Drumbeat: January 13, 2012

Error margins: forecasting energy demand

While economic and demographic predictions are challenging to make at best, long-term forecasts on technological development enter the realm of science fiction. Even attempts to predict a single statistical development in the energy sector can prove problematic.

The debates over the timing of peak oil and the emergence of hydrogen as a mainstream, flexible source of energy are cases in point.

As Danish physicist Niels Bohr said: "Prediction is a very difficult art, especially when it involves the future."

Crude rises near $100 on Iran, Nigeria fears

HONG KONG—Oil prices climbed near $100 a barrel on Friday on revived concerns over a possible embargo on Iranian oil and a strike in major oil producer Nigeria loomed.

Benchmark crude for February delivery rose 77 cents to $99.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2 to settle at $99.10 on Thursday in New York.

Petroleum Prices Set Records in 2011

Without much fanfare, the Energy Information Agency of the US Department of Energy released a report on 2011 energy commodity prices yesterday. It confirmed that crude oil and key petroleum products set annually averaged price records last year. This largely snuck up on us, because it occurred without the kind of dramatic price spike we experienced in 2008 or in the oil crises of the 1970s.

Heating homes with gas gets cheaper

NEW YORK (CNNMoney) -- Good news for homeowners: Natural gas prices are the lowest they've been in years. And they're expected to fall even further, thanks to growing production and slack demand.

North American Oil Production On The Rise

We've been talking a lot recently about North American oil- about new fracking technologies, new formations, foreign countries — namely European powers and China — rushing in to secure a piece of this newfound wealth.

Today, I want to make an important distinction.

Because with all the recent landgrabs and bullish sentiment and headlines about oil boomtowns, I want to make sure you see the forest for the trees.

Let's 'occupy' America's energy revolution

Energy security in the United States may be an achievable goal for the first time in nearly 40 years. Credit largely goes to the shale boom; its epicenters are in places like Texas, Pennsylvania and North Dakota, not Washington, D.C.

The economic benefits -- jobs, royalty and tax revenues and lower natural gas prices -- reverberate nationwide. Forget Occupy Wall Street: This is a real revolution.

Petrobras Sees Quickening Growth in Reserves as Platforms Tap Offshore Oil

Petroleo Brasileiro SA (PETR4), the state- controlled oil producer, will accelerate reserve growth over the next four years as it deploys more production equipment in deep waters of the Atlantic Ocean, the chief financial officer said.

Petrobras, as the Rio de Janeiro-based company is known, needs equipment at discovery sites to meet requirements to classify the oil as proven reserves, CFO Almir Barbassa said in an interview. The company expects to receive 19 production platforms by the end of 2015, he said.

Energy price war breaks out as more companies lower bills

Following an announcement yesterday detailing that EDF Energy will cut its gas bills by 5%, after a decline in wholesale prices; a new energy price war has broken out between some of the major energy suppliers.

Nigeria megacity shows signs of strain amid strike

LAGOS, Nigeria (AP) — Market stalls and food sellers can only return to the streets at dusk to do business or else risk the wrath of angry demonstrators for breaking the nationwide strike. ATMs are starting to run out of money, and gangs of young men have taken over some highways and overpasses.

As Nigeria's indefinite nationwide strike over spiraling fuel prices enters its fifth day Friday, there are growing signs of strain in Lagos, one of the world's largest cities where most subsist on less than $2 a day.

Nigeria fuel subsidy strike: Protests suspended

Nigeria's trade unions say they are suspending protests for two days to allow more talks with the government.

The announcement comes on the fifth day of a general strike over the removal of a fuel subsidy, which has caused fuel prices and transport fares to double.

Ukraine says won't sell gas pipelines to Russia

(Reuters) - Ukraine will not sell its gas pipeline network to Russia in exchange for supplies of cheaper gas, Ukrainian Energy Minister Yuri Boiko said on Friday, ruling out a solution long suggested by Moscow.

Ukraine, which depends heavily on Russian gas supplies, has sought for over a year to review a 2009 deal with Moscow, which it says sets an exorbitant price for the fuel. But talks have failed to produce any results so far.

No new 'gas war' between Russia, Ukraine - Ukrainian PM

Ukrainian Prime Minister Mykola Azarov said on Friday he was sure there would be no new "gas war" between Russia and Ukraine.

"Why should we be in a [gas] war with our Russian brothers? It is an absurd question, we will never even talk about it," Azarov told reporters.

