Drumbeat: April 18, 2011

Analysis: Oil companies go solar to tap hard-to-get supplies

(Reuters) - Soaring oil prices are turning some energy companies into accidental environmentalists: They are building clean, solar-powered systems to pull crude out of their aging wells.

But this is no public relations move by big polluters seeking to green their images. Having spent heavily on energy-intensive technology to increase output from depleted fields, companies including Chevron Corp and Berry Petroleum Co are using solar power to lower the cost of creating steam that is injected into the wells to improve the flow of heavy oil.

Yes, in this instance going solar is actually going cheaper. While electricity generated by solar panels is more expensive than that created by fossil fuels, using the sun to heat water and create steam for so-called enhanced oil recovery costs less than natural gas, even at today's low prices.

Sasol’s Plan For North American Shale Gas: Turn It Into Diesel

Are you worried about Peak Oil, or just convinced that America’s continued reliance on imports of foreign oil is a road to ruin? Well Pat Davies has a technology for you. Davies is chief executive of South African energy giant Sasol. The company is the world leader in making diesel fuel out of feedstocks other than oil–namely natural gas and coal–and has high hopes for someday transforming North America’s abundant shale gas into cheaper, cleaner car juice.

Ukrainian court cannot cancel gas agts with Russia -- Yanukovich

KIEV (Itar-Tass) -- Ukrainian courts cannot cancel gas agreements with Russia, Ukrainian President Viktor Yanukovich said.

The jurisdiction of Ukrainian courts does not cover Russia’s activities. “This is why the question of court proceedings concern only the Ukrainian side in this case,” he said at a joint press conference with European Commission President Jose Manuel Barroso on Monday, April 18.

Dubai to Continue to Use Natural Gas as Country's Main Source for Power

Dubai will continue to use natural gas as a main fuel for power generation even as the second- largest sheikhdom in the United Arab Emirates tries to develop new sources of electricity, a government official said.

B.C.'s curious energy double standard

VICTORIA - The controversy over the proposed Northern Gateway oil-sands pipeline highlights a unique perspective in British Columbia on fossil fuels -- bring on the gas, but not the oil.

Azerbaijan declined to increase oil production above 55 million tons a year

Baku, Fineko/abc.az. Azerbaijan has revised the value of peak oil production in the country, which was previously estimated in 60 million tons a year.

Khoshbakht Yusifzade, first vice-president of the State Oil Company of Azerbaijan (SOCAR), has claimed that thereby a goal is set to ensure a longer period of stable high oil production.

Syrian forces kill as many as 24, opposition source says

(CNN) -- Syrian security forces killed as many as 24 people over the past two days in areas where anti-government protests have been under way, an opposition source said Monday.

Some of the victims were killed in Talbisa when security forces fired on mourners at a funeral Sunday, opposition sources said.

Spokesman: Horror in Misrata grows with fresh shelling, little aid

Tripoli, Libya (CNN) -- The nightmare in Libya's war-torn city of Misrata intensified Monday amid more shelling on the city and desperate measures to get medical care, an opposition spokesman said.

"The aid coming from outside is not enough. There is no hospital," said the spokesman, who wanted to be identified only as "Mohammed" for safety reasons.

BP's $20 billion fund barely tapped

NEW YORK (CNNMoney) -- The fund established to compensate Gulf Coast residents in the aftermath of last year's massive BP oil spill said Monday it has paid out $3.8 billion so far.

BP Sued by Pointe Au Chien Indian Tribe Over Spill Damage, Fishing Losses

BP Plc was sued by the Pointe Au Chien tribe over claims the Indian group’s ancestral lands and fishing grounds in southern Louisiana were devastated by the 2010 oil spill.

The tribe “has suffered loss of use of its historical and cultural lands, including tribal cemeteries, Indian mounds, shell middens and traditional fisheries,’’ according to the complaint, filed in federal court in New Orleans on April 15.

AP Enterprise: BP is looking strong a year later

NEW ORLEANS (AP) -- It's hard to tell that just a year ago BP was reeling from financial havoc and an American public out for blood.

The oil giant at the center of one of the world's biggest environmental crises is making strong profits again, its stock has largely rebounded, and it is paying dividends to shareholders once more. It is also pursuing new ventures from the Arctic to India. It is even angling to explore again in the deep waters of the Gulf of Mexico, where it holds more leases than any competitor.

Challenges abound to control crippled reactors

Can Tokyo Electric Power Co. bring the four troubled reactors at its Fukushima No. 1 nuclear power plant under control within six to nine months as it announced Sunday? What challenges must it overcome before achieving its avowed goals?

Unsung bedrock of prosperity

Modern agriculture would be inconceivable without phosphate fertilizers - and it needs more and more of them. Experts warn of an imminent phosphorus shortage. But not Roland Scholz from the Institute of Environmental Decisions. For him, the main problems are the open phosphorus cycle and non-sustainable resource management.

Eco-luxe products: Low impact, high price

Eco-luxe is chic. It's luxurious. It's beautiful. It's conscious. And yes, it can be very expensive.

The Anti-Immigration Crusader

WASHINGTON — Three decades ago, a middle-aged doctor sat outside his northern Michigan home and saw a patch of endangered paradise.

A beekeeper and amateur naturalist of prodigious energy, John Tanton had spent two decades planting trees, cleaning creeks and suing developers, but population growth put ever more pressure on the land. Though fertility rates had fallen, he saw a new threat emerging: soaring rates of immigration.

Time and again, Dr. Tanton urged liberal colleagues in groups like Planned Parenthood and the Sierra Club to seek immigration restraints, only to meet blank looks and awkward silences.

“I finally concluded that if anything was going to happen, I would have to do it myself,” he said.

Improbably, he did. From the resort town of Petoskey, Mich., Dr. Tanton helped start all three major national groups fighting to reduce immigration, legal and illegal, and molded one of the most powerful grass-roots forces in politics. The immigration-control movement surged to new influence in last fall’s elections and now holds near veto power over efforts to legalize any of the 11 million illegal immigrants in the United States.

Is the oil market really oversupplied?

The only thing more surprising than the comment from Ali Naimi, the Saudi oil minister, that the oil market is oversupplied, is how seriously the market appears to have taken it. The oil price has dipped sharply today, according to some at least, because of Naimi’s comments.

US- Markets react to softening crude demand scenario

(MENAFN - Arab News) Perceptions are beginning to change - impacting the crude oil markets - rather significantly.

There are concerns whether the current oil market rally is finally coming to an abrupt end.

Mid last week, oil prices dropped to the lowest level this month, with pundits underlining that high oil prices are destroying fuel demand in the US and elsewhere.

US gasoline demand has dropped for six straight weeks, reported MasterCard SpendingPulse.

Kuwait Oil Min: Oil Market Oversupplied; Agrees With Saudi's Naimi

KUWAIT CITY (Zawya Dow Jones)--Kuwait's oil minister said Monday he agreed with comments made a day earlier by his Saudi counterpart that world crude oil markets are oversupplied.

"There is sufficent oil supplies in the market," Sheik Ahmad Al Abdullah Al Sabah said at the sidelines of a meeting of Asian energy ministers in Kuwait.

How BP got into another fine mess

The immediate cause of BP’s latest Russian crisis is the ruling last month of an arbitration panel in Switzerland. But its roots spread all the way to the Gulf of Mexico, and as far back as the company’s last but one chief executive. And it all reflects the company’s floundering attempts to secure production growth in a world of dwindling oil resources.

Pakistan Seeks LNG Imports on ‘Urgent Basis,’ Adviser Says

Pakistan will seek imports of liquefied natural gas on an “urgent basis” as it struggles to overcome energy shortages that have crippled the economy.

“Pakistan can’t meet energy demands without LNG imports,” Asim Hussain, the government’s petroleum adviser, said today at a news conference in Islamabad. “LNG imports are the only short-term solution for economic survival.”

Assad's promises fail to quell Syrian protests

Violent clashes with government forces erupt across the country as thousands of Syrians take to the streets in defiance of a warning by President Bashar Assad, who a day earlier had offered to enact reforms.

Bahrain protests will go nowhere while the US supports its government

The Al-Khalifa family, who control Bahrain, has cracked down on dissent with little condemnation from the west.

Libya's oil company protests to OPEC about Qatar

(Reuters) - Libya's National Oil Corporation has written to OPEC to complain about help fellow member Qatar is giving to Libyan rebels, sources familiar with the matter said on Monday.

The complaint by Shokri Ghanem, the chairman of NOC, hints at rising political tension as a result of the Libyan crisis within the Organization of the Petroleum Exporting Countries, which pumps more than a third of the world's oil.

How Libya Saps America's Power

Here's what America's worst enemies like Iran and North Korea are spouting on the international circuit about Libya: If the vaunted and mighty NATO and the U.S. can't humble that weirdo Col. Gaddafi and his pint-size army, "what do we have to worry about?"

One year after spill, where's the oil?

One year ago this week, an oil-rig explosion in the Gulf of Mexico touched off a deep-sea leak amounting to 2.5 million gallons of Louisiana light crude every day for months. In all, nearly 207 million gallons (4.9 million barrels) of oil are thought to have gushed from the leak, along with huge volumes of methane. So what's happened to all those petrochemicals over the past year? The answer is surprisingly complex and contentious.

Corbett vows to keep gas drillers from poisoning water

HERSHEY — Gov. Tom Corbett today said he will not allow Marcellus shale drillers to "poison the water" but defended his decision not to levy a tax on gas extraction.

Entergy Corp. sues to keep Vermont Yankee open

MONTPELIER, Vt. — Entergy Corp. has filed a lawsuit in Vermont to keep the Vermont Yankee nuclear power plant open past 2012.

The New Orleans-based company has federal approval to keep the plant running until 2032, but it so far has been unable to secure state approval.

Portland Is The Only City In America That Is Ready For The Energy Crisis

Portland, Oregon is now far enough along in its transition away from oil that by 2015 one can imagine this city being able to market and sell its own example to the rest of the world.

Most of Portland’s longstanding initiatives, from public transport and the integration of the bicycle, to city agriculture, water and waste management, and use of technology are solutions that will be seen not as discretionary but necessary by mid-decade.

Kurt Cobb: Do the world's contemplative religious traditions demonstrate a path to sustainability?

Within nearly all the great religions of history we find contemplative traditions which espouse the curious principle that foregoing excessive wealth and consumption (and therefore energy use) will actually make one happier. As a general rule these traditions advocate eating only what one needs to be healthy; exercising to maintain physical vigor (but not excessive strength); studying to attune oneself to the subtleties of nature and of the mind; and shielding oneself from the distractions of daily life. All this, they claim, will result in a fuller, more joyful existence.

Preparing for the future

His premise is not yet one that national policymakers and politicians are buying into, but more than 25 people listening via teleconferencing hookup Saturday in Salina showed they were convinced by a show of hands.

"We are at a fundamental turning point in world history," said Richard Heinberg, senior fellow-in-residence at the Post Carbon Institute and author of 10 books, including the soon-to-be-released "The End of Growth: Adapting to Our New Economic Reality."

Oil shortages and environmental decline could create 'global quagmire': military report

KINGSTON, Ont. — The planet is running out of oil and heading toward a future that could trap Canada in a violent spiral of decline in the economy and the environment, a special research unit within the Canadian military is predicting.

This "global quagmire" is one of four possible future scenarios advanced by the six members of the team who are developing a plan for the army of tomorrow based on existing scientific research and analysis.

Crude Market Is ‘Oversupplied,' Saudi Arabia's Oil Minister Al-Naimi Says

Saudi Arabia’s Oil Minister Ali al- Naimi said the global “market is oversupplied” with crude even as the world’s largest oil producer cut output last month by more than 800,000 barrels a day.

“Our production in February was 9,125,100 barrels a day,” al-Naimi said, as he arrived in Kuwait for a conference. “In March, it was 8,292,100 barrels. It will probably go a little higher in April. The reason I mention these numbers is to show you the market is oversupplied.”

Saudi Arabia’s spare production capacity is about 3.5 million barrels a day, and its total capacity is 12.5 million barrels a day, he said today.

OPEC worried by high oil price, patchy global recovery

(Reuters) - High oil prices represent a potentially major burden for importers with global economic recovery still fragile, leading OPEC ministers said on Monday.

Saudi Oil Minister Ali al-Naimi, a day after confirming the kingdom slashed oil production by more than 800,000 barrels per day (bpd) in March due to weak demand, warned of continued weakness in the global economy.

Oil Declines in New York After Saudi Arabia Says Market Is `Oversupplied'

Oil declined for the first time in four days in New York after Saudi Arabia, the world’s biggest exporter, said the global market has adequate crude supplies.

Futures slipped as much as 1.4 percent after Saudi Arabia’s Oil Minister Ali al-Naimi said yesterday the “market is oversupplied.” Crude fell 2.8 percent last week on speculation price gains spurred by conflicts in the Middle East will curb economic expansion. The world economy is being hurt by “very high” oil prices, said Nobuo Tanaka, the International Energy Agency’s executive director.

Gallon of gas now tops $4 in six states and D.C.

WASHINGTON — Add New York to the growing list of states where gas prices are topping $4 per gallon.

On Sunday, the Empire State became the sixth state to top $4 for the average price of a gallon of gas, joining Alaska, California, Connecticut, Hawaii and Illinois, according to AAA's Daily Fuel Gauge. The average price of gas also rose to more than $4 per gallon in Washington, D.C., on Saturday.

The next states to join the list could be Michigan, which has gas for $3.95 per gallon on average, and Indiana, where the average price is $3.94. Nevada, Washington and Wisconsin are close behind.

Some gas stations are starting to charge $5 a gallon

As gas prices continue to rise, we're starting to find isolated instances of stations charging $5 for a gallon of regular.

Gas spike tab hits $100 billion

In the latest sign inflation is tapping the brakes on the recovery, gas-price increases have practically wiped out Americans' winnings from last year's tax holiday.

So says Goldman Sachs. The firm cut its first-quarter U.S. growth projection Friday for the second time this month, warning that the price of gasoline – up to $3.83 a gallon on average at the latest reading – could undermine consumer spending and slow an already laboring economy.

"A key reason for concern is the sharp rise in gasoline prices so far in 2011 — nearly 70 cents per gallon — which is siphoning off household income at a run rate equivalent to $100 billion per year," writes economist Andrew Tilton.

Gasoline Prices Slow U.S. Recovery ‘Modestly,’ Geithner Says

U.S. Treasury Secretary Timothy F. Geithner said high gasoline prices will hamper the U.S. economy as the recovery continues.

Geithner acknowledged that gas prices have risen “quite a lot,” partly in response to tensions in the Middle East and North Africa. He also cited concerns that Japan’s nuclear disaster is calling the future of nuclear power into question.

Why high gas price effects may be different this time

"In 2008 we spent 12 months with gas above $3," and that resulted in notable changes in consumer spending choices, says David Portalatin of NPD Group. "Nearly half reduced their gas consumption by consolidated shopping trips, 29% cancelled or modified vacations, 25% found alternatives to driving. The more sustained price spike, the greater the impact."

Perhaps because consumers have traveled this road before, some analysts say this time around the impact may not be as pronounced across middle-class and higher-income consumers as it was in 2008.

Halliburton Profit Rises on North American Oil Output Increase

Halliburton Co., the world’s second-largest oilfield services provider, said first-quarter profit climbed as rising oil prices led to increased efforts to find oil and natural gas in North America.

Sinopec Said to Seek $3.8 Billion of Loans for Acquisitions, Refinancing

China Petrochemical Corp., known as Sinopec Group, is seeking $3.8 billion of five-year term loans from lenders, according to two people familiar with the matter.

Desire plunges on unsuccessful Falklands well

(Reuters) - British oil explorer Desire Petroleum said it had not found oil at its latest well in the Falkland Islands and would need further funds for future drilling, wiping over half the value off its shares.

Desire's disappointing well result is a further blow for the company as it comes on the back of a string of unsuccessful results, but it should not dent the remote British territory's chances of becoming a new oil province, say analysts.

ExxonMobil CEO Rex Tillerson chats with Maria Bartiromo

Q: But in terms of supply and demand, is there enough oil and gas in the world today, or are prices high because of speculation? And how long would you expect them to stay elevated?

A: The markets are well supplied today. If you look at inventory levels here in the U.S. and around the world, they are in a strong condition. So supply is not the issue. What’s reflected in the price is the uncertainty around what might happen in the months or years ahead if there are further interruptions in supply. That is because of what you are seeing around the world in some oil-rich regions. It really is at what cost is it going to take to replace that supply if it is lost. And that’s what’s reflected in the market.

Sri Lanka - Sobering thought: Crude oil at $100 per barrel!

With high oil prices, as a developing nation where do we go from here seems to be the timely question?

As we started to smell the sweet success associated with the post-war economic development and as we were getting ready to bring back the glory days, there seems to be a dark cloud zooming in. Energy, being the front runner of the economy, we see yet another oil price increase during the last week.

China regions face power shortage even before summer peak

BEIJING (Reuters) - Central China's Hubei province has joined a growing list of regions facing coal shortages, with a warning on Monday that it is very likely to start rationing power this month if coal supplies remain tight and low water stocks continue to curb hydropower generation.

China has warned that power shortages this summer could be the worst for years, with power generation and transmission systems unable to cope with rising demand. The east, north and south of China are likely to be hit the hardest.

Years of the Modern

The biggest wildcard among the Fourth Turning catalysts is Peak Oil. The modern industrial world is completely dependent upon cheap accessible oil. Globalization, consumerism, suburban sprawl, food production and distribution, and all means of transportation are dependent upon cheap abundant oil. Peak world oil production has occurred. Demand will outstrip supply going forward at an ever increasing rate. Various levels of chaos will ensue as the realization of this fact becomes evident to everyone.

Rebels in Ajdabiya Repel Attack by Qaddafi Forces as Libyan Fighting Rages

Libya’s rebels, fighting mainly from pickup trucks mounted with machine guns, repelled an attack from Muammar Qaddafi’s forces on the city of Ajdabiya.

Qaddafi loyalists had earlier shelled Ajdabiya, about 160 kilometers (100 miles) south of the rebel stronghold of Benghazi, Mustafa Gheriani, spokesman for the rebels’ National Transitional Council, said in an interview.

Libyan rebel oil chief: No immediate new oil sales

BENGHAZI, Libya—Libyan rebels will not sell any additional oil until production resumes from two key fields that suffered battle damage in the breakaway east, the region's top oil official said Monday.

The repairs -- which rebels say could be completed in weeks -- are a priority for opposition forces that are counting on oil revenues to maintain the fight against Moammar Gadhafi's stronger military.

U.S. secretly backed Syrian opposition groups, cables released by WikiLeaks show

The State Department has secretly financed Syrian political opposition groups and related projects, including a satellite TV channel that beams anti-government programming into the country, according to previously undisclosed diplomatic cables.

Yemen Opposition Turns Down Gulf Plan as Police Fire on Crowd

Yemen’s opposition coalition rejected a plan by six Gulf states to end unrest in the Arabian country, saying that the swift departure of Yemen’s President Ali Abdullah Saleh isn’t negotiable.

Before talks began in Riyadh yesterday, police in Yemen used live ammunition, tear gas and water cannon to disperse tens of thousands of protesters marching in the capital, Sana’a, injuring at least 100, according to Abdulmalik al-Yusufi, a doctor at a field clinic along the protest route.

What Happened to the Arab Spring? Ask Saudi Arabia.

The Arab Spring appears to have been overwhelmed by a deep frost that might just kill all of the revolutionary buds. With the exception of Tunisia the revolutionary zeal has been either co-opted by the old established ruling class, Egypt is currently ruled by a 75 year old general who has never shown any predilection for democracy and individual freedom. The army has actually imprisoned a blogger for having assumed that it was his natural right to express his point of view.

Protests in Nigeria's north over Jonathan poll win

(Reuters) - Security forces deployed on the streets of Nigeria's northern cities Monday to try to contain protests by youths angered at results showing President Goodluck Jonathan won the presidential election.

Votes counted from all but one of Nigeria's 36 states showed Jonathan, the president from the southern oil-producing Niger Delta, had beaten Muhammadu Buhari, a former military ruler from the Muslim north, in the first round.

Chemicals Were Injected Into Wells, Report Says

WASHINGTON — Oil and gas companies injected hundreds of millions of gallons of hazardous or carcinogenic chemicals into wells in more than 13 states from 2005 to 2009, according to an investigation by Congressional Democrats.

The chemicals were used by companies during a drilling process known as hydraulic fracturing, or hydrofracking, which involves the high-pressure injection of a mixture of water, sand and chemical additives into rock formations deep underground. The process, which is being used to tap into large reserves of natural gas around the country, opens fissures in the rock to stimulate the release of oil and gas.

Analysis: After BP spill, U.S. drill permits slow to a trickle

(Reuters) - Nearly a year after BP Plc's Gulf of Mexico oil spill spurred a shutdown of new U.S. deepwater oil and gas drilling, offshore regulators have begun to approve a trickle of new permits.

But the 10 new wells that have received permits from the newly created U.S. Bureau of Ocean Energy Management so far this year pale in comparison to the rate of permitting in prior years, according to a Reuters analysis of permits.

Regulation of Offshore Rigs Is a Work in Progress

WASHINGTON — A year after BP’s Macondo well blew out, killing 11 men and spewing millions of barrels of oil into the Gulf of Mexico, the much-maligned federal agency responsible for policing offshore drilling has been remade, with a tough new director, an awkward new name and a sheaf of stricter safety rules. It is also trying to put some distance between itself and the industry it regulates.

But is it fixed? The simple answer is no. Even those who run the agency formerly known as the Minerals Management Service concede that it will be years before they can establish a robust regulatory regime able to minimize the risks to workers and the environment while still allowing exploration offshore.

Scientists: Gulf health nearly at pre-spill level

BAY JIMMY, La. – Scientists judge the overall health of the Gulf of Mexico as nearly back to normal one year after the BP oil spill, but with glaring blemishes that restrain their optimism about nature's resiliency, an Associated Press survey of researchers shows.

Mystery illnesses plague Louisiana oil spill crews

Robichaux, an ear, nose and throat specialist whose office an hour's drive southwest of New Orleans is nestled on a roadside marked with handwritten signs advertising turtle meat for sale, says he is treating many of the local patients in their homes.

"Their work ethic is so strong, they are so stoic, they don't want people to know when they're sick," he said.

"Ninety percent of them are getting worse... Nobody has a clue as to what it is."

Wyoming’s Boom Poses Challenges For Obama

Economists say administration policies to reduce imported energy, along with higher commodity prices, are bolstering what Wyoming has to offer — natural gas and oil, coal so near the surface it can be harvested without underground mines and endless wind for electricity turbines.

Just last month, Mr. Obama’s interior secretary, Ken Salazar, came to Wyoming to announce the timetable for billions of dollars in new coal leases near Gillette, in the state’s northeast corner. Some coal industry boosters saw that as a strong signal of support — coming less than two weeks after the Japanese earthquake, tsunami and nuclear crisis — for traditional energy as the backbone of the national supply.

But many other residents here say they still see Mr. Obama as the enemy of Wyoming’s mineral bounty.

Quake-hit Chiba refinery restart to take time -PAJ

(Reuters) - Cosmo Oil Co's quake-hit 220,000 barrels per day Chiba refinery will likely not be up and running for some time, taking much longer than a rival refinery which is due to restart in summer, the head of the Petroleum Association of Japan said on Monday.

Japan needs more LNG, buys to push up long-term price

TOKYO (Reuters) - Japan needs to buy more liquefied natural gas (LNG) even after securing 4 million tonnes of additional fuel from top producer Qatar, which is likely to push long-term prices higher and reduce cargoes available for Europe.

Top LNG importer Japan is battling to minimise power shortages in the aftermath of a devastating earthquake and subsequent tsunami in March that knocked out more than 9 gigawatts of nuclear power supply.

Robot in Japanese reactors detects high radiation

TOKYO (AP) — Readings Monday from a robot that entered two crippled buildings at Japan’s tsunami-flooded nuclear plant for the first time in more than a month displayed a harsh environment still too radioactive for workers to enter.

