Drumbeat: September 3, 2011
Posted by Leanan on September 3, 2011 - 10:32am
Before Release, a Hydraulic Fracturing Study for the State Draws Skepticism
New York State environmental officials commissioned a study of impacts of natural gas hydraulic fracturing from a consulting firm that counts oil and gas companies among its clients and that could gain business from increased drilling in the state.The $223,000 study of the effects of “hydrofracking” on the economy and the quality of life was conducted by Ecology and Environment Inc., a global environmental and engineering services company based in Lancaster, N.Y.
The study has yet to be released, but some community, environmental and government watchdog groups say the company’s ties to the drilling industry undermine its credibility — no matter what the report concludes.
Crude Oil Declines as Stagnant U.S. Employment Signals Weak Fuel Demand
Crude oil fell the most in two weeks, trimming a second weekly gain, after employment in the U.S. unexpectedly stagnated in August, bolstering concern that fuel demand will drop.Futures dropped 2.8 percent after Labor Department data showed payrolls were unchanged last month, the weakest reading since September 2010. The median forecast in a Bloomberg News survey called for a gain of 65,000. Tropical Storm Lee formed today in the Gulf of Mexico, prompting companies to shut 48 percent of the area’s crude output.
Crude Oil May Fall on Economy as Storm Passes, Survey of Analysts Shows
Oil may fall next week after a storm threatening Gulf of Mexico energy installations dissipates and on concern that the global economic recovery is slowing, a Bloomberg News survey showed.Fifteen of 30 analysts, or 50 percent, forecast oil will decline through Sept. 9. Ten respondents, or 33 percent, predicted prices will increase and five estimated there will be little change during the period. Last week 50 percent of surveyed analysts projected a drop.
Tropical Storm Lee Strengthens in Gulf as It Heads Toward Louisiana Coast
Tropical Storm Lee strengthened in the Gulf of Mexico as it moved north toward Louisiana’s coast, shutting as much as half the oil production in the Gulf of Mexico and a third of natural gas output.
Ukraine "not considering" Gazprom merger for gas deal
(Reuters) - Ukraine is not considering the merger of its state oil and gas firm Naftogaz with Russia's Gazprom to get a better deal on deliveries of Russian natural gas, Ukrainian President Viktor Yanukovich said on Saturday.
Russia to discuss with Libya fate of its oil deals
(Reuters) - Russia has invited members of Libya's interim government to Moscow to discuss the future of Russian energy contracts in the country, Foreign Minister Sergei Lavrov said on Saturday.
Russia condemns Syria oil embargo
Russia has made known its opposition to a European Union oil embargo imposed on Syria at the same time fresh anti-regime protests reportedly led to more deaths in the strife-torn Arab country.Security forces killed two people in north-west Syria one day after protests which activists said cost 21 lives.
First Solar Receives $455.7 Million Ex-Im Bank Loan Guarantee
First Solar Inc. (FSLR), the world’s largest maker of thin-film solar modules, received $455.7 million of loan guarantees from the U.S. Export-Import Bank to build power projects in Canada.
Shifting modal picture calls for new corporate skills
Several trends are forcing transportation companies, and those who use their services, to develop new skills in order to compete successfully. Consider these examples:Oil Depletion: Many experts predict "peak oil production" in 2015, after which global production will decline. This means a push for more energy-efficient solutions.
Dr Richard Pike (1950-2011) and Peak Oil
Dr Richard Pike, the CEO of the Royal Society of Chemistry has died of cancer. He was a forceful ambassador for British Science and represented the subject of chemistry and its importance in providing a means for the fabrication of new materials and solving environmental problems, especially providing clean water across the globe. He and I disagreed about the nature of “Peak Oil”: in his opinion, as a former oil-man working for B.P., the estimates of proven oil reserves were low by a factor of 2 according to whether a P90 or P50 analysis was used, while my contention is that no matter how much oil may lie under the Earth’s surface, if it cannot be extracted fast enough to meet current (and relentlessly growing) use, there will be a gap in supply and demand for it, with catastrophic consequences for a global civilization based on crude oil to provide for transportation, chemical and pharmaceutical manufacture and food-production.
Danger Ahead: Prioritising Risk Avoidance In Political And Economic Decision-Making
This situation echoes the ideas of Joseph Tainter: that societies collapse not because of stress surges per se, but because, when stress surges occur, circumstances have become so complex that the authorities are overwhelmed by all the complications to the point of being unable to provide a response and see it through. This dynamic defines the larger and longer term challenge. We are threatened with a future of breakdowns, extreme weather events and epidemics, all observed by an increasingly paralysed state and an elite that masks the collective self-deception using the machines of the PR industry and the mass media. The race will be on to develop a coherent ecological package to forestall the growth of extremist parties. These parties will focus on people’s mass anger and despair and on simplistic messages of hatred — blaming and persecuting scapegoats like ethnic minorities, immigrants, the rich or the growing numbers of environmental refugees.
The Pacific Northwest can lead a post-carbon economy
We are all feeling a bit gloomy given the current economic situation facing the U.S. and of course the stalemate in Washington is not helping. I believe the next arms race is already shaping up and the country or region that makes the investment now will be in a position to lead as we come out of the recession. What Hunter Lovins and I demonstrated in our recent book, Climate Capitalism, is that communities, cities, countries and companies that are making the transition to the low-carbon economy now are already reaping the rewards in terms of economy and jobs. So contrary to what some in Washington (D.C. that is) will tell you, taking action on climate change does not have to be a drain on the economy.
Social media connect farmers with local customers
While it's a misnomer that farmers aren't technologically savvy (they've been using GPS on their tractors for decades), it can be hard to picture them stopping to type with their thumbs while standing between rows of cornstalks. But that's what many agriculturists have been doing lately to connect with consumers. Last week, the AgChat Foundation held a conference in downtown Nashville for farmers across the country — and spanning many farm types and sizes — to learn about improving social media skills. It's the second conference held by the organization, and attendance doubled in size this year.
Obama Administration Abandons Stricter Air-Quality Rules
WASHINGTON — President Obama abandoned a contentious new air pollution rule on Friday, buoying business interests that had lobbied heavily against it, angering environmentalists who called the move a betrayal and unnerving his own top environmental regulators.
How to Know When the River is Rising
Consistent with the predictions of climate science, we seem to have entered an era of erratic weather and rising weather extremes. We are only halfway through 2011 and it’s already been a crazy weather year — the third such year in a row. The science offers us no reason to believe this situation is going to get better, so it is time to start thinking about ways to cope.
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U.S. Awash in Oil and Lies, Report Charges
"UXBRIDGE, Canada, Sep 2, 2011 (IPS) - With four times as many oil rigs pumping domestic oil today than eight years ago and declining domestic demand, the United States is awash in oil. In fact, the U.S. exports more oil than it imports, according to the U.S. Energy Information Administration - and has done so for nearly two decades.
The country's oil industry is primarily interested in who will pay the most on the global marketplace. They call that "energy security" when it suits, but in reality it is "oil company security" ".
Specifically, with reference to the Keystone XL Pipeline :-
"The only reason U.S. citizens may be forced to endure a risky, Canadian-owned oil pipeline called Keystone XL is so oil companies with billion-dollar profits can get the dirty oil from Canada's tar sands down to the Gulf of Mexico to export to Europe, Latin America or Asia, according to a new report by Oil Change International released Wednesday."
Edit : Here is the Oil Change International website, but it appears to be down at the moment.
NASA's James Hansen arrested at tar sands pipeline protest
http://solveclimatenews.com/news/20110830/james-hansen-nasa-arrested-key...
Here is a pdf of the report referenced above :-
http://priceofoil.org/wp-content/uploads/2011/08/OCIKeystoneXLExport-Fin...
That statement is clearly wrong, if one looks at the EIA data. The US NET oil imports were 9,165 bbl/d last week and the net product imports were -289 bbl/d. Yes, the US has lately exported more product than we import, but our imports of crude are still large and our production of 5,598 bbl/d was considerably below the amount imported. One wonders where the author got the information presented, which is obviously in error...
E. Swanson
Also they say in the "briefing" that US domestic production is increasing for the first time since 1970. Not true either.
But EIA says it is true: 09 is higher than 08, and 2010 is highest in several years.
http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_a.htm
Many analysts credit this turnaround to Bakken/ND... what say TODsters?
Yes, oil production has increased. But it is not the first time it happened since 1970 as the chart above shows.
Oil went from averaging around $20/barrel for 20 years up to the $80 to $100/barrel range where it is today. That huge increase in price has made a lot of previous not-profitable oil fields become profitable. So they are being drilled.
Sorry, my mistake.
- rick
And the EIA monthly data show that US C+C production has been between 5.4 and 5.6 mbbpd since the fourth quarter of 2009, inclusive of the rather curious Texas discrepancy, to-wit, the EIA shows Texas 2010 crude oil* production to be about 20% higher than what the Texas RRC shows.
*EIA is C+C and insofar as I know, Texas RRC data are also C+C.
In any case, here is what the EIA shows for US C+C production for 2004 to 2010 (mbpd) and the year over year changes in volume (bpd). Of course, we had a hurricane related production decline in 2005, and in following years.
2004: 5.42 mbpd
2005: 5.18, -240,000 bpd
2006: 5.10, -80,000 bpd
2007: 5.06, -40,000 bpd
2008: 4.95, -110,000 bpd
2009: 5.36, +410,000 bpd
2010: 5.47, +110,000 bpd
If we go back to 2004, prior to the 2005 hurricanes, we have seen a volumetric increase of 50,000 bpd in 2010, relative to 2004. I wonder how much money was spent to show a net increase of 50,000 bpd in 2010, relative to 2004? I'm not arguing that it was not worth it, it's the business I am in, but I think it puts in perspective the challenges that the US oil industry is facing, simply trying to offset depletion.
LOL. A minuscule tiny addition to the World Oil Supply from ND. Thanks we appreciate the good news. Time to buy a Hummer and take out a few million in loans. Great News! /sarc
The most recent four week running average data show that the US produced 5.6 mbpd (C+C) versus crude oil inputs of 15.5 mbpd into refineries. So, in round numbers, the US is dependent on imports for two out of every three barrels of oil that we run through US refineries. It's something to keep in mind as US refineries are offering the Canadians a $20 billion per year incentive to take their oil elsewhere.
Perhaps they should have stated "more refined products" rather than "oil". This morning's news also mentioned something similar.
"Americans are using so little gasoline that the U.S. has been a net exporter of refined fuels to other countries for the past nine weeks. That's typical for OPEC countries, but it's extremely rare for the U.S. "You have to go back years and years," Kloza said. "I haven't found a time when we've been a net exporter for that many weeks." "
From AP.
http://www.msnbc.msn.com/id/44358964/ns/business-oil_and_energy/t/gas-pr...
It's just as ridiculous to say that the US has been exporting more product than it imports for two decades.
And here's the combined Crude + Refined Product
The fall in net imports is mainly due to a drop in consumption (about 2mb/day from peak) then biofuels + recent domestic production increase.
Thanks for posting. Reports do a great disservice in not getting the facts straight.
I haven't read a single decent energy article that's used the word "awash". Whenever I see that word alarms start going off.
"Awash" was test-marketed on the public as a word that people can cling on to with respect to the false concept of an "abundance of oil". This is a talking point word commonly we see in politicking.
Oct et al – Youse guys are being too harsh. The US is actually AWASH with oil and I’ll prove easily. The USA is the third largest oil producing country in the world. We are also one of the largest importers of oil. We are so awash in oil we can refine it and export the excess. More proof: who here has passed a gas station in the last year and saw a sign: "Out of Gas”? When was the last time you saw a report of a refinery being shut down for lack of feedstock?
And that, friends, is exactly why we’re screwed and have no chance to change the public’s appreciation of PO today. Current high fuel prices may be taking a chunk out of peoples’ pockets but the vast majority can still pull up and fill up anytime they chose.
Maybe if the govt instituted some restriction on fuel sales and limited access to all this energy we are awash in maybe the public will get the idea. Tell you what…I’m going to stand in the corner on my head until that happens…drop me a line then.
Apparently it hasn't needed to, seems demand destruction is a self imposed phenomenon...
Granted it's just a drop in the bucket so far but we may be seeing the beginnings of a trend underway!
http://www.autoblog.com/2011/08/26/americans-driving-less-log-fewest-mil...
For every mile Americans drive less, China will absorb the marginal oil. China is now adding cars faster than the US. It is just a matter of time until poor Americans are priced out of the gasoline market by middle class Chinese (150m have credit cards) that own a car.
Wait. You think MIddle Class Chinese will be making products for former middle class Americans that can no longer afford gasoline much less Chinese exports. The Chinese economy will remain robust as America sags further? OK. I dont think this is going down the way you think. There is not going to be some utopian society in China. They do not have some magic means of avoid peak fossil fuels as you suggest. In any event, the environment is so damaged in China, if I was Chinese middle class, once I had the funds I would hightail it for the US. Perhaps that is why the communist party leaders keep the internet held down tight.
Do you remember the old joke about the two Chinese families that both opened laundries and got rich by cleaning each other's clothes?
In economic terms, it's not that far from the truth. Remember that China has 1.3 billion consumers, four times as many as the number of Americans. Once they have enough American dollars (which they now do) they can get rich by selling stuff to each other.
They're not likely to move to the US. More likely to Australia and Canada, which have more natural resources and are less averse to catering to rich Chinese families. And they have better schools, too, which is important for upwardly mobile Chinese professionals.
"Do you remember the old joke about the two Chinese families that both opened laundries and got rich by cleaning each other's clothes?"
Yes, it's called the "Service Economy". In the US it's more we'll all make hamburgers for each other.
No, it's called "domestic demand". Emerging economies such as China is becoming less dependent on Western demand, and the last financial crisis gave them another boost in that direction. The next few years, 80% of global growth is expected to come from emerging economies (that today comprise 50% of the total global economy - a proportion that is increasing).
Show me a New Chinese city that is occupied and bustling with all this so-called domestic demand. They are Ghost Towns. Empty. Cultureless wastelands of wasted capital. Moreover, you cannot even access the internet in China without getting handcuffed. A society scared to look at the world will not prosper.
China Mobile has a subscriber base of 600 million. One could go on and on with stats like this. I agree that the oppression and the one-party state will eventually curb further growth, but at such a point countries like South Korea and Taiwan went for democracy. I expect China to go that way too. For now, however, 10% growth in salaries and GDP seems to be the norm.
Could you show me where the ghost town is so I can buy a house at affordable price? I actually have a relative who works in the building sector. Once I asked him “why you guys sell house at such an F**king high price?” He answered: ”Cause we can still fill it (newly build apartment blocks) up fast enough at that price.” If you have experienced what is like for a family of three to live in 14m2 flat, you will understand that under-housing is a painful reality in many parts of China. Some gov guys estimate the boom will go on (although at a reduced speed) until around 2030 to give every Chinese a relatively OK house.
There are huge speculation-driven bubbles in real estate sector in some part of China, but under-housing in other part. The speculators will pay the price, but under-housing part will see continued growth, unless stopped by peak resource induced price shock.
PS. "The world" does not equal to "first world". Third world countries is a part of this planet.
Coldhot3, your relative is lying to you. They aren't selling those houses, they are empty. Literally thousands and thousand of empty houses and apartments are empty because no one can afford to buy them. They are priced way above the average Chinese income so they are empty, and will stay empty.
You want to know where they are. Here they are. But you cannot buy one at an affordable price, not unless you make a whole lot more than the average Chinese worker.
NEW SATELLITE PICTURES OF CHINA'S GHOST CITIES
And you are off on the wrong track. No one is saying that third world countries are not part of this planet. That has nothing to do with it. What we are saying is that China is building ghost cities with houses, apartments, office space and malls that no one will ever occupy. They are just building for the sake of building and adding to growth of the GDP. But it is a bubble that MUST burst.
Ron P.
Those pictures are disturbing. I wonder what Pi-sama thinks with her comments about getting rid of unused concrete in Japan?
NAOM
Good to see all that productive capital at work huh. I'm real glad they dug up all that iron ore and burnt all that coal and oil.
On the other hand, maybe they foresee some kind of event with the ability to displace millions of people, such as rising sea levels? It would be interesting to know the elevation of these cities, since if they are at sea level that thought will be thrown out the window.
I wonder, if they ever do get lived in, just how degraded they will have become by that time.
I WAS on your side, but now, I am not so sure. About 5 years ago, my grandma-in-law get tired of city life and brought a house in one new building project in the country. When I first visited, my family spend 2 hours on bus until it stopped at end of a lone road. Only farm land surrounded this project. And my grandma-in-law was the first few to move in; entire block is almost dark at night. I thought she would soon get bored and move back. However, two years later, when I visited again, the once ghost city got half full! With a bunch of grannies reside in housed and a small market and few take away. I guess now this place is already ~80% full, and company had paid all loans back and started a new Ghost city project somewhere else. Seeing a ghost city fill up in front of your eyes is really shocking.
BTW, the ghost city you showed is in Yunnan, one of the most comfortable living province of China, near a National forest park. So I guess if it is well managed, it will be sold off gradually. My parents are considering to buy a small apartment for holiday and retirement in Yunnan. Because several friends has tried and thought it is a nice place to live after retirement.
You are telling us that an owner of an apartment complex will rather sit with it empty than fill it using a lower rent? How does that make economic sense?
The ultimate one is the "Free Service over-the-Internet Economy" where we do the main service for free but make up for the loss by posting side bar advertisements
A Funnier Joke
A funnier (not) joke would be about two Chinese families who each opens up a facade laundry business with plans to secretly outsource to the other.
You know how in many strip malls there are so-called dry cleaning store fronts that do not actually do dry cleaning on the premises but simply outsource the job to another place?
Well, what if two businesses plan to open up facade fronts and plan to secretly have the thing they don't do, be done by the other except that they change the name of the customer to a fictitious different one before they ship out the job?
On paper, the business plans might look good:
Hey rather than doing the messy work ourselves, why don't we out-source (off-shore) it to another place and simply add a 10% markup to whatever the costs are?
Just to mention that this year Chinese already experienced one of the worst power shortage in history, and it is not caused by short of coals, but because coal price skyrocketed. Sound familiar? A typical PO scenario. So the gov are crazy to push hydro (TGD currently sold electricity with a 40% discount compared as coal power plants, and they could do it with a 70% discount and still make profit) and nuclear power plant (currently market electricity at a price at 120% of coal plant, but probably at a similar level compared to coal plant when they are finished because the price hike of coal) So China cannot and will not grow in a manner like US.
Plus, Chinese ppl generally like to go to Canada or Australia for living. They go to US for study or work. It is not so easy to live in a country with a high Gini-index and periodic hostility toward “yellow monkeys”. Personally, I gave up one chance to stay in the States.
Either way, it is just a continuation on the road to hell, whether it be a U.S. or a Chinese road or both. Maybe the Chinese will win the race to hell but it is all one planet so we all get to hell regardless of who theoretically gets their first. Americans are insane and the Chinese are just emulating the insanity.
Exactly my point which everyone glossed conveniently. I know it is the Chinese mallet they try to use to beat on our heads. A meaningless argument whether China uses petroleum products for the next decade. LOL. Party is over. Who cares and no China is not more advanced or smarter with resources. In some sense they are not smart at all with their treatment of the natural world and its capital, which, in the long run, is worth more than burning fossils in the short term.
How are those Chinese river systems working out? How is the smog in their cities? Nice place. The sons and daughters of over-industrialization with no environmental controls. LOL.
Like this...
http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/
...except that I don't find it very funny. NLOL!
Good link Fred...thanks. Of course, if you look at pulp mills in Canada just a few years ago they didn't look much different. I remember crossing the Wabagoon River on my way to Red Lake Ontario and looking at the brown foam. I thought...holy sh## Batman, it smells just like Crofton, (a pulp mill where i lived), then I found out that Dryden mill 40 miles away dumped their untreated effluent in the river. Of couse, the downstream Cree could not eat fish from the rver, anymore.
I think most of the mills have shut down and moved to China, BTW. Anyway, on an interview I heard Diment? saying the only solution to a return to good times must involve a reduction of environmental standards as well as other regulations.
Unbelievable. Time to dump trailers of manure on any politician's lawn who says such crap. Pun intended.
Cheers and all that.....Paulo
FM - I wasn't talking voluntary reduction of consumption. I'm talking about the govt restricting fuel consumption whether folks can pay the price or not. Like I implied: I won't hold my breath.
Mr Rock:
I'm trying to imagine how you are typing this!
Bryan
Are you sure you want to live some place like this? It is really painful to study at a 39C room without AC even with enough money to pay for the bill, just to curb CO2 and SO2 emmisssions. And some of my friends are taking that pain.