Lukoil lifts gas output, lowers oil production

Lukoil's natural gas output rose 3.2% year-on-year to 22bcm, whereas oil output fell 5.5% to 90.7m tons in 2011, the oil and gas major said in a statement today following a meeting of the board of directors.

Kuwait activist: Police use tear gas to disperse stateless protesters

KUWAIT CITY — A Kuwaiti human rights activist says riot police used tear gas and water cannons to disperse protesters who claim the Gulf nation is depriving them of citizenship and rights.

Iran pressing on with nuclear plans despite growing support for oil embargo

TEHRAN — U.S. allies in Asia and Europe voiced support for Washington’s drive to cut Iran’s oil exports, although fear of self-inflicted pain is curbing enthusiasm for an embargo that Tehran says will not halt its nuclear program.

Russia warns US over Iran oil sanctions

Russia has warned the US that moves to tighten sanctions on Iran would be perceived as an attempt at "regime change", as Tehran appeared to express readiness to return to negotiations and allow UN monitors to inspect its nuclear facilities.

U.S. acts against Chinese oil trader

(CNN) -- The US has slapped sanctions on three firms including a major Chinese oil trader for selling refined oil products to Iran, just days after US Treasury secretary Tim Geithner travelled to Beijing to press for Chinese support on Iran sanctions.

The US State Department announced late Thursday night that penalties would be imposed on China's Zhuhai Zhenrong, the Singapore-based oil trader Kuo oil, and the UAE-based independent oil trader FAL.

China Gets Cheaper Iran Oil as U.S. Picks Up Tab for Hormuz Strait Patrols

China stands to be the biggest beneficiary of U.S. and European plans for sanctions on Iran’s oil sales in an effort to pressure the regime to abandon its nuclear program.

As European Union members negotiate an Iranian oil embargo and the U.S. begins work on imposing sanctions to complicate global payments for Iranian oil, Chinese refiners already may be taking advantage of the mounting pressure. China is demanding discounts and better terms on Iranian crude, oil analysts and sanctions advocates said in interviews.

China’s Wen to Juggle Iran Oil Need With Saudi Ties on Persian Gulf Trip

China’s Wen Jiabao must balance his country’s need for Iranian crude with its budding energy partnership with Saudi Arabia on his first visit to the Gulf kingdom, a U.S.-based specialist in Middle East security said.

Japan vows "concrete" steps to cut Iran oil reliance

TOKYO (Reuters) - Japan pledged on Thursday to take concrete action to cut Iranian oil imports in response to an appeal for support from visiting Treasury Secretary Timothy Geithner, as Washington steps up efforts to sanction Tehran over its disputed nuclear program.

Japan yet to decide on Iran oil cuts

TOKYO (AP) – Japan's prime minister said Friday the government has yet to decide on whether it will reduce oil imports from Iran in line with U.S. sanctions, saying businesses implications need to be considered.

Iran oil ban to put pressure on European supply lines

European embargo on Iranian crude oil will lead to uncertainty over supply to the continent, with Gulf exporters expected to increase production as an alternative source, analysts say.

But higher output from Gulf producers could be limited, and their heavy grade of crude could pose problems for Europe's refineries.

EU Iran Oil Embargo Over Nuclear Work Said Likely to Be Delayed Six Months

A European Union embargo on imports of Iranian (OPCRIRAN) oil will probably be delayed for six months to let countries such as Greece, Italy and Spain find alternative supplies, an EU official with knowledge of the talks said.

The embargo, which would need to be accepted by the 27- nation bloc’s foreign ministers on Jan. 23, also is likely to include an exemption for Italy, so crude can be sold to pay off debts to Rome-based Eni SpA, Italy’s largest oil company, according to the official, who declined to be identified because the talks are private.

Oil minnow Sri Lanka has most reasons to worry about Iran oil

COLOMBO (Reuters) - Sri Lanka may be a minnow in the oil world, but a near total reliance on Iranian crude imports means it has more reason than most to find a way to avoid being caught in the clutches of U.S. sanctions.

The island's only refinery -- the 50,000 barrels-a-day Sapugaskanda refinery -- is almost entirely reliant on imports of Iran's crude. Switching to alternatives is not easy because the refinery has been configured to handle Iran's high-sulphur and high-density crude oil.

The Expert's Report that Damns the Northern Gateway Pipeline

The Northern Gateway Pipeline will explosively increase the scale of oil sands production at a level not in the national interest, says David Hughes, one of Canada's foremost energy analysts.

By tripling oil sands production rates above 2010 levels, the project will "compromise the long term energy security interests of Canadians, as well as their environmental interests," charges Hughes.