Tokyo Electric Unveils Six-Month Plan to Cool Reactors, End Nuclear Crisis

Tokyo Electric Power Co. set out a plan to end the crisis at its tsunami-damaged Fukushima Dai-Ichi power plant, the worst nuclear disaster since Chernobyl, within six to nine months.

A sustained drop in radiation levels at the plant is expected within three months, the company known as Tepco said yesterday in a statement. Following that, a cold shutdown, where core reactor temperatures fall below 100 degrees Celsius (212 degrees Fahrenheit), may be achieved within six months, it said.

Unlike BP, Japan's crisis-hit TEPCO has little to sell

(Reuters) - Like oil-leaking BP plc a year ago, disaster-whipped Tokyo Electric Power is mulling a fire sale of assets to help pay compensation claims against its Fukushima Daiichi nuclear power plant.

Unlike BP, which had a valuable bag of oil and gas fields to hawk, Asia's No.1 utility has little to sell.

The post-quake nuclear dilemma

Four years ago, a disaster such as the one at Japan's Fukushima Daiichi nuclear power station would have served to back up the British politician Chris Huhne's position on atomic energy.

"Ministers must stop the sideshow of new nuclear power stations now," he said on his campaign website in 2007. "Nuclear is a tried, tested and failed technology and the government must stop putting time, effort and subsidies into reviving this outdated industry."

But today Mr Huhne, the UK energy secretary, finds himself trying to moderate public discussions on nuclear power, which apparently will have to remain a key part of his country's energy mix.

For Energy-Starved India, Japan’s Crisis Raises Hard Questions

About 40 percent of the country’s 1.2 billion people live off the grid, and most of the rest, excluding the well-off residents of a few big cities like Mumbai and New Delhi, cannot count on having power 24 hours a day. Many industries must rely extensively on diesel generators to keep their operations going.

Chernobyl nightmare haunts world 25 years on

KIEV (AFP) – The world next week remembers 25 years since the worst nuclear accident in history at Chernobyl, haunted by fears that the Japan earthquake has shown again the risk of atomic power sparking apocalypse.

Nuclear still main alternative to oil: ex-IAEA chief

DUBAI (AFP) – The former head of UN atomic agency voiced confidence Sunday in nuclear energy as the only real alternative to oil despite a potential "setback" in the sector due to Japan's current disaster.

"Today, nuclear power is the only real alternative to fossil fuel as a source of a reliable supply," said Egyptian Mohamed ElBaradei, speaking at the opening of the Dubai Global Energy Forum.

Italy’s Last Reactor Town Goes Solar in Fight Against Nuclear

Montalto di Castro, the town where Italy’s last nuclear plant was built before a two-decade ban, is fighting against a return to atomic power and staking its future on solar energy by hosting Europe’s largest photovoltaic park.

GM shows off its new super-cheap car for China

If you're wondering what General Motors is up to China, here's a fresh example. It's the new Baojun 630 sedan, which debuted last week at the Shanghai auto show.

Apparently, the midsize Baojun 630 has one truly appealing quality: It's cheap.

Tata: Building an auto empire in India

The Indian car market is small -- one-sixth the size of China's -- but growing just as fast. Tata wants to use its vast potential as a platform to transform Tata Motors from a regional powerhouse into an international automotive player. In the past 24 months he has taken three audacious steps in that direction. First, Tata unveiled the Nano, which aspires to be nothing less than a people's car for the developing world. With a beginning price of $2,900, it is designed to lure India's growing middle class away from their bicycles and motor scooters and into safe family-size, weatherproof vehicles. Nano got off to a rocky start but is gathering speed. It could open big export opportunities that Tata hopes will eventually include the U.S. and Europe.

Decision Looms for Laos Dam, but Impact Is Unclear

On Tuesday the four countries that share the lower reaches of the Mekong River will announce whether they agree to the construction of a controversial dam, a decision that could forever alter the character and natural diversity of one of the world’s longest and most bountiful rivers.

Couple builds solar-powered home with help from Google

Using Google SketchUp, a 3-D modeling program usually used by architects, engineers and other design professionals, the couple drew the plans for their home and all of its high-tech, low-environmental-impact features on a computer screen.

“Woodworkers say measure twice and cut once. We did that with SketchUp . We designed it to a quarter of an inch,” Philippe Jeanty said.

Is this sci fi - or the near future?

Our grandkids will lead the lives of the gods of mythology. Zeus could think and move objects around. We’ll have that power. Venus had a perfect, timeless body. We’ll have that, too. Pegasus was a flying horse. We’ll be able to modify life in the future.

Crusader sows seeds of change

It was former US vice-president Al Gore’s “inconvenient” advice which put Mr Molloy on his vegetable crusade.

“He talked about how people went from denial to despair, but in fact should stop in the middle,” he said.

Mr Molloy developed the idea of a community garden.

New climate change case headed to Supreme Court

WASHINGTON – The Obama administration and environmental interests generally agree that global warming is a threat that must be dealt with.

But they're on opposite sides of a Supreme Court case over the ability of states and groups such as the Audubon Society that want to sue large electric utilities and force power plants in 20 states to cut their emissions.

Scientists want climate change early-warning system

(Reuters) - A better monitoring network for greenhouses gases is needed to warn of significant changes and to keep countries that have agreed to cut their emissions honest, scientists said in papers published Monday.

"What we're hoping to do is see if the warming is feeding the warming, particularly in the Arctic," said Euan Nisbet, a specialist in methane emissions at the University of London.

FACTBOX-Australia's greenhouse emissions rise 0.5 pct in 2010

(Reuters) - Australia's greenhouse gas emissions grew 0.5 percent in the year to December 2010 to 543 million tonnes, matching a long-term pattern of growth, government estimates showed on Monday.

Following is a snapshot of the estimates released by the government on Monday. The 2010 figures do not include emissions from land use change, such as deforestation.

Arctic's Icy Coastlines Retreat as Planet Warms

In the high latitudes, climate change projections must take a new factor into account: Ice. In the Arctic, the loss of sea ice is likely to have dramatic repercussions, including greater erosion, which can present problems for the people and economic activity in this region, according to two new reports.

Sea ice is disappearing from Arctic waters at an unprecedented rate — more rapidly than predicted by the most extreme projections in the most recent assessment report by the Intergovernmental Panel on Climate Change, according to the researchers.

Arctic coasts slipping away

A quarter of the Arctic's permafrost coastline is suffering from erosion due to climate change. The impact on settlements, shipping, oil and gas installations and coastal infrastructure is likely to grow.

'Arctic coastal erosion is reaching up to 20 metres a year in places, though on average it is half a metre a year. What we are seeing is likely to affect enormous areas in the future,' said Hugues Lantuit, a geologist at the Alfred Wegener Institute, Germany's top polar science institution, and one of the lead scientists in the decade-long study. 'We have to reckon on rapid changes in a system that has been stable for millennia.'

I have several sites acting as RSS-feeds whenever there's a new post on a website I like. One such site is a newsblog collecting various links from the internet.

Now one of those blogs is linking to another blog which seems to entertain the notion that we're seeing serious trouble for Iran's oil production with increasing incidents of sabotage of their oil infrastructure, pipelines and refineries alike, and that this is an increasing trend.

Granted, I've never been to the blog at which this article/report is written but it sounds and looks serious.

I'm throwing this out there as a wildcard:

The insurrection is on

Iranian Arabs in the Ahwaz oil region have risen up, first on Friday’s “Day of Rage” in which at least nine protesters were killed by the regime’s security forces, and then again on Saturday, about which there are only very early reports as I write on Saturday afternoon. The regime doesn’t want the world to know about these protests, both because it suggests the vulnerability of the country’s major source of income, and because it shows once again that Khamenei and Ahmadinejad have failed to impose their will on a population that wants an end to the regime itself.

Thus foreign “observers” have been forbidden to travel to Ahwaz, and the disinformation mavens in Tehran staged their own “demonstrations,” claiming that the population was protesting the treatment of Shi’ites in Bahrain. Nobody was fooled, least of all the (mostly Sunni) Ahwaz Arabs.

The systematic sabotage of the petrochemical industry and the nation’s vital pipelines — to which I have so often referred — continues apace.

The author writes very long, disjointed paragraphs so it's hard not to quote him excessively if you want to capture the full content.

The main point is not just the unrest in itself, but the systematic targeting of Iranian oil infrastructure which seems to be getting worse. There are a lot of examples in that blogpost, but I cannot quote them due to the restraint on space.
Since I've never heard of the blog before, can anyone verify the claims made about what seems to be the increasing amounts of severe setbacks by radical insurgency groups from both inside Iran and coming from around it's borders?

As for Syria, also mentioned in the blog, I'm surprised how quiet it is in the Western media on this issue. People are dying there in scores of dozens per day now, and there were syrian reporters from the Swedish media(we have a lot of expats from Syria and Lebanon living here) going down there and basically saying that if this escalates further, which seems increasing likely as more and more towns are drawn in, then it will spread to Lebanon too.

And this is coinciding with May 15th fast approaching, the major Palestinian 'Nakba' day, remembering the ethnic cleansing of Palestine(from their viewpoint). Syria and Lebanon are both right next to Israel.

I don't think we are seeing the end of the Middle East unrests and revolts, probably not even close to it.

Yes, it only seems to be picking up pace in Syria. Now they're calling for Assad to go - before they only wanted reforms.

Mourners call for overthrow of President Assad a day after at least 30 demonstrators were killed by security forces.

Tens of thousands of Syrians have attended the funerals for protesters killed in the central city of Homs, chanting slogans demanding the overthrow of Bashar al-Assad, the country's president.

Rights activists say security forces killed at least 25 pro-democracy protesters in Homs on Sunday night as anti-government demonstrations flared across the country, claiming up to 30 lives.

Witnesses said mourners chanted "From alleyway to alleyway, from house to house, we want to overthrow you, Bashar," and "Either freedom or death, the people want to topple this regime".

re "Oil Declines in New York After Saudi Arabia Says Market Is `Oversupplied'"

O.K. I'm lost. All day, yesterday, we were talking about this revelation as being bad news. That this proves that Saudi oil is peaking. Now, the market takes the news totally 180 degrees. What is going on?

The difference between us humble souls and the self-proclaimed Masters of the Universe is that they clearly know everything and we know nothing.
Thus: when Saudi Arabia says something, it's always true. So when they say the market is 'oversupplied' it must be so, ergo, the price of oil comes down because the market is literally flooded with oil!

The reason we had high prices until now was a confluence of the omnipotent Speculators and the evil Federal Reserve, putting a premium on the oil price(so I read at Steven LeVine's blog, so it must be true. John Hofmeister, former BP head honcho, called the theory 'interesting'...)

True. You know nothing.

Standard & Poors put U.S. on credit watch negative today: "In 2003-2008, the U.S.’s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most ‘AAA’ rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover." Got gold?

GDP/Total Debt is the metric. A change in Yearly percentages is kind of silly to point out for almost any statistic that fluctuates.

Here is my guess as to what is going on. Clearly the price of oil is beginning to factor in it's true value. Oil at $60 is simply not a price that reflects its overall value to the world. But at some point reality does kick in. Regardless of the absolute value of oil, the world has only so much storage. Take Cushing for example, we could deliver more and more oil but eventually the tanks will fill to capacity. At that point, the price plumments regardless of its value to the world.

Please do not take this comment as a projection into the future. I believe like others on this board that oil inventories will decline sooner than later. But, for now, at least here in the USA we are indeed over supplied at greater than the 5 year average.

What's going on is that this is just more pablum for the cornucopians. Saudi had to cut production because there was just too much oil on the market or so the story goes. The fact that the world did not jump on this story as an indication that Saudi has peaked and has no more spare capacity just shows how deep in the dark the average person really is.

CNBC reported on the story yesterday but did not seem very alarmed about it.

Saudis Slash Oil Output; Say Market Oversupplied

Oil Ministers from Kuwait and the United Arab Emirates echoed Saudi Arabia's Ali al-Naimi's concerns about oversupply and said rocketing crude prices were out of the hands of OPEC, which next meets in June...

Kuwait may also have reduced output from the 2.42 million bpd analysts and oil traders estimated it pumped in March.

The Gulf state's Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters Kuwait was currently producing 2.2 million bpd but did not say whether output had been reduced.

According to most sources, Kuwait pumped 2.4 mb/d in March so that would be a reduction of 200,000 barrels per day.

Ron P.

These reductions are bigger that the Alaska pipeline flows!

My theory is that the oil market is like the corn market. Inventory (i.e. current supply) does not matter. I have pointed out in several comments in the past that corn prices often rise after harvest when the inventory is highest and then fall after July as inventory of old crop also falls.

This is due to cash prices being set in the futures market. Futures markets are just as the name says about the future and not about the present. Futures markets couldn't care less what the inventory situation is today. Participants are looking at what the situation will be at some future date.

This is very hard to grasp by those who have not followed commodities where cash price is established based on futures prices.

The purpose of futures markets is to make sure that a physical shortage never occurs. This is done by marking up the cash price to reflect the futures market price whether there is a large current inventory or not.

What this does is reduce demand today so that when tomorrow comes there will be adequate supply. That is the genius of futures markets. It is the reason markets are well supplied at all prices at all times. And it is the reason talk of getting rid of speculators is so silly.

Speculators are in the market all the time, but they are generally only under attack when a product we need rises in price. When they are running the price of the product down, everyone goes quiet. Then we love them but don't say anything. The producing side of the market has to endure it.

This has happened to me so many times over the last 36 years with corn, that I can't count them.

Saudi oil production is of lower quality oil and refiners need the light sweet stuff Libya extracts. That runs the price of Brent up even as the Saudis can't sell there inferior crude. This is telling because they do not have the good stuff to sell.

This is exactly what one would expect in a Peak Oil situation where enough refiners have not yet converted to processing the lower grades of crude. The price of the good grades must rise to the point that refiners convert to using the lower grade stuff.

The Saudi statements are an argument for higher prices of the good grades of oil like Brent. All the while they will be saying that the market is oversupplied which it is for their low quality crude.

This site's mad buzz on Saudi oil is ridiculous.

In the article, Saudi Arabia says it has produced 2 million barrels of light oil to replace the Libyan production without problems and the reason that they have oversupplied oil is because
Japan's(Saudi Arabia's 2nd largest customer) refinery production has dropped 30% on account of the Tohoku earthquake. The Europeans
have not been hurt as much by Libyan oil supply drop as they might because European refiners are deliberately reducing production to keep up profit margins.


The Saudis want to sell their 'light oil' but nobody wants to buy.

While it's rather obvious that the refineries in Japan aren't running at the same level as that before the earthquake, one should also consider changes in product imports. Without tracking both oil and product imports, one is likely to reach an incorrect conclusion regarding the quake's impact on total world oil consumption...

E. Swanson

But that doesn't really make sense - if the Saudis have lots of oil they want to sell but the refineries won't buy it because it's too expensive, then why don't the Saudis just lower their price?

In that article it has a subhead: "WEAK DEMAND, INCREASED COMPETITION"

When has that ever led to increasing prices in commodities?

In any case, it seems there's still a valid cause for concern if things aren't functioning smoothly.

Because they'll lose money.
Remember this.
Buy low, sell high.
In the 1980s the oil price remained high long after demand destruction of the 1980-1982 recession.


The Tea Pot Austerians are intent on causing a recession.
And it is happening.

The Tea Pot Austerians are intent on causing a recession.
And it is happening.

Well isn't that precisely the reason it's justifiable to be up in arms about the Saudis' admission that they've cut production?

The Tea Party Austerians are intent on causing a recession.

Hot tip: Most tea party members have no idea of what an economic school is, let alone what model the US of A is running under.

But if you have actual %age numbers showing the economic model of "the tea party" do post 'em.

They probably don't recognize it as coming from the Austrian school, but they go for the "morality play" vision of economics. It runs something like, we are in a recession I am hurting, therefore the government -and by extension anyone who depends upon the government should be made to suffer as well.

I don't think what you've projected is the Austrian School. It is something else.

Kind of like how the US economy isn't Keynesian.

Majorian, watch the clip I linked below; Oil: Supply, Demand & Risk. The CEO of Gulf Oil talks about demand destruction that is already taking place. The reason there is so much demand destruction is because the price is so high. In Florida we are starting to see a 3 to 4 percent drop in year on year weather adjusted driving and in the Northeast we are starting to see a 1 to 2 percent back off in miles driven. And we are seeing the same thing all over the world.

Demand is down at least 2 percent because of high prices. That is just what happens when the price of oil gets too high. Why is that so hard to understand?

One more thing, Saudi does not have extra "light" oil that they were not producing all along. Some of their oil is light, but not nearly as light as the Libyan oil that is off line. But most of their oil is heavier sour oil. It is a joke that Saudi can blend heavier oils and get light oil from it.

Ron P.

That was smart to put 'light oil' in single quotes. They have tons of it but they want a high price to spur demand destruction.

The Saudis want to sell their 'light oil' but nobody wants to buy.

Well, they're trying to sell a blend of oils that they claim is the same quality as the Libyan oil that has gone off the market.

In Canada, our customers made us sign sales contracts that specifically forbade us to blend oils to meet oil specifications. That was because we could create a blend of oils that met specs, but that was useless for producing the products the refinery wanted. They got a different yield of products out of each different type of crude oil we sold them, and they knew what that yield would be, but if it was a blend they had no idea.

The European refineries that were buying Libyan oil did so because of the very high yield of diesel fuel they could get from it - diesel fuel is the main market in Europe. I'm guessing that the Saudi blend probably produced a far lower yield of diesel fuel, so there wasn't much point in the Europeans trying to refine it, regardless of specs.

In the Drug world analogy, would KSA be cutting their coke with sugar or rat poison?

In a drug context - the cut is with meth or heroin.

Because oil, be it light sweet or heavy sour - is an addiction.

I am always a bit confused as to why diesel is so specific? Isn't diesel, kerosine, aviation fuel, paraffin, heating oil etc all pretty similair? I bet you could take 2/3 gallon petrol, add petroleum jelly - or rapeseed oil, tallow etc and call it diesel fuel? It's the flash point that matters isn't it..? You could blend allsorts to achieve it.

No, it is a lot more complicated than that. There is a standards document - ASTM D975 that diesel fuel should meet, and it gets into questions of viscosity, flash point, cloud point, and tons of other things:


Aviation fuel is lighter weight (less viscous) - closer to kerosene, than anything else.

I bet you could take 2/3 gallon petrol, add petroleum jelly - or rapeseed oil, tallow etc and call it diesel fuel?

No, don't do that, you'd probably wreck the engine.

Although you could run a diesel engine on 100% rapeseed oil (canola). That's a trick farmers discovered long ago. When they run short of diesel fuel, they pad it out with some canola oil they have sitting around on the farm.

The key factor is cetane number, which defines the ignition properties of the fuel in a compression-ignition engine. For a diesel engine, you need a cetane number between 40 and 55. Diesel fuel has a cetane number of 45. Rapeseed oil has a cetane number between 40 and 50.

It probably wouldn't meet emissions standards, but if you're a farmer, what do you care? You're the only one breathing the exhaust, and it's probably the least toxic chemical you're exposed to.

@RMG, your customers might have told you that, but it isn't necessarily the rule. this site lists several blends that go to refineries on a regular basis (Nacx1, Gulf1). The real issue is the refiner's "spread". Their particular alchemy defines how much spread they might get out of a barrel of oil and from that spread comes their profit. One 42 gallon bbl of oil might well produce 46 gallons of refined product - the spread. They don't want you to do the blending, they want to do it themselves. Oh, and while they're at it, they get to gouge you on the price they pay you because you didn't meet their "spec". After all, not everyone gets to be WTI or Brent, those are the gold standards and all other oils sell at a discount to them. In truth, the lower API oils give the refineries more spread, but often are more of a nuisance to process.

I'm aware that oil marketers often are allowed to blend oils to meet the specs. The specific problem our customers had was that the characteristics of Canadian oils vary quite drastically, so they weren't sure what they would be getting. API gravity doesn't tell the whole story. Crude oils in other regions are more predictable.

Western Canadian Select (WCS) is a blended benchmark - a mix of 25 different types of conventional heavy oil, bitumen, syncrude, and gas condensate - but the producers guarantee that it will be of a consistent quality. That's the whole point behind it, predictability, so that every batch will be like the last one, and the refineries know what they are getting.

I suspect whatever blend the Saudis concocted to replace Libyan oil was somewhat less predictable and refinery-friendly.

I'm also finding it confusing. There seem to be at least two levels at work - one is that you take the information at face value, i.e. 'There's not much demand so we cut production, so no need to panic - there's a lot of slack in the system.'

The other way to look at it is to examine the reasons behind the face-value appearances, i.e. 'Oil is priced too high for people to afford, therefore demand has dropped. Fine in the short-term, but how long can the global society hold its breath?'

It seems the oil market is reacting in the manner of the first, perhaps?

Also maybe of note - the gold index has jumped quite considerably this morning. Possibly a reflection that gold traders are thinking things aren't looking so rosy elsewhere?

P.s. credit to Rockman for effectively explaining this to me in the last Drumbeat!

I have to agree with avonaltendorf. The BIG story of the day is the USA AAA rating risk. All money is running out of the markets this morning. Gold is the parking lot of choice.

Wow, that is interesting. The gold hike makes sense now..

Gold is one of the few commodities that is at weekly, monthly, quarterly and annual highs but is still in contango with respect to long dated futures. ('Contango' means that the slope of the futures chain is positive -- longer dated contracts are worth more than front month contracts. 'Backwardation' is the opposite.)

Here's the futures chain chart for gold from an improved (but still prototype) Futures Chain Explorer:

By contrast, oil is in short term contango but long term backwardation. For whatever reason, the market sees the price of oil coming back down after reaching new highs this year.

Other futures chains worth watching include gasoline (RBOB) which is showing steep contango at the short end. Traders must think that demand destruction in the US is imminent

Then there is "Dr. Copper", more of a global indicator, who is trading at weekly and monthly lows, although at annual highs. Traders are apparently uncertain about the health of the global economy. As well they should be!

The futures markets for grains are also worth following as the price of grain has a lot to do with political stability in the developing world.

Futures Chains are a pretty obscure thing to look at but they capture a tremendous amount of information about perceived scarcity and how money is being allocated. The visualizations above give you a sense of how both of these have been changing recently.

I take two minutes to glance at this series of charts every day as a sort of early warning system. If I see major sifts in the price levels or overall shape I know something is up.

Happy Futures!


Very interesting, thanks!

Good to see TOD finally focusing a bit more on understanding commodity market action. I remember many years ago getting thumbed down pretty strongly for even mentioning the inevitable rise in precious metals and how it related to PO. One of the most important things to recognize about PO in my opinion is the effect it will have on the markets and how to invest to protect yourself. People often don't like the subject and pretend it is crass, but the reality is that those individuals usually don't have the knowledge or money to adapt. The reaction is actually similar to that of the general public which prefers to ignore PO rather than learn and adapt.

To put it briefly, under our central banking system, oil shortages will cause continual collapse of leverage and greater debt and inflation. This will show up as price run-ups, recession, temporary price collapses, and then the cycle will repeat. If there is no transition to a new growth economy based on a different fuel source, then the leverage collapses will be stronger each time and full blown currency collapses will occur during downturns. The simplest way to protect yourself economically is to invest in hard assets such as precious metal or land. You should also be aware of an inevitable sentiment towards forcible socialization of your assets by those who did not prepare. Once you have some economic power, your other options - such as where to live, how to help/warn others, etc. are all much easier. It is not too late - in fact if you start learning to invest now you are still ahead of 97% of the people.

The simplest way to protect yourself economically is to invest in hard assets such as precious metal or land.

Unfortunately not everyone has the assets to invest.

