Drumbeat: September 14, 2011

Five myths about the Solyndra collapse

There are still plenty of nagging questions about the collapse of Solyndra, the California-based solar-panel maker that went bankrupt last month after getting $535 million worth of loan guarantees from the Obama administration. Such as: Did the Energy Department fail to do due diligence? And did the White House intervene inappropriately in pressing for approval of the loan guarantees?

But as Solyndra becomes the newest political chew toy, there’s been no shortage of hyperbole about the affair — especially over what it means for energy policy more broadly. On Tuesday, for example, Rep. Cliff Stearns (R-FL), who chairs the oversight subcommittee of the House Energy and Commerce Committee, said that Solyndra’s downfall proves “that green energy isn’t going to be the solution.” That’s quite a leap. So here’s a look at five overheated arguments about Solyndra’s bust:

White House ignored red flags in loan to failed solar company

The Obama administration committed more than $500 million in taxpayer money to a maker of solar power panels despite repeated red flags about the company’s viability, NBC News’ Lisa Myers reported Wednesday.

The FBI raided the Silicon Valley headquarters of the company, Solyndra, last week, investigating whether the government was misled when it loaned the company $535 million in taxpayer funds. Solyndra officials say they are cooperating with the investigation.

Musings: Trying To Solve Mystery Of Missing Marcellus Resource

A tenant of America's gas shale revolution is that shale is ubiquitous and uniformly spread under our oil and gas producing basins. That belief has translated into growing estimates of the resource's potential and how it has radically changed the long-term outlook for America's, and potentially the world's energy future. Is it possible this tenant has been knocked into a cocked hat by the latest estimate of the resource potential of one of our largest gas shale basins – the Marcellus Shale?

Have frackers pushed their luck too far?

Over the past week, I've heard from serious observers of the U.S. shale gas industry -- from investment analysts, think-tank scholars and others -- that we seem near a tipping point in the heated debate over the companies' drilling methods: If there is another serious accident or two in which shale gas drillers appear to have polluted a water aquifer, look for significant regulatory curtailment of the industry, as one investment analyst put it.

If such a backlash occurs, it would be a significant turnaround for an industry that has been widely embraced as a savior, particularly for the possible role it could play in curtailing the emission of heat-trapping gases by allowing for a reduction of coal consumption.

Conoco CEO says gas drilling is U.S. job creator

(Reuters) - Expanded drilling for natural gas in massive shale formations across the United States is one way to create sorely needed jobs in this country, the chief executive of ConocoPhillips said on Wednesday.

"We have a powerful job creation machine available, if we put it to work," Conoco CEO Jim Mulva said in remarks to the Detroit Economic club.

BOEMRE: BP, Transocean, Halliburton at Fault in Macondo Oil Spill

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) and U.S. Coast Guard concluded that BP, Transocean and Halliburton all share blame in the April 20, 2010 Macondo oil spill in the U.S. Gulf of Mexico through a combination of well design, approach to well control and missed steps.

Armed pirates kidnap 23 sailors off West Africa, maritime officials say

LAGOS, Nigeria — Armed pirates raided a tanker off the West African coast and kidnapped 23 sailors Wednesday, sailing off with the vessel in waters increasingly at risk of piracy, an international monitoring group said.

Libya's Sirte Oil Restarted Natural Gas Fields -Oil Official

BENGHAZI -(Dow Jones)- Libya's Sirte Oil Co. has restarted natural gas production at several fields among the largest in the country, a Libyan official at Benghazi said Wednesday, adding to faster-than-expected resumption in oil production following the fall of Moammar Gadhafi last month.

Porter Stansberry: U.S. Shifts to Gas Export Role

I feel the same way about peak oil as I do about deflation. It shows massive ignorance of economics and human nature. In regard to oil prices, you have to separate the price from the currency, because in Swiss francs and gold, oil prices haven’t changed much in 50 years. Yes, the price of crude oil is volatile; it goes up and down. But in 1950, it took 2.5 grams of gold to buy a barrel of oil. Today, 2 grams of gold will buy you a barrel of oil. Thus, if you take the loss of the dollar’s purchasing power out of the equation, you’ll find that the price of oil has remained very flat.

So I would argue that despite massive increases in consumption, the real price of oil has remained unchanged. Going forward, that will almost certainly remain the case. Why? Because geology doesn’t create oil; capital creates oil. The more capital you put toward oil, the more of it there will be.

Crude Oil Drops From Six-Week High on Concern Economic Recovery to Falter

Oil declined from a six-week high on concern that Europe’s debt crisis and the faltering U.S. economic recovery will temper fuel demand.

Futures fell as much as 1.9 percent after technical indicators signaled gains of more than 3 percent in the past two days may have been excessive. The European Central Bank said it will lend two euro-area banks dollars tomorrow, a sign they are having difficulties with borrowing. The International Energy Agency yesterday cut global oil-consumption forecasts for this year and 2012. The Energy Department may say U.S. crude stockpiles fell last week, according to a Bloomberg survey.

Oil defies forecasts of declining demand

A paradox has emerged as oil prices remain high amid declining demand forecasts.

Opec and the International Energy Agency cut their forecasts for crude demand again this week, erasing as much as 400,000 barrels per day (bpd) from previous estimates.

Yet Brent crude, the European benchmark, seems immune to the predictions, trading comfortably above US$112 yesterday.

Some win, some lose when oil prices rise

The oil price is the double-edged sword of the global economy.

What western countries view as an "oil shock", the Gulf regards as a budget stimulus; similarly, falling energy prices are seen as a spur to economic growth in Asia, but are a threat to fiscal stability in the Middle East oil exporters.

Import Prices Fall for Second Time in 3 Months

Prices of goods imported into the United States fell in August for the second time in three months as the cost of oil and food dropped, while autos stabilized, the Labor Department said Tuesday.

Credit tightening hits Sinopec debt

BEIJING / HONG KONG - China Petroleum & Chemical Corp (Sinopec), the non-financial Chinese company with the most bonds maturing next year, may have to pay twice as much to refinance debt because of China's fight against inflation.

Chevron confirms Gulf of Mexico oil leak

(Reuters) - A leak from a shallow water crude oil pipeline in the Main Pass Area of the Gulf of Mexico has led Chevron to shut down its offshore Louisiana Main Pass pipeline network, the company said on Tuesday.

Chevron has also shut its Cypress line, the company said.

New evidence cites more BP oil spill mistakes as panel prepares to release its report

A key federal report into what caused the worst offshore oil spill in U.S. history was being readied for release as early as Wednesday amid revelations that BP made critical mistakes on the well and failed to tell its partners and the U.S. government when it realized it.

Alabama Mayor Says Tar Balls Washed Ashore From BP Spill

ORANGE BEACH, Ala. – A coastal mayor says tests show tar balls washed onto Alabama's beaches by a recent tropical storm are from last year's BP oil spill in the Gulf of Mexico.

Shell Served With Two Warnings From UK Oil Safety Regulator

LONDON -(Dow Jones)- The U.K. offshore regulator issued Royal Dutch Shell PLC (RDSA.LN) with two warnings in July for safety incidents at its Brent Charlie platform in the North Sea, the Health and Safety Executive website showed Wednesday.

Bolivia agrees to supply more natgas to Brazil

(Reuters) - Bolivia's state-run energy company YPFB signed a contract with Brazil's Petrobras on Tuesday to supply 2.2 million cubic meters of natural gas per day to the Cuiaba thermoelectric plant in Brazil's Mato Grosso state.

Mexico contracts ready by October

Tenders for Mexico's second round of private oilfield operating contracts will be ready by October as the country advances in its efforts to boost foreign investment in the lagging energy sector, a board member at the state oil company Pemex said on Tuesday.

Kuwait exceeds US in power consumption per capita

"Because it's free" was the answer the majority of renters in Kuwait gave for why electricity consumption was on the rise. Electricity is usually included in rent prices, which some renters have been abusing and, inevitably, been contributing to the ever-increasing rate of energy consumption per capita in Kuwait.

China's Sichuan may face worst power woes in 10 years

(Reuters) - Southwest China's Sichuan province is likely to face the worst power shortage in 10 years in the coming winter-spring season due to rising demand, weak hydropower generation and insufficient coal stockpiles, the local grid operator said.

Libyan oil production expected to ramp up faster

PARIS (AP) -- Oil production in Libya should ramp up faster than previously forecast, the International Energy Agency said Tuesday, but the North African country still won't be at full capacity at the end of next year.

Freed of Gadhafi, Libyans expect post-war boom

TRIPOLI, Libya (AP) -- Airlines are readying their return to Libya, ports largely shuttered during the fighting are receiving cargos and foreign oil companies that had fled the country's civil war are making tentative steps back.

And waiting eagerly on the doorstep are businessmen looking to get in on what they believe could be a bonanza for investment - an oil-rich nation with large tourism and construction potential that went largely untapped under an eccentric and often closed 42-year-long regime. Slowly, Libya is reopening its doors after seven months of fighting, even as former rebels still hunt for ousted dictator Moammar Gadhafi.

Bickering in Iraq over oil revenue hurts country

A long-running oil dispute between two centres of power in Iraq has reignited.

Russia frets over EU plans to link up Caspian gas fields

Moscow expressed its "disappointment" on Tuesday (13 September) over EU plans to build a Trans-Caspian pipeline connecting large Turkmen gas reserves to Azerbaijan, offering an alternative to the Russian monopoly on gas transports from that region.

Government figures 'wanted to buy BP oil fields'

Leading government figures wanted to buy the North Sea's major fields from BP when significant discoveries were made in the 1970s, it has been claimed.

Leading oil economist Prof Alex Kemp takes a look back in the newly-published 'Official History of North Sea Oil and Gas'.

Japan to start buying LNG from U.S. by 2015 -Nikkei

TOKYO (Reuters) - Japan plans to start importing liquefied natural gas (LNG) from the United States as early as 2015 to secure a steady supply amid growing demand for the fuel, the Nikkei business daily reported on Wednesday.

Japan is currently unable to import U.S. LNG without approval from U.S. authorities, although a Japanese trade ministry official said on Wednesday that it was seeking approval for imports by Japanese firms.

Tepco eyes 15 pct fee hike for 3 years-Asahi

(Reuters) - Tokyo Electric Power Co , the operator of the wrecked Fukushima Daiichi nuclear power plant, is considering raising electricity charges by 15 percent for three years from next April, the Asahi newspaper reported on Wednesday.

Peak oil and collapse scenarios. Part 3

In this final part of my blog series I take a quick look at how the Peak Oilers’ view that all the big oil finds are already banked and only the tiddlers remain, stacks up against the view of the oil optimists that there is still plenty to be found, particularly under the deep oceans. Great, the environmental lobby will say, just what we need, more Deepwater Horizons polluting areas that are hugely difficult to fix, or with fantastically vulnerable ecosystems.

Infographic on Peak Oil - Who Uses How Much, and Where We Go From Here

We've all heard of peak oil. At the rate we're consuming oil, we will either begin tapping into pristine wilderness (i.e., Alaska), drilling in areas that are entirely unsafe for drilling (i.e., even farther off-shore in even deeper waters), or we will be forced to make changes in our oil consumption patterns. Carsort, a newly launched website that helps people find "the perfect car" has put together an infographic on Peak Oil. Yes, it's entirely odd for a peak oil infographic to come from a car search website. The infographic looks at where oil resources are, the downsides of going after them, and finally the benefits of moving past peak oil to more sustainable energy sources.

SNP warned of 'white elephant' power plan

Dr Euan Mearns, an energy expert at Aberdeen University's school of geosciences, said: "On the one hand we've got to say that we're in favour renewable energy and it would be wonderful if Scotland was a leader in it – but we may end up a world leader in a white elephant.

"The full cost of large reliance on renewable energy needs to be taken fully into account.

"That includes the cost of maintaining back-up power supplies, building new storage and new inter-connectivity, in addition to the building and maintenance of a vast new renewable energy infrastructure.

Hearing on Solyndra Won’t Include Executives

Two weeks after the bankruptcy of a solar company that got $527 million in government loans, the House Energy and Commerce Committee will hold a hearing on Wednesday to explore what went wrong.

The tone is not expected to be friendly; the Republican leaders of the committee say that the Energy Department may have directed the money to a company with investors who were also donors to the Obama election campaign, and that the department may be preparing to give aid to other companies with iffy commercial prospects.

The power struggle for Wyoming's wind

Wyoming is an ideal place to generate electricity from wind. But getting current from turbines to customers is a political and economic puzzle. How it plays out will have lessons for renewable-energy projects nationwide.

Analysis: Polish EU lead could yet set green energy example

(Reuters) - Half way into its EU presidency, Poland still has the opportunity to lead eastern Europe in bringing on efficient energy technology and to prove wrong those who see it only as an obstacle to a greener agenda.

‘Serious’ Error Found in Carbon Savings for Biofuels

The European Union is overestimating the reductions in greenhouse gas emissions achieved through reliance on biofuels as a result of a “serious accounting error,” according to a draft opinion by an influential committee of 19 scientists and academics.

Energy Crops: Achieving a Balance

ScienceDaily — There has been much debate about the net benefit of growing energy crops to reduce greenhouse gas emissions. While it is accepted that energy crops can displace fossil fuel imports, the emissions from the cultivation of energy crops were until now uncertain.

Gentlemen, Start Conserving

Is green Nascar an oxymoron? After all, the sport is all about watching gas guzzlers drive at high speeds in circles for hours. Until 2007, race cars used leaded fuel. Tens of thousands of fans still drive to races in recreational vehicles and other gas hogs.

But more than any other American sport, Nascar is also a for-profit business, and like many companies these days, it is focused on cutting costs by recycling, conserving and generating its own energy. While the core of the sport remains unchanged, Nascar, its teams, track operators and sponsors are employing an ambitious set of green initiatives that includes collecting used fuel, planting trees to offset carbon emissions, and deploying sheep to keep the infield grass short.

Food and faith: possibilities for parishes (Part 1)

The average American salad travels 1,500 miles to make its way to my table. In order for me to enjoy blueberries in January my blueberries are grown in Chile. The American food system, buttressed by an extensive transportation system and by agri-business' intense dependence on petroleum based fertilizers, contributes to stressors on climate and addiction to foreign oil as we enter a period of peak oil.

Rare earths and other critical metals - Lara Smith

The reason for these commodities suddenly becoming critical is because where we are in the stage - we've got a number of macro issues that have changed over the last year. One obviously is the rise of China and the developing world as a whole. The other critical issue is with respect to green minerals and environmental concerns and looking for alternatives. The other critical issue is oil - we've simply reached peak oil and that is now where production begins to increase at a slower rate. So all those factors have come to the fore and we need to focus our attention on getting alternative minerals to replace the coal base.

Drought threatens way of life for Texas ranchers

"Everything about this is historic and comparable to the Dust Bowl years," says Robert Dull, an assistant professor of geography and the environment at the University of Texas-Austin, referring to the severe drought and dust storms of the 1930s that forced mass migrations from Oklahoma and other states. "People made major life-changing decisions based on that event, just as they will with this."

Energy bills: Taxpayers' Alliance on Daily Politics Soapbox

When you open your gas or electricity bill, are you aware how much you are paying for failing attempts to cut greenhouse gas emissions?

The bad news is there is worse to come. In the coming decade, we can expect drastic hikes in prices to pay for draconian climate change regulations.

Why low carbon means high profit - eventually

The global companies with the sharpest focus on climate change have rewarded their investors with double the average return of the world's corporate titans. That's the startling message from the Carbon Disclosure Project, which released its annual Global 500 report on Wednesday.

Rising sea levels could take economic toll on California beaches

As rising sea levels eat away at the California coastline over the next century, the advancing ocean could cause hundreds of millions of dollars in damage to beach communities as tourism and tax revenue is swept away, according to a state-commissioned study released Tuesday.

In regard to oil prices, you have to separate the price from the currency, because in Swiss francs and gold, oil prices haven’t changed much in 50 years. Yes, the price of crude oil is volatile; it goes up and down. But in 1950, it took 2.5 grams of gold to buy a barrel of oil. Today, 2 grams of gold will buy you a barrel of oil. Thus, if you take the loss of the dollar’s purchasing power out of the equation, you’ll find that the price of oil has remained very flat.

I believe Mr. Stansbury's analysis is flawed. Wasn't the price of gold in the 1950s fixed by government at a price above the market price? And it remained that way until the U.S. changed its monetary policy in the early 1970s? For example, int 1971 the price of gold was about $40 an ounce. In 1975 it was $160. (Gold Prices). Does that mean that oil prices fell by a factor of 4?

Besides, regardless of what gold does, we pay our bills in dollars that we earn. Our earnings don't go up with the price of gold, so what's the point of the comparison? A better metric is the amount we spend on oil as a percentage of GDP or some similar measure.

Of course, we all know that price is not a good indicator of peak oil given the dynamic between oil prices and economic activity.

Maybe, it it simply that gold extraction needs a lot of energy and the gold price are strongly related to energy price. I should do a paper about this.

I have a hard time reading anything by Stansbury. He has always been a shameless huckster extracting $ from his dupes. And has been the target of lawsuits from those duped by him.

But I had to completely stop reading when he said that "geology does not produce oil - it is produced by capital." A classic example of being divorced from reality.

The 1972 Texas production peak lined up with the 1999 North Sea production peak:

Texas & North Sea production, horizontal axes, versus annual crude oil prices, vertical axes:

These two regions were developed by private companies, using best available technology, with virtually no restrictions on drilling. The two regions combined accounted for about 9% of total global cumulative C+C production through 2005. Texas RRC data show a small rebound in production in 2010, but RRC data* show that we are still below one mbpd, versus a 1972 peak of 3.45 mbpd, and 2010 production, as well as recent annual production numbers, were the lowest since the RRC started keeping annual data, in 1935.

*We have a mysterious discrepancy between the RRC data and EIA data for Texas. My understanding is that both of them are counting C+C, but I need to double check that with the RRC.

Seems to me that he is also ignoring the issue of "peak gold". It seems to me that linking to price of gold (a finite commodity) or any other commodity that is in short supply is making the argument not refuting it.

I agree. It's true that oil would be cheaper if I was paid in gold, but alas, I am paid in dollars.

HIs critique about gold and oil in fact is a statement that we are not able to consume as much oil as we formerly did which falls exactly in line with the decline in oil consumption per capita which began in the late 1970s.

Hence he proves the we have well passed the point of peak oil per capita. LOL. Now how hard is it to understand that with all these people trying and trying to extract more oil and certain we have more people than ever that we cannot increase the level of oil at the per capita level and in fact because the population is growing that oil consumption must fall year after year.


He proves peak oil. What a genius.

World gold production is actually experiencing it's fourth "peak" since 1900. From the US Minerals databrowser:

This USGS dataseries unfortunately only goes up to 2008 but it sure looks like we might be past the all time global peak in gold production.

Of course that's exactly the way it looked in 1920, 1945 (OK WWII had something to do with this peak.) and 1978 as well. Is the peak that occurred in 2000 the final one?

Only time will tell.


The story of gold production is that of the "Super Ghawar" Witwatersrand. From vague memory, an ancient alluvial deposit of gold (often 30% Au) an inch or two (2.5 to 5 cm) thick that dipped over a mile down.

For over 4 decades 70% of world gold production was produced from this one deposit, often at very low prices ($35/troy ounce till 1970s).

Total South African production was 1,000 metric tonnes/year and now down to 300 tonnes/year and dropping. South Africa is now #4 or so in world gold production after a century as #1.


Ancient meteorite showers responsible for Earth's gold, study finds

Researchers say they have evidence that most of the gold floating around world markets and jewelry stores today was carried to Earth billions of years ago by meteorites, long after the planet's formation. The theory explains why so much gold is near the surface

There ya go - all the people who want a space program can do it for GOLD as opposed to magical microwave PV arrays.

(Imagine all the refining waste just left in space and all that comes back to Earth is .999 fine material.)

The link up top, Porter Stansberry: U.S. Shifts to Gas Export Role is truly amazing.

So I would argue that despite massive increases in consumption, the real price of oil has remained unchanged. Going forward, that will almost certainly remain the case. Why? Because geology doesn’t create oil; capital creates oil. The more capital you put toward oil, the more of it there will be.

I learned three things from that paragraph, geology does not create oil, money creates oil and the price has oil has not changed. The price of oil is the same today as it was in 1998 when WTI sold for $11.91 or $16.44 adjusted for inflation. Historical Crude Oil Prices (Table) And of course the average world price, about $110 today, is still the same as it 1998. Amazing!

You see this in the oil industry time and time again. Fears that we’ve found the last oil, that we’re going to run out, pop up constantly. And soon afterward, because the price goes up, huge new reservoirs are discovered. Always. They’re discovered because the capital is there for the exploration.

Huge new reservoirs no less. So not to worry, as long as we keep throwing money at the problem we have no problem. And there is no problem with money as the Fed has a printing press and can just print as much of it as we need.

Ron P.

Two more excerpts:

What’s happening onshore in the U.S. with oil and gas production is amazing. We’re setting new records for hydrocarbon production in the U.S. this year. Obviously, you can’t have record levels of hydrocarbon production if you’re supposedly running out of oil, so serious proponents of peak oil have their heads in the sand.

