Drumbeat: April 25, 2011
Posted by Leanan on April 25, 2011 - 10:16am
Saudi uneasy with high oil price, worried about economy
SEOUL (Reuters) - Top oil exporter Saudi Arabia is unhappy with high oil prices and concerned about their impact on the global economy, the chief executive of state oil firm Aramco said on Tuesday.Oil prices fell on Tuesday in part after the remarks from Aramco's Khalid al-Falih. Brent crude fell 57 cents to $123.09 a barrel by 0153 GMT, just four dollars below a 2-1/2 year peak hit earlier in April at $127.02.
"We are not comfortable with oil prices where they are today... I am concerned about the impact it could have on the global economy," Falih told an industry gathering in South Korea.
Dollar peg linked to oil clout: Saudi CB
JEDDAH: Saudi Arabia will keep its currency peg to the US dollar as long as the OPEC member's economy is heavily reliant on oil but this may change eventually, its central bank governor said yesterday. The dollar has been sliding this year, touching a three-year low against a basket of currencies last week. Its weakness tends to boost inflation in the world's top oil exporter, where some 70 percent of imports are priced in dollars.Asked whether the dollar link to the Saudi riyal is forever, Central Bank Governor Muhammad Al-Jasser said: "Nothing is forever in the economy; if the circumstances change, for example if oil becomes 10 or 15 percent of the economy and we have an agriculture, industry and services-based economy ... then there must be a change in the outlook.
But as long as the economy is highly dependent on one product, which is oil ... then the dollar remains," he told a university event in the port city of Jeddah. Oil accounts for around half of the output of the biggest Arab economy. The kingdom, a key US ally, depends on exports of crude, which is priced in dollars, for around 85 percent of its government revenue.
U.S. may expand oversight of rig contractors
(Reuters) - The U.S. offshore drilling regulator may be able to expand oversight of rig contractors without congressional action, Interior Department official Michael Bromwich said on Monday.Interior's Bureau of Ocean Energy Management has been examining its options for regulating rig contractors after official reports on the BP oil spill blamed actions by BP's contractors, Transocean Ltd and Halliburton, for contributing to the accident.
Venezuelan windfall tax spares new output
Venezuelan Oil Minister Rafael Ramirez said that joint ventures between private companies and PDVSA would not pay a windfall tax on new output until they have recovered their investments.
India's Reliance admits gas output boost woes
MUMBAI: India's Reliance Industries said yesterday that boosting gas output was proving "more complex than envisaged" as it comes under pressure to raise offshore production. The country's largest private sector firm said it was pressing ahead with attempts to extract gas from the D6 deepwater block, its largest oil field, located off the Bay of Bengal in eastern India.
Chesapeake says replaces Penn. wellhead, gains control
NEW YORK (Reuters) - Chesapeake Energy said it replaced a damaged wellhead and gained control of a Pennsylvania natural gas well which last week suffered a blow out that sent drilling fluids spewing into the surrounding area.
Iran says it has detected second cyber attack
(Reuters) - Iran has been targeted by a second computer virus in a "cyber war" waged by its enemies, its commander of civil defense said on Monday.
Itochu-led consortium, Gazprom may build LNG plant
TOKYO (Reuters) - Trading house Itochu Corp said on Tuesday its Japanese joint venture has agreed to conduct a feasibility study with Russian gas giant Gazprom to build a liquefied natural gas plant in Vladivostok, in the far east of Russia.
Japan finmin: Tokyo Electric should keep stock listing
TOKYO (Reuters) - Tokyo Electric Power should keep its stock listing as part of a government rescue package to help the utility compensate residents and businesses surrounding its stricken nuclear power plant, Japan's finance minister said.
Ministry backs call to defer nuclear plants
The Energy Ministry has proposed Thailand delay plans to have its first two nuclear power plants in 2020 by three years after the International Atomic Energy Agency said the country was not ready for the projects.
Edison and federal regulators must stop the continuing deterioration of the safety culture at the nuclear power plant.
From the Gulf of Mexico to Fukushima
It is hard to tell for certain whether the threat posed by oil or that inherent in nuclear energy is greater and more dangerous. However, it is obvious that people find potential nuclear contamination much more frightening. True, the Deepwater Horizon accident caused panic and provoked wild speculation: even the anti-cyclone that brought the extraordinary heat wave to Russia and Europe was sometimes attributed to changing ocean tides triggered by the oil spill.
China to invest $391 bln in power grids from 2011-2015 -report
(Reuters) - The State Grid Corp of China plans to boost investments in the country's power grids to 2.55 trillion yuan ($390.63 billion) in the coming five-year plan, up 68 percent from the preceding period, the China Securities Journal reported on Tuesday.
Nation urged to hike ethanol production
BEIJING - China should boost its fuel ethanol industry as part of its efforts to reduce carbon emissions and oil dependency, said China National Cereals, Oils and Foodstuffs Corporation (COFCO), a State-owned food processor and manufacturer."Instead of posing a threat to China's food supply, fuel ethanol will be in the spotlight of international energy consumption, as oil price hikes continue and environmental protection awareness grows," Xinhua News Agency quoted Yue Guojun, assistant president of COFCO, as saying.
The report and the conference call send a clear message: the West is getting warmer, and while the effects vary depending on geography, the places that are feeling water stress now are going to feel more in the future because snow will melt faster, bringing a decline in summertime stream flows.And as Mr. Salazar observed on Monday, this reordering of natural water supplies “will mean significant potential dislocations to the economy and the environment.”
China risks cost of fracking to exploit shale gas
CHINA has begun trials of the controversial drilling technique known as fracking to exploit the world's largest reserves of shale gas, as it tries to cope with the energy demands of a fast-growing economy while reducing its dependence on coal.In the past two weeks, engineers have completed the country's first horizontal shale gas well in Sichuan and government officials have begun drafting a national strategy to identify 1000 billion cubic metres of exploitable resources by 2020.
Supporters say China has the potential to emulate the US, where extraction of shale gas has tripled the lifespan of gas reserves and offered a lower-carbon alternative to coal.
Chesapeake halts fracking till Penna. well sealed
(Reuters) - Chesapeake Energy will not resume hydraulic fracturing, or fracking, in Pennsylvania until a natural gas well which blew out last week is permanently sealed and inspected, a company spokesman said Monday.
Gazprom sees contract gas prices for Europe rising
MOSCOW (Reuters) - Top Russian gas firm Gazprom expects its gas prices for Europe in long-term contracts to average $500 per thousand cubic metres by December, above planned levels, its chief executive told reporters.Gas prices are linked to those of oil products and crude, which is trading above $120 per barrel, the highest level since 2008 due to political unrest in the Middle East and North Africa.
Ohio missing out on millions in natural gas taxes
For every barrel of oil and unit of natural gas pumped, Ohio gets pennies and dimes in tax revenues as neighboring states rake in nickels and dollars.With Utica Shale drilling expected to boom in Ohio in coming years, some experts want more changes to the state's tax policy before billions of dollars of oil and natural gas is tapped.
Kinder Canada says shuts Trans Mountain after leak found
(Reuters) - Kinder Morgan Canada said it shut down the 300,000 per day Trans Mountain Pipeline on Friday afternoon as a precautionary measure after a leak was found, company spokeswoman said on Monday.
Gas prices set new records, $6 possible
Gas prices across the country continue to set new records, with stations in some states starting to charge $5 per gallon. But some oil analysts say $6 gas could happen this summer, sparking an energy crisis that would be bad for the economy.
Pressured by higher gasoline prices
As consumers fret and complain about the ever-rising cost of gasoline, Jeff Rubin has a deeper concern.Canada could very well be heading into another economic downturn as the cost of oil and prices at the pump continue to surge to the highest levels Canadians have seen since the prelude to the 2008 recession, says the former CIBC World Markets chief economist and author of the national bestseller Why Your World Is About to Get a Whole Lot Smaller.
Oil-proof Canada’s transit systems with electricity
If oil prices are on the same trajectory as that of 2008, we can expect a peaking in mid-2011 followed by an economic recession and a steep fall in oil prices. This is Jeff Rubin’s view, set out here in Economy Lab on March 13. He argued that a price rise can’t be prevented by a boost in supply by Saudi Arabia -- or anyone else -- because the Saudis can’t do it.A contrary view is that of Donald Luskin writing in the Wall Street Journal on March 29. He claimed that Saudi Arabia will keep prices down by bridging any supply shortfalls. Even if it doesn’t, he continued, “the U.S. economy is today well-positioned to absorb an oil spike.” This, he suggested, is because (i) U.S oil consumption is still 9 per cent below its 2005 peak; (ii) oil is now being used more efficiently than in 2008; (iii) economies in early stages of recovery are less vulnerable to oil shocks; and (iv) there is now a collective will to increase domestic oil production in the U.S.
NIAGARA FALLS — A friend in northern Pennsylvania — he has a key tourism post in the Keystone State — offers a different perspective on the impact of high gas prices for the tourist season.He’s convinced the price at the pump will not force people to cancel or change their vacation plans, despite the inevitable fill-ups for $50 to $100, depending on the vehicle. After all, he contends, people will do the math and conclude it’s still within their budgets.
Tension continues in Santa Cruz; officials fear fuel shortage
Tension mounts as around 70 oil workers who answer to Santa Cruz Private Oil Workers' Union head, Héctor Segovia, have broken in and took over the Union’s facilities in Caleta Olivia in protest against the trustee appointed to the Union by the Labour Ministry.Luis Cárdenas, one of the suspended workers, told reporters that “workers will defend the union in any way possible, we will not use fire guns but if they forces us, we’ll use whatever we've got to defend our cause.”
Crisis worsens with power shortfall at 6000MW
ISLAMABAD: The inevitable has happened and a severe energy crisis involving shortages of oil, gas and electricity has hit the nation as authorities struggle to resolve the chronic circular debt problem.According to officials, electricity shortfall has exceeded 6,000MW, resulting in more than 12 hours of countrywide loadshedding while stocks of petroleum products are drying out in parts of Punjab, Azad Kashmir and Gilgit-Baltistan.
The ongoing ‘energy crisis’ is getting worse by the day. Prolonged load shedding and closure of CNG stations are just two obvious manifestations. The effect on industry is of great significance but not talked about quite as much. Only half the electricity needed by an average household is being supplied since electricity is available for only about ten or twelve hours in a day. About natural gas, CNG stations are being closed for days on end.
Nigerians groan as diesel price hits N160 per litre
A new Energy crisis may further worsen as indications have emerged that the price of diesel, on which the economy is heavily dependent, hit N160 per litre at the weekend. The pump price currently hovers around N150 and N160 in Lagos, while it is selling higher in other major towns and cities.According to investigation by the Nigerian Tribune, the upward swing in price, partly owes to the rising price of crude oil in the international market, failure of local refineries to meet production target and lack of clear cut policy by the Federal Government on the deregulation of the downstream sector.
The Philippines: Oil supply security is greater worry
It must be the summer heat that is finally upon us. How else can one explain the insanity of thinking about issuing an Executive Order that will freeze oil prices? While Justice Secretary Leila de Lima calls it an “extreme legal measure” to cushion the effects of steadily rising oil prices, issuing such an executive order will just make things worse. The oil companies will stop importing the products at a high market price if they will be forced to sell below acquisition cost.
Rising prices pummeling your profits? You've got options
I own a bakery and one of our unique selling points is that we deliver. But now gas is at $4 a gallon. Not only that, but my main supplier just raised prices for flour and sugar. I don’t see how I can keep my business going without raising my prices, but if I raise my prices, can I keep my business going? Help!
Dumbest Guy in the Room: Donald Trump’s Energy Policy
The plan has two principal parts. First, the U.S. military re-invade the Middle East and commandeer control of Iraq’s oil fields. As Trump sees it, the U.S. earned the right to annex Iraq’s abundant reserves of crude oil by investing about $1.5 trillion in ousting Saddam Hussein.
The regimes are rallying their forces. Is the tide turning against Arab freedom?
Is a counter-revolutionary tide beginning to favour the "strongmen" of the Arab world, whose regimes appeared a couple of months ago to be faltering under the impact of the Arab Awakening?From Libya to Bahrain and Syria to Yemen, leaders are clinging on to power despite intense pressure from pro-democracy protesters. And the counter-revolution has so far had one undoubted success: the Bahraini monarchy, backed by troops from Saudi Arabia and other Gulf states, has brutally but effectively crushed the protesters in the island kingdom. Pro-democracy leaders are in jail or have fled abroad. The majority Shia population is being terrorised by arbitrary arrests, torture, killings, disappearances, sackings, and the destruction of its mosques and religious places.
How Saudi Arabia views the Mid-East turmoil
During the past 70 years, Saudi Arabia has been our most vital and faithful friend in the Mid-East. With the recent "Arab Spring" in the region, it is important for us to understand how they assessed the events of the past and present.Today and during the next two weeks, we will attempt to present the Saudi perspective during 70 years of uncertainty and turmoil. In so doing, it will be necessary to review some historical context of the region.
UAE news agency says Gulf country's blogger, academic arrested for "opposing government."
ABU DHABI, United Arab Emirates - The state news agency in the United Arab Emirates says five activists, including a blogger and an academic, were detained for "opposing the government" in the oil-rich Gulf country.The WAM news agency says the activists are being questioned over "perpetrating acts that pose a threat to state security."
Japan's tsunami waves top historic heights
Tsunami waves topped 60 feet or more as they broke onshore following Japan’s earthquake, according to some of the first surveys measuring the impact along the afflicted nation’s entire coast. Some waves grew to more than 100 feet high, breaking historic records, as they squeezed between fingers of land surrounding port towns.
Atlanta couple buys first Wheego electric car
An Atlanta couple today become the first to buy a Wheego LiFe, a novel electric car that looks a lot like a Smart car.
Companies remove restaurants' food waste by composting it
Much has been made of the farm-to-table restaurant movement. But what happens to all the food that ends up uneaten at the table?In what you might call a burgeoning table-to-farm movement, a small but growing number of companies are being launched around the country to answer that question, to help restaurants deal with the ecologically and economically expensive problem of food waste by composting it.
Lester Brown: This will be the Arab world's next battle
Long after the political uprisings in the Middle East have subsided, many underlying challenges that are not now in the news will remain. Prominent among these are rapid population growth, spreading water shortages, and growing food insecurity.
Kunstler: The Banana Peel of Destiny
That was a cute move by President Obama last week, calling out the "oil speculators" with a memo to his Attorney General, Eric Holder. The President proved a few weeks ago, in his energy speech to the nation, that he doesn't understand how these resources are produced and traded. Consequently, the people he addressed remain clueless, but ticked off nonetheless. And the logic of politics now compels Mr. Obama to call out the dogs on... people who make money trading paper claims on oil?Funny, he didn't show any interest the past two-plus years in people who make money swindling taxpayers via booby-trapped Collateralized Debt Obligations and Credit Default Swaps. Maybe those things sound too abstruse to get excited about - but believe me, it was a heckuva lot more money. In fact, a case could be mounted by God's attorney general - if he has one - that Mr. Obama abetted a gigantic conspiracy in fraudulent financial paper which makes the oil speculators look like shoplifters in a Kentucky WalMart.
OPEC unlikely to change output in June - delegates
(Reuters) - OPEC members with spare capacity are ready to pump above agreed limits if there is a need, but the producer group is unlikely to formally change output targets at a meeting in June, Gulf delegates told Reuters on Monday.Top producer Saudi Arabia in February raised output above 9 million barrels per day (bpd), around a million bpd more than its OPEC output limit, in response to supply disruption in OPEC member Libya that drove oil prices to their highest since the record rally of 2008.
But in March, Saudi Arabia scaled back to around 8.3 million bpd, citing oversupply and weaker demand in part because of the earthquakes and nuclear catastrophe in Japan. Its April production figures are not yet public.
"Floating stocks are higher, and with weaker demand from Japan that led to the cut in Saudi production, as of now it's unlikely that quotas will be changed in June, but Saudi is still ready to supply the market," one Gulf delegate told Reuters.
Crude Oil Climbs a Fourth Day as Middle East Violence Escalates
Crude oil gained for a fourth day in New York, the longest rising streak since December, as escalating violence in the Middle East and Africa threatened to prolong supply disruptions.Futures advanced as much as 0.7 percent after Syrian security forces stormed the city of Daraa, killing at least five people, while unrest in Yemen showed no sign of ending. U.S. Senator John McCain said rebels in Libya need more assistance in the fight against Muammar Qaddafi’s forces. Saudi Arabia, holder of the world’s largest crude reserves, has no plans to raise production capacity, a Saudi oil official said.
Oil price of $120 is acceptable - Iraq oil min
(Reuters) - Iraqi Oil Minister Abdul-Kareem Luaibi said on Monday a world oil price of $120 a barrel is reasonable and acceptable.
Analyst says the cost of gas may have plateaued
NEW YORK — The average price for a gallon of gasoline rose 11.5 cents in the past two weeks, but the lift was smaller than in prior weeks, and price increases may be near an end, a widely followed industry analyst said Sunday.
Energy in America: EPA Rules Force Shell to Abandon Oil Drilling Plans
Shell Oil Company has announced it must scrap efforts to drill for oil this summer in the Arctic Ocean off the northern coast of Alaska. The decision comes following a ruling by the EPA’s Environmental Appeals Board to withhold critical air permits. The move has angered some in Congress and triggered a flurry of legislation aimed at stripping the EPA of its oil drilling oversight.
Drill baby drill won't lower gas prices
The problem is this: While increased oil and gas drilling in the United States may create good-paying jobs, reduce reliance on foreign oil and lower the trade deficit, it will have hardly any impact on gas and oil prices.That's because the amount of extra oil that could be produced from more drilling in this country is tiny compared to what the world consumes.
Plus, any extra oil the country did produce would likely be quickly offset by a cut in OPEC production.
CNPC Plans to Sell 13 Percent More Fuel as Refineries Run at Full Capacity
China National Petroleum Corp.’s fuel sales unit will sell 13 percent more fuel in the second quarter compared with a year earlier, CNPC said in its online newsletter today.
I am somewhat sceptical about ‘Peak Oil’, specifically the notion that there will be a supply-side peak in oil production in this current decade.Why am I a sceptic? I have four points:
Oiling wheels of energy industry
Noe van Hulst, the secretary general of the International Energy Forum (IEF), has the sometimes unenviable job of coaxing energy consumers and producers to talk to each other.It is not an easy task. There is much historic bad blood between the two camps, and mutual suspicion lingers. But as the head of a unique organisation promoting international co-operation to keep the world comfortably supplied with energy, Mr van Hulst believes his role is essential.
Exxon Said to Shut Thailand Refinery for Works to Reduce Sulfur Emissions
The shutdown will enable work to be completed and enable Exxon to produce low-sulfur fuels before Thailand’s switch to Euro-4 standards next year, which will limit allowable sulfur content in gasoline and diesel to 50 parts per million or less.
Iraq Postpones New Oil Bidding Round To January 2012 - Oil Minister
BAGHDAD -(Dow Jones)- Iraq will hold a fourth oil and gas licensing auction in January 2012, instead of the previously announced date of November this year, offering international companies some 12 exploration blocks located in various parts of Iraq, the country's oil minister said Monday.
Dubai chases goal of being an oil hub
Almost four years into Dubai's bid to become the oil trading centre of the Middle East and Asia, the Dubai Mercantile Exchange (DME) is hitting ever higher trading volumes but has yet to land a major oil producer to push it into the big league.
Syrian Army Storms Town Where Uprising Began
BEIRUT, Lebanon — The Syrian army sent tanks rolling into the restive southern city of Dara’a and carried out arrests in poor towns on the capital’s outskirts Monday in a sharp escalation of a crackdown on Syria’s five-week-old uprising, according to human rights activists and accounts posted on social networking sites. They said at least five people were killed in Dara’a and bodies were in the streets.
Syrian Crisis Tests the Mettle of Its Autocratic Ruler
CAIRO — For years, President Bashar al-Assad of Syria has nourished a reputation as a youthful and forward-looking leader in a region full of aging autocrats, a man who might yet reform the repressive police state he inherited from his father, given time and opportunity.His country’s worsening crisis — a bloody battle between the police and protesters that is being closely watched around the world — would seem to be a chance to stave off the violence with restraint or even bold reforms, a path his father never took. But as the death toll mounts, and the ominous disappearances of dissident figures increase, his time appears to be running out. International pressure is growing, and so is the outrage his violent crackdown has inspired.
Protests in Yemen Continue Unabated by Saleh's Agreement to Yield Power
Protests in Yemen showed no signs of ending after President Ali Abdullah Saleh and the opposition agreed to a Gulf Cooperation Council-brokered peace plan.
Taliban Help Hundreds Tunnel Out of Prison’s Political Wing
KANDAHAR, Afghanistan — The Taliban staged an audacious prison break here early Monday, freeing at least 476 political prisoners through a long tunnel, according to the warden, Gen. Ghulam Dastagir Mayar.
Reliance Industries' Profit Growth May Slow as Refining Margins to Narrow
Reliance Industries Ltd. (RIL), India’s biggest company by market value, may see profit growth slow as earnings from processing crude oil drop from a two-year high, investors said.
Indian Oil Corp's daily revenue loss on fuel sales 2.97 bln rupees
The government in June last year allowed state-run oil firms to fix the price of petrol but continued to control the prices of diesel, kerosene and cooking gas to protect the poor and try to tame inflation.
Indian Oil Corp may raise petrol prices at the earliest possible
NEW DELHI: State-owned Indian Oil Corp , the nation's largest oil firm, today hinted at an imminent hike in petrol prices, whose rates have not been revised since January in view of elections in states like West Bengal.
Indian Oil: May export fuels to Pakistan if ban goes
(Reuters) - Indian Oil Corp may consider fuel exports to Pakistan if an import ban by that country of Indian petroleum products is lifted, a company executive said on Monday.
Scientists say it’s taking too long to get millions in BP money to study oil spill’s impact
NEW ORLEANS — Scientists say it is taking far too long to dole out millions of dollars in BP funds for badly needed Gulf oil spill research, and it could be too late to assess the crude’s impact on pelicans, shrimp and other species by the time studies begin.The spring nesting and spawning season is a crucial time to get out and sample the reproduction rates, behavior and abundance of species, all factors that could be altered by last year’s massive spill. Yet no money has been made available for this year, and it could take months to determine which projects will be funded.
Crisis-hit Tokyo Electric to cut top exec pay by half
(Reuters) - Tokyo Electric Power said it would cut the total compensation of its president, chairman and other top executives by half as it grapples with a crisis at its Fukushima Daiichi nuclear plant.
Japan's Shikoku Elec extends reactor overhaul 2 weeks
(Reuters) - Japan's Shikoku Electric Power Co said it would extend a maintenance shutdown of a nuclear reactor by two weeks this summer after safety rules were tightened, requiring the south Japan utility to use more fossil fuels to meet peak summer demand.
