Drumbeat: September 16, 2011

The power of infinity: How will mankind keep the lights on and the temperature down?

AS THE American presidential election approaches, expect to hear plenty of talk in the months ahead about “energy independence”. Some candidates may also express fears over “peak oil”. The merits and terrors of nuclear power will be discussed. Anthropogenic climate change, or Republican denials of it, already has been. Energy is a critical issue in today’s political debate—as is only appropriate. Providing sufficient energy to seven billion increasingly affluent humans without burning up the planet may be humanity’s greatest challenge. “What is at stake”, writes Daniel Yergin, “is the future itself.”

Mr Yergin’s previous book, “The Prize”, a history of the global oil industry, had the advantage of an epic tale and wondrous timing. Years in the making, it was published, to critical and popular acclaim in 1990, two months after Saddam Hussein invaded Kuwait, thereby putting Saudi Arabia’s oilfields in peril. “The Quest”, as its more open-ended title suggests, is a broader and more ambitious endeavour. It is, first, an account of the many ways in which people have sought to produce energy—by burning fossil fuels, harvesting the wind, brewing biodiesel and trapping the sun’s heat. It is also an analysis of the increasingly fraught political context in which this business is conducted, especially with regard to three big and longstanding fears: energy scarcity, energy security and, more and more, the environmental ruin that energy can cause.

The Peak Oil Crisis: A September Recap

The release of the International Energy Agency's Oil Market Report for September is a good time to review the status of our ongoing crisis for the report updates the IEA's latest thinking on the prospects for global oil. The IEA reports that its preliminary estimate for world oil production in August was 89.1 million b/d despite the loss of 1.6 million b/d of Libyan production. The Agency, however, maintains that the demand for oil has been running ahead of global production since the second half 2010 when the demand for oil surged.

The difference between supply and demand, which for a while amounted to 1.4 million b/d, has been coming out of global stocks which have been slowly falling in recent months. It is this imbalance between supply and demand that is likely the root of our high oil and gas prices. World benchmark Brent crude has been over $100 a barrel since last spring and showing little sign of falling.

Michael Klare - America and Oil: Declining Together?

America and Oil. It’s like bacon and eggs, Batman and Robin. As the old song lyric went, you can’t have one without the other. Once upon a time, it was also a surefire formula for national greatness and global preeminence. Now, it’s a guarantee of a trip to hell in a hand basket. The Chinese know it. Does Washington?

America’s rise to economic and military supremacy was fueled in no small measure by its control over the world’s supply of oil. Oil powered the country’s first giant corporations, ensured success in World War II, and underlay the great economic boom of the postwar period. Even in an era of nuclear weapons, it was the global deployment of oil-powered ships, helicopters, planes, tanks, and missiles that sustained America’s superpower status during and after the Cold War. It should come as no surprise, then, that the country’s current economic and military decline coincides with the relative decline of oil as a major source of energy.

Crude hovers above $89 on optimism over Europe

HONG KONG – Oil hovered above $89 a barrel on Friday on continued optimism that European leaders would be able to get the continent's sovereign debt crisis under control.

Five central banks on Thursday gave their banks far greater access to U.S. dollars in a move aimed at shoring up confidence in Europe's financial system.

The move will buy some time for banks holding large amounts of debt issued by Greece and other financially troubled European countries. Some of these banks have had trouble paying for daily operations because other banks have refused to lend to them any more.

Deja vu as fear factor infects China growth

While oil prices have recently been stable, global economic indicators elsewhere are worryingly reminiscent of 2008, when the slump really started to set in.

Fuel price hike good news: Montek

Planning Commission today said the decision of oil marketing companies to raise petrol price by Rs 3.14 per litre was a good news and would provide credibility to the economic reforms process.

Goldman Sachs Maintains Crude Oil, Copper Forecasts Even as Risks Increase

Brent crude and copper may rally as global economic growth led by emerging markets remains adequate to drive an expansion in raw-materials demand, Goldman Sachs Group Inc. (GS) said, sticking with forecasts for price gains.

Chart Presentation: The Details

Our view is that the strong energy trend that has dominated the markets for more than a decade is coming to an end. Our view is that energy prices will return to a flat trend below 2008’s peak for at least the next few years and that ‘peak oil’ has more to do with demand than supply. Our view is that it is time for the trend to shift from energy producers to energy users.

Netherlands Gas Trade Beats Peers as LNG Arrives: Energy Markets

The Netherlands’ natural-gas market is growing faster than its peers, fending off competition from Germany to be mainland Europe’s largest as the country starts importing liquefied fuel for the first time.

Indonesia gas output exceeds 2011 government target

JAKARTA (Reuters) - Indonesia has already exceeded its natural gas production target for the whole of 2011 by almost 9 percent, boosted by higher output by energy majors, Indonesian oil and gas watchdog BPMigas said.

Libyan oil refinery attack "isolated incident": NOC

BENGHAZI, Libya (Reuters) - An attack on a Libyan oil refinery this week by militia loyal to former leader Muammar Gaddafi was an isolated incident and steps are being taken to protect oil infrastructure, the head of the National Oil Corp. (NOC) has said.

Libya Plans to Resume Partial Oil Exports Within Four Days, Official Says

Libya, holder of Africa’s largest oil reserves, will resume partial crude exports within three or four days, the nation’s representative to a meeting of Arab central bank governors in Doha said.

The North African nation will produce about 700,000 barrels a day by the end of this year and an estimated 1.6 million barrels a day by the end of 2012, Abdulla Saudi told reporters today in the Qatari capital.

Russia to trim Q4 oil exports by 0.2 pct

(Reuters) - Russian oil exports via Transneft pipelines will edge down 0.2 percent in the final quarter of 2011 to 53.77 million tonnes from the previous three months, the final export schedule showed on Friday.

Russia oil duty cut delayed by Energy Min-Sechin

(Reuters) - The Russian government is waiting on documents from the Energy Ministry needed to formalise a long-awaited cut in crude oil export duty intended to encourage more oil output, Deputy Prime Minister Igor Sechin, Russia's top oil official, said on Friday.

Iran 'opposes' EU plans to support Caspian pipeline

Iran has said it shares Moscow's concern over an offer by the European Union to broker talks on a proposed pipeline to carry natural gas to the West.

The 27-nation bloc agreed on Monday to negotiate a deal between energy-rich former Soviet nations Azerbaijan and Turkmenistan aimed at building a Caspian Sea pipeline that would carry Turkmen gas directly to Europe.

South Stream to present investment plan to banks next year

(RIA Novosti) Participants of the South Stream pipeline project, intended to carry Russian gas along the bed of the Black Sea to Europe, will present its investment plan to banks in the second quarter of 2012, Paolo Scaroni, chief executive officer of Eni, one of South Stream shareholders, said on Friday.

Ukraine leader to visit Moscow amid gas row

YALTA, Ukraine (Reuters) - Ukrainian President Viktor Yanukovich will visit Moscow later this month for talks with Russia's Dmitry Medvedev on their gas dispute which has sparked sharp recriminations and driven ties between the former Soviet allies to a new low.

The one-day visit, set for Sept. 24, will be the first meeting between Yanukovich and the Kremlin leader since the two fell out over Ukraine's calls for a better deal on the price of its huge Russian gas imports.

Russia's Gazprom signs on to Libyan oil project with Italy

Sochi/Moscow - Russia's Gazprom on Friday signed on as a partner in a Libyan oil development project alongside the Italian corporation Eni, company officials said.

The Russian energy giant will pay 163 million dollars to take over a 33-per-cent stake in Libya's Elephant oil field, purchasing half of the shares in the venture owned by Eni.

Russia, China can agree on oil price out of court-Sechin

Russia's Deputy Prime Minister Igor Sechin said on Friday that an oil supply dispute between Moscow and Beijng could be solved out of court.

A source close to the situation has said China's CNPC had underpaid $40.5 billion to Russia's Transneft oil pipeline monopoly. Russia's top crude producer Rosneft has also complained it had not received enough money from China because of differences over tariffs. The companies said they were ready to go to court.

Baker Hughes More Than Doubles Revolving Line of Credit to $2.5 Billion

Baker Hughes Inc. (BHI), the world’s third-largest oilfield services provider, said it obtained a $2.5 billion revolving line of credit that more than doubles its borrowing capacity.

ANALYSIS - BP oil spill report may prompt over $30 bln pay-out

(Reuters) - Findings of the second major investigation by the U.S. government into the 2010 Gulf of Mexico oil spill, may press BP into putting over $30 billion on the table to quickly settle its outstanding legal headaches.

China warns US oil firm after spill: report

China has told US oil giant ConocoPhillips to step up its efforts to seal leaks and clean up a spill off its north coast after finding oil was still leaking into the sea, state media reported Friday.

EPA hearing on gas drilling pollution in Pa.

PITTSBURGH (AP) — The U.S. Environmental Protection Agency will hold three public hearings in September on the agency's proposed standards to reduce air pollution from oil and gas drilling operations.

China leading nuclear energy growth

The world's nuclear energy capacity is set to double by 2030, reports an industry association, dispelling fears that the Fukushima disaster would put a cap on growth.

Most Core Detectors Found Damaged At Fukushima No. 1 Reactor -Kyodo

TOKYO -(Dow Jones)- Tokyo Electric Power Co. said Friday most of the detectors lying below the pressure vessel at the No. 1 reactor of the crippled Fukushima Daiichi nuclear power plant that check the condition of the control rods have been found damaged, Kyodo News reported Friday.

The damage - mostly burnt wiring or electrical shortages - is believed to have been caused by the intense heat in the wake of a core meltdown.

Chugoku Electric says can meet peak winter demand

(Reuters) - Chugoku Electric Power Co expects to be able to supply 8 percent or more above peak demand this winter by increasing fossil-fuel power generation, the president of the western Japanese utility said on Friday.

Japan Evacuees Angered by Tepco Red Tape

Evacuees from around Tokyo Electric Power Co.’s wrecked Fukushima nuclear plant said the company’s 200-page package for compensation claims is “outrageous” and needs to be simplified.

U.S. Oil and Gas Renaissance

My next oil and gas trade could be my biggest gainer to date.

In fact Reuters says it could be "the next oil surprise in the U.S.," that it's a "huge formation... that could be worth up to $20 billion to shareholders."

The formation is known as the Utica Shale, the majority of which resides in Ohio.

Fuel crisis clear, present danger

FARMERS have been warned: petrol prices will spike and agricultural production is at risk of becoming very expensive.

According to journalist, author and Fellow of the Australian Academy of Technological Science and Engineering Julian Cribb, the world passed its peak oil reserves in 2006 and if swift action is not taken, the industry will be in for a rude shock.

Abiotic Oil a Theory Worth Exploring

It's our nature to sort, divide, and classify. We label ourselves to identify political leanings, religious beliefs, the food we enjoy, and the sports teams we cheer. The oil industry too has its own distinct labels which include the "Peak Oil" theorists, those who believe the world is fast depleting the finite supply of fossil fuel; and the pragmatists, those who recognize that engineering and technological advances in oil drilling and extraction continuously identify new reserves that make oil plentiful.

And there's a third group you may not know. These people are deeply interested in oil and its origins, but their advocacy of "abiotic theory" has many dismissing them as heretics, frauds, or idealists.

Green building to ride energy revolution

The building sector is about to ride the new energy revolution currently spreading across the world, said the head of the World Green Building Council (WGBC) to participants at a green building conference in Singapore on Thursday.

It's Time to Kill the Car Culture, Drive a Stake Through Its Heart, and Electrify Mobility

Stop debating the viability of electric cars, and work on fixing our broken transportation paradigm.

New subsidy policy for energy-saving vehicles

BEIJING - China will launch a new subsidy policy for energy-saving vehicles next month in a bid to encourage automakers to increase green-technology investment and reduce oil consumption.

Future of biofuels seen as hinging on long-term strategy

James D. Newman calls it the “green-versus-green debate” in biofuels.

People want to be environmentally conscious, but they hesitate to part with more green — as in money — to pay for alternative-fuel products, the president and CEO of Noco Energy Corp. says.

Market Risks Are Seen in Energy Innovations

WASHINGTON — The same market forces that doomed Solyndra, the solar cell manufacturer that received $528 million in government loans and then went bankrupt, could imperil other manufacturing ventures that have received loan guarantees from the Energy Department, energy experts warned this week.

The problem is that even if a company with a cutting-edge technology manages to build a factory on time and at the anticipated cost, the market price of its product can collapse before its rollout, they said. That is what happened to Solyndra and its solar power arrays, experts say, as the supply of solar panels from other factories increased and demand lagged.

White House wary of Solyndra re-election effects

WASHINGTON (AP) — The Obama administration was worried about the financial health of a troubled solar energy company even as officials publicly declared the company in good shape, newly released emails show.

U.S. clean energy loan program could double

NEW YORK (CNNMoney) -- The controversial Energy Department loan program that backed a now-bankrupt solar panel maker could nearly double in size by the month's end.

The Department of Energy has until Sept. 30 to give 14 companies final approval for loan guarantees totaling over $9 billion.

Drop in 2010 solar costs may accelerate: study

(Reuters) - The cost to install solar power in the United States fell by 17 percent in 2010 and is on pace to drop even faster this year, according to a new report issued by the Lawrence Berkeley National Laboratory.

The total cost to place solar systems on homes and businesses in 2010 excluding government incentives dropped to $6.20 per watt from $7.50 in 2009, according to the study, the fastest drop in the 13 years of data included in the study by the Berkeley Lab, which is managed by the University of California and partly funded by the U.S. Energy Department.

World’s First Solar Building Exporting Power Shelved by Abu Dhabi’s Masdar

Masdar shelved plans for the world’s first building that makes more energy than it consumes, a year after the financial crisis forced the Abu Dhabi company to step back from setting up the first carbon-neutral city.

China Consolidates Grip on Rare Earths

BEIJING — In the name of fighting pollution, China has sent the price of compact fluorescent light bulbs soaring in the United States.

By closing or nationalizing dozens of the producers of rare earth metals — which are used in energy-efficient bulbs and many other green-energy products — China is temporarily shutting down most of the industry and crimping the global supply of the vital resources.

Who Says Food Is a Human Right?

In 1981, Nobel Prize–winning economist Amartya Sen published Poverty and Famines, challenging the common perception about the root causes of hunger. Through careful analysis of hunger in India, Bangladesh and Saharan countries from the 1940s onward, Sen documented that famines had occurred amid ample food supply, even in some countries exporting food. His conclusion—radical at the time—was that famine is not a crisis of productivity but a crisis of power. Ten years earlier, in her 1971 book, Diet for a Small Planet, my mother, Frances Moore Lappé, put forward a similarly heretical notion: on a planet that produces more than enough calories to make us all chubby, hunger’s root cause is clearly not a scarcity of food but a scarcity of democracy.

A War Against Food Waste

A food industry alliance is planning a three-year initiative to reduce the tremendous amount of food that Americans still throw in the garbage even as they grow somewhat more conscientious about recycling paper and yard trimmings.

The effort, announced by the Grocery Manufacturers Association, an alliance of food, beverage and packaging makers, aims both to reduce the amount of food sent to landfills and to increase donations to food banks for the poor. The effort is being carried out and financed in concert with the Food Marketing Institute.

East Vancouver tenants challenge explicit orders to remove their garden

At issue is Peters’s claim that she and her boyfriend, Jeffery Radke, agreed to rent because they were explicitly told they would be allowed to garden to feed themselves year-round. The couple did not formalize this in written form, only verbally, but have gardened since moving into the large, 102-year-old house in November 2009.

The couple are refusing to take out the garden. Management for Taryn Court Apartments, owners of the building, told them they will tear up the garden if it is still there on September 18 and replace it with lawn.

Greenhouse Gas Rule Delayed

To the surprise of almost no one, the Environmental Protection Agency confirmed on Thursday that it would not meet a Sept. 30 deadline for issuing rules governing greenhouse gas emissions from power plants and other major sources.

People forced to move as world’s lowest country sinks under rising seas

MANILA, PHILIPPINES—Entire communities on some islands in the Maldives have been forced to relocate because of rising sea levels, a Maldive minister said Thursday in a reminder that global warming is taking a heavy toll on low-lying island nations.

Climate change to leave Pacific hungry

Pacific people will grow increasingly hungry and malnourished if the threat of climate change is not swiftly dealt with, a report warns.

The Asian Development Bank has issued an urgent call to rethink strategies dealing with rising temperatures, droughts, floods, higher tides and soil erosion linked to global warming.

Record Arctic Ice Melt Threatens Global Security

UXBRIDGE, Canada (IPS) - All the analysis and commentary about safety and security on the tenth anniversary of 9/11 ignored by far the biggest ongoing threat to global security: climate change. Just days before Sunday's commemoration of the attacks, German scientists pointed to yet another smoking gun of climate change: the Arctic sea ice reached a new historic minimum ice extent.

The rapidity with which the planet is losing its northern ice cap continues to astonish experts. The defrosting northern pole is one of the prime drivers of Earth's climate system and is changing global weather patterns in unpredictable ways.

Three recent posts on Our Finite World that may be of interest:

Don't count on gold in a downturn

Will plug-in automobiles be a success?

European debt crisis and sustainability

Excerpt from the last of the three:

What would humans have to do to really live sustainability with the world’s ecosystems?

I got a shock when I read about the pattern of species extinctions which is taking place that form a part of what is called the “Sixth Mass Extinction.” It turns out that man’s adverse influence on ecosystems didn’t start a few hundred years ago, when we started using fossil fuels. Instead it started way back, when man was still a hunter-gatherer, and there were fewer than 100,000 people on earth.

According to Niles Eldridge, in describing the Sixth Extinction:

  • Phase One began when the first modern humans began to disperse to different parts of the world about 100,000 years ago.
  • Phase Two began about 10,000 years ago when humans turned to agriculture.

Gail, I normally enjoy and respect highly the majority of your work but I find the post on plug in vehicles cost of ownership flawed.

