Drumbeat: August 12, 2011
Posted by Leanan on August 12, 2011 - 10:42am
Saudi Arabia’s coming oil and fiscal challenge [PDF]
There is widespread understanding that with oil prices around $100 per barrel, Saudi Arabia’s oil wealth is providing vast revenue inflows, enabling a strong fiscal position with low government debt and high government savings. This wealth is particularly timely as the government has increased spending and cash transfers to Saudi citizens in the wake of the broader “Arab Spring”.For the near term, Saudi Arabia is likely to continue to receive oil revenues in excess of its spending needs, with the oil price needed to balance the budget currently about $20 per barrel below the actual price.
Not widely realized, however, is that three major trends, if continued on their current and most likely paths, portend a much more difficult energy and revenue future for the Kingdom.
Analysis - Recession risk unless oil prices fall further
(Reuters) - If history is any guide, another oil-induced recession may be just around the corner, at least for the United States and some of the other developed economies.Every time that the cost of oil relative to global economic output has hit current levels -- and that's even after sharp falls in spot prices this month -- it has heralded a slump.
US natgas rig count hits 5-mth high-Baker Hughes
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States climbed to its highest in more than five months, rising by 13 this week to 896, data from oil services firm Baker Hughes showed on Friday.
Mexican oil: Brimming with potential, stuck in the mud
FORTUNE -- The Mexican oil industry is stuck in a holding pattern. In 1938, the Mexican government cast out foreign drillers and formed a national oil company, Petróleos Mexicanos, or PEMEX. It was a moment of great national pride, and for years, the model has worked. PEMEX has sent most of its profits to the government, which currently accounts for approximately one third of the government's income, according to PEMEX.But recently, this business model has started to flag. There's still plenty of untapped oil in Mexico, but PEMEX needs new technology to get at oilfields that are hard to access, and the company's government affiliation has slowed the process. Last year, PEMEX started providing more financial incentives for foreign companies to drill in Mexico, but some major oil companies might not bite, given that Mexico will own all of the oil produced.
Pemex expansion plans protested
VILLAHERMOSA, Mexico (UPI) -- Protests are rising in Mexico's southeastern state of Tabasco against pollution allegedly caused by the activities of local sugar mills and Petroleos Mexicanos.
Indian refiners start to pay off Iran oil debts
NEW DELHI (Reuters) - Indian companies have paid the first installment of their Iran oil debts, Finance Minister Pranab Mukherjee told reporters on Friday, as money owed on shipments of some 400,000 barrels per day had risen to nearly $5 billion.
Nustar Logistics and two subsidiaries of EOG Resources have agreed to build a 70,000 barrel per day offloading facility at a Louisiana terminal to handle oil from the Bakken and Eagle Ford shales, the companies said in a statement.
Shell says oil leak in flowline at N.Sea crude platform
(Reuters) - Royal Dutch Shell said on Friday there was an oil leak at its Gannet Alpha Platform in the U.K. North Sea, and that it had restarted other platforms."There is a leak in the flow line," a spokesman with Shell said.
The plight of farmers and our responsibility
Islamabad—Ghulam Hussain wishes he was not born a farmer; almost a blasphemous thought for someone who knows nothing else except growing crops. But when he looks at his 3 boisterous children, who know nothing of the bleak future facing the family, he cannot help thinking this way. The children are oblivious to the woes that plague their father, in spite of his sullen look. But his wife Parveen knows what troubles him and she feels sorry she can do nothing about it. Ghulam Hussain is out of fertilizer and does not have enough money to buy fresh stock.
Peak electricity demand in sweltering Texas this summer already has surged past levels that weren't expected until 2014, exposing a shortage of generating capacity likely to persist for several years.
Tanzania Energy Regulator Suspends BP’s Domestic Fuel Permit Over Shortage
Tanzania’s energy-industry regulator suspended British Petroleum Tanzania Ltd.’s wholesale license for three months amid a fuel shortage the authority says has been caused by suppliers disgruntled with lower prices.
Gas price drop fuels shortages: expert
A big drop in gasoline prices in Nova Scotia will send drivers flocking to the pumps Friday, leaving some stations dry by the end of the day, a gas expert says.
UAQ feels strain of petrol shortage
UMM AL QAIWAIN // The emirate's roads are rarely congested but fuel queues are now among the longest in the Northern Emirates amid the continuing petrol shortage.On Sunday morning, the Abraj fuel station on King Faisal Road, the emirate's busiest route, had queues of more than 50 cars, which spilt out into the road. All were waiting for the station's four pumps.
Algerian smugglers send petrol to Libya, creating shortage at home
One of our Observers has sent us images of linesof cars queuing at petrol stations in eastern Algeria. He explains that petrol is being illegally exported to Libya, causing a shortage in his region – which is rather ironic in a country that is one of the world’s biggest oil exporters.In Libya, demand for petrol has skyrocketed since the start of the civil war, spawning an extensive network of smugglers. Petrol is smuggled from Algeria through Tunisia to reach Libya, creating shortages in Tunisia as well. Shortages first hit Algeria several months ago, but they have gotten much worse in the past weeks.
Gaddafi forces still hold Brega oil terminal, refinery
BENGHAZI, Libya — Troops loyal to Libyan leader Muammar Gaddafi are still in control of the oil terminal and refinery of the strategic eastern port of Brega despite rebel advances, a spokesman for rebel forces said on Friday.The two sides have been battling for months over Brega, 750 km east of Tripoli. The rebels see securing the oil facilities as a tipping point in the war and hope to resume oil exports from there as quickly as possible.
Clinton Urges Syria’s Allies to Get on ‘Right Side of History’
Secretary of State Hillary Clinton today urged nations doing business with Syria to “get on the right side of history” by cutting off trade and arms sales to the regime of President Bashar al-Assad.
Malawi rights groups plan more mass demonstrations
LILONGWE (Reuters) - Malawian activists are planning a mass protest for Wednesday after talks with the government on political reforms that could see the United States and Britain resume aid to the country became deadlocked.Civil rights groups want President Bingu wa Mutharika to explain his personal wealth, address foreign exchange and fuel shortages and reconcile with Britain, which froze aid after a diplomatic spat.
What's mined is theirs to spend, and fast
States such as WA that face soaring debt levels are addicted to the direct revenue hit they receive from mineral royalties. There seems to be no other reason Barnett and Queensland's Anna Bligh are so enthusiastic about such projects.But why rush, especially when these finite resources may be worth a lot more in the decades to come?
Russian gas deliveries to Kyrgyzstan and a cut in export duties for Tajikistan are bringing to an end the price hikes and fuel shortages that have crippled parts of Central Asia over the past few months.
API Disappointed by DOE Fracking Committee Recommendations
API President and CEO Jack Gerard welcomed the shale gas subcommittee's acknowledgement of the economic and energy security benefits of natural gas development, but said the specific recommendations were disappointing and confusing.
Norway Oil Fund Head Unruffled by US Downgrade
The U.S. credit rating downgrade by Standard & Poor's will have no impact on the large holdings of U.S. Treasury bonds by Norway's oil fund, the head of the agency that manages the fund told MarketWatch in an interview Friday.
Clamour to supply UAE nuclear needs
Russia and France are in the running for a lucrative 15-year contract to supply the UAE with nuclear fuel.
Smashing the melon of American complacency with the mallet of Russian grit
Take food for instance. Many urban Russians had dachas outside of town where they could grow food for their own use and for barter. But in the US, not only do few besides the relatively wealthy own a second home -- even fewer of us bother to plant a kitchen garden. When grocery store shelves start to empty out, the dependent American food eater will be like a baby who's lost his bottle. And a nation raised on cheap eats and easy livin' could soon face the unimaginable: widespread hunger.So, what Orlov is really doing is trying to show that the American system is hard and unforgiving but that the American people are ripe and soft, like a big watermelon.
Lester R. Brown: A Fifty Million Dollar Tipping Point?
At a press conference on July 21, New York City Mayor Michael Bloomberg announced that he was contributing $50 million to the Sierra Club’s Beyond Coal Campaign. Michael Brune, head of the Sierra Club, called it a “game changer”. It is that, but it also could push the United States, and indeed the world, to a tipping point on the climate issue.It is one thing for Michael Brune to say coal has to go, but quite another when Michael Bloomberg says so. Few outside the environmental community know who Michael Brune is, but every business person knows Michael Bloomberg as one of the most successful business entrepreneurs of his generation.
John Michael Greer: Salvaging Health
One way or another, this is what history looks like as it’s happening. Those of my readers who have been following along for a year or two, and have made at least a decent fraction of the preparations I’ve suggested, are probably as well prepared for the unfolding mess as anyone is likely to be. Those who have just joined the conversation, or were putting aside preparations for some later date—well, once the rubble stops bouncing and the smoke clears, you’ll have the chance to assess what possibilities are still open and what you have the resources to accomplish. In the meantime, I want to continue the sequence of posts already under way, and discuss another of the things that’s going to have to be salvaged as the current system grinds awkwardly to a halt.
In Auto Test in Europe, Meter Ticks Off Miles, and Fee to Driver
EINDHOVEN, the Netherlands — As Sander Van Dedem recalled watching the charges tick up every 10 seconds on the dashboard meter on the way to the airport, he resolved to try public transportation next time. “Looking at the money makes you realize that a car isn’t always a good idea,” said Mr. Van Dedem, a commercial sales manager for I.B.M. here.But his pricey ride was not in a taxi. He was driving his own Volvo XC60.
The car had been outfitted with the meter so that Mr. Van Dedem could take part in a trial of a controversial government tax proposal to charge drivers a fee for the miles they drive. The meter also factors in the cost to society in the form of pollution, traffic congestion, greenhouse gas emissions and wear and tear on roads.
Crude Oil Gains, Trimming Weekly Decline as Stocks Counter Demand Concern
Oil rose in New York, paring this week’s decline, as data showing higher U.S. retail sales during July assuaged concerns that the global recovery is fading.Oil reversed losses today as European equities and U.S. stock-index futures climbed. Retail sales in the U.S. climbed in July by the most in four months, showing consumers are holding up even as employment slows. France’s economy failed to grow in the second quarter and manufacturing in the euro region unexpectedly declined in June, reports today showed.
Explosion halts Iran gas imports to Turkey
Turkey says an explosion at a pipeline has temporarily cut natural gas supplies from Iran.The governor's office for Agri province, where the explosion occurred late yesterday, says Kurdish rebels are suspected of sabotaging the pipeline. The gas flow was immediately cut and no one was hurt in the explosion.