How Much Would 'Huge Political Consequences' From the Oil & Gas Industry Cost?

Of the 118 House members who have the Oil & Gas Industry amongst their top 10 contributing industry groups, only two representatives (Edward Markey and Charles Bass) voted against the deadline on the Keystone pipeline decision imposed in HR 1938.

Company cautions against linking well, Ohio quakes

YOUNGSTOWN, Ohio (AP) — Boos, applause and the occasional outburst marked a gathering of about 500 Ohio residents seeking explanations for a series of earthquakes that has hit their area since deep injection drilling came to town.

Once Again, More Questions than Answers

YOUNGSTOWN, Ohio -- Concerned citizens seeking confirmation that a brine-injection well located in Youngstown, Ohio caused 11 earthquakes to shake the Mahoning Valley in 2011 left the Covelli Centre disappointed last night after officials from the Ohio Department of Natural Resources were unable to provide the answers they sought.

State Gets 20,000 Comments on Its Gas Drilling Rules by Deadline

After taking over 20,000 public comments, more than on any issue they have ever faced, New York environmental officials are getting ready for the final phase of work on their proposal to allow hydrofracking of natural gas in the state.

Vision for Affordable Energy Even if Indian Point Nuclear Plant Is Shut Down

Mr. Brennan thinks that New York can get by without the electricity generated by Indian Point and that the city will not be putting itself at a financial disadvantage. Other cities actually make their own electricity, and do so at lower costs than some commercial suppliers, he noted at the hearing. Asked by a city official if he thought that the city should get into that business, Mr. Brennan paused for a minute. “Yes,” he said.

Certainly, the cost of making electricity has declined drastically in the last few years, in large part because the price of natural gas has been dropping. The decrease in price has made electricity from natural gas competitive with nuclear power. In 2008, the price of natural gas was $12 or $13 for a quantity known as a decatherm.

“Right now, it is $3 for a decatherm,” said Joseph P. Oates, a vice president at Con Edison.

Denmark’s Green Europe Meets Chinese Wall as Vestas Cuts Jobs

Denmark’s push for a green Europe suffered a reality check as domestic wind turbine producer Vestas Wind Systems A/S cuts back one tenth of its workforce to survive Chinese competition and a slump in demand.

Vestas Jobs Threat Pressures Obama to Extend Tax Break

Vestas Wind Systems A/S (VWS)’s threat to fire 1,600 workers in the U.S. undermines President Barack Obama’s goal of creating green jobs and adds to pressure on Congress to extend a tax credit that the industry relies on.

Chris Huhne fights solar subsidies ruling

The Government has launched an urgent bid to overturn a High Court ruling that has hit its plans to cut subsidies for solar panels on homes.

Electronic atlas maps US renewable resources

The US Department of Energy’s National Renewable Energy Laboratory (NREL) has developed a new geospatial application to allow for the accurate mapping of potential renewable energy resources in the US.

The interactive tool, RE Atlas, is free to use and available online at http://maps.nrel.gov/re_atlas.

Richard Heinberg: Geopolitical implications of “Peak Everything”

From competition among hunter-gatherers for wild game to imperialist wars over precious minerals, resource wars have been fought throughout history; today, however, the competition appears set to enter a new—and perhaps unprecedented—phase. As natural resources deplete, and as the Earth’s climate becomes less stable, the world’s nations will likely compete ever more desperately for access to fossil fuels, minerals, agricultural land, and water.

Nations need increasing amounts of energy and raw materials to produce economic growth, but the costs of supplying new increments of energy and materials are burgeoning. In many cases, lower-quality resources with high extraction costs are all that remain. Securing access to these resources often requires military expenditures as well. Meanwhile the struggle for the control of resources is re-aligning political power balances throughout the world.

A Mining Law Whose Time Has Passed

IN 1872, President Ulysses S. Grant signed a mining law to spur the development of the West by giving hard-rock mining precedence over other uses of federal land. But the law has long since outlived its purpose, and its environmental consequences have been severe.

Mining claims for copper, gold, uranium and other minerals cover millions of those acres, and the law, now 140 years old, makes it nearly impossible to block extraction, no matter how serious the potential consequences. Soaring metal prices are now driving new mine proposals across the West.

Toward a National Coastline Policy

The White House will work with the states and various groups to develop plans for the "sustainable use and long-term protection" of oceans, coasts and the Great Lakes.