Tsunami Speeds ‘Terminal Decline’ of Japan’s Fishing Industry
“Radiation is a grim reaper, you can’t see it and you can’t smell it,” said Ken Banwell who has worked as a fish importer in Tokyo for 22 years. “I would say it would have a profound effect on sales from those areas.”
Exxon output not affected by Dutch refinery fire
AMSTERDAM (Reuters) - A fire broke out at a refinery of oil major Exxon Mobil in the Dutch port city of Rotterdam on Monday, but no injuries were reported and production was not impacted, a company spokeswoman said.
LUKoil, Rosneft team up in first Russian shelf consortium
Russia's largest private oil company LUKoil and state-run oil mammoth Rosneft are to create the first consortium of local companies to develop maritime shelves, a verbatim report of a meeting between LUKoil President Vagit Alekperov and Prime Minister Vladimir Putin said on Monday."We are considering cooperation on shelves, including the Caspian, Azov, Black Seas and the Arctic shore," Alekperov said on Saturday.
And we, all of us on planet Earth, are living at a historical moment when the twin sisters of peak oil and climate change are ushering in a 21st century world of energy scarcity that will look quite different than the 20th century world of energy abundance.I believe that for us to survive and thrive in a new century, we must peaceably dismantle the United States of Empire, and create a new political and economic paradigm.
The UNtied States.
Renewable energy can be winner for WA
RENEWABLE energy provides opportunities to restructure and refurbish rural and regional towns, according to Sustainable Energy Association chief executive Ray Wills.
Xinjiang Goldwind Wins Two Orders for Wind Turbines in U.S. Market
Xinjiang Goldwind Science and Technology Co. said it won two orders for its wind turbines in the U.S., helping the Chinese manufacturer expand into the world’s second-biggest energy market.
Latin America Gets Its First Car Charging Station
Chile's president and other top officials presided over a ceremony last week in the smoggy capital of Santiago. The aim is to reduce carbon dioxide emissions with electric cars. Also last week, 10 charging stations opened in Hawaii — a state where gas prices are usually the highest in the country.
China Introduces Bio-Diesel Industrial Standards, Xinhua Says
China introduced its first bio- diesel industrial standard, the official Xinhua News Agency reported.
WASHINGTON--(BUSINESS WIRE)-- A new study based on revised Environmental Protection Agency (EPA) estimates of the greenhouse gas emissions (GHG) from natural gas finds that gas-fired electricity still produces 50 percent fewer emissions than does coal-fired generation. The reduction in GHG is even greater when compared to coal-fired plants built at least 30 years ago.
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Re: 'For us to survive and thrive in a new century, we must peaceably dismantle the United States of Empire'
The American Empire is the real problem we face. Because we've been the top dog for so long, we can't see that we won't be able to consume what oil is left in the ground. So it goes...
E. Swanson
I think the U.S. is being dismantled effectively with the South leading the way. More and more states are refusing to recognize the hegemony of the federal government through nullification of federal laws like the clean air act. Those states who refuse to recognize the ability of the federal government to enact and enforce laws for the overall health of the nation and the planet should be encouraged to secede. I don't think the civil war ever ended and is now being fought with a ferocity which will harm us all. Those who think it is ok to shut down the federal government or not raise the debt ceiling do not really see the need for one nation.
I know that wasn't the point but I feel that there are millions of Americans who don't really want to be Americans anymore. And, yeh, we should dismantle the empire regardless.
There's an eerie parallel between recent political events in the US and the pattern presented by Naomi Klein in her book, "The Shock Doctrine". She claims that the US involvement in the coup in Chile back in 1973 was part of a plan to institute the neoliberal economic system promoted by Milton Friedman at the University of Chicago. Friedman was following Friedrich Hayek's prognosis, as presented in his book, "The Road to Serfdom". These guys wanted absolute "Free Market" capitalism, without any government restraint. Funny thing, during last year's election cycle, the so-called "Tea Party" groups rallied around the scenario of Hayek's book and the book briefly became a best seller, thanks to people like Glen Beck and Dick Armey.
One might look at the trends in US politics since the election and see a similar effort to dismantle the US democracy, resulting in smaller countries something like the "Banana Republics" once seen in Central America. If the US safety net falls apart and the unemployment rate begins to climb out of sight, the military would be brought in to restore order. From that step, there would be only a small jump to the application of the methods of the Shock Doctrine to bring the new, smaller countries formed as the result of the breakup of of the Former USA under totalitarian control. Maybe it's a good thing that Peak Oil is upon us, since the growth based capitalist model requires ever increasing quantities of energy to function and if that is no longer possible, the whole Friedman capitalist utopia concept dies as well. Whatever happens, we appear to be in for some "interesting times"...
E. Swanson
I really believe it is likely that at some point people will throw up their hands and say, "Why not? It can't be any worse!" Unfortunately, most states in the US do not have the resources to be "stand alone" countries. By that I mean that they cannot produce the goods, services, foods and energy a society needs to function even at a low level.
The West Coast (California, Oregon and Washington) probably has the best chance. However, states like NM, AZ and NV will be dead meat; lepers that no one wants.
As far as the military taking control, geeze. They can't even deal with insurgents in the ME. They might take control of a few large cities but that's about it.
Todd
New Mexico produces significant amounts of natural gas that go west to California. Even more of California's natural gas is delivered by pipelines crossing Utah, Nevada, New Mexico, and Arizona. Nevada and Arizona control access to much of the Colorado River water on which Southern California depends, and to more than two billion kilowatt-hours of Hoover Dam electricity currently consumed in California. There are a number of plans in development to build electric transmission facilities to bring power generated as far away as Montana to Southern California. Oregon's Dept of Energy has recommended that the most cost-effective way to increase natural gas supplies in Oregon is by pipelines from the Rocky Mountain states.
The Rocky Mountain states are going to be somebody's source for energy and natural resources. Far better for California/Oregon/Washington to cut a deal and incorporate the interior West than to either (a) allow the Eastern states to "capture" those resources or (b) hope that those interior states collapse to a state where they can be treated as colonies.
And all those said states produce little if any agricultural products. All those states are land-locked and have no seaports. Sure CA consumes tons of energy but it produces more GDP than any other state in the Union.
Everyone would want CA in their mini Western "country" for these reasons. CA-NV-OR-WA-HI would be a natural state that would control the entire Western US. I see those partners functioning on similar political and economic levels. That WY coal would need to flow West through this new State. WY would beg for the Federal system to remain intact. LMAO.
I love California as much as anyone, but when push comes to shove, I'd rather have water than oil. They are also prone to natural disasters like earthquakes and wildfires.
Honestly, I don't think any section of the US is prepared to go it alone. Rick Perry may talk secession, but he was quick to call for federal aid when wildfires were burning across the state. A lot of peak oilers seem to like the southeast, because they have plentiful water and farmland, but I would not fit in culturally there. Kunstler picked the northeast, and there's a lot going for it...but also a relatively high population density that probably means it would be tough to be food and fuel sufficient. Heck, that might be true for the entire country, even the least populated areas. I've heard estimates as low as 1 million for a sustainable US population. At 300 million, we're a tad over.
CA does not manage water well since it sends so much to ag land and there are too many people in CA. One day I came to the conclusion there is no place that is immune to a crisis. PIck your poison I guess.
Rick Perry does throw around succession a lot. Hard to live and die by these words he has shown us -- when you come begging Uncle Sam for money. Mainly hot air comes out of the average politician.
In CA, they think they can power the State at current consumption levels with alternative energy. So there you go.
Lots of wishful thinking but facts are avoided -- they get in the way of electability.
What do you think of this?
Am I reading it wrong?
Is it nonsense and lies?
http://www.caiso.com/green/renewrpt/DailyRenewablesWatch.pdf
Says renewables made 1/6th of yesterdays's power in California.
Wind gusted up to 2Gw making 34GWh of production for the day.
Total demand was 521GWh.
Well the responsible position from a politician would be that we can have some renewables but our current consumption is too high to sustain without significant fossil fuel resources.
1/6th is great no doubt. I am personally excited about it.
But both political parties spout BS imho.
I think 1/6th is pretty astonishing.
Half of that is wind.
When I went to the site, I was prepared to see some tiny sliver of energy coming from renewables. From "Corrupt green power" as the right-wing radio would have it. But 1/6th is within the same order of magnitude. Not too hard to imagine expanding upon that installed base.
Dang, I have got to finish writing my book.
My thesis is not so much that a section of the US will make a decision to leave, defending its departure by force, but rather that by 25-50 years from now, East and West will have grown apart enough that an amicable separation will be seen as preferable by both sides. For a number of reasons, I think the "natural" dividing line is a bit west of 100° W. longitude.
"Sustainable" is such a difficult term to define. I think (and cheerfully admit that reasonable people can disagree) that the portion of the US west of that line has the energy and other resources to support its population of 70M at a relatively high technology level for a long time. That doesn't mean BAU; lots of things would have to change, but I think it's at least a realistic possibility. For the 230M people east of that line, and especially for the 80M people in the Boston-Washington corridor, I think things are likely to be much more difficult.
Interesting. Most forecasts for the "Untied States of America" predict the first divide will be red states vs. blue states.
I do think it's likely there will be some changes. As the author of The Untied States of America points out, countries are like marriages: they fall apart all the time.
There is no reason to break the United States up into smaller geographical units because the divisions in society are not really along geographic lines.
The actual divisions are on the basis of race, language, religion, political preferences, social attitudes, economic theory, etc. It would probably be better to break up the country into affinity groups that share similar characteristics and preferences. Lebanon is a good example where the Sunni, Shiite, Maronite, Druze, etc., communities each have specific rights and preferences.
Geographically based nation states are pretty obsolete.
You're saying it as if breaking up the nation is a conscious process. I don't think that's how it plays out.. I think much larger forces are already pushing things where they will, and we'll look up from our coffee one morning and Sherlock Holmes' IMPOSSIBLES will already have been eliminated, and the TRUTH will be staring us in our stunned faces.
This country still has a strong.. can I say 'Brand'? to it. The idea of belonging to the USA still overpowers the disaffection with various complaints from different quarters.. but those complaints aren't babies any more, either... It does seem to be an awfully large place to hold united for any period of time.
There has been a steady increase in the number of nation states and the number of members of the United Nations since WW II. The various colonial possessions gained independence. India broke up into India, Pakistan, and Bangladesh. The breakup of the Union of Soviet Socialist Republics was generally along the lines of the pre-existing Republics. Yugoslavia was a lot messier due to the geographic patterns of settlement by Serbs, Croats, Bosniaks, Albanians, and Macedonians. Czechs and Slovaks split peaceably, although the Moravians lost out and there was some Hungarian discontent.
The attempt to construct a "United States of Europe" is the only active attempt to merge nations, and it is not going particularly well.
So the historical trend would seem to be the multiplication of nation states, with a somewhat more coherent set of multinational institutions to mediate their interactions.
But, if you look at the remaining nations of >200,000,000 population, they are:
- China, which is 92% Han Chinese and unlikely to break up,
- India, which is ethnically diverse but sufficiently disorganized that breaking it up wouldn't matter much anyway (and it is in a neighborhood where Muslims have been hostile to the Hindu religion).
- United States, which is ethnically diverse, but not with any particular regional pattern,
- Indonesia, which has had significant ethnic and religious conflict in the past and is a relatively good candidate for breakup.
The most likely regional breakup in the US would be a new majority-Hispanic nation in the southwest states formerly part of Mexico.
I know people talk about the red/blue split, but I struggle to see a workable arrangement for that.
These problems have come up with other countries that have split.
The solutions range from just putting up with it to "ethnic cleansing."
Frightening as the prospect is, I believe "ethnic cleansing" this is the direction the U.S. is headed. Although my suspicion is that the worst will come before any actual dissolution of the union as the white majority sees its political control waning. The "anger" will be largely directed against Hispanics, with other ethnic groups getting caught up in the violence largely due to proximity. Some places (e.g., South and Central Fl, Southern CA, Southern Texas) are bound to become Hispanic dominated and may very well become the first places to secede, in part due to the "ethnic cleansing" outbreak.
I don't like it and would love to be proved wrong (especially since my children are brown-skinned), but the dynamics of the loss of power by an ethnic group can prove to be quite ugly.
Let's be clear.
Politicians are always the reason for ethnic cleansing whether Serbian in Bosnia and Kosovo, Rwandan or Nazi and they are almost always racists.
You should be more worried about power-mad politicians than ethnic groups.
And if you believe those demagogues don't be surprised if you wake up with blood on your hands.
When you can separate the power mad politician from the ethnic group, let me know.
Whether the "politician" is a true believer in racial or ethnic superiority or simply manipulating that bent in a group of followers for self-serving purposes, the result is the same. It is not the "politican-ness" of the demagogue that is the cause of their hatred. Indeed, that hatred (or at least the willingness to manipulate that hatred) was likely there long before they became a politician.
What we should be concerned about is living in a society where these types of hatred are actually the source of political power for "leaders" AND that political power can actually get them elected to positions of influence.
Disagree. The problem actually lies in people not liking the implications of a useful definition.
For our purposes, we might modify slightly: Maintaining society/civilization/community such that it can exist in a healthy ecological balance indefinitely.
But either definition means a vastly different future, so we pretend the definition is being hotly debated, thus is actually debatable. It's a happy little lie needed to keep bogeyman of Reality tucked safely under the bed.
FYI:
I would boil it down to the point you restrict to energy--sinks must be able to be turned into sources on a human time scale.
Certainly we are the farthest from this in our use of fossil and nuclear fuels, but it also applies to our use of fossil water, minerals, soils, fish, forests...nearly everything.
The rest just strike me as tactics and strategies for achieving this basic goal.
I do think going beyond sustainable (which could imply sustainable exploitation) to actually giving back---building the soil as you mention in your last point--is an even more worthy goal. But we are so very very far from even approaching anything remotely resembling even minimal sustainability that the whole thing seems something of a joke or a cheap political trick--slogans without substance.
But do keep up the good work, pride.
'Sustainable' population can be measured in various ways. I suppose your 1 million estimate was calculated with basically medieval technology at the disposal for people.
I do think most nations are overpopulated, but places like Egypt, Indonesia or Pakistan(not to mention India) will hit the mud much faster and will likely take away much of the population pressure the U.S. faces as less people means less consumption, even if it's true that a pakistani citizen consumes far less than an American one.
I personally think that once TSHTF, Peak Oil will not be our prime concern. I'm reading a lot of Darwin now and he basically states that one of the principal tenets of evolution is it is essentially derived under resource scarcity, as individuals adapt to their surroundings. And we know that tribalism happens because of the fact that groups have a higher rate of survival than everyone going at it alone. And because there has almost always been resource scarcity, there were needs to push other groups out of the fold and even kill them if they were deemed a threat to the survival of the group.
This has been observed in apes recently too, although this behaviour has been known for many animals, and we are not different. We have a name for it: racism.
What we will see once we enter a serious PO scenario is what has always been the pattern: ethnic warfare and secterian strife. Genocide is almost a given in poorer nations with overpopulation(Africa is a prime contender, as we've seen in Sudan and other places).
A deeply divided country like the U.S. will be much worse off in this regard than, say, fairly homogenous China, although I doubt that things will deteriorate to such an extent to see a horrendous thing like genocide in the U.S. I think, instead, that we will see somekind of informal partition of America along these lines, and possibly along political lines too(although I am more skeptical of this), but admittedely I am not an American so perhaps I am underestimaing the North-South divide in cultural and political terms.
I'm much more worried about the societal effects that will come with resource scarcity, and I don't tend to think of human beings as 'special', we share 99 % of our genes with apes and have the same ethnocentric/tribal patterns as almost all other apes too. The post-Peak will, in effect, be a return to life when it was 'nasty, brutish and short'. A return to normalcy of the human condition, in other words.
I laugh at hippies(I'm not including you, however) who think we will all get along and farm peacefully in our knitted clothes and in our self-made yurts without much to worry about other than just getting fed and staying healthy. That is not what human history, nor evolution, is about or has ever been and never will be. We're not a peaceful species.
Are not the actions of the Federal Reserve meant to apply food pressures on poorer Nations to get them to cull their populations at the benefits of the West?
I suscribe to your view. Humans are hairless apes. I see them every day.
You may be wrong about that. I wonder if we have simply made ourselves psychotic with how we live.
Peaceful Beginnings for large civilizations?
http://www.bbc.co.uk/science/horizon/2001/caral.shtml
Worth viewing.
And, a regenerative system would eliminate the need for competition - but would require general agreement on what a "good" quality of life is. But that is really more a matter of people figuring out regenerative system is the only real option. Long term, anything else leaves an untenable planet where any existing "civilization" wouldn't be worth having.
At the end of the day, it's a pragmatic question, not an ideological one.
To get the 1M number the natural envoironment would have to be very seiously degraded. I've heard estimates that in 1492, there were perhaps as many as 100m (admittedly more south of the border than north). But the carrying capacity was a lot greater than 1M (and at a lower overall level of technology) than medieval.
The estimate of the population in 1492 is highly debated. As is the question of how sustainable that population was. There's really no way to know at this point.
From the Georgia guidestones:
I have heard this number thrown around quite a bit in Malthusian circles but I have no idea who calculated it or how. If accurate, I would guess that we would have to dip quite a bit under that number in a correction (darwin's dog was very fond of stating of that).
There was a study of the nitrogen cycle done back in the '90s. It got a lot of attention because popular magazines like Scientific American picked it up. It estimated that the earth would support 2 billion humans without artificial sources of nitrogen. Maybe 1 billion if you wanted to be conservative.
Exactly what would an artificil source of nitrogen look like?
Ron P.
http://en.wikipedia.org/wiki/Haber_process
About a year ago, Scientific American ran an article that pointed to six crucial earth systems that were going off track. Of the three that were cited as having crossed crucial thresholds, the nitrogen cycle was by far the farthest out of whack. The main article is behind a paywall, but here's a take on the article:
http://www.worldpreservationfoundation.org/blog/news/three-of-the-thresh...
I thought about this 'Big Picture' population/Resources/pollution Sinks idea when my wife and I toured the ruins and hiked in Chaco Canyon NM yesterday...the ranger and the rather intelligent tourists had a good Q&A discussion about water, population, food, trading routes, ceremonial centers, etc of the peoples who frequented Canyon de Chelly, Mesa Verde, Chaco Canyon, Acoma, etc.
Made me wonder how our civilization will fare.
A fellow said to me on the way our of the Big House Bonita ruins "I can see how in a couple of decades no one but archeologists will be allowed in here" (to preserve the site)...I wanted to say to him "what makes you think anyone will be able to afford fuel to drive out here and visit it in a couple of decades?"
Agreed.
I am a Californian, but seriously have Oregon as my collapse target if I have to relocate due to water issues in California.
Reason? Oregon has natural rainfall that appears to make it a better self-sustaining food state than CA, in a collapse scenario.
That, and I have extended family in OR that I can hopefully collaborate with to live ....
You'll need to pay attention to where in Oregon. This map of annual precipitation in Oregon tells the tale: there's mountains that get hammered, and there's lots of semi-arid interior, but a relatively small part that's in the sweet spot for precip. According to the state's Dept of Agriculture, 45% of the state's cropland is irrigated. I think it's completely safe to say that snow pack, snow melt, and water management are important considerations for agriculture in every Western state.
Not according to this recent article.
Hell I'm ready to secede right now, every time I hear the hypocritical Tea Partiers from some mouth-breathing state talk about our descent into socialism, while at the same time their state acts like an anchor on the country, receiving far more federal taxes than they contribute. Talk about socialism!! California only gets back like 75 cents on the dollar, while Mississippi et al get way more than 1 dollar for each dollar sent to DC. Most red states are on the dole! "Keep the government's hands off my Medicare!" Who the h*ll are these people? I really no longer want to be associated with them.
Having just returned from living outside the US for 6 years, it is turning into the most bizarre place. I am constantly looking for hidden "candid cameras" when I'm out and about because I can't believe what I see. I keep thinking "the joke's on me". PeopleOfWalmart.com etc, but for real, in the flesh. Like the recent Grammy Awards for example, when one Record Of The Year nominee was a little ditty entitled "F*ck You". Are you kidding?
Thankfully he's dropped out now, but I was just cracking up that the Governor of Mississippi, the state that is at/near the bottom of basically every index related to anything positive, was actually thinking of being POTUS.
California would be damn competitive as a country if it seceded tomorrow. All those energy-exporting, landlocked, empty states, who are they going to sell to if they can't sell to or through California? What is an empty place like Nevada gonna do with all the Colorado River water they withhold from California, out-compete us for avocados and lettuce?
Unfortunately it's not so simple.
A good portion of that money ends up going to poor blacks in the south. Not all of course.
It's easy to pick on trailer park rednecks without understanding context.
Many people in fact vote conservative because they don't want their money spread around. There's nothing inconsistent about that. There are still many independent, self sufficient people in the South who just don't want a big federal government spreading around the money, even if it is going to poor people in the same region.
Californians used to agree. The state was once the bedrock of Reagan conservatism.
Now, Californians vote for big federal government, which of course takes away money from their very productive state, and transfers it to the least productive states.
yeah, I know, I was just getting carried away. Traditionally I have been completely fine with the fact that California sends away more than it gets back. There was a spirit of "we're all in this together". What gets me now though is that the leaders from these particular "taker" states are now all up in your face calling everyone socialist - not they have a clue what the definition of the word is.
The hypocrisy in this country is SO underreported. A simple television half hour program each week could be devoted to split screen video of all of our 'leaders' and celebrities caught in bold face lies and contradictions. Now THAT would be good television.
"A simple television half hour program each week could be devoted to split screen video of all of our 'leaders' and celebrities caught in bold face lies and contradictions. Now THAT would be good television."
They have that. It is called The Daily Show with Jon Stewart.
well I don't watch that show, but I guess it is a start. It is ad-supported so still can't be 100% legit. It would be great if there was a show such as this on every channel simultaneously so people were forced to watch it. Maybe George Soros could fund it? Or maybe it would be a revolving sponsor, like Murdoch one week, showing all the left-wing hypocrites, then Soros sponsoring the following week, and on and on. Eventually everyone would see that all of our leaders, celebrities, etc., are experts at saying one thing, doing another, hypocrisy in action.
You could just as easily say that the whole modern Keynesian welfare state (which includes the military industrial complex) is a result of energy surplus.
In fact, one could reasonably argue that the conservative counterrevolution of the 80s and beyond was a reaction to already declining net energy.
Of course, the movement has nothing more to offer, the rich and corporations have already taken everything, and Republicans today are either snakes or morons. However, every American alive today who is independent and doing reasonably well owes a debt to the early conservatives. If not for them, all of your wealth would now be in the hands of bureaucrats or ghetto dwellers. As it is, you can enjoy your "golden crumbs" largely because of conservatives.
I have to admit I'm agnostic on all of this and I don't think it's particularly important. America will collapse regardless.
