Drumbeat: April 29, 2011
Posted by Leanan on April 29, 2011 - 8:53am
Consumer spending, incomes rose in March
WASHINGTON — Americans earned and spent more in March, but much of the extra money went to pay for gas.Personal incomes rose 0.5 percent last month and consumer spending increased 0.6 percent, the Commerce Department reported Friday. But after adjusting for inflation, spending rose only 0.2 percent and after-tax incomes were essentially flat.
Consumer spending had been expected to post solid gains this year, helped by stronger employment growth and a 2 percentage-point cut in Social Security payroll taxes. But Americans are paying more for gas, prompting economists to scale back their growth forecasts.
US natgas rig count climbs 4 to 882-Baker Hughes
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States rose by four this week to 882, its first gain in four weeks, data from oil services firm Baker Hughes showed on Friday.
Lower 48 U.S. Feb natgas output down from Jan-EIA
NEW YORK (Reuters) - Gross natural gas production in February in the lower 48 U.S. states fell 1.9 percent from upwardly revised January output, data released on Friday by the U.S. Energy Information Administration showed.
Chevron adopts Brent to calculate production share
(Reuters) - Chevron Corp is switching to Europe's Brent crude benchmark from West Texas Intermediate (WTI) when calculating production-sharing contract changes, to better reflect moves in international oil prices.
IEA's Birol: Current Oil Prices Put Economy 'In The Danger Zone'
NEW YORK -(Dow Jones)- High oil prices are threatening to disrupt a still-fragile global economic recovery, the International Energy Agency's chief economist said Friday."We are in the danger zone now with prices and how the economy is responding," said Fatih Birol, head economist at the Paris-based group that represents major oil consumers.
Tanked: The razor edge of oil prices in our future
The economy sits in precarious balance regarding oil prices. As the global economy recovers, demand rises and oil prices go up. At a certain point, they slow the economy so much — including the financial bets associated with energy — that demand collapses and oil prices fall. We can't drill, baby, drill our way out of this conundrum, and we've spent precious years doing nothing to address our limited, antiquated transportation infrastructure.
When faced with an issue of grave concern to the public, a politician has two choices. He can try to solve the problem. That would be the course of a true statesman. Alternatively, however, he can take the path of the demagogue, and seek to exploit the problem by blaming it on scapegoats among or linked to his political adversaries.In the case of the current energy crisis, President Obama has chosen the second path.
Oil and Gas Reserves, Ultimate Recovery, and Resource
The comments I got in my last blog about oil supply made me realize how confusing it is, even among presumably savvy observers of the oil and gas industry, to distinguish among linguistically similar terms on the quantity of natural gas (and oil) that is currently available for future production.These include the words “reserves,” “ultimate recovery” and “resource.” The ratio of reserves-to-production (R/P) is another meaningful term that is often misunderstood by writers, members of other industries and politicians. Often, expressed in years, it creates frequent alarms such as “in ten years all oil (or gas) will disappear.” Even more to the point, for the entire 150 years of oil and gas production on at least a dozen occasions misunderstanding of these terms has led to speculation of “peak oil” and “peak gas” and frenzy over escalating prices.
Iran says Indian oil funds freed in Germany - agency
(Reuters) - Iran has secured the release of some funds that India had paid for Iranian oil and that had been frozen in Germany, a news agency reported."When Iran sells its oil to a country, it should be able to receive the payments," the Central Bank of Iran's governor, Mahmoud Bahmani, was quoted as saying by Iran's semi-official Mehr news agency.
Kan says state shares blame for N-crisis
Prime Minister Naoto Kan said Friday the state shares the blame for the nuclear crisis triggered by accidents at Tokyo Electric Power Co.'s Fukushima No. 1 nuclear power plant."Needless to say, TEPCO is primarily responsible, but the state can't escape blame because it promoted the use of nuclear power," Kan said during a House of Representatives Budget Committee session.
Bill signed to close last coal plant in Washington
CENTRALIA, Wash. (AP) -- Gov. Chris Gregoire has signed legislation that will gradually shut down the TransAlta plant, the only coal-burning power plant in Washington.
House Budget Chair Ryan backs cutting oil subsidies
WASHINGTON (Reuters) – House Budget Committee Chairman Paul Ryan said on Thursday he supports cutting tax breaks for the oil industry as lawmakers search for ways to battle rising gasoline prices.In response to a question at a town hall meeting in Waterford, Wisconsin, the Republican congressman said he agreed that oil company subsidies should end.
"We're talking about reforming the safety net, the welfare system, we also want to get rid of corporate welfare," Ryan said to applause.
Pump prices jump to $3.91 on tightening supplies
Gas pump prices across the country rose to within a dime of $4 a gallon Friday, as weather-related refinery outages tightened supplies and pushed prices up.The national average increased 2 cents to nearly $3.91 a gallon for regular gasoline. It's the highest level since July 31, 2008, when pump prices were falling from a record $4.11 a gallon on July 17 of that year.
Oil Is Poised to Climb for Record Eighth Straight Month on Demand Outlook
Oil was poised to rise for an unprecedented eighth straight month as better-than-expected consumer spending signaled fuel demand may increase.
Obama 'War on Oil' Policy Increasing Federal Budget Deficit
A new report from the National Center for Policy Analysis titled "The Fiscal Impact of the Offshore Drilling Moratorium" confirms that Obama administration "War on Oil" policies are widening the federal budget deficit.According to the report, "Due to declining production at existing wells and bureaucratic delays on new wells in the Gulf of Mexico since the Deepwater Horizon oil rig blowout in 2010, the federal government is forfeiting revenues of more than $4.7 million per day." That translates to lost revenues to the federal government in lease rents and royalties of almost $2 billion a year and growing.
Oil price spike: Speculators aren't to blame
NEW YORK (CNNMoney) -- High oil prices are here to stay and they're caused by surging demand and limited new supply, not Wall Street speculators.That's the message from Fatih Birol, chief economist at the International Energy Agency.
NEW YORK (CNNMoney.com) -- The first three months of the year were good to the oil industry -- although American drivers and their elected leaders are not offering congratulations.
ALBANY -- Want to save money on gas taxes in New York? Get a bicycle -- or head for the state line.As gas prices move north of $4 per gallon, lawmakers are once again calling for a tax holiday. But despite those good intentions, past experience has shown that tax breaks have a way of vanishing, at least on the local, if not the state, level.
Chavez New Windfall Tax to Hurt Partners More Than PDVSA, Barclays Says
Venezuela’s new windfall oil tax will hurt partners of Petroleos de Venezuela SA more than the state company itself, Barclays Capital said in a report.Venezuela, South America’s largest OPEC producer, taxes oil companies more than any other country in the world and it recovered about 50 percent of the revenue from each barrel of oil sold over the past five years. On average, more than 90 percent of the gross profit of the oil industry is transferred to the state, according to the e-mailed Barclays report today.
Russian gov't blamed for gas shortages
MOSCOW (UPI) -- Petroleum industry analysts in Russia blamed the government for gas shortages in Siberia and questioned whether higher export duties would help.
Unprecedented rise in global natural gas production: Cedigaz
PARIS (AFP) – There was spectacular growth in global production of natural gas last year, soaring past pre-crisis levels, the international industry association Cedigaz said Thursday."The year 2010 was exceptional for natural gas with spectacular growth of 7.3 percent in world production," said the group, which has over 140 members in 40 countries, associating most of the leading international oil and gas companies.
"Such a historic rise was unprecedented. It's never been this strong or this sudden," said Cedigaz secretary general Thierry Rouaud.
There Goes the Data: Major Cuts at EIA Washington
One of my greatest concerns coming out of the financial crisis of 2008 was that, eventually, free services like government data would be reduced or lost altogether. This afternoon I learned from EIA Washington that one of the cornerstones of my own work, and also the work of others globally, is about to be suspended: the gathering of International Energy Statistics. For me professionally, this is among the most important gateways to monthly data on global oil production. As I said, after 2008 I came to recognize my own professional dependency on this free data. But, I never actually expected to lose my access. Well, that’s always the way, isn’t it? Below is a portion of today’s EIA Press Release:
Party may be over for Big Oil stocks
There's chatter about how oil sector profits could top the records from 2008 -- even though crude prices are still a good $30 or so below the July 2008 peak.But if oil prices don't reach new records, it may be tough for profits to surpass 2008 levels. That could mean an end to the big rally for energy stocks, which -- as the chart at the top of this column clearly shows --- have been tracking the price of crude quite closely.
Blowout could spill 58 million gallons in Arctic
ANCHORAGE, Alaska – The federal agency overseeing offshore drilling in Alaska says the worst-case scenario for a blowout in the Chukchi Sea lease could result in a spill of more than 58 million gallons of oil into Arctic waters.That's about a quarter of the Deepwater Horizon spill, which put 206 million gallons of oil into the Gulf of Mexico. But it's far more than Shell Oil — the major leaseholder in waters off Alaska's northwest coast — says it could handle under its current response plan.
Why Older Nuclear Power Plants Remain 'Cash Cows' Despite Fukushima
Although the disastrous accident at Japan's Fukushima Daiichi nuclear complex may lead to new regulations and higher costs for owners of existing U.S. reactors, that risk did not sidetrack merger negotiations between Exelon and Constellation, which began months before the March 11 earthquake and tsunami.The reason, industry representatives and critics agree, is that the existing plants remain very profitable, even with the decline in electricity prices that followed the market crash and recession in 2008.
Group says Pa. governor advisers tied to shale problems
PHILADELPHIA (Reuters) – An environmental group said on Wednesday that nearly half of the violations in the Marcellus Shale natural gas formation last year were committed by companies whose representatives sit on Governor Tom Corbett's Marcellus advisory commission."It is top heavy with exactly the people who are doing the drilling," said Tom Hoffman, the Western Pennsylvania director of the environmental activist group Clean Water Action.
Environmental fight: Tortoises vs. solar energy
SAN BERNARDINO, Calif. – A federal assessment shows more than 3,000 desert tortoises that are threatened with extinction would be disturbed by a California solar project, and up to 700 of the young turtles would be killed during construction.
Peak oil: it's closer than you think
Peak oil is forcing its way to the top of the agenda with stark warnings from the International Energy Agency and others repeated on ABC radio and television this week, after an investigation by the Catalyst program.
Peak oil highlights need for a unified policy
The infrastructure Australia needs to respond to the world's dwindling oil supply is not the sort we are building.
Stuart Staniford: A Few Notes on Personal Strategies around Peak Oil
There is a whole genre of advice on peak oil sites for how to deal, at a personal level, with peak oil, most of which is so inane that I have tended to steer clear of the whole subject. Things like gardens, solar panels, etc, can be overemphasized. I also am wary because everyone's situation is completely different and so there's a limited amount of advice that really generalizes.But this morning, I feel inspired to offer a few suggestions, mostly with a focus on the situation in the US, and focussed on people in the struggling middle. They may only be worth what you are paying for them.
Americans want walkable neighborhoods, poll says. So why haven't they been built?
Prepare for Food Security Crisis
SEOUL: The world's crop farming is facing a serious challenge due to climate change and there is a prediction that the global grain shortage will last for the next 10 years, Yonhap news agency reported.
The Arctic May Save Norway's Oil Industry
Statoil thinks the find—now called Skrugard—as well as surrounding areas might eventually yield 500 million barrels of oil. That is not a huge discovery, but it has sent a frisson of excitement through the industry. "It is phenomenal; it confirms that the Barents Sea after so many disappointments is worthwhile," says A. Bjarne Moe, the lanky, bearded director general of the Norwegian Ministry of Petroleum and Energy.Skrugard comes as a huge relief, since Norway's status as one of the world's great oil producers is under threat. Oil production has fallen by 48 percent from its 2000 peak as old fields found decades ago are depleted—bad news for an industry that accounts for about one-quarter of Norway's economy.
Crude Oil Falls From Highest in 31 Months; Heads for Eighth Monthly Gain
Oil declined from a 31-month high in New York, trimming an unprecedented eighth monthly gain as signs of a faltering global economic recovery stoked speculation that demand for crude will decline.Futures slid as much as 0.5 percent after data showed South Korea’s industrial production and U.S. economic growth missed analysts’ forecasts. Reports today may show U.S. spending cooled and businesses grew at a slower pace in the world’s biggest crude-consuming nation.
China May Face Power Shortages During Summer as Demand Gains, Council Says
China, the world’s fastest-growing major economy, may face a summer power shortage of 30 million kilowatts as supply lags behind demand growth, the China Electricity Council said.Some regions are facing shortfalls that are “bigger and earlier” than last year, the council said in a report on its website yesterday. Supplies in provinces in the north, east and south will be “tight.”
Iran to increase crude production
The Iranian deputy oil minister says the country will increase its crude oil production by more than 100,000 barrels per day by March 2012.Masjed Soleiman, Yadavaran, Mansouri and Hengam oilfields are the main four drilling projects that will contribute to the hike, Ahmad Qalebani told Mehr news agency on Friday.
The Philippines: Energy official warns oil firms anew on unjust price increases
An Energy Department official has warned oil companies found guilty of abusing the high demand for petroleum products during Holy Week will be prosecuted.In an interview by Howie Severino on News to Go, Energy Undersecretary Jose Layug Jr. said the department will look at the pre-Holy Week oil price hikes that happened in the past years.
Russia boosts gasoline export duty to keep fuel at home
Russia, the world's largest oil producer, will hike its gasoline export duty 44 percent from May 1 instead of an expected 34 percent to fight local fuel shortages, the government said in a regulation on Friday.
Libyan Rebels Fight to Keep Control of Key Border Crossing
Libya’s army and rebel forces fought for control of a key western border crossing into Tunisia, near an area where a government offensive against the Berber minority has gone on with little foreign attention.
Social Largess Speeds Rise in Oil Prices
There’s no mystery in why all the unrest in North Africa and the Middle East would cause oil and gasoline prices to soar. Libya’s high quality sweet crude is almost off the market entirely, and it’s anyone’s guess when the next oil producer is going to suffer a revolution that could cripple production.But PFC Energy, a leading strategy advisory firm, has come up with another reason why political developments in several OPEC countries are driving prices higher, despite Saudi Arabia’s assurances that the kingdom will boost production to make up for any gaps. In a report this week, PFC calculated that populist spending policies are contributing to the need for higher revenues from oil sales.
Grease is gold to rustlers as oil prices rise
OMAHA, Neb — Rises in fuel prices have led to an increase in the number of used fryer grease rustlers roaming restaurant alleys in the United States.Grease thefts have spiked whenever fuel prices climbed during the last four years and this spring is no different, according to Tom Cook, president of the National Renderers Association.
"It's on the rise and it's because of higher oil prices," Cook told Reuters in a telephone interview. "I have one member who told me it's costing his business $1 million a year."
Blame game starts for high gas prices
Gas prices in the Dayton area hit as high as $4.15 per gallon Thursday at local gas stations. And with prices at the pump for gas and diesel soaring above the key $4 per gallon mark, drivers are looking for answers for rising prices.
Summer UK gas prices likely to fall, help industry
(Reuters) - Wholesale UK gas prices should fall this summer as liquefied natural gas shipments rapidly replenish plentiful stocks, helping soften the blow of record high transport fuel prices for battered British business.After an unprecedented surge in gas costs last summer, Britain's gas market should return to its normal mid-year price lull, offering some short-term relief to big industrial users who buy on the wholesale market in an economy barely staggering out of recession.
Oil prices to keep rising as peak production reached in 2006
THE AGE of cheap oil is now over – and that’s official.(Transcript: Peak oil: just around the corner)For the first time, the International Energy Agency has conceded that global crude oil production has already peaked and that the commodity will become more and more expensive.
In the Catalyst programme broadcast last night on Australia’s ABC1 television, the agency’s chief economist, Fatih Birol, said “peak oil” was reached in 2006.