Stansberry refers to "hydrocarbons," but I suspect that most readers will interpret that to mean oil. US C+C production has been between 5.4 and 5.6 mbpd since the fourth quarter of 2009, versus a 1970 peak of 9.6 mbpd and the 2010 annual data just barely exceeded the 2004 pre-hurricane production rate. In any case, if you convert US natural gas production to BOE, I suspect that his statement about records levels of total hydrocarbon production would still be false.

I’m not saying we’ll stop importing energy. We may continue to import oil, for example, because it’s cheaper to produce it in Saudi Arabia and ship it here than it is to produce it here. That doesn’t mean that we can’t be a net energy exporter, though, especially if we export an even larger volume of natural gas.

As of last year, the US was still one of the world's largest net natural gas importers, and we are currently dependent on imported oil for two out of every three barrels of oil that we process in US refineries.

Yes and he just makes up numbers and ignores the obvious. In 2005 the world oil price was around $55 a barrel and we had worldwide, according to OPEC's latest Oil Market Report, 980 rigs drilling exclusively for oil. Today with prices double that we have more than doubled the rigs drilling for oil. (Not gas). In August, they said, we had 2,369 rigs drilling for oil. In other words we have more than doubled the amount of rigs, (money), thrown at the problem but have not increased the amount of oil pumped at all, or only marginally so.

According to JODI crude+condensate oil peaked in 2006 when the world had 1,124 rigs looking for oil. So more than doubling the amount of money thrown at the problem still produced less oil. Could this have something to do with geology rather than capital?

Ron P.

Unfortunately, as bizarre as it seems, Stansberry is very much in the mainstream regarding energy supplies.

A few days ago Aubrey McClendon, CEO of Cheseapeake, asserted that domestic US energy resources could meet our needs, apparently in perpetuity. And three of my favorite quotes follow. Note that at the time the following statements were made, global C+C production, based on the 2002 to 2005 rate of increase, was on track to hit 86 mbpd in 2010. Instead, global C+C production has been between 73 and 74 mbpd since 2005, except for 2009.

The energy industry, in 2005/2006, urges consumers to Party On Dude:


"Rather than a 'peak,' we should expect an 'undulating plateau' perhaps three or four decades from now."

Mr. Robert Esser
Senior Consultant and Director, Global Oil and Gas Resources
Cambridge Energy Research Associates
Huntington, NY,
Understanding the Peak Oil Theory
Subcommittee on Energy and Air Quality
December 7, 2005


"Contrary to the theory, oil production shows no signs of a peak . . . Oil is a finite resource, but because it is so incredibly large, a peak will not occur this year, next year, or for decades to come"

ExxonMobil Advertisement in New York Times
June 2, 2006


"We in Opec do not subscribe to the peak-oil theory."

Acting Secretary General of Opec, Mohammed Barkindo
July 11, 2006

But maybe two of the quotes were typos, and CERA and ExxonMobil meant to say that the "undulating plateau" was months away.


Incidentally, the EIA shows the following for US natural gas production and consumption for 2009 and 2010. Although production increased from 2009 to 2010, a rebound in consumption caused net imports to increase year over year.

Production - Consumption = Net Exports/Imports (TCF/year)


21.0 - 22.8 0 = -1.8


21.6 - 24.1 = -2.5

So, in 2010 our consumption of natural gas exceeded production by 12%, versus 9% in 2009, but the Stansberry headline reads as follows:

Porter Stansberry: U.S. Shifts to Gas Export Role

I guess we can look forward to headlines like the following:

Stansberry: US housing prices hit new record high

Stansberry: US federal borrowing falls

Stansberry: Projected US federal budget shows surplus

Stansberry: Laws of thermodynamics no longer relevant

He is also in the mainstream of current debt worriers despite a rising bond market and falling interest rates:


He uses a false analogy to make his case comparing the U.S. to GM and Fannie Mae. The U.S. is not a business and does not exist to make a profit. It does not keep books according to Generally Accepted Accounting Principles. GM and Fannie Mae can not print money and do not have access to unlimited credit as the U.S..

Cutting expenditure which is the same thing as raising taxes from an economist's point of view is the wrong thing to do in a recession.

He also criticises the bank bailouts of which I also am no fan. But the government had little choice because of FDIC commitments. If a bank fails the standard procedure is for the Fed to try to sell it to another bank which of course leads to ever bigger banks until Too Big To Fail size is reached.

When a Too Big To Fail Bank fails it is so large another large bank can not absorb it and the FDIC (government) is stuck with guaranteeing the accounts which is usually a larger amount than would be necessary to bail out the bank.

So the FDIC deposit guarantees only work for smaller bank failures.

Also the large banks are big time counter parties in the Fed's money creation process. They buy the government debt. Under the current system of creating money (borrowing it into existence) rather than spending it into existence, big banks play a critical role.

Money does not have to be borrowed into existence. It can be simply spend into existence by the government. Lincoln did it to finance the Civil War.

Some think that was the real reason he was assassinated. The bankers would not abide being taken out of the money creation loop and had him shot.

Since then there have been no serious attempts at direct money creation. This has led to the current situation where debt created to keep the economy going reaches alarming levels for some people.

They fail to see that when government pays off debt or does not create more, the economy will contract, reducing tax revenue. If tax cuts are made that also reduces tax revenue and debt increases.

There is no answer to this conundrum except spending money directly into existence and eliminating the bankster middlemen.

No one in power will call for it though out of fear for his life and the need to finance the next campaign with banker help.

It's a mean old world.

Laugh, cry, rage at the fools and those who manipulate them (either knowingly or just as foolishly), whatever - you are staring at the way we will deal with peak oil. We'll run that car straight off the cliff, never wavering, eyes fixed straight on the facebook page on the smartphone, never even changing expression - just flat out. So save the guffaws, the joke's on us. Knowing it and understanding doesn't mean you can change it. We're well into the time of consequences now, but there are useful things to do in that regard.

Regarding "mainstream views," here is a similar item:

Tankers to Lose Money on Saudi-U.S. Through ’12: Freight Markets

“The U.S. is awash with domestic oil and increasingly divorced and less reliant on foreign imports,” said Andreas Vergottis, the research director at Tufton Oceanic Ltd. in Hong Kong, which manages the world’s largest shipping hedge fund. “Not only is end use of oil shrinking, but domestic production of crude oil is rising rapidly.”

I compared the four week running averages of US crude oil refinery inputs for early September, 2011 versus early September, 2004, versus US C+C production.

Production - Refinery Crude Oil Inputs = US Crude Oil Imports*, mbpd

9/04: 5.3 - 16.0 = -10.7

9/11: 5.6 - 15.5 = -9.9

So, in September, 2004 we relied on imports for 67% of crude oil inputs, and in September, 2011 we relied on imports for 64% of crude oil inputs. This is described as being increasingly divorced from, and less reliant on, foreign imports.

*This assumes no change in inventories, but inventory changes aren't really relevant to my argument

I'd say your take is pretty valid, but we have to remember this guy is in the business of selling loaded miles carried tankers, so pipeline deliveries from Canada and short haul stuff from Venezuela don't really get him excited.

I suspect when he says "increasingly divorced and less reliant on foreign imports" what he really means is "I read something about the Bakken formation in the morning paper and my year end bonus just shrank--voila, the US doesn't import oil anymore."

"Stansberry refers to "hydrocarbons," but I suspect that most readers will interpret that to mean oil."

His comment itself is nonsensical: "Obviously, you can’t have record levels of hydrocarbon production if you’re supposedly running out of oil, so serious proponents of peak oil have their heads in the sand."

That was one of the dumbest lines in his whole article. You could have record levels of hydrocarbons and zero oil. One can't use natural gas production to argue that we don't have an issue with oil depletion.

I guess this sight should be renamed The Oil Dumb :-(

I guess this sight should be renamed site.

Thanks....How do you spell that :-0

a misspelled word by a casual poster, ahhh no big deal. But check out the third story above " Musings: Trying To Solve Mystery Of Missing Marcellus Resource " where the Professional Writer writes "tenant" where it should be "tenet". Does it right in the opening sentence too, immediately makes you say hmmm this guy he don't write too pretty good. But you give him a chance and continue reading and two sentences later...he does it again. I guess they laid off all the editors, now just use spellcheckerware.

"Because geology doesn’t create oil; capital creates oil."

So abiotic theory is correct after all? I guess Bernanke can print us a few M BPD.
Let's party.

This poor fool swallowed the idiotic revolution in economics around 1900. Classical economists like Smith, Ricardo, Marx, etc. said that production had three kinds of factors: capital, labor, and land. By "land", they meant any natural resource.

Sometime around 1900, economists saw neverending growth and progress as the natural birthright of industrial capitalism. "Land" was no longer considered a factor of production, only capital and labor were left. Natural resources were either unlimited, or could be surmounted through enough capital or substitution. This foolish change generated a lot of bad economic policy in the 20th century. Hopefully, we get a serious reconsideration.

Wow. So myopic. They never imagined that labor would overpopulate the land. They never imagined that the land would be stripped. But who I dare ask would honestly tell us different? Scary world. And I tend to think the CIA is briefed daily on oil issues when I put on my tin foil hat. I tend to think the Big-G knows the score and the economists are somehow "told what to say" by only allowing those to speak that conform to a singular view.

You guys realize you are having a one sided discussion here. That person (to the best of my knowledge) doesn't post or read here.

You have posters on TOD who show up often who've made exactly the same kind of statements (money creates gasoline) - where is the dog-pile when TOD posters say such things?

Someone tell Helicopter Ben to drop some bbls here in California. We can use lower gas prices. How do we put in our order for the oil?

Just get in your car and go to Baghdad by the Bay. Looks like they only have the primo light sweet stuff.

The United States Mint at San Francisco plays an important role in our nation's coinage. Although it does not currently produce circulating coins, it is the exclusive manufacturer of regular proof and silver proof coin sets that set the standard for numismatic excellence with their brilliant artistry, fine craftsmanship and enduring quality.

From the article:

Horizontal drilling is a fantastic technology that’s leading to a renaissance in the oil and gas industry in the U.S., and you’re going to have enormous amounts of new production come online in the decade ahead. That will, of course, force the prices back down. And inevitably, in 25 to 30 years when the prices go back up, we’ll again hear, “Oh no, we’re running out of oil.” It’s a constant cycle. It’s human nature. It’s economics. Really, if people just read a little bit more history, they wouldn’t fall for such antics.

Just how new is horizontal drilling? From: Chesapeake's History

1994 – 96: Continued Success Through extensive use of horizontal drilling technology and an innovative geological assessment, we had outstanding success from this high-pressured, high-production-rate formation. In fact, from 1994 to 1996, we delivered the highest growth rate in our industry and the best stock price performance in the U.S among more than 8,000 publicly listed companies.

So Chesapeake was using horizontal drilling extensively in the early 90. Now it is almost two decades later and horizontal drilling is being touted as something that will bring enormous amounts of new production on line in the future. Well... how about in the past. We did see lots of new production from the early 1990s thru 2005 then everything leveled out. Was this the result of horizontal drilling. Then why did the surge stop around 2005?

So how does horizontal drilling fit into this picture? Was the surge that started in 1994 and petered out in 2005 due to horizontal drilling? Or can we expect a much larger surge, driving prices down, due to horizontal drilling as Mr. Porter Stansberry predicts?

World C+C production in thousands of barrels per day according to the EIA. (2011 thru May only.)


Ron P.

He doesn't know matter can't be created or destroyed.

Ah, not correct.
Matter *can be* created and destroyed.

It's *Energy* that cannot be created or destroyed, only converted into other forms of energy.

No matter and energy cannot be created or destroyed. First Law. People sometimes get confused is with E = mc^2. But just go with the First Law.

The basic physics is that matter and energy (at some high energy scale) are interchangeable. Of course we can't just will matter to convert into energy, it requires truely phenomenal conditions to do that (like falling into a black hole), or going back to the early moments of the big bang.

Turning matter into energy? Isn't that just as simple as lighting a fire with a pile of wood or a bunch of coals? Or filling up the car with gas and then driving off? Don't we turn matter into energy every moment in our bodies as we eat food and stay alive?

I am not a scientist...but surely we don' need a black hole to turn matter into energy.

On the contrary, all of those chemical reactions in a fire (oxidation) merely convert matter into different forms. This is why global warming is an issue in the first place - all that coal or wood that seems to be gone is now a)ash and b)various gases, most notably CO2 but also many other noxious gases. If you were to measure the mass of all of those things, it would equal the mass of the original source (well, the oxygen comes from the air - you have to measure both sides of the reaction). No matter is created or destroyed.

However, it IS true that it doesn't take that much to covert matter into energy - just a nuclear reaction. That's what happens when a nuclear bomb goes off; a very small amount of matter is converted into energy. A VERY small amount. In a fission reaction, this is something like 1/10th of a percent, in a fusion reaction, 7/10ths of a percent of the mass turns into energy.

I'm not a scientist either, but this is why nuclear reactions are such a big deal, and why nuclear power seems so promising. Too bad it's as poisonous as it is powerful, and the technology needed to harvest energy from either type of reaction is insanely complex.

Therees no real difference between a nuclear reaction and a chemical one, Nuclear is just chemistry involving Nuclei, rather than electron orbitals. The combustion products (minus the heat) weigh less than the original materials by e=m*c*c. But the real thing, taking a chunk of mass, and turning it into pure energy, that we can't do...

β- + β+ -> γ + γ

Electron–positron annihilation

One of the proofs of E=Mc2 was that to get the calculation of the orbit of Mercury to the observed timings, they needed to include the mass of the energy of the sun.

A Bose-Einstein-Condensate is a matter/energy soup that occurs when there is too little energy left in a particle to keep it's mass. Things become very weird and counter-intuitive when very low or very high energy levels are involved.

Thank you DITUK

This is why I like TOD, it helps fill the gargantuan gaps in my education.

I think you might be confusing special relativity with general relativity.

"Therees no real difference between a nuclear reaction and a chemical one,"

With all due respect, this is not true.

Other than in the sense of "there is no real difference between a virus particle and a blue whale".

Please explain why this is not true. Not for me, as I've taken courses in Chemistry and Physics, but for others who haven't. Comparison with a blue whale makes both of us sound ridiculous!

I suspect the writer was alluding to the difference in dimensions and binding energies as between the orbital radius of an electron in an atom's outer electron shell and the diameter of an atom's nucleus. Electrons bind to the nucleus on the basis of the weak electromagnetic force. On the other hand, positively charged and thus electrically repelling protons remain in the nucleus thanks to the much more powerful, strong force present in the nucleus. Blue whale and an amoeba is a good comparison.

Thank you, step back. That's exactly what I meant!

It wasn't a comparison, it was an analogy, and an apt one. See step back's comment for why your statement is not true.

Chemical reactions do not result in ionizing radiation, either at the time of reaction or later when the products of the reaction undergo radioactive decay.

Nuclear reactions often do.

We need a tech to turn matter into anti matter. Solv that and you have infinite energy resources.

Hmmm... gotta wonder what the EROEI would be on that ;-)

With some luck multi digit. It is my wettest techno fantasy.

Actually, this guy points out principles that should make space travel more viable. Just set the spacecraft up as a capitalistic 'enterprise' and capital will create oxygen and fuel as needed, based on demand.

To boldly go, indeed.

For those who can afford it.

Actually, this guy points out principles that should make space travel more viable. Just set the spacecraft up as a capitalistic 'enterprise' and capital will create oxygen and fuel as needed, based on demand.

No no, this perfectly explains the lack of oil. It's the debt!

We have negative money now so it's destroying the oil instead of creating it!

Cause and effect baby!

There's enough gold in Krypton's core to plate the whole surface of the planet four meters thick.

Please don't tell the capitalists.

(signed) Jor-El.

(sorry for mixing fictional universes. -translator)

THANK YOU TOD!!!! Made my day bright and early. Have a couple of wells giving me fits so I've needed a good laugh for a while. From right at the top: "Because geology doesn’t create oil; capital creates oil." So many ways to explain the stupidity of that statement. But let's use a real life example. Back in the late 70's I worked for most incompetent oil companies I've seen in my 36 years...Natomas North America. They had no oil/NG experience when they took a position in a drilling program in offshore Indonesia. No technical staff...was just a country club deal. The interest they took over was abandoned by one partner who became tired of drill one dry hole after another. Bailed out one well too soon: next one discover a 1 billion bbl oil field. NNA owned a small portion.

Management of NNA decided the oil biz was easy money especially since the embargo pushed prices up. Thus they started a US exploration company. Cutting to the punch line: they spent over $500 million and found $40 million of oil/NG. Obviously they had all the capital they needed...at first. But eventually they had a $100 million bond come due and they couldn't pay $1. Of course, they weren't alone in the "if you spend enough you'll find it" mentality. At the height we had over 4,600 rigs drilling. For the capital spent this was the least productive period in the oil patch since the first well was drilled over 100 years ago. This is difficult for some folks to grasp: the high embargo oil prices did more damage to the oil patch than any other event during my career. High oil/NG prices generate huge profits from EXISTING production. But drilling during a price run up doesn't guarantee big profits. Just ask the shale gas players (like Chesapeake and Devon) that spent $billions as NG headed north of $12/mcf and then were crippled just two years later when prices dropped below $4/mcf.

Bottom line: if folks think higher prices/greater capex expenditures will produce a proportional increase in reserves/production they might be right. But it will be the first time it has ever happened. The oil patch p*ssed away many $billions in the late 70's in response to US PO. Let's see how the rest of the world does with its PO response.

BTW: NNA went belly up and was forced to sell their Indonesian oil production cheap. A bit of trivia: NNA parent company was one of the oldest US companies. Founded by Mr. Sutter (as in the Sutter's Mill gold rush of the mid 1800's). Interesting that "gold fever" not only created the company but also destroyed it.

I am constantly surprised by how dumb some people can be. When it pleases us, we will happily extrapolate one please situation into a trend (neighbor wins lottery? everyone scoots down to buy a ticket next week). But if presented with a series of pretty clear negative events we say "Oh, that won't happen to ME due to unworkable assumption (X)".

We didn't need systems thinkers for 10,000 generations on the savanna, now we have not as many as we need for the complex system that replace it, but maybe we'll be back to hunter/gatherer bands before long at this rate.

Thanks and good one, Rocky. I had immediately copied quote before I finished readings and comments. Much of what I would have said was said by others. However, reading your post and thinking of gold and oil I am reminded of when I was flying in Yukon and some crooked geologist/investor types renewed an old gold lease that had bilked many over the years.

They renewed this lease every cycle depending on the market.

Groundwork: pay off money owed to local flying company. Obtain 'cash only' customer status around town.

First: the price of gold was/must be high at the time with much drilling in area going on

Then: equipment flown in and site prepped out. Drill rig set up.

Hype: chum the water with announcements and contacts

Convince: Bring in the rich rubes (excuse me, sophisticated rich folks using other peoples money)

See: See the rubes fly into closest airport in company jets from Chicago and NY

Get: get them drunk on site and let them feel showings from core samples (from God knows where)Feed them steaks and booze in the wilderness like real men.

Finally: Go back to Calgary/Vancouver with investment secured. Bank account in City, of course.

Repeat: as needed

Why?: Because geology doesn’t create oil; capital creates oil. The more capital you put toward oil, the more of it there will be.

Just change the words and voila. On TOD we see this every Drumbeat with investor papers touting gold, silver, processes, whatever. Once, I was going to invest in a silver property and a good customer stopped me from 'wasting' my money because it was the wrong 'promoter'. It's just hard to understand that sometimes modern day promoters have PhDs from universities and are pushing concepts rather than 'plays', or books they hope to sell more of.


paulo - "...and are pushing concepts rather than 'plays'" An excellent point that many miss. Even more specific they promote concepts/plays and not individual drilling prospects. I could write 10,000 words on TOD about the potential of certain consepts and plays. And do a much more convincing pitch then some of these yahoos. But such potential is just that...potential. Which means it can't be shown to be there (or not be there) until you drill it. And that brings you down to the prospect level. Over 36 years I've reviewed many concepts/new plays. Always exciting. And then I look at prospect specific details and the vast majority of time I reject the specific project. Concepts are easy to support...especially when you're not the one writting the check.

As I type a company is drilling a very deep well looking for one of those big Deep Water GOM oil fields. Except they aren't in 5,000' of water. They're on dry land on the Louisiana coast line. I reviewed this prospect two years ago. Exciting and valid concept. And I instantly rejected it. It didn't even qualify as "exploratory" in my book. An entire risk level beyond exploratory we call a "stratigraphic test": so little information you have to drill a well just to find out what type of rocks you have down that deep. And then try to figure out if there's oil/NG down there. Play economics can look enticing. But at the end of the day some geologist has to put an X on map and present specific support for that well. And that's where the excitement/potential usually disappear. The potential to find billions of bbls of oil in the Arctic may exist. I could care less about that potential. Now show me an X on a map and the support for spending %50+ million to drill that well. Then we have something to decide. Until then it's just all talk. Exciting talk...but still just talk.

Well, there is actually one example (only) where he is right - the Canadian oilsands. There is no exploration risk there, and the oil does indeed just sit there, until *massive* amounts of capital are thrown at it. Even though it uses lots of NG for its production, it does not even need that - could use its own oil as the energy source - though NG is much cheaper.

Having said that, with oilsands at about 2mbd, or 2.5% of world production, it is not a good model to then extrapolate the future of world production.