I think that all civilized countries exist because of a surplus of energy. Going back to the earliest city states long before Greece and the Roman Republic, there needed to be enough agricultural production for the other productive efforts to occur. The Industrial Revolution happened as the result of excess mechanical power, such as water and wind, then the fossil fuels coal, oil and natural gas. As we appear to be at Peak Oil with little prospect for other energy sources, keeping the industrial production going will become ever more difficult.
The Reagan Republicans of the 1980's were only building on the neoliberal economics begun during the Nixon era, such as Nixon's CIA orchestrated disruption which produced the September 1973 coup in Chile and the March 1976 coup in Argentina resulted in the imposition of similar economic policies. We've never really seen Keynesian policies in the US, since we haven't been politically able to pay the debt during the periods of economic strength since the 1960's. As for the "welfare state", I don't think Keynes can be blamed for that, as "socialism" was nearly 100 years old by the time of the Great Depression when democratic governments adopted programs to provide a social safety net for people in need...
E. Swanson
As a 'gettho dweller" myself, you will have to excuse me if I am not falling all over myself to praise 'early conservatives.'
Really, do have any earthly idea exactly how racist and moronic you sound with these broadsides?
It is comical that brain-washed,flag waving Un-americans stuffed with entitlements(like the slave-owning elite of the Old South) want to desert the country that gave them everything.
— Ulysses S. Grant, Galena, Illinois, to father Jesse Root Grant, Covington, Kentucky, 21 April 1861
The smug class take a lot for granted, don't they? My late father remarked some years ago that the US had become ungovernable. The whole thing only held together when white men were in charge and they ruled with an iron rod. I don't see how the US can survive the coming economic and social stresses as "one nation under God."
But, maybe it is time for a change. It is hard to imagine a "one size fits all" way forward that will be just and sustainable. In that sense, maybe a break-up would be for the better. Not decided on this one...
To me at least, The South may be better off making its own laws and rules. They should perhaps make their own State. They are culturally different than the North and West. I see no problem in GA, FL, SC, NC, VA, TN, MS, AL, LA making a state.
I figure TX and OK would make a natural state.
Now where will the midwest fit into: the North or the South or the West.
Split OHIO and PA and lump them with the South where they are culturally.
Get it done.
Then (after the dust settles) all the same problems we had before we divided the Nation will be there but now regions will not share resources and work toward the common problem of energy depletion.
There never was a problem with government. It is a physical problem with oil depletion.
LOL. A perfect end for the US -- Civil War.
And Arkansas which missed in your list, made Clinton King for 8 years.
This whole bit of slicing the USA up into bits and pieces forgets that we can travel freely between the states now, and have for so long that making solid borders will be harder than you might think it is. Not even thinking that a lot of people only live in the state they are because they have a job or family there. A lot of people move around a lot. I know I have, I have lived in many states and though I live in Arkansas now, I like to travel a fair amount.
While the article that started this whole thread was from a dyed in the Wool Vermont guy, He can't speak for anything more than his local group of people.
Take any one state and look at the regional attitudes of it, the claims to fame because you live in one city over another. Those lines on maps, just don't cut it when you want to break something up into different slices.
Just because one state might be Red or Blue, or Green or Mauve, does not mean that everyone in that state thinks alike, we are more mish moshes than people tend to see in a general overview.
We have to many cross border ties formed right now to be sliced up into other groupings just yet. Give it a few years and maybe this will all blow over and people will be less willing to divide, or maybe they will have no choice in the matter.
But until there is MAJOR changes I don't see the USA breaking up.
I have family spread out all over the place and I know others that have family spread out as well, that is one tie that binds, that you might not see in other more restrictive of travel nations.
All this talk of it is just angst because you all know too much about the changes coming in the fossil fuel arena, and the climate arena. Most people still like USA USA as a chant slogan, at least where I stand anyway.
I formed my own political party back in 2007, and my own design company/theory recently, so maybe I am more jaded than you all are in a better future.
Charles,
BioWebScape Designs for a better future, today.
But of course, similar things have been said in many countries that ended up splitting. "We depend on each other, our neighborhoods are mixed and we get along with our neighbors, we intermarry and our families are mixed."
Agree that the splits might not be along the lines on the map. Heck, states have split before. West Virginia didn't agree with Virginia during the Civil War, so when push came to shove, they seceded from Virginia when Virgina seceded from the union.
Larger sustainable communities must, I think, be built from smaller sustainable communities. In this manner does nature build into larger systems, and so do we, really. You see sustainable solutions coming from small scales: neighborhood, city, etc., and pretty much greenwash from "higher" organizational structures (electric cars). Whether the US exists in one form or the other is somewhat of a moot point: we won't likely get "there" from "here": the system currently uses far too many resources and is far too unresponsive to the speed of change.
I suspect the US will survive to the extent smaller communities do first.
I am trying to properly interpret your comments...do you believe that white men ruling with an iron rod and the vast majority of citizens all proclaiming belief in one particular religion's god to be essential elements for the U.S. to be governable/viable?
It may well be that the U.S. is simply too big to maneuver through the modern world, at least in its current over-centralized condition. It was supposed to be a collection of mostly independent States with a common currency and foreign policy. It was not supposed to have everything run from a tidal marsh in Maryland.
A common currency wasn't part of the original scheme. We really didn't even begin to have one until the Civil War.
Currency and coinage are different things.
http://www.newmoney.gov/currency/history.htm
While true that the federal government didn't greatly circulate its own paper prior to the war, that's not the same as saying their was no common currency. I don't think you can limit your notion of currency to paper money.
The many banks that did circulate paper prior to the war were required to maintain gold deposits to cover the value of the paper - AND they followed the currency denominations of the coinage, that being the dollar
For those who might be thinking that this would make it easy for counterfeiters and other scam artists to create paper dollars, this was indeed the case. In fact, the increasingly large number of non-gold backed "dollars" (and some were created with the names of non existent banks, but made to look vaguely like other dollars) was part of the reason that the decision was made to have the federal gov't start printing the money itself (that and the fact that they needed to just print dollars to pay for the war effort).
States have a lot of wiggle room currently.
CA has forced automakers to curb pollution at their whim for example. The only reason we have the Prius is because of CA policies. Federal policies are slow to non-existant on things fuel efficiency related.
And the only reason we don't have dozens of diesel cars which use less fuel than the Prius and carry heavier loads than the Prius is the same set of short-sighted Californian emission rules.
There are eleven diesel light cars and trucks available in the U.S. In Europe (and in many other places such as Australia) nearly all cars and light trucks are available with a diesel engine. In Europe, close to 50% of cars sold have diesel engines. This is partly because diesel fuel is cheaper than gasoline in most European countries, but also because diesel engines are inherently more efficient than gasoline engines, especially at low power settings.
I hear a lot about diesels but if they were really accessible and cheap and clean and easy for the fuel system to provide for then they would be in the US. Something like net energy per bbl of oil is holding back diesel. There is less diesel than gasoline in a bbl. We all know what is going on. Likely pollution is one of the problems. You just cannot get high mileage and low pollution any better than a Prius.
Europe went to diesel because of taxes. The demand for diesel in Europe is stimulated by the high cost of gasoline, where unequal taxation of the two fuels results in diesel costing about one dollar less per gallon.
Also, it takes about 25% more oil to make a gallon of diesel fuel than a gallon of gasoline. So exaggerate estimates of fuel efficiency are inflated by 20% or so when the bbl of oil in considered.
But I am not going to argue about diesels one way or the other. Seems the money issue is not square at all.
If you lived in a CA city, then you would want to limit heavy soot-producing diesel cars as well. There is no comparison in those tailpipe emissions. Diesel is dirtier period. Thus Prius is still likely the best solution so far in terms of cost and pollution for crowded populated areas. 3 million of these cars cannot drive in a CA city unless you want your average CA city to be like Beijing.
I would love you to provide a detailed breakdown to back up that statement. Diesel and petrol are made from two different fractions of the same barrel of oil, with some overlap, different processing requirements, additives etc.
Diesel has a higher carbon content , and higher energy content per unit volume than petrol. Even for allowing for this, modern diesel engines use the energy in their fuel more efficiently (and produce less CO2) than from the equivalent petrol engine, at the current level of technology. The difference is fairly small, and may change. Diesel engines are preferred by drivers who are watching their energy costs, and so are likely to be people with a more efficient driving style, which probably has a bigger impact on fuel consumption than the difference between fuel types.
How much diesel and how much petrol you can get out of one barrel of oil depends on the qualities of the oil, and the level of processing employed at the refinery.
I am grateful for CA and forced pollution control on vehicles.
The catalytic converter changed the Los Angeles basin from a brown fog that hurt my lungs as a kid, to just a now-and-again haze now-a-days.
I doubt anyone born since 1980 remembers any Stage 2 or Stage 3 smog alerts from the AQMD ( http://www.aqmd.gov/ ), but I sure do.
I already know how to use chop sticks, and eat Chinese food, so I am ready ;)
Ftom link above: "OilEdge: 'Peak Oil' postponed............."
That would put current oil in place at an astonishing 9 trillion barrels. Where do these guys get their data from?
Not to be an apologist, but I've seen credible estimates that global OOIP is about 6 trillion bbl, so 9 trillion is only half as much again. Average global recovery factor of 30% yields 1.8 - 2.7 trillion URR, respectively. Not too far off from the majority of credible estimates which I believe fall in the 2.2 trillion URR range (half of which we have already consumed). What is not mentioned is that even a few hundred billion bbl either way will not significantly alter the cumulative production curve, perhaps buying us a year or two, if that.
The other questions not answered in any meaningful way are: At what rate? At what cost in energy? At what cost to the environment? At what cost to an economy dedicated to the proposition that it must grow an already insatiable appetite for energy or die trying?
Cheers,
Jerry
Jerry – “The other questions not answered in any meaningful way are: At what rate?” Excellent point. I’ll get on my soap box and lecture the cornucopians once again. There are a lot of things I know a little about. There is just one thing I know a lot about: squeezing the last little bit of oil/NG out of a field. Wildcatters like westexas get all the glory while we development/reservoir geologist are the true backbone of the oil patch. LOL.
I’ll never debate how much the recovery factor can be increased globally for one simple reason: the number doesn’t exist and never will IMHO. If you have enough data and work really hard and if the economics are working one can come up with a very rough GUESS as to how much the RF can be increased in a specific field. Any effort to speculate that global RF could be increased by X% has zero credibility IMHO. Equally important if God spoke to me in my sleep tonight and told me exactly how much additional oil could be recovered under existing economic conditions it would tell us absolutely nothing about its impact on PO. First, it takes an incredibly long time to increase recovery of the last X% of a field’s reserves. I’ve seen many fields take as long to recover the last 10% of their URR as it took to recover the first 90%.
As you imply: how great an increase in global RF will offset PO to some extent? For the most part the question itself is nonsense IMHO. The important question is how much can the global oil production rate be increased if every applicable field has every EOR technique applied under current economic conditions. I can’t present a credible model but my 36 years experience leads me to think under the best of circumstances the effort wouln't come close to offsetting even the most optimistic decline rate.
Thanks Rockman, I always appreciate your expertise in these matters. I recall in another thread you pointed out that stripper wells can greatly increase the recovery factor, where economical (i.e. not deepwater), but over many years and at only a few barrels a day!
Also, I'm curious, what are your thoughts on EOR actually increasing URR for a given field? My understanding is that artificially elevated production rates do not necessarily translate into increased recovery, but I'm certainly no expert.
Cheers,
Jerry
Jerry – I did cheat on my answer a bit. Some consider horizontal wells as EOR but I don’t. It’s simple “infield drilling” in the oil patch. But it can increase URR and do so at a much greater rate than standard EOR. But such wells are still subject to normal decline dynamics. But the higher initial rates tend to give undue expectations for proportional higher URR. But again this isn’t EOR and, more importantly, only a very small percentage of the fields would benefit. There are many fields in which no EOR method will ever make economic sense.
There’s an even more important aspect re: potential increase in URR from the application of EOR: ITS ALREADY BEEN DONE IN ALL APPLICABLE US FIELDS! This is the most frustrating aspect of such discussions. What the heck do folks think we do for a living: leave profitable oil in the ground because we’re all billionaires and don’t need the money?. LOL. Many seem to think the oil patch has been sitting on its butt and hasn’t applied EOR in all applicable fields. EOR has been a major activity in the domestic oil patch FOR OVER 50 YEARS! IOW those big gains in URR have already been achieved. Many fields are already beyond secondary recovery into tertiary recover. No quit as common overseas but has still been going on. Also, IMHO, you won't see EOR as widely applied overseas as we'v seen domesticly: the profit margin is too low for Big Oil and NOC's. Pressure maintenance (a very common EOR) has been going on at the great Ghawar Field for decades. There may be improvemnts down thhe road but a good bit of current KSA production is already attributed to EOR.
People have to understand that the question is not how much resource that appears to be extractible. It is the amount that can be gotten out at prices economies can afford --and this is related to the amount that can be gotten out with sufficiently high EROEIs. Even this can be affected by all of the real-world problems that arise.
I think people have gotten the idea from Peak Oil folks that it is OK to pick an ultimate amount, and spread it out using a Hubbert curve. I disagree in both regards. A Hubbert Curve only works if there is some other source of energy there in adequate quantity and quality to transition to--Hubbert assumed nuclear. Also, it is not possible to tell what will ultimately be extractible at reasonable cost with the information available today. Riots or war may eliminate some. Tax changes may eliminate some. Technology changes may help. Serious financial problems may eliminate some potential buyers--they can't afford the high priced oil! It is more complicated than just picking a figure for what looks to be extractable.
Exactly. We have built our complex, global, techno-industrial culture on cheap and plentiful energy. That's simple.
But nearly-infinitely-complex systems have nearly-infinitely-complex possible failure modes. So many ways for Murphy to be right.
Horizontal wells increase the initial flow and it appears more oil could be extracted. Overestimation of extractible resource may end up in a situation there more money is spent than earned on production. Knowledge about production profiles would probably give you a huge advantage. Who knows what you know is a bad offer might seem like a good business opportunity for others.
Someone used of vertical wells looking at the initial production of a horizontal well would probably overestimate the resource while someone used to horizontal wells know what will follow.
Interesting post from Stuart Staniford on Saudi Arabia
Disquieting Saudi Oil Indicators and the next oil shock
http://earlywarn.blogspot.com/2011/04/disquieting-saudi-oil-indicators-a...
Who can translate this?
http://arabenergyclub.com/site/wp-content/uploads/2011/04/Janadriah1.pdf
Saudi Arabia sees output at 10.8 million b/d by 2030: official
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8812036
Sadad-al-Husseini was too optimistic:
2/3/2011
WikiLeaks cable from Riyadh implied Saudis could pump only 9.8 mb/d in 2011
http://www.crudeoilpeak.com/?p=2669
13/8/2010
Saudi Arabia lost production share to Russia
http://www.crudeoilpeak.com/?p=1800
How many Saudi warnings are overlooked?
31/7/2010
Saudi Aramco's crude oil exports peaked in 2005
http://www.crudeoilpeak.com/?p=1738
12/7/2010
Saudi King ordered oil exploration to cease. But will it matter?
http://www.crudeoilpeak.com/?p=1710
One more:
What's "our" oil doing in their economy? -- Saudi oil consumption trends
Jon
I'm guessing this has been discussed here before, but I saw this for the first time the other day:
Dr. Kenneth Deffeyes on Peak Oil
http://peakoil.com/production/dr-kenneth-deffeyes-on-peak-oil/
It looks like a talk from several years ago, about the time Deffeyes made his famous "Thanksgiving Day" prediction. One slide in particular caught my attention, a quote from a Saudi minister that they would not be able to increase production beyond a little over 9 Mbpd.
It's interesting, I recall that during the food crisis a couple years ago there was at least one country that halted rice exports for a time, and I think the same thing happened with wheat recently. Yes, Ag. commodities are generally more volatile due to weather, but now that we are seeing a proliferation of countries mired in some form of energy crisis I wonder how long before we see someone deciding to halt oil exports?
I know China recently announced limits to exports of refined products, and certainly the war in Libya has created obvious difficulties, but a major feedstock provider deciding to stop exports for no other reason than fear would obviously trigger widespread panic in the markets.
Or is the pressure too great to continue exporting, no matter what the cost?
Cheers,
Jerry
$8 trillion wasted in wars for oil security:
http://battleland.blogs.time.com/2011/04/24/a-question-for-the-obama-adm...
Who cares?
In down-under everything is upside-down
25/4/2011
Australia's crude oil imports on record high
http://www.crudeoilpeak.com/?p=3089
Underwater homeowners who walk are more credit savvy
People who choose to walk away know what they're doing. They get credit cards and increase lines of credit before they default on their mortgages. They pay all their bills on time before walking away, making it hard to spot them.
After they default, however, their credit history becomes equally toilet worthy. Defaulting on debt that you can afford to pay is just a nice way of describing stealing.
No, stealing would be if they didn't return the property.
Defaulting on debt that you can afford to pay is just a nice way of describing stealing.
Not really because you are handing over the collateral back to the lender.
Corporations default strategically all the time. What would you call these people:
http://nymag.com/realestate/features/62880/
http://www.crainsnewyork.com/article/20100108/FREE/100109924
Fed gives Tishman a break (how about giving common people a break):
http://www.crainsnewyork.com/article/20100604/REAL_ESTATE/100609923
When banks and big businesses get bailed out by tax payers, would you call that stealing?
Not really because you are handing over the collateral back to the lender.
That's right. Historically the mortgage (the phrase means "dead pledge" in Norman French) meant that the mortgagee kept title to the property until the mortgagor made the last payment - at which point he transferred the title to the mortgagor. Until that point, the mortgagor was really just a tenant, but he could act as owner when dealing with third parties.
Since the mortgagor was really just renting, he could walk away from the property at any time, and the mortgagor's only recourse was to take the property back. In some places, the banks have managed to fudge the rules so people have to pay for any shortfalls, but that isn't really right. The bank should assume the risk and never lend more money than the house is worth. Canadian banks didn't, which is why none of them wen't bankrupt.
In most US states, the mortgagee actually has title to the property and the mortgagor has a lien against the title. Furthermore, in most states, the mortgage is a personal obligation of the mortgagee and the mortgagor can sue for any balance of the loan not recovered by foreclosure.
So there is a big difference. In the "non-recourse mortgage" states like CA, NV, AZ and FL the "foreclosures" are very high because the mortgagors go through a non-judicial process to have the trustee sell the property. This causes a flood of foreclosures on the market, depresses prices, puts more loans underwater, causes more walk aways, puts more foreclosures on the market...
In the states where mortgages are a personal obligation, the borrowers are reluctant to walk away and continue to pay the lenders even though their loans are underwater. When foreclosures happen, the lenders can and do force the borrowers into personal bankruptcy in order to attack other personal assets. So these states have a lot less foreclosures on the market, but conversely there is a lot of "hidden inventory" of people who would like to move but can't afford to because they are underwater.
Of course, the legal consequences by state are somewhat more complex due to the speculation on homes that were not owner occupied, the legal status of HELOCs and second mortgages, etc.
The modern law in most jurisdictions has been modified somewhat from the old English Common Law concept of mortgages, although the US has move further in this direction than Canada due to that misunderstanding back in 1776.
Canada did much better than the US in terms of mortgage defaults in the last economic downturn (in fact, foreclosures fell to historically low levels) mainly because the government had put the hot irons to the feet of the banking directors and forced them to be prudent in their lending. OTOH, the US government went 180 degrees in the other direction and allowed its banks to lend money to people who had no possibility of repaying it, with predictable consequences. Then they repackaged the mortgages and sold them as quality investments to other people who had no idea what they were buying. This is a great deal like financial fraud.
A friend of mine, a lawyer in Montana, was recently complaining that some jurisdictions in the US have basically revived the old concept of debtor's prison. If someone can't pay, the lender puts them in jail. This has the same conceptual failure that the original version of debtor's prison had - if someone is in jail, how can they earn enough money to pay their debts?
I get a kick out of your posts - you never miss a chance to compare Canada favorably to the U.S.! :)
Still, when America comes crashing down it may just take Canada with it.
I have been tending to compare Canada favorably to the US lately since Canada has been doing comparatively much better than the US for about the last decade. In the last "global" downturn, the reduction in Canada's economic output was 100% attributable to a downturn in exports to the US. It wasn't that serious in Canada, particularly in the West, and ended relatively quickly.
There has been a fundamental disconnect between American and Canadian economic performance since about the start of the George W Bush administration, and it seems to be continuing under the Obama administration. Prior to that time (i.e. the Clinton administration), the US was doing relatively well. Clinton seemed to be rather economically astute for a politician, Bush and Obama less so.
It's true that the next American downturn, which may be serious given current trends, might hit Canada harder. That's why Canadian politicians are trying to develop China as a major market.
The US and Canada both allowed their banks to get too big to fail. But C then kept a close watch on their to make sure they DIDN'T fail, while the US fell for the moronic and (for the banks short term) self serving interested idea that the banks would regulate themselves just fine.
How could anyone with any tiny scrap of intellectual honesty and even a tinier scrap of intellect have believed such a load of codswollop for a more than a nanosecond is far beyond me.
In the United States property laws and mortgages have evolved in 50 different flavors, since this area is governed by the states. So one of the problems is that mortgage securitizers bundled together loans from multiple states into residential mortgage-backed bonds with not only uneven credit quality and underwriting standards, but also originated and administered under different laws. It is a mess.
Besides the foreclosures and walk aways, another phenomena is that a homeowner has to be not only even, but actually 17 to 27% ahead on his home in order to be able to move to a comparable house. That is due to having to come up with the 7% realtor commission and fees, along with the 10 to 20% down payment now being required on the new property.
This also tends to freeze homeowners in place, and ti is making renting look more and more attractive. You need a fairly briskly rising price regime to cover the commissions and down payments and enable mobility by homeowners. Of course, the majority of homeowners never made out so well after properly calculating the moneys going to realtors and lenders.
What are they stealing? They are still loosing the house & down payment. These loans were made by professionals who should have known their business.
They are loosing the down payment, but they never had the house. California, as an example, does not generally use mortgages. It uses "deed of trust" where the title to the house it actually owned by the trustee.
http://realtytimes.com/rtpages/20010209_deed.htm
In states with this arrangement for money-purchase loans on owner-occupied houses, the lender has no recourse other than to request that the trustee sell the house and remit the proceeds. The loan is not a personal obligation of the homeowner.
There is no honor on either side, but contract law is pretty clear. Defaulting on a loan is just business. Bankers paying themselves bonuses after bailouts is a nice way of stealing, too.
Strategic default is just another option on the capitalist menu. No reason families shouldn't get to pick from the same menu.
http://news.yahoo.com/s/nm/20110415/bs_nm/us_morgan_stanley_real_estate
It would be interesting to know whether/how much events at Fukushima Daiichi factored into the decision to walk away.