You compare costs of a gas only vehicle to a Nissan Leaf and only consider costs for the first 1000 miles as though long term costs of maintaining a vehicle aren't a factor. Your comparison was:

initial price of the vehicle - tax adjusted
fuel (gas for Versa vs electricity for Leaf)
road costs (as in the cost the government spends on roads)

Somehow you forget the maintenance/repair costs for operating the Nissan Versa:

Regular Costs
Oil changes
Brake Pads (on an EV or Hybrid pads can last hundreds of thousands of miles)
Air Filter
Coolant (antifreeze)

Possible Costs
mechanic's labor/quick change/dealer labor for doing routine maint if you don't DIY.
fuel filter/pcv valve
emission control items like oxygen sensors or catalytic converter
starter/alternator/spark plugs

Maintenance Schedule someone posted for a Nissan Leaf It's tongue in cheek in tone but serious in comparing a regular car vs a Leaf.

Every 7,500 miles / 6 Months (for some cars this might be 5,000 mile)
rotate tires
DON'T change oil - there is no oil
DON'T replace oil filter - there is no oil

Every 15,000 miles / 12 Months
replace cabin air filter
inspect brakes
DON'T inspect exhaust system - there is no exhaust

Every 30,000 miles / 24 Months
replace wiper blades
DON'T replace engine air filter - there isn't one
DON'T inspect accessory drive belts - there are no drive belts

Every 60,000 miles / 48 Months
DON'T inspect/replace spark plugs - there aren't any (though many cars have plugs that are good for over 100,000 miles now)
DON'T replace fuel filter - there isn't one
DON'T inspect catalytic converter - there isn't one

Even if you want to focus on oil by way of gas and ignore materials like brake pads and filters you'd think someone as oil conscious as you would include oil changes into the equations. Note everyone leases and resale value is affected by expected maint costs which will be lower on an EV than a used Versa.

Also on the cost of replacement HV battery packs. A decent portion of cars will never replace the HV battery. Another large portion can be satisfied by harvesting HV battery packs from wrecked vehicles. Insurance companies will "total" a car instead of fixing it even if 90% of the systems are undamaged. There are more available recovered packs for a Prius at this point than there is demand to replace them. To the point that Prius HV battery packs are being used in home brew EV projects due to availability and cost. I know the Prius forums discuss getting recovered packs for $400 to $1200 instead of paying Toyota the $2000 for a new pack (which used to be a $4000 item).

I see no reason to believe that it won't be the same for the Leaf. Some time down the road there will be a supply of recovered Leaf HV battery packs. I'm sure they will be more expensive than Prius packs due to increased size/weight/value but I also expect them to sell for less than the $10,000 you are suggesting. Maybe $4000 to $6000 for recovered packs? That's assuming new prices don't drop below $7500. I can't imagine people paying more than half price for a used pack as common as they will be. Totally guessing but its only a matter of time until we see the supply and pricing.

Other TOD editors thought the Plug-In auto post would be too controversial, which is why it isn't on TOD. I didn't submit the other posts to TOD, because I didn't think the subject matter matched TOD's subject matter.

I didn't talk about repair costs for Leafs and Volts for several reasons:

1. Consumers are essentially beta testing a new product. Consumers Reports refused to give the Chevy Volt a "frequency of repair rating" in its recent rating of the car.

2. The cost of the Chevy Volt and the Nissan Leaf are a whole higher than the cost of the comparable cars with ICE. Clearly there is more involved than simply an electric engine replacing a gas engine. It is the other stuff, as much as the electric engine, that are an issue.

3. If I had assumed repair costs proportional to the cost of the car, it would have made the comparison a lot worse. (I left them out completely.)

4. Car manufacturers frequently give very long warranties on engine repairs, so a difference in costs might affect the car manufacturers more than the customers.

The Prius battery pack is very different from that of the Leaf and the Volt. The Prius battery pack has a much smaller capacity (1.5 kWh, versus 16 kWh for the Volt, and 24 kWh for the Leaf). The Prius battery pack is NiMH; those of the Leaf and Volt are Lithium Ion batteries. Because of the difference in the "size" of the batteries, it is not reasonable to expect that the Volt and Leaf batteries will ever come down to the cost of the Prius battery. It is also not clear that the Lithium batteries will last as long--they are being beta tested right now, in the new cars.

Consumer Guide Automotive had a report on hybrid batteries, which I did not mention in the post had this to say:

But Toyota notes there are still some problems to be overcome before lithium-ion batteries are ready for prime time--at least in cars like the Prius. One is that the batteries have a dangerous tendency to catch fire. The second is that the life span of a lithium-ion battery in an application like the Prius can't yet match that of a NiMH battery.

2. The cost of the Chevy Volt and the Nissan Leaf are a whole higher than the cost of the comparable cars with ICE. Clearly there is more involved than simply an electric engine replacing a gas engine. It is the other stuff, as much as the electric engine, that are an issue.

You are dead wrong on this. Using your own numbers, if you subtract out the price of the battery, the price of Leaf is essentially exactly the same as comparable ICE vehicle. Thus clearly the other components are not a big deal.

Electric motors are not very expensive to build. Just think about it, Gail . . . every hybrid being sold includes both a gas engine AND an electric motor AND a (small) battery. If electric motors were expensive, hyrbids would make no sense at all. Right now, EV electric motors (a little bigger than the ones in hybrids) are more expensive because the manufacturing volume is low. It really is all about the batteries.

If by success, we mean “sell lots of vehicles” the answer is probably “no” unless the price comes down a lot–say 50% from today’s prices, so that price is in line with what common people can afford.

That way over-stated. If they came down by 50% then they would be the same price as gas cars. Everyone would buy them because that would be like paying 50 cents a gallon to drive. They do need to come down in price . . . but just little bit more. And the rising price of gas will do the rest.

And the other guy is dead on correct about maintenance costs being much lower for an EV. However, I can understand not including that because it cannot yet easily be quantified. But it really is a no brainer . . . there are very few moving parts in an EV drive train.

But Toyota notes there are still some problems to be overcome before lithium-ion batteries are ready for prime time--at least in cars like the Prius. One is that the batteries have a dangerous tendency to catch fire. The second is that the life span of a lithium-ion battery in an application like the Prius can't yet match that of a NiMH battery.

Again, you are using information that is way out of date. Toyota was bashing Li-Ions at that time to tout their Prius at the time. The fire-issue is with lithium-cobalt batteries that no automaker (except Tesla) uses. Toyota had spent a lot to secure rights to NiMH battery materials. But the Li-Ion bashing was just marketing bluster.

How do I know this? Because the plug-in Toyota Prius uses Li-Ions.

Liar, liar, pants on fire!

I get the impression this is an emotional subject for some people.

The material I quoted above was undated, which made it hard to tell if it was a year or two out of date. Note that that was not included in my post, just in the comment above.

There are a lot of lithium ion combinations that battery makers are looking at to try to make a cheaper battery. With new combinations, it seems to be that it would be hard to do enough beta testing to find out all of the things that could go wrong before the cars with the batteries actually get out on the road. How long will the batteries really last? Will they explode in an accident? This would seem to add a new element of risk to the process.

I'd say a topic of high interest but not 'emotional'. If I let emotions into the analysis then the analysis will be bad.

I am guilty of being emotional when people like John Peterson spew out intentionally false information which may misguide public policy. That definitely makes me mad. (Like the Chesapeake CEO saying we can supply all our own oil.)

How long will the batteries really last?

Yes, new battery chemistry systems are being designed and tested all the time. And every new battery system will require rigorous testing. And they can simulate the effect of aging with high temperatures and 24-hour repeated cycles of usage. Nissan and GM would not slap on 8 year warranties without such thorough testing. They don't just make wild guesses.

Will they explode? No, they won't. They do all sorts of short-circuit tests. They shoot nails through the batteries.

All this Li-Ion stuff is not nearly new as you might think. 14 years ago in 1997, Nissan created the Nissan Altra electric that used Li-Ion batteries back then! Yes, it was no where close to being economically feasible. But that shows you how long they've been refining the technology.

And I agree that one cannot justify an EV today purely on economic numbers. EVs are now for early-adopters, tree-hugger, national security mavens, technogeeks, peak-oil doomers, etc. But they are very close.

Also . . . your analysis is mostly done ignoring the tax-credit. One can debate the merits of the tax-credit but the fact is they do exist right now.

I tend to agree with your content, but you should offer a humble retraction for the "Liar, Liar" snippet up there.. even if it was completely in jest, it was inappropriate in this context.

I find some of Gail's articles on Renewables, EV's and other So-called green programs to have the imbalances and blind-spots in coverage that you have implied, and I think it's those imbalances that end up getting the 'emotional' responses that she has mentioned, misattributing that indignation to some kind of stoic allegiance to our pet sources .. but in order to have that discussion, we've got to be on our best behavior, or it offers a skewed proof that will only further those misunderstandings.

Frankly, the 1000 mile evaluation is heavily skewed towards the Gas vehicles, as EV's, like many cleaner technologies will be steep investments, and only show their reward in the Long-term. As for maintenance, those Rav4 owners I link to often mention never going into the repair shops any more.. and when more of the braking is regenerative, that number will drop even further, as the battery life gets longer by the same token.

Frankly, the 1000 mile evaluation is heavily skewed towards the Gas vehicles,

As are many other comparisons made elsewhere, especially with midsize or larger vehicles.

We really need to shift the paradigm of personal transport to smaller vehicles, be they smaller cars, or bikes/scooters, and then electrifying them becomes much easier. Of course, such a shift is away from what makes America, America, so it is being resisted.

As pointed out above, most of the cost seems to be in the batteries - a Nissan Versa at $11k compared to a Leaf at $35k implies a lot being spent on batteries and associated systems. Of course, each mfr is making theirs proprietary, rather than using commodity products.

But I think Solyndra shows us the potential futility in trying to create a proprietary product in a commodity market.

meanwhile the commodity LiFePo4 batteries have been around for years now, being used by the EV conversion people, and are well proven, and it is a commodity market.

This supplier, Electric Autosports, sells a 9.6kWh battery kit, complete with charge and Battery Management System, for $6275, or about $650/kWh. Now this is retail, not OEM, so if we assumed that an OEm can get it for 20% less, then it is at $520/kWh.

How many kWh do we really need? the original GM EV-1 - the most aerodynamic production car in history, had an 18.7kWh pack (lead acid) and got 80-100miles per charge, or 4-5 mi/kWh. Allowing for some improvements on that, better batteries, controllers motors, etc, 6mi/kWh is reasonable, so the 100 mile range would need 16kWh (same battery size as the Chevy Volt). And at the OEM cost that is all of $8k - pretty close to the $7k tax credit.

Or go to 24kWh (Nissan Leaf size) and you have 150 mile range for $12.4k of batteries. Roughly $1000 for every 10 miles of range.

I have always thought that what would really shake things up in the EV world is if aftermarket conversion of ICE's to EV's attracted the $7k tax credit. That would pay a for a large chunk of small car conversions, and free people from complete dependence on the carmakers. Even though most of the batteries are imported, many of the conversion motors are US made, and all the labour is done locally. Assuming the donor vehicles are still good for another 60-100k miles, it is much more economically efficient than scrapping them and building a whole new car. By the time the converted EV is at end of life and needs to be replaced, the new EV 's will (presumably) have advanced to the point where they are the first choice, and the drivers by then are well used to them.

It would be interesting if one state that is a petroluem importer but electricity producer, like, say, Maine, took this on and offered its own tax credit for conversions. About the only way to bring auto jobs into a state like that, and to stop petro dollars leaving.

I'm sure Bob would be first in line!

in a internal combustion engine car converted to electric. The motor will last a lot longer then the car. Its about the batteries and how you treat them. You cause a big loss in battery life cycle.



Oh . . . I should have made it clear that my 'Liar, liar, pants on fire' was directed at Toyota, not Gail. I fully apologize to Gail as I did not intend to address that at her. Gail very accurately reported from an article but it was an old article. But Toyota knew full well at the time that Li-Ion technology was good . . . they just were not selling it at the time and thus poo-pooing it.

The EV space is a very difficult area to write accurately about because:
1) Prices & technologies are closely guarded trade secrets.
2) The information changes rapidly and can be out-of-date quickly.
3) There are people spewing misinformation on all sides. People like John Peterson bash Li-Ions with lies (continuing to say Li-Ions cost $1000/KWH is an outright lie as many sources show and Peterson has been told this over and over and over again). But over-optimistic EV fans also spew misinformation with over-optimistic views on how fast battery prices can drop. Battery prices will come down but not like digital electronics prices. Batteries will come down due to incremental chemistry refinements and mass manufacturing scale. I think the ~$400/KWH to $500/KWH prices for EV Li-Ions should easily come down to ~$300/KWH. And maybe in the $200s/KWH range. I think the ~$100/KWH range is too over-optimistic. Elon Musk tends to spew over-optimistic clap-trap from a position of self-interest.

That said, good information is available. But it requires some investigative skills & experience to separate the facts from the BS.

Will they explode in an accident?

About 1,000 people die each year in the USA from automobile gasoline fires and explosions.


I get the impression this is an emotional subject for some people.

We get the impression that you are biased against EVs, green energy, gold, etc and you spend an inordinate amount of time and energy trying to prove they will not work. I feel that you exaggerate the negatives and downplay the positives.

My next car will be a Nissan Leaf or something similar. The only reason I continue to drive my 12 year old Toyota is because I am waiting for the electric car to become available where I live. The Leaf will be used by my wife who has a long commute. Our gasoline consumption will drop to almost zero after she starts driving the Leaf. There are many people like me.

You have been wrong about gold so far. You will be wrong about EVs also. By the way, this is probably the last chance for people to buy GDX and GDXJ at a reasonable price.

Hi suyog.

re: SUYOG TO GAIL: "We get the impression that you are biased against EVs, green energy, gold, etc and you spend an inordinate amount of time and energy trying to prove they will not work. I feel that you exaggerate the negatives and downplay the positives."

Aniya says:

Here are my questions to you and to Neil (further down) - to Robert/jokuhl as well.

1) Is it possible to run an industrial, global economy on an electricity basis, as opposed to the current liquid fuel basis?

2) If so, what is required for the transition from LTF basis to electricity basis? What is required in terms of: oil input, NG input, coal input, "symbiot" (FF-eating machines) input, human labor input, financing and time input?

3) Are there limits to growth, in general, and, if so, what are they and where and how do they show up?

Remember, we're talking about a decline in oil that is "remorseless" to quote Colin Campbell. This means, not simply lower oil inputs to contend with, but inputs that are lower and lower as time goes on.

A "top-level" analysis on these questions - the question of conversion on a large scale - is currently lacking.

Or, if I'm mistaken, and you know of such analysis, could you please let me know - with references.

The NAS could address these questions, if directed. It could be a specific request, similar to ours here: www.oildepletion.wordpress.com

It seems to me that Gail is at least taking up the issue of how a continuing drop in oil production affects growth, finance and prospects of switching to an electricity-based economy. A subset of this latter question is the following: Are you presuming continued growth, despite a lower total energy input to the global economy? If so, how can this occur?

Aniya, I know we have been down this path before, but I feel compelled to do so again.

IF the NAS could answer this question, then why are they waiting to be asked? If they have the knowledge, and, by definition, the government does not, how then will the gov even know to ask this question? What is to stop the NAS from taking the initiative and going ahead - are they not abkle to do anything unless specifically directed by government?

If all science had to wait until gov directed it, we would still be in the dark ages.

Hi Paul

Thanks for writing. No problem walking once again the path.

Let me take your comments one at a time.

re: "IF the NAS could answer this question, then why are they waiting to be asked?"

The National Academy of Sciences can answer the question. Our petition, which is here www.oildepletion.wordpress.com, asks them to look at "peak oil" - global supplies, decline of same, and, most critical - what are the impacts of decline? And then, what are policy options? At this point, IMVHO, we're looking at "adaptation" - not "mitigation," though one might argue about this.

The way the place (the NAS) operates, they need to be directed by the President and/or Congress and/or *any* State legislature - to conduct a study.
The study needs funding. It needs to be a question that some governmental agency or body asks, and they answer. That's how it works.

Does this answer your question? Why don't you write them and ask? Or call them? Ask them if they can do a "peak oil" study and if so...why aren't they?

re: "If they have the knowledge, and, by definition, the government does not, how then will the gov even know to ask this question?"

I didn't mean to confuse things here.

Our petition - see above - is very specific. It asks exactly the "peak oil" question. Asking this question, esp. about impacts, allows for the answers that can forestall make less bad the worst of the consequences.

Right now - nothing, zip, nada is happening.

The questions about "electricity basis for industrial civilization" - those are my questions. They are about what is really required in order to use renewables only as energy input sources.

This is a bit different, although the topics, of course, overlap.

re: "What is to stop the NAS from taking the initiative and going ahead - are they not abkle to do anything unless specifically directed by government?"

The government, in theory, is "We, the People."

Get on the phone and request that your Congressperson get this study underway.

Why not?

re: "If all science had to wait until gov directed it, we would still be in the dark ages."

OK, here's the deal: Right now, the gov is absolutely silent on the topic "peak oil."


The scientists Robert Hirsch and David Fridley say it's because the current and previous US administrations have issued an edict of silence.

Meanwhile, lots of folks believe that we can have BAU with renewables and EVs.

If they are mistaken, we are in for a very bad time. Super bad. That's all I'm saying.

The idea with the NAS is for them to take the scientific work that has already been done - such as by the excellent talent here on TOD, for example.

Just issue a finding. Let the public know what's up. That's all. Simple.

Why don't you call your Congressperson and then get back to me?

Hi Aniya;
I wish I had time for a fuller answer, but I'll do what I can. My girls and I are headed up into our camp near Baldface this morning, to enjoy an off-grid day. The berries might be down for the count now, as the Virtual Mercury is saying it's 33 degrees up there. Sorry Texas, I'd send you a bunch if I could.

With respect, I have to Question the Questions instead of answer them.. but they do help illustrate why the framing of this issue gets us talking past each other.

"1) Is it possible to run an industrial, global economy on an electricity basis,"

When some of us are promoting a tool, be it Windpower or Solar or EV's.. I don't think we're presuming to 'run an industrial, global economy..' we're just looking at tools that look viable within such a transition. BB's, right? As my friend's T-shirt slogan put it.. "I don't want to buy happiness. Just a boat and some other stuff."