Online Map Shows Biggest Greenhouse Gas Emitters

The agency unveiled a searchable computerized map on Wednesday that allows users to identify the nation’s major stationary sources of carbon dioxide and other climate-changing gases, including power plants, refineries, chemical factories and paper mills. The agency said the data, which was drawn from 6,157 sources and is current through 2010, covered nearly 80 percent of the country’s greenhouse gases from large industrial sources.

How Likely Is a Runaway Greenhouse Effect on Earth?

Goldblatt and Watson have an answer: "The good news is that almost all lines of evidence lead us to believe that it is unlikely to be possible, even in principle, to trigger full a runaway greenhouse by addition of noncondensible greenhouse gases such as carbon dioxide to the atmosphere."

But there is an important caveat. Atmospheric physics is so complex that climate scientists have only a rudimentary understanding of how it works. For example, Goldblatt and Watson admit that the above conclusion takes no account of the role that clouds might play in this process.

Study: Simple measures could reduce global warming, save lives

Simple, inexpensive measures to cut emissions of two common pollutants will slow global warming, save millions of lives and boost crop production around the world, an international team of scientists reported Thursday.

The climate-change debate has centered on carbon dioxide, a gas that wafts in the atmosphere for decades, trapping heat. But in recent years, scientists have pointed to two other, shorter-term pollutants — methane and soot, also known as black carbon — that drive climate change.

Re: Vision for Affordable Energy Even if Indian Point Nuclear Plant Is Shut Down

Many, if not most, of the high rise buildings in NYC should be suitable for cogeneration using microturbines, with overall efficiencies up in the range of 85 to 90%. These come in handy packages and can be installed in multiples to meet almost any load. With the current glut of low cost natural gas, this should be far cheaper than rebuilding an old nuclear power plant.

Which works just fine if the gas stays cheap, which just isn't the way the world works.

It's hard to know what the effects on gas prices will be when this feeding frenzy over gas plays bursts it's bubble.

Shale Bubble Grows on Near-Record Prices for Untested Fields

Jan. 9 (Bloomberg) -- Surging prices for oil and natural- gas shales, in at least one case rising 10-fold in five weeks, are raising concern of a bubble as valuations of drilling acreage approach the peak set before the collapse of Lehman Brothers Holdings Inc.

Chinese, French and Japanese energy explorers committed more than $8 billion in the past two weeks to shale-rock formations from Pennsylvania to Texas after 2011 set records for international average crude prices and U.S. gas demand. As competition among buyers intensifies, overseas investors are paying top dollar for fields where too few wells have been drilled to assess potential production, said Sven Del Pozzo, a senior equity analyst at IHS Inc.

Marubeni Corp., the Japanese commodity trader, last week agreed to pay as much as $25,000 an acre for a stake in Hunt Oil Co.’s Eagle Ford shale property in Texas. The price, which includes future drilling costs, exceeds the $21,000 an acre Marathon Oil Corp. paid last year for nearby prospects owned by KKR & Co.’s Hilcorp Resources Holdings LP. In the Utica shale of Ohio and Pennsylvania, deal prices jumped 10-fold in five weeks to almost $15,000 an acre, according to IHS figures.

Not at all hard to know, when the gas companies can't keep up with the combination of increased demand and well depletion the prices will go up. WAY up.

The gas companies know this, and probably figure they'll be rolling in profits when it happens.


Your comment brings up an interesting question. Namely, what is the rate of depletion of a frac'd well as compared to similar wells that do not require fracing?

If I understand correctly, the Bakkan field is wide but thin. Hence, long horizontal fractures to release the oil. To me that means that after fracing, oil would run freely, but for a time and quantity of oil much more limited than that of a 'normal' field (say, Gawhar?).

If the flow time is low, then won't you need to frac again? Can you even frac the same well twice? Three times? How often? And, won't the fields run into a phenomena of fast depletion shutting down wells as fast as they can be drilled and frac'd (re-frac'd?) or faster?

The same question arises as to frac'd gas wells. It seems to me that a well that has been frac'd to allow recovery must have a limited supply released, or somewhat limited at least. How does that play into the economics of development? Does anyone have an answer?


zap - In essence ("...compared to similar wells that do not require fracing?") there are no similar wells. Fractured reservoirs are uniquely different than conventional reservoirs. Ghawar is more typical of a conventional water drive reservoir: the decline rate will be a function of the reservoir size. A small conventional reservoir might show decline after a few months and then deplete in a few years. A large conventional reservoir might not show any decline for years and then take decades to deplete.

