Drumbeat: May 7, 2011

Fuel crisis adds to Yemeni president Ali Abdullah Saleh's woes

SANA'A // Yemen is facing a growing fuel crisis after its crude oil exports and main refinery were shut down more than a week ago.

The shortages began after tribesmen demanding that President Ali Abdullah Saleh step down cut a main oil pipeline in the central province of Marib last month, police said. The pipeline supplied the Aden refinery and the Ras Isa export terminal on the Red Sea.

For the last five days trucks and buses at petrol stations in major cities have waited in queues at least one kilometre long to get diesel and petrol, which station employees said ran out two days ago. Stations were also rationing diminishing petrol supplies.

Libya: Gaddafi forces 'bomb oil storage tanks in Misrata'

Rebels in Libya say Colonel Gaddafi's planes have bombed oil storage tanks in Misrata. Channel 4 News Chief Correspondent Alex Thomson says the city's port is the crucible of this conflict.

For sheer audacity in the teeth of NATO's "no-fly zone", it takes some beating.

On the Edge with Kurt Cobb - Max Keiser interviews Kurt Cobb.

Bakersfield Oil Regulator Suspended in Suspected Turf War with State

Bakersfield's top oil regulator, Randy Adams, has been suspended with pay over what some suspect is an ongoing turf war between local and Sacramento-based officials over how to review certain drilling-related activities.

The April 15 action appears to stem from Adams' approval of an oil producer's request to increase the volume of hydrogen sulfide -- a toxic drilling byproduct better known as sour gas -- it is allowed to inject into the ground.

Senate Democrats call oil execs to testify on subsidies

(CNN) - Senate Democrats are calling oil and gas industry executives to testify next week about the billions of dollars they get in tax subsidies at the same time they are earning enormous profits and consumers are facing steep price hikes at the pumps.

Bus companies to strike if fuel shortage continues

The committee of the bus companies of Buenos Aires City and Greater Buenos Aires warned that “several bus services had to reduce their frequencies, and could lead to a total strike due to the constant inconvenient with the fuel distribution.”

The committee also warned that there were also problems with the “security of the bus drivers who had to reduce the frequency of the service.”

Petrol Shortage-Kenya: Petrol Shortage May Last Seven Days

The fuel supply disruption across the country is likely to continue up to the weekend, leading oil marketers said yesterday. But the Ministry of Energy said it expected normal supply to have resumed by yesterday, insisting that there were adequate stocks of Super petrol in the country. Marketers said some correction of the anomaly took place yesterday, but it will take two to three days before the backlog created by a three-day hitch is cleared.

A Memoir of Living Off the Grid

Melissa Coleman’s father, Eliot, once suggested that evidence points to “the return to the land as a cyclical urge in history.” Some families work the land out of necessity, while others seek “the good life” through labor and simplicity. In the 1840s, Thoreau took to the woods to “live deliberately.” During the Great Depression, self-sufficiency was raised to new importance, and well-educated men like the writer and editor Elliott Merrick and the economist Ralph Borsodi found homesteading a rational and intellectual pursuit. The political climate of the late 1960s (and later the energy crisis of the ’70s) provoked back-to-the-land desires in many, including Eliot Coleman, who, inspired by Helen and Scott Nearing’s book “Living the Good Life,” moved in 1968 with his pregnant wife, Sue, to a remote 60-acre wood in coastal Maine. There, they developed sustainable, small-scale farming techniques that would help catalyze the organic movement.

Bitcoin virtual currency challenges world’s centralized monetary systems

If open-source advocate Scott Nelson is right, banking-industry executives around the world will soon be looking over their shoulders.

What they will be watching, according to the cofounder of Free Geek Vancouver, is an emerging digital currency called Bitcoin. As a peer-to-peer virtual currency, Bitcoin can be created, purchased, and traded in a decentralized manner without the use of a bank or payment processor.

JPMorgan Boosts 2011 Oil-Price Forecasts as Producers Not Matching Demand

JPMorgan Chase & Co. (JPM) raised its oil- price forecasts because OPEC and other producers aren’t matching rising demand and consumers will take time to react to higher prices.

The bank boosted its 2011 Brent crude forecast to $120 a barrel from $110, and changed its estimate for West Texas Intermediate crude to $109.50 from $99. Forecasts for 2012 prices were raised to $120 and $114, respectively.

“While financial bushfires or perhaps a rapid resolution to the Libyan civil war could radically alter market dynamics, the balance of both risks and fundamentals still points to a supply-constrained world,” JPMorgan analysts led by New York- based Lawrence Eagles wrote in a report yesterday.

Gas price to drop as oil joins commodities plunge

NEW YORK – Investors finally hit the brakes on oil, gold, silver and food prices. This week's sharp sell-off doesn't mean commodity prices' stunning rise over the last several months is over, but it is good news for anyone planning a road trip this summer.

Oil prices fell 15 percent this week, the steepest decline in two and a half years, just as average U.S. pump prices were approaching $4 a gallon. Gasoline prices fell imperceptibly to consumers' eyes Friday — one-tenth of a penny to just over $3.98 per gallon — but that ended a 44-day streak of rising prices. Prices will soon drop noticeably and some analysts said they could hit $3.50 by summer.

Shell Philippines rolls back pump prices

Shell Philippines said the reductions reflect the "decline in international product prices."

World oil prices fell sharply on Friday.

Obama takes aim at Big Oil, says gas prices hurt

INDIANAPOLIS — President Barack Obama said Friday that high gasoline prices are sapping the spending power of Americans, as he tried to limit political fallout by linking it to public hostility toward oil companies.

"We've got high gas prices, that have been eating away at your paychecks, and that is a headwind that we've got to confront," Obama told auto plant workers in remarks to promote his policies to wean Americans from foreign oil dependence.

Public anger over rising costs at the pump has put pressure on Obama to look for ways to provide quick relief for consumers as he seeks re-election in 2012.

Central Asia feels gas pinch as Russia cuts supply

ALMATY, Kazakhstan - A shortage of fuel in Russia is hurting millions beyond its borders in Central Asia, where former satellite states still rely almost completely on Moscow's gas supplies -- and its decisions to tighten the taps from one day to the next.

Russia's government responded this week to domestic fuel shortages by hiking export fees and imposing a temporary export ban on fuel, measures that threaten to cause severe deficits in impoverished Kyrgyzstan and Tajikistan.

Crude Oil Prices Reverse: Where Next?

Well, according to the theory, if oil was 40% too high, and if no one is taking the spectre of peak oil too seriously (in which case the “fundamental” value is the replacement cost (i.e. what it will cost to find and produce more oil)), then at some point in the not-too distant future the price of oil “ought” to explore $90/1.4 = $64 (Brent).

Whether it does or not, will be a good test of how much the “Peak Oil” idea is gaining traction.

Venezuelan oil refinery partially paralyzed

CARACAS, Venezuela - Venezuela's state oil company says the failure of an air circulation system has affected production at the South American country's largest refinery, but the problem will not affect oil shipments.

Report doubles BC shale-gas estimate

A new assessment of the shale gas contained in the Horn River basin of north-eastern British Columbia more than doubles the province’s estimated unconventional reserves.

A report released today from the National Energy Board (NEB) and British Columbia Ministry of Energy and Mines puts the marketable shale gas in the basin at 78 trillion cubic feet, including 75 Tcf of undiscovered resources.

Iran foils pirate attack on UAE tanker

MOSCOW (RIA Novosti) - The Iranian Navy on Saturday thwarted an attempt by pirates to hijack an oil tanker from the United Arab Emirates, Press TV reported.

The UAE-flagged oil tanker was sailing from Bahrain to the Red Sea when it was attacked by two pirate boats.

Syrian Tanks Storm Banias a Day After 40 Protesters Killed

Syrian tanks stormed the coastal city of Banias today, and protesters tried to keep them out by forming human chains amid deadly confrontations with security forces, according to a rights activist.

The U.S. called yesterday for a “strong international response” to Syria’s crackdown. Security forces killed as many as 40 people and arrested hundreds during demonstrations on Friday, according to the London-based Syrian Human Rights Committee. Syria denied the reports, according to al-Jazeera.

Libya Criticizes Aid Plan that Skirts Government

Libya has sharply criticized an international plan to send millions of dollars in assistance to rebels and civilians.

Deputy Foreign Minister Khaled Kaim said Friday that Libya is "one sovereign state." He said the planned use of the funds amounted to "piracy on the high seas."

Libyan tribal chiefs urge amnesty to all fighters

Libya's tribal chiefs have urged a general amnesty for all fighters engaged in the oil-rich nation's civil war, as Amnesty International said the regime's siege of Misrata could be a war crime.

Rebels, meanwhile, braced for a new ground assault by Moamer Kadhafi's forces on Misrata, the main bastion of the insurgents in western Libya.

Ecuador referendum likely to boost Correa's power

QUITO (Reuters) – Ecuadoreans were to vote on Saturday over a reform package President Rafael Correa's rivals say would give the leftist leader too much power over courts and media critics in the South American OPEC member nation.

Chubu Electric Board Considers Nuclear Plant Closure, Postpones Decision

Chubu Electric Power Co.’s board met to discuss a possible closure of its sole nuclear plant after Japanese Prime Minister Naoto Kan expressed concern the facility may not be able to withstand a powerful earthquake and tsunami.

No decision was made on whether to idle the No. 4 and No. 5 reactors at Hamaoka plant during the meeting in Nagoya today, Tokyo-based spokesman Akio Miyazaki said by telephone. The board will reconvene at a future date, he said, without elaborating.

Japan anti-nuclear protesters rally after PM call to close plant

(Reuters) - Several thousand Japanese anti-nuclear protesters marched in the rain on Saturday, welcoming a call from the prime minister to shut down a plant in central Japan and urging him to close more to avoid another nuclear crisis.

800 workers at Fukushima plant get belated health checkups

FUKUSHIMA — Some 800 workers have spent more than a month dealing with the nuclear crisis at the Fukushima Daiichi power plant but they have only recently started to receive medical checkups, officials of the plant operator Tokyo Electric Power Co said Saturday.

It took nearly two months after the crisis erupted following the March 11 quake and tsunami to start regular health checks as the health ministry had initially only required them to be performed after the crisis had ended, assuming that the crisis would not be prolonged, according to the officials.

Mont. Senate Race Will Turn on Energy, Climate, Natural Resource Issues

Democrat Jon Tester has tried to steer a middle course in his first term in the Senate between safeguarding Montana's natural beauty and protecting its economic interests as he sees them -- whether that means allowing wolf hunting or opening new areas of the forest to logging.

Spain May Soften 2020 Renewable Energy Goal as Electricity Subsidies Grow

Industry Minister Miguel Sebastian is devising plans for Spain to stick to its pledges on low-carbon energy as voters struggle to pay their energy bills amid the worst economic slump in at least 60 years.

Subsidies for renewable energy and cogeneration plants, which turn excess industrial heat into energy, rose 8 percent to 7.1 billion euros last year, to comprise 39 percent of the country’s electricity bill. The regulator had forecast a decline of 10 percent.

Brazil's Petrobras to boost ethanol production

BRASILIA (AFP) – Brazil's state-controlled energy giant Petrobras will boost its production of ethanol as part of a government effort to contain fuel prices, Energy Minister Edison Lobao announced.

"We are going to make rapid advances to produce (an additional) 10, 12, 15 percent in three to four years," Lobao told reporters. "With this, Petrobras will be transformed into an important factor in the supply and pricing of ethanol."

Diesel From Soybeans Sparks $560 Million Investment by ADM, Cargill

Archer-Daniels-Midland Co. (ADM), the largest grain processor, and Cargill Inc. are spearheading a push to invest about $560 million in new biofuel refineries in Brazil, a country that already has twice the capacity it needs.

Masdar Conducts Measurement Tests to Discover U.A.E. Wind Energy Potential

Masdar, the Abu Dhabi government-owned renewable energy company, is conducting tests to determine the feasibility of building a wind farm in the United Arab Emirates.

Masdar is conducting the wind speed measurements in parts of the UAE though these are at a "very early stage," said Burgess Baria, the company’s associate account manager for renewable energy.

Science good, markets bad

Martin Nowak, Professor of Mathematics and Biology at Harvard University, thinks George Orwell's Big Brother was on to something. According to Professor Nowak, "[T]he knowledge that our behaviour is being observed -or that it may be observed -could provide policymakers with new leverage to deal with climate change."

In his book SuperCooperators, written with Roger Highfield, Prof. Nowak offers specific examples: "Energy costs of individual households could, for example, be published by local newspapers. Companies could be ranked according to their emissions and their investments in climate protection. Stickers [on gas guzzlers] could be used to mark out the polluting vehicles with pitiful efficiency."

Can a Water Plan Work Without an Environmental Goal?

The National Research Council sent a baker’s dozen of scientists and engineers out to California last year to weigh in on one of the nation’s most complicated political and scientific conundrums: how to please all of the parties with claims on the waters of the Sacramento and San Joaquin Rivers, while ensuring the preservation or restoration of critical species and their habitats.

Big Oil digs deep as if spill never happened

Wild weather may be an end result of our fossil fuel addiction, but away from Tornado Alley it is business as usual for Big Oil. After the BP disaster the Obama Administration imposed a moratorium on offshore drilling, which was lifted in October.

Green Smoke Is Sighted as Vatican Releases Glacier Report

Climate change is shrinking the world's mountain glaciers, whose retreat creates new risks for humans and sensitive ecosystems alike, warns a new report commissioned by the Roman Catholic Church.

"The widespread loss of ice and snow in the world's mountain glaciers is some of the clearest evidence we have for global changes in the climate system," concludes the analysis, which will be delivered to Pope Benedict XVI. It was assembled by an international team of experts at the behest of the Pontifical Academy of Sciences, the Vatican's non-denominational scientific arm.

Thinking of selling your monster home for something a touch smaller?

See: http://ca.news.yahoo.com/blogs/good-news/inside-world-smallest-eco-frien...


Talk about thinking "in the box". :-)

There are some ideas borrowed from RVs in there. And it won't meet code, of course, although if the roof area is under 100 sq ft it won't have to, at least in this state. It's real close to that dividing line.

There are a couple of eco-friendly houses locally that are of the box-in-a box design that are more practical (read as meets code). The inner box holds the kitchen and the master bedroom, and the outer box is the living room and a loft over the kitchen/bedroom. The roof is flat and used as a deck, but half of it is taken up by a PV array. And I'd have my doubts about dragging the grill up there, as part of the trip involves a spiral staircase. But still, as a technology demonstrator is was quite livable.

It's an amazing accomplishment and would make a great cottage/wilderness retreat for one or two people.

On an unrelated note, not long ago, nine out of every ten kWh of the electricity consumed in this province were generated through the burning of coal and oil, the balance being small hydro. Today, between five and ten per cent is supplied by wind and that percentage will double in a few short years. In fact, there were two days last month when twenty per cent of our electricity was supplied by wind *. By 2015, provincial law requires that twenty-five per cent of our electricity be renewable and by 2020, that increases to forty per cent. The Province is also working aggressively to cut electricity demand; between 2008 and 2013, their initiatives and those of Nova Scotia Power will be the equivalent of removing 100,000 homes from the grid - one out of every four. A lot can happen in the span of twenty years if you put your mind to it.


* Source: http://thechronicleherald.ca/Business/1241902.html and http://www.nspower.ca/en/home/aboutnspi/mediacentre/NewsRelease/2011/win...

Is there any possibility that tidal energy will become significant?


Hard to say. The EPRI estimates the potential at about 400 MW if I recall correctly, but I would be surprised if even a small fraction of that comes to fruition. That said, it has been generating some media buzz lately; for example: http://thechronicleherald.ca/Business/1242177.html

See also: http://www.nspower.ca/en/home/environment/renewableenergy/tidal/projecto...

Nova Scotia Power will be importing 1.0 TWh of hydro-electricity from the Lower Churchill Falls come 2016/2017 with the option to purchase a good chunk more, and I think that's the real game changer for us.


For all the improvements in sourcing renewable energy I am dismayed by NS Power's reluctance to embrace conservation beyond a free (to businesses) replacement of incandescent lamps with fluorescent lamps (which I am in the process of abandoning as they burn out many hours before their claimed life span).

I wish that NS Power made it easy for me to power my water heaters during non-peak times. At my shop I could run all day with the hot water charged overnight and perhaps topped up in early afternoon. NS Power says that daily peaks occur in the morning from 7 to 9, and in that time many families would have their showers and then leave for work and school, so the water heaters do not need to be re-charged immediately (i.e., in the morning peak) but could be charged through the day. I don't think that we need internet-linked systems; surely a programmable stand-alone timer could manage that. Same with the electric heat in my shop; that does not need to run during peak hours but there is no easy way to prevent it.

I have heard it said that the cheapest power is the power that you don't use. With some help, I could save us both some money.

There are several energy efficiency programmes offered by Efficiency Nova Scotia, many originally provided by NSP, but transferred to ENSC when the Province stripped the utility of this responsibility (see: http://www.efficiencyns.ca/).

If your business is on a 11M account (i.e., you use more than 32,000 kWh per annum and have a demand meter), then even small improvements in your load factor can dramatically reduce the cost of power.

Earlier this year, our firm did a lighting retrofit for a provincial incubator that furnishes office, lab and industrial space to new businesses. The building is all-electric and has two 18.0 kW/347-volt water heaters that serve the first and second floor wash rooms and a staff kitchen. [There is a third 18.0 kW water heater in one of the industrials bays; this same bay also houses a 60.0 kW electric boiler that's used to supply hot water to mixing vats.]

The first thing we did was disconnect the top two elements in each of the two tanks. This cut the combined load by 24.0 kW which saves the client $2,601.79 a year in demand charges (i.e., 24.0 kW x $9.034/kW x 12 mths/yr) and another $1,625.47 in energy by way of their improved load factor (i.e., 24.0 kW x 200 kWh/kW/mth x ($0.09646 - $0.06824/kWh) x 12 mths/yr). Taken together, that's a savings of over $4,200.00 a year.

The tanks are twenty-seven years old and have now come to the end of their lives. I've specified a 320-litre 6.0 kW/600-volt replacement that will be operated at 347v. Running the tanks at this reduced voltage will extend the life of the elements and trim demand by a further 8.0 kW, which bumps the savings to $5,636.35 per annum.

We've been monitoring the power draw of the third tank to see if we can de-rate it as well, and we're also looking at locking out the electric strips in the rooftop units whenever the boiler is energized. If we can accomplish both without impacting the tenant's operations, we can reduce their bill by an additional $1,050.00 a month.


I hope the "provincial incubator" doesn't hatch too many new provinces - I think we have enough already!

I wish that NS Power made it easy for me to power my water heaters during non-peak times.

If that is your desire, you can do it without them.

Stick a timer on the power circuit.

(and to cut water waste, consider a small inline heater at the consumption source to turn on when the water is not up to temp - thus if the water from the tank is not hot enough, it can get a boost.)

Yes, very cool.

While living in that may not be everyones cup of tea, you have to admire the innovation that has gone into that. I think they borrowed more from boats than RV's, but still.. The separate foot staircase is a great idea, though completely outside building code regulations. Some of their ideas may make their way into more normal buildings though, and that is a good thing.

And, just like any boat owner, I can see the designers and occupants wishing for "just two feet more" to fit in this or that. That's why i like the 100sf rule (which applies here in BC). You can game that space any way you want, you just can;t have more of it. I am not sure what the rules are about having several 99sf buildings though - game the system in a different way there.

Would make a great thing for an eco-inn - I would pay money to stay in one of those - but I don;t think I would choose to live in one.

My [relatively small] den is larger than this home, which is kinda amazing when you stop and think about it. Like you, I don't imagine I could live comfortably year round in something this small, but it could make a nice weekend retreat or summer home.

BTW, in another Drumbeat we were talking about air-to-water heat pumps. The gentleman in the video below reportedly spends £600.00 a year to heat his home and DHW with an Ecodan, which he suggests is roughly half what he could expect to pay if he were to heat with oil or gas.

See: http://www.youtube.com/watch?v=zlKKQpvRf_I


Hi Paul,

I actually spent quite some time living (well, mostly just sleeping) in something smaller than that, and better looking too;

The Boler is 10' x 6'3"x6' for 360 cu.ft - that cube is 1000 cu.ft - you can fit more stuff and have more space, which he has done, and done well.
My former partner and I (and a pet rabbit) lived in this for a month while working on the house. We used to do a (very small) business in fixing them up [www.bolerworks.com] - have been through all the same issues of space management as that guy - it is quite an art, but amazing just how much you can fit into a small space, if you need to. We stole a lot of storage management ideas from boats, and then made the interior look like a boat too.

There is not one cubic inch in there that is not used. The thing has Ensolite aircraft insulation all over the inside (original 1972!), styrofoam under the floor and the windows are lexan - it is amazingly energy efficient to heat, when needed. couldn't get LED lights for it back in 05, but could replace those 10W MR11's now. Combined lights were 60W to make it very bright. Whole thing weighs in empty at 900lbs - very easy to tow!

That UK video actually made me angry. First, I was amazed at the size of the oil tank, and then fell over when he said f14,000 for the system! to save f600/yr? Another case of these things being made so expensive that they never pay for themselves, and, essentially, consume more resources than they save. I will have to ask my local guy what the price of the Altherma system is - not that I can use one - but it should be a lot less than that.

And the control system for the whole thing! - you can see where the money goes. The controls for the combined wood boiler/solar water/floor heating in my parents house were far simpler than that. I would like to see the design effort going into making these systems simpler, not more complex, but the mfrs are not headed in that direction, at all.

Sustainability doesn't just mean using renewable energy, it also means using less resources along the way. These systems will remain as expensive toys for those who can afford them - until they become such that average (and below) people can afford them, they are not a scalable solution, IMO.

Thanks, Paul. That's a remarkable trailer. I'm familiar with the Boler name and have seen one or two on the road over the years, but never had the opportunity to step inside one. [I had a 34 ft. Airstream when I lived in Toronto.]

These air-to-water heat pumps aren't cheap and I'm guessing much of the cost was related to the installation of the floor loops. The homeowner may have chosen this type of system for other reasons such as improved comfort.


I always said that when Bolers grow up, they become Airstreams. They are surprisingly spacious inside - I always said bigger on the inside than out - they can sleep and seat four people!

Hadn't factored in the floor loops for the UK house, but i'll still guess over f10k for the rest - still very expensive.

I am more and more convinced that ductless mini splits, efficient elec HW and passive solar gain are the way to go (most of the time). Thermal mass helps too, and these guys did get more of that.

I did come across this interesting website from a guy in Maine who does HW thermal mass systems, using atmospheric pressure storage. He is along the track of engineer it to be simpler and cheaper;

He also sells the Geyser heat pump water heater (add on unit) have you seen any of those? Claims a COP of up to 3.7, and in summer, I guess it could be that.

Thanks for your info, much appreciated as always,

Paul N

I used to own one of those Boler trailers, too, and stayed in it while building my house. It was in the family for about 30 years, bought second-hand by my father, and then passed up and down through the family tree from father to son to grandson and back up from nephew to uncle. I only sold it because I got a VW Eurovan camper, which could do everything the Boler could, at ten times the cost.

They are quite amazing, and have become something of a cult item, typically selling for more money than they cost originally. They are remarkably spacious for their size - one of my nephews who is 6'2" and overweight camped in it with his wife and two kids. They only sold it to me when their third kid came along.

People often paint them to match their cars, as you apparently did. One of the reasons for their popularity is that you can tow them with a four-cylinder car. My 6'2" nephew towed it with his Dodge Neon and thought that was more than adequately powerful.

The original builder designed it by taking a fiberglass septic tank he was producing and adding wheels and windows to it so his family of four could go camping in it. It worked so well he started manufacturing them commercially. He's gone now, but you can buy new versions (same size, different builders) from Trillium in Canada and Scamp in the US, among others.

It is amazing how many people in Canada have a Boler story. Everyone's parents/uncle/neighbour had one, and everyone has some funny story to go with them. I did hear of one family of five that lived in one, with their dog, for two months while building a house.
Bolers and Airstreams are the *only* RV trailers that actually increase in value with time. A decade ago you could find them for $500-1.5k, now they are $3-5K - I do believe they have beaten the S&P 500.

We didn't actually paint it to match that vehicle, we painted it to match a vehicle that we wanted to tow it with;

Now that says "fun" much more than a truck and a fifth wheel. But if you must have a truck, then you can do that too;

Either way, this is a much more resource efficient (and fun) way to go than big RV's - any vehicle with a 1000lb towing capacity can pull it - ideal for RAV4's, CRV's etc, but have seen Minis and Beetles towing them, even an old beetle!. We did have one retired couple who wanted us to do up a Boler for them, but they wanted us to add hot and cold water, a toilet, microwave and a/c - clearly they just didn't get the whole point of a trailer like this .