That's an interesting point. People always talk about the gas lines of the 1970's. But you won't see those again except when natural disasters happen. Those lines only existed because of Nixon price controls. Instead, you'll just see $6/gallon gas when there is a shortage.
And instead of concluding "Hey we are running low on oil" people just go with OPEC, big oil, and speculator conspiracy theories.
You likely wouldn't see gas lines at natural disasters either, if it weren't for silly regulations and attitudes toward setting rational prices.
What do silly regulations and attitudes toward setting rational prices have to do with the simple fact that fuel can't be delivered to gas stations after a natural disaster. Not to mention if the gas stations are flooded and electricity for the pumps is not available because power lines are down and emergency generators are underwater ... Have you ever been anywhere after a major hurricane? They ought to regulate natural disasters much more strictly than they do now, heck, lets pass laws making hurricanes, tornadoes, earthquakes, volcanic eruptions,and gravity, all illegal!
Hey, I kind of like gravity !
Maybe turn it down a little, but the basic concept is sound.
Best Hopes for Keeping *SOME* Laws,
Alan
Regulations and attitudes keeps gas prices low in the wake of floods and hurricanes, even when there is scarcity. This means that there is long, wasteful and dangerous queues, that gas is less efficiently distributed among buyers, that there is no incentive to supply the somewhat hard-to-reach market quickly.
If silly anti-gouging-ideas weren't popular, prices would adjust and queues would vanish, and strong incentives would be in place to supply the market rapidly.
BS !!
that gas is less efficiently distributed among buyers,
Rich people can fill up all their SUVs and working class people cannot get enough gas to evacuate to the nearest place with plenty of gas.
That is the "efficiency". Let the working poor die.
Your amoral "free market" theories are just BS !!
People, such as oil marketers, taking responsibility for the public welfare actually worked better than an amoral "free market". And made a respectable profit doing so.
I have lived through a disaster.
Alan
You being upset demonstrates how this is not about rational thinking on your part, but of political ideas and misguided ingrained morality.
Who is aided by standing in hour-long queues? Who is aided by no incentives to NOT fill up when you finally get to the pump? Who is aided by no incentives to take your most frugal car out of there, even though your first reaction is probably to get the biggest car you have to be "safer"? Who is aided by the market not being supplied efficiently? Who is aided by less incentives to car pool, i.e. band together and overfill cars somewhat?
And yeah, if you'd like doctors to have the same probability to die as burger flippers, that's cool with me. I wasn't thinking about that, but that's a matter of preference, I guess.
Government imposed mandates -- for price, for production, for distribution, for whatever -- will work only so long as the government is accepted as sovereign.
Governments fall, and then they are not sovereign-- and I think that is occurring, albeit fairly slowly, in the US.
When that happens, there is a new law that takes over.
In the end, the bacteria and the nematodes win.
And it doesn't matter if you are a doctor or a hamburger flipper.
Jeppen, how about just using a little common sense here. Sure allowing gasoline prices to locally double during a crisis would eliminate the queues but it would not create more gasoline. All it would mean would be that a lot of very poor people would have to either walk or spend a much higher percentage of their income on gasoline.
Ron P.
Of course it would create more gasoline. First, it would be more interesting for dealers to anticipate crises and pre-store gas. Second, it would make it much more interesting for the involved businesses to try to get gasoline into the area fast. If the infrastructure is hurt and the transportation is somewhat risky, and you cannot get a premium for the gasoline, businesses wait until everything is unproblematic again. If you can get a premium for the gas, businesses will go from waiting mode to problem-solving mode.
Unknowing statements from a world, far, far away from ours.
Divorced from reality.
"Free Market" ideology uber alles.
Alan
He really has it bad. Suddenly we seem to have a few folks that have just discovered Ayn Rand and can't help yammering about it. Oh well, hopefully, like most people (except Greenspan) they'll grow out of it as they see how the world really works.
It's not just Ayn Rand devotees who appreciate the inherent economic efficiencies promoted by Free Markets. You only need to have studied Economics 101 and Adam Smith to understand how free markets can turn private greed into public gain - assuming only that free competition is allowed and monopolies are discouraged.
Let's say that a terrible Class 5 hurricane has struck Anywhere, USA and due to supply disruptions gasoline has become very scarce, nearly unobtainable. Ambulances are idled, food deliveries stop, people stop going to work, trash pickups stop, school buses don't run, etc. But some of you would say that the government should step in at this point to make sure that gasoline remains at $3.50 per gallon - and not a penny more, lest we witness that most awful of all human depravities, price goughing!! And you will carefully monitor your local news reports for any sign of price goughers on the loose - in case they need to be shown some local manners, with local fists and police batons.
At the same time, there may be any number of independent gasoline distributors located beyond the normal delivery area of Anywhere, USA. Some of you would say that these distributors should drive 24x7 to get extra gasoline deliveries to those in need. At $3.50 a gallon there is no extra money in it for them - in fact, they will certainly loose some money due to the extra round-trip mileage (not to mention the physical danger of entering a lawless disaster area with highly valuable cargo in tow). There might be a few takers (most likely very few indeed!). But, if gasoline were allowed to rise to a price level consistent with its temporary scarcity (let's say $10.00 per gallon) then those distant gasoline distributors might very quickly be on their way to the disaster scene with as much gasoline as they can obtain. Word would get around very quickly that big money can be made with a little extra work, and suddenly you have gasoline arriving in the stricken area in such great quantities, prices even start to fall. And all of this can occur without any government intervention or scolding from local TV anchors. As they say: money talks and BS walks (literally).
Ayn Rand and Jeppen are just flat wrong.
Things do not happen as you describe. The "price control" is future ill will by consumers. And corporations do not act in a profit maximizing behavior in a disaster {shock & horror}. The humans in control tend to act for the common good in a disaster.
So that you wrote is just nonsense.
Alan
As anyone who has ever lived through such a circumstance, first hand, would know. Unless of course they're arm chair quarterbacking, from La la land, while drinking tea with biscuits and reading Ayn Rand as the disaster unfolds on the telly.
I would imagine that even the CEO of BP would roll up his sleeves and pitch in, in a true disaster situation...
I guess you didn't notice that I talked about attitudes as well as regulations. Silly attitudes that will show up in the "ill will" that you talk about was thus covered by what I wrote. Also, working for the common good (in this case, optimizing resource allocation) is precisely what I was talking about. Some of that happen without the correct incentives, but not all. It would improve the discussion if you made a minimum of reading and comprehension before you write.
The humans in control tend to act for the common good in a disaster.
In that case, no price gouging laws are necessary.
I agree with jeppen. In this case, price control would simply cause and prolong a shortage.
Suyog,
You and others have touched on some of the issues which lie at the heart of oil shocks/liquid fuel emergencies.
On the topic of government plans for liquid fuel emergencies (LFEs) several things should be said:
1. Australia and UK both did intensive work on both their federal legislation and their federal LFE plan a half decade ago.
2. No such work has occurred here in North American, and it needs to.
3. The prevailing response option seems to be "full price pass-through:" in other words, governments will not attempt to control prices (other than to prosecute price-gouging, which seems like a very fine line).
4. There is plenty of historical and logical evidence to support your assertion that "price control would simply cause and prolong a shortage."
5. That said, during a prolonged peak oil/export decline scenario (ie. something other than a short-term regional hurricane/pipeline disruption), there would be a major vulnerability with respect to food supply.
Our food supply chain begins with farmers who (like non-farming rural residents) tend to be hit particularly hard by high fuel prices.
Many North American family farmers cannot absorb very high prices for diesel and fertilizer, and would be forced to cut back.
But because of the squeeze on food imports, this would be the reverse of what we would want: we would need our farmers to produce more, not less. So we may need to consider the possibility of a price cap on "dyed off-road diesel."
6. Alan Smart did several years of exceptional research for the Government of Australia on the LFE Issue, and one of his key points was that citizens and businesses need to know (well in advance) how the government LFE plan will operate, in order to make effective contingency plans for themselves (eg. creating emergency stocks).
We are speculating on all sorts of things here because we have no clue how such an eventuality might be managed here in North America.
Despite numerous requests for information, I remain unaware of any work at DHS or Public Safety Canada on LFEs: no review of the literature, no review of our legislation or our decades-old plans, nor any red flags re PO and export decline.
If anyone has info to the contrary then I would very much appreciate receiving it.
Farmers are hit hard by fuel prices only if they can't pass on costs, and with globally higher fuel prices, they can and must pass on costs. No caps are necessary, people need to eat and will pay what it costs. Fuel price caps for farming will make farming waste fuel.
I would need to see hard data before believing anti-gouging laws would work. Some folks feel Georgia anti-gouging laws made matters worse in Sept. 2008. FTC investigations have found firms behave appropriately during disasters.
Gasoline Price Gouging Laws Will Not Benefit Consumers
Of course it would create more gasoline.
Wrong. But lets look at your examples.
First, it would be more interesting for dealers to anticipate crises and pre-store gas.
"Pre storing" is not what you claimed would happen - gasoline creation.
Second, it would make it much more interesting for the involved businesses to try to get gasoline into the area fast.
Getting gasoline into the area is not what you claim would happen - Gasoline creation.
Why do your 1st 2 examples not support your claim of the CREATION of gasoline?
It seems you are blind to context. Perhaps you should work on not taking things too literally?
You have a funny way of saying "thank you, I was wrong".
As my context is to use what you said - if you have issue - perhaps you need to post correct information?
Your choices of "doctors vs. burger flippers" shows your bias. That somehow people's value is related to their cash on hand. To the extent that people differ in value, the money they have has almost nothing to do with it.
Wealth is simply *NOT* a measure of value to society.
And morality is a virtue, despite the fact that it contradicts your ideology.
Your ideology should be discarded when it conflicts with morality - not the other way around.
I started to answer your long list of rhetorical questions, and then I realized that you have no conception of a world impacted by disaster - you come from some unreal world where your ideology actually works as advertised.
Alan
Or perhaps you challenge shows your bias. I don't agree that wealth says "almost nothing". It is clearly far from perfect, but it's also clearly better than nothing. Also, letting the wallet decide separates people that NEED to get out (and so is prepared to dig deeper in their wallets) from people that just WANT to get out. More resourceful people and people in better situations (safer houses and so on...) will stay behind, which is good.
I understand that you ideologically hate the fact that some uber-rich will get out and some uber-poor will stay, but the more important issue is more how the big middle ground will behave and allocate resources.
Morality that is anchored in rationality is a virtue. Mindless group-think and inherited gut feelings is not a virtue - it is arbitrary and harmful.
Surreal. My ideology IS a moral system. And please spare me insulting nonsense about money or greed as a moral system, because that is not what it is about.
Or perhaps you do not see how it works.
Whiskey! Tango! Foxtrot!
Guess what, I have a few family members who are doctors, they are human and in a disaster it's sometimes the burger flipper, for whom you seem to have utter contempt, who ends up saving the day. I don't know about you but I like Alan have actually lived through a disaster or two. Natural disasters, unlike you, do not distinguish between doctors and burger flippers...
How do I seem to have "utter contempt" for anyone? No, don't answer that, it would just be noise. Let me point out that you're simply wrong, however.
I propose a compromise. The gas station has to sell the majority of gas at or below the controlled price. BUT while the station's controlled price pumps are selling gas they may open up one express line. The express line could charge whatever it wanted for gas, but could not sell gas once the price controlled line ran out. The station would have to donate an equal volume of fuel to mass transportation vehicles.
I have never been in a city evacuating before a hurricane. But I have been in cities where a lot of the population could not afford food. Straight out price control doesn't work well because the merchants just don't bother to get supplies in, or the producers switch production to uncontrolled items (ie, you can't get milk anywhere, but you can find 20 different varieties of luxury cheese). As much as it grates giving concessions to exploitative businesses it is sometimes necessary (unless you just nationalize enough production capacity or enforce extensive laws).
The invisible hand will allow the rich to go to work, except all the little-tiny problems like the workers that run essential infrastructure cannot get to work. So then the rich guy has trouble using the elevator in his build or the toilets no longer have toilet paper.
The free market utopia folks forget they live in a pyramid scheme. LOL. That is the funny part about our delusions regarding this problem.
On the contrary. The invisible hand will give the "essential infrastructure"-people higher wages until they CAN get to work. This has been seen from time to time in Silicon Valley cleaning staff wages, for instance.
Yeah, because we don't. It's more like a web. Some nodes have more connections and are bigger, but the web is dynamic and continually adjusts for increased efficiency in satisfying the demand of the masses.
The invisible hand will give the "essential infrastructure"-people higher wages until they CAN get to work.
Let me educate you on what the "invisible hand" was actually about so you will be educated so you do not make such un-educated mistakes in the future.
From http://www.econlib.org/library/Enc/bios/Smith.html
Mr. Smith spoke of foreign trade http://www.econlib.org/library/Smith/smWN13.html#B.IV,%20Ch.2,%20Of%20Re...
The invisible hand is about supporting domestic VS foreign industry.
For clearing up your ignorance, you are welcome.
Haha, you really don't like me, do you?
I'll give you an opportunity to also thumb your nose at Wikipedia. It says this: "The concept of the "invisible hand" is nearly always generalized beyond Smith's original discussion of domestic versus foreign trade. Smith himself participated in such generalization, as is already evident in his allusion to "many other cases" quoted above."
Haha, you really don't like me, do you?
What is it with the ego's on TOD that take gentle correction of errors with 'dislike'?
You are incorrect, have been offered a chance to learn how you were wrong, and take this correction as a "personal issue".
I've cited the original document. It is either correct or not. And if Jeppen is unwilling to admit "Oh hey, I was wrong" hopefully other readers will leave the discussion more educated.
My, you really are quite Spock-like, aren't you? Unhealthily so. If you read the wikipedia entry I gave you, you'll see that I used the word like it is generally used. If you have a problem with that, the problem is yours.
Eric, the issue is not what Adam Smith actually wrote and meant,
the issue is what we are taught in Intelligent "Invisible Hand" school as we learn economics 101
...from what I recall of my formal education, it boiled down to "don't worry, the invisble hand and the free markets magically take care of all our problems" ...something like that
[ i.mage.+]
________________________
[i]= image, [+]= more info
from what I recall of my formal education,
The propaganda one was exposed to?
Mr. Smith became "an expert" and citing him (appeal the authority), then making up what you wanted a dead man to say is Propaganda.
But what you remember "don't worry, the invisble hand and the free markets magically take care of all our problems" the AND in there is additive. "don't worry, the (spending of ones money locally VS out of your local area) and the free markets magically take care of all our problems"
Local money velocity does improve the local situation.
Now where is that comment/joke again about two Chinese families opening up laundry store fronts in the same local town and getting rich dong each other's laundry?
I think there is a "money velocity" lesson in there some place.
Maybe we need to add "growth" (more such families) to make the money rotation speed in such an example go faster and faster.
Joke all you wish about local money velocity but that is what is documented over at http://complementarycurrency.org/materials.php and its worth at least exploring the issue.
What words and expressions mean does not depend on their first use, but of current typical use. Also, Adam Smith apparently used the term four times and, as my earlier quote mentioned, participated in the generalization of the term.
Also, Adam Smith apparently used the term four times
And yet you can't be bothered to cite.
Rockman, the word "awash" is being used in a repeated manner to get the idea out that we have a lot of oil and basically prices are higher because Wall Street and Obama are keeping them high. So it seems like a slick form of repetition for a hidden political agenda., since it hides the idea that price is tied to supply. They are acting like price is controlled by manipulation. That is wrong imho and will lead to tensions down the line, since it is a bold-faced lie.
The same political groups that test market specific words are using this word, "awash" in the same way.
In any case, I agree you are correct about there being oil available. No doubt. There is dirt and fresh water too. We are awash in basic recourses. We are awash in sunlight too for that matter. But the intent is to shroud the problem of population growth and declining oil consumption per capita and so forth.
Can you imagine a word for declining quality of life being used by these folks? Cause there is no way to slip by that reality regardless of the quality of the public relations firms ;-)
Oct – Exactly. Such terminology is being used by the politicians and TPTB to maintain the system. We all know this system can’t be maintained indefinitely. But that’s not the time frame that matters to them. I’ll say their primary concern falls into a 10 year time line more or less.
I’ll use me as an example. First, let’s ignore I have an 11 yo daughter. I’m 60 yo, make good money in the oil patch and my retirement years are secure. As long as things hold together for the next 5 to 10 years I don’t give a cr*p about PO or any of that foolishness (remember I’m speaking for those who won’t admit the truth). I can be the 60 yo CEO of ExxonMobil, Ford Motors or the POTUS. Doesn’t matter: my concern is about my immediate future…the rest of mankind is on their own.
So yes: I’ll say what I have to say…awash with oil…going for energy independence…billions of undiscovered bbls of oil…etc. I’ll say whatever I need to to keep the populace moving down the same path that allows me to carry on my personal BAU. And the hell with the rest of the world.
And with such a view you can see why I’m a doomer. Those who know won’t explain. And those that can’t figure it out won’t know until it’s too late. And the rest of us who know but can’t change the process have a front row seat to watch the train wreck coming. As a philosopher once asked: If you were going to die in one hour no matter what you do would you want to know? I read a story about a young Marine trapped in a fire fight. The gunny asked if he was afraid. He said no...knowing for certain he was going to die gave him peace of mind. I've never bought that story.
You also seem to have discounted the Doomer view with your explanation. People were certainly watching out just for themselves in the same way you express in 1850. And the world didn't end. And they felt that way in 1920. And the world didn't end. And in 1970. And the world didn't end.
When people looking out only for their immediate future might give you a Doomer perspective, certainly it cannot be considered a causal factor of Doom.
You could just as easily be a pessimist as a Doomer. Unless of course your definition of Doomer runs to something more along the ridiculous conspiratorial side?
yes I heard this same report on NPR on friday morning. They said " we have so much fuel because of efficiencies in cars and lower demand that we are now exporting fuel" when did this happen and if we have so much fuel why is the price not coming down? I don't understand this at all.
It's called propaganda.
Rather than accept reality, we would rather lie to make ourselves feel better. NPR and so called "liberal" outlets are not immune to this, they are knee deep in it.
We live in a time of universal deceit. Sobering, isn't it?
NPR is nothing more than victim radio. It, for the most part is a waste of time, except for "This American Life" by the Boy's in Chicago.
Woe is me, Radio, I like to call it. Almost no concept of personal responsibility ever reported. Like most believe in the US these days, it's always somebody/something else who is to blame. Prep for bad weather? Naaaaaa, Prep for bad financial times? Naaaaaa, Take responsibility for the Spawn you bring into the world? Naaaaaaa, the list is endless.
The Martian.
Personal responsibility has no place in a worldview that holds that the government can and should take care of all one's needs.
The Government is not asking media to lie. It is the businesses that are telling/forcing the media to lie else no support will be granted to the media by the monied folks. The media is a form of paid advertising by Big Business. The brainwashing is the BAU lifestyle which is not sustainable and the big boys do not want the public to hear the truth.
It is not rocket science. The 4th estate is corrupt now more or less. It started to really ramp up with 9/11. Now I think most of the media is reporting about a dreamland that has no resemblance to reality.
"The 4th estate is corrupt now more or less. It started to really ramp up with 9/11. "
It started long before that. The news media brought down Nixon, and decided they liked the power. They then embarked on Advocacy Journalism. This eventually annoyed the powers that be, and the networks were assimilated into the corporate cloud. A few firings and some natural succession later, and the 4th estate is now a loyal corporate lackey and reduced to hyping rainstorms and celebrity scandals to seek ratings.
Journalism and news are satisfying demand. People get what they are asking for. They like to be feeded with information, to get upset, entertained, and generally moved in ways that fits with their pre-conceptions. The market supplies.
Of course, there are biases in news companies and with reporters. In my own Sweden, for instance, an extreme proportion of journalists are heavy leftists, and most of them got there with a mission to further their political ideas. (This statistics on journalist is accepted even in leftist quarters.) It does set a tone in news reporting - both rightist and leftist political issues are mainly illuminated and questioned from an even more leftist perspective.
The news media are purchased and handled by very large pubic relations firms that work for various large interest groups. They are feeding a message handled by those interests to promote their sales and positions. It is not magic.
The scare about bacteria in your home leads to the purchase of petrochemical cleansing products to remove " 99.9% of bacteria".
As a microbiologist I know that is malarky and people are buying into a fantasy promoted by the 4th estate who is doing such a great job for Proctor and Gamble.
A home can be cleaned with simple soap and water to my knowledge.
Just an example of the 4th Estate working so so hard for their Management.
Yep! That and a gallon of generic brand chlorine bleach, $0.99 at my local dollar store usually works for me.
Or if you wish you can always spend $76.03 for 18 oz of Aterra Antibacterial Hand Soap...