Russia urges Ukraine not to politicize gas deliveries
Russian President Dmitry Medvedev has called on his Ukrainian counterpart Viktor Yanukovych not to politicize the Russian-Ukrainian gas cooperation, a Kremlin source said.
Tanker Owner BW Maritime Refuses Cargoes as Rentals Plunge
BW Maritime, a Singapore-based owner of 15 supertankers, said it is declining cargoes as a glut of the vessels causes rents to plunge, joining rival Frontline Ltd. in refusing charters.
Japan utilities' fossil fuel usage in April-June
TOKYO (Reuters) - Several Japanese power companies, led by Tokyo Electric Power Co , burned more gas in April-June to offset a sharply lower nuclear run rate with many reactors halted indefinitely due to safety concerns after the crisis at the tsunami-crippled Fukushima plant.The average nuclear plant utilisation at the nation's 10 nuclear plant operators fell to 42.8 percent in the three months from 65.0 percent a year earlier.
Retail Sales in U.S. Climbed by Most in Four Months
More Americans drove away from auto dealerships in new cars last month as an easing of supply-chain constraints caused by Japan’s March disasters provided consumers with more variety and better pricing. Even so, Federal Reserve policy makers this week said they were concerned that household spending had “flattened out” and the recent plunge in stocks is hurting confidence.
Syrian forces fire at protesters in Deir al-Zor
(Reuters) - Syrian forces fired live ammunition at protesters coming out of a main mosque after Friday Prayers in the besieged city of Deir al-Zor, witnesses said, as protests against President Bashar al-Assad broke out elsewhere in the country.
Assad: Syria won't stop fight against "terrorists"
AMMAN (Reuters) – Syrian President Bashar al-Assad said on Tuesday his forces would continue to pursue "terrorist groups" after Turkey pressed him to end a military assault aimed at crushing protests against his rule.Syria "will not relent in pursuing the terrorist groups in order to protect the stability of the country and the security of the citizens," state news agency SANA quoted Assad as telling Turkish Foreign Minister Ahmet Davutoglu.
Nigeria Oil Reliance Weighs on ‘Positive’ Bank Bailouts, S&P’s Esters Says
Nigeria’s “positive” 2009 bailout of lenders and reduction of nonperforming loans in the banking industry is being outweighed by its dependence on oil and continuing social unrest, according to Standard & Poor’s.
BY BOOTING out Royal Dutch Shell in 1993, the 500,000 inhabitants of Nigeria’s Ogoniland hoped to take the first step towards cleaning up their homeland, a small region within the creeks and swamps of the vast Niger Delta, Africa’s biggest oil-producing region. Almost 20 years later, a new report from the UN says it could take 30 years and at least $1 billion to rid the poisoned mangroves of a thick, black carpet of crude.
Gas Fracking Poses Serious Environmental Risks, Panel Finds
Natural-gas companies risk causing serious environmental damage from hydraulic fracturing unless they commit to the best engineering practices, a task force named by Energy Secretary Steven Chu concluded.
Indonesia's oil output declines
JAKARTA (UPI) -- Indonesia's BPMigas oil and gas regulator says that national fields are in decline.Apparently confirming that Indonesia's oil production has hit a decline as predicted by "peak oil" proponents, BPMigas spokesman Gde Pradnyana said Indonesia will have to reduce its dependency on oil.
There are several fundamental reasons for the problems with biofuels, especially for those not made from the fruit of the plant, where the fruit makes the sugars more accessible.
Toyota to Offer Six New Hybrid Models in 2012
Toyota plans to offer six new gas-electric hybrid vehicles worldwide by the end of 2012, plus a plug-in Prius in the United States.In addition, the automaker and Tesla Motors will introduce an all-electric version of the RAV4 S.U.V. at the Los Angeles auto show in November. It, too, will be available sometime in 2012, said John Hanson, Toyota national manager of environmental, safety and quality communications.
Transit ridership surges throughout Bay Area
In a remarkable turnaround for transit agencies that have repeatedly slashed services, raised fares and lost state and federal funding, transit ridership is steadily rising throughout the Bay Area. Caltrain ridership was up almost 12 percent and BART almost 8 percent in weekday use in June compared with the same month a year ago. The Valley Transportation Authority saw an increase of more than 7 percent and the ACE commuter train of more than 14 percent, while SamTrans ridership was up 0.4 percent.
Ray C. Anderson, a leading green business advocate and founder of Interface, one of the world’s largest carpet manufacturers, died this week. He’d spent the last 17 years promoting the benefits of sustainable business practices, not only for protecting the environment but for boosting the bottom line.His “epiphany” came in 1994, when he read Paul Hawken’s “Ecology of Commerce.” He documented his transformation from plunderer to protector in his book “Mid-Course Correction: Toward a Sustainable Enterprise,” which is now required reading in every green M.B.A. program.
Sustainability skills and good business skills are increasingly the same thing
The University of Exeter is offering the first sustainable MBA. But shouldn't all MBAs be teaching these skills?
Can Jeremy Grantham Profit From Ecological Mayhem?
Energy “will give us serious and sustained problems” over the next 50 years as we make the transition from hydrocarbons — oil, coal, gas — to solar, wind, nuclear and other sources, but we’ll muddle through to a solution to Peak Oil and related challenges. Peak Everything Else will prove more intractable for humanity. Metals, for instance, “are entropy at work . . . from wonderful metal ores to scattered waste,” and scarcity and higher prices “will slowly increase forever,” but if we scrimp and recycle, we can make do for another century before tight constraint kicks in.
Handy infographic tells you if your city has a future
The folks at the Project for Public Spaces have created this handy guide to figuring out if your city has a future or it’s destined to turn into the U.S. version of a favela as our national economic nightmare grinds on.
Mass Immigration: Energy and the Silent Lie
What more will it take for Americans to comprehend what it means to add 3.1 million immigrants to the United States annually? How can we add another 200,000 legal immigrants every 30 days with over 14 million unemployed American workers? What is Congress thinking? Why are Americans too apathetic or too stupid to act? How come no one understands the implications on multiple levels of adding 72 to 75 million legal immigrants to the USA by 2035? How can we rationally and emotionally accept that number of immigrants added in a blink of time?
Almost Time to Change the Bulb
YOU may have heard that the federal government wants to limit your choice of light bulbs, starting in January.If only.
Thanks to regulations taking effect that month under the Energy Independence and Security Act of 2007, shopping for light bulbs is fast becoming akin to choosing a spouse: the options are almost endless, and the object of your affection might last longer in the house than you.
Negative Image Aside, Asian Carp Are a Boon
For many people, Asian carp are proving more boon than bane. Bolstered by government support, the Asian carp harvest has leapt thirtyfold in the past decade, creating a new industry, attracting fishermen and entrepreneurs, and feeding people all over the world.“We’ve been ramping up for years,” said Mike Schafer, owner of Schafer Fisheries.
In 2010, the company sold some 20 million pounds of Asian carp to clients as far-flung as Turkey and Indonesia, up from two million pounds in 2006.
New Rules and Old Plants May Strain Summer Energy Supplies
WASHINGTON — As 58 million people across 13 states sweated through the third day of a heat wave last month, power demand in North America’s largest regional grid jurisdiction hit a record high. And yet there was no shortage, no rolling blackout and no brownout in an area that stretches from Maryland to Chicago.But that may not be the case in the future as stricter air quality rules are put in place. Eastern utilities satisfied demand that day — July 21 — with hefty output from dozens of 1950s and 1960s coal-burning power plants that dump prodigious amounts of acid gases, soot, mercury and arsenic into the air. Because of new Environmental Protection Agency rules, and some yet to be written, many of those plants are expected to close in coming years.
As Ecosystems, Cities Yield Some Surprises
In Boston, scientists measuring the city’s greenhouse gas emissions have found what they call a “weekend effect,” a clear drop-off in the amount of carbon dioxide entering the city’s atmosphere on Saturdays and Sundays. In Fresno, researchers have discovered that backyard water use increases with wealth, as does backyard biodiversity. And in Los Angeles, ecologists studying the city’s “ecohydrology” have calculated that planting a million new trees, an idea with fairly universal appeal, would have the drawback of increasing water consumption by 5 percent.
BRUSSELS, Belgium — Prepare for extreme turbulence between the European Union and the rest of the world.Not usually accused of being unilateralist and unwilling to negotiate, the EU has sparked what is shaping up to be the next big international trade dispute.
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Has anyone else seen this video on our favorite pair of brothers?
http://www.youtube.com/watch?v=amd14Rznrc8
Yes. Apparently the Koch's have been too successful in creating a sort of closed cult out of the conservative base such that expose's like this seem to only preach to the converted.
Wind installations pick up after poor 2010
The U.S. installed 2,151 MW of wind energy in the first half of 2011, a 72 percent increase from the 1,250 MW installed in the same period last year, according to analysis from the American Wind Energy Association (AWEA).
According to AWEA’s “U.S. Wind Industry Second Quarter Market Report 2011,” an additional 7,354 MW of new capacity was under construction as of July 1.
The U.S. installed 1,033 MW in Q2 2011, up 46 percent from the same quarter last year. In total, the U.S. has installed 42,432 MW, with Texas leading in total installed wind capacity. Iowa, California, Minnesota, Illinois, Washington and Oregon complete the list of leading states.
http://www.power-eng.com/articles/2011/08/wind-installations-top-2000-mw...
Best Hopes for More,
Alan
Sounds good Alan. Any update on a smart grid to transmit power generated longer distances, and with it provide greater incentive to deploy more wind towers?
$500 million for 378 miles of 345 kV transmission lines for Texas wind
http://www.bizjournals.com/austin/news/2011/08/10/austin-firm-secures-50...
announced two days ago
This is part of a $4.9 billion transmission expansion, primarily for 18 GW of potential wind#, by ERCOT (Texas grid island).
Another point worth mentioning - ERCOT planned to build this massive upgrade in just 5 years. IMVHO, it will take six years to completion. New wind farms can be built in just 3 years - expanded wind farms less than that.
Best Hopes for More,
Alan
# Some general grid weaknesses were also addressed in this massive build-out.
PS: This is not a "Smart Grid" per se, as I understand the definition. Just needed transmission capacity for more wind generation > remote loads
PPS: 345 kV are the highest voltage lines within ERCOT and they interconnect into a backbone.
ERCOT covers 75% of the area and 85% of the people of Texas. El Paso, the northern panhandle and a notch around Beaumont are outside ERCOT and connected to the USA.