Actually...no. Their credit history does take a ding (which is why they line up credit cards before they default). And as Mish pointed out, you can save enough money by defaulting that you don't need credit. But someone who strategically defaults is more desirable as a customer than someone who just couldn't pay. Banks don't want to punish wrongdoers. They just want to make a profit. And if that means lending money to someone who can afford to pay but chose not to, they'll do it.
No, because they gave back the house. That is what they agreed to do. The banks would do the same if they were in that position. It's just business.
If the bank wanted the house, it would have bought the house itself and cut out the middleman. The house is collateral for the loan that you came to them for, hat in hand. The purpose of the loan to help you get the house that you want, the bank doesn't want the house, it wants you to pay them back for the favor of loaning you the money. How are "transition towns" supposed to work if people can't depend on each other to keep their word? I just don't get it...
The house may not be what they want, but that's what the contract says they are entitled to. If it was the other way around - say, a house was foreclosed on for nonpayment - you wouldn't be arguing that that the bank should have just bought a house if it wanted one.
You can't depend on people to keep their words. Any plan for transition must take that into account.
I also expect it will be harder and harder to get loans for anything. As Stoneleigh says, traditionally, credit was only available to people who didn't need it.
Is OPEC even CAPABLE of changing output?
Well.
You have two choices. Believe all the major organisations, the biggest governments, all the so-called 'experts', the entire media aparatus.
Or you have a small clique of people saying 'nah', some of them are around here.
I'm not saying numbers are on our side, but we have something else: reason and rationality. It counts for something.
We still don't really know although this seems like the most reasonable conclusion based on the little we do know. There just is not enough transparency.
Iggy - Certainly...they can reduce output production anytime they chose.
How easy is it to actually reduce output though? Maybe you can just turn off a switch, but presumably there are contracts to sell oil, lots of machinery that would then be idle, lots of workers with no work who may be on a contract etc. This is probably different for each different field, but is there any rough rules of thumb?
It would be interesting to see how the cost compares with the increase in profit you would get from selling any other fields still producing, as the spot price would clearly increase when some production went offline.
YES,,, Down..
They can change that at any time they want, or need to.
As far as going up any, Maybe but not much or for long. My Opionion from all that I read here and elsewhere.
Charles,
BioWebScape Designs for a better future, today.
For the week of April 15, petroleum daily runs were at 13.74 million barrels per day, down 6.22% from a year ago. Refinery capacity utilization was 81.3%, down from 85.1% a year ago.
Domestic crude oil was 356 million barrels, up 0.3%, while gasoline was 212.7 million barrels, down 3.35%.
It is not apparent that there is any shortage.
It's funny how price tends to balance supply & demand. From 2002 to 2005, global net oil exports increased from 39 mbpd to 46 mbpd. At this rate of increase, global net exports would be at 54 mbpd in 2008. However, net exports were flat to down in 2006 to 2008 inclusive, as oil prices continued to show year over year increases. Global net oil exports in 2008 were about 45 mbpd, falling to 43 mbpd in 2009. And of course, then there was the Chindia factor, with Chindia consuming an ever greater share of slowly declining global net oil exports.
In 2011, it's quite possible that Chindia's combined net oil imports, as a percentage of global net oil exports, may have come close to doubling from the 11% that we saw in 2005.
You are making the assumption that the refineries (1) can operate at maximum rates and (2) that they have the sufficient quantities of the right type of oil at which to maximize output.
In the eastern US region, utilization was 54% last week, because at least two major refineries did not make a turnaround as scheduled from winter blends to summer blends.
http://www.eia.doe.gov/dnav/pet/pet_sum_sndw_dcus_r10_w.htm
It's not completely clear if the eastern region's extended down time was due to unexpected accidents or more long term wear and tear than expected - probably both.
It's harder to determine if refiners are not getting the type of oil they need to maximize output, although I think that is also influencing output some.
Iraq is trying to do something about export bottlenecks
http://online.wsj.com/article/SB1000142405274870390700457627844055601383...
Rgds
WeekendPeak
Interesting, but all the credible reports I have seen have spoken of no more than 5-6 mb/d produced by the end of this decade.
I am not aware of the finer details of the port landscape of Southern Iraq, admittedely, but the OPEC nations have a long track record of overpromising and underdelivering.
But even if Iraq doubles export, 1.6-2.0 mb/d will be added to the world's oil demand just this year.
Since Saudi Arabia is hardly capable of going much beyond 9.5 mb/d in the near term, most of Iraq's exports would simply be swallowed by the new oil demand.
This will not make prices come down, rather it will stagnate prices in the triple digit range, trapping prices in no man's land.
And what happens in 2012? 2013? And so on.
As Saudi Arabia is utterly incapable, again, to raise their production above historic levels(and remember, due to growing internal consumption, they need to exceed their previous highest benchmark considerably just to keep up the same exports capability), and with rising demand each year, Iraq now holds the key.
They will not alter the fundamental prospects of Peak Oil, but may postpone it by a few years at best.
I agree, but I try to make a point - more to myself than anyone else - to not just look for confirming evidence.
rgds
WeekendPeak
And I in turn agree with you, but the problem is that most of the counter-peak arguments are pure propaganda and spin.
I think it's healthy not to end up in a place where everyone constantly pats everyone on their collective backs, which can happen in narrow subcultures(if that's the right word) like here at TOD, but what is the alternative?
I found the best intellectual stimulation from people like Stuart Staniford who have gone mildly cornucopian once in a while, because he essentially sees the underlying problem and won't just say "nonsense! technology will save us!".
But it's hard. It's not the Stuart Stanifords of the world who are given access to the media in our day and age, but rather the CERA delusionals.
I can't blame some people who just shut everything out after a while, because there's so much crap that you have to filter out there, to find an intelligent, cogent counter-argument that sees the basic reality on the ground and starts from there.
Richard Hienberg has a few counter-points to tech cornucopiaism here:
http://www.postcarbon.org/article/311302-won-t-innovation-substitution-a...
excerpt:
In his 1981 book The Ultimate Resource, Simon declared that natural resources are effectively infinite and that the process of resource substitution can go on forever. There can never be overpopulation, he declared, because having more people just means having more problem-solvers.
Juan Cole who writes about the middle east specifically has another theory.
The Tyrants Strike Back
So the theory here goes that SA may be holding back imports to put pressure on Obama viv-a-vis Saudi attempts to repress the Arab Spring uprisings.
Sounds like a very convoluted policy to punish a single President (maybe) while risking high oil prices, demand destruction, etc. It would be great if KSA was doing this voluntarily, but I fear since they failed to pump under Bush that this theory is horse pucky. They surely cannot be trying to punish every US President.
I'm presenting it, not promoting it. But it isn't roundabout. The ruling family is very concerned about the Arab Spring, even lending troops to Bahrain, and see's Washington siding the the French and British on the side of the revolution (in some of the contries, not the Gulf ones). The only real lever they have is oil. Normally they would be interested in optimizing the longterm benefits from the oil, but they probably see these revolutions as an existential threat (to their continuing rule).
ot but discussed here often, ghost cities in china
http://vodpod.com/watch/5866159-chinas-ghost-cities-and-malls?u=ampedsta...
How many commodities are being wasted on unnecessary housing? What a tremendous waste of resources.
"Corn Seen Topping Wheat"
http://www.bloomberg.com/news/2011-04-25/corn-seen-topping-wheat-raising...
I am beginning to wonder how much corn will get planted this month with the wet weather in some Corn Belt areas. Weather has to be near perfect in the Corn Belt this year to prevent further price rises and tens of millions from starving but that is not happening. It could change to positive very quickly with a dry week but by the end of April a few states are going to be behind the 8-ball. All eyes on the beginning of May.
Corn, Wheat Advance as Adverse Weather Threatens to Reduce Global Harvests
Weather is not co-operating
Mo. levee threatens to burst; residents evacuate
It was a scary moment not long ago when I divined food was going to be/is the first tipping point/Liebig's Minimum we hit. What is hit hardest, fastest and firstest over the largest areas and largest population by wacky weather? Food production. Add in high fuel prices, etc., and... ouch. Of course, that ultimately makes Climate Change the culprit, but at the end of the day it's splitting hairs: You can't logically separate out climate, energy and economics: It's on big system going kablooey!
Comments please on the following two paragraphs.
There are some "facts" above that I am unsure about. I do assume that ethanol has 60% of the energy density of gasoline.
And any thoughts on the trade-off "in reality" as opposed to an abstract discussion ?
Best Hopes,
Alan
Scale is the thing that people need to consider when discussing biofuels (including corn-based ethanol) and I fear that scale is what is lacking in most people's minds. They read that Richard Branson is flying planes on palm oil and they think "See! Take that you Arab b@stards! We don't need your stinking oil!" Always reinforce the disconnect between current use and what is possible with current biofuels technologies.
As an aside, Alan, it occurred to me as I was reading your paragraphs that perhaps we should consider dumping the dollar and go to "the corn standard." Hence forward, everything would be valued in bushels of corn, removing the abstraction that paper dollars inject.
Maybe it should be valued in ears rather than bushels. Hey, buddy, can you lend me an ear?
The largest hole in the argument is the relentless pursuit of corn production. There is simply no way, as noted that, etoh can have a real effect on our energy use. We will continue to want more until a change of lifestyle occurs.
As I note above, corn is expected to pass wheat this year in price. Which will have the unfortunate result of shifting even more marginal and other crop land to corn. I think it will also increase pressure on freshwater aquifers, as the higher prices will enable new irrigation systems.
As Bloomberg notes above, DDGs to animal feed may replace wheat presently shifted there. But I think the limit as a % of diet has been reached. In my mind, it's hard already hard tell the two waste flows of a feedlot cow apart, both are all liquids.
I am a big proponent of grass fed ruminants. The trouble is market price. History has shown time again of price crashes when the price gets too high. People quit buying beef when the price gets too much, as is happening now. We would like to imagine a world where grass fed ruminants are grazed on marginal and other land, the trouble as I see it is with corn following an industrial petroleum price bracket, farm returns will not justify pasture. I've read many analysis which show farm returns from pasture can exceed corn at 2.50 to $3.00, these fall apart now unfortunately.
More fruits and vegetables and less added fat and corn syrup in our diet would, of course, be a good thing and would be helped by eliminating subsidies for corn or providing subsidies for fruits and vegetables. However, more fruits and vegetables would require that some land currently devoted to corn be freed up to grow those fruits and vegetables. So, unless fruits and veggies can be grown in thin air, I am not sure how much land would be freed up for ethanol. Probably some, because feeding people directly with fruits and veggies as opposed to meat is a more efficient use of land, water, fertilizer, energy, etc.
In any event, focus should be on freeing up our streets for public plazas, bicycles, pedestrians, tricycles, scooters, electric bikes, dedicated bus lanes, light rail, and, where appropriate, subways. No doubt that is an upward struggle as we live in a society dominated by those who wish to perpetuate the auto culture at all costs. Would prefer a culture devoted to other modes of transport and living but no doubt I am in an extreme minority.
Best hopes for less motoring, happy or otherwise. Ethanol is just a road to hell by other means.
The alternative to meat is not "fruits and veggies". It is more rice, wheat, corn, potatoes, dried beans, lentils, etc. -- all of the grains and tubers that are high in caloric content.
Fruits and veggies are energy intensive to grow, harvest, preserve, transport, market, etc. and they are an expensive source of calories.
Good point ! I would add edible oils.
For me it has been a meat > fruits & veggies transition (avocados & olive oil as the main source of edible fats). But not a path for the society as a whole.
Alan
My wife and I are in our mid-fifties and started to need blood pressure medication and so we both went on a Vegan diet. No dairy or meat, just plant based unprocessed food. We both lost our extra weight, our color improved from sickly to pinkish and I was able to go off blood pressure meds. She will probably follow.
Cannot believe the difference! Feel so much better and body seems to be working the way it use to a couple decades ago. Getting saturated fats and cholesterol out of diet really makes a huge difference - massive!
Glad your health is bouncing back.
As for my family, we're eating plenty of saturated fats and chol., just keeping away from the processed foods, which spares us preservatives, colorants and all sorts of junky oils and carbs.
It seems to me the question isn't 'Carnivore or Herbivore', but getting wholesome food, paying attention to the balances, as well as other key lifestyle inputs, like Sleep, Hydration and Exercise.
I heard a quote once that said 'You don't need to clean up the rivers, really. Just stop dumping toxic crap into them.' (It's a bit extreme, but probably has a large chunk of truth to it.)
I am not saying that fruits and veggies are alternatives to meat; I am saying that if you are going to grow a lot more of them, you need to grow less of something else like corn. Growing less corn will eventually result in less meat from that is corn fed.
I would include the things you mentioned under vegetables as opposed to meat. Should have been more clear.
The terminology is not exact - is a tomato a fruit or vegetable?
There is sort of a three way distinction between fruits, vegetables, and seeds. The last would include grains and nuts. However, I think that people would consider sweet corn or fresh peas to be vegetables.
But generally, the calories / dollar for the fresh stuff in the grocery aisle is pretty low compared with that for flour, cornmeal, oatmeal, rice, dried beans, etc. in the center aisles. It it these "staples" that people will have to go back to as energy becomes more expensive.
The grocery aisles do contain some exceptions, such as potatos, yams, and winter squash.
A tomato is a fruit, but often used as a vegetable in cooking.
Corn is a grain, peas are legumes, and nuts are nuts. The distinction is important if you are trying to eat a balanced diet because very few vegetables are a complete source of protein, and none contains all necessary vitamins. You need to mix foods if you want to get all the essential nutrients in your diet. And no vegetable contains enough vitamin B12, so on an all-veggie diet you would have to take B12 supplements.
Corn is particularly bad because it is short of proteins in general, and severely short of some critical amino acids and vitamin B3 in particular. The native Americans knew how to process it to release the essential nutrients corn is short of, but non-natives who didn't know how to cook it tended to come down with pellagra on an all-corn diet.
http://en.wikipedia.org/wiki/Nix_v._Hedden
What is really important is that it is a vegetable for the purposes of collecting customs duty.
The Reagan administration thought what was really important was that they might be able to save a billion bucks a year on lunches for poor kids by classifying ketchup (catsup) as a vegetable.
http://en.wikipedia.org/wiki/Ketchup_as_a_vegetable
How much does a half cup of ketchup cost vs. a half cup of peas?
I doubt it is actually cheaper.
They had no intention of providing a half-cup of ketchup.
For it to count as a serving of vegetables they need to dish out a vegetable-size serving.
Are you defending the policy or are you in denial?
I'm just pointing out how one might *challenge* the implementation of the policy.
Of course they don't serve half a cup of ketchup, and since they don't that's the wedge to challenge it.
Alan,
This is a Gordian knot tying the human condition of third-world consumers with the fiscal condition of the US economy. I think your choices are perhaps simplistic, as they ignore other choices such as the export value of grains and the dynamics of dollar inflation and trade deficits. High oil prices will naturally make some of this happen, without much gov't help -- people won't have money to buy beef and the grains will go to the highest bidder, which might be US SUVs, but is more likely to be Chinese cars and stomachs instead. Long term, what else can we do but trade what we have for what we want -- that means food for energy, most likely.
I am not sure the US has the gumption to progressively and proactively take action on many thorny issues such as the debt ceiling, trade deficits, and energy availability, but I am pretty sure that no such action is needed, as the market will decide eventually. We just won't like the decisions it makes.
Iowa State's Center for Agriculture and Rural Development has a model of Historical Ethanol Operating Margins that estimates that ethanol producers are in the black on an operating basis but not fully recovering capital costs.
The also have available a downloadable book Using Distillers Grains in the U.S. and International Livestock and Poultry Industries which may have some answers regarding the extent to which these may be used in feed.
I'd be more optimistic about non-food crops being used for fuel in the longer run. Even in the US, things like the impending crop failure of hard red winter wheat (used for bread) in Texas and Oklahoma will cause food prices to rise steeply.
The next obvious question can people eat distiller's grains? Bake them into bread like wheat germ? Or are they strictly for the four stomach crowd?
Apparently you can eat them - this came up in a discussion on Robert Rapier's blog, and according to this guy, they were great!
There was even a DDG cookbook published once!
http://www.consumerenergyreport.com/boards/renewables/now-to-reduce-the-...
You would need much stricter and cleaner handling rules for human consumption.
The Australian iconic food, Vegemite is made from the brewers yeast - admittedly it is so loaded with salt you can't taste much else, but it is one of the world's richest sources of vitamin B.
Just to be clear, this is just two paragraphs out of 8 pages of an article titled "My Analysis of the Coming Oil Crisis" and it goes in the second half, titled "What to Do".
I am more uncertain about this short section than other sections and wanted some feedback. I do cover the waterfront.
I divide the possible reactions to post-Peak Oil Exports into
o Produce more liquid fuels as substitutes for conventional oil
o Use oil more efficiently
o Create a parallel oil free transportation system
o Do without
I think this covers all possible reactions (creating walkable TOD is "doing without" without pain).
Best Hopes,
Alan
Do without > simplify/(re)generate community at the neighborhood/small town scale.
A little more palatable.
That is just one form of "doing without".
More likely forms of
just doing without.
Weekly car-pool trips to the grocery store, staycations (if still working), rarely mowed lawns, kids walking or bicycling to school, electronic church "attendance", few doctor's visits, etc.
Alan
I'm curious about the inclusion of the phrase "and leave exports as they are." Is this an implicit moral decision, that the US has an obligation to continue exporting grain? Does the way that the importer uses the grain matter?
The USDA states that "Most of the corn that is traded is used for feed; smaller amounts are traded for industrial and food uses." Cutting our own use of corn as animal feed in order to maintain current export levels to Japan -- by far the world's largest corn importer, and where roughly 70% is used for animal feed -- seems inconsistent. The same argument would apply to South Korea and Taiwan, two of the other top-ten corn importers. Even much of the corn imported from the US by Mexico is used as animal feed rather than for human consumption.
The problem with these political agendas is there is no way in democratic societies to proactively force changes in human behavior. People demand freedom of choice and that's what their elected representatives will give them. If the United States wants to impose a police state then we could force people to stop eating beef and pork.
True about the police state thingy. But we actively promote beef and pork by actively subsidizing their feedstock -- corn. We also discourage people to eat fruits and vegetables that are not corn or wheat or soybeans. We also actively encourage obesity by subsidizing high caloric foods like corn, wheat, soybeans, and meat. We could encourage less beef and pork eating without having a police state.
It is not really freedom of choice when the deck is stacked in favor of beef, pork, corn,corn syrup, wheat, and soybeans.
The real trouble is that they are proposing converting food into fuel. This has enormous repercussions for the rest of the world since many third-world countries depend on the American corn surplus to keep their populations fed. One of the main driving forces behind the unrest in North Africa and the Middle East has been rising corn prices, because the rising the cost of corn, imported from the US has a huge effect on their ability to afford to eat. Many of those countries cannot feed their populations because of their lack of water and arable land.
The other trouble with ethanol is that it does not really "replace" oil - the US corn industry is so energy-intensive that the EROEI of corn ethanol is around to 1:1. It's just really converting one set of energy sources (natural gas, diesel fuel, electricity) into another.
Corn is not a particularly good cattle food, so feeding animals on grass instead is a good idea, but I don't think it will do anything to solve the energy problem. A better idea is to eat healthier food and drive much less.
Given the price of oil and fertilizer and everything else is going up, the minimum price the farmers must receive for their corn will also go up, and this will probably price the starving hordes out of the market anyway.
A vicious circle of the worst sort.
Feed Formulators Turn to Distillers’ Grains to Replace Corn
"Feed Formulators Turn to Distillers’ Grains to Replace Corn"
This makes it sounds as if we will all soon be living on the dregs left over from one form of alcoholic or another.
Alan, as you can guess from my screen name I grew up on a farm in the American mid-south, tobacco territory. I don't ever remember feeding corn to our beef cattle, although we did feed it to the hogs. Our cattle grazed, with hay fed in the winter. Generally, cattle were just too dumb to use anything but the most basic feeding system, and that limited what we could do on a family farm. Hogs were much smarter, so we had more sophisticated feeding systems and a wider range of food we could use.
Of course, commercial feed lots do things far differently now. I don't know the percentage of corn used, but assuming we go back to a more sustainable farming system, the methods used on my family farm would be more likely to work -- at least for the mid-south of the USA.
Interesting article in this week's New Yorker entitled "Kuwait on the Prairie" (paywall) about the Bakken oil play. Generally pretty optimistic, but outlining some of the technical challenges.
I haven't figured out the google method of getting beyond the paywall. Maybe someone here could enlighten me.
The New Yorker is different from the NY Times. I don't think there's a way around their paywall.
For the NY Times, before clicking on a URL for them
1. Disable javascript in your browser. For Firefox/Iceweasel it is found via
Edit -> Preferences -> Content -> "Enable javascript" checkbox.
Then click the NYT URL, and you will be able to read it.
("Knowledge is Power" -- Sir Francis Bacon)
From up top, Gas prices set new records, $6 possible
Not a title I'd want to claim if I was a gas station owner.
Heh. They can get away with it because the rental car outfits that they are competing with are probably charging a dollar more. Bring that rental car back with less than a full tank and they whack you good.
That is the falsehood this particular station is playing up to. The rental outfits are charging much less.
They don't post their prices on the street, and are fighting a new law forcing them to do so.
They don't want their gold-mine to stop producing.
"Kalimanku was right."
http://www.theoildrum.com/node/7846#comment-796535
I have no idea where this comes from.
?
___________________________________________
Confusions DO happen:
http://www.youtube.com/watch?v=Z1f74xqR4dc
http://lee.org/reading/general/Hampsterdance/
Bless you.
Re: Dumbest Guy in the Room: Donald Trump’s Energy Policy, up top.
The Donald has some stiff competition for stupid. The whole Republican zoo of potential candidates for example.
The Newt squiggles around trying to not lose his tail, but gets caught in flip flops anyway. At least his 3rd wife is an American.
The Donald's number 3 was born in Slovenian and may or may not be an American citizen. Will Americans buy a First Lady with a foreign accent? Perhaps if she is as good looking as Melania.
http://www.stylelist.com/2011/04/23/melania-trump-jewelry-qvc-first-lady...
Melania's tone confirms the the Donald's "candidacy" is a PR stunt to build his "brand". He hopes it will make people forget about 4 bankruptcies of Trump companies.
Some think the bankruptcies make him well qualified to lead a bankrupt country and negotiate a "deal" with creditors.
http://abcnews.go.com/Politics/donald-trump-filed-bankruptcy-times/story...
The Mitt's brand is also damaged and needs repair too.
http://www.theonion.com/articles/mitt-romney-haunted-by-past-of-trying-t...
So it's stiff competition in the stupid department. I think it is premature to anounce a
winnerloser.http://www.youtube.com/watch?v=EGekq3Jt5Go
"X", I shake my head when I listen to The Donald. It is surprising, and scary, how many people support him. These supporters are probably like those that are foolish enough to pay a premium to rent one of his properties that he has "branded" with his Trump name.