As for his comments about oil priced in gold, he is closer to the mark;

This chart stops in 2010, but at today's prices, 1000bbls of WTI is about 45 ounces of gold, so this oil/gold ratio is, believe it or not, heading towards historic lows. Even using the Brent price doesn;t make much difference here.

The real point of all this is that, over much of the last century, oil and gold have been relatively stable in value - but people's confidence/value of dollars has been steadily falling.

While there has been lots of talk about a "gold standard" currency, we could equally talk about an "oil standard" - as depressing a thought as that is!

The devaluation of the dollar represents the exact decline in the per capita oil consumption. It is basically an exact correlation with the decline in the standard of living.

However, reading your post and thinking of gold and oil I am reminded of when I was flying in Yukon and some crooked geologist/investor types renewed an old gold lease that had bilked many over the years.

That kind of scam is as old as humanity. More than half a century ago there was a gold mining operation near a farm owned by a cousin of mine in northern NSW (Australia). It was dredging an alluvial gold deposit in a river flat, and the sequence was something like this:

1. Move the dredge to a small area where high gold concentrations are known.

2. Operate steadily for about a year, issuing monthly press releases about increasing gold production.

3. Sell new shares by private placement to rich individuals in Melbourne.

4. Move the dredge to area where no gold is present.

5. After several months file for bankruptcy.

6. Form a new company to buy the assets of the failed company (essentially the scrap value of the dredge, and a lease with minimal value).

7. Go to 1.

The First U.S. Gold Rush -- interesting historical tidbit


"Most people are unaware that the very first Gold Rush in the US was in Monroe County, Tennessee, right in the area of Coker Creek. Gold was first discovered here in 1827 but the land was owned by the Cherokee nation at the time and the boom was considered as unofficial. The official boom didn't start until around 1836 when it became clear that the native Cherokee and other tribes would not lay claim on the gold since they were being deported on the infamous "Trail of Tears" ordered by Congress and President Andrew Jackson, in defiance of Supreme Court Chief Justice John Marshall.

"As soon as it became clear that all potential problems were cleared, the Gold Rush began and people with the hopes of panning more gold they can ever dream of winning via games of chance like bingo came pouring in. By then, however, the "official" Gold Rush had already started in Dahlonega, Georgia.

"The Gold belt lies within the Cherokee National Forest and surrounding areas. Gold panning is allowed throughout the forest, but to dredge or sluice you need a permit."

The Great North Carolina Gold Rush

Gold mining was once second only to agriculture as North Carolina's most important industry. It started in 1799 with the discovery of a large nugget on the Cabarrus County farm of John Reed, a former Hessian soldier. For three years the hunk was used as a doorstop. Finally, a jeweler recognized it as a 17-pound gold nugget. Thus began the first gold rush in America!

Thanks for the story Rock; and as a former geology-tyoe guy myself, I had a good chuckle at the "Capital creates oil" line, too.

Heck, why don't we just go all the way to argumentum ad absurdum and ask the question: how much oil would 345 billion dollars worth capital create if you intensively explored for oil in Wisconsin?

I drilled a well in Central Nolan County. Dryer than a popcorn fart, I would love him to give me lots of capital and we can all watch the oil appear and start flowing out of the groun!!!!


I've recently come up with a somewhat counterintuitive approach for exploration in mature plays like West Central Texas, to-wit, the bulk of the fields that can be found by offsetting a strong show, or one well producing field, have been found. Think of all the generations of geologists going over existing production data and reported shows. What is the probability one can find a million barrel plus field by drilling the tenth offset to a strong show well or one well field?

When I looked at where my commercial new field discoveries have been, they were virtually all based on exploratory drilling, not on drilling an offset to a show well or an offset to a producing well. Where I was keying off show wells, they were generally prior dry holes that I drilled. A case in point is a new field discovery that I drilled in 1983, in Concho County. We found precisely the pay zone that I was hunting for, but it was a rank wildcat with no nearby well control. It was a small discovery, but two large fields, with combined reserves of about 20 mboe were found on trend. Unfortunately, I was only able to lease one of the prospects on trend. I had earlier tried to lease both of them, but at the time the acreage was unavailable. When the acreage became available, I could only get one of the two. Another company leased the other prospect.

A field in Nolan County is actually the exception that proves the rule. A shallow oil pay was found by an operator drilling what turned out to be a seismic bust (common in this area). They had a peak production rate of about 1,200 bpd, from an area of about 400 acres. The field went right up to an old dry hole, which was drilled in the Fifties. There were no reported shows in the dry hole, but it turned out that the operator encountered oil shows and tested saltwater. He did not report the DST, planning to go back at some point an drill a structurally higher test well, but he never got around to it. If he had reported the DST, it's near certainty that someone would have built a prospect by now around the DST and drilled a test well.

The two shallow multipay fields that we are currently developing were exploratory wells. In both cases, we keyed off prior show wells, but they were prior dry holes* that I drilled.

*Or stratigraphic test wells

Funny, as I type I am re-looking at that dry hole. It was a rank wildcat targetting the Strawn, now I am looking at the Cisco Reef in the area and low and behold. Looks much better. Should have looked at that in the first place.

Now all I need is lots of capital and the oil will be CREATED!!!


*Or stratigraphic test wells

Some operators run pipe and call them 'observation wells'.

The Mass in Mass Media is meant to control the masses. Now when the lies get more audacious I expect we are near a tipping point. Are we there yet?

A paradox has emerged as oil prices remain high amid declining demand forecasts.

I decided this was my tipping point indicator a couple of years ago, and here we are.

"Paradox" = severe laundry problem for debt-based economies. It just doesn't add up anymore.

Japan to start buying LNG from U.S. by 2015 -Nikkei

Great news for us NG drillers. Anything to reduces NG reserves sold in the US will help push those prices back up. Export enough NG to Japan and we might generate enough incentive to drill up a good bit of those shale gas reserves the cornucopians get so excited about. Of course, that will mean a significant increase in costs for US consumers. But hey...nothing personal...just business.

With enough demand from Japan (if they shut down more nuke plants) and China, maybe there would be an economic case for the Alaskan NG pipeline?

Maybe, if we are lucky, the export demand will justify its construction, and when the CONUS shale formation gas plays start to peter out in a big way we can shift that NG from AK away from export to satisfy CONUS demand.

And when both AK and CONUS NG bonanzas are played out...


What the article fails to note is that the US currently supplies LNG to Japan and has done for a very long time.

The proposed initial 2 million metric tonnes per annum (as mentioned in the article) is about 100,000 million cubic feet of gas or only about 50% more than the US supplied until just a few years ago.

To put that in perspective the US imported almost 4 TRILLION cubic feet (3,740,757 million cubic feet) per annum in 2010..

According to our favored pundit, Porter Stansberry, he is bearish on Uranium and bullish on natural gas. See how these guys can steer the markets in favor of their team. Nuclear is unsafe and so we are left with natural gas. LOL.

PS: I’d be neutral on uranium, and relatively neutral on large users of nuclear power such as Exelon Corp. (NYSE:EXC), which is a stock I’ve owned in my portfolio and covered in my newsletter for almost a decade. It’s a very safe and sound company, a good way to get a 5% dividend yield. It’s not a bad investment, but I’m just not particularly bullish on it the way I was prior to Fukushima.

Quite frankly, I’m surprised and disappointed that the modern safety standards that we have across these power plants throughout the world didn’t perform better. There’s s no margin of error. You cannot afford to have an accident at these plants.

I’m not saying that we can’t get there, but the facilities we’ve built over the last 40 years have proven to be unsafe. The public is right to be skeptical, and that’s generally going to reduce the construction of new plants. Less construction will cause demand for uranium to disappoint, probably over the next several decades.

TER: What will replace nuclear though?

PS: I’m very, very bullish on natural gas consumption, incredibly bullish, because I think the price is going lower. As the price goes lower, people will use more and more of it. The conventional wisdom now is that natural gas will go from around 20% of global energy consumption to maybe 25% over the next decade. I’m more optimistic than that—I think we’ll see natural gas go to 35–40% of all energy consumption. It could even go higher. It really depends on how cheaply it can be delivered around the world. The greatest opportunity the energy complex has over the next several decades lies in exploiting the technologies that are enabling shale gas production.

Yeah can someone run the numbers on whether NG can replace nuclear as is? I bet there is a factor of 5 error in his math.

If capital creates oil, surely it can create NG too, so why doesn't Japan simply invest in wells in Japan instead? Volcanic basis should only require a commensurate increase in capital, right?

I think capital does create economists.. maybe we could get some Vivoleum out of them?


Re: ‘Serious’ Error Found in Carbon Savings for Biofuels

Sourcing biomass

Inverness County environmentalist and woodlot owner Neal Livingston and Port Hawkesbury Mayor Billy Joe MacLean were in the unique position earlier this week of voicing the same concerns about the biomass facility being built in Point Tupper.

They were both wondering aloud how fuel for the $208-million biomass plant will be sourced in light of NewPage Port Hawkesbury indefinitely shutting down its two paper machines (and hence its harvesting operations) and the possibility that they may never start up again on this side of the Canso Causeway.


Before NewPage announced its shutdown, it was understood that NSP would in effect piggyback on NewPage’s purportedly sustainable harvesting operations by taking some of NewPage’s wood and wood waste (not suitable for pulp or sawlogs) to fuel the biomass plant.

“Biomass — or perhaps better stated as fuelwood, since NewPage will not be using tops and branches — becomes just one more product to sort from the harvest, and thus shares only a portion of the harvest cost,” wrote Bill Stewart, NewPage Port Hawkesbury’s director of woodlands and strategic initiatives, in an opinion piece published in the Cape Breton Post on April 16, 2011. “This is the way that it will be harvested economically, not by single-purpose clear-cutting.”

See: http://www.capebretonpost.com/Opinion/Editorial/2011-09-14/article-27475...

The NewPage paper plant goes belly up and takes with it 15 per cent of NSP's customer load (in addition, the company has stiffed NSP over $10 million in unpaid power). More to the point, it throws a monkey wrench into NSP's $210 million biomass plant, $80 million of which was paid to NewPage for a 30-year old boiler. Under their joint agreement, NewPage was to supply one-half of the required fuel through wood waste generated by their operations. Now, the question is how will NSP source the 700,000 tonnes of biomass they'll need to fuel this plant and can this wood be harvested in an affordable and ecologically sound manner. I suspect they can't do both, and if one has to be sacrificed for the other, rest assured dollars will prevail.

NSP had far better options with respect to adding biomass to their mix and yet they bullheadedly pursued this one knowing full well that NewPage was on the verge of collapse. And now ratepayers but, more importantly, our forests will pay the price.

(No) Cheers,

stiffed NSP over $10 million in unpaid power .... knowing full well that NewPage was on the verge of collapse

Hopefully the lawsuits will show NSP had the following calculation:

Bio-power is mandated by the Government.
Bio-power will get subsidized per typical government mandate.
Without the 'bailout' to NewPage - we'd have a shortage of 10 million - they were gonna pay that off with the scrappage fees.
NSP is a public utility - it has to operate at a profit by law

Ergo - no problem. They'll just raise the rates.

I have no doubt that the $10 million will be recovered through higher rates, in addition to the $30 to $40 million a year in fixed costs previously borne by NewPage; that's pretty much a given. What concerns me is that our forests are already highly stressed due to the spruce budworm and climate change will only exasperate the problem. I also question the sustainability of our forestry operations given so much of our timber is clear-cut and now that NSP has lost its source of low-cost fuel, the utility will be under even more pressure to cut corners. Beyond that, I question the wisdom of burning our forests to generate electricity when there are alternative sources of renewable energy such as wind and soon the Lower Churchill at our disposal. And if you have to burn wood, better to burn it in a pellet or wood stove where you can capture eighty to ninety per cent of the useful energy as opposed to one-third.

This is an ungodly mess and it upsets me to no end.


And if you have to burn wood, better to burn it in a pellet or wood stove where you can capture eighty to ninety per cent of the useful energy as opposed to one-third.

Or burn it in a community sized (0.5-5MW) CHP operation. With local ownership and operation of such facilities the sort of game playing that you are seeing is much reduced, if not eliminated entirely. And a local owned, and fuelled, operation is much more likely to maintain a balance between sustainable production and sustainable forests.

I think the era of government placing its bets on one or two large partners, like New Page, is coming to an end. Gov either does the projects itself, like the Lower Churchill project in Labrador, or it gets out of the game entirely and let the private sector do its thing - without trying to pick any winners. In which case, you will see a variety of different project types/sizes/owners springing up, which is what is happening here in BC, where there has been quite a good range of independent power projects, in the 2 to 50MW range, being developed - and no government capital at risk.

I feel for you and the rate payers - you are collectively paying the tab for the gov deciding to be/back a player at the casino - instead of being the casino.

I feel for you and the rate payers - you are collectively paying the tab for the gov deciding to be/back a player at the casino - instead of being the casino.

Hold up here.

The Government involvement was NEEDED by the utilities. The utilities needed the governments power to take without payment - otherwise the costs to buy right of ways would crush the utilities. The utilities are using a limited resource - metal to carry the electrical power. So an agreement has been reached - Utilities agreed to be regulated and in turn the Government would only allow a market of one in a region for the best utilization/conservation of limited resources.

If the material to get the electrical power to the endpoints was not "rare" - one could better pitch a less restrictive market. Same with the paths to get power across many different pieces of private land - if there was some way to reduce that cost to $0 - one could claim a need for a free market/actual competition.

For the government to not "be a player at the casino" there has to be a different set of base laws and more phsyical material.


I won;t argue about gov involvement with ROW's etc - that is a necessary part of creating transmission systems. And the utility regulation thing is effectively the gov being the casino - setting the rules - and not a player.

But with the New Page deal they got involved and backed this particular biomass plant - which is trying to pick a winner. And we know how good governments are at that....

It was all Nova Scotia Power's doing, NSP being a private utility. I'm convinced it was done solely to prop-up their single largest customer -- there's no other possible explanation.


Paul - thanks for the correction - i thought NSP was a gov utility. In any case, the government is involved, from a CBC news story: company

A Natural Resources Department spokesman said the province has agreed to supply wood from its Crown land to keep the mill's boiler running if it does cease operations.

Premier Darrell Dexter said the province is working with NewPage to try and ensure the mill stays in business.

Late Tuesday, Dexter confirmed the company has filed for bankruptcy.

So, the government is definitely trying to pick a winner, even when it is clearly a loser!

From the same article;

A critic of Nova Scotia Power's biomass plant under construction in Point Tupper said the utility has been given the right to harvest 175,000 tonnes of biomass on Crown land if the NewPage mill goes out of business....

A Natural Resources Department spokesman said the province has agreed to supply wood from its Crown land to keep the mill's boiler running if it does cease operations.

I am sure that if that wood was made available to other buyers, be they lumber outfits or small biomassCHP plants, there would a competitive marker for it - instead, the (investor owned) Nova Scotia Power gets exclusive rights to the provincial forest resource, and likely for free or at nominal cost. This represents quite a transfer of wealth from the province to the company, let alone quite a clearing of provincial forest.

I remain of the opinion that locally owned, small biomass operations would do a far better job af managing the forest, create more jobs, and the profits would stay within the province.

This is indeed a raw deal for the people of NS.

Hi Paul,

As you point out, the Province has offered to supply wood from Crown land, but this offer was extended only after it became apparent that NewPage would cease operations and that NSP (or, more correctly, provincial ratepayers) would be left holding the bag. To the best of my knowledge, the Province was not involved in any way when this joint venture was initially launched. Of course, none of this negates your main point and I would argue that the Province's actions will only make a bad situation that much worse.

With 15 per cent of its customer load having vaporized with NewPage's closing and another 5 to 7 per cent at risk with a second paper mill that is struggling, NSP hardly needs another 66 MW of new generation, renewable or not. The bigger question is how this will impact our DSM initiatives, given that the intention is to cut NSP's load by one to two per cent per annum.


But with the New Page deal they got involved and backed this particular biomass plant

I'd be shocked if tax law/regulations were not involvoed - but when I mention it I'm guessing.

Does anyone know the actual Government terms?

Gov ... gets out of the game entirely and let the private sector do its thing - without trying to pick any winners. In which case, you will see a variety of different project types/sizes/owners springing up, which is what is happening here in BC, where there has been quite a good range of independent power projects, in the 2 to 50MW range, being developed - and no government capital at risk.

The BC government still has its fingers well stuck in the process. It seems many of these projects are only proceeding because the government/BCHydro contracted to buy the independent power producers' electricity at much higher than the current going rate. Now these independent power producers are making noise following a report from a government panel recommending changes aimed ultimately at reducing rate increases.

Sir Adam Beck would be rolling in his grave if he saw what was happening to the hydro system in Ontario. Adam Beck proposed a hydro system as a publicly owned utility under the slogan of "Power at cost" because he felt that the privately owned utilities that existed at the time were not adequately serving the public. Privatising the generation of power is a complete farce because every supplier wants to be guaranteed a good profit. The hydro system no longer works for the benefit of consumers -- on the contrary it is run to screw over consumers.

Adam Beck proposed a hydro system as a publicly owned utility under the slogan of "Power at cost" because he felt that the privately owned utilities that existed at the time were not adequately serving the public.

And in the US of A the trend is the public utilities offer lower cost than the private ones.

Which makes sense. The private ones "need" to pay shareholders.

The hydro system no longer works for the benefit of consumers -- on the contrary it is run to screw over consumers.

And I'm rather sure compelling text can be made by taking Jefferson's writings on yeoman farmers, Odam's eMergy and observations on Corporations/the power grid and point how PV + other tools allows the creation of wealth via extraction of photons.


There is nothing in that linked story that shows the gov is paying above the going rate. The "going rate", by the way, is what is the cheapest $/kWh for *new* power plants. You can;t compare to the paid off legacy plants, because you can't build any more of them - and the only one left to be built, Site C on the Peace River, is no cheaper than the IPP's. According to BC Hydro's official cost estimates:

Site C would have an estimated capital cost of $7.9 billion, with the cost per megawatt hour ranging from $87 to $95.

Those are the "official government estimates" - what do you think the chances are of that government project coming in on budget?

And this, by the way, does not include the transmission costs.

The IPP's are getting paid $100 to $130/MWh, and they have to build their own transmission, so, really, are they getting paid over the going rate for new, renewable power?

The only rate that is cheaper is the coal fired electricity that BCH buys from Alberta, Washington and Montana in the off peak hours. Now, if BC people are happy to import dirty, non renewable power and export power jobs out of province/country then so be it.

Me, I'd rather have the power produced here, and have a viable industry in independent power producers. Government monopolies inevitably end up being bloated, inefficient, over staffed and overpaid - like BC Ferries.

To add to this, the BC Power Workers Union is actively supporting any groups that are opposing independent hydro, and wind projects, to keep all the power producing jobs within their cushy closed shop. This is limiting opportunities for BC small business to produce renewable electricity.

If government was truly better at doing everything, then it would do everything. But it isn't. I have no problem with BCH being the monopoly transmitter and distributor of electricity, but I see no need for them to be a monopoly producer of it - there is plenty of scope for IPP's. If someone else can do a power project at a competitive rate, then they should have the opportunity to do so, rather than being told the "government can do it better" - when the evidence is that they clearly can't.

Full disclosure - I am developing micro hydro and biomass projects (5-50kW) in BC. There are many opportunities for small business - all in rural areas of BC to do so, these are then locally owned and operated projects, with all the benefits staying within the local community. Your approach ensures the continued dependence of rural communities on BC Hydro, and all the benefits get concentrated in Victoria/Vancouver - and we have more than enough of that sort of thing already.

Re the article “Gentlemen, Start Conserving”

….an ambitious set of green initiatives that includes collecting used fuel, ………..

I’m really curious about how they intend to collect used fuel. Doesn’t used fuel imply lots of high octane gasoline that got turned into CO2 and drifted away in the wind? Just how are they going to collect that CO2 floating above the grandstand?

Maybe they meant collecting unused fuel. But unless the fuel became contaminated, can’t they just take it to the next track and use it there?

"Maybe they meant collecting unused fuel."

Begs the question: Where does it go now?

It is probably put back into the tanks from which it is dispensed in strictly measured quantities and doled out to the race teams-they are pretty paranoid about cheating by doping the fuel and catch somebody at it occasionally.

The fuel is then probably used up in practice or tests or run thru on site vehicles capable of using it, but this is only a guess.

I suspect that the whole process is mostly green washing, unless they have found a way to actually generate a cash savings or cash flow with a given process.

Nascar is above and beyond all a for profit business-a couple of people I grew up with are intimately involved in it, and they make no bones about it in private.Of course the typical fan never gives this matter a thought, so long as he can afford to go to the races.

But then, so are football, baseball, basketball, etc, all money businesses at the pro level.

One thing you must admit about Nascar is that they seldom if ever go to the public trough asking for new facilities or other handouts, as opposed to the "real" sports.

I believe that NASCAR switched to using only alcohol in their vehicles? Not sure if it is methanol or ethyanol?

Nah, you are thinking about Formula 1 Racing. They switched to alcohol several years ago and are now considering going all ethanol. Nascar still uses gasoline, Sunoco Gasoline to be exact. The announcers never just say "gasoline" they always use the two word phrase, "Sunoco Gasoline". I guess Sunoco donates the gasoline in exchange for the advertising. "During his last pit stop Tony Stuart took four tires and a full tank of Sunoco Gasoline."

Ron P.