It seems politicians everywhere are suddenly waking up to the implications of peak oil. When will it arrive? Has it already passed? What does it mean for prices? And what do those prices mean for economic growth, and geopolitical risk? Most are finding that whatever action they are thinking of taking now, they should have been doing decades ago.
Sinopec Profit Gain Tops PetroChina on Smaller Refining Loss
“Sinopec’s oil-stockpiling capacity allowed the company to use cheaper crude for a longer time,” Yin Xiaodong, the chief oil analyst at Beijing-based Citic Securities Co., said by telephone after the earnings announcement.Fuel sales rose 15 percent and Sinopec’s losses from turning crude into gasoline and diesel were less than a tenth of PetroChina’s. Earnings growth at China’s biggest oil companies lagged behind Exxon Mobil Corp.’s 69 percent gain and a 60 percent profit increase at Royal Dutch Shell Plc, which aren’t restrained by government controls on fuel prices.
Oil giant under new fire for extravagance
BEIJING - A subsidiary of the China Petrochemical Corporation (Sinopec Group) breached the group's internal rules by handing out millions of yuan in bonuses to executives and employees between 2008 and 2010, the Beijing News reported on Thursday, citing a company document.
ExxonMobil warns of new fracking regulations
ExxonMobil warned that any new government regulations on hydraulic fracturing could stop shale exploration."Government policies did not cause the shale gas revolution in this country, but they could stop it in its tracks," Ken Cohen, vice president of public and government affairs, said in remarks to reporters.
Korea Secures Emergency Oil Pledge from Iraq
Korea has secured stable annual supplies of 91.25 million barrels of crude oil from Iraq in an emergency like a crude oil shortage. That amounts to 250,000 barrels per day.
China shortlists six firms for shale gas block auction-Xinhua
(Reuters) - China has short-listed six firms for its first auction of shale gas exploration blocks, according to an official Xinhua News Agency newsletter published on Friday.
Syria: U.N. Atomic Watchdog Director Says Bombed Syrian Site Was Reactor
The head of the International Atomic Energy Agency said Thursday that a target destroyed by Israeli warplanes in the Syrian desert in 2007 was a covertly built nuclear reactor, countering assertions by Syria.
AP Exclusive: Syria's referral to UNSC likely
VIENNA — The International Atomic Energy Agency is setting the stage for potential U.N. Security Council action on Syria as it prepares a report assessing that a Syrian target bombed by Israeli warplanes was likely a secretly built nuclear reactor meant to produce plutonium, diplomats say.
Voting goes on amid ruins after Nigeria rioting
KADUNA, Nigeria — Among the debris of burned homes, destroyed businesses and lives lost on one dirt road in this city on a fault line between Nigeria's two major faiths, the bright green ballot boxes stood out Thursday against the misery inflicted here.Both Christians and Muslims inked their fingers to cast their vote in gubernatorial elections held in Bauchi and Kaduna states Thursday, delayed by the postelection violence last week that killed at least 500 people across Nigeria's north. Voting went smoothly, but both areas saw low voter turnout as soldiers took over security for the hard-hit states and many remain displaced by the rioting.
Rosneft leaps to profits record
Soaring oil prices and cost-cutting efforts lifted Russian state-owned oil company Rosneft to record profits in the first quarter.
Canadian Oil Sands profit soars
Profit at Canadian Oil Sands, which has the biggest stake in the Syncrude Canada oil sands consortium, rose 84% in the first quarter due to higher production and prices, the company said on today.
Exxon Mobil earnings soar 69 percent on higher gasoline prices
Exxon Mobil Corp. earned 69 percent more money in the first quarter than in the same period last year largely because of higher oil and gasoline prices.U.S. average regular gasoline prices on Thursday hit $3.89 a gallon, a dollar higher than last year. Along with Exxon, several other Big Oil companies also saw fat profit increases because of higher oil and fuel prices.
Exxon is kinda sorry it made $11B this quarter
NEW YORK — Exxon made almost $11 billion and practically apologized for it.Sensing public outrage over gasoline prices that have topped $4 in some states, the company struck a defensive posture Thursday after posting some of its best quarterly financial results ever.
Bipartisan Target: Oil-Sector Tax Breaks
Soaring oil company profits and yawning federal deficits are making long-protected industry tax breaks a bipartisan target in Washington.Democrats have rebranded $4 billion a year in oil-industry tax incentives as a subsidy big oil companies don't deserve.
Prophets of the Environmental Apocalypse
It may be true, as many have said, that the next revolution—the green revolution—will be the first revolution in history that cannot promise material advancement in the same way that people have traditionally construed such advancement. But that does not mean we will be living immaterial lives, or that living much more modestly upon the earth will not prove to be quite sublimely satisfying. Teach that, please! And bring your poets, not your polymaths, to the front lines of the green revolution.
The Chevrolet Volt: An Electric Solution?
Hybrids have been on the market since the late ‘90s. What’s new are electric vehicles, which is why I took a test drive in the new Chevrolet Volt to see if this car is the answer to Staples students’ fuel problems.First let me explain what makes the Volt unique. This car is called an extended range electric vehicle. According to Chevrolet, this means it can run for about 35 miles solely on an electric charge, after which the gas generator kicks in, giving the car a total range of 375 miles for one tank of gas and a full charge.
Tepco Slows Water Injection at Fukushima Reactor to Curb Risk of Explosion
Tokyo Electric Power Co. slowed the pace of water injection into one of the six reactors at its crippled Fukushima Dai-Ichi nuclear station after a drop in pressure and temperature increased the risk of an explosion.
The Latest from the N.R.C. on Fukushima, and More
The Nuclear Regulatory Commission has not yet said what changes it will order at American reactors in response to the Fukushima disaster, but at a briefing on Thursday morning, some clues emerged about areas that might require further study.
Defendant in Racketeering Suit Works as U.S. Consultant on Gulf Spill
An environmental consulting firm named as a defendant in a racketeering suit filed by Chevron Corp. over a landmark pollution lawsuit in Ecuador is continuing to work on another blockbuster case: the Deepwater Horizon oil spill investigation.
Webchat with Asher Miller, Bart Anderson and Richard Heinberg - transcript
The South has so much to teach us about Transition. I think what we in the North can do is focus attention on what's happening in the South. For example, Vivir Bien in Bolivia, Agro-ecology. The campesino movement.
Students Protest ExxonMobil CEO As Commencement Speaker
Students and faculty members are staging an alternative commencement to protest the choice of Rex Tillerson, CEO of oil giant ExxonMobil, as commencement speaker at Worcester Polytechnic Institute. Peak Oil scholar and educator Richard Heinberg, a senior fellow at the Post Carbon Institute, will give the alternative address on graduation day, May 14, at a location close to the official ceremony.University officials informed the dissenting student group that any students leaving the official ceremony to listen to Richard Heinberg will not be allowed to return to receive their diplomas. The students are seeking legal assistance to determine if the university is within its rights with this threat.
ADB warns of increased poverty among Asians as food prices soar
PASIG CITY, METRO MANILA – Soaring food prices worldwide is pushing further millions of Asian to poverty, according to a report by the Asian Development Bank (ADB).The report “Global Food Price Inflation and Developing Asia” showed that global food prices have increased by at least 30 percent, which has also affected domestic prices for affected Asian countries.
Solar Panels Rise Pole by Pole, Followed by Gasps of ‘Eyesore’
Like a massive Christo project but without the advance publicity, installations have been popping up across New Jersey for about a year now, courtesy of New Jersey’s largest utility, the Public Service Electric and Gas Company. Unlike other solar projects tucked away on roofs or in industrial areas, the utility is mounting 200,000 individual panels in neighborhoods throughout its service area, covering nearly three-quarters of the state.The solar installations, the first and most extensive of their kind in the country, are part of a $515 million investment in solar projects by PSE&G under a state mandate that by 2021 power providers get 23 percent of their electricity from renewable sources. If they were laid out in a solar farm, the 5-by-2.5-foot panels would blanket 170 acres.
Sen. Tom Udall's Lonely Climate-Change Crusade
NEW YORK – Sen. Tom Udall's Lonely Climate-Change CrusadeThe New Mexico senator is determined to warn America about climate change. But as Eleanor Clift reports, the political climate is clearly stacked against him.Serious legislation to combat climate change is dead for now on Capitol Hill, but that doesn’t stop Sen. Tom Udall (D-NM) from sounding the alarm whenever he can. Concern about the environment is in his DNA.
Could a Leaking Ocean Current Keep Europe Toasty?
Climate scientists have long theorized that global warming, by increasing precipitation and melting Arctic ice, could eventually destabilize the Gulf Stream, the ocean conveyor belt that carries tropical waters into the North Atlantic and warms Western Europe. The paradoxical result would be a cooling trend for the region, even as the rest of the globe continued to heat up.Now, a new study suggests that the circulation of warm water in the Atlantic may be tougher to disrupt than previously thought.
U.S. Greenhouse Gas Emissions Projected to Grow Slowly
Even if the United States takes no explicit action to regulate greenhouse gases, emissions of carbon dioxide and other climate-altering substances will grow slowly over the next two decades, not returning to 2005 levels until 2027, according to a new projection from the Energy Information Administration, the research branch of the Energy Department.Carbon dioxide emissions fell by 3 percent in 2008 and 7 percent in 2009, largely because of the recession. But even as economic activity picks up, emissions will grow at a modest pace because of growing use of renewable technologies and fuels, improved energy efficiency, slower growth in demand for electricity and the growing substitution of natural gas for coal in power production, the agency reports in its annual energy outlook.
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Re: Could a Leaking Ocean Current Keep Europe Toasty?
The story from the NYT Green blog offers comments regarding the impact of AGW on the Gulf Stream. As usual, the story claims that there is some scientific claim that:
Actually, the Gulf Stream is a wind driven current and is likely to continue at nearly the same flow as seen historically. What might change is the Thermohaline Circulation (THC), which represents only a fraction of the flow of the Gulf Stream, causing part of the flow to branch toward the north. There is evidence that the THC moved toward the south during past Ice Ages, which would have reduced the heating of the area around the Nordic Seas, where most of the THC is thought to occur in more recent periods. The confusion which this article perpetuates only makes it more difficult to educate the public regarding the potential impacts of AGW on climate...
EDIT: For those interested in tornadoes and the possible impact of AGW on future tornado weather, Andrew Revkin has a long discussion posted today on his blog Dot Earth at the NYT.
E. Swanson
Well, yes, but that THC-driven "part of the flow" is the North Atlantic Drift (or Current), the continuation of the Gulf Stream that (we think) keeps northern and western Europe quite a lot warmer than it might otherwise be.
[Note, also, that thermohaline circulation is referenced above as if it were a local or regional phenomenon, when in fact it is the driver of deep ocean currents planet-wide.]
Yes, I'm aware of the North Atlantic Drift Current, which is the flow that tends to warm northern Europe. And, that's the part of the Gulf Stream which might change due to AGW as the surface layer is freshened. But, a weakening of shift in the North Atlantic Drift won't have much impact on the flow of the Florida Current, which progresses to the north along the East Coast of the US, then turns eastward away from the coast and is renamed the Gulf Stream.
When the idea of a global circulation first appeared (presented by Wally Broecker), it was shown as a continuous current circling the Earth. The trouble with that is the sinking takes place in only a few locations in certain seasons of the year and conditions in those locations determine the flow rate of the sinking portion of the loop. More recent analysis has shown that the deepest waters return to the surface thru several mechanisms, such as eddy flows, not just an upwelling at one location as depicted in the first graphical representations.
E. Swanson
Is the U.S. heading for recession?
US growth slows sharply to 1.8pc
The definition of a recession is two quarters in a row where growth falls.
Q2(2nd Quarter) for 2011 might actually not be even worse because the QE II(the Fed's printing operation) is still intact until June.
What happens after the Fed is done with injecting a massive amount of money into the economy just to keep it floating, coupled with even higher oil prices, is anybody's guess.
These growth numbers, with Quantitative Easing II still intact, are giving some clues.
As with most government statistics the 'recession' definition is bogus. You're correct, two consecutive quarters of negative growth is the definition of a recession.
But how about if the economy grows thus:
Q1: +2%
Q2: -3%
Q3: +2%
Q4: -3%
..rinse, repeat.
No recession here, but GDP is shrinking.
Yes, what about some speculation? I suspect that it might be a good idea to post actual growth figures for the U.S. per quarter.
Sure thing. Your point?
My point is that the definition of what constitutes a recession is bogus. The definitions are heavily biased in favour of giving the perception that all is fine, when in fact the possibility that there is technically no recession but GDP is still falling over time is very real.
A much more honest approach would be to give equal weight to both the down side as to the up side.
The point of my post was to show that the U.S. was close to recession, in fact, it may even be in the midst of it. Your critique was to show that the economy can have severe unrest without a recession in the strict, technical definition, a point I'm happy to concede.
However, the point you're missing is that when using the definition that governments use, the U.S. is indeed close to a recession, despite the massive stimulus and despite the fact that we're using the more lenient definition. This is precisely the reason why this is so noteworthy.
If you don't mind, I'd like to use your previous, rather fickle, example and turn it around. If it weren't for QE II, the 2011 Q2 would have even lower growth than the 2011 Q1, which is the whole point of the stimulus, of course, but this is interesting because the fall is so steep despite a massive stimulus.
The growth figures for the next quarter will show just how prone the U.S. actually is to high oil prices.
If we have lower growth for Q2 than for Q1, despite the stimulus, then I think we can gently brush aside those who claim we're overly focused on the oil price.
Much of the drop in 1Q'11 GDP was due to Federal, State, and Local government spending cuts. These show up as significant cuts in both government gross investment and consumption expenditure accounts.
GDP growth can be expected to be quite muted if government expenditures are cut and if the trade gap is closed. While both of these create a healthier economy, they negatively affect GDP calculations.
GROSS DOMESTIC PRODUCT: FIRST QUARTER 2011 (ADVANCE ESTIMATE)
I'm looking forward to the next installment, "much of the drop in 2Q'11 GDP was due to (X)", where X is not much to do with oil prices directly. There are atypical swings in every quarter, and it seems like those in finance are stretching our current circumstances quite a bit to fit them into a BAU narrative. I don't think there will be as many buyers for this rationalization in August. I notice also that you don't say "one-time" Federal, State, and Local government spending cuts, which seems wise.
The cuts in government spending will not be "one-time", since there is a lot of political motivation for continuing cuts in government spending. This will make the GDP numbers either small positive percentages or even mildly negative -- and cuts in government spending may well push us into two or three quarters of negative GDP growth and formally a recession.
A mild government austerity-driven recession is fairly likely and I'd expect unemployment to remain quite high, because of layoffs of government employees, because of continuing increases in productivity as information systems drive out clerical/adminstrative/managerial jobs, and because of the changing fortunes of various segments of the private economy. These are all causing lots of unemployment as old job categories become obsolete and as the former incumbents are not suited for new job openings.
I may be alone on this, but I'm a bit baffled that the economy is doing as well as it is of late. I'd have expected that $100+ /Bl would have soaked through and had an effect by now.
Joseph Palmer, I think there is a significant lag in the economy. A substantial portion of the gas increase is just now being felt. The gas price was 30 cents lower just a month ago.
Wait a couple of months and people will pull back after receiving their higher credit card bills. I think the economy will be very much impacted.
I have to wonder if it isn't just TOO easy now to 'Show' a world that is humming along as usual, and that we're simply not seeing all that much of the pain.
Some of this is simply (in my culture) the way we are all trained not to show the pain much.. if someone asks 'How are you?', you are really supposed to say "Fine", even if that's not actually the case.
Who you gonna trust, Your lying eyes, or my lying mouth?
Just kidding, I'm fine.
Really.
2 good points.