Remember with the fractured shale plays the reservoir isn't the rock per se...it's the fractures that contain the oil/NG. That's why the decline rates tend to be so high: fracture permeability is typically the highest (sometimes by a magnitude or more) in the oil patch. OTOH the reservoir volume contained within the fractures tend to be some of the lowest found PER ACRE in commercial reservoirs. IOW fracture reservoir wells are very high rate producers draining rather small volumes: hence rapid decline rates. Think of air escaping thru a 1" hole in a scuba tank and then imagine air escaping from a 1mm hole in a tank the size of your house: high flow rate/low volume vs. low flow rate/high volume.

Refrac'ng an existing well can be a viable approach. Not so much that a lot of addition production is developed but the incremental cost is relatively low compared to drilling a new well. A refrac might only cost 20% of the original well cost but produce twice as much NG PER $ SPENT as the original well. This was proven to some degree in the Barnett Shale many years ago.

The economics are the same in one sense: ROR. The fractured shale wells can have what appears to be a high ROR but the trade off is a very short life. And if you're a pubco that has to meet the Wall Street demand for continual reserve replacement then you have to drill as many new wells as possible as fast as possible to match the high decline rates.

Remember with the fractured shale plays the reservoir isn't the rock per se...it's the fractures that contain the oil/NG.

Less propaganda! More reading on the technical topics!

"Economic gas production from the Devonian Shale requires permeable pathways combined with matrix storage. These pathways permeable pathways combined with matrix storage."


Bruce - I've drilled Devonian Shale (New Albany Sh) wells in W KY. Be curious to here the details of your first hand experiences. Thanks in advance.

Reading is fine...but doing is a tad better IMHO.

Would you say the Devonian is not what its cracked-up to be ?

But seriously, a simple darcy's law calculation of transmissiblilty even in nanodarcy permeability rock will show that a finite amount of gas can be produced, owing to the low viscosity of the gas.

v = q/A = k/u[dp/ds]

v - velocity
A - cross section area through which flow occurs
q - rate
k - permeability
u - viscosity
[dp/ds] - pressure gradient

A similar calculation for oil will result in a much lower transmissibility, due to the (relatively)much higher viscosity of oil.

Thanks, Rockman. Makes more sense now.


Still it would be cheaper compared to a major nuclear reactor accident at Indian Point.

Depends on how high the gas prices go and how deep people are into using it.

How much would it cost if natural gas prices rose by a factor of ten at current usage rates?

Um, ten times as much?

I think externalities such as environmental damage and health-related effects should be front and center in the econometric calculus.

Certainly the externalities should be accounted for, but I strongly suspect that once all externalities are accounted that natural gas comes out further behind.

And fission would befine, if the plants were not flawed creations made and opertated by flawed humans.

300+ days and Fukushima is still introducing radioactive material into the biosphere.

So is every coal plant in China, and at a higher rate.

Take risk analysis more seriously or I'll start suspecting you are a natural gas industry shill.

It is my understanding (possibly wrong) that NYC is currently receiving just about all the NG that the existing pipelines can carry. This is already a potential problem as the city mandates cleaning up existing oil-fired boilers. If major new pipeline capacity is required, it would almost certainly be simpler to build to the existing Indian Point site, and convert to combined-cycle gas turbine operation using the existing steam turbines (a la the Fort St Vrain facility in Colorado).

"and convert to combined-cycle gas turbine operation using the existing steam turbines (a la the Fort St Vrain facility in Colorado)."

That would not be very efficient. Most nuclear plants use saturated steam at less than 1000 psi. Combined cycle steam generators run at 2400 psi, and have superheaters.

You would have to scrap the turbines and start over anyway. You could put the new plant at the same site, if there is enough free space left. That would save relocating the substations.

Ft St Vrain was an oddball. It was helium cooled, and did use superheated steam. They also discovered helium does not compress well with rotary machines.

"Many, if not most, of the high rise buildings in NYC should be suitable for cogeneration using microturbines, with overall efficiencies up in the range of 85 to 90%."

Would the existing distribution systems be able to handle the extra load?

So, I get it that oil prices dropped temporarily because some people placed a price premium on oil when they thought the would would back Iran into a corner.

But, why is gold so far down from its high mark last year? Are some doomers giving up the fad?

Almost every bit of gold ever found is still around.

Exactly. Which is why I've never understood why silver isn't more valued. Certainly, tons and tons of it have been thrown away in old photographs, negatives and I don't know how many other industrial processes.
It's a limited, non-renewing resource that seems to have far more applications (OK, photographic use has largely gone) but even so. Just a thought.

