-seas fisheries, can become non-economical. Of course, physical treaty oversight becomes non-economical as well, so such industries will go through a particularly destructive smash & grab phase before they peter out.

Chainsaws and chainsaw fuel are unlikely to be a limiting factor, and any Ents extant seem to be pacifists to date. Climate change will hit the rainforests and their species very hard.

Most will not be saved, can't be saved. However, there is a case to be made for intervention.

Chainsaw oil can be castor bean oil, run off of either biodiesel/alcohol or even be electric (like my 2 saws).

And 2 people using legs peddling on a bike->gen will produce more watts of energy output than 2 people using their upper bodies on a misery whip.

Saws will be the last thing to die because the conversion of photons into complex carbs to be burned for heat will far exceed the heat from the oil used by the saw.

And don't worry about the long lived lifeforms. As the nuke reactors fail the biosphere will provide the mutations of the short lived forms into longer lived as the long lived ones will have died of cancer or outright cell failure.

It's good to see you back here, Greenish!

I would be in favor of relocating as many breeding populations of various species as possible myself, given the chance that it might save a few species.

I expect many species will indeed be wiped out, but my personal guess is that the human population is apt to die off faster than we can drive all the larger species extinct-once people are few on the ground, even a handful of deer that have survived someplace remote or perhaps even in captivity could rapidly repopulate any areas suitable for deer.

Furthermore, I will hazard a guess than some domesticated animals will succeed in going feral in a big way-including hogs, chickens,goats, and cattle-ONCE people are few and far between.

We might even be able to hunt tigers here in the US someday-it seems that there are quite a few in private hands.

I'm not PREDICTING, but rather merely speculating.

Hey there OFM.

I'm working through the back-end of the flu and a fever - TOD seems to receive my posts only when I'm too loopy to get serious work done.

Hard to know how things will roll out. If some "ferret flu" or something became particularly deadly to hairless apes, it could be that humans & other species would get through the bottleneck with less ancillary damage. However, the odds of that seem pretty low - even the spanish flu only amounted to a small downtick.

I don't reckon deer and coyotes and squirrels will go extinct. However, a lot more will. Honestly, the difference between the world I grew up in, and the world now, represents a huge wildlife dieoff which simply isn't on most peoples' radar. I grew up in Indianapolis of all places - our backyard abutting the last large "swamp" (as far as I know) in the midwest. The wildlife diversity was so amazing that today you have to go to the cloud forests of Costa Rica to find anything comparable. The difference is so stark that it's amazing to me that only I and one of my brothers remark on it - others, even those who lived there - just didn't pay attention. That area is paved over now, of course.

And most of the large wildlife populations in the world at large are either gone or seriously knocked back. Unfortunately, my caring about that has involved me having to know too much about it, to experience it. The great dieoff is no theory to me; humans have just managed to cut to the back of the line.

It's spiritually taxing, to say the least, to be working to prevent an extinction, and be utterly unable to. For instance, the baiji, yangtze river dolphin. In the late '80's and early 90's I had staff and veterinarians working on them, in conjunction with cooperating scientists on the ground in China. It was clear that they were doomed unless something extraordinary could be done. They're dead as the dodo now. Our efforts were not extraordinary enough. Watching extinctions take place is stressful when it's that "real".

Moreover, humans seem amazingly adept at coming up with rationales to kill things off, to the extent they invoke them at all. I mentioned the dodo bird... you know, nobody liked the taste of dodo. They were kill with sticks for sport. I've dealt with situations here in which dolphins wash up with their insides eaten out: fishermen will put a folded baggie full of Drano inside a fish and toss it to them to keep them from "robbing" the fishermen. I can go on for hours, days, with such stories, and it has affected the way I think of my species.

Another river dolphin - in the Amazon - we tried to help; they were killed for (a) a local rumor that their dried eyeballs conferred luck; and (b) a local legend that eating their dried genitalia was salubrious. Along those lines, I think the entire fur seal cull in the USA now produces "fur" as a byproduct which there's little market for; the thing which makes it profitable is supplying the seal penises to the asian penis market. At least the US seal kill is regulated; most other sources of "wildlife penis" aren't. The asian demand for token medicine, such as rhino horn, tiger bone, and you-name-it is huge and perverse: those who buy and warehouse the stuff have an interest in driving the species to extinction; just like it benefits diamond cartels to keep diamonds rare, the old "goldfinger" scenario. And even when wildlife is hunted for 'food', it is initially hunted for "money"; which means that if the rebuilding rate of the stressed population is lower than the rate of return available on the invested funds, it makes economic sense to do a maximal kill as fast as possible and then scrap the infrastructure. That's what happened to most of the large whales; Japan and the USSR conducted a covert bilateral scam while ostensibly members of the IWC obeying quotas. Most known populations of whales were largely destroyed systematically and illegally. It takes different infrastructure to kill each species of whale, so different ships were made, and then scrapped, as blue whales, fin whales, and smaller whales were progressively targeted.

Sorry, I rant. It's the fever talking. Point being that the killing off of other species is well underway, and those few protections which now tenuously exist will not likely remain useful. Ironic indeed if "pets" became the only hope of species continuity at all... reminds me of "Silent Running" the movie. Yet at least there are permit procedures for keeping odd pets, while actually moving species would probably cause large conservation groups to sue you.

I'd rather have mountain gorillas in the valley behind my house than Yakuza golfers - a personal preference I'll admit. There already are feral pigs back there - when hikers are gone for more than a week, authorities will quit looking, because an injured human is scavenged by them.

Yet moving species is problematic. I spent a half-hour this morning netting and freezing cane toads, which are overrunning parts of an ecology which is already mostly non-native. Still, it might not be a bad idea to try with certain species, since the difference between "not many" and "extinct" is a profound one. Weird times ahead.


In Spain it is still done on steep pastures, as you say. It lives on as an sport in the Basque land, and they make good money at it, from bets.

Segalari, photograph

Video of Basque segalaris, and a journalist tries his hand at the sport.
Segar, as an sport

Santalucie, Thanks for the link!

We still use our scythes to a certain extent, as they are more efficient than even the most powerful trimmer under certain conditions, and far more dependable to boot!

We no longer raise fruit on such steep slopes, but there are lots of nooks and crannies you simply can't get with a tractor mower.

Everybody who expects to maintain a working homestead in any place with rainfall adequate for stuff to grow probably needs a scythe, just as he needs a shovel, a pick, a wheelbarrow, an axe ..............

Would some of the populations of domestic animals, eg cows, go feral? Hugh herds multiplying and destroying large swathes of land. Maybe wipe out more adjusted species before their populations collapse from lack of resources that they have destroyed.


Wild/Feral Pigs are certainly doing that now.

The author of the article about preparing for Peak Oil misses the obvious. The population of deer and other wild meat producing creatures is rather limited. When I moved to the country 12 years ago, I had similar thoughts. I already had a hunting rifle, which I have yet to shoot. But, I found that there are already many hunters out here in the Boonies and the deer population is already heavily impacted by the yearly hunt. Opening day sounds a bit like a war zone and that's muzzle loader season. Bow season is already passed by then and the serious hunters have taken quite a few by then. This past year, for the first time in our state, bow hunters were allowed to use crossbows and early reports indicate a large number of kills using them. Here's the 2009-10 NC season report, which includes only reported kills...

The point is, as in the story about the Irish, if there's a large problem with the usual food supply, most the critters are going to be killed rather rapidly...

E. Swanson

I had a friend, Terry, from West Virginia – not too much younger than me. Great guy. Great story teller. Maybe a journalist type – you know, never let a few facts stand in the way of a good story.

So, anyway, after golf one day he was reminiscing, and we talked about hunting as kids. Well, I didn’t hunt, so he entertained me. He would go squirrel hunting every day, but there were no squirrels. They had all been shot -- and eaten. Really. That's how they got their food.

Since then, I have tried to read Malthus and his commenters, who help me understand why Terry couldn’t bring home the squirrel.

We have a very large number of inhabitants of every square mile. If Terry were around, he would ask “where are you going to get those squirrels, I thought I shot ‘em all?”

Terry would question anyone who thought that there would be enough wild animals to feed the population of the US today if we had to resort to that.

My Grandfather (and father) declared that Striped Chipmunks were a pest and asked me to hunt them. (My guess it was in part for me to spend time in the woods and get better with iron sites)

Eventually I would go for days without seeing any on the properties. Dogs were going untormented. Bird seed was going to the birds.

Then I left for college. Grandpa mentioned it took 5 years before the rat traps in his garage where the bird seed was kept started catching chippies.

The deer population was quite low during the depression. And hunters who 'stopped hunting' when chronic wasting was announced were back at it to put some meat on the table.

And the old college mate who works for the DNR points out that:
1) Oneida County had a historic poaching problem
2) Oneida County deer numbers just do not match what the management models show - unless you up the poaching variables.

The planet will get stripped by humans in an attempt to feed themselves. Best figure out how to cook/eat bugs.
(and wasp larve fried is nutty flavored)

Even bugs are getting scarce.

After only a few years every wild thing in the country, and almost every country in the world, will be killed for food.

Let's say after a few years post-peak, oil exports are 15% down. Would that cause many people go hunting ? No, but maybe yes in some countries.

Han, we are talking about what will happen after the collapse, not during the decline. How far will production be down before the collapse. That is a complicated subject with too many complex inputs to make any kind of prediction. But as Orlov and many others have stated, a smooth transition all the way down is not bloody likely.

I will be a decline in steps with the last step going all the way to the bottom. That could be as early as when we are down to 75% of current production. But that is only a wild ass guess.

Ron P.

we are talking about what will happen after the collapse,

In fact, first I wrote 'a few years after what ?' but then saw that your reaction was written on 'a post-Peak world', so then I left my question out.

How far will production be down before the collapse. That is a complicated subject with too many complex inputs to make any kind of prediction.

1-2 years ago you seemed to make more than a WAG with writing that you expect economic collapse around 2018.

That was a wild ass guess, and I still expect the collapse to be somewhere between 2015 and 2020. Now natural decline would not bring production down by 25 by that time but hoarding and shipping problems could very easily do it.

After peak oil becomes obvious to oil producing and consuming nations then events will determine the export decline rate, not just natural decline.

Ron P.

After peak oil becomes obvious to oil producing and consuming nations then events will determine the export decline rate, not just natural decline.

Yes, but instead of hoarding there is the possibility that the major exporting countries try to prevent exports from dropping with measures like raising tax on gasoline. I think many of them need the oil revenues to be able to import for example large quantities of food. Hard choices for the governments, regarding the protests going on now in Tunisia and Algeria

Arab states  act  to  restrain  food costs

Published: January 12 2011 20:15

Libya, Jordan and Morocco have taken measures to control food prices in the wake of violent protests in Tunisia and Algeria fuelled by anger over unemployment and poverty.

Libya has abolished taxes and custom duties on locally produced and imported foods such as wheat-based products, rice, vegetable oil, sugar and infant milk.

Tunisia, one of the most tightly controlled countries in the Arab world, has suffered a month of rioting by youths angry at high unemployment. Neighbouring Algeria also erupted in riots for three days after prices of basic commodities such as oil and sugar rose steeply. The Algerian authorities hastened to reverse the increases to prevent further shows of public anger.

I think many of them need the oil revenues to be able to import for example large quantities of food.

This is quite true but by cutting exports they will not necessarily be giving up any revenues. If oil were $150 a barrel Saudi could cut exports by 3,000,000 barrels per day and still collect the same amount of oil revenues.

I am not saying they will stop exporting oil, I am just saying they will cut back on exports. If everyone does the same thing then exports could drop by 10,000,000 barrels per day in just a few weeks. That would raise havoc with importing nations.

Ron P.

If oil were $150 a barrel

Could the economy hold on with that price, even if oilprices slowly rise to that level ? I doubt it and I think so do you.

Nevertheless, I believe they could cut back on exports and still sell enough oil to keep their revenues flowing. I think the very idea that Saudi, or Russia, or the UAE, or Kuwait, or whomever, will not cut back on exports because they need the revenue is absurd. Knowing that their oil reserves is being depleted and that they will be in dire straights when it is gone is enough to make anyone cut back. Saudi will cut back, Russia will cut back and everyone else will cut back and as the Saudi King said, save it for future generations.

Actually they will be saving it for themselves just a few years down the road.

Ron P.

Knowing that their oil reserves is being depleted and that they will be in dire straights when it is gone is enough to make anyone cut back.

In dire straights as soon as their exports are gone. If OPEC really have so much spare capacity as claimed, could be that they are already trying to save more. Though it is stupid cheating the world about their oilreserves, they are clever enough to realize what happened with former OPEC Indonesia.

Actually they will be saving it for themselves just a few years down the road.

Maybe they will be able to keep it then anyway, if oildemand drops like a rock. A scenario published on TOD some time ago, IIRC by Gail.

It depends on elasticity of demand which in turn depends on what the oil is used for. For example, at $150/barrel a majority of soccer moms will keep their SUVs in the garage but farmers and most industries and the military will continue to buy and use oil. The extent to which the ensuing recession crashes the price of oil is function of what fraction of the oil production is used for frivolous things today.

If a large fraction of oil today is used for single passenger SUV commutes, vacations and buying lattes then a recession caused by expensive oil will cause the price to crash as this frivolous demand evaporates. On the other hand if only a small fraction of the oil is used this way then expensive oil will not reduce demand by much. This is the situation we have in emerging markets today.

I feel that we will have multiple oil price spikes/crashes and with each spike, more and more consumption will shift from OECD countries to the fast growing developing countries (10 Kenyans with fuel efficient scooters that are driven only 1000 miles per year can collectively outbid a middle class American SUV owner). Eventually we will get a new equilibrium. It is anybody's guess what the price will be at that point.

And as less cars are used/in existence the demand for road spending will drop.

Lets hope they use the last of the budget to fill in the potholes caused by motorised transport.

Even if the last of the budget is used for such a purpose - it would matter not. The roads will still develop potholes, and when the storm sewers become clogged or collapsed, the roads will end up just washing away.

As I have posted before, all the deer in my area in northern California were wiped out within 6 months of the start of the Depression. Herds didn't rebuild for 10 years. At that time there were, at most, 20% of the current population.

I have no doubt that the same thing would happen to salmon today (in addition to the deer).


I was hoping you saw that. My best hope is to help protect the cattle next door.

Salmon are mostly gone now.

The last good salmon run I remember was in 1975 when everyone and their brother was pitchforking them out of Ten Mile Creek. Not me; I called Fish and Game. Stupid people!


There are already too many hunters.

I live in "Deer Hunting Country" as my friends from Chicago and Milwaukee call it.

If you want to hunt here on the small amount of remaining "public land" you should plan on sitting on another hunter's lap - there are far too many people trying to hunt even now while it is considered "recreational."

The same is true for local native american reservations.

Hunting for need might remain viable in areas like the Yukon, but it ain't gonna work in the NorthWoods of Wisconsin.

I worked in Yukon for a few years and always got a moose in the fall, mostly because I had an airplane for transportation. No roads and little access means the game will survive quite nicely without expensive FF to move around with. Look at a US political map and a Canadian map. We have very very few roads with the exception of the Praries and southern Ontario. When I look at a WA state map there are roads everywhere. In BC not so many.