I ain't kidding either!
http://www.aaawholesalecompany.com/12092-18-cs.html
Manufacturer B4 Brands
Application Antibacterial Hand Soap
Container Type Pump Bottle
PH Balance 7.15 � 7.55
Scent Fresh Cotton
Target Area Hand
Type Foam
Volume 18 oz.
Features
* Bio-based, made with natural ingredients
* Rich lather with mild detergents
* Free of irritating dyes or colorants
* The dye-free, non-irritating formula makes it ideal for frequent use environments by scientifically illiterate morons
Emphasis mine... Sheesh! I guess that war against science is really paying dividends >:-(
Fred:
LOL!
Not just scientifically illiterate but incapable of critical thinking.
There is an ad running lately for a "touchless" antibacterial soap dispenser (likely IR triggered) which craps soap on your hands. I must assume it also consumes batteries.
This is all to save the user the trauma of touching the dreaded "germy pump handle"
Even if the handle were truly disgusting, which I doubt, am I the only one that realizes that any contact with this dreaded source of disease occurs before you wash your hands?
Idiocy!
Thats not idiocy it helps prevent anti-biotic resistant bacteria and it is a life saver in hospitals to help prevent spread of bacteria.
Replace all the stainless steel handles and knobs with copper or brass. Kills the bugs far better.
NAOM
You have completely missed my point.
Obviously hand washing, particularly in a hospital environment, is critical to controlling disease. I thought everyone understood that.
If the point of this fear mongering product is to avoid the germs on the pump handle, that implies that the soap would not kill them, which makes the entire exercise pointless, except to sell someone more crap they don't need.
Further, I expect that the refills are single source ($$$) or you throw out the whole thing and buy a new one.
This is a domestic product being advertised. It has been shown that ordinary soap and water is as effective in killing germs.
My statement of idiocy still stands.
If you get a norovirus (a Norwalk-like virus) into a building, chlorine bleach is definitely the way to go. Just lock everybody in their rooms and bleach all the available surfaces, people and clothing in the building, and in no time the virus is gone. No more puking or diarrhea amongst all the residents.
Antibiotics are useless where viruses are concerned.
Journalism and news do not satisfy demands, they serve captive markets, Jepp, just like other large corporations.
That's why we're here on TOD having this conversation-- because the mainstream media has no good data, and no good ideas.
I wrote for a talk show once where you could literally sit in the control room or a production meeting and watch the producers just make up statistics out of thin air. Sure, sometimes political bias played a significant role, but usually it was just arrogance, people who loved to hear themselves talk.
The mainstream media sucks. And it sucks because the market created it-- or, more accurately, took it over, at least in the US.
It started long before that. The news media brought down Nixon
You have WWII where the book "Public Relations" was previously known as "Propaganda". The book The mighty Wurlitzer speaks on the topic and one can go back to the 1880's. (taken from Metafilter BTW)
The following remarks were apparently made by John Swinton in 1880, then the preeminent New York journalist, probably one night in during that same year. Swinton was the guest of honour at a banquet given him by the leaders of his craft. Someone who knew neither the press nor Swinton offered a toast to the independent press. Swinton outraged his colleagues by replying:
"There is no such thing, at this date of the world's history, in America, as an independent press. You know it and I know it.
"There is not one of you who dares to write your honest opinions, and if you did, you know beforehand that it would never appear in print. I am paid weekly for keeping my honest opinion out of the paper I am connected with. Others of you are paid similar salaries for similar things, and any of you who would be so foolish as to write honest opinions would be out on the streets looking for another job. If I allowed my honest opinions to appear in one issue of my paper, before twenty-four hours my occupation would be gone.
"The business of the journalists is to destroy the truth, to lie outright, to pervert, to vilify, to fawn at the feet of mammon, and to sell his country and his race for his daily bread. You know it and I know it, and what folly is this toasting an independent press?
"We are the tools and vassals of rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities and our lives are all the property of other men. We are intellectual prostitutes."
(Source: Labor's Untold Story, by Richard O. Boyer and Herbert M. Morais, published by United Electrical, Radio & Machine Workers of America, NY, 1955/1979.)
Well in part it is "woe is me" radio.
But NPR stands for "National Pentagon Radio" because it is just the "liberal" version of the American Empire story.
People seem to forget that "liberal" was a word originally applied to people like Adam Smith, and meant people who opposed the mercantilist, monopolistic tendencies of the aristocratic elite whose privilege was based on birth rather than merit.
NPR trumpets a new American aristocracy -- which is rapidly losing steam. Hence, "woe is me."
Well I am not buying that. I have listened to NPR for decades and I have never known them to promote the Pentagon or to promote things the pentagon likes, like war. That is what the conservatives do, not liberals. You are really confused on this one.
Liberal means
1. favorable to progress or reform, as in political or religious affairs.
2. noting or pertaining to a political party advocating measures of progressive political reform.
3. of, pertaining to, based on, or advocating liberalism.
4. favorable to or in accord with concepts of maximum individual freedom possible, especially as guaranteed by law and secured by governmental protection of civil liberties.
5. favoring or permitting freedom of action, especially with respect to matters of personal belief or expression: a liberal policy toward dissident artists and writers.
Basically, in political terms liberal means unopposed to change, while conservative means to conserve the ways of the past. It is ironic that liberals are generally the ones wanting to conserve the environment while most conservatives policies would destroy it.
Ron P.
"favorable to or in accord with concepts of maximum individual freedom possible, especially as guaranteed by law and secured by governmental protection of civil liberties."
That's where Liberal theory fails to meet reality. Liberals forced me to buy a car with an airbag set to "decapitate". Liberals make it illegal to deactivate said airbag. Liberals wish for force me to buy health insurance from an approved monopoly, but forbid me from buying a limited policy. It's full coverage only.
Liberals also wish to prevent me from buying a firearm, or incandescent lightbulbs. They would be a lot happier if I was unable to buy fireworks. They also wish to prevent me from buying salty food, patte de foie gras, whale meat, and various furs, even from non-endangered species. And so on.
When Liberals actually are willing to live up to #4, I might be willing to associate with them again. Until then, Conservatives (excluding the Fundamentalists) are actually willing to let me run my own life.
Actually, Liberal and Fundamentalist share the opinion that I am incapable of running my own life without their expert guidance. The only difference is in who is to provide the guidance. The State, backed by automatic weapons, or God, backed by eternal damnation, (and if that isn't enough, burning at the stake).
You have an extremely childish and erroneous view of what is meant by "liberal", "conservative", etc. Conservatives are willing to let you run your own life to the extent, and only to the extent, that it comports with their notions of propriety. Conservatism is authoritarianism, hierarchy, class warfare, and fundamentalist black-and-white thinking.
The thing you and many other fire-breathing "conservative" "free-marketeers" seem to forget is that we don't live in a frontier town, that everything we do affects others, and that Walmart is not Sam Drucker's General Store. That the free market can't fix every problem, because a) there is no free market and b) if there were, the market signal comes too late to be effective for the type of issues presented by global corporatism. That's why, ever since I started reading the newspaper back in the 60's, there's been one crisis or another.
Your list of what "Liberals" want to prevent you from doing is a caricature. How about this - Conservatives want to prevent me from breathing clean air, drinking clean water, eating non-pesticide drenched food, etc. When Conservatives stop trying to poison me perhaps I'll associate with them.
Your simplistic ideological sermonizing is getting a bit silly.
I agree with most of what PVguy says.
I think American political thinking is somewhat hampered by the two-party system. In much of Europe, "liberal" tend to mean "libertarian", while what you call "liberal" is called "socialist". However, in the US, "socialist" is sort of an N-word, so you use liberal instead.
The problem with all that is that you lose political dimensions. In the social and economic freedom dimensions, you mostly cover two corners, i.e. social unfree+economic free versus social free+economic unfree. If your vote is to matter, you need to embrace some form of coercion. You can't vote "I'm free on both counts, you honour.".
Btw, your characterisations of conservatism, to me, makes you the simplistic guy.
What a crock
(by them I mean, not by you)
You and they never ran your own lives
From the minute you were born, your parents guided you in how to think, what language to speak, what religion to follow, etc. ... and their parents taught them
Step back, you are correct. We are all victims of circumstance. We are what we were born with plus everything that has happened to us since we were born. Genes and environment, that is all we are because there is nothing else.
Try to think of something else. I have posed that question a hundred times. And the answer is always goes like this, or something similar. They scratch their butt, purse their lips then utter something similar to this: "But still...."
Ron P.
There are times when we can make one small step forward beyond where our forefathers left us.
As Sir Isaac Newton is famed to have said, "If I have seen farther it is because I stood on the shoulders of giants"
Regrettably, in out times, most people prefer to stoop lower than the lowest of their fore-bearers --think Jerry Springer, think Jersey Shore, think American Idiocracy Idol
_______________________
footnotes:
Why American Idol Makes Me Sad
'Murican Idol Revival
PVGuy,
You lost it there. LIberals are not making you have an airbag. You do not get it. Do you know how many companies profit from airbag regulations, starting with the car cos., the air bag propellent is an explosive formerly used to launch rockets, the electronics guys, and so on and so on.
You think only liberal soccer moms want air bags. The 4th Estate then puts air bag laws on T.V. night after night for corps X, Y and Z until the laws are on the books.
It is not magic. It is called corporate control of the entire system. The child seats (not the infant or baby seats) the child seats for kids that are 8 years old. The ones that do not save lives. The ones that cost 100s of dollars. Those seats are yet another example of Big Business making tons of cash on us.
http://www.democracypowernow.blogspot.com/
conservative/progressive (see bottom of page)
I just found this guy. Check him out. Seems to have good sense.
re: U.S. Awash in Oil and Lies, Report Charges
More accurately, the report is awash in confusion and BS. It's not often that you see an article with as many errors per linear inch as this one.
Anyhow, the fact of the matter is that, even though US consumption is down substantially in the current economic mess, the US still imports most of its oil as it has done for decades.
I think that they are confused by the fact that the US has recently become a net exporter of refined products. The European refineries are having problems because of the sudden disappearance of high-quality Libyan oil from the world market. They can't handle the alternatives, which are of truly dreadful quality, whereas many US refineries are designed to process heavy, viscous, high-sulfur crude oil such as you might get from Canada or Venezuela. Venezuelan production is down, but Canadian production of not-very-much poorer quality oil is undergoing a relentless and continuing rise and a lot of new pipeline capacity has been built to import it from Canada in recent years.
Since the European refineries can't meet demand, and American refineries can, the US refineries are exporting a lot of product to Europe. This is the reverse of the historic product flows, which saw the Europeans refine a lot of Arab oil for the US market.
It's true that the US is awash in oil, but it's mostly Canadian oil (and to a lesser extent, North Dakota oil).
The point of the Keystone XL pipeline is to take this new Canadian oil (not to mention new North Dakota oil, which moves on the Canadian pipelines) to the Gulf Coast, where about half of US refining capacity is located.
"....The point of the Keystone XL pipeline is to take this new Canadian oil (not to mention new North Dakota oil, which moves on the Canadian pipelines) to the Gulf Coast, where about half of US refining capacity is located."
And from there the refined products will be shipped to Europe.
The Keystone XL pipeline will indeed open up new markets for Alberta tar sands upgraded bitumen. Because the US is using less gasoline and diesel fuel you cannot deny that the pipeline is for export of expanded tar sands production. Those of us in the midwest US will be paying higher prices for diesel and gasoline, while the profit margins from tar sand operation will grow.
The Keystone XL is not about helping US get more oil products from Canada to reduce its dependence on OPEC. If you don't believe this then lets see some facts to refute it.
You in the Midwest US are already paying higher prices for diesel and gasoline. You don't seriously think the Midwest refiners are passing on their cost savings to consumers, do you? No, they are just adding it to their profit margins. Their sales prices are the same as US coastal refiners.
Canada also exports large amounts of refined products. Historically, they went to the US because the US did not have enough refining capacity of its own. These days, due to declining demand, the US has enough refining capacity. The US is now refined products in competition with Canadian refiners, so I think the Canadian refineries without access to oil sands production (i.e. those in Eastern Canada) are not doing that well.
Here's Houston retail gasoline vs WTI
Note that the current average at about $3.40 was first reached in 2008 as WTI crossed about $112 - about where Brent is now. The recent peak at about $3.90 corresponded to WTI at about $112 (Brent was almost $130). In 2008 both WTI and Brent were at about $140 when Houston gasoline hit $3.90
If Houston gasoline still related to WTI then the price would be about 2.80/gallon today not the current $3.40 as can be seen more clearly in the 18 month chart. The chart for St. Louis (not shown), to pick a land-locked mid-west state with relatively low prices, is virtually identical to Houston.
WTI is a con game at the moment and has been since the start of the year when it "broke". Consumers aren't benefiting in general - the refiners are.
As Alan has pointed out gas tax rates and varying blends account for most of the differences across the USA.
The crack spread in 2008 was such that refiners were losing their A$$ on gasoline. Refineries were shutting down due to the low to zero profit margins. Tesoro, a stock I follow because my customer has interest in it, had little profit that year as did most other independent (non-major oil Co owned) refiners. In summer of 2008 gas in St. Louis hit $4.10 in Missouri and $4.30 on Illinois side of the river. Gas now at $3.30 to $3.50 just before the weekend.
Houston is still a long way from Cushing and much of its gasoline is made from GOM oil, not Alberta or Bakken oil, IIRC.
Gas in Kansas and Missouri is cheaper than most other places in the US due largely to cheaper Cushing price. Perhaps the refiners are making a "reasonable" profit margin with crack spreads around $.40 per gallon, but the consumer is still winning with lower WTI price. Go to Gasbuddy.com to check where gas prices all over the US.
Obviously I've been on Gasbuddy and checked US prices because that's what I was quoting from.
Here is a chart of Houston, Missouri, New York and WTI
As you can see the price difference with New York is pretty much the same now as it was 5 years ago. It has nothing to do with WTI being a huge amount cheaper (which it wasn't until this year). The WTI Crack Spread is currently about $35 per barrel.
As to your Missouri/Illinois difference
It seems to me that there are three groups that are primarily opposed to Keystone: environmentalists, Mid-continent landowners and Mid-continent refiners.
Courtesy of Undertow, who posted some Bloomberg links, following are some closing prices for several crude oils. Excluding WTI, the mean and median price is roughly about $114.
Tapis $121.90
Minas $120.40
Bonny $117.08
Forties $114.78
Louisiana $114.45
Urals $113.60
Brent $112.48
Alaska $111.60
Oman $109.01
Dubai $108.50
WTI $86.45
If we assume that about 4 mbpd of crude oil is priced at the WTI price in North America (half Canadian imports and half US production), then Mid-continent refiners are transferring about $40 billion per year from North American producers to their own pockets, which they are retaining in the form of the vastly increased WTI crack spread (as documented by Undertow). For the sake of argument, if the refiners wanted to spend about one-tenth of one percent of their annualized profits from the WTI/Global price spread, they could spend $40 million fighting the Keystone pipeline.
And if they send 1/100th of 1% of the profits ($4 million) to my account I will never reference this subject again. Westexas bribe rates may be higher :-)
I'll undercut your price and take $3 million.
I'll give the info up for 2.9 million AND toss in a 0.1 million donation to TOD and I'll stop posting here on TOD.
The price for gasoline in the center of the country (from Texas to North Dakota) is about 20 to 30 cents less per gallon than the east and west coasts. (check gasbuddy.com ). Thus the gasoline user is saving 8 to 10% on his fuel costs as a result of difference between WTI to LA and Brent crude cost, with balance being profit for the refiner. If the Keystone pipeline is built these users of fuel will pay more for gasoline and diesel as price spread between WTI to other crudes decreases to near 0.
To say that only land owners and refiners are opposed is wrong. The buyers of gasoline and diesel from TX to ND should also be opposed as this pipeline will increase their fuel prices.
Due to transportation costs from refiners (plus more boutique gasoline blends on the coasts), the East and West Coasts have always had more expensive gasoline.
Plus high gas tax states tend to be on the E-W coasts.
So I think your gas price delta was there, or most of it, back when WTI = Brent oil prices + or - $1 or $2.
Alan
California and some other US states are notorious for their boutique fuel standards, which are quite difficult to reach. This has been a great source of income for Canadian refineries who are prepared to supply whatever exotic brand of fuel US states want to specify at whatever price its consumers get stuck with.
The privately owned Irving Oil refinery in Saint John, New Brunswick is the largest oil refinery in Canada. New Brunswick has only 750,000 people and is one of Canada's smallest provinces, so obviously they don't sell a lot of fuel locally.
You know things are getting weird when a refinery on the East Coast of Canada is a major supplier of oil to California. However, things are not as lucrative for Irving Oil in the current economic environment, though. Irving Oil got a lot of its oil supply from Libya.
Irving Oil Shelves 2nd Saint John Refinery
RMG,
I think if you lived in a valley area or major city subjected to heavy smog, you would ask the people to each kick in to keep the problem managed. It is not "boutique" -- a kind of buzz word implying superfluous. I tend to think research decided the proper mix of hydrocarbons for reduced pollution.
Remember when being boutique was the thought of removing Lead from fuel. Who's idea was it to put that poison in gasoline? LOL. The lead mine owners. Of course the myriad carcinogens others choose to breath because they cannot add 20% fuel economy to their giant cars is beyond me ;-)
"Who's idea was it to put that poison in gasoline?"
It was Thomas Midgley, the same engineer that brought you Freon. Midgley worked for Charles Kettering, founder of Delco Electric and eventually Chairman of General Motors.
Freon, developed shortly thereafter, has its own story. From Wikipedia:
Environmental historian J.R. McNeil says that Midgley had a greater impact on the environment than any other single organism in world history.[1] Bill Bryson in his book, 'A Short History Of Nearly Everything', has expressed a similar opinion.
No refined product is transported from Eastern Canada to California, as far as I know. The only major pipeline that crosses the continental divide provides refined product FROM Los Angeles TO Phoenix. (See http://www.aopl.org/) The only other possibility is for tankers to ship the product, but I don't think this is happening. More likely would be crude from Venezuela going directly through the Panama Canal and the refining would be done in California. Alaska provides most of the crude to California, so they can handle heavy grades which Venezuela also has.
Irving Oil probably got this award for producing Reformulated Gasoline (RFG) used along the I-95 corridor from DC to Boston.
Well, Irving ships most of its wholesale product by tanker, not pipeline, minimum shipment 200,000 barrels. That's why they are sitting on a seaport capable of handling the biggest of supertankers.
I was just thinking back to a few years ago when someone told me Irving was sending tanker loads of gasoline through the Panama Canal to California. California is chronically short of refining capacity (just try to build a new refinery there) and their gasoline standards are different from the other 49 states, so it can be tough for retailers to find fuel. Most refineries aren't interested in doing a special run just for California.
I don't know how much gasoline Irving is sending to California these days. Probably not a lot since demand is down. However, any halfway ambitious marketer would be willing to pick up a tanker load of gasoline in Eastern Canada and deliver it to California if the price was right. Or the reverse if there were some major refinery outages in Eastern Canada.
Venezuelan extra-heavy is a LOT heavier than Alaskan oil, about 10 degrees API versus 27 degrees for Alaskan oil. Heavy oil is usually defined as having an API gravity of less than 20. They can't physically get heavy oil from Alaska to flow through the Trans-Alaska Pipeline without heating it, and they don't want to heat it.
Any article with a nonsensical quote like that gets ignored by me. Perhaps they are confusing refined liquids with oil.
Edit: Yeah, I'm just repeating what was already said.
Perhaps the article author, Stephen Leahy, has read the TOD comments. His article has removed the In fact... sentence.
31/8/2011
1 billion vehicles in year #7 of peak oil
http://crudeoilpeak.info/1-billion-vehicles-in-year-7-of-peak-oil
Interesting article, thanks. Still, I have to question some of the assumptions that underly projections done by the cornucopians. Look people we are in a global depression, why anybody believes that population and car production and energy production can keep increasing forever is beyond me.
At some point the limits will be reached. And the politicians and bankers and automakers and corporations will have to accept it.
People cannot live and keep consuming forever!!!
"...why anybody believes that population and car production and energy production can keep increasing forever is beyond me."
Okay, I will explain it. It is human pyschology, and makers and sellers of stuff have it down to a T. They know how to keep people consumming. It is the science of manipulation. I really think that "faith" is a major part of their formulas, their marketing models. They may even promote "faiths" in "having as many babies as we can." The more people of faith, the fewer people who think; faith being another word for dependent believing as opposed to thinking.
"People cannot live and keep consuming forever!!!"
Nope! (!!!!) It will end harshly, I think.