As far as the chain of tools that make them, most of them today, sure, will have been built by oil.. like our Sneakers and our Toothbrushes and everything else.. but we do also regularly show examples of heavy industry that is already functioning with electricity, and power sources like Niagara that can help support SOME 24/7 operations called for by heavy, inflexible power-users.. so it's conceivable that we could build 'that train that lays its own tracks', ie, electrical tools built by electrical tools, etc.. but still this is not meant to be a monolith, and it's frequently admitted by those of us rattling the bars for as much renewable power to be incentivized now, installed ASAP, that our future is all too likely to be scaled back by real and hard limits.

So the issue I keep having with the way Gail poses these articles, is the tenor that puts EV's or Windpower as a 'fail' because they have a harder sell to make..because Gas cars are still rolling downhill, and EV's have an uphill climb facing them. What keeps getting left unsaid is that these comparisons in today's and yesteryears afterglow do little to illuminate just how much steeper the uphill climb for our existing rolling stock (as an example) will be facing down the road. It's not only 'will this one face big challenges 'after oil'? But, 'Will the other one simply be out of the question?' It's kinda hard to guess what you'll be missing in a coming blackout, if you've never had one before.. and I know this is what Gail is trying to suss out, as well.. but I think there's such a skepticism in believing that much of Anything will work that her arguments hamstring themselves on things that we very likely CAN do without oil and oil money.

'3) Limits to growth..' 'switching to an electricity-based economy'. 'Are you presuming continued growth,' .. Surely some people are.. but a great portion of the serious EV and Renewable Energy advocates are very clear that this isn't a promised assumption that gets to ride along with arguments like these. At TOD, I have to suggest that these are becoming simply 'Fightin' words' ..

We have to be careful with the Assumptions in these Arguments.


We depend on oil

We have a great deal of transportation infrastructure - roads, bridges, cars, trucks, trains, airplanes, barges. Somehow, we have to keep this stuff repaired and operating, to keep the economy operating. Unfortunately, it takes a lot of oil to do this--both for repairing roads and for running existing modes of transportation. We also have a great deal of infrastructure for producing food, transporting it to market, packaging it, refrigerating it, and getting it to the final user. It is also very oil dependent.

Getting along without doesn't work

We have heard about Liebig's Law of the Minimum with plant growth. Plants are limited in their productivity by their limiting nutrient. A similar rule holds in chemical reactions. If you are trying to produce a certain reaction, and have a limited quantity of one reagent, your total output will be reduced.

I believe a similar law of the minimum relates to the economy, if oil is not available at prices individuals and governments can afford. The higher oil prices flow through the economy, and force the whole economy to contracts. Parts of the economy most vulnerable to high oil prices are the transportation sector and the food sector.

Electricity doesn't substitute for oil

Intermittent electricity is to me a distraction. It doesn't fix our oil problem. There would be a huge cost and time lag involved in changing the operate the transportation sector of the economy on electricity, if it could be done at all. Everything I have seen says it couldn't be done at all, certainly at the speed needed to produce growth.

In a way, it is like trying to substitute extra potassium, when a plant needs nitrogen, or using iron instead of copper in a chemical reaction, because it happens to be cheaper. It doesn't work!

We can kid ourselves that possibly fixing one small part of the transportation problem with electric cars will work, but even this is very iffy--most of the world does not consist of families with garages that can afford an expensive plug-in vehicle. Assuming this model will transfer to the rest of our oil usages (road paving, bridge repair, air transport, truck transport, food production) is even more iffy, especially with the cost involved. Making the electricity infrastructure work with intermittent electricity has costs involved that have not been factored in. None of this is available, now, when we need it.

The lack of available low priced oil is what is causing our financial problems now. Making huge investments in renewables will simply make our financial problems worse, and perhaps move up the date of collapse. After collapse, the so-called renewables probably won't work (because they will not have the rest of the system to plug into), so the whole exercise will be a waste.

Somehow, we have to keep this stuff repaired and operating, to keep the economy operating. Unfortunately, it takes a lot of oil to do this--both for repairing roads

How much oil is used every year for road repairs? I would guess quite little.

Parts of the economy most vulnerable to high oil prices are the transportation sector and the food sector.

Why do you think so? I would say that those sectors are among the least vulnerable, since people need food and transportation and will pay for it. Of course, if oil prices soar, then oil intensive food will become more expensive and consumption will shift to other foods. Anyhow, indices go in the right direction:

The lack of available low priced oil is what is causing our financial problems now.

Absolutely not. If it were, European countries would lower their extreme gas taxes to counter the increased oil prices.

We Need Not Depend on More than Minimal Amounts of Oil

First I will point to the example of Switzerland, with a seven year 100% oil embargo. With zero FF of their own, they managed to feed themselves (with poor soil) and maintain a western industrial democracy with a functioning economy.

They has some oil in storage, but the military got first dibs on that.

By 1945, the average Swiss used less oil that year than the average American uses in a day.

It is possible !

More Later,


Broad swipes, Gail. Too Absolute. I'm sorry, this logic has too many holes in it..

'After collapse, the so-called renewables probably won't work (because they will not have the rest of the system to plug into), so the whole exercise will be a waste.'

This is a great blind spot, Gail. It is a mantra you return to again and again. Wind and Solar in Many Forms can easily operate INDEPENDENTLY. From Highway emergency signs to the PV roof on the City Hall Down the road. There are forms that can be made out of common materials in the home, which means countless millions of people 'could' play a part in generating some of their own heat, work and electricity. That ain't today's energy story, but it wouldn't be peanuts, either.

You might say 'piffle' at their intermittency, but renewables do work, many can be made with electricity.. transported on electric rail and by Sail, if need be.. You think intermittency is a distraction.. try living without any power, which is what many already do.. look at Baghdad. Sunny all the time, and they have no power..

Hi Bob,

I tried to post - and the site was temporarily down and I had to leave! So, I'm finally getting back to this conversation. I hope you're around at some point!

re: Gail's comment, which you quote:

"After collapse, the so-called renewables probably won't work (because they will not have the rest of the system to plug into), so the whole exercise will be a waste.'"

Would you be more able to talk about this question, if she re-stated it?

Something like this: 1) Is there a current trajectory that indicates total, global economic collapse of the current industrial economic system?

2) If so, are there any ways that any portion of this system can remain in effect, using an electrical-based, renewable-based energy input?

Gail is posing some very legitimate questions - just getting into this topic.

Another way to say it is this: Where should be be putting the very precious oil resources we have left? Towards what ends should they be directed?

OK: Then Bob says: "Wind and Solar in Many Forms can easily operate INDEPENDENTLY."

OK, Bob: here's the point: how to feed, clothe, provide income for - i.e., cover basic needs of people based on this wind/solar independent sources?

How to switch from A to B? Is it possible? Also, they may operate independently, but can they be maintained and replaced independently? Are we talking about building more useless things? Like the ice-skating rink or the airport expansion - my two local sad examples. Total waste of resources, IMVHO. They won't last in the post-peak downturn. It's a legitimate question to ask. Gail is courageous to ask it, even if she could state it better, perhaps.

NOW: Let me put a slightly different slant on this. It may be the case that WITHOUT SUBSTANTIAL RE-DESIGN (Bob likes caps - don't mean to shout. :) of how we do things, then...

it's the case that simply trying to build renewables is a pointless exercise.

For example: Build renewables, without addressing how to make the agricultural system more sustainable.

Do you see what I mean?

re: "You might say 'piffle' at their intermittency, but renewables do work, many can be made with electricity.. transported on electric rail and by Sail, if need be.."

Bob, I think we need to define terms and try to analyze.

Let's get into specifics. This is what's required for a view of the larger picture. The larger picture is, for eg., the US.

re: "There are forms that can be made out of common materials in the home, which means countless millions of people 'could' play a part in generating some of their own heat, work and electricity."

OK. Why don't you talk about something specific here. How much heat, how many people?

How much rail? How much sail? From where to where? With what? For whom?

I'd like to try - once again! - to re-state Gail's points, perhaps in a more open-ended form. The way she phrases it, is as a conclusion. Let's have some questions.

1. Can "renewables" work when the rest of the system is in collapse?

2. Which "renewables" - where - how much of them can function independently? What does it mean to operate INDEPENDENTLY. What does this mean?

3. How, exactly, are the modern systems of infrastructure going to be able to continue to operate in a scenario of say - five years into post-peak? Ten years? Take them one at a time:

1) Water.

2) Food.

3) Waste disposal.

Let's get just these three.

How do you get these basic needs covered?

For the next century, the USA will produce measurable amounts of oil. At least 500,000 b/day in 2111.

None-the-less (and too much of a summary), hydroelectric is the most robust renewable. Good practice is to rebuild every 50 years, but North Korea, Albania and others have shown that can be extended to at least a century. And one nation - say Sweden, Austria, Canada or Brazil - can supply the entire world's need for hydro rebuild.

The world's longest HV DC line operates for 40+ years in Zaire - another robust technology. Again, a single nation that has minimal collapse can supply the world's renewal needs.

I would like to see much more hydro in Canada, exported to the USA via HV DC. Quebec +25 GW, Newfoundland +4 GW, Manitoba +5 GW, BC +2 to 3 GW. A balance to fill teh gaps.

Solar PV is very robust - power at >50% after 50 years. Wind less so - rebuilt every 25 years or so. New towers every 50 years.

Water - perfect for intermittent power. Pump water up when there is an excess of renewable power. Don't waste water on lawns, washing cars, etc.

Food - Go to grass feed beef, little pork, and mainly veggie diet. Electric rail (slow down & fewer trains when running on hydro). Solar PV alongside rail power substations to take food to cnsumers.

Biofuels for tractors (use solar distillation instead of NG to purify ethanol). Bio-diesel can be used as is in warm weather. Minor chemical treatment for cold weather use.

Same for garbage trucks. Horses may play a role as well in some cases.

Hopes that helps,


Just local hydro alone can supply all the electricity needed for basics in much of the USA.

I'm personally intrigued with electric vehicles because of their superior well-to-wheel efficiency and resulting potential to reduce GHG per mile driven. Even if all the electricity were coal-sourced you can get 15% ghg reduction over ICE, and in many areas where natural gas, hydro and wind are in the mix, the reductions are obviously greater. I compared the life-cycle cost of EVs versus a comparable ICE sedan.

However, I was a little chastened by the results of that analysis. Fuel costs are really only a small part of the life-cycle cost of a mid-sized sedan. A car driven 10k miles per year, 35mpg, $3.75/gallon gas spends ~$1100. If the car costs $25k, it is several years of operation before your operating costs approach that initial outlay. So saving on fuel, as you would with an EV, takes a long time to make up substantial differences in initial outlay. EVs need to come down in price to something within $2-3k of the ice sedan to make the fuel savings trade-off economic. If you apply a discount rate (as some economists insist we must), the allowable delta basically goes away.

Others have asserted that electric transportation doesn't really fit today's personal automobile paradigm. Reluctantly, I agree.

I agree. However when gasoline sells for $8/gallon, EVs will quickly become the preferred choice. Another issue is that a few years from now they may ration gasoline and we may have to face shortages.

Another issue is that a few years from now they may ration gasoline and we may have to face shortages.

I expect that any rationing will be by price only, if you're wealthy enough, you'll never experience any shortages, ever!

I think eventually they will have to ration gasoline. Imagine a hospital where only doctors can afford to go to work. Such a hospital will quickly shutdown. Also, what about farmers, police, fire department, ambulances, etc. They will give priority to essential services and ration for everyone else.

Once people have been priced out of the suburbs and long distance commuting, there'll be plenty of (expensive)fuel for the remainder. In the hospital example, nurses will use the bus!

Also, what about farmers, police, fire department, ambulances, etc. They will give priority to essential services and ration for everyone else.

The way to give priority is to adjust funding. Rationing is very inefficient and if you institute rationing, it is due to bad politics, not due to economic necessities.

What do you expect with $8 fuel? Bau and a conversion to EV's?
Have you stood on a six lane freeway overpass and observed what flows underneath. First take in the speed, the developed BAU world is reliant on the speed. Then notice the variety of vehicles, the plethora of SUV's, service vehicles, emergency vehicles, buses and tradesmen. Observe the suburbs surrounding the freeways and the arterial feeds.

They will all be dramatically affected by high fuel prices. Try and comprehend the businesses which rely on passing traffic, look at the parking stations and the huge parking lots surrounding shopping centers. Will they be filled with EV's? What percentage are financed?

Also quietly note the unemployed or part time employed, what do you see them driving, what are they driving now?

There is no substitute for liquid fuel, we have used it for a hundred years because it is cheap, plentiful, energy dense and convenient. Ev's appear to be the great white hope of people still in the bargaining stage of grief. Owning an EV will not give immunity to losing your job. If you have one when you lose your job, it'll probably be the first thing you sell.

I haven't mentioned trucks, delivery vans and plant equipment. They will be impacted by $8 fuel as well.

Also quietly note the unemployed or part time employed, what do you see them driving, what are they driving now?

This is worth expanding on. In terms of income, the US is splitting into two groups.

The high-income groups can afford new vehicles and high-cost fuel.

This group is driven by imperatives of relative social status, as Nate Hagens argued so eloquently here on TOD a couple of years ago. This group drives whatever is fashionable and indicates high social status, up to the limit of each household's budget.

Right now, the bigger the better seems to be the way that goes -- which fits with humans being visually-oriented social animals. Most people buying new cars will consider only the sticker price, and will buy as big as they can for their budget. This applies to company vehicles and leased vehicles also, to the extent that the user has any say in the choice of vehicle*. While there is any sticker price disadvantage, EVs will remain a minority product, because in terms of status, bigger is better.

So this group is going to continue, in the main, to buy ICEVs.

The other group, that cannot afford to buy new vehicles, gets to buy the leavings of the first group. This group doesn't get EVs, except for ex-rentals, ex taxis, and any other vehicles bought by accountants, and those only if the net present value calculation, including the value of 'range anxiety', 'charge anxiety', and other risks, comes out in favour of EVs.

EVs won't win the majority of the market unless the sticker price is below that of ICEVs - far enough below it to compensate for the risks.

I haven't mentioned trucks, delivery vans and plant equipment. They will be impacted by $8 fuel as well.

These tend to get chosen by accountants, so EVs will win in these areas if the net present value calculation comes out correctly.

* Anecdote: A manager I used to know quite well had 'green' leanings, but drove a large company car. When I asked why he didn't choose a 'greener' car, he explained that when it comes time for pay reviews and promotions, one is subconsciously judged by the size of one's car. So he felt forced to opt for the biggest one in the selection offered.

EVs won't win the majority of the market unless the sticker price is below that of ICEVs - far enough below it to compensate for the risks.

I give people a little more credit than that. I think a majority is smart enough to accept higher capex in exchange for smaller opex. Also, the risks is one thing, but there is also advantages to an electric drive train. Acceleration, durability, noise and pollution for instance.

Then I guess your status and income analysis is a little one-sided. There are different groups and in some groups, EVs will be fashionable. Also, the middle class is alive and kicking.

Have you stood on a six lane freeway overpass and observed what flows underneath. First take in the speed, the developed BAU world is reliant on the speed. Then notice the variety of vehicles, the plethora of SUV's, service vehicles, emergency vehicles, buses and tradesmen. Observe the suburbs surrounding the freeways and the arterial feeds.

"Past performance is not indicative of future returns"

That's the way the financial biz phrases it. Just because you see SUVs and big truck that doesn't mean they will continue. I'm sure a lot of people in those vehicles are regretting their SUV purchases every time they try to fill up for $4/gallon.

Oh never mind. You are doomer. I'm not going to argue with that.

I haven't mentioned trucks, delivery vans and plant equipment. They will be impacted by $8 fuel as well.

$8 fuel is exactly what you have in much of the world, like Europe. No problem, and no EVs.

What will happen if the US hits $8 fuel is that you will cut down some on fuel use by buying more frugal transportation vehicles and also relocating businesses and people to shorten transport distances. There will be no real problem, and Europe proves that.

Owning an EV will not give immunity to losing your job.

A car won't, no, but this is no different from the last 50 years. There is no reason for increased unemployment with $8 fuel.

There is no substitute for liquid fuel, we have used it for a hundred years because it is cheap, plentiful, energy dense and convenient.

In 2016, the number of electric two-wheel vehicles is projected to about 500 million. EREVs can cut down on liquid fuel use by some 75% compared with ICE cars. Different segments of the economy is affected differently by dimishing supply of liquid fuels, but the beauty of the market is that important needs will keep getting supplied while less important stuff will transition into other demand.

HI suyog

re: "However when gasoline sells for $8/gallon,"

Q: How long can gasoline sell for $8 per gallon, without triggering demand destruction, more recession, a fall in oil prices, a fall in gasoline prices and repeat, repeat of same pattern?

In other words, there is no model that shows gasoline with rise and stay at that price, is there?

In fact, volatility is most likely.

If the prices does stay high, it's also a distinct possibility that the above pattern is at work, and more and more people are unemployed. The price is high, in such a scenario, however, "the preferred choice" you refer to is simply unattainable by most people.

It's not a true choice, because no one has the income to chose it.

$8 per gallon

Well, it is already 3/4 of that in the UK with prices staying high despite reduced crude price.


Average gasoline in UK is $8.11 per US gallon (£1.357/litre, £6.17 per UK gallon)...

My bad math plus forgot the USA short changes on the gallon.


Q: How long can gasoline sell for $8 per gallon, without triggering demand destruction, more recession, a fall in oil prices, a fall in gasoline prices and repeat, repeat of same pattern?

In other words, there is no model that shows gasoline with rise and stay at that price, is there?

On the contrary, it is your model that doesn't exist. The cyclic recession idea has no basis I know of - of course prices can go to $8 and stay there, and without a recession too.

I bought a Nissan Leaf, and I love it. BTW, Nissan offers a long-term extended warranty for only $250 per year, plus an 8-year warranty on the battery.