The best deal is to raise a few animals. Rabbits are very easy to raise and I did it for years when I had a young family. I did it on a 1/2 acre back yard. Now I have land and raise sheep, etc, but I think the rabbits are the better deal. I might go back to it.

Cheers Paul

Honestly, I think I will seriously look into the Yukon and places like it.

Over the past couple months I have overheard conversations by locals that chill my blood. There is no way I was going to stick my nose in and try to diffuse the rhetoric.

There is absolutely no way I will try to diffuse the rhetoric "later" when these same people have to face real hardships.

All I can think of lately is the line from Anne Frank's diary, "Why didn't you get us out of here before it was too late?

Like Jed Clampett, I think I am going to load up the truck and move... as far away from 'Beverly" as I can get.

Croats vs Serbs vs christian vs jew vs muslim vs Native American vs Hmong vs...

(kumbaya, ma lord, kumbaya... my arse)

Arrest Made in Wisconsin Hunting Massacre

Monday, November 22, 2004

HAYWARD, Wis. — The FBI and Wisconsin authorities were searching for clues Monday as to why a hunter allegedly shot eight strangers on the opening weekend of the state's hunting season.

Chai Soua Vang (search), a 36-year-old St. Paul, Minn., resident, is accused of killing five hunters and wounding three others in northwest Wisconsin during a shooting spree on Sunday. Vang has no criminal record but was once arrested for threatening his wife with a gun...

Wisconsin authorities reveal details of Hmong hunter's death

January 17, 2007

A Wisconsin man now faces a murder charge in connection with the killing of a Hmong hunter who was found shot and stabbed to death in a wildlife area near Green Bay earlier this month.

The complaint against James Nichols also alleges that he made disparaging remarks about Hmong people to the investigators who questioned him.

Relatives of the man who was killed have speculated that the slaying was racially motivated and may have come in retaliation for the 2004 murder of six white hunters at the hands of a Hmong hunter...

May the circle, be unbroken...

Who knows how many "accidents" are really that? ...or even the other way around. I once had a co-worker who started swinging at me (in close proximity of a police officer, who then took him away)... the co-worker had been put on medications before the incident.

Who knows what evil lurks in the hearts of Men?
/8^/ The Shadow knows!

IMO, when we hit the 'big step down,' which some regard as 'the collapse,' many of our neighbors (and perhaps a few of us) will go a-hunting. When the wild game is gone, we will eat cats, dogs, rats, etc. ... so a .22 is perhaps a good choice(?)

The real problem I see is when the hunters go after each other. That might make the collapse move along faster. How far will our population drop after extreme overshoot?

On St. Matthew Island in the Bering Sea in 1944, 29 reindeer were introduced. Experts believed 13 to 18 per square mile, total 1,600 to 2,600 deer, would be supportable. In 1957 population was 1,350. No problem. In 1963 there were 6,000 animals. Quite an overshoot, and we would suppose that deer would drop to between 1,600 and 2,600? Well... not quite. By 1966, total population of reindeer was 42.

[attribution: Paul Hawken, "The Ecology of Commerce", 1993, HarperBusiness. p.25]

Anyone want to compute what a comparative drop in human population might be?

Of course, cornucopians, the WSJ, and the CoC would all have said, in 1965-66, that those who said only 2,600 could be supported were all wrong, politically motivated Democrats, progressives, communists and socialists!


"When the wild game is gone, we will eat cats, dogs, rats, etc. ... so a .22 is perhaps a good choice(?)"

How much doom are you expecting? A muzzle loader might be better, as once the government decays away at least in theory you can make your own black powder. I'm not sure on percussion caps, but a flintlock will still work if you can't get caps.

And if you are living in an urban area, a coal-burner might be easier to acquire.

Ron- I have given this topic quite a bit of thought. When I look around at my fellows here in the Appalachian mountains I am not sure how many will have the WILL to carry on post BAU. The obesity epidemic eliminates many potential hunters where I live. I also get the feeling many folks will be despondent and wait for BAU to be “fixed”. The first time they killed all the deer in these mountains it was done with considerable help by professional hunters selling meat and skins to a booming economy just over the mountains. I do realize like I could be completely wrong, but I get the feeling depression will have a much larger impact on people than many think post BAU.

Regarding Chindia's increase in net oil imports as a percentage of global net exports (from 11% in 2005 to 17% in 2009*), we have the following news item:

Indian airline orders 180 aircraft from Airbus (apparently single largest commercial aircraft order in history):


*Assuming a small production decline (5% from 2005 to 2015) among the exporting countries and extrapolating recent trends, Chindia's combined net oil imports in 2015 as a percentage of global net exports would be about 31%.

China is getting into the act as well.

China’s Comac wins 100 orders for new jetliner (Nov. 16, 2010)

China may soon be the second largest maker of commercial aircraft...

E. Swanson

I wonder if we might see a new two way trade between China and the US--China sends us used bicycles and rickshaws and we send them used SUV's and commercial airliners.

Some time ago, I read that the sixth largest industry in the US is vehicle recycling. I suppose that a large fraction of that scrap steel goes to China...

E. Swanson

Dog - We also own a steel salvage company. The irony is that much of what we ship to China is scrapped oil field infrastructure. How much does China want our metal: two years ago we sold as low as $125/ton. Today it's over $400/ton

I'm not familiar with Beijing (if that's where the picture is from) but that thing in the foreground is a bit bewildering. It looks like it should be monstrously heavy, and burdened with tremendous drag from those rear tires to boot. I have to wonder if it needs to be geared down to half or a quarter of normal walking speed, even for a 1% grade, maybe even on the level. On top of that, the glassed-in semi-enclosure must heat up like an oven in the summertime, and it will certainly block off any breeze.

So why would any potential customer ever hire such a thing? Wouldn't it be quicker, cooler, and dryer simply to walk? Why would any proprietor take it to such an extreme? What's really going on there; could it be another Photoshop job? Oh, and, is Beijing really as dead-flat as Amsterdam, to allow a thing like that to be even marginally usable?

Yes Beijing is quite flat.

Those things are generally called 'tuk tuks' and they are EVERYWHERE in Asia that I've traveled, as well as in Latin America; I bet they are in Africa too. This is basically what the developing world uses instead of a taxi. Taxis exist in the developing world of course, but most regular people use these since they are a cheaper ride. This one is really tricked out, most of them are nowhere near this nice and therefore most are far more economical than this. They usually have a metal shell then zippered plastic roof and sides, so they can adapt to almost all weather. The customers in back can have full shelter in the rain to full open air during a summer night for example.

I don't care to count how many kilometers I logged riding around in tuk-tuks on my last big trip. Generally they are sort of fun and better than riding in cars or taxis through traffic. One indelible memory was riding in one at near-freeway-speed in Delhi (terrifying) and the other was riding in one fully zipped up during a huge downpour in Siem Reap with rain water coming up to bottom of the doors and then we ran out of gas. Other than those two episodes, I was "sold" on these things, they are a great means of transport. The drivers/owners buy 1 liter bottles of fuel in Pepsi or other glass bottles that are sold all over the place along the roadside. So they basically buy fuel as they get cash from riders, "just in time" as it were.

A Tuk Tuk is a motorized tricycle. I always understood that they orignated in Thailand, but that may be local folklore.

There are many varities, but I don't think that is one.


The one in the foreground of the picture didn't look motorized though. Unmotorized and terribly, terribly heavy. So, why ... ?

It's made from the rear end of a BMW Mini Clubman. I think it's genuine, not photoshopped, and yes it would be terrible to drag around.


What you would probably call a European compact car.
Not nearly as compact (or cool) as its predecessor, the original Austin Mini.


Or for that matter, Scotland's only ever production car, the Hillman Imp.


Ok, ok, the styling wasn't exactly original ;)


"and yes it would be terrible to drag around"

And that's what I'm still wondering about - why even bother? Is it just that there's no explaining crazy?

I suspect that in a street full of rickshaws touting for business, having a novel selling point is an advantage.
"Oh look, that crazy dude has a rickshaw made from a Mini! Let's get a photo of us riding in it."
The owner may have to work harder to pedal it, but he won't go short of business.

OTOH, he may just be plain crazy.

Would you ride in a Chinese airliner? "If it ain't Boeing I ain't going", is pretty good advice from an airline captain. I wouldn't buy a Chinese car or tractor let alone ride in a Chinese jet. When my toaster lasts more than 1 year I might change my mind, but I doubt it. There are too many bogus and counterfeit parts out there, mostly from China. You can't even trust the dog food products they export. Aircraft? LOL

The China problem: all the products contain lead. Except, maybe, their crystal.


I am not a believer in the Chinese miracle but your statement is still problematic.


OK so this is only final assembly for a foreign company but how long before China moves up the learning curve?

The thing about China is that they may be 10 to 20 years too late.

In the future, you may not want to ride in any airliner, much less have the money to do so.

Is this the same company appearing in the movie, "The Age of Stupid". If not it should be.

The minister speaks on UK gas storage:

Hansard 11 Jan 2011 : Column 258W

Natural Gas: Storage

John Hemming:To ask the Secretary of State for Energy and Climate Change if he will implement incentives to encourage the storage of gas for the purpose of energy security in the winter of 2010-11.

Charles Hendry:
The United Kingdom relies on a well defined, independently regulated, competitive market to deliver the necessary energy infrastructure and competitive sources of energy. Market participants, rather than Government, are best placed to assess the complex range of factors affecting the profitability of storing and providing gas; and how these might evolve over time.

There are already sharp incentives on gas shippers to balance their positions across each day of this winter. The market has been working effectively to deliver sufficient supplies of gas to meet the country's needs. It has responded well, bringing forward sufficient supplies even in response to near record levels of demand during the cold spells earlier this winter. However, the Government are not complacent, and are seeking to refine the market framework through the measures contained in the Energy Bill 2010-11. A provision in the Bill will further improve gas security of supply by giving Ofgem a new power to amend the gas market's Uniform Network Code to sharpen commercial incentives on gas market participants to meet their contractual supply obligations and reduce the duration, likelihood or severity of a gas supply emergency. This will help underpin commercial demand for additional gas supply infrastructure such as storage and import facilities, as well as long-term contracts. Ofgem is now launching a "Significant Code Review" exercise to enhance gas market arrangements and believes that there is a reasonable prospect that the new power would enable it to implement these by the end of 2011.

Against that background the government has no plans to introduce further incentives to encourage the storage of gas over the course of winter 2010-11.

Don't worry - it's all in hand.

I read the entire chamber of commerce article with the Karen Harbert quotes. It is funny how I still have no idea what her actual views are. Is she a cornucopian? The headline makes it sound like she is not but some of her quotes are another story.

So tired of the calls for adult conversations. This is code for "if you don't agree with me, you are not an adult". By all means, let us have a massive investment in a finite and declining energy source. In the spirit of the free market, by all means let private oil companies spend their very last dime on this declining resource. Just leave the taxpayers out of it.

So tired of the calls for adult conversations. This is code for "if you don't agree with me, you are not an adult".

That is an interesting take tstreet. I think you are right that it might be "code" - or an ad hom - used by some people.

I tend to think of "Adult Conversation" as being honest about our predicament. As opposed to the use of Complexity for the purpose of Obfuscation.

For example, twice now Greenspan has shown he can be, and can treat his audience as, an adult:

1. Greenspan said it would be nice if we could be honest about invading Iraq for the oil instead of Pretending it was for WMD.

2. Greenspan said our financial system was gamed by massive fraud the past decade (note paraphrase - don't recall the exact words, it is available somewhere on You-Tube... Bernanke is sitting on stage beside him nodding in agreement in the video).

For those that have time to read right now try "Sibling Society" by Robert Bly. I think the book does a good job explaining why such comments are not surprising.

Thanks notalem, it looks like a good addition for a home library.

It looks like Tom Whipple is thinking along the same Adult lines in Leanan's Links above:

The Peak Oil Crisis: Civil Unrest

...America's problem today is that almost nobody in any official position is willing to publically recognize the real nature of the problem we face and start talking about realistic solutions.

So long as our elected officials and our media continue to speak endlessly about the recovery that is supposedly underway and continue to hold out the hope that, by voting for this or that candidate, all will be well, the great charade will continue and the people will get madder and madder...

Next year we will face another round of elections and all indications suggest that 20 odd months from now our economic situation will be materially worse and gasoline will be approaching unaffordability for many.

While realism could surface in the intervening time, the odds are it won't and next year we will be faced with a plethora of silly proposals to deal with imagined problems.

My emphasis.

Well I read the piece and I thought her message was quite clear. And the message was, forget wind and solar, they are just too expensive, forget about carbon emissions and offshore drilling regulations and drill, drill, drill.

Is she a cornucopian? Yes and no. If we continue to regulate offshore drilling and worry about carbon emissions then she is not optimistic. But if we forget about regulating carbon emissions and drop all offshore drilling regulations then we will have plenty of oil. No problem.

Oh, and I almost forgot. We should start behaving like adults instead of children. Children would be worried about carbon emissions and oil spills in the ocean, adults would choose the lesser of two evils and drill, drill, drill.

Ron P.

Don't expect the Obama administration to speak out. The COC is his new BFF.

The COC knows they have the administration in a moment of weakness. The fossil fools are going in for the kill.

It makes sense for them to say drill, drill, drill . . . because that will help those companies. But it will just no effect the situation in any appreciable amount. And after we drill, drill, drill, then we will just exhaust the little resources we have. It is merely kicking the can down the road. Perhaps running nearly completely out of domestic oil is what must happen before we take the problem seriously.

I always thought that it made sense to conserve a declining resource. There are those who would have us believe that, with enough drilling, we can treat oil as a resource that is not in decline. The former head of Shell has even stated that we can reach the peak oil production that was in effect in the 70s in the U.S. The U.S. government should not allow short term thinking to counteract what is in our long term interest. We don't have to hate the oil companies to realize that a short term perspective in dangerous to the well being of the nation.

The prevailing perception is that SA is bluffing about having spare capacity. This may very well be the case and we won't know for sure unless they actually produce from that alleged capacity. Another explanation, however, may be that they secretly have decided that some conservation of their precious resource is in their long term interest. Of course if they came clean, this would only exacerbate the calls for more drilling in the U.S.

"they secretly have decided that some conservation of their precious resource is in their long term interest"

Not exactly secret. This is what they openly say is part of their plan. Most assume that they are lying.

spec et al - And again I should point out that folks need to remember who is shouting "drill, drill, drill". It's the CEO's of public companies trying to convince potential stock buyers about their equity value. The great majority of the oil patch readily know about the futility of such expectations. But we don't do press releases. We just keep our heads down and go about making as much obscene profits as humanly possible.

I would recommend reading Secrecy By Complexity: Obfuscation in ... at the top of TOD today.

Now I know why Dmitry Orlov said not to pay any attention to these confused or intentionally distracting people.

I thought the comments were worse than the article. Especially Sunshine! What planet is she living on?


"Top Corporations Aid U.S. Chamber of Commerce Campaign"

"Prudential Financial sent in a $2 million donation last year as the U.S. Chamber of Commerce kicked off a national advertising campaign to weaken the historic rewrite of the nation’s financial regulations.