This small trailer vs big RV posed an interesting question for Parks Canada - should they enlarge the campsites at their campgrounds, as the big RV's couldn;t fit in many of them, and the RV'ers were complaining? Also should they add plug-ins and water hookups etc? Thankfully they decided that their campgrounds were campgrounds, not RV parks.

Word of warning - if you ever go camping in a Boler, you need to be prepared to have every 2nd person in the campground ask you about it and want a look inside - no one can resist a Boler!

When I saw the picture of the Mini towing the Boler, I checked the specs, and yes, the Mini Cooper really does have enough towing capacity to pull a Boler. The new Mini Countryman would have far more towing capacity than needed, and would probably be a great tow vehicle. The matching paint job would be optional, but I'm sure any Mini owner would feel an uncontrollable urge to do it.

Somebody said that as a stunt he tried towing one with a Norton 750 motorcycle. It worked rather well, but he couldn't recommending doing it on a regular basis. Power was no problem but there was an issue with the braking capabilities of the motorcycle, since the Boler doesn't have its own brakes.

Indeed the Mini can tow it - we checked that out back in 05 - though I would choose the turbo/supercharged version. Actually the ideal Mini engine would be the 1.6L turbo diesel that is sold in Europe. It has up to 270Nm of torque - almost as much as my Ford Ranger! And for lots of fun, you would choose the Mini convertible, after all, if you are going away for camping trip, odds are the weather is good - though in Alberta that can change pretty quickly.

That photo is actually staged, we just took the Boler to Mini of Calgary and parked it in front of the navy blue Mini for the photo (but someone in Kelowna does tow one with their Mini). We then did a joint exhibit with M of C at the 2005 Lilac festival, corner of 4th St and 24th Ave - had over 2500 people go into the Boler that day - my cedar floors held up perfectly. They parked the navy blue Mini in front of the Boler and several people made comments to the effect of "I didn't know Mini was making matched trailers - what a great idea!" One of the visitors was a guy from CTV, who also had his own Boler, and CTV ended up doing a (live) piece on them (and us) for their midday show - my 15 seconds of fame!

Towing it with a bike would be challenging, though a modern quad can do it no problem. I know of a bloke on Vancouver Island who modified his Boler to open up from the back (like the nose of a cargo plane) so he could put his Harley in his Boler!

By the way, the Boler name came about because the inventor thought the profile, from the front, or back, reminded him of a British bowler hat, so that is what he called it, but somehow it got spelled without the "w" (he was from Winnipeg, after all).

Like the original Mini, the Boler was a very successful exercise in minimalism - the minimum trailer for a family of four to camp in - everything you need and nothing you don't. When the Ray Olecko (the inventor) first took it to an RV dealer in Winnipeg (1968), the dealer said that there was no market for such a small trailer. So Ray picked it up by the hitch and pulled it across the yard, and back, and challenged the dealer to do the same with any of the aluminium trailers on his lot. The dealer concluded maybe there was a market after all, and signed him up.

When I was towing it with my old '97 Subaru Impreza, the hwy fuel consumption went from 32mpg to 25mpg - I don;t think there is any other (non-folding) RV trailer in existence that is that easy to tow.

Or as much fun to camp in, which was the original idea.


I put the tank on top of the car. It is roto-molded in HDPE with a 0.3" wall thickness. Since it is natural white, it is food-service grade and called a "water cistern". You get into it by climbing up the driver's seat. Very (too) comfortable. There are two 20" hatches that open up: you can sleep under the stars! Tightest turning radius of any RV ever made. Solar panels supply the domestic load. Everybody wants to know how it works, how the "tent" stays up, and wants to see inside. I'll do five shows a day if I'm just out driving around and shopping. Some people from Virginia made a video:

I am more and more convinced that ductless mini splits, efficient elec HW and passive solar gain are the way to go (most of the time).

Absolutely true, which is why I've been beating this drum non-stop. Here are this year's results for the older of our two ductless heat pumps:

I log each hour of operation in a spreadsheet and it's plugged into a Kill-a-Watt monitor so I also know its power consumption. I also record the hourly temperature and estimate its heat output at each of these temperature points using data supplied by the manufacturer. I've done this for the past six years and cross-checked the results with our fuel oil records, so I'm reasonably confident the numbers are more or less correct.

To date, this heat pump has operated a total of 17,738 hours in heat mode and eliminated an estimated 6,082 litres (1,600 gallons) of fuel oil demand -- over 20,000 hours of operation when you add in cooling and "dry" mode. No service required except occasional cleaning of the air filters.

Our second heat pump was installed in December, '08 and because it's an inverter system I can't calculate its savings in the same way; however, our net savings appear to be roughly $500.00 to $600.00 a year.

I should note that if I were to replace this older unit with a new ultra high efficiency Fujitsu, I could shave some 1,500 kWh a year off our electricity bill which would bump up our net savings by another $200.00.

One other thing: Our oil tank was last filled on August 24th, 2009, some 622 days ago, and the only time we use oil is when we experience an extended power cut and need the boiler to provide heat and domestic hot water. During the coldest days of the year when temperatures routinely dip below -20°C, I'll run the boiler for five or ten minutes before heading off to bed to prevent the radiator pipes from freezing where they're routed through exterior walls. Otherwise, virtually all of our space heating demand is met by these two ductless units.


I was at a home show a few months back, and I was asking someone who had the ductless systems for sale about how hard it would be for us to retrofit to a ductless system. But his reaction was that since we already had the ductwork, he didn't think it made sense for us.

We had an energy audit a few months ago, and it was quite eye opening to see all of the different places where air was leaking in. They had a long list of things that we ought to do (that I am still working my way through). One thing they suggested was that we consider having our ducts sealed (they snake something through and seal up all of the internal joints).

One of our neighbors replaced their system yesterday - replacing a 10 year old builder-grade 10 SEER unit with a Trane xl15i (a different neighbor got the xl16i).

That's a tough one to call. Assuming that your furnace is equipped with a variable speed ECM motor and that your duct work is in good shape, I may be inclined to go with a ductless unit and operate your furnace blower on its low setting to circulate its heat and coolth throughout your home. [ECM motors generally draw 60 to 80-watts on their lower settings versus a standard PSC motor that might use 300 to 500-watts, so the operating costs are not unreasonable.]

Why go this route? One reason is that if you currently have a gas or oil-fired system, your duct work is undersized. Secondly, a ductless heat pump is a lot less costly proposition and you can keep your current heating system as a backup. In addition, high efficiency ductless heat pumps are generally more energy efficient than conventional heat pumps; their HSPF ratings can reach as high as 12.0 whereas most central systems top out at 9.0 or thereabouts*. Lastly, you gain the ability to spot cool or heat an area that may not be well served by your central system or that can use some conditioning during the swing seasons when the rest of the house does not.


* That may soon change. Carrier is coming out with a high efficiency inverter drive heat pump later this summer with a HSPF of 13.0 (see: http://www.carrier.com/Carrier+Corporate+Sites/Corporate/Side+Bar+Links/...). That's a seasonal COP of 3.8, which makes it a better performer than many ground source systems.

I am pretty sure our current system has single speed blowers - builder grade, and all that goes along with it. In fact we have two systems which complicates matters a bit. One for the lower two floors and a 2nd independent one for the upper two floors.

BTW - I tried out one of those Phillips PAR30 LED lights. Man those things are bright - my only complaint is that I wish they had a warmer white available. I imagine that it won't be long before those are available too. I probably won't be buying any more CFLs now (I still have a few spares stockpiled, and it will take years before they all burn out).

In this case, a ductless heat pump becomes a supplemental heating system akin to a wood or pellet stove. Four stories does complicate things considerably. A multi-zone system might work, but then your costs start to escalate rapidly. An acquaintance of mine in Prince Edward Island installed a tri-zone Friedrich in his century old farm house a few years back. His home has an oil-fired forced air system and he tells us his ductless heat pump has cut his heating costs by $3,000.00 a year, and PEI's electricity rates are the highest in Canada. As I recall, his payback was about two years. (see: http://peiweather.comyr.com/weather/)

The Philips EnduraLED PAR30 is available in 2700K which is a little bit warmer than halogen (~2900K); I'm guessing yours is 3000K or perhaps 4200K.

I've specified a 4200K EnduraLED PAR20 for one of our convenience store retrofits. This lamp uses 7-watts and supplies 600 lumens (85.7 lumens per watt) whereas the halogens they replace consume 50-watts and are rated at 550 lumens (11.0 lumens per watt). Lamp life is said to be 45,000 hours which is eighteen times that of the halogens. These forty-four lamps operate 24/7, and so we'll net 16,574 kWh/year plus another 4,000 kWh or so in related a/c savings.


which is why I've been beating this drum non-stop

But are you getting people to dance to it? Are you seeing them in retrofits to replace baseboards?

Impressive numbers on your house, which, IIRC, is not that big, either - about the size of the Irving boy's garden shed?

I've persuaded a dozen or so friends and acquaintances to install ductless heat pumps. One of my clients recently installed one in the bonus room above her garage where her children sleep. This room was always cold and had four 1,000-watt baseboard heaters running full tilt day and night. This is what she has to say about her new Sanyo ductless heat pump:

Hi Paul,

Chris installed my heat pump two week-ends ago, and I am extremely pleased
with his work and professionalism.

The girls are so happy with the comfort of their bedroom and sometimes
complain that the rest of the house is cold!

Thank-you so much for all your help and discussions regarding the heat
pump...it was so helpful to have a knowledgeable person like yourself to
explain and reassure me about the benefits of installing a heat pump.

And, thank-you again for your generous support of a cause so close to my

Take good care!!!


[The reference to "a cause so close to my heart" is in relation to her four year battle with non-Hodgkin’s lymphoma. I will be sponsoring her participation in the Dodge Rock n Roll Marathon in San Diego on June 5th.]

Our home is 230 m2/2,500 ft2 in size, making it one of the smallest in the neighbourhood.


Absolutely true, which is why I've been beating this drum non-stop.

Do you know of any decent calculators/tools to compare?

I've looked around, but to compare Reverse Cycle Air Con performance with Gas Fired Ducted Space Heating is a orgy of dimension conversion and assumption that means you have little clue which will really be cheaper, taking into account step charging rates, on/off peak, etc.

I think there's not much in it here, but its difficult to be sure.

I don't know of any on-line calculators. Sorry. There are several factors to consider such as the operating efficiency of the units (their HSPF ratings), local climate, the relative cost of electricity vis-à-vis the other competing fuels and so on. Generally speaking, they're a good choice for those with oil-fired or electric resistance heating systems. If you have access to natural gas and/or your electricity rates are comparatively high, or your home has a high space heating demand, then the numbers aren't likely to pencil-out. That said, when the folks of Sitka, Alaska start signing their praises, you know you're pretty solid.

“....Conservation is always the least expensive way to meet our needs,” he said. Dryden was also encouraged by advances in heat pump technology. He thought fifty or so homeowners had taken advantage of the recent availability of simple air-source heat pumps.

“And it’s just like some sort of Gospel celebration. Everybody says this is so cool. What’s happened is that heat pump technology and the price brackets have come around to where you have the big companies – GE, Toshiba – all the big manufacturers producing a product that’s as reliable, cost-effective, high-quality, and trouble-free as buying a freezer or refrigerator.”

Dryden said the department was interested in promoting the availability of heat pumps as a way of using electrical energy to displace the use of oil, but at a fraction of the energy use of traditional electric heaters. Dryden said he also saw a growing interest locally in the installation and service of heat pumps. He called it “excellent, excellent stuff.”

See: http://kcaw.org/modules/local_news/index.php?op=centerBlock&ID=1218

For ease of comparing dimensions you can't really beat Wolfram:


Hi Paul,

I forgot to link to some of the other videos in this series which I think you may find of interest (hopefully they won't make you angry!).

Solar DHW: http://www.youtube.com/watch?v=7KXEEt63ClY

Solar Photo-voltaic: http://www.youtube.com/watch?v=8QQcOkS0nic

Wood: http://www.youtube.com/watch?v=oX5gr5KEa3w

Solar/wood/biomass: http://www.youtube.com/watch?v=2pWfYgBR3Ro


Nice toy actually. The sad thing is unless it's priced under 20k, preferably closer to 10k(the solar panels alone probably cost near 20k). You will either never pay it off before you lack the mobility to even live there(lets see a 50+ year old try to get up those stairs). Or you will have to move shortly afterwards. This is of course ignoring local zoning laws, fire codes, building codes, sanitary codes.

I would be more impressed if I hadn't designed and built a garden shed to approximately the same construction standards as "the cube project" for under $1000 which looks considerably nicer. Costs were controlled by using scavenged construction materials left over from multi-million dollar homes. It astounded the neighbors, they referred to it as an "outbuilding" and said, "That's going to increase your taxes a lot!" Why would it increase my taxes, it's only a cheap shed I built to store my tools in?

One of my friends said, "I know families of four which are living in condos that aren't nearly this nice." And that's true, I could have insulated it, added heat and appliances, and lived in it. And it would have still been a lot cheaper and nicer looking than "the cube project". I would have used wood heat, though, and not messed with the solar panels and other high-tech stuff. You don't need a PhD or a lot of money to do this kind of construction. The advanced degrees only increase the costs.

Yea that was one of the other things that bugged me. I finished the basement in my mother's house and in the process replaced windows(with some help, borrowed tools and all that) that had over a inch gap between the house and the top of the basement window exposed to the outside and it looks MUCH nicer then that. And I am a novice in all this!
my mother is over 50, has had her knee replaced and has a hard time handling normal stairs. She is hardly unique(though imho on a side note might be on the ignorance of some things) and would be unable to live in such a dwelling. What does he think we supposedly do with that percentage of the population if this is how he thinks people should live?

Oh, come on. Did anyone in the video claim that this was THE house for EVERYONE?


So why claim they did?

Build your own construction for other sectors of the population and make a utube video of it.

Thinking of selling your monster home for something a touch smaller?

This doesn't make any sense to me. I realize houses are way too big now but...,

People didn't live that way 100 or 200 yrs ago, why should people live that way in the future.....

Because less is more? Anyway, the people behind this say that the concept was to do something that was scalable. Anyway, we "need" a lot less space than we think we do. People will need to live with a whole lot less in the future and maybe projects like this will help pave the way for that future.

It's going to be quite a year, huge deflationary pressures in the financial system. Once the price of crude plummets, it's going to put huge pressure on Saudi & Iranian budgets. Could mark the beginning of serious escalations in protests there given that the Saudis have so generously expanded their welfare package. I could well envision a scenario where oil plummets to $10 a barrel due to deflationary pressures & then rise to over $100 simply on supply constraints. Hence squeezing the world economy dry.

I doubt the price of crude is going to really "plummet" any time soon. And even if another financial crash pulls down consumption by a few million barrels per day then I'd expect OPEC to cut production (as they did after 2008 crash) long before the price dropped to $10/barrel.

Agreed. I now believe that we are in the midst of the Peak, or even beyond the Peak.

We essentially have a situation where we cannot get normal growth without a very substantial increase in oil prices. Part of the underlying reasons the Arab Spring happened was because of overpopulation and rising commodity prices. Mubarak and the rest were not more genteel before, but they had the cushion of low energy prices to rely on, as well as much cheaper food.

In this sense, the Libyan fallout was to be expected. From henceworth we can postively throw out all of the detailed forecasts of what will happen from here on because above ground factors will count more and more than the mere geological details. Volatility breeds volatility and supply is not just about the geological realities, but also about political will as well as geopolitical(I hate that word) events, which in itself becomes more and more frequent as unrest is spreading and as the realisation that we have a shrinking pie and a growing population slowly sets in, people become less constrained.

Because we cannot have a functioning growth system(one doubts if we ever had one, but at least it wasn't as dismally poor at delivering growth as it has now become) without cheap energy, and because we are staring increasingly higher energy prices in the face and constrained oil supply in the near future, I do consider the Peak to be here effective as of now.

So as Undertow has implied, even if the world economy falls, China wouldn't stop needing more and more oil, nor would India or Brazil(which is an importer) either.
But as we are now stuck at about 90 +/- 2 mb/d for the overseeing future, with increasing population and increasing energy demand, it's not exactly rocket science to figure out what will happen with prices as supply is stagnating or even falling and demand is growing (from the whole world, even if the decline in the OECD continues)

This is part of the reason why I am still wondering why so few are grasping the Peak Oil concept, it's not that terribly advanced to begin with.
Perhaps it is a more psychological than intellectual issue.

I would not bet either way on the price of oil. At this point, neither $20 nor $200 would surprise me too much.

Some of the TOD staffers believe that oil could fall to $20 in the aftermath of the second wave of the financial crisis and stay there for years. Like Stoneleigh said - we could get $10 oil that no one can afford.

OTOH, the jobs report came in very, very good yesterday, and other economic indicators are trending up. Income, retail sales, etc.

The underlying fundamentals are still ugly. The system is totally out of whack and can't go on forever. But whether the crash will come this year is another question. Like they say, the market can stay irrational longer than you can stay solvent.

The job report was a big phony.Take out the 62000 jobs of burger flippers at Mcdonalds and the stupid
Birth/death model 170000 you have a +7K figure.I think you are not reading other analytical blogs.Income up??You gotta be joking.Maybe for the upper crust.Of course your comments on the market being irrational are correct.Anyway oil at $20 is a pipe dream,while $200 a possibility.

					Apr. 2010	Apr. 2011	Change
Agriculture and related industries	  2,210		  2,061		 -149
Government				 21,844		 21,112		 -732
Private industries			106,187		107,702		1,515
Self-employed workers, unincorporated	  8,948		  8,693		 -255

From http://www.bls.gov/news.release/empsit.t08.htm the non-seasonally adjusted data shows a significant numerical increase in private industries employment, but it also shows rather larger percentage drops in the other three categories.

There is a lot of churn going on in private industry as it adjusts to the new financial situation, and there will continue to be a lot of employees exiting government as budget constraints on state and local government encourage retirements and freeze hiring.

The job report was a big phony. Take out the 62000 jobs of burger flippers at Mcdonalds and the stupid Birth/death model 170000 you have a +7K figure. I think you are not reading other analytical blogs.

Wrong on both accounts. First, the birth-death model applies only to the not seasonally adjusted jobs figures. If you look at the latest latest birth-death model figures, at the bottom of the page you'll see the not adjusted jobs gain for April was 1.169 million new jobs (hiring typically ramps up in the spring, even during bad years, that's why they have seasonally adjusted numbers). The birth-death model added 175K to that. That's about 15%. So even if you don't like the birth-death model (which is a legitimate statistical exercise, but I digress), the best you can do is subtract 15% from the seasonally adjusted 244K new jobs - but that still leaves you with 207K, which is still a decent number.

Second, McDonalds did their hiring on the 19th (and most people were probably actually hired after that date). The BLS does their survey in the middle of each month. So those 62K McDonalds hirees won't appear on McDonalds payrolls until the May BLS report. Furthermore, McDonalds typically hires tens of thousands of people in the spring anyway, they just made a publicity stunt out of it and decided to do it all on one day. So even when the May report comes out, once they apply the seasonal adjustments to the numbers it won't be very noticeable.

Whatever analytical blogs you're reading, are feeding you misinformation.

"but that still leaves you with 207K, which is still a decent number"

IIRC the number of jobs created needs to be in excess of 250k just to absorb the number of people entering the workforce each month. So I'd imagine real unemployment is still growing, even if its not counted in the unemployment statistics.

IIRC the number of jobs created needs to be in excess of 250k just to absorb the number of people entering the workforce each month.

No, even that's not true because the workforce isn't growing much anymore.

Leanan, in reality it was a dismal report as pointed out below. 175,000 jobs were due to the fantasy birth/death model. The Household report showed a decline in jobs, Not in Labor Force category was at 86.25 Million people! Over 36pc of the working age population don't have jobs and aren't even counted in the unemployment statistics.

Since Jan 2000, the US has created no jobs, intact they've declined slightly. 11 years of no job growth yet the population has risen by 28 Million people in that time frame. The structural decline is well underway.

You are correct. U.S. unemployment is now primarily structural unemployment rather than cyclical unemployment.

Fiscal and monetary policy are little or no help when it comes to structural unemployment. Some economists dispute this point, but IMO, they are wrong.


We've just emerged from the largest business cycle failure in the last 80 years and you want to let the politicians off the hook.

Of course, due to neoliberal globalization hundreds of million jobs are being created in Asia but not the US. The world economy is on track to grow but not the West, why?

Because those countries have a state policy of
creating jobs in their countries. It is the highest priority to give their people a more or less Western lifestyle. They are hugely subsidizing foreign business investment, while bogus supply side ideology(tax cuts)pays the rich for gambling not working.

The jobs of 100 million americans and 300 million Europeans and Japanese are being replaced by an emerging Chindian middle classes of 600 million.

Structural unemployment is bullcrap. How can technological improvements to industry matter if industry has been offshored?

The propaganda of the economists has proved a disgusting fig-leaf
for profit-mad corporations.

The government must take these legal crooks in hand. Break up the banks, force Wall Street to invest in the USA, close our markets Chinese goods.
You don't need a Ph.D. in economics to recognize a fraudlent system, though you might need one to spread disinformation.



The government must take these legal crooks in hand.

Whose government? On my planet, we have governement by the ultra-rich for the ultra-rich. The foxes have taken over the job of guarding the henhouse.

On my planet, we have governement by the ultra-rich for the ultra-rich.

Smedley Butler points this out in his book War is a Racket.

The entire US of A was set up to benefit the land holders. At least the 2nd grand experiment showed man can become better via women voting and the busting of the direct human slave racket.

How can technological improvements to industry matter if industry has been offshored?

You have to be able to do something better and cheaper than the Chinese and Indians. I have friends whose jobs have been "backshored". Companies in China and India have outsourced their work to them.

One guy was designing a direct-to-home video-on-demand system for China. He was living on a boat on the coast of British Columbia with a satellite dish up on one of the piers to give him a direct high-speed link to Bejing. Another guy was designing a computer-aided learning system for an Indian company. He made enough money to take early retirement.

And one of my nephews was designing oil field projects in West Africa for a Chinese multinational oil company. He was living in Geneva, Switzerland, making three times as much money as he could in North America.

You just have to be able to do something better than they can do it. If you can, they'll send their work to you. If you can't, I guess you have a problem. But if you don't know more and can't do a better job than someone in China or Indian, why would you expect to make more money than them?

On the other hand, if you aren't able to do something better and cheaper than the Chinese and Indians, you're probably unemployed:
Nearly Half Of Detroit's Adults Are Functionally Illiterate, Report Finds

According to estimates by The National Institute for Literacy, roughly 47 percent of adults in Detroit, Michigan -- 200,000 total -- are "functionally illiterate," meaning they have trouble with reading, speaking, writing and computational skills. Even more surprisingly, the Detroit Regional Workforce finds half of that illiterate population has obtained a high school degree.

There is no reason why an unskilled worker in the US should have a higher standard of living than an unskilled worker anywhere else in the world.

Nearly Half Of Detroit's Adults Are Functionally Illiterate, Report Finds

The biggest problem Detroit has is that it rose to prominence 100 years ago as the heart of the American automobile industry. Henry Ford, the Dodge brothers, Walter Chrysler, and William Crapo Durant (who founded GM) were among its primary employment drivers. Now that the US auto industry is in its sunset years, it is no longer a center of innovation, and its population is back to where it was 100 years ago.

However, in the modern world, education is the key to the future, and if half of your workers are functionally illiterate, you don't have much of a future. The educational standards in the US in general and Detroit in particular are far, far lower than, e.g., Shanghai, China. If you look at the OECD Programme for International Student Assessment (PISA) test results, you'll see the differences.

It is called "outsorce" and "insourced".

We had a factory insourced to Sweden. They make motor powered grass cutters. Outsourced it to Rumania. After 3 machines failed in the US they were losing enough money on the legal procedures that followed and insouced the factory again. And no, I don't know how such a machine can fail in a way you can sue somebody for, but it was in the US. Bottom line is; if you can not maintain the quality it may not be worth it outsourcing the production.

I don't know how such a machine can fail in a way you can sue somebody for,


Have you met the Nuclear Power Industry? Seems they can make 'safe' fission power 'unsafe'.

if you can not maintain the quality

Quality has little to do with modern product creation. Can the item make it past the warranty phase - if so great. If it breaks shortly after, all the better as the consumer will buy another.

Alternatively, can you shorten the warranty period to less than the product life?


Note that jobs exported away to China count as structural unemployment in the U.S. Jobs lost to technological advancements also contribute to structural unemployment.

Take a look at the top of the U.S. business cycle, in 2006 or 2007. Note the millions unemployed and underemployed (working part-time involuntarily) plus the many discouraged workers. All of these people were structurally unemployed, except for the small fraction of frictional unemployment.

If I understand Krugman correctly, he thinks unemployment is largely something that can be fixed by monetary and fiscal policy. I think I know where he went wrong on this but I find it difficult to believe that he could be so wrong given his expertise. He continues to argue that we stopped the stimulus too early and it wasn't big enough in the first place. Well, that could be true but unemployment will continue to be quite sticky as long as we in fully exposed to a global economy.

