Drumbeat: March 9, 2011

Jean Laherrère: Why Cheap Energy Is a Bad Thing

In this tenth video in the series “Peak Oil and a Changing Climate” from The Nation and On The Earth Productions, petroleum geophysicist and author Jean Laherrère explains that we are in the current energy crisis not only because fuel is running out, but because it's cost is too cheap. Laherrère, a former TOTAL oil company employee, used his insider knowledge to co-author a game-changing 1998 article, "The End of Cheap Oil," which studied oil depletion based on the most accurate database of the world’s oilfields at the time. The article's findings were not reassuring.

Many European countries have responded to the impending fuel crisis with taxes on energy, driving down consumption with higher prices. But the US hasn't followed their lead, and the consequences may be disastrous for our collective future. “We have been living for the last 10,000 years with open space," Laherrère explains. When you have a problem, ‘go west,’ open space. There is no 'west' to go anymore. We have reached the end of the world limit."

U.S. Should Consider $1 Gas Tax, CEO Hess Says

The U.S. should consider imposing a $1-a-gallon gasoline tax and boosting average auto fuel economy to 50 miles a gallon to help avert a global energy crisis, the head of oil company Hess Corp. (HES) said.

“As demand grows in the next decade, we will not have the oil-production capacity we will need to meet demand,” Chief Executive Officer John B. Hess said in a speech today at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates. “The $140-per-barrel oil price of three years ago was not an aberration -- it was a warning.”

Timing is right for this energy event

When it comes to this year's CERAWeek, the annual, global energy symposium hosted by IHS and chaired by IHS CERA chairman Daniel Yergin, the timing couldn't be better.

The conference, which marks its 30th anniversary, got underway on Monday in Houston, Texas, against a backdrop of overwhelming uncertainty facing world energy markets, not to mention the global economy.

Amid Turmoil, a Key Voice Urges Calm

“There should be a higher degree of confidence—wary confidence—but realistic confidence, about the current situation,” Daniel Yergin, chairman of the IHS Cambridge Energy Research Associates, told National Journal Daily in an interview on Friday.

“The market is responding to fear,” Yergin said. “Oil prices are not signaling a shortage of oil, it’s signaling political risk.”

Don't worry about oil until it hits $160

While introducing the speakers, IHS CERA chairman Daniel Yergin summed up what is likely to become the dominant theme threading through this year’s conference: the political turmoil and uncertainty in oil producing countries and the effect on oil prices, and possibly, the global economic recovery.

“If we held (the conference) six or seven weeks ago, this would be about the strength of the recovery; now it’s about the uncertainty of the recovery,” he said.

Former OPEC Official to Obama: Tap Oil Reserves

HOUSTON -- A former top OPEC executive said on Monday that President Obama should tap into the Strategic Petroleum Reserve.

“It will be a wise decision because it supplements the decision of the Saudis to put into the market almost the entire amount of [oil from] Libya,” said Rene Ortiz, who was inspector general of the Organization of Petroleum Exporting Countries from 1979 to 1981.

Total CEO: Tapping oil reserve may drive up prices

HOUSTON (CNNMoney) -- The chief executive of French oil company Total said tapping the U.S. Strategic Petroleum Reserve is unnecessary, would signal fear and ultimately could drive energy prices higher.

Tapping the reserve "will send a message we are scared, and it could mean an increase in prices, not a decrease," Christophe de Margerie, said at IHS CERA's oil industry conference Tuesday. Total is the world's fifth-largest publicly-held oil company by revenue.

What Is the Strategic Petroleum Reserve, and How Much Oil Is In It?

Political and economic unrest in the Arab world have sent gas prices skyrocketing in the United States in recent weeks, and some lawmakers are ready to tap into the country's Strategic Petroleum Reserve. What is that, and how much oil is in it?

Saudi Jizan refinery ready in 2015 - exec

HOUSTON (Reuters) - Saudi Aramco's Jizan refinery will be finished in 2015 rather than 2014 as previously announced, the company's downstream operations chief said Tuesday.

Khalid al Buainain, senior vice president for downstream for Saudi Aramco, was asked whether the 400,000 barrel per day (bpd) facility now under construction would be completed in 2014 as previously announced.

"I would say '15," he said.

Steve LeVine: For Big Oil, Libya is just another fix it's in

The global oil industry is in a fix. It's still trying to persuade Washington to revive access to the Gulf of Mexico, one of the world's sole remaining dictator-free oil-rich zones, and it's locked out of Libya for the foreseeable future. Meanwhile, its greatest recent coup -- a technological breakthrough that has unlocked a bonanza of natural gas locked in shale in the United States -- is under threat by homeowners and activists across the country who question whether the method is environmentally safe. On top of all this,global oil demand is rising fast along with robust economic recovery, and the world will pour terrible scorn on the industry if, despite the hurdles, it fails to supply sufficient oil and natural gas to fuel everyone's cars, homes and factories.

Will the Libya Syndrome Spread in OPEC?

CARACAS (IPS) - The combination of a leader in power for 42 years, underground political forces bursting on the scene with violence, fractured armed forces and a fast-developing civil war would appear to be a specifically Libyan phenomenon that is unlikely to expand to the rest of OPEC.

But the specter of rebellion has reached the shores of other members of OPEC (Organisation of Petroleum Exporting Countries), in the form of petitions signed by dozens of intellectuals, armed clashes and harsh crackdowns on demonstrators.

Saudi oil supply to most in Europe stable, some up

(Reuters) - Saudi Arabia is expected to keep its contracted oil supply volumes to most of its customers in Europe unchanged in April from March, while increasing supplies to a few of them, trade sources said on Wednesday.

Saudi Arabia is losing its fear

There's no doubt the kingdom is ripe for revolution, and any security forces violence at Friday's protests could ignite the fuse.

Saudi foreign minister warns against protests

Saudi Arabia's foreign minister said today that dialogue — not protests — is the way to bring reform and warned that the oil-rich nation will take strong action if activists take to the streets.

Will Federal Regulators Crack Down on Oil Speculation?

In the wake of the price explosion in the summer of 2008, a bubble that extended to all kinds of commodities, including copper and wheat, a number of observers from George Soros to Hedge Fund manager Michael Masters to former Commodities Future Trading Commission staffer and derivatives expert Michael Greenberg concluded that the underlying supply-and-demand fundamentals couldn’t account for the sharp rise in prices. In the first six months of 2008, US economic output was declining while global supply was increasing. And even if supply and demand were, over the long run, pushing the price of oil up, that alone couldn’t explain the massive volatility in the market. Oil cost $65 per barrel in June 2007, $147 a year later, down to $30 in December 2008 and back up to $72 in June 2009.

The culprits, they concluded, were Wall Street speculators.

As gas prices rise, 'boutique fuels' may feel the heat

WASHINGTON - With Arab unrest sparking price hikes at gas pumps, more than a third of U.S. senators are backing a bill sponsored by U.S. Sen. Roy Blunt that aims to make so-called "boutique" gasoline blends more reliable and affordable.

Global recovery on track but oil poses risk: Reuters poll

LONDON (Reuters) - The United States will lead a rich-world recovery characterized by unspectacular growth this year and next, according to a Reuters poll of economists who view oil prices as the biggest risk to that outlook.

Roubini Sees Double Dip for Advanced States If Oil Hits $140

Nouriel Roubini, the economist who predicted the global financial crisis, said an increase in oil prices to $140 a barrel will cause some advanced economies to slide back into recession.

Underlying how fragile the global economic recovery is, Roubini said the European Central Bank may be making a mistake by raising interest rates “too soon” when debt-ridden countries on the euro region’s periphery struggle to restore the competitiveness of exports.

Austria's OMV buying small amounts of Libyan crude

VIENNA (Reuters) - Energy group OMV has been buying small amounts of Libyan crude oil and will continue to do so despite unrest there, its chief executive said, voicing optimism Libya will keep the door open for foreign oil firms.

Preparing for the Next Oil Shock

I have a creeping sense of déjà vu. Robert Fisk's article in the UK Independent on Saudi forces mobilizing thousands of troops to "quell growing revolt" brought me back nearly 38 years to the first oil shock of 1973.

Living in Los Angeles, I'd had my driver's license for less than a year and was thrilled with my new found mobility. But then the price of gas skyrocketed from around 35 to nearly 60 cents a gallon and lines at the pump meant a four-hour commitment to fill 'er up. Given the circumstances, I quickly reverted to my old mode of transport --hitchhiking.

Growth of GDP and discontent in Egypt and Tunisia

In both countries, as GDP rose steadily, the number of citizens categorized as “thriving” fell. In Egypt, 29% of people reported themselves as thriving in 2005, but that number fell to just 11% in 2010. In Tunisia, Cantril Scale data are unavailable prior to 2008, when 24% of the population could be classified as thriving; that number fell to 14% in 2010, a 40% decline.

The nonviolent revolutions in both countries may have been motivated less by abstract commitment to democratic freedom than by widespread experience of a declining standard of living and increased economic insecurity, even in the face of rising GDP. Two factors contribute to this result that seems paradoxical within the standard model of economic thinking: (1) increasing inequality in income and (2) increasing food prices.

India’s Widening Energy Deficit

India’s energy crisis is set to deepen as top producers of coal, natural gas and oil recently said their output will grow little in the next few of years – not what the country wants to hear at a time when its thirst for fuel shows no sign of abating.

This means more fuel imports and costlier import bills at energy companies. It also means India’s energy sector is becoming increasingly vulnerable to global supply disruptions and price volatility due to events like Australia’s floods and unrest in the Middle East.

Korea goes dark to save on energy

The back alley of Bukchang-dong near Namdaemun market, central Seoul, was nearly pitch black yesterday after midnight, just one day after bright neon signs guided pedestrians to their destinations.

It was the second day of the government’s nighttime lighting ban, imposed as part of energy-saving measures to cope with the rising price of international crude oil.

Senegal: Out of touch 
and in the dark

In mid-January, a group of young men went to the house of some relatives of Senegal’s President Abdoulaye Wade, blocking the streets by burning tyres and wooden pyres. The police broke up the protest with tear gas, while the protesters retaliated with stones. The youths were protesting about another night of blackouts, an issue which could determine Wade’s chances for a third term in the February 2012 presidential elections. 

Biofuel scepticism prompts German summit

The German government has called an emergency fuel summit for Tuesday to try to prevent a consumer backlash against biofuels from snowballing into a full-scale petrol shortage.

Growing scepticism about the new biofuel mix, known as E10, has resulted in consumers queuing up for standard petrol, leading to supply shortages in a market already spooked by the turmoil in the Middle East.

Lukoil 'targets US shale tie-up'

Russia’s Lukoil is looking to forge partnerships to invest in the US shale oil and gas sector as it seeks to gain expertise and technology to tap resources on its home turf, its chief executive was reported as saying.

Japan Regrets China's Oil Production in Disputed Field

Japan expressed regret Wednesday over China's reported oil production in a disputed gas field in the East China Sea, a feud that could aggravate the already strained relationship between the two Asian powers.

Repsol subsidiary plans oil venture in Alaska

JUNEAU, Alaska—A subsidiary of Spain energy company Repsol-YPF plans to invest at least $768 million in oil exploration and development on Alaska's North Slope.

Pemex Seeks to Buy ‘Significant’ U.S. Refining Asset This Year

Petroleos Mexicanos, Latin America’s largest oil producer, is seeking to buy a “significant” refining asset in the U.S. as Mexican gasoline demand surges.

Pemex, as the state-owned company is known, is evaluating several acquisitions and may close a deal this year, Chief Executive Officer Juan Jose Suarez Coppel said yesterday in an interview in Houston, declining to name the potential targets.

Pemex pursues drilling contracts

As part of its efforts to lure investors, Mexico's state-owned oil company, Petroleos Mexicanos, will offer contracts for deep-water drilling by early 2012, the head of the company said Tuesday.

Risky energy research faces uncertain future

ARPA-E's aggressive approach to managing research wins support — but perhaps not federal dollars.

James Howard Kunstler: The old American dream is a nightmare

Kunstler has long warned of the horrendous hangover we're going to wake up with after our "cheap oil fiesta," but he's not gloating as global instability and climate destabilization become the new not-so-normal. Unlike some dystopians, he's motivated less by the desire to say "I told you so" than by the hope that we might still manage to reinvent the American dream on a scale that better suits our current circumstances.

Lawmakers Down to The Wire on Marcellus Regulations

As they enter the last few days of the legislative session, state lawmakers are still working out the details of proposed regulations for Marcellus Shale development.

Fort Worth Democrat Pushes Repeal of Gas Drilling Tax Break

Rep. Lon Burnam, D-Fort Worth, has introduced legislation to repeal a tax break for high-cost natural gas production as part of a package of revenue-raising measures that he says is needed to help soften the impact of deep budget cuts being advanced in the Republican-controlled Legislature.

Bridgeport coal plant's owners dispute activists' claims facility is dirty, losing money

Since 2008, the plant's peak output in the summer has dropped 60 percent, but operating costs have gone up 30 percent during that same time, Greenpeace member Robert Gardner said. Those increased costs are eventually passed on to ratepayers, he said.

But Bridgeport Harbor will continue to run as long as there is a demand for its energy, Public Service Electric & Gas spokesman Nancy Tucker said. PSEG, a national energy company based in New Jersey, owns the power plant.

Beyond food miles

The report contains some surprises. Transportation is the smallest piece of the food system energy pie. Even farming isn’t a particularly big contributor. The big energy users turn out to be food processing, packaging, selling, and preparation. Our kitchens command the biggest slice of the pie, using twice as much energy as the farms that grew the food in the first place.

Dissecting that little transportation component of the system offers more surprises. The distance food travels between farm and fork has little impact on how much energy it takes to get there.

8 green stars at Most Admired companies

Turning plants into bottles? Putting airline cabins on a diet? Meet 8 leaders at Most Admired companies that are devising innovative ways to make their firms greener.

Analysis: Oil over $100 pressures Asia to cut subsidies

(Reuters) - High oil prices are straining the coffers of Asian governments, forcing them to contemplate rolling back fuel subsidies despite the political cost amid rampant food inflation, and even though the move risks hurting demand.

...Vietnam and Pakistan have both raised fuel prices recently to narrow the gulf between what consumers pay at the pump and what importers pay on international markets, although Pakistan quickly rolled back half the raise in the face of domestic political opposition.

If more countries follow suit and cut subsidies, higher prices would slow the pace of the region's oil demand growth.

Oil prices threaten double-dip recession

Further sharp increases in the price of oil would be enough to push some advanced economies back into recession, says Nouriel Roubini, the economist who predicted the global financial downturn.

Unrest in the Middle East has contributed to driving up prices to post-global recession peaks.

Analysts are now asking whether prices could touch the record highs of 2008, shortly before the financial downturn sent them tumbling.

Filling Stations Fret Over Price Creep

“The people will only spend so much money on gas, so they drive less,” he told me. He has seen a change in consumer behavior over the last three weeks, he said. His customers now are filling their tanks halfway. They are buying fewer bags of chips, fewer drinks, even fewer packs of cigarettes these days. Some people have even begun to join carpools. “People who used to change their oil every 3,000 miles,” he added. “Now they are saying, ‘I’ll wait till I get my next paycheck.’ ’’

What to do about fuel prices?

There can be no ambiguity in the effects for New Zealand of steadily rising fuel costs.

Even in normal times, they would impact on the cost of living and constrain the competitiveness of business operations.

Commercial operations of all manufacturers and retailers will be adversely impacted should prices continue to rise.

But in the rural sector, where the majority of our export earning capacity lies, the effects will be amplified.

Kuwait protesters bring reform demands to streets

KUWAIT CITY - Hundreds protested outside Kuwait's main government building Tuesday to demand sweeping changes on how the oil-rich country is run as another Gulf state joined the surge for reforms around the Arab world.

Jeff Rubin: Is the house of Saud next?

As Libya descends into a bloody and protracted civil war, both the White House and International Energy Agency are considering tapping strategic oil reserves.

Normally, no one would care what’s happening in a remote desert country that has been a pariah state for decades. But when you produce 1.6 million barrels a day of oil in a market in which global supply and demand was already balanced on a knife –edge, all of a sudden everybody cares.

U.S. Credit Swaps Index Reverses Drop as Libya Violence Drives Oil Higher

The cost of protecting U.S. corporate bonds from default rose, reversing an earlier decline as the cost of oil climbed.

Taking a Risk for Rare Earths

KUANTAN, Malaysia — A colossal construction project here could help determine whether the world can break China’s chokehold on the strategic metals crucial to products as diverse as Apple’s iPhone, Toyota’s Prius and Boeing’s smart bombs.

As many as 2,500 construction workers will soon be racing to finish the world’s largest refinery for so-called rare earth metals — the first rare earth ore processing plant to be built outside China in nearly three decades.

For Malaysia and the world’s most advanced technology companies, the plant is a gamble that the processing can be done safely enough to make the local environmental risks worth the promised global rewards.

EPA asks Pa. to boost monitoring of gas well waste

The Environmental Protection Agency has asked Pennsylvania regulators to begin testing drinking water for radium in some places to make sure it isn't being contaminated by wastewater from the state's booming natural gas industry.

In addition to producing gas, the thousands of wells now being drilled into the Marcellus Shale rock formation produce large amounts of ultra-salty water tainted with metals like barium and strontium, trace radioactivity, and small amounts of toxic chemicals injected by energy companies.

Federal hearing in Pa. addresses gas pipelines

KING OF PRUSSIA, Pa. – A Pennsylvania utility executive said at a congressional hearing Monday that it's possible a leak in a natural gas pipeline developed after an inspection a day before an explosion that killed five people in Allentown last month.

When Energy Efficiency Sullies the Environment

For the sake of a cleaner planet, should Americans wear dirtier clothes?

This is not a simple question, but then, nothing about dirty laundry is simple anymore. We’ve come far since the carefree days of 1996, when Consumer Reports tested some midpriced top-loaders and reported that “any washing machine will get clothes clean.”

Digging Up Energy Savings Right in Your Backyard

Five years ago, my husband and I walked out of what was left of our historic house after a propane explosion. As the house caught fire, the cat jumped out to safety, too. When we rebuilt, we wanted to avoid burning fossil fuels in our new home, and I remembered reading an article about an architect who drilled geothermal wells to heat and cool his Lower Manhattan town house.

Cambodia's Isolated Villagers Change Their Lives With Lower-Cost Solar

Living in this typical Cambodian village without electricity, Phat used to do homework by a kerosene lamp that emits no more light than a cigarette lighter. The dim ray hurt his eyes, made him drowsy and forced the boy to quickly give up his tasks.

That dark homework time ended in February with a gift from his aunt. What Phat received is a small solar array, which powers three light bulbs and made his wooden hut fill with bright light for the first time.

Making Vancouver sustainable: Greenest City meets Village Vancouver

On March 5, 2009, Mayor Robertson announced Vancouver would become the Greenest City in the world by 2020. With his announcement, backyard chickens were legalized and Vancouver City Hall converted a large swath of its lawn into a community garden.

'Agroecology' Could Help Stave Off World Hunger

Food production in many of the world’s poorest regions could as much as double with small-scale “eco-farming,” a system that could also help fight climate change, the United Nations reported Tuesday.

At House E.P.A. Hearing, Both Sides Claim Science

WASHINGTON — Science and politics rarely play nicely together, and a House hearing Tuesday on a bill to strip the Environmental Protection Agency of its power to regulate greenhouse gas emissions proved no exception.

Democrats Provide a Counteroffer to GOP Cuts on Energy and Climate

Senate Democrats are seeking to protect energy and climate programs targeted by the House's aggressive budget cuts, a move that accelerates the chambers toward a clash over President Obama's key priorities and a possible government shutdown.

Yet even as the Senate established a defensive perimeter, its spending plan released Friday afternoon made it clear that funding cuts are coming to renewable energy programs, climate research and U.S. EPA. The question is, by how much?

Snubbing Skeptics Threatens to Intensify Climate War, Study Says

Listening to climate change doubters, and not dismissing them, might avert a "logic schism" similar to the political stalemate on abortion, according to a new paper involving research on skeptics.

Nansen G. Saleri: Our Man-Made Energy Crisis

There's plenty of oil and no fundamental reason to expect prices of $200 per barrel. But that doesn't excuse the administration's punitive approach toward the industry.

The unfolding turmoil in Libya has amplified concerns about the reliability of global energy supplies in an era of political uncertainty. Is oil at $200 per barrel inescapable? Is this the beginning of the end so vigorously underscored by peak oil enthusiasts for the last several decades? The short answer is clearly "No."

Yes, the world still has plenty of oil, but ...

The loss of Libya’s oil output — even all of it — would remove a relatively small percentage of total global supplies. In any case, Saudi Arabia is believed to have enough spare capacity to cover any shortfall.

But that’s where the oil market’s nightmare scenarios begin. With virtually no other spare capacity, the global oil market is running on fumes. And no computer model can predict whether — or how far — the turmoil will spread in the richest oil production region in the world

“A little over two weeks ago, we were trading below $85 a barrel,” said Addison Armstrong, research director at Tradition Energy. “This price move that we've seen over the past 14, 16 days is all related to what amount to concerns over what could happen."

Oil near $105 amid mixed US demand, Libyan crisis

Oil prices remained near $105 a barrel Wednesday amid mixed signs about U.S. demand and as fighting continued in Libya between rebels and forces loyal to Moammar Gadhafi.

Gas prices are about more than just oil

When Jay Ricker, owner of the BP gas station off Interstate 70 in Plainfield, Ind., set the price of unleaded gasoline at $3.44 per gallon on Monday of last week, it was 4 cents higher than the Friday before.

That alone might have been irritating to drivers paying the highest gas prices in more than two years. It was even more so because it happened on a day when the price of crude oil, which is used to make gasoline, fell almost $1 a barrel.

Libya's revolt squeezing world oil supplies

The world faces an oil supply crunch, according to oil services companies who have most to gain from surging prices and the unrest in north Africa and the Middle East.

Ayman Asfari, the chief executive of FTSE 100-listed company Petrofac, said if production were entirely shut off from Libya, only a "very thin" margin of spare capacity to pump more oil would be left.

Oil Market Remains Well-supplied, Saudi Naimi

(MENAFN - Qatar News Agency) Saudi Oil Minister Ali Naimi denied Tuesday the surge in oil prices reflects a shortage of crude on the market, but said the Kingdom is committed to tapping excess supplies if needed.

OPEC has so far held its official output quotas unchanged, even as massive protests across the Middle East have pushed global oil prices to their highest levels since late 2008. An uprising in OPEC member Libya has stoked supply concerns, increasing pressure on the producer bloc to pump more to ease prices. Al-Naimi said the oil market remains well-supplied.

OPEC Considers Urgent Meeting as Saudis Create New, Low-Sulfur Oil Blend

OPEC members are discussing whether to hold an emergency meeting to consider increasing oil production, Kuwait’s oil minister said.

“I’ve talked to Abdalla El-Badri in this regard, and he is calling everybody and making a consensus on whether we’ll need an OPEC meeting, an urgent meeting,” the Kuwaiti minister Sheikh Ahmad al-Abdullah al-Sabah told reporters in Kuwait City today. El-Badri is the secretary general of OPEC. “We have to find out at the meeting whether there is a need for an increase or not,” the Kuwaiti minister said.

Oil and the S&P 500: Something's Got to Give

The current regime will last, but not for the duration it did in 2008. The oil price that would trigger negative impact on world growth is most likely below the 160 USD thresholds. In the short run expect this regime to prevail. The resilience of the equity market shows some signs of declining in the wake of a growing risk premium, embedded in oil prices. Any downward adjustment in the political oil premium will prove initially conversely supportive for equity markets.

Oil Tanker Rates Doubling on Lower Speeds, Libya Uprising

Supertanker owners are coping with the second-highest fuel costs on record by sailing ships at the slowest speeds in at least three years, reducing vessel supply and bolstering charter rates.

Cam Hui Is Still Right: Oil Futures and Gasoline Consumption May Fall Soon

The title of this article refers to SA Author Cam Hui's famous prediction in the summer of 2008 that "We'll see $100 per barrel oil before we see $150 per barrel oil." This author believes that Mr. Hui's prediction applies to the current oil market as well, except now downside pressures may be even more intense.

Several factors are in play right now that are likely to bring oil futures back down into the high 80s to low 90s range before the middle of April and there are likely to be long term effects of high gas prices on the oil futures markets and consumer behavior.

Eni's 41-Year Qaddafi Link Means Lowest Oil Industry Valuation

Eni SpA (ENI)’s four-decade relationship with Muammar Qaddafi’s regime in Libya has exacerbated its position as the cheapest stock with the highest credit risk among the world’s largest oil companies.