Agreed, but consider that if PO comes about as predicted, then your standard of living today is far better than what it will be in the future. If you truly can't put aside even a little money today, then the future looks terribly grim. Truth be told, even the poor in America have an incredible lifestyle thanks to numerous factors which will change post PO. Over a billion people in the world live on $1.25 per day or less. That means they have to go out and work to earn the money, then come home and spend more time living frugally (cooking from scratch, gardening, mending their clothes and homes, etc.) Can you save $2 per day? I think almost anyone can - it is less than most "poor" Americans spend on soda. Properly invested in hard assets, $2/day is enough savings to give someone a retirement in the real world rather than having to work until they die. And yes, it looks like the real world economy may be coming to America someday.

Yes, I agree - I think the security nets that we take for granted in the West could soon start to disappear.

To be fair though there are a lot of people, even in the West, living pretty much paycheck to paycheck with no easy way out of the situation - the single mum trying to support her kids through school doesn't have a great deal of time to even find out about the PO situation let alone start making mitigation plans.

It's difficult to berate an individual in those circumstances for not investing in hard assets when the evolution of society as a whole has produced the situation we now find ourselves in.

Can you save $2 per day? I think almost anyone can - it is less than most "poor" Americans spend on soda.

>$2.00/day seems high:

As stated by the Beverage Digest 2010 Fact Book, the average American spent $246.33 in 2010 on carbonated soft drinks.


That's about $0.67/day. I don't know whether poor Americans spend/consume more than average on soft drinks, or less.

Where did you get your numbers, glenn2?

If you truly can't put aside even a little money today, then the future looks terribly grim. Truth be told, even the poor in America have an incredible lifestyle thanks to numerous factors which will change post PO.

Great advice. I estimate I save several thousand a year by simply not driving a car. Yes, a lifestyle choice to be sure, but as you say better to change your lifestyle now than be forced into a dire situation with little or no choice later.

My savings are parked about 50/50 in PM's and cash, making those day to day swings in both commodities and currencies a little less stressful in the long run.

I'm also hoping it's a good hedge against the big threats of deflation and/or hyperinflation, although I'm starting to hear noises that we could see both, first deflation wiping out commodities, then followed rapidly by hyperinflation wiping out currencies.

I could easily see that leading to an emergency situation where the government confiscates PM's (as in the last great depression) followed by re-issuing of the currency. A brutal one-two punch that would destroy me financially.

Then again, if things get that bad there will probably be many things money can't buy, in which case I'll be in much greater need of the 20# bags of rice and beans in my pantry...


Personally, I worry a heck of a lot more about hyperinflation than deflation. A round of deflation in the commodity markets followed by hyperinflation would be like a huge sale on oil, wheat, corn, etc. right before the SHTF. I imagine that you are really referring to a big round of deflation specifically in precious metals however, and not commodities as a whole, but even still, any deflation we see won't hold a candle to the destruction that hyperinflation will inflict upon us.

The part I don't understand about those heavily into PM is what people plan on actually doing with those metals, assuming TEOTWAWKI. Are people planning on bringing their gold down to the store to buy stuff with it or what, and where is that stuff going to come from assuming the breakdown of transportation and the just-in-time business model? What I really don't understand is why a person would invest heavily in Gold BEFORE building up a large emergency supply of food, etc.

Imagine the worst happens and the dollar becomes basically worthless. Which would you rather have at that point, $1000 (in today's prices) of Gold Coins, or $1000 worth of food storage in your pantry? Personally, I'd take the food storage in an instant and leave someone else the task of figuring out how they are going to get the change back on a Golden Eagle and what exactly they imagine they will be buying with it.

Someone (I think Todd?) posted this awhile back and I think its worth passing the link again for those who might be interested.

LDS Preparedness Manual

Which would you rather have at that point, $1000 (in today's prices) of Gold Coins, or $1000 worth of food storage in your pantry?

I'll take the gold and here is why;

1) $1000 worth of gold at today's prices will have a far greater value post your collapse scenario,
2) Gold's shelf life far exceeds stored food, it will still be useable long after my 20 lb bag of brown rice goes rancid (two years if stored right)
3) Gold and other precious metals in coin and other measured weights will likely become the new currency, so it immediately gets you one step up from straight barter. Yes, price setting will be an early issue, but how many cans of green beans will get you a chicken?
4) Food production will recover relatively quickly because of its importance. So, you can't get your veggies from California any more - lots of folks will immediately start growing them locally.

At least that's my take.

I've never understood the obsession with gold. If there were an economic collapse, how the heck do you convert gold to food/shelter/water, etc. It just isn't fungible. How do you make change for a gallon of milk or do you have to buy the whole cow. What's gold good for besides dentistry and a few manufacturing processes. When people figure this out, the price is going to collapse. I'll take food any day over gold.

It will make adequate bullets when you run out of lead.


Gold and silver IS money. There's not much that is more fungible than money.

As for the conversion issue - how do you make change now? I'm not going to be giving you a 1 oz gold coin and expect change any more than you'd hand me a $1000 bill and expect change. But I just might have a silver dime or two that would get me that milk.

Absent that silver (or gold), how are you going to make that exchange? You might have 10 pounds of white flour you can trade for the milk, but what if the cow's owner doesn't need the flour?

Another advantage of the metals over the stored food - size.

I would say that vodka is going to be pretty valuable and it lasts... at a pinch you could distill it further, modify your car and have one last run to the seaside and back with the kids to remind yourself what life used to be like, before polishing off another bottle...


And a friend with a survivalist bent thinks that ammunition will become the medium of exchange. Which I'll concede is possible, but more than likely will be a frequently bartered item only. Gold and silver do not prevent barter (any more than FRNs do now).

So maybe you won't trade that bottle of Vodka for a nice shiny 1964 Kennedy Half because you're going to drink it. But that just means its not for sale. Then again, somehow I don't think there'll be a shortage of alcohol post collapse - just not of the quality we've gotten used to.

In some island groups in the Pacific, .22 shells are currency. Small, useful, known value. A loaf of bread could cost 5 vingt et du.

For emergency barter, I carry Swedish stainless steel fishing knives. I've never met anyone who can't use a fine knife with sheath.

Gold and silver can be cut in size. PM can be used to establish a credit account at the bakery.

I have made trades with silver and been given change in .22s.

An ounce of gold will get you a passage on my boat. NZ anyone ?

I doubt Gold and Silver will remain currency. They will be used for decoration while other, more usable, items become standard like your .22s, maybe clams. Maybe even a return to just tally sticks.


On what is your doubt based? Gold and Silver have been money for at least 5000 years, why would that change?

What can you do with it?

Our current valuation of Gold is in a currency, for example dollars. If there are no dollars then what is the value of gold? Direct barter, cowrie shells, tally sticks and many other things have been used for currency. Gold has been used for decoration, many of the native Americans gave away gold as they did not value it. I just can't see it needing to stay as a currency when items such as .22 shells or salt can be better used. It is only used as a tally against real value in the world and there are a lot of things that could otherwise be used.


Who has silver dimes? What if the cow's owner doesn't trust the "market value" of the gold coin? Absent money, people will barter goods for goods or goods for services. Maybe not ideal but I think it is much more realistic than exchanging gold and silver whose value is subject to the market's whims. Moreover, it seems to me there needs to be some minimal percentage of people to be similarly situated for your gold/silver exchange system to work. I'd be surprised if even 1% of the population has more than a modest amount of coinage.

All that you say is true. The one thing that could derail the use of silver/gold post collapse is if people don't trust it. But some form of money will be used, its simply far more convenient than barter. So, we could use seashell wampum, or even coffee beans, but silver and gold have been money for millenia.

Yes, there will be a shortage of silver dimes, quarters etc. - but we are talking about collapse, and everyone will be much poorer (well, everyone except those who hoard the future currency). That said, I think you'd be surprised to find out just how many of these old coins are sacked away in safe deposit boxes and home safes.

Hard to say what will happen with precious metals. I'm inclined toward Stoneleigh's view: cash will be king. But who knows. That guy from Argentina did say gold was good to have. Though he recommended buying a bunch of cheap, used wedding rings rather than coins or bullion. Easier to exchange. He said the gold shops would only give you the same amount for a piece of gold, whether it was the cheapest wedding ring or a huge bar or coin. It was also better to appear to be selling your wedding ring out of desperation than to be seen flashing gold coins around.

OTOH, the guy from Yugoslavia said gold didn't hold its value, and that cast iron cookware and other tools were better bets.

I also wonder if the cash shortages that have marked other financial collapses will be a problem in this age of electronic banking.

There is also the historical example of Weimar Germany where farmers had no critical shortage of food, but people starved anyway because the currency was suddenly worthless and no one had any money (see "When Money Dies").

I guess my assumption is that the short term scenario will probably be closer to Argentina, a crippled economy but an otherwise functioning society where PM's are still fungible, while an outright collapse scenario would most likely take decades to play out.


I'm trying to keep my mind open as to possible futures, since if there's one thing you can bet on, it's that people are terrible at predicting the future. I'm even assuming that there's a non-zero chance that BAU will continue as long as I have to worry about it

You're right, of course, but I also look at it like a ball thrown in the air. Yes, there is a chance it might not go where you expect, but the most likely outcome is it will follow a trajectory in keeping with the physics of the situation.

If we have overshot the long term carrying capacity of our lovely little planet, and every indication is we have, then it is hard to imagine an outcome that does not involve some level of collapse.

I find it also helps to think of it like a homeowner buying insurance. No one predicts their house is going to burn down, but the costs of not being prepared for that possibility, no matter how remote, are potentially catastrophic.


The problem is that I don't have the kind of faith in economic/financial/sociological theory that I have in physics. In the long run, collapse is probably inevitable. But whether it will be during my lifespan is a whole 'nother story.

"How do you make change"

Well I can tell you one thing. If it's post collapse and I have a bushel of corn and you want to buy it from me...I'm surely not going to accept a couple pieces of wrinkly linen with Hamilton's face printed on them. Preferably I'd be able to barter for something of use, but the next best thing would be actual gold or silver. At some point you have to abandon converting dollars into physical goods - I could stock up on a whole bunch of food, but if collapse never happens or is delayed by years then it'll all be stale or rotten by then anyway. Not to mention I'd have to fill my entire house up with crap that I might never use "just in case".

And if it's BAU forever then one thing I'm certain of given our current trajectory is the continued devaluation of the dollar in order to manage our debt problem. In that case give me gold and silver.

Plus it's fun to hold in your hands and klink around while impersonating Scrooge. You can also make little piles of it next to your guns and ammo and it looks cool.

Gold/Silver won't be fungable if food/land is in a shortage AND there are no external pressures to convert food and land into something to pay the local economic parasitic loads (tax man/insurance). If the local parasitic loads go away, why convert your food/land?

When people figure this out, the price is going to collapse.

The "price" and its "collapse" has other functions. Like - is the "price" in things like fiat federal reserve notes? If one says 'X gold buys Y labor effort' - is that the "price"?

What's gold good for besides dentistry and a few manufacturing processes.


As the "price" "increases" other material will be "substituted" They may not have existed before (various alloys), they may not be a better choice (the older tin DRAM socket pins). Your question is subject to a whole lotta personal value.

Gold/Silver won't be fungable if food/land is in a shortage AND there are no external pressures to convert food and land into something to pay the local economic parasitic loads (tax man/insurance). If the local parasitic loads go away, why convert your food/land?

Eric, would you mind expanding upon this a bit. I'm having a hard time figuring out what you mean. I'm not sure I understand what the connection is between fungibility and food/land shortage. Seems to me that the shortage just drives the price up, doesn't change the medium of exchage. And I can't for the life of me figure out what you're saying about "parasitic loads"?

And then I read it again and it looks like you're just saying people won't sell if they don't have a reason to. Which is true, but doesn't have much to do with the medium of exchange.

Help me understand, please.

And I can't for the life of me figure out what you're saying about "parasitic loads"?

If you can not grasp the idea of load or parasite that will be the 1st stumbling block.

The next mental leap will be to things like taxes, insurance and even interest as a 'load' that benefits someone else while providing you no benefit for that expense.

Do get back to me if this part needs more explaining.

I get what a "parasitic load" is - what I don't get is how that relates to a) post collapse scenarios, b)production of food, c) sale of land or food, d) use and fungibility of silver/gold, e) what parasitic loads have to do with "converting" land or food.

One would presume that in a post collapse scenario, there is no particular or unique pressure to sell your land - which means its just not for sale and means nothing about the fungibility of silver/gold. As for taxes and insurance, I don't think you'll find too many people, even today, that have "converted" their land or food just to pay them - they're usually considered just a part of doing business.

In the post collapse scenario, life still goes on, people still need/want things and if you have food - or better yet land that can produce food AND that food is in excess of what you need,you will sell it or exchange it for other things you need/want.

So, what am I missing?

One would presume that in a post collapse scenario, there is no particular or unique pressure to sell your land

Well "we" can argue back and forth "no it doesn't" "yes it does". If you assume what you have stated, then your logic has a chance of standing.

If you have ever own land and property in a place where there is a class of inspectors, who as part of their job, is to inspect and write up properties as a form of political pressure. If you have never owned property in such a place and never "ran afoul" of the local political machines you may not be aware of such.

But as the collapse happens. the government will increase its %age of take because non payment == force of arms to transfer the property title. Same with insurance - so long as law or contract bind the property owners the firms understand the inelastic demand and that will be expressed in pricing. The only way taxes and insurance will not be a load on budgets is if they do not exist.

And as pointed out by others - things of value will be sold for what they can get. The external parasitic loads will force selling.

As for taxes and insurance, I don't think you'll find too many people, even today, that have "converted" their land or food just to pay them - they're usually considered just a part of doing business.

Enough of a "business" that tax-sale.com and tax-sale.info exists.

Now back to gold/silver and a US context.
The Act of 1792 established a definition of a dollar. A dollar was defined as a coin containing 371.25 grains of silver and 416 total grains of metal (silver and alloy). The purity ratio was 1445:1664. Thus, a dollar was not a unit of value, but a unit of weight based upon a precious metal commodity.
The Act of 1792 established a coin called an Eagle. An Eagle was defined as containing 247.5 grains of gold and 270 grains total metal. The purity ratio was 11:12. By statute the Eagle was established with a market exchange value of 10 dollars.
The Act of 1834 redefined the Eagle to contain 232 grains of gold and 258 grains total metal, thereby establishing a new purity mixture ratio of 232:258. The Eagle maintained a market exchange value of 10 dollars.
The Act of 1837 changed the purity ratio of both silver and gold coin to 900:1000 (9/10 purity). The new ratio changed the total metal grains of a silver dollar coin to 412.5, but did not alter the original silver content of 371.25.
The Act of 1837 maintained the 1834 total metal content of the Eagle at 258 grains, thus with the new purity ratio established a gold content of 232.2 grains.
The Act of 1849 created a new gold dollar coin to contain 25.8 grains of total metal and maintained the purity ratio of 900:1000. The Act also created the Double Eagle or $20 gold piece.

As one can see there is a floor to "money" in the US of A by law. Unless one can show the above acts have been revoked (VS just ignored).

History has gold/silver as part of a means of exchange. Thus if a ceilac wants to trade with someone who has wheat, gold/silver allows for a historically valued 3rd item to be used as part of the exchange. So would tools, Copper, Iron et la. Gold/Silver "are better understood" and "more valued" by weight than Copper/Iron.

To stake out the claim "Gold will have no value in collapse" ignores history. Same with thinking 'things will go on as they have been' or 'the Federal Reserve Note will retain value' - history does not support such a position.

Okay - I understand now - we have completely different assumptions about what "collapse" means.


That's why we type - try to figure out paths.

I'm not gonna be able to convince you that you are wrong - I'm not convinced that a 'collapse' where gold had no value and only food does is not a possibility. But I'm guessing on the way from where we are to a place where Gold/Silver can't be traded for food there will be passing a point where Gold/Silver/other things will be one of the few ways you can get food.

I agree that storing food is more important that gold. But after you got all the food you can store it makes sense to buy gold bullion. The US$ is losing its purchasing power and will continue to do so. The real crash in the US$ and a panic out of the currency has not happened yet. My guess is that will come when the US$ index finally breaks the major support at 71.

Even after an economic collapse people will continue to use $ or some paper currency. An economic collapse does not imply a collapse of civilization. You don't have to convert gold to food. You can convert gold -> paper currency -> food. Gold is just a means to preserve purchasing power from currency debasement.

Peak oil and excessive debt will impoverish most people in US and W. Europe. It is not the end of civilization. We are not going to descend into barbarism and resort to barter. Remember that most societies today consume a lot less oil per capita than the US. They continue to function. Even if the US per capita oil consumption drops by 75% it will still be a lot more wealthy than most other countries.

Gold's shelf life far exceeds stored food, it will still be useable long after my 20 lb bag of brown rice goes rancid (two years if stored right)

Very true. However, you could instead choose to store white rice, which will store for at least 8-10 years, in the absence of oxygen and when kept in moderate temperatures (Below 70F) or Wheat, which will essentially store indefinately under proper conditions.

Food production will recover relatively quickly because of its importance. So, you can't get your veggies from California any more - lots of folks will immediately start growing them locally.

Unfortunately, most of those same people will be eating everything they can grow and still be starving/going hungry.

Don't get me wrong, I'm not saying that gold/silver etc. will be worthless, I'm just pointing out that all the gold in the world won't do you any good if you starve to death before you can find enough food for sale. Eventually, I'm sure that things will settle down and PM can become a potential medium for exchange, but in the midst of an immediate crisis, I'd bet they make you more of a target than anything. If the world goes to hell in a handbasket, you want to be hunkering down somewhere safe with a decent supply of food, not walking around town looking to buy food with a pouch of silver.

On shelf life - what you say is true, of course - I used brown rice to dramatize. That said, don't count on white rice as the main source of your nutrition, the good parts have been removed

As for your immediate crisis, I really have no use for "Road Warrior" scenarios, except as plots for entertaining movies. Will their be food shortages? yes. Will people starve to death? yes. But the notion that all of the sudden the whole of a country or even the planet will be not be able to deliver food strikes me as silly.

Hi Runeshade,

Yes, I was the one who linked the LDS Preparedness Manual.

Here's my take on PMs: I think everyone knows I have a large garden and orchard. Let's say "you" show up and say, "Todd, I'd like a bushel of those apples. I'll give you this shiny metal that's worth a lot." My response is going to be, "No thanks. But, I'd be willing to trade the apples for a new pruning shears. Why don't you trade your shinny metal for some shears and then come back."

My point is this: If I accept the PMs for my apples, I then have to find someone else who will take them for their goods. It's sort of the greater fool theory. In and of themselves, gold and silver do not add value to my life. I can't eat them. I can't use them as tools. I can't get energy from them. And, if I can't find someone to also accept them, all I have are useless paper weights.

However, there is a potential downside to not having PMs - deflation. If I use my money to buy goods prior to deflation rather than PMs, I will have spent "more" than necessary. The upside is that with hyperinflation I would be far ahead. For me, I'd sooner have the stuff in storage. If I lose money so what? If I make money, so what? I don't care.



What you're saying about gold/silver for trade is equally true of FRNs - if you don't want to accept Benjamins for your apples, you don't have to. But if most other people do use them, have you really gained anything by forcing someone into barter?

The only place where you've gained anything is if the marker (whether it be PMs or FRNs) is not widely accepted as a medium of exchange. That would be the only argument against PMs in a post collapse scenario - but I can think of more reasons that they would be used as "money" than reasons that they wouldn't.

This has an ages-old flip side, though. If you can't find somebody who just so happens by felicitous chance to have surplus pruning shears (or whatever) before your surplus apples deteriorate to where no one wants them any more, you're out of luck. So almost inevitably people have ended up using tokens, to cope with not happening to have just the right unpredictable thing at just the right unpredictable time to barter successfully. Cowrie shells, metals, reserve notes, whatever; best something not too easily forged, which is presumably what has always driven gold and silver (despite quite a lot of chiseling.) But whatever the tokens are, they help mitigate the randomness of life, and after all, the very last thing people living on the edge need is any gratuitous random element.

Oh, and best not to forget that taxes, compulsory "inspections", and suchlike will usually have to be paid for in coin of the realm. Also doctors; agriculture is a fairly dangerous occupation after all. There's only so many apples a doctor can eat, and doctors need to doctor constantly if they're to remain useful as doctors, so there's only so much time they can afford to spend futzing around with pruning shears.

If the actual coin of the realm is dodgy, PMs are a compact way to hold something at least partially equivalent, and while they do have to be secured, they at least don't have to be fed, lubricated, protected from vermin, mold, rust, or humidity, or otherwise constantly babied, as is necessary with so many barter goods. That's probably why they've "always" found a place, even though they're hardly infallible (after all they can simply be confiscated) and they can suffer from real problems with fungibility.

We will probably go on playing "purchase".
Just like we learned from mommy at the store.
Or I could just dress your wound.


Little Suzi Newsykins

Surely an object that has no utility in the service of keeping oneself alive i.e. fed, clothed, sheltered, warm etc. can only be a "perceived" store of value in times of surplus or plenty of these essentials of life.
In the worst case collapse scenarios that some postulate on these boards, surpluses of such essentials would be highly unlikely, no?
Hopefully an apocalypse would adjust peoples values back to what is really important in life and away from attaching value to essentially useless, albeit shiny, "things"?
Isn't that what got us into all this trouble in the first place?

Excellent post and I agree.

Good to see TOD finally focusing a bit more on understanding commodity market action.

Here's the thing Glenn2, TOD is what the members post - what the administration deletes. (waves to the deletion mods)

If you want more "commodity market action" - then post it. Provide links to the places making such comments.

You may find more simpatico with The Automatic Earth or Gail the Actuary's blog however.


It would be interesting to see a graph of futures market predictions for oil compared to the actual price for a long span of time.

Is that what we are seeing in your graph with the 'prior week', prior month' and prior quarter' plots?

Are these predicted prices for the dates specified from the prior week, month, quarter before the last 'current close' date?

Forgive my ignorance...I am not experienced in futures markets.

The charts above display the futures chain as it appeared at the close of each of the last 90 days. Different colors allow you to see the range of futures closing prices over the previous week (red), month (blue) and quarter (gray).

The dates along the bottom represent the 'future delivery date'. For a single date on the X-axis it's as if you took the 90 day evolution of each futures contract and then compressed the time axis to a single point so that all of the ups and downs only went up-and-down with no left to right movement.

If you want a grand overview of how the oil futures chain has evolved over the last two years you can check out this YouTube movie I made recently.

I have several years experience buying and selling options. It wouldn't surprise me to see unexpected adjustment in those nice smooth curves, especially precious metals.

By contrast, oil is in short term contango but long term backwardation. For whatever reason, the market sees the price of oil coming back down after reaching new highs this year.

The backwardation of high-volume commodities in the long run - like oil - is mostly because of the storage costs and the resulting rolling-effects (sell due contracts, buy new contract --> spread with costs). If you didn't roll you're contracts (and so avoiding these costs) you have to store the commodity, which has also costs (e.g. you need a tank for oil). Gold is much easier to store because it's value per volume unit is very high. One tresor and you can store thousends of dollar worth of gold (e.g. in a bank). For only 1000$ of oil you allready need a large tank (abou 1000l)...

If oil prices are high, it seems absurd to say that there is not much demand. This could make sense, I suppose, is there is, globally a high demand for oil but there is a lower demand for the type of oil that Saudi has available. The other explanation, popular on TOD, would be that they are lying and they want to make an excuse for cutting production so that it looks like it is by choice.

It seems like we are asked to believe that lowering prices won't change the "fact" that oil is oversupplied.

If we are reaching the point of demand destruction, prices would normally go down. However, the Saudis are apparently making an anticipatory reduction in supply which might cancel out the price impacts of demand destruction.

My head hurts.

Saudi Arabia’s Oil Minister Ali al- Naimi said the global “market is oversupplied”...

How high would oil prices go if Ali al- Naimi stated the "market was undersupplied"?

He has to say that because SA can't pump enough to bring the price down to the level of a year ago.

No matter what the margin of speculation is the current price does seem to be worrying both industrialists and consumers alike. I consequently find the knowledge that we are oversupplied very reassuring!