IMNSHO, Krugman is flat-out wrong in his belief in the continued efficacy of more and more fiscal and monetary policy. He is more of a Keynesian than John Maynard Keynes was. JMK thought fiscal policy could reduce unemployment during the Great Depression to about 10% or 12%; he never thought it could do more than that.

Keynes had it right; he understood technological and other kinds of structural unemployment. IMO, Krugman just does not grok structural unemployment.

For a really good biography of John Maynard Keynes--which goes into the evolution of his thinking--see the multivolume biography by Skidelsky. It is a masterpiece. Otherwise, just read Keynes. He was a good prose stylist, and his writing is accessible to noneconomists (which cannot be said about most writing by economists today).

"I find it difficult to believe that he [Krugman] could be so wrong given his expertise"

He's fighting the last war, as in regular recessions, not a debt collapse. He honestly believes that no amount of debt is too large, you just need to refinance. And worse, he actually believes the government's CPI and unemployment data. No matter how good you model is, if you feed it bogus data, you get bogus outputs.

At the time of the stimulus, he said it was too small, but even so it would keep unemployment from going over 7.5%. Epic fail. Since the models are perfect (according to him) and the output failed to match reality, then the inputs must have been wrong. But he won't admit it.

Stoneleigh has been wrong for several years and she will continue to be wrong. When the economy looks like it is slipping into a recession again, "The Bernank" will start QE3. It is going to be Quantitative Easing to infinity because there is no other choice. Either print whatever money it takes to let the government run monstrous deficits or deal with immediate and extreme pain of a depression. Given a choice between taking the medicine now and kicking the can down the road, the powers to be will always prefer to kick the can down the road.

Bernanke will say that he has no choice but to do QEn in order to generate employment and save the people. But in reality the purpose of QE is to hide the fact that the entire financial system of the developed world is insolvent. The US government too is insolvent. QE will increase everybody's cost of living and very few people will see a corresponding increase in income. The US $ will lose value. This is how the US consumption will be brought in line with the rest of the world.

No one is denying that QE 3 (and 4, 5, 6, etc.) are coming. Just that it won't work.

I agree it won't work for the people. It will work for the bankers because they are the first to get their hands on the newly printed money before it loses value.

Stoneleigh and others fail to see that the demand in Chindia and other fast developing countries will continue to grow. If the price of oil falls because of deflation in OECD countries, Chindians will be glad to increase their consumption. They can shift their focus from exports to large domestic markets. There was NO recession in Chindia in 2008-2009. Just a slight slowdown, but NO recession. Chindian consumption will keep commodities expensive. There will be no $20/barrel oil except under extreme conditions for very short periods of time.

It's really not a matter of demand.

The problem is that it's all interconnected. Greece going under wouldn't be world-ending, except that if they go under, Italy, Ireland, Spain, and Portugal will follow. And then probably the UK, France, the US...and it won't stop there. India and China will go down, too.

Cheer up! I'm predicting no crash this year, except in the stock market. Enjoy the fine baseball weather. Even the Minnesota Twins are doing better!

You are correct that it is all interconnected.The problem is that the current system has an elevated MOL(due to increased population and other factors) so demand cannot fall off dramatically.If it goes below MOL then the situation is catastrophic.

Well, that's the point. Those predicting $20 oil are not expecting BAU. They're expecting a catastrophic break. The collapse of the global economy and the end of globalization.

Note that this isn't necessarily what I think is the most likely scenario. I'm just trying to explain why some are expecting $20 oil despite growing demand from Chindia.

That is a plausible theory and we got to test it in 2008. There was an economic crash in OECD countries but barely a hiccup in Chindia. Hundreds of banks in US have failed since then but not a single bank in India (don't know about China) has failed! I agree there is coupling but it is not as strong as Stoneleigh & others believe.

I predict a recession in China, beginning later this year. A tree does not grow to the sky. They have had a speculative bubble in real estate for some time now. That bubble is going to go POP.

It wasn't really tested in 2008. The worst didn't happen then. Bernanke managed to contain the contagion, but didn't fix the underlying problems. Those who expect $20 oil think he only pushed off the reckoning, and it will be much worse for it. The "flight to safety" also strengthened the dollar, despite Helicopter Ben's printing presses.

I would also say the recession was more than a blip in China. By some estimates, hundreds of thousands of factories shut down. More than half. Workers rioted. Millions were forced to return to their farms. It probably felt like a recession to those affected.

And in 2008, globalization did not collapse. We saw hints of it, though. There was fear that global supply lines would dry up because credit wasn't available. Some countries that did not have cash returned to barter, trading food for fuel. Others banned exports of food or fuel, in order to keep it available domestically. If everyone does that, the global economy would grind to a halt. It didn't happen in 2008, so I don't think you can say we tested it then.


What is the underlying problem and can it be fixed? The trick at the moment appears to be engineering a gradual decrease in living standard to a level consistent with resource limitations without causing a cataclysm. What else could possibly be done that would constitute a solution?

The problem is debt. The graphs in that Spiegel article someone posted a couple of days ago are ugly.

Denninger, Stoneleigh, etc. believe that the only way to "fix" it is for everyone to take a haircut. Admit there's so much debt it can never be repaid, and write it off.

The more mainstream view is that if we can just keep pretending long enough, eventually we'll grow our way out of it. Economic growth will make it possible to manage all that debt.

Things are so out of whack that I would question that even without peak oil. With peak oil, it really seems like a long shot.

No bank in India failed because the banking industry is nationalised and is prohibited from engaging in speculative trading.Needless to say there were no slice and dice and other phony papers in the market to trade in.Private banks were only allowed in about 1998.Indian banks carry a lot of NPA which are swept under the rugs but they are definitely better than the western banks because of a conservative approach.

Once upon a time, of course, the banks here were prohibited from engaging in speculative trading too.

Correct. Hence my argument that the contagion affecting the western economies may not affect India to the same degree. Hence the demand for oil and other commodities will keep growing. Hence oil will never fall to $20/barrel (except may be for a very short period of time).

Hence oil will never fall to $20/barrel (except may be for a very short period of time).

Errrrrr, "never" != "for a short period".

I see the wildcard here - what is a $? Is that a Federal Reserve Note? Is it the weight of gold/silver? Is it 100 cents?

The US "Dollar" could radically change. But would that change radically the "value" of a barrel of oil?

In 2008, no large federally regulated US commercial bank failed, other than Wachovia.

The 2008 crisis was almost entirely limited to investment banks regulated by the SEC as corporations like Merrill Lynch or Goldman Sachs, thrifts regulated by the Office of Thrift Supervision like Countrywide and WaMu, as well as other financial institutions such as mortgage lenders like GMAC, lenders to businesses like CIT, and insurance companies like AIG.

That there is one hell of a list of exceptions.

Outstanding ironic humor

Two thumbs up !

come on, WAMU was a bank. I had a checking account there, they did home loans, they had branches all over, they offered credit cards. they were a bank. it is ridiculous to not include them in your 2008 failed banks list because of some twist in their regulatory hierarchy.

WaMu was a "thrift", which was the new name for a "savings and loan". The lessons of the Savings and Loan Crisis of the 1980s were mainly applied by renaming S&Ls as thrifts and by renaming the federal regulator the Office of Thrift Supervision. They were not regulated by the Federal Reserve Bank and the Office of the Comptroller of the Currency, which are the federal regulators of banks.

Just like the real estate bubble that broke at the end of the '80s, the '00s bubble was also partly the responsibility of the S&L/thrifts such as Golden West, IndyMac, CountryWide, and WaMu. They took the lead in pushing adjustable rate mortgages, low-doc and no-doc loans, and other "innovative" mortgage products. I say "partial" because the mortgage business was also influenced by non-bank, non-thrift lenders also entering the ever more deregulated business.

However, actual banks, regulated by the Fed and the OCC, were not a significant cause of the bubble.

Save it, Leanan.

You and Stoneleigh are wrong. A general deflation cannot happen under a fiat regime.

There's a floor on prices that will be supported by TPTB, and there is a ceiling on prices due to the deflationary forces in the real economy.

This isn't too hard to figure out.

Just who are TPTB? Who are these guys? And what is the difference between a fiat regime and a non-fiat regime? Just what is it that makes a regime a fiat regime?

Just how on earth can TPTB maintain a floor on oil prices? How is that possible?

You guys really amaze me. You reel off those buzz words and maintain that TPTB does this or that but you never stop to explain just how they manage to do these things. How is a floor on oil prices maintained? What market forces can they implement that will set a floor on market prices?

Really guys, it is awful easy to maintain that The Powers That Be, or the so-called "Elites" or whomever does this or that but unless you can explain exactly how they manage to pull off these feats your rhetoric amounts to nothing but a lot of hot air.

Bottom line, stopping a market plunge or setting a floor on prices or anything of the sort is not as easy as you guys assume it to be. No one can just dictate by holy fiat that this or that will be the case. There must be a method, or process, by which this floor will be maintained, or plunge will be stopped. You should not make such bold claims unless you can explain the process by which your claims are executed!

Ron P.

TPTB in the monetary sense is the Federal Reserve.

They intervene in markets by conjuring money from thin air. They don't even need to print it, they just hit a few buttons on a keyboard, and the money is there.

Using this money, they then buy up whatever they need to: stocks, treasuries, what have you. A floor then exists on these prices because of basic supply/demand. The demand side is met by the Fed.

I don't think they've intervened directly in the oil market yet. It's mostly done through the primary dealers, who borrow money from the Fed and then speculate on the commodities future markets.

Admittedly this is a rather simplistic explanation, but IMO it suffices.

However you won't be able to see this if you don't believe the supply of fiat is infinite, which it is.

Using this money, they then buy up whatever they need to: stocks, treasuries, what have you.

No this is simply incorrect. The Fed does not buy stocks:
Does the Federal Reserve System hold stocks or other commonly traded equities like the Bank of Japan recently started doing?

The Federal Reserve System does not hold corporate stocks, but it does hold government securities. In 2001 government securities1 accounted for a significant share of Federal Reserve System's $654 billion in assets.

You wrote:

I don't think they've intervened directly in the oil market yet. It's mostly done through the primary dealers, who borrow money from the Fed and then speculate on the commodities future markets.

Nonsense! There are rules as to who can borrow from the Fed and it is very complicated. I am not sure just who you think a "Primary Dealer" is but I assume you mean a bank or brokerage house. If they used borrowed money to speculate in the market then they would lose their license forthwith, especially if that money was borrowed from the Federal Reserve. They would cost their investors and stockholders billions because the speculated with money borrowed from the fed.

Brokerage houses and banks use investors and depositors money when they buy stocks and commodities they never use borrowed money. Why should they? Banks are not in the business of borrowing money, they lend money. And their investments are a place to park depositors money when they do not lend it out.

Anyway, speculating cannot possibly set a floor on the market. Speculating is just that, speculating and nothing more. A speculator has a 50 percent chance of making money and a 50 percent chance of losing money but a zero chance of setting any kind of floor on market prices.

Admittedly this is a rather simplistic explanation, but IMO it suffices.

No it does not, not even close!

However you won't be able to see this if you don't believe the supply of fiat is infinite, which it is.

Whether fiat is infinite or not has nothing to do with it. The fact is that money, as long as it is regarded as hard currency is hard currency. There may come a time when it is seen as totally fiat, and promptly collapses, but that time is not yet. And simply stating that "all currency is fiat" does not explain anything. You must explain how speculating can put a floor on the market, and how these speculators can avoid losing their shirts in any such attempt.

The job of any speculator is, and must be, to make money. Half the time they succeed and half the time they do not. But the very moment they change their focus to anything other than making money and protecting their investment, they lose money. I would be a fools errand for any speculator to try to set a floor on the market of any commodity.

And why would they want to? It is their job and desire to make money, not to do the bidding of the Fed. Why should they risk losing billions just because the Fed asked them to set a floor on the market. (As if the Fed would ever do such a thing.)

Ron P.

Banks vary in the percentage of their liabilities made up from equities and from deposits. I just looked up the 10Q of a major bank, and their deposits are about 40% and equities are less than 10%. The rest are various types of borrowings.

Okay, your point is granted, various types of borrowing. What do they do with this borrowed money? Do they really speculate in the commodities market?

The question is, not how much of this borrowing was borrowed from the Fed but how much of this borrowing was used for speculating in the commodities market? And even that is not the primary question. The primary question is why would they risk losing billions of this borrowed money, and investors money, and depositors money, to try to set a floor under the oil market just because the Fed, or the Administration, or TPTB, (whomever they may be), asked them to?

After all Merrill, that is what this debate is all about. Just saying that they would do this, set a floor under the market, is absurd unless one can explain how and why they would do such a thing... And with whose money they would risk losing in such a foolish attempt.

Ron P.

And in a general response to TPTB, ignore all those computer algorhythyms that the "TPTB" use when trading. Nothing there until they hit you, on the floor with an order for 10,000 May 30 puts and 5000 May 35 puts and you have to get neutral REAL fast and you tell the floor broker you need 6000 stock equivalent so hit the futures market, size and then the algorymthym have been tipped and trades walk away from you and you're losing $20,000 every 10 minutes and then trading is halted and your worries are over. Yeah

I enjoy Darwinian's epistles, but it's a wee bit more complicated than he indicates. I"ve known trades that were illegally backed out of, backdated, leveraged and then shorted, too often to ignore the possibility of collusion. Even been involved in bear raids on non other that Microsoft. Successful.

Now as far as he goes, D is correct, but not all trades are between gambling junkies in futures, sometimes they suck in outsiders who need to ensure they don't get wiped out by "TPTB", I mean computer trading algorthyms. Not generally possessed by anyone not owning a Super Cray.

Sorry if I can't give a timely reposte, service is terrible offshore Malaysia

Waverider, you are completely out in left field. Not that what you are saying is not true because it is. (Or pretty close anyway.) It is just that it has nothing to do with the subject being discussed.

High speed program trading has been around for decades but does not involve puts or calls. Options are very thinly traded compared to the underlying index or commodity. If you ever placed an order for thousands of them, to be executed all at once, only a few dozen, if that many would be filled at fair value and the rest, especially the last few thousand would be filled at several times their fair value making it impossible to profit from them.

There are many definitions of high speed program trading on the net. I would suggest you read a few of them because your description of how it works is way, way, out in left field.

High speed program trading is wholly computer generated and deigned to profit from a difference between the index and a basket of stocks. Google it.

Oilman Sachs stated: There's a floor on prices that will be supported by TPTB, I labeled this statement as total nonsense and stated that this was impossible. But if you, Waverider, think the powers that be can set a floor under prices then explain exactly how this can be done. But stating that high speed program trading proves it can is just utter nonsense.

But perhaps you don't believe it can. Then why did you bring the subject up? Perhaps you are just confused.

Ron P.

Gee, nice response, D. Slightly off center, to be sure, but nice. A thin compliment with an assertion I'm way out in left field. LOL.

You're not the only old pro, here. And I don't care if I violated your rules of discussion, in fact, won't be drawn into your specially designed logic traps for the unwary. I'll set my own rules, thankee kindly.

I remember trading on the options floor as computers first appeared, so yes, it was decades ago, and I'm not confused, amused is perhaps a better word. In those days of open outcry, we did indeed have to be market makers or make the damn market. However many were in the pit, we had to make that market, within less than 25 cents buy and sell and when the floor broker pointed at us, first guy had 50%, second guy got, 30 % and the third guy got 20 %. Ten contracts or ten thousand.

And taking your very own tactic: Where did you buy your exchange seat and what was your badge number? Or were you one of those guys sitting upstairs, registering and clearing my trades ? Or just a retail broker ? Gee this is fun.

And those "thinly traded " options can indeed be on the S+P 500. And when they're deep in the money, you could quite easily be forced to get neutral on $400,000 worth of delta. I don't need to google anything to remember the corruption or how it works on the floor. Were you there ?

OK back to what I want to comment upon, with your gracious permission. The TPTB. As I wrote below, I had no trouble figuring out that computer algorythyms were going to slaughter us. Neither did any of the other market makers.

The sense of the argument between you and well, pretty much everyone else had been your denial of any conspiracy. Fair enough, and an elegant and most amusing battle it has been. You're on the losing side when you say the market can't be manipulated, however. Oh,right go google something or not. When the banks , funds, etc are executing over half the trades, THEY are TPTB and to think they don't create their own momentum is nothing short of breathtaking.

Furthermore, most everyone defers to your knowledge of futures. But I think you have been playing with us for long enough. When you set your sights on the very specific target; that there are two sides of the trade, and one is going to lose, you are correct. But only rookies and fools go naked. The pros builda large [ 50 contract] positions. Or much larger with banks

My ideal position, when plotted and brought to me by a runner, appeared as an inverted bell shaped curve, with profit to the left and right when the market price moved. So if you have a seat on the exchange or are a market maker, your margins are virtually non existent and even a little guy like me could build multi million dollar positions that could make money no matter where the market went. Then enter computer algorythyms and you have exponentially better control. If some of our readers get confused using terms like PPT and TPTB and conspiracy, you can dazzle them with technicalities, but in the main, what they sense is market manipulation.

They are right. You way out in left field.

And one last thing, I don't want to see you belittling people . Likewise, some of us realize that for you, It's just a game . Well, there are people smarter, more experienced , and more visionary than you. Stop mocking us.


Again, computerized high frequency trading has nothing to do with Options. And again, Google it! And I am not belittling people, just telling you that you got that wrong. Point out your error is not belittling anyone. That is just what everyone does when they think someone else is wrong on any given subject.

And computerized high frequency trading has nothing to do with the subject we were discussing. I have no idea why you even brought it up.

I am through with the subject of setting market bottoms. And I never had any intention of discussing computerized high frequency trading because that is related to nothing being discussed.

Bye now. Ron P.

One large investment bank at the end of 1Q'11 had physical commodities worth around $19.5 billion, $12.8 billion of commodity derivative assets, and $11.3 billion of liabilities for commodities derivatives. The notional value of the derivatives is probably at least 10 times higher.

Large institutions are in many cases "market makers", and they are responsive to the requirements for maintaining "orderly markets". This doesn't necessarily mean a "floor" on prices, but it does mean that they will in many cases step in to curb excessive moves.

While excessive swings in prices are viewed unfavorably, volatility is good for trading profits. Program trading of various kinds is done in all sorts of equities, commodities, options, derivatives, etc. All that is required is that the trades be available for execution electronically on an exchange or dark pool under standardized terms and conditions.

Any large corporation does a lot of business with the federal government and is normally very responsive to "suggestions" from the executive branch. This is especially true of financial institutions who are more regulated than most corporations.

Do they really speculate in the commodities market?

Someone does - the Plunge Protection Team

However you won't be able to see this if you don't believe the supply of fiat is infinite, which it is.

This is probably the point of contention. While fiat is theoretically infinite, in practice, it is not. Eventually, the market realizes you can never pay off that debt, and it all goes to hell. Just where the limit lies is the difference between the $200 oil folks and the $20 oil folks.

It all reminds me of that Monty Python skit with the building that stays up only if everyone believes in it. How long can we keep believing? I actually think it might be much longer than Stoneleigh and others expect, but I also think I could be very wrong. If there's one thing I've learned in my six years here, it's that people are terrible at predicting the future. All of us.

A good show that helped me understand a bit about trading. Not sure if it directly applied, but hope it does help.

PBS "NOVA" - "Mind Over Money"

Trust your gut when trading stocks? Do no such thing, argues David Adler, producer of "Mind Over Money."


No one can just dictate by holy fiat that this or that will be the case

Darwinian - you must not have spent anytime in court or law.

Because that is how things are done there. Things are defined all the time in "law".

And, "we" are under the "rule of law" are "we" not?

Eric, I think you know what I meant, we are talking about market forces here and nothing else. Of course that's how it is done in a court of law and that's how the Pope does it, which is the origin of the term. No one can dictate by holy fiat that the market will go this low and no lower. Or stop a market plunge or anything of the sort.

I know, I know, many claim that this is exactly what happens. But those people never explain exactly how the holy fiat is executed in the market.

Ron P.

Under Quantitative Easing, the Federal Reserve prints money to buy Gov't Treasuries. In other words, they are increasing our national debt in order to keep the economy afloat. But what are they doing to us individually? I have a very simple formula for determining the effects of increasing Gov't debt on us. I take the national debt of say 14.2 Trillion Dollars and divide it by the amount of Personal Income Tax collected of say 1.1 Trillion. That produces a factor of 13. If you paid in $10K of income tax, your part of the national debt is $130K. That's why people say we are mortgaging our future.

The reason I do it this way is that the percentage of Personal Income Tax has remained steady on a percentage of Federal taxes collected for decades. Corporate taxes have gone down. Payroll taxes have gone up. To get into this further, let's grab a six-pack of suds and talk about where Excise Taxes come from (hint: from the upfront taxes on the sale of beer and tobacco products). Next we can can swing by Mickie D's and pick up a bag lunch and talk about where corporate profits come while discussing where the increases in Payroll taxes are coming from (Hint: look in a mirror). All in all, the above 3 taxes account for almost all the rest of the gross receipts for the Federal Gov't.

Check your 1040... Then lets talk about what QE is doing to us.

In other words to pay this off before I die, I will have to work longer and smarter at a time when my body is declining physically and mentally during peak oil, etc. I do not want to leave this legacy to my kids if I can help it.

**Second**, I have read Harry Dent's books. The first one was written back in the early 90's where he looked at the relative number of people in the 40 to 50 year age group with respect to the S&P 500. His premise was that those people had advanced to where they were maximum earners with kids who demanded a lot and they could do a lot for them financially. The relative number went positive in around 1982 (the beginning of the Great Bull Market) and went negative around 2000. He predicted everything would turn south around 2010 with an inflection point roughly around 2016. The graph did not turn positive until around 2020 when the sons and daughters of us "Baby Boomers" entered the 40 to 50 age group. What does this mean to us?

For someone like myself who is approaching 65 what does this mean? The wife and I will be trying to sock away as much as we can so we am not challenging the dog for his Alpo or running out of cash before we die. It means that we will be reducing expenses as much as we can. This means insulating our home, installing solar hot water and maybe radiant heat derived from solar, driving an Electric Vehicle or plug in hybrid using the electricity (or natural gas money) we saved from the solar collectors. It means finding a place where we can walk to and from or safely ride a bike to purchase food, medicine, clothing. Travel and entertainment will be simplified. We will likely plant a garden and see if we can reduce our food bill.

I look at the gasoline marguees and see prices nearing $4.00/gallon. There is a two-fold set of responsibilities and one of them is for us to figure out ways to drive less or use substitutes to keep the marquees prices from rising during increasing scarcity, rising demand, and cheapening dollar. I mentioned walking, biking, and EVs while others are mentioning growing algae for fuel, etc. but some of this is like I envision a little kid saying: "Well Mr. Boeing, what do you mean by "in-flight meals", Orville didn't even have enough time to unwrap a sandwich?" Will technology be a solution and what could it be?

We may even have to sell or want to sell stocks during the 2010 to 2020 period. Where do we invest? Things that are tangible is a good starting point. A hoe to work the garden, tools to fix things, land to grow food (notice how all the houses in Pakistan where bin Laden was found are surrounded by gardens instead of lawns), tools and parts to build things to sell, gold to ward off hyper inflation? Reading how our pre-oil/fossil fuel ancestors got by. Collecting and reading good reference books and blogs.

While thinking of the above, my distain for Wall Street and the irresponsible mortgage brokers raises my ire. Their irresponsible actions have contributed to the Federal Debt. My suggestion is that the Gov't go back first to the people who repealed the Glass-Steagall Act. Look at who paid who above and beyond above normal "finance contributions" and prosecute the players under the RICO laws. If the Senators and Representatives took payments beyond the majority and they were the ones who pushed this repeal through. I think a good case can be made that they were not working in the public interest but their own. Go back up the food chain. Inside Job, the documentary is a good place to become informed.

That's my two cents inflating to 1/2 a cent in value.

Since most oil is sold under fixed price contracts that are stable I do not expect price swings to have much effect of Saudi or Iran.

For example the Brazilians in exchange for the Chinese paying the oil field development costs have contracted to sell China oil at $20 per barrel for the next 20 years.

Good for the Catholic church pointing out climate chnage. Now if the Pope would just move to a net zero energy tiny home, he would be saying something. From what I've heard, one must give up everything to enter the Kingdom of Heaven. Does the Vatican face South? And then there's that population problem thingy.

Regarding this week's sharp decline in oil prices, there's something about it I don't understand. There have been many posts recently about how futures prices don't determine spot prices -- spot prices are determined by real supply and real demand (since delivery is required) but futures prices are just guesses which eventually converge to the spot price as the contract date approaches. So you can expect wild gyrations in futures prices, but not so much in spot prices.