Dow Chemical delivered $1.7 million to the chamber last year as the group took a leading role in aggressively fighting proposed rules that would impose tighter security requirements on chemical facilities.

And Goldman Sachs, Chevron Texaco, and Aegon, a multinational insurance company based in the Netherlands, donated more than $8 million in recent years to a chamber foundation that has been critical of growing federal regulation and spending."


Follow the money...

Interesting article about CO2 leakage from a carbon storage project.
Could this be a serious issue?

First there were the strange blooms of algae on water that had pooled in a gravel pit near Jane and Cameron Kerr’s house. Then there were the dead animals – a cat, an African goat, a rabbit, a duck, a half-dozen blackbirds. Then there were the night-time blowouts, which sounded like cannons and left gashes in the side of the pit.

But what started as a series of worrisome problems on a rural Saskatchewan property has now raised serious questions about the safety of carbon sequestration and storage, a technology that has drawn billions in spending from governments and industry, which have promoted it as a salve to Canada’s growth in greenhouse-gas emissions.


(apologies for my lack of formatting skills)

Here's another article about it:

Land fizzing like soda pop: farmer says CO2 injected underground is leaking

A Saskatchewan farm couple whose land lies over the world's largest carbon capture and storage project says greenhouse gases seeping from the soil are killing animals and sending groundwater foaming to the surface like shaken soda pop.

Carbon dioxide is not particularly toxic. The air you breath contains about 0.04% CO2, and the air you exhale contains about 4% CO2.

Massive CO2 projects are rather routine in the oil fields of Texas, and I think it's somewhat significant that there have never been any injections of CO2 under the property that the Saskatchewan couple owns. However, their talk about algae blooms on their land set off alarm bells in my mind.

From the British Columbia Environment Department: Toxic Algae

Toxic algae that thrive on pollutants are killing fish and animals and making people sick. While they have always been present they have become more prevalent, more frequent and more toxic around North America, and other parts of the world, in the last 30 years.

Water inflow from fertile agricultural land and from sewage or certain industrial wastes encourages algal growth. Blooms usually occur during summer and the ponds or lakes involved have been found to be enriched in some way by the inflow of water from arable land or by animal excreta. Algal blooms are most common in warm, calm, shallow bodies of water, ponds, reservoirs sloughs, roadside ditches and other man-made impoundments, where the water is rich in nitrogen, phosphates and organic matter.

And from the University of Alberta: Scientists solve riddle of toxic algae blooms

After a remarkable 37-year experiment, University of Alberta scientist David Schindler and his colleagues have finally nailed down the chemical triggers for a problem that plagues thousands of freshwater and coastal ecosystems around the world.

"Phosphorous really is the key," says Schindler, whose study is highlighted in the U.S.-based Proceedings of the National Academy of Sciences this week. "Here in Alberta, it is especially important because the phosphorous content in the soil is naturally high, so you don't have to add a lot to create a serious problem."

Saskatchewan has the same kind of high-phosphorous soils as Alberta. So, maybe these Saskatchewan farmers should worry less about what the oil companies are doing, and worry more about what they themselves are doing to their farmland.

Don't recall if this has been posted, but Cornell has released:

Assessment of the Greenhouse Gas Footprint of Natural Gas from Shale Formations
Obtained by High-Volume, Slick-Water Hydraulic Fracking


"We urge caution in viewing natural gas as a good fuel choice for the future. Using the best available science, we conclude that natural gas is no better than coal and may in fact be worse than coal in terms of it's greenhouse gas footprint when evaluated over time course of the nest several decades"

This seems to be comparing only GHG, not total eco impact. Hard to imagine that anything could come close to the impact of coal. The sky in the Southeast is often orange on late summer afternoons from the grandfathered coal plant emissions.

I guess a point could be, we know the coal impact, don't know the total impact of shale gas, IMO, Makes PV look better and better. Anyway WTF. What The Frack?

This is horrible news. The big push from Hansen and the Sierra Club, for example, is to stop coal plants. For whatever reason, the Sierra Club has been very successful in the least two years in stopping new coal plants. Colorado has even passed a bill phasing out coal and the main utility in Colorado, Xcel, is in the process of doing that. And then there is the U.S. on NG to backup wind and solar. If this research is correct, there is no hope as NG was seen as a transitional fossil fuel. Now we have nothing to transition with. The lifeboats are leaking and there is no rescue in sight.

So called total eco impact is dwarfed by CO2 emissions.

Colorado's shuttering of coal is primarily along the Front Range, and was done largely in an attempt to get ozone and nitrous oxide emissions down to approximately the new EPA required levels. During debate on the new laws favoring NG over coal, one of the Republicans in the General Assembly exhorted his fellow Republicans, who were opposed to mandated change, "If you think the deal is ugly while we're involved, just think about the changes the EPA is likely to impose unilaterally if we haven't acted."

While CO2 may get some play, the big things are NOx and O3. After all, Xcel has also opened Comanche 3, a 750 MW supercritical coal-fired unit, in Pueblo in 2010. Pueblo is on the other side of the Palmer Divide, and contributes little or nothing to the ozone and nitrous oxide levels in Denver.

We urge caution in viewing natural gas as a good fuel choice for the future


Summary of Weekly Petroleum Data for the Week Ending January 7, 2011

U.S. crude oil refinery inputs averaged 14.7 million barrels per day during the week ending January 7, 260 thousand barrels per day below the previous week’s average. Refineries operated at 86.4 percent of their operable capacity last week. Gasoline production decreased last week, averaging 8.7 million barrels per day. Distillate fuel production decreased last week, averaging 4.5 million barrels per day.

U.S. crude oil imports averaged 8.9 million barrels per day last week, up by 449 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.7 million barrels per day, 478 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 871 thousand barrels per day. Distillate fuel imports averaged 368 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.2 million barrels from the previous week. At 333.1 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 5.1 million barrels last week and are just above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 2.7 million barrels and are above the upper limit of the average range for this time of year. Propane/propylene inventories decreased by 2.0 million barrels last week and are in the lower half of the average range. Total commercial petroleum inventories increased by 0.9 million barrels last week.

Total products supplied over the last four-week period has averaged 19.7 million barrels per day, up by 4.1 percent compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged 9.1 million barrels per day, up by 1.9 percent from the same period last year. Distillate fuel demand has averaged 3.8 million barrels per day over the last four weeks, up by 3.6 percent from the same period last year. Jet fuel demand is 0.4 percent lower over the last four weeks compared to the same four-week period last year.

I have limited time to post due to the East Coast storm. Most noteworthy in this week’s report is that product imports increased significantly. Also the EIA made further upward technical adjustments in its product inventory totals. It’s not clear if the EIA has been correcting prior bad numbers these past three weeks, or it is temporarily over-estimating product inventories. I think it is mostly the latter.

In sum, total crude imports and total net crude+product imports were higher than last week, but very similar to the week from one year ago. Therefore with US oil demand running well over last year, the early year build in stocks won’t be anything like we saw in early 2010. Note total inventories rose only 1 million barrels last week – which is actually less than the technical adjustments made by the EIA.

Randy Chatterjee voiced concerns about the energy costs of high-rise buildings.

“These things use about 10 times more energy to heat than the low-rise houses that some of us like,” he said.

I believe high rise buildings use less energy for heating per square meter than low rise buildings. McMansion? Maybe ten times as much.

A one story building lose heat thru the floor and the roof. A high rise for example 20 story building lose the same amount of energy thru the floor and the roof but have 20 times as much space. 20 times larger and 10 times as much total energy to heat sounds reasonable.

“These things use about 10 times more energy to heat than the low-rise houses that some of us like,” he said.

There seems to be a basic problem with mathematical literacy in that quotation. It should be fairly obvious to people with grade-school math that if a high-rise building uses 10 times as much energy, but has 50 times as many people, it would be 5 times as energy-efficient per person.

There are limits to this. It appears that medium-rise buildings are usually more energy-efficient than high-rise buildings.

Apartment energy use

Buildings from 4 to 7 stories have a lower energy footprint / m2 than high rise greater than 7 stories. There seems to be a tradeoff with many other variable in a life cycyle analysis which would suggest that 7 stories (around 50 dwelling units per hectare for optimum transport petroleum use) is the optimum density

However, this particular proposal appears to be for a 500-foot (46-storey) apartment tower, which would be well past the point of optimum energy efficiency.

if a high-rise building uses 10 times as much energy, but has 50 times as many people, it would be 5 times as energy-efficient per person.

Yes. But, if your brain is a totally NIMBISYM infected one, you think the building creates the occupants. And if you draw a local box, and don't care about anything outside it, your brain is right. Big picture thinking is pretty rare.

Yesterday when my husband went to the bus terminal he could not get a bus going to Caracas (3 hour trip). It seemed that no inter-city buses were leaving because they could not get diesel fuel. We have no idea if it was a break down in the supply logistics or what. Today everything is running fine...perhaps a tast of what is to come?

We have no idea if it was a break down in the supply logistics or what.

Yes, I think that statement is a taste of what is to come.

Followed by:

NO ONE saw this coming

How are things in Venezuela?
Being a primary source, what is your take on the mood.

I think that every event I see here, every piece of information I collect about Venezuela has somebody's opinion, somebody's deliberate spin on it. There are many newspapers and television stations that seem to deliberately try and generate fear and hate.

Many middle/upper class people seem to have an exaggerated sense of entitlement. They want to be untaxed but get first world services, be able to bribe and bully their way around any obstruction but feel safe in their homes, have dirt cheap gas and no traffic jams etc. If their expectations are not met they scream dictator. But the government they criticize seems to be much better at understanding and helping the rural poor than they are at dealing with the urban middle class or complex international financial institutions.

Inflation without a corresponding rise in wages is what affects us the most. It seems that for every time we learn how to cut our cost of living there are two things that get more expensive. A lot of things are not imported, but you need something imported to make them. The potatoes are grown in Venezuela, but the seed potatoes aren't, and neither are replacement parts for the truck that brings things to market. Every time the US dollar gets more expensive EVERYTHING gets more expensive.

Scarcity occasionally affects us. For example, the pharmacies did not get re-stocked over Christmas and we had to shop around to find a pharmacy that could fill my antibiotic prescription, but it really isn't as bad as the media makes it seem to be.

The crime rate is bad, but not as bad as people believe after watching the news. However I do not trust various municipal police forces at all. There is a lot of fishing for bribes and too many police turn thief when their shift is over. I suspect that the blatant inequality fuels crime and systemic corruption and inefficiency blocks any attempt to quell it.

Lack of organizational/administrative capacity seems to play a role in amplifying problems. Equally there seems to be a lack of training in many fields leading to awkward or sub-optimal solutions. For example I know of at least two brand new olympic swimming pools that are unusable because of errors in their construction leading to leaks.

Not as many people die or are injured from shoddy safety standards as you would think. I have seen really badly maintained propane tanks, but have never seen any resulting explosions/fires, people hanging from the outside of a bus, but no-one crushed in traffic. Everybody seems to cut vegetables towards their fingers, people steal electricity from the powerlines. I did see someone drown probably because the beach lifeguards did the wrong things and I did see a boy fracture his skull jumping off a diving board in a pool that is obviously the wrong dimensions so I guess that those safety standards are increasing morbidity/mortality.

Having a large extended family and many friends seems to help people deal with a lot of the difficulties. People pool resources with their social network and willingly help out newly introduced acquaintances as a way of "banking" favors for the future. People often have very adaptable and resilient characters. Also people tend to be very quick to see the advantages and disadvantages of any situation and are good at developing strategies to manipulate events for their benefit.

every event I see here, every piece of information I collect about Venezuela has somebody's opinion, somebody's deliberate spin on it. There are many newspapers and television stations that seem to deliberately try and generate fear and hate.

Of course one could as well substitute US for Venezuela and the statement holds... (Step Back, are you out there?) And I'd say the same for the beginning of your next paragraph, and much of the rest of what you say as well. The US is becoming more and more of what we claim to oppose and despise - a two-tiered (ultra-rich and dirt poor) corporatocratic police state.

Can this quote be put in the rotation on the upper right?

People pool resources with their social network and willingly help out newly introduced acquaintances as a way of "banking" favors for the future. People often have very adaptable and resilient characters. Also people tend to be very quick to see the advantages and disadvantages of any situation and are good at developing strategies to manipulate events for their benefit.

In a weird sort of way this is not entirely OT

Losses to sugar theft on the rise

The loss over those 12 years represents an average of 0.6 per cent each year, three times the international standard of 0.2 per cent allowed for unavoidable losses; but no alarms were raised until now when the local producers discovered that during the 2009/10 crop year, the industry's losses reached an all-time high of 0.8 per cent.

"This is not news to those who operate in the sector; it has been a multimillion-dollar business over the years," said a leading player in the sector, who spoke on condition of anonymity.

This sugar was bound for export markets and is being pilfered and sold on the local market. If more Jamaican sugar cane ends up going towards ethanol production, there is going to be less sugar to export, less to steal and less to eat.

In other news, another energy focused editorial from Jan 11

EDITORIAL - Choose well on energy

Nation's future hinges on choice

But there is a larger point to be made, or repeated. It is this newspaper's contention that energy could be the game-changer for the competitiveness of the Jamaican economy if this conversion programme is done right. In that regard, the choice of fuel must be the genuine least-cost option - the one that delivers power to consumers at the cheapest price while meeting the regulatory standards on emissions.

The process, therefore, has to be transparent. We should know, for instance, of the economic and other technical arguments in favour of LNG or any other fuel, including coal, the latter of which generates nearly half the world's electricity at a cost, in North America, around half the price of LNG.

This energy programme is too big a deal for us to get it wrong.

Alan from the islands

Why $4 Gas Will Cause Less Pain This Time

When gas prices hit $4 per gallon back in the summer of 2008, America's drivers had a collective breakdown. No other single item affects the American psyche like gas prices, which are advertised on every street corner and magnified by the media every time they hit an uncomfortable threshold. No wonder car sales stalled, consumer-confidence collapsed, and some motorists even mothballed their cars, switching to buses or bicycles to get around.


The next gas-price spike, however, won't be quite as painful as the last one. Here's why:

The great thing about this article is the comments section after it . . . with near unanimous agreement (which never happens in comments sections), the commenters call this guy out as being an idiot! It was very refreshing to see such a stupid article with bogus propaganda be savaged by the readers. Maybe the public is a little smarter than I give them credit for.

This is Yahoo! comments . . . I wonder if the article got the same reception at its (more corporatist) origin of US News & World Report?

Funny. The author tried to use the Obi-Wan Kenobi Jedi mind trick.

"Gas prices won't be the collective breakdown your looking for. You can go about your business. Move along."

can I get that in a bumper sticker?

How many MM statements fall under "Jedi mind trick" category now anyway?

He may have a valid point. Even above $4 gas still still just a fraction of the ownership cost of a car/truck. The hit last time around was more psychological than real. [Although the economy can take a big hit on psche issues]. Usually gas prices aren't too much noticed until they breach the past high water mark.

Even above $4 gas still still just a fraction of the ownership cost of a car/truck.

Actually . . . no. It certainly depends on what you buy. But if you buy a cheap gas car these days, you will end up spending much more on gasoline than you spent on the car.