Best hopes for a cushioned stop. (With apologies to Alan from Big Easy)
Lizzie :)
Big Oil tries to ban E15 is the lead story on this week's Market to Market.
Oil companies generally don't mind blending ethanol into gasoline in percentages up to 10% because the engines and fuel systems can tolerate it and ethane is a useful octane booster.
The problem is that cars built more than 10 years ago weren't designed to tolerate large amounts of ethanol in the fuel. It tends to dissolve plastic parts in the fuel system and cause the engines to run too lean. This can damage fuel systems and engines. More modern cars have ethanol-resistant components in the fuel systems, sensors to detect the composition of the fuel, and electronic fuel injection systems programmed for varying fuel mixtures.
Older cars often have a lot of cheap plastic components in the fuel systems, and carburetors, which can only be re-calibrated for ethanol by replacing or drilling out the mixing jets. If you go back to straight gasoline, you have to change the jets back.
Until all the older cars are off the roads (and who in today's economy is going to scrap a car that is only 10 years old), the oil companies will tend to resist putting more than 10% ethanol in the fuel because they are worried about being sued by motorists for engine damage.
I was recently vacationing in the mountains of Idaho, and the big concern among people there was what high ethanol fuel will do to your chain saw. Chain saws have a lot of lightweight plastic components, rather simple two-stroke engines designed to run on straight gasoline, and there's no telling what ethanol will do to them.
"Until all the older cars are off the roads (and who in today's economy is going to scrap a car that is only 10 years old)"
My pickup is 21, and your point is very well taken. The pickup is fine with 10% ethanol, beyond that I'm not sure.
My 2004 motorcycle specifically says no more than 10% ethanol, as does my 2006 Chevy. My 2008 outboard says "non" (built in France Yamaha) to any ethanol although I suspect it is more due to fuel separation issues.
The better grade of two-stroke oils have fuel stabilizers in them, and at least my chainsaw has been fine with 10% ethanol. But by Idaho standards it's a toy. A pro-grade Stihl my have stricter limits.
Yes, at the local lumberjack supply store, right next to the wall full of extra-long cutting bars for pro-grade chainsaws was a display of fuel stabilizers purported to protect them from high-ethanol fuel.
They claimed it was necessary and worked as advertised, I am not an expert in the field of chain saws so I don't know. Not many lumberjacks have a degree in chemistry, so I'm not sure they know, either.
My yard gear is all 10 years old or older, and I've had to put in carb kits in all of them. Can't say for sure that Ethanol was the culprit, but seals and o-rings were swollen and breaking down. Easy fix at least. Would be worse if all the hoses and fittings failed, though!
Mt Stihl string trimmer was recalled to replace the fuel cap. Once I put ethanol laced gasoline in the tank the cap would no longer seal.
Seals and O-rings on small engines are what ethanol would wreck first, little rubber and plastic bits made out of non-ethanol compatible materials. Hoses are somewhat more robust, but 85% ethanol might do them in as well.
The factories would need to supply replacement components made out of ethanol-compatible materials, and if the product was a long time out of production they would be uninterested in doing that.
Maybe that is something for the after parts market to take to hand. All those pattern part seal sets etc.
NAOM
Snapper generator with Briggs and Stratton engine. Need it for when the hurricanes come. Every year even when hurricanes don't come, I put some gas in it and check that it runs OK, let it run until it runs dry. This year, no go. Finally figured out that the hose from the gas tank to the shutoff valve had internally turned mushy, the last time it ran some mush had sloughed off and made it through the shutoff valve to the carburetor. Looks like a regular old piece of black fuel hose, but whatever was inside it turned it to mushy gooey rubber.
Bit of carb cleaning to do there.
NAOM
GOM Update. Lots of stories about almost half of the Gulf of Mexico production being shut in today so I thought I would give an update. GOM production peaked in the third quarter of 2009 at just over 1.7 mb/d. GOM production had began to decline even before the Deep Water Horizon disaster. Production is now a little above 1.3 mb/d. But all that drop is not due to drilling restrictions. Some GOM platforms are just not living up to their expectations.
Heading Out had a special thread of GOM production on August 7th.
Tech Talk - The Deep Waters of the Gulf and Salt Domes
Adding the expected production from those three platforms it comes to a total of 575 thousand barrels per day. And they were expected to hold that level for about 25 years. Didn't happen. June production for Thunder Horse, 104,749 bp/d, Atlantis 44,000 bp/d and Tahiti 107,000 bp/d. Of the three only Tahiti is coming close to expectations. But the combined production of all three is now 256 thousand barrels per day, less than half of what was expected.
Combined production of Thunder Horse, Atlantis and Tahiti platforms in thousand of barrels per day.
Ron P.
GOM production down 25% in two years is pretty steep. There have been some alarming statistics out this week. I'm still hung up on the Forbes article that had Non-OPEC down 4% in ONE quarter. ...I know not to think too much of it until more time passes and more data comes in.
In the meantime we are waiting for Jack 2 ....
It will postpone Doomsday at least 2 years / snark
A couple of those two year postponements will push Doomsday to after the next election. And that's what really matters.
I am wondering if part of the 4% is sale of BP assets to some companies not in the 31 companies for whom statistics were summarized. I also if there is a general shift going to oil production by smaller companies--companies working in the Bakken, companies getting the last residual oil in parts of the North Sea, and smaller Russian companies working new (probably smaller) fields.
But I agree that a 4% drop, year on year, in one quarter is a mystery.
Thanks for the update. Could you do a chart showing the main Thunder Horse structure, Thunder Horse, North and the combined output?
As of June Thunder Horse Main was producing 31,754 barrels per day, Thunder Horse North was producing 72,994 bp/d for a total of 104,749 bp/d.
Ron P.
How do they get the water fraction to go down after it starts increasing?
I have no idea, I am not an oilman. But I suppose it has something to do with the reduction in oil production.
Ron P.
Shut in the wells producing most water?
That would appear to be what they did, but given the high vertical perm, it's probably only a temporary measure. At the current rate of decline, the main Thunder Horse structure may not be too far away from abandonment, with Thunder Horse, North not too far behind.
Thanks, and pretty stunning. The annualized decline rate for the main structure is about 65%/year. The deafening silence from BP regarding their poster child for deepwater GOM continues.
I don't think that is right. According to the MMS for June,2011:
G09866 605,488
G09867 937,954
G09868 952,630
G14658 833,144
G19997 383,342
Total 3,712,554 = 123,752 BOPD
You are correct, one of the formulas in my spreadsheet picked up the wrong number two months ago. The error was in Thunder Horse Main and Main Water. Here are the correct figures:
You left out G21778 from your figures. Anyway here is the correct chart. Sorry for the mistake. And thanks for pointing this out. It would probably have taken me months to catch it otherwise.
Contract G14658 was the only T.H. contract producing when that contract hit its peak of 167,651 bp/d back in January 2009. That contract is now producing more water than oil.
Ron P.
The corrected numbers put the annualized Thunder Horse main structure decline rate at "only" 40%/year, which would put June, 2012 production at about 40,000 bpd, down 75% from the early 2009 peak.
About Dr. Pike above:
“He and I disagreed about the nature of “Peak Oil”: in his opinion…the estimates of proven oil reserves were low by a factor of 2…while my contention is that no matter how much oil may lie under the Earth’s surface, if it cannot be extracted fast enough to meet current demand”.
I suspect most here understand this difference in perspective is the basis for many PO debates: reserves vs. production rate. So I’ll avoid beating that dead horse again. But I’ll offer some details how a company like BP measures the values of its reserves and investments. Though it sounds odd the amount of oil itself, such a XX billion bbls of oil, is not a very meaningful metric to BP et al. A company’s value is measured by its cash flow. And that obviously is determined by the production rate. Two companies may have the same 2 billion bbl reserve base but if it takes one company 3X as long to produce those reserves then its value is significantly less than the other.
There is a standard method in the oil patch to normalize such recovery rate differences: net present value. A discount rate is used to calculate NPV…typically 10% - 15%. Essentially the value of oil produced X years out is reduced by the DR taken for each of those years. Thus $100 of oil produced 1 year from today is worth $90 ($100 X 0.9….the DR). And produced 3 years out: $100 X 0.9 X 0.9 X 0.9 = $72.90. Obviously production beyond 8 to 10 years out has a much reduced NPV. The cumulative results of the NPV of a company’s reserves are the key metric. This explains why high capex projects such as Deep Water are designed for the highest production rates possible even if that means a lower URR.
Which I why I don’t understand Dr. Pike’s position. Trust me: BP management, like those of all public companies, is obsessed with NPV. They don’t sit in the board room a worry about the company’s URR…it’s all about cash flow and NPV. The geologists/engineers don’t struggle with URR estimates…it the flow rate, baby. Always has been…always will be.
How does one know what always will be ?
banny - Another east question...thanks. Because it's the only way to clearly value future production. And that’s how investment decisions are made. Here's a simple example you can test your investment skills against: I offer you an investment opportunity. You invest $1,000 in my project and guarantee you’ll receive $5,000 back. Would you invest? BTW did I mention that you would be getting that sweet $100 check in the mail every January 1 for the next 50 years? What…you won’t invest? OK…I send you a check for $5,000 in 12 months. You’ll invest now? Why now? Oh…yeah…the NPV of the second deal makes more sense. And always will…that’s why.
Rockman, I thought you preferred minimum payback period to maximum NPV, for investment decisions??
Economists maintain that NPV is the best criterion, but unfortunately they're totally incapable of telling us what the discount rate should be. Is it 15%, which used to be popular in the oil patch? 10%, which seems to be standard for most energy-related developments nowadays? Shouldn't it be 3%, since forestry & agriculture in the UK (and indeed the rest of northern Europe) are uneconomic at any higher DR? I've seen claims that tropical plantations can be economic at 10% DR, but I suspect that's either an exaggeration, or based on unsustainable/unethical practice.
Scottie – Pay off (we call it pay out) and NPV tend to go hand in hand. A short pay out of a couple of years tends to produce a higher NPV. A fast PO has another advantage: the economics are less sensitive to pricing assumptions. That’s what crippled many shale gas players when prices fell quickly in less than a year. Even though SG wells produced a very high initial rate some prices fell from $13/mcf to less than $6. That greatly reduced NPV due to the revenue decease and not the time factor.
IMHO the DR is really arbitrary. You pick a bigger one to guard against risks like the drop in NG prices I mentioned above. The more certain you are of your model the lower the DR you might settle on. I’m sure Chesapeake and Devon wished they had used a 50% DR back in ’08.
Sorry, your example demonstrates next to nothing.
How about if you had offered me 100 bopy for 50 years starting in 1986, or 5000 barrels oil at the end of 1986. Which one would make more sense ?
Rockman is demonstrating how the industry thinks about the way it measures success in its business. His explanation demonstrates everything necessary to understand how they rank projects. NPV is the name of the game. As he has noted before, they certainly aren't so silly as to use EROEI.
Are you having trouble understanding the effect of flow rate and price on NPV ?
None at all. Rockman has explained the way industry ranks projects. Nobody has to like the way industry ranks projects, but that has nothing to do with the fact of how they do it.
Banny – Try this: a well produces 100 bopd net to their interest and does so consistently for 10 years. Now convert that to cash flow. We’ll use a constant price of $100/bbl. In practice most companies use some modest price escalation in this computation. So that’s $10,000/day income. So that’s $3.65 million/year. The NPV (10% DR) of this cash flow for the second year is $3.65 million X 0.9, the third year NPV is $3.65 million X 0.9 X 0.9. you can see that the NPV for the 10th year is $3.65 million X 0.35 or $1.27 million. Add the NPV of all 10 years and you have the NPV of the entire URR.
Now consider another cash flow. This well has the same URR but it produces at a much higher flow rate initially and then much lower towards the end. Thus the NPV of the first few years is much higher than the first example. The total NPV of the second well is much better than the first even though they have identical URR.
Companies use the NPV when computing the economics. The higher the NPV as a result of higher initial flow rates greatly swings investment decisions.
"A discount rate is used to calculate NPV"
Same thing in mining. Mines with "7 years of reserves" can run for decades. Seven years is a sort of tradition, but it comes from the discount rate. $100 now is worth less than half that in seven years (at 10% DR). Added to general economic uncertainty, there is no point in proving reserves too far out. The economic assumptions will change by then anyway.
What matters is will the cash flow pay for the capital replacement/development to keep the mine running. And as Rockman has mentioned before, even if it doesn't, if the capital is already in place, as long as the variable cost is less than sales price, you will run the mine even if the price received does not cover the total cost (total = variable + fixed.)
Leanan's post, above:
Obama Administration Abandons Stricter Air-Quality Rules
I live in the middle of a giant forest, in a sparsely populated area, many miles from any urban/suburban area. Many folks around here are under the misconception that we live in a paradise of "clean air and natural beauty". A majority also oppose environmental regulation of any sort, especially if it has "Obama" stamped on it. We live about under the "3" (in "September 03") in this map....
[source: NOAA]
....so ask me if I'm just plain disgusted by this announcement. This is the typical summer pattern here now.
There was some discussion at the end of yesterday's Drumbeat about Heinberg's Kunstlercast comments, regarding TOD "doomers". Shoutout to Mr. Heinberg: When we backslide on these small but important incremental changes, (all I've seen recently is backsliding) how can one be optimistic? Discounting the future is a plague upon us.
And some Republican elected representatives and political office candidates rant about eviscerating or even eliminating the EPA altogether.
The flawed premise is that w/o environmental (or most any other type of) regulations that American business would flourish and jobs would be created by the millions.
More likely is that numerous corporations would see a modest rise in profits, most of which would go to stock buy-backs and investing in overseas markets for factories, distribution, advertising).
Our environment would deteriorate under high pollution loads.
I have been fortunate to have traveled in the Air Force to see some of the World....I have seen countries with lax environmental regulations...it isn't pretty.
As disappointing as President Obama has been in many aspects, I do not favor a 'shock doctrine' of electing a Perry/Bachmann ticket. The name of the game is 'least worst'.
Unfortunately, the game of "least worst" ends up with the environment being completely ignored - the administration thinks they can afford to trade those concerns off. The danger is in turning people off so far they have no inclination to show up at the polls.
I've been giving serious consideration to a third-party vote - at least I will be voting my conscience.
Who do you have in mind this cycle?
I'm waiting to see what the Green Party does - unfortunately they don't seem to have a ticket yet. I don't want to be a no-show when it comes to voting - I'm always appalled at the poor turnout in US elections compared with other countries. I became a naturalized US citizen in 2009 - too late for the 2008 elections, but voted for the first time in 2010.
It is a shame that the U.S. is locked into the 'Two-Party System'.
Some other possibilities:
http://www.gp.org/committees/platform/2010/index.php
http://www.lp.org/platform
These are two different platforms, however, they seem to overlap in the are of 'National Defense' somewhat.
On a related note, I think it is too bad that John Huntsman is marginalized in the Republican Party.
He should try a run as an Independent.
Also, upon further examination of Ron Paul, I withdrawal my previously-stated interest in him as a contender for President.
I don't subscribe to the "free market" ideas of the Libertarians, or the idea that government can do nothing right.
It may be a fine idea when one is busy colonizing a new country with vast open spaces to occupy, but as a human society, we live in increasingly close quarters - there have to be rules of the road, and limits set, as well as enforcement of those limits.
The closer you are to your nearest neighbor, the more your behaviour affects them. And vice versa, of course.
LIbertarian ideas are a joke imho. They are a yearning for utopia. For example, curbing the EPA so business Z can do whatever it wants. Well sure except when toxic waste X is dumped on Person Y's air.
Yeah cause person Y was a libertarian that wanted to breath clean air. Who gets to win that tug of war? I wonder.
I hate it when big business Z cramps person Y's freedoms.
This is the kind of thing people think will save our Country these days. So sad. People are following this nonsense.
We live by story and myth to make sense of a groundless and fragile existence.
This is probably a liability at the moment, as critical thinking is what is needed.
"Well sure except when toxic waste X is dumped on Person Y's air."
In the ideal Libertarian case, Person Y would sue Business Z to force it to repair the air quality before it traveled over Person Y's property lines, and became Person Y's property, albeit temporarily.
In practice this doesn't work. Business Z crushes Person Y with legal maneuvering or delays until Person Y dies and loses standing or goes broke.
It's the same basic issue as Keynesianism. That would work too, but during the boom times the Left wants to spend all that wonderful tax revenue on new programs for the social good, and the Right wants to return the excess revenues to the taxpayers. Either way, there is no surplus to pay down the deficit from the previous bust, and when the next bust hits the government has no reserves and inadequate borrowing capacity to fully fund the Stimulus needed.
In textbooks both methods work. In reality, both have problems.
Marxism looked good on paper too. In reality, it failed.
I've been looking for alternatives but its pretty bleak out there. I was a Green Party activist in the early Bush administration years. I gave it up in spite of the impressive idealism because of the large component of crazies. There was constant bickering between the pro- and anti-Nader factions. The national level platforms and statements of purpose are pretty classy but seem to fall down at the local levels.
Here's something I've been following but it seems to be moving pretty slowly:
http://www.americanselect.org/about
I'm a proud no show. I'd rather keep my soul than participate in the idiocy.
http://www.youtube.com/watch?v=xIraCchPDhk
I agree with carlin, he was a very wise comedian voting in the current time of this countries life is rather pointless as the system has went from a system of control by the populace to a way the political and monied class at the top to 'prevent' what we have seen in the middle east with Egypt and Libya. After all the best prison is one where you convince people to entrap themselves.
Barack Obama won New Jersey by 600,000 votes in 2008, 15 percentage points above McCain. Everyone else came to about 1%. Whether I voted R, voted D, voted third-party, stayed home, or passed my firstborn through the fire to Moloch, Barack Obama would have won NJ. My vote or non-vote was completely inconsequential. Given that, why worry about it? Do what you want on Election Day, the outcome won't change.
The problem with that logic is that if every person but one thought like that, that single person would have gotten his way, no matter how far he was from the needs/wants of the society. This highlights the problems of a uneducated, disinterested citizenry. Or is that just a random bunch of consumers?
'We the People' White House-sponsored Internet petition function/tool:
http://www.whitehouse.gov/wethepeople
5,000 signatures gets a response from the White House and your petition sent to the appropriate government agency.
Are there 5,000 readers of TOD?
Would they ever all agree on any one thing?
One of the first things to know is to not ask for World Peace or to end hunger...a petition should advocate a decision on a concrete action or well-defined action plan...what they need to post is a Congressional Bill-writing tool/widget combined with some kind of Internet-based 'peoples' Congress'.
Alan could then write his electrified freight train plan (and his other rail-based transportation plans) into draft legislation...
just spitballing on a Saturday afternoon...
I think it's a great idea. If we can find 5000 willing participants, and a means to get the petition signed.
I am willing to give it a try ! :-)
How about this ?
We urge the Administration to strongly support an additional policy to reduce oil imports, and improve our environment and economy - expanding and electrifying our railroads and shifting as much truck freight as possible to efficient electrified double stack container trains. The transportation sector accounted for over two-thirds of all U.S. petroleum consumption in 2006 and heavy trucks consumed 18.7 percent of U.S. transportation energy.
Moving freight from trucks to electrified double stack trains trades roughly 20 BTUs of imported refined diesel for 1 BTU of domestic, and potentially renewable electricity. Trucks would have to buy diesel for 18 cents/gallon to compete with the fuel costs of electrified double stack trains. The economic, energy and environmental advantages of such a modal shift are apparent.
Electrified and expanded railroads address a [the greatest] fundamental National Security vulnerability of the United States. No matter how severe and prolonged the extent of an oil supply shortfall might be: food, critical materials and some passengers could still be transported nationwide with domestic electricity.
The electricity required to operate electrified railroads, given the efficiency of electrified rail, would be on the order of 1% of our existing demand for electricity. An amount easily “generated” by additional conservation and efficiency elsewhere.
Electrified rail could potentially replace up to 2 million barrels/day, or 18%, of our oil imports. The infrastructure investment required will come largely from mills and factories in the United States & Canada. The construction will be done in the USA.
The multiple advantages of electrified rail explains the building of 2,700 km of new, double stack electrified freight rail lines in India, and the electrification of 20,000 km of rail lines in China. The French have a 20 year program to “electrify every meter” of French rail and “burn not one drop of oil”. The United States should [seriously consider] aggressively support[ing] this oil free transportation option. [Do we ask for just “serious consideration” – a weaker call here may add more signatures]
The economic benefits extend beyond the obvious. The more that rail is used, the cheaper per ton-mile it becomes and the more it affords investments to increase the speed of delivery. Faster average speeds reduce labor and rolling stock required, which further reduces costs while adding value. By contrast, increased truck freight congests roads and increases crash fatalities.