Trump put the T in tacky and the O in ostentation.
The Donald almost makes Palin look good.
What if Trump is not, in fact, a moron, but just plays one on TV?
I'm not suggesting that I agree with anything he says or that I believe there is a shred of evidence for anything he supports. It's just that, as someone down below points out, he seems to walk away from business disasters with his pockets full and a new wife.
Donald is the business equivalent of the two hunters being chased by a bear: he doesn't have to outrun the bear, only his slower partners.
I propose that Trump knows his stuff is crap. He has done so well with the birthter stuff that he has started to suggest, through coded speech, that Obama got into Harvard through affirmative action, and took the place of more talented white people:
This is very clever racism. Trump offers no evidence of any kind. Without access to the intake records of all of Obama's college cohort (and that access is both impossible and illegal) the question cannot be answered; even if such access were possible, it would still be a matter of interpretation.
The fact that Obama graduated magna cum laude and edited the Harvard Law Review would suggest that he overcame any hidden learning/study issues; more importantly, the question does not relate to Obama's current competence. It goes to something that happened 20 years ago, and, even if true, would suggest that Obama was given an opportunity and more than rose to the challenge. And yet it will be talked up by the same kind of fools who buy into the Birthers, as well as a whole new demographic: racists of all stripes, from your card carrying Klansman to the more subtle varieties all around us.
So here is the voter being courted by the Republicans (and probably for convention bargaining power rather than for actually being elected.) The un-educated, the stupid, and the racist are under-represented! They need a candidate they can get behind!
And to get them, you tell confusing, irrelevant, unprovable narratives that play to their prejudices. Narratives that can't be refuted unless your opposition can get them away from 2 1/2 Men and/or stories about Charlie Sheen long enough to give them a long explanation, including a diversion into privacy rights, which will suggest to them that you your opponents think they're stupid rednecks whom they don't respect. So even if they can convince your supporters that you (Trump) are wrong(and fat chance of that) they still lose.
It's the guy who said his opponent subscribed to a phonographic magazine for the 21st century.
Brilliance.
Of a very dark character.
Lloyd
It isn't clever at all. It's a 100 year old script.
The scary part is that one of the current contenders may get nominated by default. Narcissus would cringe.
It'll be fun to watch, for sure! In the end, if the economy improves a little more and unemployment goes down, Obama will win. If it gets worse, a Rep will probably win. I'm not sure you'll be able to tell much difference afterward either way - megatrends are stronger than any of these candidates or the system itself, from what I can tell. Popular acclaim behind a strong leader is pretty unlikely, and if that happens at all, it will likely be a nationalistic candidate.
Don't kid yourself. When Nader entered the 2000 presidential race his big theme was that there wasn't any real difference between the Repubs and the Dems. No matter how bad Al Gore may have been as president I doubt we would have ended up with two unwinnable wars and anything like the Bush tax cuts.
It didn't seem like many months ago when some oil minister was quoted saying $70 - $80 was reasonable. I guess it is a moving target. Maybe by summer $130 will be reasonable...
If you are selling the higher the price the better.
What the country needs for the next president is an expert in bankruptcies. Since the country is bankrupt.
What the country needs for the next president is an expert in bankruptcies.
Donald Trump! He's gone bankrupt at least five times that I was able to count. Nobody knows more about going bankrupt and walking away with your pockets full of money than him.
If the US went bankrupt, President Trump would probably end up owning Puerto Rico and possibly Florida and Hawaii. You'd have to be prepared for that if you voted for him.
Pffft, that's just "trump change" to him.
Yuck yuck! Then he could make sure Obama didn't have any birth certificate in Hawaii.
It is time for the north to admit the south was right. We both hate each other and would both be happier without the other. It is time to divide the nation into two along north/south lines.
I think that is the direction we are headed although the demarcation won't be quite so neat as simply splitting off the confederacy. I do not think the South has ever really bought into the concept of a unified federation that provides for the common welfare and exercises certain federal powers for the public good. The U.S.A. is an increasingly divided nation that cannot agree on the basic purposes of federal government.
"..unified federation that provides for the common welfare and exercises certain federal powers for the public good" sounds a lot like talking points for a politician with something to sell.
How about we just have the gov't do the basic functions that the majority can agree upon? It does little harm to argue about the rest, and the states can muddle along with such on their own. What hurts is agreeing to do everything for everybody while charging it to the nat'l debt.
It is not a function of the majority. Certain states have decided on their own that they can nullify federal law. That is untenable if the states can just decide which laws they choose to follow. That is why I advocate that they secede because they do not buy into federal law like the EPAs ability to regulate coal plants or the health care law. We already have a system where the majority decides what laws we have. But a minority is deciding that they can ignore them. Even if the majority agrees on basic functions, a minority has decided they can go their own way.
We already have a system whereby elected representatives can decide we will not do everything for everybody. That is not the point.
ed - IMHO if such fantasy ever did evolve the country wouldn't be split into two chunks...it would be three. After all, Texas is the only state that was once its own sovereign nation. It wasn't that long ago that we allowed the other states to join us in forming the USA. LOL
Or perhaps Nine?
This book did okay back in the early 80's
The_Nine_Nations_of_North_America
Commercial Link
It is a good book. I recommend it.
Your governor appears to think that secession would be a viable option. Sounds like a good plan which should be implemented as soon as possible.
Hawai`i. The only state that was once a monarchy. There's secession talk there, too, but no way can they be self-sustaining.
Why do they need to be self-sustaining when separating from the US? Is america self-sustaining without Canada's oil fields?
That's a fair point. Many point to Europe as an example of what the Untied States of America might look like. Norway, Denmark, and Sweden fought a lot when they were united, but exist peaceably as separate nations, while still maintaining economic ties.
However, many believe that peak oil will result in a rise in protectionism, if not outright warfare. We did a hint of it during the last price spike, when some countries banned the export of food or fuel in an attempt to keep prices low for their own people.
Vermont was a republic before it joined the United States. It too has a right to succeed. As of course all states have the right.
Well, there were the 14 years of The Vermont Republic. Pretty good secessionist movement there these days, too.
wouldnt the original 13 also count there? and what about hawaii, definitely was a sovereign nation before being rolled into the empire.
I think there are more factors than just political to divide the U.S. today.
Nope, divide the country into thirds. Everything West of the Rockies as one Country, Everything East of the Appalachians is a second Country and the remaining in the middle as a third Country.
Minnesotans have more in common with Louisianans than Minnesotans with either East Coast or West Coast folks!
You really think so?
I've never lived in Minnesota, but I have friends there, and they tell me the Communist party has a lot of support there. Because labor has deep roots there. I can't see that being compatible with the south's "right to work" beliefs.
puh-leeaase!
Yes and no. Leave 'Communist' aside for a bit, and it remains that Minnesota is different. They don't even quite exactly have a normal Democratic Party like other states. Instead they have the DFL. Oh, and it's a real hoot to hear conservatives run on about the DFL. I'd certainly guess it's not overly compatible politically with the present-day deep South...
We don't have a normal Republican Party either (Independent Republicans), though they are not quite so independent these days so we have an Independence Party again.
It's tough getting old. Why, I distinctly remember Minnesotans voting overwhelmingly for favorite son (and founder of both the Democratic-Farmer-Labor Party and Americans for Democratic Action) Hubert Humphrey, in the 1968 presidential election, while Louisiana's 10 electoral votes went to... George Wallace.
Times sure do change.
If the South had been allowed to secede, WW1 would have had an American front.
Trench warfare and mustard gas from sea to shining sea.
The South does not get to secede. The South gets to continue suffering the humiliation of DC applying the Rod of Loving Correction each time they screw the pooch, from now till doomsday.
Looks like my area in Indiana is ready to break into a new all-time high in gasoline prices after a jump this morning. Politicians locally are ducking like Obama on a national level.
Indiana AG To Ask Why Gas Prices Jumped To $4.17
What do politicians have to do with the price of gas?
It's supply and demand. Supply is down (due to Above Ground Factors of course), demand needs to match it, so the price has to go up until people can't afford gas that could before.
Of course, people squeal like stuck pigs when they get priced out of the market, but government intervention isn't the answer.
r4ndom, good comments.
Amazing how people want to blame someone else rather then accept supply and demand reasoning.
It's one of those wondrous aspects of the contemporary form of American "democracy" - When the "market" doesn't work correctly we blame the government for over regulation; when it does work correctly, we blame the government for not regulating enough.
Peculiar lot we Americans are.
You mean like the unemployed people in the ME who can no longer afford to buy food... so they blame fat westerners. I'm sure they would be glad to sit down at the table over their empty plates and discuss supply and demand reasoning with you. I'm sure the discussion would be amazing.
Actually, like fat westerners who picket their state capitals when the price of gas goes up.
People being priced out of the food market in large numbers can reasonably be expected to switch to the lead standard.
Nothing, but politicians are expected to do something to lower the price. Most people believe the gov't is all powerful and can change anything they want.
Be careful what you ask for...
Say you're the US Government and you wanted to produce a drop in oil prices. You'd have to create demand destruction. How about this little program:
Give one month warning and then:
1. Gas rationing to reduce personal vehicle use by 50%.
2. Ration Air Travel for vacations and other non-business use. Cut that in half too, and add a few taxes in, to make combined business/pleasure trips less attractive.
Mix well, and assume you get a real 50% reduction (I've only done a quick estimate- but let's say we're talking about half of 12 or 14 million barrels a day. 6 million barrels.)
Voila! You suddenly have more fuel in the world economy! Excess capacity!
Prices will drop!
Until those b@$+ards in China produce more cars, anyway.
Of course, I don't think that's what the semi-literate whining class has in mind...
Lloyd
Thinking about your example would hopefully give people pause on how government can "solve" their problems.
It has been almost 20 years since the United States last raised the federal gas tax since 1993. If we are actually serious about reducing demand, raising the gas tax is one small step we can take today.
I'm generally an anarchist, but would whole-heartedly agree with this use of the power of taxation in our current situation. I think $5 a gallon would be a start, $10 a gallon would be even better. And YES I am completely serious.
Best hopes for finally cutting back on consumption as a response to high gas prices. That's kind of the way it is supposed to work. Too bad politicians are either clueless or are afraid to tell people the truth. Of course they can't handle it and so we will replay the record where we drudge up the usual scapegoats. I would love for a brave pol to just come out and say, "Suck it up, suckers. Did you think this would never happen again? Is that why you recently bought an SUV because you thought the crisis was over?"
Saw that coming a mile away. Indiana prices usually hover right around RBOB + $0.70. Gas prices this weekend were way too low considering where RBOB was. I filled up at 3.85 before the price jumped.
First narrative of the reactor accident I have seen:
http://www.bloomberg.com/news/2011-04-25/japan-s-terrifying-day-saw-unpr...
"What Yokota didn’t know was that the quake knocked out a transformer station about 10 kilometers away, severing the utility’s connection to the electricity grid and the power needed to keep reactor cooling systems operating."
"Yoshida could get replacement electricity from 13 back-up diesel generators to run emergency water pumps for cooling reactors. Each generator is the size of a train locomotive and capable of delivering 6,000 kilowatt hours of power, enough to run 14,400 Japanese homes for that period. Again, the engineering was working. “Most are located in generator rooms in basement 1 of the turbine buildings,” Arai said..."
"Seawater flooded the basements of turbine buildings and other sites, disabling 12 of the 13 back-up generators and destroying electrical switching units. Salt water shorted electric circuitry, depriving the reactors of power for cooling and triggering a nuclear disaster that Tepco was forced to combat with fire hoses and makeshift pumps."
They should have chosen something simple as the last resort like diesel motor with pump directly attached and manually controlled valves.
Stewart and Stevenson builds them..as do others...they used to use the Detroit Diesel 2 stroke, 6V71, 8V71, 12V71, and even the 8V92T. Mounted vertical or horizontal, direct drive emergency water pump. Get fuel and air into it and they would scream along.No electricity needed. Some of the older ones even started with a pony motor....no battery required. Like the older Dozers.
I used to build/work on them, another lifetime ago. Most municipalities had them for sewer backup pumps.
The Martian.
We had one that started off of compressed air.
The flaw with those Detroit Diesel's is that if some part of the intake cracked just right (which apparently happened more often than it should) they would burn their own lube oil and run to destruction. They were completely unstoppable in this condition. And they had to replace everything but the block. It wold have been cheaper to scrap it and get a new one, but No, we had to suffer...
Thanks.
I do hope the science editor calls this reporter up to work on Electrical units.. but otherwise useful.
(Would '6k KWH' be the size of the Diesel storage Tanks? .. if so, not all that big. I'm assuming the 'Hours' was a slip of the keyboard..)
Thanks, Jokuhl, I'm glad someone else cares about unit abuse. Its awful to read energy journalism, as very few writers have a clue what they are writing about.....
From the Lands of the PIIGS.
Greek anger mounts at €50bn privatisation plans
http://www.guardian.co.uk/world/2011/apr/22/greece-privatisation-plans-r...
Meanwhile, in Spain
Unemployment figures to hit 21%, near the psychological barrier of 5 million.
Official figures to be released at the end of the week, but the unions already have them and they criticize the recent measures of the government -essentially making it easier to fire workers, little more.
Labor union leader foresees jobless rate of over 21 percent
CCOO leader says "long road" before labor market improves
It is just like what the global bankers and global corporations did to Argentina. They took ownership of everything. So too for Greece and the PIIGS and then US. US federal lands about 30% of US will be sold, US ports and airports, waterways and water rights, any public utilities, public buildings (i.e. city hall as they have already done in San Francisco), fishing rights in the ocean will be sold to private ownership, etc..... back to work debt slave
Not true.
You're probably confusing the City of San Francisco with the State of California, which latter entity, under our former governator, had proposed the sale of certain state buildings. Jerry Brown cancelled that idiotic plan in February.
AFAIK, nobody has seriously even suggested selling City Hall. It's a spectacular building, though; if it comes up for sale, we should form a co-housing group.
One man's idiotic plan is another man's brillant crime. The building would have been leased back to the state for a tidy profit. And, you can bet the new owners will make political contributions to their benefactors. Just another small piece of the shock doctrine.
Yup.
Just saw some startling stats on The Rattigan Show. 10 years ago, 2001, the US economy was 3 x bigger than China's. In 2016 it is estimated China will take over as the worlds largest economy. So in 15 years China went from 3x smaller to overtaking the largest economy in the world.
I wonder how much oil Westexas estimates China will be using in the year 2016 vs. the US. I suppose as they run right past us we will then be using less oil and they will be using more? How well is it going to sit with the neocons (that might be part of some future conservative presidency) with China becoming the #1 world economy and using more oil than us?
I don't think that China using more oil than us is the best way to say it. Maybe, that they are using more oil and competing for the oil that we want to us.
But explain those Ghost cities in China. They may be producing buildings (which is the major way to make gains in GDP of course), but the capital is not being spent on needed development, meaning the whole shift is a game and not reflective true economic growth toward the goods and services society needs.
Good point Oct., however didn't China just embark on meaningless construction in order to keep the people working while the world was in a deep recession? Just not sure how much of China's economy can be attributed to building ghost cities. Any idea?
The Dateline link above showed me that there are massive cities with units too expensive for the average Chinese person to buy.
http://vodpod.com/watch/5866159-chinas-ghost-cities-and-malls?u=ampedsta...
The buit one city to hold 12 million and it is empty. They have video where officials are chasing them in and out of vacant infrastructures.
There was a BBC report recently where they visited another ghost city but in this case all construction had just stopped about 2008 and had never restarted (government buildings including a new tax office had been built first and now stood alone and empty). I think it's very difficult to tell what's really going on in China. Someone posted some google stats once which seemed to suggest that internet buying of goods in China had fallen after 2008 but had now recovered to about the 2008 peak level. Seems very difficult to reconcile official Chinese sales stats showing double-digit annual sales increases across the board with that.
explain those Ghost cities in China.
They're over-investing in infrastructure. They have too much investment capital chasing too few investment opportunities. It's quite different from the US, which, however, has is own ghost suburbs and cities which are turning into ghost towns.
The Chinese build these things because they figure that, with the growth rate in China, sooner or later the buyers will show up.
But growth is not always good growth unless the infrastructure is necessary for the current economy.
They are making homes for $100-300k when most Chinese earn what $6k per year.
Makes no sense and it cannot go on forever either.
It is interesting how often people get it wrong by their forecasts, and often underestimating things. It doesn't seem to matter whether it is demography(just look at the transformation of America into a semi-latino nation over the next few decades) or economics. The China vs America prediction has been continously revised downwards. First it was the 2030s, then as early as 2022(shock!), now it's increasingly clear that the U.S will help the Chinese by meeting them halfway in this decade as their nation declines into the abyss.
This was, no doubt, using PPP (Purchasing Power Parity). That tool is a joke. It is a commonly used "stat" by those wishing to install ant-china sentiment.
Simply put, purchasing power does not equal economic production. But consider this example - Jane Smith lives in Charlotte NC, makes $50K a year and lives a pretty middle class life. She gets transferred to Qong Qing with the same salary and suddenly finds that her $50K salary allows her to live an upper middle class life, perhaps hiring a maid and nanny, and more. Does this difference make China a more potent economy? This is the sort of nonsense that using PPP encourages.
If you look at estimates for nominal GDP things look a bit different - http://en.wikipedia.org/wiki/List_of_countries_by_future_GDP_%28nominal%...
The converse example is also true. Ten engineers working in China designing computer chip making $12,000 each per year is not equal to one engineer working in the US for $120,000 per year. The ten in China are producing ten times as much as the one in the US.
Can you prove that assertion on computer chips? My classmate has a PhD from CalTech and he graduated top of his class. He designs computer chips for Qualcomm and manages many projects. You cannot design these chips on the cheap. It is not some trivial process that you throw a handful of Chinese on and hope they can figure it out.
In fact you could have 50 Chinese at $5k/year and get less than one engineer at $250k/year.
This skill is not trivial to come by and computer chips are not plastic trash cans.
Well...
At UCLA Boelter Hall upstairs there used to be a circular wall of class photos. Over time, the classes became mostly Asian. So many names on research papers are Asian and Indian. There are design tools out there that all but wipe your nose for you. You could code an engine in a day 20 years ago. The subtext of the bell-curve is: the bigger the population, the more geniuses there are. American engineers in the '80s did not fully understand that the Asian producers had their own library of consumer integrated circuits. American designed products were made with essentially military/industrial parts: One could tell at a glance. Having that door open between the two different economic pressures just sucked the life out of American electronic manufacturing. By then, the easiest way to buy television parts quickly, for R+D, was to buy whole TVs in Chinatown.
Then why is my friend paid what he is paid to design chips? These are not copies of old designs. You are talking about Chinese and Japanese copies of American integrated circuits no. Who designed the chips? Who made the original designs.
This is cutting edge stuff. Not the equivalent of making a plastic trash can -- cookie cutter stuff.
Why is China not making all of Qualcomm's chips with $5k / year engineers, since they are cheap and abundant in China?
Why is Intel not moving all their R&D team into Mainland China to get those $5k / year engineers who are as proficient as the American/European engineers? LOL
Because they can't do it that cheap.
Why is Intel not moving all their R&D team into Mainland China to get those $5k / year engineers who are as proficient as the American/European engineers? LOL
Because they can get cheaper engineers in India?
Intel India Systems Research Center
Intel also has research labs in China as well. Don't be naive about the superiority of American engineers. There are an awful lot of very smart engineers in Asia, and they work cheaper.
Good Indian engineers are not that cheap anymore. You will have to pay around $50,000 for a top notch Indian engineer with experience. I am not talking about run of the mill programmers who just graduated at the bottom of their class from a no-name college in podunk. Those cost around $10,000 per year.
People are confusing html programming and call centers in Asia with top-level microchip design and computer programming skills.
The difference is like having an auto mechanic do work on your spinal cord.
You can have work done on your spinal cord in India, too. See Neurosurgery in India.
The real cost advantage of these places is not so much that the neurosurgeons work cheap, because they don't, but that the support staff works for a fraction of what they would cost in the US.
But to get back to engineering, the reality is that the engineers in India and China are moving up the global food chain and are doing serious design work nowadays. I know, because I have met some of them. You should never be complacent about what people can do because, as I am fond of telling people, there are a lot of smart people everywhere in the world. They aren't just found in Western countries.
Then Where are the Nobel prizes in India and China. Where are the highly sought after patents? Where are the fortune 500 Indian corporations? Where was the latest new medicine brought to market.
India merely copies US drugs and sells them to Africa. They do not do novel medical research. I can pick on any given area and show you lackluster research in China and in India.
If you want training in science and engineering, you come to the United States. If you want to do cutting edge medical research you are doing it in the United States.
Please list the major scientific achievements of the Rest of the World relative to the West.
My point is that you need to not just be smart. You need to be innovative. Smart is not the needed skill. Thinking outside the box requires a non-stifling culture. China censors the internet. China dictates homogeneity in its citizenry. India has a very restrictive Caste system. Neither is successful from a historical standpoint. Still waiting for those models to produce ideas.
Both cultures fail basically to meet the requirements for fostering creativity and innovation.
This is your thread now to post the fruits of Chinese and Indian engineering talents, especially in light of their culturally impediments to true innovation. You know patents. Major companies. Nobel prizes. Major technologies. Developed in China and India. Post them.
This reminds me of what was "conventional wisdom" about Japan in the 1960s. They can only make cheap copies of American products. Their culture values conformity, so they will never be innovators. Even that they were genetically inferior in the creativity department.
Nobel laureates of Japan
Nobel laureates of India
Nobel laureates of China
Assuming Chindia can't compete because they lack innovation is a huge mistake, IMO. Kinda like the one the Big Three made with respect to Japan in the '70s.
Agree fervently with this.
Underestimate at your peril..
Percent of US originated inventions is constantly dropping:
[ i.mage.+]
Intel has facilities everywhere. http://www.intel.com/jobs/costarica/
Cost Rica even
But are they going to move their core design teams from the US? LOL. No. American educated and trained engineers are some of the best in the world, hence the fact that the microchip is an America invention. All major software was developed in the US. Heck the PC and the MAC are basically from the US. The internet is from the US.
What exactly was invented in China and India?
List it here.
What exactly was invented in China and India?
Well, Wikipedia has a List of Chinese inventions.
The Four Great Inventions of Ancient China were:
The Chinese also invented the bell, the coffin, the dagger-ax, the drum, the fork, the noodle, the oar, the cooking steamer, the blast furnace, the forge, the land mine, the cannon, the exploding cannonball, the rocket, paper money, clockworks, chain drives, the potter's wheel, the seed drill, the iron plow, etc, etc, etc. For a full list in alphabetic order, see the article.
The Indians invented chess, the "Arabic" number system we all use, the number zero, negative numbers, algebra, trigonometry, quadratic equations, brain surgery, cataract surgery, anesthetics, etc. etc. For a larger list, see the Wikipedia List of Indian Inventions.