It seems strange to me that people are constantly bad-mouthing electric vehicles by calculating that a similar-size gasoline vehicle costs less (at current gasoline prices).

Do we ever see an article asking whether it is rational to buy a Cadillac Escalade, based on the fact that one can get roughly equal transportation a lot cheaper?

Does anyone reading this web site believe that oil prices will remain the same? Does anyone here believe there will be no shortages of oil?

Just as investors buy puts and calls to hedge investments against possible disasters, it is rational to hedge one's transportation. An electric car with solar panels to power it (which I also have) hedges your transportation cost and capability for the rest of your life, at a much lower cost than an Escalade.

That is worth quite a bit, IMO.

It will only take one oil crisis with gasoline shortages, and there will instantly be years-long waiting lists to buy electric cars.

Those who foresee oil shortages, which presumably includes many who read TOD, should be smart and get an electric car before the crisis.

What car did you give up to get the Leaf?

We had two older Jeep Cherokees, and gave up one of them (a 2001).

We may replace the other Cherokee with a plug-in Prius or Volt, letting us do everything except summer vacation on electric.

I also have an electric bike, which is very efficient: 1000 miles per gallon equivalent.

My hedge is I last filled up my car in late July (for the hurricane season) and it is still @ 3/4 full.

Using less than 50 gallons/year is a decent hedge as well.

Best Hopes for fewer VMT,


I do have respect for you Gail but I'm confused, Do you not own a vehicle? Have you never done accounting for an individual or company that does?

Do you not know that gasoline powered cars have numerous parts and consumables other than gasoline? Do you not know that they require maintenance other than putting gas in?

1. The EV in the form of the Leaf is standing on the shoulders of giants. The Prius minus the gas engine would be very similar to a Leaf. The Prius electric drive has been around for more than a decade (1997-2011) in consumers hands and even longer in other forms like golf carts (over 50 years) and fork lifts (over 100 years).

2 and 3. You lost the whole point. The cost of regular maintenance + repairs for a traditional gas vehicle is higher than the cost of cost of regular maintenance + repairs for a Prius which is higher than the cost of regular maintenance + repairs for a Leaf. Leave the Volt out of it. A simple car from Nissan, Toyota, Ford, or GM vs a HSD hybrid (Prius and friends) vs a EV like the Leaf the order of cost of regular maintenance + repairs is

from highest to lowest
$$$ gas car
$$ Hybrid
$ EV

It's rather simple and pretending that just because the initial cost of the EV is higher than the initial cost of a gas car implies that repair costs will be higher is simply clueless or disingenuous. If you want to take a believable stance to play down this factor you could simply say the savings in costs of ownership per mile are less than the increased delta in purchase price. But if you do gas vs intial cost comparisons you really should go the rest of the way and include normal maintenance costs.

4. At least here in the US I see poor people and middle class people dealing with transmission repairs as the most expensive repair on gas vehicles and also as one of the most common out of warranty major repairs (a cost that is not a concern on HSD based hybrids or pure EVs). In fact the majority of the major failures happen out of warranty for the average US citizen (California residents aren't the average, they have much longer warranty protection for cars there). While some companies like KIA/Hyundai tout higher warranties many cars have very limited warranties.

Basic Warranty Powertrain Warranty (gas vehicles)
Chevrolet 3/36,000 5/100,000
Chrysler 3/36,000 5/100,000
Ford 3/36,000 5/60,000
Honda 3/36,000 5/60,000
Hyundai 5/60,000 10/100,000
Kia 5/60,000 10/100,000
Nissan 3/36,000 5/60,000
Toyota 3/36,000 5/60,000

Hybrids and EVs usually have higher mileage warranties than gas cars.

The average US car is driven for several hundred thousand miles before being junked if it isn't in a wreck and even the wrecks are commonly driven somewhere. Take a quick perusal of eBay, or any number of auto trading sites for cars with more than 100,000 miles and you'll see that they sell large numbers of vehicles on the used market with no warranty "AS IS". Heck even the average car with 70,000 miles on it is sole AS IS.

I'm sure there are rich people that only concern themselves with lease prices and get a new car every year or two and don't care about maintenance costs for used vehicles but for those of use who are concerned about these things we see hybrids and EVs as more reliable (based on past experience) and a good thing.

5. I never said the Leaf's battery pack would become as cheap as the Prius battery pack. What I said is that used/recovered battery packs are cheaper than new battery packs and I expect there to be a market for used packs for the Leaf just as there is a market for used packs for the Prius. Ignoring the true cost of a consumer to replace/repair/re-manufacture a battery pack is either ignorant or disingenuous. It's simply not a realistic comparison of costs to say the dealer told me it'd be $4000 to replace a battery pack when I can go down the road to someone else and pay $1000.

Relying on the Wall Street Journal to give accurate information on EVs is quite dubious. Those battery costs of $650/KWH are definitely wrong but at least the are better than John Peterson and his continuing delusion of $1000/KWH batteries. Auto makers & battery makers guard their battery prices but you can buy raw Li-Ion cells on the open market for around $300/KWH. Even doing extra testing and adding a battery management system should have the costs at less than $500/KWH. I tend to be conservative . . . others will say the car makers are paying less.

But researchers such as Mr. Whitacre, the National Academies of Science and even some car makers aren't convinced, mainly because more than 30% of the cost of the batteries comes from metals such as nickel, manganese and cobalt. (Lithium makes up only a small portion of the metals in the batteries.)

Automotive Li-Ions generally do not contain Nickel or Cobalt. And that is good because they are toxic and expensive.

Automotive Li-Ion battery prices will come down . . . no one is yet mass manufacturing them. Portable electronic Li-Ions which do use the pricey Cobalt can but purchased for less than $300/KWH so there is no reason why the automotive batteries can't at least hit that level.

The fact that Gail put in John Peterson's bogus argument is very sad and harms her credibility. But at least you briefly mentioned the hole in his argument . . . his argument only makes sense in a battery constrained world. Just build more batteries, we don't have constraints on building them. That destroys the whole argument. John Peterson is basically an internet troll who has been bashing and lying about Li-Ions for years. He owns a very large number of shares in a lead-carbon battery maker so he wants EVs killed and everyone to build start-stop vehicles. He is a shill that spews sophistry out of personal financial interest.

The bottom line is this: Are EVs a good choice for everyone right now? No. (Unless there is a real sharp increase in gas prices in the near future due to peak oil but I doubt a real sharp price increase is coming soon).

But are EVs the future? Yes. Between battery prices coming down (which they will) and gas prices going up (which they will), we will eventually hit a cross-over point where they are very economically compelling. When does the cross-over happen? No one knows. Will it happen? Undoubtedly.

Better Battery Inc
Worried about range? Forget it. No matter where you are, BBI will guarantee you get your battery swap in minutes. Either you simply swoop into our many swapstations, conveniently placed where that old gasoline station used to be, or if you should happen to be forgetful on that long vacation trip and run out on the freeway, our super fast battery swapout truck will be there in no time to get you going.

Our batteries are not only way better than our competitor swapout companies, but - remember our motto- More Of Your Fee Into R&D- you get more now, and will get even more tomorrow.

Go with BBI- you will never regret your choice.

Hi Wimbi - sounds like a good solution except for one thing - it seems the carmakers have ZERO interest in swappable batteries. There is not yet one EV made that has swappable batteries, and none announced. So at this point it's a a solution that can;t be applied.

Besides which, running out of "fuel", even if someone will come to the rescue, is damned inconvenient. Most people will make sure it never happens to them again, by either not running out of charge, or going back to an ICE - or adding an ICE to their EV.

Doesn't mean the swappable battery is not a good idea, just that the carmakers don'tlike it. And as long as they are the only ones making EV's, well then, it isn't going to happen.

Personally, I think swappable batteries would be great. However, that requires all the different car companies to agree upon a sophisticated standard it a still-rapidly changing area. They still haven't got a SAE approve fast-charging standard yet. And their are lots of issues since what happens when you do a swap and get a crap battery that dies. Who pays for it?

Better Place does the swappable battery thing, but I wouldn't want to be 'captive' to always having to buy miles from the people that sold me the car.

I suspect a swappable battery standard will eventually emerge but that will be a decade from now.

Do you always buy cell-phone minutes from the people who sold you the phone?

Well, whatever your situation, millions do.

The ICEV and other EV options available to consumers will keep Better Place honest.

Many phones are locked to the vendor. EV batteries will be different between manufacturers as they will patent key features to prevent anyone other than themselves selling you a battery. I expect that there will be changes from model to model so that you cannot use last year's in this year's car. They will do anything to stop others getting in on their territory and to ensure that you will have to keep taking their own brand of KoolAid - new flavour every year, oh sorry, you liked last year's flavour, too bad, it is no longer Kool.


swappable batteries will not work because you will have too much capital tied up in batteries that are perishable. people will beat the batteries by discharging them to failure or near failure.

Most trips are less then 25 miles and can be done by just charging up an on board battery set that you take care of with your own battery management system ( micro chips). Its the longer trips people make that will be problematic. perhaps an rent-able emergency generator that you put into a socket like an receiver hitch.

For long trips, how about attaching a generator to a trailer hitch? This idea is possible but I don't know how available the generator would be.

The article, Rav Long Ranger Hybridizing Trailer, discusses towing a 500cc motorcycle engine.

I don't think that's an insurmountable problem. It'll be priced in, that's all.

Companies that sell compressed gases - CO2, oxygen, etc. - are an example to look at. You buy a cylinder, and own it, but you don't get it back when you take it in to be refilled. Instead, they give you a full cylinder in exchange for your empty. The empties are inspected to make sure they are safe, refilled, and the next person to come in might get your old cylinder.

Think about the liability issues - whether anyone here thinks those are imaginary or not, the carmakers' lawyers will be looking at the worst possible case. Which is that if some "foreign" battery is put into the car you built, how do you know, really know that something won't go horribly wrong, with a huge quantity of oxidizer in extremely intimate proximity to a huge quantity of reductant? That's one reason for the endless proliferation of proprietary rechargeable batteries in, say, small devices - the OEMs want to stay ahead of the aftermarket guys. And also for the dire notices in the instructions about not putting any battery except the OEM's own grossly overpriced model into such devices.

Just another "free market" fail.

Yep, you bring up good points. It is a thorny area legally. But that is sad because engineering-wise, it really is the only way to build cost-effective pure-EVs that can handle long trips. Think about it . . if you could do a 2 minute battery swap every 150 miles or so, doing a 400 mile drive (such as LA to San Francisco) drive could be done with just 3 battery swaps. Yes, that is many more than the a single gas stop, but if they were faster they would not be so bad. Plus you would be driving an cheap electricity.

What if you put a special chip in every battery which uniquely identifies each battery and tells the system that the battery is safe to us.

Somebody somewhere will forge the chip, or rather the programming of the chip. The car (or other device) manufacturer doesn't want to and possibly can't afford to get sued for a bazillion dollars over something they can't control. So they'll use every trick in the book to keep it proprietary, including physical form factor and connectors, and, if they can, patents on "inventions" where nothing was genuinely invented.

Paul S, I love your optimism and faith in big business and big government!

The funny thing about this discussion is that the part that is most in danger of failing, is the battery, not the rest of the system.. Yiou can damage batteries by over charging, or leaving discharged, but it's pretty hard to damage the rest of the system because of battery characteristics - unless someone puts a 400V battery in a 300V car.

At some point in the past, the mfrs let other people supply the fuel for their ICE cars, subject to their specifications. This could be done for batteries - but it won't - for precisely the reasons you say.

What is needed is for a big battery company to come out with a standardised battery that is so cheap that they car makers will be forced to use it, ot have (some/most) buyers boycott their products for being too expensive. Kinda like when IBM came out with the PC, or for that matter, the standardised floppy disks, CD roms etc. Same happened with video too, VHS wasn't the best system - beta was better, but VHS won the race and things were standardised.

Sometimes just having a decision is more important than what the decision is. With the car batteries, a standardised form factor would be a great start, but just as it didn;t happen for laptop and cellphone batteries, it probably won't. It *did* happen for cameras in the days when they were dry cells, but now they all have their own, proprietary, rechargeables too.

It is just too bad the the carmakers have put up so many complexity fences that no one else can enter their industry - an EV equivalent of the "white label" ATM's is just what is needed here.

I love your optimism and faith in big business and big government!

I read a book, (psychology) about how we consistently overestimate our survival chances,(after cancer surgery and treatment compared to the known statistics and even ones own situation).

Researchers found that the unrealistic optimistic attitudes correlated with better psychological adjustment. That is the psychologically healthier patients were the most unrealistic. We tend to sacrifice realism in the interest of happiness.

Under normal conditions normal people overestimate themselves, we think we have more control over things than we actually do. Studies of life satisfaction on a 0 to 100 scale with 0 reflecting abject misery and 100 bliss, the average score was 75% meaning most people are mostly happy about their lives.

I don't really know what to make of it but personally I don't think it augers well for making sacrifices, if we mostly think everything is really okay and we will be the one to survive. The optimists see BAU, they see us building our way out of the crisis, they see themselves out the other end of the bottleneck if there happens to be one.

Doesn't mean the swappable battery is not a good idea, just that the carmakers don'tlike it.

Well, they're going to have to do something if they want my business, and I know I'm not alone.

I live in a city, and park on the street. Usually (but not always) I can get the spot in front of my house. But I have no plans to run an extension cord out, across the sidewalk, to my car. It's probably not even legal. And I can't charge at work. So what then?

They would need to have metered power outlets at the curb side. which anyone can use. Right now they are not there but they could be. maybe not metered but a set fee like the city pays for the power street lamps use.

The infrastructure costs of adding metered chargers to, say, even 1/4th of the parking spots is VERY high. In a typical US city, there are 5 parking spaces for each registered car.

Building urban rail is much cheaper. And it may make sense to have paid parking at the stations and you get some limited charge there (say 4 kWh for your $2 parking fee + fare).


It seems like having swappable batteries adds to the inventory of batteries you have to have. And you have to have enough of them at every station, all of the time. People will not be interested in driving 25 miles out of their way to swap batteries. So it seems like a lot of dollars need to be tied up in battery inventory. There may also may need to be a way to move excess inventory from one place to another.

You would almost need to set up the swap system over a wide area simultaneously, meaning that there would need to be a huge extra inventory of batteries. There would also be the need for a worker at each battery station, a place to store the batteries, and special high voltage wires coming into the station. It sounds very expensive, unless there are millions of cars needing the same service.

You would only swap batteries when making a long distance trip. Most of the time, you just charge at night. So for regional coverage, you just need relatively few swapping stations on the highways between major cities.

No workers needed . . . you just have robot machinery to swap the batteries.

Speculawyer, do you know how many (or percentage) new cars in Europe are electric? It seems with the higher fuel costs there that it would make sense that there would be a lot more electric cars there than in the USA.

I'm sure it is a number so small as to be insignificant. The new EVs are just starting to arrive there. EVs would seem a natural for Europe because of their high petrol prices and 220V standard but there are issues that will slow them down:
1) They don't have as much of suburban single-family home commuter lifestyle as we do. Their homes are often 'flats' with no garage where they could set up a charger.
2) They use public transport much more than we do. The tube, rail, light-rail, buses, etc.
3) The EVs are being priced very high there.
4) Electricity is also very expensive there so they go from expensive gas to expensive electricity.
5) They often want their cars for long weekend trips and EVs are terrible for that.
6) Less likely to be 2 (or more) car families than in the USA. EVs are best suited for 2-car family where one car can be gas/hybrid and the other electric. The electric is used for commuting & errands.

So even though they have higher gas prices, they often don't make ideal EV buyers. Actually, it is probably the fact that their gas prices are so high such that they learned to adapt with other means (public transport) that makes them not the best EV market.

"Well, then", said the little red hen, " I will do it myself"

Seems to me there are obvious counters to the objections above. I will leave them as an exercise for the reader.

Now, back to the beetle EV kit and the solar panels.

Oh, EVs will catch on in Europe. They are big in Norway . . . they have 2 EV makers (Think and Buddy) despite the fact that they are Europe's biggest oil producer. And they'll be big in France with Renault backing EVs and France having all that 24/7 nuclear power that could be charging up EVs at night.

I think the adoption rate in Europe and the USA will be similar. Europe has the 'advantage' (for EVs) of high gas prices but the USA has the up-to $7500 tax-credit.

"Past performance is not indicative of future returns"


The bottom line is this: Are EVs a good choice for everyone right now? No. (Unless there is a real sharp increase in gas prices in the near future due to peak oil but I doubt a real sharp price increase is coming soon).
Gail is using the criteria for success; "selling large numbers", but then gives various reasons why Ev's wont completely replace conventional ICE and hybrids. The world capacity to build EV and PHEV is presently limited, but capacity is expanding rapidly. If future Prius models have a plug-in option with 5kWh storage that would effectively halve the gasoline consumption its hard to see why most consumers wouldn't choose such an option. I think that Gail doesn't want to consider any technical fixes that are going to make peak oil irrelevant, because she is convinced that the world economy is going to crash as a result of peak oil, and along with it world trade, and any advanced manufacturing.

But are EVs the future? Yes. Between battery prices coming down (which they will) and gas prices going up (which they will), we will eventually hit a cross-over point where they are very economically compelling. When does the cross-over happen? No one knows. Will it happen? Undoubtedly.
This is a quote worth repeating. I hope it happens sooner rather than later but in any case I am planning for my next vehicle to be a PHEV.

Gail is using the criteria for success; "selling large numbers", but then gives various reasons why Ev's wont completely replace conventional ICE and hybrids. The world capacity to build EV and PHEV is presently limited, but capacity is expanding rapidly. If future Prius models have a plug-in option with 5kWh storage that would effectively halve the gasoline consumption its hard to see why most consumers wouldn't choose such an option.

Selling "large numbers" is pretty subjective. I think the Leaf is selling relative large numbers now. But her article made it seem as if anyone thinking EVs had chance then they were fools.

Manufacturing capacity is only limited by the consumers desire to buy and the producers desire to sell low-profit vehicles. And right now, I fully agree that the market is small. But as costs drop and gas prices go up, it will grow.