Rail infrastructure generally has less environmental impact than comparable highway capacity. Reducing the government subsidies of trucking should free up tens of billions of dollars annually for other and better public purposes as freight is shifted from public roads to privately owned, property tax paying railroads. A major shift to electrified rail should reduce the overall cost of the transportation of goods, with widespread benefits to the economy.
As T. Boone Pickens has proposed to BNSF Railroad, electrified rail lines are also natural electrical transmission corridors for renewable energy. Electrical transmission, HV AC and HV DC, on electrified rail lines can provide a critical element of a smart grid and regional trading of electricity, particularly renewable electricity.
The wide variety of benefits from electrified and expanded railroads should attract bi-partisan support, with the various economic, National Security, employment and environmental benefits attracting supporters from a very broad spectrum of perspectives.
We stand ready to help support this attractive addition to our National Energy Policy
Alan,
Well-written!
A few suggestions:
1. Some folks may wonder why this citation is from 2006 and not more recent, such as 2009?
2. Recommend '...a fundamental...' vice 'greatest'...avoids alienating some folks who think some other issueis the greatest threat to Mom, Apple Pie, and the American Way...
3. I recommend: ...aggressively pursue implementing...' 'consider' isn't a definitive 'ask'...I think people will respect a straight-forward action recommendation imbued with an appropriate sense of urgency.
If you want to pursue this, let us know...I will sign your petition!
What is the exact process ?
And a link to the 5,000 signature threshold ?
Electronic and/or physical signatures ?
Thanks,
Alan
And do signatories have to be USAnian?
NAOM
We the People: Your Voice in Our Government
It does not appear to be active yet. You have to "create an account and verify your email address" at the White House's Internet site. They appear to be electronic signatures from anyone over the age of 13 years. You must gather 5,000 signatures in 30 days to qualify for a government review.
We the People: Announcing White House Petitions & How They Work, Posted by Macon Phillips on September 01, 2011 at 07:00 AM EDT
This announcement was made September 1, 2011. I signed up to be notified when it came on-line. There is a 30 day time limit to get the signatures.
My guess is foreigners are allowed to sign up as well, if they are prepared to submit a zip code (US postal code). We could supply the US military codes for overseas delivery. Everybody has a good reason for the USA to use less oil and become more resilient.
The more active TOD members would need to lobby friends and family and go to other venues.
Wording would need to be tightened up a bit, perhaps (some good ideas above).
If we fail to get 5,000 signatures in 30 days, we will spread good ideas around, and perhaps 3,258 signatures will be enough to get attention.
I am willing to try if others are :-)
Best Hopes for 167 signatures/day.
Alan
++
Well, yes. And yet, the problem with the logic's opposite is this:
Will 170 million US voters all really take, or even have, the time to reinvent the policy wheel, each one for him- or herself? The scale of useless duplication of effort simply boggles the mind. And therein lies a paradox that no one will ever be able to resolve.
[And the structure of ballots is almost necessarily such that one can convey only a ridiculously small amount of information by filling one in, just a few to a few dozen bits.]
Are you really holding up economists as the model of rationality? Really?
Because voting exacts a cost - in time, effort, lost productivity
Oh yes - that lost time where you could be watching TV. Or posting on facebook. Or even here on TOD.
jjhman:
What exactly are you after? Do you think that if everybody voted, American Empire would have a eureka moment, and then all of a sudden we'd be out of Iraq or Afghanistan the next year? Do you think we'd reform our healthcare system? Do you think we would put more emphasis on stewardship and less on growth? Do you think we'd have a better financial system and that Wall Street and hedge funds would be regulated?
Were the Egyptians or the Romans or the British or the Nazis or the Soviets or anybody else capable of this? What makes you think America is?
Nope, put a fork in her, we're done. Best not to vote and contribute to the madness.
I think the bottom line is that ultimately those fools are voted into and out of office. Someone's votes counted. You can argue all day that one vote doesn't matter but, in fact, an aggregate of votes is what matters. Many of my friends said it didn't matter if Bush or Gore, Bush or Kerry won the elections but it did matter. A lot of people, not just one, stayed home and the creep was elected. Even George Carlin should feel guilty.
I don't believe we would be in paradise if Bush had not been elected but we would be in much less trouble than we are now. The whole world would be better off.
jjhman,
well-said.
I'm willing to concede that perhaps it mattered back in 2000. So yes, maybe Carlin was wrong in the past, but he was strangely prophetic. Kind of like the Limits to Growth and Population Bomb crowd in the 70s, they were wrong for 30 to 40 years, but they have turned out to be right in the end.
By 2004, it mattered less. By 2008, it didn't matter at all, as we are finding out.
So basically as the years go by, it has finally gotten to the point where it does not matter. American Empire will implode as the military and financial complexes devour everything until there's nothing left of honest, peaceful enterprise and savings.
Again, do you choose to ignore history? Do you think we are different than all of those other empires that could not be sustained, that did not turn back until they imploded?
I'm expecting a collapse of the dollar system and am buying precious metals as a hedge. I'm also preparing, or attempting to prepare, in all of the various ways that have been shared at this site and at others.
Tainter, Orlov, Greer, Kunstler, as well as some contrarian thinkers like Morris Berman and Chris Hedges point the way for me.
You can vote if you want, believing, as you do, that the right politician can save the Titanic. Meanwhile I'll be heading for the lifeboats.
Actually the "Limits to Growth" was NOT wrong.
Matt Simmons put it much better (and in more detail) than I can.
From "Revisiting the 'Limits of Growth': Could the Club of Rome Have Been Correct After All?" An Energy White Paper by Matthew R. Simmons, October 2000.
Matt Simmons - Club of Rome
I'd vote for Bloomberg if he runs third party.
If not, and if I can really cross vote in the primary, I will write-in Obama on the R primary, and Bernie Sanders and a player to be named later in the general.
Voting for the lesser of 2 evils is still voting for evil.
Jerry Garcia
Put me down for one Bernie Sanders. Would be interesting to see a poll amongst TODers. In the past, I have been as pragmatic as they come but I am not sure I can stomach voting for Obama, especially given his lack of support for environmental issues, including climate change. He is a man without any convictions.
But, the Republican field is full of crazy people. So there is that.
Increment your 'Would vote for Bernie for President' counter by one more. I have listened to him speak on numerous occasions, and I do not think for a minute that he would be a uber-caver-iner like President Obama.
At least he wouldn't be a fake Socialist, and folks would not be able to lob racist code-speak/dog whistles at him, and there is not one iota of a fake toehold to question his citizenship.
Of course a President cannot go it alone...there would have to be a change in the Supreme Court, and he would need sufficient allies in Congress. Alan Grayson as his VP would be a plus...he is not a shrinking violet. They can find a place for John Huntsman in their administration.
/fantasy island sub-routine: off/
But will may very well end up with a Perry/Bachmann show in the Big Top...
Bernie is the real deal. I was living in Burlington VT all through his tenure as mayor there, then Representative to Congress (I moved to NH so I didn't get to vote for him for Senate, but I surely would have). I would vote for him for President without question.
I've spoken with him on many occasions. I've had him show up at my house during election campaigns, and had him in for coffee. If you ask him something about an issue, you get an answer. A well thought-out answer. No weasel words. The guy has been amazingly consistent in over 30 years of politics. An extremely thoughtful human being.
Alas that I will probably never get to vote for him for President, unless I write him in. Maybe I will.
Should we start a write in campaign for him? I'm in.
"Put me down for one Bernie Sanders."
I'd vote for him.
I'm in that group, turned off with no interest in casting a vote for Prez. If the Repubs say boo, Obama jumps back far enough for them to get their way. So I can't vote for the big O again, and I won't vote Repub, which leaves a vote for a 3rd party candidate that won't change anything anyway.
Really thought Obama was going to stand on ideology, not decide every position based on the path of least resistance and what he thinks will get him the most votes come election time. Guess I was naive.
It would be interesting to have a null vote for "none of the above". The electoral college would be prevented from voting until one candidate recieved more than 50% of the total vote, including "none" votes. Of course, there likely wouldn't ever be another prez elected.
There exist alternatives to the plurality voting system we use in the U.S.
Here is one of them:
http://rangevoting.org/
An article describing a range of possible voting systems:
http://en.wikipedia.org/wiki/Voting_system
I also advocating retiring the Electoral College and implementing direct voting.
States with smaller populations can still have extra influence due to the 2-Senators-per0stae systems.
However, I advocate a reasonable cap or limit on the filibuster.
Would be nice to have that voting option.
I think Obama is stuck in the bargaining stage. He is not alone though a great percentage on TOD are as well and it's easily judged by the amount of proposals to engineer and build our way out. Building our way out though conflicts with clean air in the short and medium term. That is where Obama is at......he needs to become pessimistic.
Thats pretty much what I did in the 04 election. I still voted -for the lower level offices, but voted none-of-the-above for pres. I think that was a mistake, however. But things are getting much much worse now, there is no reason for hope left.
As inequality in the US worsens, the class solidarity of the wealthy continues to consolidate. Consider, for instance, that higher mortality rates and more sickness due to air pollution aren't good things for most businesses, since people who are either dead or plowing their resources into medical treatment don't make for the best consumers. But you don't see non-polluting businesses supporting better air quality regulations; you see a broad-based effort by big business to oppose all new regulations.
A similar phenomenon was in play during the health care policy debate. It would have benefitted most businesses to have a robust public health care regime, or even single payer. But it would not have benefitted the insurance companies. And by and large, big business opposed any improvement to public health care policy, or at best stood on the sidelines.
And, of course, the same thing has played out with fossil fuel consumption. It's not in the interest of corporations to have the economy collapse due to an inability to adjust to a new environment of resource constraints. Still, they will fight tooth and nail against any policies which might assist in such an adjustment, simply on grounds of class interest - even to a self-destructive degree. And increasingly, all other interests get crowded out of the debate...
Why do businesses get to pick? The only logical view is to regulate behavior for the good of people...benefits or harm to businesses only matter in that context.
Where is the party that advocates import tariffs based on the environment lacking of source countries, and export incentives based on the impact of local manufacturers? In a global environment, it makes sense to limit pollution ANYWHERE, and it makes doubly as much sense to keep it clean at home.
Maybe mining would recover as a responsible industry if foreign sources were held to similarly high standards.
Of course the devil is in the details, and it would require cradle-to-grave tracking and certification of everything from rosewood fretboards to diamonds to shellfish.
Why do businesses get to pick?
Because they have the money. Remember, it's the best democracy money can buy.
Where is the party that advocates import tariffs based on the environment lacking of source countries
Companies can make more money by exploiting lax environmental standards overseas than they could by getting politicians to increase tariffs. And they can do it with less protest from consumers and economists, too.
The problem is that large companies can play countries off against each other. David Cay Johnston pointed out the latest example yesterday: multinationals mysteriously always make losses in high tax countries such as Germany and the US, which losses they offset against profits made in low tax countries.
Unless and until all countries can coordinate their tax and environmental laws, this is going to be a problem. And while corporations pay for elections, it's insoluble.
I think you are mistaken. There are no loyalty or solidarity among capitalists. The reason they oppose increased regulation not directly affecting them, is that it actually would affect them negatively. The thing is - new environmental regulation is very often over-the-top, making much more damage than the thing it is supposed to prevent. Guidelines is often set on the basis of how low emissions are achievable, rather than what levels are harmful. Nowadays, "achievable" may be orders of magnitude less than what is measurably harmful. Nuclear regulation is case in point.
And health care - best would be abolishing the regulations, of course, and abolishing the tax breaks for employer provided health insurance. Most medical visits should be paid out-of-pocket, just like you pay out of pocket for oil change in your car. The tax breaks and regulations on coverage drives costs.
My wife has the same opinion, but I don't. I won't vote for a nuance of difference. Even if Obama lost most of the things he went after but stayed true to an ideology, he'd have my vote. At the end of the day it has to do with having a clear vision of where the country is going, not compromises that give that vision away. A nip here a tuck there and soon enough it's not much different than what the Repubs vision.
This country is headed for mass rioting. Once a Repub gets in office and cuts food stamps by 60-90%, medicare is ended replaced by privatization, SS turns into a roulette wheel on the stock market, taxes for the rich are reduced to 23% and the mortgage deduction is taken away (hurting the middle class the most), riots will erupt in the streets. I'm certain now we are headed that way. The repubs can only be champions of the super wealthy in so many ways, then it will turn ugly.
I was of the "least worst" mindset until the new smog regs went down. Not any more.
Increasingly, the country looks as if it is going to splinter into territorial regions, possibly loosely federated for the purposes of war and trade.
I'm paying more attention to local elections now, since I feel I can make a difference, and local decisions are going to become more important than federal decisions anyway.
Well, in my perspective, the problem is not too few regulations - It is too darn many people. Reduce the population to a sustainable level and the Air Quality Index will drop without any regulations.
Now, how to reduce the population to a sustainable level when the government is still trying to increase the population by both supporting tax laws that encourage people to have more kids and then ignore existing immigration laws to get ever more legal and illegal immigrants coming into the country is going to be most probably an unsolvable problem? Economic or environmental collapase are the only things I can see that will bring population back down to sustainable levels?
Yeah, pretty much.
Because, remember, if we try to be sensible and control population, then all we are doing is taking granny and Schiavo off the vent, then all of the right wing goons come out of their caves with talk of "death panels."
Not to mention, of course, that abortionists are "baby killers" and condoms are ungodly.
Still, it's not as if control actually works. China tries it and all they get is a surplus of men that they don't know what to do with.
See there's the rub. If population is to be controlled, then all of humanity, everywhere on the planet, has to agree on how to do it. And is has to be fair and well thought out.
Therefore, it's never going to be done. It's kind of like fiat money - if we do it right, it works beautifully, but we just aren't capable of doing it right.
My long term bet is on gold and population reduction the old fashioned way: famine, disease, and war.
Dilbert understands the optimist
http://dilbert.com/strips/
Re: Before Release, a Hydraulic Fracturing Study for the State Draws Skepticism, up top:
NYS DEC Commissioner Joe Martens on New York Now July 2011:
http://www.youtube.com/watch?v=XPb0FtQVmww
He does know how to BS his way through an interview.
In reality, the oil industry has been using hydraulic fracturing oil and gas wells for over 50 years, and the process is well understood. In the early days the mystery chemicals used to include golf balls and chicken feathers, but things are more sophisticated now. They now use stuff also found in toothpaste and laundry detergents.
Before they invented hydraulic fracturing, they used to stimulate wells by lowering nitroglycerin down the well bore and setting it off. The biggest problem with that was that they sometimes used to drop it on the way to the well and blow themselves up.
More random "noise" from the field...
I've now had the opportunity to use various LED products in a number of our lighting retrofits and I have to say that I've been transformed from a cautious sceptic into a true believer.
Last night, I swung by a hair salon that we had completed earlier in the day. For this client, we replaced ninety-six 90-watt halogen PAR38s with 17-watt Philips EnduraLEDs and the results look great. Compared to the halogens that cast a dirty, pale yellow pall over their merchandise, their replacement produce a nice clean, white light that enhances the overall appearance of their displays.
See: http://i362.photobucket.com/albums/oo69/HereinHalifax/Img_0527.jpg
The stylists are thrilled with the improved light quality and, in particular, the added comfort (working under the halogens, they said that they often felt as if the back of their necks were on fire).
See: http://i362.photobucket.com/albums/oo69/HereinHalifax/Img_0528.jpg
With this simple change-out, the track portion of their load falls from 8,640-watts to 1,632, for a net savings of just over 7,000-watts. Rated lamp life also jumps from 2,500 hours to 45,000 hours, an eighteen-fold improvement.
With the 80 per cent incentive offered by Efficiency Nova Scotia, the customer's simple payback is less than six months (actually, less than that if you factor in the related a/c savings).
Cheers,
Paul
Wow.
Use 19% of the electricity to get ~ the same number of lumens but better quality lighting, and the hardware lasts 18 time longer...and the payback is 6 months or less?
It /is/ possible to use less energy in our lives.
Note to all: This optimism in no way diminishes the importance of other logical strategies such as turning off the lights when no one is in the room, using the fewest lights/brightness (using dimmers) possible to do the job at hand, etc. Same goes for the wisdom of achieving zero population increase, then a modest-rate population reduction over time.
Best hopes for striving for and achieving incremental improvements in our energy usage.
Nah, forget it! This stuff will never work, it is too expensive, the light of quality is poor, it goes against our inalienable right to use incandescent bulbs and only an anti American commie pinko would use these things.
Hi Fred,
Although your comments are clearly tongue-in-cheek, we both know some folks believe all of this to be true.
Cheers,
Paul (clearly, a tie-dyed, commie-pinko, light-in-the-loafers anti-American)
I wonder how many business like yours are working in the U.S.?
Surely the economics of the trend in LED lighting to replace incandescent lights are becoming so compelling that all bu the most die-hard curmudgeon would accede to the logic and make the switch.
I was certainly disappointed that no one popped out of the woodwork with the tired old chestnut 'But the hotter halogen lighting helps keep the salon warm in the winter and saved heating costs'. That one never gets old...
Now I wouldn't call being a Canadian anti-American...you all just haven't grokked the glory of World-wide manifest destiny and exceptionalism...even though you have a province with the name 'Columbia' in it...
http://en.wikipedia.org/wiki/File:American_progress.JPG
Probably not that many in the US since that "80 per cent incentive offered by Efficiency Nova Scotia" is probably key for him. In the US, LED lighting is still pretty expensive and there are not many incentive systems.
Nova Scotians pay a 0.466-cent per kWh energy efficiency surcharge on their utility bills to finance these programmes, typically $2.00 to $3.00 a month for the average residential consumer. It's a fairly painless way to go and the work we do helps to keep long-term electricity rates lower than they would be otherwise (our cost per kWh saved can be as little as one-half to one-third that coal-fired power).
Cheers,
Paul
That is brilliant.
Of course here people would say "let the free market decide" . . . but the free market doesn't always work well. It works great when people go to the store and decide which shoes to buy . . . but with energy things, people don't make rational decisions. There is no conscious connection between the price of the light fixture/bulb purchased and the long-term operating cost. With that program, the right thing gets done. Instead of paying millions for a new power plant, they pay less to have inefficient lighting replaced thus getting rid of the need for a new plant.
Actually, the dollar amounts can be best measured in the hundreds of millions if not billions. If load growth had remained unabated in this province, NSP would be adding another coal-fired power plant to its fleet, not that Canadian banks are all that keen on lending the monies needed to do this. And that's when ratepayers would be in a whole boatload of pain.
Cheers,
Paul
That would set off the libertarians south of the border. They consider paying anything at all for a public good, to be highway robbery. I participate in some cleantech forums, and the comments always get bombed by such folks. Its really quite unpleasant.
Although we're justifiably proud to call ourselves Canadians, we also consider ourselves genuinely blessed to have you as our neighbour and our good friend. I think Tom Brokaw summed up the relationship between our two countries rather nicely: http://www.youtube.com/watch?v=bV_041oYDjg&feature
Our province is heavily dependent upon imported coal and oil and we're now taking steps to address this. Whereas a few short years ago less than ten per cent of our electricity was generated through renewable sources, the goal is to bump that up to 25 per cent by 2015 and to 40 per cent by 2020. That's a pretty tall order as you can appreciate, but we're determined to get there.
In addition, both Efficiency Nova Scotia and Nova Scotia Power are pursing energy efficiency with considerable vigour. With this in mind, NSP's most recent load forecast is calling for an average 1.3 per cent annual decline in demand over the next ten years (in the absence of these initiatives, average load growth would be 0.8 per cent per annum). That's an equally ambitious undertaking and one for which I'm proud to play a small role.
The long and the short is that if we can do it, anyone can. Set clear goals and quietly go about whatever it is you need to do to make it so, and if I may borrow one of your mottos, Aim High.
Cheers,
Paul
Bravo, and well-said.
I like the Canadians too...spent 9 years 18 miles from our border at Minot, ND...eh!
If I ever get fed up with my current line of work, or if I get put out on the street, I would like to consider something along the lines of what your and your team are doing.
I would need to join an established outfit...starting from scratch would be daunting, especially as I do not have the technical background experience...but I am a quick study, and would be able to more than earn my pay from an established firm down here...imaging that, work I can relish!
Thanks for the 'Aim High' shout-out...but time has passed, and the USAF has adopted the recruiting slogan 'Cross Into the Blue'!
Cross into the Blue: http://www.youtube.com/watch?v=A8-ZWgUtqfo&feature=related
wait, maybe the slogan is now this: America's Air Force: No one Comes Close: http://www.youtube.com/watch?v=ra7Hu6Jr4gY&feature=related
Or this: USAF: Above All: http://www.youtube.com/watch?v=_h1ozsCPjok&feature=related
Thanks, H, and thanks too for the links to these recruitment videos; they're really well done.