If you want modern inventions, well, they're working on that.
Still waiting for the results of Chinese Research......
New York Times: When Innovation, Too, Is Made in China
Why Immigrant Entrepreneurs Are Leaving the U.S.
One of the bizarre religious beliefs that grow out of that "American Exceptionalism" thing is that we Yanks are the only people on the whole planet who posses gray matter between our ears.
"We" are the ones who design, invent and innovate. "They" only know how to copy.
Well, time to wake up from that drunken stupor following the all night frat party.
While our kids were getting degrees in financial sleigh of hand parlor tricks, "their" kids were cramming all weekend and getting degrees in engineering and science.
Today, "they" are the ones who design, invent and innovate. "We" only know how to --no; not copy--. "We" only know how to float paper (a.k.a. borrow) and consume.
GM did not invent and design the Prius.
One of the "Them" did.
__________________
edit: you might want to check out this below post about our great and exceptional General, Mr. GM
Well creativity is somewhat of a cultural thing IMHO. I believe creativity is stiffled by homogeneity. America is great because it has a diversity of people and ideas.
Conformity is not the path to invention.
Any other country could be successful. But they are not as successful (per capita) because they do not allow for nonconformity in thinking.
This is why American inventions are top of the food chain. China could hope to one day invent like America has done for years, but you need to not just copy and build infrastructure, you need a social design that fosters creative thinking.
I am not trying to be exceptionalist. I am stating the facts on the ground.
An Asian growing up in America gets a different set of tools than one in a conformist social environment.
Thus my view is not racial at all. It is about environment.
Exactly.
Humble pie opinion.
Not facts.
http://en.wikipedia.org/wiki/List_of_Chinese_inventions
See also the following:
source
BTW. The Japanese did not invent the concept of the Prius. They merely mass marketed the product to Japan and then California. The first working prototypes were made by the Big 3 in the early 1990s.
http://www.hybridcars.com/history/history-of-hybrid-vehicles.html
So once again American innovation led the way.
My point basically. Now why the big 3 did not market the hybrid?
Well Big Oil has a stranglehold on US policy generally when issues like fuel efficiency are debated in Washington.
Hence with the early 90s oil shock averted, the need for the American Prius was no longer there.
You're kidding yourself. The Japanese automobile industry is far more innovative than the American automobile industry.
The American automobile industry would like to continue selling big, gas guzzling vehicles, whereas the Japanese industry is dedicated to designing much more fuel efficient vehicles which are not only more affordable but more reliable and of higher quality than American ones. That is why they have been eating the American automobile makers' lunch for the last forty years.
Cognitive Dissonance Alert!
Fantasy= America was and always will be the Greatest Tony the Tiger on Earth
Reality= Other people own a set of brains too
and their kids are eating the lunches of ours in math and science and ... everything else
There is this company called solazyme claiming to be able to produce biodiesel from algae fermented with sugar for $3.50/gallon. They are going to ipo soon.
http://seekingalpha.com/article/265116-the-secret-to-solazyme-s-succes
They have produced 455 metric tons of algae oil last year. This way oil just competes with sugar. Thoughts?
I think it may be wishful thinking.
Here's an up to date article on the subject. There doesn't seem to be anything scalable for $3.50/g out there.
More Than Mere Pond Scum
Probably best to withhold judgment until motion towards reality becomes reality itself. Ideally, that is.
It is easier and cheaper to make Furfural from the chemical dehydration of sugars, including cellulose from corn cobs, bagasse.
The Oil Drum: Australia/New Zealand | The Bullroarer - Friday 9th ...
9 Jan 2009... of bio-commodities, such as ethanol and the planned production of furfural, a liquid chemical made from sugar-depleted cane fibre
http://anz.theoildrum.com/node/4953
Furfural is soluble in gasoline, it is used as a diesel additive, and it is a possible fuel.
http://en.wikipedia.org/wiki/Furfural
Google "Furfural fuel", it will get you About 105,000 results
☼ Furfural fuels straight from cellulose
http://www.rsc.org/chemistryworld/News/2008/August/15080801.asp
☼ Biodiesel From Furfural
http://www.dalinyebo.com/chemicals/biodiesel-from-furfural
I think the operative phrase is "claiming to be able". But time will tell.
RMG...Rockman....Westtexas
One of you guys the other day posted their explanation of speculation and speculators. I can't find it and it takes eons to go through your past comments because it was not in the subject line or lead off sentence. My neighbour is convinced that speculation alone is driving up the prices although he does hold to PO. I can't shake him beyond making him mad about it.
Can you help me out with a quick reply and I will be able to email it to him? Or, point me to the correct drumbeat?
The allusion was betting on the Packers is not actually driving up the score......
Thanks in advance....Paul
Whoever answers this please put a number. Like ABC news did last week of 35 cents per gallon. majorian's link below puts it at $.70 per gallon.
I don't answer to any of those handles but did post a comment debunking the blame-it-on-the-traders meme:
http://www.theoildrum.com/node/7837/795711
Unfortunately, it's not a witty rejoinder like ROCKMAN and westexas often provide. But it might sway your friend if he's a data geek. ;-)
Jon
PS_ To answer Turnbull's request I'll put the "emotional factor" at $+10 per paper barrel of WTI right now. At, say 40 gallons of various fuels per barrel, that makes about 25 cents per gallon. Perhaps a little bit more for gasoline and diesel.
Just don't forget to remind people that the "emotional factor" can and does go negative just as easily as it goes positive. But of course that never makes the news.
Jon
Paulo – I know the rambling you speak but can't find it yet. Here’s one that might help.
http://www.theoildrum.com/node/7824/795603
But here’s another simple approach: ask him to explain exactly how “speculators” drive the price up. And don’t let him get away with using the question as the answer. I’ve seen countless folks parrot: “It’s the speculators” but have no clue how they do so. And the few who do offer an explanation are easily derailed.
Thanks Jon and Rock. On it. appreciate the links as always.
Paulo - Check out my post at April 18, 2011 - 3:07pm on the Drum Beat also
Tell him it's China which is driving up the price of oil by importing more and more oil, and OPEC, which is failing to meet the increased demand.
China used to be a net exporter of oil, producing more oil than they consumed. China is now importing about 5 million barrels per day, about half as much as the US does. In particular, China is importing about 1 million barrels per day of that from Saudi Arabia - as much as the US is - and Saudi Arabia's exports are lower than they were in 2005.
Oil speculation by Goldman Sachs among others driving the market.
http://finance.yahoo.com/blogs/daily-ticker/gas-prices-because-legal-spe...
I can't wait to read Darwinian's reply to this BAU-adopted talking point.
I enjoy the epic 'Speculation Wars' in the comment's section and clearly, by the flaming intensitiy of which you continue to push for the cause of the Speculators that OPEC loves to blame, so do you.
Leiten, I have been on the road all day today and am just now sitting down to my computer.
Anyway, I just checked the closing data on the NYMEX. NYMEX Light Crude Trading was very light today, just over 300,000 contracts traded but open interest (outstanding contracts) was well over 1.5 million contracts. The guy in the video says sometimes an individual trader can control 40, 50 or even 60 percent of the outstanding contracts.
Now if this is true then 60 percent of today's outstanding contracts would have been 910,000 contracts. Just margin money for that many contracts would be over 5 billion dollars. Now Goldman Sachs could easily produce that kind of margin money but... I just don't believe it.
Futures trading is a zero sum game, minus commissions. For every dollar gained there is a dollar lost. For every long speculator there must be a corresponding short speculator! Why do people think speculators always drive prices up? It is just as likely that all those short speculators are driving prices down.
Also every contract opened must be closed. A contract only affects the market the moment it is opened or the moment it is closed. A contract, while it is simply held, has absolutely no effect on the market whatsoever. Again only at the moment when it is opened or closed does it affect the futures market. And if buying, going long, huge amounts of contracts drives the price up, the moment these contracts are sold it has the exact opposite effect, the same downward pressure on the market.
Anyway from The Wall Street Journal: See You Later, Speculator
Really guys, it is just super dumb to believe that speculators are driving the oil price up unless you also believe that half the time they are driving the prices down. If you know how the futures market works you will realize that it cannot possibly be otherwise.
Ron P.
Well, yes, speculators are not driving the price of oil up. If anything, they are driving the price down.
How GS or anyone can say there is a $27 speculation premium, or any other amount, is just wishful thinking.
The problem probably originates with a general perception that all oil is the same, and equally available, so that for example oil lost in Libya could be made up from the oil sands or anywhere else.
KSA has already admitted they will not increase output because they can not replace the high quality oil from Libya with their sour crude.
So essentially oil from Libya has not been replaced, and will not be replaced. How much will you pay for something you need but you will have to pay enough so that other potential buyers can no longer afford to buy what they need to? The EU, US, and China have roughly similar ability to buy oil, so the bidding for what's left could get intense.
Darwinian said "For every long speculator there must be a corresponding short speculator!"
and then quotes from the WSJ "The number of contracts held by these investors betting that prices would increase -- the net long position -- fell by 11%, and more were shorting oil than going long over the six-month period."
If for every long there is a short how can there be more shorting oil than going long?
Speedy, obviously you have not been following this debate nor did you read the article. Everyone, by now, knows that every contract has two sides, the long side and the short side. There is no doubt about that. At least I hope everyone is aware about that by now. The only argument that the "it's those damn speculators" gang has is that it's the funds that are driving the prices up. That is the funds are always long and their long positions are driving prices up.
If the funds are always long then the individual speculators, those really dumb butts, must take the short side and lose their money. And they have to be really dumb because they keep coming back over and over to lose their money to those funds speculators who are always long and always make money. From the article:
Bold inserts mine. The talking head in Majorian's link said it was "40, 50, and even 60%". Wrong, it they usually have about 13 percent. And think about that, if 60 percent of all contacts were held by funds then a large number of them would have to be short because exactly 50 percent of all positions are short.
Ron P.
Darwinian, maybe I have not being paying attention properly to the debate, but from what I quoted it is not so easy for the layman to understand what is going on in the commodities futures market.
I don't mean to pick at you personaly, it is just that when people start talking about net long or net short, it gets confusing when you know for every long there is a short.
Either speculators influence the price up and down , or neither.
My personal belief is that most of the price of oil is based on fundementals, i.e. dwindling supply against increasing demand.
Again, no offense was intended.
Dave
Speedy, the debate is whether or not some types of traders are net long or net short and influence the price of oil. Everyone realizes, or at least should realize, that the net longs and net shorts are equal. For every long there is a short.
The debate is whether the funds as speculators, are net long or net short. Actually the funds bet both ways and usually hold as many shorts as longs. Not the same fund of course but one fund can have net longs while another fund is net short.
But as I said for every long contract there is a net short. If one makes money the other loses money. And there are no exceptions to this. It is just like a crap table. There are two sides to every bet but when the house takes its share there are only net losses. Commissions are like the house's share. Commissions take a zero sum game and make it a negative sum game. But because commissions are quite low, compared to moneys bet, some very good traders can be net winners. They are usually less than 10% of all traders however. And the winners always play both sides. They know when to go long and when to go short. Well not always because everyone loses some time.
Ron P.
Speedy, I was along on that debate, but not arguing with Darwinian or Rockman, with whom I agree that speculators can't possibly be moving the market to this extent. There ARE speculators of course, they are just gamblers betting on red or black (red going down, black going up). Here's a link, which was the first thing that showed when I Googled "oil futures explained". There are other links like this one that go on to explain it further. They seem simple enough for me, especially compared to "McMillan on Options", which was handed to me when I was going into energy trading (electricity not oil). Like Darwinian I didn't stay.
OPEC produces 40% of world oil, which was actually rising as of 3rd quarter 2010 and you think they are running up the price of oil.
http://www.eia.gov/emeu/ipsr/t22.xls
Darwinian is a speculator who blames OPEC for price hikes and says market speculation is almost impossible.
You are being played.
Okay Majorian, let me make my position clear because you have it all wrong. Many here may say that OPEC is running up the price of oil, I am not one of them. Well they are not intentionally running up the price of oil. They are producing every barrel they can, or every barrel they dare without damaging their fields. That is just not enough and therefore the price is going up.
I do not blame OPEC for price hikes or of doing anything other than producing every barrel of oil they are safely capable of producing. Of course they are a cartel and their original intent was to keep prices at a safe high level. Now most of them realize that prices are at an unsafe high level but there is really not much they can do about that.
And where do you get off saying that I believe market speculation is almost impossible? I have never said such a stupid thing. Of course market speculation is possible. Millions are speculating on the market right now. They have been speculating for years and they will likely continue to speculate for yers in the future. Nothing is so easy as market speculation... if you have the margin money to put up.
What I am saying is that for every speculator that is betting that oil prices will rise there is another speculator betting that oil prices will fall. A futures contract is a bet! If you or a hedge fund or anyone else wishes to place a bet that oil prices will rise then someone else MUST take the other side of that bet and bet that oil prices will fall.
If there is anyone, or any funds, betting that prices will rise, and if they always win then there must be someone out there always losing. If that is the case then boy are these guys, these speculators, really dumb. You would think that sooner or later these guys would lose all their money and stop betting.
The peaking of world oil supplies is responsible for the high price of oil, not OPEC, not the Fed and certainly not speculators.
Ron P.
Ban Goldman Sachs and hedge funders from the markets forever and we'll see if there's Peak Oil.
What we're seeing is Peak Money.
But I won't tell anybody...your secret scam just between us.
In other words, Ron should stop pestering you with facts that don't fit your worldview.
He's weak on links but his own opinion is very loud and monotonous, which is why he's so popular here.
I think of him as a kind of TOD Donald Trump.
IMO, his explanations of how the oil markets work has been crystal clear and compelling. Basically, he keeps giving the same answer when asked about "speculation."
Just google how futures markets work for oil and I think you will find that they closely follow Darwinian's explanation. What, in his description of how futures markets work did you find erroneous?
You probably think I am just trying to jerk your chain. No. I genuinely want to hear from someone who is able to effectively refute Darwinian's arguments. Sadly, people on both the left and right in the media think that speculation is the main cause of higher prices. However, they provide no real arguments supporting their position.
It seems like people always want to blame someone else. Our demand, along with every other consumer, is what is driving the higher prices.
Speculators can drive prices higher by ensuring that product is withheld from the market, artificially reducing supply. With oil, this does not necessarily mean a large and growing stockpile somewhere in the world.
Hypothetically, in a situation of tight supply, a large producer could restrict its production while alternately saying, "the market is well supplied", and "we raised production last month, but no one bought it", and "we're going to cap our production capacity", and "we're restarting development projects", and, the latest: "it's all a bit concerning, really" (today's top-of-Drumbeat) -- all these to add uncertainty and so get buyers' fears to help drive up the price.
They'd keep the old stand-bys, "technical difficulties/mechanical breakdowns/force majeure/staff or subcontractor incompetence", in reserve for when the hard questions start getting asked. The game could go on for quite a while.
Hypothetically.
Of course Darwinian is right -- futures contracts can't affect the price, except, maybe, by changing expectations. If futures prices are rising, maybe buyers don't bargain as hard -- they subconsciously think they're getting a good deal. But from what Jon posts, the futures chain is flat.
Gregvp surely you are aware of the fact that when people talk about speculators, they are not talking about people hording actual oil. Speculators are people who trade futures because they can buy one contract with only about five percent of the price of a thousand barrels.
And yes it would mean very large stockpiles somewhere in the world. These people, if such people actually existed, who would have to hoard several million barrels of crude. With 74 million barrels per day traded per day they would need to hold off about a million barrels per day in order run the price up. This would take a lot of money and would be obvious to the world that such and such billionaire is hording oil. That is not happening. So saying that hording by some billionaire is purely academic.
Ron P.
Right now, Darwinian seems very persuasive. His ability to persuade is a direct function of the arguments and facts he presents. But I'd like to think I have an open mind. Try as I might, I cannot see the flaw in his argument. Perhaps you could point directly to the flaws in his argument. Saying that we should experiment by banning speculation does not show the flaw. Darwinian does not have the power to ban speculation as far as I know so your challenge does not really do any good in settling the argument.
Following are what we show for global net oil exports for 2002 to 2009 (oil exporters with net oil exports of 100,000 bpd or more in 2005, which account for 99% plus of global net oil exports).
Note that global net oil exports increased at about 5%/year from 2002 to 2005, and then we had flat to declining global net oil exports. I suspect that this inflection point was quite a shock to oil importing countries, especially developed oil importing countries.
From 2005 to 2009, I have added Chinidia's combined net oil imports. The difference between the two is what I define as Available Net Oil Exports (ANE), i.e., global net oil exports not consumed by Chindia.
As you can see, ANE fell from 40.8 mbpd in 2005 to 35.7 mbpd in 2009. A plausible estimate is that ANE will be down to about 27 mbpd by 2015, but we shall see what happens.
Global Net Oil Exports (BP + Minor EIA data):
2002: 39 mbpd
2003: 42
2004: 45
2005: 46 - 5.2* = 40.8
2006: 46 - 5.5 = 40.5
2007: 45 - 6.1 = 38.9
2008: 45 - 6.6 = 38.4
2009: 43 - 7.3 = 35.7
*Chindia's combined net oil imports
This table shows the detailed data for 2005 to 2009:
http://i1095.photobucket.com/albums/i475/westexas/Slide3-1.jpg
I haven't yet had someone offer me an explanation of how futures trading (speculation) can affect the actual price that real crude oil is traded at without taking physical crude off the market or adding physical crude to the market.
We get a lot of opinions from market pundits, but I'd really like to hear from some folks who actually trade the physical crude, such as someone working for a refinery who buys crude or someone working for an oil company who sells crude. They should be able to shed light on the issue of how the COMEX (or other commodities exchange) prices affect the actual sales contracts for crude oil that are made by the actual producers and consumers of the oil.
I have never worked for a refiner/distributor just in a trading room of a major Wall Street firm, and for some months, for an international shipping company. I also worked briefly for a public utility on a per diem basis where I reviewed futures trading, and they did buy and sell futures contracts, but generally they traded futures for the purpose of hedging pending cash market trades - without intending to take delivery on the futures. For example, buying futures now and then selling when the actual physical commodity is bought.
I am not aware of any tankers, etc., being used to store oil, products, off the coast of the US - although that would not really be that unusual for very large oil trading firms to store some oil offshore this time of year to meet the peak demands of the summer driving season.
So your question - where is the oil these speculators are supposedly buying? - is a very good one, and the lack of an answer to that question is very telling.
American Basic Economic Security Much Different than 'Poverty Line,' UB Researcher Says
Maybe the economy does not make enough to provide for all the citizens and guests. Maybe some will have to starve?
GOP to make hay in May over gas
Well I like Theater. Not trying to be political.
Of course we will be talking about ANWR which I would think we would want to reserve like the Strategic Petroleum Reserve until things get real ugly. Right now it is just Average Joe who can't run his SUV and his motor boat all the time. I honestly do not feel bad for Americans. We live high on the hog compared to someone from Africa.
Also as a matter of comparisons, wouldnt public money spent on electrification reduce as much gasoline demand as the increase in oil production from these other domestic sources.
Dollars and cents-wise they could do both. More drilling. More electrification of cars -- spend equal public money on either end, but I bet then they would balk. Compromise has ended in D.C. alla the last 2 years of filibustering etc. So I think the Repubs will not get anymore drilling from the Dems. You gotta give to get something in return.
Those are my two cents.
The great bubble predictor and reversion to the mean investor Jeremy Grantham changes his view:
Warning PDF:
http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf
http://en.wikipedia.org/wiki/Jeremy_Grantham
Wow thats quite an article that Grantham has come up with. That might just get a few folk thinking.
Agree with Andy. Thanks X.
Right, this article is a real keeper. I am going to print it out, mark it up with a yellow highlighter, like I do all my good books, and refer to it often. Ever so often we come across an article like this. Glad we did not miss thin one.
Yeah, that's a problem for sure. Unfortunately there is no fix for those optimistic, short-term-oriented relatively innumerate humans, that's just a product of our evolution. We evolved to survive another year. Then next year we will face those problems when they arrive. That served us well in our hunter-gatherer days but not today. A very few, like Jeremy Grantham and many members of TOD are not so myopic. But there is no changing the world, it's just in our genes.
Thanks for the link Iowa Corn Farmer.
Ron P.
I made it to page 9, but I have to get back to work. Great article that I will finish later.
Grantham is paying attention. Anyone that looks carefully at the data will reach the same conclusion.
What we're seeing is an interplay of
1) growing population which you can investigate with the Population Trends databrowser
2) limited mineral resources as showcased in the US Minerals databrowser
3) limited fossil fuel supplies evident in the Energy Export databrowser.
The extent to which investors understand this interplay is reflected in the futures market which becomes visible at the Futures Explorer.
The data tell a pretty clear story.
We're doing everything we can to make it easy for folks to interact with the data and reach their own understanding.
Take a look at the data yourself and see what conclusion you come to.
Jon
Nothing more than Dr. Albert Bartlett has been saying for years...
"The greatest shortcoming of the human race is our inability to understand the exponential function."
http://www.youtube.com/watch?v=F-QA2rkpBSY
I seriously doubt that humans will have a sudden attack of rationality.....
"Third, our analysis of Easter Island and the other cases suggests that economic decline based on natural resource degradation is not uncommon.
Institutional change could potentially have averted collapse in many of these societies but it was not undertaken (or at least was not undertaken fast enough).
Institutional failure in renewable resource use does happen, and it has been fatal for several societies. "
Extract from:-
http://are.berkeley.edu/courses/ARE263/fall2008/paper/ContinuousTimeDyna...
There is a belief that when the cost of gasoline goes over 5% of GDP there will be a recession in 60 to 180 days. Gas went over 5% some time ago anybody have an exact date? Do we expect a recession? How will the president pump the economy for his re-election bid? When will that start?
Well, if we get another economic step down like 08, then Obama better pack his bags for Chicago. It might not be his fault, but the voters won't care.
I heard he's a muslim, socialist and even a Kenyan too, so he might go back to Africa and preach the virtues of Radical Islam, now that he's finally free to speak his mind openly after all these stifling years in Washington trying to pretend to have been born in the U.S. and actually like the country, while he in fact was always secretly out to destroy America.
Thankfully the only person who sees this, beside me and Glenn Beck, is Donald Trump. He is now just an inch from running for office. We are saved.
Steven Kopits is back with a new article at ASPO (USA).
He basically says that historically, when over 4 % of the U.S. GDP goes to crude consumption, the other sectors are cutting back and therefore creating a recession(sometimes as shortly as within 30 days, at times as long as 9 months).
From my personal observations, if you count from the time oil hit more than $90 dollars a barrel for all major blends, the 9 month timeframe ends at the intersection of autumn and summer this year, around September(give or take 1 month).
Steven Kopits says that as of April 22nd, the crude consumption for the U.S. now stands at 6 % of GDP, which is the dangling little star in the graph.
