Drumbeat: October 5, 2011

The Peak Oil Crisis: Turmoil Erupts

The Financial Times and Wall Street Journal have gone into full crisis mode with live blogs continuously reporting unfolding events.

Equity markets are falling and London oil prices have been flirting with $100 a barrel for the first time since February. Talk of recessions, depressions, and even collapse of the euro zone is everywhere. There seems to be general agreement that a Greek debt default is inevitable. This is to be followed by insolvency of many European banks, which in turn will lead to the possibility of debt defaults by Italy and Spain. These countries, of course, are too big to be bailed out by the rest of EU, which is what has everybody worried. Economic contraction in Europe - perhaps even a major contraction - looks likely.

Harry Brekelmans on the future of Shell

People talk about peak oil in the sense of supply. But I think of Sheikh Yamani's classic quote, "The Stone Age didn't end because we ran out of stone." People simply moved on to different and better things. The same will happen with fossil fuels. It's very important to realize that we'll be moving on to alternatives before we run out of oil and gas.

The year 2040 is not necessarily the demand peak either. The interaction between supply and demand will govern at what point -- 2030, 2040, 2050 -- we really see the peak. But rest assured, I think there will be gas and oil left by the time we've moved on to those alternatives.

The Energy Expert You Shouldn’t Trust

Nearly all the data cited in the book is from his company and is proprietary and non-public, so it can’t be verified or challenged. He doesn’t appear to take seriously the views of people he doesn’t agree with, and they are not included in his extensive bibliography or interviewee list. When he makes (or quotes himself making) forecasts, it is almost always at the high end of “as much as,” putting the best possible picture on things. He treats overall supplies and continued growth as assured. He is skeptical only when it comes to the concept that new sources of energy could upset the status quo.

One thing Yergin never asks, though, is what if he’s wrong?

The geopolitics of energy in the 21st century

Daniel Yergin: One of the key features is the idea that I focus on -- the "globalization of energy demand." Energy demand used to be a business of the developed world, and now the growth is all in the emerging world. So, for instance, the Middle East will increasingly look east for its growth markets. That raises interesting geopolitical questions about responsibility for security in the Gulf.

Daniel Yergin: The perils, prizes and pitfalls of the post-Gaddafi era of oil

The modern oil era began in 1969 when the 29-year-old Muammer Gaddafi seized power in Libya. A year later, he used threats of production cuts and nationalisation to begin forcing western oil companies to accept new terms. At the signing of the first of the new contracts, one of the western negotiators said: “Everybody who drives a tractor, truck or car in the western world will be affected by this.” He was more prescient than he knew.

Riding a wave of rising oil demand and in a tightening global petroleum market, Col Gaddafi initiated the dramatic shifts that burst upon the rest of the world with the 1973 oil crisis, thrusting oil to the centre of world politics. Today the price of oil, when adjusted for inflation, is 10 times higher than when he took power – beyond imagining then.

S.Arabia puts record premium on Asia oil price

KHOBAR (Reuters) - Saudi Arabia has raised the price of its flagship Arab Light crude oil for customers in Asia, who buy more than half its crude exports, to a record premium to Oman/Dubai prices while cutting costs for U.S. and European buyers.

Shell: More Than 100 Oil Wells Drilled in Jordan in 2 Years

Shell has drilled more than 100 wells in Jordan in the two years since it a concession agreement to explore for oil from the country's vast oil shale reserves, a person familiar with the project said.

Power outage: protests continue across Punjab

LAHORE: Violent protests, demonstrations and strikes against power cut continued on third day in Punjab as the energy crisis is aggravating in the country.

When it comes to Arctic oil drilling, all geopolitics are local

The great Arctic oil race is under way. In Russia, where one needs only Vladimir Putin's signature to drill in the most environmentally vulnerable region on the planet, ExxonMobil a month ago sealed a deal to explore underneath the Kara Sea. Now, the United States may allow Shell to explore the Chukchi Sea offshore from Alaska. At stake are the world's largest remaining untapped oil and gas reserves, and for Russia a chance to extend its economic and geopolitical power.

Arbitration Ruling In Chevron Case -Ecuador Attorney General

QUITO -(Dow Jones)- Ecuador plans to launch an appeal in a court in the Netherlands next month against an Aug. 31 ruling from an international tribunal in the Hague that awarded oil company Chevron Corp. (CVX) $96 million in connection with claims made in Ecuadorean courts in the early 1990s.

"We are on time to prepare an action for annulment of the ruling," Ecuador's Attorney General Diego Garcia told reporters Wednesday.

Doctors Urge N.Y. to Weigh Health Risks of Fracking

New York’s environmental study of the possible risks of high-volume hydraulic fracturing, a technique for natural gas drilling, addresses everything from the possible impact on job creation and the character of communities to damage to roads and wildlife. But a group of doctors, medical associations and environmental groups say there is one glaring omission: the possible effects on public health.

GM teams with car-sharing company RelayRides

NEW YORK (CNNMoney) -- General Motors is making it easier to let complete strangers take your car. An arrangement between the automaker's OnStar division and RelayRides, a peer-to-peer car-rental company, will give GM car owners a simple way to rent out their cars on the RelayRides network.

A peak oil Technocrat ignored the power of technology

“Hubbert’s Peak,” says U.S. energy historian Daniel Yergin, “is still not in sight.” This is true: Global oil production is still on the rise with no evident decline any time in this century. We should take a moment to acknowledge this fact. It’s not only that resurgent oil and gas reserves have abruptly extended the world supply of fossil energy for another 100 years. It’s that market economics has again triumphed over the Luddite left, that democracy has prevailed again over “Technocracy” – the ideology, memorably captured in 1984, that George Orwell once described as “a prerequisite for fascism.”

Oil Climbs for First Time in Four Days on Surprise Drop in U.S. Stockpiles

Oil rose from its lowest in a year in New York after a surprise drop in crude stockpiles and on signs the U.S. may take further steps to sustain an economic recovery.

Futures rose as much as 3.7 percent after sliding 7.9 percent in the past three days. Crude inventories dropped 3.1 million barrels last week, the American Petroleum Institute said yesterday. An Energy Department report today was forecast to show a gain of 1.5 million barrels. Federal Reserve Chairman Ben S. Bernanke signaled yesterday he’ll push forward with further expansion of monetary stimulus if needed.

OPEC Risks Bear Market as Libyan Output Recovers

(Bloomberg) -- The decline in OPEC’s oil below $100 a barrel for the first time since February is raising the likelihood the group will cut production, as Libya revives output and the global economic recovery falters.

...“Saudi Arabia stepped up production to help compensate for the loss of Libya, and they will probably calibrate and go the other direction as production comes back,” Daniel Yergin, co- founder of IHS Cambridge Energy Research Associates and author of the 1991 Pulitzer-winning “The Prize: The Epic Quest for Oil, Money and Power,” said in a Sept. 21 interview in New York. “The impact of Libya will be determined by what’s happening in the overall global economy.”

Iran To Propose Maintaining OPEC Output

LONDON -- Iran's oil minister will call for unchanged crude oil output by the Organization of Petroleum Exporting Countries at the oil body's next meeting in December.

Speaking to Iran's oil ministry website Shana, Rostam Ghasemi said "Iran's request at the next OPEC meeting is to maintain the production ceiling."

Foreboding from Opec official

The UAE's Opec governor has warned of dark days ahead for the global economy and urged oil producers to prepare for a slump in demand.

Prices for food and gas could soon fall

Consumers may catch a break on the price of gasoline and baked goods and sweets as the Thanksgiving-Christmas season approaches, thanks to a sudden tumble in worldwide commodity markets.

The consumer price outlook has brightened, in part, because commodity speculators have fled the energy and grain markets in the face of fears of a global recession triggered by the European debt crisis, says Tomm Pfitzenmaier of Summit Commodity Brokerage.

Commodities Climb From 10-Month Low as Bernanke Vows Steps to Boost Growth

Commodities rebounded from the lowest level in 10 months after Federal Reserve Chairman Ben S. Bernanke said the central bank may take further steps to sustain an economic recovery.

Saudi Arabia Vows ‘Iron Fist’ After Attack

Saudi Arabia vowed to use “an iron fist” after 11 members of the security forces were attacked and injured during unrest in a Shiite Muslim town in the east, the official Saudi Press Agency said.

The government accused an unidentified foreign country of seeking to undermine the stability of the kingdom as a result of the violence in Awwamiya, in which the assailants, some on motorcycles, used machine guns and Molotov cocktails, the Riyadh-based news service reported late yesterday. A man and two women were also injured, it said.

U.S. to regulate contractors of offshore oil firms

STAVANGER, Norway (Reuters) - U.S. authorities are looking to regulate the contractors of oil companies that work offshore in the wake of the Gulf of Mexico oil spill, a senior federal official said on Tuesday.

"We will regulate contractors as well as operators. There is no compelling reason or logic not to do so," Michael Bromwich, director of the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, told an oil conference.

Ruble's fate depends on Greek tragedy

Debt-laden Greece is holding a sword of Damocles over the fate of the ruble, with a solution to Europe's debt problem key to boosting the price of oil, Russia's key revenue source, analysts said on Wednesday.

Russia-EU energy relations too politicized - EU official

Energy relations between Russia and the European Union are still heavily politicized and a new gas war between Ukraine and Russia is still possible, an EU energy expert said on Tuesday.

Russia vetoes UN resolution against Syria

UNITED NATIONS (AP) — Russia and China vetoed a European-backed U.N. Security Council resolution Tuesday that threatened sanctions against Syria if it didn't immediately halt its military crackdown against civilians.

Turkey says sanctions on Syria to go ahead

ANKARA, Turkey (AP) — Turkey's prime minister increased pressure on Syria to halt its military crackdown on protesters Wednesday, saying his country and other would press ahead with plans to sanction Damascus.

Turkey's military meanwhile, was scheduled to carry out exercises close to the 850-kilometer (520-mile) long border with Syria.

Lax Law Gives U.S. Subsidiaries an Opening to Sell to Iran

“U.S. and international officials appear to agree that the sanctions have not, to date, hurt Iran’s economy to the point at which the core Western goals on Iran’s nuclear program can be accomplished.”

That was the conclusion of a report last month by Kenneth Katzman of the Congressional Research Service, a nonpartisan group that writes policy and legal analysis for lawmakers.

Belarus, China to join Venezuelan oil deposit project

Belarus and China are to take part in the development of an oil field in Venezuela, Belarusian state television said on Wednesday.

Basic Minigrids Promise Major Fuel Savings in Afghanistan

A simple change being made to military camps in Afghanistan will save enough energy to take an estimated 7,900 fuel trucks off the road over the next year, an Army officer in charge of battlefield energy said this week.

EU to put higher pollution price on tar sands

The European Commission on Tuesday (4 October) proposed that oil derived from tar sands be given a higher greenhouse-gas emission value, a move slammed as "unjustified" and "discriminatory" by Canada, the world's largest producer of this fossil fuel.

Shale gas discovery should be a cause for celebration in UK

The fells of Northern England hold a treasure for the United Kingdom - shale gas.

Poland lobbies against EU shale gas regulation

Poland, long seen as promoting a common European approach to shale gas, has now published a surprising study describing possible EU regulation on the industry as "unfeasible".

LNG Market May Tighten Further on Japanese Nuclear Shutdown, SocGen Says

Kyushu Electric Power Co.’s nuclear shutdown may exacerbate tightness in the global liquefied natural gas market as demand for the fuel used in electricity generation has exceeded estimates, Societe Generale SA said.

Cooling Problem Shuts Nuclear Reactor in Japan

TOKYO — In a fresh blow to public confidence, a reactor in southern Japan went into automatic shutdown on Tuesday because of problems with its cooling system, clouding the outlook for an imminent restart of the country’s idled nuclear plants.

Japan panned for pushing nuke plant exports after accident

Japan has been given the Fossil of the Day "award" at a U.N. climate change conference in Panama for pushing a scheme to promote its exports of nuclear power generation technologies to developing countries as a way of curbing global warming, an international environmental group said Monday.

Nuclear power essential to cut emissions: UK expert

SEOUL (AFP) - Britain's chief scientific adviser voiced concern on Wednesday at moves to abandon nuclear power after Japan's Fukushima crisis, saying it remains vital to combat global warming.

Like it or not: Hybrid cars are here to stay

There's been lots of handwringing lately about the future of hybrid cars. "Too expensive" the critics say. "Since buyers believe they will never recoup their additional upfront cost with savings from improved mileage, hybrids will remain a specialized niche."

They remind me of the same people a few years ago who didn't see any future for navigation systems because "$2,000 is too much to pay for an electronic map." Today, very competent aftermarket systems are available for a tenth of that price, and nav systems have become as essential as power steering and anti-lock brakes.

Consumer Reports recommends Chevy Volt

NEW YORK (CNNMoney) -- The Chevrolet Volt, General Motors' plug-in car, has earned a recommendation from Consumer Reports magazine.

Molycorp Set to Announce a Rare Earth Rediscovery

An all-but-forgotten rocky outcropping in Southern California contains ore that could help break the country’s dependence on China for certain types of rare earth metals, according to the only American producer of rare earths.

Overbearing Brasilia at fault in ethanol shortage

SAO PAULO (Reuters Breakingviews) - Once seen as a potential supplier of ethanol to the world, Brazil is now itself short. Lack of investment in the past few years and squeezed margins mean biofuel production is not matching demand growth. The industry's predicament is also affecting oil giant Petrobras and shows the risks of a crop-based fuel market constrained by government policies.

Sahara Solar Project to Outline First Plant Next Year, CEO Says

The Sahara solar initiative backed by German turbine maker Siemens AG (SIE) and Deutsche Bank AG (DBK) will sketch out plans in 2012 for its first power plant, a 600 million-euro ($800 million) station in Morocco, its project manager said.

'Solar-coaster' hits as sun sets on federal subsidies

The booming U.S. solar industry faces a potential tipping point — what some call a "solar-coaster" — as the sun starts to set on billions in federal subsidies.

Can it make it on its own? Can it compete with China, which U.S. officials say spent $33 billion in 2010 alone on solar loans?

Obama warned not to visit Solyndra

A Silicon Valley investor and senior administration officials warned the White House to reconsider having President Obama visit a solar start-up company because of its mounting financial problems, saying he might be embarrassed later.

As farmers markets thrive, so do concerns

Although the fare sold at farmers markets often is perceived as more wholesome than what’s available on grocery shelves, there is no evidence that it is less prone to cause foodborne illness — and it generally receives less federal and local oversight.

Ameren cites EPA rules in closure of 2 Ill. plants

ST. LOUIS (AP) — Ameren Corp. said Tuesday it will close two power plants in Illinois by the end of the year, blaming the cost of complying with new pollution rules issued by the Environmental Protection Agency.

Climate Change Policy: Should We Tax the Poor to Help the Rich?

If the government limits carbon emissions now through taxes or direct caps, it is taxing the poor today to benefit wealthier future generations. Perversely, such limits would also deprive future generations of the additional capital that would accumulate if the money were invested in the market instead of being used to combat climate change.

Who's Bankrolling the Climate-Change Deniers?

As the sociologists Riley Dunlap of Oklahoma State University and Aaron McCright of Michigan State University suggest, climate denialism exists in part because there has been a long-term, well-financed effort on the part of conservative groups and corporations to distort global-warming science. That's the conclusion of a chapter the two researchers recently wrote for The Oxford Handbook of Climate Change and Society. "Contrarian scientists, fossil-fuel corporations, conservative think tanks and various front groups have assaulted mainstream climate science and scientists for over two decades," Dunlap and McCright write. "The blows have been struck by a well-funded, highly complex and relatively coordinated denial machine."

Coastal Cities Face Serious Threat From Rising Sea Levels, Warns UN Sec Gen

UNITED NATIONS (Bernama) -- UN Secretary-General Ban Ki-Moon has warned that rising sea levels could put coastal cities from Kolkata to Miami at "serious" risk in the years to come.

..."Major coastal cities - such as Cairo, New York, Karachi, Calcutta, Belem, New Orleans, Shanghai, Tokyo, Lagos, Miami and Amsterdam - could face serious threats from storm surges and are at risk of being inundated by rising waters.

Arctic Sea Ice Continues Decline, Hits Second-Lowest Level

WASHINGTON -- Last month the extent of sea ice covering the Arctic Ocean declined to the second-lowest extent on record. Satellite data from NASA and the NASA-supported National Snow and Ice Data Center (NSIDC) at the University of Colorado in Boulder showed that the summertime sea ice cover narrowly avoided a new record low.

Melting Arctic ice clears the way for supertanker voyages

Supertankers and giant cargo ships could next year voyage regularly between the Atlantic and Pacific Oceans via the Arctic to save time, money and emissions, say Scandinavian shipowners.

New data from companies who have taken advantage of receding Arctic sea ice this year to complete several voyages across the north of Russia shows that the "northern sea route" can save even a medium size bulk carrier 18 days and 580 tons of bunker fuel on a journey between northern Norway and China.

Morning, I Would like to pass on a little timesaver to my fellow TOD'ers that use Firefox.


An add on that brings the "found" object to the center instead of the bottom. Useful for looking for [ new] comments.

Takes a couple days to get used to after years of having to scroll up after every click.

Thanks for the tip! I always wished for a feature like that...

Interesting. I would always go to the bottom of the page and do a "Previous" find to deal with this issue.

I did that sometimes, but other times it's useful to read in sequence.

I use GreaseMonkey and the todban script to automatically collapse all non-new posts. It makes skimming TOD much easier.

Does the todban script work in FF 7 ?

Works for me in FF 7.0.1

Thanks, useful.


It’s that market economics has again triumphed over the Luddite left, that democracy has prevailed again over “Technocracy” – the ideology, memorably captured in 1984, that George Orwell once described as “a prerequisite for fascism.”

Technocracy is "a prerequisite for fascism.”? Anyone have the actually source document for this quote? VS just saying the quote and calling it true.

For some reason, I don't quite remember that quote.

I do remember this http://orwell.ru/library/articles/As_I_Please/english/efasc Perhaps Mr. Yergin doesn't like the idea of a replacement economic system, based on energy and therefore what he does not like is to be called Fascism?


Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.

So say - hows that Corporations are people and laws/treaties like the ACTA working out for ya all?

Perhaps Mr. Yergin doesn't like the idea of a replacement economic system, based on energy and therefore what he does not like is to be called Fascism?

The author of the piece was not quoting Yergin about Fascism that was the author's own words. I had to read it twice before understanding who said what.

quoting Yergin about Fascism

I was under the impression the claim was George Orwell had a quote about Technocracy. And I'd really like to see the source work for such a quote.

re: A peak oil Technocrat ignored the power of technology

There is a lot of errant nonsense in this article, the Luddite left remark being just part of something resembling a drunkards walk through peak oil theory.

M. King Hubbert was a a geoscientist who worked at the Shell Oil research lab in Houston, Texas, so I don't think he could be described as a "Luddite". I don't his political leanings but odds are, considering his employer and his city, that it wasn't very far left.