Sunoco is about to sell their refineries. I guess that means NASCAR will start turning left using ethanol if the new owner(s) decide to get out of the racing fuel business...

E. Swanson

It might also mean the advertising was designed to get them a (cough) "premium" price for their refinery ;)

According to Wikipedia (which isn't always right but in this case it is) (F1) "Engines run on unleaded fuel closely resembling publicly available petrol"

You're probably thinking pf Indycars - again from Wiki "For the 2006 season, the fuel was a 90%/10% mixture of methanol and ethanol. Starting in 2007, the league advertised "100% Fuel Grade Ethanol", the first competitive series to utilize renewable fuel. The mixture is actually 98% ethanol and 2% gasoline for races held in the United States. It was provided by Lifeline Foods of Saint Joseph, Missouri."

Regards Chris

Yes. F1 cars run on ordinary petrol. Two recent moves make the sport "greener":

1. Reducing engine size from 3L V10 to 2.4L V8; and

2. Allowing KERS (Kinetic Energy Recovery Systems, i.e. battery packs recharged under braking which give the driver an extra 70 HP or so boost for overtaking.)

My mistake, I thought F1 cars were Indi cars. I know that Indi switched to alcohol quite a few years ago, primarily for safety reasons. Open wheel racers do not have nearly the gas tank protection that Nascar racers have.

Ron P.

Yeah, it's been like that for many years IIRC.... I have memories from watching the action over a long period - a few things come to mind....

1. In the seventies, the F1 action involved not-infrequent accidents where the fuel tank of the car was breached, resulting in a massive fireball - and with petrol (that's gas for US readers) the explosion of yellow flames was very apparent - even in bright sunshine - for instnce http://www.youtube.com/watch?v=rnMPWtgmqVw

2. I remember seeing on UK "World of Sport" - 25 or so years ago - a clip from some Indycar coverage in the States - it was a refuelling accident. A member of the pit crew was "dancing" around in the pit lane - screaming for someone to get out the fire extinguisher - he'd been doused with fuel and accidentally set alight, but in the bright direct sunshine, the alcohol flame was effectively invisible.

3. These days the F1 cars have the petrol tank in the same safety cage as the driver, and whilst everything around them disintegrates, the cage remains intact. Also there are clever cut-offs to stop the flow of fuel when the car is involved in some catastrophic accident - for instance http://www.youtube.com/watch?v=AtrzvwayniM&feature=related

It's kinda ghoulish to say it - but F1 was a better spectacle when it involved drivers getting burned to death.

Regards Chris

I totally disagree. I've been watching F1 races since 1965 and always hated crashes. The races today are terrific to watch and it is also wonderful when someone like Kubica can virtually walk away from a crash like you linked above. The thrill of F1 is the incredible skill of the drivers and the fantastic technology, such as the KERS. To me there is also a "soap opera" effect in that I feel like I know all of the drivers and enjoy the interactions between them both on and off the track.

I don't watch any other racing, but did track events in my own car for 20 years. Crashes are bad news.

From the linked article (which I usually try to read before commenting)

That was part of the thinking behind Nascar’s decision to make Sunoco Green E 15 ethanol blend its official fuel this season. The choice was contentious. Fans and drivers protective of the sports’ traditions look warily on efforts to tinker with something as elemental as fuel. Many environmentalists object to corn-based ethanol because it may drive up food prices and may not reduce emissions by as much as its proponents claim.

The ethanol blend Nascar uses does boost horsepower slightly, alleviating fears that it would hurt speeds on the track. And many at Nascar note that ethanol is produced with corn grown in the United States, which and helps reduce reliance on imported oil.

“We have all the resources here and we have to take care of the environment,” said Clint Bowyer, a driver with Richard Childress Racing. “Ethanol is a big step in that direction.”

As part of a broader sponsorship, Nascar put the logo of American Ethanol, the promotional group for Growth Energy and the National Corn Growers Association, on the green flags used to start races.

Note: Sunoco also blends an E85 race fuel.

It's mostly other fluids; oils, lubricants, even greasy rags, that NASCAR has hired a recycler to handle. They're also recycling trash, metals (an s-load of Coke and Coors cans, I'm sure) and anything else they can.

...other projects like the installation last year of 40,000 solar panels over 25 acres at Pocono Raceway in Long Pond, Pa. The track operator, which spent about $15 million to build the three-megawatt solar farm, now saves about $500,000 a year in energy costs and has produced electricity equal to 324,000 gallons of gasoline.

One would think that every grandstand in NASCAR would be shaded by a PV awning.

From my limited reading, ethanol allows an engine to be run at a much higher compression ratio... significantly better fuel economy and horsepower vs. gasoline. But I'm sure they'd market it as green to make the rubes feel better about the sport.

Dude, when NASCAR recycles COKE cans we are near the end of times.

Boy that Porter Stansberry really got you guys going this morning.

On another topic: I've noticed that WTI seems to have established a $90 ceiling. It doesn't matter what the value of the dollar is to the Euro. I suppose that because you guys didn't finish the TOD pipeline between Cushing and Galveston, the WTI is a totally internal game. I mean, mostly not concerned about Europe or anywhere else, just US investor sentiment and so on.

I thought this story was more important

Oil defies forecasts of declining demand

A paradox has emerged as oil prices remain high amid declining demand forecasts.

Opec and the International Energy Agency cut their forecasts for crude demand again this week, erasing as much as 400,000 barrels per day (bpd) from previous estimates.

Yet Brent crude, the European benchmark, seems immune to the predictions, trading comfortably above US$112 yesterday.

Seems like in spite of all gloom and doom coming out of Europe and USA, oil is now stuck at a new plateau. Doesn't bode well for the world at large. As Dohboi had mentioned in a previous comment, may be the descent down Seneca's cliff has already begun.

I was wondering, on that "gloom and doom" sentiment thing. Are we now starting to have young adults who grew up in families that had financial stress for as far back as they could remember? I know that there was a generation of people who grew up in the great depression that mentally never got over it. They were something like our modern day 'preppers'. If we are developing a new generation of scared young adults, then shop-baby-shop will never bring back the consumer economy like some are hoping for.

Young people are not full of doom and gloom but rather to be abstracted from the whole issue of economic growth---they are no longer believing in the mantra that it is a good thing, on the other hand the modern economy keeps them alive...so the motto is live for today, don't think too much or expect too much or commit too much. That is what I see. It's a kind of distancing from the position of utter engagement that most baby boomers had with the concept of "economic growth".

I know that feeling. My dad grew up in the 50's and 60's, a time of great misery and scarcity in my country, same with my grandfather he saw the second world war. No matter how much I tried I have never been able to convince the both of them to buy anything new and fancy or get rid of something that is no longer fashionable.

Both of them use a thing until it is beyond repair and even then they try to salvage the parts, as a result we have a bunch of collectibles ranging from the 80's to the 90's in our house that I can't get rid of. It includes a 30 year old radio (still plays), an 22 year old TV (B & W) and a 20 year old bicycle(still looks new). Imagine what would happen to the world economy if people started to cling to stuff like this. I too have imbibed some of those traits...I use a seven year old cellphone.

Hopefully you learned well from them - it will give you an advantage in what is coming.

"I know that there was a generation of people who grew up in the great depression that mentally never got over it."

Good point though, as my parents were depression era kids/young adults, I'm not sure "getting over it" would be their goal. Learning hard, lasting lessons would be more their style. They never saw anything worthwhile in being anything more than frugal, always considering their level of consumption and detesting conspicuous consumers. Long gone now, their projections about the future could be considered prophetic by some, but were just common sense to them. It certainly had a lasting effect on me.

What we need now is a protracted event, a downturn so severe, that it will become a pervasive, lasting part of our culture and our stories, a coming of age for humanity. Sounds a bit harsh, I know....

United States Consumer Confidence has never been so low for so long going back to '67.

However, consumer confidence reached an all time high during the '90s. Someone born in '90, for example, would have grown up during the '94 - '07 period, and have only experienced the recession since the last years of high school.

I think that there is a lot of shock right now, in that the usual economic nostrums are not working to rapidly restore confidence, but it is too early to say that there is a permanent attitude change. The search for an economic saviour will be the theme for the '12 election. The most likely scenario seems to be that we get throw out Coolidge, elect a Hoover, and then look for an FDR in '16.

Politics these days got me thinking that we are now living amongst the first generation who have watched television their whole lives. And there are other firsts as well. Most people growing up with divorced parents... Most people with 2 parents working out of the home... Most people consuming massive quantities of fake and junky food...

Back to our television generation: People seem stupid , have short attention spans, buy endless unnecessary crap, think the USofA stands for freedom and democracy, etc etc. I think the environment we've grown up in is a huge influence on today's reality.

One example: Kids today are bored all the time, bored at the pace of life. It's so much slower than TV and movies and video games. They sit there and want to be entertained. Things were not that way pre-TV. Sure kids got bored but not like that.

I think it spills over into the intellectual process as well. Reason and logic used to hold (some) sway. But all our entertainment, is about emotional thinking, and nearly instantaneous rewards. So people are easily led down the garden path by those skilled at exploiting emotional arguments.

People can change, but it's hard. Sometimes it's forced on them.

I remember growing up, all I used to so was sit in front of the tube, watching sports. It horrors me now, the sheer amount of time wasted. Used to watch alot of movies as well, now it's maybe one or two a year.

I credit the internet for expanding my horizons. Some here might balk at that - but TOD is part of the internet, isn't it? Of course the internet presents its own set of pitfalls, and it's still a sedentary, plugged-in activity.

Do not underestimate the knowledge and abilities that the under 45, post boomer crowd have. We are cynical precisely because we understand what's going on and how screwed we are. As far as people thinking that the U.S. stands for freedom and democracy, who but the most idiot right winger believes that anymore?

eastie - Not trying to sound flip but I don't know anyone who pays for WTI with Euros. But if they did they would have to convert to $ first. As far as WTI being an internal game so is all our domestic production. Until someone overseas is willing to pay more (including transport costs) than local refiners for our production it doesn't matter what the Euro is doing or the price of Brent. Now if the day comes when the differential is high enough and US oil (more likely Canadian oil) is shifted from the US refiners to overseas buyers it will likely open up a very messy political scene. Except for oil/NG produced from govt lands anyone can export domestic oil/NG out of our country. Export US oil: print that headline on the NY Times and watch all hell breakloose. LOL.

Leanan's link, above, Peak oil and collapse scenarios. Part 3 which refers to Oil Crunch, a term I've used when folks state flat out that we'll never run out of oil, ends nicely:

So now to the ranks of the Peak Oilers and Anti-Peak Oilers, we have to add the Oil Crunchers, whose numbers obviously include collapse scenario veterans like Orlov and Greer. Are they right? I’d like to argue the point, but I’m a bit pressed for time laying in tubs of potatoes and sacks of dried beans.

... and has links to parts 1 and 2. It also links to the ABC docu-mini
Oil Crunch (about 12 minutes) from April, a short and fairly concise explanation of where we are and where we're likely headed. Stops short of discussing the many implications of an Oil Crunch. All of these links should be useful for initiating the uninitiated. That said, I’m a bit pressed for time laying in tubs of potatoes and sacks of dried beans....

Flooding in Pakistan/India... from Jeff Master's blog at www.Wunderground.com

The heavy rains began in the 2nd week of August, and have continued into the 2nd week of September, accumulating to 2 1/2 times more than average. According to Dr. Qamar-uz-Zaman Chaudhry, Pakistan's Federal Advisor on Climate Affairs, this is the highest 4-week monsoon rainfall total ever recorded in Sindh province, amounting to more than 37 million acre feet of water, "which is unimaginable." The "unimaginable" rains occurred after a 12-month period where the province received no rain and was under severe drought conditions. At least 226 people have been killed in the new flooding, 1.2 million houses have been damaged or destroyed, and 280,000 people made homeless. There were already 1 million people needing food aid and 800,000 families without permanent shelter due to last year's floods, making this year's renewed flooding particularly disruptive.

I'm thinking, at what point will there not be enough aid (dollars, materials, etc.) to recover much less grow after disasters (natural or otherwise) that affect huge numbers of people? Can you imagine what the reaction/response would be if in the USA an event occurred that left 1.2 million homes damaged/destroyed? Just this month in Bastrop County, Texas, just east of me, fire destroy approx. 1500 homes and it will have ripple effects - think property tax receipts next year after all those property owners demand their valuations be adjusted down.

Oh yeah, we did have such an event, albeit smaller - Katrina. Maybe Alan D. can expound on how the recover is going 6 years on... and when might N.O. expect growth, as in above pre-Katrina levels.

Last August I looked at the Russian wheat embargo due to fires, the Pakistani floods, and I said "North Africa is gonna let go." Right on schedule, five months later, it all started to happen.

This year the U.S. had a massive winter storm stretching from Maine to New Mexico, with bitter cold and high winds sweeping our wheat lands from Kansas to New Mexico without benefit of snow cover. Pakistan got hit again, this time only about half as many people displaced and it seems that they grow more rice in Sindh than wheat, but the loss of cereal crops is troubling.

There isn't a happy ending to story. The only question is where the trouble will get loose first. I truly wonder about North Africa - if they revolt and things don't get better, do they revolt again? Things are truly grim in the Horn of Africa due to drought. We might see much of the arc from Morocco to Somalia fall into disorder.

Looks like Center for American Progress is reading my mind today:

Twenty Years of Collapse and Counting: The Cost of Failure in Somalia

Executive summary - 10 million Somalians, about 10% killed in the last twenty years, $55 billion in direct and indirect cost from this failed state, and no end in sight for the misery in South Somalia.

The northern areas of Puntland and Somaliland are more stable and here is a bit about the oil and gas in that region, as well as the current drought and famine.

I’ve been saying that for quite some time Edgy – the natural disaster roulette is going to be the thing that breaks us ultimately and why I think Peak Oil and AGW are going to be a true double wallop…

Think of the fuel we burn up basically completing the trashing of other resource intensive items - we complete what mother nature couldn’t quite finish – i.e. the Joplin, MO tornado makes thousands of cars unusable – we have to scrap them – which requires a lot of energy; or we have to dismantle and cart away tons of debris from houses destroyed by Hurricane Irene… now repeat this hundreds to thousands of times around the world each year – at some point you simply run out of additional resources (be that capital or energy) to deal with it.

With climate change you have compounded the unpredictability of a large scale system that could already be nastily unpredictable – and there’s good evidence that the formerly “outlier” events may become the norm. So you get the worst of both worlds – unpredictable in that there may be a multi-year lull in activity for any given location (just enough to allow us human short term thinkers to fall into complacency) and extreme since when a given pattern changes it may change in a most unpleasant manner.

Thanks for the Jeff Masters link – I think he has some of the best analysis of these issues – not purely the science side of things but political and economic components too.

Here’s another one from him from back in June– if you look through the list just see how many of the events make you stop and say “wow, I forgot about that…” or “I can’t believe all of this occurred in just the past year”.


Money quote from Dr. Masters:

But it is highly improbable that the remarkable extreme weather events of 2010 and 2011 could have all happened in such a short period of time without some powerful climate-altering force at work. The best science we have right now maintains that human-caused emissions of heat-trapping gases like CO2 are the most likely cause of such a climate-altering force.

It is the norm, Cat. We have developed an immunity to the new frequency of the extremest of events. Not even awe anymore, its become expected.

Completely agree Doug - I think it's a perfect storm of complacency - a certain percentage of people have the attitude of "if something doesn't directly impact me then it's not an issue..."; another portion is unable/unwilling to honestly make the analyses necessary and instead rely on their memories "oh yeah - we used to have summers this hot all the time back in 19-- and back then they said it was a new ice age..." etc etc. and then there's another group who are so far removed from being in touch in any way with the natural world that, barring a paralyzing blizzard or Cat 5 hurricane, they pay no attention whatsoever to what at first are subtle changes and with time grow to be alarming changes.

And then there's a another small portion out there who are trying to get these issues taken seriously but are constantly being attacked as "crying wolf"... so some of us just sit back, sick of being labeled "alarmists", and watch the whole thing unravel...

CLIMATE SHOCK: UC-Berkeley Scientist, Dr. John Harte, Puts the World on Notice

"JH: No. It means we’re going to experience far more global warming than our current models predict."

"It means we’re going to experience far more global warming than our current models predict."

Yep. I'll go with that. I've been saying this for a while, actually.
   I'm WAG'ing a non-linear increase far more severe than any models. Feedback loops like tundra methane release triggering/continuing, making the increase look exponential for a short period. ~ 2016ish for weather so severe and irregular that it seriously messes with our food supplies and living quarters/comfort...

   There have been plenty of articles with the "this is happening much faster than we expected" theme. We'll probably continue to see more of them.

From your link:

"By some estimates the additional warming could raise mid-century temperatures by as much as 11 degrees Fahrenheit."

That would be 0.275 degrees F per year! (if linear) - More than 1 whole degree in 4 years!

Ron L:

Top of drudge:

Geithner: Economy In 'An Early Stage' Of Crisis...
'Political Dysfunction' at Root of World's Troubles...

I wonder if the yeast said the same thing right before they doubled their population that last time in the finite world of the petri dish?

It is the banking system. The stock markets. The paradigm of growth that are beginning to wail and scream. Oh boy what do they swallow next?

yeah----but at the same time that Giethner is saying that the economic problems are due to political dysfunction (more like it is the other way around!) there was a conference called Delivering Alpha yesterday and CNBC had a bunch of investing tips that the big-shot hedge fun managers made there. So one piece of advice is buying options against Japanese bonds since Japan will follow Greece after G. defaults (probably that is true). Another one was buying options against US gov. debt. So the Wall Street people are not really interested in Geithner's stupid theories....they are just watching for the next profitable opportunity: getting rich off the sovereign debt crises around the world. It's very thermodynamic at least..the system consumes itself in every way, leaving nothing behind.

Well Geithner works for Wall Street, remember that. He doesn't work for the government in any meaningful way.

The way these guys operate is to take advantage of what is indeed an ongoing, natural crisis, the "long emergency," if you will, by pronouncing the end of the world at every drop in the stock market unless they are given billions, nay, trillions of dollars, coming out of your pocket and those of future generations.

Fight back. Don't be a consumer. Take your money out of the big banks. Get out of debt. Buy gold and silver, or anything genuinely useful, and keep it outside of the banking system.

They can't win, and they're going down eventually. Be strong, row that lifeboat, and don't get caught in the whirlpool.

I have only been able to garden and add solar panels and I ride my bike lol I am a lemming more or less but I fight the man everyday ;-)

Thats still 90% more than most people are doing.

I wonder if the yeast said the same thing right before they doubled their population that last time in the finite world of the petri dish?

That's the difference between them and us. They don't know the end is near, we do, but instead of actually doing something sensible about it, we offer up equal amounts of both sides of the debate which cancels out any possible action, and join the yeasts' fate anyway. It will require one more humanoid evolutionary step to take minimal action.

New Canadian Hydropower to Pump Electricity to U.S.

In the far northern reaches of Atlantic Canada, energy companies seek to harness untapped river sites with a hydroelectric project that could replace fossil fuel plants and export power into New England.

Utility company Nalcor Energy​ aims to build two hydroelectric sites along the Lower Churchill River in Labrador, downstream from an existing 5,428-megawatt station -- one of the largest in the world.

The proposed Muskrat Falls and Gull Island projects would have a combined capacity of more than 3,000 MW, produce 16.7 terawatt-hours of electricity per year and offset millions of tonnes of greenhouse gas emissions, says the company.

"It translates into displacing 16 megatonnes of carbon dioxide annually from thermal, coal and fossil fuel generation," said Nalcor spokeswoman Karen O'Neill. "That's equivalent to offsetting the greenhouse gas emissions from 3.2 million automobiles annually."

""It translates into displacing 16 megatonnes of carbon dioxide annually from thermal, coal and fossil fuel generation," said Nalcor spokeswoman Karen O'Neill. "

How many displaced trees does it translate into? Just askin' .....

Not much, these project have a very small reservoirs.

Summary of Weekly Petroleum Data for the Week Ending September 9, 2011

U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ending September 9, 426 thousand barrels per day below the previous week’s average. Refineries operated at 87.0 percent of their operable capacity last week. Gasoline production increased last week, averaging about 9.4 million barrels per day. Distillate fuel production decreased last week, averaging nearly 4.5 million barrels per day.

U.S. crude oil imports averaged 8.5 million barrels per day last week, down by 23 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged close to 8.9 million barrels per day, 494 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 659 thousand barrels per day. Distillate fuel imports averaged 154 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 6.7 million barrels from the previous week. At 346.4 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 1.9 million barrels last week and are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories remained unchanged last week. Distillate fuel inventories increased by 1.7 million barrels last week and are in the upper limit of the average range for this time of year. Propane/propylene inventories increased by 1.2 million barrels last week and are below the lower limit of the average range. Total commercial petroleum inventories decreased by 4.6 million barrels last week.

Total products supplied over the last four-week period have averaged 19.2 million barrels per day, down by 0.9 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged 9.0 million barrels per day, down by 2.7 percent from the same period last year. Distillate fuel product supplied has averaged about 3.9 million barrels per day over the last four weeks, up by 0.8 percent from the same period last year. Jet fuel product supplied is 2.5 percent higher over the last four weeks compared to the same four-week period last year.