For example, if you buy a brand new car that gets 30MPG, spend an average of $4/gallon filling it up, and drive it for 150,000 miles then you will spend $20,000 for gasoline.

Of course over the life of the car, you'll probably pay much more than $4/gallon. And don't forget oil changes and repairs. Those electric cars are looking better and better.

Actually, I think that walking + mass transit, possibly augmented with an hourly car sharing service looks best, but here is a link to a website that calculates True Cost to Own (TCO) for various cars for a five year period. The 2011 Civic Sedan is shown, which averages about 30 mpg, city & highway, based on EPA data. As best that I can tell they used about $2.70 per gallon for Year One and about $3.00 for Year Five:


Based on the above assumptions, the TCO for a five year period is $28,028 (a Yukon XL would be about $69,000).

I doubled the fuel cost assumptions for each year for the Civic, which would indicate an initial price of about $5.40 per gallon and a final price of about $6.00, and the five year Civic TCO rose to $35,137, an increase of 25%. The assumptions were for 75,000 miles over a five year period, so the TCO per mile would go from 37¢ per mile to 47¢ per mile.

As best that I can tell they used about $2.70 per gallon for Year One and about $3.00 for Year Five

So it starts and ends with a gas price cheaper than I can get now.

I think that calculator illustrates societies lack of knowledge about peak oil. The vast majority of people are assuming that gasoline will just go up at the rate of inflation when (assuming the peak oil story is correct), the price of oil will go up at rates much faster than the rate of inflation. And this is why I think we are creating a 'gas guzzler bubble' these days.

If we assume prices 50% higher than they used ($2.70 going to $3.00), which would be $4.05 going to $4.50, the five year TCO would increase by 12.5%, and the TCO per mile would go from 37¢ per mile to 42¢ per mile.

Note that the Yukon XL would go from 92¢ TCO per mile to $1.00* TCO per mile (going from $2.70/$3.00 to $4.05/$4.50). Link to Yukon data:


*This is probably too low, because the depreciation rate on a large SUV tends to increase as fuel prices go up.

Anyone seen any TCO per mile data for the Nissan Leaf? Edmunds has a link to the Leaf, but no data. Except for the battery, I assume that depreciation would be practically zero (although strictly speaking the I suppose the battery replacement should fall under maintenance costs since it is a part that wears out with time), so it would be interesting to see what the cost per mile number looks like.

The fuel cost data is said to be computed assuming 45% highway and 55% city driving. For the Yukon Denali(6.2L V8 FFV 6-speed Automatic), the EPA estimated economy is 14 city/18 hwy mpg, thus the TCO calculated average mileage is (18 x .45) + (14 x .55) = 15.8 mpg. The assumed 15,000 miles per year would thus require 949 gallons of fuel per year. In my area, the TOC says that amount of fuel was supposed to cost $2,786 a year and thus the cost per gallon is supposed to be $2,786/949 = $2.93 a gallon. At the end of year 5, they claim the cost of fuel would be $3,136, or $3.30 per gallon.

For the Civic, the EPA mileage is 26 city/34 hwy mpg, which, for the TOC calculation, works out to an average of 29.6 mpg. That mpg would result in the use of 507 gallons of fuel which they say would cost $1,386 the first year, which gives a calculated cost of $2.73 a gallon. The price for gasoline as calculated for the Yukon appears to be greater than that for the Civic, which makes one wonder if the TOC calculation used higher octane for for the Denali. Edmunds specs notes "flex-fuel: premium unleaded recommended/E85".

Of course, all this assumes I haven't made a mistake (or 2)...

E. Swanson

I saw the 45/55 split in their calculations, but I just rounded it off to 50/50, giving us 30 mpg gallon for the Civic (versus 29.6).

But in any case, regarding the Leaf, anyone seen any estimated cost per mile data for a five year period?

Looking a bit deeper, consider the GMC Yukon XL. It comes with a 5.3 liter V-8, which is a flex-fuel (unleaded/E85) engine and that has a fuel economy rating of 15 city/21 hwy mpg. The TOC combined mpg is 17.7, which would use 847 gallons a year. With an estimated yearly fuel cost of $2,364, that works out to an price of $2.79 a gallon. Clearly, GM has specified premium fuel in the Denali and one reason might be the increased efficiency with higher octane fuel. That would make the EPA mileage shown on the window sticker look only slight less bad than that of the lower cost Yukon XL or the similar Chevy Tahoe.

In other words, I think the GM folks intended to game the system, since most people would decide to use the lower cost fuel, with which all new gasoline vehicles are required to operate, AIUI. It's also interesting that Edmunds appears to have been aware of the difference in fuel...

E. Swanson

Looking a bit deeper...

Only slightly OT...

'Denali Denial' - Chris Jordan

Denali Denial paints a portrait of the parts of nature we’re losing thanks to our reckless unsustainable habits. The image is composed of 24,000 logos from the GMC Yukon Denali, equal to six weeks of sales of that model SUV in 2004.

Read more: http://www.brainpickings.org/index.php/2008/10/29/artist-spotlight-chris...

What we admire most is that his art doesn’t aim to point the finger but, rather, to put our individual role as change agents into perspective.

In a world where large numbers have become practically meaningless, it’s easy to glide over the piles of zeroes, but it gets a little harder when we’re looking straight at the building blocks of our apocalypse.


Actually, I think people expect that gasoline prices will NOT go up, period. Compared to 1981, adjusted for inflation, it hasn't.


Comparing to 15-20 years ago gasoline has shot up 66%, however.

A lot of suburban sprawl was all built out during this cheap gasoline boom, which is no more.

I guess this means that the valley gasoline price year in 1998.

More relevant, however, is the nominal cost relative to the average working wage. That is how gasoline really hits people. The graph you show is floating and not pinned down relative to the average joe purchasing power.


Some folks ^up there^, however, will have no problem buying oil. LOL

compare gasoline nominal dollars to minimum wage:

And hence this graph of the disappearing savings rate:


Thanks for the links Oct.

I agree with your observation that purchasing power has declined. I'm just trying to point out the madness of thinking that gasoline prices can remain fixed indefinitely while the price of everything else climbs. I don't believe it's the price of gasoline that hurts so much as the sudden upward change in that price. If the price had gone up little by little, year after year just as the price of most other things have I don't think we'd think much of it. But since it tends to remain fixed for long periods of time (decades!) we spend our money on other things rather than save and prepare for the inevitable jump in price.

I agree totally. Gasoline is a small part of the oil picture, which is why most people dismiss the importance of oil I think.

tree-huggers with three kids

From: Detroit Auto Show 2011: Where is My Tree-Hugging Minivan?

Kinda hate to go here, but any real 'tree-hugger' would have 0, 1, or perhaps at most 2 kids. The most environmentally damaging thing someone in the US (or any OECD country) can do is to have children, thereby multiplying their own ecological footprint. Driving a minivan, no matter how good the mileage, ain't gonna offset the impacts of just being a USian. I know, for I are one. The first world lifestyle - central heat/AC, personal planetary mobility, 1,500 mile Ceasar salads, 24/7 infotainment et. al. - is utterly not sustainable.

Yeah . . . you kinda lose your tree-hugger status with 3 kids.

The Nissan Leaf seats 5 . . . jam your 3 kids in the back and stop whining.

Don't forget the safety nazi folks. With 3 kids the safety seats required may not fit side-by-side in there.

Fuel inefficiency is built into every nook and cranny of our legal code.

With 3 kids the safety seats required may not fit side-by-side in there.

Nissan has got you covered . . . 3 safety seats fit:

Nice! I admit we break the rules with my son. He is close enough. I wonder if the police carry a scale. LOL

Careful throwing out generalities. I won(?) the jackpot by having triplets - and stopped there. I've been in the environmental cleanup business most of my career before leaving in disgust. My wife and I are also doing our best to teach our children about reduce, re-use & recycle. I don't know about being a tree-hugger; but I do think everyone should be mindful of the consequences of their activities.

I won(?) the jackpot by having triplets - and stopped there.

Our 2nd, came in as a package deal with our third (twins). Even planned parenthood has its planning limitations.

During the height of the baby boom many people had large families but made do with a station wagon or even sedan. Nowadays people have even 1 kid and they're convinced they have to run out and buy a van or suv the size of a minibus.

Thus we see how capitalism is its own worst enemy in a sense - it desires perpetual, rapid population growth, but it also causes people to raise their expectations generation after generation. This reaches the point where people feel they can only afford a couple of kids, at most.

In the old days, people would just throw the kids into the back of the truck or the station wagon. Or they'd sit on grandma's lap. (When I was a very small child, I remember my mom taking me on her class's field trips. The car would be jammed full of kids. I would sit in one of her sixth-graders' laps.) Now, you're required to use child safety seats.

I guess when you have fewer kids, you start expecting them all to live.

here's comics nearly x rated take on over population
not for the weak

Where is My Tree-Hugging Minivan?

Somebody's not payin attention. Why, it's right here:

Detroit 2011: C-Max Engergi mixes plugs and petrol

and here:

Detroit 2011: Toyota Prius family adds a V for volume

That's if you can wait till 2012.

Alan from the islands

Holy cow! Alot of data and information coming out today. First up, EIA gives projections for non-opec productions for 2011 and 2012. Pretty dismal from the looks of it. See here.. http://tonto.eia.doe.gov/oog/info/twip/twip.asp 40k in Russia this year and 200k next year. US losing 20k and Mexico losing 200k.

2nd item is the EIA Monthly Oil Report. Report 1.1D claims that October's C+C is 500k less than September (October measured at 73,064K B/D). This sounds fishy since they have Azerbaijan at 44k this month, I think this should be at 1,044K B/D. That would make October's 74,064k B/D. Matching the climb into record territory that total Oil production (C+C,NGL's,EtOH) has reached. http://www.eia.doe.gov/ipm/supply.html

Darwinian, care to comment or add insight?

It looks like they are discontinuing the International Petroleum Monthly report:

December 2010 International Petroleum Monthly
Posted: January 12, 2011
No Next Update: This is the final edition

I talked to Patricia Smith of the EIA this morning. She tells me that management no longer supports an excel product on their website. Told me to go to this page for the latest results... http://tonto.eia.doe.gov/cfapps/ipdbproject/IEDIndex3.cfm#
If people do not like this change... Patricia said to complain to this dude.. joseph.ayoub at eia.doe.org


This is terrible. That page is all liquids, not C+C and the data goes only up to August, now two months behind the International Petroleum Review.

I really don't understand this at all. Perhaps they are cutting the budget at the EIA.

Ron P.

Perhaps they do not want people to know the data behind the figures.

The C & C data is still there. You just have to select it on one of the menus.

In any case, if they are off by one mbpd for October, the average global production to date should be 73.5 mbpd for 2010 (through 10/10), versus the 73.4 mbpd that they showed. For all of 2010, if we are to match the average rate of 73.7 mbpd that we saw in 2005, global production would have to average 74.7 mbpd in November and December. Of course, the recent numbers are subject to ongoing revisions, generally downward, and it's a continuing question as to what the margin of error is.

But what we can say is that the data show a large cumulative shortfall, between what we would have produced at the 2005 rate and what we actually produced in 2006-2010 inclusive, despite the fact that global oil prices have exceeded the $57 average level that we saw in 2005 for five straight years, with four of the five years showing year over year increases in oil prices.

BTW, the EIA is showing Iraq, through 10/10, as being flat to 2009. I suspect that Iraq will show another year over year decline in net exports, just like 2009. Maybe they will start the two million barrel per day per year climb toward 12.5 mbpd next year . . . and maybe I will be living next to George Clooney in Italy's Lake Como region next year too.

Yes, I think there is a mistake here. Almost all non OPEC countries are up except Azerbaijan. They are down 990 thousand barrels per day from 1,034 K barrels per day to 44 K barrels per day. That cannot be right. The person who prepares this report, Patrica Smith no longer gives out her Email address but I did call her and left a message on her answering machine. I expect she will be correcting that error soon.

Norway was up 315 thousand barrels per day, coming off maintenance, and Russia was up 91 thousand barrels per day. So after this correction I expect production to be up half a million bp/d instead of down half a million bp/d.

Ron P.

UPDATE I just talked to Patrica Smith on the phone. She said the data will still be reported each month just as it has been, just that it will not be in Excel format.

Note. From Internet Explorer you can copy the data from HTML directly into Excel. But you cannot do this from Firefox. Anyway I can continue to keep my Excel spreadsheets updated.

Oh, she also thanked me for pointing out the Azerbaijan error. She said she will fix it immediately.

Ron P.

That action alone shows that Ron is as serious as a heartbeat about this subject.
Tracking down the responsible party is not something the casual observer is going to do.
Thanks for your efforts.

Thanks for the kind words Web. All those on the EIA mailing list got an email explaining it.

Notice: The Energy Information Administration is discontinuing the publication of the International Petroleum Monthly in its current format. The December, 2010 issue will be the last one to be available as a separate publication. Beginning with the January, 2011 issue, you may access the data in this report, as well as energy data for all fuels for over 200 countries, on our International Energy Statistics website . If you have any questions, please contact the National Energy Information Center at 202-586-8800 or infoctr@eia.doe.gov.

Ron P.

They have updated the IPM data. October is 74.0 mbpd, and year to date through October is 73.5 mbpd (subject to revision, generally downward). It looks like we need 74.5 mbpd for November and December to match the 2005 annual rate of 73.7 mbpd.

I think that it is quite likely that this will mean five straight years that global crude oil production has failed to exceed the 2005 annual rate, despite annual oil prices exceeding the 2005 annual level of $57 for five straight years, with four of the five years showing year over year increases in oil prices.

But for the sake of argument, let's assume--because of slowly increasing unconventional production--that we average 73.8 mbpd for 2010 (which would still mean a large cumulative shortfall relative to the 2005 rate). How much money would the industry have spent in five years, 2006 to 2010 inclusive, to show a net 100,000 bpd increase in 2010, versus 2005? What would the cost be for each incremental increase of a barrel of oil per day?

I think some of the EIA figures are just guesses, especially their OPEC data. They always have OPEC producing more crude than OPEC says they produce. And they usually round most of the figures off to the nearest hundred thousand barrels, or fifty kb/d for lesser producers. For instance here is what OPEC's Oil Market Report says Saudi and the UAE produced thru October verses what the EIA says they produced, crude only.

Saudi Crude Only Production in Thousands of barrels per day.

                OPEC	EIA	Difference
2010 January	8,141	8,200	59
     February	8,143	8,200	57
     March	8,126	8,200	74
     April	8,151	8,300	149
     May	8,171	8,400	229
     June	8,184	8,500	316
     July	8,215	8,600	385
     August	8,238	8,600	362
     September	8,227	8,500	273
     October	8,196	8,500	304

United Arab Emirates Crude Only in Thousands of barrels per day.

	        OPEC	EIA	Difference
2010 January	2,277	2,300	23
     February	2,281	2,300	19
     March	2,283	2,300	17
     April	2,291	2,300	9
     May	2,331	2,300	-31
     June	2,302	2,300	-2
     July	2,336	2,300	-36
     August	2,307	2,300	-7
     September	2,314	2,300	-14
     October	2,325	2,300	-25

Now tell me they are not just guessing.

Ron P.