How much oil is left?

Greenbang CEO Dan Ilett posed a simple question to our team over the weekend:

“Guys — how much oil is left?”

Why are gas prices rising? Gasbuddy.com tells us why

Peak Oil theory says that we’re currently at maximum global output, and output will not go up in the future. There may be some validity to this theory as resources of easy to get to crude oil are dwindling rapidly. This is why they need to get crude oil in the Gulf of Mexico, and other hard to get to places. Having said that, speculators looking to make a profit do drive up prices too. This has a somewhat limited effect, as at the end of the month, someone needs to take delivery on the oil contract.

Oil’s well that ends well

It is a fair bet that within three years, oil prices won't just be back where they are today - they will be HALF what they are today.

Malthus Lives on With Peak Oil Alarmists

History has shown time and time again that Malthus was wrong. The population growth has not outstripped the food supply. Malthus’ predicted social catastrophe never happened because necessity is the mother of all inventions — when more food was needed to feed a growing population, there were innovations or alternatives discovered.

When it comes to energy, Malthus lives on with those who believe in peak oil. Peak oil is the idea that humans have reached the point of maximum oil production, and that proven reserves will be depleted. Despite these claims by peak oil alarmists, world proven reserves have doubled since 1980.

They haven't got us over a barrel at all

The interesting question is why so many seem to have a stake in terrifying the public. Different people have different reasons. For Chris Huhne, it is to persuade us to shift to renewable sources of energy (although his vision of electric cars powered by wind energy could lead to a situation in which only multi-millionaires like him would be able to afford to drive at all). More generally, British politicians like to disguise the extent to which high domestic oil prices are a function not so much of Arab greed but of the enormous taxes they themselves impose on petrol at the pump.

Continent below the oceans: how much and how far? The future for deepwater exploration (and geopolitics)

US Geological Survey global reserve estimates are based upon conventional perception of the extent of continental crust below the sea—most submarine crust is oceanic and uninteresting. Reconstructions of Pangaea, the supercontinent that existed until Triassic rifting and Jurassic drift, show assemblages unrealistically on one side of the planet and laud "tight fit" of reconstructions practically at the coastline. They leave little leeway for exploration below the deep sea.

This article describes a rationale for industry to be more optimistic and explore wider and deeper.

From Russia with Love

Guess who's the world's largest oil producer?

You said Saudi Arabia, right?


Russia passed the desert nation last year and is now producing 9.93 million barrels per day, according to the most recent data from the Energy Information Administration (EIA). The Saudis have fallen to second with 9.76 barrels per day.

This goes against everything Middle America thinks it knows — and against most of what you read in the media.

Industry working to deal with oil spill threat

Australia's peak oil and gas industry body says it has been working vigorously to make sure companies have the necessary measures in place to deal with an oil spill.

Oil exploration: not a price worth paying

Have the world's oil companies learned nothing from the Deepwater Horizon spill which poured 200 million gallons of crude oil into the Gulf of Mexico for three months last year? It seems not. The petroleum giant Shell has now applied to start exploration drilling just off Ningaloo Reef, one of Western Australia's most treasured marine-life nature reserves. It is famous for its whale sharks and one of the most bio-diverse coral reef systems in the planet's oceans.

United scraps expansion plans because of oil

CHICAGO — United Continental Holdings Inc. is scrapping plans to add flights this year, and says it will drop unprofitable routes because of rising fuel prices.

The announcement from the world's largest airline company on Monday is the latest example of airlines shifting plans because of the run-up in oil prices. Southwest Airlines matched an industry-wide fare hike, and the smaller Frontier Airlines said it would reduce growth plans.

Public transport numbers rise with cost of fuel

Skyrocketing petrol prices have seen Wellingtonians flocking to public transport.

Passenger numbers on Wellington's rail service during February were up 6% on last year. A similar increase was seen two years ago when petrol hit record highs.

Gadhafi: Libyans will fight no-fly zone

TRIPOLI, Libya (AP) — Moammar Gadhafi said in an interview broadcast Wednesday that Libyans would fight back if Western nations impose a no-fly zone to prevent the regime from using its air force to bomb government opponents staging a rebellion.

Ebadi says Arab-style revolt certain soon in Iran

GENEVA (Reuters) – Iranian Nobel peace laureate Shirin Ebadi said on Wednesday an Arab-style popular revolt would come soon to her country, driven by poverty and the fierce oppression of critics by its Islamic rulers.

Officials: 11 killed in Egypt sectarian clashes

CAIRO (AP) — Security and hospital officials say Muslim-Christian clashes in the Egyptian capital Cairo killed 11 people and wounded more than 90.

Make energy cost more

The concept of the rebound effect is not a new one. Its original name, in fact, is the Jevons paradox, named after English economist William Stanley Jevons. In a book published in 1865, Jevons took a look at advances in the technology of coal-consuming industries and machinery, making them more efficient. But instead of decreasing coal consumption, this increased efficiency pushed it up. More than a century later in the 1980s, economists Daniel Khazzoom and Leonard Brookes took a fresh look at the issue in what is now called the Khazzoom-Brookes postulate and came up with similar conclusions. These are the foundations of the Breakthrough Institute's study. Far from being some controversial, crackpot theory, it is carrying on an established line of research.

Not a waste of energy

To say energy efficiency is vital for human welfare is a truism. Developed and developing nations may quarrel over targets linked to carbon emissions reduction. But neither doubts it must contribute to realising such cuts by conserving energy. However, going by a recent study, achieving greater energy efficiency may be a waste of time courtesy its 'rebound effect': a proportionate rise in energy demand. US think tank Breakthrough Institute suggests the gains registered as energy savings could thus be erased, and carbon emissions actually increase. For, higher energy efficiency seems to boost rather than trim energy consumption.

The perpetual politics of petroleum

The boom-bust cycle of oil politics is booming this week on Capitol Hill, where the only thing more predictable than politicians’ policy solutions are their claims that the other side is ignoring the issue.

Gas guzzler hedge fund could help alleviate pump pain

With gas bearing down on $4 a gallon and no ceiling in clear sight, why not create a hedge for the consumer - a simple, low-cost stock-market investment that increases in value as pump prices rise?

If the smart guys on Wall Street can dream up credit default swaps, they can slap together something as elementary as this.

The short and long-term future of oil

Oil executives are meeting in Houston. Reporter Scott Tong discusses whether there is panic among execs at the energy conference and what's in store for the oil industry going forward.

Total’s De Margerie Keynotes CERA Conference, Sees No Oil Supply Concerns From Mideast Strife

In the keynote speech to open the CERAweek conference in Houston today, Christophe de Margerie, chief executive of French oil giant Total said that despite political unrest in north Africa and the Middle East, he sees “no reason to consider there is a risk of sufficient supply,” later adding “I don’t see major concerns as far as the production of oil and gas is concerned.”

Regarding calls that President Obama should open the Strategic Petroleum Reserve to help placate high gasoline prices, de Margerie says that with Saudi Arabia still capable of replacing the 1 million barrels per day of Libyan oil there is no defensible argument to open the SPR. Doing so “would send the message that we are scared,” he said. We should just “wait and see if there is a real shortage of oil.”

Mongolia Seeks Balanced Growth to Avoid `Dutch Disease' From Mining Boom

Mongolia needs to look beyond the coal and copper mines that are driving its economic boom to find a more balanced model of growth, Prime Minister Sukhbaatar Batbold said.

Australia Will Begin Talks to Sell Uranium to U.A.E.

Australia will enter talks to sell uranium to the United Arab Emirates as the second-biggest Arab economy aims to start a nuclear power program in 2017, Foreign Minister Kevin Rudd said.

Impax, Hudson Clean Energy Join Investors Suing Spain on Solar Subsidy Cut

Impax Asset Management Group Plc (IPX), Hudson Clean Energy Partners and HGCapital are among at least 15 international investors suing the Spanish government over retroactive cuts to the country’s solar power subsidies.

Race for better biofuels heats up

Scientists who engineer microbes to efficiently produce biofuels from plants and algae are busy reporting breakthroughs that could wean us from fossil fuels — offering a glimmer of hope to consumers eyeing gas prices skyrocket.

In one breakthrough, a microbe has been genetically engineered to produce isobutanol, a gasoline-like fuel, directly from cellulose.

"That's the first time cellulose has directly been used to produce four-carbon alcohols," James Liao, vice chair of chemical and biomolecluar engineering at the University of California, Los Angeles, told me today.

New study to look at economics, groundwater use of bioenergy feedstocks

AMARILLO – Biofuel feedstock production in the Texas High Plains could significantly change the crop mix, which could affect regional income and groundwater consumption, according to Texas AgriLife Research and Texas AgriLife Extension Service economists.

'2050 strategy' builds on energy savings

Europe must invest heavily in efficiency to limit spiralling energy costs and beat its own target for cutting greenhouse gas emissions, the European Commission said yesterday (8 March), unveiling plans to move to a competitive low-carbon economy by 2050.

Smart meters raise suspicions about accuracy

Coast to coast, from Maine to Marin County, Calif., the number of homes being outfitted with smart meters that keep a close eye on homeowner electricity use is on the rise. And so is the number of folks who think smart meters are a dumb idea.

Can We Make Electronics Without Factories? The Future of Gadget Design

Dominic Muren has a great way of looking at greener gadget design -- make it simple, make it repairable, make it upgradable. The longer gadgets last, the less overall environmental impact they have. He gave a great TED Talk on the idea, and we were lucky enough to get him to talk more about the essentials of green gadget design and his hopes for the future of electronics. Read his rapid-fire 5-question interview, and maybe change your mind about how our consumer electronics should be made.

Change Is Coming; Get Used To Your New "Normalized" Lifestyle

Remember that lifestyle that we all enjoyed back in the year 2000. Remember it with fondness because it's gone and it's not coming back. Welcome to a new, "normalized" lifestyle that will be yours into the foreseeable future. This society, long caught up in the grip of hyper-materialism, went too far, too fast and now that bubble has burst. Dramatic changes to our lifestyles are coming and, like it or not, we will just have to learn how to live much simpler lives, doing more with less.

Surviving the Apocalypse in the Suburbs

Surviving the Apocalypse in the Suburbs envisions a suburban evolution -- from isolated cookie-cutter houses with manicured lawns and 2-car garages to small, closely packed, productive, interdependent homesteads. This guide to simplifying suburbia and adopting a lower energy lifestyle breaks down all our basic needs and describes how they might be met after the loss of the modern conveniences we currently take for granted. From small-space gardening techniques and a guide to small livestock, to tips on cooking, heating, and sanitation options and much more, this is a complete guide to becoming more self-sufficient wherever you live.

Small Is Possible

In an era when incomprehensibly complex issues like Peak Oil and Climate Change dominate headlines, practical solutions at a local level can seem somehow inadequate.

In response, Lyle Estill's Small is Possible introduces us to "hometown security," with this chronicle of a community-powered response to resource depletion in a fickle global economy. True stories, springing from the soils of Chatham County, NC, offer a positive counter balance to the bleakness of our age.

Crossing the 'green frontier'

We are now in the early stages of what has been called the Third Energy Revolution - the first was harnessing fire, the second was the Industrial Revolution. We now are exploring the "green frontier" as we adapt to historic changes. And the opportunities are unprecedented and unlimited.

Is this to be America's new Manifest Destiny? Boldly, we can make it so. Those who seize the day will thrive; those who ignore or deny this opportunity - like blacksmiths deriding automobiles - will diminish or disappear.

Western China the 'Middle East' for coal?

LONDON (UPI) -- Western China's vast coal reserves could make it the "new Middle East," a top coal industry official said.

Plan for new coal-fired plants heats up at the Capitol

Despite appeals from youth, health and environmental groups, House and Senate panels voted overwhelmingly Tuesday to lift restrictions on new coal-fired power in Minnesota.

The Republican-led push sent the legislation to the floors of the respective bodies, where the Senate could take action as early as next week.

Coal vs. gas debate rages over which energy spews more methane into Colorado skies

Colorado’s coal industry is on fire lately, going after natural gas producers with gusto in the wake of last year’s controversial Clean Air, Clean Jobs Act, which requires Xcel Energy to convert several coal-fired power plants on Colorado’s Front Range over to natural gas or alternative fuel sources such as wind and solar.

Gas is touted as burning up to 50 percent cleaner then coal and dramatically reducing carbon dioxide emissions as well as the amount of nitrogen oxide, sulfur dioxide and mercury spewing into Colorado’s air. Colorado coal backers, however, strongly dispute the notion that natural gas is superior at all in terms of reducing greenhouse gas emissions.

It's all in a name: 'Global warming' vs. 'climate change'

Overall, 74 percent of people thought the problem was real when it was referred to as climate change, while about 68 percent thought it was real when it was referred to as global warming.

These different levels of belief may stem from the different associations carried by the two terms, Schuldt said. "While global warming focuses attention on temperature increases, climate change focuses attention on more general changes," he said. "Thus, an unusually cold day may increase doubts about global warming more so than about climate change. Given these different associations and the partisan nature of this issue, climate change believers and skeptics might be expected to vary in their use of these terms."

World trade growth may propel fourfold increase in size of the maritime carbon footprint, WISTA UK meeting is told

Merchant shipping's already huge carbon footprint is set to increase massively, based on present international trade potential, Dr Martin Stopford, managing director of Clarkson Research, has forecast. Speaking to a monthly meeting of WISTA-UK (part of the Women's International Shipping & Trading Association), Dr Stopford underlined the role that fossil fuels had played in the last two and a half centuries, in driving the maritime industries forward.

Polar ice adding more to rising seas: study

(PhysOrg.com) -- The Greenland and Antarctic ice sheets are losing mass at an accelerating pace, according to a new NASA-funded satellite study. The findings of the study -- the longest to date of changes in polar ice sheet mass -- suggest these ice sheets are overtaking ice loss from Earth's mountain glaciers and ice caps to become the dominant contributor to global sea level rise, much sooner than model forecasts have predicted.

Massive explosion at Ras Lanuf oil refinery/export complex - storage tanks hit. Smoke rising miles into the sky.


2.12pm: At least three bombs have been dropped on an oil terminal outside Ras Lanuf has been hit by at least three bombs, al-Jazeera's Jacky Rowland reports. The images on television show a huge plume of smoke coming out of the oil terminal. Rowland says there is "intense fighting" in the oil port.

Live video at http://english.aljazeera.net/watch_now/

Edit: feed dropped just after I posted - I 'm sure they'll get it back as will other networks.

Ambrose Evans-Pritchard: Oil markets brace for Saudi 'rage' as global spare capacity wears thin

The world's economic fate now hangs on the success of Wahabi repression. Any sign that the Saudis are losing their grip risks an oil shock large enough to derail the global recovery. Nobody knows where the "inflexion point" is. Bank of America says we are already in the danger zone since energy costs as a share of global GDP have reached 8.5pc, near historic peaks.

This Fri 11th is the planned 'Day of Rage' in Saudi. Could be a very interesting day indeed...


And an interesting quote from the comments on this article: http://blogs.independent.co.uk/2011/03/07/will-saudi-be-the-next-to-rise...

Now we turn to Libya. Gadhafi has the USA and Saudi Arabia over the provable barrel. If Saudi encourage or interfere with Gadhafi as a cruel murdering dictator the Saudis people will be thinking why should they settle for $38 billion gift when all of the country’s wealth belongs to its people? They could vote in a parliament who would decide how best to invest the country’s wealth and I doubt that will be in the pockets of thousands upon thousands of bastards that the Saudi royal family have squired from wives and concubines and are given huge sums of money and don’t work for it. And on the other hand if the Americans are encouraging democracy throughout the Middle East why are they making an exception for Saudi Arabia? Wouldn’t that be hypocrisy writ large?

The article quotes Jeff Curriil, Goldman Sachs oil guru:

"We believe that OPEC spare capacity has already dropped below 2m bpd. The question therefore arises how much spare capacity is left to absorb potential supply disruptions in other countries," he said.

If this picture is broadly correct, spare capacity is already close to the wafer-thin levels that led to wild price moves in mid-2008.

The article quotes Chris Skrebowski:

Chris Skrebowski, editor of Petroleum Review, said the long-denied oil crunch is starting to bite. "We cling to the comfort blanket that spare capacity exists, but it is mostly fictional, or inoperable. If you take 2m bpd off the figure, the whole dynamic of global oil supply changes," he said.

Oh, you beat me to it. That is the best peak-oil statement, without saying peak-oil that I have ever seen.

the long-denied oil crunch is starting to bite

My "15 Minute" analogy:

Egypt, a classic case of rapid net-export decline and a look at global net exports

Consider the first 15 minutes after the Titanic hit the iceberg versus the last 15 minutes before the ship sank. In the first 15 minutes, only a handful of people knew that ship would sink, but that did not mean that the ship was not sinking. In the last 15 minutes, it was readily apparent to everyone that the ship was sinking, but by then it was far too late to try to get to a lifeboat.

That fits. Yesterday, a Saudi spokesman said that they have redirected oil shipments but have not yet increased production. Also asking for Kuwait's help indicates that the Saudis are unable to produce more crude.

Bank of America says we are already in the danger zone since energy costs as a share of global GDP have reached 8.5pc, near historic peaks.

I've read on several web pages that 7% is what brings down an economy. Also that oil prices above 85 US$ have this effect. If true, bye bye recovery. Not that anyone here at TOD would be surpriced.

I suggest that this time round the level for recession/depression will be higher than 7%.

Think of economy energy users as a herd of buffalo. As the wolves of high oil prices tear down and eat the slowest moving members, the average speed increases. The US average efficiency will increase, if not by action, then by attrition.

Reuters reporting Zawiyah refinery is down too:

TRIPOLI, March 9 (Reuters) - Heavy fighting has forced a shutdown of one of Libya's biggest refineries in the flashpoint town of Zawiyah 50 km (30 miles) west of Tripoli, a refinery official said on Wednesday.

"Heavy weapons have been fired nearby and we can't run the refinery under these conditions," the official told Reuters.


Should be interesting to see what this does to oil prices -- seeing infrastructure be damaged is different than just having refineries shut down.

If other nations do not help stop gov't choppers and tanks, I imagine the rebellion will soon falter.

Will anybody really care, as long as the oil flows again?

Reminds of the Far Side cartoon:

"Buy the oil - it's good for you. Besides, nobody died that we know."

If other nations do not help stop gov't choppers and tanks, I imagine the rebellion will soon falter.

The slogan everything is political is critically certain with the situation in Libya. The US is hesitant to do anything for fear of it smacking of our previous foray into Iraq to secure its oil. But if any situation deserved intervention it is the one in Libya for several reasons. Kaddafi is insane, their oil if offline, the people of Libya have not benefitted from their oil wealth and the rebels only need to be supplied weapons to defeat a fairly weak kadaffi lead army. It's so painfully obvious to intervene, but like I stated above, it's not politically advantageous.

Along these lines Obama now seems to have been rendered completely unable to act. His motivation to get things done has been cancelled out by his concern for how much hatred the right will throw his way. He's scared of his own shadow. He's even endorsed Bush jr's use of Guantanomo, unilaterally reinstated the super wealthy bush jr. tax cuts, stayed in Afghanistan and Iraq and is slowly but surely giving ground on his healthcare. He failed to do anything about lobbying, which is why I voted for him. If he doesn't want to run with the ball, then go home!

It's worse than that, though. If he does act in Libya, then why not in Ivory Coast, or Rwanda, or Somalia? Does the US only act in places where the "national interest" is oil? And not where freedom and safety is at risk? If we act, do we "own" whatever results - you break it, you buy it?

Right, the UN should be seen to be leading this, not the US.

It does smack of double-standards at times, but perhaps that's just the unfortunate inevitable backlash from Iraq/Afghan.

DR Congo, Iran, North Korea and Zimbabwe are other v. obvious candidates for intervention.

I am actually OK with saying "we WILL break things, and not fix it", and "we don't act militarily for humanitarian causes, only for national interests", and "we give liberally to the Red Cross, nationally and individually - lean on them", and "we use the CIA and special forces where the State Dept falls short".

What I don't agree with is having a flexible and unclear foreign policy which shifts case by case and day by day, and saying things unilaterally with no expectation of force to back things up (that's what the UN is for). Teddy R. had it closer to right, I think.

No matter how many times they play the drums of war, people will still dance. They always sound so good, don't they? This time the cause is just! This time we'll make things better buy killing people and blowing stuff up.

I ain't buyin' it.

Any motion at the UN Security Counsel will be vetoed by China because, if there is unrest in China, then the same present arguments could apply to interfere there as well.

Interesting point. Perhaps they might just abstain?

And Russia - Russia has already stated they would veto any motion for a no-fly-zone.

It is convenient for Sec Clinton to say that the UN should organize an international response when she and the president know very well that NOTHING will get past China's security council veto.

The slogan everything is political is critically certain with the situation in Libya. The US is hesitant to do anything for fear of it smacking of our previous foray into Iraq to secure its oil.

No... it is not "hesitant". It is against the nature of the US governmental culture that has been in play for the last 30 years (or is that the last 150 years?) to do what you suggest. You seem to have the idea that the US is to other countries what Boy Scouts are to little old ladies waiting to cross the street. Paleocon's view below,

I am actually OK with saying "we WILL break things, and not fix it", and "we don't act militarily for humanitarian causes, only for national interests",

is closer to the reality. Closer, but not nearly dark enough, in my opinion.

The government does not see right and wrong here...it is all about timing. If the US government thought they could end the war, restore the oil flow, and stop the uncertainty, they would. (Actually, they don't care about stopping the war...it's just that it is the only way to get the other two things.)

But they can't.

And they know it.

Give the guns to who?
Who would be in charge?
How would the Oil profits be distributed to the populace?
Who would stop the Kadaffi forces from staging a counter-coup if someone else takes power?
How can the Oil Infrastructure be protected from the losing side?
And about a hundred similar unanswerables.

The US is a colonial power who doesn't give a rat's a$$ about anyone who's not very, very rich inside it's own borders. The only reason to intervene is if it thinks it can gain some advantage: in this case, the speed with which the oil flow can be restored. The timing.

You (the National you) don't really care about brown people on the other side of the world except to steal their oil from them(not Americans individually, of course...but 300 million of you put together do seem to have nothing but bad ideas.)

My guess is that whatever comes out of the Libyan Civil war is not going to make Americans happy: it will take years to get half the production they have now back online, they will use more of their own oil in country because of ELM, and they will continue to fight amongst themselves.

If you were to intervene on a large scale (which is to say occupy the country, which I know you didn't suggest) you'd get the same thing, only years later at a cost of trillions of dollars and hundreds of American lives. Oh...and the Libyans would hate you.

Intervene on a small scale, you get Osama Bin Laden 10 or 20 years down the road.

President Obama should be congratulated for not getting you into another quagmire.(So far, that is...)


They could, however, be more outspoken. Kudos to France for the latest:

BREAKING NEWS: France recognises the Libyan Transitional National Council as the sole legitimate representative of the Libyan people, says the office of President Nicolas Sarkozy according to Reuters.



This time leave it to the Europeans and let them deal with their Arab populations.

So now Gaddafi is in the process of bombing his own oil infrastucture. This global "oil shock" may last a lot longer than many pundits predicted.

Sounds a bit like the actions of a man clutching at straws...?

Reports not clear if bombing was intentional or even if it was outgoing fire from rebels. May become clearer later.

AJE reporter who was on the front line saying that it appears that the fire was started by bombs dropped from war planes. Although there were some pro-Gadaffi mortar troops in the refinery around the time the bombs were dropped raising questions about the communication/organisation of Gadaffi's troops.

Yes, I just heard that. An earlier report from the scene suggested that the rebels were firing anti-aircraft weapons in that direction at Gaddafi planes at the time. Also still not clear if refinery itself damaged or just export storage tanks. Don't suppose there are many fire suppression teams putting it out though

Don't suppose so! I wonder how long a refinery would be out of action even with the best conditions in the country?

Libya rebels, govt trade blame on oil blast

(Reuters) - The Libyan government and rebels fighting it accused each other of blowing up oil facilities in the east of the country on Wednesday.

Yeah, but the AJE reporter was actually there on the frontline when it happened and she was saying it was bombs from a plane. It might be retracted later, but that's what she said on the live-link.

Although if you are right there and an explosion goes off not too far from where a plane is bombing then you may just assume it was the aircraft. Another reporter more distant thought it was maybe the anti-aircraft fire directed from near where he was reporting.

But if we assume it was the air-force for now , was it deliberate? Hmm.

That's the key - if it was deliberate or not. If so, then it seems likely it would only be done by someone with the possibility of losing on their mind.

In terms of the pro/anti forces, who does it most hamper in the short-term? The anti I guess?