Marketwatch was running this story last night. Now I don't see it anywhere on their front page. Looks like its being buried?

Same thing happened on MSNBC.com. Yesterday afternoon it was on the front page for a few hours, and had lots of comments, all blaming speculators. This morning it was gone. You can find it if you do a search for it but all the comments have been removed.

So here's my attempt to make sense of the news.

Crude oil futures were already well over $100 per barrel, when the Saudis announced that they would be decreasing crude oil production, and the futures price went……. Down?

I pondered this for a few minutes this morning and the only plausible theory that I could come up with is that the MSM reported the Saudi announcement with a straight face, and then the oil speculators in New York thought to themselves, “It must be true, I saw it on TV”

Perhaps this is just a demonstration of why fixating on the daily spot OR futures price of oil is not to be encouraged. Teasing out the long term and short term signals from these "prices" is likely beyond the ken of anyone (at least with any certainty).

Re: New climate change case headed to Supreme Court

Looks like another round of Lawyer Science as the neocons try to stop any regulation of greenhouse gases. Notice that the suit revolves around whether the power companies should limit their emissions, since the EPA has also proposed limits on emissions. Trouble is, the R's have effectively killed the EPA's efforts to limit emissions...

E. Swanson

My "most annoying" report of the day (so far) :-

"Authorities have responded to 7,807 fires across more than 1.5 million acres since this year's wildfire season began, Gov. Rick Perry wrote in a letter late Saturday to President Barack Obama. Perry requested that the federal government declare Texas a disaster area. Fires have affected all but two of the state's 254 counties."


The secessionist, anti-AGW, no-taxes, freedom-state governor apparently now needs Federal aid. Texas is having the driest weather since 1917.

Also, the megastorms pounding the South, which have FEMA called out.


When will people start waking up? /rant

God is punishing Texas for not believing in global warming. Texas was already a disaster area of the mind. Obama should tell Perry to pound sand as we have not money and must cut the deficit. Start with Texas.

There are plenty of blogs that spend all day bickering between elephants and donkeys. The thing that brings me to this site, is the understanding that none of that will save us from the oil problems coming our way. There will most likely need to be less humans on the planet, very soon, in order to balance out the energy equation. This is BIGGER than old lines drawn in the political sand. None of the current political figures, and probably none of the next generation figures, can stop this train wreck from happening.


Please feel free use the "flag" button on posts like that.

This isn't about bickering between donkies and elephants. It is about pointing out that there are people who are hypocritical in the extreme as pointed out in the primary post. The governor happens to be a Republican. I can't help that. It is about frustration with those who deny global warming and federal spending and then want to be bailed out with the worst drowth in Texas history. One political party wants to completely focus on spending at the expense of minor players like planned parenthood. Well, this concern with spending seems to be strong unless their ox is being gored.

Nothing is going to save us from peak oil. It is a reality that we will adjust to or not.

The lines being drawn in the sand are real and they have a direct impact on what we do about energy and AGW.

I was going to amend my post by adding this - if we don't roll up our sleeves and work together on the real issues, we will all sink.

I guess that means we are all going to sink....

The idea isn't "we" all get to sink.

As Joe Baget said in an interview with KMO at the C-realm 'The 3rd world gets to take it in the shorts'. They provide the pile of bodies the State-ly Ship hopes to beach on. The poor, they too shall be tossed overboard. If the ship is in shallow water - enough bodies will provide mass to prevent sinking.

The well connected along with the "leadership" expect to be saved because of things like Continuity of Government plans or the acres of land they "own". And, well, you ain't them.

There will most likely need to be less humans on the planet, very soon, in order to balance out the energy equation.

If I might be allowed a small editorial adjustment?

There will most likely need to be fewer humans on the planet, very soon, in order to balance out the energy equation.

What can be more important than getting our financial house in order? Uncle Sam needs to "Just Say No".

Seems like every week now there's a strip of intense weather activity headed in a W > E direction, leaving a trail of destruction behind.

It's called North American Spring. If you're looking for quiet, equable weather, most of North America is not the place to be.

The United States has the highest incidence of tornadoes worldwide, with more than 1,000 occurring every year. This is due to the unique geography that brings together polar air from Canada, tropical air from the Gulf of Mexico, and dry air from the Southwest to clash in the middle of the country, producing thunderstorms and the tornadoes they spawn.

There's nothing like it anywhere else in the world.

Not meaning to nit pick, but for tornadoes per unit area, the Netherlands comes out top with the UK second (If England were taken as a separate country then it would in fact be top). It's just that we get tiddly little ones, and the US gets proper big ones.

You might get 1,200 a year, but you've got a huge area to have them in. And quite frankly, you can keep them too!

Good old Wikipedia.

Thunderstorms, hurricane, tornados. Lots of fun.

But the interesting thing this year on the West Coast. We got a lot of rain and it was cooler last summer. So the wildfire thing here may not be as bad as it normally is. We will see.

But fire wind and rain are great equalizers of civilization.

We spend Gov't money to fight these elements (called Natural Disasters).

With spending on the way down, Mother Nature gets the upper hand.

Oh really, well I've lived here 20+ years and I don't quite remember it being quite this bad.

Did this even get reported here?


"Did this even get reported here?"

It doesn't seem to have gotten much coverage; videos of whirling wind and rubble obviously bleed a lot better than videos of no visible effect at all. Anyway, another spring day, more tornado damage, yawn. Overseas, of course, the heavy damage is all but unknown, so it's news. As I said, if you're looking for equable weather, most of North America is very much the wrong place to find it (in part because of the very existence of the Gulf of Mexico.) That goes double if you want a suitable climate for, say, cycling safely year-round, or anything else of that sort. (Oh, and a mere 20 years won't even begin to show you what can happen out in the tails of the distribution.)

OK, I'll give it another 5K years then, if the weather still sucks I'll move....

On CNBC today, as expected, one of the discussions was about oil prices with the CEO of Gulf Oil. Now he is saying, that instead of oil rising to $150, he thinks that oil is now peaking out and that we should expect oil below $100 by this summer because of demand destruction. Why couldn't he have figured that out before? Did he just wake up yesterday and notice the phenomenon that was so prevalent in 2008?

"The cure for high prices is high prices", he said.

He also called for higher mileage standards, among other things, to help get us off Saudi oil.

My comments:

As usual, the Saudis have announced that the market is "well supplied". Accordingly, they are cutting their production in anticipation of demand destruction. Now, of course, if prices had anything to do with demand destruction and economics had anything to do with oil prices, then increasing the supply would help prevent demand destruction. But, you see, high prices are all about speculation and, therefore, nothing can be done to help the situation by the Saudis.

My impression is that the overwhelming majority of media commentators believe that speculation is the main cause of higher prices, including the CEO of Gulf oil and others. But demand destruction can bring down prices. Go figure.

I find the arguments by people like Darwinian persuasive. But then I wonder how there could be such a massive disconnect with seemingly intelligent and well informed people. Excuse me if I think that I have entered some kind of Alice in Wonderland like alternative universe when I listen to commentators on CNBC and others.

And by the way, we may be entering a phase of demand destruction but we are also entering a phase of supply destruction, at least by the Saudis. Despite this, oil futures are down today because the Saudis announced that the market was oversupplied. So, I guess, speculators believe the Saudis. Well, apparently the Saudis have enough power to influence speculators. But the Saudis say they have no control over the speculators.

Given the fact that the Saudis have announced supply destruction, shouldn't that countervail their announcement of over supply? Or has the market not figured that out yet?

In any event, I thank the Saudis for helping get us off their oil by producing less. That is our project independence plan.

Despite this, oil futures are down today because the Saudis announced that the market was oversupplied.

I don't think so. Oil prices generally follow the stock market. The market is almost down 2% and the oil market is flat that is a pretty big disconnect today and may have something to do with the Saudi news.

One reason oil is down today has nothing to do with Saudi Arabia or their remarks about the market being well supplied. It is the economy and what people are expecting out of it this morning. The Dow is down over 200 points, almost 2 percent. There is a lot of bears in the market today and they are having an effect on oil prices.

Ron P.

This may be sinking in as well - some interesting stuff coming out of last weeks's BRICS Summit. From last week:

Five of the largest emerging nations will push the U.S. and Europe to end their 65-year monopoly on leadership positions at the World Bank and International Monetary Fund, according to two diplomats who helped negotiate a statement by the countries.

...and from yesterday:

Local Currencies To Replace Dollar For 5 Countries’ Dealings

Brazil, Russia, India, China and South Africa – the BRICS group of fastest growing economies – Thursday signed an agreement to use their own currencies instead of the predominant US dollar in issuing credit or grants to each other.

The agreement, the first-of-its-kind, was signed at the 3rd BRICS summit here attended by Indian Prime Minister Manmohan Singh, China’s Hu Jintao, Brazil’s Dilma Rousseff, Russia’s Dmitry Medvedev and South Africa’s Jacob Zuma....

...“We will insist on the fact that governance at the IMF and the World Bank cannot be a systematic rotation between the U.S. and Europe, with the other countries excluded,” Brazilian President Dilma Rousseff told reporters in Beijing April 12. “There is no reason for that.” But the agreement is confined to credit and not trade. BRICS economies hold 40 percent of the world’s currency reserves, the majority of which is still in US dollars.

I posted a while back that the West is being handed its reserve currency hat, that as soon as these economies (that are actually growing in real terms) reduce their exposure to the Federal Reserve enough, the US will be shown the door regarding its reserve currency status. Another step in the process, while the Fed is doing its best to hang on to past glory. It's kind of sad really; a bit like a quarteback that hasn't come to grips with the fact that his career is ending. Too bad the US and Europe have been so successful at squandering their retirement packages.

That was tricky, you moved this post and my first reply went into the ethernet.

Anyway, I was going to say that it looks like a race is on, between the BRICS gaining world power, and the world loosing power. Very interesting, but I wish I was not on the race track. :)

Sorry, eastex. It seemed lonely down there ;-) Maybe Kunstler can cheer you up:

...The signs are unmistakable. It's not as bad you think, either. We'll become reacquainted with that fugitive experience, reality. Disillusion is not the worst thing that can happen to people. We can re-direct all the effort that we put into gaming our own asses and cast off the awful weight of pretending to be what we no longer are.

See? There's alway hope :-/

That may be so but are you saying that the Saudi announcement will not affect oil prices? Anyway, I find Saudi announcement possibly the final proof that they can't increase production. Or do they really believe that speculators are driving this market? My main point is that the rules of economics are thrown out the window when it comes to Saudi behavior.

Another reason oil is down today may be that the dollar index is up, making oil in dollars less expensive.

On CNBC today, as expected, one of the discussions was about oil prices with the CEO of Gulf Oil.

Here is a video of that clip with the CEO of Gulf Oil. It is interesting.
Oil: Supply, Demand & Risk

Joe Petrowski, Gulf Oil LLP CEO, discusses oil demand destruction, as prices rise.

Ron P.

"I find the arguments by people like Darwinian persuasive. But then I wonder how there could be such a massive disconnect with seemingly intelligent and well informed people."

I relate to this completely. Its hard to believe that the people who rose to the top of 7 billion of us could be this out of touch. The natural inclination is to put stock in their pronouncements.

But whenever I go down that road I remember the "Great Moderation" Theory of the 2000s and how spectacularly wrong they all were in 2008. I remember the day in September 2008 when I was driving to the store and they announced the $700 billion bailout, and I called my Dad and said "those obscure people on the internet were right and everyone else was wrong!" So now I tend to trust people on small internet websites more than the NY Times or Wall Street Journal. Its a shame, and not a good sign for the long-term prospects of the empire, because a lot of people are trusting the wrong small internet websites that are spewing fantasy even worse than what you find in the newspapers of record. But trust is gone, and deservedly so. People are on their own when it comes to finding out the truth, and they know it, but they don't know where to turn to find it.

I tend to think that those who place so much stock in the speculators are in denial because they cannot face the simple fact that too many people are consuming too much of a commodity that is in decline. They are in denial because of their overall belief that there are no limits and those who claim limits are in league with the socialists and (gasp) the environmentalists. They just cannot bring themselves to believe that there are limits to anything and that the party is over or almost over. Their undying belief in growth is incompatible with any recognition of limis to anything. And therefore, it must be someone's fault; it must be someone who has the power to distort the natural movements of the market.

So. It doesn't matter how smart you are, if you have this blind spot and an irrational belief that things must go on as they always have. At the core, how can we be happy if we actually have to change, if we actually have to live in a world where austerity is necessary.

There is also just the basic fact that ideology trumps reality and that it is very difficult for people to change their ideology even in the face of overwhelming evidence that their ideology is no longer tenable. They, therefore, create their own reality.

But I could be wrong. Just my attempt to try to understand the prevailing meme.

I think your rant comes down to the following;
'Speculators cannot be responsible for the rise in oil prices because too many people are using a product in decline'.

That's jam packed with assumptions.

Is liquids production in decline?
No, liquid fuels production is actually rising slightly and is expected to rise by 650,000 bpd in 2011 or 0.7%.


Is liquid fuels consumption rising?
Not in the OECD oil consumption is steady and is expected to fall in Europe and Japan(people with money). Elsewhere demand will be rising slightly(people with less money).
Overall consumption of liquid fuels has been projected to rise at the average (linear) rate of 0.9% per year based on trends.

How can a difference of 0.2% translate into $106 oil?


You reflect the economic ideology of TOD very well and ideology often trumps reality.

Crude oil is not the same thing as all liquids.

If you change what's being talked about in the middle of the discussion you can prove anything, and the proof is meaningless.

As discussed previously, demand equals consumption equals supply so not sure your "demand" figures mean anything.

It is understandable that speculators get the popular blame for commodity price rises. The financial establishment isn't realy keen educating anyone to the reality.

Consider that to cause a price rise, a speculator must buy and hold a commodity. If a speculator just buys and immediately re-sells something then it will still be sold for whatever the market will bear at that moment based on supply and demand. So if a speculator were to buy say 5% of world oil production and hoard it in a big tank, yes, this would cause the price to rise UNTIL the speculator decided to sell - which would then drive the price abnormally low. Since the changes to oil in storage are inconsequential compared to oil used, you can see that "evil speculators & hoarding" are not having much of an impact on oil price. What is driving up the price of oil is rising demand from the developing world with flat supply. It also doesn't help that the dollar is losing purchasing power due to the fact that we have a central bank and not a hard currency. (but that's a whole 'nother topic too few people understand)

A speculator is one who buys on the belief that the price will rise and sells on the belief that the price will fall.

You have succumbed to the Efficient Markets Delusion which
has been debunked by the 2008 Financial Market Meltdown.

Speculative economic bubbles are an obvious anomaly, in that the market often appears to be driven by buyers operating on irrational exuberance, who take little notice of underlying value. These bubbles are typically followed by an overreaction of frantic selling, allowing shrewd investors to buy stocks at bargain prices. Rational investors have difficulty profiting by shorting irrational bubbles because, as John Maynard Keynes commented, "Markets can remain irrational far longer than you or I can remain solvent.


I think the issue here is that you are referring to speculators in the futures market. Yes, by definition the future price of oil is determined entirely by speculation (by the way the futures price of oil was generally in backwardation during recent run-ups meaning speculators were betting it would fall). So yes, speculators bet and determine the theoretical price of a contract of oil in the future. However, when that contract comes due it is converted to the "spot" or market price by a sale of the actual physical product. This physical product must either be used or stored (and for oil, storage changes are negligible). So, no the spot price is not affeced much because there are almost no speculators who take delivery and store the product.

Actually, I think you may have succumbed to an inventory fallacy. It is perfectly possible for people to hoard, say, "house" on a major scale, and they did so, big time. One way is to buy enormously more than you need; plenty did so. Other ways are to buy vacation houses, or even to buy tract houses on spec; quite a few did that too. Houses are conveniently self-storing - oh, somebody might have to mow the lawn at the spec house, but you don't have to build and pay for a hugely expensive, heavily regulated tank in which to store it. And only a small fraction of the "house" inventory trades each year, so the tail wags the dog big-time - a little shift in trading patterns causes a huge change in the marked-to-market "value" of the entire inventory, and thus in the extent to which people in general feel awash in riches they did nothing whatever to earn.

OTOH, how could "speculators" possibly match those dynamics by storing several years' worth of global (or even national) oil production? Where could they ever put it? You'd need a lot of tanks or caverns and probably centuries of environmental "studies". So in the real world, relative to houses, the "inventory" is very small relative to turnover. So the (+) bets have to track the (-) bets fairly closely, and while there is a lot of short-term noise it can't help but be a nearly zero-sum game overall. (And anybody is free to become one these speculators and place their bet. If it's such a sure thing, what are all the whiners and moaners waiting for?)

Of course the exception would be if the "speculator" were a Saudi Arabia, and could "store" the oil by leaving it in the ground. No need to build and maintain tanks for that. But for some odd reason nobody seems to be condemning Saudi Arabia for speculating in that manner; apparently it's considered perfectly OK for the one sort of party who can actually move the price long-term to do so. This all suggests that the fuss is really to do with mindless glandular reactions, AKA "seeing red", over any appearance that, horror of horrors, someone might be making money, however temporarily, at a given instant...

Of course your 'self-storing' house will rack up $$$$ in land taxes owed.

True enough. And actually, so will a tank farm. So no distinction there.

Houses are conveniently self-storing

Houses (particularly wood-frame houses) deteriorate very fast if they are not properly maintained, and maintenance can be very expensive if you are not handy with tools and carpentry yourself.

Once the roof fails (i.e. starts leaking), it's not long before the whole house fails (i.e. collapses into a pile of rubble). In a cold climate, frost can destroy the foundation if you don't heat it, and in a hot climate termites can destroy the whole house if you don't kill them.

That's certainly true, but it's not just houses - everything deteriorates, everything fails. Gold and silver can be taken by force or ruled illegal (using the threat of force to reduce its value). The issue here is how to store value, how to make something permanent. And that in turn ultimately becomes "how to I defy entropy?", or how does one make something of value and keep it. In nature life forms use energy flows to make higher ordered states and locally reduce entropy, which is the best model here too. Your best store of value is what you know, what you can do, how you can use those energy flows to create order and therefore value - your skills in other words.

The things of value that are a part of you cannot be separated from you, and any attempt to store that value externally is subject to being lost. That we think in terms of storing value in objects is part of the problem, and we should be far more concerned with increasing our own value as part of a society.

"...we should be far more concerned with increasing our own value as part of a society."

The trouble is that the deep-doom POV seems to figure that society and trade will be gone too. So once you go there, there's no way out.


I obviously cannot speak for all deep-doomers much less doomers in general. What I do see is a collapse of business and societal BAU. But, this does not imply that any form of business or society is dead meat. I know with a certainty that the people in my rural community will come together to make the best of a bad situation. In fact, one of the things we are trying to do now is to reinvigorate the local Grange.

I haven't lived in an urban or suburban area for close to 40 years so I don't know if this is their reality or not but my wife and I host an area barbecue each year. Our "neighborhood" is about 6 square miles and it has about 12 families. It is an opportunity for us to really get to know one another to the degree that there is trust. It is the trust that is the important thing. I know that Carl, David or Barry and everyone else will be "there"...as will I.


"The things of value that are a part of you cannot be separated from you..."

If that's intended in an economic sense, I'm afraid it just isn't true. Age, accident, disease or other infirmity, lack of access to necessary tools, materials or venues... all of those, at least, routinely "separate" individuals from effective application of the skills and/or knowledge that might be seen as stores of value.

Most likely, only young, relatively healthy and lucky people believe otherwise.

Only in the context of the western ideal of the rugged individualist, itself a distortion only made possible thanks to our cadre of personal energy slaves. Most societies have been made up of a variety of ages, skills and abilities, but that does not mean they cannot all contribute in valuable ways, even ignoring emotional attachment.

The main problems are twofold: First, we live at the beginning of an extended period of transition, and there is a mismatch between the skills valued now and those that will be valued later on. If we don't have the appropriate skills we'll need to trade something of value for what we need - and if we aren't expecting to acquire such abilities then we feel the need to store up value from the present system in some form we anticipate will be valuable then.

Second, what is all this wealth we think we'll need to preserve for later use? It's the product of all the cheap and plentiful energy we've been surrounded by all our lives. Most people throughout history have not had access to such riches and so would not have been so worried about preserving it. Instead they needed to live on a more real-time energy budget where little could be accumulated and stored long term, and they were more concerned about how to make use of those real-time energy flows. But that does not mean that everyone had to be an island in and of themselves - quite the opposite actually.

That's certainly true, but it's not just houses - everything deteriorates, everything fails. Gold and silver can be taken by force or ruled illegal

Yes, but gold doesn't crumble into a pile of dust or rust. It persists. Most of the gold ever mined is still sitting around in a vault somewhere, or in someone's jewelry case. That's the basis for its popularity as a hedge against troubled times.

No matter what you have, someone can steal it. The advantage of gold is that it is easy to hide, and if they can't find it, they can't steal it. Every so often archeologist dig up a stash of gold that someone hid. The person who buried it never came back to dig it up, probably because they didn't survive whatever it was that led them to bury it, but the gold is still there and as good as new.

What sort of people do you think they were, those who buried stashes of gold? I don't have much in the way of PM because I cannot afford it, and I doubt that situation will improve going forward - but in that I join the vast majority of people throughout history, most of who never handled much in the way of coins let alone gold and silver. It simply wasn't relevant to their lives. So yes, it's sitting in vaults somewhere, but it isn't in my vault.

I think the other issue is whether you regard those "troubled times" as something temporary where one can squirrel away wealth and hope to ride though it, or an endless process of ever lower access to energy and stuff. In the latter, eventually the gold runs out or is traded for something else of value at that time - but then you must hope that whatever you traded it for can be retained or retain its value too.

A silver dime costs around $3.20. Not really a steep investment.

As for the "transition" versus permanence of the "troubled times," I think you have it exactly backwards. If we're only looking at a temporary crisis, PMs remain only an investment whose value is dependent on our ability to get out of the "crisis" and finding someone willing to purchase your gold/silver for whatever the future stable currency might be. But in the permanent financial collapse gold and silver should become the medium of exchange, just as it has for millenia. It works because you don't need a gov't to stand behind the money.

thats all good majorian but you still haven't handled the particular scenario glenn pointed out. I have thought about similar setup of a speculator buying and hoarding oil in (comparative to daily consumption) large quantities before a foreseeable increase in demand (like summer driving). but for him to make money he needs to sell the oil to somebody before the jump in demand goes away so that somebody is the bigger fool because ultimately to the final consumer there are going to be multiple places oil will be available (the final speculator and the regular source) so for final contract for the oil the price is going to be lower (its true price as per fundamentals). So on an average yearly basis the price of oil would be what the supply & demand fundamentals dictate.

Now i can think of a play where a hoarding strategy might work where you buy right after summer season and get the physical oil NOT futures, store it away, and sell in the summer months but i suspect storing oil for such long periods may not be feasible/economical. Also, i guess supply cushioning is the main purpose of SPRs (strategic petroleum reserves). so even that may not be very fruitful.

PS: the assumption is that for the period of time the speculator hoards the commodity there is no change in the underlying value of the currency.

Good points glenn. I can't back it up but others on TOD have offered that only about 1% of the oil traded in the futures market is actually delivered to the buyer. The other 99% of the oil only exists on paper. Difficult to hoard oil that doesn't physically exists.


Less than 1 percent, or 3,248 crude futures contracts, were delivered in 2010, compared with the average open interest of 1.34 million contracts during the same period, according to Nymex and data compiled by Bloomberg. There is no physical delivery against Brent oil futures contracts traded on the London-based ICE Futures Europe Exchange.


If I could rep you, I would, but since I can't I'll just tell you that was beautifully - yes, that's the word - written but it was also sad. It just struck a chord within me because you are so right. You simply cannot trust MSM. The MSM is always lying to an extent but these days it's just pure propaganda.

And most people are simply clueless, not knowing what is going on, and thus unable to prepare. It's like a giant invisible tsunami creeping up towards them that they cannot prepare for because they are blind and deaf.