How is Russian production this month?

So far in January Russian production is above December but still below November. They had some problems in December that hit their production numbers. These appear to have been fixed now but I see their production now gradually dropping.

Ron P.

The OPEC data for some countries are far to perfect to be trusted, no real data look like that. My thirst thought is that they are guessing and in this case OPEC's numbers look far more trustworthy. It is of course simple to fake variance but to believe that OPEC fake variance and EIA is guessing the correct number is ridiculous ???

Thanks Ron.Been on TOD since inception but started posting recently.You,Memmel,Rockman,Don,WT etc are the lifeblood of this forum.Your efforts and comments are greatly appreciated.Keep rocking.

Thanks for making the phone call. I look forward to see how much, and if at all, EIA corrects the December collection of Excel files in the IPM report. I could potentially read some of the other comments to conclude they will no longer support these data files. Instead, focus will now switch to the the EIA data browser.

It does appear that a C+C excel file will be extractable at any time, from the above portal for global production. I guess the question for me is: is EIA going to now be 3-5 months behind in reporting data vs the current 2-3 month lag.




Tight Brent supply partly to blame for premium

The spread between the two main global oil benchmarks, West Texas Intermediate and Brent, is blowing out (again).
We’ve known for a long time, of course, that WTI futures are partial to underpricing distortions due to the contract’s over-reliance on the Cushing delivery point in Oklahoma.
The trouble is, this time around, it looks increasingly like the widening might be as much to do with tightness in the physical Brent crude market (that made of Brent, Forties, Oseberg and Ekofisk crudes) as it is restricted capacity at Cushing.

Data from the ICE Futures Europe — home to the most liquid and popular Brent futures contract on the market — shows, for example, that four days ahead of expiry there are still more than 122,000 February contracts waiting to be rolled on, exchanged for a position in the physical market or cash settled.

The physical market for Brent, however, remains tight ...

Brent Blend         98.91
Tapis              103.59
Alaska North Slope  92.98
Dubai 1M            93.83
Louisiana Sweet     98.83
Urals               96.11
WTI                 91.83
Oman 1M             93.75
Minas               95.9
Forties             97.96
Bonny Light         99.76

Out of all the crudes in the list, when was the last time that WTI was the least expensive (excluding any time in the past three months)? Is this the first time? If so, then the current prices are quite interesting.


While the technical explanations offered as to the difference between the US and elsewhere are true, there is a more basic truth about trends in the oil market going on here:

The US is now being outbid for available exports, and meanwhile all available information indicates that the pool of oil available for export is not increasing.

The US imported 300,000 bpd less in total oil + products in 2010 vs. 2009, while at the time, oil demand increased. The persistent perception of 'high' US oil inventories was caused by the dumping, if you will, of oil stored around the world offshore in tankers, back in to the US during late Spring and accelerating through the summer (of 2010).

Even the EIA within the last day says that won't be happening again any time soon. At some point the US has to rejoin the bidding to maintain minimum operating levels (MOLs)- and then US price will allign more closely with the rest of the world.

Thank you for the summary, Charles. I always look for your posts. The oil supply situation appears to be approaching a critical (and quite interesting) stage.


Thanks. As far as I know, there is no oil being presently stored offshore in the Gulf of Mexico, although I am not completely certain of that.

January 13, 2011
"The VLCC storage deals on subs in the U.S. Gulf last week have all reportedly failed, most likely as charterers were unable to conclude at economical terms," Pareto Securities said.

"The read through is that although the WTI forward curve contango has increased lately, it is still insufficient to support storage at present levels."

Dubai Business – Kippreport [no link possible]

From the budget cuts front,

Looks like CA is going to cut University of California a massive amount ~$500,000,000 -- this is a staggering 33% cut in their budget. I will not even plot the cuts to UC over the last decade. It is a very sad graph indeed. Students are looking at class sizes in the thousands here. Research slashed to the bone. Supporting contractors and services are headed for broke.

All those tax dollar investments in that infrastructure are at stake now -- the state thinks they can borrow from the future.

However, equally important Notice: No cuts to prisons, K-12 or pensions. Nada. Not a single cut in any of those.

Higher ed is where the blood is going to flow in CA.

Illinois passed a 66% increase in income tax.


Wonder if it is uniform, or if the rich got a lower rate?

Of course, the wealthy can still go to college. Alone.


Today, the UC system includes more than 220,000 students and more than 170,000 faculty and staff, with more than 1.5 million alumni living and working around the world.

The ratio of students to faculty and staff seems out of whack for an educational institution.

The ratio of alumni to students would indicate a fairly large recent expansion. Should new campuses like Merced be abandoned? It is way below the planned enrollment, and the housing developments in Merced that were built on spec in anticipation of a full-fledged campus are now in deep trouble.

UC is more of a huge conglomerate than an educational institution. If it were a business, some vulture capitalist would take it private, reorganize it, and IPO the pieces.


"Should new campuses like Merced be abandoned?"

Well, you are using logic which evades the "central planners". I think the same exact way, but it is far worse than that. A campus like UC Berkeley makes direct payments to the places like Merced. So they are going to drain the major producer to float these small campuses for a while.

Here is perspective. I keep toilet paper in my office. The janitors and other staff are working such reduced hours that sometimes it is better to have back-up on hand here.

I never throw away organic things in my office, since the trash is emptied like 2x a month.

So with almost no janitorial staff, who is next in line. Maintenance crews? Staff in the academic offices?

It is all bare bones.

My feeling is that the pensions are draining the system and the expansion campuses are next in line to be converted into the world's most expensive empty office space -- what a waste of capital.

But the prisons thrive in CA. That is where the gold rush is these days -- and it is the worst form of socialism.

Lots of empty buildings around here too....

Waste products are piling up.

I guess when the buildings were generated people didn't really think that they would become stranded assets.

But the price of oil is so high that noone can afford to take these buildings away.

"So with almost no janitorial staff, who is next in line. "

So why is the college paying full time janitors when there are work-study students willing to do the job for much less? Working through college used to be common, and the college used to hire a lot of students for the unskilled work, like janitor, lawn-mower, etc.

So why is the college paying full time janitors when there are work-study students willing to do the job for much less?

Because the janitors now, are the PhD's with tenure, and they get first dibs at these positions over the students...

"Should new campuses like Merced be abandoned?"

I got a kid (freshman) I got to drive there this weekend. They were overwhelmed with students this year (far more accepted than they expected). I think it is because it is one of the cheapest of the UCs.

I doubt it will be abandoned. However their plans to become a 20,000 student campus can't be taken seriously anymore.[ They are rougly 3500 now] I bet anyone who bought Merced housing as a speculative investment isn't going to come out with a profit. The area had already had the greatest percentage drop in housing prices in the state!


Remember that UC also runs a massive teaching hospital system (5 large facilities), a National Lab (Lawrence Berkeley) with partial management duties at two other national labs. Lots of facilities to maintain besides undergraduate education.

The ratio reflects that several CA schools are very new ones of course. The oldest one is Berkeley and that is not too old really.

The whole thing is pensions of course -- the growth in costs are pure and simple pension problems -- projecting massive gains in investments from the 90s stock market boom.

This is the central problem and it was a problem before peak oil set in.

Why do state and local governments have pension funds? Why aren't current pension payments paid from current tax revenues?

Governments aren't particularly astute investors and money managers, and pension funds are a huge opportunity for fraud and abuse. So let's get governments out of the pension fund business and switch to a pay as you go system, which is what social security mostly is.

And if they can't pay current pension costs out of current tax revenue budgets, they shouldn't pay them.

"Why aren't current pension payments paid from current tax revenues?"

'Cause experience shows that when they do it that way, they rack up obligations to pay future pensions even more recklessly than usual, which is part of how so many state and local governments got into so much trouble. They're politicians after all, which means many of them will do anything to purchase votes in the here and now, since power is what counts, and they'll be long gone before the future they mortgaged off arrives.

"And if they can't pay current pension costs out of current tax revenue budgets, they shouldn't pay them."

Well, there's an army of former employees who were promised those pensions, and of course a good many were retired absurdly young. But one size does not fit all; many others are now quite old. So do we change the age-discrimination law, now covering ages 40 to 70, and make it 40 to, oh, 90, instead? How workable could that be even as a thought-experiment? (Not that it would matter in practice since that law is never enforced anyhow.)

Despite the existance of pension funds, politicians have no problem promising pension benefits that they are not adequately funding. Removing the pension funds would at least remove the illusion that somehow these future obligations were already funded. Besides, defined benefit plans are fundamentally flawed because no one can predict economic conditions and potential returns on investments for multiple decades in the future anyway. It is all the imagination of accountants, who base rosy scenarios on the rosy recent past.

The problem in the future will be how to fairly divide up the available cash flow, never mind historical asset values and claims of ownership.

Older faculty here staunchly defend the fact that they did not contribute personally to their pensions from 1991 until recently, since the system was "overfunded."

So they also had a demographic bubble with the rosy stock-market prediction bubble projected off of the 90s stock market.

meaning the pensions were a problem due to demographics even before the stock market conditions soured and peak oil began to demo the economy.

They are Sh-tting bricks now. They already knew of the demographic bubble -- before the stock market bubble showed up. And now they may not believe in Peak Oil, but they see a deadbeat jobless economy.

So that is a triple whammy on pensions.

It is all of the problem.

The ratio of students to faculty and staff seems out of whack for an educational institution.

Keep in mind that the UC system includes some of the premier research schools in the country. That drives faculty and staff counts. For example, most departments in technical fields at research schools have some of the faculty that are brilliant at getting research grants, but are ideally kept as far from the undergraduate students as possible. There are also adjunct faculty, who count as part of the staff but only teach a specialty graduate class or two each year.

Medical schools are particularly notorious for skewing the counts. It is not uncommon to find a big medical school with 1,000 students, 1,000 faculty (some part time), but 12,000 total staff. Lots of nurses, technicians and other people required to operate a big teaching hospital.

In contrast, the California State University system, whose mission is purely teaching, has 23 campuses, almost 433,000 students, and 44,000 faculty and staff.

Running LLNL, running a hospital and medical complex, and running an educational institution are different enterprises. The conglomerate is ripe to be broken up so that underperforming enterprises are clearly identified and fixed, and do not become a drag on performing enterprises.

One of the biggest assets an educational institution is its brand. It passes this branding on to its students as a major part of the value of their education. Much of this is tied to the selectivity of its admissions, the excellence of instruction, and the rigor with which it weeds out underperforming students. Draining Berkeley, which had an excellent brand, of funds to support the vastly different Merced jeopardizes the education that Berkeley can provide to its students and the association of Berkeley and Merced under the same system tends to dilute Berkeley's brand.

I couldn't find the exact budget figure, but based on the revenue chart in the following article, it looks to me like $500 million would be more like 10% of the budget:


In any case, regarding local, state and national government budget battles, we are past the point of there being winners and losers, it's generally a question of loses the most versus who loses the least. To again quote Tom Brokaw in regard to the 2008 election, which is really true for all subsequent elections too, "The winner should have demanded an immediate recount."

My piece this week on California's budget actually links to alot of the details, in what Brown proposed:

Peak California Budget? Or Brown-ian Motion?

Thanks Gregor. I try to catch your site when I can. Where is the breakdown of the biggest losers in the Brown-ian motion.

Now someone is saying going from ~$2.6 billion to $2.1 (funds from State).

I was getting this from word of mouth so I apologize for the 33% thingy ;-)

Of course, as your chart shows elegantly -- they are converting reduced state funds into increased student fees.

Overall funding is on the decline.

Time to restock my toilet paper.

they are converting reduced state funds into increased student fees.

And greatly reduced support. My occasional co-worker UC prof say his U (San Diego) essentially laid off everyone who wasn't tenured (i.e. all the secretaries, assistants etc.). And that was last year, before the latest haircut.....

...they are converting reduced state funds into increased student fees.

I attended two California Cal States for College: CSULA and CSULB.

When I started, tuition at CSULA was about US$133/quarter (back in the 1980s)
By the time I was finishing at CSULB, the tuition was about US$800/semester.

I believe it was a much faster rate increase than inflation.

Hopefully students will take advantage of the City Colleges to take as many transferable credits as possible before attending a 4yr school, and save themselves and their parents some money.

would be more like 10% of the budget:

Probably correct. Generally the brownouts are 10% hits. But UC just had an 18% last year, on top of other hits every six months to a year. So the cuts just keep piling up.

I worked at UC San Diego till last July. From the discussion on the budget I saw, the contribution of the state of California to the budget was already around 40%, the rest of the money coming from Federal grants, donnation, commercial activities and student tuition of course. SO the cut will be about 10% of total budget and might be partly compensated by other income. Anyway, the reduction, while bigger than expected will affect teaching far more than research which is mostly financed by Federal grants. On the other hand, UCSD did cut all its subsidies for bus transportation, so people might switch back to car... if they can afford the 100$ per month parking permit. Even before I left the janitorial condition was bad and wde started having roach infestation... a serious problem for doing sterile work.

I missed this story when it came out in December:

Alabama Town’s Failed Pension Is a Warning

PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry. Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

Mixed feelings.

On the one hand, this is the logical consequence of American society now. Sacrifice the future to prop up every rotten system of the present.

On the other hand, we don't need more "college educated" comparative lit and MBA numbskulls.

We need full time jobs building things that will help us transition to a post peak world. We need to end the Middle East imperial project. We need to reign in speculative fiat finance. We need to manage and control immigration. We need to control health care inflation.

None of this will happen, and kids in California are the collateral damage. They won't get to go to college, and those who do will end up with worthless degrees and mountains of debt.

To me at least good solid thinking is needed -- creative thinking -- higher education does foster problem solving skills. At least that is one of my personal goals. Engineering, math, science are important skills.

But one should consider the way we are curbing spending.

We are cutting education and maintaining the largest prison system in the world -- we are paying our pensions that cannot possibly be funded in a sustainable way with zero cuts in those areas.

Do you think Prisons have ZERO WASTE -- nothing to trim back? LMAO.

That is my main concern. I am happy to cut but the cuts need to be across the board to prevent waste elsewhere. Herein lies the dirty political back door -- save my prisons industry shenanigans.

Students are looking at class sizes in the thousands here.

Not for long.

I stand behind my prediction of a >80% drop in enrollment by 2020.

Stage 1. Growing economy, growing enrollment
Stage 2. Economy slows, enrollment increases faster than historical rate as people decide to go back to school so they are ready for "when the economy bounces back."
Stage 3. The economy stays sluggish and enrollments gradually drop as word gets out that graduates for the last 4-5 years haven't found jobs.
Stage 4. Enrollment plummets within a two year period. Suddenly it becomes clear to most potential students that spending money on education provides no economic return. About the same odds as winning a lottery so most potential students decide not to play (or are unable to).

This sounds about right. Only two questions.

1. Timing?
2. Will students/parents ever acknowledge this?

Rev. Karl

So is there a role for higher ed? Can it be a place where people come to learn about the true dimensions of our predicament so that they can decide for themselves what to do with that info? As a college prof. myself, that is what I try to do (when I can get away with it).

Me too, dohboi. It's a fine line...

Sure, for a little while.