Edit: The AFP report that an eyewitness says the planes definitely bombed an oil pipeline. Doesn't confirm the actual refinery though: http://www.google.com/hostednews/afp/article/ALeqM5i5b9YaRAa1K0RDskJY_R-...

Fog of war.

The reality of crippled oil infrastructure will focus Western minds around a 'No Fly Zone' wonderfully.

If Gaddaffi is seen as being prepared to bomb oil infrastructure, he will become an immediate target for elimination.

Right, and now apparently they've targeted oil storage in other areas:

Reuters reports: Forces loyal to Gaddafi launch a bombardment near rebel positions around the east Libyan oil terminal of Es Sider, blowing up storage tanks at the facility.


That's actually the same facility. we are talking about at Ras Lanuf. It's the official name of the export terminal I believe.

Ah, thanks. Probably why the BBC seem to have removed that post from their live blog now!

Let's just hope nobody hits the natural gas tanks which, according to CNN, are close by.

...hope nobody hits the natural gas tanks...

Ash Wednesday has taken on new meaning.

Anybody for giving up gasoline for Lent?

If I was a rebel, I would blow up a little of the oil infrastructure myself, so as to get the no-fly-zone a.s.a.p.
Because, that is the only way to stop the bombs from dropping on my head.

It's great to analyze the play-by-play of the fight, but, it isn't over.
I mean, if they keep fighting, there will be plenty of "oops, I didn't mean to blow that up" moments.
After it's all over. How long before you or I would feel safe to go in and help them rebuild the oil infrastructure?

Right, culpability aside for the minute, how long would it take to get an alight oil refinery back online even under the best of circumstances?

New report says "An engineer working at a major east Libyan oil terminal said air strikes had hit the Sidrah port and destroyed storage tanks as well as facilities such as the power and water plants"

Again this refers to the same facility near Ras Lanuf they've been talking about all along.

You'd think the engineers on the ground would have the best idea of what happened. So my money's on Gadaffi right now..

I'm still not totally sure. Both Al Jazeera and Press TV have now reported that outgoing multiple rocket fire at the time was directed at the source of the mortars targetting them. Unfortunately the pro-Gaddafi mortar team was apparently firing from close to the storage tanks which were hit and even the Al Jazeera reporter (who said it was a bomb dropped) said she was surprised the airforce was bombing right over its own troops. Maybe journalists can put together multiple bits of footage and work it out but it certainly seemed that the rebels were firing multiple rockets that way just before the explosion.

There is also clearly smoke rising from at least two distinct locations. Perhaps both sides hit something.

Yeah I was thinking along the same lines. A good indicator would be whether we now see Gadaffi attempt subsequent strikes on other oil infrastructure.

Latest in terms of bpd:

Libyan oil output is down by more than two-thirds from 1.6 million barrels per day to just 500,000 amid the uprising, National Oil Corporation head, Shukri Ghanem, said on Wednesday.

2027: Back to Libya and the dramatic drop in its daily oil output. Chairman of Libya's National Oil Corporation Shokri Ghanem tells reporters that this is "mainly due to local and foreign workers leaving the plants to go home". He says his priority "is to maintain the integrity of the installations". He adds that the huge explosions that rocked oil storage tanks in Ras Lanuf today will not have a big impact as it was a small facility.


I suspect that both sides in this war are very soon going to run out of fuel. I saw a report (I think on the BBC live log) that
Libya has 1 week's fuel reserves left. That would explain Gadaffi's desperation to regain control of the refineries. Nobody is going to ship him more fuel, and without fuel he has no tanks and no airforce.

I suspect the rebels are also running out, but they control the border with Egypt. Plenty of friendly tanker drivers...

Maybe Gadaffi is closer to the edge than we realise.

Logistics is everything in war.

RalphW +1

If that's true, that both sides have about a week of fuel left, this should be an interesting weekend. Not to mention the chance of the "day of rage" thing in KSA.

Nansen G. Saleri (formerly from Saudi Aramoco) is engaged in US-centric navel gazing. WHAT ABOUT CHINA and INDIA? The US does not exist in a energy vacuum.

The presence of a Chinese frigate off the coast of Libya last week was deeply significant as the world’s major powers position themselves to protect future supplies of fuel, says Praveen Swami.


Indeed! What else would you expect, when the vast majority of USian navel gazers, hold it as part of their unshakeable core belief that, 'Peak Oil Theorists' are just another more modern form of long descredited Malthusians... See: Malthus Lives on With Peak Oil Alarmists linked up top.

History has shown time and time again that Malthus was wrong. The population growth has not outstripped the food supply. Malthus’ predicted social catastrophe never happened because necessity is the mother of all inventions — when more food was needed to feed a growing population, there were innovations or alternatives discovered.

Fractal logic fail! History has shown nothing of the @#$%^&!! sort! We have only been running the current experiment of massive cheap energy inputs for couple of centuries. We have yet to see what happens when that cheap energy is no longer available. There are no innovations that can supersede physical limits or natural laws. Why is this concept so @#$%^&! hard to understand?!

Malthus was essentially correct, even if he didn't foresee the temporary period of easy living due to humans having discovered how to harness fossil fuels. Even if that did skew his predictions by a century or two.

Sooner or later we will crash headlong into limits. Social catastrophe will happen!
Only an absolute moron, doesn't understand that necessity *CAN NOT BE* the mother of *ALL* inventions! And at some point it becomes impossible to squeeze sustenance out of a pile of dry sand no matter how badly a growing population engages in wishful or magical thinking.


What an annoying article. Malthus only needs to be right "once," using the logic of the writer.

I like the reference for the total amount of oil. It was pre-Hubbert. LOL

Malthus was right from the evolutionary step down from the trees, all the way till we begun using fossil fuels. Then he was wrong for a few centuries. When those fuels gets to expensive to use, he will be right again.


Why all the anger?

Calm down. Deep breathes.
Tards will be tards. Or as Forest Gump's mamma always used to say, stupid is as stupid does (or squawks).

The Malthus Lives Not Guys are just hopeless tards.

Just ask the guy who said:

Malthus’ predicted social catastrophe never happened because necessity is the mother of all inventions — when more food was needed to feed a growing population, there were innovations or alternatives discovered.

if he finds it "necessary" to continue to live,
and if so, why he hasn't yet invented a real path around death.

(Yeah sure, we all known about the invention of religious delusions and their illusionist head fakes around the "necessity" of living forever (i.e. by your "spiritual" being moving on to some other invisible dimension called heaven or heXX). But where honestly is the true "invention" that has been guaranteed by the cornucopians to truly be delivered on a just-in-time basis (JIT) by the Technology Tooth Fairy at the very moment we feel a "necessity" for the same growing in our loins?)

[ i.mage.+]


In watching the tard doing his tard talk on the video (see link above) I noticed that the "proven reserves" of hair follicles (or substitute "resources" therefor) on his head don't seem to be increasing despite approach of the guaranteed technical "Singularity".

Now why is that?

Hmmmm ....

p.p.s. here is another link to another version of Malthus Lives on With Peak Oil Alarmists Oil

Remember FM, take deep slow breaths

LOL! Thanks step back, I took a couple of deep breaths and posted this comment:

This guy has a PhD?!

Let me guess, it isn't in mathematics, physics, chemistry or biology. He obviously has no clue about the laws of thermodynamics....How exactly does he suggest that all those fiber optic using folk who no longer depend on copper wire for their communications obtain their sustenance?

Perhaps they can all eat sand... May I suggest he spend some time studying the physics and chemistry of photosynthesis, followed by a good course in biochemistry and cytology with special emphasis on mitochondria and the krebs cycle.

What does this genius plan to use as a substitute for NPK in agriculture? Hint, the P in ATP is not infinitely available on our finite planet. Oh, lest I forget, he really should get a basic understanding of energy flows into and out of ecosystems. A grasp of basic concepts in non linear dynamics as they relate to population dynamics might round out his education. Collectively, humans, are obviously not a whole lot smarter than Saccharomyces ...SIGH!

I can't wait to read his rebuttal... assuming he doesn't think the 'A' in ATP stands for Arsenic >;^)
In case someone doesn't get the somewhat obscure reference:

Just "economize as resources get more scarce"

But there is no peak -- just "scarce." LOL

The P is able to be re-gained. The problem is the energy to process enough Sea Water (where a bunch of the P went) is beyond what man can invest.

Solar powered biological processes have been shown to gather P - Grass+photons -> sugar that feeds fungi to put P in grass. Animals eat grass -> P in their bones.

Various Sea plants that are high in P and used to fertilise.

P is not "infinitely available" at the price and energy levels "we" have become used to over the last 100 years. Remember that humans have been willing to go to old human battlefields and grind the bones to make our bread.

Is there any study on ocean floor silt? In the Baltic Sea,most of the bottom is dead due to anoxic water. Could not that siltbe pumped up and processed a little bit, before beeing thrown on the fields for food production? Would both improve the ocean floor and give us food stuff. Any study on this?

Malthus has been right on a local scale. Look at Easter Island and the Anasazi, to name just a couple of recent cultures that caused their own destruction due to population overshoot coinciding with environmental damage and, in the case of the Anasazi, climate change. It seems it is just a matter of time before we prove him right on a global scale.


Look at Easter Island and the Anasazi, to name just a couple of recent cultures that caused their own destruction due to population overshoot coinciding with environmental damage and, in the case of the Anasazi, climate change.

Both incidents are (heuristic) theory, not fact. The last I heard about the Anasazi is in a National Geographic article, "The Drying of the West". They postulated that the Anasazi dispersed due to lack of rainfall, and didn't even suggest that they overshot and began eating each other as you're kind of suggesting. For all you know, DD, the Anasazi trekked somewhere else and nothing as dramatic as what you say happened at all.

The upshot of the article, however, was that they're able to look at tree rings of ancient junipers and the like and chart wet/lean years across millenia - the result of the study is essentially that the settling of the west (1800's-1900's) coincided with what is the wettest period on record, now ending. According to the time-lines, etc., the SouthWest is about to enter a more-or-less normal dry spell and in another couple of hundred years, a following less dry period but probably not nearly as wet as what is now just getting over. The supposed time of the disappearance of the Anasazi coincides with what's revealed to be a time of severe drought.

The last I heard about the Anasazi is in a National Geographic article, "The Drying of the West". They postulated that the Anasazi dispersed due to lack of rainfall, and didn't even suggest that they overshot and began eating each other as you're kind of suggesting

There are other sources than Nat Geo. Sources that don't target waiting rooms or the under 18.

Human remains found at a twelfth-century A.D. site near Cowboy Wash in southwestern Colorado provide further evidence of cannibalism among the Anasazi (see "A Case for Cannibalism," ARCHAEOLOGY, January/February 1994). The remains of 12 people were discovered at the site, designated 5MT10010, but only five were from burials. The other seven appear to have been systematically dismembered, defleshed, their bones battered, and in some cases burned or stewed, leaving them in the same condition as bones of animals used for food. Cut marks, fractures, and other stone-tool scars were present on the bones, and the light color of some suggests stewing. Patterns of burning indicate that many were exposed to flame while still covered with flesh, which is what would be expected after cooking over a fire.

Both incidents are (heuristic) theory, not fact.

Yes, well, until someone has a backward traveling time machine or gets a really powerful telescope to travel out to where light from Earth can be viewed "from the time period in question" - the "burden" of "proof" will always "theory".

Meanwhile we are stuck with are time travel being forward, one day at a time trying to sus out the past.

Both incidents are (heuristic) theory, not fact.

I think that is a good attitude to take. What localized regions have in common, which remains pretty much an observable fact, is a lack of dispersion and variability. This is not a causative effect of course, but it manifests as a uniformity of the resultant behavior if it does indeed take place. Therefore you see the effects of St. Matthew's Island, or the effects of bacteria in a Petri dish, or the chemical oscillations in a well-mixed liquid solution. These are all small-scale or concentrations where entropy makes the effects uniform.

On the other hand, the effects on a larger system is obscured exactly because of dispersion. Certain parts may manifest themselves first with the rest taken up later, and if corrective actions can be taken, it actually never occurs.

This entire analysis is rarely taken up and it is a theme of The Oil ConunDrum. Dispersion rules for every large-scale phenomena, in stark contrast to people's intuition and the typical doomer's doomstering. Yet, it is why climate science and oil depletion need to be taken seriously, because you can't escape the larger scale ramifications.

According to Heinberg today in the The Energy Bulletin, we have aleady reached peak food per capita. With global warming, drowth, floods, potassium shortages, peak oil, etc., I don't see how it is going to be turned around this time.

The idea that Malthus was wrong is like someone jumping out of a 100 story building and then saying everything looks ok at the 50th floor. Not dead yet so why worry.

It doesn't matter how many swear symbols one uses, there is no substitute for the real thing when it comes to idiocy like this.

Those US import numbers look low. Not only does it import more than that (its roughly the same as Europe), it takes flows from many more countries (eg Nigeria, Venezuela).

Mind, it does show why China would like to hook into the Canadian exports - rather than being dependent on the powderkeg of Persian Gulf or the big bear of russia.



I think The Sun newspaper is following a certain US news channels story line! I'm still quite shocked. I don't understand the 'point' of this story. The Sun has it's very clever style of chummy banter disguising clever audience manipulation but that usually involves things like changing their politics just in time for a change of government; what can this achieve?

Not sure, but judging by the comments even the die-hard Sun readers aren't buying it.

The "establishment" line is in full flow today.

The Sun also happens to be a Rupert Murdoch rag for those outside the UK.

Yes, I had the same reaction just scanning the Drumbeat stories above. And thanks for coming up with a good term for it. Denialist, BAU, Establishment or whatever, you can practically hear the pleading in their voice as they scream - EVERYTHING WILL BE FINE, YES IT WILL, IT WILL, IT WILL, IT WILL!

(Each from a different link above:)

There's plenty of oil and no fundamental reason to expect prices of $200 per barrel.

Oil Market Remains Well-supplied, Saudi Naimi

Several factors are in play right now that are likely to bring oil futures back down into the high 80s to low 90s range before the middle of April

It is a fair bet that within three years, oil prices won't just be back where they are today - they will be HALF what they are today.

Despite these claims by peak oil alarmists, world proven reserves have doubled since 1980.

They haven't got us over a barrel at all

And of course The Sun and 'a certain US news channel' share the same story line because they share the same ownership, Mr. Murdoch, as you indicate.

[Well, I screwed up the formatting, but decided to leave it, as it kind of graphically depicts the echo chamber that the MSM has become...]

Actually that's pretty cool, as long as there are no bandwith issues with it.

Nested <blockquote> tags, I think, so essentially the same bandwidth as straight text. It is eye-catching, isn't it?

I heard no less than AM radio talk show hosts yesterday who said we should drill here, and that it's Obama's fault that we are not. It is depressing to think how collectively dumb we are as a nation.

Well, we shouldn't be so collectively hard on ourselves. After all, how often have we made reasoned decisions? I think what you describe is going to slowly build and build, far beyond AM radio to all corners of the nation. And under the guise of "national emergency" or some other suitable cover, we will begin to drill wherever it is conceivable that we might find recoverable oil. Not that this is wise -- or necessarily prudent. However, the current instabilities will give many parties the perfect cover they need to press their case for "drill everywhere -- now!"

I'm afraid you might be right, Helios. Kinda like running the constitution through the paper shredder after 911.

Above, I meant to write, "I heard no less THREE than AM radio talk show hosts yesterday who said we should drill here, and that it's Obama's fault that we are not. It is depressing to think how collectively dumb we are as a nation." Sorry.

Well - I think you are right that the "drill here, drill now" mantra will increase in intensity. But drilling will not take off as a result. Those radio talk show hosts cannot drill, and the people who can would already be doing it if they thought there was plenty of oil around that they could sell at $112 per barrel.

But of course those radio talk show hosts are convinced exploration folks are just dying to drill but the mean environmentalists will not let them.

helios - "drill everywhere -- now!" Actually with the exception of a tiny bit of onshore federal leases the industry is doing that right now. They've even issued the first Deep Water drill permit since BP's screw up. Folks chat about the Bakken and Eagle Ford. But there are dozens of other formations containing oil that the oil patch is in a downright feeding frenzy leasing up today. With oil north of $100/bbl there are a lot of opportunities out there...particularly for public companies more interested in boosting stock valuation than making a profit. In truth, if the feds opened up all their currently restricted leases tomorrow I'm not sure there would be much industry interest.

As I've stated before the current boom in drilling in the U.S. has many positive aspects: employment, decrease trade deficit, increased tax/royalty revenue for the govt, increased income for ranchers/farmers, etc. But will it have a significant effect on PO and the coming difficulties? IMHO...no.

helios - "drill everywhere -- now!" Actually with the exception of a tiny bit of onshore federal leases the industry is doing that right now. They've even issued the first Deep Water drill permit since BP's screw up. Folks chat about the Bakken and Eagle Ford. But there are dozens of other formations containing oil that the oil patch is in a downright feeding frenzy leasing up today. With oil north of $100/bbl there are a lot of opportunities out there...particularly for public companies more interested in boosting stock valuation than making a profit. In truth, if the feds opened up all their currently restricted leases tomorrow I'm not sure there would be much industry interest.

From your lips to the ears to AM radio talkers.

Meh . . . that wouldn't really matter, they would just ignore you. That doesn't play into their endless narrative of "all the problems are caused by the illegal immigrants, environmentalists, gays, blacks, unions, Muslims, 'liberal elite', etc." Their narrative is driven by always having someone to blame. They had the communists for decades. But since the communists went away, they've moved to demonizing the above rotating list of bad guys.

A story line of 'Oil is problem because there just isn't much left in this country after having drilled up the country for 150+ years' just doesn't provide an enemy to blame. And it is not just that such an argument is being presented from the Left . . . even when it is presented from people on the right, the AM radio right refuses to believe it. Matt Simmons was a Mormon Houston-based conservative Republican investment banker for the oil industry . . . he seemed to get little attention. T. Boone Pickens is the guy who funded the notorious hit-job "Swift Boat Vets for Truth" . . . and he is out there pushing the peak oil story . . . but he is ignored.

I'll just go back to what I keep saying . . . the Democrats need to make a good deal (where they get good royalties to use for alt-energy funding) and open up all areas for drilling. This canard will not go away . . . it needs to be killed by proving it won't fix the problem.

Rockman, I agree with you other than ANWR. I do think there would be immediate interest there. Even if only to keep the pipeline from shutting down.

treeman - I get your point but when I'm talking about the oil patch 99% of the companies will never drill one well at ANWR. Just like 90% of the companies won't ever drill a well in the OCS. The companies with N Slope production have a dog in the fight but I'll hazard a guess that less than 0.1% of the oil patch cares if TAPS freezes over or not. I realize that the ExxonMobil's and ANWR's get the press time but the backbone of U.S. drilling are the independent companies. They even dominate today's production: the combined domestic production of all Big Oil is less than the independents. The vast majority of drilling capital in this country is spent by the independents. Americans wouldn't recognize the names of the great majority of the independents.

I'll say it again: for the very great majority of the oil industry it would be to their self interest if not one additional bbl of oil or one cubic foot of NG is ever produced from ANWR or the OCS. Consider the DW GOM NG trends. In addition to the recession the addition of 1 bcf/day from the Independence Deep Water Hub to our supplies helped push NG prices down. The net effect: a decrease in revenues to all companies on the order of 100's of $BILLIONS. But it's easy to lose track of these differences: the independents don't throw money away on smarmy little TV ads like Chevron et al. Most can't spell lobiest let alone will pay for one. That's why I like to remind folks who the real oil pacth is from time to time. And for the most part it isn't those idiots at BP.

That's why I like to remind folks who the real oil pacth is from time to time. And for the most part it isn't those idiots at BP.

Hey! Don't talk that way about those idiots at BP. I know many of them. You shouldn't talk that way about the mentally challenged, and you have to realize that most of them are just trying to make it to early retirement and get their pension before the roof falls in.

As for drilling the ANWR, I think they should let them do it, if only so they will shut up and go home after they find little or nothing there. I get sick of hearing about how wunnerful it will be.

From that TV-show I don't remember the name of (not "Burn up",some other one):

-ANWR is the next oil frontier!
-No, ANWR is the LAST oil frontier.

Like you I doubt there is much in it. ANWR is within glaciation teritory. With all those vertical land moves coming in ever 100 000 years, I'd bet a bucket of butter the rock formation is cracked up many a times.

All good points, Rockman

Furthermore, once the US has consumed all these options, then what?
Surely your nation's best long-term option is to buy from others and safeguard your own supplies... that would be be something closer to energy security, though the "Drill, baby, drill" enthusiasts argue the reverse (get off foreign oil now).

As various posters have pointed out over the years - it is about time for someone to call their bluff and open up every damn acre of this country to drilling...

Then sit back and listen as the crickets chirp... "now don't everyone rush in to drill at once... take it easy now..."

As someone linked to the other day - the oil companies are only drilling on a small percentage of the area (both on land and offshore) that they already have available to them. Make everything accessible and smash this myth of "limitless" oil in our own backyard once and for all...

Cat - A couple of points. The "oil companies aren't drilling where they have rights to now" is a little bit of a straw man argument. Companies pay the govt for the rights to drill on a lot of land that's eventually not drilled...ever. Even when a company decides they don't have a viable prospect on a fed lease they'll hang on to it hoping someone else will and get a sublease from them. The reality is that many of those fed leases won't generate any revenue for the govt except for the original lease bonus. IOW no oil/NG production and therefore no royalty payments.

I don't know what the actual number is so I'll make one up (and I'm probably not far off): of all the land in the U.S. that has any recognized viable drilling potential probably 95%+ is available to companies today. All they need do is cut a deal with the landowner and write a check. I wasn't kidding when I said that should the feds make available onshore lands there might be little interest in leasing them. Right now companies are spending $billions every month for privately owned leases.

So I fully agree: make all the onshore feds lands available tomorrow and then wait two years to see how much drilling occurs on them. That should shut up those "limitless oil" folks pretty quick IMHO.

That should shut up those "limitless oil" folks pretty quick IMHO.

Their 'position', if one can call it that, is not based on any facts/data/information/reality, so I doubt that it will ever change. They'll just shout more loudly and offer other excuses. Come to think of it, it's such excuses that will be 'limitless'...

One of the presidential candidates in the last election cycle spent a lot of time making that exact claim. It's hard to blame people for believing it.

Oil states including Libya, Iraq and Iran could pump TWICE as much oil if they invested in new technology.

Best quote in the item by a bunch. It shows where their brains are - up where the sun don't shine.

Ignoring that it would take time if the investment money showed up to develop those fields, and all the rest of the fields are depleting in the meanwhile, the Sun overlooks that when you drink twice as fast, you run out twice as fast as well. Thereby guaranteeing that the final days will be catastrophic, lulling the sleeping sheep into thinking that all is well until it is too late.

Of course, they would then have their ultimate capitalistic shock, and could take over everything at once. All worth exactly squat.


That sir, is the most excellent graphical presentation of ANYTHING I have yet seen on TOD.


Thx - If only all my mistakes turned out so well...

I'm with Slinky. Didn't really appreciate it at work on my gi-normous monitor, but at home on my little 15-inch it's totally centered and makes a nice effect.

Which reminds me. There's usually enough stories posted to get below the sidebars before the comments begin. Would it be possible to have the comments widen back to full width? The thread can get really skinny sometimes for me!

Being from South Africa, I am always reminded of comments by one of the National Party leaders in the early 1970's who said that he did not want television in South Africa because it would be a bad influence on people. And then discovered the power of one state-run channel.

TV only came to South Africa in 1976. The first cable channel, MNet, was launched in 1986. And the rest, as they say, is history.

IIRC, MNet was originally only granted a license for entertainment, and not allowed to broadcast news.


What a bizarre fact-free and logic-free article. He just asserts that there is all this magical oil available . . . no evidence given.

And it is completely logic-free . . . if there really were all this oil available then why are the oil companies not producing it? Wouldn't they like to make money?

Is Norway reducing oil extraction because they are tired of all they money?

Is Iran making a big push to switch from petrol-cars to natural gas cars because they are born again environmentalists?

And his idea that new regimes will pump even more oil in order to pay off their populations . . . he got it completely BACKWARDS. The reason those populations rose up is because prices of food and fuel were rising so fast that they could not handle it. And why did the prices go up? Because fuel is becoming scare and thus expensive. Part of Egypt's big problem is that they are running out of oil such that they are now an oil importer instead of an oil exporter.

It is just a p*ss-poor piece of tabloid journalism, with factual errors (for instance, suggesting that the Former Soviet Union - FSU - is operating at 20% efficiency is plain wrong).