Refiners step on the gas, but oil supplies tumble

US refiners adjusted their refinery output about as much as they could last week to produce more gasoline, and less diesel and other refined oil products (called ‘other oils’ by the EIA). Shortly before Labor Day, gasoline supplies in the New York City area and the northeast in general, had run down. Although it is not unusual for gasoline inventories to be seasonally low at the end of the summer driving season, various problems such as an earthquake and tropical storm had made the shipment of gasoline more difficult. Refiners in the eastern US sharply increased utilization, to 75.3% from 58.3%, but the Gulf region was impaired by tropical storms, and utilization there fell from 94.2% to 87.9%.

Crude oil imports were about the same as last week. Eastern ports imported more as they recovered from an earlier storm. However Mexico reported that its oil exports in the first part of September were down about 300,000 bpd. Not surprisingly then, the gulf coast region reported a drop of about 300,000 bpd in imports.

Still if the many recent acts of nature are ignored, the trend in US oil imports and total US oil inventories is clearly down. The distribution of from the Strategic Petroleum Reserve was completed before the US Labor Day weekend. Prospects of increased imports from exporters such as Libya still look to be some weeks away. Now that the oil of summer is gone, the coming weeks will give us a clearer idea of just how the world has adjusted to the loss of 1.35 mbpd of exported, high quality, Libyan oil. With net import/exports (total imports and exports oil and oil products added together) running about 1.5 mbpd less than the comparable 4 weeks period a year ago, we (in the US) may not like what comes our way this fall.

So CM you're saying the US will be facing shortages this Fall that will greatly increase the cost at the pump? Seems like we may be headed for harder economic times this Fall and Winter anyway, so add in the spice of even higher fuel costs and we should all have some very Merry Holidays!

Despite Greer's Elegy for the Age of Space a couple of weeks ago, 'progress' marches on. NASA Announces Design for New Deep Space Exploration System this morning:

NASA is ready to move forward with the development of the Space Launch System -- an advanced heavy-lift launch vehicle that will provide an entirely new national capability for human exploration beyond Earth's orbit. The Space Launch System will give the nation a safe, affordable and sustainable means of reaching beyond our current limits and opening up new discoveries from the unique vantage point of space. The Space Launch System, or SLS, will be designed to carry the Orion Multi-Purpose Crew Vehicle, as well as important cargo, equipment and science experiments to Earth's orbit and destinations beyond. Additionally, the SLS will serve as a back up for commercial and international partner transportation services to the International Space Station.

"This launch system will create good-paying American jobs, ensure continued U.S. leadership in space, and inspire millions around the world," NASA Administrator Charles Bolden said. "President Obama challenged us to be bold and dream big, and that's exactly what we are doing at NASA. While I was proud to fly on the space shuttle, kids today can now dream of one day walking on Mars."

Your tax dollars at work:

I suppose this is how we'll get all of those orbital solar collectors up there. "Beam me up Scotty, ........."

I actually like this kind of spending when it is used for research like space telescopes making it possible to figure our more about the universe. It is our eras best pyramid building leaving a legacy of knowledge instead of dusty ruin.

Indeed. When I'm dead & gone, the space probes that my generation sent to Mars will still be there. Others are now leaving the solar system. Rising from single cell creatures to creating our own robots that explore areas off of our planet is amazing. A reasonably sized NASA is money well spent.

Let's all sing the pledge of allegiance and bow our heads. Unfortunately history shows the space program is 90% geared toward military uses. Notice the first benefit listed is "good jobs". What a joke -- just a PR statement to con the rubes.

It sure seems we lost a bunch of 'good jobs' with the ending of the Shuttle Program.

There is a lot of other military waste that I'd dump long before the space program.

Not the smart money in smart bombs. We all need personal protective smart bombs in every house in the US.

Or, "We'll have peace when there's an atom bomb in every garage," as one beloved WWII vet used to say, when speaking of his belief that nuclear war (accidental or otherwise) is just around the corner.

- and he didn't even know about peak.

Notice the first benefit listed is "good jobs". What a joke -- just a PR statement to con the rubes.

Meh, every government spending mention has to have that as a tagline now.

Latest news...Government official stops off at McDonalds. Helps create jobs! Economy saved!

My bet is that SpaceX will get to Mars long before NASA.

I can't imagine how you believe this. Where's the investment money going to originate from? Space Tourism?

Frankly at this point, I barely expect either one to do it. (and by 'Get to Mars', I'm assuming we mean putting human feet down on the planet, right? ..since NASA is already there with a few pretty stellar 'bots)

NASA has already gotten to Mars. Did it last century.

So far it has not been feasible to send a man to Mars, because of weight issues. The weight of the tanks to hold the air for breathing, fuel, food, etc. I suppose when there was still the Shuttle in operation, a large enough ship could have been put together in space piecemeal, but it never happened before the Shuttles were nixed. There's also the problem of boredom while waiting about a year or so to get there. It's not like you have an outlet if you get cabin fever.

Better to just send more sophisticated bots. Have one dig deep enough to see if it can find microbrial life. Now that would be an eye opener.

My understanding is that there's a not-insignificant issue with radiation shielding for the astronauts, since travel to Mars means going outside of the magnetic shielding provided by Earth.


This is exactly what humans should be all about. Exploring science and out-a space.

Admittedly I am not, nor have ever been, a US tax payer but in my mind Obama and Congress should have told Wall Street where to shove it and instead given NASA one trillion dollars.

Obama (to flunky): "Get the head of Nasa on the phone"...

brrring, brrring. Brring, brrring

Nasa dude: "Hi there Mr Pres, what can I do you for?"

Obama: "Here's a trillion bucks. Now piss off to Mars and don't call me back till you've got there"

Nasa dude: "Rightie ho! Off we go!"

Is It Weird Enough Yet?

There is only one effective, sustainable way to produce “green jobs,” and that is with a fixed, durable, long-term price signal that raises the price of dirty fuels and thereby creates sustained consumer demand for, and sustained private sector investment in, renewables. Without a carbon tax or gasoline tax or cap-and-trade system that makes renewable energies competitive with dirty fuels, while they achieve scale and move down the cost curve, green jobs will remain a hobby.

Would you rather cut Social Security and Medicare or pay a little more per gallon of gas and make the country stronger, safer and healthier? It still amazes me that our politicians have the courage to send our citizens to war but not to ask the public that question.

john - Even weirder: raise the price of conventional energy to make the alts more viable and you cool off the economy, Then demand/prices for alt energy go down and the alts become less or uneconomic. Seems like the only way to get around this feed back loop is to guarantee a fixed return for alt investments. A better idea IMHO then giving govt loans to the alt players. Just saw what happened when the US picked the wrong solar builder and perhaps lost a half billion of tax payer money.

I wonder about that Rock.

Monthly variation of retail gas is now close to a quarter. Seems the price is around $3.50, unless you're out rural, where we're used to 4. Put a 15 cent alt tax and I doubt it would really be noticed, save all the complaining. I think everyone knows deep down the days of $2 fuel are over, even tho it was a scant couple yrs ago.

But as to determining which alt bets to place, there's the hangup.

doug - I think I get your point. But what I was trying to say is that give the alts a zero tax rate and let them compete in the market place with other energy sources at their prevailing prices. If the alts can't compete profitably on that level it should tell us something about their future. If it takes a zero tax rate AND huge govt subsidies to make the alts economic then so be it. But that still means the public will pay the same price for the alts (when you add the additional taxes) as other energy sources. That neither helps the economy or frees us from energy imports to any great degree IMHO.

If the alts can't compete profitably on that level...

The problem is that most new tech requires a long learning period to achieve its potential. If you want to build say a concentrating solar thermal plant, and have to design all sorts of subassemblies, your cost goes way up. Nobody would want to build plant #1, because it would be seriously uneconomic. So you gotta find some sort of trick to get the industry up to the scale, where economies of scale (in time as well as investment) overcome the cost of novelty.

Just my 2 cents, but how about we add in all of the externalized costs to the utilities. Like the billions spent to insure nuke plants, to process and store for an eternity the nuclear wastes. Also add in the costs from the coal power plants for the disposal costs of all of the hazardous and toxic waste that they produce. While were at it, take away the billions in tax breaks that the oil/gas/natural gas industries get. Once all of the energy providers are on an equal and level playing ground the costs/value of the wind/solar/hydro will be very apparent. Again just my 2 cents.

Take away the billions in tax breaks and FITs the renewables get as well, when you're at it. I'm all for it.

So you are happy for externalities to be added, to get the cost of something closer to its true value. Presumably this would have to be some kind of tax on top of the good? Maybe it could be called the externality added tax, or something similar.

Do you realise that there are positive as well as negative externalities? The free market can not provide for them in a way that maximises utility, so how would you suggest these goods reflect their true value without subsidies?

In the case of positive externalities that outweigh the negative, subsidies may be ok. However, electrons are interchangeable, so if electricity has positive externalities, the gross subsidy should be the same for all sources. I don't think wind power or PV, for instance, has other positive externalities of signifikance.

Lost half a billion dollars of taxpayer money and already I've seen 10x as much whining in the MSM about this lost money than about the the trillions we dumped into the banks (and oh by the way the billions or trillions we are probably going to dump in a shadow bailout of the Eurozone)... Some hard hitting investigative journalism forthcoming about the boondoggle of green jobs etc. - while they all but ignore the trillions pissed away on the financial "industry" and our overseas adventures. If that now bankrupt solar company was able to produce even one solar panel they were more "productive" than the collective financial industry... their only mistake being that they didn't have the right connections to get billions in taxpayer money but had to settle for the chump change they're now being crucified over...

Not defending the investment in any way... maybe it was a bad deal but the heart was in the right place or maybe it was completely misguided. Regardless though, until the subsidies for other energy sources / companies get equal treatment this being presented as merely a "boondoggle" is clearly agenda driven by the (business as) usual suspects...

The biggest energy investment -- single payout loan was $8 billion for a Nuke in Georgia anyway. The energy infrastructure would need trillions of dollars. No way that can happen except in China that dropped a 25% of GDP investment. I do not think China was smart because they did not let competition improve the technology and they are betting on producing last decade's technology. That is the other extreme. Too much subsidy makes losers into false "winners."

But as long as energy is subsidized (including the Dept of War that guards the oil interests abroad) then you need to consider how best to subsidize energy. Surely loading all the subsidies into one pot is not good policy. Some regions of the country have more oil and NG than others. Some have more solar and wind and coal. So at least the investments need to allow the respective regions to get some pie.

I do not think China was smart because they did not let competition improve the technology and they are betting on producing last decade's technology.

I'm not so sure they weren't smart. China's specialty is not improving technology per se, it is finding ways to produce things cheaper. Look at what is happening with solar panels - they are making them so cheap now ($1/W), that they have pretty much got the entire market. Even if a competing (US or German made) panel is "better" - more efficient, longer lasting, etc, how many people will pay double the price for that?

You have a good point about potential "false winners", but in the renewable energy business, I'd suggest the real winners are the technologies that get widely adopted. A fuel cell may be "better" than an ICE, on every ground except cost, and that, alone, is why they aren;t making it to market.

I think China's policy of let other countries do the R&D and improvement, and then mass produce the stuff when it is market tested, is proving a winning strategy - for them.

Paul with 25% of Chinese GDP thrown onto the renewable bizz there will be tons of wasted capital. They are not exactly competing with that bollus of funding. If you are running a Marathon then you are giving the Chinese runner a 25-mile advantage. Competition seems dead when suddenly a Nation State backs you will tens of billions of bucks. So sure China wins with the funds. But are the best manufacturing methods in play? Probably higher in labor and higher in pollution and lower in quality. Did the global economy respond to a need and produce the product in the most effective way? Not sure. What I am sure of is that any US company trying to enter the ring will feel that they will be demolished by the next round of even bigger Chinese stimulus at 35% of GDP. That is a crushing blow to taking risk in the renewable bizz. for a young American engineer. So I guess it works and State-run Communism ends up being the right way to do business after all, albeit the final product will pick less efficient methods and results. Once the America companies fold -- then the overall product quality will go down in the vacuum, like most other finished Chinese goods I have had experience with.

Not a winning plan in my book to produce the most optimal products. There should be tariffs to prevent anti-competitive practices. But it is what we have -- cheap Chinese panels. May the most sheltered market win.

In many high-tech products, there is far more science and engineering that goes into the processes for making and assembling all the bits and pieces into the product than there is in the product itself.

Unfortunately, we seem to focus on product design in the US, and not so much on production design.

Unfortunately, we seem to focus on product design in the US, and not so much on production design.

You have hit the nail on the head there. That is precisely the business model of Apple, and almost any other American company that produces consumer products (as opposed to industrial products) Keep the high value design and marketing jobs here, but outsource all the hassle of production to China, or somewhere.

This has worked well, until now. now, because the outsourcing of so many jobs, there are fewer consumer spending $ to go around, so the markets are shrinking. the reaction of most companies is, of course, to cut/mechanise/computerise/outsource/offshore even more jobs, which results in a race to the bottom. The only "companies" not doing this to any great extent are governments, but with their declining tax revenues, they can't keep their payrolls going forever - something has to give.

Much of the world's electronic manufacturing is done by companies that never get their name on the box that the product is sold in. US sold electronics is likely made by Hon Hai Precision Industries (Foxconn), Flextronics, Celestica, Sanmina-SCI, Jabil or one of a number of small Electronic Manufacturing Services companies.

In some cases, they only manufacture subassemblies, and these go into products assembled by Original Equipment Manufacturers. Notebook commputer OEMs include Quanta, Compal, Wistron, Pegatron, Flextronics and Hon Hai.

As time goes by and products mature, more and more of the design work is done by the EMS and OEM companies. The US companies are left to specialize in the four-color brochure and the graphics for the packaging.

Oct -not disagreeing with what you say, that's just the way it is. china's goal is not necessarily to get the most optimal manufacturing, it is just to get the most manufacturing, period.

So they throw massive amounts of gov money at it - that is their right to do so. Consider this - if you were to reword your post and replace "China" with US and "manufacturing" with "military" - you have pretty much the same story. The US gov has massively subsidised defence industries, to a huge portion of GDP, such that few other countries can compete, in terms of building thier own fighter jets, missile systems etc.
Not fair to other countries either, but that's just the way it is - the US gov has every right to do that.

And that is arguably just as much "state run communism" as China's spending on renewables, but even if their manufacturing is less than optimal, is this still a better result for the planet than if they put their preference to military spending like the US does? Sure they could do it better, but at least they are doing it.

Meanwhile we get to watch as companies like Solyndra go bankrupt, and the gov loses $$$, but the primary financier of it is likely to walk away enriched. In China that guy would likely be beheaded.

The focus of China is to produce stuff, optimally or otherwise - the focus of the clean tech developers here is to get rich, regardless of whether anything is actually produced.

Vinod Khosla at the recent TechCrunch Disrupt conference;

Over the last 12 months, Khosla has generated more than $1 billion in profits from three IPOs and will “probably” see six more IPOs over the next 12 to 18 months, if the markets hold up, he said. “That $1 billion in profits over the last year is way more than most venture funds have done in IT in the last ten years cumulatively,” Khosla said. “I challenge anybody to claim clean-tech done right is a disaster.”

Note that he focuses on profits and conveniently ignores the fact that *none* of his ventures, profitable as they may be, are actually making profits by producing commercial quantities of biofuels - the profits have been by cashing out to other speculators jumping onto the wagon. So far, his clean tech has produced very little useable "tech"

The Chinese may not be perfect, nor environmentally friendly in their methods, but they, unlike Khosla's ventures, are at least producing stuff that everyone can buy and use.

if the US wants to impose tariffs then by all means. But is it really sensible to have a tariff on imports of solar panels - that produce clean energy for free, often owned by homeowners instead of utilities, for decades, while oil has no tariff? No one seems to have a problem with all the cellphones, ipods, laptops etc that are not made here - which are all energy consumption devices - why tariff one of the few energy production devices that are imported?

China's policy of let other countries do the R&D and improvement, and then mass produce the stuff

I wonder how long that will continue to be their strategy. They are educating a huge number of engineers. I think it will be a lot like other Asian tigers: start out as the cheap manufacturing center for cheapjunk, then move up-market, as the country generates worldclass skills.

Possibly but it's important not to rely too much on catchphrases bandied about during the go-go years.

China is the last one to the party, and much of the booze is gone.

It's sort of like every American believing they can become a millionaire. If you follow that logic, then eventually those million dollars would become worthless, as everybody has them. And perhaps that's already happened, to some extent.

The good stuff in life is precious and rare. It can only ever be so. It's impossible for 1 billion Chinese to live like the wealthy world without causing serious geopolitical disruptions. Most likely something will give sooner rather than later.

The good stuff in life is precious and rare. It can only ever be so.

I vehemently disagree. Most of the "good stuff of life" is not material or requires minimal material goods.

And the most precious material things are clean water, clean air, enough to eat, some clothes and a decent place to sleep.


until the subsidies for other energy sources / companies get equal treatment this being presented as merely a "boondoggle" is clearly agenda driven by the (business as) usual suspects...

Driven by a combo of fossil fuel interests, and political interests (tar Obama). Now the later probably foolishly bought the hype on that company. But even with some poor management habits, it it hadn't been for the unexpectedlt sharp drop in panel prices, the company probably could have been viable. Its really tough to compete against $1/watt flat panels. Only really great concepts will make it, merely good ones will be swept aside.

Obviously $8G for a nuke plant, is a much much larger risk. But, big corporate advertisers will penalize any media outfits that try to highlight that.

The weird thing is that statement is exactly correct. What is your problem with it?

He didn't say he had any problem with it. It was a quote without comment. Maybe he posted it because he liked it.

Could you please be a little less antagonistic in your posts?

It still amazes me that our politicians have the courage to send our citizens to war but not to ask the public that question.

It doesn't amaze me, they are just playing to the peanut gallery.

French bank downgrade is latest blow to Europe

NEW YORK (CNNMoney) -- Underscoring the uncertainty about Europe's financial system, two major French banks -- Societe Generale and Credit Agricole -- were downgraded Wednesday due to their exposure to the debt of Greece and other weak eurozone nations.

The move by Moody's Investors Service wasn't a complete shock to the markets, since the ratings firm had placed SocGen, Credit Agricole and BNP Paribas on review on June 15. BNP remains under review.

The Eurozone markets actually rose a bit after the news. Go figure...Maybe a sense of relief, like after lancing a boil or something.

It is "critical" that they build these wind farms, because they have now come out with 72" flat screens and we all need to upgrade.

Sorry, I couldn't resist.

Related to Rare Earth article in DB

Exeter academic explains chemical ‘risk list’

To coincide with the British Science Festival, the British Geological Survey (BGS) has released a new ‘risk list’, which ranks the risk to global supply of chemical elements of economic value. The list highlights vulnerable elements where global production is concentrated in a small number of countries, including metals that are critical to development of a low-carbon digital economy. The list helps to focus future research on diversifying supply from new resources, using greener production technologies and cost-effective recycling.

Report Risk list 2011

As demand for metals and minerals increases, driven by relentless growth in the emerging economies in Asia and South America, competition for resources is growing. Human factors such as geopolitics , resource nationalism, along with events such as strikes and accidents are the most likely to disrupt supply. Policy-makers, industry and consumers should be concerned about supply risk and the need to diversify supply from Earth resources, from recycling more and doing more with less, and also about the environmental implications of burgeoning consumption.

re: Infographic on Peak Oil - Who Uses How Much, and Where We Go From Here

The graphic on this link says oil can be extracted from kerogen shale for $90/barrel. Is this accurate? If so, the kerogen shale folks ought to be beating down the doors of Congress for a WY->LA pipeline. Produce a barrel for $90, sell it for $115 sounds like a helluva deal.

I'm guessing either $90/bbl underestimates the costs, or folks can't produce enough to make a pipeline worthwhile.

I'll go with underestimating the costs. The shale has to be mined, and then heated, hydro treated and all sorts of stuff, and huge amounts of spoil to deal with. A sort of similar process to producing oil from oil sands, but every step along the way is more complicated and more expensive, and needs more energy and water.

Another factor is the price risk. Even if $90 is the mark, a company making the investment has to be confident that the average price will remain above that, and that its costs will remain stable. The oilsands experience shows that neither of these things happen - the price always fluctuates and the costs *always* go up. As soon as a second operation starts up, the two players find themselves bidding against each other for all their services/supplies.

So, even though they could be "economically recoverable" at $90/bbl, the fact is, they are not economically recoverable until someone is actually recovering them! My WAG is that would be at least $150/bbl.

GAO had a report a few month back on the Water Energy Nexus that makes that $90/b figure meaningless.

The short version is that it takes 12 barrels of water to make 1 barrel of oil from oil shale. There isn't enough water in that region to develop anything more than a couple 100,000 b/d at at best. It might as well be on the moon (or Titan)

Agreed, there is a definite "production ceiling" dependent on water availability - if you ain't got water, the "cost per barrel" is indeed meaningless.

But there is enough water there for someone to do something, and that still hasn't happened, and likely won't.