In the northern panhandle, outside ERCOT, they are proposing 765 kV lines, about the highest voltage in the world.
http://knowledgeproblem.com/2009/04/08/overlapping-transmission-grids-in...
Glad to see at least part of the country is moving ahead with transmission lines for wind. Sure many more will follow. Very positive news. Thanks for the info.
Transmission project going on to feed electricity from the world famous Tehachapi wind resource area to metro Los Angeles: http://www.sce.com/PowerandEnvironment/Transmission/CurrentProjects/TRTP...
I doubt any area in the world measures up to California's explosive growth in renewables going on right now.
Alberta is scheduled to add 7,095 MW of wind, under construction or under contract, to 800 MW installed by 2015.
China is building 100 GW of new hydro and leads the world in new wind installations.
Alan
China is like energy growth on steroids. Wish they would cool it on the coal, but that is wishful thinking.
Just one wind project being installed near me is 1500 MW in size http://altawindenergycenter.com/awec.html. I live relatively close to the massive Tehachapi wind resource area, which is a hodgepodge of separate projects. The Los Angeles Department of Water and Power, Pacific Gas and Electric, and Southern California Edison, all have their own things planned for that area. We have two other large wind resource areas, Altamont Pass Wind Resource Area, and the San Gorgonio Pass Wind Farm.
I tried to find a single resource consolidating everything going on in CA that's up to date, but in the time I took, I couldn't find one. Supposedly the following state website is the be all to end all, but it's too much for me to parse right now. http://www.energyalmanac.ca.gov/electricity/index.html#table
CA is third in wind capacity, just behind Iowa. Per capita it isn't so great. CA only has a few good wind sites, Altamont pass, the Delta, Tehachapi pass, Antelope valley. Many of these already have turbines, or have serious opposition to wind expansion. PV is doing well however.
They are moving the blades and towers onto the Altamont now. Environmentalists fought this for decades, but finally the old first gen turbines are going down, and big new ones are being put up. I suppose the years of delay were a good thing, as the technology has been advancing, and the output will probably be greater than if the replacement had been done a few years back.
Wind has been put to the test this summer in Texas, and according to Robert Bryce has failed spectacularly.
And Wind saved Texas's bacon when both coal and natural gas failed in mid-January ~
The short 4 GW rotating blackout would have been a very long (potentially > 24 hours) blackout >8 GW.
Alan
My Letter to the Editor of the National Review
Best Hopes for Balance,
Alan
"Antelope valley"
That's where I live. They haven't even begun to exploit the AV for its wind resources yet. There's only one wind turbine installed by a local water district, and Sam's little parking lot wind farm. I can't keep up with all the solar being installed right now, though.
From Tehachapi, the wind farms are spreading down into Mojave. That's where most of the wind is being installed right now. I wish I wasn't so lazy. All the equipment is staged at one location, so it would make for some interesting pictures.
California has its ambitious mandates, but I think Los Angeles has their own, so it looks like investors and banks are funding all the renewables, bad economy or not, and utilities will bill us all later. I haven't visited my friends home for a few months, I go to visit, and there's a new solar farm next door to his home. In three years, all the schools and district headquarters out here have either parking lot solar canopy installations finished or almost finished.
Bad idea or not, it's happening, and it's happening in an awful economy. I've been wondering, do the mandates placed on utilities go by nameplate rating, or actual output?
For California, the peak wind to solar ratio is already about 5MW of peak wind for every 1MW of peak solar.
As I have shown in the URLs to CAISO, the two, if they were 1:1, would be a more even power contribution throughout the day, as wind shows a characteristic "V" pattern with the low being mid day, when solar can contribute the best.
I am happy more renewables are being brought online in CA, I just think more solar is needed to balance out generation throughout the day.
http://www.caiso.com/Pages/TodaysOutlook.aspx
Isn't that where its headed. Good wind sites aren't all that common, and most of the best spots are taken. Sure we are building some new capacity, but the potential is limited. With solar, practically anywhere that has a grid connection will work. And the growth rate of PV is higher than for wind, so several years down the road I expect solar installations to exceed wind.
From your lips to deities' ears (as the saying goes). :)
OPEC Sailings Fall By 60,000 B/D In 4 Weeks To Aug 27 -Tracker
I keep waiting for all that new OPEC oil to show up on the market. But alas, it just ain't happening.
OPEC Crude Only January 2004 thru July 2011 in thousands of barrels per day from OPEC's OMR.
Ron P.
It won't happen until the "great" recession ends. No way to know if we're past peak or just in a demand slowdown.
Or it could be both simultaneously and the fact that we're past the peak is preventing a full recovery and resumption of growth. Have you noticed that every time things start to pick up, the price of oil goes up, which contributes to upward pressure on the price of all goods and downward pressure on the economy (and hence demand)? Same pattern for the last five years or so, rinse, repeat. That would seem to indicate that there's no meaningful spare capacity left in OPEC and that we're past the peak. No growth but with oil still hovering around $90? Yep, pretty sure we've got it. Of course you can attribute it to a "demand slowdown" if you like, and many pundits in fact do just that, but that doesn't say much about what caused demand to slow down in the first place. It might have something to do with...high oil prices?
Oh wait, but I forgot, there's millions of barrels of oil sitting right underneath our feet, which would solve our energy crisis if only we would end the EPA's regulatory reign of terror ("moderate" GOP candidate Huntsman's line, not mine). Sorry, I just couldn't resist.
Louisiana Light Sweet $107.39
Brent $108.39
Tapis $116.31
Minas $117.66
Bonny Light $110.94
Alaska North Slope $106.84
Russian Urals $107.59
As of one week ago today, average world oil price: $111.32.
World Crude Oil Prices (Dollars per Barrel)
Ron P.
Ron,
Is this weighted average (on volume and/or quality-BTU content or some reasonable normalization)?
Edit: Next time I'll read the whole comment first. Sorry to bother!
Could be, but the debt situation by itself can create "lost decades" even with cheap oil.
Debt based 'deflation's' after mania's have happened before. I would tentatively suggest this time the debt binge was bigger, by deluded necessity, because the peaking of oil.
WastedEnergy:
Why should you be sorry?
Look I've been very consistent in my posts that this country is basically finished, that mockery is all we have left.
Still worth discussing energy and things which are hopeful, because we need that. But you never need to apologize for gentle cynicism.
Because we are propagandized from birth to always be optimistic in this country, it prevents any meaningful discussion of the truth, which actually leads to a sort of passive aggressive denial of reality.
Better to be truthful and cynical than to be a happy faced liar.
"Better to be truthful and cynical than to be a happy faced liar."
Yes - I am reminded of the old Bertrand Russell quote:
“Men fear thought as they fear nothing else on earth — more than ruin, more even than death. Thought … is merciless to privilege, established institutions, and comfortable habits; thought is … indifferent to authority, careless of the well‑tried wisdom of the ages. Thought looks into the pit of hell and is not afraid.”
Uh huh. And somehow China and India grow 10-15% regardless of oil prices. You lose. Correlation isn't causation.
Do you know what the average wage in China or India is? When you get that figure then we can talk about decoupling growth from oil. Of course, China is experiencing inflation when we had our 2011 peak in oil prices despite their wages being depressed compared to the first world, and oil prices have not really cooled down globally. Why is that? Could that possibly be because there is not enough fuel and electricity to go around?
Then you get to factor in the massive increase in coal, oil imports into China and India to fuel that growth. They did not grow for free -- on free energy!
Decoupled growth from energy is a myth more or less that is why the financial system is reeling.
Mkkby, read the article up top: Analysis - Recession risk unless oil prices fall further
Or the article above that one: Saudi Arabia’s coming oil and fiscal challenge. In that article the author makes the point that high oil prices cause recessions and Saudi Arabia is very aware of that fact.
Everyone in the world realizes the connection between high oil prices and recessions... Well everyone except you I guess.
Ron P.
You really don't understand that continued growth is no longer possible, do you? Not here, not in China, not in India nor anywhere else either. That 10-15% growth you are talking about is pure fiction!
http://i289.photobucket.com/albums/ll225/Fmagyar/ExponentialFunction2.jpg
'Growth' in the annual consumption of oil is likely over, but growth in the economy is very likely, though less so in countries with political systems geared to protecting the interests of the rentier class.
Economic growth is not about consuming ever greater amounts of physical resources, it is strictly about the expansion of economic activity, to which end I will make a small contribution tonight while I drink beer from reusable bottles listening to acoustic music at a local coffee shop to which I will travel on my bamboo bicycle dressed in my hemp clothing. Hell, I might even smoke a little of hemp's cousin in order to keep the underworld afloat during these hard times.
We have consumed more and more non-renewable natural resources, and fouled our sinks, because we could, not because we had to.
May I suggest that you turn your attention to the idea of increasing returns.
To that end: "Knowledge and the Wealth of Nations: A Story of Economic Discovery" by David Warsh.
Actually, it would worth the time of many regular contributors and posters here who appear to think that they grasp economic issues.
Perhaps you've been smokin a bit too much of that hemp there son... there's these laws of thermodynamics that you seem to be breakin, you're gonna get busted for that sooner or later!
Economic growth is indeed about consuming ever greater amounts of physical resources no matter how much you recycle or how efficiently you consume them? Furthermore, expansion of economic activity requires, DRUM ROLL PLEASE!! TATATATANTADAH!.... ENERGY!
Jeez, don't they teach basics physics and chemistry in school anymore?!
No, economic expansion does not necessarily require more physical resources and energy. People can and do buy things with less physical resource usage. For example, if instead of paying $X for gas to power a boat for entertainment people payed $x to watch a few movies streamed across the internet there would still be $X of economic activity but one used less resources & energy.
As he emphasized in his night out, he was doing very low energy & resource activities but still participating in the economy by buying beers & some weed.
I fully agree that it will be very difficult to have economic expansion with less energy but it is possible and to some degree inevitable. As the price of energy goes up, people will pick less energy intensive ways of living & entertaining themselves. It is already happening. People are opting for apartments closer to work because a cheap house in the exurbs is not all that cheap when you add in all the money you spend on gas commuting. People are taking stay-cations because it costs more to fly now. People download/stream movies, music, and games on the internet because it is cheaper/less energy intensive than going to a store and buying a physical media copy.
Absolutely it does! Which part of "There are limits to growth", do you not understand? Economic expansion requires growth, even if it is less energy intensive, it still requires some energy. As long as you are growing you continue to have a problem.