The price of silver is lower than gold because:

1) There is far more silver in the world than gold, and
2) The film labs recycle the silver from their processing. It's not hard to do.

Interesting factoid: In WWII, the US ran short of copper for wire for the Manhattan project, which produced the first atomic bombs. Since cost was no object, they borrowed tons of silver from the US Mint and turned it into silver wire (a good replacement for copper wire since it has better conductivity.) At the end of the war they returned all the silver to the Mint.

Interesting off-topic factoid #2: The Canadian Mint is going to change the composition of the loonie and toonie ($1 and $2 coins) from nickel and copper alloy to plated steel because nickel and copper have become too expensive to make coins out of.

In WWII, the US ran short of copper for wire for the Manhattan project, which produced the first atomic bombs. Since cost was no object, they borrowed tons of silver from the US Mint and turned it into silver wire (a good replacement for copper wire since it has better conductivity.)

When I was in graduate school in Austin back in the 1970s, the Engineering School had a pulsed reactor, and the power for the pulse came from electrically braking a rather large flywheel. The story that was told was that the initial cable connecting the flywheel and the reactor was copper, and melted the first time it was used -- someone had apparently done their sums wrong. The replacement involved a half-million dollars worth of silver.

The space occupied by the operations research graduate students (where I was) had a wall that backed up to the shielding on the reactor. Every week people in white lab coats came by and replaced the film dosimeters. Years later I sometimes expected someone from the University to show up at my door with questions: "Do you have children? Do they glow in the dark?"

However, that old story fails the basic sniff test, as such stories often do. The conductivity difference is a mere 5.5% or so. If a copper cable "melted", an improvement as trivial as that simply wouldn't help enough to fix the problem properly, i.e. get the replacement cable below the "melting" point with a bit of safety margin. And while academia can be a very strange place at times, normal people would simply install a (considerably) larger-gauge cable, or perhaps a liquid-cooled one. So if they indeed squandered half-a-million in silver, I'd be most curious to know what they could possibly have squandered it on.

Excellent point, I'd never thought analytically about the folklore. Add in that silver's melting point is somewhat lower than that of copper, and it would probably be a wash. OTOH, it was the University of Texas, and they spent money on some strange things. I can verify the weekly dosimeter exchange -- I recognized them because I had worked a summer job where we used them, and saw the people in white coats swapping them out.

Back in my earlier years the wire line companies would have monthly Beer/Bar-BQ parties with the money they received recovering silver from film development.

Now Film recorded logs are obsolete and so are the Beer/Bar-BQ parties. Staff headcount now requires more Attorneys than Engineers.

1) There is far more silver in the world than gold,

Really? I've heard otherwise.


It is this inventory depletion that accounts for there being more gold in the world than silver. Thereís a low physical amount of silver compared to the amount of gold.

Do you have actual data to back up the 'more Silver than Gold' claim?

At the end of the war they returned all the silver to the Mint.

http://www.silverbearcafe.com/private/silvermystery.html has a different POV.

Well according to Wikipedia, estimates of the abundance of elements in the Earth's crust, estimates of the abundance of silver ranges from 0.07 ppm to 0.08 ppm, while that of gold ranges from 0.0011 ppm to 0.004 ppm. That indicates that silver is about 10 or 15 times as abundant as gold in the Earth's crust. The amount of silver mined annual is 23,000 tonnes while the amount of gold mined is 2,800 tonnes, indicating 8.2 times as much silver is mined as gold.

Now, about 95% of the silver mined is consumed for industrial purposes while most of the gold which has ever been mined is around in the form of gold bars, coins, or jewelry, so there is probably more gold sitting around in vaults than silver. However, that has nothing to do with its relative value, which is determined by its relative abundance in the earth and in mines, not its relative abundance in vaults.

As far as the Silver Bear Cafe theory, I'm not that big into conspiracy theories. The reason so much silver keeps appearing on the market is the 23,000 tonnes of it they mine every year. Don't assume that the price of silver will skyrocket, because if it does, they'll open new mines and dig up more of it.

However, that has nothing to do with its relative value,

"value" of something has little to do with objective reality many times. It is why there is egging of Apple Stores over 4i phones and an entire industry dedicated to deception called "Public Relations".

As far as the Silver Bear Cafe theory

1) They have a 'buy Silver' message. To that end, they will take what data they can find and present it in a pro-Silver buying way.
2) They present an alternative narrative with links and far more detail than the other narrative presented WRT the WWII era Silver issue.
3) One version of the narrative requires belief that what one is told via press statements is true. The other version of the narrative requires a dis-trust of large orginizations public statements. Which is the more likely event - you are being told the truth or you are being lied to?

they'll open new mines and dig up more of it.