I've had the good fortune to have travelled throughout much of the United States and to have acquired some amazing friends along the way. For much of my nineteen years living in Toronto I spent half of each week in western New York, so I consider Youngstown/Lewiston and, by extension, Niagara Falls/Buffalo my second home. Suffice to say, I have a great deal of respect for the United States and her citizens.
Wherever your career may take you, I'm certain that you'll excel at whatever you do, and that you'd be a tremendous asset to any organization. As in any relationship, be it professional or personal, it all boils down to trust and mutual respect; focus on that and pretty much everything else will fall into place in due course.
Cheers,
Paul
Besides, I hear that LED stands for Latent Erectile Dysfunction At least that's why Michelle Bachmann told me.
That's just the excuse her husband is giving her.
This is so not true. http://homefixated.com/sexy-led-mood-lighting/
Hi H,
My work is limited to just our small business clients (my partners take care of our larger commercial and industrial users). Even so, my crews eliminate, on average, 15,000 kWh of incremental load per day, seven days a week, and in the months ahead I hope to bump that up to 20,000. Some may consider this as nothing more than "noise", but I can tell you that it can make a huge difference to a small business owner struggling to make ends meet in terms of their cash flow. That's just one of the many things that motivate me to try harder.
Cheers,
Paul
You omitted the 80% incentive. I guess that means payback is 3 years + more interest, so perhaps 5 years. And the question is if the LEDs really last as advertised. Unsubsidised, I wouldn't go for it. Or perhaps I would, due to increased quality and comfort, but not for direct economic effects.
An incentive, such as the one Paul cites in Nova Scotia, doesn't figure into your personal payback...and such an incentive is highly logical...it is spreading out the cost of the subsidy among all the utility customers...no difference between this and the utility raising its rates a bit to fund building new power plants....better, in fact, since the utility avoids future O&M costs, fuel price increases, and society benefits from less pollution to boot.
The consideration is not only on a personal basis, but for both the individual and the collective good.
Also, I replaced almost all the incandescent lights in my house with CFLs when I bought it 2+ years ago...no complaints, no failures, lighting if fine, electric considerably lower than otherwise. I have CFLs in recessed fixtures, in enclosed fixtures, and even have bare curly-cue bulbs in open outdoor fixtures which have weather the occasional serious rain-lashing...no failures, no regrets, lower electric bills...and no, I did not increase the number of lights in my house, nor did I increase the lumens per light, nor do we use the lights any more than we need to (I am a lights-off nazi' when it comes to shutting off unneeded lights...no Jevons paradox here.
Oh good, you beat Jevon's.
By the way just in passing, where is the energy you saved? Is it off the market?
Bandits,
Reference Paul from Halifax's posts regarding the Nova Scotia electricity 'conservation surcharge' which is funding targeted efficiency improvements for people in the Province.
They (Nova Scotia Power)are forecasting a 1.6% decline in electricity demand over the next ten years, as opposed to a projected .8% demand increase without the subsidies for energy efficiency improvements.
In their case, aggregate actions (as opposed to studying individual actions)are projected to reduce aggregate demand for electricity.
Of course, there is likely NOT a net increase in population in NS due to immigration (lots of folks don't relish colder temps), but we in the U.S. persist in not strictly regulating our immigration...I have nothing against immigrant folks (no racism, xenophobia, etc...they tend to enrich our American milieu) but I do not favor our population growth to 400M+ in 2050 and beyond, on resource/pollution/sustainability grounds.
At any rate, some people will try to make improvements as they can, and some will throw rocks and wait for the crash...each to his own.
Shouldn't LEDs support automatic on/off switching? CFLs and some vapor-type outdoor lighting suffers becacause of on/off cycles, but aren't the new LEDs perfectly happy to be cycled? That allows the best possible combination, high efficiency when on, and the ability to not be on when not needed.
Hi EoS,
Switching and daylight harvesting. As energy codes become increasingly more stringent, the latter will take on a greater role within the commercial sector. The problem with linear fluorescent systems is that a two, three and four lamp dimming ballast will set you back a cool $100.00. Add up all the fixtures in an office and you can quickly see what you're up against. With LEDs, there are no additional costs associated with this capability.
Philips has some really nifty and relatively inexpensive occupancy and daylight harvesting control systems that are easy to install and configure.
See: http://www.youtube.com/watch?v=sMwHysmgG_s
Cheers,
Paul
More than you realize. To get the most consistent colors, LEDs should be fed with a constant current. To control light intensity, Pulse Width Modulation is generally used. Thus, LEDs are typically cycled on and off hundreds or thousands of times a second.
A powerful testament. Great show. It must be a miracle for these end users.
Hi Oct,
I'm happy to report that the client couldn't be more pleased with the results. The store looks great and the stylists are universal in their praise. As noted below, the client wasn't going to sign-off on this project unless everyone was 100 per cent on board.
Cheers,
Paul
I certainly get the heat part. But it seems weird to the point of "up is down" to be reducing the color temperature by 210K, and yet going from "a dirty pale yellow pall" at 2910K (and presumably a CRI in the high 90s) to "clean white light" at 2700K and CRI of a rather poor 80.
So, what are the color-temperature and CRI numbers failing to measure? Does the LED's blue spike and green deficiency create the effect? Was the voltage at the socket well below the halogens' rated voltage? Or is it just that everyone sees a little differently and the effects of a spiky spectrum are in that sense unpredictable (so that 660nm LEDs weren't used in red traffic lights for very long, some people barely see them)?
The original halogen lamps had a colour temperature in the range of 2800K whereas these LED lamps (Philips Part No. 41018-3) are rated at 3000K -- that's 200K higher, not lower. Although the CRI is 85 versus halogen at 98, the lower number can be attributed to an over-saturation of one or more colours. The salon owners made their final sign-off contingent on the quality of the replacement light and based on the feedback from the stylists the lamps met with their overwhelming approval and, at the end of the day, that's all that matters.
Cheers,
Paul
Please keep up the great work, both in keeping us all straight on the facts of these matters, and in doing the work of using your acumen in your private business to work with public/government incentives to save businesses money, and lower incremental electricity demand.
Walking the walk must be very satisfying!
Are they commonly stocked in different color temperatures? Or is that choice only available at wholesalers who sell exclusively to lighting contractors?
I'm not sure how much choice there is in the normal retail channels. We use 800 series 3000 and 4000K EnduraLEDs in our retrofits and our Philips representative has worked hard to keep us well stocked, which hasn't been easy because the company is struggling to keep up with the demand.
Cheers,
Paul
HereinHalifax, is there much call for controlled color LED lighting or precise control of each LED? I'm working with some guys that have a great system for LED driving that allows every LED to be individually controlled.
Not in our line of work, but I know that Philips' Colour Kinetics division offers products that are geared to this market segment, although perhaps not to the level of control that you have in mind.
See: http://www.colorkinetics.com/
Cheers,
Paul
Could I ask does there heating bill go up during the winter? 7 k/ws is a lot of heat taken out of the system and would have to be compensated by running the heating system longer in the winter. Just a thought.
Their natural gas consumption will go up during the dead of winter, but their heating costs will go down. Most commercial establishments even in our cold Canadian climate are air conditioned near year round, but when heat is required much better to use natural gas for this purpose than what amounts to electric resistance (natural gas is one-half to one-third the cost).
Another big plus is that they won't have to haul out the step ladder every other day to replace a failed lamp. Their old halogens have a nominal service life of 2,500 hours and there are ninety-six heads in all -- if you take 2,500 and divide by 96, that means one of these halogens can be expected to fail about every twenty-six hours, or basically every second day.
Cheers,
Paul
Paul, your posts have inspired me to start looking for energy saving opportunities in my neck of the woods.With electricity costing somewhere in the region of US$0.39/kWh the complaints from consumers are getting louder. Some businesses and non-profits are being forced to close up shop as they can't pay for much else after they have paid their electricity bill.At the same time the local utility is just telling people that they need to conserve but, not really telling them how. The utility seems much more interested in tackling the supply side but, at the same time they're not really interested in encouraging renewables as can be seen from their insistence on offering net billing as the only option as opposed to net metering. That leaves your line of work as one of the most viable opportunities around here right now.
Thanks for the inspiration
Alan from the islands
Hi Alan,
Given the extraordinary high cost of electricity and its likely direction going forward, energy efficiency should be the first order of business. However, unless the costs associated with these investments can be repaid over time, ideally on the business owner's power bill, adoption rates will most likely remain low. The goal should be to make the whole process of climbing on board as simple and painless as possible, and to ensure that the monthly savings always exceed the associated costs.
I hope you pursue this further. Take a look at the incentives offered by organizations such as Efficiency Vermont and see if something along these lines might be appropriate for your nation; if so, push the powers that be to move in this direction. As you point out, rising energy costs are putting many small businesses at grave risk and initiatives such as these could very well prove critical to their ongoing survival.
Good luck to you on this mission and to your fellow citizens.
Cheers,
Paul
Behold the $15 LED bulb: http://www.mnn.com/your-home/at-home/blogs/behold-the-15-led-bulb?hpt=hp...
The whole concept of LED "bulbs" is just so wrong though. It is kind of like trying build cars that look like horse-carriages. Bulbs exist because incandescent bulbs died so fast . . . but LEDs will most likely outlive the desire for a particular lighting fixture.
Bulbs are bad because they are point light sources and they concentrate heat thus making design difficult. LEDs are should be used as light panels or bars . . . spread the light out and create less sharp shadows.
Like old fashioned horseless carriages, LED bulbs will eventually go away and morph into better designs that take advantage of the way LEDs work.
Maybe. But if, say, an electrical storm zaps a few of them, it's much, much cheaper to screw in, or plug in, new ones, rather than spend $ hundreds or thousands to have an electrician install new fixtures. (And let's not forget that LEDs don't always last, the mean lifetime doesn't apply to every sample: the LED traffic-light roundels in town that have been around for a few years already look like hell.)
And even cars still resemble carriages of a certain type - four wheels at the corners, etc. - even if the styling has changed greatly. That form factor simply works. With the LED itself, it's more or less a point source like the filament it replaces, the form factor of the bulb-like enclosure works, people can install it immediately, and replace it if need be, without the electrician rip-off, etc. So what's the issue, what's not to like?
An individual LED is a point source but you never use an individual LED in a lighting fixture, you use many of them. So spread them out.
But perhaps an replaceable LED standard is needed. That won't be an easy standard to make since LEDs can vary widely in voltage levels, current levels, heat sink requirements, etc.
One reason I recommend a whole house surge protector and a few surge protected outlets (which keep the voltage spike from rebounding).
There are many appliances and other devices that are sensitive today to voltage spikes.
Best Hopes for an Ounce of Prevention,
Alan
One could keep the concept of modularity while addressing the obvious thermal and voltage issues. There are a gazillion little incan bulb form factors already -- adding a few LED-centric form factors would not hurt a bit.
"LED bulbs will eventually go away and morph into better designs that take advantage of the way LEDs work."
Word! Actually, cheap LEDs will be integrated in a wide variety of toys and products, and often thrown away as junk within a year. They will be all over your houses, gardens, roads and so on. The world will be lit and beautiful, and draw much more power than in the days of the incandescent. Jevons' paradox will apply.
Surely that was in jest.
If not, hyperbole to the max...
Gods, reason, and stars above, any excuse to avoid implementing a lead-pipe cinch to save energy!
Jevons paradox is a great fake excuse not to adopt any energy-saving technology:
1. Don't have everyone drive Prii, which will get more than double the gas mileage of the average vehicle it replaces, 'cause folks will just drive twice as much...
2. Don't adopt lighting that used 5 times less electricity than the technology it replaces, 'cause folks will obviously use five time as many bulbs, or the same number of bulbs which throw five times the lumens, etc.
I buy Jevons paradox as a marginal increase effect, but not to the scale that some folks around here bandy about.
Why?
There are definite absolute and personal preference limits to how much people can increase their consumption of any given thing...people are not going to suddenly double their yearly miles driven...they have 24 hours per day, 365 days per year, and no more. They have to take time to eat, sleep, use the loo, work, etc.
As for lighting, it is just not going to be the case that folks will use five times the amount of lights, intensity, or duration, or any combo thereof. Especially with high unemployment, stagnant wages, and a wealth of things competing for their scarce dollars.
Elasticity of demand is generally not infinite, not even close.
And guess what...if there is a tendency for more use of something due to a wide-spread adoption of greater efficiency, then a logical response would be to raise the price of the product...either an electric utility could do that to raise money for more efficiency/reliability improvements, and/or the government could do it (taxes!) and use the funds for government services. Product/Gizmo class X becomes twice as efficient, then double the price for the consumable involved (electricity, gasoline/etc).
Yeah you are probably right but it may be a bit academic.
Poverty takes care of it, either way. Sit at home in the dark, with nowhere to go, and it's amazing how little energy is consumed.
There is that route, no dispute, and it unfortunately looks like it will be more and more prevalent.
We decided to trade jobs making things for people in our country for cheap offshore labor feeding the grail of corporate profits a long time ago, with the false promise that we would all work as innovators/inventors, work in the import/retail/finance/real estate/services biz, and that the wealth from the off-shoring corporations would trickle down.
Well, we got 'low, low prices' on a lot of goods, and it seemed like a good thing for a while, but at some point, folks wake up and realize that people who do not have a job can't afford to buy more stuff, even if it is inexpensively produces by overseas labor, much of that unfettered by environmental laws, labor laws, etc.
I would still, by a country mile, rather live in the U.S. than China or India etc.
"with the false promise that we would all work as innovators/inventors, work in the import/retail/finance/real estate/services biz,"
Add on "we'll all get rich from eco-tourism" and "web-developers" and your list gets seriously complete.
And it's not new. In the 1970's Patrick Lucey, governor of Wisconsin, had the brilliant idea of running out all that nasty industry so that the tourists would flock to the state's forests and lakes. Didn't work. Forced me into the Navy when the economy fell apart. "Escape to Wisconsin" became "escape from Wisconsin before you starve".
So, for the next bubble we need something that will generate something like 7 million jobs that do not require any great skill, but that can't be done cheaper by illegals or outsourced.
Ideas have been in notably short supply. Infrastructure gets mentioned a lot, but those are not unskilled jobs, and I'm not hearing a lot of specifics as to where and when. Not like when they picked a good spot on the Columbia and built a dam.
It was absolutely not in jest. I agree that we won't drive twice as long just due to Priuses and such, but I do think light is so beatiful, useful and desired that we'll easily five-fold and more when prices decrease and options increase.
But Jevons' is absolutely not an argument to not use more efficient technology. I'm all for it. At worst, we'll get a nicer life with the same amount of resources used. However, I don't like the idea of subsidising it. That just wastes resources - that means the tech isn't, on a life cycle basis, more efficient. If it were, it would need no subsidies.
Also, your idea of raising prices is absolutely correct. LEDs won't do squat for coal emissions, due to Jevons. However, a carbon tax would work beautifully, and it would also make LEDs more attractive without directly subsidising them.
Incentives help to create technology and build a production base. Once you get a "decent" solution at a "decent" price with "decent" volumes, it should be able to take over on its own. In the case of LEDs, the incentives help push fence-sitters averse to the long payback periods. Society can thereby elect to have a lower discount rate than individuals alone may choose.
Though I'm a free-market guy, I see the market as needing bounds, and I don't have much issue with technology side-bets being prodded by the gov't here and there. Makes as much sense as, say, using nat'l labs for military or space projects.
It is very unlikely that governments are able to pick winners and time such efforts correctly. IIt is much more likely to cause harm than good by distorting the market and wasting resources. That's why subsidies of large-scale technology deployments will always be inferior to internalizing the external costs of the incumbent alternatives. (However, subsidised research and of a few very limited pilots is fine.)
jeppen,
Thanks for your additional thoughts...your ideas seem largely sound to me.
However, in my view, a carbon tax is the mother of all subsides, because it covers most everything that uses electricity or liquid fuels, and the beauty in it is that it goes for the ultimate desired effects (using less energy, and generating energy from much lower carbon-intensive sources such as wind, PV etc [they use carbon/FF in their manufacture and installation and Mx ]) without specifying solutions (picking winners). It also blankets 'escape routes' for Jevons paradox. Make the tax big enough, and current low-mileage vehicles are unaffordable to all but the truly wealthy, and a Prius would cost as much (or maybe more even) to operate than it did before the carbon tax...hence, Jevons is kneecapped.
However, I do not hold much hope that the U.S. would implement an overall carbon tax. Many folks would take your argument against individual subsides (high-mpg cars, LEDs, etc.) and apply them vehemently in opposition to a carbon tax. They are going to say that such a tax is a huge waste of resources, a 'drain on the economy', and that the 'free market' would do a better job allocating resources and reacting to a fundamental decrease in cheap oil etc.
I don't agree with their view...firstly, there is and has not been such a thing as a 'free market'.
At the risk of an Econ/History lecture:
- 'Free markets' don't price externalites (pollution)
- They do a lousy job at incorporating predictions of paradigm shifts such as declining oil flows and 'lead-turning' the problem. Ideally, society should change its usage paradigm before the oil /etc. energy flow became serious, but the 'fee market' will always lag greatly...in the case of a huge underlying shift...late enough to cause great hardship...this is due in no small part to NPV...if the problem is more than 7-10 years away and not absolutely certain, then why bother...maximize your quarterly profits while you can then get into another biz later if you must.
- Most things have and will be subsidized:
-- Interstate Highways; Airline travel (TSA, FAA (including ATC), airport construction funds, pilots from the military, airliner companies which stay strong due to the cash cow flow from their military divisions);
-- of course the military is on giant subsidy without a metric of return-on-investment (lack of attack on the Homeland is not a sufficient metric...how do we know if we spent too much? How do we know that the next attack isn't coming in an hour and we spent too little, or more likely, spent on the wrong things, or wouldn't have gotten attacked at all if not for some previous action on our part?)
-- ... and if we go back to more rail freight (Alan's advocacy), that will be subsidized as well.
-- Farming and ranching and mining is subsidized.
-- And let's face it: most oversees manufacturing is as or more subsidized than in the U.S....but we are told that we are benefiting from competing in a globalized (and strongly implied) 'free' market. This is close to utterly false.
So, in sum: I am with you on implementing a Caron Tax. Please start a 'We the People' petition and I will sign it with you. However, barring that, individual subsidies (such as the Nova Scotia electric rate tax funding efficiency improvements which Paul has explained) seemes to be the best we can do.
Thanks for your reply. A few additional thoughts:
Subsidies tend to increase overall use by decreasing price. Set wind power subsidies, and electricity production and use will swell, for instance. Internalization, OTOH, tend to decrease overall use. The former makes a sector bigger than optimal. The latter makes a sector as large as it should be, all things considered. That's why I wouldn't call the carbon tax a subsidy.
One problem with internalizations is to agree about the external net costs of an activity. That difficulty makes it harder to agree. US tax aversion is also a problem, of course, and thus we seem to get stuck in another difficulty: Agreeing internationally on countries' individual caps. The setting of caps means some countries win and some lose. With national carbon taxes with an agreed upon global minimum level, that particular problem wouldn't exist. Sadly, the global political scene does not seem to be mature enough to agree on this.
Regarding free markets predicting paradigm shifts, I'd say that they do, on average, a better job than anyone else, including political powers. Timing of adaptation decides how much resources goes to waste, and the market, on average, times well. Of course you can time better by a stroke of luck, but on average, you'll do worse.
However, in my view, a carbon tax is the mother of all subsides,
Its worse than that. Its use of the force of the Government to profit private businesses. Regulatory capture.
70% of the money spent on Carbon capture is not spent on the capture, its wasted in "overhead".
(The regulars of TOD have been shown this - but if you don't believe what I'm saying is backed by others, make a post and I'll provide followup.)
A carbon tax is "use of the force of the Government to profit private businesses"? Seriously? I'd expect the lobbying efforts in this area to be overwhelmingly anti-taxation. Don't you?
A carbon tax is "use of the force of the Government to profit private businesses"?
Yes, because if one does not pay taxes one gets jail, as an example.
Seriously?
Yes.
I'd expect the lobbying efforts in this area to be overwhelmingly anti-taxation.
People can make all kinds of expections - doesn't mean reality is gonna conform.
Don't you?
Not when you can lobby yourself into a paycheck.
Your comment didn't further the discussion, so I guess you don't want it to progress.
And thus you admit via your action that you are not able to respond. Understandable, given how unsupported by reality your position is.
Because large businesses regularly go to Congress and get laws passed to support their business and suppress the activity of the competition.