But what we saw was a 10% decline in spot prices in just a few days. Did real demand fall off a cliff or did real supply suddenly jump? That seems impossible. Did the dollar strengthen enough to account for that big a price shock? It did go up against the Euro, but not that much. I have no answers, but it seems unexplainable. Any insight would be appreciated.

Commodities fell across the board, not just oil. Some say it was a combination of the silver debacle, some 'positive' economic news, and the demize of OBL. Whatever, a sell-off occured for commodities, not just oil. I got out of (some) silver at $48. If this sell-off continues, I'll soon buy it all back, at a big discount ;-)

I hope my local broker will let me in the door this time :-/

Used to be that the "pump and dump" was only done in thinly traded stocks.

Looks like the major hedge funds have enough fire power to do it in silver now.

Could this have anything to do with it?

Deadline to raise U.S. debt ceiling pushed to Aug. 2, Geithner says
By Zachary A. Goldfarb, Published: May 2

Treasury Secretary Timothy F. Geithner said on Monday that he will begin to undertake emergency measures this week to avert a potential default on the federal debt.

At the same time, he said, the United States now has until Aug. 2 to raise the legal limit on federal borrowing, 25 days longer than he had estimated last month. The reprieve is largely the result of higher tax revenues than anticipated.


This "potential default on federal debt" is pure B.S. The debt has to be paid first, and there is ample tax revenue to pay interest on the debt and maturing debt. The truth is the Feds would have to cut spending.

This "potential default on federal debt" is pure B.S.

Why? Because you say so?

The debt has to be paid first

No "it" does not.

History is filled with defaults.

The value of "The Contentintal". The money of the Southern Confederated States. Various nations.

Even the idea of a Debt Jubilee in the Mythos of the Christians.

My WAG is that as the economy slowed, the PPT {plunge protection team} and the Administration wanted to get commodity prices down for political purposes. They made the the CMC raise margin requirement for silver three time in two weeks. Then someone planted a rumor in a German magazine about a Greece-Euro split to shake the Euro down and dollar up. They placed a call to Tricky Trichet in Europe to get him to change his mind on a rate rise, and then relied on greed and fear to unwind the carry trade to get the monkey of high costs of commodities off their back. The BLS presented a 230,000 gain {to counter a -190,000 household survey finding} employment number in April by reducing job gains in 2010 and bringing them into the Feb., March and April numbers and hope nobody looks back. The BLS also adjusted the birth-death number up by 30,000 a month and presto Wall Street knows what to do, according to John Williams SGS website.
I don't think they asked the oil producer Countries what they wanted, but what do I know?

You are on the spot.

the Administration wanted to get commodity prices down for political purposes. They made the the CMC raise margin requirement for silver three time in two weeks.

No, you are not spot on. You assume that the "Administration" is all powerful. I assume you mean the Obama Administration. They have nothing to do with margin requirements. Also those Wall Street folks and Chicago Commodities Brokers are mostly republicans. It is highly unlikely that they would cowtow to Obama even if he did call them. Which of course he would not because it would be a major scandal if the news got out. And with 90 percent of those guys in the enemy camp, the news would get out.

All About Futures Margin

Futures margin rates are set by the futures exchanges and some brokerages will add an extra premium to the exchange minimum rate in order to lower their risk exposure. Margin is set based on risk. The larger dollar value moves that a futures market makes, you can expect higher margin rates.

But all in all it is a great conspiracy theory and like all such theories it is full of holes. And it requires too many things to fall into place. They placed a rumor, they placed a call, they relied of fear and greed... But at least your theory was good for a laugh, brightened my day a bit.

Ron P.

And why not?Everybody knows about the PPT and how it props up the stock market.Everybody knows that JPM,GS,etc play the game in tandem with the Fed,Treasury,Comex and all TPTB .As to news getting out.Nobody really cares now and know they will be covered.After three years of the biggest fraud in economic history not a single arrest(excluding Bernie as a showcase).By the way the Republicans are bigger crooks than democrats(of course they are all crooks).

Everybody knows about the PPT and how it props up the stock market.

Well no, everybody does not know that. In fact, those who claim to know that the PPT can stop a plunge or manipulate the market, nobody can explain just how they do that.

You can google the term and get plenty of pages saying it is real and just as many saying that the PPT is an urban myth. But you will never find a page telling exactly how this PPT actually does anything. But you, and every other PPT believe believes they do in, you just don't know how. And the reason you don't know how is because it is impossible. Well, impossible unless you have billions and are willing to risk every penny of it in order to buy enough stock to stop a plunge.

This page claims to know exactly what the PPT is. The Plunge Protection Team

The Plunge Protection Team (PPT) is not some urban myth or Oliver Stone-style conspiracy theory...

Born out of the 1987 crash, the team is formally known as the Working Group on Financial Markets. It was created by Executive Order 12631, signed on March 18, 1988 by President Reagan.

And under Sec. 2 of the order, its "Purposes and Functions" were stated as follows:

(2) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

1. the major issues raised by the numerous studies on the events (pertaining to the) October 19, 1987 (market crash and consider) recommendations that have the potential to achieve the goals noted above; and
2. . . . governmental (and other) actions under existing laws and regulations. . . that are appropriate to carry out these recommendations.

Working in secret, the group consists of the President, the Treasury Secretary as chairman; the Fed chairman; the SEC chairman; and the Commodity Futures Trading Commission chairman.

Well, that's just all fine and dandy but that does not make them a Plunge Protection Team. Executive Order 12631--Working Group on Financial Markets is very real but a Plunge Protection team they are not!

And Hole, everyone in Washington is not a crook. Such a cynical attitude only means that everything you say can be regarded as nothing but pure cynicism, not to be taken seriously.

Ron P.

Yeah, I'll take mine sunny side up too.

But as I remember, the SEC uses timely advance warnings of coming changes { like three months } so as not to disturb the markets.

You are being much too credulous. I can possibly agree with a statement that there is simply a convergence of interests that cause market fluctuations. But then again, who's doing all the trading, Ron. Me on my Asus, or Morgan , Stanley.

TPTB are quite simply trading platforms by various banks that are powered by algorythms. They don't care whether the market goes up or down, as long as it moves. 1% a day adds up. When you and your buddies in the "banking industry" do 75% of the trades, you ARE the market.

So there you have it. Dave's explanation of TPTB.

Apologies if I seem gullible.

Bet this won't stop ' conspiracy bashing ' will it ?

Executive order is a good cover,akin to bringing out the CIA charter and saying we don't do covert ops and we don't engage in torture.There are open secrets and this is one of them.Whether you are a believer or not is one's choice.
How do they do it?Buy stocks thru the PD's or associated brokerages to pull up the DJI (only the DJI)and not any individual stocks.It could be a basket of stocks in the DJI.The point is to get the confidence of the suckers back who then come in you offload.By the way even if you offload at a lose but are able to move the confidence in a positive direction a billion or a couple of billions does it matter?JPM,GS etc can easily afford to loose a billion,look at their yearly profits.Anyway the Fed and Treasury are always there to compensate them in some form or another.
Not everybody in Washington is a crook.Yes ok they only take "political donations" not bribes.In India we have a saying roughly translated"Show me a honest politician and I will show you a virgin prostitute".
No I am not a cynic as a matter of fact very much in your camp a hard headed realist and appreciate your views.

Hole, your first sentence makes everything a giant conspiracy theory, (a good cover) , then you bring up torture which has nothing to do with anything. You do that only to poison the well.

No members of Executive Order 12631--Working Group on Financial Markets are allowed to buy stocks and they sure are not allowed to buy them, covertly, with government money. And if they did do it there can be no guarantee that they would make money. They just might lose their shirt.

But if the Secretary of the Treasury, or any other members of the Working Group, were caught buying stock with government funds just to stop a plunge... it would be a scandal to rival Watergate! It would bring down the President!

Now you might be inclined to believe that the president would take such a chance but I am not. It just would not make any sense whatsoever because it would be impossible to hide. No president, not even Dubya, was ever that stupid.

Ron P.

1.No conspiracy theory.What the charter(executive order)says is not what it will do.The reality on the ground is different.No charter(executive order) is followed to the 'T'.As a matter of fact all are bent or extended to suit the needs of the time(e.g the fed will not monetize the debt but then it does).
2.Yes no members are allowed to buy stocks.Something like the Fed cannot buy treasuries directly from the treasury department but thru PD's to keep a hands distance.The intervention is done thru proxies.The members keep a hands(safe) distance.
3.I have already said that the Fed or the treasury do not directly trade or deal in the securities.They know the consequences as you have rightly pointed out.

Ron, I love your reasoning. You are a moderate, cool voice in an often overheated debate. I just wanted to thank you for that. :-)

I agree that the PPT, which manages the exchange stabilization fund - a joint fund operated between the Fed and Treasury, has had a significant influence on various markets – especially over the last few years. Keep in mind although the fund may have roughly $50 billion + in assets, it can borrow an unlimited amount from the Fed.

Thus when I refer to TPTB, this is what I usually have in mind.

Previously I worked in the trading room of a major Wall Street firm, and I personally had some limited contact with the Fed. Don’t claim to be an expert in all aspects of the Fed’s operations, but for example, it was proven recently beyond doubt that the Fed is selling interest rate outs to drive down long term interest rates.

Quite possibly they could also buy stock index futures and roll them over quarterly. That would not be so difficult in a liquid market such as for stock indexes. They recently announced a major dollar buying operation in March, so one should not be surprised to see sudden dollar buying.

Shorting oil futures would be a trickier proposition for the PPT. That is because they would eventually have to cover their position. Seems like we had quite an incredible short covering rally in 2008, and occasionally lesser ones in 2011, but most that wander into TOD would rather blame those moves on speculators who mindlessly rush in to pay the highest prices possible for oil.

Anyway, I told every one here last year to expect a major stock market rally starting in August 2010 (before QEII), while at the time I posted that deflationists responded by saying to expect both a stock market and oil market price collapse. So let me repeat – the Fed can produce inflation any time it wants. I’ve posted the monetary history of the mid 1930s US here many times. The Fed and Treasury succeeded in greatly increasing the rate of inflation in the middle of a great depression. What more proof does someone want the Fed can create inflation when it wants to?

Granted there will be occasional financial panics and the one two years ago was probably the worse since the 1890s for the US. While there is no guarantee that prices of anything will always rise in terms of dollars, I would not consider the current policy of the Fed to be deflationary.

Very odd. A lot of people have noted that it's starting to look like 2008 all over again.

My feeling is still that the economy is improving, but whether it will survive $4 gas is another story.

I found this to be an interesting article which seems to address some factors relating to the current U.S. economic situation being discussed in this thread:


Corporate profits grew 36.8 percent in 2010, the biggest gain since 1950...

...the bigger part of the story remains workforce reductions, technological advances, low lending costs and minimal borrowing. All have combined to give companies unusual control over their balance sheets, and thus their profits.

Another factor in today's strong corporate profits also might mask how sluggish the U.S. recovery has been — the growing percentage of profits from foreign sales by U.S. corporations.

The Labor Department reported on March 3 that annual average productivity rose by 3.9 percent in 2010. Aside from that strong productivity growth, unit labor costs fell during the same period by 1.5 percent. That reflects that worker compensation didn't keep pace with rising output. Put another way, businesses produced more than compensation rose.

The recent climb in oil and gasoline prices, now approaching $4 a gallon in some areas, is holding back consumer spending on other goods and renewed business activity.

For now, the question on the minds of most Americans remains — when do increases in corporate profits actually translate into hiring? Traditionally, profits lead hiring in an economic recovery.

From stanford.edu

top CEOs in 1970 made 39 times more than the average worker, whereas now they make 1,039 times more than the average worker. (this 1,039 figure was attributed to be from the year 2000...I imagine it is higher yet now)

I wonder when this allegedly rising tide will lift all (or even many) boats?

The rich get riches. The poor get children. 'Twas ever thus.

Sad...Must it be so? The data seem to show that income distribution was not so skewed to the wealthy several decades ago in the U.S.

A week or so ago a poster opined that the idea of having to earn our living (putting forth efforts at a job in order to make money to pay for stuff) was a fundamental problem with our society, or something along those lines.

I truly did not, and do not, understand her idea that modern innovations allow a minority of workers to support the rest...I also do not understand if her idea was for everyone to live in a modest hovel and grow one's own food and pump one's water from a well or something (maybe mend shoes and male candles?).

Is having 10-20% (depending on how you measure) unemployment the 'new normal', and is this able to continue for decades?...especially given that the U.S. will likely top 400M people circa 2050 (or a few years before)?

That was the person the quoted Buckminster Fuller about earning a living.

I think we are at that point where a minority could easily support the majority, given sufficient external energy sources. BUT there would be a few changes, such as a lower overall "standard of living" in material terms, and more free time - which was Buck's point. I think the Euro countries are closer to this - many have six weeks annual holiday etc. In effect, the society has given up higher productivity in return for more free time - the US has gone the opposite way.

And most importantly, the minority may well decide to go elsewhere, where they can work just as hard and keep it all - a bit like Halliburton relocating to ME.

The more unworking majority you have, of course, the lower the overall standard for everyone - this will be a huge problem for the US going forward. I expect the one thing the minority hates more than supporting the majority would be supporting illegals as well - and they are not shrinking in number.

It is silly to think that we need most people to work forty hours per week, fifty weeks a year. We do not need nearly that much labor. I advocate earlier and earlier retirement; I retired at age 61 with a full pension and hope that my children will be able to retire at earlier ages. They all save a lot of money, but of course that can be wiped out in hyperinflation or (much less likely) debt deflation.

As John Maynard Keynes pointed out in his famous 1930 essay, "Economic Possibilities for our Grandchildren," the real and long-lasting problem is what to do with all the leisure that technological advances have brought us. For the next twenty years, though, Economize, Localize, and Produce are the best advices we (westexas in particular) have come up with.

I've economized by buying French champagne by the case; I've localized by moving to Highland Village in St. Paul, and I'm as busy as I can be producing more writing for sale. I only use about three gallons of gasoline per week, except for visiting one of my daughters in Grand Rapids, MN. I walk or bike every day for about an hour. I sail boats, which does not use much in the way of fossil fuels (though I do drive to the dock).

Well, i think the internet has solved the issue of what to do with all that time!

Facebook (and its competition) are especially big time wasters. Let us hope that collapse is gradual enough so that we can keep at least some sort of Internet in years to come.

Being poor and having leisure is no fun, because you have no funds to go places and do things and drink Guinness, for example. I'm well-to-do (in my opinion), and I make the most of my retirement years. So far as I am concerned, the Collapse will come when Medicare no longer pays for my Viagra;-)

Would it not be more accurate to describe the loss of your Viagra as a downturn?

Being poor and having no money is indeed not much fun, but if you have enough for the basics, you can be creative on what to do in the remaining time, especially if you are around others in a simialar situation. Problem is, few (none?) of us are ever really satisified with the basics, we always want more, as Adam Smith so correctly pointed out.

I will nitpick at your definition of "retirement" though. If you are still writing for money, or doing any activity to earn money, then, in a strict economic sense, you are still "working", albeit at reduced hours. You are still contributing "labour" to the production pool. I would define retirement as when you are no longer labour to the production process, though you could argue true retirement is when you no longer contribute any land, capital or enterprise either, though I think that is an unworkable definition.

I probably qualify as "poor", according to first world standards, and I have to say I greatly enjoy my free time (I work about 25 - 30 hrs a week). My current hobby is trying to set up a shoestring budget container garden on the balcony - today's milestone was finally achieving thermophilic decomposition in the mini-compost that cost nothing but the time needed to collect leaves from the side-walk and separate the organic waste from my garbage screen.

I hope that society works itself around to more people having part time jobs, it permits people the free time necessary to pursue interests that would be useful in a society transitioning towards lower energy use. As a side benefit the income from a part time job is usually lower, helping people to choose modest, energy efficient activities.

I must agree. I am unemployed, but the stuff that limit my appreciation of leasure time is not lack of money (I have some funds tucked away) but social factors. I could use more friends. But I do use my free time. My hobby is hiking. If the weather is good I go out on day hikes and do stuff. The forests are like a book, willing to teach you new stuff every day, if you just take care to read it. The long hikes take some planning but I try to get as many of those done as possibly. This year the big project is to change from sleeping on the ground to go hammocking. The real chalenge there is what to do with the mosquito problem (I live in Scandinavia).

It is silly to think that we need most people to work forty hours per week, fifty weeks a year.

Perhaps, but every bloody time "society" becomes more productive on the whole, government absorbs all of it and then some with new and expensive mandates. If we could all drive Tata Nanos at $3500 a pop instead of $35000, we could work less, but there would be tradeoffs. If we could have only the medical "care" that actually makes life better, instead of endless useless "tests" and "checkups" that kill more people (indirectly via risky invasive "followup" of nothing) than they save, and infinite mandates for futility beyond torture, we could work less, but again there would be tradeoffs. If we could still have the $19.95 smoke alarms that work just fine, instead of hard-wired ones that cost thousands to install and big bucks to replace when they go bad, we could work less and there would be no absolutely no tradeoff of any significance whatsoever. And it just goes on and on forever.

As long as our societies remain utterly in thrall to supercilious puritanical moralizers for whom no expense, no matter how absurd, in the name of "elf'n'safety" (or "the environment") can ever be spared, we can never conceivably work enough hours.

"The mouth of the just shall meditate wisdom"
Elfen Lied

the real and long-lasting problem is what to do with all the leisure that technological advances have brought us.

In general technology has not brought us more leisure. Technological innovation has to compete with the Malthusian effects of population growth and resource depletion. Initially farming wasn't all that labour intesive, but as the population increased the need to more food per acre drove farming into ever more intensive forms. Perhaps a similar thing will play with with industrial processes versus resources. Will we be able to rest and let the machines do most of the work, or might we have to keep increasing the human effort needed to find new resources, and recycle old one? Plus we seem to get greedy, and want ever more stuff.

It is the human condition of many people to want to out compete the rest of us. All the paid useful work could be shared out at perhaps 15 hrs each, but the competitors would need to be mandated not to out breed or outwork the rest of us. I can't see it ending well.......

People seem to assume that the lust for stuff is innate, but I think there's plenty of evidence that that is not necessarily true. Yes, humans like novelty, but that doesn't always translate into the need to acquire and own things, let alone work for them. For most of our history, we were nomadic, and could not acquire more than we could carry.

Work over leisure was a choice, and not one the workers made.

Business leaders were less than enthusiastic about the prospect of a society no longer centered on the production of goods. For them, the new “labor-saving” machinery presented not a vision of liberation but a threat to their position at the center of power. John E. Edgerton, president of the National Association of Manufacturers, typified their response when he declared: “I am for everything that will make work happier but against everything that will further subordinate its importance. The emphasis should be put on work—more work and better work.” “Nothing,” he claimed, “breeds radicalism more than unhappiness unless it is leisure.”

Kellogg's went to a 30 hour work week during the Depression. (This was a popular idea back then, to spread what work there was around to more people. The Senate even passed a 30 hour work week bill, which FDR opposed.) Anyway, Kellogg's found their workers loved the shorter work week, even if it meant less money.

One of the least known flirtations with the 30-hour work week was by the cereal giant, W.K. Kellogg Company. In 1930, the company announced that most of its 1500 employees would go from an 8-hour to a 6-hour work day, which would provide 300 new jobs in Battle Creek. Though the shorter work week involved a pay cut, the overwhelming majority of workers preferred having increased leisure time to spend with their families and community.

New managers who began running Kellogg had no enthusiasm for the shorter work day. They polled workers in 1946 and found that 77% of men and 87% of women would choose a 30-hour week even if it meant lower wages.

inbuilt population control mechanism maybe if there are no predators to keep the population in check?

Doesn't seem to work very well, and, in fact, current day aboriginals seem to be better at it because it's not just "personal choice" but is embedded in social structures.

We seem to be very much into tournament economics, where the winner takes all, or nearly all. "Consumers" won't accept second-rate stuff anymore; they scream bloody murder if they get it. Witness the ever growing millions of gov't regs, requiring anyone who wants to do anything to hire armies of lawyers first, as the local-foodies are finding out the hard way. Witness J&J6P shelling out substantial sums of money (relative to their means) to get "nationally branded", "something I've heard of" entertainment, or other goods and services: who wastes time on a mere local game when they can watch the Major Leagues?

So the poster is partly correct - a handful of designers, marketers, actors, ballplayers, executives, and other "stars" support the rest of the population, who are more and more forced by the ever-metastasizing regs and the winner-take-all attitudes to function merely as interchangeable unthinking drudges following a precious few "approved", "certified" designs (often copyrighted or patented with enormous royalties due of course) to the letter with nary a micron of deviation allowable. Of course, the poster is only partly right since the drudges are often still needed since the "stars" can't do all the tasks; then again, as mere drudges they need not be paid much.

But at least all the regs and constraints make the drudges "safe" - so "safe" indeed that even in the case of mere entertainment, they can expect to "know what they are getting", and they'll sue if they're disappointed. In the "progressive" 21st century, "safety"/"consistency" is the be-all and end-all that utterly trumps every other conceivable consideration. So: widespread skill and craft as in the "good old days"; or else the absolute zero of risk ensured by rigid conformity to the smallest possible number of absurdly over-engineered designs. Can't have it both ways...

[With respect to other manifestations of the mindless "safety" hysteria, see for example Lenore Skenazy.]

Thanks for that link about tournament economics - I had not heard of that before (but then, I am not an economist either). But I am an engineer, and I do agree with you about the problem of zero risk engineering. Absolutely safe often requires infinite resources, which we all end up paying for.

The car industry is an interesting example - they used to object to safety rules, as it cost more. But now the overly complex safety rules are an effective barrier to new entries into their business.

The same applies to many other industries, where the codes and standards, which were written to ensure safety, compatibility (e.g. bolt thread pitches) and a minimum level of quality, often end up being a maximum level of quality, and a barrier to innovation. The entrenched players have a great interest in maintaing the status quo, and limiting the opportunities for disruptive innovations - unless they think of it themselves, of course.

And then, they creep the status quo, like your example of smoke detectors, but we get into diminishing marginal returns on safety. A company cleaning up a contaminated site must clean it up such that a child climbing the fence and eating 5 grams of dirt has a 0.00001% chance of getting cancer - it gets to the point where the $$$ spent is wasted because the child has a greater risk of being run over while walking to the site.

I think all this is a good example of Tainter style complexity. When I was back on the family farm at Xmas, I could do stuff there that in an industrial situation you couldn't do, or would take 10x as long with 2x the people, etc etc. There are risks but you have to learn to manage them to an acceptable risk/reward ratio. Now some farmers get it wrong and its safety record is not as good as many industries, but are people prepared to pay 2x as much for food so we can have 2x the farmers producing the same?

The general public has lost the ability to evaluate risk/reward, and government and companies say we will do it for you. This has saved a lot of lives but are we getting to the point where there is now no net benefit?

Unfortunately, the small number of over engineered designs is winning out, regardless of our ability to pay for them

I saw a prediction of this - the US companies making all their money overseas - about 18 months ago. I am sure that GE etc are doing very well selling stuff to the BRIC countries, but that doesn;t make for many jobs here. Even the few remaining domestic mfrs like Caterpillar have a small workforce in relation to their profits.

What will be really interesting is when/if the companies start reinvesting their record cash piles - where will it go? Would you invest in a new factory here, or in Brazil? GM, of all companies, is doing well in China, while sales here are so-so. There just aren't many growth opportunities here for the big co's, and they are the ones that have the ability to invest anywhere in the world.

The US is remaining as the corporate headquarters, and that's great of you are in any job related to that, or hold a lot of their stock, but otherwise, too bad. The only boats being lifted are their own sailboats.

In my opinion, the stagnation in jobs growth is a much bigger problem than the government is prepared to admit, and it has no solutions. (I don;t have any either, but it's not my job to come up with them!)

Is America becoming like the inner city?

Its no longer meant to lift all boats. The rich have captured the system and are manipulating it to help themselves at everyone elses expense.


Lots of news articles searchable from news.google.com showing the phrase 'double dip.'


Just a guess, but might mean something.... ;)

But what we saw was a 10% decline in spot prices in just a few days. Did real demand fall off a cliff or did real supply suddenly jump?

I think you're trying to make sense out of a groupthink type situation. Ever since the 08 debacle the various investments such as stocks, commodities and precious metals have been moving together upward and lately downward. It's probably due to a lack of trust in the world economy in which investors are emboldened or shaken by the company of other types of investment all throwing in or pulling out their funds in concert.

Investments often have short periods of retracement. The various markets seem to have restabilized and we can probably expect they will begin building to higher prices next week.

A lot has to do with the expectation of where prices are going. Once the expecetation that something will keep getting priceier its sets up a dynamic for that to continue, until finally it can't keep it up and it crashes. Some of these bubble trends are self-reinforcing, rising real estate prices, means bank lending looks more secure, the co-lateral is going up in value, so the banks lend lend lend to anyone with a pulse, and that creates new demand, sustaining the price rise. Eventually gravity reasserts itself.