Speaking of the MSM, I happened to have the TV on during the wee hours, and I heard a segment on ABC World News on rising gasoline prices. They assured us that there is “plenty of oil” and laid the blame for high prices squarely on those evil speculators. In fact, they went on to state that OPEC has 200 Million barrels per day of spare capacity. Since that didn’t square with other reports I have seen, I left the TV on for another hour, and sure enough, they said it again an hour later. 200 Million barrels per day of spare capacity!

Maybe we should award an annual prize for the most outlandish statements on oil production from what used to be known as the Main Stream Media. And maybe we should start calling ABC the Fantasy News Network.

I'm sure that was #NotIntendedToBeAFactualStatement

I saw that too. They said $.35 of the price today is due to speculation.

TV is filled with useless cheerleading. Game over. The exaggerations tell you the next dip will be unavoidable.

OPEC has 200 Million barrels per day of spare capacity.

That's only since the little purple men on Titan joined OPEC and added their production capacity to the total. They're still working on the details of getting it from Titan to Earth, though.

Not to worry - the Pink Unicorn Fleet (currently approaching Earth) is helping to facilitate the shipping.

But it will be a titanic task.

Well as earth has a higher escape velocity than Titan, and we are much closer to the sun, the earth's surface is much much lower in the gravity well than poor Titan. So net energy would be released by moving a gallon of Titan hydrocarbons to the earth. In fact the gravitational energy released by such a move is several tens of times greater than the energy of combustion.....

"those obscure people on the internet were right and everyone else was wrong!"

Among shortcomings of the mainstream media is that these people tend to be generalist reporters and not industry insiders or specialists and they tend to have little technical background. Also, they are afraid to publish anything unorthodox or against “conventional wisdom” or what is better described as called “groupthink”.

I encounter these types all the time when I edit Wikipedia articles for which I have thoroughly done my homework, only to have some uninformed editor undo my edit because it is an unpopular idea or something they are ignorant of.

What I find amazing, is that with the cost of gas going ever higher. People are still saying that gas should only be $1/gallon, and its all because of speculation.

I am reminded of a story I read once about the Titanic, don't know how accurate it is but it demonstrates a point. When the Titanic was making its long plunge to the bottom of the Atlantic and all of the lifeboats had been launched. Many passengers on deck were in such shock that the unsinkable was sinking that they just stood there, and the band began to play music because it was all that they knew how to do. I think we, the US public are there now. Not sure what to do, which way to turn, too many talking heads and no one making sense. When will the US wake up?... Probably about 10 minutes after we hit the wall and the lights are out for good.

Welcome to the Drumbeat. I believe 'Westexas' owns that analogy. "And the band played on..."

Sorry if I stepped on Westexas toes on that one. And thank you for the welcome. I have been a reader for several years now and finally decided to comment.

I suspect that most Peak Oilers, starting with Hubbert, have probably used the same analogy.

What a dramatic image of the end. We are all doing things that we know how to do but really we are not preparing for a sinking US Economy.

So true and yet the inertia is hard to free yourself from.

The public pathology always strikes me as a group afflicted by a variant of Stockholm Syndrome.


I sometimes wonder whether the USS Thresher would be a better nautical analogy than the Titanic.

The band played "Nearer My God To Thee," and the passengers stood there and prayed because there was nothing left to do. They at least died with their dignity. Pity we aren't measuring up to them.

Two shows coming up on CNBC that might be of interest to people on this list.

Today at 7PM CDT Released 2010
Beyond the Barrel: The Race to Fuel the Future

There is an amazing race going on right now around the world to find the fuel of the future. More than three decades after the oil shocks shook America, the United States and the rest of the industrialized world is still addicted to oil. Now, for the first time in a generation, plans to break the black gold stranglehold are closer than ever to becoming a reality.

Thursday 9PM and Friday 12AM CDT Released 2011
Fuel No link but from the info button on the cable:

A filmmaker who grew up in a major oil-producing region spent 11 years putting together a documentary about America's addiction to oil that espouses alternative sources such as algae-based biodiesel as well as solar and wind power.

Edit: Found a trailer for Fuel here: FUEL

Ron P.

Thanks Ron- good recommendations...

FUEL is freely available here (allow for the commercials first) : http://www.snagfilms.com/films/watch/fuel/?utm_source=snagfilms.com&utm_...

RE: Why high gas price effects may be different this time

So if Americans are less likely to cut back on gasoline consumption this year because “they’ve been down this road before”, while the net exports keep dropping, with a little help from the Saudis, doesn’t that imply that pump prices will likely go far higher this time? Anyone for $6.00 per gallon by July 4th?

And if we avoid another financial collapse this time around, then the price decline after the spike probably won’t be as big this time, so could we be looking at $5.00 per gallon gasoline and heating oil being the new normal by November?

I’m currently looking through the BP statistical review of world energy http://www.bp.com/productlanding.do?cat ... Id=7044622
A few of the figures in there confuse me and i think i’m reading them incorrectly.

Total wind production for 2009 – 160,084 Megawatts
Total Solar production for 2009 – 22,929 Megawatts
Total Geothermal production for 2009 – 10,710 Megawatts

The problem i’m trying to solve is how many Btu’s these figures calculate into – but i believe i am using wrong conversion figures.
I’m using the conversion of: 1 Megawatt = 3,410,000 Btu

So the figures are:

Wind production 2009: 545,886,440,000 Btu
Solar Production 2009: 78,187,890,000 Btu
Geothermal production 2009: 36,521,100,000 Btu

I realise Alternatives total contribution is small – but these figures seem far too small to me.
The reason i may have it wrong is that i’m using 1 Megawhatt hour = 3,410,000 Btu and by megawatts you may not mean megawatt hour.

Should i then multiply these figures by 24 and then by 365?

This would then give a wind production of: 4,781,965,214,400,000 Btu
Which seems more in line with general concensus.

For example EIA figures from 2008. The below numbers are all in quadrillion Btu’s

Nuclear 27.159
Hydroelectric 30.735
Geothermal 1.27
Wind 2.075
Solar, Tide, Wave 0.088
Biomass and Waste 2.620

Comparing these to the 2009 figures given by BP something is clearly wrong as BP have wind as only 500 billion in 2009 – yet in 2008 the EIA have wind as over 2 quadrillion – so there has to be something wrong with the calculations i’ve made.

I was wondering if you know whether this is the case and if i’m using the wrong conversion figures?

If i look at Hydroelectric Production the figure is: 740.3 Million tonnes of oil equivalent.
And using the conversion of one tonne of oil equivalent = 40 million Btu

The total figure is: 29,612,000,000,000,000 Btu

I realise that Hydro production is much more than wind, solar, etc – but not by this much – which is why i’m worried my figures are very incorrect.

Any advice you could offer on this would be greatly appreciated as i’m completely stumped.

Yes, you need to multiple by 24 and then 365. The conversion figures are fine (see Wolfram)

The totals that BP are giving you are the 'capacity'. i.e. how much energy they could theoretically produce at any one point in time. So if you wanted to estimate how much energy they actually captured/generated during the whole of 2009 you would have to assume they were operating non-stop at maximum capacity 24 hours a day, 365 days a year.

Of course you might want to make it slightly more accurate by making your own adjustments i.e. perhaps only assume solar operates 12 hours a day etc.

P.s. Hydro is WAY more than all the other renewables put together. Have a look at this graph

The above graph assumes renewables are running 24/365.

Fantastic - thanks for your reply.

No probs!

For future, to avoid confusion it's helpful to remember that a megawatt (MW) is not a unit of energy (it's a unit of power) whereas a megawatt hour (MWh) is.

But it's very easy to calculate a megawatt hour when you know the megawatts - when a source producing a megawatt (MW) has run non-stop for an hour it will have produced a megawatt hour of energy (MWh)

Simple :-)

This may help and may be the simplest way to get there. IRRC - The power company here in NW FLA uses 20% for the capacity factor for Solar PV from STC Panel peak ratings.

Go look at EIA data instead of BP data. It gives Btu data directly for Electricity Renewables. You have to guess at capacity factors with BP data (% of time a facility is actually in use -- they are quite low), and EIA calculates the amounts for you. The amounts for 2009 are generally wrong though, because many countries are listed as NA, and added in to world totals as 0. For this reason, you need to use 2008 data.

Rocks: Mark Fiore's latest:


Isn't it sick. We deserve extinction.

Fortunately for us, the universe doesn't care what we deserve.

Yeah, but failing to maintain an equilibrium with nature is really a sign of the species failure. Too smart for its own good, but not smart enough to understand Nature.

So we should die.

I am thinking from the standpoint of the planet really. The planet decides our fate basically. We cannot make the right choices because we are not intelligent enough to see the problems before our eyes.

Great cartoon.

Very nice cartoon.

An entry in my blog titled "Photosynthesis and Us" used the same device of spaceman's-point-of-view to illustrate the absurd and stupid way we collectively manage the global energy budget. Here is a snippet from that blog post:

Intrigued, I carried out a small thought experiment. Imagine that all of humanity consisted of 150 men, women and children living in a high-tech community inside giant enclosures on a 600km asteroid, somewhere in the asteroid belt beyond the orbit of Mars. Imagine that their source of natural energy from the asteroid’s resources originally in place had started declining, and that excessive carbon dioxide was building up in their enclosure by a few parts per million per year faster than their plant ecosystem could remove it.

The start of this thought experiment was set in 1972, the same year that "Limits to Growth" was written back here on Earth. What do you think my imaginary outpost of humanity did over the last four decades? Do you think that liberals and conservatives have been duking it out on Asteroid's version of Fox News and Glenn Beck, inbetween obsessing about Asteroid Idol, or do you think they got down to business solving the sustainability-and-resilience problem?

The answer is here.

What price does gasoline have to get to before the public begs for nuclear reactors to be built?

I would guess $10/gallon will do it.

I don't think the public sees any connection between nuclear power and the price of gasoline.

I agree. I see yard signs for "no fracking", "no drilling", "no nukes". But I know they all expect to have cheap gasoline and home heating oil. There is no connection in the public's mind between action and results. They are using "cargo cult" thinking. If you stamp your foot and yell enough it will come.

Are you saying you believe fracking, drilling and nukes will reduce the price of gasoline?

Yes, that is true. You see signs for "no fracking", "no drilling", and "no nukes", but you never see signs for "no heat", "no driving", or "no electricity".

There is a fundamental disconnection in the public mind between actions and consequences. All actions have consequences, but often politicians and the public take actions without foreseeing the consequences, and then become irate because the consequences hit them directly in the wallet, or otherwise inconvenience them.

Then, of course, they blame someone else because blaming yourself for the consequences of your own actions is very unpopular.

When people promote something like, e.g. electric cars, I usually ask them, "Sure, you can plug a car into that electrical outlet, but do you know what is on the other side of that outlet? Have you ever inquired?" In the vast majority of cases, they have no idea where their electricity comes from. They just assume that it is all very environmentally friendly and has no drawbacks. In most cases it is a giant coal-burning power plant or nuclear reactor, but they don't know that, and ignorance is bliss.

but you never see signs for "no heat", "no driving", or "no electricity".

That's because every time I put my signs out in the yard, the neighbors pull them down and call me ugly names like "lunatic," "nut case" and the all time insult "hippie"

+10. You no good Hippie.

Rocky – Speaking of signs I was able (while pulling a log this weekend) to finally get one of the big yellow “STOP THE WHITE STALLION PLANT” signs. For those who didn’t catch my earlier post: they just broke ground on a big coal fired power plant on the S Texas land under which I’m developing a NG field. NG that I’ll be selling cheap. And the coal: shipped in from Australia. Just drips with irony, eh? Just drips.

But it gets better: just six miles away is the S. Texas Nuclear. A plant that just had a $48 billion expansion postponed (and maybe cancelled eventually). All because of that little problem they’ve had in Japan. And a 20% partner: one of the Japanese utilities having that little radiation problem. Just drips, eh?

And did I collect one of those “STOP THE NUCLEAR PLANT EXPANSION” signs? Nope…never saw a single one in the entire county. BTW the expansion would have brought 8,000 jobs to this rural county. Just drips, eh? Just drips.

It is kind of ironic that the US is importing coal from Australia. It's kind of a modern version of the "Selling coal to Newcastle" metaphor. The US has the largest coal reserves in the world, so one wonders why it would import coal from halfway around the world.

However, an eccentric American businessman named Timothy Dexter once made a fortune selling coal to Newcastle, England. (His ship arrived during a coal miners' strike and got top dollar for its cargo). He also made a lot of money selling wool mittens in the Caribbean. You can't always make assumptions about what will make money.

However, I checked, and Texas imports most of its coal (2/3) from Wyoming by rail. 96% of it is used to generate electricity.

Use up someone else's coal first. Save your own for later. Good plan.


Rocky - I guess WY politicians finally wised up. Back in the 80's they upped the excise tax on WY coal to almost the value of the coal itself. Lost a big chunk of market share to imported coal. In 1986 I was selling NG for $0.90/mcf (just 80 miles form this new plant)within sight of a coal fired plant that was burning coal from S Africa initially and then Autralian coal later. Needless to say I didn't get warm cozy feelings seeing those trains cars loaded with coal roll by.

I don't know if coal imports are a big part of the US market. According to the EIA data I looked at, the US only imports 2% of its coal, and the biggest source (2/3 of the total) is from Colombia.

In fact, most coal burned in Texas is domestic coal from Wyoming. Wyoming now produces 40% of US coal, so I guess they had some scope for increasing taxes. It's kind of the Saudi Arabia of coal.

In 2009, Australia ranked behind Colombia, Indonesia, Mexico, and Venezuela as a source of US coal imports. I suppose that some company might import coal into Texas if the price was right, but Australia is not an obvious source of it.

In 2009, the US produced 1073 million tons of coal, imported 23 million tons, exported 59 million tons, and consumed 1 billion tons.

Back in 1986, it produced 890 million tons, imported 2 million tons, exported 85 million tons, and consumed 804 million tons. So, yes, imports up more than ten times since then, but they're still not very big compared to domestic production.

Thanks Rocky. I need to check out my source. The Aussie coal seemed to come from a reliable insider but your post makes me wonder.

Oh no, you need to get a donkey.

This is from article Pancho the Donkey

I'm unsure how much of what I read is true but STP seemed doomed from the beginning when 50-50 ownership agreement was made between CPS Energy and NRG Energy. Someone long ago told me 50-50 business arrangements are the same as two guys having their hands in each others pocket. In Dec 2009, CPS Energy squeezed a little by filing a $32 billion lawsuit against NRG Energy and NINA(NRG/Toshiba joint venture). IMHO, I suspect the TEPCO involvement will be used by both energy company's to get out of an agreement neither wants.

Someone long ago told me 50-50 business arrangements are the same as two guys having their hands in each others pocket.

It works if they have a joint bank account...

Fantastic brit! Never saw that pic before. Despite the environmental uproar I've heard the real local political battle was over whose land the plant was going to be built on. Not that some folks didn't want it but wanted it built on their land. The land for the nuclear plant expansion sold for $80 million. That's very tall cotton for Matagorda County.

In the short run, I don't believe fracking, drilling, or nukes WOULD appreciably affect the price of gasoline in the USA. And it's not because I'm ignorant either... there just isn't much evidence of a causal relationship between the one and the other.

PT in PA

No, of course not. But surplus electricity could make alternate forms of transport at least possible.

I think there might be some evidence in the current price differential of WTI to Brent. We all know that the Canadian oil sands are the main reason for this. However, plays like the Bakken and the Spraberry in West Texas also contribute, and these play would not be possible without fracking.

"I don't think the public sees any connection between nuclear power and the price of gasoline."

I don't see any connection either. Completely non-interchangable parts.

Now if Nissan can replace the back seat of a Leaf with a second battery, then maybe. That would make the Leaf a lot like a nuclear plant; high initial capital cost, low fuel cost.

Who wouldn't sign off on a state of the art nuke plant/depository complex in the middle of nowhere to make hydrogen for cars. As long as we took down Indian Point and other most at risk reactors. Maybe that is not a winner, but it has to be getting close. I am one anti-nuke person that acknowledges the challenges and even submits REPLACEMENT reactors may be a necessary intermediate step. Really the line between anti-nuke and transition to alternatives with nuclear as being completely blurred by the half-life and dangers of the nuclear fuels and accompanying contaminated materials.

Good point. There's a lot of reactors out there that have been dragged well past their reasonable end of life, they need to be replaced with *something* (and the process to do so needs to start yesterday...).

And yet, the Corporations have demonstrated they are not able to operate plants in a safe manner.

In the "reasonably safe" world of fission plant operation as demonstrated in Japan in the latter half of March - who's gonna build the plants without flaws and then operate them safely?

So? Corporations are pathological, a corporation won't run a toy factory safely if they aren't forced to by government regulation.

Pick a *something* you prefer. Show it is a reasonable replacement. Lobby to have that as the replacement instead of coal-fired plants or more nukes.

I really don't give a d&%$ what the replacement is, as long as it does the job and is safer and cleaner than what it is replacing.

I don't demand perfection, because it doesn't exist.

Corporations are pathological, a corporation won't run a toy factory safely if they aren't forced to by government regulation.

I want to make sure I understand your position:

You want nuclear fission power and are happy to have the above Corporations run 'em?

Pick a *something* you prefer.

I believe I've mentioned what is preferred many times and supplied the why.

Well watched corporations.

I don't trust an unregulated corporation to run water for my bath.

ok - now, would you consider firms under the NRC in the us of A "well watched"?

Unfortunately, we have seen enough times now just how that 'should' keeps hitting the fan ..

Entergy Corp. sues to keep Vermont Yankee open

Vermont is the only state in the country with a law saying both houses of its legislature have to give their approval before regulators can issue a state license for the nuclear plant to continue operating.


Built in 1972, the Vermont Yankee power plant has been plagued by leaks of radioactive tritium and strained relations with Vermont authorities.

In January 2010, Vermont Yankee announced that test wells had turned up evidence that radioactive tritium had leaked from underground pipes at the plant into surrounding soil and groundwater. Within days, it was revealed that plant executives had misled state lawmakers and regulators -- the latter under oath -- by saying the plant did not have the type of underground pipes that carried radioactive substances.

But the U.S. Nuclear Regulatory Commission granted it a 20-year license extension last month.

The U.S. nuclear industry is turning up the power on old reactors, spurring quiet debate over the safety of pushing aging equipment beyond its original specifications.

The power boosts come from more potent fuel rods in the reactor core and, sometimes, more highly enriched uranium. As a result, the nuclear reactions generate more heat, which boils more water into steam to drive the turbines that make electricity.

Tiny uprates have long been common. But nuclear watchdogs and the U.S. Nuclear Regulatory Commission's own safety advisory panel have expressed concern over larger boosts — some by up to 20% — that the NRC began approving in 1998. Twenty of the nation's 104 reactors have undergone these "extended power uprates."

What could go wrong?


Right. Along with an uprating of the allowable amount of spent fuel that the pools are allowed to have racked up in them.

Ultimately, it becomes a question of time factors. How thin is the time margin now for a fuel pool to boil its water away if the resupply of cooling water is somehow interrupted?

It reminds me of the madness of Massachusetts, which has turned the breakdown lanes on the highways into travel lanes during peak commuting hours.

"Margin of Safety? What for, we barely ever use it for that.. seems like wasted money to me."
- Emmanual Goldstein, MassHiwayTrafficSafetyBored (: DoublePlus-Wholly owned Subsidiary of Nabisco/Time-Warner B)

(Thanks to those who pressed the 'DONATE' button to help get a new containment building for Chernobyl. 'Problems go away if you put something over them')

Right. Along with an uprating of the allowable amount of spent fuel that the pools are allowed to have racked up in them.

Doesn't it kind of remind you of the perpetually rising national debt? It's obvious that it can't rise forever, as it is obvious that spent fuel rods can't be stacked in ponds near a reactor forever, but we maintain this fiction that we can simply wave an administrative wand and declare a new upper limit (...to our collective insanity).

Well, as the saying goes, something that cannot go on forever, won't.

I hate to be a pill about this, Bob, but I am truly alarmed about this blind spot in the US's nuclear designs. The time margin is 1 hour and 40 minutes. And the mention of the nuke power outage in Virginia was picked up briefly by the Guardian and then dropped like a hot potato.

Meanwhile, the Japan Nuclear Energy Safety Organization (JNES) released last fall a simulation in which a nuclear reactor would have a core meltdown and other consequences only 100 minutes after losing its cooling capabilities. . . .

. . . The JNES comes under the jurisdiction of the Ministry of Economy, Trade and Industry and is an independent administrative institution tasked with studying nuclear safety. It wrote a report in October last year after examining seven types of nuclear reactors and carried out simulations of quake-triggered severe accidents at the reactors.

It studied how a boiling water reactor (with an output capacity of 800,000 kilowatts) identical to the No. 2, 3, 4 and 5 reactors at the Fukushima No. 1 Nuclear Power Plant would react once it lost its power source and the function to cool the reactor core halted.

The study shows that a meltdown began about one hour and 40 minutes after the water- pumping function stopped. About 3 hours and 40 minutes later, the pressure container broke down and about 6 hours and 50 minutes later the containment vessel also ruptured.


A US nuclear power company has disclosed that one of the tornadoes that hit the US at the weekend, killing at least 45 people and causing widespread damage, forced the shutdown of two of its reactors.

The series of tornadoes that began in Oklahoma late last week barrelled across the country, with North Carolina, where 22 people died, the worst-hit state.

The US nuclear safety regulator said on Mondayit was monitoring the Surry nuclear power plant in Virginia. Dominion Virginia Power said the two reactors shut down automatically when a tornado cut off power to the plant. A backup diesel generator kicked in to cool the fuel. The regulator said no radiation was released and staff were working to restore electricity to the plant.



Connect the Panel's Red Lead to the Charge Controller's Positive Terminal, and the Black Lead to the Charger's Negative Terminal. Indication of Power into the unit should be immediate if the Panel is in the light.

Fusing your battery is HIGHLY recommended.

Do not 'test' the leads of any solar panel with your tongue, as electrocution may result.

A Basic Understanding of electricity is recommended for connecting or varying this system.

Behind a paywall, but viewable if scripting is blocked:

Watching The World: Saudis under scrutiny

Saudi Arabia's ability to produce the oil needed to keep markets calm has come under scrutiny lately, a point neatly confirmed by recent analyst reports.

...Last week, an unnamed senior Persian Gulf source said the Saudis would have "no problems" producing at its claimed 12.5 million b/d capacity if the market needed the oil.

In fact, the official dismissed doubts raised by some analysts over the Kingdom's stated spare capacity as the work of speculators trying to manipulate oil prices after fighting in Libya has disrupted production there.

"First traders used the peak oil theory to drive the market up and since that didn't work now they are saying that Saudi Arabia can't use its full capacity, which is completely not true," the source said.

"The market is reacting to misinformation, there is no reason for the price to be at this level," the source said, adding, "We have no problems in reaching our full capacity, we are completely capable of it if it's required."

The market is reacting to facts. The Suadi's are not pumping 12.5 that is the fact. If they COULD pump 30 but are never willing to it does not matter. The fact is a noisy plateau at 9.0

The last sentence of that article reads:

Given the remarkable 80-year performance of the oil company formerly called the California-Arabian Standard Oil Co., though, this editor would put his money on Riyadh.

It is because the company and its oil fields are so old is precisely why we should doubt Riyadh. Well, that is one of the reasons, there are several others. And just who is this "senior Persian Gulf source"? What is his credentials? One sentence you quote above shows that this guy, and he is likely a guy if he opens his mouth in the Middle East, but one sentence says he doesn't know what he is talking about:

"First traders used the peak oil theory to drive the market up and since that didn't work now they are saying that Saudi Arabia can't use its full capacity, which is completely not true,"

Peak oil theory did not come from "traders". Traders had nothing to do with it. Hubbert was not a trader, Colin Campbell is not a trader, and none of the big names bringing peak oil to the forefront are traders. Well none that I know of anyway.