First, that official statistics have been made less meaningful, and at the same time more favorable to the politicians who stand to look bad had the statistics not been manipulated. For example "inflation" not counting food or fuel costs. "Unemployment" not counting people who give up looking. "GDP" including disasters, divorce and traffic accidents as a positive number.
Second point - prevailing Western culture not allowing folks to show the pain. This is important because such cultures will suffer greatly when the pain does come. It's much better to feel it, cry and wail, than just put on the facade that 'everything's fine'. People who stuff their feelings don't get the support and love they need. There are plenty of small groups trying to counter this, but the dominant culture says "No Fear!". The folks who feel the pain and move on will be much better able to survive than those who adopt coping mechanisms in the face of an inability to express what's actually happening
got2surf, good points.
I am surprised that the Fed keeps QE2 going even though we have month after month of higher inflation on fuel and food.
How many months need to go by before the Fed determines their "temporary" definition of inflation isn't just temporary?
The unemployment definition is another that leads to confusion.
One thing the Fed watches very closely is wage rates. If nominal wages are rising, then they worry about a vicious circle of cost-push/demand pull inflation. However, both nominal and real wages are stable (and indeed, falling in some categories), so the Fed is not worried that the current round of increases in commodity prices will work its way very much into "core" inflation--that excludes both energy and food prices because they are so volatile.
Nevertheless, Bernanke does watch commodity prices very closely. If, for example, people borrow a lot more money on their credit cards to pay for gasoline and groceries, then he'd be concerned about excessive credit expansion and might steer the Fed toward tighter money policies. However, with real GDP growth only 1.8% on an annualized basis for the preliminary first quarter numbers, the last thing Bernanke is going to worry about is whether to tighten money to get gasoline and grocery prices down. It is true that tight enough money (increasing interest rates enough) will knock down oil and other commodity prices, but it does so by choking off economic growth and perhaps causing a recession.
Don, thanks for the insights.
Besides the effect on our gasoline and grocery prices, isn't the loose monetary supply (and the growth it is trying to create) also contributing to the increase in food cost throughout the world?
Insofar as loose monetary policy in the U.S. encourages excessively loose monetary policy around the globe, to that extent the easy money policy in the U.S. raised food prices around the world. But if India had tight money (which it most emphatically does not) food prices could fall in India while they rise in the U.S.
Exchange rates and international finance are not that hard to grasp, so long as you know the right terminology. Each country has its own monetary policy. For example, the price of oil in Euros has gone up much less than the price of oil in dollars. Why? Because the Euro has been rising in value against the dollar for some time now.
When I was going for a Ph.D. in finance (after I got the MBA in finance), international finance and financial institutions were one of my areas of specialization; the proper measures of inflation were another one of my specialties. Really, both economics and finance are very logical and rather easy; where they go wrong is with wrong or incomplete premises.
As far as the construction of good measures of inflation goes, that is a can of worms inside a basket of snakes floating on a radioactive sea--lots of practical and theoretical predicaments involved, i.e. insoluble problems.
that is a can of worms inside a basket of snakes floating on a radioactive sea
I though you were describing a bunch of politicos on a cruise! (probably off Japan)
Seriously though - your thoughts on referencing inflation to gold, where it is assumed that gold is the thing of stable value?
Gold is way too unstable to be a store of economic value. Remember 1980 and what happened to gold and silver prices after tight money came along and crushed the speculative boom in commodities? I am convinced that much money that is now buying both gold and silver is borrowed money--with extreme leverage. Thus the precious metals are in a speculative bubble that can pop at any time. If you want to buy precious metals, buy them at low prices. For example, I "bought" silver coins in 1965, because I knew that due to Gresham's Law (Bad money drives good money out of circulation.) silver would go out of circulation and--in the long term--rise in value. I bought gold coins shortly after Nixon made it legal to do so, somewhere around $38 an ounce. I've never regretted those investments and still have my silver coins; the gold ones I sold to finance my children's college educations in the 1990s.
To everthing there is a season . . . . IMHO, now is the time to sell gold and especially silver and to sit on cash (i.e. T-Bills) until the bubble bursts and the price of precious metals plunges to perhaps one third current levels. Patience and liquidity are great partners.
If we had to base currency on metals, I'd favor a trimetallic standard of gold, silver, and copper, kind of like what we had before the invention of the Fed in 1913. Clearly, central banks cannot be trusted to maintain the value of paper currencies. More severe inflation is in our future, but the folks at the automatic earth.com may be right and we could very well have a deflationary depression first.
In two more years the Fed will be 100 years old. During that period of time the dollar has lost roughly 97% of its 1913 value. Gold and silver and copper have all held their value, but as I stated above, I think precious metals are way overpriced now. I suspect copper is somewhat overpriced too, though I don't know much about the copper market.
Well hang on. First you say "Gold is way too unstable to be a store of economic value" and then you finish off by saying "Gold and silver and copper have all held their value" (for 100 years)
I would say something that has held its value for 100 years, is a pretty good store of economic value. In fact, if it is worth the same 100 years later I would say that is the exact definition of a "store of value"
To be clear, I am not talking gold as an investment, because it is not - it is a storage medium.
You can try to ride short term fluctuations, but that is purely speculation, not an investment at all.
I think this is where many people go wrong in their thinking of gold, as they think it is an "investment."
Gold has not been an especially good store of value; once again, remember 1980.
Timberland, though much less liquid and not a good money substitute, has held its value much better than has gold, and in addition you can get income from timberland.
Until it started going up in price, maybe a dozen years ago, the real (inflation adjusted) value of copper had been going down for almost a hundred years.
Remember that Simon won $10,000 from Paul Erlich by betting, not too long ago, that commodities would fall in real terms over a period fairly late in the twentieth century.
I am not arguing against owning gold; all I'm saying is that one should buy it at reasonable prices, not current speculative bubble prices.
I do not know what you mean when you say that gold is not an investment. Surely, the main reason most people want to own gold is because they think it will be a good investment.
I bought gold purely because I was losing money in real terms if I stuck with any of the banks' saving accounts / ISAs over here in the UK - gold seems the easiest way to hedge inflation.
I do not know what you mean when you say that gold is not an investment. Surely, the main reason most people want to own gold is because they think it will be a good investment.
When I was being taught economics, we defined an investment as putting capital into something with the expectation of generating a future flow of returns from said investment - interest, dividends, profits, etc.
Conversely, to put capital into something that, in and of itself cannot generate any "flow" of returns, but can only be resold for a "hopefully" higher price, is what we deemed speculation.
I know in the real world these lines/defintiions are very much blurred, but I think they are very functional definitions.
With gold, it needs to be recognised it cannot generate returns - unless you rent it to someone, or write options.futures on it, or some such. But in and of itself it just sits there and hopefully improves in dollar value - that to me is the very definition of speculation.
But, regarding it as a store of value - you put money into it, and later, at any time, (and anywhere for that matter) you can redeem it for money - that is what I would call a store of value, or money. It can;t go broke, or default like a company or government, it can't burn or deteriorate like a building, be flooded/contaminated/squatted/paved over like land - it truly just sits there - which is *exactly* the definition of "storage".
We then have the question of stability - and I will then say compared to what? Compared to almost any other commodity, I think gold has been more stable over the long haul.
Someone looking to "invest" in it, to make money by a rise in value - is truly speculating, in my opinion, and like you, I would not recommend buying gold now (or anytime, actually) with the expectation of a fast buck. There are occasional fluctuations in the dollar value, and you might get lucky, but why speculate on a rise in value of what is about the most stable thing there is - that would be a very bad "investment" indeed.
I'm no financial expert, but it seems to me that gold is another bubble waiting to burst. In my opinion it's way overvalued.
As for me, I'm no "expert" expert.
/sarcasm
Darn it, I forgot to refresh before replying to Paul's post -- Don beat me to it (and did a much better job). That's what I get for doing this on an iPod :)
but QE2 doesn't feed food/fuel prices, global shortages do. The Fed is technically correct, its mandate is to control inflation feeding through the economy. Since no-one today has the ability to demand higher pay because food and fuel have gone up, these don't lead to general inflation. In the 70's when fuel was part of the official inflation higher oil prices lead to wage pressure, which created an inflationary spiral. Either way we gotta take it in the shorts (if food and fuel are scarce and more expensive to procure) then on avarage people have to become poorer, its just a matter of allocating the pain. But, if the allocation process causes too much collateral damage, then that pain is only amplified.
Of course the technical inflation metric has clearly diverged from what consumers feel. The needed correction is to apply some sort of time smoothing filter to the volatile components like food and fuel, so they at least reflect the longterm secular changes. But thats too much to ask for innumerate lawyer or political types......
I'm pretty sure that the justification for taking food and fuel out of the measure is twofold. First they tend to be so volatile that the month to month changes are not meaningful. Second, since they are so basic to the economy any stable change in either will cause a stable change in the "core" inflation.
That may or may not be true anymore. The offsetting issue that has changed is the weak bargaining power of employees. Without unions and the constant threat posed by offshoring and illegal immigrant labor, it is difficult to demand sufficient wages to cause a rise in prices. Labor costs, I suspect, are the broken link between higher fuel and food costs and core inflation.
I would agree with that. Of course if you an oligarch it is a feature not a bug. Inflation is more feared by the upper classes. For the lower classes, inflating their savings takes nothing away from nothing, and that doesn't amount to a hill of beans.
The rich tend to be creditors. The poor and middle class folks tend to be debtors. In an unanticipated inflation creditors lose and debtors gain. However, excessive inflation tends to hurt everybody in the long run, and so would excessive deflation. During the period 1815-1900 the British had a long gradual deflation, and everybody (Well, almost everybody.) was way better off in 1900 than their ancestors had been in 1815. During the period in the U.S. between 1940 and the present day there has been more or less gradual but also variable inflation. Most Americans are way better off than their ancestors were in 1940.
When my youngest daughter becomes first Empress of the American Empire, I shall advise her to back currency with a "basket" of commodities. Given discretion, central bankers since the Great Depression have always erred on the side of excessively easy money.
Don, thanks for your insights.
In your opinion, is the Fed maintaining too much easy money today? If you were in charge, would you end QE2 early? Raise the funds rate (0.25, 0.5)? Any other actions I am missing?
If I were sitting in Bernanke's chair, I would announce that QE2 will be followed by QE3, because with rising oil prices, the Fed is in a tough spot: If they tighten money, then consumer spending and business investment in capital goods (plant and equipment, inventory, raw materials) will both decline. This decline in consumer spending and business investment would put a great strain on a weak financial system and increase the probability of the debt deflation predicted over at theautomaticearth.com.
Almost any alternative is better than a debt deflation, which is what caused the Great Depression to be so great and so long. Sooner or later, inflation is inevitable, because the Fed should not and will not allow big banks to fail. One of the changes I'd make if I were appointed temporary dictator (as the ancient Roman republic did during times of crisis) would be to break up the big banks into companies that were not too big to fail.
Despite all the arrows and sling stones hitting the Fed, I think it has done a reasonably good job since the crisis of 2008. The banks were bailed out, and the financial system and financial institutions survived. Companies that were not bailed out, such as Lehman Brothers, deserved to fail. We should give great credit to the Fed for preventing a run on banks that would quickly have evolved into drastic debt deflation and a Greater Depression.
Be patient.
It's comin'; the hangover/downturn.
The DOW is pumped up on a combination of inflation expectations (courtesy of the Fed & QE2) and overseas earnings by the multinational companies.
Remember, healthy corporate earnings (at least temporarily) are consistent with Peak Oil theory as the multinational companies cash in on business from the oil exporting countries and the areas of the world such as Asia and Australia where growth is still being maintained.
But this is definitely not translating into strong, renewed economic growth here at home.
And the increases at the pump are most definitely impacting consumers at the low end. WalMart issued a report yesterday that they are seeing problems with sales toward the end of the month as their customers run out of money prior to payday.
As an interesting side light on the above, WalMart has seen quarterly declining same store sales for seven consecutive quarters. This is really damning info for those who believe we're in any kind of turn-around.
I am still not sure which way the economy is going. IMO, it's sort of on a plateau, like oil production. Some signs pointing up, some pointing down. Some talking heads saying pricey oil is a killer, others saying it can't derail a recovering economy like we have now (as opposed to the bubble about the burst three years ago).
I am more and more convinced that there won't be a sudden crash. It will be a long descent, and the stair steps down will go largely unnoticed.
Oh god, I hope you're right. It keeps me up at night, thinking how a sudden crash will cause an unrecoverable and painful down step. I wouldn't even know were to run.
As I watch the tornado trauma unfold, I think how in the future, these unlucky places will not be rebuilt. The only good places to live, will be the places untouched by mother nature.
Keep your powder dry, eastex.
The markets are in "Full Complacency Mode" right now.
They can transition in a heart beat to "Full Panic Mode".
This is human nature.
It is certain that the sovereign debt problem will trigger "Full Panic Mode" at some point. It's impossible to guess when because it's all a matter of market confidence. And this varies depending upon the specifics of the circumstances of each individual debtor. The trigger for "Full Panic Mode" for the European Union core will be different than the one for the EU periphery which will be different for Japan which will be different for the U.S. which will be different for the debt market in China, etc.
But as sure as God makes frogs, it's gonna happen.
I think the markets may panic...but it's less likely than it was, because Helicopter Ben "fixed it" the last time. And even if they do, it's only the markets. They seem to have little connection with the average person on the street.
Don't confuse the debt markets with the equity markets.
When the debt markets go, they panic.
Stability in the debt markets rest entirely upon confidence. With confidence, you either have it, or you don't. There's almost no in between.
I used to think that. After the crash of 2008, I think there is an in-between, and we're in it.
The crash of 2008 was a run on financial institutions that created a liquidity crisis. What really matters is whether e.g. Barclays thinks Morgan Stanley is good for its obligations. Whether the general public is confident or not doesn't matter much.
+1.1
Yes a reality best whispered within closed circles.
"debt markets rest entirely upon confidence"
confidence game (also known as a bunko, con, flim flam, gaffle, grift, hustle, scam, scheme, swindle or bamboozle)...?
Crashes tend not to happen the same way in subsequent cycles. It likely won't be led by homes and load portfolios this time. Maybe commercial real estate, or wages, or gov't debt and bonds, or state pensions, or some combination, but I bet not the same leaders as before. Likely even different segments of stocks will get hit, and different world economies, though I still think the PIIGS have issues.
Will be interesting to see if metals ride through the next crash as good as the last. Silver has been my best investment ever, and I wish I'd bought more. Dollars were great DURING the crash, but not since. I'm about to rebalance and see what happens this summer.
Full complacency mode is exactly what they are in, but really no different than in 08 when oil was rising along with the Dow. The Dow topped out at 14,700 and the price of oil at 147, then all hell broke loose.
I am sure the same will happen again. What happens to the stock market, the economy etc., is somewhat a groupthink type experience as we can see from what happened in 08. Suddenly the groupthink gets on the same panic page, dumping stocks and off the cliff we all go together.
Right now in the markets makes no sense whatsoever. Think about it: Oil, gasoline, stocks, gold, silver and food are all going up by leaps and bounds, while the dollar plummets. That is not sustainable because higher energy costs eat into economic activity, and the declining dollar is acting as an accelerant for energy price increases.
I agree with Jabberwock, with his comment: But as sure as God makes frogs, it's gonna happen. Meaning another economic step down will occur. When? In the next few months is my best guess.
Perk Earl, good comments.
Many Americans don't realize how unsustainable the path is that we are on.
Going down...too many public employees, at all levels of government, getting canned.
Wonder when the gov't will fire the guys that lob Tomahawk cruise missiles at foreign countries. Isn't there a cheaper way to control the supply of oil.
Unless we cut funding to the military it will not find the cheapest way to control the supply of oil.
Seems like a problem down the road. LOL
Leanan, with the higher fuel and food prices, and high unemployment, there is not a lot of spare funds to support economic expansion. In the future, I predict there will be more signs pointing downward.