The proximate cause of the current commodities correction was a poor economic report. That got all the commodity momentum players worried, and they srarted dumping stuff.

Agreed. Markets always test bottoms. They also note when, all those stop loss orders kick in and when there are too many longs or shorts in the market. We used to call it skinning the rabbits. Normal trading patterns in my view.

Give it a month.

Although there are signs that the bigger banks are starting to get it, they are now approaching the same status as the soon-defunct EIA: good for stats, but useless forecasts.

These people still almost universially reject Peak Oil. Many anticipated gas prices to go up around $4.50 this summer a few mere weeks ago and are now going into a complete reversal.

The same was true when it came to the initial forecasts when it came to oil demand, which I just laughed at. Oil came above triple digit levels even before Libya, a fact that is often convenient to forget now. In this area, however, they seem to have taken to their senses and stuck with their high (revised) estimates not only for this year but for next too.

The short fluctuations are quite irrelevant in the end. The long term trend is undeniable: just listen to the absolute despair that is coming out of Fatih Birol increasingly by the day.

The man's starting to sound like some of the more well known doomers here in the comment's section.

J.P. Morgan now joins Goldman in saying the current drop is a blip.

Goldman sees new oil rally; JP Morgan ups forecast

LONDON/NEW YORK: Goldman Sachs , which in April predicted this week's major correction in oil prices, said on Friday that oil could surpass its recent highs by 2012 as global oil supplies continue to tighten.

The Wall Street bank, seen as one of the most influential in commodity markets, said it did not rule out a further short-term fall after Thursday's near record drop, especially if economic data continued to disappoint.

But the bank reaffirmed its traditional long-term bullish view of oil, helping crude to pare some of its earlier heavy losses on Friday. And it wasn't alone: JP Morgan took the bold step of raising its oil price forecasts for this year by $10, becoming the most bullish of 27 forecasts in a Reuters poll.

But, as you say, I consider the day to day movements as relatively unimportant. Let's see what happens the rest of the June front month (we still have almost two weeks left).

Goldman must be investing in oil...


If you check oilprices at the "1Y" resolution, you will see how the price follows a pattern of a series of road bumps. Or if you so want, have regular glitches. These comeso regulary that a child could predict the next one just by extending the graph. I have used the method for the last year and never been wrong. "Oh, glitch time again" I say, and then the price drops for a short while, soon to return to normal. I have no clue what causes it. Maybe some psychological effect on the buyers side? Or some guy out there has a very good investment strategy going on?

I think the glitches are when investors in a herd mentality take their money out sometimes. However, the price stays within a range because the demand provides a floor. The price range I have learned to use for oil is $10. It has only fallen out of this range two times in the past 4 years -- during the price collapse of 2008 and this past week. If demand was strong I think it would have provided a floor for Brent at $115 but it didn't.

From the link up top on off grid:

She analyzes their actions honestly and generously. Eliot, eager to spread his gardening expertise, possessed “supernatural energy” that was hard to match. But his guru status put him at odds with his wife and the privacy she craved. Sue, exhausted from child rearing and manual labor, crumbled. Coleman remembers “a screaming in my heart” as meals became silent and her parents’ marriage dissolved.

The difficulty of country life is an issue I have often posted about (on other forums) for those considering such a move. Very few of the relationships the I have observed over the past 37 years here in the boondocks have survived. There are a core of us who are still married after 30 or more years and, in my case, 50 years but the majority have failed.

Part of it is differing expectations and part of it is the reality that lots of things that are easy in suburban or urban areas are damn hard here. For example, we expect to get snowed in for at least a week each year (the longest was three weeks). We expect the power to fail many times during the winter. Or, having to spend an hour a day trucking the kids back and forth to the school bus stop and on and on.

Yet, for me, I can't imagine myself doing anything else. In many ways I would find that my life had no purpose if I had no challenges and "real" work to do.


Building our Passive Solar house in the White Mts of Maine preceded my parents' divorce by about 8 years, tho' the exact causes would be wrong to pin to those stresses alone.

My wife and I are working many of the same angles that my folks did, whether it's healthy foods, early potty training, avoiding industrial toxins, exiling ourselves from a vast majority of 'Popular Culture' (read, TV and Sugar).. these fairly mild-seeming positions already put stress on us as we try to find 'better ways to live' and are seeing what actions have precious little or no common support from friends/neighbors who haven't necessarily taken on the same dragons to fight. It adds a lot of pressure and frustration to a relationship, and even slight differences in a couple's views can then be magnified into seeming much greater, as the need for allies and confirmation is so scarce.

When I bitched about how Manipulative, Cute and Precious Whole Foods seems to me, to my Mom (now Deceased), she reminded me of the hoops she had gone through just to GET Whole Wheat Flour at all in 1970.

It can be very hard to try to reinvent 'How to Live', when you find the culture you've been raised in seems to have so much of it wrong. It really is a form of Pioneering, and it claims many worthy souls in the process. .. And building that house was one of the greatest experiences of our family together.

Hi Bob,

There are also many other factors that add stress. First, the new person who was big time in the city is now just one other guy in jeans and no one cares about his prior status. Second, the old male/female relationships don't work because one person can't come close to doing it all so "men's work" and "women's work" no longer exist. Third, partners spend lots and lots of time together but it means there are few times for "aloneness." It's not like when people come home from work and spend a few evening hours together and then go their separate ways in the morning. Fourth, for women especially, it is hard to establish new, solid relationships with others since there are few regular contacts. There's more but that's enough.


Driving and waving to people in every other car. Stars at night. Plow blade on the truck in winter. Real work, like fetching water and wood, feels real, feels good. Animal familiars waiting, wheeling in the sky, playing just outside in the morning and returning all through the day.

Finding intellectual companionship is easier inside a dense population. In close rural community, the alcoholics' wakes of tragedies are undiluted by anonymity.

Finding intellectual companionship is easier inside a dense population.

Since I'm in the boondocks, this is one reason two other buddies and I have a long lunch (1 1/2-2 hours) every other week (weather permitting) at the town park. It is crucially important to be able to discuss serious topics with others who can intellectually understand what is being said...even if they disagree although we seldom do.

In my case, I used to prepare a little "handout" of links I was interested in for my buddies because I couldn't print everything out for them. My "Update" has now grown and goes to several TODers along with other friends. And, interestingly, through this, I've made friends with people outside my area (and, in fact, other countries) that I would have never known without the Update.

With the Internet, people now can find fellowship even when it is difficult locally. Finally, a word about forums...they have a lot to be said for them but it is often difficult to actually make friends.


PS to Leanan - My stuff is small potatoes compared to what you do several times a week. But, of course, you don't have a section about the wild turkeys around your house.

My recollection of farm life is that we only saw people outside the family on a couple of days per week, other than the kids in the local one-room school house. Even today, I have a relatively low need to socialize with people face-to-face, compared with my wife, who grew up in a major city.

However, urbanites also may tend to have many acquaintences, but few friends.

The major socializers seem to be the suburbanites.

Then again, maybe I do. ;-)

I'm glad you have a mailing list, and I agree about forums. They're good for a lot of things, but friendship really isn't one of them, unless it leads you to make more personal connections.

Good one! You got me.


I'll get in trouble if I start using words like friends, I suppose, but I do really treasure the 'Generous Intellectual Companionship' I get with many of the contacts here.

I was never a good pen pal.. but this seems to be an excellent substitute for it, and I'm not willing to write it off as mere entertainment, as some will. I believe this kind of contact is useful and productive.

I'm going back to 20 acres and the well, but I'm comfortable with that.
A mountain lion killed both goats last time, but currently the horses and lamas have had no problems.
The turkeys better watch out--

But I'm not in Northern Mendo like Todd, but down in crowed Valley of The Moon, with the wine and chefs who are rock stars.

Are you still meeting in the park in Laytonville?

Ya, we're still meeting at Harwood Park in Laytonville every other Tuesday. I don't know if any other north coast people would be interested in it but we meet from 11:30AM to about 1:30-2:00PM. If any one is interested, contact me at detz2 at willitsonline dot com and I'll tell you more about it. Be forewarned, we are doomers and preppers. There is no agenda or formal stuff. We talk about everything from energy to government to food storage.

We brown bag lunch.


I think we're lucky in Europe where the village has been the bedrock of society for thousands of years. The men get on with their work in and around the village, while the women work and interact within the village. Socially, the village is organised by the women and in our village we even have a matriarchal figure.

Villages here in France tend to be within walking distance of each other forming a network throughout the countryside. Most villages will be within 10-20 miles from a town or city. This allows women to establish their own networks with regular contact with each other.

Unfortunately the current economic regime is wrecking this old tried and trusted way of living.

My 83-year-old mother tells stories about when electricity arrived in the small Iowa town where she lived. She says that it is almost impossible to overestimate the qualitative difference that rural electrification made in women's lives.

When power came down my Nova Scotia road in 1952 my neighbours rushed to buy a wringer washing machine. Next came a refrigerator, when finances permitted. And life was then so good . . . The men hardly noticed.

I just finished reading a 193[6] publication on rural electrification in Nova Scotia.

See: http://collections.mun.ca/cdm-stfx/document.php?CISOROOT=/stfx_coady&CIS...

Pages 5 ff. are a personal account of how the arrival of electricity in Benson, Vermont radically improved one farmer's life.

BTW, 5-cents per kWh in 193[6] is roughly equal to 80-cents in 2011 dollars! People who complain about the high cost of electricity don't know how good they have it.


[Edited to correct publication date and currency conversion.]

Nye,David E. 1990 Electrifying America: Social Meanings of a New Technology, 1880-1940. Cambridge, MA: MIT Press. A terrific read.

Thanks, LO, for the recommendation. Looking forward to obtaining a copy.


electricity arrived in the small Iowa town where she lived. She says that it is almost impossible to overestimate the qualitative difference

Not at all.

If one looks at the advertisements of the "the day" - buy a refigerator/clothes washing machine and then apply 2 filters:

1) What are the expenses for 'the really poor' or the post-hurricane/post tornado (Things like Laundromats or buying food one meal at a time)
2) Raw Wattage.
3) Try doing the tasks of "today" without the electrical power.

#2 - you need to apply additional filters. Like how building a home in the 1890's was a 30+ man crew, some of 'em were sharpening the handsaws midday at lunch VS the 2-5 man crew with power tools who can do the same job. Or how a human using the lower body has a 100-200 watt output (upper 50-90 watts) and then compare to 220 3 phase power.

still married after 30 or more years and, in my case, 50 years

Wow. I am in awe. My grandparents made it to 50, but that is so incredibly rare anymore. Because it is so easy to get out, I think.

Not that that is necessarily a bad thing- who wants to be trapped with the wrong person forever? But I think those days of relatively painless escape may be coming to an end. In 2009 I was seeing articles in the MSM about people staying together solely because they couldn't afford to leave.

You reveal something about yourself with that bit of information. That is, either you, or your wife, or both, are very adaptable. And one or both of you are very "giving" people, the human equivalent of battery chargers.

When people don't have these things, then when a crisis occurs, the person has to use up all their internal resources just to keep their own self going, and there is nothing left over to be supportive of someone else. Since relationships are all about being mutually supportive of each other, the crisis causes the relationship to crumble.

Sometimes a relationship can be very one-sided, and then the collapse happens when the one doing all the giving and supporting hits a wall for whatever reason. The non-supportive one can't handle it when the giver suddenly stops providing the accustomed support.

A relationship that lasts so long speaks volumes. Congratulations.

Thank you VT. It's hard even for us to believe it's been that long. I think in our minds we are still the kids in college sitting on the Quad where I'm trying to explain "valences" to her for her physical science course. I was a chemistry major.


Nabucco start delayed as North Stream moves ahead

The international consortium tasked with constructing a gas pipeline from the Caspian region, across Turkish territory and all the way to Austria, has lost another step in the race to deliver fuel for European homes.

Nabucco Gas Pipeline International announced it had to push back the start of construction on its 7.9 billion-euro project to carry Caspian natural gas to Europe to 2013 and the start of operations to 2017.

The firms behind the two North Stream gas pipelines, which will pump gas from Russia to Germany by way of the Baltic Sea, bypassing eastern Europe, meanwhile said they have completed construction on the first pipeline.

Nabucco is a dead dodo.They cannot tie up gas suppliers who are all in Russia's backyard.A few who dare to break are not enough.The only way to fill the pipeline is with gas from Iran but that is a "no go" area for EU.However the politicians will keep pushing it for show.Intelligent one's like Berloscuni pay lip service to the project and then sign up with Putin to use gas from the south stream

Re: Japan anti-nuclear protesters rally after PM call to close plant, up top:

According to The Nikkei [sub], “chronic power supply troubles threaten Toyota Motor Corp. and the other manufacturers that call the region home. At this point, Toyota has no idea what effect shutting down Hamaoka will have on its operations, a person familiar with the automaker said Friday.”

The plant’s owner, Chubu Electric, will build a seawall of at least 12 meters (39 feet) at Hamaoka. Construction will take until the end of fiscal 2013, about three years.

Currently, 32 of Japan’s 54 nuclear reactors are down. 11 shut down after the March 11 earthquake and tsunami. 21 had been down for inspections. It is now more than likely that these power plants will be down for years.


If the above info is correct and 32 of the 54 reactors are down then what about the Japanese factories.How are they going to produce anything at all?Is this the end of Japan as an industrial society since they have no other energy sources?Any answers?

They have fossil fuel plants as well as nuclear. Electrical generation capacity is expected to be about 70% of previously. Industrial production may be off 25%.

In the US this would be quite disruptive, as stronger companies ganged up to kill off the weak. In Japan, probably a lot less so.

In the US this would be quite disruptive, as stronger companies ganged up to kill off the weak. In Japan, probably a lot less so.


Ok - show why.

Show why Japan is immune to the thinking of "economists".

My recollection is that early on there were news stories in the Japanese press quoting managers from the major auto manufacturers to the effect that they were not spending time on moving purchases to second suppliers, but that instead they were focusing on assisting their existing suppliers to recover and restart.

And how does this "recollection" translate to your claim?

The BP Statistical Review of World Energy shows that oil makes a much bigger contribution to Japanese energy than nuclear power. Interestingly the same is true of coal, and even natural gas. Remarkable when you consider that Japanese production of oil, coal and gas is negligible.

So the nuclear reactors weren't doing much, even before they got wrecked.

The IEA's Oil Market Report (April edition, page 6) gives the latest available figure for Japanese oil consumption as 5.07 million bpd. Again remarkable - it means the Japanese use more than twice as much oil per capita as we do here in the UK. How do they manage to do that??

Are you implying they burn oil for electricity?My interest is in electricity generation that is needed to run machines,plants.Never heard about thermal plants in Japan.I am aware that Japan has no FF resources of its own so from where do they get the coal.The gas I know comes from Qatar.

Oil supplied a peak of 74% of electricity in 1973 (http://www.uow.edu.au/~sharonb/japan.html), and I expect those old oil-fired generators have been taken out of mothballs, regardless of expense, to make up for the loss of the reactors.

The coal probably comes from Indonesia and Australia.

The EIA data sheet on Japan answers most of your questions. Electricity is about 28% coal, 26% natural gas, 25% nuclear, 10% oil, 8% hydro, then small amounts from other sources. Australia is the principle supplier of coal. LNG comes from a variety of sources, with Malaysia, Australia, and Indonesia providing almost 60% (Qatar is about 11%).

Thanks for the info .

World Bank data showed Japan consuming 410 kb/d for power generation in 2006, slightly behind Saudi Arabia, and slightly ahead of the US.

The Hamaoka plant is not only on a fault that gets very regular earthquakes, but is situated right between Tokyo and Nagoya, so if something happened you'd probably contaminate one or the other pretty badly. Basically, it's in a very dangerous spot and is probably the highest priority to shut down - all the other nukes are built in the sticks, across mountains from the Tokaido belt which has most of Japan's industry and population. This one is the only one IN the Tokaido belt.

Public opinion in Japan is still pro-nuke, but just barely, and industry needs power. Shutting down Hamaoka, despite the obvious wisdom, can't be done easily. The power company obviously doesn't want to shut the plant down, and as of now the government can't actually force them. I think Kan just doesn't want to come out and say, "look, if anything happened to THIS plant, it would truly ruin Japan as we know it", because it would cast a shadow on the entire nuclear industry and cause a public fight between industry and government in a country where public fights of that sort are avoided at all costs.

Just returned from the annual Offshore Technology Conference in Houston. About 65,000 + attendees.

Listened to an always entertaining Michael Economides (Energy Tribune) give his standard talk on Energy Geopolitics. Those on TOD who have commented on Economides always dismiss his message because he is not a believer in any near term Peak Oil. However his message is much more subtle than just "geologic" peak oil. As a consultant to Chinese, Russian, and many other governments (and companies) on oil he has a different perspective - namely that we are facing a permanent energy crunch simply because so much of the remaining reserves of conventional crude are being managed by clueless and power hungry political hacks.

He makes his points with rather hysterical political cartoons of the various countries involved. He does this despite his professional resume as a long time professor in Petroleum Engineering with over 300 peer reviewed papers in oil and gas technology. He apparently believes the message gets across better with humor. And he had the audience constantly laughing.

Bottom line - without ever mentioning peak oil he continues to predict that geopolitical constraints will ensure a permanent condition of high and fluctuating oil (and eventually natural gas) prices for the future. He predicted +$100 oil for 2011 two years ago. I heard that talk. He continues to say that only one more upheaval in the Middle Est could catapult us to $200 oil. Michael still firmly believes there is enough economically recoverable oil in the world to delay peak oil for 40 more years - but that mismanagement by the national companies will ensure that will not happen. Thus he seems to be predicting peak oil - but not for geologic reasons.

Whether you agree with him or not - he is entertaining.

Does anybody know if Saudi Arabia sells all its oil at spot price or if it uses long term contracts to fix the sale price and make budgeting more predictable?

I don't know the numbers, but I know they sell a lot of their oil on contracts, off the spot market. They are seemingly always announcing that they will (or will not) be delivering the full amount of contracted oil to East Asian customers. And very recently, they tried to get some customers who bought extra light grades to instead take delivery of Arab Light (or worse) at a discount so as to free up some that could be used to produce the faux-Libyan blend (that nobody wanted anyway).

RE: "Libya: Gaddafi forces bomb oil storage tanks in Misrata."

According to C. J. Chivers (NYT), it was a Grad rocket barrage, not an incendiary bombardment from a converted crop dusting plane, that set fire to the oil storage tanks.

This is a picture of part of one of the tail sections of a Grad-rocket variant that landed early Saturday at the Misurata fuel terminal, part of a barrage that set three fuel storage tanks ablaze...

Related story: Qaddafi forces are using "a Chinese-made variant of a Grad rocket that opens in flight and drops mines to the ground below..."

The Type 84 Model A is fired by a mobile multiple-rocket launcher system that can carry up to 24 rockets containing 8 mines each. The system’s range is slightly more than four miles, according to a publication of Jane’s Information Group.


RE: Libya: Gaddafi forces 'bomb oil storage tanks in Misrata'

Have you noticed how the original article has changed? The exerpt you quoted...

Rebels in Libya say Colonel Gaddafi's planes have bombed oil storage tanks in Misrata. Channel 4 News Chief Correspondent Alex Thomson says the city's port is the crucible of this conflict.

For sheer audacity in the teeth of NATO's "no-fly zone", it takes some beating.

...now reads,

Rebels in Libya say Colonel Gaddafi's planes have bombed oil storage tanks in Misrata. But Channel 4 News Chief Correspondent Alex Thomson says they may not be accurate reports.

For sheer audacity in the teeth of NATO's "no-fly zone", it would have taken some beating.

Thomson goes on to blame "rumour-addicted rebels" for claiming that the oil tanks were bombed by crop dusters. But he never really acknowledges the original version of his article.

Oddly, when I tried save the original article as an mht or html file, the edited version was saved.

Link to the original version (jpg - click to enlarge):

Edit: Fixed typo. Deleted criticism of Thomson's sourcing. Added link.

Does Namibia have any significant oil reserves?

I wondered the other day how Africa and South America likely fit together in the past, and wondered if there might be oil-bearing formations off the coast of Namibia similar to what is being discovered off the coast of Brazil.

I did not see Namibia listed in the Energy Export Data browser.

I did a quick Google search for Namibia +oil, and found a few hits, such as this one:


How well-explored and characterized is the interior and all the continental shelves around Africa?

Anecdotal, but every enemployed rig worker in Phuket just got job offers from Namibia or Angola. The local bars are empty of all their patrons. Nothing for a year, now the dregs are getting calls.

Bar girls getting desperate.

""Bar girls getting desperate.""

Nothing like the Basics of Supply and Demand to work the prices up and down.

So to speak.....Same with Oil, same with Women....

But where are the Speculators?? I wonder..

The Martian

H – Don’t know much about the interior but the near coast areas along west Africa have been worked pretty well for the last 10 years. Check HO’s post a short while back…covers the production rates in detail.

Yep…as simple as it appears Africa and S. America were once connected. But once sea floor spreading split them apart they developed their oil petroleum generation histories independently. The oil fields developed long after the continents split. But there are similarities (like water depth)but the big difference is the nature of the reservoir rock and the reservoir extents. The African fields tend to be sands deposited in rather limited areas. Big fields for sure but some what limited and scattered. The Bz fields are much higher quality rocks and more concentrated. Individual fields tend to be much large.

Both areas have to deal with the great water depths. Oddly the size of the Bz adds a nice problem: the fields are so large and have much higher flow rate potential that development programs will be more complicated, more expensive and take longer.

Waverider and RockMan,

Thank you for the above-ground and below-ground info!

Regrding the Yemeni rebels cuting of an oilpipeline; does anyone have a guess on how much oil has been taken off markets from these MENA unrests?

Yemen has been a pretty marginal producer. Their total production is less than 300K bpd, so I doubt the drop from this has had much if any effect on world markets.

The yemeni oilproduction is mainly a concern for them self. They producelittle, and like with their water they are depleting the wells in an alarming rate. Few people are worried about yemeni contribution to oil supplies, but many is about theyr contribution to public unrest and its geopolitical consequences. As am I.

What I wondered was the total MENA production loss due to these issues.

I've been thinking about utility scale storage, and I'm wondering about the cost of producing, storing and producing power from hydrogen.

First, the following gives a target electrolyzer capital cost of producing hydrogen of $300 per kilowatt for a relatively small system (250kg/day). What would be the likely cost per watt for a large system (100,000 kg/day) 20 years from now??

"$2.50/kg (electrolyzer capital cost of $300/kWe for 250 kg/day at 5,000 psi with 73% system efficiency)."


Consider producing methanol with plenty of electricity instead of hydrogen. Liquid fuel is what we are most immediately going to be very short of. Fortunately, nuclear electricity is a lot safer now than it was back when the Fukishima reactors were being being designed and built. For bigtime replacement of fossil fuels, I think nuclear will be both essential and viable. As far as storing wastes goes, I still think Yucca Mountain was a good choice--at least as good a choice as can be found in the continental U.S.

Ha! Nick loves his hydrogen, almost as much as the EREV

The one advantage that hydrogen electrolysis has, is that it is not a thermochemical process, and you can literally turn it on and off whenever the wind blows. Making methanol is not so simple - it is better run as a steady process - which defeats the purpose of intermittent storage. IF your objective is just to make and sell methanol, you could conceivably have a system that only operated on cheap night time electricity, but your return on capital is halved, or worse, as the plant only operates 8hrs a day.

The real challenge for any storage technology is that it spends a lot of time sitting there, storing a low value product - so your inventory turnover is quite low. The storage needs to be very cheap, and have a good round trip efficiency. It is easy to get one or the other, but not both, in an affordable package.

If we are all willing to accept 20c+ electricity, it is a different story, of course. But then, you might just as well build lots of nukes and dump the steam at off peak times.

Yes, I think we should build a lot of nukes and just dump the steam when it isn't needed. Note that France gets the great majority of its electricity from nukes. Are the French smarter than Americans? Maybe they are, at least when it comes to nuclear energy. It took France only a dozen years to go nuclear; it would take longer for the U.S. to do so. If the lights are still going to be on in a hundred years, my guess is that most of the electricity will be nuclear generated. There is plenty of uranium and even more thorium; no need to worry about running out of fuel, plus eventually we can perfect fast breeder reactors for electricity.

Are the French smarter than Americans?

No, just more desperate to catch up in the nuclear arms race, and more willing to throw money at it. The very tight link between nuclear power and weapons makes it hard for me to get enthusiastic about it.

Well, keep in mind that the French realised they have no coal, no oil, and (virtually) no hydro. Nuke is not a bad option under that scenario, especially when you have NATO to protect you. They were able to build many nukes to a standardised design (something the US has so far not really done), and then minimise the cost of importing fuel - as uranium is relatively cheap for the energy provided.

Had weapons not been a factor they might well have tried thorium reactors, but sadly, weapons were a factor.

They may not be smarter than Americans but they sure are more arrogant and annoying - and that's no mean feat!