JP - Actually I doubt anyone would spend the $billions or so to build the plant even if they were guaranteed $115/bbl and if they knew for certain it would cost $90/bbl to produce. I'm assuming the $90/bbl is the actual operational cost and doesn't amortize the initial capex. The profit wouldn't be $25/bbl. That would be the net income. Just guessing but if the initial capex were $1 billion they would have to sell 40 million bbls of oil just to recover their initial investment. And that doesn't include any return on that initial capex. So just my WAG but I don't think anyone would make that investment. And remember the assumption: guaranteed $25/bbl net income. And no one is going to accept that assumption until someone actually produced even just 1 bbl of profitable shale "oil". Remember todate no one has ever sold one bbl of those billions of potential bbls for a profit...not one bbl. And no one began building a plant when oil almost hit $150/bbl. And it's important to remember: there are 100's of thousand acres of privately owned shale oil leases available anytime someone decides to give it a go. Don't need any govt lands to get started.

How about the economics of Sasol spending $10 billion for a 96,000 bbl/day plant to convert natural gas to diesel?

Sasol intends to build a plant near Lake Charles in Louisiana that would be capable of producing up to 96,000 barrels a day of diesel fuel and naphtha (a chemical feedstock). Additionally, the plant can produce jet fuel. It is estimated to cost $10 billion to build this first-of-its-kind plant.

Compare the Qatar Pearl GTL plant: Pearl Gas-to-Liquids Plant, Ras Laffan, Qatar to produce 140,000 bbl/day which started its first train operation in June 2011.
Platts reports on Pearl:

The project is designed to use 1.6 Bcf/d of gas as feedstock to produce 140,000 b/d of nearly sulfur-free oil products, and a further 120,000 b/d of condensate and natural gas liquids. . . .
The Pearl project cost $19 billion, or roughly $371.82 per barrel per year of capacity. In comparison, the 7.8 million mt/year Qatargas 4 LNG project, completed in 2010 and also a partnership between Qatar Petroleum and Shell, cost around $8 billion, or roughly $107.96 per boe per year of capacity.

With two multi billion dollar GTL plants in operation and another planned, some bean counters must consider them "economical" with the risk of crude dropping below say $50/bbl is now "manageable."

David - I'm not sure what any of those projects have to do with producing oil from those kerogen deposits but I'll play along.

Sasol: $10 billion to build the plant. I have no idea how much NG it takes to make 1 gallon of diesel or how much it costs to do the conversion. But let's assume someone gives them the NG for free and they figure out how to repeal the thermodynamic law and it cost nothing to do the conversion. Now let's assume they make a profit margin of $1/gallon. Yes...I know fuel profit margins tend to be much less than $1/gallon. But what the heck...let's be hog crazy optimistic. And let's assume someone loans the $10 billion interest free. So let's see: $10 billion / $1 per gallon profit = 10 billion gallons of diesel to break even. And at 96,000 bbls/day (4 million gallons/day) it will take almost 7 years before the first $ of profit is made. And remember: this is with a free source of NG, no cost to do the conversion, someone giving them a free $10 billion loan and no profit for almost 7 years.

Sounds like a heck of an investment. When can I buy in? Obviously this is insane. Double check my numbers...I have 3 times and it keeps coming up the same. Did you calculate how much product they'll have to produce at what price to just recover the construction costs? Maybe they're giving us the wrong numbers. I can't imagine their numbers are correct.

Rockman - I am seeking to compare risk vs returns for various alternative fuels. Kerogen, Oil sands, Gas to Liquids, and Coal to Liquids all have relatively high capital costs while there is not the high risk of drilling exploration wells.

Sasol's projected capital cost is $104,166/bbl/day, $285/bbl/year or $6.79/gal/year.
Applicability: That cost is about the same as the capital cost to recover and upgrade "oil sands" to syncrude. Assuming a 20 year straight line depreciation, the capital depreciation is $14.25/bbl or $0.34/gal. Compare:
Deo van Wijk, chairman of Swiss company Janus Methanol AG, presented: GigaMethanol and Gas to Gasoline NPRA, San Antonio, March 2011
Se: Alaska North Slope gas to state legislature

Costs for a 63,000 barrel (of gasoline) per day system would be approximately $5.2 billion, he said. Gasoline could be delivered from Valdez at $2.65 to $2.85 per gallon, including a $1.45 margin.

That’s $82,540/bbl/day
See also ExxonMobil: Methanol to Gasoline (MTG) Technology: An Alternative for Liquid Fuel Production

David - Thanks. My original point was that there is no risk vs. return for the oil shales: Currently the projected return is zero: no one has developed an economic method of recovering those billions of bbls of oil. In that sense it doesn't fit at all with the other projects you mention.

But more importantly, did my model make sense? It is miles apart from these last numbers you offer: I offered a $1 margin but to get there they had to be given all the NG for free, run the plant at zero overhead (no salaries, no energy inputs, etc) and they are given a $10 billion loan at zero interest. And even with all those absurd assumptions it takes 7 years to pay out? And I actually missed a point: the plant has to be producing 100% on Day 1?...IOW zero construction time. So payout would probably be closer to 10 years.

My point is that even if you take the Sasol press release as accurate it makes no sense. That's why I wondered if they didn't miss speak. I do back-of-the-napkin reality checks on big capex projects all the time. This one misses the mark very badly. So bad I have to think they put out incorrect numbers.

I would like to look at a side by side NPV and ROI comparison of the different approaches. 7 years lag in itself does not negate a stock market average ROI. Compare the gas to liquids economics where the natural gas is not "free".

Harold Vinegar is working to recover oil from shale economically. Israel Targets Energy Superpower Status

Vinegar’s Oil Plan
Harold Vinegar, the former chief scientists of Royal Dutch Shell, has devised an ambitious plan that would, if successful, turn Israel into one of the world’s leading oil producers. Now chief scientist for Israel Energy Initiatives (IEI), Vinegar maintains that the 238 sq km Shefla Basin holds the world’s second largest shale deposits outside the United States, from which around 250 billion barrels of oil – about the same as Saudi Arabia’s proven reserves, could be extractable. IEI estimates the marginal cost of production at between US$35 and US$40 per barrel. That, says Vinegar, would be cheaper than the US$60 or so per barrel it would cost to extract crude oil in more hospitable locations such as the Arctic, and even favourably with the US$30-US$40 in Brazilian deepwater.

David - I suspect comparison between different approaches would yield a wide range of NPV/ROI. I researched the Shefla Basin and could find much. At first it sounded like our kerogen shales but then I found: "...the Shefla shale is in a hospitable location. It also contains oil of the light, sweet variety that is easy to refine into gasoline or other common end products." That sounds like crude oil in a potential fractured shale like our Eagle Ford in Texas. But elsewhere they mention in situ recovery and that distant pilot project. And that sounds more like kerogen. The tech is here today to developed an oil bearing shale: drill I horizontally and frac the heck out of it.

But kerogen shale? I'll contain my enthusiasm until some produces at least one bbl at a profit.

How much energy might it be possible to recover from "tar mats" in locations such as Saudi Arabia?

Characterization of Tar From a Carbonate Reservoir in Saudi Arabia: Part I-Chemical Aspect

E. Swanson

Re: how much energy from "tar mats". See also "bitumen". Nominal global resource ~ 2 Trillion bbl.
USGS Fact Sheet 70-03 Heavy Oil & Natural Bitumen nominally 78 billion bbl of 434 billion.
Compare USGS 1990 Bulletin No. 1944 showing 1.86 trillion bbl globally.

However, much "tar" may not be reported as focus was on light oil.
Simmons Twilight In The Desert (slide 20) notes a 500 ft thick tar mat.

For heat used see: GHG Analysis of Thermal Petroleum Production Slide 8.
Industry nominally uses a benchmark Steam/Oil Ratio (SOR) of 3 bbl steam/bbl oil. Steam enthalpy 325 MJ/bbl steam (0.308 mmBtu/bbl steam). Thus 975 MJ/bbl bitumen or 0.924 mmBtu/bbl bitumen typically for the net energy to extract the bitumen. At 82.5% boiler efficiency, gives 1.81 GJ/bbl bitumen gross (1120 mmBtu/bbl bitumen).
HOWEVER, See slide 9, where SOR varies from 1.06 to 168 with an average of 5.13 for 2 GJ/bbl bitumen gross natural gas to bitumen out.

(Then need to add transport and "upgrading" to syncrude, then conversion to gasoline/diesel. See rest of slides for Cogen to generate electricity and steam.)

That 90 billion barrel of arctic crude is playing hard to get

Cairn sinks as Greenland well comes up dry

... Its Gamma-1 well in the northern section of its acreage did not find any oil or gas. Cairn has been frustrated in the region, with its LF7-1 well failing to find oil in August. Drilling is continuing at another well, Delta-1.

... Analysts at Evolution Securities ... added: “It looks increasingly unlikely that the expensive Greenland drilling programme will prove to be the hoped-for exploration bonanza ... analyst Richard Rose: “So far, the drilling programme in Greenland has yielded little encouragement.”

And ships traversing the NE passage are coming across strange sights:


Commercial shipping through the Northeast Passage over the last couple weeks has reported the seas bubbling as if they were boiling. Their observations have been reported to the science ministry who have sent scientists to investigate.

Does anyone know about this source? Is it usually reliable?

Does anyone else find the notion of "seas bubbling as if they were boiling" a bit...disconcerting?

Just one of those Three Paths To Near-Term Human Extinction. Nothing to worry ourselves about.

"seas bubbling as if they were boiling"

Do not light a match.

Any ship should have an LEL meter on board. (lower explosive limit) slow down, dangle it over the side on a string and see if the alarm goes off.

Yes, the immediate threat to those ships is worrying. I wonder if a major, sudden eruption of seabed methane might not sink one of them, methane being...not quite as buoyant as sea water...

But, of course, the larger concern is that this seems to mean that the vast stores of methane in these seas are now erupting into the atmosphere. There is and estimated trillion some tons of methane in seabeds. Given that over decadal time scales methane is 105 times more powerful as a GHG than CO2, a tiny fraction of that entering the atmosphere would amount to many multiples of what all of industrial society emits every year.

The scientists most involved in this research have concluded that a sudden release of 50 Gts of methane from the waters off of Siberia is possible "at any time". 50 Gt methane is equivalent to over 5000 Gts of CO2. All of industrial emissions in a year are about 30 Gt per year.

It's looking like "any time" is right about now.

Yep, a ship sailing into a major eruption, or having one underneath it, would go down almost instantly. No warning, no time for an SOS signal. It would be like sailing over a waterfall that you didn't know was there.

I wonder if the release will continue when the sea ice returns this winter. That could provide one massive methane burp when it finally breaks through the ice cover!

/sarc/ Disconcerting? Nah, probably just flatulent whales.
Either that or it's the Sixth Seal going bye-bye. Anyone hear trumpets?
Still, probably best to stay away from lighters and matches.... //sarc/

We are truly 4Q'D.

As dorlomin would hasten to point out, the monitors around the Arctic have not shown sharp increases in atmospheric concentrations of methane even while scientists have been recording dramatic increases in methane emissions in various locations around the Siberian-Arctic continental shelf over the last few years.

I don't know what to make of this discrepancy myself. I hope that somehow the scientists and shippers are wrong and the monitors right.


My take is that scientists and shippers have found methane bubbling in the Arctic ocean but there is no historical record -- methane may have been bubbling for the thousands of years before somebody decided to go take a look -- so we can't state we are seeing an increase in methane being released based on their observations at this time. We can see a troublesome increase in methane concentrations from the monitors but that increase may be coming from a different source like melting permafrost.

Is methane actually in some form of a chemical bond with the permafrost or is it literally like a bottle of soda pop with the permafrost being the cap?
How did such a vast amount of methane become stored there: is it a byproduct of the decaying plant matter etc. that forms the permafrost structure?
Any links that would cover this subject appreciated.

Methane comes from biological activity (such as "Swamp gas").

Subsea, the methane-water complexes (weak chemical bond between the two) are held stable by a combination of temperature and pressure.

Raise the temperature and the fraction held at the boundary of stability lets loose into the atmosphere as they cross over the boundary.

I am less knowledgeable about the land based captured methane.


My understanding is that the frozen methane hydrates (or 'clathrates') have been forming a kind of cap over a much larger store of free methane. So melting clathrates don't just release the methane in them, but also vast quantities of methane that they had been holding in place.

Another thing, it is bad enough that these are coming up in the shallow portions of the continental shelf. Since there is less pressure over them there, and they are quite close to a now choppy warm, surface that mixes it's warmth down the the floor, it is not surprising to see the stuff starting to dissociate and bubble up from those regions.

But there are now reports that the bubbling is happening even in much deeper areas. I'm not sure what the cause for this would be, unless there is a lot more warm water getting down a lot deeper than I, at least, had thought. Or perhaps the release going on in the shallower areas is somehow having some kind of ripple affect down to deeper areas?


... methane may have been bubbling for the thousands of years before somebody decided to go take a look...

I think the argument against that is that current methane level have tripled in the last thirty years; whereas, prior levels, including ice cores, have remained in a much lower range for the past several 100,000 years. What is happening is a new phenomenon

And scientists like Semiletov and Shakhova have been looking at this area for over a decade and note marked increase over that time period, 100-1000 fold increases in some areas. Now that might also be part of some kind of cycle.

I'm hoping the recent expedition can come up with some kind of estimation of just how much gas is escaping from the waters in that vast region so we can get some kind of handle on what is going on up there and how fast things are developing. If there are really large amounts, we can be pretty sure that it is not an old phenomenon, since we would expect to have acquired even larger amounts in the atmosphere by now.

Shape of Things to Come. I wonder if the Permian-Triassic extinction event started like this.

Oceans' increasing acidity likely to hurt biodiversity, researchers say

... If the results are a prediction of the future, "you are left with a dramatically different ecosystem that is likely going to be less able to deal with stress and is going to have less biomass available to feed organisms higher up the food chain," said Kristy Kroeker, a graduate student in biology at Stanford's Hopkins Marine Station.

...That could bode ill not just for the marine organisms living in near-shore waters, but also for the humans who have gotten used to feeding on that rich biota.

IEA’s Oil Market Report cuts prognosis for oil demand growth

GDP assumptions for 2011 and 2012 are scaled back nearer to 4% annual growth, with the bulk of the downgrade focused on the OECD countries

Market observers are puzzling over the ‘paradox’ of weakening economic growth and oil demand indicators on the one hand, and $110/bbl crude on the other.

Government debt in the OECD and the spectre of inflationary pressures and currency protectionism in emerging markets raise fears that expectations of ‘business-as-usual’ 4.5-5% world GDP growth are unsustainable.

also http://omrpublic.iea.org/

regarding the article up top:

"Rare earths and other critical metals - Lara Smith"

"The other critical issue is oil - we've simply reached peak oil and that is now where production begins to increase at a slower rate."

Lara doesn't know what peak means never mind peak oil.

Lara is hoping we are still on the upslope. But rather we are on the top the heap and looking at decreasing production from here on out.

Based on historical voting patterns, it seems likely that the next Chief officer of the Titanic,* AKA the President, will be a Republican, but the GOP is really determined to make sure it happens. An item linked on Huffington Post, from Mother Jones, on the GOP's plans to change how Electoral College votes are allocated within a state (instead of winner take all, it would largely be by Congressional District, at least in some states, like Pennsylvania):


*Very few politicians, in public at least, are so far willing to address resource limits, or they openly endorse the infinite growth model.

westexas -

I assume you're talking about the persistently high unemployment rate, lack of significant GDP growth, and the crappy economy in general being likely to torpedo the incumbent president's shot at re-election. And that's a pretty good bet.

On the other hand, Mr. Obama has a few cards up his sleeve. He's pretty bad at BEING president, but he's really, really good at RUNNING for president. Also, he should go into this thing with an enormous pile of greasy Wall Street cash. So he could still wind up with his bum in the captain's chair for another four.

Understand that I am not endorsing Mr. O. We've now reached the point where the only vote I can make in good conscience next year is "none of the above".

Obama's biggest re-election advantage will be the Republican candidate, whoever it is. I doubt that any credible candidate can get thru the Repub primary.

Another take on the Solyndra bankruptcy

... FOX News has been promoting this "scandal" story heavily. (It should be noted here that Fox's parent company News Corp's 2nd-largest shareholder is oil billionaire Saudi Prince al-Waleed - an "oil interest" if ever there was one.)

The Phony Solyndra Solar Scandal

Here is some information to help you push back on the latest whipped-up, anti-green, anti-government, anti-Obama "scandal."

I have read articles saying both that the feds provided a loan guarantee and that the feds directly provided the loan. The article you link to mixes these two ideas indiscriminately, and the Grunwald article doesn't help.

What the heck are the facts? What is the actual source of the loan, I wonder.

count - Can't say for sure I have the facts straight. But according to NPR the govt guaranteed loan repayment. So if the company is liquidated that sale could be used to pay off some of the debts. But supposedly the govt isn't the first in line. The company secured a second loan ($75 million?) from a number of funds. And the govt agreed to allow them to recover their loan 100% first before the govt recieved anything. I guess the funds understood the risk better than the govt'.

If I have the facts wrong write NPR...not me. LOL

It is funny how people get mad about a few million. What is cost per bomb dropped on the Libyan countryside last Spring? American perspective (if we ever had it) seems clouded by the mass media.

Them deep-fRied R type congress members with the deep-fRied Southern accents got to make fun of those Left Coast Yankee type solar huggers.

I'm shocked, shocked there is solar thinkin' going on over yonder on the Left Coast.

They should think only about the Moon, like us lunacy tooners do in the reality based Red States.

(On an off-note, I seem to recall a time when "Red State" meant you were a commie)

'I don't want a Hammer and Sickle;
I just wanna ride on my Motorcicle!'


Yeah,people need some perspective. Lots of things were funded and it was assumed that some would go bankrupt. Private investors lost a lot of money in this company too. If there is some criminal activity, then nail them. But if it was just a bad investment, it was just a bad investment.

And even as a bad investment, at least it employed a number of Americans and had a shot of creating a good company. When compared to the Iraq war, I'd rather lose money on risky investments in American companies than pour hundreds of billions into death & destruction.

I read about solar some and drove by the Solyndra buildings sometimes but I never knew what they did. Cylindrical thin-film? That doesn't seem like it was a good idea . . . and they got crushed when silicon prices dropped. It just looks like a bad investment to me.

Local news says the left-leaning billionaire Kaiser was the rainmaker for the deal, and has rights to the assets under bankruptcy. If it works out as the locals say, he'll walk with assets greater than his investment, all funded by the gov't, while the other investors and tax payers get zilch.

The newsies say "that's why there are only a few billionaries -- not everybody can be well-connected, understand the game, and have the cash to play".


Of course local news is not all that accurate, and the story will surely evolve and spin.

So you're saying that Bush should not have initiated that deal?

In retrospect, obviously not.

At the time, then idealistically not. I like alts, but I don't like having big gov't supports for big private projects. If gov't is going to support something, it should be small-scale, so the benefits go the taxpayers more directly.

Me, I'd fund Habitat for Humanity to include solar hot water and great insulation for every HFH home built or refurbed. Maybe add PV soon, as prices have come down so much.

Kaiser is sort of Robin Hood around these parts. Gives all sorts of cash to boondoggles and bonafide needs at various scales. Many locals wouldn't be all that upset that he pocketed a bunch of taxpayer cash for greenwash, and then spread it around in oil country. General view is that the gov't is shoveling out cash, and everybody should figure out how to grab some.

One interesting fact not talked about. The biggest loan guarantee was for a Nuclear Plant in Georgia -- that deal was for over $8 billion. Meanwhile we talk about solar subsidies. LOL.

I think California produces like 10% of the tax base but gets squat from the big G. Georgia raked in a nice freebie. LOL. Oh the system is quite distorted.

The other interesting thing is that the company was trying to make a solar cell that was not limited by Si, when the price was very high for Si. They bet wrong and the price came down. But I bet the idea will make its way into some products in the years ahead especially if Si market gets tight again.

Oct - I admit I'm not comfortable with the govt backing private enterprise oans even when it looks beneficial for the public. I especially worry abut the govt's abilitiy to assess risk correctly let alone have politics play into it. But in your example did the G. plant go bankrupt? Did the tax payers (including my hippie west coast cousins)lose any money? Granted such a loan guarantee is a nice feebie but did the tax payers los a penny on the deal? Can't say I'm abig fan of nukes but I'm guessing the folks in G are satisfied...so far.

Not only have the plants not been built yet, the mandatory hearing isn't targeted for completion until next year. Will the plants ever be built? Constellation pretty much bailed out of the proposed Calvert Cliffs 3, although it hasn't been formally abandoned.

I think talking about nuclear power in the U.S. is silly until a waste handling program for existing (and future) plants is implemented. If waste isn't a problem, how about Congress enacting legislation placing a national repository under The Mall in D.C.? Lets's talk then.

I am confused. Did the Georgia nuclear plant fail to pay its loan?

Thanks for your question. I am a twit. The plant is Southern Nuclear's Vogtle plant, not Summer Station in South Carolina.


Hearings aren't yet finished for new reactors at Vogtle, so Southern Nuclear might not even have begun to draw against the loan guarantee.

In fairness, if Bush had pushed this loan to one of his major campaign contributors and it rolled over and died this fast, the non-Fox media would be all over it.

It's probably just Chicago politics to Obama, but he seems to have trouble keeping a low profile about it. No one cares in Chicago.

Solyndra had a good idea, but the rest of the industry ran right past them. Now it would be cheaper to reinforce your roof to hold the $1/watt panels than to buy theirs for $3 a watt, if they actually made their cost target.

If you live on the cutting edge, sometimes you bleed.