May I suggest you re-read:
http://www.theoildrum.com/node/8155
Galactic-scale energy: Part 1
Posted by Euan Mearns on July 22, 2011 - 9:45am
Topic: Supply/Production
http://www.theoildrum.com/node?page=1
Galactic Scale Energy, Part 2: Can Economic Growth Last?
Growth by qualitative improvements rather than quantitative increases can create "more growth" without more resource inputs.
Alan
Even if the world GDP is flat, some areas can be going up while others go down. Having low wages and well educated people, I expect China and India to increase their share of the global pie. Plus equating energy one to one with economic acticity (unlessit is measured in BTUs) is wrong. Efficiencies can, and are being improved. So with a fixed supply, we can grow simply by using what energy we have smarter. Plus as we get better with PV, we can keep adding more capacity, the resource limits are many times current power usage. So in a hundred years, I do expect human energy use to be considerably higher than it is today. The real bottlenecks are 5 to 25 years from now, as the old standbys might go away faster than the new ones come online.
... and in a 1000 years from now we'd be sucking out the sun and looking for ways to suck out neighbouring stars. To admit the truth, even I'd like to blame Mr.Asimov & Co for instilling such a sense of confidence (arrogance?) in the Human Genius.
OPEC sailings set to fall...for now folks in Albuquerque do not see an oil supply/price problema:
http://www.albuquerquegasprices.com/index.aspx?fuel=A
$3.19/gallon cheapest in the last 36 hours...I filled up for $3.24 yesterday.
According to this source, gasoline was $1.68/gallon when GWB was sworn in...however, that us water under the bridge...so 10 years ago!
Since then gas hit ~ $4.40/gallon in Albuquerque a few years ago IIRC...so $3.19 now seems like a bargain.
Really, only two things will grab the attention of Joe and Jane Box'O'Donuts:
1. Record high and rising prices at the pump
2. Lots of pumps with those little yellow plastic bags over the nozzles.
Lots of #2 should lead to #1, but #1 can occur without #2.
The underlying, fundamental feedback loop between historically high energy prices and the floundering economic performance we are experiencing seems lost on most people. The reason oil didn't keep increasing in price is that higher prices are a brake on quantity demanded compared to lower prices...
I know everyone here knows this...but I was thinking about how to communicate the situation of finite oil and EROEI to folks I work with...starting with the guy who keeps saying 'There's Pleeenty of oil..." while rolling his eyes at any mention of depletion of easy-to-extract oil...he and his cohorts simply lay the blame for lackluster economic performance at the feet of the President and the Democratic Party, and that is that.
The same guy, in a flash of insight, dis say that the World may have too many people by the year 2100...I started to get excited that he saw the light until he stated the 'problem date' as being comfortably beyond his (or his children's) expiration dates.
I think that the only person who can have any hope of grabbing the peoples' (and I mean the World peoples') attention is the President of the United States, via an at least 1-hour-long television /webcast address and simultaneous press release addressing the finite nature of oil and the realities of decreasing EROEI.
What would the response be the days and weeks after?
What if the speech is given and then ten years later things are about the same...another Jimmy Carter Malaise/wearing a sweater/turn down the thermostat brief in the dustbin of history?
The problem with PO messaging is that there is no dramatic inflection point (as depicted in previous PO graphs showing a great decline starting in 2010),
http://www.businessinsider.com/jeremy-gilbert-peak-oil-2011-5#traditiona...
..so we are as the frog in the pot of water on the stove on our way to boil....
One last: Why is there a gap between Consumption and production in this chart/graph of total World oil production? Is this refinery gain or something?
http://mazamascience.com/OilExport/output_en/Exports_BP_2011_oil_bbl_MZM...
Heisenberg, good comments.
Many drivers today have not experienced gasoline being unavailable. I remember the shortages around 1980 and would much rather pay additional for the gasoline rather than not have it available.
Now that the stock market has dropped we'll probably have a few more months before gas prices experience an increase in cost again.
Maybe if it was a Repub prez and the Dems weenied out of a rebuttal, like they often do. However, the Repubs always completely and utterly rebut anything and everything a Dem prez says. So as soon as Obama was finished, Boehner, Canton, Mitchell etc. would roll out some line like Obama's giving up on Freedom and his message would be cancelled out for many people.
I'm convinced most people view the world as existing in a fairly level steady state. For the most part they are unable to relate to the idea of their steady state altering negatively for any reason other than failure at the top, i.e. prez and congress. Ideas like oil is finite are too abstract for their innumerate minds. They cannot process it. So let them find out the hard way, when it happens - oh, that will be quite a moment to watch their reactions. Just to have fun with it, I'll say something like, "This is crazy. There's plenty of oil!"
Peak Earl,
',,,Maybe if it was a Repub prez...'
I thought of that aspect...kind of like 'Only Nixon can go to China'?
Maybe we can have a Mission Impossible team reprogram Governor Perry's brain and then we get him elected, and he rolls out the Bully Pulpit Peak Oil and Limits to Growth messaging....
...and part of his brain reprogramming will have him explain to the American people that there will be no help from any deity, that we have to use our collective intelligence to figure out the best way ahead...
Edit: Intrade currently showing a 32% chance that Perry will be the Republican presidential candidate.
http://www.intrade.com/v4/markets/contract/?contractId=656777
It's more of a job for the 'inception' team.
Well, he did stipulate that the audience would be the world's people, most of whom would not be particularly impressed by our current crop of Repu leaders.
But I agree that such messages go so strongly against what most believe or want to believe that they won't be able to hear it.
Another point is that as long as everyone thinks things are growing, they may get a piece of the ever-expanding pie. This makes them less concerned that a few percent of the population have horded a majority of the pie.
As soon as it becomes clear to most that the pie is not going to get any bigger and will be shrinking at an increasingly rapid pace, the pressure to 'share the pain' may become very strong and probably violent.
So TPTB, including our very conservative, by most global (or at least western European) standards, president, will want to keep the lid on things as long as possible, vacuuming up as much of what's left as they can while they can.
Who was the wise Russian who said not to pay attention toe the circus of national politics for you can not effect them?
If we can read the chart as an accurate representation, business insider seems to indicate that Ouldavai range for the '100 year age of oil' looks to be more like 1960 to 2060 than 1930 to 2030. It gives a few more years to prepare, and does not otherwise change the message. Almost an improvement, though. I almost feel giddy about that.
You are correct about the Jimmy Carter moment. That would be a concern, and the effect would be potentially devastating.
Can anyone comment on that chart? I seems contra-intuitive to me.
Craig
"The underlying, fundamental feedback loop between historically high energy prices and the floundering economic performance we are experiencing seems lost on most people. The reason oil didn't keep increasing in price is that higher prices are a brake on quantity demanded compared to lower prices..."
Totally wrong, but love the arrogance of it. It is true that higher prices is a brake on demand for any product/service. What's lost on you peak doomers is the economy is floundering because of peak debt. But I guess when you have a religious belief, the blinders prevent considering other factors.
mk - Not disputing your general implication, but what has caused peak debt? IMHO a number of factors. But couldn't PO be contributing to some degree? PO leads to higher energy prices with much of that capital leaving the US economy. And the loss of that capital, combined with all the other factors (such as the housing bust) impinges upon growth. We can argue all days as to which factors have the greatest impact. But a bit of a waste IMHO. It's difficult to look at any one significant problem in the country today and not attribute multiple causes.
Capital leaving the economy? Like 12 million barrels of oil/day at $100/bbl.
$1.2 billion/day x 365 day/yr= $438 billion/yr. Bad for the economy? Duh. How much credit card debt do you suppose consists of gasoline purchases?
What has caused peak debt? You must be effing kidding me. The US and fed print trillions each year. The bank of japan did it for 20 years and ongoing. Now the EU is doing it and half the countries/banks are still failing. Short term borrowing has been near 0% in the US for 11 years, and Japan for 21.
Oil does play a role. The high prices are a function of currency devaluation, demand, expectations and a lot of other things.
If you want a root cause, look to the bankers. Everything might have been fine if we hadn't left the gold standard in Nixon's day. Going off of it allowed unlimited credit and currency printing for wars, entitlement programs, stock market bubbles and finally, houses for people with no income.
mkkby,
"The US and fed print trillions each year"
You have made a very poor argument!!
The US, Fed and other central banks are trying to "re-inflate" the debt markets because the
300+ years of "fractional reserve banking" that power economies (by creating money as debt)
is in serious trouble.
The private banking system created all this money as debt, not governments or central banks!!!!
lncreasing availability of energy is required to increase manufacturing, food production, and services!
This is how you "pay off" the bank note/credit card bills!!
Are you trying to say that the financial system is divorced from the energy system -- wholly dissociated? Wow that is delusional sorry to say. The something-for-nothing-crowd has lost it. They think you can invent money and finance things without energy behind the deal. So where is the oil/energy to support "growth"? Then why can't they service the debts as growth stagnates as energy stagnates?
Better yet. Where is the oil considering the investment poured into the system for the last 10 years? Show me the oil.
No. I'm trying to say only what I said ;)
Like I said you cannot divorce peak oil and peak debt. They are interlocked. You have not provided one bit of evidence on the contrary.
They're only interlocked because our money is created by bank loans. Peak Oil would occur under any monetary system (gold standard, free banking, Social Credit, etc.), but the debt/oil link is a product of our particular monetary system.
In an industrial civilization like ours, what do you envision as an economy that can possibly separate the money supply from the power sources that make the industry function, then bringing the workers to their jobs, the customers to the vendors?
Bank loans are an intermediary function within the system, it's not a fundamental.
Once you have invested in a bunch of asphalt and cement...ribbons of highways, acres of malls and skyscrapers.....it becomes unthinkable to simply scrap these "investments" and do away with the unsustainable untenable lifestyle that they imply. The oil-supported economic structure is able to be supported, after its useful life, by infusions of government cash. As Japan has shown, this process can go on for decades. Japan was simply the first major OECD economy to enter the circling drain, so it goes slowly down, in bigger circles. As we can see those following like Greece and Ireland are going faster and circling in smaller circumferences.
Governments can't really give up on printing cash to fund the bankrupt and insolvent businesses that now are the economy.
We can see the countries entering the circling drain together now, in tandem, synchronized. Whereas 20-30 years ago, governments could rely on one area of the world taking over when a slack economy appeared somewhere else. Japan, China, Eurozone, Ameroca... when one went up another one would get economic benefits. They all had their turn to go into overdrive then sink back.
But now there are no good clean economies left to cannibalize. There are only heavily indebted zombie economies subsisting on over stimulation. It was fated after the first oil well was drilled.