Try as I might, I can't disagree...

"I think we should build a lot of nukes and just dump the steam when it isn't needed."

Why dump the steam? If you are building new reactors then you can design them to follow loads. The reason they tend to run at full capacity is economic, not technical.

Nick loves his hydrogen

?? I think this is only the second time I've brought it up...I'm not wedded to it, if you think something else is better - what would you suggest, and do you have some preliminary cost estimates?

The storage needs to be very cheap, and have a good round trip efficiency.

For seasonal storage, I suspect low cost of storage is much more important than a good round trip efficiency: the cost of storage can rise very, very quickly for 20 days of power that's only used once per year, but the cost of the overall generation capacity power needed would rise much more slowly.

So...got some cost numbers?

Maybe I am wrong but I thought we had done a discussion about hydrogen some time ago - maybe on Robert Rapier's blog when you posted there for a while (and you are missed). If not, I apologise for being half wrong - you do still love the EREV's, right?

I think it's hard to choose between low cost and round trip efficiency - you have to divide cost by efficiency, so a low efficiency = higher cost.

To save something for your 20 days - that is a challenge. If you can rely on getting 50c/kWh for those days, then all things are in play, but the lowest cost, lowest risk will be NG, with a bonus that it is profitable the rest of the time too. Otherwise, yes pumped storage is about it. You have potential self discharge problems with batteries, or any kind of thermal storage.

I don't have any numbers though - pumped storage is highly geography dependent and all battery systems are just too expensive, IMO.

I think a better way is to find something useful to do with the electricity when it is really cheap - there are more options there as we have lots more ways of using the stuff than producing and storing it.

I thought we had done a discussion about hydrogen some time ago - maybe on Robert Rapier's blog

I think that must have been someone else - hydrogen has almost exclusively been discussed for use in land transportation, and that has always seemed un-useful to me (in water transportation, I think you might have something...).

I think it's hard to choose between low cost and round trip efficiency - you have to divide cost by efficiency, so a low efficiency = higher cost.

When you're talking about seasonal storage of free surplus power, the cost of storage of the output begins to dominate the overall system cost, and the cost of the input (or waste of the input) begins to be less important. The longer the length of the storage cycle, the smaller is the relative size of the surplus power needed, and the larger the cost of the storage.

Does that make sense?

the lowest cost, lowest risk will be NG

Yes, for the foreseeable future. Heck, I'm looking past that - for some reason, people want reassurance about what we're going to do after FF is completely gone, despite the fact that it's well beyond the horizon of technological forecasting.

The best bet appears to me something that has very low costs of storage, like hydrogen stored in geological formation - CAES on steroids.

Hydrogen production cost $3 per kg(gasoline gallon equivalent) for hydrogen from NG and about $3-5 per kg delivery.

Certainly hydrogen from NG makes sense, and transportation would be needed for some applications, but that's not what I'm pursuing.

I'm asking about hydrogen from electrolysis, stored in a central site.

Certainly hydrogen from NG makes sense

Are you kidding me? How can longtime TODers like yourself even come up with this statement?
If you already have NG - just fill up and go.... Such tech_on_wheels is already around, so why waste energy - precious energy - via a detour to hydrogen gobbling EROEI ?


You didn't take the time to read carefully. I'm not talking about hydrogen for transportation, I'm talking about central utility storage. And, I'm not talking about the short term, I'm talking about the distant future, when we're not using fossil fuels at all.

... when we're not using fossil fuels at all.

Ohh- but you have got access to NG in 'that future'?
Whatever you say in this reply makes me even more puzzled- ' central utility storage' - wot ?? If you have NG use it as is, and I'm talking about today AND in a distant future .... a future where everyone understand that hydrogen is NOT energy.. Period!

No, I'm not assuming we'd have NG at that point.

Yes, I think we're all clear that H2 is a storage medium, and not a primary source of energy. That's the application I'm analyzing: use of H2 as a form of storage.

Gimmi a break Nick - you are a moving target - did you know that?

When - exactly when - does YOUR statement: "Certainly hydrogen from NG makes sense" apply ?(dates and years plz)

NG is currently the primary source of H2 for things like ammonia fertilizer production. That's more cost effective right now than H2 from electrolysis. That's all I was saying.

Majorian provided cost numbers for H2 from NG, and I was simply replying that I was looking for cost numbers for H2 from electrolysis - something that doesn't make sense right now, but may in the distant future.

Nice try huh! "That's all I was saying" You never wrote about H2 for fertilizers, so quit the cra%¤¤#").

Your initial approach was to store hydrogen for energy - http://www.theoildrum.com/node/7886#comment-800985

H2 demanded for ammonia-production is a completely different thing and has nothing to do with your discussion. "ammonia and fertilizer " occurs only in your reply here.Enough

Frankly spoken- when reading your replies to mine - you better work on your short-term memory.


Why so angry?

For what it's worth, I've been quite consistent here.

Your initial approach was to store hydrogen for energy

Yes. Majorian gave me cost estimates for H2 from NG, and I politely told him that that wasn't what I needed.

"H2 demanded for ammonia-production is a completely different thing and has nothing to do with your discussion.".


Well - since I'm not psychic I never actually got your gist (the fertilizer gist) in your reply to Majorian- so I see fit an apology hereby sent with flowers your way.... due to my 'slamming with the doors'. I'm namely getting into the red square whenever somone proposes to make H2 from NG (as you just have experienced)
OTOH you could have come across much clearer as to what you actually meant by "Certainly hydrogen from NG makes sense", given my reply, but that is another story.

As for your dream about H2 production/storage from electrolysis - I go mute!
***) I have also been consistent :-)

It depends on how much you pay for electricity.
Electrolysis of hydrogen is about 53.4 kwh per kg due to inefficiencies.

At 10 cents a kwh of grid electricity that $5.34 per kg(gallon equivalent).

I've heard that wind farm electricity goes for about 8 cents per kwh so that's about $4.2 per kg.


Now what are you going to do with it, turn it back into electricity?

That's what fuel cells do. A solid oxide fuel cell is 60% efficient so converting back to electricity would be 7.12 cents per kwh.

Actually it might sense to pipe hydrogen rather than run electric wires all over the place.
A 36" liquid hydrogen pipeline, 100 tons per hour would represent 3.7 GWh of electricity per hour.
A 450kv HVDC would represent 2 GWh per hour.



I'm thinking about almost-free surplus wind power.

I'm looking for capital costs for electrolysis, storage and generation.

Yes, right about now there is lots of stranded wind in the PNW

From an April 26 press release from the Bonneville Power Administration (emphasis mine)

Since spring runoff began April 1, BPA has:
- Adjusted non-essential maintenance on transmission lines so that maximum capacity is available to carry large amounts of power to consumers.
- Deferred non-essential hydro generation outages and maintenance activities.
- Executed contracts with other power producers to sell low-cost federal hydroelectric power.
- Implemented spill at federal hydro projects within prevailing water quality standards.
- Operated Grand Coulee Dam inefficiently at night when power consumption is lowest.
- Asked Energy Northwest to begin a refueling outage of Columbia Generating Station – the region’s only nuclear plant – several days earlier than planned, reducing the generation feeding BPA’s transmission system by about 1,000 megawatts.
- Sold significant amounts of energy at zero cost

And with BPA having over 3000MW of wind coming online in the next few years, I expect lots more free electricity, at certain times.

But there's a catch - the power surplus is in the east of the state(s), and the transmission out of there, in all directions, is maxed out. so you have to do your H2 there, or pipe it somewhere. I have no idea if there is any NG storage anywhere near there.

Surely the sensible thing is to "free" that power by building transmission to places hungry for power imports, like California.

Surely that is the sensible thing...

Now you just have to pony up the money to do it, and go though California's insane approvals system, fight off lawsuits from the Sierra Club, and, likely, southern California generators who will say you are unfair competition, then justify to the CPUC why California needs the line - which is very different from whether you need the line.

And if you still have any money left after five years of that, then maybe you can build it - though by then, BPA may have built a line to Denver instead (which is closer than LA!)

Finally, the capacity factor on your line will be quite low, as this excess only occurs for a few months a year. The rest of the time, it will only be used when the wind is blowing, and so you'll be at about 40% capacity.

Sound like a "sensible" investment?

Sure. Transmission isn't that expensive, so it would be worth it.

The NIMBY would be annoying, but that's life.

Well, before you get out your chequebook, have a look at this report from the California Energy Commission;

They have on the plans, an HVDC line from BC through eastern WA and OR to Sacramento. (page 1-18)
Cost is just $3.9bn
On the "environmental score" it ranked the worst of all the different transmission projects considered - so I'm sure the lawyers are salivating at this prospect - having already forced the cancellation of another northern Ca line.

None of the Ca utils, nor Bc Hydro, nor BPA, want to build this - they all want someone else to build it, and they will just use it. sounds like a business opportunity at first, but I think it would be a minefield. Sort of thing that needs a state or federal mandate to enact eminent domain where necessary.

I think it is only when forced with a decision of new line or lights out that anything will happen, and even then it will be the same story as with water - why should the North have to suffer inconvenience for the benefit of the South? Sometimes I think Ca will split up before the USA does!

As a by product, deliver water at the same time.


Consider producing methanol with plenty of electricity instead of hydrogen.

That's not a bad idea, but that requires a source of carbon. The carbon can be pulled from the atmosphere, but that I suspect that's unrealistically capital intensive compared to alternatives like GTL; or from a flue stack, but that requires colocation with a FF power plant; or from biomass or fossil fuels, but that's kind of indirect: better to simply synthesize liquid fuels directly from FF, very likely from natural gas (aka GTL).

So, I'm thinking about a different problem: storage as one solution to the long-term problem of dealing with seasonal intermittency of wind power.

For bigtime replacement of fossil fuels, I think nuclear will be both essential and viable.

Could be...but I'm choosing to analyze wind power for the moment.

Wind and nuclear are complementary. For baseload, nuclear wins.

We won't know that until we calculate the cost of dealing with wind's intermittency.

Got numbers on low-cost long-term electrical storage (probably hydrogen)?

To the best of my knowledge, pumped storage is as good as it gets for storing electricity.

I still like methanol; there is plenty of carbon in the atmosphere, and if electricity is cheap enough the methanol ought to be pretty cheap too. No, I do not have numbers, though I've seen some during the years on TOD.

pumped storage is as good as it gets for storing electricity.

It's very good, but it's high capital cost needs to be amortized over a lot of cycles: several hundred per year, not once per year for seasonal storage.

Hydrogen or methanol have much lower storage costs.

there is plenty of carbon in the atmosphere

True, but the concentration is pretty low - that raises the cost of extraction. That will make it more expensive than either pure hydrogen or GTL, I'm pretty sure, though I welcome numbers to the contrary.

if electricity is cheap enough the methanol ought to be pretty cheap too.

But not as cheap as GTL.

Actually, I'm thinking in terms of almost free electricity, but that's in the very long-term: at least 50 years out. By then, transportation is likely to be 90% electrified.

Well, if you want a low upfront cost, energy storage system that collects energy all year round, using CO2 from the atmosphere, that you can then use to sell power for 20 days a year, and you have a 50 yr timeframe the decision is easy - you need to plant trees and then use them as fuel for electricity. It will achieve all your goals, with the one caveat of requiring some land.

You can make methanol from wood too, though it is not really worth doing.

I agree - biomass is one of the very best options.

Still, it might not scale up quite to where we want (it will be in demand for a lot of things), so I'm looking at other options as well.

Gee, all these long term options you are planning - are you the Future Planning Agency for the government?

Seriously though, on a long term (years-decades) basis, I will bet biomass stacks up fairly well. Depending on the land/rainfall etc, you can get, and store, on average 4-10 tons/acre/year. For your 20 days per year, that is 0.2-0.5 tons/day, and assuming you just want the daytime peak hours (12hrs) your power output could be 40-100kW. at 20c/kWh, you would have $2-5k per year - a far better return per acre than any normal farm!

The energy density, at 1kWhe/kg, and 500kWhe/cu.m is better than anything except a solid or liquid fuel (or high pressure H2, but that has storage issues)

I think to electrolyse the hydrogen is actually cheap - you can build your own cell, after all, but compressing and storing it is a whole different matter. Even if the electricity is free, I doubt it would be cheaper than MajorIan's numbers, and you still have to store it, and make it back into electricity. A stationary H2 fuel cell can do that, and maybe in your future it will be cheaper than an ICE to do the same - but not today.

Probably better to look for other ways to use the H2 than storing directly.

Here is one study about making methanol from CO2(from flue gas) and H2 - they come up with just over 2kWh of electricity to make 1kWh of methanol - which is actually not bad, in my opinion. The electrolysis and synthesis part is 1.5kWh/kWh


There are 16.4kwh in a gallon of methanol, so you would need about 30kWh to make it. Methanol is currently $1.28/gal
( http://www.methanex.com/products/documents/MxAvgPrice_April272011.pdf )

So if your electricity is free/very cheap, you could do it, but I have no idea on the equipment cost -except that it would be expensive.

You could do short term H2 storage, maybe even at low pressure, under water, until you have enough to do a batch of methanol, but you still need to supply CO2.
You could get the CO2 from gasifying biomass (CH2O), and then you just need 2g H2 per 30g biomass, or 66kgH2 per ton biomass, to get a maximum of probably 2/3 ton methanol. But that is worth about $260 - not bad.

If you can get the electricity for free, the CO2 for free, and the equipment cheap - I'd say you are onto something. And remember me if it works out :-)

are you the Future Planning Agency for the government?

just a little, somewhat indirectly...

Depending on the land/rainfall etc, you can get, and store, on average 4-10 tons/acre/year. For your 20 days per year, that is 0.2-0.5 tons/day, and assuming you just want the daytime peak hours (12hrs) your power output could be 40-100kW. at 20c/kWh, you would have $2-5k per year - a far better return per acre than any normal farm

That's $500/ton, 2,500 kWh/ton, and about 1.25 kWh/pound, right? How much energy per pound, and what conversion efficiency are you assuming? Standard conversion charts say 8,600 btu/pound for hardwood, and 30% conversion efficiency and 3,414 btu/kWh would get you about .75 kWh/pound.

I guess the bigger question is the "average 4-10 tons/acre/year". I wonder if we could narrow that down more?

$2-5k per year - a far better return per acre than any normal farm!

Seems like normal revenue per acre might be $500-$1000 per acre. Once again, we are reminded of 1) how heart breakingly difficult farming is, and 2) how energy production can outbid food production.

I think to electrolyse the hydrogen is actually cheap - you can build your own cell, after all, but compressing and storing it is a whole different matter. Even if the electricity is free, I doubt it would be cheaper than MajorIan's numbers, and you still have to store it

I'm thinking that in the far future, when we've stopped using NG, there will be a lot of cheap underground storage available.

A stationary H2 fuel cell can do that, and maybe in your future it will be cheaper than an ICE to do the same - but not today.

Well, it will be more efficient than an ICE, so I think it's fair to assume that the cost of a stationary H2 fuel cell per kW of output would be in the same range. And, that's pretty cheap.

Here is one study about making methanol from CO2(from flue gas)

Thanks - that's interesting for the different question of synthesizing liquid fuels in the short term.

just a little, somewhat indirectly
C'mon, you can't just show a little leg and stop there - what's the story? If you are getting paid for this I want a cut.

How much energy per pound, and what conversion efficiency are you assuming?
I don't use stone age units - I work in metric, and if you are planning for the far future, you should too, as that is what everyone will be using.
A dry ton of wood has about 20GJ/ton, or 5500kWh of gross energy. I am using 40% conversion efficiency - ( gasifier + ICE + ORC bottoming cycle) this is quite high, but you are talking in the future, and for a serious venture, you would set it up for high efficiency.
So one ton = 2200kWh, or if you must go back to stone, 1kWh/lb (dry).

I guess the bigger question is the "average 4-10 tons/acre/year". I wonder if we could narrow that down more?

Sure. Do it on fertile soils, with highly stocked and managed forests, probably eucalyptus, 10yr rotation and reliable rainfall or irrigation and you'll get 10t/ac/yr or better. Use effluent irrigation and you'll really do well. These guys in Australia were able to get 14t/ac/yr in just four years. Since you are doing it in America, probably with union labour, lawyers and other parasitic losses, you would have to scale that back a bit, so 4-10 is about right.

Ordninary, lightly managed forest on ordinary soil and ordinary rain is about 4t/ac/yr. Native forests are often 2t/ac/yr, and mature forests, by definition, are zero (net) t/ac/yr

how energy production can outbid food production.

When a society places more importance on energy, as the US seems to do, than on food, people and health, this should be no surprise to anyone.

there will be a lot of cheap underground storage available.

That may well be true - but you might want to check on the performance of hydrogen in said storage. It is the smallest molecule there is - if it can migrate through, and adsorb into, steel, it can probably do so through rock too, so your recovery % may not be great.

Well, it will be more efficient than an ICE, so I think it's fair to assume that the cost of a stationary H2 fuel cell per kW of output would be in the same range. And, that's pretty cheap.

Well, they aren't more efficient today, and they have actually been around longer than ICE. Best ICE's are 50%+ , best H2 fuel cells are not, though they are much more expensive. An SOFC might actually be better than H2. I would plan for ICE and if fuels are competitive by then, that's a bonus, but don;t bet the farm on it.

that's interesting for the different question of synthesizing liquid fuels in the short term.
It is, but I was thinking for long term - methanol is pretty easy to store for seasonal storage - and very easy to move if the generation place is not the storage place. H2 is much harder to move. If you pipeline it 700 miles, you have used energy equal to the H2.

Brief summary of H2 cost from electrolysis here (2004); they came up with $1.70/kg plus electricity.

what's the story? If you are getting paid for this I want a cut.

I do work like this, but this project is just for me.

stone age units

In N. America, a "ton" is generally a short ton, not a metric ton, right?

you are talking in the future, and for a serious venture, you would set it up for high efficiency.

Probably, but for a seasonal application that will only be used for 20-100 days per year, it seems possible that a lower efficiency would be optimal.

Do it on fertile soils, with highly stocked and managed forests, probably eucalyptus, 10yr rotation and reliable rainfall or irrigation and you'll get 10t/ac/yr or better...Ordninary, lightly managed forest on ordinary soil and ordinary rain is about 4t/ac/yr


When a society places more importance on energy, as the US seems to do

I haven't seen any evidence that the US is below average on this kind of score. I think we often judge it more harshly than is realistic because US rhetoric sets higher expectations for morality.

It is the smallest molecule there is - if it can migrate through, and adsorb into, steel, it can probably do so through rock too, so your recovery % may not be great.

I've wondered about that. This Wikipedia article says that several large commercial companies has been doing it successfully for a while.


Best ICE's are 50%+ , best H2 fuel cells are not

I think you're thinking of a full cycle, not the generation side. Shouldn't best H2 fuel cells get 70%? Heck, what's the point otherwise? Why would anyone bother with them?


methanol is pretty easy to store for seasonal storage

True. If underground storage works well for H2, though, there's no need for the synthesis step.

very easy to move if the generation place is not the storage place. H2 is much harder to move. If you pipeline it 700 miles, you have used energy equal to the H2.

True. I would assume that all movement of energy would be high efficiency electrical transmission.

Brief summary of H2 cost from electrolysis here

Ah, thanks, I'll take a look.

I always work in metric tons, but the difference is not that great. I really don't understand why America has to have smaller units for everything(except miles) - it is either to short change people or make it seem like there is more stuff.

Probably, but for a seasonal application that will only be used for 20-100 days per year, it seems possible that a lower efficiency would be optimal.
You may be right, though once the thing is built, it might get used more often. The ORC can also be used with hot water heated by solar (or any other waste heat)

I haven't seen any evidence that the US is below average on this kind of score

The US is well above average in valuing energy. That is why most other countries tax fuel and have cheap/free health care. America has cheap fuel and strictly limited societal health care - so I think it's fair to say a higher importance is placed on energy.

Shouldn't best H2 fuel cells get 70%? Heck, what's the point otherwise? Why would anyone bother with them?

Well, not many people are bothering to buy them because they have not lived up to the hype. The automotive versions average about 30% efficiency - not better than a Prius, so indeed, what is the point?

An SOFC would be great - 60% efficiency, but cost $800k/100kW (Bloom Box). ICE costs $40k/100kW, or less.
SOFC eats dirty, low energy gases, like landfill gas, for breakfast - H2 FC's need high purity etc - very complex.

why America has to have smaller units

Greater precision? :)

most other countries tax fuel

Not really. The US is right in the middle of any chart of national fuel pricing. Many countries underprice fuel.

cheap/free health care

I don't really see the connection.

Really, these things are just based on history: the US has a history of abundant fuel production, so it doesn't tax it. Europe doesn't, so it does. No questions of values or morality in either place.

The automotive versions average about 30% efficiency

Automotive versions have to make many compromises for portability. OTOH, are you sure about that 30%? The Equinox advertised 50%+, IIRC.

An SOFC would be great - 60% efficiency, but cost $800k/100kW (Bloom Box).

In 2009, the Department of Energy reported that 80-kW automotive fuel cell system costs in volume production (projected to 500,000 units per year) are $61 per kilowatt.[9] The goal is $35 per kilowatt.

H2 FC's need high purity

That's ok if we're electrolyzing water - that will be very pure.

OTOH, are you sure about that 30%? The Equinox advertised 50%+, IIRC.
I had read 30% in real world driving.
The EPA test results for the Honda FCX clarity are 60mpghwy/city - not much of an improvement over the Prius. Given that they both have regenerative braking, the average efficiency can;t be that much greater than a Prius



That's ok if we're electrolyzing water - that will be very pure.

Not if you are pulling it out of underground storage it won;t be.

Interesting report here on the market for H2 electrolysers, including a neat looking home unit, they used gasoline prices $2,3 4/gal - now we are of the chart!


The US is right in the middle of any chart of national fuel pricing. Many countries underprice fuel.

cheap/free health care

I don't really see the connection.

The US is at the bottom of the chart among developed countries where fuel prices are concerned. All the other developed countries tax fuel at a higher rate, and also have cheap/free health care. Connect the dots.

Connect the dots.

Those dots don't connect like that.

Those "developed countries" didn't have large domestic oil production when oil pricing developed, so they taxed it heavily. That has nothing to do with health care pricing.

In N. America, a "ton" is generally a short ton, not a metric ton, right?

In the United States, a ton is generally a short ton. Outside of the United States, it is generally a tonne (metric ton), and prior to metric conversion, in British Commonwealth countries it was generally a long ton (2240 pounds).

The US is marching to the beat of a different kazoo player from the rest of the world, where units of measure are concerned.

Outside of the United States, it is generally a tonne

Exactly. A "ton" is often meant to refer to a short ton, especially in N. America.

I fully agree we should avoid stone age units...so why use acres?

I don't want to dampen enthusiasm, but exceptional yields like those in that Australian study are not representative of normal forestry practice. For one thing, a forester doesn't normally have fertile soils, with...reliable rainfall or irrigation, because that means good agricultural ground which will give a much better financial return if it's farmed.

Tropical/subtropical eucalyptus plantations don't average much over 10 tonnes/hectare/yr (4 tonnes/acre/yr) of usable oven-dry wood; and in temperate latitudes, with slower-growing species, productivity is less. Total biomass/hectare is a lot higher, but that includes roots (not usually economic to retrieve) and foliage (which should be left on site for nutrient conservation).

Methanol production for energy storage is an interesting possibility, but it is a rather nasty substance. Highly toxic, very inflammable & burns with an invisible flame: when I designed a methanol storage facility, it needed bunding, fire detection & deluge system, emergency shower, the lot. Can we go for ethanol instead? Then if we have an energy surplus, we can drink it instead...

foliage (which should be left on site for nutrient conservation).

What if the ash is returned?

Highly toxic, very inflammable

How different is that from gasoline or diesel?

Actually, the leaves and small branches should be chipped/mulched and left on site. They contain the highest amounts of NPK and contribute to soil carbon and microfauna. The sap in them is great food for the bugs - the stuff composts very nicely and has close to the right C:N ratio.

The ash should also be returned, it has the rest of the K and much of the P

If the tree stand has a mix of N fixing trees (like alders and acacias) then it will be N self sufficient.

so now we have an almost closed loop nutrient cycle, including N, a perennial plant system that produces a high value product - just one that you can't eat!

But there's no law that says farmers have to grow food.

Ideally, the ash would be returned, but that would likely kill the EROEI. The energy gained is so low that having to return the ash whence it came would eat it up.

I think biomass would work mainly as a local thing.

What do you mean it will kill the EROEI?

Wood is 1-2% ash by dry wight, so to transport that back is not a big deal, especially when you have empty trucks going to the farm to pick up the wood.

Wood ash is a great fertiliser. It contains most of the original nutrients and trace elements, and lots of very fine carbon (actually as activated carbon) which helps soil structure. It is also an excellent liming material, and has a pH adjustment factor equal to about half its weight of lime (CaCO3).

the Alberta government did a 20yr study on the effects of wood ash and found very positive results;

Almost doubled the yield - that's a pretty good result for applying a free waste product, and I would say, the EROEI on the ash operation is probably 100:1 - all you have to do is transport and spread it - not make it in the first place.