Mr. Hubbert got everything wrong – as End Times prophets are wont to do. U.S. oil production did not, in fact, peak at 1.5 million barrels a day. By 2010, U.S. production was 3.5 times higher than Mr. Hubbert had anticipated: 5.5 million barrels a day.

Hubbert said nothing of the sort. When he published his original paper in 1949, US oil production was already running at 5 million barrels per day. By 1951 it was higher than today and the good times were starting to roll as if they would never end.

What Hubbert said in 1949 was that there wasn't enough geological data to give a petroleum peak for the US, so what he showed was a ballpark estimate of an "all fossil fuels" (mostly coal) peak.

By 1956, he was giving a low and high estimate - the high estimate was that US oil production would peak around 1970 at about 8.2 mbpd. What actually happened was that it peaked in 1970 at 9.6 mbpd. That's not just a ballpark estimate, that's a three-base hit in any game I've been in.

Mr. Yergin foresees not a finite peak but a never-ending plateau. He anticipates further increases in U.S. production of oil – noting that production has increased by more than 10 per cent in the past three years.

Mr. Yergin is selectively quoting statistics. He fails to mention that US oil production fell by nearly half, from 9.6 mbpd in 1970 to 4.9 mbpd in 2008 before the minor uptick to 5.5 mbpd in 2010. In 2008 it was lower than it was in 1948, while in 2010 it was back to where it was in 1950. Yergin is arguing that the historic 40-year decline is over on the basis of 3 years of increased production.

Mexico has huge reserves... China is already drilling in Cuban waters... Australia has vast reserves of gas and coal. Greenland possesses large oil reserves...

Thank gosh we're all saved. Did he notice that Mexican production has crashed in recent years as their supergiant Cantarell field went south, suddenly; That Australia has lots of coal, but that's not oil; or that the Greenland "reserves" are based on six dry holes (so far).

But the greatest oil and gas rush of them all will probably take place in the United States and Canada – where the five largest shale oil zones in the world are all located. Drill, baby, drill.

The author doesn't realize that shale oil is not oil shale, which is where the US hypothetically has most of its non-conventional oil deposits (there's nothing going on there at the moment, not even a pilot project). He also doesn't realize that oil shale is not oil sands, which is what the vast Canadian non-conventional oil deposits are. The Canadian reserves are going on production, but it's slow, baby, slow.

This is in a Canadian newspaper so you would think the editors would catch the last blooper, even if they are in Toronto. I mean, Toronto isn't that far away from Canada (Canadian in-joke).

No, No, RMG. You don't understand. The thing is, the author claims that if prices go high enough there is sufficient oil to last another 100 years! Ergo, no peak! If the price went to, say $500/Bbl, someone would undoubtedly produce a whole bunch of oil! Everyone, in fact. That it is environmentally ruinous is unimportant. That the (rest of the) economy would be destroyed, also unimportant. Capitalism would find a way, and there is simply no peak, ever. If the price was even higher, by many multiples, no doubt someone would find a way to turn rocks into oil. Then we are back into the stone age! All courtesy of your friendly, neighborhood capitalist/corporatist/facist.

I like the drill baby drill part the best. In Canada, as you know, it is "dig, baby, dig!"

Meanwhile, in the US of A, we are decapitating mountain ranges, and filling in valleys to access our particular answer to the energy problem.

Can you dig it?


I don't his political leanings but odds are

One of the founding members of Technocracy. The 1st time I saw/read it - http://technocracy.ca/tiki-index.php
Later others were at - http://www.technocracy.org/

Both seem to claim to be 'the voice' of Technocracy.

From the wiki

Here is an expanded list of Technocracy's Goals:

The highest possible standard of living for all citizens
Reducing the amount of work required to produce this abundance<*> to the minimum required by using machines to do as much as possible
Providing a Sustainable Economy<*> by employing several methods, including:
Minimizing waste of resources, natural and otherwise
Minimizing if not eliminating pollution and other forms of environmental damage
Using a non-fluctuating economic method of distribution<*> such as Energy Accounting?<*>
Providing all citizens with the maximum latitude in choice of goods and services
Providing social programs free of charge and of the highest quality possible given current technology, including health care and education, to all citizens
Providing adequate defence and security of all citizens without unduly restricting the rights of the individual

From the other site

No, it is not. Technocracy Inc. will never operate as a political party and field candidates who solicit votes for themselves.

So Hubbert may not be "of any party".

I only went through the first page of comments, but I didn't see anything close to a supporting post in there.

I suppose it's too much to hope that the Globe and Mail editors are paying attention to this..

It’s not only that resurgent oil and gas reserves have abruptly extended the world supply of fossil energy for another 100 years.

Gas? If you change the goalposts to include natural gas then you are tacitly admitting that your argument against peak oil is weak.

I found this comment on Climate Progress to be succinctly on-target - applicable to peak oil as well as climate change:


I loved Reynold's stuff about Luddite Technocrats. You don't see nearly enough newspaper articles these days where you can tell the writer was 3 sheets to the wind.

I had a pause with the Luddite technocrat, something like a steak-loving vegetarian.

Meanwhile, quite a stream of denial articles, not just clever ones but off the boards.

Such as the one that presumes people will be richer 100 years from now so best to get these future wealties to pay for climate change rather than doing something about it now ...

Just to raise one of my pet hates, the Luddites weren't actually anti-technology. They were against the mistreatment of workers by the implementation of new technology by unscrupulous mill owners. A bit like an early Trade Union.

I just thought I'd make a general point.

I do not understand why Yergin gets so much traction. It really isn't about total amount of oil but actual EROI of that oil (or coal or gas). If one gets a million cubic meters of gas from one straw in the ground, that is not the same energy out if you need a 1000 or 10000 straws in the ground. It might also be pointed out that oil per capita has been declining a long time and that oil production is no where near keeping pace with the world's birthrate. But I guess that does not matter to first world ( soon to be 2nd then 3rd and maybe 4th) journalists.

Hasn't Rockman covered the value of EROEI elsewhere? I thought I saw it somewhere around here.....industry just doesn't use EROEI as a measure of economic value in their business, so why would Yergin?

I think people need to give Yergin a break. He is only saying what the people who pay him want him to say. That is true for the "journalists" who cover him. Would you blame a dog who does stupid tricks for looking stupid?

A domesticated dog has little or no own will - nor has Yergin, is that your point?

I think people need to give Yergin a break. He is only saying what the people who pay him want him to say.

You are presuming bias with no evidence. Perhaps you made your comment because you are paid by the Sierra Club to disparage anyone or anything with doesn't fit in with their anti-fossil fuel agenda? See how easy that was, as long as no one requires me to prove it first?

Do you have some knowledge that Yergin is paid to lay down a particular position, or are you just accusing him of it because you can, it sounds good, and it's easy? And has the same basis as the claim I just made about you?

Nobody has to be paying Yergin-he is a business in and of and unto himself-nobody has to pay me to advocate for local farmers, as I am one myself.His AUDIENCE pays him -he doesn't need a "front" organization to support him, he owns his own, sfaics.

Now my personal opinion, but backed by good communications theory, is that Yergin should be treated with respect, in order to draw HIS audience into an educational scenario wherein they are introduced to his simply enormous errors in predicting prices, etc, and can be invited to take a look at THE DATA from OUR pov, when WE get to do a bit of cherry picking of our own.Or not. We don't even need to cherry pick, since the data are overwhelmingly on our side.

Just calling him an xxxx or a paid mouthpiece-even if this happens to be true-will not bring the members of the cornucopian church into our little reality based free thinkers club for a visit.

Quite the opposite, actually.

Oh brother. Trying to be "fair and balanced", Bruce? Try again. There most certainly IS evidence on which to presume Yergin has a bias. He has a vested financial interest in providing industry-friendly analysis. They actually do pay him, and he (surprise!) does seem to say what they want him to say. He also consistently includes misrepresented and even flat-out incorrect data in his essays and "expert" talking head appearances. And it is consistently incorrect in favor of his (surprise!) industry-friendly positions. It's not a smoking gun, but it's what them lawyers like to call circumstantial evidence. Now, since you seem to like condescending rhetorical questions, see how easy it was to call you out on that?

My 2c on" I do not understand why Yergin gets so much traction"

I personally pay some attention to what Yergin has to say because he is an insider (knows a lot of people of power and knowledge)
Do form my opinion solely on what he says? Of course not.
Do I weigh his opinion more heavily than the opinions of some of the oil drum experts? Probably not. but I cannot ignore his opinion, since I cannot have a valid independent point on the subject.
A lot of lay people have similar standing and are interested in the opinion of an insider.

Yergin announces 70% cut in predicted rate of increase in total liquids "Capacity"

Someone else may have picked up on it, but I initially missed a crucially important point about Yergin's 2005 Washington Post column versus Yergin's 2011 essay in the WSJ. Following are the two key excerpts:

Yergin in 2005:

It's not the end of the oil age

Our new, field-by-field analysis of production capacity, led by my colleagues Peter Jackson and Robert Esser, is quite at odds with the current view and leads to a strikingly different conclusion: There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day -- from 85 million barrels per day to 101 million barrels a day -- a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand.

Yergin in 2011:

There will be oil

Based on current and prospective plans, it appears that the world's production capacity for "oil and related liquids" (in industry jargon) should grow from about 92 million barrels per day in 2010 to over 110 million by 2030. That is an increase of about 20%. But this is no done deal. There are many "buts," having to do with what happens above ground. The policies of governments around the world—especially concerning taxes and access to resources—have a major impact on whether and when oil is discovered and developed.

In the following linked article, I analyzed Yergin's 2004/2005 predictions, with a special emphasis on his item in the Washington Post in 2005:

Three strikes and you are out?

When we look at the actual numbers for total petroleum liquids production, it is clear that Yergin was wrong about a “Large, unprecedented buildup of oil supply.”

Global total petroleum liquids production rose from 74.7 mbpd (million barrels per day, BP database) in 2002 to 81.5 mbpd in 2005 (an annual rate of increase of 2.9%/year). At this rate of increase, global total petroleum liquids production would have been over 94 mbpd in 2010, a volumetric increase of about 13 mbpd (or 16%) over the 2005 rate, which would have been consistent with Mr. Yergin’s prediction, but that is not what happened.

The data show that global total petroleum liquids production effectively stopped growing in 2005, and production has averaged 81.5 mbpd for 2006 to 2010 inclusive, with production ranging between about 81 and 82 mbpd for 2005 to 2010, except for 2009.

Regarding Yergin's two predictions:

A 20% increase in six years would be a 3.0%/year rate of increase (2005 prediction).

A 20% increase in 20 years would be a 0.9%/year rate of increase (2011 prediction).

Yergin cut his predicted rate of increase in "Capacity" by 70%.

When you take out increasing volumes of biofuels and NGL's, it seems to me that Yergin is now, in effect, forecasting a zero rate of increase in crude oil production, and it may be close to a zero rate of increase in total petroleum liquids (crude + condensate + NGL's).   Incidentally, assuming a continuing increase in consumption in oil exporting countries, a flat forecast for crude oil production effectively means a forecast for declining Global Net Exports, and assuming increasing Chindia net imports, in effect Yergin is forecasting an accelerating rate of decline in Available Net Exports of petroleum liquids (although I doubt that he realizes it). 

However, the general consensus among WSJ readers seems to be that there is no reason to worry about future oil supplies. 

The meme that that we will have abundant oil supplies (however defined) for the foreseeable future is winning and will continue to win. The sophistication required to see through this meme, constantly repeated on a daily basis, is well beyond the capability of the average citizen, reader, viewer, consumer. The establishment is completely in the pockets of the cornucopians and will continue to be so.

Do not resist. Embrace the future of abundance. You have nothing to lose but your wallets, your livelihood, and your planet. But that is for the next generation to worry about.

The most insidious part of this meme is that since we will continue to have an abundance of oil (however defined) and energy, we can continue life as we have always known it. Even if it were true that this abundance would continue for the foreseeable future, the way we are reacting to that "news" is a tragic of existential proportions.

I would imagine that many people concerned about global warming have seen peak oil and other scarcity as another way to get people to cut back on their profligate lifestyles. Since appeal to environmental concerns has clearly failed, it was thought that the problem could be addressed by appeal to their self interest. Well, that is not working either and will not work as long as there are charlatans like Yergin around.

"The establishment is completely in the pockets of the cornucopians and will continue to be so. "


"Well, that is not working either and will not work as long as there are charlatans like Yergin around."

While getting ready for the last few days I listened to Bloomberg....ate quick breakfasts tuning in Wall Street protests...CNN, renovating listening to NPR etc....all efforts trying to fathom opinions on economy from 'down there'.

Over the last few days I have heard numerous segements on energy and auto sales, but nary a thought on constraints or limits of pet. reserves. The knashing over new recession...swings of the markets....whatever, makes me want to shout into the radio, "oil is 107....or 104, not 78. What happens if growth never returns?!"

No one has even dared to ask, "what happens if growth never returns"? All seem to assume if this gets done, or if Obama does that, or leaves, or if Greeks only....but no one has asked what if economic growth is finished?

How many years or election cycles will it take before the truth sinks in?

I think that such a question is absolutely too extreme to be even considered by most, and yet if you accept that the world and (her) resources is/are finite, sooner or later the question has to be asked and answered.

Now is the time for sociologists to become involved in more dramatic ways. Now is the time. Or, if American Airlines does go broke, B of A continues to drop, Boeing shuts down due to airline failures....the f35 cancelled, something has to spark this discussion. I just don't see any current change despite the continual barage of decline. There once was a world before jet travel and time shares, right?

A good analogy are possible reports of the recent eastern seaboard hurricanes without met. services. Picture the news..."wind is picking up, no one knows why. It has rained for 1"/hr for 3 days, but no one knows just why, although the wind has increased and it feels warmer. If this continues, there may be flooding." "Some say it could flood, but we have never had any flooding here so it isn't possible...after all, this is America".

Thank you protesters and good luck. May it produce some questions at the very least.

Cheers Paulo

"No one has even dared to ask, "what happens if growth never returns"? All seem to assume if this gets done, or if Obama does that, or leaves, or if Greeks only....but no one has asked what if economic growth is finished?"

I wake up every day hoping growth is finished. That's a good thing. You folks knash your teeth over climate change and overpopulation, but you never think out of the box either. Peak resources is the solution to human unsustainability. Stop wishing for a political solution that can never happen. You wouldn't like a world government lording over you, and any uber leader would just be owned by industry anyway.

Peak resources is the solution to human unsustainability. Stop wishing for a political solution that can never happen. You wouldn't like a world government lording over you, and any uber leader would just be owned by industry anyway.

Right, MK. There is a tension between fear, frustration, and hope that prevails on TOD. We see what is coming; we recognize that people will not agree to change absent a crisis. And, we know that 'crisis' in this case is TSHTF, at which time "people" will turn to their "leaders" and demand... not request or ask, but DEMAND that the crisis be solved.

Overwhelming problem: more than one crisis. 1. The Population Crisis (if not done top down, it will be done bottom up, and be very messy); 2. The Energy Crisis - needed to begin acting about 30 years ago, but instead we elected Reagan and had a nice, but short, party; 3. Water / soil crisis - we will eventually have to come to sustainable, local farming; 4. Climate Crisis - it may be too late, but we don't know. The longer we wait, the behinder we get though. Plus, most of these 'problems' have already become conditions, incapable of solution. We need to learn how to deal with them. Nature can and will solve them all.

Maybe we can terraform Earth?


No one has even dared to ask, "what happens if growth never returns"? All seem to assume if this gets done, or if Obama does that, or leaves, or if Greeks only....but no one has asked what if economic growth is finished?

The situation is viewed as simply not being handled correctly. Some factor among numerous possibilities must be out of tune with the other moderating factors and it is causing a non-growth period. Must be Obama, or must be Bernanke, or Geitner, or the interest rates, or a failure to invest in infrastructure, or something we haven't quite put our finger on yet. But maybe one of these hate the middle class Repubs running will have the right answer. Maybe if we just rewarded the super wealthy a lot more we'd all be better off.

Anything and everything but the willingness to look the situation square in the face. Fact is oil supply hit a plateau in 05, and from there rose in price until the economy faltered and since then growth has been stalled except for minor GDP resulting from massive borrowing against the future. As long as oil remains expensive relative to the what the economy needs to get it revved up, no growth will occur.

I agree. Growth is over. Now it's just a matter of deciding as a society how best to handle no growth. The trouble with that is its not conducive to lending. Without loans the system falters.

Now it's just a matter of deciding as a society how best to handle no growth.

Who? There will be no deciding anything, even the ants who think they're steering the log are just passengers now. Someday far in the future, perhaps people will be able to make some decisions about what type of society they will build from whatever is left, but this one will be long gone then. Although the damage done will not. Our lot is to weather the fall of this one as best we can.

Correct. Finally someone who understands politics and human nature. There is no deciding as a society. There is no leader who can "save" us. There is only narrow-minded special interests. Some are very large and have clout. There are also 300 million who are small and just sound like thousands of cackling hens.

There are also broad minded people who are working selflessly and tirelessly.

"There is only narrow-minded special interests."

I'm sorry that's the way you see the world, and I'm glad it's not as narrow and cackling as you describe it. Careful where you aim those slippers, someone could lose an eye..

I'm not entirely sure what "There is only narrow-minded special interests." was intended to mean. There certainly are a lot of folks perusing their own narrow-minded special interests at the expense of the common interest. But that is not the whole picture.

There are many things one can do, many things worth working selflessly and tirelessly on that will make a real difference in people's lives. Beyond the walls here at TOD there are many lively discussions on appropriate responses to our predicament worth thinking about and taking up. But deciding what society is going to do to re-invent itself is not one of them. We will live out the rest of our lives in a time of consequences, dealing with the accumulated results of our (and other's) past actions.

If someone says 'we as a society need to decide', I'm willing to look at that language with a little charity. I don't think it means 'everyone votes on a plan', or 'create a centralized ruling structure that sets our course for us..'

Societies do move and change as influences and habits develop or erode. Our society 'decided' to give women the vote.. and yet it was a gradual process with a lot of inputs and false-starts. I don't think it necessarily has to be some palpable conscious moment.. but new perspectives take hold as need warrants, or as some stroke of genius or some extraordinary notion catches fire in a population that's ready for it.

Yes, these are 'consequences', and yet they are also tied in with choices that individuals have made, groups have committed their fortunes to..

It's a bit like debating Nature/Nurture, and expecting one to come out as the absolute winner over the other.

Yes, and if you look you can find good things that any past civilization did for their people - when they were in their prime, before they overran their resource base, before collapse. People in collapsing societies are concerned with where their next meal will come from, will they have shelter, how to stay out of the way of competing warlords, etc. Universal suffrage, not so much.