Pi:
I don't know if you are into physics or not, but what you are describing is a gravity well.
It is the gateway to a black hole.
Once we discovered "free energy", i.e. very high EROEI, the mass agglomerated.
I think it was coal, but it could have been wood, maybe even agriculture itself, but no matter. The successive transitions piled upon each other, allowing us to expand, spending an inheritance without any regard to paying it back.
The debts piled up until not even good, honest work can escape the pull.
What remains on the other side of the collapse is yet to be seen.
Pi,
I have always read your comments with great interest, and mostly agree with your conclusions-occasionally you hit one right out of the park.
Your 1:10 am is one of the best comments I have ever seen on TOD.
You could by fiat, simply create the money to keep the economy going. But, that requires a strong government that can do what it thinks is has to. Like the Chinese. Money is just a means to get peolpe to do things. Other than that its an intangible. If we have twenty percent of the population unemployed, thats really a collective failure of our imagination. Something that could be cured with a software (wetware?) upgrade.
If those 20% who are unemployed get jobs, they will spend their new income buying things that need energy to manufacture and transport, even if their new jobs somehow do not consume energy.
The ultimate, minimal energy consuming, fiat method of growing the economy: print the money and give it to the 20% who are unemployed at a rate of $4,000 per month perpetually. They are supposed to spend that money buying stuff which requires energy to manufacture and transport. The increased demand creates more jobs except that the energy supply can not increase to supply the demand. The price of energy skyrockets until supply and demand are back in balance creating no new jobs. The ultimate fiat plan increases inflation but otherwise fails.
The very idea that peak debt is not connected to peak oil, and the price of oil, is indeed quaint. Anyway we have been over this point time and time again.
The Link Between Peak Oil and Peak Debt – Part 1
The Link Between Peak Oil and Peak Debt – Part 2
Ron P.
I've seen all your old posts. Correlation isn't causation. Ever heard of that?
Obviously you are just making that up because those are not links to my posts, they are links to special threads by Gail the Actuary. These two threads had over 240 comments each. And not one of the comments was from you. So either you did not read Gail's threads or any of the comments or... Gail's analysis was just way over your head and therefore you had no idea how to reply.
Ron P.
It is good to see a a different opinion on oil and energy and economic growth and debt. It is likely wishful thinking to various political classes that politics can solve the energy crisis.
They need to maintain the fantasy that debt is decoupled from oil to make it seem as if the spending of Big Government can be scapegoated as the cause of the Debt crisis. This is the current political debate. That debate would be different imho if debt were the result of the limits of oil growth. That is very hard on that particular type of politicking.
One possible outcome is to try and make gov debt itself the political message. Even though the collapse of private debt is what caused the 2008 recession. Gov't Debt's surge is what is filling in the void from private debt collapse.
The idea I think is to restructure federal assets and various services in favor of particular special interests based on the problem of abstract debt. The whole energy scarcity thing muddles that particular messaging. Heck most people just cannot get that message period.
It is true that Correlation is not always causation. However, in a complex system there are feedback loops and tipping points. Therefore it is difficult to pin point what caused a change of state of the system.
The posts by Gail linked here by Darwinian explains the link between debt and oil. It needs Systems thinking - one cannot expect linear / one-line answers.
Well, I read the linked articles. The author clearly knows little. Oil was created by a divine logarithm, or by chance. Debt, like money, is an act of the imagination: it can be whatever size we want.
"Well, I read the linked articles. The author clearly knows little."
Most of us here at the Oil Drum would disagree. We think Gail knows far more about the situation of Debt and Peak Oil than almost anyone else. Well, anyone else on The Oil Drum anyway. She certainly knows far more about the subject than I do.
Oil was created by a divine logarithm...
Oh, God did it. Sorry I was of the opinion that I was talking to a rational person. Sorry but I don't argue religion.
Bye now. Ron P.
or by chance
I'm sorry that the humour whistled through your ears. Still, I thought that you would have grabbed the 'chance' bit.
As for Gail, she's clearly in over her head and, if your appeal to the authority of the mob accurately reflects the consensus here, then she's not alone.
"As for Gail, she's clearly in over her head"
Took you a whole 8 weeks to figure that out, did it?
Did you happen to read this?
Peak Oil and the Financial Markets: A Forecast for 2008
Posted by Gail the Actuary on January 9, 2008 - 10:32am
http://www.theoildrum.com/node/3382
Wow! I did not remember this post. Almost all here predictions were spot on. Some of them uncanny.
1. Many monoline bond insurers will be downgraded in 2008, and some may fail.
4. There is likely to be a serious recession in 2008, deepening as the year goes on.
5. At least several large banks will fail.
7. Fannie Mae and Freddie Mac may need government assistance.
11. Besides banks, many other players in financial markets are likely to find themselves in financial difficulty in 2008.
13. The stock market probably will decline during 2008.
14. Prices are likely to rise in 2008 for food and energy products. Prices may decline for homes and non-essential goods and services.
15. There is a chance that some type of discontinuity will make financial conditions suddenly take a turn for the worse.
Those were just the ones where she hit the nail squarely on the head. None of her predictions were clear misses. I have a new respect for Gail now.
Ron P.
You mean money is perhaps arbitrary but imaginary debt is lala land. The monetary system is whatever unit of currency we choose -- you could imagine it to be any unit you like. But after that is established it is tied to energy consumption. Debt is not imaginary.
The financial system has falsely accounted for an available supply of cheap oil prior to 2008. As the supply tightened, debts were not able to be paid. People went onto food stamps and lost their jobs and houses/mortgages went under. What is so hard to understand?
You should read the prior work in the area first or at least post a counter-perspective that is credible in its place.
What is hard to understand? Why anyone capable of turning on a light switch can believe this kind of jibberish. James Hamilton makes a reasonable argument about the impact of the oil price run-up, but I'm sure he'd rather dive headfirst through the outhouse hole than be associated with the logic you present.
The financial system, debt, money are all acts of the imagination. That does not mean that they are not real, which I'm guessing is what you meant by "imaginary".
The financial system has not falsely accounted for an available supply of any resource; that's not what it does.
Let's continue this discussion after you go to the library and get up to speed on the material.
The Catch-22 Recovery: We Need to Keep Gas Prices Low
It was nice to see an article recognize that gasoline prices are a huge problem for the economy. But then it suggested the worst possible policy prescription:
Oh. My. God. Yeah . . . that is what we want to do . . . subsidize a commodity that is entering long-term permanent decline which we already import 2/3s our needs of. Yeah, let's make our economy even more dependent on oil by subsidizing it. That is like treating a heroin junkie by giving them more heroin.
Does anyone know of a site that lists the Presidential candidates' energy policies/views?
Including President Obama...I am still not sure what his energy visions is...
?
I'd bet there are politicians out there looking for a corresponding website to figure out what the public's energy views are, so they can update theirs..
I just got an Email response from one of my Congresspeople (Pingree, Maine), whom I wrote to about Oil a week or so back.. with a few of the more encouraging mentions of Transp. Dependency and Home Energy/Insulation needs, and how the money sent out of state does nothing to support our State Economy, etc.. but she still has the comment in there about 'Reigning in the Oil Companies'.. which I think is not JUST pandering, but is also a belief.. and I want to say 'All you have to do to reign in Oil Companies is buy less and less oil. They are the middlemen,' as Rock astutely reminds us every so often.
For the sake of humor, I did a quick search. Well, here's Bachmann's:
Bachmann: Energy is ‘the most easy problem for America to solve’
Look no further. I think we have a winner!
Has the potential to be the most entertaining.
Wow. Such a dangerous combination of arrogance and stupidity. Brings back memories of George W Bush and his plans of a quick war in Iraq.
And in addition she even manages to work in some paranoid conspiracy theory vibe with the "Did you hear that on your local nightly news? Are you kidding?" lines.
Yes, Michelle, you solved it. Thousands of petroleum engineers working for decades have been unable to solve the problem and we've been stuck with a slow 40 year decline since 1970. Shale oil. Why didn't they think of that?!?!
When Carter talked about shale oil, I bet the Right Wing got all uppity and slammed the guy. People seem to forget Shale Oil technology is so 50 years ago. It is just that today we can extract it for a profit.
You know the killer. Bachman forgets. At Shale Oil prices the US economy will remain in permanent recession. I mean the shale oil that you mine and grind up and extract not the other kind of shale oil liberated by fracking. But whatever ... not one insight on our plight. Her handlers want her to feed a false vision -- the no pain solution to tomorrow.
Maybe Peak Oil Doomerism is a good idea after all.
mkkby,
Thanks for your viewpoint, and here are a few nuggets from me to you;
1. 'Totally' wrong...wow, speaking in absolute terms is rather bold, cowboy!
-- BTW, my use of the term 'fundamental' does mean 'only'
2. Am I a 'Peak Doomer'? ...Use broad brush labels much?
3. Please reserve the use of the word 'religious' for when you are speaking of religions, commonly understood to involve deity or deities, punishments and rewards, and some kind of afterlife.
Riiiing...
School's out...
H, lays down the Debate Club rules. I'd hate to see you with a yard stick chasing down discipline cases ;-)
Oct,
Maybe I should dress like a penguin and smack my flocks' knuckles with a ruler (one with the little metal edge) :)
The joke is on me...in my haste to get in the great outdoors, I mi-stated one of my sentences:
Should have read: "...my use of the term 'fundamental' does NOT mean 'only':
My stones...my glass house!
But my dealio was a typo...what I was trying to correct was the OP trying to hijack the terms of the debate by labeling PO a 'religion'. Once we even implicitly agree to that by letting it slide, now PO is not science, but faith.
My two other comments stand as well.
I recently facilitated a meeting where folks were dreaming up specs for a system that will cost billions of tax payer dollars...I did the same thing with them...reminding them that words matter and common definitions must be agreed upon and documented.
Very True. Gas prices are the equivalent of that invisible glass ceiling. I was reading Gail's blog today, he's put it quite succinctly.
Here in my country MSM is still peddling the idea that GDP has grown by 8% in the past 2 years so we must be doing well, I guess someone forgot to teach them that any growth is always measured in inflation adjusted terms. Since QE1 inflation has averaged close to 8%(mainly oil prices), so the growth has actually been 0% in real terms and this has been the case in China, Brazil and almost every other country, I guess many of western economies have actually contracted in real terms.
So much for growth.
Oil and inflation are up because of peak debt and currency devaluation. Maybe oil has peaked as well, but we won't know that until the demand picks up and we see if supply can meet it.