A more realistic story appeared on the BBC website with some insight into the current, observable, UK trend of reduced driving, and more fuel-effieicent driving.


If the real authors of that piece are not aware it is full of lies then I'm the Archbishop of Canterbury.

Must be related to this guy:


He is perhaps best remembered for his final broadcast in which he agitatedly declared that US troops were defeated and committing mass suicide at the gates of Baghdad, and that there were "no US tanks in Baghdad", all while al-Sahhaf's camera clearly showed several US tanks maneuvering through the city streets behind him less than a mile from his position.

I recall some of his very last words as official spokesman to camera, as tanks were visible behind him were, "We are now too far from reality. Goodbye." That was after he had just denied everything of course.

That article up-top by right-wing nutcase Dominic Lawson - They haven't got us over a barrel at all. is just packed full of lies from start to finish. Apparently he works for MI6, according to a renegade MI6 agent anyway. He's certainly part of the UK governing clan.

This time, however, the Saudis have immediately offered to cover any shortfall, which they are more than capable of doing, given that they have spare productive capacity of at least 3.5 million barrels a day. Indeed, these Saudi assurances brought the price tumbling back from $120 a barrel to its current level of around $105.

Note how he switches from Brent (or something even more expensive) to WTI without batting an eyelid.


Lawson has several times been accused of working with MI6 (by for instance Richard Tomlinson), but has denied being an agent.[3]

[citation needed]

That is a spectacularly bad article.

Saudi Arabia says it has spare capacity therefore they do, oil prices increased in 2008 but they came back down again and no harm was done. Iran and Iraq went to war and in the 1980's and it was ok.

The mind boggles.

There was a discussion in Monday's Drumbeat about the businesses and industries that will be hammered by the current oil price spike. I suggest that it's not hard to figure out. 1. they will be heavy users of fossil fuels and/or represent discretionary purchases. 2. they will be many of the same companies that got hammered by the last oil price spike.

So car companies (again), airlines (again), book and music stores, furniture stores, newspapers, new home construction, chain restaurants and restaurants generally.

What did I miss? Yes, this is an America-centric list. I'm an American, so there you go.

Deflationary trends in auto, housing & finance, against generally rising food & fuel prices, while the discretionary side of the economy gets crushed; rinse & repeat:


Who's taking their family to Disney World this summer?


This summer was looking good for the travel industry, including Disney, just a few weeks ago. Bookings were up. Airfare and hotel rates rising. That might be changing.

As I'm sure has been noted here, airfares have risen something like 5-6 times so far this year.

Might have to change plans to Disney, rather than traveling further this summer ;-)

my in-laws, and they cannot afford it and are trying to live on in BAU.

Question, is Russia blocking the UN No Fly Zone simply to keep their prices up and the market in need? And if this so, will this backfire?

Thanks Paul

Ah, the stability of the undulating plateau.

I think Russia and China are more afraid of "outside interference" coming to their own countries when civil unrest vistits them.

They do not want to support "outside interference" now and have it be used against them, possibly in the not too distant future.

Great point, but, if you have oil left to export, you're going to get some "outside interference" jack.

Yup. The curse of living on top of other peoples' oil ;)

I don't have any oil left to export.

I would suspect that Russia's motive is more likely the traditional reason of trying to keep the US military out of that part of the world. It's one thing to say that the Cold War is over, but it seems to me that there's still "sphere of influence" struggles going on. For example, Russia has pretty clearly indicated that they would like to dominate the Caspian region. They are no doubt eager to have large-scale US deployments in Iraq and Afghanistan done with. And equally eager to avoid having the US find any other reasons for keeping equipment deployed on that side of the Atlantic at all.

There's nothing wrong with Lybia from the Russian point of view. The government bombs civilians? Not unheard of in Russia.

No, in Russia blowing up and burning down your own cities is something of a tradition, so they wouldn't consider it anything unusual for the Libyans to do.

Look what happened to Napoleon - he captured Moscow, and rather than surrendering, the Russians burned the city down. And there he was, in the middle of Russia, in the middle of winter, with no shelter or food for his troops. Most of them died during the retreat to France.

Or how about the Russian siege of Grozny, one of their own cities:

During the early phase of the Russian siege on Grozny on October 25, 1999, Russian forces launched five SS-21 ballistic missiles at the crowded central bazaar and a maternity ward, killing more than 140 people and injuring hundreds. During the massive shelling of the city that followed, most of the Russian artillery were directed toward the upper floors of the buildings; although this caused massive destruction of infrastructure, civilian casualties were much less than in the first battles. The enormous scale of the devastation prompted numerous comparisons with Hiroshima and other cities leveled during World War II.

By the way, this is Grozny now:

How about a road trip down to the Gulf coast to enjoy some fresh Gulf Shrimp and seafood? A fun filled day at the beech, swimming with dead dolphins.


Might be a good summer for a driving trip. Fewer people on the road ..

Commercial real estate in general is setting up for a good bit more trouble. David Rosenberg, I think it was, has articulated a nicely reasoned analysis. There is way too much square footage allocated to bricks and mortar shopping.
And there will be some domino effect, too. Borders is closing stores and Starbucks closed a bunch all ready. These are key stores for the mall business model; Borders being an "anchor" and Starbucks being an attractant for more impulse orientated visitors.
And then the inevitable loan defaults as tenants vacate and rents don't get picked up by new businesses.

I'm thinking Klare is right with respect to Libya. We can say good bye to Libya's output into the foreseeable future.

The civil war in Libya brings to mind images of George Miller's The Road Warrior, "crumbled...the cities have exploded;" uprisings and social disorder due to energy shortages have destabilized the country; and that "two mighty warrior tribes" had gone to war. The crumbling remnants of the government attempt to restore some form of order, but life has become a "whirlwind of looting and a firestorm of fear, in which men began to feed on men." Miller, was very insightful in this 1981 classic.

As for now, we are probably heading towards a significant inflection point in modern human history. If the KSA comes undone we can probably say good bye to any form of economic recovery, forever.

Well that was a pretty prescient report.

I roll my eyes when I hear some emotional newscaster talking about thousands of tons of toxic gas, but no mention of what the gas/chemical is. And I'm not sure what a "radius of 15 square kilometers" is. There was some mention of that *area* from one of the techs at the facility, but no mention of why. But the news guy used a number, so he must be smart.

So...AJ (and BBC and SkyNews) pust our media to shame, but they could still use a little better technical focus.

BUT..just glancing at my Yahoo News homepage....I see not one, but TWO articles about energy. One on Libyan oil installations ablaze, the other on $100/bbl oil. Two articles at the same time might be a record.

btw...nobody else in my office (or home) cares. I wish I had that sort of peace!

A circle of radius 2.185 km?

or a circle with an area of 706.85 square km?

None of my family, co-workers, friends seem to know or care diddly-squat about PO or LTG/sustainability issues.

Not even on the radar...

Unless the PO/LTG perspective is similar to atheism...more people than is commonly suspected are in the club, but an observer cannot tell since the folks in question know there is a stigma to coming out so they keep it to themselves...

you're in ABQ, right? Kind of off topic, but I feel that you folks are more in tune with this stuff than the people of SoCal. I don't know if it is some version of 'the grass being greener' (ironic that it is doomier!), or that the people I know out of area tend to think similarily to me, whereas the people I know locally I know for more day to day reasons.

What is your take on PO awareness in your local area vs your perception of the same in Southern California?

ABQ, correct.

Perhaps because of the nature of my work, and the folks I work with, I do not see very much PO awareness at all here.

Even in my neighborhood...maybe because I am in a well-off neighborhood in town brimming with a lot of older conservative folks.

But, I do not even think the poor folks or salt-of-the-earth middle-income folks 'get' PO or Limits To Growth here.

Sorry to disappoint...I know there must be some people who are PO/LTG aware here in the land of enchantment...but they don't get any press time.

The biggest media concerns along these lines are fire danger in the forests in the mountains, and water supply issues which occasionally get some print space and air time.

If every there was a place that was well-suited to solar PV and hot water etc, it is here: Scads of sunny days and lots of people (and roofs) per square mile.

I don't see PV etc taking off yet, though.

City is still growing McMansions and filling in...no discussion of population control either.

There was, a few years ago, a debate in the media about Rio Rancho (our smaller sister city across the RIO to the NW)and ABQ charging developers a land-use fee for new developments to help pay for water, sewer, electric, sidewalks, etc, but I think that may have been overturned. The PTB buzzed on about needing to be business and developer-friendly.

The news report tells us that the tech guys are buissy burning off the gasses as fast as they can "but it would take weeks". So I guess it is some hydrocarbon gas. Those are not toxic as such, but there are those who remove oxygen from your blodstreem if inhaled. Buthane is one such. Teenagers use it to get high, a procedure called "buffa" in Sweden. And it kills someof them every year. So my guess is buthane or similar.

Nice post. Al Jazeera English is much more informative than CNN, FOX, NBC, CBS, and ABC combined, with resprect to such matters. BBC had a banner script that read "Huge explosion at Ras Lunaf" about 20 minutes ago, it is gone now. I hope that 10 man skeleton crew is OK at the refinery. I would not want to be in their shoes now.

Al Jazeera would be a welcome addition to the comcast chicago lineup which in the last year added more than a handful of evangelical production channels. Although as Tracy Ullman remarked on Real Time last week, AJ could use a less arabic looking logo for the US market - maybe replace the calligraphy with a barrel-drone hybrid?

(humor) I reckon they need to change their logo to be "AJ America" and get someone like Stephen Cobert to run their newshour for American viewers ;)

There are couple of channels in the low 100's, generically titled "leased access" - perhaps AJ will show up there, along with RU Tv.

IMO The Road Warrior is the definitive peak oil movie. In fact, very few apocalyptic films are about oil at all.

I highly recommend it to anybody who hasn't seen it, it's tremendous fun.

Agree with the recommendation, but keep in mind that Road Warrior is basically a sequel to Mad Max. Both good.


Summary of Weekly Petroleum Data for the Week Ending March 4, 2011

U.S. crude oil refinery inputs averaged 13.9 million barrels per day during the week ending March 4, 145 thousand barrels per day above the previous week’s average. Refineries operated at 82.0 percent of their operable capacity last week. Gasoline production decreased last week, averaging about 9.0 million barrels per day. Distillate fuel production decreased last week, averaging about 4.1 million barrels per day.

U.S. crude oil imports averaged 8.3 million barrels per day last week, up by 290 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged about 8.2 million barrels per day, 669 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 761 thousand barrels per day. Distillate fuel imports averaged 252 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.5 million barrels from the previous week. At 348.9 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 5.5 million barrels last week and are above the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories decreased by 4.0 million barrels and are above the upper limit of the average range for this time of year. Propane/propylene inventories decreased by 1.4 million barrels last week and are below the lower limit of the average range. Total commercial petroleum inventories decreased by 6.3 million barrels last week.

The EIA really go to town with adjustments this week.

Crude stocks "adjusted" up by 3.1 million barrels. Product stocks up by 1.3 million. Total commercial up by 4.4 million barrels.

That's 622,000 barrels per day turned up again from apparently nowhere this week. That is it wasn't produced, refined, imported or otherwise recorded as far as the EIA know. It just appeared.

Kind of like moon shine. It just showed up in my trunk. :)

A Dry Season

Hardly more than 2 months into 2011, stocks of US oil products (such as gasoline and diesel) have already plunged by about 33 million barrels. Why? Let’s go back four months to the start of a paradigm shift by OPEC oil exporters – that is a shift of more exports ‘eastward’ from ‘westward’ – particularly towards China. Ostensibly the shift started for a rational reason: near the end of October 2010, China started to experience shortages of diesel fuel. Within days, the shortage spread across China like wildfire.

China went to great lengths to secure extra supplies of oil and diesel. So desperate was China then that it took a cargo of oil from Mexico that it had an abnormal amount of water content. In addition, it also managed to obtain a cargo of US diesel originally sent to a major European port – then had it re-shipped it to China. My understanding is that last November, China’s refineries at that time were running at about maximum capacity already, so some incremental demand for diesel also had to come directly from product imports.

While China around mid-December started reducing its oil and diesel demands, it appetite for oil and oil products never returned back to the levels seen in October 2010 and earlier. [For more information about China, check out an articles earlier this year by Tom Whipple, on the ASPO and other websites, who says that China is seeking alternatives to coal – mainly by using more diesel. See also: http://www.aspousa.org/index.php/2010/12/predictions-for-2011/ and http://www.energybulletin.net/stories/2011-01-06/queensland-flood-coming... ].

China has grabbed an increasing share of exports from OPEC countries, while the US gets less. This, by the way, was occurring before a revolt started in Egypt. Lacking sufficient oil supplies to meet slowly growing domestic demand, as well as increased oil product exports heading out of the US, it should not surprising then that a fairly steep, counter-seasonal, fall in total US oil product supplies continues week by week.

Even though US oil inventories improved in this last week, oil imports from OPEC countries fell. The total level of oil imports was only maintained by higher than normal imports from Columbia and Russia (who are not OPEC members). In the longer term, the current level of oil imports may be insufficient to stabilize oil product inventories at a level above minimum operating levels (MOLs). If product inventories fall below MOLs, that is the point when we might see the oil price ‘superspike’ begin - which I discussed in an earlier post from late 2010 [ http://www.theoildrum.com/node/7252#comment-751587 ].

China imports more crude

China's crude imports in rose 7.8% last month from the year-ago level to the third highest on record on a daily basis, data showed, as refiners ramped up imports despite a demand lull during the holiday month.

If anyone is interested these days, what with the Libyan civil war and all, there was another hearing yesterday in the House Energy and Commerce Committee regarding the proposal to ban the EPA's efforts to limit greenhouse gas emissions. One may read the statements prepared by the various speakers HERE. The lead speaker is the chief denialist, John Christy, who does a great job of ignoring the obvious. Where's all that Arctic sea-ice gone, John? If your buddy Spencer is correct about negative feedback dominating climate, how did the Ice Ages happen???

E. Swanson

It almost seems insidious the way it's coincided with the current distracting international events! But I'm sure it's just that, coincidental.

I really hope they're not successful. They're not fighting the good fight in my eyes.

If your buddy Spencer is correct about negative feedback dominating climate, how did the Ice Ages happen???

Multiple states that are locally stable, plus shocks? I'm not making excuses, but there are complex systems that have two or more stable states where negative feedback rules. Given a shock of some sort, the system may deviate far enough from the current state so that it recovers to an alternate stable state. The planet is currently in an interglacial period within a longer-term glacial age. Why the various transitions occur are not well understood. Is anthropogenic climate change extending the current interglacial? Making it more severe? Severe enough to kick us out of the longer-term glacial period?

Granted, we can wipe out our current civilization fairly quickly regardless of what those longer-term answers are.

Multiple quasi-stable states are quite ordinary. You can view it as hilly terrain, with each valley a local minima. Some valleys have mountains in between, some only hills, and some lower passes exist. Getting from valley A to valley B takes some amount of energy depending on what the path might be, and what happens to be in between.

The problem with climate is we don't know what mountains we're wearing down or tunnels we're digging, so we don't know if we're stably in the bottom of Death Valley or perched in a tiny melting dimple on top of Everest. If we're rolling down the slopes of Everest already, who knows where we'll end up, or how hard it might be to get back somewhere close to where we started.

Anyway, minor negative feedback to maintain state is a form of hysteresis, like you see in light switches (which stay where they're set if you jostle them a bit, but if you purposefully move them they switch readily) and thermostats (heater turns of at 72 degrees but won't turn back on until 70). It seems the planet has a lot of such mechanisms in place, but again, we just don't know when we'll accidentally flip an important switch.

With all due respect, negative feedback DOES NOT maintain state. It reduces the amount of change which would otherwise result from a perturbation. Positive feedback, such as the water vapor feedback in the climate system, tends to increase the change. In the climate system, a negative feedback would reduce the cooling which might result from the differences in solar insolation due to Milankovitch orbital variations. Hysteresis, such as the case of the thermostat you describe, is a non-linearity, not a feedback...

E. Swanson

You are correct, and my recollection was faulty. I should have stopped with the examples, which I do believe offer some analogous value as states, not feedback. The latter examples are indeed bi-stable non-linear systems. I was recalling the Schmidt trigger model from years ago, but really that couples positive feedback with hysteresis.

Here's a link to one of Roy Spencer's papers published in 2010. Trouble is, the graph which Christy presented isn't included. Christy didn't provide a reference to his source, thus, one can't know where Christy got his graph. Not good science, but a great act, none the less. There was some discussion on RealClimate about Spencer's work and that of Andrew Dessler, who's later work showed a positive cloud feedback...

EDIT: Here's another look at Spencer's work for those with a love of math. It appears that Spencer made some serious errors. Note that geologist Barry Bickmore took a look at Spencer's book and found similar problems. With these revelations, one might conclude that Christy intentionally failed to provide a reference for his graphical presentation...

E. Swanson

When do they teach mathematicians to say things like "straighforward" and "simple" when describing integrations of differential equations that most of us used for one or two classes decades ago?

Are you sure he made errors? It seems there is a general desire to use math to obscure the simplicity of the model, and the underlying reality isn't much different than those number games where the dupe does a bunch of math with a guessed number to arrive at a value which is then divined by the trickster -- of course the math just ends up saying "7 = 7" or such when simplified, so that the original guess matters not at all.

Like WHTs derivations for oil, I think it is reasonable to assume that some constants are going to have be calibrated from real-world measurements, but that even a basic model should be self-supporting from a theoretical basis. An exponential decay model for temperature deltas even with some secondary inputs isn't exactly a sophisticated model that requires a lot of math to characterize the behavior.

Are you sure he made errors?

The model Spencer used is an extremely simple energy balance model. As Bickmore mentioned, Spencer's model is available as an Excel spreadsheet HERE, so you or anyone else can play with it. I think the simplicity of the model makes it easy to analyze as Bickmore and Smith have done, thus their conclusions appear to be rather solid. Without repeating their work, I can't be certain.

The scary part is that Spencer has developed a large following among those who now think that the science behind the global warming question is all a hoax and that includes members of the US Congress...

E. Swanson

Sorry, I was not at all clear. I know the work contains errors, but I'm not sure they were mistakes, rather than purposeful obscuration of a simple model.

It is possible that Spencer is not all that sharp, and certainly it is easier to make a situation more complicated than it needs to be than it is to make it as simple as it can be, but in a field with much scientific focus an inexpert mathematician would seem to be a readily avoided liability. Surely the math for any model can be vetted for a small fraction of the overall research cost.

Spencer has been involved in climate research for more than 21 years. For example, he and Christy published a paper in SCIENCE back in 1990 giving their first analysis of the MSU satellite data. This work lead to a later analysis after it was shown that their first effort to show climate changes included "contamination" from the stratosphere, which is known to be cooling due to ozone depletion. They later produced a series, published in 1992, which is claimed to represent temperatures in the lower troposphere, a series which has been found to contain several problems in the years since, leading to several rounds of corrections.

I don't know their motives, but I think they know what they are doing. Spencer had to pick a set of parameters to make his model match the historical temperature data. The recent analytical work I linked to has shown that it's possible to pick parameters which give the right match, but which are not physically plausible. Spencer has also presented the model for discussion, apparently without serious objections from the denialist camp, such as this discussion on McIntyre's blog. This isn't a new subject, for example HERE'S a PAPER for the serious mathematicians (which I haven't the time or inclination to digest)...

E. Swanson

Today, there was a markup on H.R. 910, the Energy Tax Prevention Act, in the House Energy and Commerce Committee. The bill's description says:

To amend the Clean Air Act to prohibit the Administrator of the Environmental Protection Agency from promulgating any regulation concerning, taking action relating to, or taking into consideration the emission of a greenhouse gas to address climate change, and for other purposes.

The funny thing is, the Bill includes water vapor in the list of emissions which the EPA is prohibited from regulating. But, the amount of water vapor in the atmosphere is a function of the temperature and any excess amount quickly rains out, so there's no reason to limit emissions. Obviously, the people who wrote this bill don't understand the science. The effect of this bill is to prohibit ALL regulation, not just taxes.

HERE'S a link to the video of the hearing...

E. Swanson

Blackdog, No, it makes sense, because those huge electric power plants have huge cooling towers like these -- that isn't smoke coming out, it is WATER VAPOR

Image Link

Wardsmith the amount of water vapor that escapes from cooling towers is really insignificant. Far more water evaporates from one square kilometer of ocean than from those cooling towers. Anyway, would you rather we just dump the hot water into the river than cool it first in the cooling tower? The only alternative is just do without the electricity altogether.

I agree with Eric completely on this one. The amount of water vapor in the atmosphere is a function of the temperature. You can forget about any very tiny fraction of the water vapor in the atmosphere that comes from cooling towers because it is insignificant.

Your picture however is really pretty, though totally misleading.

Ron P.

Yes, that sure looks like a water aerosol cloud. But, the greenhouse effect of that load of water is nil because the water vapor over the much larger area of the Earth is not significantly changed, thus there's no effect on climate. Don't forget that about 72 percent of the Earth is covered by water...

E. Swanson

@Darwin, @Blackdog, I think we are in vehement agreement but the nature of this medium is that misunderstandings occur too often.

The original post mentioned a bill before congress that would not allow the EPA to regulate water vapor. That makes PERFECT sense given everything you both have said. Would you rather the EPA did regulate water vapor??? To what end? That would be incredibly stupid IMHO.

Yes water rules the earth, and water (vapor) is a major greenhouse gas. It also seems to self regulate and the energy consumed in changing its phase is subsequently released in rain, wind, snow, hurricanes etc.

Water vapor is regulated - building interiors have limits due to fungal blooms that'll happen if there is too much water vapor.

Having now watched the hearing, I found that there were several potential results from this bill which aren't clear on the surface. For example, AIUI, if the EPA were to set emission levels for cars, they could include the effects of air conditioners, which the agency that does administer the fuel economy regs (NHTSA) does not. Thus, if the bill becomes law, the EPA fuel economy standards now in the pipeline would not take effect after 2016 (or whenever). This would result in lower fuel mileage, greater imports of oil and oil products (not to mention the continued cost of the military strength required to maintain these imports) and thus a greater expense for the consumer. The bill is being presented as a cost saving measure, the proponents claiming that the cost of reducing emissions of greenhouse gases would increase the cost to the consumer and that jobs would be lost. Since the Repugs aren't willing to consider these costs, their accounting is likely to be bogus...

E. Swanson

I was looking for some 2011 prediction and found this:


2011 predictions made on the 80th anniversary of the NY Times in 1931. #7 is quite visionary for humanity in some cases.

"The principle of expediency will be the dominating one in law and ethics."

"Touchdown and the end of a historic journey for Discovery... Goodbye Discovery".

One down, two more to go.

well, at least they landed safe, right?

Yes. The above quote was from NASA tv at touchdown.

I'm beginning seriously to suspect that, after the last two shuttles make their final flights, that will be the end of U.S. manned space travel. Already there will be a several year gap in which we will need to rely on the good graces of the Russians to get us to the ISS. With the economy in the tank and getting worse, and all the volatility elsewhere, I think plans to develop alternatives to get Americans into space will be scrapped, or delayed to death.

I'm not judging whether the program was/is worthwhile or not. I simply see this emerging more and more as the Chinese/Indian time for space initiatives, at least until it all catches up with them as well.

Maybe if we could get those smart "rocket scientists" to help us dumb old oil engineers, we could find more cheap oil around here.

You mean, like the ones who lost those two consecutive climate monitoring satellites? LOL

Are you sure that the "rocket scientists" were at fault?

E. Swanson

I'm beginning seriously to suspect that, after the last two shuttles make their final flights, that will be the end of U.S. manned space travel.

It seems that we get better science payback with things like the Mars rovers, autonomous probes, and such.

I feel humans in space is more of PR than anything else.

Well, that's always the argument for Automation isn't it? It can be (in this case a lot) more expensive to use Human Labor.. but it begs the question of how we regard our part in all this.

I think the POINT is for humans to explore and see what happens when we cross new boundaries, experience something a step farther than we did before. I don't think the Apollo missions were a waste of energy, and I bet we use easily as much energy in real waste every couple of commuting days. That redundancy and pointless expenditure of energy where the same effects could EASILY be accomplished using less is a sorry insult to our society.

The unmanned explorations have been great as well. But the point, IMO, is human experiences, experiments and exploration. Inward, Outward, Up and Down.. and of course, remembering the lessons we learned from them.. that's been a sticky one in these days of the Energy Trust Fund, and Automation Waiting on us Hand and Foot. Damn these soft cushions!

China possibly, India probably not, and none of it matters one bit.