Could be. I wouldn't bet against it. Wouldn't bet for it, either.
In particular, it seems to me that the jobs picture is improving. No, I'm not talking about the government figures. They are improving, but no one trusts 'em, and for good reason. Just my feeling, from what I see around the country and what I hear from my friends and family.
No one I know has lost their job recently, and many have gotten new jobs, or even quit their jobs because they had better offers. In my circle, people are getting married, having kids, buying houses, going on vacation again. Roads are crowded, hotel rates are rising, restaurants are busy, mall parking lots are full.
Housing looks like it's headed for a double dip, but that was kind of expected (we all knew about the "phantom inventory"), and it's not all bad news. The low prices will lure people to buy (since everyone's sure prices will eventually rise again).
I am almost positive prices will rise if inflation keeps up -- before too long that alone will take the slack out of pricing in many areas, though those that fell furthest may take a decade to recover even with 5% inflation.
The next concern will be to see if wages will rise with inflation, or if we stick in stagflation for a while. Given high unemployment, this is quite likely.
As I've opined for several years now, staying employed is critical, and in a "required" side of the economy, not "optional" or "outsourceable". Out of debt is good too, in case the world calls our bluff on debt financing and we have another crash. Inflation could help pay off fixed price loans, but variable rate loans and credit cards will hurt badly as rates eventually rise -- credit cards are often well over 20% even with with rates at zero.
Crashes tend to be personal -- one job at a time. Debt with no job equals hard crash pretty quickly.
The notion that a demand/supply balance will keep us on a relatively even plateau for a while seems plausible to me, but I'm also a firm believer in punctuated equilibrium, at least in natural systems; the Columbia River Gorge was eroded from a volcanic plain to a deep river valley over a nice long period of time, but it was really 6 or 7 catastrophic flood events that created it, not a patient, predictable little stream. I'm curious to see if we can avoid some serious punctuations in the next 40 years or so. Personally I don't think the risers on our stair-steps are going to be up to code.
I fall into the long decline camp with fits and starts along the way. A couple of things to remember regarding the economy and the stock market. Energy companies comprise a rather large share of the S&P 500. With oil prices on the rise someone will benefit handsomely. Also, the jobs created from a rising demand for energy with significant gains in price will be higher paying with better benefits than many non-energy focused careers. All this plays into a positive feedback loop where our expenditures on energy will comprise a larger share of our disposable income. Kind of like trading futures, some will win and some will lose. But the markets and the overall economy can benefit in a rising oil price environment. At least for awhile.....
The major reason is the massive stimulus, which keeps the patient alive through artificial measures.
The second reason is that gas prices have a lag of several weeks before they catch up with the crude oil prices. That is why you have this creeping surge in prices.
We also have to remember that according to the research done on this, once the price crosses the $85-$90 dollar threshold, it takes an average 9 months to get into a recession. We've crossed that threshold in late 2010(Nov/Dec), so you'll have to wait until September, at least, before you'll start to see the full effects barring anything unpredictable happens.
As my post indicated, there are nascent signs that we are already heading that way, considering the very sharp fall of GDP growth, despite a massive stimulus.
Of course, the Fed might decide to print even more money, and add even more debt, but that will merely prolong the inevitable.
Seems to me that the parts of the economy that rich people like to talk about are doing well--if you're in high finance or run a big corporation, or are the type who likes to use those rich-people metrics as a guide, everything is, indeed, looking just fine. And you're sure as heck not going to talk about other measurements that don't look so good, hence the relative silence on those.
Don't worry, it won't last. It's finally dawning on a large group of average people (think teapartiers, perhaps) that their interests don't follow those of giant multinational corporations or the politicians who depend on them for support. I think we can expect this to be a big topic going into the upcoming US elections. It will be interesting to see which party can buy the most votes with lip service to populism without inadvertently backing any policy which might serve the middle class.
Excellent points, as usual.
Care to stick your neck out on when you think the next big downturn will be?
Nicely put, Erica. I'm not sure I share your optimism about the mass (e.g., Tea Partier) awakening, since those folks seem to me so easily led.
However, there is no question that the pain has been spreading upward (from the sectors that America long ago consigned to perpetual suffering and doesn't give a damn about) into mainstream society for some time, and is only intensifying despite the damned lies and statistics. The natives are still confused and, mostly, docile, but there are signs...
Joseph Palmer:
It's all a scam and will end in tears.
Think about it this way: if people get very obese, and need to see the doctor frequently, this is all counted as economic activity! Food sales are strong, healthcare employment goes up - thereby, the economy must be doing well.
Of course, this tells you nothing about whether obesity is in fact a good thing or not, whether it's worthwhile. Just like we can't really tell if SUVs or McMansions are worthwhile.
This is the natural endpoint of a fiat currency based on nothing in a country obsessed with money. Morris Berman has written about this.
At first, in such a country, obsession with money works really well - the country has bountiful resources and land, and money may be backed by gold. As such, people work hard to produce value, and in turn receive something of value.
But such a system has limits - especially when the ability to make honest money diminishes (as happened in 1970), and the ability to make money based on debt vanishes (as in 2008). If this happens, the only way to "make money" is to just flat out print it - which is what we are doing.
But it's all malinvestment now, on a scale so large that it's incomprehensible. Waste is crowding out value.
And it's a shame because our country could be so much more. But for now, it is what it is - one giant black hole of malinvestment based on fiat money being conjured from thin air to pay for that malinvestment.
Oilman Sachs, I agree. I pray for our country. It is great country but could be much better.
What's the US population growth rate? Isn't it about 2.0%? If so, 1.8% GDP growth is a recession in per-capita terms.
The Fed doesn't stimulate the economy, the politicians do.
It's true that 'printing' money does put money into the hands of the bankers
but they are not the US economy--they invest their 'free' money in the stock market and overseas. If that indirectly led to more purchases of US products that would be wonderful, but that ain't happening.
http://www.tradingeconomics.com/united-states/balance-of-trade
Qualitative Easing is the Fed buying up US debt with electronic money, which indirectly dumps dollars into the market thru the banks.
In 2008 the Fed started with a US debt was $0.6T USD and by April 2009 Bernanke had bought $1.8T USD from banks, mortgage backed securities-$0.8T USD TARP and bought ~$1T USD of government debt. The budget deficit in 2009
having been $0.4T USD.
So QE wiped out the Fed deficit and TARP. Yea, Ben!
However the recession and tax cuts reduced government revenue by $0.4T and
government expenditures increased by $0.4T to fight the recession plus the $0.4T USD deficit run in 2008(war related?) caused a deficit of $1.2T USD in 2010.
The 2010 budget showed a $1.2T USD deficit forcing Treasury to issue $1.2T USD of more debt. Therefore the US national debt went from $12.9T 2009 to $14.1T 2010.
In August 2010, Bernanke started QE2 buying $30B USD per month, then increasing it to total $0.6T USD by August 2011.
The 2011 budget shows a $1.6T USD deficit so the US national debt will rise
by $1T USD to $15.1T USD for 2011.
Bernanke is reducing the US national debt by buying it while the government fights wars,
government revenue continues to fall from tax cuts and government continues to
stimulate the economy to control the effects of the recession.
It appears that the recession isn't going away so revenue will be flat if the tax cuts hold and government stimulus can't go down much without seriously screwing the US public.
So the moral of the story is that Ben has done what he can to bailout the politicians who love giving out tax cuts, which haven't helped stimulate the economy and the Pentagon which loves fighting wars--i.e. end the tax cuts, end the wars and it largely would end the deficit. Protect SS, Medicare by
raising payroll taxes and reducing drug company subsidies i.e. Medicare Advantage would remove it as an issue.
The big loser is, of course, the entire world which relies on the USD as the stable reserve currency. Without that status, the pain in the US would be far worse.
The big winner is, of course, the bailed-out banks who are selling low interest Treasuries to the Fed.
Majorian,
Of course you meant to write "quantitative" not "qualitative" easing. One other quibble, QE1 and QE2 did not mean that the Fed was elimininating national debt; what they were doing was putting the debt out of the open market. Note that almost all interest on governement securities held by the Fed is repaid to the Treasury (less a bit for expenses), so at least tax payers need not worry about the interest cost of bonds, notes, and bills issued by the Treasury being held as an asset by the Fed.
I agree with the main thrust of your discussion, however. In my opinion
1. oil prices are going to remain above $100 for some time to come and
2. the high oil prices will bring on a global recession. If the recession is severe enough, then oil prices will fall below $100/barrel, considerably below for a short time, perhaps a rerun with variations of 2008-2009.
Oops, quantitative I meant.
The Fed is buying Treasuries(US debt) to boost the money supply, first to
save the banks who depend on the Federal Reserve System for performing its intended function(Banker of Last Resort), that was the Bailout. I found it interesting that Congress not Bernanke actually provided the Bailout cash even though Ben came back with QE buying.
At this point, the US was dead even heading into the Great Depression II.
The Fed and Hoover sat on their hands in 1930 opting for 'financial responsibility' and the result was severe economic contraction.
As Keynes stated, the government had to provide economic activity where the business cycle failed to provide it. Unlike the 1930's, we have a virtual economy operating in cyberspace.
The current political fad of government austerity plus free-market globalized investment spells doom for a US recovery, not the price of oil.
The US will continue to stagnate.
QE2 will end in a few months and the US will still be running giant deficits.
The political season will rule out any policy changes(war,stimulus,tax cuts) and Teapot GOP will never agree to even 'symbolic' tax raises.
I expect Ben to initiate a QE III of $1T USD--$0.3T war, $0.4T tax cuts(thanks, Dubya, Obama!), $0.3T reduced stimulus-- next year to save politicians from themselves as the Fig Leaf. And much that money will go straight to Communist China.
"Useful idiots"..somewhere Lenin must be smiling.
You are correct that when it comes to fiscal policy Congress (with the consent of the President) acts--not the Fed. But QE1 and QE2 were essentially printing of money by the Fed to implement deficit spending caused by Congress and the President. In other words, monetary and fiscal policy have been coordinated.
What monetary and fiscal policy cannot do is to reduce the price and the scarcity of oil. Thus I think a focus on oil prices at this point is appropriate, although of course it is not the ONLY thing to focus on.
Hoover did not sit on his hands. He increased taxes and spending and begged businesses not to lower wages or lay workers off. FDR actually campaigned against Hoover's interventionism in 1932, and accused Hoover of leading the country "down the path of socialism". FDR obviously thought differently once he was actually elected. He remarked that the New Deal was an extension of Hoover's policies. Let's retire the Laissez-Faire Hoover Myth.
http://www.harpers.org/archive/2009/07/0082562?redirect=1982284879
this is the best piece I've read on the Obama / Hoover thing.
I consider this as good a piece of research as I've seen, feel free to improve on it. That appears to me to be real history, so I wouldn't spend much time generating an internet sound byte response unless there are technically incorrect factual errors in there.
I predicted when he was first elected that he would be seen as more like Hoover than like FDR.
You must be kidding or "teabagging", Patriot.
Typical RW revisionism (at the level of Glenn Beck's 'Hitler was a leftist' meme). Whatever you imagine Hoover did, it was entirely inadequate as a stimulus.
OTOH, New Deal Socialism worked wonders.
http://en.wikipedia.org/wiki/Herbert_Hoover
Personally, I think there really wasn't much either Hoover or FDR could do. The problem was too big. IMO, it was WWII that ended the Depression, not the New Deal.
The end of the Depression left many people with the idea that we understood the economy, and that because of that, the Depression could never happen again. I think they're wrong.
Just draw a straight line from 1920 to 1930 in the graph, ignore the depression and draw a line from 1933 to 1940, they are basically intersect at the same spot.
A lot of folks parrot the line that the war ended the Great Depression but that's misleading. WW2 ended the high unemployment which was at 15% in 1940.
Actually the NRA brought unemployment down below 15% in 1936 when it was cancelled due to SCOTUS reinforced by a coalition of austerity-minded Republicans and Dixiecrats in 1937.
The dreaded Smoot-Halley tariff remained intact until 1944 so there was no boom in US exports to end the Depression.
Actually, New Deal Keynesianism did a good job of running the economy.
The guns AND butter policy of Kennedy-Johnson-Nixon isn't exactly what Keynes intended(in good times you correct the economic course) and naturally the unbridled free-market idiocy of Reagan/Clinton/Bush intentionally undid the careful controls of Glass-Stegall,etc.
You can hardly blame Keynes or FDR for that.
That depends on what you mean by ended. The new deal certainly blunted the severity of the thing. But it required deficit spending, and fear of that caused the programs to be scaled back. The pullback in 1937 was caused by austerity. Its sort of like the Obama stimulus was just enough to end the GFC freefall, but not large enough to put things back. Which is kinda great, because different people can throw out the data and say it worked (or didn't work) based upon their ideology.
I agree with this part of your comment. Well, I don't know if it's great, but it's reality. Krugman insisting that the reason government stimulus hasn't fixed the economy is because the stimulus is too small reminds me of the supply siders who claim tax cuts can fix all ills, it just didn't work because the tax cuts were too small.
No one seems willing to consider that they could be dead wrong, when it sure looks to me like they should at least consider it.
We have had plenty of experience with tax cuts, the most recent starting in the Bush years. They clearly do not increase income and revenues to make up for the decrease in tax revenues. The tax cutter's projections have been proven wrong time and time again and the results are fully predictable given multiplier effects based on the Keynesian theory.
I think Krugman is correct and should be given credit for predicting all this ahead of time. It wasn't like he advocated a policy that was actually followed and then backtracked.
I differ,however, with Krugman in the sense that I think it would be virtually impossible to get full employment even with a stimulus much higher than we have now because I believe we have structural unemployment that cannot be fixed with fiscal policy. The jobs have gone away and are not coming back through either lowering taxes or increasing spending.
Where Obama erred was getting on board the anti deficit bandwagon too early. He will be blamed when the recovery stalls regardless of the facts.
I think tax cuts and government stimulus have the same problem: there might be short term benefits, but eventually, the bill comes due.
The idea that the fed or the president can prevent recessions/depressions strikes me as being as wrong-headed as the still popular idea that wars are good for the economy. In the end, it's trying to lift yourself by your bootstraps.
Leanan,
You were a Denninger fan.
The guy who claimed to found the Tea Potty and a Birther.
http://en.wikipedia.org/wiki/Karl_Denninger
Some doomers are delusional.
What? What makes you think I was ever a Denninger fan?
You are correct that neither Hoover nor FDR could do much to end the Great Depression. But I think that Milton Friedman was correct when he wrote to the effect that the Fed could have caused the Great Depression to be only a relatively mild panic and recession by bailing out banks, particularly the big Bank of the U.S. Cascading bank failures caused the debt deflation. That could have been stopped. Friedman speculated that one main reason why the Bank of the U.S. (I think I have the name right.) was allowed to fail that it was owned by Jews, and most of the Board of Governors of the Federal Reserve system in the 1930s were antisemitic.
Ben Bernanke has studied the Great Depression. He's going to make his own mistakes and not repeat those committed by the Fed in 1929-37. IMHO Bernake and his Fed will always err on the side of excessively easy monetary policy rather than the tight money policy that the Fed exercised during the Great Depression.
Money= Implied promises that can't be kept
Yes, FDR promised us
a chicken in every pot and
a car in every garage
But he could not foresee that the car's gas tank would be empty
and the natural gas will have stopped flowing to fuel the flame under that chicken pot
step back, you'll know things are really bad if they stop selling cars, with a full tank of gas.
Regarding the flame, gives a new meaing to "your goose is cooked".
"FDR promised us..."
Neocon revisionist history.
The truth is just the opposite.
The link between Hoover and the phrase "a chicken in every pot" can be traced to a paid advertisement which apparently originated with the Republican National Committee, who inserted it into a number of newspapers during the 1928 campaign.
http://www.hoover.archives.gov/info/faq.html#chicken
I stand corrected. Thank you.