Societies in collapse don't do the things they might want to, because they are collapsing. By definition, they do not function as they once did. Rational decisions about how we might adapt to no-growth, to much less energy, are not going to happen. But this is obvious, it's just your mission to see only the positive getting in the way of understanding again.

"Rational decisions about how we might adapt to no-growth, to much less energy, are not going to happen. "

It looks to me as if you are taking any positives that are brought up to be unacceptable counters to the wholly hopeless conclusion you have set yourself upon.

I don't use the bits of encouraging news or the hopeful tools I bring up to say "No Problem, we're out of the woods." I never have done that at TOD, Ever. I frequently describe how dire our situation is, but that we also have opportunities to take advantage of. There are a great mix of positives and negatives around us, and I'm talking about both ends of it regularly.. but moderate views seem to be the enemy of BOTH extremes. What are you gonna do?

You were holding out the fact that we granted women the right to vote as specific evidence that a nation in the predicament ours is in might make rational decisions about things such as how to handle a move to no-growth. This is absurd twaddle and I pointed that out. The problems we face are by and large not things that can really be solved while allowing the greater society to remain. And societies that are collapsing do not function properly anymore. The formal mechanisms to make decisions fail, and they are unable to adapt or respond effectively to the circumstances they find themselves in. That's pretty much the definition of collapse, and you can see it all around now.

Yes, once we had great infrastructure projects, passed clean air and water laws, expanded the rights of women and minorities, etc. This is not evidence that we can or will make rational choices about how to deal with peak oil and resource limits together with climate change and the follow-on effects. Undoubtedly a few wise choices will be made, but for the most part we won't be able to effectively respond. Take a look at how our governmental systems are working now. What other mechanisms do you see that might work more effectively?

A large, complex society built upon growth and ever greater resource extraction will not "decide" to become something else. It will fail and eventually be replaced by something else of much lower complexity, not dependent on the things that are no longer viable. Individuals and local groups may, and likely will, make good rational choices about how to adapt. That was not the point being made.

You appear to have assumed the role of gatekeeper here on TOD, trying to make sure a positive spin is placed on everything. This is not grade school and we don't need to have everything sugar-coated - we're adults and should be able to see the reality without having someone constantly jumping in to tell us it's not all that bad. We, as a society, will not make any rational decisions in an organized way about how to transition to a no-growth reality. That was my statement, which I believe is both true and fairly obvious - now you can paint pretty flowers on it or try to distract by pointing out the cute bunny over there, but I'm done responding to your obfuscations.

We as a society have never decided. This has always been a raucous, fractious country. We did get it together enough to fight a revolution, muddled through the Civil War. Probably the only time we truly came together was after Pearl Harbor. To some degree with Kennedy's goal to put a man on the moon. Unfortunately, our situation is clear only to a few. Roosevelt knew what was coming, but he had to wait until circumstances were right for the country to pull together. The US only pulls together when attacked--this probably true for most countries. Our looming crises are invisible to most people. There is plenty of gas at the pumps. Most people believe that the oil companies or the Arabs are responsible for prices and they deny that supplies are ever an issue. In what little public discourse exists, there is little consensus amongst experts. Whose voice is heard? Yergin? Lynch? Laherre? Cacophany is what the public hears so they tune out. It is unlikely the public will perceive the crisis until well after the earthquake hits and the tsunami breaches the walls.

From a book manuscript on my computer, wich will most likely never hit the book shelfs. Translation by Google Translate, some effort to clean up by me:

In addition to that the response shows that the Swedish Energy Agency is totally irresponsible on the issue so it shows another thing: no one is responsible for what our society looks like. Everything we know today is the result of a lot of different players who worked on their own for their own goals. Their work has changed society for what we have today. There was never any master plan. It just happened. When we left the Stone Age or Middle Ages, it was not because any committee decided it is time for some reform, it just happened that people took the initiative. And that is how our politicians are planning today, they hope that someone else will do something, or that the market will solve it. But there is no plan. There never was any.

"When we left the Stone Age or Middle Ages, it was not because any committee decided it is time for some reform, it just happened that people took the initiative."

That's a very good line!

Scary but true. 10+


A good analogy are possible reports of the recent eastern seaboard hurricanes without met. services. Picture the news..."wind is picking up, no one knows why. It has rained for 1"/hr for 3 days, but no one knows just why, although the wind has increased and it feels warmer. If this continues, there may be flooding." "Some say it could flood, but we have never had any flooding here so it isn't possible...after all, this is America".

My dad (85) and I were talking about this about a month ago. When he was growing up in Washington, DC his dad (my paternal grandfather) used to describe this as the "fall rains." With the limitations of early radio and the telegraph, conveyance of news over a long distance on a schedule anything like we are used to (or used by) now, was unthinkable.

My dad said, that in retrospect, they now realize that these were hurricanes and tropical storms passing through or by the region.

No one has even dared to ask...

You need to read The Great Disruption

Which one? There are several in print which may fit the bill.


<< for sociologists to become involved in more dramatic ways. Now is the time. >>>

I know, I know. We are trying.

I am working in one of the most progressive community mental health centers in a very progressive city, and it's just a really tough sell, and a long hard slog. The economic and career displacement is massive, it's in our face, and still-- changing our policies and procedures, trying to adapt... it's like trying to change the course of some enormous vessel at sea, and it feels like the ship just isn't answering the helm sometimes.

We will not give up. Sure feel like it some days, but we won't.

There are a few analysts, for example Albert Edwards at Societe Generale, who are saying an economic "Ice Age" is descending on the world. Yesterday CNBC had an article about how the word "Depression" is becoming more and more commonly seem in the mass media. They had a few other analysts' names----economists and the like---who are saying exactly that "GROWTH IS OVER".

It is being talked about, slowly. The world is starting to get its head around the picture of no more growth.

I happen to think that personally it will be a huge relief for billions of people. Finally we can start to count on the simple things we counted on for so many millenia. We can just live simple lives without worrying that the bulldozers and other huge machines are arriving to claim everything around for the mass elite in some city miles away. Those mass elite will also be relieved. They can pack up and move on to some simpler more useful job.

Once the phenomenon of "no growth" is truly recognized, it is just a matter of time before some of the ugly cement buildings start getting knocked down so that some hungry and enterprising person can grow food there, or pay someone else to do so.

Still I don't see recognition of resource constraints (and saturated pollution sinks) as the cause of the end of growth.

I'm sure the economists will come up with some phlogiston based theory for the decline of GDP.

If it's on CNBC I doubt it's genuine. More likely a banker planting fear so he can justify another bailout or goad the fed into printing more money.

Let's say the "elite" and mass media agree peak oil is here or coming soon. Imagine what they'd do. I think it's safe to assume they'd react by allowing drilling on every square inch of land. Be careful what you wish for. Peak oil will mean the last standing ecosystems will be decimated. That will give us a new, higher peak, about 40 years out. One more generation of status quo, then the slow decline into a more sustainable world.

I think Plato nailed what's going on in his Allegory of the Cave...

In the dialogue, Socrates describes a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall by things passing in front of a fire behind them, and begin to ascribe forms to these shadows. According to Socrates, the shadows are as close as the prisoners get to viewing reality. He then explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall do not make up reality at all, as he can perceive the true form of reality rather than the mere shadows seen by the prisoners.

Nice image, of course, but the philosophical idealism (as opposed to materialism) underlying Plato's metaphysics (the theory of Forms) is, in my opinion, very questionable.

It's all good up too this piont:

He then explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall do not make up reality at all, as he can perceive the true form of reality rather than the mere shadows seen by the prisoners.

I'm always leery of people who think they are in possession of 'secret knowledge'. We're all prisoners in the cave. We never come in direct contact with reality. We only imagine reality; building upon our senses and memories of past sensations. Anyone who claims to know 'what is really going on' is most likely full of sh!t. At least that has been my experience, your experience may vary.

I often think of Plato's cave when I watch TV in my living room. I have a projector positioned behind the couch, and I sit and watch the shadows dance on the wall. My mind transforms them into a story convincing enough to physiologically and physiologically affect me.

I wonder what Plato would think of modern Americans; sitting in their artificial caves, watching shadows from artificial fires (T.V.'s). It seems that we are going in the opposite direction of what his teaching's prescribe.

(A lot of people taking the blue pill - if you're a 'Matrix' fan)

I just liked it as a literal metaphor.
Many people don't have the courage, desire or maybe even the time to really look at their lives and society directly.
Or, they are so bought in to the "story" they are told they will not look away from the shadow world to glimpse the real.

If we can't rely on Yergin for soothing Cornucopian reassurances, who you gonna call?

I'm betting if you got fists full of money to give soothing Cornucopian reassurances, you'd be on call too.

Yergin might just be cheaper than others is all.

Nice catch, Westexas. And if you want to show their changes visually, you can dig up the IHS/CERA oil production graphs that show oil production growth with the 'undulating plateau' around 2030. I've seen at least couple different versions and the height of the undulating plateau drops in the later version.

I am beginning to suspect that IHS/CERA's celebrated field by field analysis largely consists of extrapolating recent total liquids production numbers.

When Yergin predicted a 3.0%/year rate of increase in global total liquids "capacity" from 2004 to 2010, global total liquids production was then increasing at 3.1%/year (2002 to 2005, EIA).

He just predicted a 0.9% rate of increase in global total liquids "capacity" from 2010 to 2030, after global total liquids increased at at 0.9%/year (2007 to 2010, EIA).

Note that the actual 2005 to 2010 rate of increase in total liquids was 0.5%/year (EIA), and as noted above, if we subtract out biofuels, global petroleum production has basically been flat for six years.

wt - Have you mentioned Yergin's comment ("Global oil production is still on the rise with no evident decline any time in this century.") to many of your cohorts yet? Coincidentally we had a company wide update meeting this morning and I mentioned it. It was good to start off such a meeting with a big laugh. I'm very willing accept anyone's guess as to where we're heading with re: PO. But I do have my limits. IMHO I cannot...will not accept...that he really believes that. He may not be degreed in geology/pet engineering but he's been in the room for a long time. As much as I want to not say it out loud I have to believe he knows he's telling a big lie. Either that or he's had a stroke and doesn't know what he's saying. I don't recall the most pie-eyed cornucopian making such a prediction. He's essentially predicting that we will produce as much or more than we have since the beginning of the industry. Not sure how old he is but he probably won't be around to be proved wrong. So he has nothing to lose and just a big consulting fee to earn in the meantime.

Even if the stuff's there, are they willing to produce it?

The Rick Perry Hustle, by Larry McMurtry

The state does in fact have an overabundance of natural resources and usually enjoys a robust economy. The New York Times reported that oil shale alone might bring two million jobs to South Texas—a report at which local oilmen scoffed: the jobs may be there, but try finding two million Texans who are willing to work. What was largely been unreported is that the Western work ethic is not what it used to be. My brother-in-law is a small oil producer; he has four rigs but can rarely find roustabouts to keep even two of them in operation. Meanwhile, in other industries, just this August the state lost 1,300 jobs and our jobless numbers are not that far below the national average.

Another problem never mentioned in talk about huge prosperity in the oil patch is the factor of crystal meth. Speed in one form or another has always been the drug of the oil business: workers who find themselves doing twenty- or thirty-hour shifts need a boost. But meth is virulent in its force, and hundreds of hamlets and small oil-patch towns bear its scars and will forever. Rid the oil patch of that drug and you’ll find a lot more takers for those two million jobs.

Ever read any of Julian Simon's stuff? Talk about pie-eyed.

Here are the graphs of the shrinking plateau obtained from CERA's web site. Notice how much the peaks of both conventional oil and total dropped.

CERA's view in 2006:

CERA's view in 2010:

So CERA is a gang of peak oilers as well. Why would they, or Yergin in particular, draw so much derision when he obviously believes in the same idea?

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" -Upton Sinclair

I understand the quote. I do not understand what it has to do with Yergin actually being a peak oiler, admitting it freely, yet getting pounded pretty hard for...not being a particular brand of peak oiler?

Bruce - Try this take on Yergin's position: everyone is a "peak oiler". Except the fringe who truly believe there is an endless supply of oil continually being produced. The difference for the rest of us is when the peak has/will occur. The date and rate of when oil production peaks is, in and of itself, not relevant. What is critical is how it will affect the world's economy and its population. And how we respond. So what truly matters is how we plan to deal with PO subject to when it occurs: 2005, 2050, 2100, etc. And accepting any one date will have a huge impact on policies...both private and govt. If it happened in 2005? Then obviously significant measures should be taken now. Measures that try to mitigate as best as possible the worst effects of PO. If it won't happen until 2050 then we could focus on more pressing matters such as slow/no economic growth and unemployment. And that would mean increased energy consumption and less concern about conservation...at least for the next 20+ years or so.

So the difference between Yergin's position and others isn't just a different "brand of peak oiler". With respect to how we react/don't react it's two different realities IMHO with drastically difference consequences.

Do you realize Rockman, that some peak oilers claim that the timing of peak isn't really all that important, versus the consequences they wish to associate with it (some of which you allude to). Under that scheme, Yergin has just as much a claim to peak-oilhood as any other peak oiler does. He may not advocate it for the same reasons, but certainly he is perfectly willing to show peak oil happening.

"..but certainly he is perfectly willing to show peak oil happening."

No, he's really not. He chooses a set of directions and conclusions that seems to please what certain people want to hear, and this crowd at TOD has demonstrated pretty clearly that his specific predictions have been reliably and seriously as bad as he is CLAIMING the PO community's are, and yet he is mysteriously not being called to the carpet on them in the Public Discussion on Oil Supply.

In the first chart, look at how supply is comfortably above demand even after the plateau. This is obviously a "prediction" designed to push the effect of PO far into the future with no consequences. It deserves a laugh and derision.

One thing is obvious. Supply WILL NEVER be that far above demand. Simply because that would crash the price putting the producers in financial straits. Producers will try to match demand or keep supply tight.

It deserves a laugh and derision.

Once not predicting the future correctly is the basis for laughter and scorn, can we apply the same rule to Hubbert's prediction of a world global oil peak of 13 billion barrels a year, rather than the 30 or so we actually achieved? Or do we laugh at Colin for being deluded enough to predict that in 2010 the world would only produce some 30-35 million barrels a day or so? Good for the goose, good for the gander, those in glass houses, etc etc.

I would prefer we laugh at neither, and try and learn why they all missed their marks. Certainly heaping laughter and derision on any of them is hardly a productive exercise.

That's more misinformation about what Hubbert predicted.

What he actually said, in a 1971 paper in Scientific American entitled Energy Resources of the Earth was that, given an estimate of URR at 2.1 trillion barrels, world oil production should peak around the year 2000 at about 37 billion barrels per year.

So, given that according to the BP Statistical Review of World Energy said that in 2010 world oil production was about 32 billion barrels per year, Hubbert might have been a little too optimistic.

It's still a 3-base hit in the oil prediction game.

What he actually said, in a 1971 paper in Scientific American entitled Energy Resources of the Earth was that, given an estimate of URR at 2.1 trillion barrels, world oil production should peak around the year 2000 at about 37 billion barrels per year.

What he actually said, in a 1956 seminal paper entitled Nuclear Energy and the Fossil Fuels...etc etc. You have what he said, I have what he said.

Are you mentioning his later work to demonstrate that even the originator of the theory could miss flowrates by 230% over just a 15 year time span, and that is okay because one of those guesses was better than the other?

If Hubbert is allowed these sized error bars, why isn't Yergin?

It's still a 3-base hit in the oil prediction game.

That is entirely relative. Apparently Yergin considers the error bar on US oil production to be somewhat less than what you describe as a 3-base hit. Not saying his predictions are any better, but relatively speaking and with a 230% error bar? Even Colin Campbell is inside that metric, and he missed 2010 oil production rates by some 30+ million barrels a day.

No, I'm saying that in 1956 he didn't have enough data to accurately estimate the oil production in 2010 - 54 years later. In particular, nobody knew at that point in time how much oil was in the Middle East, which happens to contain most of the world's conventional oil resources.

...the estimate of the ultimate potential reserves of crude oil in the Middle East has been increased to 375 billion barrels, which can only be regarded as a rough order-of-magnitude figure.

And that was a serious flaw in his data - the current estimate of Middle Eastern oil is roughly double that.

By the time he wrote his 1971 paper he had a much better estimate of how much oil was in the Middle East and other places, so his estimate of 2000 production was much more accurate. Remember, he's predicting 30 years ahead.

Hubble did rather well predicting oil rates 30-40 years in advance. Yergin is having trouble being as accurate 5 years in ahead, and is having to adjust his predictions constantly as they turn out to be too optimistic.

Hubble's methods produced increasingly more accurate curves as the oil reserves are depleted. Yergin's seem to mostly involve a lot of misplaced optimism.

No, I'm saying that in 1956 he didn't have enough data to accurately estimate the oil production in 2010 - 54 years later.

Maybe he didn't. But did HE say that, or are you just making an assumption for him? Colin Campbell some 18 years after your 1971 reference certainly had more data, and he decided that peak oil was in 1989 or so.

Hubble did rather well predicting oil rates 30-40 years in advance. Yergin is having trouble being as accurate 5 years in ahead, and is having to adjust his predictions constantly as they turn out to be too optimistic.

Could be. But I haven't seen anyone break down predictions, Hubbert's or Yergin's, by % miss/years in advance of the guess, and we are talking about multiple guesses, some with multiple scnearios. It would be a nice metric though wouldn't it? As far as Hubbert's undiscovered assumptions, if he thought his Middle East number was low, he could have beefed it up any way he wanted. Hindsight is 20/20. Just because the size of the Middle East was unknown doesn't mean Hubbert didn't already have a system in place to assign a size to what was yet to be found. If that didn't work out, it didn't work out, and demonstrates an area of needing improvement certainly.

Hubble's methods produced increasingly more accurate curves as the oil reserves are depleted. Yergin's seem to mostly involve a lot of misplaced optimism.

Yergin's estimates appear to be hinged on a bottom up analysis from Jackson, or perhaps someone else within CERA. Because they have access to the international production data available through IHS, this makes sense. As far as what Hubbert's method does, or does not do, I recommend Caithamer, P., 2008, "Regression and Time Series Analysis of the World Oil Peak of Production: Another Look", Mathematical Geosciences, v. 40, Number 6, p 653-670

Here is what Yergin wrote in the WSJ essay:

In this view, the world has decades of further growth in production before flattening out into a plateau—perhaps sometime around midcentury—at which time a more gradual decline will begin. And that decline may well come not from a scarcity of resources but from greater efficiency, which will slacken global demand.

What he did not say was that his prior prediction, circa 2005, for a 3%/year rate of increase in total liquids was wrong, and he did not highlight the fact that his new prediction is for a 0.9%/year rate of increase in total liquids. Instead, he talked about a 20% increase in six years in 2005, and in 2011 he talked about a 20% increase in 20 years. In any case, I am beginning to suspect that CERA seems to charge a lot of money for simply extrapolating the previous three years or so of total liquids production data.