STS-133 Ascent Highlights

Beautiful closeups of the SRB's. What a loss, it will take 6 trips of the Russian vehicle to carry as much supplies as 1 STS flight can carry to the ISS. Not to mention the loss of servicing satellites.

A beutiful white elephant comming to rest after manny missions. The space shuttle is a grand and expensive failure that should have been replaced by something better a long time ago or at least been complemented with Shuttle-C for building the space station. I wish good luck to Space-X, Atlas and Delta and the "Direct" team who made Nasa change path to better shuttle heavy lift successor.

You just can't combine a truck and a bus into one vehicle and have it serve either job very well.

I doubt the shuttle can be launched to service satellites at a competitive cost($500M per launch?). I imagine the Russian model is more cost effective due to saving people-time at every stage. They are the Southwest Airlines of launches today -- no frills, but quick turnarounds. Cheap but reliable vehicles, too.

The Russian Launch Program-Simple, Modular, and Robust The Russians have achieved a low-cost, reliable launch capability because, first of all, they used simple, damage-tolerant designs that were less than optimum by Western standards (from a performance and weight minimization standpoint). The Soviet boosters and their subsystems were designed to be highly modular, allowing vehicle customization for various missions without always requiring completely new launch systems. Soviet launcher modularity also provided the opportunity for large manufacturing economies of scale for many components. Either because of pragmatic engineering judgment or because of economic necessity, the Soviets reused existing designs for decades, making minor modifications only when necessary.

Watch the complexity of society be scraped from the top up, rewarding those with the least complicated system over the complex ones. The russians picked the winning horse. So the 'merkans was first on the moon? Space still belong to mother Russia. I declare Russia the winner of the space race.

Beautiful video.

However, I would gladly trade in the STS and the ISS for :

Jupiter Europa Orbiter

Mars Max-C/ExoMars

Titan Saturn System Mission

Uranus Orbiter with probe

Venus Mobile Explorer

Terrestrial Planet Finder

Terrestrial Planet Imager

and so much more!

The ISS cost may be in excess of $100B...the first five unmanned missions above are estimated at $5B or less each. The Hubble Spece telescope was ~ $5B.

We could get scads more science data about a wide spectrum of planets, stars, etc. from unmanned missions such as these vice trucking food, water, and spare parts continually to keep spam in a can circling the Earth in low orbit for years.

Q: If we were to put all oil drilling pipe in-use end-to-end, how many times to the moon and back would it go?

I'm afraid you are probably off by quite a bit. Apparently, the total number of rigs in use worldwide is about 3,500:


Then the question is the average amount of pipe per rig. Each mile of pipe per rig would be 3,500 miles of pipe. My guess is that the average amount of drill pipe per rig is between two and three miles of drill pipe per rig, or about 7,000 to 10,500 miles of pipe, while I think that the average distance to the moon is on the order of 250,000 miles or so.

I think you are wrong. 3500 is not even one rig per producing field, worldwide. If we count holes in the ground, we are dealing with tens of thousands, or even higher.

No, Jedi. There are fields with no rigs. The rigs are used to drill the holes (the wells). Once the wells are drilled the christmas tree goes up and the rig is moved to the next location where a "hole" is needed, maybe a galaxy far, far away;-)

Correct. But they don't take the holes with them. So; how long is the "total hole" in the ground. And how much of that has steel pipes in it. Enough to get tothe moon?

Drill string and casing are two different things. Drill string is for drilling the hole and casing is for lining the hole to hold it in place. the same drill pipe is used on many different holes.

So, what's the answer to the question if we assume casing as well as drill string?

I would say add 3 zeroes maybe 4.

Yeah, oil is really not all that deep. We can drill deeper than oil exists (but that is expensive). At a certain point, if the oil gets too deep, the earth is too hot and cooks the oil into natural gas.

Seems like the oil price moves up or down about a dollar every time a new news headline hits the web, talking about Qaddaffi winning or loosing.

If I only had a friend in the Bloomberg editors desk, oh, and some money.

Do you have a good link for following minute by minute changes on oil price?

Like the oil equivalent of great graph for the gold spot: http://www.bullionvault.com/gold-price-chart.do

Great stuff, cheers.

real time display for WTI, NG, gold, silver, copper, and other metals


Thanks :thumbs:

That's nice as it has the different timescales. Cheers.

i - Just a reminder about those oil prices that "change minute by minute". I think the vast majority of folks are talking about changes in oil price futures...not the price oil is selling for at the time. If I sell oil tomorrow it will be at the price my local oil buyer posted. That number isn't based upon anything going on with the futures prices. He has contracts to deliver oil to various refiners. I typically sell my oil on a monthly basis. On April 1st I'll sell my oil for the price posted that day. It matters not what oil futures were selling for at 2 PM March 9.

The future players are betting on what oil will be selling for in 30 days, 60 days, etc...what ever the contract period might be. If the 30 day contract bets oil drops $2 in 30 days that has nothing to do with what oil will sell for in 30 days. If in 30 days oil is selling for less than the futures price that player loses money. If it sells for more he wins his bet and makes money. The futures are bets as to what oil will be selling for at some future date. And like all betting there is a winner and a loser. Every future bet on higher oil prices is taken by someone who is betting that price won't be reached.

Ahhh... that's very useful info, cheers Rockman. I'm not an oil insider so a lot of this is still a bit of a mystery to me.

So when the news in general talks about WTI/Brent shooting up in value after, e.g. a Libyan refinery shutdown, are they talking about futures? And the prices here: http://www.upstreamonline.com/marketdata/markets_crude.htm, are they futures?

If so, and if I'm not directly involved in buying/selling oil, then I can almost treat futures like a real-time indicator of the market's reaction (albeit delayed by 30 days or so)?

Most of the time the MSM quotes oil prices, they are talking about the spot market. Futures win or lose based on the spot price at a settlement date. I'm interested that Rockman is selling at the spot price, most of the big producers lock in longer term contracts that are essentially a futures/spot hybrid, where when they say they can deliver nnn bbls at such and such a date, they really CAN deliver those bbls. The rest of the futures market is made up of speculators who have no idea what a bbl looks like, nor do they care. They have to close out their positions long before physical delivery is required. Same goes for cotton markets, gold, lumber you name it.

Thanks, think I'm slowly starting to understand..!

Most of the time the MSM quotes oil prices, they are talking about the spot market.

Eh? Virtually the only price ever quoted in the MSM that I see is the Nymex WTI futures front month or the ICE Brent futures front month.

tow - True. And I'm not sure folks understand what the spot market price really is: it's the price any producer wants to charge for oil that isn't being sold on a contract basis. It's a negotiated price with the buyer. Thus it changes from deal to deal. There is not spot price posted anywhere...just speculation what the deals are at the moment. And just like contract prices, it's detrimental to both sides of the trade to tell anyone exactly what their "spot price" was.

Ah ok, so the bottom line is that there isn't really an accurate minute-by-minute spot price equivalent graph for oil like the nice, friendly gold spot that I posted earlier?

http://www.upstreamonline.com/marketdata/markets_crude.htm says it is up to the minute spot prices for various markets. However other sites showing spot prices often differ a bit. I presume it's likely to be a good approximation of the price an individual buyer will pay for a spot cargo on a particular listed spot market at a specified location at that particular time but then I've never bought oil by the barrel let alone thousands of barrels :-)

i - I have to wonder if your gold spot is completely accurate: has every gold buyer/seller agreed to do trades excatly at that price or are they free to do their trades at whatever price they want? If you sold your gold this afternoon is that the price you would be FORCED to sell at? IOW is there a "gold police" that makes sure every one follows the "golden rule'? LOL.

Good point. Actually I am kind of forced to sell my gold at a certain price as I don't physically hold it - I have it stored with a gold company that then monitors the gold spot price minute by minute and if I sell at any particular minute then I'm given about 4 minutes (or something, I forget exactly how long) to complete the transaction to lock it into that price.

Of course I could actually take physical delivery of the gold and sell it myself, but that has its own drawbacks. For now I'm content to leave it where it is!

But I think there are various gold spot prices, so yeah, you're right - there's not one official price that the gold police enforce..

It's a market -- if you go buy/sell at your local dealer or on-line, they'll have prices to buy or sell based on the index price. The dealer just makes his money on the spread if he's trading quickly, but can have windfall gains or losses on his inventory. I assume, but don't know, that the local dealers have wholesale trades on the back-end when needed, at larger volumes but less margin, and possibly a futures trade to help insulate against loss from a price drop.

The retail spread is pretty significant. You can't day trade physical metal around here anyway.

Paleo - Good points. And if I understand correctly that's why there is such a huge volume of paper bbls traded every day: many of the trades are only held for a matter of seconds/minutes before computer programs trade them off. A single futures contarct might be traded many dozens of times before it matures (if that's the correct term).

Most of the time the MSM quotes oil prices, they are talking about the spot market.

It has been my experience that they are usually talking about the futures market. They speak of how high oil went today and what it closed at. And they mention WTI or Brent. In those cases they get their information from the futures market itself.

However the WTI Cushing spot price always reflects the NYMEX near term contract price except for the first three trading days after expiration. But that is just the price reported by Bloomberg and others. The actual spot price is always negotiated between the buyer and the seller.

They have to close out their positions long before physical delivery is required.

Delivery is never required. Even if the contract is still open at expiration no one is ever required to take or make delivery. They can simply opt to settle in cash. This is the very biggest myth of the futures market. That is the myth that if you do not close your contract before expiration that you are required to take delivery, or make delivery if short. No, you can always opt to settle in cash. And this is true whether you are talking about wheat, oil or pork bellies.

Ron Patterson, former commodities broker.

Meaning you just cover using the spot market?

No, the NYMEX will set a closing price. That price is the average price of all contracts marked to trade "at the close". Then your contract will be settled for cash, at the closing price, either debiting your margin account or crediting your margin account depending on whether you made or lost money.

The spot market is not involved in any manner whatsoever. And you don't have to do anything other than inform your broker that you do not desire to take or make delivery. After that everything is done for you.

Ron P.

smitty - it's not so much small operators sell at spot prices. I may have a well producing oil in Lavaca Co. Texas. There are a limited number of oil buyers I can sell to in the area. An oil buyer in N. La. might pay me more but I have to pay to truck it to him. So I don't sell to him. My local buyers post a price. I either sell it to them at that price (if I don't have a long term index priced contract) or I shut my well in and just sit there with a tank full of oil that isn't making me any cash flow. The big producers have some leverage. But at the end of the day you either accept the buyer's price or you shut in and lose cash flow.

Thanks for the clarifications Rock et al. Serves me right for trying to "clarify" a complex subject after some glasses of vino and right around beddie bye time. ;)

Here's another link from the same source as before. I still think of the "spot" market akin to the old bid-ask spread for stocks. There are always local "jobbers" who aggregate from the small fry and try to work out prices (and leave a bit for themselves as profit). It is truly a good ole boy network.

On that same note, here's a medaimatters discussion about oil prices, speculation and presidential input, which kinda takes us back to the start of this thread (if I can even remember it correctly anymore). The thesis Bolling put forward was that Bush opening up offshore drilling removed the psychological barrier on the futures market and drove the price down to $33/bbl in 6 months. Conversely, a new moratorium put the price back up above $100/bbl.

smitty - It probably all boils done to psychology. There is no magic formula to predicting what oil FUTURES will be trading at X days down the road. Football Team A may be figured to win the Super Bowl. But then hthe quarterback is hurt and the bets swing hard the other direction. And..SHAZAM!...Team A still wins the Superbowl. Unless someone is betting futures at least 3 years out opening up any or all fed leases for drilling will make no difference in what those futures will be worth all those years out. In fact, IMHO, such action won't have any effect on the future prices whether the lease are opened up, drilled and big discoveries made. The only event that can impact future prices signficantly (in a reality sense) is a major supply disruption. Even then they are still making gut guesses as to high oil goes. Let's say...SHAZAM!...All of Iran's production is shut down by some act of war. SHAZAM!!!...I take all my money and buy a bunch of 30 day futures at $180/bbl. And in 30 days...SHAZAM!...oil futures are trading at $175/bbl. And ...SHAZAM!...I just lost my house, my car, my wife, my dog. I'm going to really miss that dog. BTW: the guy that covered my futures bet got my house, my car, my wife, my dog...that b*tch.

i - I have to assume that's what they're talking about. I've seen neither a buyer or seller putting out a press release telling us how much more they were willing to pay for spot oil.

I'm not an oil trader either. I don't even spend much time around those folks. But that's exactly what an oil future is: a bet on what oil will be selling for X months down the line (actually it isn't...it's what oil futures will be selling for...not oil). I don't have the link but someone pointed out the volume of oil involved in the futures market measures into the BILLIONS of bbls of oil on a daily basis. IOW they are "paper bbls" as someone coined. The vast majority of "oil" traded in the futures market doesn't actually exists. You can play the oil futures yourself with a family member: bet them that in 30 days oil futures will be $Y/bbl. If it is that price or higher your kin pays you $10. If it's lower you pay them $10. That's exactly what the future market prices represent. Well guess what: if folks think oil prices will be going up they make that bet. Thus if their projection is correct they win. Remember though: someone is making the same bet that you're wrong. But folks think making such a bet drives the price of oil up. Just the opposite: it's the expectation of rising oil prices that pushes the futures prices up.

There is a very small componet of the futures market that does deal in real bbl: it's the folks who acutally buy/sellig real bbls of oil. They essentially use the futures market to lock in their revenue to a small range. What they might lose selling oil at lower than expected prices they make back with the right futures bet. Likewise they lose some of their potential profit by betting futures in the opposite direction. This what most folks are talking about when they mention "hedging": I give up some potential profit by safeguarding against losing more money than I would otherwise.

Brill, cheers for the excellent explanation.

Very interesting to note the existence of the 'paper barrels' phenomenon.

So really it's some like kind of weird, unspoken consensus by the players in the oil market that when an event occurs, such as the unrest in Libya, then the price will rise. But it's not a direct result of oil availability being taken off the market at that particular point in time. How peculiar.

The physical unavailability of Libyan crude which refineries were expecting to turn up forces the buyers to find another suitable supply. They may then go out and buy on the spot market. Unlike futures there is only a limited physical quantity available on spot markets and so increased competition for that oil will push up the price. Once there's no more spot cargoes in a particular market available then you must look further afield. If oil supplies are tight then a relatively small disruption will result in shortages unless the price rises to balance demand (that is knock out bidders). So I would say the price rise is as a direct results of oil being removed from the market. The futures market is trying to predict that change. Recently there have been some very large jumps in spot prices. Sumatra Light spot jumped 10% in a day a few days ago which suggests to me someone was willing to pay almost any price to get that oil.

At least that's my best understanding for what it is worth.

tow - From what I understand as to how much Libyan crude was going to Italy the folks there must be going crazy chasing after spot market oil. I think I read that Italy (or ENI) gets 80% of their oil from Libya. Imagine what would happen to the U.S. economy if we lost 80% of our imports overnight. How much would our refiners bid for uncontracted oil?

Rock or Ron,

So the real price is the price you pay or receive at delivery. Like wheat at the elevator. What is posted is what you get, don't like it, go somewhere else. You can dicker a little, but not much. Futures prices are entirely different. No physical handling of the commodity, just bets one way or the other. Spot price is that average, tabulated by whoever is providing the information, of non-contract sales they have at their disposal.

To get back to the argument, is it the oil speculators driving the price at the pump?

That means is it the futures trading, betting on their expectations, who are setting the price? One reply says no, impossible, they are just betting their hunch, not physically trading. But when that contract for delivery is made, or some entity is selling on a non-contract basis, it is that futures price that is helping to form a level of acceptance in the buyer or seller. That and the individual's own expectation of future value. The elevator manager knows that futures price, of what he can expect to receive for the grain/oil downstream, which in turn is predicated on another's expectation, again with today's spot and future's prices in mind.

So yes, all that betting on the futures market does not determine the price, but it sure influences it. The question is degree.

To get back to the argument, is it the oil speculators driving the price at the pump?

No, it's not the speculators, it's the Chinese. They are buying up more and more of the world's oil exports - and, remember - China used to be a net oil exporter a few years ago.

The Chinese are importing over 1 million barrels per day of Saudi oil now, and the Saudis are exporting less oil than they did in 1980, when the US was by far their biggest customer.

This is reflected in the price differential between WTI in New York and Brent in London. You can't physically get WTI to China, and the only demand is from US refiners. They aren't willing to pay as much as the Chinese because they have access to and can process heavy, sour Canadian crude, so the price is lower. The lowest gasoline prices in the US are in Montana, Wyoming, and Colorado, and guess what they are the states closest to? A: the vast Alberta oil sands.

Also, at this particular point in time there must be some Italian refineries going into the gobal market and driving up the price of very sweet, very light oil. It's hard to match the quality of the Libyan oil that is off the market.

I see little news on the fuel situation in Italy and other Libyan customers. Are they succeeding in finding enough oil on the spot market, or are there shortages looming?

Italy is having some limited success in obtaining additional oil cargoes from the Persian Gulf. Some of that oil may be coming directly or indirectly from Iran.

I don't know if there has been some kind of back room, quid pro quo deal, but it appears that China is actually going to get more oil from the Persian Gulf in the next few weeks, and taking less from West Africa (Nigeria + Angola). This would leave more for Italy.

But that is not enough: Italy and even the US will still come up short here, so unless something changes (for example, some OPEC nations start to ship more oil) well yes, there eventually will be some kind of shortage. The first sign clear of a coming shortage would be action taken by the IEA to release oil reserves.

I assume floating storage is dropping like if they torpedoed those tanker ships right now.

Don't NYMEX rules specify actual physical delivery? The "players" usually close position by making offsetting trades (at loss or gain), but one can actually execute delivery.

Exxon CEO says oil prices not yet hurting economy

Chris Kahn, AP Energy Writer, On Wednesday March 9, 2011, 1:50 pm
NEW YORK (AP) -- The CEO of Exxon says he doesn't think the recent jump in oil prices is hurting the U.S. economy just yet. But it's getting close.

Rex Tillerson, speaking to reporters Wednesday at the New York Stock Exchange, says that in 2008, when oil hit $147 per barrel, American families appeared to change their driving and spending habits when gasoline hit $4 per gallon that June.

The average price for a gallon of gas is now $3.52. But drivers on the West Coast are paying close to $4.

The head of Exxon Mobil Corp. blames a recent jump in oil prices on fears of production losses from North Africa and the Middle East. Oil is up nearly 25 percent since civil unrest began in Libya in mid-February.

Wow . . . a new low in reporting. Could you possibly find a less qualified person to make an objective statement on the matter?
1) The guy is a multi-millionaire who has no concept of what the price of gas does to Joe-sixpack; and
2) He is a guy who's livelihood depends on selling oil and thus has an incentive (whether by delusion or misleading intent) to downplay the destructive effect of high oil prices.

Who gives a crap what *he* thinks??!?!?!


Naimi sheds light on Saudi oil reserves

When a supply oil crisis hits, policymakers in rich countries always look at their strategic petroleum reserves. The stockpiles, set up after the Arab oil embargo of 1973-74, are the last line of defence against a shortfall in oil supply.

From now on, they should look somewhere else too.

Almost unnoticed on Tuesday, Saudi Arabia said it was boosting its own strategic storage to guard the world against a supply shock. In an interview with the official Saudi Press Agency, Ali Naimi, the kingdom’s oil minister, said Riyadh was now “storing additional quantities of crude oil at various storage facilities”.

Mr Naimi said that Saudi Arabia was building crude oil inventories in Sidi Kerir (Egypt), Rotterdam (the Netherlands) and Okinawa (Japan). The reason? The Saudi oil minister went on to say that the stockpiles will allow the kingdom, the world’s largest oil exporter, to “better meet any additional call on its production”.


A final note on the interview with the Saudi Press Agency. My colleagues at the SPA did not ask Mr Naimi about actual production – curious they forgot about it! But the Saudi minister said the kingdom’s current production capacity was of 3.5m b/d. Because we know that Saudi Arabia maximum production is, at least, 12.5m b/d, the comment is an implicit confirmation that Riyadh has increased its production to 9m b/d in March.

I hardly know where to begin with this story... so I won't try. Enjoy.


Well . . . since they really don't have much excess capacity, they can make it look like they have more excess capacity by filling up storage tanks with the existing (limited) excess capacity. Then, when a real emergency happens, they can export from both the (limited) excess capacity and the storage tanks.

Seriously . . . I guess I'm reading the negative in every story but . . . . . Well, when even Saudia Arabia feels the need to create a strategic petroleum reserve then you know TSHHTF.

Seems that one quarter of Irak's oil export is now offline for a "few " days after a bomb attack :


No worries Saudi Arabia will compensate!.

But on a more serious note, the northern line is extremely vulnerable and based on how politics are unfolding in Iraq, I expect multiple bombings of this line in 2011 and beyond; not to mention what will happen to the line, once the Kurds claims Kirkuk, which Talabani (Iraq Kurdish president) called the Jerusalem of Kurdistan few days ago.


The American ambassador to Saudi Arabia was interviewed on Bloomberg today and he reassured us all that SA can increase production to compensate for the loss of output from Libya, and even Algeria, so we have no need to worry.

No need for lifeboats, it's unsinkable you see!

I'm seeing the first signs of oil fires in the Libya videos.

US - creeping signs of bond collapse? Very early days (and this is but a drop in the ocean of US bond debt) but surely the writing is on the wall here. This is not the only indicator - as Greer mentioned last week.


Pimco cuts US Treasuries holdings to zero

Pimco’s $237bn total return fund, managed by Bill Gross, has cut its holdings of US government related paper to zero for the first time since early 2008.

Known as the “bond king”, Mr Gross has a high media profile and writes about the outlook for bonds and other markets.


Mr Gross said in his March investment outlook that Pimco estimated that the Fed had been buying 70 per cent of annualised issuance of Treasuries since QE2 began – a programme he last year likened to a Ponzi scheme.


OpenStudio visualizes energy use in buildings

Together, residential and commercial buildings account for a staggering 40 percent of energy use in the United States. However, the U.S. Department of Energy's (DOE) National Renewable Energy Laboratory (NREL) is developing a suite of tools to tame this energy beast — and it is free to anyone who wants to use it.

...The first version of OpenStudio was released in 2008 and is a plug-in that leverages Google SketchUp, a user-friendly 3-D drawing program. "OpenStudio was originally developed so people could view and edit geometry for EnergyPlus models," NREL OpenStudio Developer David Goldwasser said. "We've now expanded it to be able to view and edit a lot of the other attributes of EnergyPlus building models, for example putting in loads like lights, equipment and simple HVAC systems."

The new suite of OpenStudio tools includes the SketchUp plug-in plus:

• ModelEditor which provides users with a simpler way to edit the building model. It includes a way to access components that don't have a physical representation in a building, like a mechanical system.

• ResultsViewer, a way to review EnergyPlus simulation data in a graphical format. It allows users to look at the data, draw conclusions and compare results.

• RunManager, an application to run simultaneous simulations. Designers can compare results between differing models to see where the best energy savings can be achieved.

The OpenStudio plug-in also heavily leverages a feature in SketchUp called Match Photo which uses photographs of a building to create a 3D model — almost effortlessly. Once the 3D model is finished, users can use the plug-in to trace over windows and doors for EnergyPlus' use in running an energy model. It's a tool that developers believe fills a need, especially for crews planning a building retrofit.

Download at http://openstudio.nrel.gov/

Or for those who like to spend money http://www.reuters.com/article/2011/03/09/idUS59187320720110309

Thanks Seraph,

I spent some time noodling with EnergyPlus and the SketchUp plug-in a year or two ago. It was interesting, but as someone unschooled in the finer points of HVAC I found EnergyPlus to be extremely dense and opaque.

I recall there were a few tutorials that only went over the most basic aspects of modeling a simple building, but little or nothing to help navigate the much more complex topics of mechanical systems, so GOD HELP anyone not already an expert in HVAC and intimately familiar with the ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) handbooks.

I lost interest when I got mercilessly flamed on their "community" forum by one of the engineers for asking a newbie question (this despite publicly declaring myself to be a newbie and begging them to be gentle).

Maybe I'll dig up those old project files and take a look at the new capabilities of OpenStudio.



Thanks for the info: I got retrained (AAS) into HVAC/R in 2008 at 54 yo and have skills commensurate with the AAS. I was looking at that program a bit cause the software simulation I saw in school piqued my interest. I've got previous computer hardware and some software background that might allow me to use such a tool.

By the way, I find the individuals in HVAC industry online and offline 'unfriendly', to be blunt. It's pretty much a dog-eat-dog mindset.

My present interest as a part time seasonal independent contractor is in the residential market. The commercial market label of the plug-in was what first caught my eye.

I'll most likely dig in a bit deeper ... just in case.