I suppose that in the modern era a presidential candidate would have to indirectly imply, but never outright promise: an iPad in every nook and a Hybrid SUV in every McMansion cranny
One of the better things that FDR did was to remove Andrew Mellon from Secretary of the Treasury. http://en.wikipedia.org/wiki/Andrew_W._Mellon
Likely Hoover would have taken more action to stimulate the economy and implement more effective recovery policies, but Hoover was undercut by Mellon.
Another factor was the misguided post WW-I policies of the central bankers, for which see "Lords of Finance: The Bankers Who Broke the World" by Liaquat Ahamed. Of these, Benjamin Strong was the Chairman of the New York Fed and had he not died in 1928 may have prevented the crises that led to the Great Depression.
FDR certainly didn't remove Mellon in Feb. 1932. He wasn't elected until the following November. Maybe he fired him as ambassador to the UK
Right. Wright Patman and company, effectively, did that when they introduced articles of impeachment. Mellon evidently decided that discretion was the better part, etc. and Hoover sent him to London.
What FDR did was experiment. He tried X and it flopped. The usual inclination is to double down, do 2X, then when that fails do 4X. But, instead when X was a failure, FDR went back and tried Y instead.
FDR also had the power of organized labor and really mad people behind him, enough power to let him tell the truth about the wealthy and the banking/finance thieves. That's why the US right is so openly hostile to all forms of organized labor, including the recent Wisconsin attempt to break the state employees unions. Big money knows that if it can splinter and divide while organizing itself it can take over completely, and that's a big prize.
I was amazed when I went back and read some of those speeches. There's a reason they had a 90% tax rate, that's the only way to get the money back from the thieves and looters. All they use that extra cash for is speculation, just like they are doing today, by the way.
Greed is always the same, undermines and destroys, I assume that's why in Timothy it was noted: the Love of money is the root of all evil. Not, note, money. Love of money is greed, and greed is all that drives modern finance.
Its seems they are pretty close to accomplishing that.
Not really.
Roosevelt had implemented successful broad NRA style relief as governor of New York.
He knew what he was doing.
He put Harry Hopkins who was his aide when he was Governor in charge.
Alabama nuclear plant shuts safely after tornadoes
Didn't see this posted yesterday.
3,274-megawatts offline, perhaps for weeks. Miles of transmission lines damaged. At least this incident occured in the Spring when demand is lower.
We're downwind from these TVA plants so I try to pay attention.
So if I understand the article correctly, they're actually a diesel fuel supply outage away from a meltdown?
I'm not sure.
Perhaps the diesels take priority in their loss of transmission protocol. Good to know they've had options. It still makes me a bit nervous... What would the situation be if the plant had taken a direct hit? This same storm took out much of Ringold, GA.
Ghung, it appears from Ken's quote that they are primarily using the diesels.
With only one transmission line into the plant any operation on that line would cause a blink in power to the plant. To avoid this situation, I suspect they would prefer to operate off the diesel generators. Under normal conditions, multiple transmission lines connect to the station and so loss of any line does not cause a blink to the plant.
Fukushima demonstrates with painful thoroughness that a protracted loss of reactor and SFP cooling can drive a nuke plant to nightmarish disaster. If Brown's Ferry is one high-tension utility feed and a line of tanker trucks away from that, then that strikes me as a regime where human "intervention" could conceivably finish the job. I find that highly troubling.
Like an elephant balanced on barstool..."safe" 'til one the legs snaps.
"a" & "of"...jeez my typing...:-(
This makes me just a bit nervous. The ISP for my personal website (A large multinational) had a significant outage because of a failure of filters in their diesel driven backup system after hurricane Wilma.
Complex. Brittle. Spindly. Vulnerable.
Have a great weekend!
So that's fine, (as long as the diesel keeps coming..)
So what is the plan in 5 years, or 15, when we're getting another storm like this, and there's also been a growing diesel problem in the area?
How far away are we from having ALL of our Nuke plants set up to be 'walk-away safe'?
A LONG ways!
This plan is unlikely to have the three-fold impact that Fukishima had. With available river cooling, a residual steam pump would have sufficed if gens had failed, and if I understand it correctly they did recover low-voltage grid connectivity quite rapidly.
A key problem with Fukishima was the presumption of independent faults when over-spec tsunami, over-spec, quake, and grid failure were obviously closely tied in retrospect. It would be easy to have expected multiple grid-ties to be independent here, too.
Walk-away is still a necessary requirement for nukes IMHO. With that, insurance might actually become affordable enough to make smaller-scale nukes reasonable.
The amount of power needed for the pumps is orders of magnitude less thanthe power output of the plants in normal operation. A smallish power line could feed the emergency backup power, even if its capacity is dwarfed by the usual output of the plant. I think they also have battery backup, so short periods (sevarl hours) actually of switching between sources can be acommodated.
Indeed. As in, complete replacement of the reactor fleet. Every reactor in the commercial fleet has a basic design that is 35-40 years old, or more. Some work has been done to them over the years to make them safer from external effects -- more redundancy and capacity in back-up power supplies, for example -- but they are not and will not be walk-away safe.
The Fukushima disaster seems to have revealed another failure mode that had received inadequate attention. Wonder if operators and regulators are starting to think more about disasters that can result in so much debris in the cooling water source (eg, a river) that the intakes will be hopelessly fouled.
This article explains many things:
Why Older Nuclear Power Plants Remain 'Cash Cows' Despite Fukushima
http://www.nytimes.com/cwire/2011/04/29/29climatewire-why-older-nuclear-...
""They can buy them much more cheaply than they can build them,""
""These [nuclear] plants, which are fully depreciated, were purchased at a discount and are, in fact, cash cows,""
"...costs of just over 2 cents per kilowatt-hour in 2009, compared to 5 cents for electricity from natural gas-fired plants and 3 cents for coal..."
A telling line:
"power output from the multibillion-dollar new plants could not compete with natural gas-fired power plants in the absence of a carbon price."
"A rising price on carbon emissions would be a windfall for existing nuclear plants."
-A new nuclear generating station, even with its freedom from real liability and final waste disposal costs, can not compete with a gas-fired station that can dump its trash into the common air for free.-
"...already concerned about the impact of excess low-priced wind power... Surplus wind power in Exelon's home service area puts pressure on its nuclear plants to reduce output, and that strikes directly at the profitability of nuclear operations, some analysts said."
"Exelon has commercial reasons... (not to) have large build-out of wind power occur off the Atlantic Coast. ...(they scuttled a) legislative proposal this spring to support wind projects off Maryland's coast... (their) objections were pivotal, according to people familiar with the issue.
-So they HATE wind.-
The nuclear industry's commercial interests trump the common good. Their greater money certainly trumps a lesser commercial interest's lesser money.
Radiation for Children's Day
http://www.counterpunch.org/alvarez04292011.html
___________________
Fun fact:
Wind made 42GWh in California yesterday. It out-performed the total contribution from nuclear for part of that time.
http://www.caiso.com/green/renewrpt/DailyRenewablesWatch.pdf
Why not have a Stirling engine powered cooling pump independent of the electrical generation?
Most of what a nuclear reactor produces is heat anyway, use that directly for cooling.
I do think E-P or someone said that newer systems have done some version of this.. I am encouraged to hear it, but still I am left well over on the side that says 'We can't handle a perfect storm', which is exemplified by PO and CC, but can also be ushered in with other conjoined misfortunes, while Pripyat and Hundreds of Japanese Acres and Towns show us a downside that makes the costs pretty easy to see.
Using the waste heat would be critical, but so is having water available to move that heat with. A very hard condition to guarantee.
Adding such a subsystem to an existing reactor would be a challenge. Consider Fukushima as the example. You couldn't put the Stirling in the turbine hall because one of the first things that happens in an emergency is to cut off that steam flow. The containment building is already rather full, what with the existing cooling systems, spent fuel pool, etc. Any substantial change could put the operator in the position of needing new design certifications, which might be a bit of an issue on a reactor design that's already 40+ years old.
The preferred direction for new designs is, of course, towards passive safety, where the reactor remains safe, at least over modest periods of time (days, weeks, months), with no external connections or powered pumps at all.
YES! Or at least thermopiles, like in an RTG. I can't believe there is nothing worth doing with all that "waste" heat! Solid-state electrical power that would have been plenty to run the sensors and valves. A shorted thermopile junction even provides cooling if the cold side stays cold, like it would if water cooled or in bedrock. Works great in space, look at one:
http://en.wikipedia.org/wiki/Radioisotope_thermoelectric_generator
Presumably you could put spent cores inside these and get some voltage out. Use the output like in the brakes of a diesel-electric train if necessary, and dry storage could be an option.
In the reactors, add some electrical generators to the emergency steam-driven pumps on all but #1, big enough to keep the valve open and power the sensor. Sure seems like they could have built-in a better failure modes. And something that important should be redundant, didn't the pump on #3 fail before the Hydrogen explosion? Didn't NASA used to require triple redundancy on such things for man-rating, whenever possible? But with power plants, we'll just assume the worst won't happen, so one cheap, token backup system was enough. Reactor #1 used a passive condenser loop IIRC which didn't even bring water up from the wet well, no wonder it overheated first.
And here in the West, we have a bunch of these lovely designs near population centers, so lets extend their lives! But that's ok, we'll probably never have to evacuate a really big city like NY or Miami, so we're not going to include that in our accounting. Making them so profitable! And by the way, is there any way to make them cheaper?
The whole concept of a powerless Nuclear power station seems absurd to me. Are nuclear submarines so vulnerable that a scram means death and meltdown unless they get help quick too? I don't recall even a backup generator on my old model of the Ethan Allen, but could be wrong it was a long time ago. And I heard that in its long life, Enterprise has been refuelled only once, and that was unusual. Why do the civilian reactors go through so much fuel anyway?
My opinion of nuclear power has gone from bad to worse. Obviously if something really big happens to one of these reactor sites, something absurd like ash or pyroclastic flow from a volcano, and she's gonna blow and spread all that stored wast and there is nothing anybody or even a good design could do to stop it? Or a good bombing in time of war and it'll be almost as bad as a direct nuclear attack, potentially worse long-term given the volume of stuff. So a foe does not even need their own nuclear weapons to launch an effective nuclear attack.
Re melting down nuclear submarines, consider the case of the Russian submarine K-19. Bad workmanship caused a failure of the cooling circuit, which caused the reactor to scram. However, there was no backup cooling system (not installed due to cost!). The only thing that prevented a meltdown was the crew entering the reactor to fix the coolant pipes that failed.
http://en.wikipedia.org/wiki/Soviet_submarine_K-19#Nuclear_accident
I just got back from Huntsville. Went up to pick up my wife. We are both back in Pensacola now.
Power is out for most of North Alabama. I went up last night and once I got about 15 miles north of Birmingham, everything was dark. Lots of cars on the side of the road, out of gas. People driving in from outside never expected a 100 mile stretch of road with no gas available.
I saw lots of destruction. Trees down everywhere and some houses gone. The problem with Browns Ferry is the grid, not the plant.
The word I heard was that it would likely be Monday or Tuesday before power was back to normal. But you never know about these things. It could be up tomorrow but I seriously doubt it, or it could be another week.
Anyway I saw something while I was there that I have not seen in years. I looked up at the night sky and there was the Milky Way.
Ron P.
I've often made rural drives in the area, and I have a long habit of filling up by 9pm as many stations roll up the carpet early anyway. It's funny how close to the edge people like to live on such simple things as "full tank" versus "I'll make it on fumes". A couple of years back when there were spot shortages and high prices after the hurricanes I took a few five gallon jugs just in case -- I figured a few hundred extra miles was good insurance in case something bad happened.
I can imagine that open stations are being mobbed and are struggling to restock. Even though trucks can travel, it is like that many warehouses, jobbers, and so forth are closed, so supply chains are fractured. JIT becomes NQIT once again.
Everybody, everywhere should keep some gas, some cash, and some food -- you just never know what curve balls the world can throw!
Yeah, Ron, I drove through a section of North GA Thursday morning where a twister cut a path. Power lines down for miles, and the highway I was on was closed for a time.
We just got a call that an old friend (my father's roommate at GA Tech) was killed in his lake cottage about twenty miles from here. Sort of brings things into a different realility. After 83 years, at least he died in his favorite spot.
Oil companies are making more money and less fuel
Re. Solar Panels Rise Pole by Pole, Followed by Gasps of ‘Eyesore’
I've posted about the solar farms going online in our area and the NIMBYs who are coming out in full force. There's a move on for new zoning laws to limit their installation, by the same folks who have fought zoning in the past to limit ridgetop developement. These people spent lots of money developing view lots and building massive homes and putting roads where they don't belong, but don't want to look down on "ugly mirrors".
I've now written several responses to their rants in the local paper, but haven't submitted anything yet; I come across as way too snarky. These folks don't care that most of their energy comes from coal, and that entire mountains are being leveled to provide for their high level of consumption. Who cares what happens in some other state, some other country?
Since most of these folks are Christian conservatives I'm considering sending this to the paper next week:
....maybe not..I doubt it's possible to get through to these folks. Better to wait for the big reset, when they can't get the fuel to drive to their mountaintop retreats.
Got to go plant the muskmellons :-0
Good letter, G.
I have to say that the picture in the article looked like they put Zero thought into this when they did it. The panels being so low on the poles are definitely cluttering the street visuals and just begging for the naysayers to splutter on them, etc. Just putting them at the peak of the pole, and making them perhaps Long and Narrow, parallel to the wires might have made the poles look better even, or just have gone by nearly unnoticed.
You know I'm one of the biggest PV boosters here, but I don't ignore the power of a diplomatic blunder, like the Bill Nye story yesterday. 'Genesis was Wrong.. the moon doesn't emit light..'
Still, it's continually laughable that the PV is an 'Eyesore', but the poles and wires are universally accepted now. I'm sure when they were going up originally, there was no shortage of resistance (so to speak) offered against these miles of cables being placed overhead.
I see what you mean.
If they put them at the top, they would land in the distribution wiring when they fell?
The interesting thing is these are not primarily power supply, but line conditioning devices:
Can Petra Pull an Intel in Solar?
These have a battery and an inverter controlled by electronics that montors line voltage and is used to balance out transmission capability. They are claiming to exploit synergies in function by charging the battery with a panel, rather than drawing the power off the line. Whether or not it makes economic sense to combine power conditioning and solar in a lot of small packages is a different matter.
In NIMBY cases, always beware of AstroTurfing. In this case big money fossil fuel agents could well be sending out newsletters to homeowners with a known political bent, trying to drun up the impression of wide popular dislike for green power. Many of these objectors are probably inadvertent water carriers for some clever political actors.
Thanks for the qualifying link.
Not sure tho if the modules are communicating load response back to a central source, or adjusting load in situ? Is PSG&E expecting significant power production from the panel portion of the module, or just killing 2 birds w/ one stone, and mainly getting a voltage regulator up?
"In reality, Petra combines electronics for controlling and monitoring the grid, a microinverter, and a solar panel into a modular offering called SunWave. SunWave modules are then attached to power poles in a dense manner to create a virtual power plant and smart grid network for a given region."
At 250 w/panel, doesn't seem much for a suburban US area, probably I'm just OTL on suburban electricity draws.
My first response on reading the NYT piece was like Ghungs, of how far we are removed from our existence. And want nothing to do with it. Whatever happened to the old independent, pioneering spirit of the country that is so lauded politically?
I had the impression they interact with the power line, probably by measuring voltage and current. Although it is possible to send RF through wires (I think). The total power may not have to be large, probably they are just trying to remove/reduce reactive loading (where current is out of phase with voltage), and making small adjustments to supply as demand varies. I wonder if turning them into a power source puts them into a different capital expentiture column when negotiating with the public service commisision. Maybe they make sense as an end run around some ill thought regulation? Or maybe they make sense technically -because they want distributed power conditioning anyway, and adding the panels doesn't increase the number of servicing trips etc.