Toyota just put a price on the plug-in Prius . . . $32K.
Epic fail, IMHO. With its small battery it only gets a $2.something tax-credit. The Leaf is a better deal since it although it costs more, it qualifies for the full $7500 tax-credit. I'm disappointed by Toyota's very highprice . . . that is a money-grab when you compare the price of the normal Prius to the Plug-in Prius. They are profiting on it.

Hmm, a $5500 premium. You can get an aftermarket 4kWh plug in conversion done for just under that from Electric Autosports in Vancouver, and an 8kWh conversion for $6500. So Toyota have priced it just about the same as the aftermarket guys, but a new car gets the $2k tax credit, factory warranty etc etc.

Looks like they have decided its time to make some money off the Prius.

The thing that disspoints me the most about these tax credits is that they don;t apply to aftermarket conversions - if they did, we would see a lot of conversions being done, and the automakers would have some competition for the EV buyers, which would help prevent high margin pricing like this.

Manufacturing capacity is only limited by the consumers desire to buy and the producers desire to sell low-profit vehicles.

Another very significant limiting factor is time. Years to expand lithium production, battery production, electric motor production, power electronics, etc.



I'm with Gail on this one. Unlike a lot of people on here, I have the "privilege" of growing in a developing country i.e. being dirt poor and when I came to the States a lot of my youth was spent in Section 8 housing. Poor people and/or people who doesn't have job security won't even consider upgrading to a more efficient vehicle. They are moe likely to be thinking of driving less and perhaps taking alternative mode of transportation. I can assure you the vast majority of people will consider downgrading to a used Toyota Corolla before before they consider an EV if ever. I think this is how collapse will unfold. Perhaps I have extra insights into living in the age of scarcity by growing up poor.

Thank you for a realistic reply - from another average dude in the UK. Anyone that must use a car for work is only going to want the known failure modes of a conventional engine.

I file mass ownership of electric cars under 'segway thinking'

I don't get this thinking. The Segway is a solution without a problem, but the EV is the solution to a whole host of problems with current ICE vehicles: fuel price, noise, pollution, maintenance costs, maintenance intervals and acceleration. The electric drive train is fundamentally superior. The issue is battery costs and capacities, and very importantly, maturity of supply.

Regarding LCDs and plasmas, for instance, they were too expensive to be able to dominate the market for many years simply because they were of superior quality (and thus in high demand) and supply hadn't been able to ramp adequately, even though the technology was know to be fundamentally cheaper. So, that plasma/LCD TVs would dominate the market was known years before it actually happened. I see a similar situation with electric drivetrains in cars - they are simply better and cheaper, so of course they will come to dominate.

You guys are fine, representing the part of the Elephant that you are in contact with.. but don't forget that there are many other parts of the beast as well.

There will be many roles for EV's, and yet certainly not ALL the roles that cars fill today, but still others that ICE cars don't manage well. My friend's kid, whose got that electric Toy car in the driveway, which runs after being under a snowbank all winter reminds me of how damn durable and scalable and cheap a motor and battery can be.

I think the cost of transportation is going to become more and more important. It has always been more of an issue for the poor than many realize. If you can't afford a car, you can only take jobs that are in walking/biking distance or on the bus or subway line.

In the old days, workers were housed by their employers near the job site, and I think that model might make a return.

Well hell's bells, Nellie. In the previous Drumbeat, I wondered whether the Solyndra transaction involved a federal loan guarantee or a federal loan, and wondered the true source of the loan. No wonder everyone was confused. Despite what the federal government's table of organization tells us, now we discover that our ship of state is being steered by the ghosts of Frank Baum and Lewis Carroll. From the AP article,

Meanwhile, the Treasury Department's inspector general said Thursday it has opened an investigation into the Solyndra loan.

Spokesman Richard Delmar said the inspector general is reviewing the role and actions of the Federal Financing Bank, a government corporation supervised by the Treasury Department. The bank provided the low-interest loan to Solyndra. The loan is one at least 15 loans totaling more than $6 billion made by the financing bank as part of the stimulus program.

…loan guarantees essentially make it easier for the companies to get financing, because the government guarantees repayment in the event of default. In Solyndra's case, the loan came from the government itself, but private banks often provide the financing.

So, the government guaranteed a loan made by the federal government. What feeble minded fool dreamed up this mess?


What a lovely little slush fund. Possibly the motivation for this is that it keeps the loans off the books of the Federal government?

Egad, Merrill. I've never before heard of this agency, but obviously it's very active.

Great post. Thanks. Methinks the country needs more information about this.

You are correct.


Much of the FFB’s work is performed outside the US budget, which has led some to nickname the institution a “ghost bank.” The FFB has helped finance a wide array of government operations, from agricultural to military programs.


The FFB deals with federal budget management issues which occur when off-budget financing floods the government securities market with offers of a variety of government-backed securities that are competing with Treasury securities.

This beauty has been around since 1973.

ZeroHedge has been quite active on SolarGate, as it is being called, and it appears that the Treasury Inspector General is opening an investigation.


In the latest installment of what is rapidly becoming Obama's Keynesian Solargate, we learn that the Treasury Department's Inspector General has opened an investigation of the now defunct $528 million government loan to Solyndra which has no chance of getting repaid, following what will be a pennies on the dollar liquidation of the company, especially since it is primed by a $75 million term loan to George Kaiser, a documented Obama "bundler" as was documented previously.

Further, Brucke Krasting just published an article that uncovers some questionable financial transactions that took place.


Inventory Accounts Receivable Trust Funds. Prior to the Petition Date, Debtor Solyndra LLC (as servicer), one of its subsidiaries, Solyndra Financing LLC (as seller), Argonaut Solar LLC (as agent), and Solyndra Solar LLC (as buyer), entered into that certain Amended and Restated Purchase and Sale Agreement dated as of July 29, 2011 (the "A/R Sale Agreement"). Pursuant to the A/R Sale Agreement, Solyndra Solar LLC purchased certain of the accounts receivable resulting from the sale of the Debtors’ inventory and owns and has the right to receive the proceeds of collection of such accounts receivable. In addition, Solyndra LLC (as servicer), one of its subsidiaries, Solyndra Financing LLC (as seller), Argonaut Solar LLC (as agent), and Solyndra Solar II LLC (as buyer), entered into that certain Inventory Purchase and Sale Agreement dated as of July 29, 2011

Bottom line: Did George Kaiser lose a butt load of money on his Solyndra investment? If so, this seems to be manufactured scandal. If he lost a ton of money, this was just a bad investment. If he somehow made money then this could be serious issue.

From your second link, I infer that about $500 mil of $528 mil must have gone to the lawyers who wrote up those deals.

There is a very interesting picture of Solyndras' California facilities on page 16 from a Solyndra document dated 07-13-2010. Not a single Solyndra panel is visible in their entire manufacturing campus!!!


Pages 16 and 18. Perhaps President Barack Obama should have toured the roof when he visited. Might have made him nervous.

I think there might be some of them up there but clearly most of the area has nothing. That right there should scare investors. We have a saying in Silicon Valley along the lines of ~'If you won't eat your own dog food, it is not good enough for the customer.' They were not eating their own dog food.

I think there might be some of them up there but clearly most of the area has nothing.

Those pictures must be old. I was up on the roof of Solyndra’s Fab #2 one week before they filed Chapter 11. The entire roof was covered with Solyndra panels. One inverter, several hundred kW, was connected to half of the panels. A second inverter not yet installed was for the other half. The person giving us the tour said that most of the panels were new production, however there were a fare number that were from early production, and engineering test production used to see real world effects of process changes. So Solyndra did eat there own dog food.

On the other hand.....It could also be not that big a deal:

"The truth behind the episode isn't entirely clear yet. Apparently the Obama administration really did push way too hard to speed up the application. Then again the Bush administration pushed too. I've heard from people that Solyndra's tech was crazy and doomed from the beginning, that it was brilliant and could have triumphed with more support, and that Solyndra was undercut by heavily subsidized Chinese solar companies. .....

For a mix of financial and ideological reasons, U.S. conservative movement activists, operators, and politicos hate clean energy. They don't believe in climate change, they love fossil fuels and fossil-fuel campaign donations, and they think, or want the U.S. public to think, that clean energy is weak, unreliable, marginal, and dependent on government subsidies. They have been trying to make that case for a long while.

What Solyndra gives them is a symbol, something to use as a stand-in to discredit not just the DOE loan program, but all government support for clean energy and indeed clean energy itself."


"crazy and doomed" sounds right. What is the rationale for making solar cells by coating the outside of a cylindrical glass tube with CIGS and then inserting it into another glass tube with a liquid or jell filler between?

Possibly there is an advantage in that the seals at the end of the tube are smaller than around the periphery of a rectangular sheet assembly, so that ingress of moisture is easier to prevent. Moisture kill CIGS.

The tube would also be self supporting from end to end, so less in the way of metal or plastic mechanical support for the solar panel assembly would be needed.

On the other hand, the geometry ensures that there is a lot of CIGS surface at a shallow angle to the solar rays. Demo panels were mounted on roofs that had been made white, and I suppose that treating roofs with reflective materials would lessen the disadvantages of the geometry.

I'm assuming they were trying to piggyback on florescent tube technology, and many of their design parameters were constrained by the need to use equipment designed for an entirely different purpose. Even with all the mistakes the stuff wasn't that bad. Better output per nameplate, because the power versus time of day curve is flatter than fixed flat panels. And low eneough weight, that they could go after roofsm, that would need expensive reinforcements to support standard PV panels. But, $2watt production cost, when cSi can be had for $1.15 is just a huge barrier to overcome.

For another novel geometry, there is http://www.pythagoras-solar.com/

It looks like they assemble window units from rectangular glass boxes with silicon solar cells on the bottom of each box. Presumably there are some novel optics to direct light onto the horizontal cell surface while letting pependicular incident light straight through in order to provide visual transparency.

Continuing an my post from last night, (no telling where it is now) Solyndra was trying to target a niche of roofs that could not take the structural load from conventional PV panels.

Solyndra claimed a weight of 2.8 lbs/sq foot, and conventional modules run from 4 to 6 lbs/sq ft, the latter figure being for ballasted systems on a flat roof. It turns out though that the wind loading is a bigger issue, and can be up to 19 lbs/sq ft. Upwards. It's a wing effect.

Theirs may have had a lot less wind lift, but I didn't see than on the website, just the dead weight number. And that small decrease in weight isn't worth much. Certainly not enough to compete with conventional cells that are half the price per watt.

Interesting information on wind loading of arrays on roofs here;


Is someone going to make a reasonable comparison to Wall Street and GM bailouts? Fusion Research?

All this uproar about supporting a business that is struggling, but might have a promising breakthrough.. yes, irregularities must be investigated, but this one is being held high in the air far out of proportion to comparable subsidies and experiments.

How much did we spend on the "Missile Shield" so far?

Obama should encourage the investigations, but also stand in strong support of the research and exploration that needs to happen. He can point to any number of Bridges to Nowhere to show dead-end money holes that his detractors have signed off on.

For a mix of financial and ideological reasons...

Most of all they have a very loud and effective noise machine. Any thing that is embarassing (or can be made so via a distortion campaign) will be endlessly flogged to the media. They have a continuous media circus going on, it is a way to over a long period of time to generate bad feeling towards anyone opposition in the general public. It seems to be very effective. Mostly the public doesn't remember why they don't dislike the victims, just that they have some general feeling of distrust toward them. Its easily enough to swing elections. This tiny-scale (by government boondogle standards) affair, will get a hundred times as much airtime as massive boondogles traceable to the other side (such as billions of dollars in cache unaccounted for in Iraq).

This anti-enviro, anti-greentech is pretty amazing. Even a majority of Republican voters is in favor of those things (but not big money donors). But I bet they will lose few votes because they are going steeply against the policy wishes of the majority of the country, or even of their supporters.

We haven't had sound money in the world for quite some time now. This is the logical consequence.

It's not too hard to figure out. Money is now a figment of the collective political imagination and thereby meaningless. It can, and will, be printed or loaned out to infinity.

See that's why none of the "crooks" were prosecuted after the crash. The whole banking system would be implicated. Truly!

Rotten, rotten, rotten. Rotten to the core. Rotten all around. Rotten from top to bottom.

The link up top: The power of infinity: How will mankind keep the lights on and the temperature down? This is actually a review of Daniel Yergin's latest book and it is a whopper, 816 pages at $37.95 but you can get it for $21.08 on Amazon.com. The Quest: Energy, Security, and the Remaking of the Modern World

From the review, not the book. Bold mine:

The first is nothing new. People have been warning of peak oil almost since they began putting the stuff into barrels in Pennsylvania in 1859. Both world wars saw surging demand for oil—in inflation-adjusted terms America’s highest ever petrol prices were in 1918—and both ended amid dark predictions that it was running out. Mr Yergin counts five such scares in all. Yet there is plenty of oil left, with perhaps only a fifth of the world’s endowment so far produced. Indeed estimates of the remaining reserves keep growing. This is proof of something the doomsayers routinely discount, the wonderful combination of human ingenuity and market forces.

...Yet peak oil and gas look to be many decades off.

Notice that this review is in The Economist, perhaps the most prestigious publication in the business. Of course they hold similar views as Yergin. There will likely be more reviews of this book and I am looking forward to every one of them. ;-)

Ron P.

I noticed that the WSJ will be running a Daniel Yergin column tomorrow entitled "Daniel Yergin: Forget 'Peak' --There Will Be Oil."

There does seem to be concerted effort going on to persuade us not focus on actual production and net export numbers, something like to my "Cheating Husband*" metaphor.

*A wife walks in and find her husband in bed with another woman. Her husband denies being in bed with another woman and asks, "Who are going to believe, me or your lying eyes?"

It's interesting how many people think that the US is a net natural gas exporter. Most of them are stunned when I point out that the US remains one of the world's largest net natural gas importers, and our net natural gas imports increased from 2009 to 2010. But that's just those lying eyes and numbers again.

I think media outlets want to run these "There will be Oil" articles because it reinforces their own worldview. Far more comfortable and reassuring to have one's beliefs reinforced than to actually face reality. Saves a whole lot of brainpower. Sad for so-called "Investigative Journalism", of which there are not many real examples left.

Media is in denial because people are in denial. Tell a guy buying an SUV that ten years down the line his machine would become a piece of junk and he will look at you as if you're insane. Another factor that usually works for the denial camp is the human tendency to think of history in terms of human lifetimes. I've got several quips from middle aged and old people saying, yea right, I keep hearing about doomsday every ten years or so, never happens, I think a similar logic is being used here. Yea right, peak oil, has happened five times already since 1918

I am sure many people who predicted the collapse of Roman Empire or the British Empire were also laughed at. In the long run, collapse is a certainty, continuity is not.

I am sure many people who predicted the collapse of Roman Empire or the British Empire were also laughed at. In the long run, collapse is a certainty, continuity is not.

Sure, and in the long run we are all dead, and even the Sun goes out. So what?

Over the centuries the great majority of those people were laughably wrong with respect to the timing of the Roman Empire's slow demise. In other words, in order not to be laughed at, you've got to explain persuasively how and why This Time It Will Be Different Soon Enough To Matter. Otherwise, yawn, you're just propounding Stopped-Clock Theory (sooner or later the clock stopped at midnight will be showing the correct time, but since there's no information in that, so what?) Or, at least, if people aren't persuaded yet, they'll figure it that way.

Sure, and in the long run we are all dead, and even the Sun goes out. So what?

We are not talking about 5000 million years are we, a hundred years is within the life of two generations. Roman cities had become unlivable long before the last Roman emperor walked the Earth. I think we are talking about the decline of a decent quality of life which people get used to during the peak, if you are waiting for the last democracy on Earth to fall then you will have to wait for a long time indeed.
As Orlov pointed out there were a lot of people who predicted the demise of FSU, they were off in their predictions by 15-20 years or so but according to your logic it ain't worth it unless you nail down the exact year is it.
Decay is a slow process, one should not wait for the final implosion, get out while you can.

you've got to explain persuasively how and why This Time It Will Be Different Soon Enough To Matter

This is exactly the kind of thinking that got us here in the first place, if it ain't in my lifetime I don't give a damn

There is a point in ignoring stuff that is a few generations out. For example, with Moore's law in play, it would be unwise to start a new computer on a computing problem that will take it 10 years to solve. It would be optimal to wait some 3.3 years and then start solving it on a new computer, for a total time-to-solution of 5.5 years.

Similarly, with economic growth, it is unwise to start solving a problem too early, as growth increases our capacity to solve problems.

That's true, but it's also important not to start solving a problem too late which leads to the question how do you know when the optimal time to start is.

Problem-solving ability is a two-edged sword.

People ask me, "How can someone as smart as you be so stupid?"

I reply, "Because I can be very persuasive in deciding to do the wrong thing."

"Media is in denial because people are in denial."

This is yet more overgeneralization of the blame.

Media are in denial because sponsors won't tolerate truth-telling about our energy future. The real story getting serious coverage would be a catastrophe for auto sales and advertising budgets and, therefore, commercial media enterprises. Hence, it is anathema all around.

We must stop blaming ordinary people for the specific flaws in our ruling institutions and the elite they serve. "People" in general have yet to be given the slightest chance to contemplate reality.

We give the sponsors more credit than what is due, they show exactly what the people are used to seeing. TRP's are decided by the people not news outlets. The average guys is stupider than you think not the other way round.

Hello wiseindian

re: "The average guys is stupider than you think not the other way round."

Present company excepted.

Yergin's full page essay in the WSJ is a must read. Following is a link to Part One of my response:


This is proof of something the doomsayers routinely discount, the wonderful combination of human ingenuity and market forces.

Indeed, when you can't increase production, market forces (i.e. shareholder pressures) demand that you show growing reserves. And we have seen many examples of human ingenuity as these companies sell stories about growing reserves.

So I would say doomsayers discount neither market forces nor human ingenuity, they just dispute how wonderful a combination it is...

"Market forces" is just euphemism for 'Oil will continue to be available . . . but most of you won't be able to afford much of it.' But he seems unwilling to ever admit that.