The trouble is that for people like Yergin, there are no consequences for being wrong. He just has to talk fast and confuse the press, and his future is secure.

When you actually have to find oil, it is quite different. We used to have a picture on the bulletin board of an old petroleum geologist that some of us knew, dressed in rags, pushing his shopping cart from dumpster to dumpster in hopes of collecting enough refundable bottles to pay for his daily supply of whiskey. We put a caption on it, "THIS COULD BE YOU!". HR made us take it down. However, these are the consequences of being wrong when your decisions count and your neck is on the line.

OTOH, the consequences of being right are a lot better. Some junior oil companies who couldn't afford to pay a top-flight geologist used to offer them a deal: a 2% overriding royalty on all the oil they found. I can think of a lot of big mansions in ritzy areas that were paid for using those 2% overrides.


But again . . . he weasels out by saying . . . well, we have the 'capacity' to produce that oil. Such 'capacity' is in a nonexistent world where we have much more money to pay for the drilling & extraction.

In the real world, we really do not have the 'capacity' to produce that oil because our economies simply do not have money to extract it. The world is filled with people who would like to be driving more . . . but they lack the money to buy cars and gasoline.

This "capacity" of his is nothing but a fictional construct that makes it impossible to 'prove' him wrong because 'capacity' is fuzzy and unmeasurable pseudo metric.

From my "Three Strikes" article link up the thread:

In the column, Mr. Yergin quantified the possible increase in production, stating that we could see as much as a 20% increase in global total liquids production from 2005 to 2010. He was technically talking about “Capacity,” and he includes biofuels, which have a low net energy component, in his total liquids number.

However, I think that Mr. Yergin’s intent was pretty clear. He was predicting a robust increase in global total liquids production, and he explicitly stated that “Such growth over the next few years” would relieve the current pressure on supply and demand. I fail to see how the theoretical capacity to produce oil would relieve the current pressure on supply and demand.

When we look at the actual numbers for total petroleum liquids production, it is clear that Yergin was wrong about a “Large, unprecedented buildup of oil supply.”

Their peaks has dropped- but the total amount of oil they dream about is almost the same (2010 = only .23 trillion less) - they just smears it farther into the future ... just like that.

The takeaway from them 2 charts should be obvious to all who has eyes : CERA is not to be trusted!
Their predictions doesn't even last for 4 years--- and they claim 100 mbd 60 years from now ??!! gimme a break

Well no one's predictions are to be trusted. They are all just guesses as to the future. But it is pretty clear that in the last 10 years, the "pros" as CERA have proven to be far too optimistic. It is also known where their funding comes from. So their public pronouncements should be taken with a grain of salt.

But the word 'public' may be critical there. When I hear about publicly available Wall Street ratings on stocks, I just always say "they are worth what you pay for them". Studies show they are pretty bad and generally over-optimistic. But what do they tell their big clients privately? Where do they invest their own money?

Besides the oil companies, another set of big customers for CERA's private data is the auto companies. And when you look the way they are all working on EVs, hybrids, transmissions with tall gears, CVT, start/stop systems, ecoboost engines, lighter materials, more aerodynamic shapes, etc. Well, their actions speak louder than words.

The oil company actions speak loudly too. Pushing for a pipeline to carry tar sands oil. More ultradeepwater drilling. Pushes for polar oil. That is not cheap oil they are going after . . . it is what is available.

The first inkling that there were problems with oil supply was when everyone started changing the definition of oil. When they started adding biofuels and other things to make up the drop in production the jig was up. I am trying to think of other components that we can now call oil. Lets see, how about waste french fry oil, drippings from finished salads, 4th press olive oil anyone.

A Swedish energy firm was making ads about them selves a year ago bragging aout howthey crushed olive seeds to get energy out of them. They claimed tobe inovative. Yestrue,but I' say desperate as well.

That little skirmish in Saudi's back yard didn't seam to bother the oil markets. I guess they are all looking at the consumption side of things again (like, is EU going to hold together, and employment numbers).

The Shia in SA are a relatively small minority. As long as income from oil exports hold up, the bulk of the population can be bought off, and the Shia minority can be kept under the thumb.

However, a collapse of export quantity or a sustained fall in oil prices will leave the Princes very nervous.

Shiites (Twelvers) are primarily concentrated in the Eastern Province, where they constitute over a third of the population. Another third are non-nationals (migrant workers). The Eastern Province includes 80% of KSA oil.


As Ramius said in 'The Hunt for Red October'... "Ryan, some things in here don't react well to bullets..."

The Oil fields are guarded by Drones, F-22's, Tomahawk's, Abrams Tanks, 100,000 infantry, AI robots and genetically modified rottweilers, nothing to see here, move along.

I didn't know about the genetically modified rottweilers. Thanks ;-)

Another example of the psychopathic/sociopathic mind hard at work on Capitol Hill....

Apocalypse on Capitol Hill: Lawmakers Who Love to Vote No

On Capitol Hill, they are the apocalypse caucus. Twenty lawmakers, from both parties, who calculate that the best way to fix government is to act as if you wouldn’t mind if it burned down.

This unofficial caucus believes that power goes to those who seem least afraid of catastrophe. “It’s like playing a game of chicken,” said Rep. Michael E. Capuano (D-Mass.), one of the 20.

Another example of the psychopathic/sociopathic mind hard at work on Capitol Hill....
Apocalypse on Capitol Hill: Lawmakers Who Love to Vote No
On Capitol Hill, they are the apocalypse caucus. Twenty lawmakers, from both parties, who calculate that the best way to fix government is to act as if you wouldn’t mind if it burned down.

Really? Dennis J Kucinich 'wants to burn down the government' and is an example of 'the psychopathic/sociopathic mind'?

Ron Paul - Dr. No isn't even on the list at the link.

Capuano agrees with Kucinich on most things, (our district would lynch anybody they thought was a Wall Street tool) but is a really low-key guy. He was the office manager in 2006 when the Democrats took the majority. He's voting against bills on substance, not just to make a point. Him turning to bombthrowing rhetoric is as surprising as if Joe Lieberman voted against a war.

If we can get past the name calling- and stipulate that there are reasonable sane people who actually believe that a small government , increased privatization and the role back of the welfare state is good thing for everybody in the long run. Looked at from that perspective the default by the Greek government is not a bad thing- since it will result in a smaller government, greater privatization and the role back of the welfare system. I think irrespective of where one stands on the political continuum one has to accept that despite all the protesting the American people are addicted to big government. The only way that you are going to break that addiction is through a government default.

Those who believe that you can "starve the government" must not understand the American psyche very well- retailers are well aware that you can get people to spend more money with a 25% off scheme. Whats not to love about big government if you can get it at 25% off. Off course Americans are addicted. I have always believed that if you want to get smaller government demand that you raise taxes to pay for it. How long do you think the stupid wars would have gone on for had we been required to pay for them with a tax?

How long do you think the stupid wars would have gone on for had we been required to pay for them with a tax?

Less time then the impeachment or sex scandals of the politicians how voted for the tax and the President who signed it.

If we can get past the name calling- and stipulate that there are reasonable sane people who actually believe that a small government , increased privatization and the role back of the welfare state is good thing for everybody in the long run.

Sure we know there are sane people who believe the above ideology. But where is the real world evidence supporting that belief?
Where is the country that has "small government , increased privatization and the role back of the welfare state" and that has actually delivered a better quality of life for the general public?

It is easy to observe the European social welfare states like Germany and Scandinavia and see that almost every every single quality of life metric is among the world's highest (low infant mortality, high life expectancy, low poverty rate, low crime rate, low rate of homelessness, high educational levels, etc., etc.). But where is the real world example of "increased privatization and the role back of the welfare state" that works for the general public (and not just for their corporate overlords)?

In the absence of such examples, a belief in the mythical success of "small government" could be considered sane, but not reasonable.

If there are sane people out there who want smaller government, I ask that they be very specific about which part of government they want to shrink. I want to cut defense expenditures in half. That does not mean, however, that I am just vaguely calling for a smaller government. If the government is not serving the people or is not actually doing what a government needs to do in an efficient way, then cut it. But what is going on is just general statements that government is wasteful or over burdensome.

What you have to consider is after 200+ years a government gets clogged arteries. We have layer after layer of laws and bureaucracies that have lost all purpose. 200 years of narrow minded lobbyists screaming for their bailouts. 200 years of candy for the masses to buy votes. Now we have confused mass of spaghetti that nobody can put their arms around.

That is why some people believe it's time to just kill the whole beast and start over. Imagine a model T car with 200 years of improvements tacked on haphazardly. It would look like a pile of junk reaching the moon.

What the Founders omitted from the Constitution is a fourth branch of government to dismantle the errors of the other 3.

There should be a Fourth Branch, numbering the same as the House, elected by proportional vote in the states, which has the power to abrogate any treaty or foreign agreement, revoke any regulation, repeal any law, or nullify any court decision that is over 4 years old in whole or in part.

The other branches should be prohibited from reinstituting the same for 4 years.

The fourth branch shall meet Jan, Feb, March each year in Havre, Montana. All lobbyists, diplomats, agents of foreign governments, and party officials should be forbidden from a 100 mile radius of Havre.

you total chaos then?

I think it would look like a new Camaro.

People are drowning in Ideology, even among the so called preppers I find this debilitating disease which clouds one's vision. It's either Karl Marx or Milton Friedman, there's absolutely no other choice. I think both socialism and capitalism were initially designed to work at very small levels, think about the local teachers union or the local coffee shop.

Countries which have retained this essence of size have done well, countries which have gone to the extremes have done badly or are going to do badly. Even democracy works only at a small level with citizens who are not willing to cut corners, today's nation states are monoliths of a bygone era, either you devolve power(economic and political) at local level or go the way of dinosaurs.

Thank you wise Indian for saying something that I have been in agreement with for years. Democracy works best at grass roots level. It is about devolving power downwards, where the people who are effected by it can change things quickly . Here in Europe we have been delegating power to an unelected bureaucracy and putting more and more layers on the political cake that does not understand what the people want and ignore what is happening at grass-root level. This creates a level of inertia that cannot react with the speed needed in a crisis. This means that when it hits a crisis it cannot react swiftly enough and breaks down, into its component parts. History tells us that Multicultural societies break down very rapidly when they hit a wall of sustainable. The best examples are of cause the Hungarian Austrian Empire USSR in in 1989 the British Empire after the second world war Yugoslavia and perhaps the best case for you is the break up of India once it gained its independence in 1948, into its Muslim and Hindu parts. For groups of people to stay together there has to be a sense of communality. This is lacking here in Europe. The Nightmare of Europe I am living in is doomed and will most likely dissolve into a set of countries that will themselves be no more than a set of city states caused by the massive immigration of millions of unassimilable muslims who have flooded into Europe over the last couple of decade forming vast ghettoes in our major cities. They will demand independence when they are strong enough. My children and grandchildren are in for a rough time.

You had small city states and look what happened. They fought for hundreds of years, culminating in 2 world wars. Get this through your head. Humans are ungovernable. Shit -- most families can't get along. There are a small number of humans in any society that crave power. They are never satisfied with a small amount of power. They are driven to get more. And then more after that.

Your choice is small govs that fight wars with each other, or large govs that have clogged arteries. Both are terribly flawed.

There are a small number of humans in any society that crave power. They are never satisfied with a small amount of power. They are driven to get more. And then more after that.

Working in sports I agree, but I would change "small" to "moderate". If you want to see a collection power grubbing megalomaniacs and self righteous hypocrites just go to any mid-level sporting event (the type where the athletes get a small scholarship, and the administrative apparatus gets small grants).

Personally I don't want to be around when my colleagues and clients aren't sublimating all of their energy into fighting which child is the best/worst athlete.

It always seemed that the EU was swimming against the tide of history.

The dissolution of the pre WW I empires, the multiplication of sovreign states after WW II, the dissolution of the Warsaw Pact and the USSR, and the breakup of Yugoslavia all pointed in the direction of smaller countries with more cohesive populations becoming the norm.

Gluing a couple dozen European countries together into the EU and the Eurozone seemed ill-fated.

Former Soviet republics within current Russia, provinces of China, parts of the Phillipines, parts of India, parts of Myanmar, and various sub-Saharan ethnic groups are among those still trying to gain independence.

In the book of Daniel, Old Testament, there is a prophecy of some sort of future union of nations. Daniel predicts about it that "As you saw iron mixed with ceramic clay, they will mingle with the seed of men; but they will not adhere to one another, just as iron does not mix with clay."

Translation: they will marry across borders, but unity will not come.

I always think of those words in such contexts: You can merge countries politically, but they will never become one. We could not even keep Norway and Sweden together and we have very friendly relations... And this has been known since the day of the Persian empire. Yet we try.

...today's nation states are monoliths of a bygone era, either you devolve power(economic and political) at local level or go the way of dinosaurs.

Of course, this also limits the level of technology that can be supported. A state of the art integrated circuit fab line costs $8-9B. It requires prodigious amounts of reliable electric power and water to function. To cover the cost of capital alone means that it must produce (and sell) millions of devices per year. My own guess at the minimum population required to support such a fab (especially when you factor in all the incidental coffee shops and dry cleaners and teachers and so on) is 30-50 million. I argue that without some sort of unifying economic and political authority on that scale, you don't get billion-transistor ICs.

Leopold Kohr claimed

that society's problems were not caused by particular forms of social or economic organisation, but by their size. Socialism, anarchism, capitalism, democracy, monarchy – all could work well on what he called "the human scale": a scale at which people could play a part in the systems that governed their lives. But once scaled up to the level of modern states, all systems became oppressors. Changing the system, or the ideology that it claimed inspiration from, would not prevent that oppression – as any number of revolutions have shown – because "the problem is not the thing that is big, but bigness itself". Drawing from history, Kohr demonstrated that when people have too much power, under any system or none, they abuse it. The task, therefore, was to limit the amount of power that any individual, organisation or government could get its hands on. The solution to the world's problems was not more unity but more division.

The link is to an interesting article about the book he wrote fifty years ago, The Breakdown of Nations in the UK Guardian newspaper.

Thanks for pointing out this article, The Breakdown of Nations is going on my reading list now. I wonder if Joseph Tainter has heard of his work as both of them talk about the same thing.

I argue that without some sort of unifying economic and political authority on that scale, you don't get billion-transistor ICs.

Oh well.

Indeed, as much as my livelyhood depends on them we got by OK without.

my livelyhood depends on them we got by OK without.

I got by better when they were more primative. I was great at squeezing performance back when supercomputers were "big iron". Now the darned software is layer upon layer upon layer. My sort of personality likes fundamental stuff -as well as programming from scratch. Now you got to deal with interfacing overcomplicated packages, and never know when some incompability is going to bite you in the butt.

Me, too. Way back in the bad old days, I designed end-user interfaces for custom software that ran on a Unix-like platform using simple menus and line prompts.

My specs and documentation were slick as snot and easy to read, time on task was low for pretty complex apps-- telemetry for fiber optics, back ends of insurance systems, etc. We got it down to very few keystrokes and super low time-on-task.

Nothing like that around now. I know, I know, a lot of the engineers here love new software that runs on current operating systems, and I get it.

I'm being trained in the new Electronic Medical Record system next week. It's eight hours of training just for writing process notes. How happy am I supposed to be? How many displaced workers could I be helping in those eight hours?

without some sort of unifying economic and political authority

Way too many Simple-Simon ideologies being expressed here to allow for a cogent response.

We're swinging here between a Ron Paul notion of "Get the government out of the way and let the free markets do their thing" to "We need a single minded strong government in order to do large and grand things".

In this case, both of the simple-minded and extremest camps are wrong.

The world is a complicated place.

There are so many details-level and complex-things necessary for making something like an iPhone or iPad happen, but alas the inmates in the asylum don't even begin to have a clue.

I think you are close to the fundamental truth. We have created a world that is too complex for 99.99% of the population. Someone said that any sufficiently advanced technology is indistinguishable from magic.

I used to be able to take any car apart and put it back together. When I got my first PC I bought the manual for the basic hardware and studied the BIOS. I grew up assuming that I could understand any commercial technology (OK I never quite got quantum physics). Now I feel like I'm overwhelmed by technologies that NO ONE really understands and I'm in a world wide economic system that NO ONE understands.

This can't be good. Or I'm just getting old.

When I mean local I don't mean village. Cities (the big ones), maybe even Switzerland, the thing is that there must be a fine balance, I cannot define it but it exists, USA and Soviet Union on the other hand are examples of size gone wrong.

Perhaps you are right that we couldn't have sent a man to moon without the backing of an industrial giant like USA, but I see no reason why smaller nations cannot collaborate on large technological projects, CERN is a good example.

But we humans may not need state of the art fab to have benefit from Microprocessors.

What glory can be done with a 24 pin $2.00 microcontroller? Could you do most of what you do with a 286 or 386 level processor?

"Could you do most of what you do.."

I think the question is 'could you do enough..?' .. where ENOUGH is of course one of the slipperiest words we've got.

Do you have any thoughts on whether some of the newer Multicore Approaches could be applied back to a much simpler, ie 386 processor, in order to get a higher result with the paralleling of more Low-level Proc's?

I think there are all sorts of untried combinations from way down the Computing Ladder below us, that were never tried because the power levels of our machines was racing up so fast.


newer Multicore Approaches could be applied back to a much simpler, ie 386

Corrolary made 2 products - a multiport RS232 device and parallel 386 hardware. As I remember, they were bought out by Intel so Intel could use some of the ideas in their new devices. So the multi-core was being done, in a way, back then.

The "interesting" part of the "experiment" will be how much of the power savings and larger masks could be done at what volume and cost. The supply chain is effected by things like the Fukishima radioactive machine failure. Seems one of the epoxy makers was a preferred supplier due to the low radioactivity - and now has a factory of junk.

Libertarians: Start with 'property is sacred' and take it to it's logical conclusion.
Communists: Start with 'property is theft' ( from everyone else who would use the property ) and take it to it's logical conclusion.

Personally, I agree that property is theft, and there's nothing wrong with being a thief. You get to keep what you steal if you can, but you've stolen it from everyone else who wants it including me, and I'll take it back if I can. Take my stuff however, and I'll beat you away with a stick.

It's like lions and hyenas. Whoever eats the carcass owns it until they themselves are eaten.

...believe that a small government , increased privatization and the role back of the welfare state is good thing for everybody in the long run.

That is indeed a statement akin to religious belief. Free-market fundamentalism is dogma that we are to accept as true without any evidence. History has shown us where this leads and that this philosophy is fraudulent.

Just think for a minute:

Postulate #1: People act tend to act out of self interest.

Postulate #2: Economic power in private hands, without any constraint in a fully privatized and deregulated economy, gives the biggest actors the power to further accumulate wealth in a positive feedback loop resulting in runaway wealth concentration.

Unrestrained private / corporate wealth leads to the formation of trusts or monopolies and fosters corruption as those seeking to protect their wealth will do so by any means necessary, and the wealthiest have the greatest means to do so. Paradoxically, an unrestrained free market soon becomes not-free as the market becomes rigged by the biggest boys with the power to load the dice.