250W/pole over 200,000 poles is 50MW, not to be sniffed at.
NAOM
Enemy -
That is a great point about the Astroturfing and one I hadn't really thought about for relatively "localized" situations such as this but that I have no doubt probably does occur...
Such is the cancer that is the manufactured doubt / concern industry... it (they) has metastasized to invade all the organs and is doing its part to kill the host.
Ghung, I thought this was a good letter. I couldn't help thinking that fixing a couple of punctuation issues could make your letter more convincing. I know the OD folks are particular about space, so rather than re-post it with the edits in a reply here, I put the suggested modification on my site, www.fullostrich.com. If you have a moment, please check it out. (And of course I'll delete it after you've seen it as it's obviously not my work.)
Thanks, Erica. Feel free to use it as you wish. It was a late night jamb-out. I must point out that some of your edits resulted in incomplete sentences ;-) I also try to follow the rules applying to semi colons (conjunctive adverbs, closley related complete sentences, etc.) but good punctuation is tough and often subjective. Hyphenation stumps me for some reason, but you'll never catch me doing this: Pls dnt txt wyl drvng.
BTW: I'm in rural NC. My letters shine compared to some of the submissions :-/
I was thinking that I had fixed YOUR incomplete sentences! :^D
Sometimes it's tough to tell whether the second part of a sentence is a complete sentence (semicolon) or a list (colon). I did spot one place where I replaced a semicolon with a colon, and probably shouldn't have. I'll check for others. (Not the most glamorous way to spend a Friday night, but I've had my share of 'em in the past.)
Anyway, it's a good letter and I hope it gets people thinking.
You are probably right but I say go for it anyway!
BTW I was in Pensacola, Florida on Wednesday and Thursday when the Tornadoes hit Alabama. On my way back to south Florida I had to drive through the most incredible rain and thunderstorms I've ever seen, As I was heading back south I came across convoy after convoy of Electric Utility trucks heading North West towards Alabama. I myself was driving a loaded Heavy Duty Ford F350 diesel with a heavy trailer. Even though I kept my speed at around 60 mph the whole trip the $4.15 per gal. average price of diesel caused me to swallow pretty hard every time I had to fill up.
There is no way in hell that this house of cards, fossil fuel dependent economy, isn't going to come crashing down if the price of fuel continues on its current trend. Methinks that big reset is going to come a lot sooner rather than later.
Cheers!
Fred,
Commenting on your last paragraph, somehow truckers are adapting, tho often eating the increase. Talking w/ my cattle hauler yesterday on the same note, he's been eating alot, but feels the buyer will have to pick it up soon. Mentioned yet another packing plant going under this June. This will effectively double the distance from our sale yard to packer, approx additional miles one way 250. Hope to get around it by finding one way empties, and increased revenue from commission as beef price escalates.
If you might take a swing at the questions I posed upthread about Petra's modules, I'd appreciate it.
I'm sure a lot of people and truckers are trying to adapt and are eating the increases for now. My question is how long can they hold on? Also the consequences of all the feedback loops of more and more buyers of all kinds of products not being able to keep their heads above water will mean fewer and fewer customers who are able to support the increases in prices as well. Sounds like the beginning of a downward spiral to me.
This is from the SunWave Up PDF. http://www.petrasolar.com/downloads/SunWave-UP-Series.pdf
I took a quick look...
Sounds to me as if Petra Solar by using SunWave technology is cornering the market on distributed power generation and feeding it into the new smart grid and New Jersey is their test market.
Personally, in most cases I think I'd still prefer to have individuals not corporations being in control of their own power generation and usage. But that's just me.
Fred, NJ may be their test market, but how can Petra corner the market? Other mfrs could easily make similar systems, yes?
I'm no expert on power conditioning but it seems to me that having units of 200W is a real drop in the bucket when even a 25kV distribution line can be carrying megawatts. You need a lot of VAR's to make even a 1% difference in power factor if the line is carrying 5MW.
Wonder what would happen to these pole mounted systems in a good storm? They have to be designed for it, but it still seems like asking for trouble.
Hey Paul, I'm a bit brain dead from a long trip at the moment but that remark was intended to be somewhat tongue in cheek.
Agreed, they are going to need a lot of drops in the bucket but you have to start somewhere.
I live in Florida and we design PV installations to survive Cat 5 hurricanes so I'm no too worried about that.
Petra is a Utility Solution. I've done a test project - 1 Megawatt of very distributed DG on 1500 Billboards in FL. Rolling out same in LA staring next week. Very pleased with the Results. Surprising amount of kWh even on Cloudy days. Gallery here - www.longtimber.com/Powerboards. The Billboards feed the Grid in the day and take back ~70% at night. NJ has blown past FL in Grid Tied PV, IRCC Petra had ~14 Megawatts of Sunwave deployed in NJ a year ago. Distributed Generation works. Just got samples of the 4th Generation Micro-inverter, Big Step Forward & Perfect match for a 250 watt PV Panel. ~ 1A peak PER PANEL at 250 VAC, adds up quickly. If Every Pole in the US had a 250 watt panel on it, That would be bocu (?) Tera watts. Would save a lot of transmission lines. Working now on Gridfree solutions - We have developed a dark sky light that saves 70% energy, We need 80% energy reduction to get cost of ownership below grid tie. Should be there in Next Gen or 2.
Thanks for that. Given that billboards are already an eyesore, might as well make them produce something!
14MW of these things is 56,000 units in NJ.
In the case of billboards, there is already a service to the board, for the power poles you will need a transformer too, but they are obviously doing that.
For a typical pole spacing of 100m, you would have 2.5kw/km, or 4kW/mile, under full sunlight. So a 25 mile distribution line would have 100kW of solar (at one panel per pole) - still doesn't seem like much in the scheme things, but every bit helps.
Actually sounds like a good unit for rooftop installations, especially where you have broken roof lines that only have small south facing areas available. Do you know what the units costs are for these things?
Yesterday I paid $9.09 per US gallon for diesel. In the UK. I know, apples and oranges. Just saying...
JN2, $9.09 per gallon - wow, hard to believe. The US prices are low, even at $4 per gallon.
At almost $1 per mile fuel cost, probably not too many of these trucks being sold in the UK: Denali GMC heavy-duty pickups
Test truck was Denali 2500 HD 4x4 with optional diesel, Allison transmission, navigation and more, priced at $61,774.
GMC says its tests show about 18 mpg (13.1 L/100 km)highway. 10.5 mpg (22.4 L/100 km) in suburban driving without load.
Yair...Not trying to be a smartass but that truck is relitivly inexpensive...not that I would want one.
Over here the basic "heavy duty" work truck...trayback Landcruiser with a bit of bar work will set you back more than that.
"To those who would demonise these installations,
Leviticus 25:23-24 redemption of the land.
Jeremiah 2:7 defiled my land"
No point quoting the Old Testament to them. Here's how it works: All those sins are sacrificed for in the death of Jesus. So they can be ignored. So, go ahead, cut your beard, get some gnarly tattoos, pollute your daughter...It's covered!
Leviticus 19:26
Leviticus 19:28
Leviticus 19:29
Very nice explanation here:
http://www.religioustattoos.net/Bible_Support/index.php
http://yltbible.com/leviticus/19.htm
http://www.codexsinaiticus.org/
"Demons" opens up another can of worms you really do not want to get into.
I have found an effective salve:
http://www.conniedover.com/lyrics/the_wishing_well/ubi_caritas.shtml
http://www.youtube.com/watch?v=Q3gfIJeNojo
Speak of joining together...
KalimankuDenku: I generally appreciate your posts, but now I'm really starting to wonder. A few days ago you cherry picked a couple of articles to make some vague sweeping claim that women were generally better off under agrarian conditions, against all evidence (which I could cite but it's not really worth it).
Now you completely garble Christian theology. Not saying there aren't people who call themselves Christian who may think this way, mind you.
Could well be!
The matrilineal understanding comes from cultural anthropology. The reference I was looking for was "Man's rise to civilization: as shown by the Indians of North America from primeval times to the coming of the industrial states" by Peter Farb. But I could not find an online version of the text. The equally accessible "Faces of Culture" PBS series videos have been pulled. It is a matter of how ownership and naming are passed down.
The adventures of Leviticus are from the exact attempt at communication Ghung finds himself engaged in. No, quoting the Jewish bible is not going to score any points. I've had this explained to me with the same patient smile reserved for errant children and small pets. The tattoo link I included has the same take.
I'm glad to hear from you, friend! Did you enjoy the Connie Dover song?
Matrilineal and matrilocal (the two go together ususally) societies are typical of communities organized at the horticultural level. Plow agriculture everywhere seems to destroy matrilinearity and matrilocality, and so does a free market economy. The key to matrilineal societies is that wealth (gardens) pass in the female line, not patrilineal nor bilineal. Agricultural societies are all patrilineal and are often strongly patriarchal, because in horticulture women did most of the gardening work, but when you hitch an ox to a plow, that is man's work.
There is a huge difference between horticultural society (digging sticks, sometimes slash and burn) and an agricultural society with plows and draft animals. The rule has been that agricultural societies destroy horticultural societies, because agricultural societies can be more complex due to the added energy provided by draft animals pulling plows. The ancient Hebrews were a herding society (most wealth was sheep) and highly patriarchal and patrilineal.
Thank you for the distinction and the knowledge.
The other pole of the comparison was societies where warfare is important, which tend toward patriarchy.
Agricultural societies are the ones most likely to be involved in wars; they are considerably worse than industrial societies in this regard. However, ancient Chinese society, which was horticultural up until about five thousand years ago, was quite warlike.
Agricultural societies tend toward monotheism with a highly patriarchal god. In horticultural societies monotheism is either unknown or exceedingly rare.
If I could suggest two things:
1) Cut the length, be succinct and to the point.
2) Get a photo of the local scene, probably quite pretty. Get your copy of Photoshop and drop and mountaintop removal scene into the background of your local scene.
Nothing gets across the point so well as a picture, and newspaper types know that and will run it just because it has a good visual to go with it.
Good letter
Paragraph 4: "you BREATH it in..."
should be: "you BREATHE it in..."
Breath is a noun, breathe is the verb.
Don
My four year anniversary as a TOaD just passed. As a recovering doomer, I must say I've heard just about everything in the four plus year. HyperInflation, Deflation, Depression, Mass Die Off, Every US Currency ending in X will be voided, the works. And yet I still get up in the morning, hop in the car, and drive my ridiculously long commute so that I can make enough money to buy the foreign made crap I don't need.
I still read the Drumbeat just about everyday (without comments) and sometimes I read the posts just to see if anything difference is being proposed. But all in all, not reading the posts and not watching the news and not really caring about the price of gas has been a far more relaxing lifestyle.
I am certainly not criticizing anyone on this site. It is a wonderful resource. The J-Nuke coverage was the finest on the net. And the first amendment is still my favorite of the bill of rights. I just don't have to time any more to worry about things I can't impact anyway.
Thanks to all you for keeping the site going. I look forward to enjoying my 5th year reading the news, technical discussions, and maybe a post of two from time to time.
jteehan, we all have an impact. Each buying decision we make has an impact, whether it is foreign made stuff or not.
Many challenges lie ahead, but I remain optimistic.
+5
Even if you stand silent at the back of the crowd, your silence is taken as affirmation of the status quo.
You become part of the "Silent Majority".
And in the naked light I saw
Ten thousand people, maybe more.
People talking without speaking,
People hearing without listening,
People writing songs that voices never share
And no one dare
Disturb the sound of silence.
--Simon And Garfunkel: The Sounds Of Silence
Consider yourself lucky, or perhaps better informed.
http://money.cnn.com/2011/01/27/news/economy/long_term_unemployment/inde...
Just out of curiosity, was there anything specific that caused you to change your mind about doomer-ism? Other than the fact that things didn't crash during the last four years? I have my own set of reasons for not being a doomer, but am always interested in others' thought processes about retreating from that position.
If you became unemployed and cannot find a job, and still have bills to pay and a family to feed, then your world has crashed. John
Everything is local in terms of the pain.
Yes, a bad economy is the aggregate of all people. But any individual is just a number.
Fat cats will remain fat until the skinny cats find them in their fenced in communities I guess.
I'm afraid many will be live spit roasted out in front of their gated communities.
The screams will bring smiles to the formally working masses.
I'll respond to this one. I found out my energy was better spent visiting my daughter's school and stocking up her special ed class with new everything. Computers, cameras, printers, etc. The I decided to lower my taxes by giving huge chunks of my pay to the local food bank. My wife, and my money, brought it back from the brink by matching the entire county of 60,000 people for a month. Response was so strong that we actually had to go make a payment plan with the director. Then, I decided the women's shelter inability to send us a receipt required new computers and printers.
In short, I decided a doomer was a lazy person who didn't really care. After a few years of stocking food, guns, solar panels, solar ovens, and everything else. Then being depressed about the 91 Kunstler prediction of the end of society in the US, I realized I did care. And therefore, could not possibly be a doomer.
My latest project is needs411.org I have about 700,000 non profits which can be searched only locally and doesn't require registration and I don't take money. This will be The Oil Drums record by the way. http://needs411.org/orgform.php?action=search&ein=261233189 I haven't added it yet, but the third party donation links work.
It's amazing what can be done, even after a year of unemployment as another poster referenced (all of 09 for me) when you just stop defining the problems and start solving just few. I call them potholes. Fix the pothole in front of your house, be it a school, homeless shelter, food bank, hell even a pothole for that matter.
I'm going to write an essay on being a Recovering Doomer and submit it. But I don't know the steps. I can be reached at tod@needs411.org if you want to help on my project. Anyone who wants the entire SQL dump can have that too. I have another 400K records to import, and the scrapers are STILL running after three months.
Anyone, I'm a lot happier now. And a lot less informed!!!
No judgements to anyone, just decided to change course.
j
When I was visiting a psychologist for treatment of depression about a year ago he told me to stop reading TOD, or at least limit myself to fifteen minutes a day. I find reading the doomers greatly cheering, however, and I did not follow the psychologist's advice. I've been reading TOD for more than five years now, and this site has greatly enriched my life and clarified my world view.
For decades now I've been predicting TSHTF in 2012 and TEOTWAWKI in 2020 and see no reason to change my predictions now. The end of the world as we know it is going to be tough, and death rates are going to increase a lot, but I do not see apocalypse as likely in our future. My views resemble those of John Michael Greer.
I remember you from the years. My doc didn't give specific advice, but I figured out that doomerism is a treatable form of depression. Lexapro for a while. Mandatory exercise and mandatory go outside for an hour a day. And no matter what, don't watch any news run by a company worth more than five million dollars. I stopped watching Jon Stewart because despite my respect for him, he's a emotional media sucker better than most.
And Greer, surprising that you mentioned him... And Greer's book was the beginning of my road back from the abyss. Life will go on. Maybe not with me, but then again, it's not about me, is it?
I'm glad you responded Don. It's been a wild few years, huh?
I also have a deepseated respect for Greer.
Kunstler is little more than a loudmouthed charlatan.
As for the scenario, I think the peak will indeed come about 2012 but the TEOTWAWKI will most likely come far before that, certainly by 2016 at the latest.
But I see the Peak as a bottleneck, rather than the end. Population will come down and there will be wars, but Darwin states that one of the principal underpinnings of Evolution is competition over scarce resources, and this has been the norm for almost of all human, and indeed living, history. It will become the same again.
Whoever comes out in the end, and people will come out in the end, will most likely go into the technological stratosphere. We're alreading outsourcing more and more jobs to machines.
It used to be blue collar workers but there are now even computer programs that do a lot of work lawyers used to do with documents, and I think this is only the beginning.