But I'm quite sure that except for a very few exceptions most people in higher ed have as little idea of what's happening as the rest of society. In other words, maybe the professors will start teaching something on the topic a year or two before they are fired.

Witness the comments that Tainter said in his recent talk (previous DB) — and he even studies collapse!

Maybe by the time everyone is really worried about EROI (and understands it) that is when things are REALLY local. As in "will I use up more calories trying to hunt a deer than I will get from eating the deer?" Or "It will take 10 people 10 days to knock down that building with a crowbar....who is going to feed them, how many fields can we get from the land cleared when the building is gone?"

I think very few people really understand EROI now. I try to explain it to my students, and I think they do get it, but modern life is not lived like that, doing those calculations, so they are not good at thinking along those lines.

People in the past used to be sensitive to EROI because every day the food supply was tenuous...everyone had to think about that. We have become so insulated from reality. It is a true bubble existence and not good for anyone. It creates lots of laziness, lots of wastefulness. Now it feels like we are waking up.

The answer is a clear yes, to both questions. Though the more important question, in my view, is how do we deliver affordable higher education to every deserving citizen?

Does the internet with our newly emerging social networks become a bigger part of the medium of transmission and delivery? How do we create real world laboratories where hands on research and development of the theoretical knowledge acquired in the virtual world can be tested and put to direct practical use in real communities, towns and cities. I certainly hope that we find a way to preserve and build upon all the knowledge we have obtained during the last couple of centuries.

Perhaps the vision of Prof. Dr. Konrad Osterwalder Under-Secretary-General of the United Nations
and Rector of the United Nations University regarding the The Role of Higher Education Institutions
in Promoting Sustainable Development may serve as a starting point for discussion about the difficult journey ahead.


To care about sustainable development means to accept responsibility for the well being of future generations and also of our habitat, of our planet. An affirmative attitude towards sustainability has to be an integral part of the moral foundation of our activities and of our lifestyle. This means that promoting sustainable development must be an important aspect of the educational agenda at all levels. It starts in kindergarten and it goes all the way to the university level and beyond. It basically involves three aspects: the buildup and reinforcement of a basic understanding of the problem of sustainability, an inspection of all aspects of our life under the criterion of sustainability and finally an active search for new methods and techniques to further sustainable development.

In all of this, Higher Education Institutions play a crucial role. Clearly, the research agenda should be influenced – but not dictated – by striving for sustainability with the goal of inventing new methods to deal with all the big problems such as climate change, pollution, energy, hunger, infectious diseases, biodiversity, etc. Systematically thinking about justice and ethics, peace and good governance, not only about ecology, but also about economy might contribute in a substantial way to the establishment of a sustainable way of life. But the most important contribution is in education offered by institutions. Whatever particular subject is being taught, the question whether and how it may influence development towards sustainability must always be asked and discussed. Of course there are contexts in which it is difficult to make this connection, but they are much less frequent then one would expect.

Should sustainability also be considered as a topic all by itself and be taught and discussed in special courses? The answer is a clear yes. Nowadays as we are moving towards thematic and problem-focused teaching and research, sustainability is a wonderful topic to bring together many different disciplines.

For the record, in my opinion, we can no longer allow our best and brightest to squander their talents by using their education to pursue activities that destroy the wealth of the commons for the benefit of the few. In a new post peak oil world, quantitative analysts, should be out and biophysical economists, with practical skills and who aren't afraid to roll up their sleeves and get their hands dirty, will be be in

In what kind of economy do you see all these people with specialized skills working? I see a contracting one. In other words, we're about to have hundreds of millions of people in the West and an economy that no longer needs them. The idea of talent "being squandered" seems pretty much beside the point, in my view.

The more important question is: how are these people going to feed themselves?

Hey aangel, I think you missed my point. I actually agree with you.

What I was trying to say, in a long winded way, is that any higher education will by necessity be focused on practical knowledge that can be directly applied to survival.

The example I gave of the Biophysical economist who would also get his hands dirty by which I was attempting to allude to the fact that he needs to have a grounding in physics chemistry and biology rounded out by a knowledge of history and social sciences possibly tempered with with a good dose of ethics but he should be also have practical farming and engineering skills as well and should be willing to possibly push the plow himself and help with the harvest.

So in my opinion higher education will no longer focus on training people to be MBAs and financial analysts... Sorry if I wasn't clear.

Ah, I understand now. Thanks for the clarification.

In surveillance society UK it seems you'd better not keep your pets warm in the winter.

Bradford cannabis raid finds guinea pig heater

Police swooped on a suspected cannabis factory at a house in Bradford - only to find the suspicious heat source was for two guinea pigs.

Officers arrived last week after the West Yorkshire Police helicopter detected a hotspot on the roof of the garage in Huddersfield Road, Odsal.

A hotspot is often a sign of specialist heating systems used to grow cannabis.

Police have apologised for any distress the raid caused to the guinea pigs' owner, 42-year-old Pam Hardcastle.

...Insp Darren Brown, of the Queensbury, Royds and Wibsey neighbourhood policing team, said: "A majority of operations of this nature are intelligence-based and often rely upon swift action.

"Due to the location of the garage, we could not make further observations without alerting the occupants.

"On this occasion, it transpired that the significant heat source coming from the property was not connected to the production of cannabis.

How many bbls of oil are wasted on this shite!? Drug raids with one purpose -- political gamesmanship -- and they accomplish nothing. Nonetheless, the waste oil is amazing to consider in our present day situation. The expense on the budget in also quite a spectacle as well. Cut cut cut that budget -- except the military, police and drug raids.

Indeed. How much harm is really caused by growing the quantity of pot that generates the same amount of heat as the guinea pig's system? I would suggest that armed raids on people's houses by SWAT teams do a lot more damage.

But I guess it is one more reason to insulate your roof.

So we waste absolutely loads of oil fueling a helicopter, to try, and fail, to catch something that doesn't really harm anyone.

We waste further huge amounts of electricity, which as we all know comes from fossil fuels, to grow the plants that should be outside but aren't because of the policing of said plants.

Laws are supposed to be for the benefit of society, and this is clearly at a huge cost. What is wrong with these people?

In the US, law enforcement has a strong incentive to pursue 'evil doers' and seize their property:

Law enforcement agencies create no conflict of interest when they seize vehicles to keep for their own use, according to a ruling released Wednesday by the Arkansas Court of Appeals. The court's decision is designed to encourage police to continue taking cars from motorists whether or not the vehicle owners have been convicted of any crime.

The case in question began on May 26, 2006, when Carroll County Sheriff's Office seized the 1996 Toyota Camry registered to Adam Hammame, 22, and Susan Hammame. Officers at the scene grabbed the car after accusing the couple of selling marijuana to an informant. In July, the sheriff's office served notice on Hammame that the agency would keep his car for good. A Carroll County judge blocked the move by pointing out that state law prohibited agencies with a conflict of interest from having the responsibility of serving confiscation notices.

"The language of the statute makes it clear that the seizing agency is a party to this type of action, and has an interest in the outcome," Judge Alan D. Epley wrote.

The sheriff's office appealed, insisting that they be allowed to keep the Camry.

It's clear that most enforcement agencies have a mandate to use and fund any level of energy usage, even if they have to take and sell your stuff. Keeping some of that stuff for personal use is considered a 'fringe benefit'. It seems that some courts agree.

What is wrong with these people?

What is wrong with the political psychology of the people (voters), that make anything else unthinkable!!!!!

"How much harm...?"

Very possibly not much at all, but possibly not absolutely zero. And that's the rub, same as with a lot of other insane Safety Nazi (or 'elf'n'safety-run-amok) and "security" stuff. People want their rights, but they also demand to be paid off dozens or hundreds or even thousands of times over by somebody, anybody, they don't care who, in the event they ever damage themselves even the tiniest bit in the pursuit of said rights. But naturally enough, other people may not feel duty-bound to empty out their wallets on behalf of every idiot fool who does something stupid. Bottom line: You Can't Have It Both Ways, at least not on a sustained basis.

A hotspot is often a sign of specialist heating systems used to grow cannabis.

It's not 'specialist heating systems, it's the HID lighting that growers use which creates the heat. A neighbor of mine was raided because of his wife's small pottery kiln. The cops used their warrant to ransack the house when they discovered their mistake, looking for anything to justify their screw-up. They charged the couple for possession of a mason jar with 'residue of illegal spirits'. The couple counter sued and won a settlement of an "undisclosed amount".

"To Serve and Protect" ........

Best hopes for high intensity LEDs.

Best hopes for high intensity LEDs.

And, or, better roof insulation >;^)

Seriously though, to be fair, I have looked into low heat emitting high intensity LEDs that emit in the 650-670 nm range which is generally considered to be optimal for photosynthesis. In case you are wondering, it was to maintain symbiotic algae living within the tissues of live coral in a living reef salt water aquarium. It actually turns out the Algae Action Spectra charts are somewhat different from the land plant action spectra.

Hmm, I wonder if it might be possible to genetically engineer algae to produce THC? That might throw off the cops for a while. Unless of course they decided to bust you for 'residue of illegal spirits', though that might be more of a job for Ghost Busters...

Still, it makes you wonder how long it will be before the hydroponic attic farmers switch to LEDs? I'm pretty sure they at least can afford it and the cost benefit ratio would have to be very favorable to them...

There actually is already quite a market for these things, though there are mixed reviews on their effectiveness and reliability. They are also expensive: http://www.ledgrowlights.com/ There are a number of commercial growers testing LED systems in green houses, etc. Perhaps Paul in H'fax has an opinion.

I tested some fixtures for an upstart company a few years ago for our indoor herb garden (legal herbs, mind you) and the first two sets failed. My hope was to run them DC direct from our solar system, something the manufacturer was advertizing as an option. They eventually decided that it would be better if I used their (rather large) transformer to power these things and run them 24/7, using a couple of my precious kwhs per day. They are now collecting dust in my shop. Hopefully the newer fixtures are more robust.

I am going to borrow a thermal imaging camera so that I can do thermal insulation surveys of some neighbour's houses in our village.

I was warned not to go around randomly imaging people's houses. Not that it is illegal, but some people get very upset and aggressive. Now I know why :)

Yeah, I'm sure plenty of the rooftops here in Maine would exhibit a wide selection of such 'Crop Circles', blooming through the rafters.

Chuckle...on the peninsula here, if you're flying over at helicopter height, quite a few folks have painted very large letters on the barn roofs, "FU", usually in white and mainly an experiment to reflect sunlight I think.

A few years back we had a major woods fire that also happened to be the location of a very large "grow".First volunteers on the scene called out mutual aid and every town for 20 miles sent a crew, some even loaded up with munchies on the way for those already at the fire.

Don in Maine

Well, there is also the fact that with thermal imaging cameras you can sort of kind of see through people's clothes (depends a lot on what they are wearing, and the wavelengths that the imaging camera is picking up).

People are funny about that sort of thing. But after the new TSA scanners, maybe people won't care so much.

Hi Ghung,

I'm afraid I don't know much about how plants respond to light and the spectra that promote good growth and healthy development. From what I understand, most grow ops utilize high wattage metal halide fixtures equipped with what I assume are 400 and 1,000-watt lamps. A Philips 400-watt pulse start lamp produces just over 42,000 initial lumens and a 1,000-watt pulse start metal halide cranks out 120,000 lumens. That's a lot of light when you consider that a standard 100-watt incandescent supplies 1,600 lumens. I just don't see how an LED fixture can match the raw performance of a high wattage HID, certainly not at any reasonable price point.

Assuming a 400-watt pulse start metal halide is our base line, I would recommend a 315-watt Philips MasterColour Elite lamp driven by an electronic ballast as an alternative -- 25 per cent more light per watt and correspondingly less waste heat to discard, 80+ per cent lumen maintenance at end-of-life versus 50 to 60 per cent for pulse start, and a CRI of 90 (62 or 65 CRI for PSMH). A more compact light source would also have a positive effect in terms of lumimaire efficacy and perform better in confined spaces.

See: http://download.p4c.philips.com/l4b/9/928601167301_na/928601167301_na_ps...

Heat removal is a tricky point and venting this waste heat outside may not be such a good idea in terms of detection. A better alternative may be a heat pump water heater because the waste heat can be sent down the drain undetected. A residential HPWH can remove some 3.5 kW of waste heat or about the same amount of heat as would be generated by ten of these Philips lamps.


Thanks, Paul. One of the primary claims these manufacturers make is that, with LEDs, they can taylor their fixtures to the specific wavelegths that the plants actually use and avoid wasting energy on wavelengths the plants don't use. They can even design to specific species of plants with a mix of various wavelength LEDs, mostly reds and blues. It seems that LEDs can be tuned to very specific wavelengths, even for various phases of a plant's life cycle (foliage growth, blooming, fruiting). I know that indoor/off-season cut-flower growers use this light (and nutrient) varying technique to force their plants to bloom at exactly the right time.

As Fred mentioned above, these techniques are used extensively in the hightech aquarium hobby. The Dutch and Germans pioneered much of this, which is why they have the best aquariums (and are great growers as well ;-) It seems that illicit drug use and the pet industry are funding some fairly significant energy saving research.

You and Fred are way ahead of me on this. So I take it the days of HID are numbered when it comes to these types of applications?


I just don't see how an LED fixture can match the raw performance of a high wattage HID, certainly not at any reasonable price point.

Paul, lumens and intesity, while very important are only part of the story. What is critical for plants is the absorption spectrum of Chlorophyll. There has been a lot of research done by LED manufactures to specifically create lights that emit mostly in these narrow optimum bands and consequently they are quite efficient since little energy is wasted creating a broad spectrum white light which would mostly reflected.


Chlorophylls absorb light most strongly in the red and violet portions of the spectrum. Green light is poorly absorbed so when white light (which contains the entire visible spectrum) shines on leaves, green rays are transmitted and reflected giving leaves their green color.

The similarity of the action spectrum of photosynthesis and the absorption spectrum of chlorophyll tells us that chlorophylls are the most important pigments in the process. The spectra are not identical, though, because carotenoids, which absorb strongly in the blue, play a role as well.
The carotenoids help fill in the absorption gaps of chlorophyll so that a larger part of the sun's spectrum can be used. The energy absorbed by these "antenna pigments" is passed to chlorophyll a where it drives the light reactions of photosynthesis.

Green is the color which has a wavelength of the middle of the solar spectrum.
Given the effects of evolution, there is probably a reason that this portion of the spectrum is not included in the basic biological energetics of plants. Is it because the plants on land "use" that energy for thermal pumping of nutrients via transpiration?

E. Swanson

Biology cannot alter the absorption spectra of organic compounds.
The electron orbital properties of the compounds fit the cliche: It it what it is.
All that evolutionary biology can hope to do is to opportunistically use whatever organic compounds it can synthesize through biological process.

Which brings up the question, why were those compounds the ones which "won" the natural selection process? They were the result of biological processing, if evolution is correct...

E. Swanson

Evolution is not intelligent and the "best" (i.e. Green) does not always win.
It's random luck.
Sometimes the "best" loses and goes extinct.

But with that said, it wasn't the point I was trying to make. Rather the point is that chemistry dictates the absorption bands of the various organic compounds and there is nothing that "evolution" can do to alter that more basic fundamental.

And different wavelengths drive different plant biology.