BTW, you should change your handle. Anyone who calls themselves "wise" is just begging for attention. We'll let you know if your written thoughts are wise. So far, not yet proven.
There is no demand for expensive oil. That is the problem. I bet there are a whole bunch of folks that would buy $20 a bbl oil and a lot fewer that will buy $200 a bbl oil. That is the essence of the current energy debacle. That is supply and demand.
mkkby, look you want to pick a fight on here. This is the wrong forum for slamming people with personal attacks. Try CNN or Foxnews blogs to shout names at people.
Heh. Gail is a She, not He.
The denial runs deep on the conservative side. They are constantly being exposed to cornucopian messages (usually with the ,essgae, only the enviros stand in the way). Latest I hear is : we can mage gas(oline) from oil, so no worry, simply kick out all the liberals, then full speed ahead. These are people capable of doing quantitative analysis. If they'd only put numbers and costs as the to probable size of these miracle new sources, they'd see the problem. But ideology and tribal identification might then be threatened.
This is why ANWR needs to be opened. The Cornucopian myth must be killed in order to make progress.
And there is some evidence that conservatives are able to slowly appreciate facts and change behavior. They did go from "Deficits don't matter" to "OMG! OMG! THe Defict! The Deficit!" in just a few years time. Of course much of that may only be since there is a Dem in the whitehouse but hopefully some really did learn something.
So perhaps opening ANWR and seeing that oil prices only continue going up will slap some reality into them. (And least enough of them to allow better policy making.)
But you know damned well that if a Republican got back into the White House that the Republicans would cease to care about the deficit, and return to more tax cuts and more needless defense spending. They care now only because it suits them politically.
"Reagan proved deficits don't matter." -Prick Cheney
Obama has cut taxes and drastically increased defense spending. Enjoy 2012!
That was a zinger. Ain't it all great. None of this addresses the central problem.
In fact they let Obama have his stimulus via tax cuts last fall. That was the same folks. They just knew it was rope they could turn around and hang him with. And Obama with his supposedly eleven-dimensional chess brain, didn't see it coming?! The whole plan for the R's has been. Get in office, cut taxes, run up massive deficits. Then when out of office scream about deficits, and blame Democrats. Then they deal with it, partially by raising taxes, which isn't exactly popular. Then R's get into office again, rinse and repeat.
Link up top: Indonesia's oil output declines
Indonesia's oil production decline is apparently confirmed as predicted by "peak oil" proponents. Apparently it took 12 years for some folks to realize this. Indonesian oil production began its steep decline in 1999.
Indonesian crude + condensate production in thousands of barrels per day from the EIA. The 2011 data is the average for the first four months only.
Ron P.
One of the interesting aspects to the Peak Oil debate is that many, if not most, of the POD (Peak Oil Denying) People accept that discrete oil wells eventually decline, and that discrete oil fields eventually decline and that discrete producing regions (like Indonesia) eventually decline, but they profess to believe that global production--the sum of the output of discrete regions like Indonesia--will never peak and decline.
Westexas, besides Peak Oil is the increasing population and the reduced oil available per person, even with a stable oil supply.
Well than its a simple solution Governor.
Total energy = Number of people X the amount of energy each person uses.
If the left side is shrinking and one wants their own personal amount of energy they use to not be reduced, there is only one variable left to change. Right?
But most people are still focused on the left side of that equation, whether it be ff-oriented folks, pro-nukers, or alternative types.
What is most easily reduced is the amount of energy each person uses, much of which is wasted, especially in countries like the US, Canada, Australia and a few others.
As mentioned yesterday, the best way to humanely bring down the number of people is to reduce the birth rate and the most important strategy there is educating and empowering women.
A major global effort in those two areas--reducing energy use per person, especially in developed countries, and educating/empowering women--would go a long way to making the problems of limits of total energy a non-issue, or at least a relatively trivial issue.
Was it Nate who said we have not so much an energy shortage as an expectations "longage."
A huge effort on both fronts would probably take a fraction of the $ wasted on military expenditures worldwide.
Politically possible? Perhaps not, though politics can change radically and suddenly. But logistically doable none the less.
What is becoming less and less possible in a very real, physical sense is preserving a livable planet on which to use however much energy from whatever source. If Arctic sea ice volume follows current trajectories, we will have an ice free north polar cap for the first time in who-knows-how-long, an event which will likely make inevitable the melting of land and seabed methane stores, stores many times larger than all the carbon currently in the atmosphere.
http://neven1.typepad.com/blog/2011/08/piomas-july-2011.html
We may or may not get a reprieve of a few years, but we will almost certainly waste it in more bickering, denial and profligacy.
http://neven1.typepad.com/blog/2011/08/arctic-ice-melt-could-pause-in-co...
Recently I refined my knowledge of the second law by reading up on something called MEP...Maximum Entropy Production. (Google it if you don't know what it is). I would say that bickering, denial and profligacy are just the perfect vectors for the continuation of MEP. Add infighting, short-sightedness, and a herd-mentality....I think we weren't meant to "get it" at any point. Only a very few people can understand this idea of energy depletion.....for most it is absurd: the earth is huge and there should be oil all over the place, right? I think for many, they equate oil and ocean water: something sloshing naturally and abundantly, there if you need it.
The idea of a system, with people as part of it, effecting MEP is a kind of heretical notion: we should not be material creatures engaged in something ravaging and ultimately self-destructive like entropy production. We are supposed to be made in god's image and what we do is right and good, with the best intentions and the outcome can only reflect our perfection. Therefore any kind of misery won't compute.
So it is religious territory. I think oil depletion has little chance of being generally understood, except much later, on a personal level.
I myself respect religious ideas---not all---and find much awareness and goodness in religion, I am sympathetic because I think we are indeed decent creatures and we just stumbled on a substance that we weren't prepared, as a species, to deal with in a way that reflects the depleting quality of the substance. We are used to the steady and constant sun and when it comes to coal and oil we were just blind-sided, now whipsawed through time....it really isn't fair.
I think part of it is that the human condition has come to expect the world to be in a steady state, come what may. 'My grand daddy says it is just like his grand daddy's times so it is always going to be that way'. The humans expect fields to always produce enough food, rivers to stay their course and not meander or flood, the ocean to remain calm with no tsunamis, oil to just come out of the ground if you poke a pipe in it. The dynamic, changing state of the world is not within the time horizon of human consciousness and so cannot be accepted. People look around them, 'there were always this number of people around me' they say. They do not understand the world filling with people, it is not within their horizon. People look at one small part of an exponential curve and only see a straight line, they cannot see the curve as a whole.
NAOM
Yeah the whole is not the sum of its parts. Kind of a weird position to take. It is like believing that calculus is wrong and infinitesimal changes cannot be used to integrate a curve. Very bizarre.
How Practical is Residential Solar Power?
See: http://solar.calfinder.com/blog/news/how-practical-is-residential-solar-...
I should point out that the home is actually 2,200 sq. ft. in size, not 3,000 as indicated above (see: http://ecoplushome.com/index.php/test-house).
Cheers,
Paul
"Picture a 3,000-square-foot home that generates more energy than it uses"
Personally I would have typed "electricity" instead of "energy", since much of the developed world still consumes more energy directly by incinerating things in their home than with electricity. For space heating, water heating, clothes drying, and cooking.
With respect to other potential energy inputs, I'm quite confident that this home is all electric. We know from the article that the space heating and DHW systems are geothermal/thermal solar. I can also tell from the placement of the control knobs in this video (http://ecoplushome.com/) that the cooker is electric. As for the dryer, I can't be 100 per cent certain, but my guess is that it too is electric (propane tumble dryers are extremely rare in Atlantic Canada).
Cheers,
Paul
At least for me and my 4-person, 2000 sq/ft house who lives in sunny Southern California, it would not be difficult to cover my house with enough solar panels to completely offset all my direct energy needs including:
1. Electricity
2. House heating in the winter
3. A/C in the summer
4. Clothes drying
5. Cooking
6. Transportation
We currently have a very modest 3.24 kW DC PV system which offsets nearly all of 1, 3, 4, and 5 (granted we do not use the A/C much) - this is about 5000 kWh / year.
We use about 120 therms of gas a year for heating the house and water. Replacing this with heat-pumps, this would probably result in an additional 1500 kWh / year of electricity usage.
Transportation - we have 2 cars driven about 20,000 miles a year. One of them is an EV which goes about 3 mi / kWh from the wall. This is the monster - this would require about 6600 kWh / year.
Adding it all up comes to approximately 13 MWh / year.
1 kW of solar PV decently situated generates about 1500 kWh/year around here - so I would need about 8-9 kW DC to generate enough electricity on my roof as my family uses. My best roof only has room for about 6 kW of PV - after which I'd have to mount it on an East facing roof which reduces the power for a 1 kW system to about 1200 kWh/year - so let's just say I need a 10 kW DC system.
Current prices for such a system would range between $50-70k before any rebates/credits.
Doable? Yes. Expensive? Yes! Hopefully the SunShot Initiative works quickly (with a target of $1 / watt installed in 5 years for commercial systems). If prices get to $2-$3/watt for residential systems everyone will install PV. Even in the last year I have seen a good number of PV systems pop-up in my neighborhood. As prices continue to fall, this should accelerate.
FWIW - one can buy PV panels for about $1.50/watt and inverters for $0.50/watt. Racking/wiring will cost another $0.50/watt. So the raw prices are getting close to $2/watt already - the rest comes from installation and other overheads.
Most of So Cal experiences relatively mild winter temperatures. I'm not so lucky here in my So Cal high desert town, with about 66 nights averaging below freezing temperatures, yet most people in the US, Europe, and all in Canada would scoff at that.
Well that is best remedied by a really really thick homemade wool quilt. This is a problem with energy though. Not everyone lives in the same climate.
I spent a few miserable nights trying to keep warm with wool quilts in Yosemite a few years ago.
Wait, homemade? They won't allow sheep in my neighborhood.
There are some sub-$1/watt panels . . . however they tend to be the low-efficiency thin film systems such that you'd have trouble meeting your goals due to limited mounting space. But your goals are really high. If you let natural gas handle cooking, heating, hot water, drying, and any other heat-based task then you can easily use a PV for everything else. Using PV for heat-based tasks seems foolish for now since natural gas is currently plentiful and cheap.
The thinfilm stuff has its place. They are only a little less eficient than my lower end silicon panels. And the thermal coefficient is only about .2% per degree C. Instead of .5 for Silicon. So in a hot climate, they might be a good choice. Say 12 percent. Not so bad. You can still get quite a bit from a roof.