There may or may not be plenty of oil left. What is certain is that there is little CHEAP OIL left. Prices will be skyrocketing.

I am an even better optimist than Yergin, guessing we may have tapped 5 to 10 percent of all oils down there.
The problem is that most of that oil is useless/unaccesible, and of the good stuff, we have taken out half or something.

Yet there is plenty of oil left, with perhaps only a fifth of the world’s endowment so far produced.

The only way that you can say something like is if you include a lot of really expensive oil that is not economically viable at current market prices. But that is not the way people will understand his statement and Dan Yergin full well knows this. Thus, he is a charlatan that is intentionally misleading the public.

Sure, if you count oil shale (which is not being produced) polar oil, all the tar sands, all the extra-heavy oil, the ultra-deepwater oil . . . well, oil will still be flowing long after every single one of us today is dead. Planes will still be flying 100 years from now. But the economy as it exists with 3000 pound gas-powered cars carrying a single driver back & forth to work 30 miles each way just won't exist. And that is what people think of when they think of their oil usage. That just won't be economically viable for most people.

...Yet peak oil and gas look to be many decades off.

Again . . . completely misleading. Peak oil is NOT 'many decades off' . . . And that is even by CERA's own forecasts! (They have oil 'plateauing' in less than 20 years . . . a plateau is a flat peak.) But by throwing 'gas' in there they can spin it as happy talk. Try to fill your SUV with natural gas.

We really have no idea how much absolute oil there is,do we, but we do know for a fact that we are finding it harder and more expensive to find affordable oil to maintain our industrial economies. I always wonder at the idea of planes and cars eventually being reserved for the rich only because once the mass market goes I seriously wonder if there will be enough cash to develop improved designs, or even keep building current models, for the mega rich. That is of course if the rest of society, incrementally losing their comfortable standard of living and even going hungry and without medical care, will allow a few rich to exist in a bubble of self indulgent isolation.

My feeling, and it can only be that although many experts believe it too, is that oil has peaked already and that peaking is to a large extent responsible for the world being unable to throw off the shackles of the financial meltdown and grow again. Economic growth? I'll bet that will soon look like a thing of the past but when the realisation dawns the responses around the world will be, well, astonishing. I don't know what will happen. Any ideas?

“Economic growth? I'll bet that will soon look like a thing of the past but when the realisation dawns the responses around the world will be, well, astonishing.” Posted by Ulpian

Exactly what I always wondered. At some point, after some time of continual recession, some critical mass of the population will “grok” the fact that the 300 year era of continual growth and “progress” are over. How this will play out in different locations will indeed be “interesting.”

Antoinetta III

and that peaking is to a large extent responsible for the world being unable to throw off the shackles of the financial meltdown and grow again.

I'd recommend looking at the data. In 2005, the oil extraction reached a plateau, it seems. World real economic growth since then: 2005, 3.4%, then 4%, 3.7%, 1.7%, -2.1%, 3.7% (2010). So, some 6 years of oil plateau has resulted in 15% real economic growth, and still expanding. This year, the global economy will grow 3-4%, and we'll be close to 20% total growth since 2005.

So, what shackles? I don't see any yet.

Total energy production has still risen. Once the decline in crude sets in, the other sources won't be able to keep up.

Besides, I don't believe GDP numbers, which are corrupted beyond reason.

Of course, as they say, only madmen and economists believe in perpetual growth on a finite planet.

A huge fraction of this so-called economic growth is phony--solely the result of the massive debt being piled up all over the world. If you subtract out this debt (like the 1.5 trillion dollars federal deficit per year in the U.S.) you get no growth. And if you continue the massive deficit spending the bond market will rebel and you get a situation like Greece.
So some of us expect multiple bad things happening in the next few years--peak oil, the debt crisis, exploding health care costs, baby boomer retirement, weather getting more extreme--creating a very bad economic environment.

This is nonsense. Credit doesn't make growth phony. Your arguments show your US centric view. We don't expect you yanks to grow very much, and perhaps not southern Europe either. Emerging markets, comprising more than half the global GDP, will keep creating the bulk of growth in the coming decade.

You must be counting those vacant Chinese cities, then.

I wonder how much of the Magical Asian and Indian growth is going to look like Wile Coyote winding up his slingshot..

The vacant Chinese cities is only a significant phenomenon in TOD denialism.

So, world GDP can grow roughly 3%/year with flat oil supply. What happens if supply starts going down at 3% per year? Is world GDP growth then 0%? Given the billions still yearning for a decent life, that will mean the dashing of lots dreams.

No, if the oil supply starts going down by 3% per year, I guess global economic growth may fall from 3% to 1-2%. This is the first decade or so - then we'll see what happens when demand destruction reaches higher value demand, and/or supply is increased again by CTL and other alternatives.

The thing is - the marginal demand is of low value and of little importance to growth. We have a lot of "air" in our consumption.

In 2005, the oil extraction reached a plateau, it seems. World real economic growth since then:

Your link won't work for me.
ChIndia is not "the world".

That is because many developing countries like Chindia could continue to increase their import of oil and China could continue to increase their import of coal. What happens when China cannot increase their coal imports (will probably happen by 2013-2014) or Chindia cannot increase their oil imports (will probably happen by 2020)?

Those numbers are phoney. Behind a pay wall but available via google. Global Gloom Buffets Factories

The world-wide manufacturing expansion is losing steam at a precarious time. The slowdown could exacerbate debt worries in both Europe and the U.S. and sap energy from Asia, the engine of most global growth in recent years. It also raises the stakes for policy makers addressing fiscal concerns this fall in Europe and the U.S., and for emerging-market officials who have spent much of the year grappling with rising inflation and overheating economies.

Turning Down

World On Verge Of Economic Collapse As European Leaders Prepare For Greek Default

Europe is on the verge of collapse, and their collapse will likely cause a US collapse to follow. And you post silly numbers about growth. Give me a break.

Ron P.

I always wonder at the idea of planes and cars eventually being reserved for the rich only because once the mass market goes I seriously wonder if there will be enough cash to develop improved designs, or even keep building current models, for the mega rich. That is of course if the rest of society, incrementally losing their comfortable standard of living and even going hungry and without medical care, will allow a few rich to exist in a bubble of self indulgent isolation.

I agree. One of the things I see along these lines recently, is the push by the wealthy via their proxy of politicians in DC to continue to gear things more in their direction. What use to be a country of 'The People', is now a bunch of chickens with their heads cut off running around trying to pay ever higher bills while a small percentage continue to rake in the big dough.

However, as this dynamic moves forward, the skilled workers that put together the transportation toys of the rich will get squeezed out by increasing costs and lower wages, and new airships will no longer be made. The masses of disenfranchised will reach a threshold and revolt like they have in so many examples throughout human history.

The illusion for the super wealthy at this point is security and jails will hold back the unhappy mob, but in the long run the mob always equals the playing field. Then things start over again, but in this case the complexity of a start over will be so much less and with fewer people.

The super rich are not self-buoyant.

Remember that the crest of the wave is still riding on the rest of the wave.

They're up there, but that's just cause they're standing on our heads.

(I re-read yours.. sounds like we're saying the same thing!..)

(I re-read yours.. sounds like we're saying the same thing!..)

We are - have a nice weekend.

We passed the point of Peak Horses (or is it Peak Pasture) a hundred years ago, and the horse has continued to be developed as a rich man's toy, for racing, show jumping etc.

Interestingly, some poor people still use horses in the city. Fresh produce vendors and junk collectors still clip-clop past my place every week or so. Presumably they have some niche source of feed and storage to make it economic.

Our economics professor always used to ask, "What are you going to do when the barbarians are at the gate?"

At least you can eat the horses. Not much you can do with the motor cars.

You're failing to account for the new fusion-powered autonomous drill/pump made of permanent materials that will walk through the earth's innards and find all the Oil there is. We're set for thousands of years.

A Golden Oldie from 1999:

The next shock?
March 4, 1999

OIL is cheaper today, in real terms, than it was in 1973. After two OPEC-induced decades of expensive oil, oil producers and the oil industry as a whole have more or less given up hope that prices might rebound soon. The chairman of Royal Dutch/Shell, Mark Moody-Stuart, three months ago unveiled a five-year plan that assumed a price of $14 a barrel. He has since publicly mused about oil at $11. Sir John Browne, chief executive of BP-Amoco, is now working on a similar assumption . . .

Yet here is a thought: $10 might actually be too optimistic. We may be heading for $5. To see why, consider chart 1. Thanks to new technology and productivity gains, you might expect the price of oil, like that of most other commodities, to fall slowly over the years. Judging by the oil market in the pre-OPEC era, a “normal” market price might now be in the $5-10 range. Factor in the current slow growth of the world economy and the normal price drops to the bottom of that range.

Abiotic Oil?

The Big Bang Theory should be overturned, as it, like global warming, is a big conspiracy designed to make scientists rich. While we are at it, lets overturn the Theory of Relativity, the Theory of Gravity, and every other scientific theory. We have way more filthy rich billionaire scientists than rich bankers, right?

I don't know of any billionaire scientists! None of the scientists I know are filthy rich from their science and I know several scientists. But like Abiotic Oil there must be a bunch of them filthy rich billionaire scientists hiding somewhere.

The simple fact that oil is associated with sediments mostly of marine origin suggests that this has something to do with oil's origin. If abiotic oil truly existed, then we would find oil in basalts that cover most of the earth's surface. In the Pacific Northwest there is no oil in the Columbia River Basalt nor underneath it where they have drilled deeply underneath (reaching sediments). The only commercially produceable hydrocarbons in the Pacific Northwest come from the marine Clark and Wilson sandstone, and Eocene deposit in NW Oregon.

Fossil fuels are called "fossil" for a reason.

Of all oilever discovered between "fossil" and "abiotic" geologists, what is the relation? It is nearly a 100:0 ratio. The guy who find the most oil,his theory is the better one. Case closed.

The guy who find the most oil,his theory is the better one.

I'd be careful with statements like that. A large proportion of all the oil ever found has been found using incorrect theories, or purely by accident.

The Kern River field in California was found in 1899 by accident.

Spindletop was drilled in 1901 against the advice of most experts.

The East Texas field was found by drilling on a non-existent prospect.

Between 1871 and 1945 seventy-two fields in the U.S., each with more than 100 million barrels of recoverable oil, were discovered without significant geological or geophysical data. This amounted to more than one third of oil discovered in the U.S. during that period (figures from AAPG Memoir 6, p.460). Most of these fields are still producing small quantities of oil.

The Cantarell field, the largest ever found in Mexico, and one of the most productive ever found anywhere, was found by Pemex after a fisherman complained of oil fouling his nets.

Similar tales can be told about almost any major onshore oil province, and in some offshore provinces.

Most of the real exploration wells ever drilled -- new field wildcats -- have been dry holes, no matter how good or complete the geological information and theory has been.

Lrd, you miss the point entirely. All oil ever found has been found in sedimentary rock on the theory that oil is of organic origin. No oil has ever been found in igneous rock on the theory that oil is of abiotic origin.

Ron P.


I'm not defending abiotic oil: I'm just noting that others can point to the failures of the consensus geological theory used to find oil.

The easy oil is easy to find, easy to produce, and is mainly already consumed. The best science we have does not do a very good job finding the not-so-easy oil unless the difficulty is with producing it (oil sands, for example), and the best engineering we have does not do a very good job producing difficult-to-produce oil. Or, for that matter, the difficult-to-find oil in most cases. Difficult-to-find oil is often difficult to produce too.

I'm not defending abiotic oil: I'm just noting that others can point to the failures of the consensus geological theory used to find oil.

But of course. There have been thousands of dry holes drilled as well as thousands of not so dry holes. The abiotic theory has never found one barrel of oil. What you seem to ignore is this whole thread is about abiotic oil verses organic oil. That is abiotic theory verses organic theory and which one has produced the most oil.

Care to guess?

Ron P.

Ron - There are a few freaky very rare exceptions almost no one except us nerdy geologists know about. See below.

The banjo music in the background really makes his presentation all that more convincing.

From the Far Side:

"Welcome to Heaven! Here is your Harp!"

"Welcome to Hell! Here is your Banjo!"

Kind of reminds me of BeePee. Different accent and inflection, but very similar timbre to voice. They could be brothers, perhaps.


The weird thing is it's in US News & World Report. That used to be the most respectable of the US weekly news magazines.

Diamonds show depth extent of Earth's carbon cycle

Scientists have speculated for some time that the Earth's carbon cycle extends deep into the planet's interior, but until now there has been no direct evidence. The mantle–Earth's thickest layer –is largely inaccessible. A team of researchers analyzed diamonds that originated from the lower mantle at depths of 435 miles (700 kilometers) or more, and erupted to the surface in volcanic rocks called kimberlites.

... Analysis shows compositions consistent with the mineralogy of oceanic crust. This finding is the first direct evidence that slabs of oceanic crust sank or subducted into the lower mantle and that material, including carbon, is cycled between Earth's surface and depths of hundreds of miles.

Now all we need to do is start burning diamonds.


I can end the whole abiotic oil debate right now: Rockman freely acknowledges all oil/NG has been generated by abiotic processes. There you go....discussion over.

OK..OK...a little more discussion. First, oil/NG can only exist under certain temperature limits. Second, the oil/NG has to accumulate/concentrate into reservoirs to be economic to recover. So we geologists look for those geologic conditions where oil/NG MIGHT accumulate. It's generally accepted that the majority of oil/NG ever created (by whatever method) has leaked to the surface. Consider all the natural oil seeps around the world and multiply by 10's of millions of years.

Every well that has ever been drilled has targeted those geologic conditions that would be conducive to oil/NG accumulation. I couldn't care less where it was generated: at the earth's core or in Donald Trump's garage. Since my career has been centered in the Gulf Coast I never worried about there being some source of hydrocarbons: the Gulf of Mexico is one of the premier areas on the globe for hydrocarbon generation...by abiotic or other means. I've never have drilled for abiotic or biotic oil once in my 36 years...I've drilled for potential hydrocarbon traps. You either find the trap containing commercial hydrocarbons or you don't. I've never cared how the oil/NG was generated.

And that's the little hitch in their hopes: where is abiotic oil hiding that we haven't been drilling for the last 100 years? It doesn't matter if they have sufficient proof to convince everyone on TOD that oil has been created by abiotic means. The questions is simply: where is it that we aren't already looking?

But, If you had a great geologic trap, but underneath it was only metamorphic and igneous rock, would you approve an exploratory well? If the answer is no, you don't have enough faith in abiotic origins to risks megabucks on. Thats not an issue in the GOM, since you have lots of deeply buried sedimentary rock.

EOS - As I just described CA is a weird place. Some of the biggest oil fields out there are from sedimentary sections laying right on top of igneous rocks. But those sandstone reservoirs were deposited with muds that became the source of the oil. I'm sure some mid-continent geologists out there could site other weird fields in the mid-west. As you point out about the GOM: we've never worried about source rocks...we got'em baby...big time. LOL.

CA, has a lot of crustal deformation going on. So over millions of years, whats under a given layer of rock, may have shifted from somewhere else. If the oil is slowly migrated upwards, it may show up somewhere not so close to its parent rock. I doubt that sort of thing happens except at plate boundaries.

EOS - You got it. In the early days of the geologic analysis of CA they couldn't begin to explain the complexity they mapped especially in N CA. It wasn't until the development of the theory of continental drift and subduction zones were they able to figure it out. As you point out something rather unique to plate boundaries.

Rockman- I trust your insight

What are the counter arguments for the examples that they cited e.g. Eugene Island suddenly having greater production. Is it possible that tectonic activity created new fissures and pathways?

Is it possible to distinguish abiotic oil from conventional oil?

Does the age of oil vary from region to region or is pretty constant all about 60 million years ago?

Take, say a raspberry sno-cone. You have crushed ice saturated with a bright red syrup. Then take your straw, stick it a way in the ice, and suck out two or three mouthfuls of the syrup. You will see that the area in the ice around the tip of your straw has faded to a light pink. Then wait five minutes. The bright red syrup from the surrounding ice will migrate to the by now low-pressure area around your straw-tip, and the whole of the ice-environment will be bright red (not quite so bright however), once again.

I suspect it must have been something like this that caused the Eugene Island situation.

Antoinetta III

crazy - back in the 70's I worked a bit on EI area for Mobil Oil. Big deal...so what? LOL. It's called secondary migration and was recognized in the oil patch many decades ago. The oil is feeding up a fault plane from a deeper pool. It's not leaking up from the center of the earth. LOL.

"Is it possible that tectonic activity created new fissures and pathways?" What typically happens in such situations is that the pressure are reduced in the producing formation as it's depleted. So it's not so much new pathways are created but the pressure differential (flowing from high to now lower) causes this secondary migration of the hydrocarbons. And sometimes it's more deadly than beneficial. When I started at Mobil Oil they drilled a replacement well in an old field. They weren't worried about the risk of a shallow NG blowing out because none had been encountered in the original development. But over years NG had leaked up thru bad cement jobs in those old wells and had accumulated in a shallow reservoir where no NG had been before. Thus they drilled into it unprepared, the well blew out and 7 hands burned to death.

Given that no one has ever said they had a sample of abiotic oil that I know of then who knows what the difference might be.

Age of oil? Nothing close to constant. Not sure what the oldest oil produced is but I think well over 100 million year. And there have been oils produced that were dated just a few million years. And that's one of tricky things about tossing out "ages". You could have a rock that's over 300 millions old that could have oil migrate into just 10 million years ago. And that oil might be produced from igneous rocks that were formed deep within the earth...just the "evidence" the abiotic folks go nuts over. The field I just described exists in the San Joaquin Basin in S Ca close to Bakersfield. Did my Master's thesis on a field in the area. There's an oil field producing from fracture granite rocks less than 1,000' below the ground. The history: over millions of years ago granite mountain rose out of the earth and the over millions of more years it was eroded down. The seas covered to remnants of the weathered granite, deposited organic shales on top of it, the area became buried deep in the earth again, oil was generated and migrated into the granite and then area was then uplifted again with much of the rocks eroded off again. So now you have oil producing from igneous rocks created over 300 millions of year ago perhaps hundreds of miles below the surface of the earth producing oil from a depth of just hundreds of feet and generated just a few tens of millions of years ago.