In few words: the prices we are now having are unsustainable according to extensive research made by several economists, such as James Hamilton.
He also states that unless oil prices go down, an oil shock may come as early as this summer(which is hardly a radical position to take among the TOD:ers) but he is a moderate economist and businessman, so for him to utter these words is something that at least I find noteworthy.
He also says that according to his firm and the research they've done, most of it quantative, they deem that the chances are 'over 50 %' that the world will experience a major oil shock before 2013.
Note that he uses the term oil shock and not "hit the peak". This is because he is a careful man and does not want to get ahead of himself.
Even if you already hold positions close to his, you might gain a few deeper insights, because he also discusses the role of the SPR as well as the eventual role that speculation might have in oil prices, among other things.
His article is here:
Pick One: SPR or Recession by Steven Kopits at ASPO USA
Simulated annealing.
As you go round the cycle of oil price spike > recession > fall back > recovery, you preferentially kill off those usages and businesses which are dependent on cheap oil. Therefore the level of oil price that can be endured without generating a recession tends to rise over the cycles.
As such, even if it were $90 last time, it wouldn't be now. Fuel economies, systems, heavy industries get forced out of the totality, or offshored.
Now that doesn't mean there aren't other effects that mean the global economy is in worse shape to endure high oil prices this time, but that effect will 'anneal' the economy over time. My guess, probably by $5-$10 a cycle.
Where did you get that idea? I have the opposite opinion, that oil price will not exceed 147. A lot of retail outlets barely survived the Great Recession and many borrowed to get through it, hoping to pay off those debts in the recovery. If the recovery is already dead in the water due to higher priced fuel, then retail outlets will dump on an unprecedented scale, and many jobs with them.
In 08 the price of oil went to 147. Right now WTI is 111.24 and Brent is 123.66. Your prognosis is those prices will exceed 147? Right now the price has stagnated because some demand destruction is already occurring. If you remember what happened in 08, there was little warning that all hell was going to break loose. But suddenly it did, with the stock market tanking, the price of oil crashing, etc. We are in the midst of approaching another crescendo moment, it just hasn't happened yet.
This situation of skating along a plateau of oil production while Chindia continues to expand is a ticking timebomb ready to detonate at any time in the next few months. This time though there will be little if any stimulus or bailout money. It will be sink or swim, and many people will become disenfranchised. The oil age seems alive and well as you get out and about. Things don't seem so bad, but there is a creaking sound that's there if you pick up on the cues.
Agreed! Beijing property prices fell 26.7% in the last month... I would say the bubble is already popping. Will most definitely be messy. Oil prices falling by 50% in the next 3-6 months? (However, wouldn't be suprised if oil prices spiked before collapsing).
As stated, I'm not saying there aren't other effects in play, one of which is the damaged state of business and government finances after the effects of financial fraud 1. However I'm saying that if you strip out the other effects, then there is an annealing effect that tends to push the resilience of the economy to higher oil prices ever upward every turn around the cycle.
If you are lucky there might even be a further effect where companies and governments 'intelligently' anticipate the future and reengineer old methods to be resilient to a high oil price future.
Frankly, if you were smart, you'd be planning now for a $200 future. Can your entity still function with the 1st and 2nd order effects that would bring?
Demand destruction worked the last time oil hit triple digits, no reason to assume it won't happen again. Jeff Rubin makes some pretty convincing points here
This is a thought I have had for some time now. Some industries that aren't as dependent on cheap fossil fuels weren't hurt as bad by the previous oil spike - others that are highly dependent on cheap oil are only now recovering (only to get punched in the gut by high oil prices again).
I like that analogy. Only there is nothing "simulated" here, its just plan old anealing.
Annealing, in metallurgy and materials science, is a heat treatment wherein a material is altered, causing changes in its properties such as strength and hardness. It is a process that produces conditions by heating to above the recrystallization temperature, maintaining a suitable temperature, and then cooling. Annealing is used for inducing ductility, soften material, relieve internal stresses, refine the structure by making it homogeneous, and improve cold working properties....to quote the Wiki.
The Martian
Looking at the graph above, one gets the feeling that the economy is less capable of dealing with oil price rises, rather than the generally held belief that the economy is in better shape to deal with the increasing cost of oil.
Sniffing the air, the atmosphere feels highly charged as though a terrific storm is approaching. It feels as though the next major economic crash is on its way.
Here is Jeremy Grantham's latest newsletter:
http://www.scribd.com/fullscreen/53865070
Key quote:
"The fact is that no compound growth is sustainable. If we maintain our desperate focus on growth, we will runout of everything and crash. We must substitute qualitative growth for quantitative growth."
Commodity collapse approaching fast?
Almost all commodity prices including silver, gold, oil and grain are reaching record highs. In my view price increases can be attributed to three main factors:
1. A loss of confidence in paper money combined with (as a result of)QE.
2. China's completely unsustainable investment in housing and transport infrastructure.
3. Availability of raw materials. (Geological, hydrological etc.)
There are currently 64 million empty apartments in China. Read that one more time. 64 million. Yes, that's right - almost enough housing to accomodate a quarter of the population!!! The bubble is bursting.
http://vodpod.com/watch/5866159-chinas-ghost-cities-and-malls
Prices are already falling faster than a bungee-jumper:
"BEIJING (MNI) - Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission. "
http://imarketnews.com/node/29203
Did you all see that??? 26.7%!! In one month????
If the Chinese housing bubble now pops, Chinese banks go bankrupt and Chinese demand for raw materials collapses we could see absolutely enormous falls in commodity prices in the near future. (2011?). Add to that the fact that QE may be reduced by the Fed... and there is even the possibility of deflation being the problem and not inflation...
I would not be in the least suprised if we see oil falling to Euro 50/BBL. And I'm saying Euros because the USD may collapse at the same time. But even if oil will still be relatively costly for those operating in USD it will probably not be for anyone else. It already looks as if the USD's time as the reserve currency of the world is over and that we are now at so many tipping points that almost anything can happen in the near future.
Everybody invests in the US market, because it was thought to be safe. So, when the US housing market crashed, investors around the world got hit. If China is the epicenter of the next crash, how does that play out? Does China simply use less oil, and we get a break on oil prices? Or, is there enough outside investors in Chinese housing to crash European and US banks?
Do you have any recent references for the number of empty apartments in China?
The 64 million figure appears to have come from an unsourced report in August 2010 that there were 64 million electricity meters in China which had registered zero usage. This was subsequently denied by the utility companies.
But I can also imagine electricity meters reading zero usage in occupied apartments -- occupants forego electricity, bypass meters, use electricty from an adjoining unit, etc.
They built a city of for 12 million where units are at best 25% occupied. That is just one city and example. How hard would 64 million be to imagine?
IN any case, why speculate? It is clear from the TV footage that those ghost cities are completely absent of life.
Ok, I can believe 64 million empty apts in ALL of China, not Beijing. The other problem is that 64M x 4 = 256M, which is itself only 1/4 China's population, 64M is 1/8th. Now let's look how fast they are adding population. Even with the one child program, they are adding about 81.4 Million new people per year! The power of large numbers. So, if you are China and you are adding 80+ million per year, how quickly /should/ you build infrastructure? What does it take to stay ahead of the curve?
A quarter of a quarter = 1/4 * 1/4 = 1/16
China has about 1,200 million people.
64 million apartments = 64/1200 = 5.3% or roughly 1/19th
Of course, one person per apt is probably not the norm in China.
lol, thanks for the catch. My neighbor had invited me over to try an 18 yr old scotch last night and I was foolishly posting afterwards (the scotch was fantastic!_) No more drinking and posting for me... ah who am I kidding? I'll do it again and am counting on you to catch my mistakes in the future too! ;)
You guys are out to lunch on this. Watch the video and listen to the economists. No one in China but property investors can afford the apartments. Most Chinese are dirt farmer poor. The average wage is like $5k.
Those are not $20k apartments. LOL. They are $100-$300 k apartments. Big difference now in your estimates of housing supply and demand.
If you compare China and the US, even assuming the 64 million empty housing units is true (and there is no reliable data), you have to consider that the US has about 14 million vacant housing units.
China: 64 million / 1.3 billion people = 0.049 empty units per capita
US: 14 million / 300 million people = 0.047 empty units per capita
So, there is not a great deal of difference in the number of empty housing units per capita between China and the US. The main difference is that many of the empty American units result from mortgage defaults, whereas the majority of the Chinese units have no mortgage on them - the owners paid cash. So, in the event of a real-estate crash, the owners would only suffer a paper loss, and the banks would not be hurt.
Another major difference from the US is that China has no property taxes, and, since most investors have no mortgage payments, it costs owners of vacant apartments nothing to let them sit idle as speculative investments. They view this as lower risk than the other things they could invest in.
One of the reasons governments in other countries levy property taxes is to discourage people from leaving housing units sit vacant. They want to put a cost, preferably a high one, on an empty housing unit. Most governments prefer housing to be used as housing rather than a speculative investment.
Those so-called investments look sickly in the Dateline video. Empty. Paint falling off the walls. Not sure I understand why you build for things that the average citizenry cannot afford. Thus I classify the enterprise as a pony and dog show of so-called Chinese growth. A joke on the West in the end. Many do not know.
One other point to make however. US housing units are fairly well spread and intermixed. These are entire vacant cities with zero life in them for as long as 6 years! and all high end properties. Only one model has a chance of coming to life. It is not the empty city imho.
The Chinese built a bunch of Disney Lands. Great show. It really opened my eyes.
A Peak Oil Warning
Half the fun in reading these "Seeking Alpha" articles is reading the comments following the article. An example:
I don't know whether to laugh or cry.
Ron P.
End of "Fossil Fuel Age" will drive oil-prices up"
I tell you it's happening. Fewer and fewer people believe the Saudis and more and more people are coming around to realizing that any new oil will be very hard to find and more expensive to produce. And that will lead them to the realization that Peak Oil has arrived.
Ron P.
Even so, Peak Oil is a fringe intellectual stream. By the time most people get it it will be far too late. We're already at the plateau since 6 years back. How long can we stay on it? I doubt for longer than 3-4 years at the most unless something truly amazing happens.
We are now at the point where speculation of *when* the Peak will occur is pointless. We're there now. We cannot even have growth without an oil shock now. What more proof do people need, and yet look at our MSM, both in Europe and America. They are utterly horrible.
Since we have now reached the stage where normal growth cannot be sustained without constant crashes, that settles the timing of the Peak. The question now is how far the descent will be, and how fast.
The coming decade will make the 1930s look like a picnic.
A pipeline from Cushing to the coast - The WTI/Brent spread should come in if/when this pipeline actually gets built.
http://online.wsj.com/article/BT-CO-20110426-707710.html
Talk about devils in the details. Does the article say anything about whether the partners already have rights of way? Q4 next year is beaucoup quick.
The Newt gets caught. Loses tail, but not to worry he will grow another one.
http://www.politico.com/news/stories/0411/53678.html
Americans depend more on federal aid than ever
What will the people do when the 18.3% of total income goes away?
A. Cry to the politicians?
B. Beg, and Steal?
C. Starve?
D. Go insane?
Is it time yet to suspend minimum wage laws?
Yeah, you do that. And then, hope that people who rely upon those minimums to (barely) feed their families don't come to your neighborhood at night to pick up a few essentials.
There is no reason to believe that a free market will provide for all people. Some may starve. If they do not go peacefully the government will have to deal with them.
Yeah, you "free marketeers" always want society to protect your hoards from the hordes.
In a truly "free" market you'd be on your own. I sincerely hope it comes to that. You richly deserve it.
k - For what it's worth I've never depended on the free market or society to protect or take care of me. I've been on my own since a teen and IMHO I do deserve what I have today...and am very please with it. Do the hoards worry me? Not in the least...I leanred at an early age how to deal with such problems. Who knows...could be a start of a trend where folks don't just stand there with their hands stretched out. Certainly won't be easy for many to do so. Probably impossible for a number. OTOH I don't recall seeing anything on my birth certificate promising life would be easy. I've seen many sources of failures in my life: by politicians, religions, corporations, family, etc. But the most common source of failure I've witnessed first hand was folks not trying their hardest to succeed.
At some point though this crosses the threshold from whether life is hard or easy into the realm of basic fairness and trust. My father worked for 30 years for GM and when they went belly up a few years ago he lost his health insurance and has struggled ever since to find an alternative. He worked hard and retired after, in good faith and trust, working under the of course naive premise that he would be taken care of...
Well of course corporations go under and bad things happen - no one denies that - however there is never any perception or reality of SHARED sacrifice and consequences. Of course we'll deny the working stiffs their measly pensions and health care or minimum wage but have any of the middle management on upwards shared in this - probably some lost jobs - but far more never had to give up their pensions or liquidate a couple of their five plus vacation homes... Nope they "muddled" along until they had the good fortune to be on the "inside" when the next IPO came around.
Without some sense of trust this whole grand experiment implodes and the free marketers will realize just how short a journey it is to a free-for-all. All the much worshipped economic models and free market mythology will quickly become irrelevent once enough people realize there really was no intent to allow them in on the "american dream".
To summarize - as Matt Taibi wrote in his book and Rolling Stone article - "the whole thing is f-ed up and nobody went to jail..." There can be no trust in a system or society that operates like that. When fairness becomes this out of whack it's a short trip to the cliff.
Cat - Sounds like your dad got the same end of the dirty stick that the grandfather who raised me did. Maybe as a result you're more like me then they were: I've never counted on corporate mentality doing the right thing. To me a "promise" has a very fundamental difference than a contract: they're free to break promises...contracts not so much. I went to work for Mobil Oil in 1975. But many of my professors were geologists who were kicked out of the industry in the early 60's. And without so much as a "sorry about that". Just an envelope with a note saying you're fired delivered by a security guard who walked you to the door and took your keys away. Needless to say the corporate BS from Mobil management meant nothing to me. And then when the bust came in the early 80's I got to see the next slaughter first hand. Many families decimated. Two geologists I knew of committed suicide. Been workoing as a consultant since then. And when most of that work dried up in the mid 80's I drove a Yellow Cab when I wasn't delivering food to restaurants in my pickup. So maybe you see where I developed the attitude of not depending on anyone for anything. To be honest I don't entirely trust me. LOL.
Great post, couldn't improve on it.
Let me make my point more clearly, Rock: There is no such thing as a "market" that exists outside the rules and sanctions established by the community (whether those rules and sanctions are based upon democratic process, revealed by the gods to the high priests, decreed by a king, whatever). Without those rules and sanctions, the biggest, the sneakiest, the greediest and the best-armed simply take what they want.
And, although you may not recognize it, you depend upon that market and the society that ordains it, and you always have.
No doubt you have worked hard for what you have and feel you deserve it, but you only have it because the society you live in provides a structure that, for instance, recognizes and enforces contracts.
Your property is only "yours" to the extent that the community approves ownership and it is subject to the limits we, collectively, decide.
Society protects and "takes care" of you every minute of every day, and you wouldn't have a chance of survival if it didn't.
As for the most common cause of failure, well... your view is probably the most common among members of our society who feel successful. Whether it is an accurate one is another matter, but let's break this into bite-sized pieces.
k - lets try this angle: I am the market. Me and folks like me (and you probably). We, the makers (or tools if you prefer) of the market, take care of society every minute of the day and "they" wouldn't survive if "we" didn't.
I don't exist because the market allows me to...the market exists because I do. Or to be more blunt: you ever get a paycheck from a poor man?
That's true, Rock. But "we" wouldn't be doing all that well if "they" didn't support and accept the system we operate in.
And both of us have received a significant portion of our paychecks from poor people. It trickles up to us.
Every richman's check comes from the sweat of thousands to millions of poor men.
OK dohboi...let's try a few facts from the govt's GAO. About 94% of your "poor men" work for small businesses (companies employing less than 100 folks). There are over 8 million small businesses compared to 250k large companies (over 1,000 workers). So those small companies pay the vast majority of those paychecks to your "poor men". And those paychecks collectively add up to many times more than those "rich men" make by owning those companies. Thus those "poor men" owe their paychecks to the sweat of other "poor men” as well as the entrepreneurs who risked their investments and provided their “sweat equity” to start those 8 million companies.
See...those emotional taunts don't stand up very well to the facts, do they? But you make a vald point: our system works due to the efforts of all involved.
ed - Did I miss the memo? LOL. Since when was the free market responsible for providing for anyone let alone everyone. The free market helps the govt by paying taxes which are than used to help those unable to take care of themselves. If anyone is responsible for taking care of these folks it's society in general IMHO. Society is free to tax the market place for the funds it needs but has to balance that with leaving the market sufficient revenue to carry on business.
And doesn't that define the predicament we're in today: the market place has to deal with increasing energy costs and thus unable to provide all the govt needs to take care of folks who can no longer do so because of higher energy costs. And as gov't pulls more money from the market it maty actually develop a smaller tax base.
Thank goodness the Fed can just create money out of thin air to make up this natural deficit.
FEMA has some lovely camps. They will camp in remote isolated areas of the country. And then???? What will be the final solution????
TEPCO begins unprecedented procedure to fill containment vessels with water; experts raise doubts
Fukushima catastrophe ‘already more serious than Chernobyl’
Why is the WTI price stabilizing at 112?
Is there a lack of news to push to trend line?
It looks like they might try to slow boil us this time. :)
It's called demand destruction. $112 dollar WTI and $124 Brent is killing enough demand until demand now equals supply.
Ron P.
eastex - And remember: if you're referring to WTI as put foreward in the futures exchange this isn't what any oil, WTI or any other, is selling for today. It's the futures price of WTI probably 30 days out. So if WTI has become flat it means the traders aren't expecting the price of future contracts 30 days to be any higher. Those future contracts will be what they'll be regardless of what the future traders are predicting today. And for every bet predicting correctly and making a profit there will be one wrong predictor losing money.
Alright it's late - here is a beyond fossils mode of flying ..... completely non polluting as well
Water-borne IED Threats and the Strait of Hormuz
Study shows developed nation's reduction in CO2, outpaced by developing country emissions
Don't the poor countries mostly produce that extra CO2 producing crap for the richer countries to buy?
62-year old man makes car that runs on whisky
I don't think it's too difficult to make an IC to run on 180 proof White Lightning, but 80 proof whisky isn't gonna fly. Besides the story is a spoof...
E. Swanson
3rd Coca-Cola's Profit Up As Revenue Climbs 40%
IN the old days we used to drink little bottles of Coke in glass bottles that were returned for a deposit. Same thing for Milk.
Wonder what the break even point will be for smaller glass bottlers/returns all over the country with cleaning facilities or large central distributions with high transportation costs and plastics requirements.
PET weighs quite a bit less than glass so I would assume that PET would have to travel a much longer way before transportation costs equalized. Also, the price rise in plastics will result in more stuff being recycled so maybe that will moderate price rises some as oil supply becomes more scarce.
PET soft drink bottles can be recycled into clothing, carpets, polyester sheets, strapping, or back into PET bottles. I have several fleece sweaters that are made out of recycled soft drink bottles. The labels say so.
In Europe, about half of all PET bottles are recycled.
Yes polyester thread is very important stuff, and many Americans still throw away coke bottles. Curse them! LOL. Kind of pisses me off actually ;-)
But what I mean is when PET is more useful for thread and PET gets expensive won't the old days of local soft drinks and refilled glass bottles be kind of nice again.
Nothing better than drinking a coke out of a reusable glass bottle. Such perfection.
We still have the glass bottles here for the individual size alongside plastic ones. There is also a heavy duty, larger plastic bottle that is returned for refilling too.
NAOM
MIT recommends interim storage for nuclear wastes
The Massachusetts Institute of Technology today released a report called the Future of the Nuclear Fuel Cycle, where a panel argued that the U.S. policy needs to make spent fuel treatment an integral part of nuclear plant operations, rather than an "afterthought."
http://web.mit.edu/mitei/research/studies/nuclear-fuel-cycle.shtml
It's quite baffling that, 50-60 years down the "atomic-power-road", there are still no finale waste storage facilities in place anywhere in the world... but eventually the Finns have taken the bull by the horns- giving it an effort.... but to which price?
This Onkalo nuclear waste facility at 1700 ft down (picture) is supposed to deposit ONLY Finland's own nuclear waste - coming from their 4-6 reactors.
Onkalo waste repository :: http://en.wikipedia.org/wiki/Onkalo_waste_repository#Onkalo_waste_reposi...
Do the mental upscaling yourself to understand how many miles the US has to provide- sometimes down the Peak Oil-slope....
New CNBC video tries to blame the Fed for high oil prices, but at least someone wants to blame supply and demand... and the depreciating dollar.
Blame Bernanke for High Oil
Ron P.
He talked about "perceptions of reality in the future" affecting price. Could it be that perceptions of the futures market, however erroneous, could affect perceptions of reality? If so, couldn't one say that the behavior of the futures market could affect prices in that way? This would be a counter argument to the idea that it is just fundamentals affecting market. I think that the stock market often moves this way. Why not the oil market?
If true, then the answer is not to ban speculation but a concerted effort to explain how the futures markets work. I nominate you as a guest on CNBC.
To his credit, Obama's recent letter to congress mentioned demand and middle east turmoil as the main drivers of higher oil and gas prices. He did not mention speculation. Perhaps the White House really doesn't buy the speculation argument.
I think that the stock market often moves this way. Why not the oil market?
Of course it does if you are talking about the futures market and not the spot market. Perceptions of what the price of oil will be in the future definitely affects what oil futures trades for right now. And the further out in the future you go, the further the oil futures price will likely be from the spot price. But as the trader in the film stated, the futures price can swing the spot price for a few hours, perhaps as long as one day, but not likely any longer than that.
Futures traders try to guess what the future price of oil or other commodities will be in the future. That's why they call them futures.
Don't worry, they will never ban the futures market or "speculation" as some refer to it. There are legitimate hedgers, (nothing to do with so-called "hedge funds") that depend on the futures market. Speculators are the guys who take the other side of hedgers so they are needed.
CNBC never has peons on their show so I could never be a guest.
Ron P.
Ron P., doesn't the Fed's present monetary policy have the effect of depreciating the dollar?
Of course it does. Did I give you the impression that I thought differently? And the dollar has an effect on the price of oil... on the price of everything. Oil is always traded in today's dollars. If we have runaway inflation oil will be higher for that reason also, along with supply and demand.
Ron P.
Ron P., no.
I was unable to get the Blame Bernanke for High Oil video to work for me so I did not see the actual story.
I was responding to the following line which I may not be understanding properly being abridged and out of context:
"New CNBC video tries to blame the Fed for high oil prices, but at least someone wants to blame supply and demand... and the depreciating dollar."
Yes. But it has only depreciated a little bit, but oil has doubled. So the Feds effect is little more than noise. But, we have a certain ideological crowd, for whom the Fed is the evil ogre that causes all harm.
I absolutely love listening to them tie themselves in knots trying to admonish the methods and behaviors that they otherwise unflinchingly cheerlead.