That is why thing film seems to be the panel of choice for utility scale installations, where land area is not the key determinant, but $/W is.
Arizona based First Solar does not sell any retail, only to major projects, likely for these reasons.
What's not practical about it? You didn't address your own conclusion.
"How Practical is Residential Solar Power?" is the title of the article.
Cheers,
Paul
From: Can Jeremy Grantham Profit From Ecological Mayhem?
A long but good read. Grantham is good at giving a view from 50,00 feet on the future.
From up top: "Natural-gas companies risk causing serious environmental damage from hydraulic fracturing unless they commit to the best engineering practices, a task force named by Energy Secretary Steven Chu concluded." I suppose the best news is that they are finally beginning to highlight the real potential risks: proper fluid disposal and not the actual frac'ng process.
“While many states and several federal agencies regulate aspects of these operations, the efficacy of the regulations is far from clear,” Far from clear??? I would say it's very clear. In the last few months both NY and PA passed laws making it illegal for their own municipal waste treatment centers to take in frac fluids and release them back into the environment untreated. Such practices were illegal in Texas many decades ago. At least my Yankee cousins are beginning to catch up. As I said very early on the northern regulators needed to visit the Texas Rail Road Commission. The TRRC develop good regs decades ago. And know how to enforce them with an iron fist.
"The report underscores differences in public perception of the potential consequences of gas frac'ing. Industry advocates say the technique hasn’t caused a major incident for more than 60 years, though current techniques were introduced less than a decade ago." Unfortunately still some BS in the discussion. With the exception of using horizontal well bores these same frac'ng techniques have used for over 50 years in Texas and elsewhere. But it's still something of a straw man argument...it's improper disposal that's a very serious threat...not the frac'ng operation itself.
"Fees and taxes are “an appropriate” way to fund better enforcement of environmental regulations, the report found." Which is exactly how the TRRC has funded it's enforcement activities for more than half a century. There's no need to use one penny of public money to regulate the industry. Just charge us: we either pay up or we don't get to drill. And in Texas the operators never stopped drilling. They just mailed the check in to the TRRC and got to it.
Re: metering mileage. In the US, it would be so much simpler just to increase the gas and diesel tax, which would automatically adust the driver's cost for fuel efficiency and weight on the highway. In Europe, which already has a huge fuel tax, maybe there is a place for this.
I think people seriously expect there to be a significant number of cars (and maybe even trucks) that do not use gasoline or diesel in the future. Electric, hydrogen, whatever. The interest in the mileage system is a way to fund road repairs in a future where people no longer use gasoline or diesel.
>The interest in the mileage system is a way to fund road repairs in a future where people no longer use gasoline or diesel.
I can't imagine BAU with regards to our immense infrastructure of asphalt roads and parking lots. Something I see seldom discussed.
True, being able to tax vehicles that don't use much oil might be driving the roll out of this technology. However, I think the important thing is that the meters give immediate feedback to the driver in a way that gas taxes don't. That immediate feedback is critical to making behavior changes.
Yes, that was what I found interesting about the article. I had never considered that aspect of it - that people being people, they would find the ticking of the meter right in front of their eyes far more compelling than a higher price per fillup at the pump. But of course, it's true. Presumably, a guy who works for IBM and owns a Volvo is not poor, but watching that meter made him wish he'd taken mass transit.
The by the time people no longer use fossil fuels there will be a lot less demand for roads, and so less demand for road repairs.
But the real problem with the current tax mechanism -- fuel taxes -- is not that the reduction in fuel usage is threatening funding. The problem is that the historic funding stream has come quite disproportionately from road users who use fuel very wastefully simply because fuel costs have been a minute fraction of the costs of running a light vehicle. A vehicle with axle loads less than 3000 pounds probably cause negligible damage on a road built to carry trucks up to 34000 pounds on a two-axle assembly. The theoretical damage ratio might be 10000, which means in practice the heavy vehicle causes 99.99% of the damage. Yet a typical heavy truck goes 5-7 miles on a gallon of fuel, while the light vehicle goes (on average) about 17-20 miles. A light vehicle pays 25% to 40% as much tax per mile as a heavy vehicle, while causing 0.01% as much damage.
And that's just when nothing goes wrong. On Tuesday a heavy truck in Houston managed to take out a sign structure which will cost about $100,000 to repair. It's hard for a light vehicle to cause that much damage so easily.
The real answer to the loss of funding for road repair as fossil fuel consumption drops is to tax the real culprits -- heavy trucks -- in proportion to the amount of damage they cause. I'm very much in favor of an increase in fuel taxes, but that won't solve the problem.
But reducing the current subsidy for heavy trucks would push more freight onto railroads and waterways, proportionately reducing road repair costs and fossil fuel consumption. It would also make local food production much more attractive too.
Incredibly Californa, a few years ago, ELIMINATED the license fees on all trailers. So if you are hauling an 80,000 pound trailer there is no annual fee. That's effective lobbying in action.
The trucker lobby, has the power to keep it that way. I think.
huh, metering mileage , there to tax the electric car - think about it - no fuel to tax
easy and some of course think our politicians don't get peak oil
why worry about the fuel? tax the miles!
Forbin
Very true. Politicians understand, but it gets in the way of their "messaging" cause they have special interests to satisfy. So they distort the reality to bend it to their constituents best interests. The trick comes in when they convince one class to vote for them while giving the benefits to a different class of folks.
Electric cars DO run on fuel, its just that the "fuel" is electricity instead of liquid fuel. Now, maybe things are different where you live, but when I open up my electric bill, I am most certainly taxed on my electricity usage. You could argue that this tax needs to be raised if you wish, but it is simply not true to assume that electric cars pay no tax at all, in most cases.
Now, if you want to argue about the even more rare cases where that electric car is 100% powered by home generated electricity, then maybe you have a small point (however, a large amount of sales tax was probably paid in many cases, or a property tax increase due to the increased value of the home, etc.), but I'd be more than willing to let the small minority of folks who generate their own electricity at home to power their electric car have a "free" ride, while making the gas using vehicles pick up the difference. If, in the distant future, this were to become an issue due to large majorities of folks moving towards home generation, then there is nothing stopping us from revisiting the issue at that point (hah, we could only be so lucky), but until then, its a non-issue.
http://econospeak.blogspot.com/2011/08/its-political-economy-stupid.html
Who says no one has a clue? If the "elites" see the world through their portfolios, then that's the place to hit them. We know now they are so leveraged with debt, they've made themselves a house of cards -- easily toppled. Here's how.
Just stop feeding the beast. Live within your means. Stop buying consumer goods on credit. Stop watching television (a non stop electric billboard) and buying all the junk you see advertised. Stop doing business with large banks that demand bailouts. Imagine what this would do to tax revenues and corp profit.
Just opt out and STOP FEEDING THE BEAST. You control your destiny.
Good idea. How do we spread the message?
You forgot:
1) Buy gold and silver, and keep it out of the banking system. Keep it hidden and safe. Liquidate if you have to, but otherwise plan on turning it in sometime in the future when currencies are backed by them.
2) Get cash out of the banking system. I'm less enthusiastic about this one, because I consider cash to be trash and only marginally more valuable than digital dollars. But, it does help to decapitalize the banks.
3) Stop all voting, campaigning, and political contributions or involvement.
4) Eat less. Let the gluttons stuff themselves to death.
This is why it will never go anywhere. Someone always goes WAY overboard and says "don't forget" eating or using banks. All you have to do is be reasonable.
The world didn't come to an end during the great depression and 2 gigantic wars.
I'm not characterizing your comment as such, but too many people are trained by organized religion to see the world ending in 2-3 years. It's terrible logic. I'm afraid it's just another power elite control mechanism.
Are you on board or not?
People who don't buy precious metals aren't worth wasting my time over.
Things you could buy today for $1700...
One Ounce of Gold
OR
68 Fruit Trees at $25 each
I know which one I'd rather have in hard times. To each their own I guess.
That's exactly why gold makes sense! With my ounce of gold, I easily buy out your fruit trees. There's a reason why farmers weren't kings.
Maybe I'll trade you some of the surplus food off my 68 trees for that oumce of your gold. Of course, next year, I'll have another crop of fruit to eat, sell or trade, whereas your pile of gold will be diminished. Gold is great if you have all of your other bases covered, but without some fruit trees, gardens and food storage, you'll be way behind. Why spend your hard earned gold in the future for something so mundane that you can buy so cheaply right now? It makes much more sense to save that gold for other uses.
Farmers might not have been kings, but kings were often farmers... they just didn't do the work themselves. The king might have had a royal orchard, and had the benefit of the law to keep the peasant farmers (or in many cases serfs) in their place. If you legally own the farmers and what they produce, then in a sick sort of way you actually are a farmer yourself. Do you plan on becoming a king?
You're wrong. 'They' are not leveraged. 'They' have the money that most people don't.
There is no debt problem. There is a problem of idle capital, sitting in the accounts of rich people and large corporations. Trillions.
In other words, the 'problem' is the velocity of money in the economy: it's way too slow. Which is why government needs to tax more, spend more and regulate more. It needs to aggressively tax the super rich, and the rich, not just to get the money into circulation, but to recreate a sense of fairness in the society.
It needs to spend loads of money on much needed infrastructure such as: sewers; water (do you have any idea how much potable water your municipality loses through leaking pipes every day?); transportation infrastructure, especially electrified rail transport, and walking and cycling facilities; energy infrastructure, especially that needed to make incoming solar more useful; insulation; and there's more, no doubt. Government should spend this money directly, as was done during the last great depression, and through and expansion of programs that support private sector initiatives, especially in the case of insulation and energy infrastructure.
I do not think modern has anything to do with it. The US rulers have a 10 million person military to enforce their rule and a 10 million person town, county, state, federal police, blackwater and various spy agencies (CIA, NSA, NRO, NYC police intelligence unit, etc...). This is as old as organized society. The rulers have thugs in their pay that will kill those who oppose the rulers.
CNBC has a pretty good lead article discussing oil price vs. economy.
"If history is any guide, another oil-induced recession may be just around the corner, at least for the United States and some of the other developed economies."
http://www.cnbc.com/id/44121011
This article is heartening to me, as I have been frequently dismayed by the cornucopia views often trumpeted on the CNBC televisions shows.
Perhaps another 'Only Nixon can go tot China' thing...maybe Joe SixPack will start to understand Limits to Growth once CNBC, and more importantly, Fox News, starts to tell the truth.