Also helped with weed control, no herbicides required;

Research has shown that increasing soil fertility reduced the severity of infestations of ox-eye daisy, wild caraway, dandelion, Canada thistle, common tansy, yellow toadflax and scentless chamomile. Farmers have observed reduced infestations of scentless chamomile and corn spurry after liming. The use of ash as a soil amendment provides a unique opportunity to increase the competitive ability of crop growth by increasing soil pH and increasing soil fertility.

Biomass is intended as a local thing, the more local the better. In fact, on farm may well be best of all, though there are some scale advantages to larger plants. In general, the collection area should be less than 50 miles, for bog plants like 20-50MW ones, but if you were doing small (0.1-2MW) your collection radius could be as low as 10 miles, depending on what is grown in the area.

Since the wood is 1-2% ash, you would have one truckload of ash going back for every 50-100 truckloads coming in - no big deal at all, and a nice nutrient return too.

Since trees collect nutrients from deep below the soil surface, a decade or more of tree growth and ash spreading will turn poor soils into good stuff, which may then be useful for normal agriculture, if flat enough.

Scot - point taken about acres - but most Americans have never even heard of hectares - they think they are some kind of jackrabbit. I'm sure Nick is well familiar with the term though.

I disagree about fertile soils and rainfalls - most forests seem to be in areas of good rainfall (they actually make about 40% their own rain) and they create fertile soils by bringing deep nutrients to the surface. Also, of course, many forests are on land that is to steep/rough/rocky for farming, even though it may be in a good rainfall area. Dryland forest will still produce more biomass/ha/yr than any almost any other plant system.

With wood yields, when the stand is managed for maximum biomass (usually for pulp) you plant densely and harvest early - about 10 years normally.
These guys in the UK are growing eucalypts and getting 15t/ha/yr

Another Australian trial, also irrigated, they got a mean annual increment of 25-30cu.m/ha (15-20t/ha)

In India they get 20t/ha/yr on 7 yr rotations;

High yields are absolutely achievable, but you have to manage to that goal - which will certainly not be the same as high sawlog yields.
Still easier than normal farming!

As for methanol, you would have need the same protections for storing ethanol, butanol, petrol, diesel etc. They are all toxic one way or another. Methanol has a couple of unique properties though - it is the only liquid fuel where a fire can be put out with water, and if it gets into the environment, it actually serves as a soil and plant fertiliser, and is eaten up rapidly. In water it helps to remove excess nitrogen and is used as an additive in sewage treatment for this purpose.

But I too never say no to a glass of ethanol product, especially if it is from Scotland.

As I said before, I don't want to dampen your enthusiasm, but none of those examples you cite are from established large-scale commercial practice. That trial in Kent used Eucalyptus nitens, which is certainly a very fast-growing species & I've tried it myself. Unfortunately it cannot survive -12C, and mine died, as probably did those Kent trees after the last 2 winters. The timber cannot be put to premium-value uses (construction, furniture etc) so it all has to go to pulp or firewood, which means miserably low prices. The trial looks to have been planted on arable quality ground, which in Kent currently costs around £20k/hectare, so financially it can't work, even if the trees didn't get frosted.

Most forests are in areas of good rainfall for the simple reason that they have to be. That great mass of foliage transpires a lot of moisture, which has to be replaced. Forests do tend to increase surface soil nutrients, though interception of atmospheric dust and aerosols by the leaves can be as important as root action.

Alas it is not true that forests produce more biomass/ha/yr than almost any other plant system. Algae are an obvious counter-example. Even if we stick to dry land, intensive modern agricultural methods on quality arable land give astonishingly high yields. 50 tonnes/hectare of potatoes, 60 tonnes/hectare of sugar beet, and these are yields our farmers can achieve in regular practice with normal inputs of fertiliser. That's a lot better than maximum timber yields with any of the trees we can safely grow here. So the forester has to look for land where trees will grow but agricultural crops won't.

I shall be happy to offer you a glass of Glenmorangie, to demonstrate that the toxicity of 30ml of ethanol is nothing to worry about! In contrast, 10 ml of methanol can cause permanent blindness by destruction of the optic nerve and 30 ml is potentially fatal.

Don't worry, you haven't dampened my enthusiasm - I love trees!

I'm sorry to hear your trees died - the E Nitens is not the cold hardiest of them - E. Regnans is better for that. They may not produce premium lumber, but the whole point is that if you are growing an energy crop, they don;t need to. This allows you to pick the trees that grow fastest, not the "best". In interior Canada the tree of choice is hybrid poplar - which grows very fast, is non-invasive and produces max biomass on 7-15yr rotations. You can get some lumber out of it, though it is low value. But if you have a cost effective means of turning the stuff into energy, then all the biomass has a minimum value - depending on the electricity price - of much more than you can sell it at the farm gate.

Forests don't have to be in wet areas, though they obviously produce the best results. The Victoria Dept of Ag has a guide to growing farm firewood and they give a range by rainfall zone, up to 20t/ha/yr. On my family's farm, (NSW) we get 600mm rainfalll, and the best measurement we can make of our tree plot is about 6t/ha/yr - though it is not very well managed (I intend to change that).

The West Australian Dept of Ag guide works on 20t/ha/yr for tree farming (>600mm rain) and some places get more than that, on 10yr rotations.

In Minnesota with hybrid poplar they were getting 7-10t/ha - but that's what you get for being in Minnesota!

Yields from commercial lumber plots are not really applicable as they are going for best lumber, not max biomass, and on much longer rotations.

In dryland areas trees have an advantage in not losing as much moisture to dry winds, as they block them out

Those 50-60t/ha yields for spuds and beets sound like gross yields, not dry matter - but if you can get 50t dry matter per ha of those crops then I wouldn't grow trees either!

i don't think algae is really comparable, as you can;t grow it on sloping land etc. Water plants like water hyacinth do produce higher growth volumes, but again, you can't do that on ordinary land (and they are invasive).

As for methanol, yes it is toxic, but so are all fuels to some degree - that is why I do not recommend drinking any of them. If it is OK to sell methanol (as methylated spirits) to anyone, anytime, by the gallon, at any hardware store, then I think it is certainly OK to use as a motor fuel - where you have far less chance of coming into contact with it. You can't buy petrol at your hardware store though as it is deemed too dangerous!

As for the health effects of a good single malt - I understand that "whisky" is an old gaelic or celtic word that means "water of life" - I'll drink to that!

I'm currently trialling E. Regnans. It certainly has an impressive growth rate.

Yes, spuds and beet are gross yields, not dry matter. Dry matter yield is only about 15 tonnes/hectare, but that still beats forestry. (Unless I can persuade E. Regnans to survive!)

Aha! I wait and wait around here for a chance like this to make my little pitch for straight biomass- electricity conversion. For years I have made demonstrations of a 1kW biomass fired stirling generator, and always, always, people say it is "not economic". So, there it sits, right over there in the cobweb corner with all those other moldering corpses of great ideas. All, all, "not economic".

But how do you get a rational estimate of the cost of some new widget that isn't on the market? Simple. You look at its content, find something else on the market right now that has that same content, and say your new widget will cost in commercial quantities the same as the thing already being sold that has the same content.

When I do that it turns out that the nice little 1kW biomass-electricity converter will cost a little less than a kilobuck. A lot more than a briggs engine, but not so awful terrible either.

So for that much, you could have this thing that eats any biomass, like in my case all those sweet gum balls that shower down all over my yard, and gives you the elixir of modern life- aka electricity. So do you happen to have a few score megabucks lying around to set up a factory??

Ah well, that's life . So I assuage my despair by burning a few handfulls of those gum balls to give my wife a really hot shower w/o resort to propane. Whoops! better get to it.

Wimbi - you don't have to wait - you can make your pitch anytime - but do you have anything to sell.

If you can do a stirling engine generator for $1k/kW then power to you. That is cheaper than most other means of generation except NG turbines at about $700/kW.

the problem is, of course, that you have to convince someone to take the plunge on making it. If I had to guess, I'd say that someone is likely in China. And this is assuming you have a fully fundctional prototype - do you?

The problem with Stirlings is that you have a history of failed attempts to overcome - I'm not saying it can't be done - I have in on my desk a Stirling that runs of the heat of my cup of coffee (or a bowl of ice) but it doesn't produce anything useful at a price worthwhile.

Dean Kamen's unit was not successful, neither was WhisperGen, and they were $6k/kW. So for any potential investor, history (about 130 years of it) is against you

But show us what you've got - I'm always interested in biomass.

Meanwhile, here is an on the market small (1-5kW) biomass gasifier unit - the HotWatt - bring your own generator.

Right, Paul. what you say about history is true, true true. So when i show my prototype- a thing that eats wood and generates electricity and can be seen heard smelt and lifted, people say what you say-- history of failure, etc etc etc. There it sits, doing what I say, and there they stand, citing history. Funny!

But- but- go to NASA and look up space stirlings-- a great success! Of course they cost a megabuck, but so does everything else at NASA- for good reason- they just gotta work. Real ones sitting on the ground have to cost only a little, and they do--but only if made in big numbers. Aye, there's the rub.

I agree that China might be the way. Goodby any return on investment, but who cares but the starving inventor, and everybody knows that inventors were made to starve. And serves "em dam well right.

Anyhow, thanks for the gasifier link. I like to make my own, but always interested in what other madmen are doing.

PS- You seem to do a lot of good stuff. Thanks.

Hi Wimbi,

Don't get me wrong - if you have got a working prototype that takes wood in one end and puts electricity out the other (a fire eating, electricity pooping, dragon?) then you have made good start.

And you have gotten further than I have down that line. I have spent many hours "analysing and designing" a Stirling system for wood, and eventually came to the conclusion that the power density of the Stirling is just too low - even for a stationary one, the friction and parasitic losses seem to extract to high a price. I concluded that a gasifier-ICE method, at 20% efficiency is better, although I do really like small steam systems too - they have a character that is irresistible - if inefficient (at about 10%).

The gasifier guys seem to be making progress. In addition to Victory, the guys at GEK gasifier also have a unit on the market, and kits to make your own - I like their approach.

For pure heat engines, I think the ORC's are winning the race, certainly at medium scale -50kW-1MW - they are over 20% efficiency for the large systems. I would like someone to come out with a 1-3kW system based on refrigerator components. But I think the small scale leads to inefficiency problems again.

If you have something that works, and don't want to give it all to China, you could contact this guy in India - he can build almost anything, and he is on the inventor's side, as you can see from his Sheffler reflector project. In fact, his solar concentrators would be a good match for your engine - he currently uses them to run steam engines - which he builds himself. I have corresponded with him and I don;t think you could find a better or more committed partner.

As for NASA, well, check out what this former NASA fuel cell expert thinks - he has worked with their Stirlings and fuel cells and decided to go a different way - though he too has not been able to bring anything to market;
I might add that I first spoke to him six years ago and he has not made any real progress in that time - getting VC backing is not easy.

I wish I had actually "done" more of what we are talking about - like you, I have done lots of homework, but it is not easy to turn these into a viable business - that is why very few have done so. If you can, then I'll buy an autographed edition of the first run of your engine - I won't even hold you to the $1k price!



Paul. I see you are a kindred spirit! Your thinking seems to exactly parallel mine. That means we are both right. Right?

Thanks much for that valuable info. I shall follow up on it.

Re stirling vs brayton. Think of the rats nest of problems related to that expansion piston and its valves and seals working in 600 degree gas! Piston braytons have been tried over the years, and can't overcome that one, not to mention the high expansion ratio needed for efficiency--or, low expansion ratio and big recuperator, esp one loaded with wood ash.

So, us old geezers, who have been there and done that over and over, keep coming back to the stirling- free piston much to be preferred over crank- charged with light gas and sealed tight.

No problem with power density, hot valves, oil, etc that plagues the old hot air engines- stirling or brayton.

NASA says their free piston will last 14 years in orbit.

Good news! i have just heard that a big company has decided go for our engine for real. Wow! I shall send you one free when and if I ever actually get it in my hands.

Nuclear is unstable WITHOUT a baseload level of grid power to lean on, as well as a consistent water supply.

It's a house of cards.. great until someone opens the windows or shakes the table.

Over the decades, France has done pretty well with its policy of generating most of its electricity from nuclear energy. No humongous accidents and no sabotage or loss of uranium to unexplained sources.

I still think the French are smarter than the rest of the world when it comes to utilizing nuclear energy. They have been doing it right for a long time now, and of course modern nuclear reactors are much safer (and somewhat more efficient) than they used to be.

I think the U.S. will turn to coal-to-liquids in the short run of the next dozen years but will also do a major buildout of nuclear reactors for electricity. IMO, there will be sufficient financial and real capital to do both of these things. Capital accumulation is something the U.S. has traditionally been very good at. (I know that Gail the Actuary disagrees with me on this point.)

French nuclear depends on Swiss pumped storage to match constant baseload to varying demand.

I was in France 3 days ago, and electricity is around $0.20 per kWh, versus $0.10 here in Colorado, so the French pay a high price for their nuclear (and consumer behavior reflects it, most lighting on timers, sparse use of electric heat, CFLs very common,etc.). France still has no long term solution for nuclear waste.


"In the winter, the Swiss grid
absorbs excess power from French nuclear power plants in the low hours, and restores the energy to the European grid in peak
hours. On the Continental scale, Switzerland acts like a large scale daily storage system. There is hardly any pumping in winter."

France has done pretty well with its policy of generating most of its electricity from nuclear energy.

Define Most.

More than 75%. I thought everybody knew that, but I guess I was mistaken in my assumption.

It depends on how you count. France likes to count the total kWhs generated in France, and divide that by total French consumption. The problem: some of French production is exported at night to other countries, and some of peak French consumption is imported.

Nothing wrong with that, but it does remind us that nuclear is more economic as one source of power among many, rather than as the primary source.

As is true of wind, and everything else.

The words of the English Language matter.

"Most" is not really well defined.

Now that you have defined it as "75%" - at least that can be a standard here on TOD.

So thank you.

"most" means more than fifty percent. I'm just astonished that you did not know that more than 75% of France's electricity production came from nuclear reactors. This statistic has been true for more than thirty years now. Thus nuclear electricity has proven its long-term viability as the main source of electricity for a country.

Note that the U.S. has a lot of nuclear engineers, many of them with U.S. Navy experience. We could ramp up nuclear at least as fast as Alan Drake suggests, and I think we could do it even faster, reasoning by analogy with France and its fast nuclear energy buildout.

nuclear electricity has proven its long-term viability as the main source of electricity for a country.

Not quite. As I said above, France likes to count the total kWhs generated in France, and divide that by total French consumption. The problem: some of French production is exported at night to other countries, and some of peak French consumption is imported. If you count just the power actually consumed in France, the number is more like 60%.

I don't really doubt that nuclear would work as a source of 100% of a country's power, but nuclear is far more economic as one source of power among many, rather than as the primary source.

As is true of wind, and everything else.

We could ramp up nuclear at least as fast as Alan Drake suggests

He suggests a fairly moderate ramp-up, with the primary emphasis on wind power.

I think we could do it even faster, reasoning by analogy with France and its fast nuclear energy buildout.

That would be much more expensive and much riskier. Better to emphasize wind power.

No, Nick: The percentage of electricity generated by nuclear reactors in France per year has varied between 75% and 80% for decades now.

They went nuclear and they made it work. Their vitrification process for wastes is, IMO, better than what we have in the U.S. and better than the Japanese techniques for dealing with waste.

For a nuclear future (which I think is in the cards), let us now toast the French . . . and with French champagne, what else?

The percentage of electricity generated by nuclear reactors in France per year has varied between 75% and 80% for decades now.

Per Wikipedia:

"Nuclear power is the primary source of electric power in France. In 2004, 425.8 TWh out of the country's total production of 540.6 TWh of electricity was from nuclear power (78.8%), the highest percentage in the world.[1]

France is also the world's largest net exporter of electric power, exporting 18% of its total production (about 100 TWh)"

So, 78.8% of total production was nuclear, but 18% was exported, leaving about 60% for domestic consumption...

But electricity is a valuable export commodity! It makes no sense just to look at domestic consumption.

Look for example at the production of Champagne in France. Much (most?) of it is for export. That makes Champagne even more valuable for France. They are sitting pretty with their exports of electricity--and champagne and cheese and other stuff too.

Just because you export a product does not make it less valuable. Au contraire.

But electricity is a valuable export commodity!

Not so much at night, when it's in surplus everywhere. French power exports go for a low price, while their peak imports are quite expensive.

It makes no sense just to look at domestic consumption.

It does if you're using it as a test case for feasibility of standalone nuclear production. In this case, France does not stand alone.

Champagne in France.

Is always good...

"Nuclear power is the primary source of electric power in France. In 2004, 425.8 TWh out of the country's total production of 540.6 TWh of electricity was from nuclear power (78.8%), the highest percentage in the world.[1]

France is also the world's largest net exporter of electric power, exporting 18% of its total production (about 100 TWh)"

So, let assume that all (net) exports were nuclear, leaving 325.8 out of 425.8TWh of nuke energy for domestic consumption.
They produced 540.6 from all sources, exported 100, leaving them with 440.6 consumed domestically.
We have already established that nuclear is 325.8 and dividing that into 440.6 gives 73.9% of domestic consumption is provided by nuclear.
so Don's number of 75% is about right.

Now, we do have them exporting and buying back - which is essentially paying Switzerland to store it for them, but the production is absolutely nuclear.

If it was coal instead, we would be accounting for all the CO2 from the primary production, not claiming the stored and re-imported power was "clean"

leaving them with 440.6 consumed domestically.

You have to add in the peak imports to account for all consumption. Plus, adjust for the fact that the exports are dirt cheap and the imports are very expensive.

You have to add in the peak imports to account for all consumption.

Then what does "net exports" mean? - we are talking consumption here, not power.

The 100Twh is all exports less all imports - i don't see what other dimension there is to this calculation

Plus, adjust for the fact that the exports are dirt cheap and the imports are very expensive.

That is money, not electricity consumption

Besides, the Swiss have to charge them that to afford French champagne!

Then what does "net exports" mean?

Yes, I suspect that's badly written, and misleading. We need better data that breaks out actual exports and imports.

The point is, France has badly overbuilt it's nuclear program for it's own needs. If it was not embedded in the European grid it's program would be far more expensive.

French nuclear power plants aren't designed for load following - they depend on relatively large domestic hydro, a fair amount of fossil fuel generation, an unusually low capacity factor, and very large night time exports to simulate it.

The fact that France can generate a lot of power doesn't prove that it would be a good idea for an overall grid to rely on it for most of it's power. Probably a 60% market share limit for any one source of power is an extremely good idea to ensure the cost effectiveness and resilience of the grid.

Of course, it isn't so much that they want nuclear, it is that they didn't really have a choice following the embargo (which hit them much harder than us).

An interesting essay:

Has TOD done a piece on France's nuclear program? I wonder if they have any looming prblems with aged reactors?

Other countries had the same problem, and reacted differently.

The desire for an independent nuclear weapons program was an important factor.

I'm just astonished that you did not know that more than 75% of France's electricity production came from nuclear reactors.

Why not be precise and state the percentage?

An unknown amount of radioactive water was released accidentally into the Mississippi River late last week at the Grand Gulf Nuclear Station.

"as well as a consistent water supply."

That one is debatable. At work our new plant uses fin-fans (a glorified radiator) instead of cooling towers because the EPA doesn't like cooling towers, at least not out here in the desert. No water needed. Eventually they will pull our permit to discharge the cooling tower blowdown water, and we'll have to either turn off the old plant or convert it to fin-fans as well. That decision will depend on the economics at that time.

I don't know how many existing and coming reactors could be (economically, at the very least) converted to a non-hydro cooling. It seems to me the point is somewhat academic, as we have river-bound plants all over the US and France. The vulnerability is current and ongoing.

It's well and good to have improvements in the pipeline, but we have water, climate and grid issues waiting to show up with no regard to that schedule. France has already seen summer heat waves forcing Reactors to shut, which seems to me a good bit more dire than the question of Windpower not delivering juice during the extreme weather events.. just like Fukushima, Nuclear is primed to really hit a region with additional blows when it's already down.

That Don is waving the Fission Flag right now is distressingly heedless, I have to say.

Would you rather I wave the coal flag? In the real world, we have two choices for baseload electricity--coal or nuclear. Nuclear has problems, but coal is much much worse than nuclear.

If there were a real-world alternative to nuclear, I would applaud it. But the only alternative in the real world is to mine coal faster and faster, until the economically viable deposits of coal are gone.

I'm all for wind power, wave power, concentrated solar thermal, PV, and other niche technologies, but when it comes to baseload power either you go coal (as the U.S. has) or you go nuclear, as France has.

Natural gas is good for load balancing, but there isn't enough of it to displace coal as a main source of electricity. Nuclear, and only nuclear, can replace reliance on coal.

Wind made 47GWh in California yesterday.
Renewables out-performed nuclear.
And that is without really trying.
Most of that came from wind, yesterday.
They start as near equals in California.
The winds are always blowing somewhere.
The need is for transmission systems.
Too bad Tesla was out of his mind.

False Choice, Don.

Nuclear power is uneconomic, and private money won't touch it without embarrassing Liability Caps and Insurance Guarantees. It is just as objectionable as coal, while spreading its faults differently over time and societal costs..

"Real World Alternative" .. The real world will be happy to serve us up with no Baseload at all.. calling these rich sources 'Real' because they're merely powerful is a classic delusion of people who've been spoiled with unquestioned access to power. This is quickly changing, and Nuclear Power will be an early victim of this change.

Nuclear has problems, but coal is an unmitigated disaster. We have a real world choice, and coal vs. nuclear is the big one for electricity generation.

Nuclear energy generation adds little or nothing to global warming. Coal is the major source of atmospheric additions to carbon dioxide from human activities. If you want to trash the planet, just say no to nukes. Because then, by default, you are saying "yes" to more burning of coal.

I grant you that the choice is a harsh one, but we should choose the lesser of two big evils.

If you want to trash the planet, just say no to nukes. Because then, by default, you are saying "yes" to more burning of coal...when it comes to baseload power either you go coal (as the U.S. has) or you go nuclear, as France has.

That's really not true. The nuclear industry would like you to believe that, but it's not true. There are lots of low cost ways to deal with wind intermittency.

I agree nukes and methanol. Just a question of which nation does it first. My guess China because they have money (which translates into all those useful things like materials, skilled labor, and knowledge).

Fortunately, nuclear electricity is a lot safer now than it was back when the Fukishima reactors were being being designed and built.


Because the Corporations who make "economic decisions" like run the manufacturing flawed #4 Fukishima reactor have all be replaced by a council of learned elders who are only concerned with safety.

For bigtime replacement of fossil fuels, I think nuclear will be both essential and viable

I've heard that "economist" are precise and dictated in their thinking by being able to 'show the math' and if they can't 'show the math' - their opinions are not worth consideration.

Oh, if someone could 'show the math' on how to make portable energy to replace fossil fuels. Added kudos if they can show how fossil fuel feedstocks can be replaced with electrons moved through a conductor in chemical processes.


It's not the state of technology, but the culture of corporate imperviousness and nickel-grubbing that will leave our underbellies unguarded.

Duck and Cover.. (While a 'D and C' means something else, right? I'm channeling Ignatious P Reilly with that line of thought..)

Has anyone else here played with Bitcoin? There's one article about it in the drumbeat above, but I don't recall it ever being mentioned in any threads. I find it a bit surprising no one has brought it up yet, since it's been gaining impressive momentum "on the Internets" and it's definitely a disruptive technology which could play a big role in the coming years (it started out in cypherpunk circles, but it's quickly getting the attention of more mainstream venues).

As a bit of cypherpunk myself, I can't help but to drool about the technology itself: they managed to "square the circle" that seemed untenable by creating a true peer-to-peer currency without the need of a central issuer or controlling authority (it's all based on strong crypto).

As for the economics of it, I'm still a bit on the fence. The builtin deflation strikes me as bad idea, but I guess time will tell.

Anyway, here are a few more links if you want to find out more information about it:

I'll stick to trading tomatoes and eggs for firewood ;-)

Has anyone else here played with Bitcoin?

As in trade? No. As in running the software, yes.

There's one article about it in the drumbeat above, but I don't recall it ever bng mentioned in any threads.

How often is The Liberty Dollar talked about? How about Phoenix Silver? Goldmoney? TimeDollars? Open Currency?

How often can any of the above be exchanged for a barrel of oil?

Bitcoin isn't the exchange of human labor for other items - for most people it is the exchange of electricity to power computers to compute the bitcoin.