If Humanity is entering a low energy future - where is the energy going to come for this?

Black smoker mining on the ocean floor and deep water oil tech has lead the way on the equipment needed.It's been awhile since I've followed this but there are million of tons minerals around inactive smokers.http://www.eurekalert.org/pub_releases/2006-02/nsae-tdo021706.php

Silver production runs almost 10 to 1 to gold production.

Data from 1900-2009 http://mazamascience.com/Minerals/USGS/

One has to assume that has been true throughout history.

1) There is far more silver in the world [now, in humans hands] than gold

That statement could be true if most of the silver was consumed, and most of the gold was hoarded throughout history. But I doubt it.

Oops RMG beat me.

I bought silver ca. 1981 because of all of the nonsense about silver being more valuable than gold and other silly jabber was going on back then too, but in reality, the world as we know it didn't end even though publications were announcing imminent economic collapse. The world is still here.

It collapsed for the Hunt brothers and nobody else.

It was at 8, it could go to 700 like they said it would back then but it never ever did, knowing full well it wasn't going to happen, but if it did, a buyer could make some money; the reason for buying silver, to make some money. It stayed purdy much the same for 28 years until last year sometime. I can't remember when off hand.

Of course, had you continued to buy silver all of those 28 years because it is a safe investment, it then has been to your benefit. Remains liquid no matter what. An asset, as it were.

It's different now, but gold and silver could collapse and revert to the low prices once again; doubtful though.

No guarantees for anything in this world.

I don't know how many other industrial processes.

There was a drumbeat discussion back during the Lybia attack because claims of mass quanity of Silver being 'blown up' with every missile used. The resulting discussion had either the explosive or the propellant being based on Silver.

No, the price of oil has nothing to do with what the world thought but only what oil traders thought. News moves the market, temporarily anyway. When traders thought there would be conflict in the Straights of Hormuz then prices jumped. But when those fears eased, prices dropped. Such news has always moved the market and always will. There is nothing surprising there.

What do you mean doomers giving up the fad? As a doomer myself I really don't care what gold does. And I really don't see any important connection between doomerism and the price of gold.

Ron P.

"Doomers" have minimal effect on gold prices. Sovereign and institutional/contract buying and selling drives prices, and it seems there's been more selling recently. That said, gold has held up pretty well considering it has few other uses.

Didn't NASA use quite a bit of gold in the lunar missions and various satelites? Also, electronics in general does use quite a bit, to say nothing of the marriage industry in the West. Indian people also enjoy gold jewelry, as do professional athletes (and amatures, in their medals).

Of course, as was said, the gold does not go away, and it does not react with oxygen. It is, however, actively mined (if in low concentrations), and I have heard is present in solution in sea water.

At some point any metal will be worth the cost of extraction (plus a bit of profit) and will be useful as a place holder in bartered transactions (my wheat, [= .05to gold] for your woolens [= .05to gold]. In the end, it would be the wheat and woolens that have value, beyond the gold, and gold would only increase in value as to fiat currency, as would wheat and woolens. Currencies are easier to use than gold, but subject to sovereign abuse.


Gold is pretty good at reflecting infra red so is used, instead of aluminium, in the mylar reflective blankets used in space missions. It was also used in the engine bay of the F1 supercar for that reason. I have wondered if it would be good for parabolic reflectors since gold leaf is so thin it may be cost effective.


Yes, gold is a good reflector of infrared radiation. I know of at least one building that has $250,000 worth of gold in the windows for that exact reason. I suspect there are others as well. And it does look pretty in the sunlight.

I think the gold foils on spacecraft were so thin that the quantities were minimal. Gold was/is very useful in electronics, it makes great contacts, because the metal won't tarnish with use, as well as being soft and a great conductor. So a significant amount gets used in various industrial products -often in amounts that are too small to profitably recyle at the end of the products lifetime. So there is loss of gold.

won't tarnish with use,

Actually it's the other way around. Seldom used contacts need the gold, often used contacts are self cleaning.

Use doesn't cause tarnish ;·)

Frequently used contacts do indeed gradually oxidize-or maybe they react with other components of the air other than O2 alone, but they present a pitted and burned appearance after extensive use, which gradually gets worse, until they eventually fail.Maybe this is an alternate way of defining oxidation, but it is a commonly used terminology among maintenance people.