It's worth a look, especially if you have training in that area. The EnergyPlus simulation software has quite a bit of engineering behind it, and you can download the detailed engineering reference that describes all the maths.

That's probably why it's labeled "commercial", at first glance it looks like overkill for your average residential setup, but don't let that fool you. You can model any building for simulation, from the largest mega-hotel in Dubai to the most modest shack on the bayou. Perfect for noodling with passive solar setups, and they even include a few examples of just such.

The OpenStudio plug-in (for the SketchUp 3D modeling application from Google) is primarily intended to facilitate the creation of building models, which are then exported to a format the EnergyPlus simulation software can use. For any detailed simulation you would still need to add all of the air loops and mechanical systems in EnergyPlus, which is where I got stuck. Maybe this new version of OpenStudio helps with that, I can't say.

It's probably a good career move, as energy costs become ever more painful people will be desperate for a few good building engineers to swoop in and cut their utility bills (but still keep everyone comfortable!). Good luck!


Ethanol a Massive Waste

In 1944, Hitler's Schutzstaffel commandeered the entire European potato crop and turned it into ethanol to fuel V2 rockets. With their foreign oil sources interdicted by Allied advances, the Germans resorted to replacing imported oil supplies by converting civilian food stocks into ethanol.

To an extent, we are driving down much the same road with our current ethanol program in America but, at least for now, our potatoes are safe.

No one makes articles about very large cars wasting gasoline or people driving solo or gasp the myriad of other wasteful ventures in our daily lives. While I wish they did not make ethanol from food, it seems the problem is not the ethanol as much as it is the consumption of fuels in general.

(Just for fun.)

"The Endless Spiral of Gas Price Tipping Points"

Paul Taylor, chief economist for the National Automobile Dealers Association, puts the tipping point slightly higher at $4.50, for when consumer interest significantly shifts towards fuel efficiency. “Generally it takes a level that consumers have not seen before,” Taylor said. “Gasoline prices in excess of $4.50 per gallon are likely to have a more dramatic increase upon consumer choices.”


How can the tipping point keep increasing if we're getting poorer?

Unless the currency is being debased, of course.

Peak oil + fiat currency debasement + population growth.

Always keep all three in mind.

We know that oil production will decline, and we can be pretty confident that due to various disruptions population growth will slow and may even reverse.

Both of those are good things - though we may not initially perceive them to be - as they will put the brake on global hypercapitalism run amok.

The big question mark is currency.

I would add debt, Government and private.

"hypercapitalism run amok."

peak oil doesn't beg a solution it is the solution.

Listening to Life, before it's too late: An interview with Ellen LaConte

People of conscience face two crucial challenges today: (1) Telling the truth about the dire state of the ecosphere that makes our lives possible, no matter how grim that reality, and (2) remaining committed to collective action to create a more just and sustainable world, no matter how daunting that task. It's not an easy balancing act, as we struggle to understand the scope of the crisis without giving into a sense of hopelessness.

Ellen LaConte's new book, Life Rules, is a welcome addition to the growing literature on these crises. The subtitle -- Why so much is going wrong everywhere at once and how Life teaches us to fix it -- captures the spirit of the book. LaConte offers an unflinching assessment of the problems and an honest path to sensible action. In an interview, I asked her to elaborate on her background and path to the insights of the book.

I just read a piece on change we can believe in.

It seems that the FDA has granted some rip off pharma company the EXCLUSIVE right to manufacture a critical drug used to control premature labor formerly custom compounded for twenty dollars a dose by hospital pharmacists so it will be SAFER.

The new price will be 1,500 dollars per dose, and up to thirty thousand per pregnancy.

I expect that will save the lives and health of a LOT of poor women and thier babies.

They won't be at risk of allegic reactions.

This certainly seems to be a case of change that is 180 degrees in the wrong direction.

I would hope that the spectrum of media outlets, Fox, MSNBC, and CNN...the Nation, Mother Jones, Time, Newsweek, The Weekly Standard, et al offer articles and segments asking why this is a good idea for Americans.

So much for controlling costs of medical care so that more people can have access to it...

I wonder if this will be cited as an egregious case of government interference in 1/6 of the U.S. economy...government squashing competition and distributed supply by picking a winner in the market?

Unfortunately we may only hear crickets from across the political rainbow on this one...

Unfortunately we may only hear crickets from across the political rainbow on this one...

They'll be partying with the new contributions from their pharma masters. Thats pretty much how it works. Pharma is owned by the investor class, and the investor class owns the politicians and the media.

It's not so much that it will be safer, but that it will be easier to get. At least, that was the theory. Doctors supported it for that reason. No one expected the price to rise that much.

That is what they say, ie March of Dimes. But for this organizaation to say they didn't expect that level of increase is either a faulty statement, or faulty thinking. It's a very common practice in Pharma, to become a sole source supplier, and jack the price thru the roof. With the FDA outlawing the compounding this drug, it's a no brainer. Fortunes are legislated.

At least it will be temporary. Drug patents don't last too long.

7 years.

"The FDA last month signed off and gave Makena orphan drug status. That designation ensures Ther-Rx will be the sole source of the drug for seven years.

The March of Dimes, which gets hundreds of thousands of dollars in funding from Ther-Rx, celebrated the approval in a press release, saying if all women eligible for the shots receive them, nearly 10,000 spontaneous premature births could be prevented each year."


They knew what was up. 7 years of donations. The cynic in me. Ther-X found an orphan drug, whose R & D had already been paid, and went to town with it.

"Makena is a synthetic form of the hormone progesterone that first came on the market more than 50 years ago to treat other problems."

Granted, Ther-X will assume liability for future dosing, but it in no way justifies 100x price increase. But this practice, of assuming sole source and jacking price 50-100x, is too common. Manufacturer's will drop a drug, for unknown or unstated reasons, and suddenly you have a sole source manufacturer. What is very troubling also is the consolidation of suppliers, those middleman who provide the drugs to hospitals and pharmacies. Cardinal and McKesson are the 2 biggies left, the others gone under.

Ex-KV CEO Hermelin in court today

The former chairman and CEO of Bridgeton drug maker KV Pharmaceutical is scheduled to appear in federal court this afternoon for a sentencing.
Hermelin has been at the center of an ongoing federal investigation by the U.S. Food and Drug Administration and U.S. attorney’s office. Last year, KV agreed to pay $27.6 million in fines and restitution and closed its Ethex Corp. generic drugs business after pleading guilty to criminal charges for allegedly misbranding and adulterating drugs and for not disclosing that its painkiller tablets were oversized.

KV Pharmaceutical is the parent company of Ther-X.

For some reason I had the impression that it was longer than 7 years. I Googled it and got a different story.

How Long Does a Drug Patent Last?

In the United States the patent filed on a drug lasts for 20 years; however, because companies file even before clinical trials, by the time the drug hits the marketplace, the patent may only have between 8 to 10 years left. Once the patent expires, other companies can produce the drug using the same ingredients and bring their version to the market, introducing competition and generally lowering the prices for the drug.

Wikipedia says the same thing but... Generic drug

In the US, drug patents give twenty years of protection, but they are applied for before clinical trials begin, so the effective life of a drug patent tends to be between seven and twelve years...

But the same article tells us that a new law changes that slightly.

The Patient Protection and Affordable Care Act, which President Obama signed on March 23, 2010, authorized the Food and Drug Administration to approve generic versions of biologic drugs and grant biologics manufacturers 12 years of exclusive use before generics can be developed.

The seven year patent life is for Orphan Drugs only.

The Orphan Drug Act (ODA) of January 1983, passed in the United States, with lobbying from the National Organization for Rare Disorders,[1] is meant to encourage pharmaceutical companies to develop drugs for diseases that have a small market. Under the law, companies that develop such a drug (a drug for a disorder affecting fewer than 200,000 people in the United States) may sell it without competition for seven years.

Okay, this doesn't make any sense... at first. But apparently a biological drug is different from a non-biological drug. So if you develop a non-biological drug and it takes you 19 years to get it to the market after you filed the patent, then you have only one year of exclusive use before it can be copied as a generic drug. But if it is a biological drug then you have 12 years or if it is an orphan non-biological drug then you have 7 years.

Ron P.


They just change the molecule by adjusting the co-salt and making a time-release drug so that they can extend the patents much longer.

Here is my issue in the main. A lot of the leg work on drugs and development happened with public tax dollars funding the research. So why the high price if you and I paid for it -- like 90% of it -- according to an NIH study?

I think companies should be able to recover costs but the whole blockbuster drugs thing by advertising what we need to take is causing an overmedication problem in my view.

There are other obvious causes of depression, cholesterol, high blood pressure etc.

Maybe we ought to encourage simpler methods like diet and exercise or writing poetry to get those depressive feelings out in the open ;-)

Red yeast actually has the basic compound Merck developed to control cholesterol.
Merck never did any real work on it. LOL. A researcher in Japan figured it out fist. Basically almost no R & D to get billions of bucks.
And they tried to block people from using the Red yeast with various laws to say it is unsafe and contained the anti-cholesterol drug. Well gee red yeast works very well as an anti-cholesterol drug, since it is the same thing Merck peddles to you on the TV.

Pharma is smart, and they like to use the FDA to pull their punches. LOL

The fact is that we have overmedicated child birth in the West.

Children can be born without pain meds under the supervision of a midwife.

My wife had children without pain meds -- the whole thing has gotten out of hand. She tooka small class on learning to control pain. She said it was hard but she was able to do it.

Well we are headed the other way and this why healthy people are paying the bills in crazy out of proportion ways.

This actually isn't a drug used in childbirth. It's used throughout pregnancy to prevent premature delivery (for women who are at risk).

That is how the company is justifying the cost. Even at $1,500 a dose, it will be much cheaper than caring for a premature infant. Therefore, insurance companies and maybe Medicaid will likely pay for it.

Yeah I know.

But we have been skeptical about how many C-sections are performed in the US. Seems Drs. are running from Lawyers and the insurance costs are on the hook.

The whole pharma/medicine thing with child birth is getting out of hand. Then your child is born and they want you to go to specialists to look at worthless problems. For example, my child had this slight, subtle hip issue but we were sent to a specialist to pay a bill or two for no good reason.

The problems with the system seem to be overdoing so many things.

Yeah, root canals can be performed without pain meds too. I'm sure they offer small classes on that too.

LOL. My wife wanted to do it that way. Now don't be silly.

Root canal? A pliers and a bottle of Jack Daniels will fix any dental problem.

Now Daddy is talking.

I may take the jack and skip the pliers though.

Last Wednesday 21:00 on PBS Watertown, a BBC production narrated by Sir Attenborough showed the path of ecological destruction we are following. There were 4 segments: water, energy, food, and population. The document correctly showed the interaction of the 4 problems.

It was said that, if the whole world would have the lifestyle of India, then a population of 14 Billion could be supported. Conversely, a U.S. lifestyle would only support 1.5 Billions. This one hour document should be shown in all schools around the world to educate the young and perhaps lessen the devastating impact.

Anyone got the low down on cornocopian Philip Verleger? He's just been in New Zealand telling us all everything is going to be just fine and dandy and the price of oil will be the same in 10 years as now because alternatives will have taken the strain:


Unfortunately the media here have latched gleefully on to his comments

Hi andyh,

Don't know Verleger.

You might try bringing attention to the NZ Parliamentary report from October of 2010.



If only...

So, the Professor of Strategy and International Management at the University of Calgary, says regarding Peak Oil: "Yeah, production's going to peak sometime. So what? There's going to be substitutions. That is what innovation is about. People worried about peak oil were frozen in a history that didn't exist."

Well that's a relief.

That is what limitations are about. People unconcerned about peak oil are being hypnotized by a future that will never exit.

Maybe they believe they will be part of a select group that will remain immune from the effects of depletion - resource depletion is for "little people" as Leona Helmsley would say.

I suspect people like this, which includes the Danny Yergins and most, if not all, of our political leaders, believe they personally will remain a part of a shrinking, select group of industrial peoples who will eek through this bottle neck by crawling over the bodies of the rest of us (the cannon fodder folk).

And the (industrial piglets) shall inherit the earth... ?

So, the Professor of Strategy and International Management at the University of Calgary, says regarding Peak Oil: "Yeah, production's going to peak sometime. So what? There's going to be substitutions.

You have to look at where he's coming from (the U of C, my old Alma Mater). Wind-powered electric trains zip by the university every four minutes and disgorge thousands of students per day. His office is heated by the university's natural-gas powered Central Heating and Cooling Plant. His lights are kept on by a mixture of hydroelectric plants, mine-mouth coal burning plants, wind generators, natural gas peaking units and cogeneration units at oil sands plants in the north. The university is connected to one of the largest bicycle path systems in North America, and he's probably living in one of the affluent residential districts within walking distance of the university.

Naturally, from his perspective, peak oil doesn't seem that important. If he couldn't get fuel for his car, he'd just scrap it and take one of the other ways to work and shopping. It wouldn't have much effect on his life, other than the fact that his academic position is funded by an oil company, and the university is subsidized by Alberta government oil and gas revenues. If oil prices went up, they'd have more money to pay him.

Space Shuttle Discovery: Final Flight in Pictures

I wonder what arguments the strategy professor has to offer to explain why the "next" shuttle is not ready yet ?
I mean, common professor at least Say something ! Never mind, I'm calling Branson.

The next generation of space shuttles will be photo voltaic. I promise you.


That's a link to a Youtube video entitled; 'The Day the Dollar Died'

It's really well done in video footage and logic to the sequence of events that could take place.

Very scary video. I noticed that there had been 1,131,208 views so far. I guess a lot of people is concerned about inflation. Here is the best one I have seen yet. It is scary because it is not fiction. It makes you think the situation depicted in your video could actually come to pass.

Bailout Big Lies & Your Savings Video about national debt.

Ron P.

Is it realy that easy to get civil unrest?

You know what they say a dog is only four missed meals from being a wolf.

I'd rather deal with the hungry dog than the hungry wolf.

The dog I can negotiate with, if it has had interactions with humans.

The dog I can negotiate with, if it has had interactions with humans.

You can negotiate with a wolf, too, it's just that the negotiations are tougher. You have to convince the wolf that you are the Alpha Wolf, and you are higher on the food chain than it is.

I have a friend who had a wolf as a pet. He said it was a great dog, loyal, obedient and trustworthy. The only thing was that it kept eating the stray dogs in the neighborhood. Being lower on the food chain than a wolf is always bad.

""You have to convince the wolf that you are the Alpha Wolf, and you are higher on the food chain than it is.""

Yes, the conversation starts with, "Have you met my little friend,,,,KIMBER-45 ACP?

It's quite easy to negotiate with the bipedal Wolfs as well, from the top of the food chain.

Choose Wisely,
The Martian.

The inflation.us "The Day the Dollar Died" video is a Ron Paul/Tea Party approved propaganda piece using a fair amount of video of President Obama. In the video, the stated cause of the collapse and imminent hyperinflation is the Obama/Bernanke fiscal policy and the failure to curb entitlement spending. People involved in making this video are known pump and dump stock market scam artists.

We may have a day of reckoning, but I don't think it will be for the reasons portrayed in this video. A nation like the U.S., whose economy is dominated by ultra-wealthy financial corporations and individual gamblers who are only lightly taxed, a country without a foundation of manufacturing/production, is headed for disaster. Simply taking money from entitlements and giving it to the financial elite for large-scale wall-street gambling and financial shenanigans will not solve our nation's fiscal problems.

This spreading of fear with the real or implied promotion of Tea Party fiscal policy is another factor which, like the denial of global warming/climate change and the refusal to accept the reality of near-term peak oil and related energy issues, prevents any possibility of dealing with the reality of the problems we face.

An easily mislead and under-educated or brain-washed populace, especially in the U.S., is a big problem. I am appalled at the way Fox News and it's backers are so easily able to dominate the cable world with crap that isn't really news, and to convince the so-called working class of the U.S. to back actions and policies that actually hurt them in the end.


Evenin', Dear TODers,

Some thoughts on the "Food Miles" article posted up top:

1) "Choosing whole foods over processed foods;
Households 4.1%, Processing 2.8%"

One question, which requires more analysis, is: What kind of "processing"?

For example, it may be the case that preparation of spaghetti sauce in the "processing" sector, might save energy over many more individual households, each making sauces from scratch - and then, also, canning or preparing for storage. Don't know.

Likewise, for many other products. The question is, though: Would people actually consume potato chips, if they had to make them at home?

So, it seems to me there are probably certain ways in which the processing sector actually reduces what would otherwise be energy use in the household sector.

2) Re:

2. "Highly-processed and packaged foods simply require far more energy than whole foods, regardless of how far they travel. Choosing imported whole foods over local processed foods almost always reduces food system energy use."

Again, processing depends. (i.e., I question this.)
Certain foods are only going to be consumed via processing. (Nobody eats whole grain wheat straight, right?)

3) Re:"Choosing food that was grown in a region well-suited to the crop, using methods that build soil and rely primarily on sunshine for energy and rainfall for water."

It seems to me that this particular metric is just about impossible for a consumer to measure.

Or, let me put it this way: How would the consumer go about assessing these factors? Where does the information come from and who provides it?

At the same time, these questions could be more easily answered (it seems) by local-and-(more)sustainably-produced food (I'm guessing.)

"Nobody eats whole grain wheat straight, right?"

Not uncooked, but they can be cooked with very little energy and can be quite tasty. Same with oat groats. Bring them to boil, then remove from the burner, wrap in towels and let sit over night, ideally over the pilot light. Warm back up in the morning and you have an extremely tasty, healthy and very low energy breakfast. Pressure cooking can reduce the energy input, too.

We do also make our own baked potato chips on occasion. I don't know about the energy compared to mass produced chips. The main thing is that these should be seen as a special luxurious treat, however they are prepared, not as a daily staple (the way they seem to be for many Americans).

There is lots of bad information and weird logic in lots of this. If something doesn't grow in your region, why should you eat a lot of it. That just doesn't make sense. Transportation costs, environmental and financial, are going to be going up. If that's something you can take out of the equation, isn't that good?

Local is also about resilience--about supporting the farms around you that are going to be there when transport systems fail. It is also about creating relationships. If you know the people who grow your food, or even know the people who know the people who grow your food, you are more likely to be informed about what goes into its production, as you point out.

I did like the inverted pyramid in the article. Basically the lowest energy stuff to transport was also the stuff that was best for you--grains (I assume that includes beans), then veggies and fruit. Meats and dairy came next. And finally oils and sugars. I was disappointed but not surprised to see juices in the least efficient category, as I love many kinds of juice.

Also any heat from cooking is not wasted in high latitudes, for 10 months a year. Just like the heat from those filament bulbs that they decided we can't have anymore in the UK.

A filament bulb wastes about 60-70% of the heat at the power station and in the transmission lines, if it is coal or gas powered.

Natural gas pumped straight to the house wastes 10-20% of the heat in a condensing boiler.

Your argument does not stand up to scrutiny.

Every jar used in the commercial sector needs to be made from raw materials.

When people can, the jars are reused countless times. I have a lot of trouble with these energy use comparison issues.

The food I make is always better tasting and fresher than Tyson. LOL

No value on that though I guess.

The heat in my kitchen warms my house. The commercial places do not warm my house and heck I need to heat up their food anyway. Too many variables and food processors seem to have their hands in the jar on these dubious studies.

I also do not like pesticides and other chemicals in my food. My 2 cents.

EDTORIAL - What about energy conservation?

No short-term solutions

But there are some more immediate concerns about the administration's energy-management agenda that raise questions about the vision and/or thoughtfulness of those with responsibility for that portfolio.

In the midst of the emerging crisis, we discern no ideas to have significant effect in the short term.

An ongoing energy-conservation campaign should be part of the programme of the energy ministry. In the current circumstance, any that may have lapsed should have been started, urging, for example, carpooling and the use of energy-saving lighting.

I have posted comments to other energy related articles in this newspaper, one of the two daily national papers in my neck of the woods, using the moniker "Peak Oil Believer" in the hope that enquiring minds would do a web search for "Peak Oil". I also wrote an email to the editor chiding them for their very shallow analysis of the world energy situation and suggesting that they have someone on their staff read a few articles on TOD to sort themselves out. Maybe they did, maybe they didn't but, it seems like they might have. Their columns seem a lot less ill informed in recent times.

This is in stark contrast to the other national newspaer in this neck of the woods that seems to have been on a campaign to put pressure on the government to reduce import duties on motor cars in order to spur sales. Of course, with the recent run-up in oil prices, they now seem to want to spur sales of renewable energy systems.

The world runs on oil; or is it run by oil?

The prospect of high, fluctuating and steadily rising oil prices is an ominous harbinger of a prolonged global economic crisis. It could destroy the prospects of growth and poverty reduction in energy importing countries, especially developing countries such as Jamaica. Higher oil prices would hit growth, the cost of living, tourism, the balance of payments deficit, the budget deficit and the debt stock.

Why are we not getting more excited about alternative energy, such as solar power? It seems to us that the time for talk and excuses is now well past.

Alan from the islands

Rockman - Continuing our discussion of evaluating the primary cement job. According to the Chief Counsel's report and the latest testimony by the mudlogger at the MBI hearings, they had stopped pumping to perform a sheen test when he called the drill shack to report he was going on a "cigarette" break. While he was gone, there was a noticeable rise in pressure that would not have been masked by changing levels in the mud pits as the pumps were stopped. This is reported to have been the clearest sign the well was flowing and he was the person best positioned to see it, but he was away from his post.

Since the purpose of the sheen test was confirm that all the SOBM had been pumped out of the riser, we know it was now full of just the spacer (at over 16 ppg) and sea water. At that point, because the depth of spacer and water in the production casing is 8,367 ft, but only 5,227 feet over the mud in the annulus, there is still an overbalanced condition in the annulus while they have transitioned to an underbalanced condition inside the production casing. Flow would not occur in an overbalanced condition, so you logically would attribute the flow to a faulty primary cement job not through the annulus.

So if the mudlogger hadn't felt the call of nature (he also hit the head and got a cup of coffee) and had noted the rise in pressure, they could have simply done the kill pill thing and overbalanced the production casing again and 11 men would still be alive. Then they could do a remedial cement job and sent Halliburton a bill for a faulty cement job that had been pumped to Halliburton's satisfaction as noted in their nitrified cement expert's report.

If you pay for failure and then pay extra to fix it, you have incentivized even more failure. You and other operators have the power to improve the situation, but only if you use it.

P.S. And since IIRC MI Swaco is also part of HAL, and it was a dereliction of duty on a part of their mudlogger to not hold his water long enough to perform the clearest confirmation of the success of the cement job, BP could sent HAL a bill for the oil spill.

Bruce - I've analyzed more well site accidents, including fatal ones, than I care to remember. And almost always the key cause was human error. And most commonly because someone didn't see obvious clues that a dangerous system was developing.

Again, you put me in the uncomfortable position of sounding like a Halliburton apologist. The operator of the well, not any cmt company, decided what cmt is pumped, how it's pumped and how it's tested. The cmt company will make recommendations but that's all. They don't make any decisions on the rig...the company man does. In fact, if a service company wants to get run off the job all they need do is try to usurp such authority from the operator. I've seen many cases, including myself, where the service company was certain some procedure was going to fail but did as instructed by the operator. If it's a potentially dangerous situation for any of the hands we'll pass the word along to them. But quietly behind the company man's back. You may recall the statement made sarcastically in one meeting: "Well...guess that why we have a BOP". Trust me: such statements are not made without risk. I've done it more than once. It's tantamount to saying FU to the operators rep and thus you do so at the risk of being runoff the job.

Again this is why Halliburton will bill for a failed cmt job as long as they mixed and pumped the job AS DIRECTED TO BY THE OPERATOR. A simple analogy: you house painter says the paint you bought is too cheap and that it's to damp to paint that day. But you instruct him to do it anyway. So 3 months later when your new paint job begins to peel what do you do: sue the painter for a bad job? The painter (or service company) gives you recommendation to do or not do something. In the end it's your decision and thus your responsibility. There is one recourse with service companies who consistently give bad advice: they don't get any more work. So they do have significant incentive to get the job right. But they never have control of the situation. That's always the responsibility of the operator. Always.

Later this morning I'm heading to a pre-drill meeting on a new well site. All the service companies involved will be there. In addition to going over the technical side of the drill the emphasis will be (as always) safety. I won't be on the rig 99%+ of the time. But I'm ultimately responsible for the safety of all the hands. Thus I'm responsible to make sure all my subcontractors don't screw up. I'll have two company reps on location full time but they can't be everywhere all the time. Doesn't matter: things go bad it's on me because, in the end, nothing happens on that rig without my company's approval. Without my approval. I turn 60 next month and I've never had a hand killed on one of my wells nor had an environmental nightmare. I'm going to try really hard to maintan that record thru retirement.