Mother Earth likes to make it a tad complicated for us simple minded geologists from time to time. CA geologists sometimes refer to such geology (and this example isn't nearly as complex as some areas in CA) as "FUBAR": F-upped Beyond All Recognition.

Age of oil? Nothing close to constant. Not sure what the oldest oil produced is but I think well over 100 million year. And there have been oils produced that were dated just a few million years. And that's one of tricky things about tossing out "ages". You could have a rock that's over 300 millions old that could have oil migrate into just 10 million years ago.

As a deep time guy but not an oil patch pro, I've often wondered about this. You see references to Permian strata in KSA ("Khuff"?), which would be circa 250-300 mya, but I've never been clear on whether it's all gas or there is some oil down there as well.

Perhaps more to the point, one of those media-produced peak oil documentaries--I want to say it's the one called Crude but don't remember for sure; it's whichever one is watchable on an .au web server--claims that most of the world's oil was formed in two massive bouts of global warming ~90 mya and ~150 mya. I found this claim fascinating, but they provided no sources or additional info and I've never heard it referenced anywhere else. A careful look at the Phanerozoic δ18O record [a proxy for temperature] indeed shows a mighty temp spike around 90 mya (the largest since the Permian extinction, actually), but I don't see what's so special about the lesser spike circa 150 mya, which was also during a presumed glacial period, or why this particular temperature excursion would result in oil formation on a massive scale while the spike ~120 mya or the PETM ~56 mya, both of an equal or greater magnitude to the ~150 mya event, apparently did not.

I was kinda hoping one of you professional types might have more data about the age of oil, especially considering ROCKMAN's caveats about the difficulty of accurately "dating" a sample of oil. Surely someone has published on this topic? Primary lit would be great.


Ash - Some developments about oil dating I wasn't aware of. Might be just what your looking for. Enjoy.


“The Jurassic (180 million to 140 million years ago) was a very good age for oil formation. So too was the Cretaceous (140 million to 65 million years ago). But, until now, oil industry experts have lacked a direct way to date their crude.”

Fossil fuels:

Coal contains actual fossils.

Fluidized oil contains molecular signatures of plant origins, which vary from site to site. Rockman or others might have something to say about indications of biotic origins in non-fluidized precursor formations.

Natural gas: I don't know if abiotic NG is touted, but I don't know why it wouldn't be. I speculate that abiotic NG would have carbon isotope ratios the same as natural abundance, whereas carbon isotope ratios in biotic NG would skew to lower atomic weights. Scientists said life origin was 13.7-13.8 billion years ago, even though they didn't have fossil evidence, just because of the isotope skew in carbonaceous deposits of that age. Microbial fossils in those deposits were discovered recently.

I thought the Earth was less than 5 Billion years old.

You are absolutely correct. 13.7 is the alleged age of the universe. I should have written 3.7-3.8 billion years for life origins on Earth.


I have lost track of the number of times that I have explained that abiotic oil theory may be right, but if it can't point us towards a new class of reservoirs that can be commercially exploited (drilled to, adequate volumes, adequate flow rates), then whether the theory is right or not is immaterial. Or at least, point us to conventional reservoirs that consistently refill at rates near our extraction rates.

Hi Rock

re: "Rockman freely acknowledges all oil/NG has been generated by abiotic processes..."

I was waiting/hoping for something to pry me away from TOD and here it is: a good laugh.

Most grateful. :)

Re: Green building to ride energy revolution

Empire State Building Achieves LEED Gold Certification

The Empire State Building in New York City has been awarded LEED-Gold for Existing Buildings certification, making it the most well known building in the US to receive green building certification from the US Green Building Council.


The green building improvements will reduce carbon emissions by an estimated 105,000 metric tons over 15 years. In January 2011, the Empire State Building Company bought carbon offsets totalling 55 million kilowatt hours per year of wind energy, making the Empire State Building carbon-neutral.

See: http://www.reuters.com/article/2011/09/15/idUS14887746020110915


I've just been crawling around in my attics and knee-walls, trying to get my house 'BLEED' De-certified.

Hey Bob,

Some of your neighbours have been paying attention...

Solar on Munjoy Hill
Old and new technology create a house that requires almost no outside energy.

Paul Ledman and his wife, Colleen Myers, are using the power of the sun and air to make their Portland home perfectly comfortable with minimal energy from outside sources. Ledman says cutting down on usage doesn't mean sacrificing comfort.

See: http://www.pressherald.com/life/homeandgarden/solar-on-munjoy-hill_2011-...

Best of luck with your renovations. [Seven hundred and fifty-four days since my last oil fill and counting.]


One of our City Councilors informed me last night that we will be getting Solar Heat on the roof of my daughter's elementary school very soon, to heat the public pool there. Bits and pieces are happening..

I'm at about 108 days for oil now, but still have a half-tank at each house..

RE: Chart Presentation: The Details

…peak oil’ has more to do with demand than supply.

When I took Econ 101 in college we studied the Law of Supply and Demand.

We did not study the Law of Supply in one chapter, and the Law of Demand in another chapter.

It was all in the same chapter because it was the Law of Supply and Demand.

Apparently when people get advanced degrees in Economics, they are required to forget everything they learned as undergraduates.

Comments from a brokerage firm:
Oil Movements: Middle East eastbound and West Africa westbound sailings are set to increase

Total Middle East sailings are expected to remain stable, at 17.44 mbpd, over the 4-week period to 1 October, 620 kbpd (3.7%) above last year, and higher than the 5-year average. An increase of 202 kbpd (1.6%) in eastbound sailings is partially offset by a decrease in westbound sailings of 143 kbpd (2.9%), for the same 4-week period.

Total West Africa sailings are seen to extend the recent smooth decline, with the 4-week average to 1 October set to decline by 48 kbpd (1.1%). The decrease is to be driven by eastbound sailings, at 257 kbpd (17.3%), leaving the absolute level 645 kbpd (34.4%) below last year, and somewhat under the 5-year average. In contrast, westbound sailings are expected to increase by 209 kbpd (7.8%) for the same 4-week period, leaving them up on the year by 680 kbpd (30.7%) and slightly above the 5-year average.

Utica Shale: Just a little reality check - "In fact Reuters says it could be "the next oil surprise in the U.S.,". The fact that the Utica contains oil/NG is not a surprise at all. Folks have been drilling and producing it for over 70 years. It's not some new discovery. That doesn't mean it won't have a drilling boom flare up soon and contribute to US production. The booming Eagle Ford Shale in Texas was known to be productive for many decades.

IMHO two factors will contribute to the Utica "gold rush" if it happens: high oil (and potentially NG) prices and the never ending demand by Wall Street that public oils increase their reserve base y-o-y. The public oils have no choice but to chase any and all unconventional plays: without these trends maybe half of all the companies would be forced to shut down. Profitability of these plays is not the prime metric. It's drill, baby, drill. Actually it's really "book reserves, baby, book reserves". As long as oil prices don't collapse (as NG prices did back in '08) these unconventional plays will be THE game for the public oils. It's their only chance for survival.

C'mon ROCK, get with the program. We can't say 'book reserves, baby, book reserves', that's just jaded and cynical spin. It is, rather, 'the wonderful combination of market forces and human ingenuity.' [Economist, 9/16/2011, all rights reserved].


You getting any rain down in the Houston-Galveston locale?

steve - Not a drop worth mentioning. As far as "booking reserves" when I've worked with public companies booking dominated almost all discussions. It was never "how much oil/NG do we actually have" but "how much oil/NG can you convince folks we have". In fact, they typically did not want me to physically document my real analysis. IOW no paper trail.

I've gathered the cycle runs something like this: book reserves --> get market excited --> use increase in equity value to fund capex to turn reserves into production --> cross fingers you can grow actual production. If not, sell to another company that can, you know, book reserves growth attributable to the merger. Rinse and repeat...

You got it nailed Stevo

One exception appears to be Tullow Oil, which is wildcatting in Africa for conventional oil with some success.

And Petrobras, if you want to consider extreme oil as conventional - and a company controlled by the Republic of Brazil as a public company (stock listed as PBR (voting) and PBR-A (non-voting)).

The exceptions that prove the rule ?


People forced to move as world’s lowest country sinks under rising seas

But just think of the real estate possibilities for those that don't believe in global warming!

I talked to an american fellow on the chat on an RPG (MUD, actually) game world where I've had a characher since 1999. I did respect the guy because he saidsome smart things in previous talks on the chat channels. But the other day we got into climate change. According to him:

it is the sun, affecting stellar radiation, affecting cloud formation, wich is the main thing

CO2 is a small climate driver

the climte change trend is not clear

the human contribution to any change is a smaller fraction

it is not established if the change is going to be economically good or bad

but he is leaning towards the end result will be generally positive.

Cry baby, cry...

An ocean of oil and gas under Lorraine?


but experts challenge the claims

They appear to be estimates for an entire region, somewhat like the Marcellus Shale estimates we've discussed recently ("Schiste" is French for shale.). From the article, I can't tell if they're talking about something like conventional oil trapped in shale, or kerogen shale. The journalist may not know or understand the difference. If I wasn't a loyal TOD reader, I sure as hell wouldn't.

The company says they won't frac the oil or gas out - France banned fracking in July - but they don't explain how they would get at it. They do claim there's 2.1b bbls of conventional oil there already, but they don't explain whether that number is URR or economically recoverable reserves, nor whether it's crude or NGLs and other stuff.

IOW, wish in one hand...

In this article, Elixir Petroleum is happily confusing people by speaking about potential oil in place rather than recoverable and at what cost it could be recovered. In Fact, they don't even have hard data about this shale oil and gas. Furthermore, fracking is now forbidden in France, so even if that oil existed, it cannot be exploited, at least until the law is changed again. However, a bit of conventional oil was found and exploited in that area a long while ago, so more could be found... maybe.
Just to be complete, there is a known large deposit of shale oil in the Paris bassin with more that 100 billion barrel of oil in place. It was found in the 50's and confirmed by multiple drilling but not a single barrel of oil was ever extracted. Note that there is also some conventional oil in Paris bassin giving 11,000 bpd, mostly from stripper wells, down from a peak of around 33,000 bpd.

JP - The best details I could find: http://referentiel.nouvelobs.com/file/2431591.pdf

"There are at least six sub-plays existing within the Moselle Permit. These are a
combination of conventionally and unconventionally sourced hydrocarbon plays which Elixir will individually drill and test.... NSAI...(the independent consultant company they used)...will then develop their resource estimate for the Moselle Permit. The independent resource report is expected to be finalized prior to the commencement of the farm out process."

If you aren't familiar let me decode for you: "... their resource estimate...". This means the consultant company couldn't come up with 1 bbl of PROVEN oil or 1 cubic foot of PROVEN NG. That's why they use the term "resource" and not "reserve". But don't over interpret what I just said. They may turn it into a booming play in a couple of years. Or you may see a tiny press release saying the company is filing bankruptcy and the investors are filing law suits. Only time will tell.

Time tells us this:

elixir = snake oil

Someone on the forum once mentioned that the most dangerous person on an engineering project is the person that's not in the room. Ran across this example that proves the point ...

NSA Director Fears “Destructive” Element in Coming Cyberattacks

... [explanation of] the catastrophic destruction of a water-driven electrical generator at Russia’s Sayano-Shushenskaya dam, near the far eastern city of Cheremushki, in August 2009.

Gen. Alexander said one of the dam’s 10 650-megawatt hydroturbine generators, weighing more than 1,000 tons, was being serviced and, by mistake, was remotely restarted by a computer operator 500 miles away. The generator began spinning and rose 50 feet into the air before exploding. The flood caused by the accident killed 75 people and destroyed eight of the remaining nine turbines.

S - Even on a small scale it can be heart breaking. About 2 years ago the father of my daughter's best friend was checking on a pump jack that wasn't pumping at the moment. Most PJ's are on a timer. There's a kill switch you throw before you mess with it in case the timer clicks it on. He didn't throw the switch, pj kicked in and killed him instantly. Worst part: his wife and daughter were waiting in the truck for him. They stopped on the way to church on Sunday morning. Took a bit afterwards that to get my daughter to stop worrying about me. Needless to say his daughter still has problems.

Makes me wonder if in your example they had a kill switch that could have been thrown. amazing how a few thousand $'s of hardware can prevent losses into the $million and a terrible body count.

Yes. Something as simple as a circuit breaker under an access hatch.

S - Not nearly as bad today but I'm sure you know what a dead man switch is. I can't tell you how many times I saw a dead man swtich tied off on a drill rig in the bad ole days. Or warning systems turned off because of too many false alarms waking folks up.

Yeah, the Russian dam example is certainly valid, but the generator should have been physically locked out of power and control systems at the site before maintenance took place. Then the 500 mile away operator would have just seen an error message, and the dam wouldn't have exploded.

The guy who wrote this certainly heard something, but never bothered to actually read the report about the accident. It wasn't an operator's mistake. It was a mechanical problem which dragged for months and nobody could explain it. And nobody had guts to shut down the cash cow for deep inspection.

In the 'lectric bidness, it is common practice to "lock out/tag out" the equipment... vavles, breakers, computer controls and any other component thought to isolate the piece. Everything is documented on paper and computer. It works and has been in place for decades.

I take it that "the guy" in question is General Alexander, not the Washington Times reporter?

I don't know the truth of this, not having read the report to which you refer, but if you're correct, it's disconcerting that the director of the National Security Agency either doesn't know the facts or deliberately misinformed his audience.

Jellyfish replacing fish in over-exploited areas

... In some areas where fish stocks are declining, often through over-fishing or pollution, jellyfish are becoming the dominant species. These areas include coastal waters off Japan, Northeastern US, the Black Sea, and the Mediterranean. The increasing numbers could change the nature of marine ecosystems, and in some areas, such as Japanese coastal areas, it is already causing problems for human beach-goers. In Japan, Scotland, and Israel, nuclear power plants drawing water from the sea have also experienced problems and have had to shut down at times through an over-abundance of jellyfish clogging water intake filters.

Hmmm...... Now if only we could find a way to turn Jellyfish into oil. Muhahahahahaha

Edit: I couldn't think of any logical reason why people wouldn't actually try this. I did a quick Google search and found this.


Last fall, a swarm that covered 10 square miles killed $2 million worth of salmon at a fish farm in Northern Ireland. In Japan, jellies have clogged coolant intakes at nuclear power plants. Meanwhile, Japanese scientists are experimenting with ways to use jellyfish, including extracting a compound from them that can be used to help cosmetics retain moisture and using them as a sort of biofuel to produce power.

It's already started. Muhahahahahaha

The catch is that you can live without oil but not without food. Fish has been a major food source around the world for basically all of human history. On the other hand, I suppose most people would still survive without fish (too bad for Micronesia), but it sure would suck.

I know the Japanese would be REALLY unhappy if they could never eat fish again. Sadly, they are the ones making that reality. Not just them though, fisheries around the world are mostly severely depleted compared historic levels (almost certainly much, much, much worse compared to levels say 1000 years ago), even the ones we consider "healthy" and "sustainable". I just read a book on this exact issue, "The Unnatural History of the Sea", it's enough to make you want to cry.

The Icelanders claim that they have sustainable fisheries (having beaten the British Royal Navy twice for the right to manage their fisheries). The annually adjust their quotas by species with the spread of sizes of fish caught the prior year being a primary determinant.

It is possible that their sustainable level is set lower than the maximum. To explore that option, they tend to be slow in raising quotas.


Not to worry. I'm sure some fish will re-evolve in a few hundred million years...right?

Well, lets just hope they don't grow legs next time. That just caused a heap o trouble in the end ;p

Forget legs, it's the hands that are the problem - just gotta do something with 'em!

Reminds me of when I gave a young nephew a Swiss Army knife for his birthday years ago, and after a few moments of marveling over the various blades and tools, he announced "I'm going to fix something now". We managed to get him under control before he "fixed" too many things. :-) It's a primate thing, alright. Busy busy busy.

Secretary of the Navy Ray Mabus Announces NPS’ Energy Degree Programs

... "Let me give you the headline of why I'm here today," Mabus said. "Starting this fall, the Naval Postgraduate School will offer … energy graduate degree program[s], the first military educational institution to do so. And beginning early next year, NPS will launch the SECNAV Executive Energy Series – catchy title – a two-week program designed to tackle specific energy challenges."

As Mabus noted, the energy programs will begin in the fall, with an initial offering of energy-focused existing degree programs, to be followed next year by two new degree programs with concentrations in energy technology and policy.

Maybe they'll have a course on peak-oil?

IEA Governing Board concludes Libya Collective Action

The collective action was launched on 23 June 2011, when the IEA Member countries agreed to make available to the market 60 million barrels of crude oil and oil products. Of these 60 million barrels some 38 million barrels were released from public stocks and 22 million barrels via a relaxation of obligatory industry stockholding. Public stocks were taken up by the market over the course of July and August. Uptake of public stocks has been 97%, compared with 73% at the time of the 2005 collective action.

Seems like 30 of that 38 Mbbl came from the US SPR

Reuters has run a piece on the oil price/GDP repeating Gail's (Hamilton, Rubin, Therramus, and Kopits et. al.) contention that recessions are a consequence of unsustainably high crude prices. They have a new name, call it the “oil expense indicator” The article quotes Christophe Barret, global oil analyst at Credit Agricole.

The warning signal flashing is what economists call the "oil expense indicator": the share of oil expenses as a proportion of worldwide gross domestic product (GDP) (oil prices times oil consumption divided by world GDP).

Since 1965, this has averaged roughly 3 percent of GDP, and it has only exceeded 4.5 percent during three periods: in 1974, between 1979 and 1985 and in 2008.

Each period has seen severe global recessions.


I searched the topic but could find no original reference? The conclusion:

If history is any guide, another oil-induced recession may be just around the corner, at least for the United States and some of the other developed economies.

If you genuinely understand and "believe" in the long emergency, as I think I do, terms like recession are now more or less meaningless.