So, yeah: cut taxes (and cut teachers, schools, police, fire services, let infrastructure rot etc.), let health insurance companies charge whatever because making money is a GOOD thing (even if it kills people who can't afford runaway costs), deregulate and let millionaires bloom. This is the best way to improve the general welfare???

Man, people who believe this without question are, by far, the best friends the CEOs at Goldman Sachs and the rest of Wall St. could EVER hope for.

I'm sorry, but all evidence and common sense points to this belief system being a product of propaganda designed to have the bottom 99% voluntarily agree to the unrestrained pursuit of wealth and power and corruption at the top at the expense of the general welfare of the people.

IMHO, the common good requires a pragmatic blend of public sector services and private enterprise - with reasonable public oversight. Free-market worship is a recipe for disaster. Look no further than the 2008 Wall St. collapse for ample evidence of where deregulation and the corruption of big money lead us.

Economic power in private hands, without any constraint in a fully privatized and deregulated economy, gives the biggest actors the power to further accumulate wealth in a positive feedback loop resulting in runaway wealth concentration.

Classic Marx, and a statement that many modern economists would agree with (lately, for example, those at the IMF). Where Marx was seriously wrong -- at least so far -- was in what would happen when the accumulation got far enough along. Post Marx, some sort of redistribution has always occurred within the existing framework instead: Bismarck's social insurance programs, FDR's New Deal (where there was a great deal of redistribution in addition to the social insurance), WWII wiping out a lot of the accumulated wealth in Western Europe.

Postulate #1: People act tend to act out of self interest.

I think that this is true. But I also think that self-interest is an innate inclination with a flexible and broad reach. Unfortunately, we seem to assume, too quickly, that it can only bring us down. But there is an alternative way to frame it, one that Erickson used to explain generativity in the older members of a group:

... it is necessary to clear up two misunderstandings about self-interest. The first involves distinguishing self-interest from selfishness. Self interest is often devalued as a useful motive because it is, mistakenly, equated with selfishness (Perloff, 1987). It is easy to confuse the two. However, selfishly consuming resources or creating waste without concern for others is quite different from taking care of yourself and maintaining your ability to function effectively in a challenging and frequently chaotic world. The responsibility for getting your own needs met, for gaining a sense of happiness or meaning from life, for maintaining mental vitality and a positive outlook, rests only with yourself. If you do take care of yourself and can maintain a positive outlook, then you will be in a much better position to take care of others who cannot take care of themselves (e.g., people who are sick, children) or to advocate for the environment.

A further misunderstanding is the belief that self interest is only about attaining personal happiness. The extreme of egoism is to believe that the only thing that matters to us is our own happiness and that, by extension, we can never have concern for another person or thing external to us. In their thoughtful book, Psychology's Sanction for Selfishness, Wallach and Wallach (1983) clear up this misunderstanding by noting that our individual happiness can depend on what happens to those things about which we care. They state that, "we are satisfied or pleased if we attain what we (really) want; we are made happy if something that we (really) wish for comes to pass." Thus, while happiness is experienced personally, it is derived from attaining an outcome, any outcome, we care about. A personal sense of satisfaction can be derived from such things as enhancing the well being of another person or the sustainability of an ecosystem. Framed in this way, self-interest can be tied to a vast number of concerns, many directly relevant to the promotion of [environmental stewardship] and some working with surprising effectiveness.

Source: http://deepblue.lib.umich.edu/handle/2027.42/83703

Right on! Last night I sat like a fly on the wall, doing my own little things back in the study, while my wife's executive committee met in the living room. These were smart, hard working women, making some important decisions that affected the community. They were all concerned about the ones in trouble, and the things in the community that were good or bad. I did not hear one word that could be called selfish. Some of them had expended enormous toil the last week on defending their town against an environmental threat from rapacious corporations.

After the meeting, my wife commented how proud she felt at the performance of the group- personal satisfaction- enlightened self-interest. "Attaining an outcome we care about."

But how many of them drove home in SUVs?

People can be intelligent, caring, dedicated, hardworking, idealistic and wrong.

I think you're missing the point a bit..

Wimbi is showing us a group of people working, doing their best and acting on their concerns for their community. Are these efforts 'wrong' just because they aren't looking at energy the way we do here? No. They are focused on a certain set of issues, and might be unprepared to look at another set of important issues. We need to be really careful not to throw the babies out with the bathwater. People are both right and they're wrong, and we have to give the perpetual finger-wagging a rest. EXAMPLE: My daughter has a new Piano Teacher, and this woman is really good at looking at what Lorelei has done right each time she plays a phrase or section, while when I would help her practising, in my responses, I was just perpetually first keying right in on 'That was a mistake..', 'You were wrong there..' 'Nope, nope, nope' .. My daughter generally already knows there's something to get better, but the continual harangues make the process oppressive, and I don't accept that we have to persist in this scolding, negating path that many of us grew up with. You don't ignore the mistakes, but you can put the positives in there first, or reframe the problems as opportunities to 'make it even better'..

We all have people around us doing various important things that WE are not doing.. does that make US wrong? I don't think so.. we have to recognize that everyone makes different contributions.. and that for energy right now, there really are VERY few people, it seems, who are really watching the meters, as it were. It seems to me that this forces us to realize that we are watching what we think is 'The Iceberg', and if too few are willing to agree that this collision is coming, that we might have to keep trying without simply berating and so frequently alienating those who don't see it.

We see what we see.. we can try to share it, and we can also be working at the same time with each other to try to develop what plans and tools we can to have whatever contingencies thought through, for when the signs get more obvious, and anguished people are looking for some ideas on what they can then do about it.

Yes, the SUV's are a big problem, but it might be a time to encourage what people are doing right, and stop just beating on each other for all the failings..


RE Self interest:
One need only re-define 'self interest' as 'enlightened self interest'.

It is in my self interest to have safe streets to walk on in the city. It is in my enlightened self interest to support a public safety structure, including a police department, in order to achieve and maintain this state of affair.

Read up on the definition of 'social contract.'



Most so-called self interests in the "free market" are dim-witted interests.

Is it in my self-interest to to have super fast food service at a Micky-D's so that I can quickly gobble down my animal fat X-burger and deep fried in trans-fatty oils pile of fries? Economists and tea partiers say yes.

Caveat Emptor means let the victim die.

Absolutely. Although re-labeling it doesn't necessarily help us to uncover the psychological mechanism(s) involved.

The social contract framework is solid. But it's a relational approach. It may suffer from a range of social interaction problems (e.g., securing and verifying commitment, free riders). What Wallach and Wallach and others are doing is looking for a non-relational framework to explain broader self-interest by exploring universal, innate inclinations that are self-sufficient.

But there's no intent to claim that such an explanation would render all other explanations irrelevant. (This notion that an explanation at one level usurps the possibility of a useful explanation at another level is sufficiently pervasive to have received several colorful labels, such as “nothingbutism” and MacKay’s more elegant “fallacy of ‘nothing buttery’.”) Since a great deal of human behavior is over-determined (a situation that was apparently found to be evolutionarily adaptive since it keeps coming up in behavioral research), our having more than one good explanation for broader self-interest is probably useful for practitioners.

The "safe streets" example is good. But maybe it involves too tangible, direct and personal a benefit? I wonder if we could come up with examples that have benefits that provide less of all those features but leverage our innate inclinations? Maybe something parallel to Maimonides’ notion of helping others without knowing whom one helps, and without the recipient knowing from whom he received the help. It might still have the general form of "It is in my self interst to have..." but then, "...a community in which people flourish and are well supported in their efforts." And maybe it helps to add the "veil of ignorance" notion here?

Free-market fundamentalism is dogma that we are to accept as true without any evidence. History has shown us where this leads and that this philosophy is fraudulent.

Hear, hear!


Ideologies and religions

Ideologies and religions are systems of thought that shape and decide the way persons and groups of persons think and act.

Ideologies and religions don’t necessarily first and foremost respect conditions for description, and hereby logical relations and facts, but are also often the expression of subjective opinions, social conventions and habitual conceptions. Because subjective opinions, social conventions and habitual conceptions are not necessarily in compliance with conditions for description, religious and ideological assertions are often a mixture of right assertions and wrong assertions.

This is a fundamental problem that is shared by for example ideologies like representative democracy, anarchism, neo-liberalism, communism, capitalism, nazism, and religions like christianity, hinduism, judaism, islam, etc.
Experience tells us that religions and ideologies usually don’t first and foremost aim to respect conditions for description and hereby the logical relation between persons and persons’ rights.
Persons might have personal reasons to believe in ideologies or religions, but ideologies and religions that don’t first and foremost aim to respect persons’ rights, should never be used as the basis of political action, because the fundamental purpose of politics is to protect the rights of persons.

Instead of using ideologies and religions as the basis of political action, persons ought to use conditions for description as the basis of politics and thereby first and foremost try to respect persons’ rights.

Koch Bros - It's the evil thing


Question: I just watched Michael Lewis on Jon Stewart's "The Daily Show". His new book "Boomerang: Travels in the New Third World" looks really interesting and I am thinking about ordering it. On Amazon.com another of his books, published last year, came to my attention, "The Big Short: Inside the Doomsday Machine".

Both these books appear to deal with the collapsing of the world economy. So my question is: Has anyone read either of these books and if so, what is your opinion?

A link to last night's clip mentioned above: Michael Lewis discusses Europe's financial crisis on "The Daily Show"

Ron P.

Michael Lewis was also on Charlie Rose the other day....here is the link


I read "The Big Short" It was good. I can't remember much of it specifically because I've read way too many books about the financial collapse. I've been thinking of checking the price on the new one. I heard it discussed on Bloomberg yesterday and it sounded really good.

The Big Short was a very good read.

Thanks guys, I just ordered both books. I have read about half the peak oil books ever published, and that was a lot. After awhile they all seem to say the same thing. I recently read Chris Martenson's book "Crash Course". It was the first book I had read in years that I just could not put down, though I had already watched his video "Crash Course" twice.

Anyway I decided to read a few more economic collapse works like Crash Course and see if I can tie this thing all together. There are just so many connections that I have not connected all the dots yet. But I am working on it.

Thanks again, Ron P.

Ron, I wish you had a blog as I would be very interested in hearing your conclusions. I am following the same line of thinking and the majority of my research is now in finance.

Summary of Weekly Petroleum Data for the Week Ending September 30, 2011

U.S. crude oil refinery inputs averaged 15.1 million barrels per day during the week ending September 30, 73 thousand barrels per day below the previous week’s average. Refineries operated at 87.7 percent of their operable capacity last week. Gasoline production increased last week, averaging nearly 9.3 million barrels per day. Distillate fuel production increased last week, averaging about 4.7 million barrels per day.

U.S. crude oil imports averaged 8.7 million barrels per day last week, down by 1.0 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.8 million barrels per day, 246 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 505 thousand barrels per day. Distillate fuel imports averaged 208 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At 336.3 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.1 million barrels last week and are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 0.7 million barrels last week and are in the upper limit of the average range for this time of year. Propane/propylene inventories increased by 1.2 million barrels last week and are below the lower limit of the average range. Total commercial petroleum inventories decreased by 4.6 million barrels last week.

Total products supplied over the last four-week period have averaged just under 19.0 million barrels per day, down by 1.3 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged 8.9 million barrels per day, down by 1.7 percent from the same period last year. Distillate fuel product supplied has averaged about 3.9 million barrels per day over the last four weeks, up by 2.0 percent from the same period last year. Jet fuel product supplied is 2.9 percent lower over the last four weeks compared to the same four-week period last year.

Blame it on Rio – and Russia (Revised)

Per this week’s EIA report, US oil and oil product demand shows some signs of improvement - despite ever deepening gloom about the prospects for the US economy. Commercial oil inventories in the US continued their relentless decline that started about the end of May. Had it not been for an emergency release of 30 million barrels of high quality oil from the Strategic Oil Reserve last summer, oil and oil product inventories might now be well below average - and in short supply.

How can this be, when domestic US consumer demand for gasoline, for example, is now running about 2% less than about a year ago? Simply put, the drop in US domestic demand is being more than offset by increasing oil product exports – and a rather steep fall in crude oil imports. Although the US only imported a small amount of Libyan oil before it went ‘offline’ into its revolution of sorts in early February, other countries have made up their loss of Libyan oil by grabbing oil shipments that would normally go to the US. More specifically, China has bargained for oil supplies that may have taken supply away from the US. (See http://www.businesstimes.com.sg/sub/latest/story/0,4574,459174,00.html ).

International shippers this week are planning for a resumption of exports from Libya of about 100,000 bpd in early October – far below the 1.35 million bpd export level at the start of February. That figure may increase to about 250,000 bpd by the end of October. So it does not seem reasonable to expect much of an increase in US oil imports very soon.

Meanwhile US oil product exports to Latin America – especially Brazil – have picked up greatly in recent months. Accounting for most of the export increase are products like ethanol (yes Brazil needs more ethanol due to drought) and naptha (basically unfinished gasoline). Russia is not helping the situation by building up its internal supply of diesel and similar products, probably to insure adequate supplies for winter. This results in Europe seeking replacements oil products from the US.

Since oil supplies usually build up seasonally within the US late in the year, the US is no immediate danger of running too low on oil supplies. However if the Libya doesn’t resume oil shipments to the US soon, 2012 will be off to a unpleasant start for the US. Hopefully Libya will increase its exports quickly to avert the need for a second SPR oil release before Spring. If they don’t, at least we will know who to blame (just kidding, of course, there is plenty of blame to go around).

Thanks for the commentary. It is very interesting to me.

Yair...Charles. Is there a trigger price or minimum reserve where the SPR is replenished? How does that mechanism work...and surely if releasing oil has had an effect then unless demand (and price) drops significantly the replenishment process must have an effect as well?

What am I missing?


Probably nothing. There is no formal trigger mechanism. I suspect the Department of Energy is more aware of the vulnerability of the US to supply interruptions than they let on, and realized that the world supplies from Libya were not being made up by other OPEC members. Gasoline supplies are normally seasonally low in late August/early September, so the release appears to have been timed to have supplies when the US is most vulnerable to supply interruptions - not to mention hurricanes and tropical storms that also peak about that time.

It's likely that the release of 30 million barrels from the SPR lowered prices in the US relative to other countries, and the lower prices may have marginally increased demand for gasoline.

The US has a general plan to replenish the SPR after releases, and mostly they have stuck to that plan. Sometimes that happened with some delay until market conditions are generally favorable (mostly when prices are lower).

On another subject, some may have difficulty with my link to the article above.
Here is an excerpt:

October 5, 2011, 1.46 pm (Singapore time)

China books record high spot VLCC oil tankers from Mideast

SINGAPORE - China booked a record high 48 Middle East supertankers, capable of carrying a total of 96 million barrels of crude oil, in the spot market in September as refiners raised their throughput volume, traders said on Wednesday.

The world's second largest oil user fixed eight more Middle East very large crude carriers (VLCCs) than in August, according to Tokyo-based broker firm Meiwa International.

China also booked seven VLCCs from West Africa, bringing its total shipments in September to 55 supertankers - the highest amount this year.

Yair...thanks Charles. I always appreciate your straight forward informative posts.


As you mention, comparing the latest EIA 4 week averages for 2010 with 2011 we find:

          (Thousand Barrels per Day)
   Year          2010      2011   Change

   Imports       2415      2018    -397 
   Exports       2156      2445     289
   Net Imports    259      -437    -696  

Note that the numbers from the tables don't exactly add, perhaps due to stock changes.

From these data, we see that the US net imports are down about 4.9 million barrels a week over the last 4 weeks, compared to the same period last year. This difference is offset in part by a the increase in US production of 286 thousand bbl/d or 2 million bbl a week and the decline in gasoline use. Small wonder that the US total stocks are showing that downward trend...

E. Swanson

Crude oil posted prices are being increasingly discounted within the U.S. A grade/area I am familiar with was selling at a $4 - $5 discount to wti just a few months ago and is now posted at a $10 - $11 discount.

Crude Oil Price Bulletins


Here is some late supplemental information on gasoline supplies, indicating that next week's EIA report may show a further draw down:

OCTOBER 5, 2011, 3:37 P.M. ET
New York Spot Gasoline Premiums Widen Sharply On Sunoco Refinery Work
By Rose Marton-Vitale

NEW YORK (Dow Jones)--New York's wholesale gasoline prices moved sharply higher Wednesday amid speculation over the scope of maintenance under way at Sunoco's (SUN) Marcus Hook refinery in Pennsylvania.

A Reuters report said Sunoco shut a crude unit and a reformer unit at the 178,000-barrel-a-day refinery Monday for two weeks of work, according to trade sources.

As a result, reformulated-gasoline for oxygenate blending, or RBOB, for prompt delivery in the New York Harbor market rose to a premium of 14.0 cents a gallon to the November Nymex gasoline benchmark price, from a high of plus 9.5c Tuesday. Barrels for delivery by Oct. 10 are 5.5c up on the day, at a 12.75c premium to November Nymex.


Gasoline Cargoes to U.S. to Slide 35% on European Refinery Maintenance
By Isaac Arnsdorf - Oct 6, 2011 10:30 AM ET



Over the last year we have seen the floating storage come ashore. This summer we saw the release of 60 million barrels from the SPR. While both have received extensive media coverage no one in the press has actually done the math. Floating storage had been reported as reaching a peak of 100 million+ barrels. Add that to the SPR release and the world has blown through 160 million+ barrels of oil above and beyond that which we have produced in the last year alone.

This does not bode well for future imports unless I am missing something. What are your thoughts?

Your comments are always appreciated! Thank you.

Great point and exactly why we should be worrying.

On floating storage, I'm not sure if there was some overall plan in place, but in recent years - except 2011 - the oil buyers and distributors managed to accumulate up to 100 million barrels of oil offshore for use during the peak 'summer driving' season when gasoline demand was the highest. This floating storage was no where to be seen this year.

Essentially the US is taking the brunt of the drop in world next oil exports, also called the exportland model, sharkfin, etc.

There are no indications from the shipping industry that oil is being stored on tankers now for later use. In fact, the tanker business is so bad they are dismantling some tankers for scrap metal.

So the future if oil imports into the US does not bode well. The main possibility of some improvement comes from Libya, where whatever oil Libya can export will indirectly allow more oil to come to the US.

US oil production reached 5.8 million bpd last week, for the first time since 2003.

And yes, that 4-week average will start to head over 5.7 million bpd once we get beyond the week or two affected by tropical storm Lee.

Rockman, RMG, (or any industry insider) - Does anything like this impact the the Oil/NG industry?

Non-compete agreements create ‘career detours’

A new study of more than 1,000 engineers, conducted by an MIT professor, shows that non-compete agreements come with a high cost for employees: When those workers do shift jobs, roughly one-third of them end up leaving their chosen industry altogether...