The company's assets should have substantial scrap value, so the total loss should be lass than the loan amount. More suspicious is how the US gov't loans ended up at the back of the line (the junior debt)

Yair...here we go again. I have asked the question before.

PVguy why do you need to reinforce a roof to take a domestic PV array?...surely the roofs aren't built that close to the ragged edge of failure?

I mean, you surely have to walk on them any time you want. The point loading of a couple of blokes up there cleaning out gutters or sniping rabbits or something must be much greater than a few panels mounted in a rack.

Just asking.


"PVguy why do you need to reinforce a roof to take a domestic PV array?"

It depends on the roof. The lowest legal roof load limit I'm aware of is 20 lbs/sq ft in places where it doesn't snow. 40 lbs/sq foot where it does, 70 lbs/ sq ft where it snows a lot, etc. It's not the point source where you are standing, it's the total load over the entire roof. So, in my case my roof has to hold 62 *16 *2 *40 ~= 80,000 lbs. ( the times 2 is for each half of the roof) If the roof can't hand the additional weight of the panels and mounts in addition to that 80,000 lbs, then you need to add some lumber somewhere. Most newer houses are load bearing only on the side walls, so you have to distribute the load from the peak area of the roof to the walls. Trusses are good at that, but they have a weight limit and are designed for evenly distributed loads. Hang a couple tons of panels on one side and not the other, and add a snow load that might be worse than usual because the panels catch snow that would otherwise blow off, and your roof may collapse.

Most roofs should do fine, but you really should check first. Solyndra was aiming at the niche where the roof was not up to conventional panels, but could take theirs. Then their niche basically shrank so far they would not be able to produce enough to lower their per unit costs, and the business plan died. As did the company. And some portion of the taxpayer dollars.

It's the wind lift, not the down-force of the static load.

Leanan's link becomes reality - the Joint Investigation Team finally published the much-delayed final report on the Deepwater Horizon disaster. While waiting for it, I've been entertaining myself by imagining the hellacious backbiting and infighting that must have been going on behind scenes.

Deepwater Horizon Joint Investigation Team Releases Final Report

F. Company Practices 
The failure of the crew to stop work on the Deepwater Horizon after 
encountering multiple hazards and warnings was a contributing cause of the 
Macondo blowout. 
BP’s failure to fully assess the risks associated with a number of 
operational decisions leading up to the blowout was a contributing cause of the 
Macondo blowout. 
BP’s cost or time saving decisions without considering contingencies and 
mitigation were contributing causes of the Macondo blowout. 
BP’s failure to ensure all risks associated with operations on the Deepwater 
Horizon were as low as reasonably practicable was a contributing cause of the 
Macondo blowout. 
BP’s failure to have full supervision and accountability over the activities 
associated with the Deepwater Horizon was a contributing cause of the Macondo 

BP’s failure to document, evaluate, approve, and communicate changes 
associated with Deepwater Horizon personnel and operations was a possible 
contributing cause of the Macondo blowout. 
The failure of BP and Transocean to ensure they had a common, 
integrated approach to well control was a possible contributing cause of the 
Macondo blowout. 
The failure of the current Subpart O rule to identify (by definition) 
personnel who need to be trained in well control operations, specifically in kick 
detection, was a possible contributing cause of the Macondo blowout.

Fuelfix has a good article summarizing the report called Federal probe: Cement problems, other failures triggered Deepwater Horizon disaster

Halliburton points finger at BP saying,

If correct, the report attributes such failure to BP’s operational decisions, including placing too light of a drilling mud in the rat hole, ignoring industry standards by not properly conditioning or circulating the well prior to the cement job and not drilling a larger hole diameter.

Both Transocean and BP are complicit for not controlling the well,

The investigators said both BP and Transocean personnel on the Deepwater Horizon missed a chance to combat the cement problems when they misinterpreted unusual readings from a so-called negative pressure test of the cement barrier.

I wonder what the Justice Department will do regarding regulation violations,

The Coast Guard and ocean energy bureau investigators conclude that BP, Transocean and Halliburton violated more than a half dozen federal offshore safety regulations in their work at the site.

New data on oil seeps around the Deepwater Horizon site. http://oceanexplorer.noaa.gov/okeanos/explorations/ex1105/welcome.html
My son is on this ship. Interesting sonar images.

The Chart That Totally Refutes Keynesianism

But the greatest flaw with Keynesianism now is that, like the economy itself, it has run squarely into the energy limit. As the most recently updated data shows, 2011 will be the 6th year that world production of crude oil was unable to increase beyond the ceiling established in 2005. Oil remains the primary energy input to OECD economies. OECD economies are of course where the Keynesian experiment has flourished longest, first in Japan, then the United States and now Europe. It is hardly, hardly the case that the current financial crisis in the OECD is “simply a matter of accounting.” Instead, the crisis is one of systemic, structural growth now permanently limited by energy costs as OECD economies try to service debt loads that have escaped their ability to manage. Change all the digits, and the energy limit remains.

While I continue to be an advocate of debt jubilee, and, of energy infrastructure Keynesianism (building out more efficient transport and non fossil fuel energy production), the energy-intensity problem of OECD economies is now the controlling factor in the West’s ongoing crisis. The redoubling of government efforts to distribute paper capital to society will not bring forth the cheap energy required to spur the growth Keynesians either assume, or have failed to even consider.

I think it would be wise to check whether these 'unheard of' energy constraints don't undermine some of the assumptions in all the other mainstream economic models as well.

Just because my shirt didn't turn out to be bulletproof, doesn't mean that yours will...

Ultimately, whether it's public money or private, the root question now is whether it will be getting invested into an 'Energy Resilient' program (cough, cough, Home Insulation, Transit Oriented Development, Solar Inputs, etc) , or they will simply expect that throwing the money anywhere will be 'positive activity'.

That invisible hand better not try clapping down into the mouth of an invisible wood-chipper, eh?

Well loans for bigger Mc Mansions or smaller footprints with roof top solar? Spending on Big Defense or spending on energy infrastructure? Economic choices are made daily. Most are bad ones. The masters make the economic arguments favor the status quo. Like Sub-suburban sprawl that will be a loss -- those loans will go bust. We also invested in things like cars instead of things like electric trolleys and trams. Dismal choices made in retrospect, with very low probability of returns on investment for the consumers buying them in the years ahead. I think various energy corps like cars. GM likes the complexity of individual motors for each person with millions of parts to service and fail. We also invested in NPK fertilizer and destroyed our soils so we could eat more low nutrition produce, diseased eggs and poor quality meat and oh ethanol to fuel the cars that cannot possibly be fueled with petroleum products. Is there a bright side to making money with mass production? Or is it all just about use and discard and degrade the quality of the next finished good and pass on the lower quality and environmental costs as a way to make money? Doomed to fail I guess but people will make money. Some will.

Greenpeace Plan for Renewable Energy for Japan.

I'm surprised there hasn't been any discussion of this:

Others are also looking to RE for Japan

Japanese businessman launches Japan Renewable Energy Foundation with mammoth goals

(PhysOrg.com) -- Masayoshi Son, founder and CEO of Softbank, one of Japan’s largest Internet conglomerates, announced this week the establishment of the Japan Renewable Energy Foundation (JREF) with the goal of moving Japan away from its dependence on nuclear energy towards more eco friendly and safer renewable sources. Son, reportedly the richest man in his country, said in an interview with Asahi Shimbun, that despite suspicions by other business people regarding his motives, his ambition regarding JREF is to safeguard the Asian nation’s energy supply in light of the problems encountered by the country in the aftermath of the Fukushima nuclear plant disaster following the tsunami last March.

... Son concludes by noting that past wars have been fought over scarce resources and those who fail to learn its lessons are likely to repeat the mistakes of the past. He hopes that others in his country will join him and that together they can all secure the future of their country.

There is already a JREF.

Oh no, are we reaching peak acronym?

Is this the same guy:
In 2003, he was sued by the U.S. Securities and Exchange Commission, who alleged that he "engaged in an ongoing scheme to defraud public investors by disseminating false information in several Internet newsletters", while using the pseudonym Jay McDaniels.[3] Ultimately, in August 2007, the U.S. District Court for the District of Maryland ruled in favor of the Securities and Exchange Commission and fined Stansberry $1.5 million dollars.[4]

"geology doesn’t create oil; capital creates oil"
This quote has been thoroughly trashed already. So my comment is simply 'piling on':

How much additional capital would it take to 'solve' the oil problem? Where would it come from? What capital intensive aspects of the world economy would be cut back to get this capital? How does it compare in size to the world gold reserves?

I suspect that throwing capital at this problem is not really possible. Most of world capital is really just other peoples' debt and has nothing to do with the price of gold. In these troubled financial times, trying to move it into an expansion of oil exploration would lead to massive bankruptcy. But just proposing the shift suggests the second half of the statement is just as silly as the first half.

From Have frackers pushed their luck too far?, up top:

This refusal to break ranks is typical of groups. It's what John Forbes Nash of "A Beautiful Mind" fame (pictured above) won his Nobel for -- the Nash Equilibrium, which says that individuals within a group pursue their best interest while also weighing how others in the same group will act; they will stay with that decision -- or equilibrium -- even if another way would result in a better outcome for all group members. So even though big industry players do feel they might stave off the growing public backlash if they went pro-actively environmental, they won't do so unless they are convinced most or all their rivals will at the same time or soon after. They think that the knowledge of the chemical content of their fracking fluid is too precious.

This is why I do like being a member of a group. However it is lonely and stressful being outside the group. Nash succumbed to mental illness that may have been related to his insights. Pure conjecture on my part.


x - "They think that the knowledge of the chemical content of their fracking fluid is too precious." FYI: the contents of the various frac fluids is known by every operator. Anyone can buy a bbl of any company's "magic/secret" formula and have it analyzed. I wouldn't waste my money to do it: not a big difference between one company and the next. Why have the companies refused to publish the contents? Don't ask me why but they must have a good reason to take the flak for it.

In Texas no fluid can be injected into the subsurface for any reason without the contents being certified and reported to the state...even if it's just plain salt water. And there have been hundreds of thousands of fracs done in Texas with almost no complaints from land owners. And if anyone thinks our landowners are less protective of their fresh water aquifers than our Yankee cousins they obviously know nothing about Texas or Texans. BTW: the only independent documented case of intentional frac fluid contamination was local municipal waste treatment facilities taking the nasties in (for a fee) and then discharging them into the streams untreated. That's way NY and PA had to pass laws making it illegal for these facilities to do this anymore. NY signed it into law the same day their gov lifted the ban on frac'ng.

Here's an interesting observation regarding Chinese solar. We keep hearing about how US companies are unable to compete with chinese manufacturers lower costs, well many of the chinese small cap solar companies have been trading lower for over a year now.

Check these ticker symbols and then check their 1yr graphs: TSL, YGE, STP & JASO.
Reminds me of the ethanol companies as their stock prices continued to drop until many went out of business.

Here's an article about it: http://blogs.forbes.com/ericsavitz/?p=11428

A high percentage of the solar contracts come from Europe, and since the debt has been hitting the proverbial fan lately, their business is down and so are their stock values. I'd suggest to anyone in solar stock to consider getting out - let the weak ones die out - then maybe get back in later.

re: Above comment from "pasttense:

"Greenpeace Plan for Renewable Energy for Japan" makes the following opening statement:

“will we look into the eyes of our children and confess

that we had the opportunity,
but lacked the courage?
that we had the technology,
but lacked the vision?”

As far as preventing catastrophic climate change, the phrase that you often hear is: "we have the technology"... to prevent it, including from Al Gore.

The truth is that we don't have the technology. The reason being that GHG emissions between now and 2050 will be largely driven by the existing 3 billion people plus the yet-to-be-born 2.4 billion by 2050 in the developing world who neither have a grid nor the wherewithal to buy the existing renewable energy technology.

There are some promising technologies out there, but they are mostly at the research stage, such as the one shown in this youtube video:


If you're replying to someone, please use the reply function. Click on "reply" at the bottom of their comment.

On a note of good news today:

New York City has announced they've picked Alta as the contractor for the city's new bikeshare system.

New Yorkers are a short train ride away from 2 other cities with the system, so they are well aware of the advantages of using it. And NY will be starting out big, with about 10000 bikes and full coverage of Manhattan.

I wonder how many will end up stolen and shipped to Haiti

0, if Boston is anything to go by.

Or Minneapolis.

Continuing a conversation regarding LEDs, I mentioned in Monday's Drumbeat that we've been upgrading the canopy lighting in a number of petrol forecourts, replacing 400-watt metal halide fixtures (455-watt with ballast) with 105-watt LED retrofit kits.

I found a station where one of the HIDs hasn't been changed out so that you can compare them side by side. Once this last fixture is replaced, this portion of their lighting load will drop by 5,600-watts. (The lighting around the parameter edge is also LED.)

See: http://i362.photobucket.com/albums/oo69/HereinHalifax/Img_0542.jpg

The spec sheet can be viewed at: http://www.betaled.com/RuudBetaLed/media/RuudBetaLedMediaLibrary/PDF%20F... (PDF format).


Looks great

I don't see a difference between any of the white lights. Is that the point?

There's not a huge difference in overall appearance, but the light to the right of Pump 1 uses over four times as much energy. The original fixtures were also fitted with drop tear lenses which resulted in significantly more light pollution and their LED replacements correct this.


Ah yes, you can see it creates more glare than the others.

Is anyone else watching this? I'ts about climate change. It's called 24 hours of reality.


Yep, I was just about to post on it.

"24 hours of [GW] reality" is now going on


Thanks for the link dohboi. My link to it kept stopping and starting. Maybe a glitch in the transmission - unfortunate because I was enjoying the broadcast.

Study: Self-delusion may be a winning survival strategy

Researchers have shown for the first time that overconfidence actually beats accurate assessments in a wide variety of situations, be it sport, business or even war.

... The evolutionary model also showed that overconfidence becomes greatest in the face of high levels of uncertainty and risk. When we face unfamiliar enemies or new technologies, overconfidence becomes an even better strategy.

or not

We're losing the solar production to the heavily subsidized Chinese companies. They are subsidizing their solar way more than us. This is about where the jobs will be in the future. We should have given 1O times the money to this company in the states and many others...


From Boston.com:
An Entergy Corp. lawyer argued Wednesday in the court battle over Vermont's refusal to extend the life of a nuclear power plant that state lawmakers wrongly considered safety in blocking an extension.

I work for an economic consultancy that generates its own oil price forecasts. I've been moaning about these internally for years to no avail. I've copied the latest response to my moans from our oil price "guru" below. For my take, his is a wholly optimistic view of demand and supply which is simpy designed to generate a cosy consensus-type forecast. However, I'd be interested in any specific comments addressing the points he makes below:


"Oil demand is slow to adjust to price changes, but it does adjust eventually. There have been big fluctuations from one year to the next, but in broad terms real prices from 2008 onwards have been 200% higher than the norm in the 20 or so years prior to 2004 and the medium term forecast has them remaining around that level. This huge price shock is still feeding through to demand. For the OECD, the combination of weak GDP growth and oil demand destruction causes oil demand to decline at an accelerating rate. Outside of the OECD the oil intensity of GDP is also being reduced at a faster rate than before. The net effect is that global oil demand is forecast to grow at a fairly average rate, which is not the impression one would get from looking at Chinese GDP growth alone. When we add in rising non-OPEC output, OPEC NGLs and OPEC crude we end up with a less tight market in 2015 than now and somewhat lower prices."

Global annual C+C production has been between 73 and 74 mbpd since 2005, except for 2009. Global annual total petroleum liquids production has been between 81 and 82 mbpd since 2005, except for 2009. In both cases, this is in marked contrast to the rapid increases in production that we saw from 2002 to 2005.

We have seen a measurable decline in Global Net Exports (GNE), with 21 of the top 33 net oil exporters showing lower net exports in 2010, versus 2005. Furthermore, a simple model, and numerous case histories, show that net export decline rates tend to accelerate with time.

The data show that the developing countries, especially China & India, are generally outbidding the developed countries for access to GNE. Our work suggests that the US is well on it way to "freedom" from our reliance on foreign sources of oil, just not in the way that most people hoped.

Following is a chart showing Global Net Exports (GNE) and Available Net Exports (ANE). I define ANE as GNE less Chindia’s combined net oil imports:


The observed GNE 2005 to 2010 net export decline rate was 1.3%/year (BP + Minor EIA data, top 33 net oil exporters in 2005). The observed rate of increase in Chindia's net imports was 7.7%/year for 2005 to 2010. Note that ANE have declined at an average volumetric rate of about one mbpd per year for the past five years, from 40 mbpd in 2005 to 35 mbpd in 2010.

2010 to 2015 Projections for ANE:

For the low case, we assume a GNE net export rate of change of -1.3%/year and a Chindia rate of change in net imports of +5.0%/year.

For the middle case, -2.5%/year (GNE) and +7.7%/year respectively (Chindia).

For the high case, -5.0%/year (GNE) and +10%/year respectively (Chindia).

Historical ANE and Projections to 2015:


The low case is basically a continuation of the volumetric ANE decline rate that we saw from 2005 to 2010, i.e., about one mbpd per year, but note that this requires no increase in the GNE decline rate and it requires about a one-third decline in Chindia’s rate of increase in net imports.

Very helpful, thank you. I'll pass it on and see what happens.

I suspect that he will say that I am crazy.

the points he makes below:

... the oil intensity of GDP is also being reduced at a faster rate ...
... demand destruction causes oil demand to decline at an accelerating rate ...
... net effect is that global oil demand is forecast to grow

So let me get this straight.

Your "guru"is saying that the "demand" thing will decline and continue declining at ever faster rates ("at an accelerating rate")
and this will cause the "demand" thing to "grow"?

And you call this in-the-fog vortex of smoke and mirrors a making of a "point"?

I'm sorry. I just happen to be so stupid, so unfit and so disloyal that I fail to see the finery of the Emperor's New Clothes **.


(** In the story of The Emperor's New Clothes, the crooked weavers of fantasy cloth accused everyone who could not see the cloth and its sheer beauty of being disloyal to the king and too stupid to understand what is transparently there before their eyes.)

Your "guru" is saying that the "demand" thing will decline and continue declining at ever faster rates ("at an accelerating rate") and this will cause the "demand" thing to "grow"?

Actually, that's not what he said. He said demand will decline in OECD countries. The oil intensity of GDP will decline in non-OECD. Oil intensity means barrels/GDP. Oil intensity can decline even when you use more barrels, if your GDP rises even more. Put another way, 1/3 -> 2/7 is a decline, even though 2 > 1.

He expects demand to grow more slowly because the OECD will use less, and the non-OECD will be able to grow their economies faster than their oil consumption. I don't know if I agree or not, but that's his argument.

"Oil demand is slow to adjust to price changes, but it does adjust eventually."

I just have to suggest that when this sort of 'formula element' is mentioned like yours here, it seems to do so completely insulated from the essence of what Oil is to the people and companies that demand it. In normal economic parlance, it seems that these are just numbers flowing back and forth, and this is 'just another item on the balance sheet', and if a particular resource has to go away, 'another will step in to replace it.. it's nothing personal, it's just business', etc etc..

Clearly there should be a message attached to the reason that demand has so far been reluctant to move on some price signals, (while it will in particular industries or cases hit tipping points where it will also react excessively to a price signal, as with the potential caving of a string of Commuter Jet markets, or redirecting of Air Freight, perhaps..) With individuals and with businesses, fuel for transport, heat and work is hardly an optional expense.. and people will forgo doctor visits, food, house maintenance, all sorts of other costs, and probably as a very fast reaction to fuel prices, while they can't do as much in most cases to radically shift the distance of their commute, or the complex routing that their company employs to get their products to market. Energy to us is like proper foot-care to a Cheetah.. many other sacrifices will be made before you undermine your mobility and your muscle.

On the demand side - the aftereffects of 2008 price spike and still impacting structural decisions -with current prices considered. In other words, the medium term price elasticity of demand is beginning to kick in.

In the USA, that effect is mainly the type of new car bought. And the shift towards smaller cars is modest at best.

OTOH, airlines have cut available seat-miles by -10% and further, smaller cuts are coming. And the seats cut have been on the older, less fuel efficient airplanes.

France on the other hand is full speed ahead on creating an Oil Free Transportation system - bicycles, trams, electric rail for people & freight.

Significant reductions in oil demand are most closely tied to reduced economic activity. If that is the forecast - 3% more people in 2015 and -3% fewer jobs in 2015, I can see reduced demand for oil at lower prices.


Fundamental Factors Should Suppress Crude Prices Into 2012

Non-OPEC nations are expected to increase average exports by 770,000 bbl/day in 2012 from an increase of 550,000 bbl/day in 2011. This is including an estimated decrease in Russian production.

That is the EIA's very optimistic projection for the remainder of 2012 and the remainder of 2011. So far they have been woefully wrong in their 2011 predictions. They predicted non-OPEC oil production would take off right out of the gate in 2011. It did not, they went down instead. Both JODI, thru June, and the EIA, through May, have non-OPEC down for the first half of 2011. But we shall see.

US inventories are the same as 2010. 359 million barrels still remain in reserve, and are even expected to increase to 364 million by the end of September.

Inventories were the same as in 2010 back in June but are now well below that level. Inventories now sit at 346 million barrels and have dropped for the last two weeks. Anyway it is impossible to predict inventory levels precisely but it is not likely they will change enough to greatly affect oil prices.