And traders come in all different flavors. There are just as many traders rooting for prices to fall as there are wanting them to rise. For every trader on the long side of a futures bet, there is a trader on the short side.

These so-called officials and unnamed sources would have a lot more credibility if what they said about peak oil and traders made any sense. Since it does not we must assume they are as ignorant about Saudi's oil production as they know about peak oil and those they label as traders.

Ron P.

It's a slow afternoon Ron so I'll beat the point again. Speculators don't determine what the KSA sells their oil for. The traders don't decide what price they charge. The US consumer doesn't set their price. The KSA, and no one else, determines what they sell their production for. The KSA posts the price it will sell for. The buyers either pay that price or they don't get the oil. It's really that simple. Just like walking onto a car lot: the price is right there on the sticker.

So they obvious question is how does the KSA decide to set the price? If the KSA set the price at $60/bbl they could likely sell every bbl they could produce. But would they? What if they were willing to sell only 5 million bopd at that price? Can't think of any reason they would do this but it's completely within their power to do so. And what if they posted a price of $150/bbl? How much would they sell? Certainly no more than the buyers could afford. So let's assume there are buyers for only 6 million bopd. So the KSA sells 6 million bopd...right? Not necessarily. They might choose to sell only 4 million bopd. Again, I have no idea how this situation could develop but that's not the point. And the point is the KSA sets the price. And by setting the price they alo determine the amount of oil the market can buy. And thus they are supplying exact what demand is...at the price they've set. But having said that they also have to accept the repercussions of their decision. Too high a price and their cash flow could drop below their needs. Too low a price and the world will greedily such down the ever declining reserve base. Yes…the global demand for oil is being met…being met at the price the KSA has set.

Again, to be very clear: every bbl of oil the KSA sold today was at a price they decided. The only control the buyers have is whether they meet that price or not. Folks still seem to be confusing the futures market with what oil actually sells for. For all practical purpose almost none of the BILLIONS (your estimate, I believe) of bbls of oil on future contracts is ever actually purchased. They are essential wagers as to what oil will be selling for X days in the future. If the futures price decline/increase it only represent epectations of future prices. Folks need to remember that for every $ one of these SPECULATORS makes another SPECULATOR loses a $.

Also the "market price" is the price for one more barrel it says nothing about existing contracts that the Saudi have signed. They may be selling 4 million barrels per day at a contracted price of $40/bl. We do not know what contracts are in place. For example the Chinese signed a deal with Brazil to develop some of their oil fields. The deal is China pays all up front costs and in exchange it gets oil at $20/bl for the next 20 years. Now that is a great deal. We can see why the "western" global corporation hate China they out bid them. They are used to making these deals at ever more outrageous profits. Good for the Chinese out bidding the cheapskate westerns.

The joke is on China. Won't be any production to deliver cheap barrels.

I didn't realize that the Saudi released data on inventory changes. According to Bloomberg, the Saudis drew down their crude inventories at almost 400,000 bpd in February:


True, but inventories of "Total Products" increased by almost 300,000 bpd in February.


But of course they would be building product inventories for the summer when they frequently have to import refined product, but in any case, I think this demonstrates why monthly data are pretty noisy. I assume that close to 400,000 bpd of the reported Saudi crude oil production in February consisted of inventory drawdowns.

On the lead article. The New York Times is a pure propaganda rag.

No argument can be supported by merely attacking the person or media source making the argument. That is simply an ad hominem attack. Everything the New York Times publishes is not propaganda even if some of it is. The only we can know which is which is to examine the argument on its merits. If you are unable to do that and can only attack the messenger then you should not comment at all.

Ron P.

Ron, the article was a pure hatchet job. The NYT can be measured in some articles but when it comes it immigration, especially mass immigration, it becomes a frothing-at-the-mouth dog.

I read the article before it came up on here and it was just a big giant attempt to throw so much mud as it was humanly possible.

The NYT is a part-time propaganda rag at the very least.

The NYT is a part-time propaganda rag at the very least.

Sadly, they were excellent just a decade back. But, now I don't think they are suitable to wrap fish in. There is a difference between ad-hominem, and attributing low credibility to a source which has proven wrong too often in the past. In a world where there is to much stuff purporting to be information, it is a necessity for truth seekers to shun unreliable sources, especially ones that have a history of mis/disinformation.

upstreamonline.com reports the Brent blend at over $123 down 2% today and that is probably close to the average of the quotes of major blends except WTI. Two thirds of the world's oil exports are sold at these prices that are around $16 over the WTI price.

It isn't a bubble until the mainstream rags start calling it the "new normal".

Angolan crude oil exports to slip in June: trade

The west African country plans to export 1.40 million barrels per day (bpd) of crude oil in June on 44 cargoes, down from 1.48 million bpd originally planned for May on 48 cargoes.

Angolan crude oil exports:

June  1.40 mb/d
May   1.48
April 1.50*
March 1.73*

* Source

Before the months of May and June, April was the lowest for around four years (Source):

Revised loading programmes for Angola suggest it may export less than 1.5 million bpd in April, the lowest for around four years, as maintenance work hampers production, trade sources say.

There is accumulating indications that not just KSA but other oil exporting nations will be exporting less in the next few months. While OPEC oil exports will already be at a 2011 low in late April, exports may well decline further in May and June at the same time western Africa exports less.

Although the price of oil fell this last week, short term price trends don't necessarily tell us where long term supply trends are going - and at least as far as the US is concerned, the long term trend for oil imports is down.

Doomers don't what to hear about solutions and non-doomers don't want to hear about the need for solutions. A perfect circle of denial.

There isn't enough doomers to justify writing that statement. I would guess there is 1 finite resources doomer for every million people.

Standard & Poor’s Puts ‘Negative’ Outlook on U.S. AAA

“We believe there is a material risk that U.S. policy makers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013,” S&P said in its statement.

“If an agreement is not reached and meaningful implementation does not begin by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns,” New York-based S&P said today in a report that maintained its top rating on U.S. long-term debt while lowering the outlook to “negative” for the first time.

Standard & Poor’s Puts ‘Negative’ Outlook on U.S. AAA

Hasn't been that much discussion of this yet.
I sometimes wonder if we're overly focused on the oil price?
I mean, I certainly buy the theory that the '08 crash wasn't just a subprime crash, but I don't think it was mainly caused by oil(although oil was a great multiplier).

I struggle to see how the U.S. can dig itself out of a 11 % deficit with almost 100 % debt-to-GDP considering the next 5 years will very likely not be very rosy.
In fact, when you add on the Fannie Mae and Freddie Mac and all the other assets the Government owns or guarantees, the debt rises much higher. And add to this the unsustainable medicare development.

Things are looking very, very grim for the U.S. even without PO. As reflected by S&P's unprecedented move today.



This article calls attempts to call into question China's effectiveness/investment wisdom.

I don't know what to think about this...any smart cookies out there want to comment?

Is both the U.S. and China heading into trouble by driving down different paths to the same cliff?

China is merely the last great industrial power, and in population overshoot, ecological collapse, and dependent on imported resources to maintain equilibrium.
The sky was green during my brothers last business visit.
It is not remotely survivable.

Unfortunately this blog about China is in Spanish, but there are good translation services on the web, and it is not the most difficult language in the world.

The Chinese authorities are so incensed with this journalist resident in China that they blocked access to the blog.
He was even harassed by a Chinese 'student' in Spain.

It is a nightmarish society.
On a lighter note our goofy president Zapatero went to China, boasted that he'd gotten 9 billion dollars to help the banks in Spain, then the Chinese bank said they didn't know anything about that.

It is not remotely survivable.

Neither are any of the grow, grow, grow, BRICS. It is pure delusion on their part to think their growth is infinite.
Since I'm Brazilian, that's the country I happen to know the most about. Ecologically they are cutting off the limb on which they are sitting and calling it progress. They are making all the same mistakes that the US has made. It makes me sick to my stomach to see it happening.

In any case I'm betting that all the BRICS are just inflating their own bubbles and sooner than later we will see a few of them popping.

I think the Chinese are investing for the future, rather than the present. The high-speed trains (they have recently slowed them down to 300 km/h (186 mph) to save money) are an investment for the time when their people are more affluent than they are now, and the price of automobile and jet fuel is much higher.

The average Chinese income has growing at 10% per year for the last 30 years, so as long as it keeps up for another decade, the investments will pay off.

And then about 10 years later, it'll all start to go to hell for them, too......;^)

I think the Chinese are investing for the future, rather than the present. The high-speed trains (they have recently slowed them down to 300 km/h (186 mph) to save money) are an investment for the time when their people are more affluent than they are now, and the price of automobile and jet fuel is much higher.

The average Chinese income has growing at 10% per year for the last 30 years, so as long as it keeps up for another decade, the investments will pay off.

Unfortunately, infrastructure takes maintenance. Empty cities and idle bullet trains will either deteriorate while waiting for this big income redistribution (which may not happen), or an increasing amount of money will have to be spent maintaining all this unused infrastructure. Either way, it will drag the economy down.

idle bullet trains will either deteriorate while waiting for this big income redistribution

I don't think they have redistribution in mind. The basic principle is that "A rising tide lifts all boats". A decade from now when the average Chinese traveler can afford to take the the bullet train, the train will be waiting for them.

One issue that is seldom mentioned is that they are building the high speed lines to get passenger trains off the freight rail lines. They are short of capacity on the lines, and passenger trains are using up too much of it. They want to get rid of them.

They also seem to be anticipating Peak Oil, and a time when people will not be able to afford to fly or drive between cities in China. At that point the high speed trains will seem a lot cheaper.

Election Protests Set Northern Nigeria Ablaze - Reuters

Deadly rioting erupted across Nigeria's largely Muslim north Monday as youths torched churches and homes in anger at President Goodluck Jonathan's election victory.

The results show how polarized the country is, with Buhari sweeping the north and Jonathan winning the largely Christian south. Jonathan had nearly 23 million votes to just over 12 million for Buhari.

The Nigerian Red Cross said churches, mosques and homes had been burned in rioting across the north and many people had been killed, but it was impossible to give a toll for now.

"In Kaduna we have seen dead bodies lying by the road," Red Cross official Umar Mairiga told Reuters. "Two thousand people have been displaced at one military camp alone."

Through the Swedish media, I'm getting that at least 300 are injured and approximately 15,000 are fleeing the violence, as of now.

Let's hope this doesn't escalate into a religious civil war, because the Saudis couldn't even cover Libya, and now that we're already 1.4 mb/d in the red, what would happen if Nigeria's 2+ mb/d went down? Total meltdown.

Election Protests Set Northern Nigeria Ablaze

Economic-balance hybrid LCA extended with uncertainty analysis: case study of a laptop computer

The emergence of Life Cycle Assessment (LCA) on the global stage as a design and policy tool increases the importance of assessing and managing uncertainty. This article develops and implements uncertainty methods for hybrid LCA. Hybrid LCA combines a bottom–up construction of the supply-chain based on facility-level data on material/energy use with a top–down economic input–output (EIO) model to account for processes for which direct data were unavailable. For the bottom–up part of the LCA, we account for variability in process and usage pattern data by developing parameter ranges. For the EIO side we develop a method to assess price uncertainty. These methods are explored through a case study examining energy use and carbon dioxide emissions of manufacturing and use of a laptop computer, a 2001 Dell Inspiron 2500. Results show that manufacturing the computer requires 3010–4340 MJ of primary energy, 52–67% less than the energy to make a desktop computer, and emits 227–270 kg CO2. The manufacturing phase represents 62–70% of total primary energy of manufacturing and operation. This indicates, as for desktop computers, that mitigating manufacturing energy use, for example through extending lifespan, can be an important strategy to manage the life cycle energy of laptop computers. Results also indicate that truncation error from excluded processes in the bottom–up process model is significant, perhaps particularly so due to complex supply chains of information technology products.

As noted, the ratio of embedded energy to lifetime energy will depend strongly on the life of the laptop computer. They probably assume something on the order of a 4 year life, but I don't have access to the article to check.

Thanks for the comments. This gives me another angle with a side project I'm working on and having a tough time getting management to chomp on. My goal is to substitute mechanical hard drives with solid state hard drives in laptops. I'm in a large company and most management refuses to discuss changing BAU or flings the discussion of the word hard drive into a security concern of a hard drive containing confidential data getting stolen. The laptop manufacturer is now offering 100GB (TRIM, Win7, buffer) for $240 and standard drive in laptop is 80GB. For me, the speed difference alone would sell the drive. But that angle is getting no traction.

The management is very sensitive to environmental issues so I'm planning to use that angle instead. I had no idea how many benefits could be found when comparing the drives using life cycle assessment. Today, I told one manager the SSD would have same impact as planting 4 trees. He said he never heard that and wanted to know more. LOL. So, I emailed a pdf stating exactly that with hard numbers regarding CO2, energy consumption and thermal emission.

Also, I found a pdf that I think summarizes the report you cite and it isn't behind a paywall. The pdf is authored by Deng, Williams and Babbitt called Hybrid Accessment of the Life Cycle Energy Intensity of a Laptop Computer

This document states lifespan range is 3-5 years.

Eight seconds. What can you do eight seconds? Win the PBR championship?

Steven Kramer, a University of Washington earthquake expert, wasn’t sure what was happening Monday in Tokyo when an alarm interrupted a lengthy briefing by the Japan Society of Civil Engineers. An announcement came on in Japanese, a language he doesn’t know. The large auditorium fell silent.

Harry Yeh, an Oregon State University tsunami expert who speaks Japanese, leaned over from the seat next to Kramer. "There’s been an earthquake," Yeh said, "and it will arrive here in eight seconds."

Most people could set down loads, move away from shelves, run outside, grab your keys and phone, or whatever. Industrial processes (like reactors) can get a good start on shutting down. Bullet trains can stop, too.

I think I would move for cover while counting 1 kuso, 2 kuso, 3 kuso....

Given a certain profile/strength for the P-wave, bullet trains not only can stop, they do stop. Automatically. Ordinary trains too. That way, when they sway from the S-wave shaking, they won't tangle with trains going the other way, which is very very messy.

Asia's coastal nuclear plants: Disaster-in-waiting?
Scientists say several could be vulnerable to a tsunami like the one that struck Fukushima


Will they take sufficient precautionary measures to avoid future calamities?

Future of proposed solar-power plant looks dim
A proposal to build the largest solar photovoltaic plant in the Pacific Northwest may be on the verge of collapse due to financing problems.

Without that incentive, Trott told legislators, he couldn't get utilities to sign power contracts he needs to secure financing to start construction.

And if construction doesn't begin by the end of the year, the solar project couldn't take advantage of a federal grant to pay for 30 percent of the cost.

"No financing means no construction. No construction means no federal grant. No federal grant, no project," Trott said at a hearing last month.

Trott, a former project manager for telecom billionaire Craig McCaw, did not return phone calls or an email seeking comment.


"We pretty constantly hear from developers that if there were not subsidies, they would not be doing these projects," said Revis James, director of the Energy Technology Assessment Center at the Electric Power Research Institute.

Solar farm future in doubt after bill's demise

Another fine example of so-called "green" energy projects turning out to be little more than fat-cat schemes to harvest millions in free flowing taxpayer dollars.


DOE announces $2.1 billion loan guarantee for two 242MW thermal power plants to be built in Riverside, CA, by Solar Trust.
40 Percent Renewable Goal for California

Jerry Brown, California's governor, says he wants to see California get 40 percent of its power from renewable sources. By 2020, Brown wants to see California to have 12 gigawatts of PV capacity and 8 gigawatts of thermal capacity.

If anyone is interested in viewing the California Energy production as reported by CAISO here are the links:

1. Power generation for the day

2. Previous days 'renewable' contributions to power production

I expected a sad chuckle over renewables.
But, they made 1/6th of the power yesterday making 85 GWh.
Wind made 1/12th of all the power used producing 36 gigawatt hours.
Total demand was 600 gigawatt hours.

What is going on in California is very interesting. I just hope they can afford it. I've read projections of electricity cost rising 5-6% per year for quite some time.

The Far Niente winery provides 477KW of power in Napa Valley by placing PV panels on irrigation ponds. The application is called Floatovoltaics

You might want to reread your own link...

It allows solar-power plants to get up to 30 percent of their construction costs paid for by the federal budget — if they begin construction by the end of the year. That has been credited with helping launch 1,100 solar projects in 41 states, according to the Solar Energy Industries Association.

Just because this one particular developer wants more doesn't mean that the entire program was a "fat-cat scheme". Ask the people in NE Japan or fishermen on the Gulf Coast or in Prudhoe Bay what they think about the alternatives if you really believe Green Power subsidies are so damaging.

I call it 'Jerry-Picking', Jerry.

The legislation, House Bill 1365, was opposed by leading environmental groups who objected to amending the state's green-power law for the benefit of a single project.


.. a wrinkle in I-937 gives smaller power projects — including some in Oregon — an advantage in competing for contracts with Washington utilities.

The initiative gives double credit for power bought from projects that generate 5 megawatts or less. (By comparison, the Cle Elum solar array could produce up to 75 megawatts, enough to power 45,000 homes.)

That was done purposely to encourage small, dispersed electrical generation, such as solar panels on the side of a building or near an electrical substation, said Danielle Dixon, a senior policy associate with Northwest Energy Coalition.

The environmental group opposed the legislation that would have given the big Cle Elum plant the same double credit.

Clearly, the policy being protected is there to prevent abuse by 'fat cats' in the mix.

Setting smart policy and following it is a continual challenge, no matter what the topic is, 'Green Energy' is not causing the problem, here, and with our poor state of preparedness, subsidizing more distributed systems makes sense.

I call it 'Jerry-Picking', Jerry.

Pot, meet Kettle. The proposed plant would be 400,000 panels built over 900 acres to the tune of $300 million. Neither small nor distributed as you so mistakenly have mis-characterized it.

More to the point, how many people BESIDES fat-cats can afford a scheme to rake in $100 million in free taxpayer dollars?

Oh, right, I forgot, not a scheme! Just ALL of the developers demanding boatloads of free money or "no green energy for you!"... Yep, sure sounds like a great way to run an industrial civilization.

Into the ground.


Read mine again, Jerry.

You picked a Loser of an example (and tried to make it emblematic), and it Lost for a good reason, and has been called to the carpet by people who were supporting the quite productive policy measure that this group was trying to do an end-run past.

Yes, this was a 75 megawatt installation plan that wanted to reap the gains put in place to stimulate the development of more small systems (sub 5MW) instead.

I'm not particularly opposed to Utility scale installations.. but this one was gaming a system and got called for it. How are you suggesting that this proves these pro-GreenEnergy policies are misfiring, counterproductive or wrong-headed? Yes, they cost money.. so do college grants, so does Professional Training, or buying insurance. You make investments where you think you can fortify your position in the future, and Solar and Wind are good proven candidates for this..

.. and I'm sitting under solar lighting right now, UNsubsidized, and well worth the investment, since this little 40w panel and 12ah battery can quickly dismount and run most anything I'd plug into a car lighter jack. Good in an emergency, also good during 'normal days'..

So far, your opposition is hard to understand. It seems to be about the money.. compared to real emergency times, the money these have cost is pretty minor, next to what they offer once there are no more batteries on the shelves..

Sorry, I'm just being cranky because I think the reason green energy needs to be so heavily subsidized is because in the long run it simply doesn't pencil out. Not economically, energetically, or environmentally.

By all means, and I'm not being sarcastic, build all the solar panels you want if you think it will help.


The cost of multiple endless wars to secure oil is just a tiny bit higher than the measly and intermittent tax breaks granted to some renewables when the political winds happen to be blowing in the right direction. Nukes and ff, all very, very old very, very dirty technologies should no longer be getting any tax breaks or other incentives, and that is what you should be railing against.

But it is true that the greenest source of energy is efficiency, conservation, insulation, and curtailment. That is where nine tenths (at least) of our attention and funding should be focused on.

These involve simplifying the system, and that is the primary thing we should be looking at doing.

I think we can, in fact, afford some small areas of increased complexity, such as smart grids, if the pay backs are great and the complexity and load of the over all system is greatly reduced.

It is not clear to me that renewables are more complex than ff and nukes, since they cut out one entire half of the process--procuring the fuel. That extra step doubles, at least, the level of all non-renewable systems in comparison to renewable ones. We see that right now as threats even potential threat so the supply of oil--uprisings in the middle east--are causing spikes in prices. A wind, water and sun based fuel system will not be quite so easily threatened by political upheavals half a world away.

So by complexity standards as well sustainability and survivability--by all these standards ff and nukes are an enormous fail. Shouldn't we be doing all we can to move away from them by reducing our total need for energy as well as moving toward other sources of energy?

Sorry, I'm just being cranky because I think the reason green energy needs to be so heavily subsidized is because in the long run it simply doesn't pencil out. Not economically, energetically, or environmentally.

You might have a point, 'GREEN' energy is pretty lame. On the other hand, Ultra Violet, is on a whole different wavelength...

And it does make economic, energetic and environmental sense even without subsidies. Yes, it does require a paradigm shift away from where you seem to be stuck, but you most certainly aren't alone in that regard.

Spend an hour with Bill Gross.


Aha! So my profuse solar plant ranting did have some lingering effect! Even if it was a bit off the mark... ;-)

Thanks, Jerry.
That answer is one I think we can at least sink our teeth into.

Personally, (as anyone here surely knows), I do think Renewable Energy comes out ahead, as I look at the simplest examples, like my own modest equipment, then Solar Calculators up through Solar Highway signs and people using solar to charge EV's, and Geothermal & Solar Heating/Cooling, of course.

Much Simpler connections between Source & End Use, where we can cut out several lossy links and materials dependencies, and remove key waste issues like throwaway batteries and burnt fuels, and rely on a much more benign intermittency, since days without Sun or Wind (as only the two most common forms of RE) might stretch out to painful lengths, but are not generally as extreme or deadly as the Political, Environmental and Military Implications of Securing Oilfields, Shipping Lanes and Uranium Supplies, etc.. and then dealing (or not) with the mess that these humongous systems ultimately leave behind.

With those things in mind, I can hardly see that these opposing directions even need to be specifically 'weighed out' in order to make such a choice. But if I have to continue to work to point out how I think this all adds up in favor of the variety of Renewable Energy sources, I certainly will. As your challenges often bring to mind, creating wise policy in order to engender growth in this direction is a very tricky game, indeed, and I am not dismissive of the very real abuses that can arise when Uncle Sam offers her bounteous breast for the business community to suckle at.. God help us.

My inclination towards smaller, distributed systems is likely very similar to your discomfort with the likelihood of abuse when these systems and producers get so large that it gets back into the realm of oversized businesses that have so many incentives to get fat and abuse their power. It is one of my many concerns about Nuclear Power as well. 'How much does Nearly Absolute Power corrupt?'

I talk about PV frequently here, but if I could build my dream house, the vast majority of KCal at play would be Simple Solar Heating and Refrigeration, Solar Cooking, Low-tech Geothermal Support, Natural Daylighting, Predominantly Human-powered tools (they're quieter!), Water reuse and Pond-based repurification, Humanure.. etc. I don't think I'd have more than a 2kw PV system needed, while I remain very cognizant of how flexible and valuable electrical energy can be to perform most of the other above functions, when their regular natural sources aren't on-line.. it's a balance.


Well something has changed significantly in the PV market during the last couple of years. Production costs are being driven relentlessly downwards, instead of being stalled on a plateau as they had been for years. I don't know how much is due to the market size getting big enough to fund rapid progress, or the competition from the Chinese. But if it is the former factor, it validates that early subsidies can pay off bigtime.

re. Canadian military warning

This team of military analysts is thankfully filling the void created by the inaction of Canada's federal departments.
Natural Resources Canada continues to insist that "there is no imminent peak oil challenge" despite having conducted no formal analysis of this unprecedented phenomenon.
Canada's Department of Foreign Affairs and International Trade (DFAIT) has likewise conducted no analysis, despite the global nature of the impending oil supply crunch (which surely is worthy of some attention, for a multitude of reasons).