... The agreements are also a matter of state law; some states use them and others do not. “Although non-competes prevent people from changing jobs within a state,” Marx notes, the agreements may “encourage mobility out of a state.

To further analyze this dynamic, Marx is also currently researching whether non-compete agreements affect the flow of workers within industries, and whether they affect the pool of talent available to smaller companies and startup firms.

S - It may have happened to someone in the oil patch but I've never heard of one EMPLOYEE being restricted by a non-compete clause. But lots of confidentiality agreements (CA's) : you can work the same job for a new employer but you can't disclose proprietary info of your previous company. A CA will prevent me from generating a drilling idea for one company, quit and go to a new company and sell them the idea before the first company can acquire the leases. Actually I could still cheat and have a cohort sell the idea for me. But if you get caught most will unofficially black ball you. Everyone but the other unethical players. OTOH I can spend 15 years learning about a particular geologic trend and understand it better than any other geologist. But I can quit, go to work for another company and use my experience to generate NEW drilling prospects. I can't ethically sell specific work product I developed for the first employeer. But my general knowledge base belongs 100% to me.

But non-compete requirements are a big part of the acquisition side. Say Halliburton acquires a company that builds well heads. They'll have the seller sign a N/C agreement that restricts them from starting up the same type of company for X years. But these N/C agreements seldom have anything to do with the technology itself. It's all about the client list. A fellow sells his company for $500 million...his clients really like his product/service and they buy a lot. He sells, opens up a new shop doing the same thing and all his clients stay with him. The new owner doesn't have much to show for his $500 million other that the acquired company's name.

My son, working at the tar sands, says that when employed on construction projects there is a time out type ban to discourage company jumping by employees.

If you are laid off from a project, that is one thing, but you can get black listed for trolling. For trades the rates are high, anyway, and are pretty standard as far as I know. I know that when you leave a job for another you have to be careful about it.

I think in any industry employers look for a steady work history and dependable attitude in new hires. Too many jobs listed on a resume can be the kiss of death in any business.

I had a comment about the non-compete agreement, however, my experience isn't in oil/NG industry.

The article doesn't mention a couple of other issues I've seen with these agreements. Another way employees get blind-sided by non-compete agreements is when a large company buys a smaller company where the larger company requires an agreement that the smaller one didn't have. That happened where I work and some engineers quit. I guess they got tired of getting asked to sign agreement and quit in disgust.

Another issue is when the parent company is a holding company of many different companies. The agreement is written to apply non-compete with all companies under the holding company. For example, an engineer with Otis, which works on elevators can't take a job that competes with Sikorsky, which works on helicopters. Both these companies are under parent company UTC. Not sure if UTC still has this agreement. It did many years ago when I worked for them.

Personally, I never worried about the agreement and didn't pay any attention to it when looking for work elsewhere. But that may not be true for others.

A 'Carbonizing Dragon': Construction Drives China's Growing CO2 Emissions

Fast growing capital investments in infrastructure projects led to the expansion of the construction industry and its energy and CO2 intensive supply chain, such as steel and cement production. As a result of this transformation of China's economy, more and more CO2 was released per unit of gross domestic product – a reversion of a long-term trend.


Oil Sands Environmental Impact Unknown: Canada Audit

Key gaps in information mean Canada has been unable to assess the impact of exploiting Alberta's oil sands, the nation's environment commissioner said Tuesday.

Lack of information due to "insufficient or inadequate environmental monitoring systems" mean the federal environmental and water agencies cannot build a clear picture of how regional ecosystems have been affected by oil sands projects, the Commissioner of the Environment and Sustainable Development said in a report to parliament.


From above about the feds now regulating offshore contractors: ""We will regulate contractors as well as operators. There is no compelling reason or logic not to do so," Michael Bromwich, director of the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, told an oil conference."

I honestly have no idea what they are talking about. All companies operating in the OCS are under the same regulations be it BP, Halliburton or any drilling contractor. There are not two sets of rules...only one that all companies are required to follow. In fact, the drilling companies are more heavily regulated from a practical sense than the oil companies. The oil companies have to push a lot of paper work through the system for sure. But as I've mentioned before there may be a DW GOM well being drilled when there isn't one oil company employee on the rig for most of the drilling. Day to day offshore operations are typically in the hands of the subcontractors and consultants like me.

The cynic in me reads such a press release as just more smoke blown at the public to make them think problems are being addressed and fixed.

The cynic in me reads such a press release as just more smoke blown at the public to make them think problems are being addressed and fixed.

Here's some more cynicism to add:

And if no one talks about the matter for 2 weeks (or more) then the public will have moved on to the new idol, who needs their vote on dancing with the stars or some other outrage.

Based on some experience looking at government regulation from inside that government...

The brief article has very much the flavor of being about changes to the regulators' internal processes. It is unfortunately common for legislatures to empower regulation and require some minimum set of regulations, then to inadequately fund the agency so it can can't execute the stated policy. Both the oil companies and their contractors may be required to file reports, and the various inspections get done for both groups, but that doesn't say anything about whether the paperwork is all treated equally inside the agency. I find it very easy to envision an internal practice that said, "Read and check the oil companies' paperwork, but ignore the contractors." The give-away is the statements that without increases in resources (ie, staff), things will no longer proceed as quickly as they did in the past.

This type of situation is relatively common. In many cases politicians don't have the votes to dismantle, or are unwilling to take the public heat from dismantling, a regulatory agency. But budget legislation is typically (a) hideously complex and (b) crushingly boring, so effectively cutting the budget is straightforward. The result is inevitably that corners will be cut, most often in the back office where it isn't publicly visible. An inspection is made, the report is filed, a permit is issued; hard for anyone outside the agency to figure out that the permit was issued without anyone looking at the report.

[Edited as indicated for clarity.]

mc - Good points. But potential problems are seldom found in the paperwork. You seem to imply the problem is typically the follow through. that's been my experience also. In the case of offshore drilling the follow through is regular field inspections. The paper work may be perfect but the reality on the rig may be different. That's why I took notice with the statement regarding "3rd party auditors" popped up. I couldn't find details as to what exactly these auditors would be doing. If they are just checking the paper work from the company or how the fed employees are processing the paper then nothing has been fixed IMHO. If these 3rd parties are actually going out to the rigs and doing honest inspections and monitoring the riskier operations then we have a real game changer.

Sigh... Yep. You know what the procedures ought to include, and I know what the procedures ought to include (more generically, but the basics of process control are, well, basic), and we both know that the current Congress is highly unlikely to provide new funding.

I do wonder if the spill will change one of the long-standing political dynamics in Washington. Since at least the mid-1970s it has been impossible to get a Secretary of the Interior confirmed unless they were from one of the western states with large federal land holdings. At least one of the criticisms leveled at Salazar has been "What does someone from the West know about deep water drilling?" I wonder if we'll see someone from a Gulf Coast state nominated in 2013?

mc - Here's the fact about the costs situation: the feds require a 3rd party independent experienced DW engineer on the rig 24/7 while drilling. And guess what: the feds require the operator to pay the consultant's day rate. How much? Top pay for a very experienced engineer = $2,000/day. Yes...that's $2,000/day sitting on the rig and watching others work. Nice "work" if you can get, eh? LOL. Would the companies not drill due to this extra cost? A DW well might take 80 days. So $2,000/day X 80 days = $160,000. But the estimated cost for the well is $80 million. So what's the increase: an extra 0.2%. Guess what? They might complain but no operator will abandon a project due to a 0.2% cost increase. Particularly a well they hope will find $15 - 20 billion of oil. BTW: my last DW well had an estimated cost of $110 million. Actual cost: $154 million. And it was a dry hole.

As much as the feds like to tax folks it's appears to be difficult for them to see a cash cow they can bleed a little without disturbing our free market system. Along the same line did you see that PA is thing about assessing a 5% production tax on all this new Marcellus NG? Texas and La. has been assessing much higher production taxes for many, many decades and collecting many, many $billions from the oil patch. In fact, our counties in Texas assess a small prodction tax. And how did the oil patch respond? More wells have been drilled in these two states then the rest of the country combined.

A few years back in CA they had a proposition to raise 6% royalty fees on oil (the state collects none). Chevron spent money claiming it would make your gasoline more expensive, an it was defeated. Its easy for money to corrupt democracy -even direct voter democracy -just purchase enough misinformation.

The California ballot proposition system unfortunately gives companies an opportunity to game the system just by spending a lot of money on TV adds. The voters seldom understand even basic economics and finance.

Texas politicians, being heavily involved with the oil business themselves, have a very good idea of how much money they can skim off the oil companies without affecting drilling or gasoline prices. They set the severance taxes to that level. The oil companies could complain, but they wouldn't get a lot of sympathy.

California's budget is a mess and the state is a financial disaster area as a result of their wacky propositions. They should have put a severance tax on oil, and increased their gasoline taxes substantially, and they should have done it years ago. And they shouldn't have built all those freeways they can no longer afford to maintain.

Rocky - "The oil companies could complain, but they wouldn't get a lot of sympathy." Maybe from the PR folks but in 36 years I've never heard anyone make a big deal out of severance taxes. Kind of like complaining about getting older...beats the alternative. Sort of like a person complaining about having to give the govt a big chunk of the $5 million income last year. Personally I can't wait to be able to lodge such a complaint. And I'll be filing that complaint from my villa over looking the white sandy beaches of Costa Rica.

Rockman, oil men know those severance taxes are paying for their schools, hospitals, roads, and the landscaping in front of City Hall. And they know that if they cut them, somebody in some other state would get the money, while the shrubbery died, the roads developed potholes, the hospitals were closed, and school standards sank to even lower levels than they already are.

Sort of like California.

It's much better if they bite the bullet and cough up a little cash. They really don't need a new 12-car garage at their villa in Costa Rica that badly.

re: Royalty increases

As in love...timing is everything.

Stelmach didn't do too well, or Alberta, either, when they increased the royalties on Tar Sands production. I think my dog does a good imitation....the roll over, expose the throat, smile, and angle for a pat on the tummy.

Stelmach, being a good Ukrainian farmer, didn't have a clue how the oil industry worked. The consequences of his royalty increases was that all the oil rigs stampeded across the imaginary dotted line between provinces and turned Saskatchewan into one of the most affluent provinces in Canada. If you are going to be Premier of Alberta, you have to know exactly how much revenue you can collect from oil companies before that sort of thing happens.

(For outsiders, Ed Stelmach is the former Premier of Alberta, who was recently punted by his party and replaced by Allison Redford. We'll see how she works out.)

Alberta politics are rather unforgiving - no party that has ever been defeated has ever been reelected to power.

Alberta politics are rather unforgiving - no party that has ever been defeated has ever been reelected to power.

RMG, depends on how you define forgiving? Other political jurisdictions in Canada toss governments out fairly frequently. Alberta is, for all intents and purposes, a one party state.

The Conservatives have been in power since 1971. Before them, Social Credit governed for 36 years, the United Farmers for 14 before that, and the Liberals for 17 years before that. In fact, in the 106 years since the province of Alberta was carved out of the Alberta and Athabaska Districts of the Canadian Northwest Territories, it has had only four changes of government.

Strangely, Alberta is perhaps the only place in the entire Commonwealth of Nations that has had fewer changes of government than sovereigns (5 monarchs since 1905).

I already said why Alberta politics are unforgiving - no party that has ever lost an election has ever been reelected to power again. Of the three parties that have lost elections (Liberal, United Farmers of Alberta, Social Credit), UFA doesn't even exist any more and SC came sixth in the last election.

Alberta doesn't change governments very often, but when it does so it does it suddenly and decisively. In 1934 the Social Credit party didn't have a single seat in the legislature, but in 1935 they won 56 of the 63 seats, and the governing UFA lost every single seat it held.

The SC party was in power from 1935 to 1971, but in 1971 it went from 55 seats to 25, while the newly revitalized Progressive Conservatives took 49 and have been in power ever since. The next election SC won 4 seats, and now they are down to sixth place party with zero seats in the last 7 elections.

That's no cause for confidence for the PC's. Their end could come as suddenly as the UFA and SC, and they know it. That's the reason for their recent change of leadership - Stelmach wasn't performing, and in Alberta politics, nonperformance is cause for immediate termination, just like it is working in the oil industry.

People are cutting on dipers... Then you are cutting in every spending.


(Steve) Forbes has predicted that the U.S. would be on the gold standard
within 5 years.
In Forbes plan, we would fix the price of gold to the dollar to
somewhere around $1500 an ounce: "If it goes much above $1500, the
Fed tightens -- in open market operations. If it goes much below
$1500, everyone knows its going to ease, to bring it back up. So you
just keep it within a narrow range, you don't have to own an ounce
of gold."

Right now, the external debt and obligations of the US divided by US gold reserves yields a price of around $12,500/oz. How can one have a gold standard without gold reserves? If the fed tightens above $1500/oz they should be tightening now. Any tightening now will cause the economy to collapse and banks and the markets will shut down because the debt is so large and asset deflation is so severe.

To the top callers: In the last 6 weeks of the previous bull market gold doubled from $400/oz to $800/oz. When that happens again we can call it a bubble.

Conservationists sue to block TransCanada pipeline


More on the Pennsylvania Marcellus Shale Fees.

Reactions Mixed to Corbett's Marcellus Shale Plan

Reaction to Gov. Tom Corbett's plan this week to impose a local impact fee on Marcellus Shale drilling was mixed—with some local legislators saying they were surprised by how much "juice" was in the plan, while others wished a bill would have been set forth instead.

The fee, which could be as high as $160,000 per well over a 10-year period, is part of broader plan that Corbett said calls for even-handed laws that recognize the competition beyond the state's borders for an industry that he said is boosting the economy and lowering energy bills.

Pa. Would Let Counties Set Gas Drilling Fees

Sounds like he's giving away the store.

Corbett, a first-term Republican who is viewed as an industry allydid not go as far in his proposal as have plans from many urban and suburban lawmakers for extracting tax revenue from producers in the Marcellus Shale region or imposing tougher environmental standards on drilling. Pennsylvania is the only major gas-producing state in the country that doesn't tax natural gas production.

Corbett took a campaign pledge not to increase taxes or fees, and he opposes a tax because he says he fears it would drive the industry away ...

Give me a break. Yah. Like they might discover NG in the granite of Maine. Thing's like that will keep him up at night./sarc

S - "Corbett took a campaign pledge not to increase taxes or fees, and he opposes a tax because he says he fears it would drive the industry away ..." I can't tell if he's a liar or just that stupid and believes what he's saying. I'm guessing you saw my earlier post on this subject. Someone needs to explain to Corbett that these public oils have to drill every resource play they can or they go out of business and their stocks get flushed down the toilet

Texas and La. have collected many, many $billions from the oil patch over the decades. And did we stop drilling? More wells have been drilled in these two states than the rest of the country combined. It's just the cost of doing business and we don't lose one minute of sleep over it. I enjoy paying a lot of production taxes...the bigger my severance tax bill the more money I made: something like making a $15 profit for every $1 of severance tax I pay. I think I can live with that.

Exactly. If depletion is anything like what you describe for other shale gas wells, then his plan screws the state out of 75% of the fees, because the fee schedule is spread out over 10 year; most of which, the well will not be producing (at any significant level)

S - A little different schedule: "While Corbett's plan calls for each well to be subject to a fee of up to $40,000 in the first year, $30,000 in the second year, $20,000 in the third year and $10,000 in the fourth through 10th years".

Sometimes I just don't understand politicians. Maybe it's ego. Why is he trying to re-invent the wheel? In Texas it's a simple 6.5% of the value of the production. As you say most of the production will come the first 2-3 years. So assume 1st year = $4 million X 6.5% = $260,000. That's $220,000 less than his plan. Lets assume the well produces a total of just 2 bcf equivalent. At $4.50/mcf that's $9 million X 6.5% = $585,000. Compared to the max of his proposed $160,000 he is screwing the public.

Try La. now: they charge about $0.30/mcf. So 2 bcf = 2,000,000 mcf X $0.30/mcf = $600,000. So again, the public is screwed. The fee basis is silly. Not all wells will produce a lot of NG and some may produce a lot more than 2 bcf. So a severance tax based on the total value of the production makes sense.

He didn't even have to fly down to Austin to learn how to do it. The state of Texas has all the details available on line. And there's actually a lot of details with implimentation when you get down it. All they had to do was change it from the Texas logo to PA.

Any PA TODsters want to educate this guy just let me know and I'll send you the data.

We don't need no stinkin' Granite-NG..


As all the Real Texas cowboys and geologists can tell ya, we won't be freezing, and we won't be in the dark! Who's got a match?

J - Laugh'd my A$$ off - Great way to start the morning.


You can see why I don't believe in these 'SuperTight' building envelopes, then?

You can see why I don't believe in these 'SuperTight' building envelopes, then?

This is just a slight touch of reality intruding onto this thread. Granite typically contains about 2% uranium and as a result outgases radon. Radon is radioactive, but as long as you have adequate air circulation this is not a problem.

Bottom line: if you have a lot of granite in your building, and it is "super-tight", you may want to buy a radiation monitor.

Just thought I'd mention it. We now return you to your original programming.

Oh. And if you are a smoker and are exposed to radon gas, due to highly technical reasons, there is a high probability that you will die of lung cancer - but this normally a problem only uranium mining companies have to deal with. They deal with it by not hiring smokers. Back to your original programming just move along no problem here.

Big Tobacco Knew Radioactive Particles in Cigarettes Posed Cancer Risk but Kept Quiet

Tobacco companies knew that cigarette smoke contained radioactive alpha particles for more than four decades and developed "deep and intimate" knowledge of these particles' cancer-causing potential, but they deliberately kept their findings from the public, according to a new study by UCLA researchers.

... the industry was not only cognizant of the potential 'cancerous growth' in the lungs of regular smokers, but also did quantitative radiobiological calculations to estimate the long-term lung radiation absorption dose of ionizing alpha particles emitted from cigarette smoke

...The radioactive substance - which the UCLA study shows was first brought to the attention of the tobacco industry in 1959 - was identified in 1964 as the isotope polonium-210, which emits carcinogenic alpha radiation. Polonium-210 can be found in all commercially available domestic and foreign cigarette brands, Karagueuzian said, and is absorbed by tobacco leaves through naturally occurring radon gas in the atmosphere and through high-phosphate chemical fertilizers used by tobacco growers.

In 2006, Alexander V. Litvinenko, a former KGB officer and self-exiled dissident, ingested a rare and highly toxic radioactive isotope, polonium 210. It didn't agree with him.

Song for the times?

Apple co-founder Steve Jobs dies aged 56

Former chief executive and co-founder of US technology giant Apple Steve Jobs has died, the company says. He was 56.

"Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve," Apple said.

Jobs announced he was suffering from pancreatic cancer in 2004.

Fellow internet pioneer Bill Gates said Jobs' "profound impact" would " be felt for many generations to come".