A small correction: you're talking about the mud engineer...not the mud logger. two different companies...two different jobs. But yes, in a case where someone doesn't do their job correctly, especially if it involves monitoring a critical situation, then yes...BIG LIABLITY. I have bad cmt jobs because the cmt wasn't mixed as I instructed. Again: BIG LIABILITY for the cmt company.

Here is an article http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/12/halliburton_te... on the Sperry (not MI Swaco) mudlogger who was not at his post at the critical moment. He said he told the rig floor. But that begs the question as to why everyone involved would not recognize that this was "prime time" to get reliable data and tell him to wait 15 minutes before taking his break so as to make the most of the opportunity. (There was another distraction going on at the same time due to a faulty valve in the pump room.)

I agree there was a lot of human error. I am astonished that the only guy aboard the DWH who had any personal knowledge of the rupture disks in the 16" casing seems to have been the manufacturer's technician and all he said he knew about them is they were pre-assembled at the factory into the casing sub so they went into the hole when they screwed the casing together. He seemed to have no clue why they were installed. He had a plan that said install them HERE and he followed the plan to a tee. And I have not heard any testimony that anyone else aboard the DWH knew what they were for either. Maybe the question wasn't asked because the MBI and all those high paid lawyers never figured out they ought to ask the witnesses to see if anyone had a clue.

I also note that it seems no one among the regular crew of the DWH, including their Halliburton reps, had ever done a nitrified cement job at depth, especially one for an application as a pressure barrier (i.e. the shoe track). All that expertise was provided by specialized Halliburton people brought aboard just for the purpose and sent ashore so quickly that they missed the blowout that occurred on the same day they finished the cement job. The MMS' co-chairman asked both the BP engineer and HAL's Gagliano if they knew if MMS regulations allowed the use of nitrified cement at over 7000 ft and none of those three could provide a citation or case history. It seems Opti-Cem allowed them to model its use, so they assumed it was okay.

I say the hallmark of the crew was an utter lack of curiosity and a desire to learn more about their craft. If I were doing a new process, such as using nitrified cement at depth, I'd want to learn more about it. Who knows, maybe the possibility of "nitrogen breakout" might come up in the conversation, so when the well is blowing but the methane alarm isn't sounding I wouldn't be so confused that I failed to shut in the well.

I guess my advice would be to tell everyone that if they haven't done the job before to ASK QUESTIONS!

Exactly Bruce. At my pre-drill meeting this morning that's the same point I continuely beat into every hand: ASK QUESTIONS!!!! You might not be surprised to know how difficult it is to get relatively unsophisticated blue-collar hands to question any thing a "real engineer" says. BTW: I've had folks use the "I had to pee" excuse before to explain why they didn't take care of business and missed something happening. Sometimes they were right where they were suppose to be but didn't understand what was happening. No way for me to know if that mud engineer was doing his job or taking a pee. But I can usually watch a hand's body language and tell if he's probably lying. And they do lie sometimes

Maybe it would help to tell them that the little kids (age 6 to 13) in my sailing class know that every time we get together they are obligated to do two things.

1) Have fun!
2) Learn something new because "knowledge is power".

If the hands don't watch out, my kids will eat their lunches! And at the rate they're growing, they tend to be mighty hungry.

P.S. If you are still on the BBIC wagon, why don't you recruit Little Miss Rockman for a science demonstration. Buy a BBIC milk shake of her favorite flavor and have her drink it through a straw drawing from the bottom. If experience is any indicator, she'll start to de-homogenize the mixture and draw up milk leaving ice cream. She will have just simulated the creation of channeling in nitrified cement. Oh, the sacrifices she'll have to make in the name of science ;-)

Bruce - I just got my BBIC 6 month coin. But that doesn't mean I don't treat my sweet tooth sometime. My favorite is Mc's coffee frape. And you experiment works just fine with them. LOL

See how much fun learning can be?

BTW - Tell those hands what Coots' obit quoted him as saying, that he "had been married four times to two women, you figure it out".

The way an engineer would figure that out is to reject the "he's just a hopeless romantic susceptible to the triumph of hope over experience" trope. I'd figure that, notwithstanding his many heroic traits, when it came to learning from experience, "he was all hat and no cattle".

Must be the engineer who concluded that; 'That glass isn't half anything, it's just twice as big as you needed!'

What is also says is Coots was a wise man, at least wise enough to pass the Dirty Harry Test, he was a man who knew his limitations.

According to Loren Steffy's book on the BP blowout, "Drowning in Oil," Halliburton's modeling predicted severe gas flow problems if BP went with only six centralizers. As Loren noted, it's a little unclear who finally approved using only six centralizers, but that is what BP used (over Halliburton's objections). See pages 168-169 from Loren's book (which I highly recommend):


There is also some good stuff on Thunder Horse in this excerpt (Pages 157-160). Loren found a former BP employee who confirmed that BP has big problems with the field. And of course, BP continues to try to "Hide the decline."

Given BP's safety record, it's a mystery to me as to why they would be permitted to ever again operate a well in US waters, and if you asked a lot of Oil Patch types their preference (off the record), I suspect that the majority of them would be happy to see BP banned from US waters.

It seems you have not been paying attention to what Rockman and I have been discussing, so I'll give you a recap.

In 36 years of drilling he has never done a negative pressure test to check the integrity of his primary cement jobs. So he has ZERO PROOF that he has ever gotten a good primary cement job. He has always maintained an overbalanced condition until AFTER HE HAS PERFORATED THE CASING DURING THE COMPLETION PHASE, the perforations serving to equalize the pressure at both ends of the primary cement job rendering the quality of the primary cement moot because nothing will flow if a pressure diferential does not exist between the two ends. At the completion phase, it does not matter whether he had a good job or not.

He does have lots of experience with faulty cement jobs in the annulus. He does not have any good reason to expect that the failure rate for primary cement jobs should be any better or worse than the cement in the annulus, given they are pumped at the same time from exactly the same mixture. Logically, he ought to have a similar failure rate for each. So for 36 years he has trusted his life to primary cement jobs that often were faulty, but he did not take the risk seriously enough to consider a likely cause of a blowout, like it was for the Macondo blowout, though the evidence now clearly shows that is exactly what did happen.

I want him and his crews to take that risk seriously so he can keep going home and be a good daddy to Little Miss Rockman.

Peak Coffee

I just had to post this New York Times article because the author asks if the world has reached "peak coffee". I guess the concept of things peaking has begun to sink in.

The talking heads on CNBC continue to be in full CPSR* mode, in regard to oil prices and supplies. Joe Kernen asserted that the true price of energy was best reflected by the US natural gas price, and therefore the true price of oil worldwide should be around $24 per barrel, with anything above that being due to "speculation." He did not address why the global oil market is susceptible to speculation, but the US natural gas market is immune.

Note that Upstream tracks the spot price for 11 different types of crude, and the average spot price this morning, excluding WTI, is $115, but CNBC guys continue to talk only about WTI.

*Cornucopian Primal Scream Response

Colin Barr continues to offer rational analysis, and is therefore unlikely to be seen on CNBC:

Don't sweat the oil speculators

Rounding up the speculators sounds almost as appealing as killing all the lawyers. But neither will cool seething crude prices.

That is a point worth considering as oil markets run wild. Big traders are making a record bet that crude prices, up 26% over the past year, will rise further as unrest rattles the Middle East. It's tempting to view that bet as irresponsibly driving up gas prices and endangering a tepid economic recovery. How can market fundamentals that justified $80 oil six months ago do the same for $105 oil now? Can't we blame some dark conspiracy?

Alas no. The reality is that bets on higher oil prices are little more than a rational response to steadily rising fuel demand in a world of increasingly uncertain oil supplies.

Joe Kernen asserted that the true price of energy was best reflected by the US natural gas price, and therefore the true price of oil worldwide should be around $24 per barrel, with anything above that being due to "speculation."

Evidently Mr. Kernen doesn't know about reification. Reification is a logical fallacy where an abstraction (energy) is treated as though it were concrete. It disregards critical differences in different forms of the abstraction.

Claiming a true price for energy is like claiming there is a true price for grain. Or that there is a true price for metal. Total nonsense.

Failure to recognize differences in forms of energy is a major flaw often seen in energy analysis. These differences are critical.

Whether or not energy is in a form that can be used by the infrastructure matters. It is not all about BTUs any more than grain is all about bushels or metal is all about tons.

There is no true price for grain. There is no true price for metal. And there is no true price for energy. They are all abstractions.

Each form of energy has unique characteristics that can not be disregarded in analysis. To do so is wrong.

I wish I could argue this point when I take my son to the baseball game. The guy selling the hot dog keeps trying to rip me off. Doesn't he know the true price of hot dogs is set by the super market? I mean, come on, who would pay $6.50 for a hot dog, when the grocery store sells an 8-pack for $2.35?

Then my son: "Daaad, I want two".

I just wonder what kind of rationalizations go on in Kernen's head for him to assert that the natural gas market is not subject to speculation, but the oil market is.

I was just reading through the comments posted so far on the Colin Barr blog post linked up the thread (shown below). So far, 100% of the comments assert that high oil prices are due to speculation--CPSR at its finest. (I just added my 2¢ worth).


Most encouraging renewables development I've seen for a while, from Stanford University's Entrepreneurship Corner:

Moore's Law: A New Weapon in the Solar Arsenal

We're within striking distance of the price of Fossil Fuels right now, and with some additional storage techniques and additional production we should be able to get to the price of FFs in just 3 to 5 years.

I tend to find all these fancy solutions of trying to get too price parity with FF rather a waste of time. It wont make a blind bit of difference in five years if they are are at price parity if there is not enough of them deployed. I follow PV development fairly closely, just over the boarder in German they are going mad, but I live in Holland and I can't get any of the action. The real problem is deployment rate. I think America is installing somewhere at the rate of 42% compound/ yr. you think that is great especially when you read about all the billions that are being invested in new production plant etc. you begin to get more hopeful and say we are saved but when you look at the overall figures you get a shock, America only produces only 0.1% of its electricity from Solar. If they continue to install at this very good rate it will take about 6 years before they reach 1% and that wont make any difference at all. It all well and good to concentrate on a so called moores law concerning quality but it is quantity that we need.

I worry as well, but I'm not content to look at the installation rate as it stands, even in its current exponential rates. This will reflect what people believe. It's growth rate basically represents the small but everpresent growth in numbers of folks who have fallen into the group, all this while the noise machines continue to distract and the economists continue to sneer..

It's not 'good enough' by a long shot, but this rate could jump pretty fast, as installation of this technology is quite simple and flexible (Flat or Sloped rooftops, Open Ground, Sloped or Rough Ground, over Parking and other multi-use spaces..).. PV would probably empty shelves in a hurry, and factories would have to train personnel and jump to multi-shift, where they don't all do that already, but there would also be the same opportunity for vast quantities of Solar Heating to be going up, and for that MFG sector to be broadening in a sudden upswing. It wouldn't be instantaneous, but many of the materials needed are simple enough that a range of production profiles could be quickly duplicated.

I'm not saying 'easy and cheap', necessarily.. but I do think it could be fast and 'pretty good', if I get to choose two.

I don't think it's too disheartening personally. There's no reason for it to stay at 42% compound - it could leap to 300% or 3000% if the price is right.

Like jokuhl says a lot of it is do with social dynamics - once it gets past a critical mass then things could take off very quickly.

If they can prove that they can generate cheap electricity with very little emissions, relatively small overheads and by using abundant raw materials then it would be damned stubborn of us not to give it a go.

I saw a quote somewhere saying that 83 sq miles of these towers could meet US' electricity demand. I haven't had time to check the calculation yet, but I certainly will. 83 sq miles... that's not infeasible by any stretch.

P.s. these towers aren't PV, they're thermal turbines.

Edit: Have just looked up 83 sq miles to get an idea - it's roughly twice the size of Disney World..

There are myriad of social impediments. People say it is too expensive and use number from the early 90s or they say panels are not going to fit into the beautiful landscape. LOL.

I see all kinds of crap out there. The roof will leak. The roof needs to be re-shingled.

A lot of passion though but not a lot of deep thought against solar imho.

Times will change and solar wil get there slowly.

Look at the electric car. It made it on the map in a few years time.

Similar story for EVs. A lot of anti-EV passion, but when oil gets scarce -- what else is there besides your feet or the bus or your bike?

Important not to confuse solar panels with EVs.

Solar panels are a solution to a problem that doesn't exist. We don't have a problem with electricity, at least not yet.

EVs are a solution to a problem that does exist, namely transportation.

Granted, if we ever adopted EVs on a wide scale, that would eventually cause a problem with electricity.

As far as AGW, that's a lost cause.

yeah I know the difference, but some say we do not have enough electricity for EVs so well the solar panels and EV car seem to be the only solution. I would expect people to have only one car too and a smaller house to offset the costs.

But there is this cultural problem.

Will this oil crisis kick us in the butt or will we just return back BAU.

Solar panels are a solution to a problem that doesn't exist.

They can ameliorate climate change by producing electricity without a constant need to keep burning fossil fuels.

They can also produce electricity in locations where it would be very difficult expand the current grid.

If they are deployed in sufficient quantities and connected to the grid they can eliminate the need to build more fossil fuel dependent generating plants.

I can take this little solar generator with me to places where there is no electricity and use it to charge my communication devices, power my lights and charge my power tools and I don't need to carry any fuel with me.


I could go on with a rather long list but I think you get my drift, right?

Give it up, Fred. All evidence to the contrary, some folks insist that PV doesn't have a place in our energy mix. They haven't been there ......

30+ acres of PV are being installed in our small county as I type; upstart companies taking advantage of the real estate price crash (and incentives) to scarf up south facing slopes to go into the power business. These are small, ~5 acre plots, nicely distributed around our small TVA reservoir. It should be a useful partnership and even if these companies fail, the PV will still be there feeding the grid. I'll post some pictures when the weather clears.

Agree. The need for renewable electricity is the emission factor. Plus, if they can get electricity to below oil prices then it can't hurt the EV sector.

We've hit the iceberg, or perhaps one might choose to say that the ship is 20 to 30 inches away from hitting the iceberg. We most certainly do have a problem, just because your Martini hasn't tipped over yet, or the Martinis of those around you. The arrow IS in flight.. it'll hit, and we'll need all forms of energy.

PV and other electrical generating Renewables can supply energy for Cooking, Lighting, Communications, Heating, and Transportation energy (plus drive electron microscopes, x-rays and Traffic Signals, and a few million other slightly more arcane, but possibly critical things).. Show me another energy source that we use that covers this range.. and then help me understand why we shouldn't see it as critical NOW, that we have the ability to keep that vast array of tools working as much as possible, for when the actual WET part of our Tsuname is hitting us.

The fall is not a problem. The sudden stop at the end is.


Have just looked up 83 sq miles

I think you missed something, it was a square 83 miles on a side, 6889 square miles. Now that sounds like a lot, but I recal reading a decade ago the US already had an area the size of Ohio paved over. So compared to the size of intensively built over human area, its actuall quite small. My whimpy 14% efficient panels cover maybe a third of my SW roof slope, with higher efficiency and using the whole roof I could produce several times more juice than I use.

Thanks! That makes a lot more sense. I hadn't watched the other parts of the video and just accepted a friend's quote!

Ok, well now that's a sizeable area. Although he did say that further efficiency savings could be made.

Maybe I'll try and guestimate how much raw materials they'd need to cover something of that size.

Solar can be deployed really quite quickly, so I don't think the deployment rate would be too much of an issue if a country really wants it.

Germany has installed about 16GW of PV in only about 3 years (before that one can mostly neglect that). In the month of June 2010, more than 2GW was installed in a single month.

PV now supplies more than 3 percent of total German electricity, and if the political will continues (which isn't entirely sure), this number can rapidly continue to grow.

Also the manufacturing capacity has also grown really quite rapidly, and if there was sufficient demand, it could presumably continue to expand.

In all those numbers, one has to remember that Germany isn't particularly sunny, but is a major industrial nation using a lot of electricity. So many countries are in a much better position to increase their percentage of PV usage.

The big issue is imho not so much deployment rate of PV, but storange and expanding the distribution network, as well as price. Although the latter is starting to become less of an issue.

it will take about 6 years before they reach 1% and that wont make any difference at all. It all well and good to concentrate on a so called moores law concerning quality but it is quantity that we need.

But, if we can get the price down, then the economics as analyzed by a potential customer changes from marginal to "you'd have to be brain dead stupid not to". Already First Solat claims $.75/watt for panel production. A new thin film (GaAs startup claims they will be able to hit $.50/watt, and have efficiency of 20-30%. As the price of panels is driven through the floor, then the low tech Balance of System stuff becomes the key area in need of optimization. Several players are working on business plans to reduce the thickness of silicon needed to make panels by factors of 2 to 5 times. So I really think sub dollar panels aren't that far away. [Darn I bought my system more than a year ago, now I bet I could replicate it for half its cost!].

In any case for those whose real interest is saving money (not being green), only in the highest cost electricity markets is the economics favorable to going the PV route [yes some areas have rediculously high feed in tarrifs, but these will become political hot potatoes as the volume of customers skyrockets]. But I think within 2-5 years it will be seen as just a sensible way to save money.

"[Darn I bought my system more than a year ago, now I bet I could replicate it for half its cost!]."

Jeez, I started my system over 16 years ago. It hurts to think about, though I suppose there's something to be said for early adopters.

And I do worry that as they push feverishly to make PV 'acceptably cheap', will it still have the durability that it did when it was built out of a 'Slab' of Silicon?

I'm not rich, but I know when you have to put real money into something if you want durability and performance. I've spent the last week fighting the plumbing in my apartments, and I know what happens when I go for the cheapest parts. In matters of hardware, you really get what you pay for. (Well, with their markup the plumbing store gets a good chunk of what you pay for, too..)

People are in such a frenzy about how PV isn't worth squat unless it's met some magical price marker of their choosing. Is the customer always right? I'm a 'customer', too, and I can assure you, we're not. Sometimes 'GOOD' things are expensive for a reason.

It's utter madness to try to curb emissions while subsidising fossil fuels

The orthodox view goes something like this: federal debt and taxes bad, budget savings good; government intervention and industry protection bad, level playing field good; climate change bad, emission cuts good. So why does Australia's government effectively promote fossil fuel use at a cost of about $12 billion a year? A carbon price, in effect, would already be operating if only government did not feel the political need to insulate energy and road users from demand-driven prices.

Politics aside, the decision to end indexation on petrol excise was a short-sighted knee-jerk reaction at the time. Trouble is no politician will reverse it once its done.

Have you heard of TPP? It is the Free Trade Agreement around the Pacific side of the globe. I am vague on the details but it is a huge debate raging here in Japan. Under TPP (if Japan joins) the tariffs on food imports (including rice)would be zero, so lots of Japanese farmers would be out of business because imported food is much cheaper. Meat, fruit, rice, everything.... is cheaper from abroad. Why? Not sure, it seems this is a very uneconomical country to exist in.

Lots of people are opposed to the TPP, like farmers, for example. Others are worried that Japan already imports about 40% of its food and that would just get higher. Then, they say, there could be a food price shock ---supplies cut off from abroad----and everyone here would starve.

But auto dealers say that without joining TPP they can't compete---tarrifs on exports are going to ruin them without joining TPP.

Well, it looks like we are finally really circling the drain here!! or are we? What is going on and what will happen? It is not as if just anyone could be a farmer--running machines, using lots of chemicals, etc. takes money. Also people want to live comfortable city lives and be "white-collar professionals" whatever that means. A complicating factor is that lots of farmland is buried under huge swathes of cement.

The final isse: maybe I should consider emigrating? Is this TPP debate a bad sign? I mean when people are starting to talk about food security and to sound serious too, then is that an indication that things are getting a little bit desperate?

Al Jazeera reporting major ground campaign now being mounted by Gaddafi troops near Ras Lanuf. Troops have apparently outflanked rebel front lines. Gaddafi forces moved in from multiple directions including the beach according to report.

BBC also reporting the same:

1428: A rebel source says forces loyal to Col Gaddafi have been firing rockets from offshore oil tankers at rebel positions onshore at the oil port of Ras Lanuf, Reuters reports. "I see them with my own eyes. The oil tankers are rocketing the town," the source said. "Planes are also bombing and rockets are being launched from the land."

Apparently the market likes this. Those darn speculators have driven down the price $3 with this news.

Ras Lanuf has fallen.

I suspect that the rebels who are currently lying injured in the hospital will be transferred into oblivion.

France has formally recognised the rebel council. Rumours that the EU has as well. France is calling for air strikes. They
have the planes within range within hours. I suspect the EU will talk and talk and talk. The UK will do nothing without the US and the US will do nothing without the UN and the UN will do nothing because both Russia and China will veto any resolution.

The markets like the news. Brent is down.

Given the size of the opposing forces, strikes by European planes for a few days should be sufficient to tip the balance militarily.

What it would do politically is anybody's guess.

Somehow, "too little, too late" comes to mind. Momentum was available for the rebels last week. Now much of that momentum is lost, and likely dead.

If Gadhafi holds on, humanity will lose out to greed and politics again. But at least we won't have to worry much about KSA -- party on, dude!

A few cruise missiles on munitions dumps and the air bases would slow things down. A few A10s in theater would probably be better.

Even the rumor of A10s would change thing for a while. But it isn't looking good for the rebels if someone doesn't give them a hand. Thinking of future purges makes one nauseous...

And begs the question of who really wants the rebels to succeed and who wants them to fail. Party on, bau.

What is needed is another front -- even just psychologically. Park an amphibious lander at the horizon, announce that the seaways are mined, and lob a few cruise missiles. Just enough action to keep Gadhafi looking outward instead of eastward.

And begs the question of who really wants the rebels to succeed and who wants them to fail.

I suspect neither Europe nor America will let Gaddafi win. International relations have been severed - the country's diplomatic corps has all but resigned. Obama has called for a regime change. U.K. Foreign Minister William Hague has used strong language against the Libyan government's mistreatment of its own people. The threat of war crimes hangs over the family.

The use of artillery and air power to quell civic unrest is not something that can be readily justified or excused once made public. Visual images of brutal repression and violence, courtesy of countless cell phones and internet uploads, invoke a genie that will be hard to put back into the bottle.

Rehabilitation a second time? Not likely.

Yes, the Gaddafi family is fighting fast and furious. What else do they have to lose? Backed into a corner, they will come out tooth and claw. They will have successes. Teeter-totter forces are at work here.

Teeter-totter forces with oil prices are at work too.

Even if Gaddafi wins the day, it has been shown that he has lost the support and confidence of most Libyans. He may be able to survive for now, but it is a question of for how long?

Gadhafi likely to survive revolt, U.S. intelligence chief says

Washington (CNN) -- Under current conditions, Libyan leader Moammar Gadhafi appears likely to survive the revolt against him because of superior equipment, the head of the U.S. intelligence community told Congress in a blunt assessment Thursday.

National Intelligence Director James Clapper's appearance before the Senate Armed Services Committee came as officials in Washington, Europe and the Middle East are debating whether to aid rebel forces in Libya's civil war. Clapper said the rebels are "in for a tough row" against Gadhafi, whose forces are now moving to retake territory lost since the uprising began in mid-February.

"I do believe Gadhafi is in this for the long haul," Clapper said. "I don't think he has any intention, despite some of the press speculation to the contrary, of leaving. From all evidence that we have -- which I'd be prepared to discuss in closed session -- he appears to be hunkering down for the duration."

Clapper cautioned that the situation is "very fluid," with government troops attacking opposition forces and then pulling back. But he added, "I think, longer term, the regime will prevail."

Not that their batting average is very good.

Well, if the Company is saying he's here to stay, Washington will treat his regime as if it is here to stay.

Although even if Gaddafi survives this round, the myth (even in his own demented mind) has been exploded that he has widespread support. His legitimacy has been betrayed from within.

He will govern from a much weakened position.

TPTB like winners. Mr. Gaddafi may prove resilient and doggedly ruthless but a loser in the confidence game. His days are numbered.

Apparently, the French president has accepted to help the Lybian rebellion and even to do the job alone. I think Sarkozy is victim of the "short victorious war" syndrome. Right now, he is very impopular in France and unlikely to win the presidential election next year, so a quick "humanitarian" intervention could boost his rating and restore his reputation of acting fast and bold. During the discussion with the Rebels representative, Sarkozy has accepted to help disrupting Gaddafi's communication network, bomb the three main Libyan military airports and impose a no fly zone... Whether he should be believed is another question, but he might well do it, specially if he is peak oil aware and wants to secure friendly oil supply for the coming years.