The Coup de Grace would be for Limbaugh to broadcast the facts about finite resources and the impossibility of permanent growth.
OK, I took my meds, I'm better now...
It's a good article for MSM, but still, the focus is completely on above-ground factors--Libya, Arab Spring, China demand...
And at the end, it says, one way or another (but probably by recession), oil prices will come down.
But there is no mention that they will go right back up again when the recession ends or softens.
As others have said, eventually so many people are unable to buy oil at any price, it becomes irrelevant for most what the price is.
Nope. Fail. Gas going up may get the attention of the masses, but the actual cause is debt growth and dollar devaluation. The bankers and MSM would like to divert blame to something else.
I think the CNBC article is a good one.
It ends by quoting Christophe Barret, global oil analyst at Credit Agricole as saying,
I agree that prices must come down. People/ businesses can't afford the high oil prices for very long. I think recession is likely. It may be that there is a credit contraction, that helps bring oil prices down as well as bringing on a recession.
We all know that the price drop is not likely to come from some new producer flooding the market with oil, but I suppose there are some readers who would not understand this.
Gail
I agree that prices must come down. People/ businesses can't afford the high oil prices for very long.
Of course people who have fuel efficient vehicles can afford some of the lowest gasoline prices in the OEDC, its those driving low mpg vehicles who are experiencing problems with $3.50/ gallon. US average car vehicle fuel use is about 24mpg, and average distance traveled 30- 40 miles/day so average driver is paying $4-6/day.
The problem isn't they cannot afford to pay this, its the reduction in spending on less essential items, such as fast food, DVD rentals, additional consumer items that are not remotely essential.
Consumers in many countries can and are continuing to use oil at $100/barrel, and a point will be reached when US reduction in consumption during a recession will not be able to reduce prices.
The only long term solution is for the US to improve efficiency of oil use(more GDP/barrel) for example by increasing fuel economy of ICE vehicles or replacing most ICE vehicles withe PHEV and EV's.
I wonder how expensive gasoline would have to be before a Chevy Volt driver would feel the pain of gasoline prices. My guess about $20/gallon, based on a 150mpg gasoline fuel use( ie using <1/4 gallon per day; <$5). How high would electricity prices have to rise to for an EV to use $5 electricity/day? driving 40 miles; about 60cents/kWh. Roof-top PV would be very competitive at that price.
Oil price and its effect on the economy to cause a recession (if too high), or provide for growth (if low enough).
At one point about a year ago, Gail had run a piece on the price break point in which it causes contraction at 85 dollars. At the time not much information had been compiled to verify that total. Now there is more data available it begs the question:
What is the dollar price break point and how many months at that price to cause a recession?
Seems like there is an opportunity for a TOD special analysis to further refine that price. It would seem since Brent has been at triple digits for several months, maybe the price break point is higher than 85, like 95 or 105?
Of course the price could also be a moving target as QE's act to reduce the value of the dollar.
As I've pointed out before, there is a 'simulated annealing' going on. Each oil price led recession preferentially kills off businesses with low FF efficiency - effectively removing them from the population distribution of business energy efficiencies and shifting the mean upward.
It also changes the shape somewhat and brings to the fore commuting energy requirements of staff.
Net effect is each step down increases the price cut point for the OECD countries.
Of course, the actual point at which the economy breaks is determined by which 'straw' breaks first. Last time it was CDS and financial fraud. Maybe this time it will be debt ceilings and credit confidence. For several MENA countries its been civil unrest.
Either way, the longer things go on, the higher oil prices can go before breakage, but eventually the straw that breaks will be a big one...
Either way, the longer things go on, the higher oil prices can go before breakage, but eventually the straw that breaks will be a big one...
Not sure I agree with the idea the longer we go the higher the price can go before breakage (recession). Are you suggesting the rift-raft having been completely written off have less effect on the price oil needs to be to cause recession? A sort of Darwin type scenario in which those left still standing can handle higher oil prices.
Maybe, but not sure it works out that way, because the disenfranchised become more of a drag on society by requiring more fed & state assistance and are reduced themselves as consumers to basic necesseties which are often bargain basement recycled merchandise.
I actually think the reason the price needed to go into triple digits for a long period of time to cause a downturn (this time vs. 08), is the massive Govt. influxes of stimulus of one kind or another. If that hadn't happened high oil prices would have dunked us into the muck long ago.
What I'm concerned about now, is the spending spree is over. The House is no longer going to permit large sums of money for jobs or stimulus construction programs. Bernanke seems determined not to use QEIII, which leaves us uninfluenced by Fed intervention. They have run out of funds and schemes and must simply keep interest rates as is and HOPE the economy comes roaring back.
We are all floating in a weird zone now of essentially no growth, yet some companies are still posting record profits. It's that mid-zone of hardship for many and BAU for the rest.
I'm convinced collapse can only occur via a sharp multi-year descent of oil supply. But maybe only 3-5 years of that will be enough.
Thanks for the article on immigration.
The idea of increasing the population of the US when we are depleting the fossil water, shutting down farms in the central valley of California due to a lack of water, when one in five people who want to work do not have jobs, is evil.
I agree immigration should either be slowed or stopped, but "evil?" I'm not nationalistic enough to think that.
If other people have it worse, they will come to the U.S., and there's no stopping it. Why? Because the business of America is business, and immigration is good for business.
Immigration will only slow once people, in general, have it worse or the same here as in the countries of origin. We are not there yet, but we are getting there.
So, yes, it's guaranteed to slow eventually, but for the wrong reason.
If is causes my children to go without food I think evil is the right word.
Scientists must leave the ivory tower and become advocates, or civilization is endangered, says Stanford biologist
Not exactly news. We are talking Paul Ehrlich here. He has been very vocal since the 1960's.
I love listening to his rants. Like Malthus, Ehrlich is a bit earlier and alarmist but in the big long-term picture, he is correct.
Politician and scientist are two different roles. Politicians needs to raise large sums of money to get elected and so must pander to 1) the people with money 2) the people who vote. Scientists we hope pursue the truth without regard for social pandering.
If a scientist goes into politics she or he will need to raise money to get elected and appeal to voters. Neither is advanced by telling the truth. So scientists can become liars and get elected but so what.
ed
Apparently you misread the article. Nowhere in it does it talk about scientist becoming politicians. Were you trying to set up a 'straw man' argument?
Being an advocate does not make you a politician. It does not require social pandering. It does not require raising money. It reguires you to interact face-to-face with your elected representatives [at whatever level].
When have you spoken with your representative about energy, climate, and sustainability issues recently?
Herman Cain: Stop Iran's bomb program funding by pumping more oil and thus reducing oil prices.
Anyone watch the GOP debate? In an amazing stroke of peak oil denialism, Herman Cain suggested that we could stop Iran's nuclear bomb program by changing our energy policy such that we pump more oil, thus significantly lowering oil prices, thus cutting off Iran's money that they use to build the bomb. Apparently this is not a new idea from Cain as the above link shows.
But the fact that this completely impossible hair-brained plan isn't debunked by anyone is a disturbing. The USA hit peak domestic production in 1970! Even if you are in denial about an impending global peak, you can't deny that the USA peaked OVER 40 YEARS AGO. We don't have the oil resources to push down prices like that. Even if opened up ANWR and all offshore, that is just not going to happen. Yet no one has bothered to criticize his ridiculous crazy idea. Why? Do they just feel sorry for him? Or do people actually (and wrongly) think it was a plausible scheme? I fear it is the latter.
The other insanity is Cain believing Iran has a nuclear bomb program. It does not.
The propaganda story line has become more important than the truth. Except continued crazy behavior from the politicians (global bankers middle managers).
Last night's debate on FOX News was the most poorly moderated debate I've ever seen. And that goes back a few years since I remember watching the first televised debate, between Kennedy and Nixon, in 1960.
It is deplorable to think that there was not one question asked about energy or climate change. Sadly, if the questions had been asked, the responses from those candidates would have been laughable at best.
On the topic of debt, energy and resource depletion, I highly recommend Richard Heinberg's "The End of Growth." I was able to get an early copy and just recently finished reading it. He does an excellent job of tying many loose ends together. It is one of the most thoroughly researched books I've read on any topic.
I saw the clip of this question on a show this afternoon and about choked on my drink:
http://mobile.nytimes.com/article?a=827729&f=19
Every one of the stooges raised their hand right away...
They do not care about the deficit...it is all about their oath of fealty to Grover Norquist, the new shadow emperor of the U.S.
Yet watch the voters invite Perry to ride into the Beltway on angels wings to make it morning again in America, the shining city on the hill.
Wind turbines upset The Donald:
The Donald believes golf courses are environmentally friendly, but wind turbines are not.
http://www.huffingtonpost.com/2011/08/12/donald-trump-golf-course_n_9247...
http://www.youtube.com/watch?v=zEWxBcL35Uo&NR=1
There little that annoys me as much as NIMBY people that whine about wind Turbines. OK, I'll accept that turbines should not be built to close to residences due to the noise which could keep people awake at night. But other than that, people that whine about wind turbines should be forced to live next to coal plant instead. That goes to the Donald, the Kennedys, and even wind-man T.Boone Pickens that called them ugly.
Having lived in Chicago and visited the Northern Indiana Area, I would make a wager that the ultimate NIMBY corrective action would be to place one of them next to an oil refinery. PHWEUY. The upside: You can fart and no one will know you farted ;-)
I would add: A paper mill. Several of those in the vicinity of Altoona, PA at one time.
Donald is confusing what "a green" is; he must also think dollars are critical to being "green" too. I never knew he was such a reactionary. I always put him somewhere near the center.
The Donald is quite a piece of work.
He donated a large and expensive parcel of property to New York State, now Donald Trump State Park. Is he an environmentalist after all?
Not quite. He bought the property planning to build a resort and golf course, only to have the town refuse to give him the required permits. He decided to give the property to the state in order to take it off the tax rolls and screw the town.
Ray C. Anderson - RIP - "A Magnate's Green Epiphany" up above. A good man, and a rare case of someone at the top of the corporate structure who saw it and truly "got it" regarding the primary issue of sustainability. He committed himself to transforming the operations of his own corporation and did much to positively influence his peers and industry in general. He made a very good presentation in The Corporation video.
The space station (ISS) just flew over our house (89 degrees). This was the best viewing we've had, clear and bright for ~4 mins. Tracked it on my Meade with a moon filter for about 20 seconds and saw some shape.
We waved...