They have no problem whatsoever as far as I can tell regarding any other form of "speculation"... but this one hits too close to home and threatens the party line regarding the "recovery". And if they were ever to admit actual supply issues - well then that really threatens the whole house of cards.
Of course they are so completely invested in their belief system they probably truly can't see any other reason for high prices besides speculation... case in point - a week or so ago they were talking about how hot the market was for used fuel efficient cars. Of course one of the comments by the airheaded host was something along the lines of "wow - well I guess now is a great time to get a deal on a bigger truck or SUV..."
Indeed it is.
Texas City BP Refinery Hit by Power Failure
http://www.reuters.com/article/2011/04/26/us-bp-texascity-idUSTRE73P1VQ2...
One report said the failures were caused by "residue" on the power lines. Normally the residue would be washed away by rain, but there hasn't been any rain.
Texas City residents are being told to stay indoors and turn off the A/C, which is like being locked in a sauna.
Shelter-in-place order lifted
Local news video of flaring during the power failure http://www.youtube.com/watch?v=QDYt1cUunTw
Does anybody know what the benefit of locking everyone indoors is supposed to be, other than to feed the self-importance of emergency officials by suggesting that they are "doing something"? "Turning off the A/C" suggests fumes. But surely many houses are not so well sealed as to keep fumes out for long?
Obama to congressional leaders: End oil subsidies
I wonder if they are actually doing to do this. It's going to be awfully hard for either party to justify the tough budget cuts they're pushing for in the face of what seems like corporate welfare to an industry that's making obscene profits as it is. (Yes, I know the reality is more nuanced, but we're living in soundbite nation here.)
leanan - For what it's worth my owner has anticipated the change in the oil patch tax structure for a while. He expects it to kick in within two years. As a result we've already dropped projects from our long range budget that don't make it economicly with the anticipated changes in the tax code. Folks need to remember that no matter how profitably a company is operating at any point in time they aren't going to make investments that don't meet the minimum economic metrics. IOW no company is going to use any of its profits to subsidize sub-economic projects. That's a job for the feds. Our job is to meet our economic targets. If the new tax code causes some projects to fall below economic requirements they won't be drilled. Nothing personal....just business.
Theoretically, a lot of people would find that to be a feature, not a bug. Since drill baby, drill can't really lower gas prices anyway, we might as well encourage other sources of energy instead. An increase in the gas tax probably isn't happening, but eliminating subsidies to big oil...that sounds a lot more palatable. Even if the end result is similar.
Leanan - Don’ misinterpret my personal position. Our company would have a great advantage with the changing tax code. Anything that discourages our competitors from drilling more wells improves our bottom line. We don’t need the tax advantages like most companies. We don’t have to borrow capex or raise it from investors. Since we buy our drilling deals from prospect generators changing the tax code in a way that eliminates any drilling activities allows us to negotiate better trades. Likewise we’ll be able to negotiate landowners down since we won’t have as much competition. One of the greatest benefits would be cheaper drilling costs since there would be less demand for the service companies.
OTOH not so good for the country. Unemployment in the oil patch would spike, landowners would receive less bonus mony and royalties (along with the feds who now collect over $11 billion from such activity), local and state taxing authorities would have less revenue, shareholders (including huge numbers of retirement accounts owned by union workers) of public companies would lose dividends/equity and last, but not least, less drilling would increase our trade deficit that is driven by imported oil. Of course reducing drilling won’t make PO happen much sooner just as more drilling won’t delay it much either. But the oil patch is one of the last US industries doing well. Then again, the American folks haven’t seen much wrong with exporting jobs overseas so a few more won’t matter to them. The public hates the oil inductry in general.
About the only thing that would help our business plan more would be for oil to drop below $50. It would cripple the industry and knock out many of our competitors. Then when it comes time to sell our company it will worth that much more. Again, nothing personal…it’s just business. Yes…we’re in an odd position: anything the govt does to discourage domestic oil/NG production and damages one of our few viable industries is advantageous for us. This is not an accident. My company was created to take advantage of this rather predictable turn of events. Our owner didn’t become a self made billionaire because he was dumb. Takes guts to be a contrarian but that’s how you make the big bucks. PO is THE bedrock of our company.
As I see it, this is all about negotiation and political pay back. Ethanol has been under severe attack for its subsidies for years now.
The oil industry has been a main backer of these attacks even though it collects the blenders credit and presumably benefits to the tune of about half of it.
I have warned there would be consequences for these cheap shot attacks on ethanol subsidies. If the oil house were not made of glass they might be able to get away with throwing stones. Oil is many times more subsidized than ethanol if all the costs of oil are included.
That means the costs of imported oil both in military expenditure and the economic cost of having wealth transferred to foreign oil producers.
For the faithful who still believe in EROEI, EROEI for imported oil is less than zero. This is because not only of the lost energy of war but because energy gain can only be counted once.
That gain is captured by oil extractors. If the extractor is a foreign oil producer, when he sells his oil he captures the profit of the high energy gain in the oil price.
The imported oil is an energy loser from then on. The importer's gain is a economic gain from the profits generated as the imported oil is refined and consumed both of which are energy losers. That is why imported oil is worse than ethanol especially when imported is over 50 percent of U.S. consumption.
But imported oil and domestic oil are not differentiated in the oil subsidy argument nor in the EROEI argument. All oil is treated the same which is wrong.
The idea that ethanol should not have subsidies while both domestic and imported oil do is preposterous on its face. Any thinking person should be able to recognize this.
Unfortunately, the ethanol anti subsidy argument is based on a double standard as well as EROEI lies. It is entirely political.
Realizing this the only way to fight for fair treatment of ethanol is through politics. That means threatening oil subsidies in order to bring the anti ethanol crowd to their senses.
That is what Obama and ethanol supporters are doing and will continue to do. The inevitable compromise will not be what either ethanol or oil backers want which is a continuation of the status quo.
But that's politics. The oil industry has more to lose because it is so much bigger.
But they have to be taught a lesson: Greed for market share should not override common sense.
X, that is a very myopic view of EROEI. You're trying to fudge the data to tilt the equation in favor of ethanol and against oil. You have a political perspective on a physical energy calculation.
In reality, EROEI is a simple comparison of energy in versus energy out. For oil, it's the energy of exploration, drilling, production, pipelining, refining and delivering to market. The amount is highly variable, but in general the energy in the produced products vastly exceeds the energy necessary to get them into the consumers fuel tank. The EROEI of conventional oil is very high, which is one reason why it has become so widely used, even in the face of steep taxes in most countries (the US excepted).
For fuel ethanol, it's the energy required to make the fertilizers, pesticides, and herbicides to grow the corn, the fuel for the farm machinery to cultivate the ground, plant the corn, weed it, and harvest it, the fuel to transport it to the ethanol plant, the energy to ferment it, the energy to distill it, the fuel to transport it to the refinery, and the fuel to deliver it to market. It's difficult to calculate how much energy that takes, but some estimates put the input energy equal to or greater than the energy in the produced ethanol.
However, the real problem I have with producing fuel ethanol is that, as done in the US, it requires turning food into fuel, and the world has a big and growing problem with food supply as well as fuel supply. We need a fuel supply source that doesn't deprive people in other countries of food to eat.
It's at variance with his policy to reduce US oil imports by 1/3, though.
If he cuts tax breaks for oil companies, they will drill fewer oil wells and produce less oil. Since he hasn't put any measures in place to reduce consumption (e.g. fuel taxes), people will consume the same amount of fuel, and the refiners will import more oil to produce it.
There's a fundamental disconnect between desires and results in these policies. He can't just wave his magical presidential wand and wish for consumers their behavior, he has to hit them in the pocket book to get them to reduce consumption. I don't see that happening in the US in the current political climate. Americans consider cheap gas to be an entitlement.
In some sense market prices for products should discourage consumption without extra taxes.
Extra taxes would be a longer term way to cause changes in oil consumption.
Oct - In a way increasing oil industry taxes can accomplish the same. Since most companies would be hit the same there would be no competition to eat the revenue loss. So they can all raise prices without fear of losing market share. At least that's the classic theory. I'm not really sure if it would work out that way. OTOH if you reduce the income of any industry would you not expect the public to pay. If the auto industry lost their tax breaks would they give up some profit margin or would they just raise their prices of their autos by the same amount?
Why not just go back to the excess profits tax which was, in reality, was tax collected from the public by the oil industry and given to the govt. The public was happy: they thought the oil patch was beng hurt. The govt was happy: they raised taxes wihout the public realizing it.
I see raising taxes on oil companies instead. They raise prices and the public does not think taxes were raised on them. Wonder if they will do it?
There is a saying that companies don't pay taxes, they just collect them from their customers and give them to the government. It's basically true - in any rational economic system it is just about impossible to prevent them from passing on taxes to their customers.
In irrational economic systems it can be stopped, in theory, but in those systems companies lose interest in delivering products to their customers at all, and people have to live with shortages instead of high priced products.
To watch the current Canadian election campaign, it is obvious that some parties either just don;t understand this fact, or choose to ignore it.
There is one case where the saying is not quite true. In the case of a foreign owned company operating domestically, and producing export goods (e.g Vale's nickel operations) If there is no tax levied on the profits, and they are repatriated to the owners, then the Canadian gov has missed out on tax revenue paid by foreign customers.
i always thought an interesting variation would be to have a very low, or nil, general corporate tax rate, and the companies only had to pay taxes at normal rates (15-20%) if they sent the profits out of the country (which would included dividends paid to foreign stockholders).
I'm sure there would be some unintended consequences to such a scheme but if the tax on exported earnings was the same as today, and the tax in on retained/domestically paid earnings was nil, I don't see any real downside for the companies, be they foreign or domestic.
That "saying" is only true if the company can control price and that only happens in monopolies and cartel captured industries.
And wouldn't it also be true that individuals don't pay taxes, they just collect them from their employers (in the form of demanding higher wages in order to get to the "take home" pay they want)? But being ever more creative than companies, they've also burdened those same employers with the onerous task of holding that collected tax and working with the government to make sure it gets paid.
Irregardless of who pays them, taxes are extractive fees on the "productive economy." They come in all shapes and sizes and of necessity slow the velocity of the exchange of money. This then goes back into the economy, albeit frequently at a reduced velocity.
Perhaps what we should be talking about is not how much different segments of the economy are taxed, but how can we reorganize our tax structure to reduce the impact it has on velocity and still allow the society as a whole to deploy the government services that we agree upon as needed.
But instead, we argue over debts and taxes as if they were separate from governance; budget "reduction" bills include increases in military spending; and straight line projections of future funding shortfalls are "reasons" for eliminating or radically altering programs in the present.
That "saying" is only true if the company can control price and that only happens in monopolies and cartel captured industries.
No, because in a competitive environment, every company is in the same boat. If the government raises taxes for one, it raises them for all. All the companies look at each other, and when the first one raises its prices to cover the taxes, everyone else does the same. They're not living in a vacuum, they know what each other are charging, what their costs are, and what they need to charge to make a decent profit. When taxes go up, the amount they need to charge to make a decent profit goes up.
The same does not apply to individuals. If the government raises their taxes, they can go to their employer and demand a raise, but the employer says, "No, I don't think so, my prices are the same." And that's the end of it unless the employer, for some strange reason, decides to raise his prices so he pay the employee more. That doesn't usually happen in a competitive environment. The employee suffers a decline in his disposable income.
And the company can go to its customers and say "I want you to pay more for this product" and the customer can so "no I don't think so, I just won't buy this from you."
Your description in your first paragraph defines a practice called "collusion" which is illegal in most places (except for the airlines, apparently).
But all it takes is one company to keep their price lower, be willing to accept the lower margin, and the others would need to follow.
You are still looking at this from only one perspective, that of the corporation. To me, its not very convincing.
And the company can go to its customers and say "I want you to pay more for this product" and the customer can so "no I don't think so, I just won't buy this from you."
That is one way to reduce the price, but you have to realize that you have to do without the product if nobody else will sell it to you cheaper.
Your description in your first paragraph defines a practice called "collusion" which is illegal in most places
It's not collusion. Fuel prices are not secret - the companies post them on giant signs and all the other companies can read them. What typically happens a market is that one company raises its prices, and the other companies either follow suit, or don't. If they don't and their tanks run dry due because everyone goes to their station, they they realize they should have raised their prices like everyone else.
You have to realize that the margins in fuel retailing are very low - a few cents a gallon. If the government raises taxes substantially, it will put a lot of retailers under water - they will be losing money. Companies are not in business to lose money, so if they can't raise prices to put themselves back in the black, they will shut down the business and walk away from it.
But all it takes is one company to keep their price lower, be willing to accept the lower margin, and the others would need to follow.
Or not. If one company reduces its price, the reverse situation applies. The other companies either follow, or don't. If they don't, and the company which reduced its price runs dry, it realizes that dropping its price was a mistake, and puts it back up. If company's prices are less than its costs, and it can't put prices up, it will shut down the operation instead. That's why you see closed and abandoned service stations and refineries sitting around.
It's all about supply vs. demand. The objective of the market is to match supply and demand, and companies will adjust prices up and down until that happens. If they can't recover their costs while doing so, they will go out of business.
Rockman, per what you have written above, do you think the proposed change in tax code would dissuade some percentage of wildcatting? Will it have a net effect of reducing US oil production?
Earl - The big hit would be if they eliminated the intangible drilling cost deduction. This could possibly reduce the numner of wells drilled by up to 35%. But that's just a rough guess. I doubt anyone could put a credible potential downside number to it. Complicated and full of unintentional consequence IMHO.
It might be easier for folks to appreciate the implications if the replace "oil industry" with any ther business sector...especially with the one they ae employed in.
No. In the instant that Boehner heard Obama double down on what he had just said, his neurons sent a signal via a synapse to the part of his brain that makes decisions (about the size of a flea) and it was decided that the last thing he wants to do is end the oil subsidies. We will hear tomorrow how what Boehner said was taken out of context or mis-construed.
Didn't take long!
Boehner Plays Down Oil Subsidy Remarks After Dems Seize on Interview
http://www.foxnews.com/politics/2011/04/26/boehner-opens-door-cutting-bi...
About time he started using populist rhetoric.
Absolutely right...
Exhibit A that Obama is bought and paid for by the puppet masters is the fact that none of the Wall Street Boyz responsible for this economic debacle have been locked up for a nice long time... in any other climate than the one that currently exists this would be such a no-brainer - a populist bone thrown to an electorate so hungry for someone, anyone, to pay (other than, of course, the taxpayers themselves). If he was allowed to do this it would be an instant populist morale boost and his popularity rating would probably shoot up by double digits.
We hardly hear any populist platforms any more - they are strictly forbidden. In fact it is more like we are in an anti-populist Twilight Zone whereby the most unpopular proposals to the majority of citizens are the same ones that are most often re-visited (i.e. almost nobody wanted social security privatized but that didn't stop them from trying to put it out there several times - until the stock market showed itself to be such a rigged and dead end game for the "average" investor that even the masters were no longer able to get the lipstick on that pig)
Rent or Food?
"NEW YORK -- Around 10 million American households -- or one in every four families that rent their homes -- could have to choose between paying rent, buying groceries or keeping current with bills, according to a report released Tuesday.
The number of households spending more than 50 percent of their income on rent and bills jumped by 2.6 million over the last decade, according to a Harvard Joint Center for Housing Studies report. Economists generally consider "affordable" rent to cost about 30 percent of a tenant's income."
On a side note, I just became aware that stores that sell seeds may only sell seeds dated for the current year. Many of them donate seeds that have a "sell by" date of, for 2011, 12/31/10 or prior.
My local garden center just gave me a whole box of seeds that will be perfectly good for at least five years, and possibly longer. Time to start building local seed banks...
So ROCKMAN, whaddaya think? Just not trying hard enough?
k - Speaking for my families members I would say yes. I've got 5 brothers and sisters who made no effort to improve their lives. In fact, that would be a good day for them. Other days their self destructive habits make it much worse. If I don't have much sympathy for my kin why would expect me to have it for strangers? Again, there are folks who are victims of circumstance but they aren’t the folks I was talking about. I'm talking about the great majority of folks I personally know who are where they are due to their lack of effort. But maybe that's just the folks I know and doesn't represent most of our citizens.
Yes...I am a hard ass. Although I was hospitalized as a child for malnutrition thanks to being raised by alcoholics, couldn’t recite the alphabet all the way through when I started high school but I made it though graduate school with a science degree reading no faster than a 6th grader. Today sometimes I work a couple of days straight on a drill site hobbling around on crutches thanks to bad knees and multiple sclerosis. I contribute good bit of my income and time to folks who are not able to help themselves. But they still try. But I have no sympathy for the multitude of folks I see not making any real effort to improve their lives or help anyone else.
Yes…a world class hard ass with no apologies
Well, Rock, your social awareness truly sucks, but it is without doubt that you're one of the unapologetic hard asses I'd like to have a beer with. I like gritty hard workers.
My childhood would easily compete with yours in the hardship and horror show categories, and I've landed in a comparatively comfy spot, too. There's no question I've worked hard, but there's also no question that I've been lucky (even being born bright enough to take advantage of opportunity is really a matter of luck).
Without society and the markets it creates, I'd just be an unnecessarily-inquisitive hunter-gatherer, and some big dumb guy would probably steal my berries.
K – Actually I talk the hard ass game more than live it. I was trying to be a tad over the top to get folks stirred up. You’re certainly correct: a few lucky breaks along the way can make all the difference. One of my most satisfying/frustrating experiences was teaching adults to read/write. I think many folks can’t imagine what it's like to not have those skills. They can’t relate to learning to read as a “lucky break”. I suppose my luckiest break was not dying in a rice paddy when I was 18 yo. LOL. Everything since then has been a bonus. Due to an injury my anticipated career in the military did not come to pass so I became geology major at a time when it offered almost no employment possibilities. Ahhh…to be so young and foolish again. LOL. Flash forward 40 years and look where I am now: The Mother of All Lucky Breaks.
I'm going to ask to you please stop trying to get folks stirred up. You may find it entertaining, but it tends to generate heat rather than light. This ain't the place. I know you're bored, but come on...get yourself a porn subscription or something. ;-)
Leanan - My apologies for using the wrong word...sloppy of me. By "stirred up" I meant to get folks engaged in the conversation. Rightly so TOD tends to focus on the technical aspects of PO. Occasionally someone points out that the effects of PO will be more a function of human nature and not hard science. Perhaps I was too subtle: when times are good and energy was cheap a significant portion of society still slips through the cracks. But the system still has enough fat to offer some assistance to these folks. But I think most of TOD sees this "fat" and our willingness to share disappear as we roll down the PO path. I found k to be a good and sane representative of the liberal side of the fence and offered good rebuttal to some of my statements. I kept the conversation going hoping more folks with their own vision would join in. I don't recall anyone but k and Earl getting engaged (stirred up) in the thread. I didn't notice anyone paying attention to our chat until you joined in. Thus my attempt to add a little human flesh to TOD scientific skeleton failed for the most part. Yes...I suppose I get a little bored with the tech side of TOD since I know and understand virtually all those aspects. But as k pointed out I do lack a bit of sympathy for the lower half of our societal pyramid. As I said to k, I was being a bit over the top hoping for sane and logical rebuttal but unfortunately only k was as bored as I was. But k did represent his side well and I also would probably enjoy sharing a beer with such a bleeding heart wacko. LOL.
Let's just say I had to remove some of the more...passionate replies to your post. Honestly, if you want that kind of political crap, there's USA Today, Yahoo, CNN. We don't want TOD to turn into that.
Leanan - I truly do apologize. Didn't know you were cutting out responses. I need to go back and re-read my words. Didn't think I was making any political statements per se. At least no more than many others such statements I've seen on TOD
Your a tough guy Rockman!
At the same time though I pass no judgement on those falling through the cracks. There is no level of tenacity people will be able to achieve to remain fiscally viable in a world descending the net energy ladder. It's just simple economics that those at the bottom will fail to compete, but as time goes on and the descent intensifies, eventually all levels of society's economic strata will be pushed to the limits of survival.
Taking the Plunge
Late Tuesday afternoon, New York time, the API released its weekly inventory report. Per the API, the plunge in US gasoline supplies continues unabated, as it has almost every week since the start of 2011. This was even before the unexpected lightning strike at BP’s huge Texas City refinery late Tuesday night (their time), starting multiple fires, which may leave the facility shut down perhaps for a few days - or longer.
Getting back to the report, distillate supplies also fell, but not quite as fast as gasoline supplies:
http://www.marketwatch.com/story/api-shows-gasoline-stockpiles-down-rise...
One major reason diesel and gasoline supplies are not growing lately is that some refiners were having extended problems with ‘turnarounds’ - that is converting from winter blends to summer blends. This problem was particularly severe in the Eastern PADD (region for EIA reporting purposes), where refinery capacity had slipped almost as low as 40% a few weeks ago. By the end of last week, all major Eastern refineries were restarted.
As if this were not bad enough, shipping reports indicate that China is taking delivery of some type of oil product directly from the US Gulf Coast in early May, and is also buying from a Caribbean refiner.
It remains to be seen if US oil products levels, such as for gasoline and diesel, can be maintained at sufficient levels through the summer driving season to avoid shortages.
[Note: I am on my way to the EIA energy conference in Washington, DC tomorrow, and won’t be posting my usual EIA weekly inventory review]
Chernobyl tourism in 2010, nearly 25years since its level seven event.
http://www.smh.com.au/travel/a-tourist-spot-so-hot-its-radioactive-20100...
It will be interesting to to see how the two compare over time. Tragic, but interesting.
Some excellent pictures that show how grim it was/is.
http://www.guardian.co.uk/environment/gallery/2011/apr/26/chernobyl-nucl...
Power-slurping signs
That's some 880 KWH a Day.
There's some low-hanging fruit for ya.. and that household avg looks like about 30kwh/day.. I think we're at around 10, including electric Stove .. but our Hot Water is on the Oil Furnace. Working on changing that one..
A new record ...
Millions of internet users hit by massive Sony Playstation data theft
What good does it do to warn customers their personal information has been lifted off the net? Are they suppose to reinvent themselves? New names, new SS#'s etc.? Actually, it means they now need to spend money (they wouldn't normally have to) on identity theft insurance. Thanks a bunch Sony!
Missouri's Black River levee fails. Where floodwaters could hit next.
Libya Sours Profit at Mediterranean Oil Refiners: Energy Markets
Yes, despite its claims to the contrary, Saudi Arabia simply couldn't replace the 1+ million barrels per day of Libyan oil which has gone off the market. The refineries which used to process the Libyan oil can't process any significant amounts of the heavier, higher sulfur Saudi oil which is available. They are not built to handle it.
The Saudis claim that the supply of oil is meeting demand, but what is really true is that there is not much demand for the heavy, sour, and frequently vanadium-contaminated oil which constitutes most of their "excess" oil production capacity.
AP survey: Only oil shock can stop economy now
Australia Pistachio Disaster Hints at Agricultural Breakdown