Although many small businesses could greatly benefit from energy efficient lighting retrofits, they typically lack the technical expertise and financial wherewithal to make it happen and so this is where we step in. Efficiency Nova Scotia will pay up to eighty per cent of the total cost of the undertaking (it's a variable incentive based on the cost per kWh saved) and the customer's remaining share can be repaid over twenty-four months, interest-free, on their Nova Scotia Power account; thus, no upfront or out-of-pocket expense. We take care of everything -- we'll choose the most appropriate hardware for the task at hand and completely redesign their lighting systems if need be, pull the necessary permits, install the new equipment, arrange for its inspection, properly dispose of any PCB ballasts, recycle 100 per cent of the materials removed from service, and guarantee all work for two full years. It's a complete turn-key package and generates strong net positive cash flow from day one. In addition, these improvements can provide other tangible benefits such as improved worker safety and productivity, greater employee satisfaction, and increased retail sales. For many small businesses faced with steadily rising utility costs it can be a make or break proposition. One other thing: with our high volume purchasing, we've negotiated some very aggressive pricing with our suppliers and so our material costs are far below what our clients would pay if they were to buy this equipment on their own, and all of these savings are passed on to the consumer.
So, no question, the direct beneficiary comes out a winner. But, in addition, all ratepayers benefit because it's much less costly to save a kWh than to generate it by burning coal and oil. And, as mentioned, if load growth were to remain unchecked Nova Scotia Power would be forced to construct another coal-fired power plant which would likely cost upwards of $1 billion dollars. That's a huge capital commitment that would negatively impact electricity rates in this province and needlessly drain money from our local economy.
Beyond that, every Nova Scotian stands to benefit from our reduced dependency on fossil fuels as it enhances our province's energy security/resilience. And every kWh that we save eliminates 0.83 kg of CO2(e) and lessens the amount of Hg, NOx, SO2 that pollute our land, air and water, along with all the other nasty things that come along for the ride.
In terms of programme verification, ENSC's internal auditors and those of the public utility review board independently analyse our client's consumption data, post retrofit, to ensure that the energy savings we claim are valid. And guess what? The actual savings twelve and twenty-four months out are typically far in excess of what had been projected. For one, I'm probably more conservative in my calculations than need be. Secondly, we don't take into consideration the related a/c savings and we're often making adjustments to timers and controls and recommending other low and no-cost energy saving strategies that fall outside the scope of our work, and we don't have the means to account for these ancillary savings. We've completed over a thousand lighting retrofits to date and not one of our clients has increased their energy usage because of our work. Not one.
Lastly, with respect to new construction and remodels, national and provincial/state energy codes have dramatically reduced lighting loads; whereas forty or fifty watts per sq. metre was not uncommon all that long ago, it's now generally in the range of ten watts or less. Likewise, light levels have been trending steadily downward since the 1980's; whereas an office might have been carpet bombed to 1,000+ lux thirty years ago, 300 to 400 lux is now pretty much the standard. Increased use of task lighting and a greater reliance on daylighting have also helped to lessen the amount of ambient light that is needed.
So if you can provide any evidence to contradict what I've just said, I would appreciate the opportunity to see it.
Cheers,
Paul
Paul (and all):
I did a quick Google search and discovered that Public Utilities of New Nexico (PNM)...the 'lectric company...does indeed offer a program along the lines of Nova Scotia Power (I am not saying that it isa as good, I would have to do more research).
Here is a success story about retrofitting Smith's grocery stores with higher-efficiency lighting, cooler fans, etc. which sounds like Paul's success stories:
http://www.pnm.com/powerstories/smiths.htm
And a gymasium business had a similar experience:
http://www.pnm.com/powerstories/liberty_gym.htm
and a bicycle store:
http://www.pnm.com/powerstories/fat_tire_cycles.htm
And private contractors partnering with PNM create jobs, pay taxes, create jobs for their supplier (multiplier effect);
https://websafe.kemainc.com/ProjectCenter/Portals/68/TradeAllyWebList.pdf
I can't sign off on the 'Atlas Shrugged' approach/philosophy...these types of public-private efforts are logical and make a difference.
win-win-win-win-win
PNM avoids costly new power plants...businesses decrease costs...private contractors make money and jobs implementing the PM-subsidized retrofits...these companies pay taxes...people get a cleaner environment.
The fact that this doesn't fit into some folks' ideologies is too bad.
Thanks, H, for providing links to these case studies; much appreciated. I hope PNM continues to pursue these types of DSM opportunities as the total benefits far outweigh the costs.
Cheers,
Paul
"I do think light is so beautiful, useful and desired that we'll easily five-fold and more when prices decrease and options increase."
????
I just unplugged two of the three tubes in the high-efficiency light fixture at work because it was too bright and glaring off the computer screen.
By the way, the work PC is a small formfactor box that pulls about 1/3 the power of the tower it replaced. I did not get two extra computers to make up the difference. At home my mac mini pulls 1/4 the power of it's predecessor, and I did not buy 3 more to make up the difference. Jevon's paradox is wrong.
Thank you.
Maybe JP is not wrong across the board, utterly, but it has been greatly hyped on this list by some folks IMO, as an excuse for doing nothing.
Myopia. Your a informed, person a elite, less then 1% of the population thinks like you do. that's problem one with your view.
Problem two is that your extending your own views on the rest of the population 'They won't use more when they get a more efficient $object because i won't'
He is beyond reasoning.
Anyway the problem is out of our hands, it's like Ceres breaking free and heading towards Earth, running around waving my hands and telling everyone they are going to die is moot, it's sort of narcissistic.
There is a terrifying discussion taking place at peakoil.com "Runaway Global Warming - Has Arrived pt 5". Might as well let 'em carry on with denial.
There are only 24 hours in a day.
That fact is invariant to me, you or Joe Box'o'donuts, or whomever.
So are these facts:
Most people have to work, and most people have rather modest means...and if someone replaces their desktop with a laptop, they don't buy two to three laptops to compensate...they only can use one at a time, there is no need for more.
If one trades in their SUV for a used compact car, one isn't likely to double their vehicle miles traveled...there are little things that get in the way called work, sleep, eating, bathing, etc...and that pesky fact of only 24 hours per day.
People only want so many lumens, and won't want five times more if they replace their incandescent bulbs with CFLs or LEDs etc.
I am not referring to me, or 'elites' (whatever you meant by that)...this is simple logic that would apply to most people, unless they are wealthy.
Jevons Paradox certainly has merit, up to a certain point, and no more. People have a finite amount of money, and if the jobs/income stagnation/decline continues while real-world inflation increases, then folks certainly will not have the financial headroom to greatly increase their consumption in response to some efficiency improvements.
Will increases in efficiency cause some increase in personal consumption...yes...to the magnitude that you imply...I doubt it.
Now, as to population increase...efficiency improvements can certainly help the additional people consume energy...controlling fertility rates and immigration are issues outside of my point...we were talking about individual people's behavior, not the effects of increasing population.
Somehow I do not think that more efficient lighting and higher MPG vehicles will entice folks to have additional children than otherwise...it is my understanding that most U.S. population increase is due to immigration...
Note that my assertion that elasticity of demand for energy is not as high as you think does not indicate that I think energy efficiency advances are a cure-all/panacea for humanity's predicament...by itself, far from it.
I do think that your perception of elasticity of demand for energy is exaggerated, given the financial/jobs/economic constraints most people face.
Beyond reasoning? I think your position is the one that is dogmatic.
I guess right there is your problem. You see, any increase or even modest decrease in energy consumption just will not do. Unless your plan is carbon neutral at the very, very least then you don't understand the terrible peril we face.
Efficiency has been improving since FF use began. Just because the economic trend or peak oil shows a decrease in energy consumption does not mean Jevon's has been defeated. Theoretically we could continue increasing efficiency, and continue to burn on the plateau for however long it takes to boil the planet.
If you have a plan to reduce carbon use I can't outright condemn it but it does nothing to alleviate the relentless increases in atmospheric CO2 and CH4. Personal, industrial and country wide carbon use reduction, must be accompanied by an equivalent reduction in the amount of CO2 you WOULD have emitted before the efficiency started. Otherwise it is there for someone else to use. So your plan to be effective must be accompanied by a CO2 sequestering mechanism or fence off the FF.
It doesn't matter though the tipping point has passed, all we are left with is a faint hope that geo-engineering has an answer, but that appears to be wishful thinking if we continue to unsequester CO2. I know how desperate you are to preserve BAU and your world with grand plans of engineering efficiency miracles but unfortunately those ideas were for another place and time.
This is what I think.
Global warming is a clear and present danger.
Efficiency alone is not the answer to reducing CO2 and methane in the atmosphere.
Increasing population will continue to place overwhelming pressures on the environment.
Deniers appear to be defeating the best efforts of climate scientists.
I think the key point is that efficiency without price increases negates part or most of the efficiency. The clearest example is the auto which has had massive increases in efficiency but not massive increases in mpg. Much of the gain has been negated by bigger and more powerful cars.
Having said that, of course, efficiency is not the answer but is helpful. But helpful is not good enough. Look at the state of our politics with one party almost unanimously denying that we even have a problem. First step is to admit there is a problem. We can't even do that.
I don't think I'll convince you. We'll have to wait and see.
Btw, computing is interesting. For as long as I can remember, computer power supplies have grown bigger. Much load is now being shifted onto grid computing. True, for a specific task, power consumption always goes down, but we seem to add more and tougher tasks. It's hard to say where it'll end up. The world's dominating cellphone network supplier's vision is a market of 50 billion connected devices in 2020, for instance.
Well obviously you cannot remember very far back. I have been in computers since 1965 and computer power supplies back then were monsters. The power supply for the old vacuum tube Norad computers took up a whole building. Then transistors replaced tubes and the power supply took up only one cabinet. It was usually 5 5to 6 feet tall and about three feet square at the base. Then as integrated circuits replaced transistors and they got smaller still.
Now one tiny little box sits in your laptop and has many times the computing power as those old mainframes. No, computer power supplies have gotten smaller and smaller over the years.
Ron P.
I was thinking about PCs, and those power supplies have been getting bigger the last few decades at least.
Btw, your argument is case in point. How many Norad behemots were there?
Jeppen, perhaps you are stuck in mode of only thinking about the bleeding edge 'gamer rigs', which can have power supplies now > 1kw.
I think that market trends for the non-power-users (non-home engineers/scientist, and non-hard-core gamers) is to shift to laptops, and to some extent net books, and now to pad devices...and of course smart phones pick up some of the previous 'big iron' PC demand.
We are sliding down the scale of power consumption, as we move to lighter, portable devices being powered at least part of the time unleashed from the wall plug, on battery. Your point about energy consumed by 'the cloud' is valid.
Break break:
According to Wikipedia, there were 26 Semi-Automatic Ground Environment (SAGE) complexes built starting in 1957 and serving through 1983.
http://en.wikipedia.org/wiki/Semi-Automatic_Ground_Environment
http://www.mitre.org/about/sage.html
http://www.mitre.org/about/photo_archives/sage_photo.html
Please note that the Wikipedia article is inaccurate in at least one respect: It claims that Minot AFB hada SAG center planned but never built.
This is untrue...Building 475, the PRIDE building, at Minot AFB, ND, was a former SAGE building. There was no space in that building I have not been in, due to my job, my curiosity, and access provided by several remodeling construction projects. I chatted at length with the Building Custodian who knew the history.
Fascinating building, probably could withstand a 'near miss' and be at least partially standing I bet...huge air-plenums running up from the basement, big SAGE Command Post with a 2-story screen (unused for nothing more than storage now)...no windows, save for a couple of windows in the few doors at ground level.
FAS is more correct regarding Minot's SAGE complex:
http://www.fas.org/nuke/guide/usa/airdef/sage.htm
Thanks for the historical info. Fascinating stuff.
Regarding gamer rigs, yeah, I'm perhaps a bit stuck in that mode of thinking. However, my experience is that many/most buyers of stationary PCs buy much more powerful equipment than they need. Someone in the household may want to play games, and many others like their setups to "last" a few more years and so over-dimension. Or they want to brag with the stats. Laptops and stuff is often bought on top of that, rather than instead, or bought by grannies that previously didn't have a computer at all.
i think he is referring to the wattage of a micro-computer aka a pc. from less then 100 watt's for a Pentium pro & 486. to this behemoth.
http://www.newegg.com/Product/Product.aspx?Item=N82E16817153147
I disagree. LED PAR lamps can provide us with strong punches of light which make them ideal for the retail trade. Soft, diffuse light sources tend to make spaces look flat, dull, lifeless, even antiseptic (think back to some of the sets of 2001 A Space Odyssey). You require a minimum amount of contrast to make a space visually interesting. For example, take a close look at this hotel lobby and try to imagine how it would look if it were illuminated uniformly from one wall to the next.
One of the reasons why I love watching the classic black and white films of the 30's and 40's is that the set lighting is often exquisite, especially the film noirs. Those lighting directors had more talent in one fingernail than I could ever hope to amass in a lifetime.
Cheers,
Paul
Same reason I like the circular fluorescent tubes if I can get them to work.
I'm with you. But I think thats a longterm prognosis. We are largely stuck with the presentday lighting infrastructure. Only when interior designers, start designing new or retrofit spaces for the new possibilities, will your vision start unfolding. Till then, I expect more than 90% of LEDs sold, will be screwin replacements.
Looks like Mother Nature is working to greatly simplify all our political and economic issues...
Russian, U.S. scientists set to study methane release in Arctic
also Methane closely watched by scientists
Video Uaf Scientists Find Arctic Seabed Methane Stores Destabilizing, Venting
Mortality - "Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." - Samuel Johnson
Kind of fitting that humanity could be wiped out by a gigantic fart.
And, in other news: Nature Strike Back II.....
Evolution never ends. We have to make new flu vaccines every year.
But of course. However, Nature created us and will always have the upper hand. The more we try to fight that fact, the angrier Nature seems to get.
Man vs. Nature? Nature has had billions of years to refine her gameplan. Humankind has no gameplan other than to create imbalances, ever defiant of the limits that mommy has set.
The beatings will continue until morale improves.
Nature is not playing the same game as us... and nature is the one with the actual rule-book. We just have to guess :)
Eactly as expected. It is inevitable that resistance will develop if there is only a single gene (e.g. Roundup resistance or resistance to that Bacullus thuringiensis used for the Monsanto corn) to deal with. If they wanted to develop something that lasts, they would need to develop a triple-transgenic corn just like the triple-drug therapy that is used against HIV/AIDS. It is much more unlikely that a bug will develop three traits simultaneously. However, due to discounting/net present value calculations, an agricultural company cannot do this: the cashflow lasts only until the patent runs out, and that may not be enough to finance a triple transgenic.
This is why ignoring a problem like annually increasing CO2 levels is not a good idea, because it leads to tipping points. One tipping point already passed is the mass reduction in ice extent, volume and loss of old ice in the Artic vs. 1979-2000 data. Notice that word 'data'? It's the word the denialists like to explain away in various non-sensical ways. But, acting dumb doesn't make the problem go away.
Although 2007 had the lowest minimum, 2011 is looking like it will go down as being at least as low as 2007, maybe lower. We'll know in the first 15-20 days of this month.
http://nsidc.org/arcticseaicenews/
It could be a case that now the Artic ice minimum is so much lower than 1979-2000, each year softens up the frozen cap holding in the methane just a little bit more. What I suspect we'll find out from further on site analysis is at the current rate of annual ice melt, the cap will only hold so long. How long will be the question.
Again we get back to another tipping point, which will be the threshold at which the entire cap becomes unstable and disinterates.
I'm not sure that people are really grokking the full implications of Seraph's article.
Why would they suddenly rush a whole lot of scientists up to this distant part of the world 'on short notice.'
How dramatic is the 'dramatic increase in leakage of methane gas from the seabed'?
Just as in the GOM spill, the word 'leakage' may be making people think of a tiny escape of negligible amounts of gas.
But already two years ago Shakova had seen gas escaping at a thousand times the rate it had been escaping a few years earlier (published last spring in Nature). So does 'dramatic' mean a 1000x increase on top of that? More?
Unless estimates of the gas under the East Siberian Arctic Shelf have been greatly exaggerated, release of even one percent will increase total atmospheric methane a number of times over. If this happened rapidly, this would pretty much be the end.
Perhaps the end is worthy of a lead article here? Or do we want to quibble further about whether oil peaked in 2005 or 2006?
dohboi,
I had the same reaction as you did about the importance of this story. I first learned about global warming in 1980 in a freshman biology course. In that class we discussed the positive feedback loops that could lead to a runaway greenhouse effect like what happened in the Permian die-off. I asked the professor what would stop a runaway effect (from methane outgassing) from occuring once human induced global warming (from carbon emissions) was well underway. His answer was "probably nothing!". The theory seemed very plausible at the time and I have been paying close attention ever since. I first learned about peak oil in 2005. Since then, I have assumed that the economic effects following the peak of global oil production would lead to a social collapse and massive human die-off long before we faced a true global warming disaster. Now I'm not so sure. This really could be the tipping point for climate change. It's a race to the finish line.
Thanks, LS. It's the kind of article that would probably elicit yawns from most people--a bunch of Russian and US scientists are going to the Arctic to look at some gasses--so what, big deal...
So it's good to hear that someone else recognizes the deeply ominous implications of this apparently ho-hum story.
We've been on the wrong path for a long time, and it seems to have finally lead us straight off a cliff.
My "gigantic fart" comment may have been glib but I felt it to be quite apposite.
What is the estimated volume of methane that is locked up in the permafrost?
If it did "let go" in a catastrophic fashion, what would the worst case scenario be?
Relative to AGW, how significant an additional burden on the atmosphere is this potentially?
See, I'm not yawning!
Edit: Okay, followed the links...you're right, truly alarming.
Yeah, I get the idea people aren't following the links on that one.
Here's a quote from an earlier article:
From: Geophysical Research Abstracts, Vol. 10, EGU2008-A-01526, 2008 SRef-ID: 1607-7962/gra/EGU2008-A-01526 EGU General Assembly 2008 © Author(s) 2008
"Anomalies of methane in the atmosphere over the East Siberian shelf: Is there any sign of methane leakage from shallow shelf hydrates?"
N. Shakhova (1,2), I. Semiletov (1,2), A. Salyuk (2), D. Kosmach (2)
(1) International Arctic Research Center of the University of Alaska Fairbanks, USA (nshakhov@iarc.uaf.edu) (2) V.I. Il’ichov Pacific Oceanological Institute, Far-eastern Branch of Russian Academy of Sciences, Vladivostok, Russia
To get a further idea of what a 12 fold increase in atmospheric methane would mean, consider that methane contributes 28% of the warming CO2 contributes.
http://www.skepticalscience.com/methane-and-global-warming.htm
I'll let you do the math from there.
These numbers are just numbers, pointless as they are. I fail to see the size or consequenze of a Gt. So to put those numbers in perspektive, here are some I got written down in a file on my laptop:
Total amount of GHG emissions 1750-2010: 350 billion metric tons.
Amount of methane in the Siberian Tundra: 1000 billion tons.
Amounts of methane on the bottom of the sea: 1400 billion tons.
You just don't want that to start melting...
Thanks for the context. I asked a question about total GHG emissions at RealClimate a few weeks ago and got this response:
http://www.realclimate.org/index.php/archives/2011/08/volcanic-vs-anthro...
"21
Slioch says:
4 Aug 2011 at 4:46 PM
Between 1850 and 2000 the total recorded human caused emissions of CO2 amounted to 1620 billion tons CO2. The increase in atmospheric CO2 was 640 billion tons. Most of the difference (about 1 trillion tons CO2) has been absorbed by the oceans and terrestrial sinks. The oceans are a net sink of CO2 at present, ie. they are not expelling net CO2, even though they are warming, because the effect of the increase in partial pressure of CO2 in the atmosphere more than compensates for the warming.
[Info. from the Carbon Dioxide Information Analysis Centre:
http://cdiac.ornl.gov/faq.html#Q4 with masses C converted to CO2 by multiplying by 44/12)]
As for the total accumulated emissions of CO2, each increase of 1ppmv of CO2 represents an extra 7.81Gtons CO2 in the atmosphere (see cdiac above), so the increase from c.280ppmv pre-industrial levels to the present 394ppmv means an extra 890Gtons CO2 in the atmosphere. This does not, of course, represent the total human emissions, since rather more than half of anthropogenic emissions have been absorbed by oceans and land."
So your first figure may be a bit low. But not by orders of magnitude, so the point still stands.
Another thing to keep in mind is that, as the ocean warms, it will be absorbing less and less CO2, methane and other GHGs.