Mr Gates added: "For those of us lucky enough to get to work with him, it's been an insanely great honour. I will miss Steve immensely."
'The face of Apple'

"Apple has lost a visionary and creative genius, and the world has lost an amazing human being," Apple said.


Wow. This one came with a big gulp..

RIP, Steve.. Vaya sin DOS, brother! .. from an old PC-Agnostic

Insufficient consideration has been given to the new underground religious war which is modifying the modern world. It's an old idea of mine, but I find that whenever I tell people about it they immediately agree with me.

The fact is that the world is divided between users of the Macintosh computer and users of MS-DOS compatible computers. I am firmly of the opinion that the Macintosh is Catholic and that DOS is Protestant. Indeed, the Macintosh is counter-reformist and has been influenced by the ratio studiorum of the Jesuits. It is cheerful, friendly, conciliatory; it tells the faithful how they must proceed step by step to reach -- if not the kingdom of Heaven -- the moment in which their document is printed. It is catechistic: The essence of revelation is dealt with via simple formulae and sumptuous icons. Everyone has a right to salvation.

DOS is Protestant, or even Calvinistic. It allows free interpretation of scripture, demands difficult personal decisions, imposes a subtle hermeneutics upon the user, and takes for granted the idea that not all can achieve salvation. To make the system work you need to interpret the program yourself: Far away from the baroque community of revelers, the user is closed within the loneliness of his own inner torment.

You may object that, with the passage to Windows, the DOS universe has come to resemble more closely the counter-reformist tolerance of the Macintosh. It's true: Windows represents an Anglican-style schism, big ceremonies in the cathedral, but there is always the possibility of a return to DOS to change things in accordance with bizarre decisions: When it comes down to it, you can decide to ordain women and gays if you want to.

Naturally, the Catholicism and Protestantism of the two systems have nothing to do with the cultural and religious positions of their users. One may wonder whether, as time goes by, the use of one system rather than another leads to profound inner changes. Can you use DOS and be a Vande supporter? And more: Would Celine have written using Word, WordPerfect, or Wordstar? Would Descartes have programmed in Pascal?

And machine code, which lies beneath and decides the destiny of both systems (or environments, if you prefer)? Ah, that belongs to the Old Testament, and is talmudic and cabalistic. The Jewish lobby, as always....

...excerpts from an English translation of Umberto Eco's back-page column, La bustina di Minerva, in the Italian news weekly Espresso, September 30, 1994.

Would Descartes have programmed in Pascal?

A more telling question, would Pascal have programmed in Pascal?

Interesting analogy which begs the age old question, is salvation/redemption/fulfillment through the universal (Catholic) or through the particular (Protestant)? Btw, this does not necessarily warrant a religious answer. Rather it a difference in perspective and mindset. Tory/Whig, Conservative/Liberal, Socialist/Libertarian, Imperialist/Nationalist, Federal/State, etc., etc.

"I will miss Steve immensely."

No intent here to detract from Apple's loss,

but isn't this an example of not truly appreciating
what you had until it (or the person) is gone?

... And can that lesson be extended to our global loss of "cheap" crude oil?
--It was the Steve Jobs of our Apple-like global economy.
There won't be a "substitute" showing up any time soon or ever.

The economists are too often wrong about the "There will be a substitute" prophecy.

I like analogies as much as the next guy, but nobody will ever get a Drudge Report headline saying "Cheap Oil is Dead". At least not everybody will believe it.

And on the economists, how many economists could make a living saying "it's over"?

Nobody will ever get [it from] a Drudge Report headline saying "Cheap Oil is Dead"


but we can be a bit more creative:

The Day the i-Carousel Stopped

(Subtitle: Was it because Steve Jobs passed or because Cheap Lube is no more?)

Electric Bills About To Spike

From Alaska to Georgia and Wyoming to Florida, utilities are seeking permission to pass on hundreds of millions of dollars in new charges to customers to help upgrade aging infrastructure and build new or retrofitted power plants that comply with tougher environmental regulations.
For instance, close to three million customers in parts of Virginia, Kentucky, Ohio, and West Virginia that get their electricity from American Electric Power have seen their rates increase between 48 and 88 percent over the last few years. Those rates are expected to rise an additional 10 to 35 percent in the next three years. The reason? AEP officials are quick to blame environmental regulations that they say are going to cost the company $8 billion in compliance and upgrades.

AEP, which operates in 11 states, says it is raising rates because it needs the cash to upgrade its infrastructure. The company plans to retire five coal plants—which amount to 6,000 megawatts of generation— and build at least two natural gas plants by the end of this decade.
“It’s a relatively recent phenomenon that’s happening because a good portion of the coal plants in use today are at or near the end of their useful lives,” EEI’s Jim Owens explains. Though the specific upgrades will vary among utilities, there is no doubt the costs will be passed on to consumers who will have to shoulder most of the burden despite the economic difficulties they face.
And, a report in August by the nonpartisan Congressional Research Service countered some of industry’s claims of gloom and doom. That report noted most of the plants that will be affected are coal-fired facilities that are more than 40 years old—many of which are already being closed or have been upgraded to deal with toxic emissions.

The report also states that many of the new rules are the result of court rulings mandating regulation. “Some may question why EPA is undertaking so many regulatory actions at once, but it is the decades of regulatory inaction that led to this point,” the report notes.

The trouble is, the electricity from all those old plants is priced with capital costs from 30 or 40 years ago, which were very low compared to the today's cost of new power plant construction. And, the story didn't mention nuclear power plants, many of which are also nearing the end of their 40 year design life. There is a push by the utilities to extend the lives of the nukes, which might be a bad idea...

E. Swanson

Yes. It will be blamed on 'Mommy and Daddy's Regulations', but it seems that in fact, the consumer (via the Utility Middlemen) is going to be increasingly held accountable for the once-free externalities of Coal.

It's not nice to short-change mother nature..

Time to get out the calculators and re-gauge just how uneconomic renewables are..

One other factor not mentioned is the ability of the rate payers to actually pay their bills.

Don in Maine

The way foward:


"Most renewable energy advocates overlook the sub-title of Germany's Renewable Energy Sources Act: the "The Act on Granting Priority to Renewable Energy". The authors wanted to make the law's purpose and intent clear from the title alone, so there would be no ambiguity. They could have used deceptive euphemisms like those so popular on this side of the Atlantic, such as "The Full Employment and Jobs for Americans Act" to mask their intent. Instead, they wanted it to be clear to all stakeholders, and to their parliamentary colleagues, that the law required that renewables be given the "right to connect", and the "right to sell electricity to the grid" as well as priority over electricity from fossil-fired and nuclear generation. The success of the German program is as much about the right to connect and to sell electricity as it is about the specific payment per kilowatt-hour for each technology."

Nat gas pipelines were deregulated decades ago. If you have a well, you can put in and take out elsewhere with a transport fee.

From the article up top by Tom Whipple:

Should the current economic situation spiral down into something similar to the 1930's, and last for an indefinite period, at least two races are likely. This 1st will be cost of producing new oil from expensive, difficult places vs. its selling price; and the 2nd will be between the demand for oil and the amount available. It should make for an interesting decade.

On that note I'm getting some shuteye.

Looks like hell on Earth.

China set to exceed carbon emission forecasts, figures show
Studies warn that the economy is growing faster than expected and may become 'locked in' to carbon-intensive activities

Chicago area expected to endure worst winter weather in nation

"Winter’s going to clobber Chicago again, hitting us with colder than normal temperatures and nearly twice the normal amount of snowfall.

That’s according to long-range forecasters at AccuWeather.com."

Gotta hope Accuweather is not accurate weather.

Well, since that is Obama's old stomping ground, maybe the entire country can be forced to help pay for the city's snow plow costs.

Ouch ! Since that didn't happen last year, I doubt we can expect it this year...

I just came across this great refutation of Yergin on the Harvard Business Review website:


All the growth in supply since then was not crude but unconventional liquids, including natural gas liquids, biofuels, refinery gains, synthetic oil from tar sands, and other marginal resources. These liquids are by no means equivalent to crude. Yergin's calming charts include these unconventional liquids and hide the fundamental issue of the depletion of mature fields. They also hide the declining energy density, higher cost, and lower flow rates of these new resources.

It's by Chris Nelder and Gregor Macdonald. They are peak oilers, and sometimes post here.

From IEA

Energy Industry Leaders to Attend IEA Ministerial

Industry leaders from 35 global energy companies will participate in a ‘Davos’ style meeting of the IEA Energy Business Council (EBC) on 18 October which will take place at the OECD Conference Centre under the theme Co-Operating to Secure a Better Energy Future. The meeting will form the opening session of the biennial Meeting of the IEA Governing Board at Ministerial Level ...

The theme is Government and Industry: Co-Operating to Secure a Better Energy Future. A presentation on key messages in the forthcoming World Energy Outlook 2011 will be followed by an interactive debate on topical energy sector issues, such as the likelihood of a Golden Age of Gas.

Company List

India announces $35 tablet computer for rural poor

Datawind says it can make about 100,000 units a month at the moment, not nearly enough to meet India's hope of getting its 220 million children online.

Um...If all those children grow up trying to use energy like the developed world, we could, just maybe, have a little problem.

Here's a little something for you Liberal Arts types:

"I don’t even know if anyone will be alive in a hundred years, unless it’s bacteria hanging out in hydrothermal reservoirs a mile beneath the surface of the earth. But if bacteria can read, I’d like them to understand that in the last few decades of human existence, one of those humans looked around himself, observed carefully and thought about what he observed, and wrote down the results of that thinking—existential jokes, mostly, which I’m pretty sure bacteria prefer above all other forms of humor."

John Rember's final blog post - http://mfainabox.com/blog/last-waltz/

He's working on a book called "A Hundred Little Pieces on the End of the World", which are small meditations on our current cultural situation.

Pujo Committee “Money Trust” Wall Street Banking Cartel Investigation 1912-1913

For those who wish to understand the true nature of our current financial system, the Pujo Committee’s 1912-1913 investigation of the “Money Trust” is essential reading. The Committee identified a concentrated group of Wall Street bankers who operated a sophisticated financial network unified by 341 interlocking directorships held in 112 corporations valued at more than $22 billion in resources and capitalization exerting significant control and influence over the U.S. economy and monetary system.

The companies and individuals comprising this network were primarily agents of the Morgan and Rockefeller banking empires which dominated U.S. finance following the “Industrial Revolution”. The Committee names a number of prominent banking institutions as participating in this system including J.P. Morgan & Co., First National Bank of New York, Kuhn Loeb & Co., William Rockefeller, ...

Understanding this system of overlapping financial networks and how those networks were used to dominate utilities, railroads, banking and the U.S. financial infrastructure throughout much of the twentieth century is key to the proper analysis of our current economic situation and the influence that the “Money Power” wields over global politics.

In 1912, a special subcommittee was convened by the Chairman of the House Banking and Currency Committee, Arsene P. Pujo. Its purpose was to investigate the “money trust,” a small group of Wall Street bankers that exerted powerful control over the nation’s finances. The committee’s majority report concluded that a group of financial leaders had abused the public trust to consolidate control over many industries. The Pujo Committee report created a climate of public opinion that lead to the passage of the Federal Reserve Act of 1913 and the Clayton Antitrust Act of 1914..

We've forgotten a lesson learned

Cullen Roche has already updated his MMT 101 videos after being out only a few days.

He changes his analogy from a theater to a bath tub among other improvements.


Los Angeles City Council Resolution in Support of Occupy LA, Occupy Wall Street

It kind of makes you long for the inevitable day when the Cascadia Subduction Fault lets go and takes the San Andreas Fault with it, and everything in California is either swept away by the tsunami, or is reduced to approximately the height of a fire hydrant.

Or alternatively, California returns to the real world, but I think the former alternative is more likely, just based on my knowledge of geology and my visits to California.

Makes me happy I live on the left coast.

Cheers to all!

The City Council just wants to keep order in Civic Center in downtown. They are far more to the left then the rest of the nation but any urban area is - by default - more involved in the day to day affairs of its citizens because a lot of people live in a relativity close space.

I think the Council will wait until this burns out. But if the mass crowd becomes more dangerous LAPD reputation for ruthlessness is not undeserved.

Mortgage Fraud Reports Have Increased 88% Since 2010

Reports of mortgage fraud in the U.S. surged by nearly 88% in the second quarter of this year as banks discovered more problem loans made during the housing boom, according to a government report released Wednesday.

The increase was attributed to mortgage servicers performing reviews of loan files after receiving demands from mortgage investors to repurchase defaulted mortgages. Government-controlled mortgage-finance giants Fannie Mae and Freddie Mac and other mortgage investors have been trying to recoup losses by forcing banks to buy back loans that don’t meet underwriting guidelines. ...California, Florida, Nevada and Illinois had the highest fraud rates.

Sesame Street’s New Poverty-Stricken Muppet Will Teach Children About Hunger

The special aims to address the growing problem of hunger in America, where nearly 17 million families like Lily’s have limited access to food, according to Jeanette Betancourt, the senior vice president for outreach and educational processes at Sesame Workshop. Children age six and under make up 9.6 million of those who are hungry, she said.

While they're at it, could they mention to the kids that obesity is becoming a bigger problem than hunger, even in third-world countries. Maybe it's a good thing for kids to be hungry occasionally.

Because of our background as hunter-gatherers, human beings are well-designed to survive short periods of food deprivation, not so much to deal with too much food all the time.

30% of kids in the U.S. are obese, 15% are hungry. It costs us both ways.

Report reveals economic, social costs of hunger in America

Actually the human body is best at consuming a Vegan diet, which is no meat, no dairy, both of which have high saturated fat and no fiber. And what you'll find on that diet is you can eat as much as you want, there is no need to go hungry to lose weight. In fact, its the opposite. Just try staying at your minimum best weight without sat. fat.

Primitive man (before eating meat) ate more bulk than we do, but it was a high fiber diet. That is the basis for our genetics. We get heart disease because we are eating a diet our genes are not designed for. A lion is designed to eat meat, but we are not. We only do so by way of adaptation. It provided more energy, but if that energy isn't burned off the fat accumulates in the body and damages the linings of the circulatory system allowing toxins entry points into the organs. The liver becomes bogged down trying to process those toxins.

My wife and I went on a Vegan diet about 6 months ago. I lost 35 pounds and am now at my ideal weight, but there is no going hungry. Really, it works! We have friends, a couple that only went on the diet a month ago and both have each lost 13 pounds.

But it doesn't even have to be boring food. Get Curry Paste and mix it with Corn flour to make a thick spicey sauce and mix with vegetables and wild rice. It makes for an amazingly great tasting, high nutrition, non-fat meal. Use the sauce sparingly, the more you use the hotter the dish.

Humans are built to be omnivores. Our mouths are equiped with a wide range of teeths,a littleov everything. Our intestines are not short like the carnevours, or long like the plant eaters, but in between. We are built to eat anything and everything. If we just look at the hardware.

Bugs and fruit, the breakfast of champions!

Well, eat like an omnivore and end up with heart disease, high blood pressure, hypertension, stents, pacemakers, etc.

Eat like a herbivore and avoid all those problems. People can eat whatever they want, granted, but they pay a heavy price for consuming large amounts of saturated fat - guaranteed!

I'm sure the medical field with all the hundreds of billions they rake in every year would love your stance on a varied diet. Believe me, I use to be an omnivore and was over-weight, had the beginnings of all sorts of health problems, then switched to a Vegan diet and all those problems simply vanished. I'm sold. However, you can lead a horse to water but you can't make it drink.

People can eat whatever they want, granted, but they pay a heavy price for consuming large amounts of saturated fat - guaranteed!

Actually, it's not guaranteed. As Gary Taubes has pointed out, the scientific evidence against saturated fat is lacking.

The scientific consensus is changing. More and more, it's looking like refined carbs are the problem, not fat or meat.

We are omnivores. In our hunter-gatherer past, about 65% of our calories came from meat.

Your curry recipe sounds delicious, but would it really kill you if some chicken or beef were added? My guess is no. That's a healthy meal, with or without meat. OTOH, scarfing down donuts and potato chips is probably not healthy, even if they're vegan.

We are omnivores. In our hunter-gatherer past, about 65% of our calories came from meat.

Actually, it was probably higher than that in some places. Our early modern ancestors during the ice ages were living in areas where they couldn't have had any veggies or grains in their diets. The evidence is that they ate a lot of mammoth meat with no salads to go with it.

It used to bother the early European anthropologists when they found that the Cro-Magnon men who invaded Europe were a lot bigger and stronger than they were. However, now that Europeans are eating a high-protein diet they are almost as big as the Cro-Magnons were, so they can stop worrying about the decline of the human race.

One interesting tidbit I read was about the Indo-Europeans, the people who originated most of the languages in Europe and India, as well as the wheel, the horse, and agriculture, and whose existence has been deduced largely from linguistic evidence.

Anthropologists excavated bodies from a graveyard that very probably belonged to the early Indo-Europeans, and from that deduced that they had not invented cereal agriculture yet. How did they know that? Of 480 bodies, not one had a single cavity in their teeth. If you don't have carbohydrates or sugars in your diet, you don't get cavities.

We aren't really built for a vegan diet. Our ancestors could never have survived on one before they invented grain-growing agriculture. And after they did, they became much shorter due to a lack of protein in their diets, and their teeth went all to heck.

Agree that grains are more problematic than meat. There was a recent study that found ancient hunter-gathers ate more grain than expected. Still, it was probably much less than most of us eat now. Grains are a lot of work if you're not a farmer.

I think the problems are related. The poor are more likely to be obese than the rich, because healthy food isn't cheap. The classic budget food these days is carb-heavy ramen.

Is Junk Food Really Cheaper?

Healthy food is cheaper than the crap the poor eat. A dinner for four at McD's is more than $20. Roasting a chicken with potatoes and serving a salad is less than $15. Smaller meat portions and more potatoes is even cheaper.

A healthy breakfast (steel-cut oats, splash of milk or cream, piece of fruit, cup of tea or coffee) is under $1/person.

Problem is, eating cheap and healthy food requires 4 things:

1. Knowing how to cook.
2. Feeling like cooking.
3. Having the time to cook.
4. Having a taste for healthy, unprocessed food.

The poor generally lack several, if not all, of these.

By calories, processed foods are much, much cheaper than healthy foods -- that is why the article doesn't actually provide any numbers and dismisses counting calories. I think that article is junk.

Cost of food

Sharon Astyk has written about this. Cooking from scratch takes time and knowledge, which people often don't have these days.

It also requires some equipment. If you don't have a fridge, your food options become very limited.

But I think the link you posted is a bit misleading. The cost given for meals often assumes there's a family, so it's "cheaper" to buy a whole chicken and roast it. But if it's just you, or just a couple of you, it IS cheaper to eat at McDonald's. Also, Bittman's example isn't realistic, IMO. If money's tight, you don't order the stuff he listed. You order off the dollar menu.

About time that food and preparation was taught from kindergarten not some of the rubbish they teach nowadays.