The way I see it, we have two seperate trends, one is the increasing intelligence of machines and the other is resource scarcity. Even if we wouldn't have PO, we would still have more and more unemployment as we need more and more efficiency to grow our economies and this is starting to weed out the weaker peoples, and the only way to keep them on board is by subsidising their work(often through government) which increases debt.
For me, if the peak is more severe than most think, that may cancel out this trend completely, but I doubt it. I'm not a person who belives in a Apocalypse Day scenario, rather long, small steps of decline and increasing wars and unrest in poorer parts of the world, as well as the rise of nationalism across the world, not only in Europe but in Israel, Canada, Australia, China and perhaps even a fracturing of the U.S. along these lines.
But either way, I see the peak as a obstacle to the next step in evolution for the human species, when we merge more fully with machines(a process which has already started with pacemakers and other variations) until being human becomes something of a conscious mind, rather than a biological existance. But that's some 20-30 years ahead. But it will happen in my lifetime unless the most extreme of the ultradoomers are right. Either way, life will change radically in the next few decades and most people will probably struggle to cope severely just to comprehend what is happening.
Yes, reading TOD is depressing.
On the other hand, not-reading-TOD is maddening.
Without TOD I'm left with only the mindless numbo jumbo of MSM:
... Oh look at the queen's hat, it's simply smashing
... Let's get government out of the way so that the Invisible Hand can once again weave its magic
... Yes we can (if we only wish upon a star, makes no difference how ignorant we are)
With you on this.TOD is one of the few places for rational thinking.MSM is just bull****.Being peak oil aware and its consequences have added a new dimension to my life.I was a doomer for sometime till I realized there is no exit plan because of multiple variables.Now I live to enjoy it till the good times last.I try to educate people especially the young ones(frankly with little success).Just returned from ordering a van.I asked the owners son(28years old)if he knew about "peak oil".He asked me if this was a new brand of synthetic oil I was trying to sell him.Lectured him for two hours but at the end I could feel that I had made no difference and it was BAU for him.
From "Blame game starts for high gas prices", up top:
So, it looks like two-thirds of the readers blamed either speculators or politians.
Less than a third are attributing the higher prices to supply and demand related to peak oil.
I still think it is important to reply to these stories, just to get a germ of common sense into the discussions.
Identify as a peak-oil 'exponent' not a 'proponent'.
Re-state the obvious, that the problem is geologic in origin and depletion is universal and unavoidable.
No need to engage in hyperbole or imaginative projections, no point in responding to political rhetoric.
We are winning the argument that we face a supply-side crisis but we will still be attacked as 'survivalists' or 'wackos' even as events unfold in conformity with peak-oil theory.
You would be amazed how tightly people cling to their beliefs that the problem is one that can be overcome through some measure (limiting speculation, looser environmental laws, more drilling, etc). In one instance someone alleged that there was a "Peak Oil Agenda", and I guess by implication arguing that if there were an agenda of some sort that somehow that made peak oil a less credible threat.
And nowhere does anyone talk about the declining dollar vs the price of oil, which I believe is large component in the current oil price runup. Denninger had some nice charts recently of dollar value vs several commodities, including oil/gas prices. All had a direct correlation between the falling dollar and commodity prices, courtesy of the Fed's printing press.
IMHO one of the methiods by which oil consumption per capita in the USA is going to be brought in line with the rest ofthe world, is through a fall in the value of the US dollar relative to currencies in countries/regions that use less oil per capita. With the dollar falling in value and dollar denominated oil prices rising, the perceived price for petroleum products will rise faster for US residents and residents of countries who's currency is pegged to the US dollar. If the dollar falls far enough, the rest of the world will perceive much less of a price increase than the US.
Alan from the islands
islandboy, quite a while ago there was a proposal to add a tax on imported oil. The idea died.
Wouldn't the US be better off with a tax rather than having the Fed devalue the dollar and drive up the cost, thereby having the same effect, without the benefit to our government's treasury?
I think the tax on imported oil would be good - IF, and only if, it was accompanied by mandatory country of origin labelling on the fuel you buy. That way there would be at least a mechanism for consumers to express their preference for domestic produced stuff - and to call out those retailer if they just add the tax amount to their price for domestic product.
Unfortunately, in the light of large Exxon profits, it would be seen as an oil company subsidy and thus will never fly.
Then again, large PU's and SUV's are oil company subsidies, and lots of people like those...
Paul – The problem would be that oil is bended at the refinery as well as the end products. Thus any particular gallon of gasoline might be composed of many different source oils. To make it even more difficult the refiners make “gasoline”…not Chevron gasoline or ExxonMobil gasoline. If you watch the tankers coming of a refinery, especially an independent, you’ll possibly see every brand name out there. The tankers will fill up with generic gasoline and then get topped off with each brand’s specific additives. I’m a particular fan of Chevron’s additives and avoid ExxonMobil. The gasoline component in every station is the same. It’s the additives that vary. Yes…it’s possible that the Chevron station is selling gas that came out of a Shell refinery that got the oil from an ExxonMobil field.
Hi Rock,
i know that stuff from everywhere gets mixed with stuff from everywhere else, but that still doesn't mean it can;t be done.
In the electricity business, you can buy wind power, or solar power, or even nuke power if you want, but the electrons you actually receive have certainly not come from there.
My concept is to apply the electricity model to the oil retail business, which, really is about the only business I can think of where the buyer can't know where the product is coming from. The retailers can bid for the amount of domestic available, and the amounts from other countries, and this is posted at the point of sale - and updated daily. Not hard to do with modern technology - someone would write an app for your iphone that tells you this before you even pull into the station.
It then allows the customer do something they simply can't do today - to use their purchasing patterns to express their desire (assuming they have any) for domestic fuels and away from Saudi, Venez etc.
if we assume they will pay a measly 10c/gal premium for domestic, then the retailers pay 10c more for domestic to- ultimately - the domestic producers. This would be reflected in the price of domestic crude.
For companies that claim to "support America" then they can buy domestic fuel, and their customers can even check to see if they are doing so.
At the moment all consumers can do is take what they are given. if they had the choice, they could express their disgust for Saudi oil by simply not buying any of it.
Apparently not, as tax hikes get fought, but the fed's actions have no equivalent block, it seems.
If the gov't can devalue the currency without having to get tax laws through congress, then that might explain why we are seeing things happen they way the are.
mrflash818, just because it is easier for the Fed to adjust monetary policy than it is for Congress to raise taxes doesn't mean that devaluing the currency is "better for the US" than raising the fuel tax.
It does get talked about here, and I suspect it's been often enough that it's buried in the assumptions of economic conversations.
Of course the big trick in such a correlation 'tween the Dollar and the Oil Price, is whether you're looking at your side of the equation as the cause or the effect. Even the Printing and Helicoptering of money didn't just happen in a vacuum and leave only downstream results, it was an effect before it was a cause.
Researchers conclude Mexico could become oil importer by 2020 without new investment
Report from the James A. Baker III Institute for Public Policy: THE FUTURE OF OIL IN MEXICO/EL FUTURO DEL SECTOR PETROLERO EN MÉXICO
A two-year study. 14 specialized papers. Influential academics flying around the world to join together in a roundtable.
<snarc>Thank goodness we have such smart people doing all this hard work to figure out that decreasing production and increasing consumption pose a problem!</snarc>
I would imagine that anyone with a high school education taking a one minute look at the data would come to same conclusion. Do we really need high powered muckety-mucks writing obtuse papers that are held behind paywalls to tell us what is so blindingly obvious?
Mexico's oil production is declining. Duh!
A rising population uses more oil. Duh!
Best Hopes for not getting too frustrated.
Jon
Actually all the papers are available (free for download as pdf) at the link I posted:
http://bakerinstitute.org/programs/energy-forum/publications/energy-stud...
However, you're right, almost all of this information has been covered by yourself and many other authors here on TOD.
In addition, they seem to have skipped the whole concept of systems analysis and limits to growth. This could be expected since the authors of this study are heavily weighted towards the economic bent. (What's the word I'm looking for ... Ahh! Clueless!)
Some of the titles ...
Jon,
In their defence, that is what these people do (and are paid to do). They are last century's "experts", where this sort of data and knowledge was more tightly held, and these experts and think tanks justified their existence by doing this sort of thing.
I hope/expect as more data is readily available to more people, of which your databrowsers are a great example, that there will be less money wasted on this sort of thing - as you say, a high school student could do it now.
Having said that, if you look at the credits for almost any PBS special, the list of sponsors of the "John Smith Foundation" type suggests that private funding is taking over, to some extent.
One of the greatest things about the internet is the availability of information to everyone - but TPTB are very threatened by it. Wonder if this has anything to with the announcement about cutbacks to EIA funding for reporting and forecasting? Are we going to see the US make such information a state secret like Saudi? If the stats are pointing to bad news down the pipes, I wouldn't be at all surprised.
Jon,
I have been a fan of your data browser plots, both their contents and layouts.
When I discuss resource and population and government finance issues with people, using per capita units often seems to help to visualize and internalize the quantitative impact for them -- it also helps me, despite my own professional daily use of numbers over many orders-of-magnitude to describe a variety of physical quantities.
For example, in eyeballing the Mexico: Oil and the Mexico — Population plots, I see that present total daily production per person in Mexico is about 4.3 liters. The total consumption per person is around 2.8 liters per day. (This compares with just over 10 liters per person per day consumed in the US.)
Would it be possible to add a plotting option in your Energy Data Browser for plotting per capita?
Yep, Houston area refiners will probably get their little pipeline from Cushing to make up for lost imports from Mexico. But, the Mexican government will not get a replacement of the oil revenue. Mexico will be another revolting mob soon enough, just like Egypt, Libya, etc.
$4 gas is just around the corner, but it might not last
There will be reports on the TV news when the US average gas price passes the magical $4 mark. At the rate its going, it won't be long now....
Compared to the $10+ gas price in Turkey, a $4 price is still low.
In Indiana, we've been +$4 since Monday. It went from 3.89 to 4.17 on Monday during lunch time. We're at 4.19 right now. We typically sit at RBOB +0.70, give or take, and RBOB has only climbed since Monday. It doesn't look like prices are coming down for a while.
In the last week, Upper Midwest gasoline prices have risen fast relative to NY harbor prices (similar to the gasoline futures price usually quoted in the media).
Mainly this is due to continued problems refiners have making their turnaround from winter to summer blends of fuel. After some significant delays, by early last week Upper Midwest refiners were thought to be back to normal, only to experience new problems this week. Something similar happened in the Northeast too.
Add in the problems with the huge Texas City refinery, shut down for a few days and may not be back to normal for one week more, and you will find gasoline supplies about as seasonally low as ever for this time of year (based upon recent history).
So $4 gasoline may not last long, we may be on the way to $5. Whether that happens soon or later depends if these problem plagued refiners can get back to normal operations.
Later in the year with will experience perhaps a more serious supply/demand crunch - as the worldwide summer driving and air conditioning season will increase demand at a time that supply is impaired mostly by Libya - but also as we recently discovered - less exports from Saudi Arabia.
I laughed out loud at that one :D
I'm not sure if you set it up intentionally, but it seemed that you were slowly building a case of semi-defence for the story before you whammed it with that sentence. Good one.
Cutting 'food miles' doesn't necessarily pay
I think this study has been brought up before.
Personally, I am as concerned largely about two other factors beyond the direct energy costs of transporting food.
1) The vulnerability of having a supply system that can leave my area cut off from what could turn out to be Essentials and Dietary Lynchpins if we allow the current '90% trucked' system to continue evolving within such a framework. (Pulled the 90% number out of an area not approved for food preparation, and which gets little sun..)
2) Our contributions as consumers to support a local economy of growers, bakers, brewers, grocers.. etc. As much for local economic principles as well as hoping to allow these businesses to thrive and continue on.
My take on that study, is that if the average distance for dairy products is 320 miles, then it is possibly the most local food sector there is.
My bet is that the average distance for grains (incl bread and pasts) vegetables and (especially) fruit would be much greater.
That said, dairy is highly processed, and it is not always easy to relocate those facilities, at least not at their present scale.
AS for the supply vulnerability, I agree, though I'm not sure how much can be done. Not many finished foods can be distributed by rail - the last leg will always be truck.
I am a big proponent of local processing of food. Import the storable commodities, like grains and beans, and then mill them and make the bread, pasta, beer etc locally. Maintaining several months supply of grain is easy. For fruit and veg, somehow, people gave forgotten that many of these things are seasonal. If we didn;t insist on buying and eating them, fresh, all year round, we wouldn't need to transport them from Mexico or Chile, or (increasingly) China.
this will support your #2. if all the bread in your town was milled and baked in the town, and only the grain brought in, it would be quite a boost to the local economy. Look at other processed foods in the same way and there are many opportunities - the hard part is getting people to give up their "brands". For some reason people like buying from Kraft etc. A local food brand/logo, for the town would be one way to go about it - then when you are buying you look for that logo first. Lots of wine growing regions do this, with great success.
"...the hard part is getting people to give up their "brands". For some reason people like buying from Kraft etc."
One factor I've heard more than once is "at least I know what I'm getting." This applies even more to restaurants, since people on the road often don't want to "take chances". But another real trouble with local processing is compliance/paperwork/lawyer costs, which don't scale down very well, and get worse each and every time some Congresscritter wants to make the 10 o'clock news by scaring us about "safety". That may be less of an issue with boutique wine, since wine tends to be expensive anyhow, than it would be with staples. As, when, and if things get tighter financially, that tightness will tend to favor the big guys, not the little ones, in anything remotely like the current regulatory environment - as the local-food movement (ironically sometimes the same folks who want everything swaddled in red tape) seems to be finding out the hard way.
You are right on, that is one of the big things about brand loyalty - even when the same company owns "competing" brands!
The safety regulations are manageable at small scale, IMO, for most things except meat and dairy. The independent small town bakery is the best example. They could take wheat in the back in sell bread in the front, if they wanted.
I was at a conference in the Cdn prairies a couple of years ago, and there was talk about some company building a $150m pasta factory there. didn;t go ahead, as "the market didn't justify it". So the grain growing ares import their pasta from elsewhere, including italy! The presenter's view was that somewhere between the $150m factory and the Italian grandmother making it on her kitchen bench, there is a happy medium. I am inclined to agree, but no one seems to be looking for it.
The rules can be worked around.
Having said that, I am in Canada, and grew up in Australia, both countries like to get things done, where as the US likes to create paperwork for lawyers, so I will concede that the situation may be unneccessarily difficult there.
But, there's always a way - i think the local food movement is just not going about it in the best way.
Yair...If things get tough I reckon some of the B/S regulations will gradualy become redundant.
I read some where (probably on TOD)that some administration somewhere will now allow the sale of raw milk provided the customer bring their own containers and the seller doesn't advertise.
In a brave new powered down world if I want to hand milk half a dozen cows and sell a few litres around town from my solar charged golf cart I don't see why I shouldn't...same with eggs and veges.
All the little towns used to have a baker and a butcher and many still would have if it was not for over regulation.
Bread for the Queensland eastern seaboard is baked in just a few super bakeries and during the recent floods even unaffected settlements soon ran out of store bought bread.
Bread for the Queensland eastern seaboard is baked in just a few super bakeries and during the recent floods even unaffected settlements soon ran out of store bought bread.
That is why I am such a big proponent of local "processing" of grains, in particular. They are the cheapest commodity to buy, transport, and can be stored for years.
A town bakery can have a silo out the back with 30 tons of wheat, and that will make a lot of bread, as long as there is some power/fuel available to grind the grain and bake the bread.
making it in the superbakery, and trucking it, you have a product that is 50% heavier (water added), 3x the volume, has shelf life of days, must be individually packaged and can't be handled in bulk. it is the most back-assward product processing - distribution system I can think of.