FOR ALL
Re: my post above about using net present value to evaluate a company’s real reserve base. I’m so use to thinking in such terms I forget most don’t. My world (and that of all the decision makers in the oil patch) hangs on NPV and not URR. I’ve said it before: when I look a proposed drilling project I pay no attention to URR…that number has no bearing on my decision. I apply what believe is a reasonable expectation of the cash flow…and that hinges on the future flow rate of those hydrocarbons. Think about: this philosophy focuses exactly on the theme of this website: PO…the future flow rate of oil.
An example makes it easy. Project A and B will each produce 10 million bbls of oil. But A does so at 5X the rate of B. The NPV of A (including all the capex and production costs removed) is $600 million. The NPV of B is $200 million. Now here's the neat trick: using the current oil price the net present VOLUME of A is 6 million bbls ($600 million/$100) and for B its 2 million bbls ($200 million/$100). Both projects cost $200 million to develop. A makes me 3 to 1. B is a wash. Jump on A and ignore B even though they have the same URR.
Get it: both projects have 10 million bbl URR. But A has 3X the net present VOLUME of oil. And that volume is directly related to its production rate…the heart and soul of PO. So let’s look at one of those 1 billion bbl proven DW Brazil fields. I’ll make up the numbers but they’ll be realistic. Given 6 years to build the platform and drill all the wells plus the 10 years to recover the 1 billion bbl URR the NPVol (using $100/bbl price) is 600 million bbls.
Now take a Canadian tar sand deposit with an URR of 1 billion bbl. Following the same calculation it has a NPVol of only 200 million bbls. OK Rocky…cut me some slack…had to make some rough guesses).
Now for a real flight of fancy: oil shales. Given there’s no current economical method to recover any oil from these bitumen deposits I have to make it all up. So in 20 years someone finally figures out how to do it and make a profit. But it’s a slow process since you have to dig at lot of rock out. The NPVol of its 1 billion bbl URR is just 50 million bbls. So if there are 100 billion bbls of URR in all the oil shale deposits the NPVol is only 10 billion bbls. That’s not insignificant but it ain’t like having 100 billion bbls of oil in our hands today either.
Maybe this will explain why in our chats I tend to minimize the value of some projects that may have high URR. In my mind I automatically think of NPVol. Or as some of us say: “It’s the flow rate, baby, not the reserves”. LOL
"Given there’s no current economical method to recover any oil from these bitumen deposits"
I'm sure you meant Kerogen deposits.
Incidentally, I have heard that Texas producers west of Port Arthur are generally stuck with the WTI price. Has this been your experience? What puzzles me is how refiners in Corpus get away with paying global prices for imported oil, but WTI prices to US producers.
Just wondering what's puzzling about the puzzle: if I buy groceries at the store, I don't necessarily pay what the gouging-est convenience store in town charges. Is the underlying principle vis-a-vis various sources of crude oil really radically different?
The WTI/Brent spread was zero a year ago, and as Undertow has documented, Cushing inventories are below year ago levels, so the rationale for the current spread is, shall we say, a bit puzzling. In any case it's pretty much irrelevant to consumers. It's really only relevant to North American producers and to Mid-continent refiners. And the refiners making a killing; on an annualized basis it's about a $40 billion per year transfer from producers to refiners. However, it could come at a long term cost to the country if the Canadians move forward with plans to ship their oil west and/or east because of the WTI/Global Price spread.
Is it one company with a monopoly on refining there? If there are competing refiners maybe someone should look into whether they started to operate an illegal cartel a year ago.
If its fair and square they probably don't want to risk the margin closing again if they try to increase supply. Maintaining inventory is all very well when they are paying normal market prices, but as they have a big distortion in your favour they might not want to risk it going away by putting a bit of extra demand in. If the suppliers become desperate to sell a bit more, they would take it, but they wouldn't want to lose 90% of your margin distortion by asking for an extra 5% supply. They will prefer to cut back their throughput rather than have that happen, but first they run their inventory down.
The risk that the refiners are taking is that they are in effect offering the Canadians a $20 billion per year incentive to take their oil elsewhere, and the US is dependent on imports for two of every three barrels of crude oil that we refine. As noted up the thread, consumers really aren't benefiting from the lower WTI price anyway. But I'm sure that the refinery executives are going to get some good bonuses this year.
Yeah, but lets face it, the TPTB had a meeting and decided on all the details and ways to profit from the deal long long ago. We are just watching their master plan "to produce new jobs."
Yes...mucho thanks. I'll check with some traders about those prices.
Do you guys have any South Texas production? As noted above, it just seems crazy to me that refiners in Corpus are presumably paying US producers around $25 less per barrel than what they pay for imported oil.
wt - No S Texas oil.Mostly La. condenstate. Don't understnd it other than producers can't afford to haul out of the area for higher prices. You know how it goes with crde buyers: no point in having the edge if you don't take advanatage of it.
Rockman, no I'm not going to criticize your explanation of the economics of the oil biz, particularly NPV. You're doing a much better job of explaining it than I would do. This is an area of arcane knowledge about which which most people have zero understanding and it's hard to present it in terms that make sense to the average person.
I used to design software to do economics for oil companies, and the NPV button was the one they clicked on most often. And then they'd do a cash flow run to make sure they didn't run out of cash before the project payed out.
I would, however, comment that the economics of oil sands are significantly different than that of conventional oil (sorry about that, I can't help myself, I've often thought about how the view from different sides of the fence was remarkably different).
This speech from the CEO of Suncor helps explain it.
I remember when Suncor Energy started up 40 years ago as a wild, reckless gamble by Sun Oil Company called Great Canadian Oil Sands. My father bought shares in it. It wasn't that great an investment and didn't make any profits at all for the first seven years.
That was when I was back in high school. Now that I'm retired, the former parent company (now Sunoco) doesn't produce oil any more and is just a gasoline retailer, but the now all-Canadian Suncor Energy is the biggest oil producing company in Canada, selling gasoline under the Petro-Canada label after it bought the former Canadian state oil company.
The oil companies that focus on NPV may very well not be here 40 years from now. (A lot of the companies I worked for aren't here now.) 40 years from now Suncor might well be the biggest publicly traded oil producing company in the world since all its competitors will have run out of oil to produce.
Given our current low interest rate environment, and given the 1998 to 2010 (and year to date 2011) track record for annual oil prices, I think that a reasonable discount rate for proven production is zero. Of course, much depends on whether one is a buyer or seller.
Rocky - Maybe you missed it but I did point out that the oil sands differ. In fact I think my exact words were "more like a manufacturing business". But NPV analysis is as applicable for them as it is for some rare long lived conventional oil fields. I call them constant NPV properties. The NPV of your oil sands beyond 15 years is very small. So today a particular oil sands deposit has a NPV value of $X. But go forward 5 years and its NPV is still $X. The depletion from the first 5 years is replaced by the value of years 6 - 10. If the deposit is large enough NPV Year 20 could still be $X. I've found this same nature in gravity drainage reservoirs with slow but a seemingly endless production. Virtually impossible to buy…trust me I’ve tried: offer them a price of 5 years payout and they turn it down: they keep it for 5 years, cash those checks, and you offer the same 5 years payout again. Now reverse you position from seller to buyer: offer 15 year payout and maybe they sell. But how do you make a decent rate of return if you give up the first 15 years of your potential cash flow up front?
Remember an NPV calculation doesn't determine WHAT A PROPERT IS WORTH. It determines WHAT YOU CAN INVEST in or buy a property for and still make an acceptable rate of return. But that same property could be worth a good deal more than you can justify buying it for. I imagine some folks will have trouble getting their heads around that bit of reality. But these are the methods that govern oil/NG investments. Always have been...always will.
Blink! LED just went on.
It's a variant of book wealth does not imply a high income stream, like owning a forest.
Or land rich-cash poor, a more common way of putting it.
Rockman - I'm not disagreeing with you, I'm just feeling an uncontrollable urge to pontificate on the difference in economics between conventional oil and oil sands.
However, the subject of NPV brought up memories of running economic analyses for oil companies. The disconcerting thing was that at the end of it all I realized, "This company is going to go out of business!" Not right away, but it was running out of opportunities, and at some point the NPV on all the new projects was going to turn negative. It was time to polish up your resume and buddy up to your friends at the competing companies, because you might soon be working for them.
Of course, shutting down the company would be the economically rational thing to do, an oil company that has run out of oil to find is a useless thing, but upper management does not really want to mention that to the investors, or admit it to the employees or even themselves. However, when HR sent out a memo to all employees reminding them to polish up their resumes, you really knew the handwriting was on the wall.
The NPV of oil sands was a completely different story. It failed the NPV analysis up front, but any company that got in at the start and ignored the fact it was throwing money away would end up lasting much longer than a company that did rational economics. If long term survival rather than making money was the game, they would be the winners.
One of the companies I worked for sold billions of dollars of oil sands and heavy oil properties because they failed the NPV test, and then a couple of decades later, the company that bought that company had to buy the very same properties back at a much higher price. They were the only opportunities that were left, and the NPV was good, but it really P.O.'d the senior executives who had sold the properties in the first place, and were now working for the company that bought them back.
Rockman, thanks for this perspective - always interesting to see all the various aspects of a problem. Now I would like to add the ecologists'two cents to this:
If applied to ecosystems, such as forests or pastures, the NPV idea leads directly into desaster. Imagine a forest that has just been cut and provided $1,000,000 in cash flow. Now the decision is whether to protect the land from erosion, and have another harvest 80 years from now, or let the land go to waste. Cost would be $2,000. The NPV of a 1,000,000 cash flow in 80 years at 10% discount rate is $218. Bye, bye forest.
Comment to Westexas' zero percent discount rate and (shameless) self-comment to my own "forest" example:
The zero discount rate principle was actually introduced by the aristocracy a long time ago with a slightly different reasoning. Imagine the duke of Essex on his deathbed adressing his son:
"It is your holy duty as the scion of our dynasty to uphold the faith, and to keep the land and castle ...."
The thing about the Middle Ages is that the discount rate was zero since Christians were prohibited from lending money at a profit. With a zero discount rate, and your serfs producing a new crop for you every year, the NPV of land was nearly infinite, so nobody ever sold it.
If you wanted more land, you had to go and kill someone for it, which was the usual solution.
Bio – Actually you can use the NPV in your world. Remember it’s just a way of modeling economics. Use your forest example. If you were in charge would you just clear cut and walk away? I doubt it. But you do need to exploit the forest…that’s your job…right? So how would you go about it in a profitable and sustainable manner? You can recover you investment very fast by a quick clear ct but would you? Maybe you would cut fast enough to generate an acceptable return. You can back calculate NPV to determine that cut rate. But you’ll want to replant for the future…right? We do something similar in the oil patch: a deeper reservoir in a well depletes but there’s another one up hole behind casing we can complete next. But that cost money so it goes into the NPV model as a negative revenue (a cost) at the appropriate time. Do the same with your replanting costs. And just like my recompletion your planting produces future income. Thus you use the NPV approach to design a profitable method of managing the ecosystem in a logical way.
And there are comparable foolish approaches in the oil patch to your wrecked forest example. We could be looking at one with BP’s management of its Thunder Horse Field. Production rate is way under expectations and the water production is constantly increasing. Expensive offshore fields will be produced at high rates in increase NPV. But sometimes it backfires. Produce a reservoir too fast and you can cause premature depletion. Not only does this decrease cash flow (reducing NPV) but usually reduces URR (lowering NPV even more). Just the same type of mis-management of your forestry project. NPV calculations are done to measure the economics of the various ways to develop an asset. See if you can generate a forest development model that satisfies your desires to preserve the ecosystem. If you want an investor to develop such a project in a responsible manner you’re going to have to show him a financial bottom line that’s acceptable. Just telling him a quick and dirty clear cut just won’t do it in most cases IMHO. Business is business. I applaud anyone’s effort to treat Mother Earth respectfully. But you’re going to have to do it in a capitalist manner if you hope to be successful, again IMHO.
Meh! Who cares, who needs that stupid forest anyways, after all as Rocky said up top...
So all you have to do is invest in companies like Suncor, get rich, and you'll be laughing all the way to the bank and living the good life in the 'No Problem Valley', stupid environmentalists, notwithstanding.
Life on an oil field 'man camp' _ not for everyone
http://news.yahoo.com/life-oil-field-man-camp-not-everyone-042950463.html
great article!
I am waiting now for the reality TV show based on this...like AxMen, Ice Road truckers, etc.
Would make a good NatGeo documentary too...
A person could work up there for ~ 5 years, bank their coin, and buy themselves a nice little house etc. after they had enough...
H – Oh oh oh use meeeeeeeeeeeeee. I’m Oscar material for sure. LOL.
The reality is that those that can handle rotation work, even if nicer climates, enjoy the money but it typically doesn’t work for many. Many geologists don’t like being in the field for just a few days let alone weeks. A few like me tend to prefer it. I actually enjoy the total immersion aspect: 18 hours a day (sometimes more) all I’m thinking about is the job. Sometimes a 7 day rotation, sometimes 2 weeks, sometimes a lot longer. My longest hitch for 43 days off the coast of Africa…let my back-to-back stay home for the birth of his kid. And when home for a week/month I don’t think about it all. Usually totally immersed in my wife (feel free to use that line for your movie…but the only freebie I’ll give you.) Another example how you cope: the oil patch calander. Christmas is not always on 25 Dec nor your wedding anniversary the same month every year. My 11 yo daughter always like having two birthday parties and getting open Xmas presents early.
BTW: title idea…”Rockman…the Good, the Bad, the Ugly of the Oil Patch”. I would suggest Salma Hayek or Penelope Cruz as my costar. Either is OK...I'm not too picky.
Rocky,
Sounds dangerous to me, the home life getting to see the away life, and heaven forbid the crew change life.
You don't have to be schizophrenic in this business,but it helps.
How close do hurricanes get to each other ?
http://www.nhc.noaa.gov/storm_graphics/AT13/refresh/AL1311_PROB34_F120_s...
If you want a "laugh", here's the output of the 18Z (1800 GMT) US High resolution NAM model at T+84
That's Lee back in the Gulf as a hurricane and Katia approaching from the Atlantic and a few other deep lows just for fun (one which was sort of spin off from Lee and more follows the NHC predicted track). The consensus at various weather forums is that the NAM is "on drugs" and this won't happen :-)
Re: Shifting modal picture calls for new corporate skills article, I'm proud to share that Salish Sea Trading Cooperative reached our modest sail transport goal for 2011: the addition of transporting local goods beyond the CSA vegetables! Both boats are now merrily sailing their way home on a gorgeously sunny day here in Seattle--you can follow our trips on Twitter if you'd like. From our homepage:
And we have a meeting with the local Coast Guard next month to review compliance, safety regs, and an informal community partnership. For 2012, we want a shipshape model we can share out with other sustainability groups. Onwards!
Hi all! I'm looking to implement the World3 model. Does anyone know if the source code is available anywhere online? I have found an implementation in the simulation language Modelica here. However, I've read that the original was programmed in DYNAMO.
Check out the external links at the bottom of http://en.wikipedia.org/wiki/World3
Being a Dynamic Systems sim, the source code in a conventional computer language form doesn't really exist - unless someone converts both the Dynamic Systems framework AND the model into code.
The references from Wikipedia is where I actually found my initial info. I'm really more curious if anyone here had personally messed around with it.
Member for a week and lists a dead home page?
NAOM
Yeah, I recently changed usernames here. This one is more cheerful. I've been around here for a long time, but I mostly lurk. As far as the homepage goes, I haven't set up the server yet. The mail server is not up either, so it will bounce if you use it. The sysadmin stuff is high on the priority list, I've just been busy programming.
Edit: Just for reference, my last handle was 'asunder'
I'm planning a beta rollout within a couple months if that's any consolation.
You can check out http://www.vensim.com/ they offer a free version of their simulation code and one of the examples is World3.
Thanks! I'm hoping to implement World3 in some dynamic sense in the not-too-distant future. I need to do some more research as I presently do not know enough of what I'm talking about.
Currently I'm working on a application to manage the proverbial firehouse of information that we're inundated with on a daily basis. I'm supremely disappointed with news aggregation as a whole, and perhaps I can contribute something that will aid us moving forward. I'm working with machine intelligence and natural language processing algorithms to sort, classify, and theme news items in real-time with corresponding geographical information. That's just the tip of the iceberg.
I plan to release it beta to the TOD crowd in a couple months. So keep an eye out if you too find information overloading and want a fresh perspective on how to manage it.
Thanks again for the link!
Cheers,
John from VA
The entire study by the German Defense think tank on Peak Oil [translated to English] is now available here
Wow...I knew this was a major document when it first came out, but now that I've read it...this one is truley amazing. I'm saving this doc off for future reference.
Large pdf warning. From page 50:
Sounds like a page out of TOD,, or perhaps it's just that great minds think alike ;-)
A search for the word barter finds the following:
That section discusses what concerns me the most:
3.2 The Systemic Risk of Exceeding the Tipping Point
The systemic risks are often the hardest part of this mess to explain to folks. They simply don't understand complex, interdependent systems and how reliant we've become on them. Folks tend to think that our systems are redundant and flexible, not considering systemic Achille's heels such as oil, water, climate, etc.
Try this:
Imagine you are building a house of cards. It's a bit of a rambling mess, with bits added and seemingly random strings connecting between disconnected elements. If any one of the top bits falls over, it tends not to take the whole lot with it. Just the loss of a few wings of the mansion. If one of the lower bits is dislodged then there are often others to keep the structure up, although it IS possible for the lot to collapse if it turns out that part was key.
Peak oil is like joggling the table.
It's so fundamental that its connected into virtually EVERY system, EVERY card, either directly or via other cards. If you only tap the table, you might survive. But, if you cut the table legs so it goes from a 5 foot table to a 4 foot very quickly, then the house of cards goes into freefall; with interconnections broken, and ends up in a collapsed pile - everything smashed.
Most of the military guys have a no nonsense attitude, so I am not surprised that they have come up with such an assessment. As far as Germany goes, not too worried about them. They along with Japan will do relatively well in-spite of all shortages. I am yet to see two countries where people are so disciplined.
I appreciate the sentiment, but my personal observation (from professional tribal interaction/membership) with the U.S. military is that the majority of military members in the U.S. do NOT grok PO, Limits to Growth, etc.
The majority report memes are that environmentalists are ruining everything, the World is awash with oil, we Americans deserve/have earned/are blessed to live our way of life.
Go to a random selection of Military Treatment Facilities (MTFs) ('hospitals'), Military Personnel Centers, lodging facility lobbies, military eateries (BX Food Court, Bowling alley, Golf Course grill, etc)or anywhere else in a military facility where there is a waiting area and a TV...you would find that the vast majority are tuned to the Fox 'News' channel, and you will also find that it is forbidden to change the channel.
There are some folks in the military but they dare not 'fart in church' or speak out of school. The over-arching memes are that Republicans and Ayn Rand are heroes, and non-republicans, people who do not profess the majority faith, and environmentalists are zeros.
This is reality. I spent 20 years in-Uniform (and four before that in ROTC), and the past three years I have worn business attire but still swim in the same ponds.
Great to read an insiders opinion. Anyways I didn't mean it in a reverential kind of way if that's what you're worried about, as you yourself said most of the channels of information are closed and there is heavy indoctrination so not hard to imagine why they'd not know about PO. It's just that they would be the first to recognize how their capability to defend or attack would be impacted by lack of cheap oil.
I myself managed to get a polar opposite opinion when I talked to a few servicemen in my country. They gave a very honest assessment that is quite different from what the media dishes out on TV.
I commend the service people you spoke with for breaking out of the media matrix.
And I do not mean to imply that 100% of U.S. service folks are cut from the same Fox News cloth....my personal estimate is that as many as ~ 25% of U.S. military folks hold at least somewhat liberal viewpoint on various issues, and as many as another ~25% may be further along the right on the scale, but still not too close to the Bachmann/Palin/Perry/LimBeck camp.
There is hope.
That is usually the turning point in a revolution, when the elite loses backing of the military and the police (French, Russian, etc).
Heisenberg,
I don't doubt your observations, and I have observed such views among Canadian Forces regular personnel as well, though I believe that it would be significantly less common here.
But (as I've said at TOD before) the view of the Canadian Forces "Futures Analysts" & researchers whom I've had the pleasure of getting to know would be much closer to that of the Bundeswehr analysts (rather than the Fox/anti-environmental perspective that you describe).
They view PO as a legitimate and potentially serious problem, one which is worthy of much more scrutiny than it has received from our civilian agencies (which in Canada remains at zero: NRCan has done no formal analysis which prevents other departments from undertaking proactive research).
I'm glad that people are examining the BW document: it really is exceptional (for a number of reasons) and warrants much greater exposure in our media, which has yet to occur.
Japan just can't catch a break lately.....
http://www.guardian.co.uk/world/2011/sep/04/japan-hit-by-typhoon-talas