It's real simple to cut the US defecit.
Either reduce expenditures or raise taxes.
Social Security and Medicaid will always be exempt because any government cutting these items will never be elected for a substantial period(except for minor trimming like raising retirement age).These are protected items as they are the republicans core constituancy.
The only items that are reduceable are defence maybe $200 billions and a few bits and pieces maybe $50 billion and thats about it.
The rest has to come from tax increases and it has to be broad based across the entire community because the defecit is so large. It doesn't really matter whether the haircut is taken by A)Hyperinflation B)Deflation C)Tax increases and expenditure cuts the haircut still has to be taken.
If it were me making the decisions I would make the $200B cut in defence and $50B bits and pieces and impose a tax of $210 per barrel on all oil sold in the US and a tax on coal of $100 per ton on all coal sold in the US.
This would do much for reducing demand for oil lowering imports and allowing some export of excess coal released by lower demand.

As I have been predicting for some time it finally may look as if the great commodity bubble of 2010/2011 is beginning to burst and that we will see a "normalising" of prices over the coming months.

Oil will probably overshoot on the downside and hit somewhere between 40 USD/BBL and 60 USD/BBL before settling back into the long-term trend: Perhaps ending up somewhere between 60 USD/BBL and 90 USD/BBL?

However, it is very hard to judge the short term prices as the world is awash with almost zero-interest money being pumped out from the US, Europe, Japan... As long as interest rates remain so low (and particularly as quantative easing goes on) we will continue to see enormous amounts of money rushing around wildly looking for returns. But the money rushes out of a commodity even faster than it rushes in - as has been seen over the last week as silver fell from 50 USD/oz to 34 USD/oz in a few days. Which commodity will be next to collapse? Will gold follow siler? Only time will show - but I don't really doubt that the falls will be sharp and perhaps even more dramatic than anything we have seen in the past.

NB! That of course is not to say that competition for energy and commodities with a rising world population and rising living standards in Asia and Africa will not increase. But there is the possibility that the bursting of the Chinese housing bubble could moderate this effect for a long time to come...

There is no indication that worldwide oil demand has even fallen below available supplies. Therefore being out of balance, it is unlikely that there will be any sustained price drop.

Right now, demand is being met by drawing down available supplies. For example, in the US, product supplies have had there greatest seasonal fall ever (since such records were available from the EIA).

In 2008, the financial system collapsed worldwide oil demand. Keep in mind that the price of oil advances six months into a US recession of falling demand, and basically it took one of the worst financial panics in modern times to drop demand back below available supplies.

So unless you are predicting some sort of financial collapse in the near future, I don't see how prices will fall much further.

The last two weeks the EIA has reported that total oil and product stocks have increased. More interesting, they have reported 9.85 MBD in oil and product imports (trust me, that is above demand at $4/gallon gasoline). Two weeks isn't much with their noisy data but with Libya offline that is a lot of oil for the USA.

China's consumption of copper started slowing down in February and bad news coming from Europe lately.

The EIA did not associate the increase in oil imports two weeks ago with any country, or in other words, it is some kind of adjustment of prior weeks. Those imports could have arrived as long ago as February.

In any case that does not tell where we are going, and all available information indicates that the US will not see the increase in oil imports it saw going into summer 2010.

UK Oil Blockade Bid

Fuel protesters are staging a go-slow on major routes towards Cheshire's Stanlow oil refinery, where they plan to impose a blockade.


Organiser Ian Charlesworth said that the aim was to ask the government to reduce fuel tax duty by 24p a litre.

Good luck with that...

Well, at least the ME is calming down..


Good to see that whole religious tolerance thing is working out so splendiforously, &.......


i - If their actions were to have any effect you think they would grid lock Parliment. So they might slow up refining, reduce supplies and thus run prices up a tad? Not likely but why mess with the refiners who have no control over the taxes? Just frustration I suppose.

Exactly - must be frustration.

It might not have made much headlines were it not for the fact that it's now hit the BBC's 'Most Popular' list - so I think motorists will now be split between joining the protest out of solidarity and getting angry because they can't get to the fuel.

Will be interesting to see if the situation develops..

Image grabbed from Twitter. Police out in force but notably not in riot gear - although I'm sure that will change rapidly if deemed "necessary". Other tweets say some protestors intercepted and stopped a long way from the refinery.

Not seeing any delays in the area listed on real time traffic info.

Edit: Image of not very impressive convoy (apparently led by the police ;-) from video at http://www.youtube.com/watch?v=bPNOfUQGKeo

The convoy has probably been led off into a field somewhere where they're now getting seriously beaten up - err... I mean protected for their own good - don't they know these refineries are dangerous places :)

Nice pics!

Yeah, it was never going to be a riot situation - not yet anyway!

The police have apparently prevented the protesters from stopping two tankers entering the refinery but they're now saying they're not going to let them leave.

Must say it's quite unusual to see a convoy of even that size on a UK motorway - definitely out of the ordinary and must be frustrating for the public (I think I saw one car trying to dart through?)

“We’re hoping, realistically, we can hold it for six to seven days. Hopefully we’ll get into a no fuel situation.

Hmm, wonder what their chances are?


Looks like they managed to cause a 10 minute delay earlier.

M62 westbound between J12 and J11 | Westbound | Congestion

On the M62 westbound between junctions J12 and J11, there are currently delays of 10 mins due to heavy traffic . Normal traffic conditions expected from 2:00 pm.

It's the taking part that counts...

Some how that pic of the cops reminded me of an old joke: unarmed bobby chasing a resistant suspect yells: "Stop...or I'll yell stop again!"

Haha, very true! Fortunately in Big Brother UK they no longer have to give chase, there's nowhere to hide..

i - I don't care much for govt intrusion into our private lives but I do like their video camera system. Not really any different than having a cop on every corner 24/7 but a heck of a lot cheaper. Driving/walking down a public a public street isn't "private". In two subdivisions I once lived we installed fake video survelance. Cost almost nothing and almost completely eliminated break ins/vandalism.

Ah, well it's the way of the world these days anyhow! I think the worry is that it will lead to other, more intrusive monitoring techniques. But perhaps just paranoia!

The reason is because it has a history of working, unlike most protest forms. The fuel protest back in 2000 worked because they blockaded refineries, so fuel tankers didn't go in or out, that meant petrol stations ran a bit low, and the rumour of no fuel meant huge queues / a run on fuel = Govn Panic. Taxes were cut, or at least rises not implemented.

Of course, between then and now the government have got wise and have mechanisms (usually violent) to break such attempts before they begin - but the protestors at least have one historical point of success to point to, more than most protest forms.

UK Oil Blockade Bid

So, they blockade the refinery, and as a result of fuel shortages, prices go up. How does this help the problem?

I think they've missed the essential fact that British North Sea oil production peaked in 1999 and is now in steep decline. The British now have a fundamental problem in that the easy days of increasing oil production and resulting government oil revenues have come to an end, and they have to deal with the dual problems of declining oil production and declining government oil revenues - which is to say prices and taxes are likely to continue to rise with no easy fixes in sight.

"People are suffering already from the high cost of fuel as they are having to give up jobs they can't afford to drive to,"

Okay, this is a test for the British. If you can't afford to drive to work, how are you going to get there? (Hint - electric trams seem to work well in continental Europe.)

Actually we do have a electric trams here in quite a few cities in the UK now - the newest was installed in Nottingham in 2004: http://www.thetrams.co.uk/net/

I guess the protesters' plan is to try and draw attention to the high prices.

Definitely a testing time for the UK though, especially with the SNP taking a majority in Scotland last Thurs - the dissolution of the United Kingdom a very real looming possibility..

Britain is a fallen empire in the long tail of decline. My belief is that the decline won't end until the Union itself breaks up and England, Wales, Scotland and Northern Ireland become independent sovereign countries. Of course all this will be taking place against a backdrop of an even larger fall and decline of the West, but Britain will be a far more troubled place having to deal with the effects of both (not to mention the chronic overpopulation it suffers).

Well with Scotland poised to hold a referendum on secession it may well be that it inspires a rise in popularity of the nationalist parties of Wales and NI.

The population of the UK is truly worrying; the strain is really starting to show.

Trams, even when they work well, only work where they exist. The drivers in question can't wave magic wands and conjure up trams that don't exist. (And let's not forget that English NIMBYs probably get their own way as much as those in the States, something that may be less so in, say, dirigiste France.) Nor do those drivers have any assurance that any tram that might eventually get built will serve them, rather than serving only someone else. So I'd imagine they're looking for something more tangible, timely, and certain - the answer to the test question being of little use or relevance for the time being. Whether they actually get anything now, or not, that's of course a different question.

[N.B. they probably see a blockade as getting the attention of a government that simply doesn't give a stuff about them, but instead continually fights against them by waging what the tabloids call "the war on the motorist".]

Trams, even when they work well, only work where they exist.

That's true, so the secret answer to the trick question was that the British need to start building tram lines - quickly, before they can no longer afford to drive at all.

The British can be amusing to watch from a distance, but only up to a point - the point at which people start to suffer due to government inaction. The British government needs to wake up to the fact that the country has a large and growing problem with declining oil production and the cost of fuel in their economy. So far, they don't seem to be reacting effectively to it.

Keeping a stiff upper lip is not going to be a good solution - they need to actually start doing something about their problems before they get completely out of control.

7 Billion and Still Growing

Those who debunk the very idea of overpopulation have a variety of explanations for their optimism. They range from Biblical injunctions about populating the Earth to expectations that technology will overcome. They believe that better educational achievements for women will lead to lower birthrates. The naysayers also think world population will top out at 11 billion or 14 billion, or something "manageable."

But Garrett Hardin, a biologist and environmentalist, once put a wry twist on such views. "He who says 'the Earth can support still more people' is always right," Hardin said, "for, until we reach absolute rock bottom, we can always lower the standard of living another notch and support a larger population."

A very good article. It mentions peak oil and talks about those who put their faith in science and technology to pull us out of this mess. It largely debunks them. But another great paragraph from the article:

Apocalyptic predictions generally turn out to be wrong. But it is worth noting that, even before the undersized harvests last year, 27 countries were on apparently permanent international food welfare. Most of these recipients are poor countries with runaway population growth. Lester Brown puts the matter in understandable terms: "There will be 219,000 people at the dinner table tonight who were not there last night."

Ron P.

Too many people.11 billion-14 billion??.Wait till you hit the Olduvai.

From a Wikipedia article on population growth:

In 2009, the human population increased by 74.6 million...

To put that number in perspective, that works out to roughly 2.37 more people every second...

E. Swanson

Note that currently population increase adds between 75 and 80 million people to the global population each year. These amounts are some of the largest annual amounts in history--much higher than the annual amounts added during, for example, the nineteen fifties. Thus, population is not only increasing, it is increasing (in absolute numbers) faster and faster.

The percentage increase is lower than it used to be, but the population base is so much bigger than it was forty or fifty years ago that the (relatively) low percentage increase translates into record highs in absolute increase. So we are not only into overshoot, we're getting deeper and deeper into overshoot faster and faster.

No, we are not growing too fast, it is just that the planet is not growing with us. Surely, on Planet Economist, they have worked out how to increase the supply of planets, since supply always matches demand at some price, and we certainly have the demand here.

I think Douglas Adams (who was not an economist) vaguely dealt with this question in the Hitch Hiker's Guide to the Galaxy (1979), with the Best Named Character in History, Slartibartfast, who made his living designing planets - nice work if you can get it. He did win an award for his Norwegian fjiord designs, though the Norwegians are yet to acknowledge this.

Alas, even planet designing/building suffers recessions and his planet/company, Magrathea, had to close down for a few million years until the intergalactic economy recovered.

In any case, he had a great strategy for dealing with the recession;

Slartibartfast: "Perhaps I'm old and tired, but I think that the chances of finding out what's actually going on are so absurdly remote that the only thing to do is to say, 'Hang the sense of it,' and keep yourself busy. I'd much rather be happy than be right any day."
Arthur: "And are you?"
Slartibartfast: "Ah, no. (laughs) Well, that's where it all falls down, of course."

And yet in terms of Political Correctness, one is not supposed to mention it...

Don, your post reminded me of the classic example of pondweed for explaining exponential growth:

"The danger of exponential growth is that for a long while increases in numbers are slow and almost imperceptible. It is only during the middle stages that growth in numbers becomes larger, faster and more noticeable. The final stage is when growth rockets upward over a very short period of time. If drastic action is not taken before the onset of the third stage the momentum of change is so rapid and overwhelming it is almost impossible to reverse. What begins with a whimper ends in a bang.

The analogy used by the Ehrlichs to indicate the acceleration of exponential growth is the daily doubling of pond weed. After thirty days of growth, the weed covers the entire pond; "The question is, how much of the pond will be covered in 29 days? The answer, of course, is half. The weed will then double....to cover the entire pond. As this example indicates, exponential growth contains the potential for big surprises." It takes 29 days for the pond weed to cover one half of the pond but a mere day for it to cover the other half."

Actually, that last bit sounds similar to what has happened to the dollar, the amount in existence having doubled in the last few years IIRC. The first half taking a hundred years or so to come into existence, the second half in only 3 or 4 years. Which, as in the example above, may well mean we're in the final stage.

We just had a federal election in Canada. Not one word about the relentless increase of the world's population, climate change, peak oil, or even our home grown housing bubble and associated upcoming financial crisis. All we heard was talk about more growth, more immigration, higher population, more healthcare spending, more spending on everything else, and more debt. Even the Green Party was mostly mum on these subjects, although to their credit they managed to elect one person to parliament, a first for North America. As far as I can see, the political will for a change away from perpetual growth is non-existent. That's why nothing will change until nature forces us to. I agree with Ron that we're screwed.

Not one word about the relentless increase of the world's population, climate change, peak oil, or even our home grown housing bubble and associated upcoming financial crisis.

Those are other people's problems. This is Canada, after all. It has fewer people than California or Spain, but more land area than the US or Europe, and more oil than Saudi Arabia (although the Saudis would never admit it.)

Most of what Canada consists of is by one name or another wetlands. If you look at a map that shows water, the upper 60% is a wild expanse of veinlike waterways. It doesn't look like most of it is inhabitable. And the parts that aren't uninhabitable are colder than a freezer in winter. You can ring the Canadian bell all day long, but I lived in Toronto as a kid and it was dark, dank, cold, sometimes super cold and on ocassion it was so cold we could watch the northern lights (Borealis). We moved to Sausalito, CA in 63 and never looked back with any interest in returning.

Most of Canada consists of the Canadian Shield, which is Precambrian rock with a disorganized drainage system, but it has lots of mineral wealth.

The vast majority of the country's agricultural land is in the Canadian Prairies, with about 40% of it being in Saskatchewan and 30% in Alberta.

The weather is brisk and invigorating, but we're used to that.

The Northern Lights have nothing todo with temperature. It stems from ionized gs from the Sun, coming in through the magnetic "hole" by the poles. It is rather a matter of beeing close to the poles. You can see it if you are lucky from 45 degrees (north or south dosent matter) and the chance increase with the distance from the equator.

If you think it is caused by the cold it is probalby because cold days are clear days, and you need the sky to be clear to see this.

And along comes The Economist, with their article about how China needs to increase its birth rate to solve demographic imbalances wrt old/young people distribution, male/female distribution, etc.


I love how any population trend needs to be 'fixed' by higher birth rates according to some folks...

Maybe, just maybe, China can determine how to accommodate a population with a lot of older folks...after all, they don't have the bad diets and lack of exercise and rat race stress that Americans do themselves in with, so aren't the oldster Chinese fairly healthy? Can they not work and do something productive in their silver years? Do they consume a lot? Not nearly as much as Americans, and there is not reason for them to try to emulate our wastefulness.

The preference for boy babies...well, they will have to work that one out...pretty short-sighted of them to not value women...'fixing' that by increasing the fertility rate doesn't make a lot of sens in the big picture to me.

China has 1.3B4 B people...if their current fertility rate truly is ~ 1,4, how long will it take them (through old folks dieing naturally) to decrease to ~ 1 B people? How about 500M people?

Would they not be better off with fewer people in the long run, as would the entire planet?

You're right, that statement's bordering on outrageous!

For the last few years I'd consoled myself with the UN's prediction of a population peak around 2050, but now they're saying they've underestimated population growth it's once again appearing on my 'worry radar'.

That's a fair summary of the (boring) campaign, though it was a very interesting result. I would like to see an anti spending campaign, where the pols compete with each other not to rack up promises of more spending, but of spending reductions - a political Dutch auction.

There was actually a mention of housing by Vancouver's mayor, who said something to the effect that Ottawa needed to solve Vancouver's affordable housing problem (which he himself is exacerbating). While multiple levels of government have their purpose, the amount of buck passing that goes on is ridiculous. The ancient city-states solved this problem by being city-states, and i would not be surprised to see a few of them appear again soon.

Frugal - Ha! You think you're screwed now wait till you become the 51st state.

Do you know something that we BC'ers don't?

Hey Rockman. I always wondered how it would play out if the US ever attacked Canada? Tanks rolling into Alberta from Montana, then taking a beeline toward Fort McMurray??

Or are there other more likely scenarios that you guys are currently planning? In the 1970s a lot of Canadians thought the US would simply buy Canada and all its natural resources. But now that the US is bankrupt, we can discard that possibility. Maybe China will do it instead.

Better start making your fence, like the US did with Mexico.

If/Once global warming becomes hot enough and dry enough in the US, people will start streaming North, en masse, to begin living in the now-thawed and fertile north, ay? ;)

Frugal - I don't think force will be necessary. Once we offer them access to our medical system and to some decent beer I'm sure they roll right over.

In Sweden news a few weeks ago was the gouvernemntal surplus. Yes, we spend less than we get in from taxes. Although we have a national debt that is quite large. The debate was about what to dowith the extra money. Not a word about begining to pay off the loans. But lots of talk about wich group of voters to bribe off.

Dr. Phill once said that if your problem is you can't handle money, more money is not the solution.

Talking about population increases and humankinds inability to come to terms with limits, I did a google search last evening on peak oil and came across this very interesting Christian explanation of peak oil. It intermixes religious ideas, but for the most part is quite accurate in its explanation. I'm not a Christian and have some misgivings about a faith that seemingly ignores science for the most part, however this was refreshing.

It's entitled 'Coming Down from the Peak' A Sermon by Dr. Philip Cook


For too long Christianity has been silent on this important matter (peak oil). Despite the huge resistance to change, the
ridicule, and the censorship awaiting those who publicly espouse limits to material growth, we must together
put aside our fears and move metaphorical mountains, even eventually without oil and other fossil fuels. Let
us this day begin to build a new awareness of the long term consequences of our actions. With a new vision of
where we can and want to go, let us help find the best path down from the peak, for all of God’s creation.

Christians could do worse than following this:

Luke 14:33 - "So likewise, whosoever he be of you that forsaketh not all that he hath, he cannot be my disciple."

No doubt, however, the ministers to the flock have found various loopholes. When I was growing up, my minister drove a Mercedes, so I guess he found the loophole.

Were good at finding loop holes. Ghandi once said that "christianity is a very powerful religion, to bad the christians don't know about it". There is for example lots of talk in the Bible about beeing satisfied with base needs and spend your excess resources on other stuff than consumption. But who follows that today? "Faith preachers" who tells you all they know on welth building strategys? This sickens me.


Remember the Iraqi claim to produce 12 mbpd by 2017? Well, not anymore. And it's just for "price" reasons, not because they can't do it. Or so they claim.

I'll go on record right here claiming that their new 6mbpd number by 2017 is just as much horse crap as the original 12 mbpd projection was. Iraq will be lucky if it ever gets back to 4 mbpd.

Oh yeah, that places a nice 6mpbd hole in the IEA's petroleum forecasts, since they use data provided by each nation.

Grey - I don't mean to stir the debate up again over proposed cuts in various reporting agencies. But you highlight one of my points: if folks like the IEA are regurgitating numbers (without any way to verify) given by Iraq et al should that cost over $100 million/year to do? And US production: that can be had in extreme detail for a few $thousand per month along with all the software to plot it up a hundred different ways. And reserve numbers for US fields: again, unverifiable numbers from the public companies and nothing from the privately owned independents (who are the vast majority of companies).

I know folks like to use these nice organized outputs from the different agencies for acedemic discussions/debates but you can't escape the basic "cr*p in/cr*p out nature of these studies. And their practical impact on the oil patch day to day activities? I've yet to know anyone in the biz who even reads those reports let alone are influenced by them.

R - you just don;t get it, do you? All those bureaucrats fiddling all those numbers are not there for your benefit - they are there to
1 - increase GDP
2 - provide information for politicians and lawyers to use for arguing with each other
3 - give the government numbers to play with to claim that "speculators" and OPEC et al are manipulating the markets.

Paying real people to produce real stuff is sooo last century - how many Berkeley or Cornell graduates want to get their hands dirty with something like oil (or anything other than a keyboard?)

Bureaucrats in DC producing numbers is an example of the "clean economy" - you need to get with the program.

Regarding that article at the New York Times Sunday about the cozy relationship between the NRC and the Nuclear Power Industry....

Some of the comments were great. I think my favorite was comparing the NRC and Nukes with BP's relationship with its overseers. Specifically, BP hiring prostitutes for the DofE folks. My guess is that this type of thing goes on between the NRC and the Nuclear Power Industry. They really are in bed together, probably!

On another note I was going through my home office yesterday and came across a letter I wrote in my young 20s to the NRC, regarding spent fuel expansion at the Trojan Plant. One of the things that got pointed out (I forgot all of this) was that during the spent fuel expansion construction, the Spent Fuel Pool was simply unavailable should it be needed. Also, the work was already in progress and finished while the hearings were going on and before anything had been approved. So essentially all the NRC had to do was to publicly rubber stamp this work in progress - which they had bent over backwardly approved behind closed doors previously!

I suspect that once one looks at the nitty gritties of the current relicensing craze, that it has to do with additional spent fuel expansion (someone have any info on this?) and that they are already retrofitting this additional capacity to the pools by adding more racks - before a public approval. Some things never change and the NRC and the Nuclear Power Industry are a good example.

One thing they didn't do at Trojan was to upgrade and increase the coolant and pumping infrastructure for the pool, which was designed for 4/3rds of a core originally. They later expanded the pool to 22/3rds and again to 44/3rds of a core, without any other upgrade. I suspect they are doing the same at these other plants, and relying on an underpowered and inadequate pumping system for coolant for these spent fuel pools. Again, does anyone have any data on this, about the work required for 20 more years of operating life? Is it simply more Spent Fuel Expansion?

Fortunately I don't have to worry as much about Trojan any more - since the plant is gone and the fuel sits in casks, not a spent fuel pool. They may just decide to store them upriver at Hanford someday and I'd be fine with that. Hanford is radioactive enough that a little more won't matter. That is where they buried the reactor vessel etc. as medium level waste. Or so they say (for all we know these get sent to China where they are recycled into steel for car parts!)....

Another commenter mentioned the waste from reactors down in Eureka CA on Humboldt Bay. I want to look into this one, since I have many friends and some family in the area and I go that way frequently. The Redwoods National Park surrounds Eureka. The reactor is since long decommissioned and the site is now used for power generation using natural gas. It is also a sitting duck for exactly the same type of tsunami disaster that happened at Fukushima, since the Cascadia Subduction Zone starts just an hour south, in the vicinity of Cape Mendocino. The plant, built 10-15 meters above sea level is vulnerable to a large tsunami, as well as subsidence since its sitting essentially on bay fill, not bedrock. Am not sure if the fuel there is in dry cask or still in spent fuel pools - sources on the Net say both! Hopefully its in dry cask, or we could have a West Coast Fukushima on our hands. Its in a very seismically active area and it was insane to build it there. There were three shallow 7+ earthquakes at Shelter Cove, just 30 miles away, in the 1990s, all within a day of each other! Fortunately the tsunamis generated were insignificant.

But if a great earthquake or Megathrust hits, this plant is in exactly the wrong spot, up near the top of the bay near where the Eel River empties into it. What happens is that the water builds up higher in these areas as the channel gets shallower. 15 meters will be insignificant, since the run-up could be higher. I suspect there are studies documenting the run-up evidence left by the last one which I'll look up and report here if I find them. Just to the north are the same types of swampy bays with the 311 year old snags that were killed from salt water intrusion from subsidence in the Great Earthquake of Jan 26, 1700 that ruptured from Cape Mendocino to Vancouver Island.

Writing from Eureka here and wanted to clarify a few things...

We are surrounded by redwoods, but Redwood National Park is about 50 miles north of us.

The Eel River does not flow into Humboldt Bay.

And the old nuke plant, I am told, is all in dry cask storage now, so, relatively low risk. It is low, and close to the water, but I don't think is is built on "fill".

But you are correct that this is one of the most siesmically active areas on the planet and we could get pretty hurt by The Big One (which would be a mega-thrust quake along the Cascadia Subduction Zone - probably taking out Portland and Seattle and leaving us low on the priority list for aid). In this scenario, subsidence is a real threat, and where I'm typing now could be under sea level PDQ. Of course, in 1992 the coastline went up 2 meters near Petrolia, so YMMV.