A future analysis team in the German military recently released a 125-page study of Peak Oil. Here's a review of their earlier draft version as well as the link to the growing bibliography of military studies:

Meanwhile, we should all be thankful that Defence analysts in many countries are taking an honest, realistic assessment of these twin issues (oil supply and climate change) and their likely implications.
These analysts are doing important work, but it is equally important that their research be examined & presented by the media (in order for the public to be aware of the concerns).

Device can heat home, save money

A new polymer-based solar-thermal device is the first to generate power from both heat and visible sunlight – an advance that could shave the cost of heating a home by as much as 40 percent.


Unlike the flat solar cells used today, the curve of the tubes inside the new device allows for the collection of both visible light and infrared heat from nearly sunrise to sunset. This means it provides power for a much greater part of the day than does a normal solar cell.

Because of the general structure and the ability to capture light at oblique angles, this is also the first solar-thermal device that can be truly building-integrated – it can be made to look nearly identical to roofing tiles used today.

See: http://news.wfu.edu/2011/04/18/device-can-heat-home-save-money/


Pretty cool Paul. Any chance of it being scalable and affordable...anytime soon that is? All this Saudi talk (Staniford's recent post in particular) has me down in the dumps. Thanks.


Well.....it's still a beautiful place...


Wow, fantastic Martin, thanks. Very impressive slideshow! I've added a little more info from the site..

"This was filmed between 4th and 11th April 2011. I had the pleasure of visiting El Teide.
Spain´s highest mountain @(3715m) is one of the best places in the world to photograph the stars and is also the location of Teide Observatories, considered to be one of the world´s best observatories.

The goal was to capture the beautiful Milky Way galaxy along with one of the most amazing mountains I know El Teide."

You'll like this too I think. You may or may not like the music (one of my favourite bands).


Boards of Canada (from the album Campfire Headphase, 2005),
unofficial video made by FroschYankee from BluRay Atmospheres (National Geographic), Salten - Norway

Just beautiful in HD.

Compliment and you shall receive : ) Fantastic northern lights. I thought the pianist on the galaxy slideshow sounded a bit like Keith Jarrett.

I don't think the author/performer would be insulted by that comparison. :)

Ooh, surely got to get Dayvan Cowboy reference in there somehow.

The economy in freefall...?

Well, that could happen...

...and when gas is [http://www.youtube.com/watch?v=LRVMPk5twvY&feature=related]$20 a gallon it's going to be....[/url]

I was trying to say ...when gas is $20 a gallon we'll all be doing a lot more of this.....


Text to hyperlink on this board?

Ah, yeah you need to use anchors so it would be {a href="http://www.youtube.com/watch?v=LRVMPk5twvY"}TEXT HERE{/a}

But use < instead of {

Excellent...many thanks.

Hard to say, 1observer. As Bob notes, a lot of ground to cover between the lab and isle 6 of your big box home improvement store. I seem to recall another form member is working with a UK company that has developed something similar to this?


Thanks Paul. A lot of ground to cover seems to be an ongoing theme with so many "fixes"....


A bit of hype mythinks. Something as simple as black paint can absorb both visible and infrared. Once I see the first gross use of hype, I have a tendency to dismiss the rest of the claims.

Then you didn't read the article..

This is a hybrid system, heating up both a transfer oil for Solar Heat, plus a layer of PV on the back of the tube for electrical generation. Another variation on an approach many are trying in order to use the same Array Area for multiple inputs..

Whether it's durable, manufacturable, financable and affordable (and lucky) are, as usual, the next set of tests that must be passed.

Here's another description of the research:
First Polymer Solar-Thermal Device Heats Home, Saves Money.

And, HERE's the Abstract for the research paper. Notice this comment from the abstract:

The optimal inverted tandem device achieves a maximum power conversion efficiency of 2.89%...

I wouldn't get very excited about this device just yet...

E. Swanson

Here is what Dr. Chris Busby, the Scientific Secretary of the European Committee on Radiation Risk, has to say about radiation risk from the Fukushima plant:

"the people in Tokyo and he now predicts based on his calculations that 800,000 people out of about 8 million who live within 200 kilometers of the plant will contract cancer if they are not moved out."


Well... IMHO, Busby is worthy of attention, although he tends to get ahead of the science and has a tendency to alarmism--not the most inappropriate bias under the circumstances. Kaku is a very smart guy, but he's become a "celebrity physicist-popularizer" -- he'd love to have inherited Sagan's mantle -- and he's a technophile cornucopian at heart. He probably figured out a while ago that the sarcophagus option isn't realistic any time soon, but he isn't clearly backing away from it.

The real kiss of death for these guys may be that Alex Jones is promoting them heavily. It's hard to get serious people to take you seriously when closely associated with that wackiness.

OTOH, Arnie Gundersen continues his understated, sensible commentary and questioning. New video on Monday:


Especially interesting is his exploration of TEPCO's explanation of how all that 131I "fell from the sky" into the unit 4 SFP.

So now apparently the EU is sending in troops into Libya. Something like 1000 troops. I have missed this somehow:

EU awaits UN approval for deployment of ground troops

And as a follow-up on my first reply in this thread, about Iran, I'm getting confirmation from the Guardian.
Twelve have died since Friday alone.

Iranian Sunni protesters killed in clashes with security forces

There hasn't been that much coverage on the sabotage of oil infrastructure, but I'll try to get updates on that one too.

Great! If they're really going to help the people of Libya and bring that oil back online then half measures isn't going to help. In fact from the looks of what is happening to the people of Tripoli, it will only make matters worse. Europe has a big stake in this because of all the refugees now entering Italy and France. Yesterday France stopped a train with Libyan refugees.

A thousand soldiers is more dangerous (to the allies) because their on the ground instead of flying by, but it will probably cost far less than missles from cruisers and jets, and be much more effective at taking back and keeping territory. Pincer in on Qaddaffi and remove him and his sons.

If you want your blood pressure to rise, spend some time listening to this talk by Matt Ridley at the Long Now foundation: http://longnow.org/seminars/02011/mar/22/deep-optimism/

This is a long and interesting talk even though I thoroughly disagree with pretty much everything he says:

  • Shale gas will save us
  • No peak oil
  • Climate change is not really a big deal
  • energy intensive agriculture is fully sustainable

He is apparently an editor at the Economist magazine.

In 2006, the Economist Magazine asserted that Saudi Arabia could produce at their current rate for about 70 years, without finding another drop of oil. No discussion of what would happen to net oil exports given the ongoing increase in Saudi consumption, but in any case Saudi Arabia is now in the sixth year of production and net exports below their 2005 annual rate.

And then there was the 1999 cover story that discussed the probable arrival of oil prices in the $5 range for the indefinite future. From 1998 to 2008, US annual crude oil prices rose at 20%/year.

So, given their track record, I would take the opposite position.

the Economist Magazine asserted that Saudi Arabia could produce at their current rate for about 70 years, without finding another drop of oil.

That's a simplistic but common misinterpretation of the Reserves-to-Production ratio. What it really means is that Saudi Arabia will be able to produce oil at an exponentially declining rate for at least another 150 years. Of course, somewhere in the early decades of that time frame they will cease to be an exporter because domestic consumption will exceed their production.

The same thing happened to the US, which at one time was the world's biggest oil exporter rather than the world's biggest oil importer. Those days are long gone.

I don't know where Saudi Arabia would be able to import its oil from. Probably nowhere because they won't have anything to export to pay for it.

I don't know where Saudi Arabia would be able to import its oil from. Probably nowhere because they won't have anything to export to pay for it.

It reminds me of a co-worker who had a rental house. One month, the renter was late paying his rent. My co-worker called the renter demanding payment. The renter said he was short on funds. The renter promised to pay the $300 rent if my co-worker would first loan him $500. After the call, "steam" came out of my co-worker's ears.

While I enjoy his science writing, he is a Techo Utopian.
I attended a Long Now event last Wed, that featured Morris, who has a different view.


OPEC Nations Face a Balancing Act

LONDON—OPEC nations, after boosting spending to quell unrest, now need higher annual oil prices—estimated at around $95 per barrel in some cases—to make their budgets work, analysts say.

Oh ho ho! Will isn't that just a fine howdy-do!

I almost spit my coffee trying to imagine hearing you saying that.

Hahaha. Something like this: "What ho! 'Tisn't this a fuh-hine howiddy-do-dah! Mmm, what?"

That's very interesting.

And if the research on the global economy and the oil price(about $85 dollars is the limit of what the economy can take before it slowly, and subtly, starts to lose steam) is accurate, then we're now officially in a cycle of recessions(and eventually depressions).

Because if the oil price falls below that, the populations will revolt - yet again.
And they might even revolt anyway.

It appears to me we're now entering a perfect storm coming from all sides, aimed squarely at the center of the world economy.

Have you ever seen a kid bounce one of those super bouncy balls in a small room? The thing bits all the hard walls and you can't keep you eyes on it, because it changes directions so fast.

Well, this new piece of info. adds a hard wall to the room. The world economy is the super ball. Economy goes good, ball hits the ceiling (peak oil output), economy drops, ball hits the floor, etc.

Edit: the traders, in New York, are trying to keep there eyes on the ball.

What are the chances that it will go back to being that low (bar a major economic rupture) anyway?
Even after all the intended soporifics of the last few days price hasn't exactly fallen off of a cliff.

Chernobyl new radiation shield funding fall short

An international conference called to raise funds for new safety measures at the site of the 1986 Chernobyl disaster has fallen 25% short of its goal.

Secret memos expose link between oil firms and invasion of Iraq:


I don't think this story has legs right now, because oil price is too high. I think in times like this, we refer back to that famous line at the end of that 1975 movie "Three Days of the Condor", where he said, "They're not going to ask us how, or why, they're just going to want us to get it".

I suppose that this information makes Bush 43 a war criminal, since he was complicit in the campaign to build public opinion leading up to the invasion. But, didn't we already know that???

E. Swanson

For years I've argued that the number one takeaway from Cheney's supersecret energy task force meetings was likely that a Saddam-free Iraq would be one of the world's great hopes for expanding oil production.

It took more than seven years for the Bush-Cheney strategy to really bear fruit, but it is at last beginning to pay off. Iraq is our sixth largest oil supplier behind Canada, Mexico, Saudi Arabia, Nigeria and Venezuela. If Iraq's dreams of expansion come true, it could within ten years or so supplant Saudi Arabia as our third biggest source of imports (or second if Mexico's exports continue to decline).

Of course, we may never recoup the cost of the war in terms of the value of oil imports, but if the goal was to keep foreign oil flowing in the direction of the U.S., even at a net long term loss, the Iraq war was a resounding, far-reaching victory of immense significance.

If Mr. Cheney's heart weren't hooked to that machine, I'm sure it would flutter in pride to hear you say so.

Did anyone else hear this program yesterday on NPR:

Era of 'tough oil' won't deter drillers

This is the story of I told you so. Time after time, West Texas oil drillers have proved the skeptics wrong, proved the oil companies right.

I did, and had to turn it off--
I was a bit frazzled, and just couldn't put up with it.

I heard it last night and was quietly fuming, but didn't look it up to make a comment. Thanks for bringing it up here, Debbie.

The feedback on it is actually a cause for hope, no? They didn't get much slack from what I saw, maybe the word is getting out!

(I've got C-span running, with Rumsfeld blurbing about what they wouldn't tell the press 10 years ago.. It just had me thinking that with his Voice, I hope that Christian Slater will play him in the After-School-Special someday)


I've seen some "tough oil" infrastructure recently, while doing some fieldwork. North of Fillmore CA, up near the Sespe Condor Sanctuary is the Sespe Oil Field. This is steep country, with steep, unstable slopes. Oil wells are located all over the place, especially where they can muster a flat spot. There is a new and apparently big well somewhere up there, as well as all this other infrastructure that requires several workers to frequently go up and down this really steep and unstable road carved into the cliffs of soft and not so soft sediments. 1/2 an inch of rain and that road suffers. Yet they keep it open at all costs. I wouldn't want to drive in one of those tankers that frequent this road, for fear it would collapse under me.

Most amazing are all these pipelines draped over the hills, some of them labeled with chalk as "high pressure gas". These go up and down steep hills with 50-60% slopes with elevation gains and drops of more than 1000' in places. All of that pipe is sitting on the surface, and held down only by gravity it appears. It all had to be carried there and welded in place. One geologist told me that after a fire, the area looks like its covered in cobwebs - which are these pipes. There were several older ones rusting in place and the ones in use were rusting as well.

This is similar to logging in the Pacific Northwest. Once all the forests in the flatter areas were logged, they started going after the stuff on the steep slopes. But then, the Sespe Oil Field is one of the older ones in California. It must have been a really good one full of gushers to justify working in such difficult terrain.

Now you are bringing back too many memories from my Geology field trips to the Sespe. I'll never forget the Cozy Dell Shale and some great fossil finds.

Were any of them fossil sand dollars? If so, I am very interested.

Huge clams maybe a foot long. It's been too long now to remember their proper name. It was back before the Condors were removed for captive breeding (yes, I know they have released some back to the "wild."

We were working up above Fillmore last May, and saw 4 on the wing. Better country for condors, less so for oil wells!

They just need to scare some dinosaurs into a hole, cover it will dirt, and then stomp real hard on the dirt to make it form oil. Should be easy.

Talk is cheap. Look at the charts: http://upload.wikimedia.org/wikipedia/commons/2/2b/Texas_Oil_Production_...

Obviously Texas oil production is long past its peak and its not ever going back, but I could not quite confirm the numbers in your chart. I looked at the eia.doe.gov website and I could not find a month in 2005 or earlier that dropped below 1 million barrels per day. Also, your plot is somewhat dated. Since 2005 they have held production flat and actually started increasing it thanks partly to those West Texas drillers.

That data is the same as here too: http://i4.photobucket.com/albums/y127/BrandonDS/Peak%20Oil/TexasOilProdu...

Or here at the eia

But probably off-shore is being including in your higher than 1 million bbl data tat you recall.

They have had a tiny uptick in recent years.

Argentine oil strike continues despite union deal

Argentine energy workers have rejected a deal by company and union officials to end a two-week pay strike halting oil and natural gas output in Santa Cruz province, an industry source said on Tuesday.

From April 14:

Argentina limits oil exports as labor conflict cuts output: source

Argentina is limiting crude oil exports as a two-week-old strike reduces production in the south of the country, raising concerns of crude shortages at domestic refineries, an industry source said Thursday.

The cut in production is 88,100 b/d, or most of Santa Cruz's output, the source said.

Argentina exported an average of 87,100 b/d, or 14% of total production, in February, according to the latest Energy Secretariat data.

I think the Saudis can mix up a blend to cover that.

For every day there is talk of supply gluts, there is another social event, political unrest, a pipeline attack, an oil terminal closed.

Something makes me think the former is actually a lot of BS.

I think the Saudis are using history as a guide. They know the last time our 'speculators' ran the price up to $147, there was a glut. So, it stands to reason that this summer's high price will cause a glut. They are just trying to get ahead of the curve. Why fill up all those offshore barges this time? /sarc

And don't forget Brazil importing an extra 200k bl/da of gasoline that is subing for the ethanol they are not making from sugar since Dec/10(high sugar price).

They have the option of selling their sugar for purposes other than for ethanol in Brazil? That could be a big game changer for ethanol production if food prices compete at higher prices.

On a tangent from the Saudi production discussion, I wonder how far the Baltic Dirty Tanker Index will fall early this summer. We are not seeing a total collapse in oil tanker rates and it depends on other factors besides just exports (like Black Dog pointed that they may ship oil from the west coast of Africa to China) but my guess is bankruptcy for shippers in the next couple of years. Maybe there will be investors who gobble up these bankrupt companies really cheap and keep the business going but I would think that would depend on credit availability.

Slight rally seen for Asia crude rates

The world’s benchmark Very Large Crude Carrier (VLCC) export route from the Middle East to Japan eased to a two-week low of W50.09 on Monday, from W54.53 last week because of a decline in Saudi Arabian cargoes and an oversupply of ships.

On an average earnings per day basis, rates on the same route tumbled to a six-month low of $2,546 a day, from $7,235 last week.

"We have been waiting for OPEC to increase production with oil so high, but this hasn’t happen and it looks unlikely at least for the short-term," said a Singapore-based shipbroker.

"We have been waiting for OPEC to increase production with oil so high, but this hasn’t happen and it looks unlikely at least for the short-term," said a Singapore-based shipbroker.

Oh, come on! Saudi Arabia will put its 2.5 million barrels of "excess capacity" in the shipping tanks, and then there will be more than enough business for the oil tankers. Won't there?

I don't think the shipping rates on hot air are that good, though.

The EIA's International Energy Statistics with production data for January 2011 came out late yesterday. There have been some major revisions in the 2010 data. I am still digesting it and will have a detailed report tomorrow morning.

Most of the revisions for C+C data were in the Saudi Arabia production. Every month except January and December was revised dramatically upward. June, July and August were all revised up 70,000 barrels per day and September was revised up 800,000 bp/d. The difference between the EIA's numbers and those of OPEC's Monthly Oil Market Report, for those four months, is about 1,100,000 barrels per day. But the EIA data is C+C and the OPEC numbers are crude only. However the average difference for 2008 and 2009 has been 177,000 barrels per day which would be about right if Saudi produced that much C+C per day. To have that figure jump to 1.1 million barrels per day is suspect.

2010 C+C yearly data was revised up by 366 bp/d and all liquids was revised up by an equal amount.

Ron P.

Yes, it looks like we have a new (annual) record for Crude and Condensate:


2005 - 73,712.432
2006 - 73,427.901
2007 - 72,985.625
2008 - 73,655.495
2009 - 72,258.602
2010 - 74,042.962

Is this a final defeat for the 2005 peak? Or should we wait a bit longer
(the numbers could be revised again of course)?

Anyone care to guess whether 2011 will be higher still?

That's an incredible number when you factor in the lost production from the GOM. Wow. A new peak.

well, EIA revisions being what they are, one has to expect this might not be the final word..

beyond that to the essential question, it's fair to look at a few other complicating factors.

- How much has Population risen since '05, in other words, how many Barrels/Human do the '05 and '10 numbers reflect?

- What was the EROEI or Lifting cost of the '05 vs the '10 barrels?

Ultimately, is isn't the date that stands to be defeated, but us. Debunking '05 might be a Pyhrric Victory, but in any case, it's a sideshow to the main event.

It doesn't really matter whether the EIA revises their numbers or not. The 300,000 barrels per day is well within the margin of error. And the revisions to OPEC was all in round numbers of 100,000 barrels. They are just making a wild ass guess, nothing more. So we will never really know which year was the highest. But it really doesn't matter. We are at peak right now and have been since 2005.

But something is about to break, or that is my opinion anyway. Before this year is out OPEC's 4 to 6 million barrels per day of spare capacity will be shown to be a myth along with OPEC's massive reserves. Saudi reduced production to what they feel they can hold for another year or so. They are hoping that they can hold this level until Manifa comes on line in 2013. They may make it but I don't think that is likely.

I am sure that all the peak oil folks out there are getting tired of watching nothing happen. It has been as exciting as watching paint dry. But all that is about to change. Actually it already has started to change. It started with Saudi Arabia announcing that they cut production in March by 833,000 barrels per day. And everyone wonders why. I know and you know why but the world is still in the dark. But not for long.

Ron P.

A couple of "interesting" points about those EIA figures.

1. The totals are given with spurious precision down to single barrels per day. This is clearly impossible given that the Saudi Arabia figures are rounded to 100,000 barrels per day, and there are revisions of ~300,000 barrels per day. It is bad practice in science to quote more significant figures than you are sure of, or to quote a single precise figure without a margin of error.

2. I'm curious why EIA have to guess here. Presumably Saudi exports are relatively easy to measure, and the legitimate uncertainty is about internal consumption. (Maybe EIA have been receiving submissions from Saudi to revise the production/internal consumption upwards, and they have no counter-information to resist those revisions?)

3. Despite the big upward revisions to Saudi numbers, Saudi peak year remains 2005. OPEC peak year remains 2008.


There is a reasonable chance that the net export peak year remains at 2005, but the annual export figures only go up to 2009 (so far).


Finally, some thoughts.

If the 2010 number stands unrevised, there is bound to be a further delay in convincing governments, opinion formers etc. that we are genuinely past peak. For instance, suppose crude oil production declines for the next four years up to 2014... is that the long-awaited fall off the plateau, or just a bump down, before the next bump up? A counter-argument would be "Well you peak oil guys claimed that peak was in 2005, and then five years later proved you wrong (again), so you could well be wrong this time as well. Let's wait and see". Another five years of confusion/delay. I'm also intrigued that the IEA claimed that 2006 was the peak crude year, and predicted in 2010 that it wouldn't be exceeded. Is someone trying to show them up?("Silly prediction, it's already exceeded!")

Secondly, I think in practice that we have multiple peaks, defined in different ways.
We can take peak year, quarter or month; we can look at peak production or exports; we can consider peak crude/C+C/all liquids/net energy; we can look at swing producers, or regions, or the world as a whole; we can take an absolute peak or a peak per capita. Probably a sensible way to think about the "plateau" is that it represents a rather dense cluster of such peaks. There is no reason why they should all happen at once, but on the other hand there are only so many points in the cluster...

There is a reasonable chance that the net export peak year remains at 2005, but the annual export figures only go up to 2009 (so far).

DrNick, the link you posted was for exports of refined products, not crude oil. Net crude exports, that is exports of all exporting nations minus their net crude imports, was in 2009 three million barrels per day below their 2005 level. There is not a reasonable chance that 2010 net exports will be up three million barrels per day over 2009 levels, it is a led pipe cinch that they will not.

The only question is: Will 2010 net exports be above or below 2009 net crude exports?

Ron P.

Sorry... this is the correct link:


Agree: it seems very unlikely that 2010 crude exports will exceed 2005 crude exports.
A reasonable chance that 2005 is the true peak year (for crude exports).

Absolute changes since last year.

About the same number of countries with losses as with gains but the gainers have larger gains.
Take the largest 6 of Saudi Arabia, China, Nigeria, Qatar, Russia, and Canada and you essentially equal the gains from last year. The rest balance out, which you can tell from the graph..

Does this lend credence to the Saudi claim that the world is fully supplied with oil or other's contention that we are awash in oil? Anyway, I think most commentators and people think there is plenty of oil and that high prices are due to speculation.

I don't think it is reasonable to blame speculation but of course what I think is irrelevant. There are growing calls for a "crackdown" on the speculators.

The question is, what can it hurt other than those who are making money on speculation? Further, would it hurt those who in the business who are actually hedging by locking in future oil prices?

Obama has now weighed in with the contention that speculation is a factor. This may be a political move but could lead to some controls.

There is a grain of truth to what KSA says, there may be little incremental demand for the type of oil they are making available. Refiners in southern Europe were optimized for oil from Libya, and basically they want to use similar oil and are bidding up the price of similar high quality oil.

In addition, upward pressure on all oil prices is being caused by the steep, and steepening, drop in overall OPEC exports.

However I think speculators will continue to be blamed, since that provides an convenient excuse for the negative effects of oil shortages to come.

Is this a final defeat for the 2005 peak?

05 wasn't a peak like everest, it was the beginning of an undulating production plateau. Small incremental pluses or minuses along the plateau are simply part of the undulation. Think of it like the surface of slightly wavy water.

If suddenly we start heading up 2-3 mbd, then a new upward trend of increasing production will be heralded. But don't hold your breath on that one.

Good points.

I always thought that focusing on particular days, months or even years was too narrow of a time width to get a statistically significant picture for a process that has been going on for over a century.

A better view of the whole would be a graph that smooths out to five year or so averages. That would show the shape of the plateau we have been on since about 2003.

I also suspect that accurate numbers getting harder and harder to come by. But perhaps that is just my paranoia?

Readers of TOD seem to have this fascination with short-term variations in production numbers. This hasn't really held my interest because the long term trend is definitely the key evidence; yet there are certain things you can do by parsing the data, similar to what I did with the chart above.