If he succeeds, he'll show up Obama. If he fails...well, the French will have one more military joke to endure. :)

Edit: Just to be clear, this was meant to be a jest, on both sides. The serious point is that you gotta give Sarkozy props for doing something!

The serious point is that you gotta give Sarkozy props for doing something!

Yes. I sure hope he does. It might not take much to tip the balance. Its mainly psychological. Mercenaries could desert in droves if they think they are on the losing side.

The use of artillery and air power to quell civic unrest is not something that can be readily justified or excused once made public. Visual images of brutal repression and violence, courtesy of countless cell phones and internet uploads, invoke a genie that will be hard to put back into the bottle.

I do hope you are right. But, I'm not optimistic.

More likely we will end up with well over half the country undrgoing severe punishment for not recognizing dear leaders value as a leader (or just for beinga resident of a region that did so), a zillion refugees, hopelessly ruined relations between Libya and the West, and a model for how despots can remain in power. All really bad outcomes.......

The talking heads on CNN said that Gaddafi is very shrewd, and is being careful not to cross the line that would bring UN action.

It sounds like it's about over, from the way they are reporting it. They're spinning it as a victory for the rebels because it took so long for Gaddafi to beat them.

So...the markets like the idea of a rebellion being shut down. I think it is because maybe it scares off the next group from trying anything. This output is off line for a while no matter what.

So...the markets like the idea of a rebellion being shut down.

I do think so. Markets are pro-plutocracy, and if most of the Arabs can throw off their oppressors, maybe they can't count to John Q Public to just roll over and let the plutocrats take the last little bit of remaining wealth they have.

Wonder how many operational Scud B missiles and similar Libya has at the moment? Parts of Italy are in range.

Barton: Govt Subsidies Necessary To Keep Exxon From Going Out Of Business

Check out this interview of Rep. Joe Barton (R-TX) -- he of apologizing to BP fame -- by ABC on Wednesday. Pressed repeatedly by John Karl to stake out a position on tax credits enjoyed by offshore oil companies, Barton argued that the subsidies represent equal treatment, and are required to keep the companies like Exxon-Mobil from going out of business.

"Over time if you put so many disincentives against any U.S. manufacturing or production company, or oil and gas exploration company, they'll go out of business," Barton said.

Barton, perhaps the oil and gas industry's staunchest support on Capitol Hill, says the subsidies for the industry should remain unchanged "so long as you believe that you believe in the free market capitalist system and they should be headquartered in the United States."

My head just exploded.

Right up there with 'Keep the government's hands off my Medicare!'

Poor Exxon.. the company that made more money than any other company in History. They must be so frightened..

OPEC Crude Shipments to Fall for Fifth Week, Oil Movements Says
By Lananh Nguyen - Mar 10, 2011 11:30 AM ET

The Organization of Petroleum Exporting Countries will reduce crude exports for a fifth time in the four weeks through March 26, according to tanker-tracker Oil Movements.

Loadings will drop to 23.56 million barrels a day in the period, down 1.3 percent from 23.88 million barrels a day in the four weeks to Feb. 26, the Halifax, England-based company said in a report.

Exports from Middle Eastern producers, including non-OPEC members Oman and Yemen, will decline 2.3 percent to 17.36 million barrels a day, Oil Movements’ data show.


Where oh where can those Saudi oil barrels be?

Despite the deluge of reports in the media that the Saudis have “offered” to make up lost production from Libya, all available shipping information concerning oil exports indicates that Saudi exports have, in fact, fallen from about mid-January until now.

Are we fools to believe them, and their purported “stealth” moves to supply oil to the market?

Well, um, perhaps so. The only good news is that the decline in Saudi exports appears to have ended for now. Shippers expect an increase of about 300,000 bpd from about March 15 to March 30, and there are preliminary indications that exports out of the Persian Gulf will rise further about April 1. However it is unclear just how much that will be and for how long. It is most unlikely that any increase in Mideast exports will make up for lost supplies from Libya.


Quote from AP article: "Saudi police have opened fire at a rally in the kingdom's east in an apparent escalation of efforts to stop planned protests.

Government officials have warned they will take strong action if activists take to the streets after increasing calls for large protests around the oil-rich kingdom to press for democratic reforms.

A witness in the eastern city of Qatif says gunfire and stun grenades were fired at several hundred protesters marching in the city streets Thursday. The witness, speaking on condition of anonymity because he feared government reprisal, said police in the area opened fire. The witness saw at least one protester injured."

Better slap sanctions on them, freeze their assets and make it a no fly zone. Make low level diplomatic contact with the protesters and hint at political recognition, then..... just a minute, the Saudis are the good guys aren't they? What's Charlie Sheen been doin today?

I wonder if they really fired live rounds. It sounds like they're using crowd dispersal stuff - smoke bombs and the like. Maybe rubber bullets?

Is this the beginning of the Facebook unrest supposedly planned for the 11th?

I don't think so. It's still Thursday night over there.

Thanks. Market back below 12K at the moment -- still high, but I couldn't help but note that the small investor was said to be back in the market just a month ago. Makes me wonder if the big guys are getting out and the little guys and 401Ks are ready for another fall.

Looking at the DOW chart, it's been just noise around 11K for a decade now. Looks rather like the period fro '65 through 82, and that included concerted effort to move away from oil then...not so much now, at least not yet. Makes me think we've got a long slog ahead before any semblance of a healthy economy, even not a GDP-centric one, can be attained.

The billionaires can suck another 33% of the 401ks' value.

"Yummy," Mr. Billionaire says as he baits Joe Average back into the market.

Poor Joe Average. He is such a sucker for the whole automobile, investment, buy everything from China thingy we call America these days. LOL.

Treasurys jump on concern over Saudi Arabia

Treasurys are rising after Saudi Arabian police opened fire on protesters.


Yes I do believe the dollar is set for a rise as well, and stocks for a fall, albeit it will try to be controlled by TPTB so as not to resemble '08.

Don't think any of this is meaningful. It's noise!

Keep accumulating gold and silver, avoid bonds as well as stocks like the plague, and use cash to purchase necessary goods.

I for one do not believe we will see a genuine bull run in bonds or stocks for a lifetime, if not centuries or millenia.

Just another day in paradise:

Wave after wave of disappointing or disconcerting economic data has put heavy pressure on U.S. stocks. Before the open, investors got a wider U.S. trade gap and a worse-than-expected jobless benefit claims report.

"Now we're back focusing on the economy," said Marc Pado, chief equity strategist with Cantor Fitzgerald.

Economy: The U.S. trade balance for January widened to $46.3 billion -- a five-month high. The gap was much wider than the $41.5 billion forecast, according to a consensus estimate from Briefing.com.

Initial unemployment benefit claims rose more than expected in the latest week to 397,000, the Labor Department said. The increase was due partly to a catch-up effect from the President's Day holiday the previous week.

World markets: Asian markets fell after China reported a surprise trade deficit, as imports outpaced exports in February for the first time in nearly a year.

In Europe, the debt crisis made headlines again after credit agency Moody's cut Spain's credit rating. Moody's downgraded Greece's debt another notch earlier this week.

....and there's always tomorrow ;-)

"....and there's always tomorrow ;-)"

Like an 8.4 magnitude earthquake in Japan with a tsunami you mean? We seem to be in a period of dramatic events and cascading consequences. The system response being to print ever greater amounts of money which elevates little in the real economy and blows useless financial bubbles across the globe.

Some shocking images coming from Japan this morning.

Reports show large fires at an oil refinery there too, caused by the quake.
Several nuclear power stations have been automatically shut down, but no confirmed radiation leaks reported.

Here's a site with some of those images. Pretty horrifying. When should the Tsunami hit the West Coast of the US, and how big will it be then?


Possibly a second refinery in trouble:

1333: There has also been a major explosion at a petrochemical complex in Sendai, according to the Kyodo news agency.

...and two nuclear power stations declared as emergencies now.

(and there is my hook to hang this on)
Japan declares ‘nuclear emergency’ as attempts to cool reactor at northern plant are ‘not going as planned’ – official via NHK

Secondary cooling is by diesel generators. These have failed.

2km (1.5 mile) radius evacuation zone around the plant declared.

The reactor is an early boiling water reactor made in 1971.

Three mile island?

Report that water levels are falling in the reactor core. Risk of the rods being exposed.


The gutter press is calm and rational as always


Fears nuclear reactor will explode as 'out of control' cooling system fails at....

I dunno.

This could be the start of the Saudi "Day of Rage" set for tomorrow. Whatever the reason, if things continue to escalate then I may have to think twice about going to the Adirondacks this summer.

How is going to the Adirondacks this summer a potentially risky proposition for you? Can you elaborate?

clifman, my hunch is that PetroGuy was commenting on the cost of transport fuel should events spin out in Saudi Arabia.

Better hope one can travel to one's holiday destination by horseback. Car rides may be priced out of Joe Sixpack's range.

PetroGuy could morph into PonyGuy. And a clifman could watch as the travel industry goes over a cliff :-)

Fuel costs for regional vacations are only a fraction of total costs, so a 40% increase in fuel price may only mean skipping the visit to Col. Beaver's Magic Cave or the Puttputt course. The problem is that all costs eventually go up.

That's why I asked. I've no doubt that rising fuel costs can put a crimp on leisure activities. But the typical Adirondack vacationer comes from the greater NYC area. It's about 250 miles, so 500 round trip. Even in a gas hog, that's less than 50 gallons. So, prior to the current run-up in prices, under $150. If gas goes to $5, then $250. While $100 is not chump change, for someone going on vacation, all it means is one less meal out with the family and hot dogs over the fire instead. Or something like that. I'm curious to get a feel for what folks anticipate in terms of curtailment. On the one hand I look at what's unfolding in MENA and go 'whoa!' On the other, when you crunch simple numbers like I just did in this comment, we've a ways to go before major changes. What do you all think?

I'll take your example one step further. Hotel prices are still mostly lower than they were in 2008. Even the Dollar Menu at McDonalds is still a buck. I don't think $4 gas will stop people from taking a vacation.

However, I am already seeing signs of changing behavior. I started my "change" a year ago when I moved my office to "scooter" distance from my house. Just today I heard from my farrier who has shoed my horses for the last few years. He called to tell me that he and another farrier were swapping customers to cut down on driving and save fuel costs. Great idea! And these are just some good ole country boys. We waste so much oil.

Granted, this change is not a long-term "solution" but it does keep us treading water until we come up with an alternative lifestyle.

I was hinting at the fact that IF Saudi Arabia's production is cut significantly transport fuel could be unafordable/ or even unavailable in some areas.

Bloomberg and the WSJ are reporting that live ammunition was used, but it was fired into the air.

It's about dawn now in Saudi. Not sure when the "day of rage" protests are scheduled. In Egypt, I seem to recall they waited until after religious services were done on Fridays.

Not sure when the "day of rage" protests are scheduled.

Why do I have this feeling the day of rage protests will be a big dud? The Saudi's have 20,000 police ready to spring into action as soon as anyone hits the streets, and immediately arrest them. How can the protesters get any momentum?

The protesters can still have their rage for the day over jobs/food/the hypocrisy of leadership. Keeping them from "rage'n" by police won't address the things that make 'em rage'n.

Not to mention, they picked a bad news day. Looks like the world's eyes will be on Japan and the Pacific today.

And there's no POMO (aka. Fed money printing) today to boost markets either. Commodities and stock markets are in the red, continuing a slide which began several days ago. Seems wheels are dropping off everywhere creating a stampede to safety. No doubt global finance will use this opportunity to push the Fed towards introducing QE3, Japan will have to hit the printing machines again too.

Its certainly looking like a bad news day. Not a good day to protest in Saudi Arabia. We even have a possible nuclear incident to add to the growing list of things vying for our attention.

Used Cooking Oil Hot Commodity For Thieves

"You just come around at night and just pump it out and move on the next," he said.

Police said that is exactly what's happening, and that the crime is growing because the used cooking oil is stored in outdoor containers and can be sold to recyclers who turn it into biodiesel fuel.

Things are tough all over. Restaurants used to pay to have their used oil hauled away. Most were glad to let folks take it. I know a couple of guys that do this and make their own B-100. Funny; they don't look like criminals :-/

Wow. We are not at peak oil. It just looks that way.

USED Cooking oil is now worth 100s of bucks. Cannot believe it.

Is it possible that military action like a no fly zone or supplying the rebels in Libya with weapons is not taking place by the US, NATO or as a UN mandate, because it will set a precedent that cannot be repeated in Saudia Arabia? Just imagine we help the rebels oust Qaddaffi, then the same scenario happens on Saud sand - oops, now how do we answer questions about why we are not doing the same there?

The ability of anyone to publish hypocrisy, on the internet, in real-time, for millions to see, is killing the fun of playing the game of politics.

Well, the new game is that the internet is full of BOTH babies and bathwater.

I'd call it 'Meta-Old Maid', where you get to flip up one web source after another, and find the connections and the truth somewhere in that morass, AND remember where you found it on your last turn, to put the pieces together..

Edit failure of cooling at nuclear power plant just announced at a news conference.

Watching the Tsunami come in on Japanese tv coverage. Biggest quake in Japanese recorded history at 8.9. Many aftershocks.

Over 30 million in Level 7 shaking or above http://earthquake.usgs.gov/earthquakes/pager/events/us/c0001xgp/index.html

Economic damage estimated may be as much as 100 billion dollars or more.

Nuclear plants shutting down. Some reports of fire at nuclear plant.

US tsunami warning below.


To: U.S. West Coast, Alaska, and British Columbia coastal regions
From: NOAA/NWS/West Coast and Alaska Tsunami Warning Center
Subject: Tsunami Warning and Advisory #6 issued 03/11/2011 at 2:37AM PST

This message keeps the warning and advisory regions fixed and adds new tsunami observations. A link is provided for tsunami amplitude forecasts.

The Tsunami Warning continues in effect for the coastal areas of California and Oregon from Point Concepcion, California to the Oregon-Washington border.

The Tsunami Warning continues in effect for the coastal areas of Alaska from Amchitka Pass, Alaska (125 miles W of Adak) to Attu, Alaska.

The Tsunami Advisory continues in effect for the coastal areas of California from the California-Mexico border to Point Concepcion, California.

The Tsunami Advisory continues in effect for the coastal areas of Washington, British Columbia and Alaska from the Oregon-Washington border to Amchitka Pass, Alaska (125 miles W of Adak).

A Tsunami Warning means that all coastal residents in the warning area who are near the beach or in low-lying regions should move immediately inland to higher ground and away from all harbors and inlets including those sheltered directly from the sea. Those feeling the earth shake, seeing unusual wave action, or the water level rising or receding may have only a few minutes before the tsunami arrival and should move immediately. Homes and small buildings are not designed to withstand tsunami impacts. Do not stay in these structures.

All residents within the warned area should be alert for instructions broadcast from their local civil authorities. A tsunami has been recorded.

A Tsunami Advisory means that a tsunami capable of producing strong currents or waves dangerous to persons in or very near the water is expected. Significant, widespread inundation is not expected for areas under an advisory. Currents may be hazardous to swimmers, boats, and coastal structures and may continue for several hours after the initial wave arrival.

At 9:46 PM Pacific Standard Time on March 10, an earthquake with preliminary magnitude 8.9 occurred near the east coast of Honshu, Japan . (Refer to the United States Geological Survey for official earthquake parameters.) This earthquake has generated a tsunami which could cause damage to coastal regions in a warning or advisory. Estimated tsunami arrival times and maps along with safety rules and other information can be found on the WCATWC web site.

Measurements or reports of tsunami activity:

Location Lat. Lon. Time Amplitude
------------------------ ----- ------ ------- -----------

Tosashimizu Japan 32.8N 132.9E 0747UTC 00.9FT/00.27M
Tokai Japan 33.8N 137.6E 0645UTC 00.8FT/00.25M
Ofunato Japan 39.0N 141.8E 0605UTC 10.8FT/03.29M
Hanasaki Japan 43.3N 145.6E 0643UTC 09.3FT/02.82M
Boso Japan 34.8N 140.8E 0609UTC 02.6FT/00.78M
Minamitorishima Japan 24.3N 154.0E 0747UTC 01.5FT/00.45M
Naha Japan 26.2N 127.7E 0902UTC 00.7FT/00.20M
Saipan USA 15.2N 145.7E 0901UTC 02.6FT/00.79M
Wake Is. USA 19.3N 166.6E 0918UTC 01.6FT/00.50M
Shemya, Alaska 52.7N 174.1E 1028UTC 01.3FT/00.43M

Time - Time of measurement.
Amp. - Tsunami amplitudes are measured relative to normal sea level. It is NOT crest-to-trough wave height. Values are given in both meters (M) and feet (FT).

Tsunamis can be dangerous waves that are not survivable. Wave heights are amplified by irregular shoreline and are difficult to forecast. Tsunamis often appear as a strong surge and may be preceded by a receding water level. Mariners in water deeper than 600 feet should not be affected by a tsunami. Wave heights will increase rapidly as water shallows. Tsunamis are a series of ocean waves which can be dangerous for several hours after the initial wave arrival. DO NOT return to evacuated areas until an all clear is given by local civil authorities.

Pacific coastal regions outside California, Oregon, Washington, British Columbia, and Alaska should refer to the Pacific Tsunami Warning Center messages for information on the event.

This message will be updated in 60 minutes or sooner if the situation warrants. The tsunami message will remain in effect until further notice. For further information stay tuned to NOAA Weather Radio, your local TV or radio stations, or see the WCATWC web site.



0307 AM HST FRI 11 MAR 2011


Remarkably little damage so far, considering the eye-popping magnitude of the quake.

Just have to hope the tsunamis aren't too bad. Hawai`i has been pretty lucky the past few decades. They had some terrible tragedies in the past, but the last time was in the '60s.

Little damage where? Hawaii? Can't really say the same for Japan!

I didn't mean there was no damage, just that the damage was surprisingly low for a 8.9 quake. That is huge.

Tsunamis are another matter. I wonder if North Korea is vulnerable. As I recall, that was one of the causes of the major famine in the '90s. A tsunami flooded some of their best farmland, ruining it with salt water.

Yeah maybe so - but it was off the coast so could explain why. The tsunamis seem to be ruining farmland left, right and centre in Japan.

I'm seeing horrific damage from tsunami hit in parts of Japan.

Huge fire at large oil refinery now. Emergency declared at one nuclear power plant.

Just heard oil facilities hit by tsunami in Russia. No more info given. Edit: first reports say initial waves around Kuril islands relatively small but bracing for possible bigger wave as of latest report.

Oil market thinks this disaster is good for oil price I see. Huge plunge in price right now.

Oil markets are now expecting an oversupply in the market. Japan imports some 5 million barrels a day. I guess that number will drop substantially leaving oil tankers looking for ports.

My thoughts to the people of Japan......

But surely they will be needing to import gasoline. So the refined product will go up, I assume.

That would seem to be a very short term dip.

Do we buy the into the dip?

(I don't actually do any trading in oil, but this seems like a pretty predictably short dip in oil prices.)

Back to the horror of the quake--the Haiti quake was 7 and it killed hundreds of thousands. The Kobe quake of '96 was about the same magnitude and killed over 6000.

This one at nearly 9 should be about a hundred times more powerful, unless I am mistaken.

It wasn't directly under inhabited areas, but we must hope that superior building practices may have prevented the kind of mortality the Haitian quake wreaked. It is unclear from reports whether most people along the coasts got the warning on time to evacuate. Some videos show people driving on roads as those were getting inundated, so not everyone got away in time. The Kamaishi video seems to stop just as the bridge that people were on was starting to get flooded.

Reports now of multiple collapsed buildings in Sendai. Many trapped in collapsed hotel. Airport completely destroyed by quake and tsunami. Many staff and travellers escaped to roof of terminal building which survived.

Emergency at two nuclear power stations reported now.

I notice there were fore-shocks before the 8.9. I just hope we've actually had the big one :-(

The wave travels at 800 mph and the quake was under 100 miles off the coast, so I'm thinking that, even if the warning system worked perfectly, the folks on the coast would not have had much time to flee.

First fore-shock (Mag 7.2) was two days ago. Large sequence of quakes leading up the the 8.9 can be seen with hindsight.

I hope they read those signs right. Of course relatively minor quakes hit Japan all the time and are barely newsworthy, so even a 7.2 and some other tremors might not have raised much of a concern.

It looks like the epicenter was east-south-east of Sendai, so the Oshika Peninsula to its east-north-east that might have otherwise shielded it from direct impact might not have been able to do so in this case.


Actually looking more closely the shocks further back than 2 days are close enough that they may also be related.

I think a lot depends on how far away the epicentre is and how shallow it is from the surface. You can't really tell too much from the magnitude alone.

The one that killed 166 people in Christchurch was only 6.3 but was very shallow and very close to the city.

Also Haiti was obviously not as well equipped to deal with things as Japan is. Can't imagine it being on the same scale as the death toll there.

But I imagine we'll see fatalities rise quite rapidly once things settle down, unfortunately..

Edit: Although just seeing reports from the BBC saying that whole towns have been flattened in the Iwate region. The region has a population of over 1 million - I wonder how much of the area was affected?

If the USGS shake-map is correct then 2 million people live in an area which received the same shaking level that about 300,000 experienced in New Zealand.

FOR ALL/dohboi - Was considering that and other possibilities. We've been chatting about the futures market and it's possible impact on actual prices. We can take advantage of the Japanese tragedy and now have an official "I'm an oil speculator" game of TOD. Obviously it's deals more with perception than reality. But IMHO that's the essential driver behind the futures market.

So TODsters how do you bet? Let's start with the easiest: 30 day contract. So will the potential inability of Japan to import oil result in lower oil prices 30 days out due to more oil in the market place? Or will Asian refineries see an opportunity to buy more oil, refine to products and sell to Japan at a significantly higher margin than usual since Japan MAY have lost some refining capability? Or will Japanese demand for products go down due to workers not commuting due to offices being destroyed? Or will the govt start buying huge amounts of fuel on the open market to aid in the recovery and supply folks who are now off the grid? How many millions of gallons of extra fuel will the govt itself need in its relief efforts: you think an SUV sucks down gas check out the mpg on a deuce and 1/2.

And will other nations (U.S., China) divert some of their fuel inventory as a humanitarian effort? And will that drive up local prices in those countries due to a drop in their inventories? What's the political calculus there?

Bear in mind we TODsters can chat about such possibilities/factors for the next several days. But we're all oil futures speculators this morning. The betting windows are about to open very shortly. You need to start betting with your money now before you get left behind in the chase for "easy profit". So who's for betting higher prices in 30 days? Lower ? Of course we could expand to question to 60 days...6 months... 3 years...etc. The futures traders will be also making those bets when the market opens. But a 30 contract is a good start so whose ready to back up the speculation with cold hard cash? Remember there are many $billions that will be won in the next few days on the futures play. Of course an equal amount will be lost. And both sides of the bet will be paying commission on their wager.

OTOH with all the other events going on in the ME maybe the Japanese earthquake will have no significant effect on the futures market. But we don't have time to think about it...WE'RE OIL SPECUALTORS! We need to start impacting the price of oil in the world right now just like some folks say we can. Given how I make my living I'm hoping the TODster oil speculators drive up the price of oil. Now if I could only get them to drive of the price of NG I would truly be in hog heaven.

I don't know. Some of these images look pretty bad:


But most of the bldgs in Tokyo do seem to have survived (as they're designed to).

To be fair Tokyo was 230 miles away from the epicentre!

Good point. I haven't seen any pictures or video from Sendai, the closest major city, but the pictures of the flooding in the region look pretty horrific. And there is a huge fire in what looks like a major refinery.

One report talked about a ten meter wave, another of a four meter wave. Perhaps the latter was in Tokyo, the other closer? They're talking about a one meter wave hitting Hawaii within a couple hours.

Fortunately, as dozens of posters here have beaten into our heads for years here, all nukes are perfectly safe under any and all circumstances...or maybe not:


Reports of an boat with 100 people on board, and an entire train 'unaccounted for'.

I was struck, while watching the disaster footage, by one commentator saying "now, let's see how the stock market is reacting" - as if it were a real, live person.

Next, they'll roll out the economists...

And one of the most incongruous juxtapositions I've seen in a while - a split screen, the news from Hawaii on the left, and a bunch of applauding dark suits at the NYSE opening bell, on the right....

Nobody has claimed that nukes are without any risk, just that the risk is low compared to the alternatives.

If you see anything over the next couple of days that demonstrates differently, I will be happy to revisit my opinions on the topic.

CNN reporting huge fire and plume of smoke rising above oil complex near Ras Lanuf again. Not clear what hit.