Flowering VS growth

Regarding Japan 2010 nuclear power usage rises to 4-yr high, it says

The average nuclear power plant utilisation rate at Japan's 10 nuclear power companies rose to a four-year high of 68.3 percent in 2010, Reuters calculations based on trade ministry's data showed on Tuesday, helped by the restart of Tokyo Electric Power's (9501.T) two reactors hit by a major quake in 2007.

In the US, utilization is on the order of 90% -- the only time plants are down is for maintenance. Is someone counting things differently, or do we really keep our nuclear plants utilized that much more? (See capacity factor trend chart off to the right on this page.) There was a big shift toward improving US utilization in the 1989 to 2001 period.

Hi Gail ..

Some capacity figures from NRC ..


Triff ..

Most of them are at 100%.

Yesterday, the USDA crop report had corn inventories levels 1/2 of last year. If consumption and supply stay level then next year, at this time, we would have no corn in inventory. The obvious next step is to increase acreage planted this spring. After that, the weather will have the final word in how much is supplied.

It does appear that corn demand will need to decrease before the crop comes in. There is a real possibility of rationing this year. [there is also the possibility of the double-dip]

The Incredible Shrinking Corn Stocks

Industrial use accounts for 341 million bushels of the projected increase, with 332 million bushels of it for ethanol. While ethanol plant margins are tight from a historical perspective, they are still positive and the bushels are being used. There is no sign of rationing there.

Exports could be rationed, but only reluctantly. Global corn ending stocks are projected by USDA to drop to 127 million metric tons (5 billion bushels) by the end of the marketing year. That's a 15 percent stocks-to-use ratio, or only 55 days of use at the current consumption rate. When global stocks are tight, bushels are pulled out of the U.S. and into the world market. USDA projected the second-largest global wheat-feeding year in history, mitigating that pull to a degree, but there is still a lot of buying interest.

China is a wildcard.

Current price of the March 2011 contract is $6.40. You'd think that the ethanol producers would be hard pressed to make money at this price.


Refer to this chart for Ethanol margins:

Historical Ethanol Margins

Back to the acreage, looks like that may not be so simple to expand based on this article.

US ‘battle for acreage’ will shape key food markets

But limits on cultivable land will this year make plantings a zero-sum game, increasing one crop only at the expense of others. Rabobank, one of the world’s leading agribusiness lenders, says this year’s battle “will be one of the fiercest in history”.

While the corn prices are approaching those of 2008, so far oil has stayed below $100 / barrel in the US. Unless oil goes up, it would appear that the ethanol producers will not be covering their depreciation, interest and return on investment -- just their operating costs.

Clinton says Mideast faces disaster without reform

DOHA, Qatar (AP) — U.S. Secretary of State Hillary Rodham Clinton on Thursday delivered a stark warning to Arab leaders that they will face growing unrest, extremism and even rebellion unless they quickly address depleting oil and water reserves and enact real economic and political reform.

What she actually said about oil reserves:

"And all of this is taking place against a backdrop of depleting resources," she continued. "Water tables are dropping, oil reserves are running out and too few countries have developed long-term plans for addressing these problems."

"oil reserves are running out"

Wow, that's more extreme than anything any peaker has said. I'm not a Hillary basher, but I have to wonder if she has any idea what it is that she just said. I have to assume that she does, but that she is choosing blunter, clearer language than the more nuanced terminology used around here. (Would we ever expect that such a main stream figure would be out-dooming us??)

I hope it becomes more frequent and starts opening some eyes. Like a bucket of ice cold water poured on someone's head.

dohboi - Did shock me a tad also. Hillary is as much as political animal as the rest (don't take to be a slam) so I have to assume there is at least some calculation behind such a statement beyond performing her public duty. Wonder if it's a trial balloon she's letting loose at the request of the administartion. Perhaps just wishing thinking on my part.

I don't think there's any doubt that whatever she says (especially in a public speech like this) comes from Obama. That's the way it works, and as you say, Hillary is a political animal who plays by the rules of the game.

I don't think there's any doubt that whatever she says (especially in a public speech like this) comes from Obama.

Remember when AG Eric Holder announced civilian trials for 9/11 terrorists? And afterwards Obama ditched the idea saying Holder made and announced the decision without consulting him.

I agree with DoomintheUK below, I would not hold my breath in anticipation of any real changes by the Obama Admin with regard to P.O.

As pointed out by Jon Stewart - every president since Nixon has given lip service to our "oil addiction."

As pointed out by Jon Stewart - every president since Nixon has given lip service to our "oil addiction."

The "Crisis of Confidence" Speech
Jimmy Carter delivered this televised speech on July 15, 1979.

The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.

What I have to say to you now about energy is simple and vitally important.

Point one: I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade -- a saving of over 4-1/2 million barrels of imported oil per day.

Point two: To ensure that we meet these targets, I will use my presidential authority to set import quotas. I'm announcing tonight that for 1979 and 1980, I will forbid the entry into this country of one drop of foreign oil more than these goals allow. These quotas will ensure a reduction in imports even below the ambitious levels we set at the recent Tokyo summit.

Point three: To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation's history to develop America's own alternative sources of fuel -- from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun.

I propose the creation of an energy security corporation to lead this effort to replace 2-1/2 million barrels of imported oil per day by 1990. The corporation I will issue up to $5 billion in energy bonds, and I especially want them to be in small denominations so that average Americans can invest directly in America's energy security.

Seems much more than lip service to me. Then along came Reagan.

You're right undertow.

We did have One Adult president, followed by 5 ... whatevers.

Yes, but the real problem is that we are a nation of spoiled whinny brats!

Yes, the "Adult-Sized Children of America/Industrial World."

See also "Sibling Society" by Robert Bly as posted by notalemming above.

One of the things I like about Orlov's writing is how he pokes fun of the things we think we have a "right" too.

Yes, how much more important these goals were than putting a man on the moon. Yet his goals were ignored and ridiculed, while JFK's were much ballyhooed.

Maybe you should knock that hammer against 'Morning in America', 'A Thousand points of Light', or 'Keep Shopping' ... but I have no problem continuing to ballyhoo putting human beings onto the Moon.

And that was a trip that people all over the world got to share in the thrill of..

By the way, my favorite overachieving PVEV's are turning 6 soon! - one is chugging along.. the other might be settling in for a much-deserved retirement.

Spirit: Spirit Remains Silent at Troy
Opportunity: Rover Continues to Explore Santa Maria Crater


..oops! They ARE six.. here's the video http://www.jpl.nasa.gov/video/index.cfm?id=882
(expected original mission lifetime, 3 months)

...One of the toughest problems with the direction of the conversations here (not at you, d'oh!boy) is the ongoing dismissal of new ideas and of keeping a sense of eagerness in approaching them. (Which is what I think is still a very positive piece of our space explorations.. not that they are perfect or anything) I don't mind things being proven wrong, but not when 'disproving' has become the sole ideology driving the analysis. The constant refrain is that any acceptance of a 'positive' is going to lull everyone back to sleep.. so therefore, we'd better not do anything positive, because of the inevitable unintended consequenses!!!

The Horror..

Pardon the rant..

Carter at least showed some willingness to address these issues, but he only scratched the surface.

The generation-long growth in our dependence on foreign oil

An inevitable, absolutely unavoidable consequence of America's ever-increasing appetite for energy. The only way to halt this would be to:

* Halt, and then preferably reverse, American population growth as quickly as reasonably possible.
* Rationing and frugality on a scale dwarfing even that imposed during WWII.

The American population wouldn't stand this for more than 5 seconds. Perpetual growth in population, energy use, production and consumption is the American way of life. Most Americans have convinced themselves this will continue until the end of time.

Anyhow this whole drama about dependence on foreign oil shows a certain amount of arrogance. "The rest of the world must come cap in hand to buy from America! The only reason America will ever buy from other countries is if we deign to! America is beholden to no other country for anything!"

I think you went a bit over the top there, ChrisInns.

I don't see what's so arrogant about working to have a 'better balance' in terms of energy dependence, which is how I read the Energy Independence issue. It's certainly how I mean it when I use such terms, as I will often do regarding my house and my city as well.. to develop a range of ways so that we A) Require Less B) Have ways of working during 'outages' and C) Generating and Storing our own power in any ways possible.

This doesn't mean 'cutting the US off from the world markets', any more than getting your 27 year old to earn their own living at long last means dissolving the family. It means growing out of an overextended adolescence.

"Perpetual growth in population, energy use, production and consumption is the American way of life. Most Americans have convinced themselves this will continue until the end of time." This is popular, but largely overblown hyperbole. Yes, America and much of the Industrialized West has been pretty spoiled by access to extravagant amounts of power, but to start defining the culture as if this is the basic mode of thinking is an unhelpful extension of that fact.

There was a great Conversation hosted by Tavis Smiley on C-span tonight, which will re-air at 12am Eastern Time, where he brought together voices from across the spectrum (somewhat..) to think together about having a more Civil Dialog in the Country. Some of the views will make folks here cringe.. (and then I suppose the other views will make the other folks cringe!) .. but it was respectfully mediated, and I thought that Doctor Cornell West made some wonderful statements that I felt hit the marks perfectly.. while others on the panel were clearly non-plussed.. but remained well-behaved in their 'American Exceptionalism' ..

I disagree. It's rather obvious to many educated folks that population growth is the most basic problem facing Western Civilization. That's because each additional person will consume resources. Our Western (especially American) lifestyles of high energy consumption per capita are almost certain to experience a major hit as fossil energy sources are depleted. But, here we are about 35 years after Carter's energy speech and we still can't discuss some of the most basic aspects of this situation. For example, attempting to discuss birth control, including abortion, in the political arena results in immediate condemnation, protests and even death threats. Sorry to say, that's the climate in today's US political world. If you haven't noticed, I'd say you missed the message from the Tea Party and the religious Fundamentalist camps. That's because a large fraction of the public isn't interested in reasoned (or civil) debate, they have already made up their minds and aren't likely to change their thinking...

E. Swanson

Population growth is my main concern - contrary to what the neo-marxist "green left" may claim population is ultimately far more important than average consumption.

I am Australian and Australian attitude regarding this seems to closely match American attitudes. Unfortunately I have come to the conclusion that most people, and almost all politicians and business leaders, believe America's and Australia's population are going to continue growing forever. This is sacred doctrine for most people.

Not sure what you mean by "neo-marxist 'green left.'"

There is essentially no effective 'left' left in the US, much less a green left, much much less a marxist (of any stripe) left.

Only right wing fanatic idiots think otherwise, those who in one breath accuse the likes of Obama of being a communist and Hitler.

But I'm one of the most lefty people I regularly interact with, by a number of measures, and I certainly think that population is a huge problem. It's just that most Americans that point to population first are clearly doing so because they want to self-righteously point out how few children their responsible white, usually male, upper-middle-class, developed-world reproductive organs have generated compared to poor, mostly colored, third world, by implication promiscuous women do.

What we are most in control of on a daily basis is our own consumption. Bring that down to or near 'one world' on, for example, www.myfootprint.org, then come back and we can talk about global or even national population.

I'm willing to bet even money that she has a general idea of the problem but doesn't really get it yet.

Unfortunately I suspect that her audience will be just as ignorant as the rest of the general public.

They wouldn't know the difference between resources, reserves or inventories.

All they'll hear is "developing long-terms plans" and assume that the mythical 'someone' will be doing something about it. And anyway, everyone knows we're awash with oil.

Her words might make our ears prick up, but as for anything further, I won't be holding my breath waiting for a reaction.

I'm not expecting a big reaction, either.

However, she might have more understanding of the problem than you think. Her husband has been spotted reading Richard Heinberg's The Party's Over and Matt Simmons' Twilight In the Desert, and has even mentioned peak oil in his speeches (after he was out of office, of course).

Well that's mildly encouraging - I must appologise for having my cynicism turned up to full today.

I hope for all our sakes that Mrs Clintons' speech has a bigger impact than I fear it has had.

"They wouldn't know the difference between resources, reserves or inventories."
I'm thinking of an updated saying for: "A bird in the hand is worth two in the bush"
It goes like this: "A barrel in inventory is worth two in reserves"
unless you're lying about your reserves...

Dear Sec. Clinton,

Please give the very same lecture to your Boss and the Congress.

Clinton says Mideast faces disaster without reform...

Clinton warns Mideast leaders to listen to their people...

It is good to see her notice there are some problems with resource depletion, but does she forget we are the world's leading consumer of those resources? Why lecture the Middle East when we do nothing but ignore the problems here at home?

We are currently the world's leading exporter of hypocrisy.

Funny she says this and so many expect the KSA to turn on the spigot in a few months to save high oil prices. LOL.

I wonder if the oil-o-plenty crowd will notice what she said and try to ridicule her for it.

I just made a similar remark to my wife - even if she shouted this from the Roof Top of the White House if would probably be lost in the noise of partisan politics.

So few people trust her or any of our leaders now that I wonder if any of them could "get traction" with the general public anymore.

I personally know many people who would conclude Hillary is just a "political animal" (Leanan's very correct description) and that she is just trying to sell the public a line of political B.S.

Too bad she didn't come out with this on Day 2 of Obama's presidency when they still had some political capital and momentum from the election.

political animal

'T'was Rockman who called her this, not Leanan.

Yes cliffy...t'was I. And as I added don't consider that tag a slam. Our political animals were bred by the system our voters have allowed to develop. Hillary et all (both Red and Blue) know what it takes to garner the public's votes. We can critisize the vast majority of our elected officials as conivers who only preach what the public is willing to accept. So who's to blame? If Hill (and I can call her Hill because my daughter works for her now...LOL) et al can play the game that the system has evolved into or not get elected. As they say about the wolf that chews his foot off to escape the trap: he is neither brave nor a coward. He's just following his evolved nature...he's just being a wolf.

Rockman, I think that is a very good way of looking at it. She has to work within the system, and she has to tow the Administration's line.

I guess her statements just don't comfort me knowing she is a political animal. Afterall, none of these political animals seem to have the courage of someone like Jimmy Carter (he must have been a mutant political animal - ousted by natural selection via a Republic of fools ??? ;).

Obama should go for broke - get a special prosecutor for the financial fraud and morph into a Jimmy Carter on energy.

He might fail miserably, might still go down in flames in 2012, but at least he will separate himself from the most recent failed presidents and be remembered along with Carter as being one of the last Adult presidents.

get a special prosecutor for the financial fraud

An admission in court without fear of objection is self admission.

What the President has as a power all his own - The Presidental Pardon.


"I am here tonight to answer rumors of what I've been working on for the last (x) days.

Various scandals have shook the faith of the citizens in the Rule of Law in this Republic. The corruption needs the power of sunlight to kill off this creeping mold which threatens the foundation of the Republic.

And I have a solution to get the corruption dragged into the light.

We have set up pardon.gov. For 14 days, you can admit what you have done in violation of Law and will automatically obtain a Presidental pardon. The admissions will then be passed onto your neighbors who make up your local Grand Juries and 120 days later made open to the public.

If your crimes are part of a documented ongoing investigation or a filed lawsuit - you will not escape via the Pardon. If your crimes are high treason - you will not escape Pardon. But rest assured - other lower level co-conspirators will step forward and will be Pardoned. And if you did not confess, you will be subject to a True Bill from your local Grand Jury and possible prosecution.