This scratches the surface with what you can do with statistics. As an aggregate the percentage increase since last year is 2.47% whereas the average percentage increase of the individual countries is only 1.28%. Can compare that number against recent trends and also can look at the variances, etc.

In other words, look at the numbers and don't try to lose information by filtering. There are elements of random walk to the noise but there are also real deterministic behaviors buried in the data.

Commenter WeekendPeak brought this issue up recently and it did get me thinking. Please read these two comments. http://www.theoildrum.com/node/7815/793899

I agree that long-term is a better bet, but the short-term can be quite interesting too - especially as they play a role in affecting the human psyche which can have repercussions in the market/economy.

It's not too much of a stretch to imagine a scenario where the mere official announcement that the Saudis no longer have any spare capacity could trigger another global recession, for example.

But first you have to figure out how real the data is. So in the short term you have to discern between:
1) Plain old counting noise and uncertainty
2) Faked numbers
3) Small biases, due to mixes of non-crude components
4) Real movements

Over a longer term, the first three disappear and we are left with the real trend. The problem is that people may not to wait.

Yes, agree. As someone else pointed out it's probably more of a hobby of people wanting to be able to say to themselves "I was watching when the trigger for the collapse began!"

To bring your theme of "heuristics" into it (as if it has ever left..),

I suspect that the attention to the daily data points (particularly BPD and $/B) has more to do with catching a sudden Southbound shift, as tenuous as our vulnerabilities have become. There does also seem to be a little subroutine we play at that can continually try to tie this news into the 'trend' as well, but I count that, and even my own daily reactions largely as the whitenoise of the surf on the rocks, and it is quickly gone. It doesn't hold much weight as we wait for real signs of a potential Tsunami. But being 'on watch' can make one a little oversensitive.

Speaking for myself, I am watching the daily stories in order to catch 'Coughing Canaries', if you will, as I'm convinced that we are in a fragile situation and that this thin ice is prone to fail quickly and disastrously, such as the few surviving folks who were standing on the Beaches of Fukushima could surely tell us.

There is a lot of noise in such a routine, but I think it is actually a sign that the general outlook here allows for the possibility that the graphs could quickly swing in any number of directions, so the short term prediction-making is going to have a concordant 'flutter' to it.

As tiring as it is, I don't find it useful to 'Time-weight' a daily event until a little time has passed. We're on high-seas near many shoals.. I don't think ALL our steering should be based simply on a compass-heading at this point.

Here's my guess:

2005 - 73,712.432
2006 - 73,427.901
2007 - 72,985.625
2008 - 73,655.495
2009 - 72,258.602
2010 - 74,042.962
2011 - 73,843.712

Yes, a little birdie in Saudi Land, gave me that exact number... you can take it to the bank.

Methinks it looks like an undulating plateau. I would be shocked to see something higher than say 75,000.000

Well since EIA are willing to guess 5 or 6 significant figures (see above), you might
as well do so too ;-)

Welcome to the era of 'extreme energy'

Fort McKay, Alberta (CNN) -- Celina Harpe was 7 when her grandfather made a prediction that would forever change her life.

"I won't see it, I'm too old now, but it's going to be really bad," she recalls him saying on a warm summer night after returning from a moose hunt. The two were standing on a hill that overlooks the birch-and-spruce-lined river here in far northwest Canada.

"You see these plants and this water we've got? That's going to be all polluted. You're going to have to buy water -- and water is life.

"Mother Earth is going to be all torn up."

Wow! Great article. Also a good counterpoint to the "Era of 'tough oil' won't deter drillers" article.

Yes, we can get at that "tough oil", but at what cost?


I guess $106 was the floor.

These little up and down ticks are media pumps so that Goldman Sachs can take 1% or 2%. LOL

Protests at Indian Nuclear Plant Site..


Chief of police in the town, 60km (38 miles) north of the site of the planned plant at Jaitapur, said at least 20 people had been injured.

Protesters attacked and damaged a hospital to prevent a government autopsy on the activist killed on Monday. Protesters think the autopsy will not be impartial.

Police wielding wooden sticks tried to disperse the protesters who set fire to tyres to block a road to the site of the planned 9,900 megawatt (MW) plant, television pictures showed.

Amid Violence, Syria Lifts 50-Year State of Emergency

Blood in the water.
Once the government blinks, and gives the protesters something, they know they are getting somewhere. They won't stop.

But, they didn't have much oil left anyway, so...

AJE joining the speculation fray: The scam behind the rise in oil, food prices

Gas at the pump is up, and going higher. Food prices are following...

...Why is it happening? Why all the volatility? Is oil getting scarcer, leading to price increases? Is the cost of food, similarly, a reflection of naturally increasing commodity prices?

While it's true that natural disasters and droughts play some role in this unchecked price inflation, it also seems apparent that something else is attracting increasing attention, even if most of our media fails to explore what is a political time bomb, while most political leaders shrug their shoulder and ignore it...

...Critics say the problem is that government and media outlets alike refuse to recognise what's really going on: unchecked speculation!

Not everyone buys into this suspicion. In fact, it is one of more intense subjects of debate in economics.

Maybe we should just let Greece borrow money from our fed at 0.25% and buy oil futures. When they make 10% profit, they can pay it back and fix their budget at the same time. This will allow us to help without bothering the IMF. /sarc

You're obviously wasted doing whatever it is you do - get yourself involved at the US Treasury Dept. quick sharp!

Energy-saving targets getting tougher to meet

Nova Scotia is unlikely to meet its energy reduction targets next year without including savings from two private industry projects completed in 2010.

Efficiency Nova Scotia, the corporation tasked with promoting energy conservation in the province, aims to save 235 million kilowatt hours in 2012. But the interim CEO admitted Monday that 80 million kWh of its projected savings will come from projects completed last year by NewPage Port Hawkesbury Corp. and Bowater Mersey Paper Co.


Efficiency Nova Scotia’s energy reduction goal for 2013 is 300 million kWh.

See: http://thechronicleherald.ca/NovaScotia/1239119.html

There's been a concerted effort to drive down programme costs and that has certainly made our work more challenging. It use to be that 80 per cent of our lighting retrofits were paid by Nova Scotia Power and the remaining 20 per cent could be repaid over twenty-four months, interest free, on the client's NSP account. That has since changed whereby Efficiency Nova Scotia now offers a sliding scale incentive, ranging from 50 to 80 per cent depending upon the cost per kWh saved -- on a $20,000.00 job, that means the client can expect to pay as much as $10,000.00 out of their own pocket whereas, previously, it would be $4,000.00. With a less generous incentive, the number of potential retrofits is likely to fall, although it's too early to determine to what degree.

To meet our 2012 target, we need to secure 940,000 kWh in new energy savings each and every workday. Next year, that jumps to 1,200,000 kWh per workday. Guess I can forget lunch !

and on a related note:

Province orders $100-million switch to LED street lights

Nova Scotia’s street lights are going green.

Premier Darrell Dexter announced planned legislation Monday that would require all the province’s street lights to be converted from high-pressure sodium bulbs to more energy-efficient technology within five years.


Dexter estimated it would cost about $100 million to change over about 120,000 street lights. Nova Scotia Power owns about 90 per cent of the province’s street lights, with municipalities owning the rest.

Alan Richardson, vice-president of integrated customer service for Nova Scotia Power, said the province’s current street lights use enough electricity to power 10,000 homes. The new lights should cut consumption in half and require less maintenance, saving Nova Scotia Power $18 million a year, he said.

"This is the type of investment that saves money," Richardson said.

The utility also predicts the new lights would cut annual greenhouse gas emissions by 30,000 tonnes and mercury production by 500 grams.

See: http://thechronicleherald.ca/NovaScotia/1239117.html


Incidentally, for those interested in LED bulbs, the new Philips bulbs from Home Depot are worth trying.

Pros: Good light output (800 lumens), dimmable, decent efficiency (12.5W), softer than most LEDs, broad angle, small size (fits anywhere a normal bulb would fit).

Cons: A little on the yellow side for my taste, barely noticeable turn-on delay, modest CRI (80).

Neither here nor there: Price (about $40 -- cheap compared to ones I've liked in the past; expensive by any normal standard).

Overall, this is a pretty good compromise bulb, and the first of the medium-base replacement bulb form factor that I've deemed "acceptable". It has at least as good output, better beam pattern, and better color than the Evolux family that was my previous overall leader (only complaints with those is they include a fan, which is sometimes audible and will surely fail prematurely, and the size is too large for some fixtures).

Philips appears to have utilized a phosphor coating to shift colors to the yellow (the bulb is a funky yellow color when turned off), and the result is to me a too-yellow soft white that still has tinges of harsh blue, but not much. I'd be interested to see a spectroscope of the light output, as it seems to be a good "average" but weighted toward the edges (which is probably why the CRI isn't too great).

Still, this is the closest thing to a "bulb for the masses", and if the price comes down some more the moderate 25K hour life will make it a reasonable investment even those with shorter horizons. I think we are maybe 2 years from a viable mass-market in LED bulbs.

I am also looking to get the most recent Tess bulbs (the makers of the Evolux) to see if their 12.5W no-fan bulb is as good as the Philips.

Overall leader in my book remains the Cree LR family, though those are special-purpose for can lights only. Still waiting for a good-looking CRI > 90 LED bulb that is 'vanity ready' to satisfy my female contingent.

Hi Paleo,

I recently purchased a number of these Philips 12.5-watt AmbientLED A19s for our home and I'm greatly impressed with their performance. As noted in another Drumbeat, this is the first non-incandescent/non-halogen lamp that I can't distinguish from the real McCoy. Prior to this, I had tried several good quality CFLs, disliked them all and ultimately settled on the Philips Halogená Energy Saver T60 (40-watts, 800 lumens and 3,000 hrs rated life). Now, I use this 12.5-watt LED exclusively.

This is a picture of the Philips AmbientLED A19 in my den: http://i362.photobucket.com/albums/oo69/HereinHalifax/PhilipsA19Demo.jpg and http://i362.photobucket.com/albums/oo69/HereinHalifax/PhilipsA19.jpg

I also use the Philips 3-watt EnduraLED BA11 candle in all fixtures that take a candelabra base lamp: http://i362.photobucket.com/albums/oo69/HereinHalifax/PhilipsBA11.jpg and http://i362.photobucket.com/albums/oo69/HereinHalifax/BA11Candle.jpg

In the front foyer I use this same BA11 lamp as well as a Philips 7-watt EnduraLED MR16: http://i362.photobucket.com/albums/oo69/HereinHalifax/PhilipsEnduraLEDBA...


Dang, you've got me at it. I was waiting in the local council today and looked at the lights. Lots of pairs of long fat fluorescent tubes. Started thinking, what would HiH put in here, light on desks is lousy, how much power is being used, mount the lights 90 degrees to the existing, how much power could be saved, how much better could the light be, how much air conditioning would it save, this is just one room.............................


Obama blames speculators for oil price rises

President Barack Obama has blamed speculators for the rise in crude oil prices above $125 a barrel, saying on Tuesday that the oil market was well supplied.

The comments put Washington in line with the view held by Saudi Arabia, the world’s top oil producer, and aligned with France, which is pushing commodities regulation as a major topic of its presidency this year of the G20 group of leading economies.



I can't wait till they force the price down, by getting those 'speculators' out of the picture. As soon as the price drops, I'm going to buy as much as I can carry. Will that be in-stock, or on back-order?

You shouldn't be surprised.
The guy did the same thing during his campaign over and over again, just like McCain.

Bush actually admitted that they didn't have much left in an interview after going there down there personally - twice - to meet and urge the King to produce more, which they of course failed and then claimed, just like now, that the fault lay at the door of the Speculators, and besides, the market is either well/oversupplied and we're seeing demand destruction so we don't need to increase production.

They just forgot to mention that the reason we're seeing demand destruction is the Saudi inability to amend high oil prices by using their supposed and by now almost mythological 'spare capacity' - a total chimera - because that's what a spare capacity is for: using it when the oil prices get really high.

It happened in 2008 and it happened in 2011.
And Obama followed the line back when he was a candidate and he is just repeating his old position now.
Bush actually admitted, rarely, to be sure, but still did admit to the fact that they can't put out more.

They just forgot to mention that the reason we're seeing demand destruction is the Saudi inability to amend high oil prices by using their supposed and by now almost mythological 'spare capacity' - a total chimera - because that's what a spare capacity is for: using it when the oil prices get really high.

Oh, so true Leiten. I find it fascinating that MSM continues to fall prey to Saudi manipulations. Must be too difficult to look at the other possibility, the abyss.

Shockwaves from Saudi’s crude statistics

Saudi Arabia is seriously trying to talk down the oil market. But in doing so, it is setting the stage for another oil price rally. Ali Naimi, the kingdom’s oil minister, has revealed that Saudi Arabia sharply reduced sharply its oil production last month – by a hefty 800,000 barrels a day – because of lack of demand.


The International Energy Agency, the western countries’ oil watchdog, estimated Saudi Arabia oil production at 8.9m b/d in March. Now, the Paris-based agency will have to revise its figures down and show that Riyadh, at least in March, did not replace the loss of Libyan oil. Opec total production could have dropped then to just 28.6m b/d, a huge decline from more than 30.1m b/d in January and the lowest level since April 2009. The IEA estimates that Opec needed to supply an average of 29.5m b/d during the first quarter to balance the market and avoid a drop in inventories.

If Opec oil production is in reality as low as the Saudi data suggest, there are two possible explanations.

Edited to remove excessive quoting.

If it's behind a paywall for you, you can read the article through Google - just search on the title and it will pop up.

Fair comment - I did not realize it could be reached without subscription - people can read it themselves then if they are interested (and save me the posting).

Fairly good article, as most major media articles can't even get the basic facts straight.

However they stick to what has become the party line of demand destruction from Japan.

After Japan experienced its disasters, it did import less oil but imported many more oil products - especially naptha (Naphtha is used primarily as feedstock for producing high octane gasoline and is also similar to gasoline). In fact, as best as I can determine from the many extra shipments Japan received, the increase in oil products was about equal - perhaps more - than the drop in oil imports. Or in other words, it was using the same amount of oil as before.

Demand from China is growing at a tremendous pace, although it is possible some of that is going into storage.

So if world demand is going up and supply is going down, the only shockwave we have to worry about is the one from the coming 'superspike' in oil prices.

Fairly good article, as most major media articles can't even get the basic facts straight.

Charles, the FT article and your comment above prompted me to write about the subject on my blog. In the process of researching my blog post I think I caught Reuters massaging the Saudi oil news on March 29th - March 30th by deleting a pessimistic story and morphing it into a completely different optimistic story.

I would appreciate it if experienced TOD'ers can read my post titled FT Admits Saudi Arabia Did Not Replace Lost Libyan Output; Reuters Replaces Pessimistic Saudi Oil Story With An Optimistic Story and comment right here in this thread.

Nice to know there are only "two possible explanations"

If Opec oil production is in reality as low as the Saudi data suggest, there are two possible explanations.

Either oil consumption is collapsing in a similar way to late 2008...or Saudi Arabia, the world’s largest producer, is making a serious mistake and over-tightening the market...

Either oil consumption is collapsing in a similar way to late 2008...or Saudi Arabia, the world’s largest producer, is making a serious mistake and over-tightening the market...

They never even thought about a third possibility staring them right in the face ... hint: peak Saudi (+ Kuwaity and Iranian) production is now in the rear view mirror.

By the way, there's increasing reports, among other places in the Guardian, that the Greeks might default(the favoured euphemism is 'restructuring') and some German paymasters refuse to rule it out, notably the finance minster of Germany although there is a counter-campaign in the media by the Greeks themselves and some ECB allies.

I just read in the Telegraph that the interestrates are higher now for Greece than it even was during the eve of the big bailout, and that is now costs them more in interest just to get a 3 month loan than it does for Germany to get a 30 year loan.

And now with the election of the new nationalist party in Finland, which has opposed the Euro(which Finland uses as a currency) and is against the EU, as well as the rescue package to Portugal, it will be harder for Portugal to get off the hook easily.

Because to get through the rescue package, all countries in the Eurozone(those who have the Euro as a currency, not the entire EU zone) must agree. And the new nationalist party got almost 20 %, together with two other parties, are is now soon in a coalition.

So Finland has essentially veto rights and a new very Euroskeptical government in Finland is now very likely, brining further pressure on Portugal and giving it a much harsher regime.

Portugal's situation is intervowen with Spain's, because a lot of Spanish banks are deeply exposed to that country. So people think that Greece is an isolated phenomenon or that the only thing put at risk is the Euro, and cut off the Euro and leave Greece alone in it's spasms, and we'll be okay but that's not the case here.

If Greece defaulted, it would put huge stress on mainly French and German banks because that's where the exposure is, and it might even halt(partially at the very least) lending in parts of mainland Europe, or it might require new bailouts by intercontinental governments.


Info on Greece:

Furious Greeks Press For Country To Default On Debt

Fears Of Greece Debt Default Hits Financial Markets

Will Greece Default? FAQ

All are written within the last four days.

It certainly seems on the cards, and it probably won't be just Greece either.

There was a good article on it on BBC Mundo. Apologies, I can't find the equivalent English version, but Google Translate works pretty well with Spanish.

Anyway, Peter Spencer, Ernst & Young's Chief Economic Adviser had this to say:

"You only have to look at what happened during the Latin American crisis to know that once the European banks are sufficiently strong enough to tolerate it, they are going to default. It's the only way out."

I don't understand why all these hopelessly indebted European countries don't just default every euro-penny that they owe and get it over with. That's what Iceland did and now they're much better off than Ireland for example. That's what I would do if I was in charge. Screw the banks and the creditors -- who needs them.

API shows oil supplies up 667,000 barrels

Crude-oil inventories rose 667,000 barrels in the week ended April 15, the American Petroleum Institute said late Tuesday.

Gasoline stockpiles declined 1.8 million barrels, the trade group said.

Stocks of distillates, which include heating oil and diesel, dropped 3.4 million barrels, the API said.

The free fall in oil product supplies continues. Some on TOD have commented that we can’t have a shortage of gasoline and diesel here in the US while the markets are ‘free’ and ‘open’. Well I don’t agree. If refineries can’t get the type of oil they need to optimize output and earn a profit, and if they just can’t keep them running near maximum capacity, then we are on a collision course with shortages later this year.

One reason diesel and gasoline supplies are not growing lately is that some refiners are having extended problems with ‘turnarounds’ - that is converting from winter blends to summer blends. Four important refineries, in the upper Midwest and the Northeast, have restarted only to be shut down again (although all expected to restart a second time in a few days).

More on this tomorrow after the EIA weekly figures are released.

Thanks Charles, I find your information insightful and valuable.

Final comment for tonight but an update on the Nigerian situation by AP via the Guardian:


It's probably worse than the initial reports, the scenes described are roads littered with burnt bodies on the sidelines after massacres.
16 people are already confirmed dead with many unconfirmed more, churches and mosques have been attacked and they even tried to storm and destroy the residence of the vice-president of the region.

The report is skeptical that the violence will calm, instead predicting it will continue unabated at the very least for a whole week until this Tuesday.

Nigera's my new watchword in the news for the coming week.

Ok so we all know robots are sent in to measure radiation and look around. I have a layman's understanding of the ionizing radiation that these radioactive substances emit, but what about the non-ionizing radiation? I have seen nuclear materials like a radium or tritium watch face 'glow'. We keep talking about all the heat. What about microwave, specifically would a small radar help look at the situtation given the high humidities. Infared? UV?

I would say the kind of thing that radioactive nuclei can give off are
1) electrons and positrons (beta rays - and + )both light weight and charged little penetration
2) protons some weight and charged some penetration
3) alpha particles (Helium nuclei) heavy and charged more penetration
4) neutrons some weight and neutral very penetrating
5) gamma rays (high energy photons) neutral very penetrating

All can ionize. The more penetrating the deeper the damage. Beta rays only reach the skin and no deeper.

Microwave/UV/infrared (low energy photons) do not enter the picture.

Are you sure? If it glows it must have visible light radiation. If it is hot it has heat radiation. What is neutron radiation? So if I took an AM radio near a nuclear source, no changes?

Neutron radiation is sometimes called "indirectly ionizing radiation" since so many of its interactions with matter eventually result in ionization. Neutron radiation consists of free neutrons. These neutrons may be emitted during either spontaneous or induced nuclear fission, nuclear fusion processes, or from any other nuclear reactions. It does not ionize atoms in the same way that charged particles such as protons and electrons do (exciting an electron), because neutrons have no charge. However, both slow and fast neutrons react with the atomic nuclei of many elements upon collision with nuclei, creating unstable isotopes and therefore inducing radioactivity in a previously non-radioactive material. This process is known as neutron activation.

The glow is from another mineral (zinc sulfide according to this source) included in the paint.

The radiation excites the zinc sulfide, which gives off visible light.

Pretty much the same principle as CRT's use with phosphorous and a beta beam.

This glowed with no paint.

True it is Hollywoood but it 'glowed blue'. Accurate?

Cerenkov glow from the emitted particles trying to exceed the speed of light in air. I'll let you look it up. ISTR it being reported from several criticality incidents.


New York Times confirms Fukushima Unit #2 has containment leak:

"The primary containment vessel at the No. 2 reactor is damaged and leaking gases, and the leak or leaks need to be plugged before it can be flooded [cooled by pumping water into it]... When two robots entered Reactor No. 2 on Monday, the steam inside was so dense that a robot mounted with a camera was unable to get a clear image of a radiation sensor carried by the other robot."

In the closed Fukushima thread on April 13, 2011, RootlessAgrarian asked:

Spinach, purchased 4/7/2011... Cs137 @ 1.3 Bq/kg
I would find it much more relevant if anyone could guesstimate the number of cells in my body that are likely to be irradiated -- for how many years -- if the cesium bioaccumulates for, say, 2 years of eating spinach tainted with cesium from Fukushima....

You can calculate the number of radioactive atoms using the following equation:

N = - D0 * h / ln(.5)
N = number of atoms
D0 = initial decay rate
h = half-life

For cesium-137, h = 30.3 years and D0 = 1.3 Bq / kg = 41 million decays / year / kg

N = 1.8 billion atoms of 137Cs / kg

If they all stay in the body, over a period of 30.4 years half of them (900 million) will decay emitting a beta particle with a kinetic energy of 1.175 MeV that will absorb in the body. If one eats a kilogram of this contaminated spinach every week for 2 years and all the radioactive atoms remain in the body, then one could expect about 94 billion decays over 3 decades. However, according to the EPA link below cesium-137 stays in the body for a vague "relatively short time" (relative to what?).

Cesium-137 decays into Barium-137 with a half-life of 2.6 minutes and emits a gamma photon.

EPA Facts about Cesium-137 (PDF warning)

After radioactive cesium is ingested, it is distributed fairly uniformly throughout the body's soft tissues. Slightly higher concentrations are found in muscle; slightly lower concentrations are found in bone and fat. Cesium-137 remains in the body for a relatively short time. It is eliminated more rapidly by infants and children than by adults.

EPA, has established a Maximum Contaminant Level (MCL) of 4 millirem per year for beta particle and photon radioactivity from man-made radionuclides in drinking water. Cesium-137 would be covered under this MCL. The average concentration of cesium-137 which is assumed to yield 4 millirem per year is 200 picocuries per liter (pCi/l).

So according the the U.S. EPA the maximum contaminant level for ingested cesium-137 is:

200 pCi / liter * 37 GBq/pCi = 7.4 Bq / liter of water

If the density of spinach is .8 kg / liter, then the MCL is about 9 Bq / kg. Not knowing the resident period of cesium-137 in the body, eating 7 kilograms of this contaminated spinach exceeds the MCL. I point out that the EPA's general MCL of 4 millirem / year is the total from all ingested radionuclides, but my calculation is only for cesium-137.

Since Japan and the European Union have played fast and loose with the exposure limits while the Fukushima fallout settles globally, be safe and do not eat these contaminated foods.