My local town bakery here sells bread for 2/3 the price of the name brands in the supermarket, and it is better and fresher. And, the money stays here.
Now, to find a way to do that with fuel...
Oh I don't know, maybe because you could make people extremely sick or even be responsible for the death of others...
Why we pasteurize:
A textbook example of what can happen when we don't:
There is absolutely no reason not to pasteurize milk and juice. Not doing so in a misguided attempt for "freshness" or slightly better taste is negligent in the extreme.
Unpasteurised milk is a whole different debate from local milk. I grew up drinking unpasteurised milk on my farm (milked by hand, not machine!) and none of us ever got sick. but then, I knew exactly how careful we were, and we didn't sell it either. That said, I would not buy unpasteurised milk from someone else.
But, if you are in the business of selling the milk, even in a one or two stand dairy, it is easy to have the equipment to pasteurise, and there is no excuse not to, and if you are selling then you should not even think about not doing it.
Locally produced should not give you a free pass on food health regulations - it is just the way that some of these regulations are written and applied that unnecessarily limits things.
The real problem is that many customers want unpasteurized milk. A lot of people believe that it's healthier - that it has natural bacteria that is beneficial and that some of us, at least, evolved to eat. It's related to the surge in interest in fermentation, probiotics, etc.
A lot of people believe that killing off those beneficial organisms makes the food less healthy, not more.
Whether it's true or not is another question...but it's customer demand, not laziness or the expense of pasteurization, that's behind the raw milk thing.
A lot of people think peak oil is a myth. A lot of people still believe that Obama was born in Kenya, and is really a Muslim. A lot of people think that the risks from vaccinations are greater than the benefits. All of these people happen to be wrong.
Fermentation and pasteurization are two completely different processes with two completely different goals. Fementation is a great example of how foolish it is when people demonize "processed" food. Regardless, the "lots of people" standard is almost never the way to go. What matters is the truth, not what people believe, and the truth is that "raw milk" has a very high potential to make you sick.
9 Recent Outbreaks of Raw Milk Induced Sickness (Since January 2010)
The CDC's take on Raw Milk
It probably is healthier - if used straight away. But when you are selling to the public that can't be guaranteed.
Fermented products are a different story - that is literally, the way that milk was "stored" before refrigeration. Cheesemaking is a highly effective way of concentrating the milk nutrients into a storable form.
I think it's much easier to determine whether fermented products from unpasteurised milk are safe, and I have no problem with them, as long as they are prepared, stored, handled properly. We made our own yoghurt - didn't taste as good as the bought stuff until we started adding sweeteners - my favourite was vanilla + golden syrup. But the yoghurt would keep for weeks when the milk would not.
But as long as there are people, there will be some that want to buy raw milk - those people should get their own cow or goat.
I think the apple juice incident made it clear that pasteurization is a really good idea for industrially produced products. A small amount of contamination can be spread to a large volume of product because of the way such foods are produced and distributed.
But people who want to buy a few quarts from the local Amish farmer should probably be allowed to. Or at least, trying to arrest them seems like a waste of resources. Especially since the post-carbon age is likely to involve increasing cuts in government services like food inspection.
Yair...point taken. One of the problems we have now is that the human immune sytems seem to have become less effective as we live in an artificialy sanitised environment.
My Mum always reckoned rugrats should be allowed to crawl out in the yard dirt to build up a bit of normal resistance...it worked for us.
The Oil Company Gusher
By Robert Reich Apr 28, 2011, 7:39 PM
I would say his piece on the economy is even better. He talks about the fact that we have declining real wages in the so-called 'recovery', which is very rare. He also details the grim prospects of the American Worker.
http://robertreich.org/post/4962078752
I like Mr. Reich's writings -- he has a lot to say, he can back it up, and he does it well.
Reich also says there is a greater chance of a recession than inflation. If we do go into another recession and oil price remains high (vs. 08 when it dumped back down), then it could become a permanent recession. In other words, at a certain oil price point that cannot be reduced by US recession, growth is unattainable.
The question is, can other countries like China, India, Brazil, Europe etc. pick up the slack as oil demand destruction occurs during a US recession. If so, we are toast!
The question is, can other countries like China, India, Brazil, Europe etc. pick up the slack as oil demand destruction occurs during a US recession. If so, we are toast!
You know, I think the term "demand destruction" should be reserved for when demand is *destroyed* as opposed to merely trimmed.
For example, demand for asbestos has been "destroyed", but demand for oil has merely backed off a little.
[Data from EIA and http://minerals.usgs.gov/minerals/pubs/commodity/asbestos/asbesmcs06.pdf]
So, for oil, I think we can say "peaked", 'declined", "decreased', etc but "demand destruction" should be left to Fox nerws and others interested in sensationalising.
As to whether China, Brazil and India can "take up the slack", well, they have already done so, and then some;
[data from indexmundi.com]
So the question is not can they make up for demand destruction, the real question is "if the US ever needs more, will they give it up?"
And I don;t think they will - so yes, the US is toast.
Relax folks, we have plenty of natural gas:
So sez Calgary Herald:
I'll believe it when I see it ...
I think there's another terminology detail we will need to be clear about.
A fuel is Techincally Recoverable.
0r,
Well, it is Recoverable, 'Technically'.
All depends on having the right Can Opener.
Well put.
And, as ROCKMAN always points out, recoverable at what cost?
I think the cost determines whether it is in the former or latter of your categories, as the latter is never recovered, because is is simply too costly.
There is a big difference between "technically recoverable" and "economically recoverable". There are a lot of resources world-wide which technically could be produced, but in reality will never be produced because they are a money-losing proposition.
That aside, the numbers they published aren't totally unreasonable. In the US, the EIA gives shale gas resources of 862 Tcf. That is less than the approximately 1200 Tcf of conventional gas the US has already produced to date, so it is not an unreasonable increment.
On an energy equivalent basis, it would be 144 billion barrels of oil equivalent. Total US oil production to date has been about 176 billion barrels, so shale gas resources are in the same range and certainly a lot better than remaining oil reserves (21 billion barrels). The US produces about 27 Tcf of gas per year, so 862 Tcf of shale gas represents about 32 years of reserves - a lot, but not enough to get the US through the rest of the century. The idea of the US having 100 years of shale gas reserves appears to be an exaggeration.
China is particularly interesting, though. The EIA estimates their shale gas resources at 1,275 Tcf. That is equivalent to about 213 billion barrels of oil. China's oil reserves are only about 15 billion barrels at the moment, so their shale gas position is a lot better.
China currently consumes about 9 million barrels of oil per day or 3.3 billion barrels per year. If they converted all their oil consumption to shale gas, they would have about 64 years of supply. They can't actually displace all the oil, but the numbers suggest that drilling up their shale gas resources and replacing as much of their oil and coal consumption with natural gas as possible would be very worthwhile, given the current price of oil and their steadily diminishing coal reserves.
Death Tornado Destroys Supplies of Gas, Water, Electricity
I have a question for those of you that know anything about nuclear power and/or silver markets. I have just realized the following two things:
1. Silver is a good element to capture neutrons
2. Silver markets are going crazy right now, as if somebody was buying lots of physical silver
My question is: Is it possible that those two are connected? In other words, is there any conceivable scenario, including desperate measures, where the Japanese government may be buying a lot of silver to fix Fukushima in some way? It would help to have an idea of how much silver somebody would need to buy to produce that effect on the market, how much such a purchase would cost and how much physical silver that would be. I have no idea how much would be those numbers.
Silver has been going crazy long before Fukushima. Likely speculation - people jumping on the investment bandwagon.
Also, I would have thought there were cheaper materials to capture neutrons, seeing as silver is currently trading around $1500 per kilo..
There's clearly speculation going on with silver, I'm not denying that, and it's been going on for a while. Still, I was wondering if the following scenario is possible at all:
1. The engineers dealing with Fukushima reach the conclusion that they need, say, a ton of silver. There aren't really lots and lots of options for neutron absorber materials, according to this:
https://www.cedengineering.com/upload/Plant%20Materials.pdf
It looks like your options are
(a) Hafnium: Very good, but very expensive (even more than silver)
(b) A silver-indium-cadmium alloy with 80% silver
(c) Boron. We know Fukushima has already used lots of it, but the document above seems to imply that it's a cheap but not entirely ideal option. A nuclear expert may be able to expand on this.
2. If a ton of silver costs about $1,500,000 nowadays, that's a hell of a lot for you and me, but certainly the Japanese government would have no trouble spending that amount to fix Fukushima
3. At first blush, it sounds unlikely to me that anyone has ever needed delivery of a ton of silver at short notice. I imagine if anyone did that, it would distort the silver market quite a bit. Then, people taking notice that somebody is demanding a hell of a lot of physical silver, see it as a sign that they should be doing the same... triggering the rather extreme madness we're seeing lately in the silver market.
OK, it may all be my overactive imagination... but with the limited information I have right now, it doesn't seem an entirely implausible scenario. I'd just like to know if anybody has more information that would shed more light on this particular question.
http://en.wikipedia.org/wiki/Neutron_poison
On 16 March 2011, South Korea said they will send 1 kg sample of their Boric Acid stock to Japan. If the sample works on the reactors in Japan, South Korea will ship over 50 tons of Boric Acid to Japan. This was requested by the Japanese government in an attempt to further prevent meltdown at the Fukushima Nuclear Power Plant.
http://www3.nhk.or.jp/daily/english/16_34.html
"That amount would include almost all the substance available in South Korea, excepting a quantity for domestic use.":
http://ezinearticles.com/?Flea-Control-With-Boric-Acid---How-Effective-I...
http://www.youtube.com/watch?v=BLpMQ0aZd0Q
How this works: The melted reactor core structure, its fuel rods, and the neutron absorbing control rods flow together to make "corium".
http://en.wikipedia.org/wiki/Corium_%28nuclear_reactor%29
It is so diluted and poisoned that neutron-producing criticality is less likely. Its intense lava-like heat comes from the decay of radionuclides induced in the fuel during the time the reactor was humming along making power. There are no neutrons involved. The neutrons are made when the fuel rods are carefully arranged in space and the neutrons are slowed down enough to allow "neutron Capture" by the neutron cross-section of the fuel as measured in "barns".
http://en.wikipedia.org/wiki/Barn_%28unit%29 Two related units are the "outhouse" and the "shed". The water acts as a moderator. So, if water is added to a core assembly where the control rods have melted, the core may start to react. There are neutron sources built into the reactor that are used for starting:
http://truthiscontagious.com/2011/04/15/ge-manual-for-bwr6-reactor-desig... -page 3-8 (this manual is for a newer reactor)- So the water is "borated" so that its function as a moderator is swamped by its new function as an absorber.
Lead was directed towards a pile of ejected core sitting on an exposed part of Chernobyl. It was used in an attempt to cool the materials and and contain the radiations. It was a different situation. Lead melts a 620 degrees Fahrenheit:
http://www.chemicalelements.com/elements/pb.html Tin at 449:
http://www.chemicalelements.com/elements/sn.html silver at 1763:
http://www.chemicalelements.com/elements/ag.html
Tin would have been the better choice toxicologicly.
It was a different situation.
Google "Max Keiser: Crash JP Morgan – Buy Silver!"
He has been running a (apparently) successful campaign to get individuals to buy physical silver as he believes that JP Morgan are short on silver.
Incinerator for children's dreams
The expected response to nuclear terrorism in the form of a "Dirty Bomb" is that the government will simply raise the "acceptable limits" for radiation exposure. This will lull the peasant tax base into staying put and remaining productive.
http://www.epa.gov/rpdweb00/rert/pags.html
# A nearly 1000-fold increase for exposure to strontium-90
# A 3000 to 100,000-fold hike for exposure to iodine-131
# 25,000 rise for exposure to radioactive nickel-63
Radiation for Children's Day
http://www.counterpunch.org/alvarez04292011.html
"May 5 is Children's Day, a Japanese national holiday that celebrates the happiness of childhood.
On April 19, the Japanese government sharply ramped up its radiation exposure limit to 2,000 millirem per year (20 mSv/y) for schools and playgrounds in Fukushima prefecture.
Three-fourths of the monitored schools in Fukushima had radioactivity levels so high that human entry shouldn't be allowed, even though students began a new semester on April 5.
Experts consider children to be 10 to 20 times more vulnerable to contracting cancer from exposure to ionizing radiation than adults."
______________________________
During Chernobyl, stations and procedures were set up to monitor the radiological safety of food being consumed by officials.
http://books.google.com/books?id=3wUAAAAAMBAJ&pg=PA13&lpg=PA13&dq=A+Dosi...
_______________________________
Denial is how nuclear contamination is dealt with.
This may have been discussed before on here, but I came across it today on wiki:
http://en.wikipedia.org/wiki/United_States_public_debt
Going nuclear has (and will continue to be) very expensive.
Photos of the tsunami destruction in Japan (360)
For those with Google Earth, these panoramas can be located on a map of Japan (link)
If Google Earth crashes, try the following: add 2 zeros to the KML file parameter refreshinterval so it reads 8640000.
Thanks. That's really impressive.
They've started killing the animals.
http://www.globalanimal.org/2011/04/29/fukushima-exclusion-zone-update-5...
:-(
Saudi Arabia and the world supply problem
More on the Saudi's slash of oil output
Paul Horsnell is the main oil analyst for Barclays, one of the biggest banks in the world. It's interesting that the biggest banks are starting to pay attention. Goldman Sachs' oil guy went out in March and said that OPEC spare capacity is now under 2 mb/d, which is directly contradicting the gospel of the EIA and the IEA as well as most of the MSM narrative.
More on the Saudi's slash of oil output
I just had to post this, for comic relief.
Holder to Hold First Meeting in Probe of Oil, Gasoline Market Manipulation
Hold on to your hats, folks!
Read the whole thing
One of the people who thinks that speculation affects prices significantly is one of the commissioners of the CFTC. Goldman Sachs also apparently believes that speculation has a significant impact even though they are one of the speculators. Do these people not understand the futures market even though they are apparently experts? Darwinian would argue that they do not understand the market (I think). I tend to think Darwinian is correct. But then the constant barrage by people who should know what is happening makes me wonder.
I am in the camp,however, who doesn't care and welcomes higher prices as an inducement for getting off the stuff though conservation,efficiency, and alternatives. Instead, we get calls to reduce prices and drill,baby,drill, so we can use more of the stuff. Both Desm and Republicans are hopeless. Meanwhile, the ROI for my Prius and my bicycle increase daily.
We are stuck on stupid.
Oil down, Russia halts petrol exports
We know that Russia is on a plateau and have stagnated so they can't keep up with the increasing demand. The article doesn't mention too many specifics and since Russia is a huge exporter, this, of course, could be alarming.
Are we talking about refined products or crude oil? And how much are they going to decline? We know it's for the entire month of May, but is it the entire production of May?
Does anybody know what volume we are talking about, and in proportion to what?
These questions are directed to the gurus on this site(Mackay et al, I'm calling you out).
So leiten, we now have a halt to petrol (refined) exports out of Russia, 800k reduced KSA oil production, 200k reduction via Kuwait, a high percentage of reduction from Libya, a recent halt of petrol (refined) exports out of China...
Hold on to your hats, is right. Got to hit the fan sooner or later.
Naive question possibly, sorry.
The headline "Oil down, Russia halts petrol exports" seems oxymoronic.
Oil available for export down; price up. No?
http://www.nytimes.com/2011/05/01/world/asia/01japan.html
A little bit of (unintentional) comic relief:
A surprise: China’s energy consumption will stabilize
http://www.energybulletin.net/stories/2011-04-30/surprise-china’s-energy-consumption-will-stabilize
Of course, one tiny problem is that at Chindia's 2005 to 2009 rate of increase in their combined net oil imports, as a percentage of global net oil exports, in 2025 Chindia would be consuming 100% of global net oil exports.