The investigators have 7 days to file at law.pardon.gov with specificity. You have 7 days to file your lawsuits.

The clock is now ticking down to returning the Rule of Law."

No new magical power from the President.....and imagine what would show up in the confessions? I'm betting any big events would be buried for months discussing who's done what and who's getting shot for treason.

When reading through some news reports on what else Hillary has been up to on the trip, I came across this

Clinton 'discussed Lebanon tribunal' in Gulf

She planned to also "raise this (Lebanon) with her counterparts in Doha," where she is expected to meet Gulf Cooperation Council officials, the official told reporters.

"There will be a certain urgency to the Lebanon question right now," the official added.

The US administration official said Hezbollah appeared intent on bringing down the government by constitutional means rather than by taking matters to the street.

"We've seen no signs of any attempts to mobilise the street," the official said.

Dratted "terrorists" using constitutional means. Why can't they just blow things up so "someone" can bomb them.

A little offtrack but what are the chances of her trying a re-run in 2012,especially if Obama hits the skids with the economy tanking etc?

Not a snowball's chance in hell of that happening. Everyone would turn against her for being a traitor and not supporting the administration. And it would split the democratic party down the middle and insure defeat in November. And, not being an idiot, she knows that. Clinton is true to the party and will remain so.

Ron P.

Uncertainty grips Lebanon

BEIRUT: Lebanon was plunged deeper into political turmoil Wednesday with the collapse of Prime Minister Saad Hariri’s national unity Cabinet after 10 ministers from the March 8 coalition and a minister loyal to President Michel Sleiman resigned over the U.N.-backed Special Tribunal for Lebanon.
M.P.s who met Berri Wednesday quoted him as saying that the Saudi-Syrian settlement was in favor of all Lebanese factions. He was quoted as saying that the Saudi and Syrian leaders were honest in reaching a solution for the Lebanese crisis “but it seemed that the Big Powers’ game was bigger [than them].”

Read more: http://www.dailystar.com.lb/

Science Daily had a release on January 11 saying Energy Limits Global Economic Growth, Study Finds.

A study that relates global energy use to economic growth, published in the January issue of BioScience, finds strong correlations between these two measures both among countries and within countries over time.

The research leads the study's authors to infer that energy use limits economic activity directly. They conclude that an "enormous" increase in energy supply will be required to meet the demands of projected world population growth and lift the developing world out of poverty without jeopardizing standards of living in most developed countries.

. . .
To support the expected world population in 2050 in the current US lifestyle would require 16 times the current global energy use, for example. Noting that 85 percent of humankind's energy now comes from fossil fuels, the BioScience authors point out that efforts to develop alternative energy sources face economic problems of diminishing returns, and reject the view of many economists that technological innovation can circumvent resource shortages.

This is link to a PDF of the study itself Energetic Limits to Economic Growth.

Lots of chatter about oil supplies and rising price of crude over at Seeking Alpha this morning:


To this end, in the vast majority of jurisdictions in the U.S., the price of regular unleaded gasoline has already surpassed the $3.00 per gallon level and it is still climbing. On the other hand, light sweet crude is approaching the $100 per barrel area and given prevailing conditions and market sentiment, it will likely get there before long.


Where crude prices head is anyone’s guess. The conventional logic is that they are going up and I wouldn’t be inclined to quibble with that scenario. Based on past experience, I suspect that might spell more than a bit of trouble for the economy. Perhaps more to the point is that we don’t seem to have the prospect for an extended period of low oil prices such as we experienced after the 1981 recession. That might well be part of the reason we don’t have a robust recovery and a cautionary note as to the immediate future.

Code for time to liquidate positions in equities -- the boat is about to rock.

Also the idea that the time between recessions will be short and oil prices will not recover to lower levels is a major insight perhaps.

OPEC to Cut Loadings as Asian Demand Slows, Oil Movements Says

By Rachel Graham - Jan 13, 2011 11:30 AM ET Thu Jan 13 16:30:00 GMT 2011

The Organization of Petroleum Exporting Countries will reduce crude loadings this month, partly as demand from Asia slows, according to tanker-tracker Oil Movements.

Shipments will drop 0.9 percent to 23.51 million barrels a day in the four weeks to Jan. 29 from 23.72 million barrels in the period to Jan. 1, Oil Movements said today in a report. The data exclude Ecuador and Angola.

“Loadings to the East were at an almost unsustainable level in December, way above the annual and monthly averages,” Roy Mason, Oil Movements’ founder, said today by telephone from Halifax, England. “They’ve come off a bit since then.”


Reports from OPEC tanker tracker, Oil Movements, [above] and other shipping reports [not shown] do not indicate any pickup in OPEC exports in the second half of January – as compared with the first half. If anything, OPEC is fairly clearly exporting less. This in spite of higher prices, approaching $100 for some grades of oil. However exports from western Russia, Iraq, and Central Asia have not diminished – and may even be slightly higher. Exports from South America also have returned to about the same levels in November, before some port operational problems developed in Venezuela.

Although ‘Oil Movements’ notes a decrease in exports to China, perhaps more worrisome for the United States is the fact that China still appears to have garnered a higher percentage of OPEC exports ever since early on in November. China has recently reported that the situation concerning a diesel shortage has all but disappeared for now, yet new refineries opening in China during 2011 have increased crude oil import demand there. Then there is the additional issue of how China will deal with a coal shortage brought about by the flooding in Australia, which may be met through additional diesel imports.


'The Foreclosure Dump'

Today's report from RealtyTrac serves as a warning to big banks, Fannie, Freddie and local communities; The foreclosure glut is coming, and they'd better be ready to get rid of that glut in a big way.

2010 saw a record number of bank repossessions, over a million..

Sharga estimates as many as a quarter of a million foreclosures that should have happened in 2010 will now be pushed into the 2011 numbers, and added to an already huge supply of bank owned properties.

I've got a couple of questions:

If the economy is recovering so well, then why, in spite of a quarter million foreclosures that were delayed until 2011, was 2010 a record year for foreclosures? Wouldn't we have expected 2009 to have been the historically high water mark for repossesions?

If the economy is recovering so well, then why is unemployment still at a govt. recognized level of 9.4%?

Why does the stock market continue to rise in spite of rising commodity prices, particularly oil?

http://www.oil-price.net/ 91.89

http://www.bloomberg.com/apps/quote?ticker=APCRTAPI:IND 104.78

Tapis oil in the last two days has gone from 101 to 104.78!

Is this really the recovery we keep hearing about? Are people heavily invested in stocks playing a fools game? Didn't they learn anything from the last freefall in 08?

There are lots of ARMs that reset through September 2012. The mortgage vintages of 2007 and 2008 are still being worked through. The mortgage mess will continue until most of these get washed through the foreclosure process in 2013. JPMC should have some interesting charts in their earnings presentation tomorrow am.

An item linked on Calculated Risk. The phenomenon of banks refusing to foreclose is just not limited to Detroit. It has spread to Chicago:


Abandoned foreclosures are increasing as mortgage investors determine that, at sale, they can't recoup the costs of foreclosing, securing, maintaining and marketing a home, and they sometimes aren't completing foreclosure actions. The property, by then usually vacant, becomes another eyesore in limbo along blocks where faded signs still announce block clubs.

...banks refusing to foreclose is just not limited to Detroit.

Are the mortgage holders remaining in the residences? That would be pretty sweet. Sorry can't pay - that's ok, just stay and if you can pay later, great - thanks so much.

I'm not sure about Illinois, but here if they stop paying property taxes for three years the county gets them. That will get whatever is left back on the market.

In Illinois, the unapid taxes are paid by a tax purchser who pays interest on it,and then owns the home.

In Texas, seniors cannot be foreclosed for taxes; otherwise I am not sure how the system here works. It would seem that if there is a mortgage on the property, the mortgage holder would pay the taxes if there is any equity whatever. If they let the property go completely, it is a total write off.

I don't see why any bank would just let the property fall apart if there is any chance of recovering more than a buck on the foreclosure sale. I mean, ten cents on the dollar is better than nothing on the dollar. unless of course the loan is guaranteed by someone, say the Fed or Fannie or Freddie, if it is not paid. In that case, all they would be doing in conducting a foreclosure sale is wasting time and money. Which, IMO, is why they are doing nothing.

I'm not sure what is going to kick off the next melt down; high petrol prices, bank failures, or maybe some looming fraud will be uncovered. Whatever the cause, it will be sharper than the last one, and the recovery won't last as long. Each step down will be more devastating; each recovery shorter, and between outright defaults and monetizing of debt, pensions, savings and qualified plans will slip away into sad memory.

In an earlier post, I wanted to ask whether or not those government pensions were funded (my pension issues an annual report that it is in good shape - so far). I know private plans must be, though the raiders (that would be the hedge funds) have stolen many of them during takeovers, and others have gone bye bye in Chapter 11.


The Quickening!

It looks like we are setting up for a repeat, oil-spike => economy crash, this year. That was only three years!
I was expecting a bit longer. I was looking for unemployment to recover first, then something like this.

Question: This being the first cycle, or step-down, what does everybody think about how the timing will go in future cycles? You know my guess from line one.

also, I don't think I understood, before now, that the undulating-plateau of global oil production would be connected to the step-downs in the overall economy.

WAG...shorter "recoveries" between each price spike with unemployment staying moderately high during the entire time...until there are no more constructed recoveries.

I think you may be right. And that is kinda funny considering that so much of the news these days is about the (albeit weak) economic recovery. It may just crash again. :-(

Question: This being the first cycle, or step-down, what does everybody think about how the timing will go in future cycles?

Great question. aangel, who posts here and has his own website on peak oil, has a step down graphic that shows one very big step down amongst other smaller ones. The expectation is not all step downs will be the same magnitude.

My guess is the next one to occur might be a very big step down. The reasoning being that the new House of Reps will probably not agree to more bail-outs or stimulus programs. That means once it occurs the fall will be precipitous. I also think the current unemployment rate will seem quite good compared to what's coming, which will be more than a doubling of current rates.

The timing is anyone's guess. Many factors play into it, if oil supply increases to reduce price, or if price suddenly spikes higher for whatever reason. My guess is 125 a barrel for a few weeks will be the catalyst to the next step down. Less than the 147 that occurred in 08 because the economy is now weaker.

The more the stock market rises while oil price rises, the harder and farther the fall. Why the stock market? Because it is the gauge by which business determines the health of the economy, and from that how much to invest in equipment and employment.

Electricity pricing policies may make or break plug-in hybrid buys

California policies aimed at reducing electricity use and curbing greenhouse gas emissions have the unintended consequence of making new plug-in hybrid vehicles uneconomical, according to a Purdue University economist.

"The objective of a tiered pricing system is to discourage consumption. It's meant to get you to think about turning off your lights and conserving electricity. In California, the unintended consequence is that plug-in hybrid cars won't be economical under this system," said Tyner, whose findings were published in the early online version of the journal Energy Policy. "Almost everyone in California reaches the third pricing tier each month. If they add a plug-in hybrid, they are charged the highest rate."

From above

...Tyner said to make the Volt more economical than either the Prius or the Cobalt, oil prices would have to rise to between $171 and $254 per barrel, depending on which electricity pricing system is being used. That's because the Volt has a higher purchase price and will cost more in electricity than gasoline over the life of the vehicle.

The simulations accounted for a $7,500 federal rebate to consumers for purchasing plug-in hybrids. Tyner said electricity costs would have to decrease to allow the plug-in hybrids to compete.

"People who view the Volt as green will pay $10,000 more over the lifetime of the car because it's green," Tyner said. "Most consumers will look at the numbers and won't pay that."

We must make sure not to simply conflate the Volt with the 'End All' of EV's for demonstrating whether they will be sensible, however.. (while I would additionally put the above argument simply as a peer alongside a number of other metrics, such as street-level pollution, the value of being able to operate from a truly flexible variety of energy sources.. not many other vehicles could be powered by Wind, Sun, Hydro, Coal, NG, etc, etc..)

Personally, I'd like to see an electric Tuk-tuk show up (or a Velo that you can get in and out of), and a set of traffic designs and policies that would make them fit into our communities. I don't think I could be convinced that this is impossible or even all that Herculean.


Excellent point. The Volt will appear very over-engineered in a decade. The populace will need very simple transportation that is inexpensive — much less expensive than the current crop of vehicles. In real terms the average cost of a passenger car likely will never exceed that of today.

I'd like to see an electric Tuk-tuk show up

That may well happen, but not in the US any time soon. We have already seen examples of neighborhood vehicles already running around vartious communities, some of which are electric powered. One problem is the speed limits, which keep these vehicles off the arterial roads in the US because these fancy golf carts can't keep up with the other traffic powered by IC's. The other problem is weather, since it's hard to keep an electric vehicle warm in winter, a situation which does not pertain to IC powered vehicles that take advantage of the waste heat from the IC engine. However, some locations, such as south Florida, with it's semi tropical climate, such vehicles would likely become popular for local transport. I wonder what it costs to import a fleet of those CNG or LPG powered versions from Thailand? If I had the money, I might consider it...

E. Swanson

I've always take time to point out that you don't need to imagine what a post PO future may look like. You just have to be observant sometimes.

Presently, Cuba receives little fossil fuel inputs. Most of her energy comes from biomass and hydroelectric. The link below offers a series of pictures of decaying daily life.


I can't help think of Kunstler lesson on livable community and building living structures worthy of our appreciation. I'm also reminded of the scene either in the Godfather part I or II, where Michael was in Havana enjoying her luxury at her height of opulence.

At 11: 00 GMT. the Int. Oil and Gas Newspaper reported today that Brent oil was quoted at $99.30. the spread is dangerously out of balance.

The spread is now almost $8.00 a barrel. Has anyone ever seen the spread this wide before? Also, does anyone really understand the consequences of this? i.e. Will tankers really change course and sell into the Brent market? You mention "dangerously out of balance". Can you help me understand the "danger"?


The ELM at work!

Maybe we could use a map, showing importing countries color coded to WTI or Brent, etc. That way we could visualize the game. I wonder if manipulating the WTI price, for a period of time, could cause demand destruction outside of the USA, so that the USA can have more.

It seems that US oil demand no longer determines the world price for oil.

It looks like the Chinese and Indians are driving the Brent price up through their increased demand for global oil supplies. The same is not true of West Texas Intermediate because the Chinese and Indians do not buy much oil at Cushing, Oklahoma. At the same time, more and more synthetic crude oil from the Canadian oil sands is flowing into the Cushing hub, driving down the price of WTI, for which syncrude is a direct competitor.

The flow of oil sands crude to Cushing is going to be increasing in the next few months as some new pipeline capacity comes on stream, so I think you can expect the WTI:Brent spread to remain large or even widen in the near term.

The situation will not last forever because oil companies are working on pipelines to deliver Canadian bitumen to Canadian West Coast ports, which will allow it to go to Asia rather than the US. This will take some years to build, though.

If the spread gets wide enough, it would be worthwhile for oil sands companies to move syncrude from Northern Canada right through the US and export it to China through Texas Gulf Coast ports. That might really upset some people, though, if US fuel prices are skyrocketing at the time.