Ron P.

Petrol prices got jacked up by around 5% today in India owing to a falling currency. And people have started blaming corruption for this. All the talk reminded me of Orlov's five stages of collapse.

To some extent people are correct. Taxes on petrol are very high in India. Where does the tax money go? What do people get in return? Bulk of the tax money goes into the pockets of corrupt politicians and bureaucrats.

Aren't the electricity rates also going up in Delhi soon?

I agree that there is corruption but taxes have remained same for many many years. The hike is purely due to prices going up in world markets, people in India just love to blame everything on corruption.

...people in general just love to blame everything on corruption.

How's that?

It's a defense mechanism I guess, sort of like a punching bag. For people to hide away their own shortcomings. You should tune in to some of the TV channels, unbelievable comments.
Falling crop yields..corruption. Communal Riots...corruption. Droughts...corruption Floods...corruption. I mean it's a massive problem all right but the world isn't so simple that all problems should stem from one single thing.

If we include the SPR, crude oil stocks are down 58 million barrels since May 27:


Fellow citizens the fight for the black gold has begun


NEW DELHI: India today dismissed Chinese objections over its oil exploration projects in two Vietnamese blocks in the South China Sea, saying its cooperation with Vietnam was as per international laws and it would like the cooperation to grow.

Noting that there was an active programme of trade and economic cooperation with Vietnam, External Affairs Ministry official Spokesperson Vishnu Prakash said cooperation in the area of energy, hydrocarbon as well as renewable energy was one of the important facets of it

These folks claim that their new gizmo can make Ammonia for ~ 20 cents per Liter and fit that the kit can fit in a standard shipping container (That's what I inferred anyway from the article) and be easily placed on-site at existing locations which dispense gasoline.


~90cents/gallon estimate...add another 90 cents for cost growth from lab to commercial reality...add another 90 cents for profit, and another 90 cents for taxes...ammonia fuel from water, air, and electricity for the magic iron chariots for ~$3.60/gallon?

Of course there is the cost of new vehicles with flex-fuel engines...

Good use for stranded wind power?

Didn't there used to be a poster here called 'Stranded Wind' who advocated such an idea?

A second read of the artilce seems to indicate that the 20 cents per liter is for the production of Ammonia from the Hydrogen and air. Which never was the expensive part in the prodution to begin with. Producing hydrogen from electrolysis or other means is whats expensive. Seems the only thing they have done is find another(maybe even practical way) to store hydrogen.

Conventional electrolysis units are made up of more than 100 2-volt cells connected in series, ensuring they can be powered by a 240-volt mains electricity supply. By using a transformer-like device to step the mains voltage down to 1.75 volts, Fleming has been able to simplify the design to use just eight cells. This makes the units much cheaper to manufacture and operate.

I am confused. Why would you put Mains 240V Alternating Current through a series of cells in series? Why would a "transformer-like-device" putting out 1.75V AC be any better? Can anyone make sense of the above?

"Why would a "transformer-like-device" putting out 1.75V AC be any better?"

Not sure where you got alternating current, as conventional electrolysis uses DC current (anode and cathode). AC must be converted to DC at some point. That said, the math still doesn't work for me without some assumptions. Changing 100+ 2 volt cells to eight 1.75V cells would involve around a 14 times increase in amperage (per cell), assuming a constant watt input, if my math is correct. This may be the point. "Transformer-like-device" is pretty vague.

I don't recall the electrical configuration of the large electolysis system we used on submarines (for making O2), just that we called it "the bomb" :-0

Not sure where you got alternating current, as conventional electrolysis uses DC current (anode and cathode). AC must be converted to DC at some point.

Yes I know that electrolysis uses DC. That was my point. The article says that conventional techniques use 240V mains electricity (50/60Hz AC) running through a series of cells in parallel. It specifically says a transformer isn't used let alone mentions any form of rectification. However perhaps the miraculous "transformer-like" device mentioned is actually a low voltage DC power supply.

Efficient switchers for H production. www.powerstream.com
Search the site for Hydrogen Generation

I have a distant recollection of another student inadvertently (?) using AC for electrolysis. The collected gas would combust rather spectacularly for reasons that are now all too obvious.

Still, I rather doubt that there are many circumstances under which you would want to produce a large volume of hydrogen and oxygen in a 2:1 ratio as a gaseous mixture.

Low voltage DC supplies can be fairly efficient - the better power supplies in PCs can put out low DC voltages with >80% efficiency depending on the load current, but these are quite a bit more complicated than the traditional transformer + rectifier circuits. Also, when one is dealing with high currents and low voltages, it is important to be careful about I^2R losses in the wiring used to distribute the power (this is the reason that the CPU power supply in a PC is located on the motherboard close to the CPU socket - a high end CPU under load can draw the better part of 100 amps).


China buys gold, challenges US dollar

WikiLeaks cables allege that China is buying gold to weaken the US dollar's supremacy as the world's reserve currency.

"They [the US and Europe] intend to weaken gold's function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the US dollar or Euro," stated the 2009 cable, quoting Chinese Radio International. "China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold."

The cable [scroll down] is titled "China increases its gold reserves in order to kill two birds with one stone". Taken together with recent policy announcements from Chinese banking officials, it may signal moves by China to eventually replace the US dollar as the world's reserve currency.

I just feel compelled to point out a couple of things about items from this news cycle:

1. Re: Solyndra, "DOE/administration ignored red flags" isn't an appropriate headline to use when what really happened is "GOP Reps Insist DOE/administration ignored red flags." I actually heard a good chunk of the E&C subcommittee hearing in question, and I can assure you that the teabag victory dance is premature and that many news agencies' handling of this story has been irresponsible in the extreme. Anyway, I guess they won't be happy until the U.S.' domestic PV industry is entirely handed over to China. The story certainly won't do anything to change the overall trajectory of the energy future -- geology bats last here, not politics.

2. It's not news when an oil company CEO asserts that the oil industry is a huge job growth engine.

That's all I got.

New report (pdf) from the Congressional Research Service

U.S. Energy: Overview and Key Statistics

(pg 18-19)...Changing Views on Oil Resources. Because the oil market is forward-looking, future supply and demand conditions are important factors in determining price. During the crises of the 1970s, there was a widespread belief that natural resources in general, including oil, were running out. In the 1980s, after the price of oil collapsed in the face of reduced demand and excess production capacity, the limits to growth concept lost much of its support. During the recent price runup, despite a doubling of world proven oil reserves since 1973, there was, and continues to be, widespread belief that future finds of large oil deposits will diminish and even that world oil production will soon reach a peak and stabilize or decline. Controversial as these predictions may be, they have a powerful influence on the forward-looking oil market.

Oil ................................................................................................................................................... 6
   Petroleum Consumption, Supply, and Imports.......................................................................... 7
   Petroleum and Transportation ................................................................................................. 10
   Petroleum Prices: Historical Trends........................................................................................ 12
   Petroleum Prices: The 2004-2008 Bubble and Back Up Again .............................................. 15
   Why Are Oil Prices So High?.................................................................................................. 18
   Gasoline Taxes ........................................................................................................................ 20
Electricity...................................................................................................................................... 20
Other Conventional Energy Resources.......................................................................................... 24
   Natural Gas............................................................................................................................. 24
   Coal............................................................................................................................................... 28
Renewables ................................................................................................................................... 29
Conservation and Energy Efficiency ............................................................................................. 31
   Vehicle Fuel Economy ............................................................................................................ 31
   Energy Consumption and GDP ............................................................................................... 32
Major Statistical Resources ........................................................................................................... 34
Energy Information Administration (EIA) .............................................................................. 34
Other Sources .......................................................................................................................... 35

For a national research service, they didn't dig too deep.

Thanks for the link Seraph, this is one I missed. I am going to study it closely. At first glance I see they believe that "proven reserves", especially in the Middle East, have increased dramatically therefore we are set for increased production for decades in the future.

If they only knew.

Ron P.

From Greenland

Map reveals greening of Greenland The Times Atlas has made it official: Greenland's ice loss is permanent, and they have had to re-draw it in their latest edition.

Time-lapse Video: Biggest Greenland glacier break-up For scale: The glacier is 600 ft thick the distant cliffs are over 3000 ft high and nearly 10 miles away.

So are the Danes selling lots for retirement homes there yet?
Get in the boom while you can!
It's never been a better time to buy!

Come one guys, Bernanke says we need another bubble.

Re: Drought threatens way of life for Texas ranchers above:

I like this qoute:

The drought is a result of La Niña, a weather phenomenon that cools surface temperatures in the eastern Pacific Ocean and creates drier-than-normal conditions in the southern United States, Nielsen-Gammon says.

And this La Niña is the result of what? Any guesses?

Meanwhile, this was linked from the Energy Bulletin:


Algorithmic trading to replace humans in the stock market

The UK Government’s Foresight panel, led by Dame Clara Furse, has released a working paper that points out that algorithmic trading, or high frequency trading, will soon replace human decision making when it comes to the stock markets.

... The Foresight panel notes that human workers are made with hardware that is too slow and runs on limited bandwidth in comparison to their computer counterparts.

What could possibly go wrong?

How SkyNet really takes over the world. The war against the machines terminating your portfolio is beginning.

We don't need SkyNet, we have the U.S. Congress and Donald Trump

The most anti-environment Congress ever?

Analysis by Democrats shows the Republican-dominated Congress has voted 125 times on measures that undermine environmental laws and the powers of the EPA

Donald Trump's plea to Alex Salmond over 'ugly' wind farm

The US tycoon has written to Scotland's first minister to object to plans to build an offshore wind farm near his luxury golf resort

Yeah, god forbid we should try to build a wind farm somewhere a rich guy might see it. Keep blowing up mountain tops, and dumping toxic slag into people's drinking water, though. That doesn't hurt anyone that matters.

Well, ugly is also in the eye of the beholder, I guess. I drive past a rather extensive wind farm somewhere in Illinois when I go between Madison, WI, and Tennessee, and I think it's "raht purdy." Certainly the most entertaining thing on that particular landscape. And certainly not "ugly."

Edited to add: MUCH purdier than MTR and coal ash slurry and Donald Trump's hair.

e - So true. I live across the highway from the largest oil refinery in the western hemisphere and enjoy seeing it especially at night: always remindes me of Christmas with all the little lights. And the flare burn offs reminded on New Year's fireworks sometimes.

What with the Reapers and such, I really don't object to the analogies to SKYNET, as was done a couple days back.. but I will continue to mention that these decisions are what PEOPLE are doing to their own kind.

The 'Machines' are not making any antisocial, aggressive or blatantly negligent decisions.. People are.

From Harry Potter,
"Never trust anything that can think for itself if you can't see where it keeps its brain." JK Rowling

or in former terms..

"Pay no attention to the Man behind the Curtain!" Frank Baum

In the US, algorithmic trading is reported to account for about 3/4 of the trading volume.

Notorious Grid Bottleneck Spawns Western Blackout

The blackout that squelched power flows to nearly 5 million residents of Arizona, California and northern Mexico last night and shut down California’s San Onofre nuclear power plant may be the latest sign of strain in an outdated U.S. power grid. The incident began during maintenance at a substation in Yuma, Arizona that lies at the center of a sclerotic section of the grid between Phoenix and Tucson—one long recognized as critically congested and thus at heightened risk of failure.

Utility officials have not yet identified an explanation for how the substation work took down such a large grid area, since transmission systems are supposed to have sufficient redundancy to survive the loss of any given line or generator. However, such incidents are not without precedent. In 2008 an engineer with Florida Power & Light blacked out 4.5 million customers in south Florida during work on a substation switch in Miami.

What is clear, however, is that the substation where trouble began last night lies at the center of last night’s disruption is located in a sensitive spot. The North Gila Substation operated by Phoenix-based utility Arizona Public Service (APS) is on the eastern edge of a zone extending to the Pacific Coast that the U.S. Department of Energy (DOE) judges to be the second-most congested transmission flow path west of the Rockies. The corridor runs from south-central Arizona to San Diego, and at its heart is a single-circuit 500-kilovolt high voltage transmission line that brings coal-fired power from southeastern Arizona to San Diego.

That single line to San Diego leaves the city highly vulnerable, since California’s environmental policies have shuttered many of southern California’s baseload generating plants. “They rely on imports, and if those imports go offline they have nothing to rely on,” says John Kyei, a former APS transmission planning engineer who is now director of Transmission for Houston-based renewable power developer BP Wind Energy.

You get what you pay for. If they do not pay for redundant transmission lines then they get the occasional blackout. And do not pay for backup generation within the bottleneck.

Quite so.

To make things even worse, part of the agenda behind the so called "smart grid" is to try to use demand side load management to allow them to reduce the redundancy even more.

I think the people of California have been well and truly duped on electricity. They are being sold the image of green power, when the reality is that the state is hopelessly dependent upon imports, green or otherwise, in some cases from two states away .

Any efforts to build extra generation, or transmission, within California is fiercely resisted, so the inevitable result is that, unless their load decreases (it isn't) then they will be pushing the envelope of reliable operation.

California demand is well below their peak of some years ago.


Any idea how much in-state generation has been shut down?

Only just.

According to the CA gov figures, they peaked in 08 at 268,000 GWh and were 250,000 in 2010, so a 7% reduction, mostly due to recession.

However, certain areas, like San Diego, and the south in general, are still increasing, and that is where the bottlenecks are.

Anybody know if they got any Sun there in the last couple weeks?

What is odd is that there didn't seem to be enough transmission capacity between LA and San Diego to compensate for the loss of the line from AZ to San Diego.

San Diego's grid appears to be largely independent of LA's.


Actually, Path 46 and Path 27 have all of SoCal pretty well interconnected, just not well enough to compensate for the loss of a major transmission corridor.

...since transmission systems are supposed to have sufficient redundancy to survive the loss of any given line or generator.

edpell, it may not be just a matter of "you get what you pay for".
I suspect the analysis will show multiple issues related to the blackout. Loss of one transmission line should not cause a blackout, however if subsequently other line(s) open then the system may get into a cascading situation leading to a blackout. The eastern US has tighter interconnections than the western US, yet the large east coast blackout of 2003 still occurred. The electrical grid is a complex machine that overall operates very well. An official report for the San Diego outage will likely be out in about 6 months.

The first Chinese-built car is finally being offered for sale in the U.S. All-electric Coda: First Chinese-made car comes to U.S.

$45k for Chinese 'quality'. Good luck with that. Looks like a Ford Tempo to me....

Interesting stuff.

Looks like they have built a Corolla clone around their electric system. 50% more battery capacity than a Leaf, and about 50% more miles - range of approx 150. peak power of 100kW - more than enough for normal driving.

Kerb weight of 3670lbs, which is getting up there for a small/midsize car

All the specs at CODA's website


At about $36k after rebates it's still expensive compared to a Corolla, Civic, etc As with the Leaf, it is for those who want to have an EV, rather than for those who are looking to save money on driving.

If you were to drive it 100miles/day, or 25,000 miles/year, you would use 6000kWh of electricity, for $400 or so, compared to gasoline at about $3000 per year, so for a long commuter, it might, just might be worth it over a ten year horizon. But with average mileage at 15k/year, it is a different story.

Would be a different story in Euro markets, where fuel is $8/gal, but CODA isn't going there.

I personally think a better way to go would be a small two seater EV - something similar to GM's original EV-1, that would be smaller, lighter, more aerodynamic, and get the same range on half the batteries. Then it might have a chance of being affordable.

Still, I applaud these guys for bringing another EV to the market - be very interesting to see how it sells - an oil price shock wouldn't hurt.

It looks like the battery is deeply integrated into the chasis. Just wondering how that effects cost at replacement time.

I've just started shopping for an Electric Scooter to be our 3rd vehicle, soon to become our Second Vehicle instead.

What do you have in mind, Bob? I'm sure I saw one of these in Atlanta a few weeks ago. I just caught a glimpse 'cause it was really scooting along in the other direction. It's a kit, which I like, and three wheels are more stable on gravel. Building an E cycle from scratch is a big project, but a kit allows one to source good batteries, etc., and if you can assemble something, you should be able to repair and maintain it. It's nice when parts that wear out are off-the-shelf, standard stuff. A human-assisted, solar-charged, electric three-wheeler is my goal someday.

Hey, G.
I am thinking about something kind of more vanilla, actually.. sort of along these lines, but with the PV up on my roof instead of on the Vehicle.. http://www.ecofriend.com/entry/make-your-own-super-solar-wings-to-propel... (original article was in HomePower, I think)
Something that can get Leslie to work, or perform basic errands, not draw much attention when parked..

Seeing a lot more scooters in Portland now.. but the Electrics off the shelf still seem pretty uncommon, and pricey.. so I'm thinking about getting a broken Gas Scooter and a conversion kit. Would love to find a nice old Vespa Chassis, and there's a sweet little 70's? Honda on the next block with a flaccid front tire.. I might see if they are looking to dump it.

Of course, my preferred alternate, similar to Fred Magyar and yourself, it seems, I think, is some form of a Faired Velomobile, Pedal/Electric .. but for starters I'll go with the basic scooter, if the right combo of deals shows up.


"A human-assisted, solar-charged, electric three-wheeler is my goal someday."

that is the holy grail for me ..... closest I have seen ...

on board solar panels are not worth the drag



had problems with the proto type

anyone know of a similar project ?

all the real work is being done here ....http://endless-sphere.com/forums/viewforum.php?f=21

my favorite 3 wheeler ...http://www.evalbum.com/2311

"on board solar panels are not worth the drag.."

Yeah, I'm thinking a smaller array at home to charge the EV batteries direct and supplement the home PV; a solar trike port.

Thanks for the links! FFR is only 2 hours from here (in Fletcher, NC) and I'll be in their area in 2 weeks. I'll stop in and report back to TOD.

probably no harder than replacing an engine, but too hard to do a Better Place style battery swap. Actually, it seems that none of the EV developers are at all interested in swappable batteries maybe it will happen when Apple comes out with the iCar...

Unfortunately, Steve Jobs is ill :-(

A nice little 2 seat EV car like the original (1999-2007) Honda Insight with a small battery option (range 60 miles in ideal conditions), a large battery option (2 of above, 115 mile range in ideal conditions) and an XL option (3 of the above, 165 mile option).

Less carrying space as battery space enlarges and increased cost for extra batteries.

Best Hopes,


Elon Musk: In 20 years, most cars will be electric


yep, the original Insight would do the job - saw one of them in my town the other day - quite a nice unit, really.
Both the I sight and the original EV-1 paid a lot of attention to aerodynamics, with the EV-1 still holding the world record for a production car at 0.19.

Add in advancements in batteries, motors, etc, and lightweight building that have happened in the last 10 yrs, and you could build the same shape of either car lighter and with more battery capacity.

Whether three battery modules are better than just two (say 80miles each) is a minor question. You could also have a plug in generator that mounts onto a trailer hitch on the back, similar to hitch mounted carrying racks like this;

This rack for the mini is rated at 200lbs capacity - a small DC gasoline generator, say 10kW, would be half that.

I just don;t understand why all the EV makers are trying to make 5 seater, midsize cars that use a lot of batteries for moderate range, when they could make smaller ones and resolve the range issue, and make them cheaper. There has to be a niche for someone there.

The Energy Fairy ?



How do I wash that off me now? I wonder how many of those interviewed were told about the 'Alien Energy' stuff?

But still, Yecch!

Duane Elgin, Nassim Haramein, Steven Greer, Jack Kasher, Daniel Sheehan, Adam Trombly, Brian O'Leary, Vandana Shiva, John Gatto, John Robbins, Deepak Chopra, David Icke, Catherine Austin Fitts, G. Edward Griffin--

We live by story and myth

Let me see if I have this straight: This guy claims some basic repeating design burned indelibly into rock that was left by ET's, is trying to convey to us a machine (which he has no idea how it works but has some atomic looking power loop) that will draw energy from the air/universe, and it is a worldwide conspiracy by those in power and corporations that provide energy to us at a profit, to keep this information from getting out and made into a machine, that would be so powerful it would transform the entire planet forever?

Sounds like he used the plot from Total Recall with Arnold, in which there's a massive power machine on Mars (constructed and left there by aliens - but for some vague reason never turned on) that will transform the entire atmosphere to a breathable one for animals and humans in a matter of a few hours, and all it needs is someone to put their hand in a premade hand shape and push down, but the greedy one's running the planet would no longer be able to ruthlessly run the place at great profit if that machine gets turned on, so they fight Arnold tooth and nail to stop him, only to lose out and Mars is transformed forever.

It's called plagerism.

and it is a worldwide conspiracy by those in power and corporations that provide energy to us at a profit, to keep this information from getting out

Except of course for the people that have made a movie about it. Oopsy right there with your secret worldwide conspiracy.

In fact given that most countries don't even get along with each other, could you even have a worldwide consiracy? Does making your first million come with a booklet on the secret handshakes?

What on earth will it take?

Be a part of the conversation.

Be a part of the solution.

Huh??? What conservation? That aliens will help us to overcome the Illuminati sponsored Federal Reserve, Oil Barons and Rockefeller clansmen?

What solution? To tap into an all-encompassing panacea embedded in the rock of some ancient mystical Egyptian temple?

Notice the release date - November 11th, 2011 - 11/11/11. They even have the numerology sideshow covered. Everything you need for hyping the New Age cottage industry. Snake oil salesmen are alive and well in America.