I don't think it makes a whole lot of sense to say we can eat like hunter-gatherers without living the lifestyle of hunter-gatherers. The whole argument for eating meat, apparently, hangs on the fact that, since our primordial ancestors used to do it, we should, too.

That conveniently leaves out the fact that we are a whole lot more sedentary than typical hunter-gatherers.

The fact that they had relatively long lifespans, and were free from a lot of the degenerative diseases we are plagued with today, probably rests on the fact that there was high infant mortality and many did not make it through childhood. If you made it past the age of 15, you might live to 45 years and more, some believe even up to 72 years. You'd need to be pretty strong and disease-resistant to do that.

Once again, people like to cherry-pick. Eat the meat, but be sedentary at the same time.

What we should be doing is adapting our diet to be more in line with our current lifestyles, in order to be healthy for the long term, and our reduced energy footprint. That will mean less meat on the table, like it or not.

I realise, for some, taking meat off the table is as unpopular an idea as taking away the guns or the steering wheels, but the reality is we are going to need to learn to do with less or none.

Interesting article :-


Edit : dietary adaptations take place relatively quickly. Look at the difference between a rural Indian diet and an Eskimo diet as an example. People around the world are adapted to food sources that occur in their local area.

The jury's still out on infant mortality among foraging societies. Today, there's a lot of variation among existing foraging societies, and also some evidence that pre-contact, deaths from disease were much lower than they are now (since what causes disease is contact with other people).

The whole argument for eating meat, apparently, hangs on the fact that, since our primordial ancestors used to do it, we should, too.

That conveniently leaves out the fact that we are a whole lot more sedentary than typical hunter-gatherers.

There's a lot more to it than that. How our ancestors ate is just an interesting side note. In any case, the fact that we are now more sedentary doesn't mean we shouldn't eat meat. It might mean quite the opposite: that we should eat less carbs and more protein. Or it might just mean we should stop being so sedentary.

As for eating meat being hard on the planet...no argument there, at least as currently practiced. Taubes pointed out in Good Calories, Bad Calories that that was one of the reasons for the "eat more carbs, less meat and fat" recommendations adopted by the government ca. 1980. It wasn't the only reason, or even the main one, but it was a factor. Back in the '70s, there was a lot of concern about the population bomb, limits to growth, etc. Eating lower in the food chain was seen as desirable. So if it was healthy, too, well, that was great.

The real world being messy, however, it's entirely possible that what's good for the planet is not necessarily what's good for individual humans on it. In the long run, caloric restriction may take care of the problem. In the short run, I would not be surprised if obesity gets worse before it gets better.

And in the really long run...meat/dairy can be sustainable, and in fact was traditionally the way people survived the lean season (winter in the temperate zone, the dry season in the tropics).

It's a whole lot more energy intensive to produce meat than plants, since animals are higher on the food chain. Just in terms of energetics, if energy resources are in short supply, one should be investing the effort in the easiest-to-procure calories. That would be plants, not animals.

One can grow the plant to feed the animal in order to eat the animal, or one can skip a whole step and just eat the plant.

Most of the rural areas in China and India have lived on a predominantly plant-based, subsistence diet, until the current period of relative affluence has introduced them to the "Western Diet". Not unsurprisingly, the incidence of degenerative disease has increased.

Meat/dairy is not sustainable with populations nearing 7 Billion. One can theorize about where populations will be 50 or 500 years from now, but if one is preparing for a lower-energy future, trying to replace a supermarket-meat-diet with a hunted-meat or home-grown-meat diet seems to me to be a fruitless pursuit. It falls into the category of replacing fossil fuel use with renewables. We know renewables, however useful, will not supply the same BTU's as fossil fuels.

Better to start adapting by getting used to less.

Just in terms of energetics, if energy resources are in short supply, one should be investing the effort in the easiest-to-procure calories. That would be plants, not animals.

Only if your goal is to cram as many humans onto the planet as possible.

Most of the rural areas in China and India have lived on a predominantly plant-based, subsistence diet, until the current period of relative affluence has introduced them to the "Western Diet". Not unsurprisingly, the incidence of degenerative disease has increased.

Taubes argues that it was caloric restriction that made the "Asian diet" so healthy. (He also points out that the original study was extremely cherry-picked.) Basically, if you are underfed, it doesn't much matter what you eat. That's what I meant when I said caloric restriction would take care of it.

Better to start adapting by getting used to less.

I expect "rationing by price" will take care of that.

Young and Thin Instead of Old and Bulky: Researchers Report on Changes in Arctic Sea Ice

... at sites where the sea ice was mainly composed of old, thicker ice floes in the past decades there is now primarily one-year-old ice with an average thickness of 90 centimetres.

and new research on soil carbon

What will happen to Soil Carbon as the Climate Changes? A team of scientists seeks answers

Current view of Soil-Climate Interaction too Simplistic, Warn Scientists

UN agency reports Belgian nuclear mishap, 3 people contaminated

The three individuals evacuated the area and have undergone external decontamination procedures and medical checks. They are now being assessed to determine the level of their radiation exposure.

Utilities Seek Record Loans as Fuel Costs Spike: Japan Credit

Oct. 7 (Bloomberg) -- Japan’s top five electric utilities, shut out of the bond market following the Fukushima nuclear disaster, are borrowing a record 4 trillion yen ($52 billion) in loans at a premium to pay for the surging cost of fuel.

The link Occupy Wall Street Confusing 'Corrupt' And 'Dense' Media broadcasts OWS General Assembly's first statement. The link includes both a Keith Olbermann video and full text of statement.

As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments. We have peaceably assembled here, as is our right, to let these facts be known.

The following oil related comments are in statement.

They continue to block alternate forms of energy to keep us dependent on oil.

They have purposely covered up oil spills, accidents, faulty bookkeeping, and inactive ingredients in pursuit of profit.

I really hope this all goes somewhere and doesn't just fizzle out.

I really hope this all goes somewhere and doesn't just fizzle out.

I hope it goes berzerk on a massive scale. I've already said to my wife, if it goes to SF, CA we'll both go!

Occupy SF has had a camp on Market St for a week or so. Last night the police invaded the camp after midnight and stole all their belongings. The group hasn't grown very large and is about 50-100 folks.
S.F. police break up Occupy SF camp

Thanks for the info. I'll let my wife know. We're going!

I found an interview done a year ago that appears to explain current events. Paul Jay interviews Chris Hedges in two videos (9/6/2010):
Collapse of American Liberalism
Inverted Totalitarianism

I had never heard the term "inverted totalitarianism" before and had to go do a little research on this. It comes from the political philosopher Sheldon S. Wolin who published the article Inverted Totalitarianism in The Nation

While the Nazi totalitarianism strove to give the masses a sense of collective power and strength, Kraft durch Freude ("Strength through joy"), inverted totalitarianism promotes a sense of weakness, of collective futility.

Dunkirk to welcome France’s Largest Methane Terminal

The port of Dunkirk (in Northern France) is to host France’s largest methane terminal and so position itself in the worldwide race for liquefied natural gas (LNG) procurement. EDF Energy (one of the UK’s largest energy companies) has announced its decision to invest in the Dunkirk methane terminal, together with Fluxys G (a transmission infrastructure company operating on the north-western European natural-gas market) and Total (one of the world's largest international oil and gas companies).

Out of 53 methane terminals currently operating throughout the world, five are under construction or under consideration in France. ... The methane terminal, the commissioning of which is predicted to occur in late 2015, will boast an annual capacity ranging from 6 to 13 cubic gigametres. This capacity could be extended in a second phase to 12 or even 16 gigametres, representing 10% of current French gas consumption.

Spin Overtaking Facts in Marcellus Shale Debate

... There are signs the messy public policy debate is causing people to question Penn State and Duke — two institutions with distinguished reputations.

That perception may have come because Penn State has accepted huge donations from people with ties to the gas industry. Some independent experts said Penn State hasn't always handled that situation well.

This year, geologists at Penn State and the University of Wyoming released an industry-funded report on Marcellus Shale projections and economic impacts. It contained a disclaimer that none of the scientists or institutions "makes any warranty or representation, express or implied, with respect to the accuracy, completeness or usefulness of the information contained in the report."

"I'm just shocked by that," said Mark Frankel, who follows science and ethics issues at the American Association for the Advancement for Science. "That sends a very mixed message that doesn't help with our ability to communicate. And it raises the question: If they disclaim all of those things what are they saying about the science that is done by members of their faculty?

Regina refinery explosion injures 10

An explosion and fire has ripped through a refinery in north Regina, injuring 10 people and forcing 1,400 to evacuate the facility.

Eight people were sent to hospital with burns, while two others were treated at the facility owned by Consumer's Cooperative Refineries Ltd.

The company did not say what condition they are in.

All 10 were contractors working on a $1.9-billion expansion of the refinery.

North Korea's malnourished orphans point to scale of humanitarian crisis
Pyonyang yet to respond to Seoul offer of emergency aid as footage hints at disaster following harsh winter and flooding

The shape of things to come? What is the point of bringing kids into a world like this?


I think this 10 minute RSA animate, smile or die probably explains the lack of attention to issues like peak oil better than anything I have seen on the subject.


If you want to know why everyone turns a blind eye and why it is so difficult to raise objections to the current beliefs on the status quo this is it.

Acclaimed journalist, author and political activist Barbara Ehrenreich explores the darker side of positive thinking.

Thank you, Squilliam. Brilliant exposé on the delusion of positive thinking.

As the philosopher John Ralston Saul has said, "The citizen's job is to be rude - to pierce the comfort of professional intercourse by boorish expressions of doubt."

That's a good quote.

He is quite a prolific writer:


Voltaire's Bastards: The Dictatorship of Reason in the West (1992)
The Doubter's Companion: A Dictionary of Aggressive Common Sense (1994)
The Unconscious Civilization (1995)
Le Citoyen dans un cul-de-sac?: Anatomie d'une société en crise (1996)
Reflections of a Siamese Twin: Canada at the End of the Twentieth Century (1997)
On Equilibrium: Six Qualities of the New Humanism (2001)
The John W. Holmes Memorial Lecture (2004)
The Collapse of Globalism and the Reinvention of the World (2005)
Joseph Howe and the Battle for Freedom of Speech (2006)
A Fair Country: Telling Truths About Canada (2008)
Louis-Hippolyte LaFontaine and Robert Baldwin (2010)

The greatest irony of this whole circus between financial crisis and peak oil is this, the financial crisis IMO was caused because there was a bunch of money pumped into bubbles due to a lack of better investments which was popped because of a lack of investment in conventional/alternative energy caused a price spike which sent shockwaves through the economy.

I'm not so sure the bubble was popped by a "lack of investment" in energy - there has been a LOT of investment in energy production. BUt, as people like Rockman tell us, you spend more money drilling more wells for less oil than ever before. The investments in oil alternatives have largely been unsuccessful to date. And, regardless of how much investment there has been in the US, there has been a massive increase in consumption in China, India etc - that is what really raised the price.

What is so amazing is all the people who want to just talk about peak oil and all our other problems that continue to accumulate while we've done nothing about them for the last 40 years are so. Most people have been turned into do nothings. You can blame on government, wall street, the banks or who ever. The real problem are the people who stand around and do nothing. They seem to think they are immune.

You know who you are and your time of desperation will come. I’m not afraid anymore!

The Revolution has started -
Read “Common Sense 3.1” at ( www.revolution2.osixs.org )

Good Luck!

[All you] just talk about peak oil and all our other problems ... [but you have] turned into do nothings.


And the common people have "common sense", really?

So we'll wave Old Glory in Mother Nature's face and she will blink?

So we'll conjure up new words of magic and Mother Nature will listen?

Believe what you will. but there are people here actually trying to change/save the world.
However, a few words of encouragement every once in a while from like minded people can't hurt.

Good luck with the Democracy 2.0 thing.
And wish us luck as well with the Coping-with-Peak-Oil thing.

Occupy Austin plans march from Austin City Hall camp to Bank of America today at 4PM. Yesterday, there were 1,200 people at Occupy Austin.

Thomas Paine is one of my heroes. But he wrote "Common Sense" at a time when America, as well as the rest of the world, had a tiny fraction of today's population. Common Sense 3.1 is doomed to fail because you, and the rest of your organization doesn't have a clue as to what the problem really is.

You actually think the problem is the government. You think that another American Revolution could fix everything by fixing the government. Yet almost every government in the world has similar problems. How do you propose to fix all them?

All humanity is now suffering from the same problems, we have vastly overpopulated our niche. And since our niche is the entire world, we are killing thousands of other species as we march to take over their niche. Our problems are a consequence of the evolutionary success of an exceptionally rapacious primate. And no revolution can fix that.

Ron P.

In the article posted on this thread 'The Peak Oil Crisis: Turmoil Erupts', Tom Whipple writes about the possibility of debt induced depression and the correlation of lower oil prices with economic growth and higher oil prices with economic contraction. Correlations between two variables that are embedded in complex and nuanced, social, environmental, and economic systems do not necessarily prove causation. In order to build on Whipple's assertions, and to add to discussions about the relationship between the cost of energy and economic activity I will argue the following:
Since the 1870s and through the 1930s capitalism struggled with a malaise borne out of a lack of frontiers of expansion and the exhaustion of possibilities offered by the technological innovations of the first industrial revolution (Landes 2003: 234-235). The resurgence of capitalist expansion underpinned by the “second industrial revolution” (Landes 2003: 231-237, 276-281, 288-293, 394-397, 420-421) was driven in many ways by the expansionist possibilities that oil offered. In the 1950s the cost of oil extraction was between U.S. $0.25 and $1.50 per 205 litre barrel (Banks 1980: 43). Each barrel contains the energy equivalent of 1.7 megawatt hours (Banks 1980: 3). It is these enormous scales of use-value embodied in the “dead labour” energy used by machinery and contained within the versatility of oil which transformed the “the organic composition of capital” as written down by Marx’s familiar equation: C = c + v + s, whereby: the value of c - machinery and raw materials including energy - was radically altered via order of magnitude increases in productivity. Likewise, the value of v experienced order of magnitude increases due to “the surplus generated by workers using those machines” via increased productivity. Therefore, the revolution in the nature of c and v facilitated a concomitant revolution in the value of s, the “relative surplus value” accumulated by capitalists as profit (Banks 1980: 17; Braverman 1974: 251-256; Hall & Klitgaard 2006: 13; Massarrat 1980: 36, 50; Nore & Turner 1980: 12-15). This revival of capitalist profit and increased wages enabled an increase in government taxation income and the enhanced supply of capital flows into credit markets, keeping interest rates low and housing mortgage affordable (Berry 1999: 108; Massarat 1980: 32-39). Thus, a self-reinforcing feedback loop was closed between more ubiquitous mortgage availability at low interest, generous hire-purchase credit, the iconic Fordist industries of motor vehicle and household appliance manufacture, and mobility enabled access to new tracts of housing estates – all of which re-invigorated capitalism via new frontiers of expansion (Braverman 1974: 251-256; Klitgaard & Hall 2006: 13; Landes 2003: 395-396; Sheller & Urry 2000: 738).

The critical change that has occurred in recent decades is that this pathway to easy capital formation has broken down. Cheap oil is no longer available at the scales it once was. Therefore, economic productivity relative to the cost of energy input is contracting as the complexity - and therefore cost - of obtaining energy increases. Hence the malaise that plagued Capitalism from the 1870s to the 1930s is returning. It has exhausted possibilities for expansion. In addition as capital scarcity intensifies, the enormous scales of investments needed to replace production declines in established fields will be increasingly impossible. The debt crisis, and demographic shifts toward negative dependency ratios are only compounding the problem.

Therefore, I anticipate in the medium to long term, compounding oil production decline as investments in new fields are increasingly abandoned due to increasing capital scarcity.


Berry M. (1999) ‘Unravelling the “Australian Housing Solution”: the Post-War Years’
Housing, Theory and Society, 16, 106-123.

Banks, F.E. (1980) The Political Economy of Oil, Lexington Books, Lexington, Massachusetts.

Braverman, H. (1974) Labor and Monopoly Capital, Monthly Review Press, New York.

Hall, A. and Klitgaard, K. (2006) ‘The Need for a New, Biophysical-Based Paradigm in Economics for the Second Half of the Age of Oil’, International Journal of Transdisciplinary Research, 1(1), 4-22.

Landes, D. S. (2003) The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present, 2nd Edition, Cambridge University Press, Cambridge.

Massarat, M. (1980) ‘The Energy Crisis: The Struggle to Redistribute Surplus Profit’ in Nore P and Turner T (eds) Oil and Class Struggle, Zed Press, London 26-68

Sheller, M. and Urry, J. (2000) ‘The City and the Car’, International Journal of Urban and Regional Research, 24 (4), 737-57.

Cheap oil is no longer available at the scales it once was. Therefore, economic productivity relative to the cost of energy input is contracting as the complexity - and therefore cost - of obtaining energy increases. Hence the malaise that plagued Capitalism from the 1870s to the 1930s is returning.

I always like analysis that has a historical parallel, and it appears you've nailed a similar time period. Should be interesting to see how it plays out.

Yes, I like this analysis.
Growing capital scarcity is a huge component in the looming problem. Here at TOD and over at TAE, much emphasis has been placed on the role of debt, but from my own studies of this problem, the thing that really stands out to me is growing capital scarcity. One factor in this is that cash itself is rapidly losing its utility as an investment tool. It has become nearly impossible to invest cash at acceptable risk levels. And enormous amounts of capital that could be put to use in the private sector to finance alternative energy and other more useful developments is being sucked away as it finds "more secure haven" in government debt. The irony in all this is that there is still plenty of capital and more and more of it is likely to be provided by the central banks of the world, but its investment utility has plummeted to almost unusable levels.

I rather like this analysis as well - see PE and J'w'ck.
I have been wondering whether the growth of the motorized suburbs (and the introduction of far more women to the paid economy) was part of the reason for the sucessful and still famed American productivity? Returns on labor via the amazing 'efficiency' of cheap oil, and economies of scale, and a highly flexible labor force? Turn that Kunstler phrase on its head - the suburbs were part of the reason this economic model was sucessful?

Now. Done that - where next? ... oops ... oil costing more in real terms, more persons out of work - these persons still must be paid for, however minimally - and infrastructure now costing rather than paying for itself? Fordism and well-paid labor no longer self-stoking the economy?

Germany may buy Greeks' sunshine

In the wake of Japan's Fukushima nuclear disaster, the decision of the German chancellor, Angela Merkel, to close all 17 German nuclear reactors by 2022, alternative sources of energy are set to become increasingly important for Berlin.

"Greece could become the showcase of solar development in Europe's 'sun belt' and that development could become the main driver of Greece's green economic growth," said Costas Karayiannis, chief executive of Greece's only solar energy investment fund, Axeon Navitas. "Germany is the global leader in solar energy and it has a lot less sun than Greece. It makes a lot of sense for it to invest in this type of project here."