So oil price goes down and the recession ends. The price goes up, and a new recession begins. On and on, with no end in sight. Of course, once the decline sets in, the general price direction will be up, but in ways which will be so volatile that we'll have major political and financial disruptions. We may finally admit then that we are in a depression.

Couldn't agree more. I like the term “oil expense indicator” to describe our dependence on easy-to-extract, inexpensive fossil fuels, The fact that Reuters and other news outlets picked it up suggests this important concept is gaining acceptance as an energy-based economics. Perhaps EROEI and Net-Energy Analysis will next become household terms. "Dear! Should we consider walking to the bio-diesel station for our tractor ration?"

Scientists air new views on how oxygenation affects aquatic life

Recent work at Plymouth University on how animals breathe underwater suggests that decreases in water quality and oxygenation will have an even greater impact on the diversity of aquatic life than was previously thought.

“Any decline in water quality and in particular oxygenation, could greatly exacerbate climate change effects.”

U.S. county, state, and federal politicians and bureaucrats know this without the necessity of more academic studies, but still we're trying as hard as possible to create as many dead zones as possible as quickly as possible, and as large as possible. Industry and political leaders assert that U.S. industrial agriculture requires this, without regulation.

My favorite song at the moment. Fans of the old 'campfire' might enjoy it.

Turn on Tune in Drop Out With Me - Cracker (Youtube video)

New single from Cracker. From new album "Sunrise in the Land of Milk and Honey". Release date May 5th 2009. C'mon everybody, it's the collapse of western civilization! turn on tune in drop out, quit your job, stop coding, throw your law books away, move to the country, bring the kids, build an agrarian fortress, meet the survivalist neighbors. the whole things coming down so let's just get out of the way.

Hey! That's where I live: Sebastopol.

The whole town dropped out decades ago.

Just down the road in Valley of The Moon.
Sebastopol and Fairfax are towns with a beat of a different drummer.
If you could envision Mayberry on acid----

Mayor Bloomberg predicts riots in the streets if economy doesn't create more jobs

Mayor Bloomberg warned Friday there would be riots in the streets if Washington doesn't get serious about generating jobs.

"We have a lot of kids graduating college, can't find jobs," Bloomberg said on his weekly WOR radio show. "That's what happened in Cairo. That's what happened in Madrid. You don't want those kinds of riots here."

Read more: http://www.nydailynews.com/ny_local/2011/09/16/2011-09-16_mayor_bloomber...

yay, more brinkmanship. can't wait to see this country tear it's self apart. *sarcasm*

So is he not effectivley telling the college grads who can't find jobs to riot?

Got a degree? Can't find a job? Well you know what they did in Cairo and Madird don't you?

By the way, now that the riots are more or less over, ask those college grads in Cairo and Madrid. How's the post riot economy working out for you?

Jesus, people, c'mon. No, he's not posturing for brinkmanship or inciting the kids to riot. He's intensifying the warning; he is out on the street worrying alongside with his people. Unless you're from the socialistic Northeast, you literally won't "hear" what Bloomberg is saying. You're missing the context of our regional fabric.

I grew up in NYC metro, and know that most of the country dislikes us. We're loud and pushy and greedy, goes the stereotype. But we're experienced with bad times, we will take care of our people when the chips are down, and we expect to lead if Washington cannot or will not help. Governor Christie during the recent floods: "I know New Jerseyans are tough and cynical. I also know you'll pull together during these times." Giuliani during 9/11 when Bush was AWOL...

I've resettled in the Pacific NW and finally found the right analogy for regional comms differences: on the West Coast especially, it's like all of the black keys on a piano are missing. The subtleties and the intensifiers for communicating are missing. The history of war, of leaving bloody footprints in the snow outside Trenton; the Civil War Draft riots; the 70s: Ford to New York: Drop Dead; 9/11; and bad times and cohering together during those bad times are just not deep in the memory bank here: "Dude, it's all good."

Here's more of the article for context:

Bloomberg gave Obama kudos for coming up with a jobs plan.

"At least he's got some ideas on the table, whether you like those or not," he said. "Now everybody's got to sit down and say we're actually gonna do something and you have to do something on both the revenue and the expense side."

"And everybody's got to share in the pain."

"When you start picking and choosing which groups do and do not, that's when it becomes unfair in a lot of people's minds," the mayor said. "But we're all in this together."

Obama didn't create this economic mess, it developed "over long periods of time," Bloomberg said.

Thanks, Ballard. Well put!

"..We'll make Manhattan into an Isle of Joy!" - Rodgers and Hart

Re: Michael Klare - America and Oil: Declining Together?, up top:

Michael T. Klare interview:


Slightly off topic, but related to the issues we discuss here (especially with respect to the warning people about what is coming).

I give you this: http://www.nature.com/news/2011/110914/full/477264a.html Italian geologists on trial for manslaughter for failing to provide (I'm not sure what) to the residents of a town hit by an earthquake.

I'm reasonably sure that when the earthquake of peak oil hits John Q Public square between the eyes, they may ask "Why didn't anyone tell us about this?" I wonder who will be held on trial then?

Wettie - Not really that far off. Sounded frivolous at first but: "the trial has nothing to do with the ability to predict earthquakes, and everything to do with the failure of government-appointed scientists...to adequately evaluate, and then communicate, the potential risk to the local population. ...officials...provided incomplete, imprecise, and contradictory information to a public... Picuti says that the commission was more interested in pacifying the local population than in giving clear advice..."

Taken like that it's easier to extrapolate to reactions in this country when PO becomes inescapable to the majority of the population. Consider the near constant pacification feed to the American people by politicians, Big Oil and various other cornucopians.

BTW: The Rockman has more than adequately covered his butt here on TOD. Just one more benefit of hanging here.

However it's unfortunate that our earthquake detection technology to date gives us "incomplete, imprecise, and contradictory information". Damned if you do...

Can you imagine the outcry if they told everyone to run for it and then an earthquake didn't happen?

Richard - Good point about false alarms. But they weren't talking about the equipment giving bad data. They don't even address the nature of the data. It's the govt they are charging with not giving a fair assessment of the dangers. How you make that call I'm not sure. If someone sees a brick falling off a building and doesn't yell at you to run that's one thing. But if they let you walk past a building that they know has a tendency to drop bricks occasionally it's a different matter.

But what about a politician who promises us "energy independenc" if we pass his legistlation? Again, a judgement call. But for some of us on TOD that promise is the same a telling us if you put a loaded gun to your head and pull the trigger you'll be alright. But opinions vary.

Re: People forced to move as world’s lowest country sinks under rising seas, up top:

Global warming causes increased sea evaporation, lowering sea level and increasing rainfall on land. Water does not run back into the sea fast enough to allow rising sea level.


Water does not run back into the sea fast enough to allow rising sea level

Umm, so where's the water going? Are the Great Lakes getting deeper? Are the deserts blooming? Are the rivers deeper (I suppose people along the Missouri might have a different opinion on that)? Maybe the water tables of the aquifers are rising?

I'm not buying it.

Massive amounts stored in soils, or contained in rivers, canals and lakes flowing back to the sea over the timespan of days. Yes, days. Take for example the river Rhine which is about 1200 km long and assuming an average speed of 2 m/s it will take a drop of water 7 days to reach the sea after it entered the river.

Satellites see the body of watermass in the soils building up before a flood begins. Water deposited on land is also the explanation the scientists are giving for this pothole in the sealevel:

Willis said that while 2010 began with a sizable El Niño, by year's end, it was replaced by one of the strongest La Niñas in recent memory. This sudden shift in the Pacific changed rainfall patterns all across the globe, bringing massive floods to places like Australia and the Amazon basin, and drought to the southern United States.

Data from the NASA/German Aerospace Center's twin Gravity Recovery and Climate Experiment (Grace) spacecraft provide a clear picture of how this extra rain piled onto the continents in the early parts of 2011. "By detecting where water is on the continents, Grace shows us how water moves around the planet," says Steve Nerem, a sea level scientist at the University of Colorado in Boulder.

So where does all that extra water in Brazil and Australia come from? You guessed it--the ocean. Each year, huge amounts of water are evaporated from the ocean. While most of it falls right back into the ocean as rain, some of it falls over land. "This year, the continents got an extra dose of rain, so much so that global sea levels actually fell over most of the last year," says Carmen Boening, a JPL oceanographer and climate scientist. Boening and colleagues presented these results recently at the annual Grace Science Team Meeting in Austin, Texas.

Still not buying it?

Well, I'm coming around.

It's just that the oceans are such a huge amount of the surface area of the earth. Yes, there are floods, but there's droughts too. Water stored as ice seems to be declining. But as you say, there is a lot of potential to store water in soils. A 6 mm drop of oceans would be, what, 18 mm for the land masses to suck up?

It would be interesting to know how thermal expansion (or lack thereof) compares to "water not running off fast enough".

How about dams? All dams combined contain about 30 mm worth of sealevel. If we assume that globally dams hold 10% more water then before 2011 just because we are in an La Nina regime currently, it would already explain about half of the 6 mm observed drop. The other 3 mm could easily be soaked up by dried-out soils due to the 2009/2010 El Nino as some of them are able to carry more then 1 meter of moisture.

To me it seems like the bulk of the pothole is easily explained by these two factors, but there are ofcourse other factors.

Here we have floods, many of which recordbreaking or near-recordbreaking, in
- Pakistan (multiple)
- China
- Australia
- USA (multiple)
- Phillipines
- Southern Africa
- Colombia
- Quebec
- South Korea
- Thailand
- Brazil
- Singapore

And probably many more, contributing to this:

Good stuff. So what is happening is that these events are replenishing the storage of water on land - mostly by groundwater recharge. This is good, as someplaces, like Eastern Australia were very dry. But how much can be stored, in a short time of say, less than 10 years?

Land is 30% of the earth surface, so if we assume the ocean loses 1mm of water, then the land has gained 3mm as rainfall. Typical soil porosity is about 20-40%, and the field capacity is usually 2/3 of the porosity. so lets just say 20%, which means each mm of rain will saturate 5mm of soil. so the 6mm sea level drop is 18mm of rain, or about 90mm of soil that has been saturated. Or, 1mm of sea level reduction is 15mm of soil saturation

So, if we are trying to offset a 0.1m sea level rise, then we would be saturating 1.5m of soil - that is not already saturated. That is a lot, and in many places you would start top see lots more runoff - which shows up as flooding.

so yes, this is a good theory, but I suspect the size of the available terrestrial storage is limited.

There is scope for replenishment of deep aquifers, but this generally takes place over thousands of years.

The atmosphere gets my vote. Warmer, wetter; lots of water floating around up there. When it rains, it pours.

The hydrological cycle is thought to be enhanced both in terms of weather system and precipitation intensity as higher air temperatures enable greater take up and transfer of water vapour (latent heat) from the surface to the upper atmosphere (Folland et al., 2001b; Groisman et al., 2004; Trenberth et al., 2005).

Wouldn't all the water that fell as rain in the Australian floods stay in the center of Australia? It cant get out.

Not necessarily. Any rain that fell on the eastern side of the Great Dividing Range - which includes all the floods in and around Brisbane, drains eastwards to the Pacific. part of south-central Queensland and all but NW of New South Wales drains into the Murray-Darling basin, and, eventually, to South Australia and the Indian Ocean.

The SW part of Qld and NW part of NSW drain into Lake Eyre, which is a salt lake below sea level. So Lake Eyre did get a good fill up, but you can imagine the evaporation that is happening there - the westerly winds coming out of the red centre suck up the moisture like a sponge!

There certainly has been a replenishment of soil moisture, and a rise in the water table, but this increased rainfall would need to continue for years over a wider area to really store lots of water. That would be welcome in Australia, but is unlikely.

Most of the central and western desert areas have huge amounts of groundwater about from about 10m below the surface - though much of it is salty. Every now and then the remains of a tropical cyclone come in and dump lots of rain, but over a century, the groundwater levels there have been fairly steady.

I would have thought that dropping sea levels would be more to do with the volume of water contracting due to it (possibly) being at a lower temperature than 40 years ago, not just at the surface but much deeper.

Why would you think the deep ocean has cooled? Do you have sources for that?

Oceans are stratified and the overturning time is measured in centuries so there is no way that colder surface waters (due to 2011 La Nina?) have penetrated into de deep ocean causing thermo-driven lowering of the oceans.

Anyway, the oceans are still building up heat, also slowly starting to in the deep, as shown by the ARGO bouy network (I refer to papers by e.g. Levicus 2009 or Lyman 2010).

Hmm. The biggest effect is warmer water has lower density, so the volume of the water increases. Secondarily, land ice melts and runs into the sea. Of course the total atmospheric inventory of water vapor has increased by roughly 4%, but thats less than a millimeter.

Global warming causes increased sea evaporation, lowering sea level and increasing rainfall on land. Water does not run back into the sea fast enough to allow rising sea level.


But for those who might argue that these data show us entering a long-term period of decline in global sea level, Willis cautions that sea level drops such as this one cannot last, and over the long-run, the trend remains solidly up. Water flows downhill, and the extra rain will eventually find its way back to the sea. When it does, global sea level will rise again.

"We're heating up the planet, and in the end that means more sea level rise," says Willis. "But El Niño and La Niña always take us on a rainfall rollercoaster, and in years like this they give us sea-level whiplash."

For more information on NASA's sea level monitoring satellites, visit: http://sealevel.jpl.nasa.gov/ ,

Elevated radioxenon detected remotely following the Fukushima nuclear accident

We report on the first measurements of short-lived gaseous fission products detected outside of Japan following the Fukushima nuclear releases, which occurred after a 9.0 magnitude earthquake and tsunami on March 11, 2011. The measurements were conducted at the Pacific Northwest National Laboratory (PNNL), (46°16′47″N, 119°16′53″W) located more than 7000 km from the emission point in Fukushima Japan (37°25′17″N, 141°1′57″E). First detections of 133Xe were made starting early March 16, only four days following the earthquake. Maximum concentrations of 133Xe were in excess of 40 Bq/m3, which is more than ×40,000 the average concentration of this isotope is this part of the United States.

► First measurements of radioactivity detected outside of Japan following the nuclear reactor accident.
► High level description of the accident and the use of noble gas as an isotope that can be detected long range.
► Determination of the inventory of xenon-133 released from the accident.

Unfortunately, the paper is behind a paywall.

There are addition papers in the current issue of the Journal of Environmental Radioactivity

This guy doesn't see the whole picture yet, but interesting to see these types of articles appearing nonetheless:

How America's Decline Is Linked to Oil

America’s rise to economic and military supremacy was fueled in no small measure by its control over the world’s supply of oil. Oil powered the country’s first giant corporations, ensured success in World War II, and underlay the great economic boom of the postwar period. Even in an era of nuclear weapons, it was the global deployment of oil-powered ships, helicopters, planes, tanks, and missiles that sustained America’s superpower status during and after the Cold War. It should come as no surprise, then, that the country’s current economic and military decline coincides with the relative decline of oil as a major source of energy.

“The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” - Sheikh Yamani


"That guy" is Michael Klare, a regular contributor to the peak oil discussion. He presented at the last ASPO-USA conference and will be presenting again in November in Washington, D. C. Michael understands peak oil but is more focused on the geopolitical side of it.

Thanks for clarifying, Texas_Engineer and Leanan. I meant no disrespect to Mr. Klare, just wish his article went into a bit more depth, but that's likely a function of his editors and/or audience.

Klare is a peak oiler. He's been writing such articles for years. This article is linked up top, under the title "America and Oil: Declining Together?"

Re: Who Says Food Is a Human Right?, up top.

I did not know that Amartya Sen got a Noble prize for pointing out what to me seems obvious. I have argued many times that ethanol in the United States is not the cause of famine (as in Somalia).

It is nice to find out there is an academic argument that backs that up.

Amartya Sen:



Updates from Andrea Rossi and the ECat:

Article from 16.09 (that's 09/16 for you weird Imperial people, isn't it?) at Pure Energy System.


A report done by Mats Lewan (nyteknik.se) from September 7th.


Excerpt from the report:

* Average overall power developed after boiling should have beeen
approximately 3.8 kW, in a worst case scenario, assuming that all liquid
water at the output was never evaporated. Possibly this value could have
been up to 7.8 kW.
* As input electric energy was 2.6 kW, the excess energy developed by
the E-cat should initially have been in the order of at least 1 kW, in the
worst case scenario.
* As only a slight decrease in temperature was observed when the
electric resistance was switched off, and as no energy could have been
stored inside the device, the excess power developed by the E-cat should
have been clearly larger than the electric power fed through the resistance
at the beginning of the self sustained mode. The overall energy
calculation also indicates this and the power from the E-cat in self
sustained mode should thus have been about 3.8 kW in the worst case
* As this model of the E-cat was significantly larger and heavier, it was
not as obvious as with previous models to completely exclude alternative
energy sources inside the E-cat. This was partly due to the fact that we
chose to terminate the test after only 35 minutes of self-sustained

Dear OilDrummers, I am interested in being a guest, presenting the Tripe System Report. www.environmentalfisherman.com
Part of the discussion could be on how fishery systems and offshore energy systems interface symbiotically.
I'm interested in market systems for fisheries and also for sustainable energy, and to this end I believe in new commodity pricing, just as in natural gas, for the green fuels of compressed air, hydrogen, and oxygen rich compressed air. Energy must be able to go from remote locations to everywhere, with little loss, if sustainable energy is to work well.

The areas of discussion may be separated into components, as this is a very complex system.

Basic theory of the green fuels, production and use, storage, transport.

Pipe as transportation infrastructure, mono-rail, new rail designs.
(this does not include how to power a train necessarily, but certainly train electrification would not stand in the way of the tripe system, as the tripe is not a train locomotion invention at all, contrary to popular assumptions)

Pipe as utility infrastructure, conduits for natural gas, broadband, sewage, water, solid waste etc.

Pipe as energy infrastructure

Economics and finance, cash flows of a multi use system, cost to benefit numbers,

Politics of a consortium

Having fun with the idea, roasting etc.

Formalizing models and critiques, new idea ways and means