Lack of use also results in oxidation, but it is smooth surfaced rather than fine grained granular/pitted in appearance, and can often be easily removed by judicious use of electrical contact cleaner, alone or in conjunction with a very fine file.Emery paper works too, but it leaves particles behind that are apt to cause the contacts to fail again.This is oxidation in the sense we most often use the word I suppose-for instance copper and aluminum both form tough oxide surfaces when exposed to air.This film prevents further oxidation.It's a pity iron oxides aren't similarly tough;cars wouldn't rust out!

Gold is indeed the gold standard;a minute amount is enough to make a very durable and dependable low amperage switch.Any connoisseur of older stereo equipment will tell you that back in the good old days when we played records that top quality brands used gold contacts at all the critical points.

Another interesting use for gold is to make filter lenses for welders helmets. I haven't bought any recently due to stocking up years ago, but if I am not mistaken, you can but the larger of the two most common sizes(four by four something inches) at any commercial welding supply for about twenty five dollars each.They are made by laminating a very thin layer of gold onto glass backing, and essentially last forever, or until they get scratched or broken or pitted by slag particles.

Back in the day, I used to REALLY impress the girls by making presents of them fitted out as purse sized mirrors, mounted in highly polished tig welded stainless frames I made myself.Making one took a couple of hours on a slow day when the shop bosses weren't around.

Cleopatra herself probably used polished gold mirrors.

They are as good as the best silver mirrors, except they cause everything to have a fine golden tint, which I found does not hurt a girl's feelings at all.

Markets are moved by the actions of large, institutional investors, not by the average "doomer", who may own, in comparative terms, a tiny amount of gold.

Since most of the volume trading is apparently done by computer these days, one might ask whether computers are people too.

Edit : "Doomer" computers, anyone ?

All of this negativity reassures me that this gold bull market still has a long way to go.

You'll know it's over when interest rates rise, debt is written off, books are balanced, and everybody and their dog is talking about Eagles vs. Maple Leafs and the fair price for Newmont and Barrick.

You gentlemen can stick with Treasuries and the latest tech stocks. I'll take gold, thank you very much.

Since most of the volume trading is apparently done by computer these days,

You are confusing equities with commodities. Computer programs watch for a difference between stock index futures and an underlying basket of stock. When a gap appears computer programs often sell one and buy the other, locking up the difference as profit. There are no such programs for commodities. The only commodity index traded is the CRB index but it is too thinly traded for computer programs.

Individual traders make up the vast majority of oil futures trades.

Ron P.

Thank you for the correction. Does that include ETF's ?

The big investment banks will trade anything where their software can make a profit. The window of opportunity that can be exploited by the computers has become incredibly small. So much so that a firm is laying a new $400M trans-Atlantic fiber optic cable in order to shave five milliseconds off the transit time. The London investment banks are apparently lined up to buy capacity on it, because they believe five milliseconds is enough to give them a competitive advantage.

<sarcasm>Who says investment banks don't create jobs?</sarcasm>.

This is what resources are being used up for ? Yikes !

Yikes !
Gaming zero-sum gamesprocesses is big business.

The big investment banks will trade anything where their software can make a profit.

True but the only anything that exist for these programs to trade is in equities verses the index. And this is mostly the S$P index and a basket of shares that represent the index. However the Dow index and a basket of Dow shares are traded as well.

The window of opportunity that can be exploited by the computers has become incredibly small.

Yes it is. The period of time when the S&P index is unbalanced against a basket of stocks that represents the index, may exist only for a few milliseconds. Computers and their programs constantly track the index and the basket of stocks. The instant a profitable gap opens up then "Bam" the index and the basket of stocks are bought and sold. And perhaps only minutes later the trade is closed in the opposite direction. However this situation exist only in equities. That was my point.

Of course if such a situation did exist in oil futures then big investment banks would obviously build computers and programs to take advantage of it. But it does not and they don't. There is simply no Crude Oil index to trade the futures against.

In equities the spread, between the index and the basket of shares, guarantees the computer traders a profit. There is just no way to guarantee a profit in this manner when trading crude oil futures.

Ron P.

True but the only anything that exist for these programs to trade is in equities verses the index.

High-frequency arbitrage trading has been observed in large liquid markets for many types of securities, including bonds, foreign exchange, and many sorts of futures (although oil futures may not meet the criteria). These other opportunities are more often between markets rather than between different securities within a single market -- eg, buy yen for dollars in New York and simultaneously sell yen for dollars at a higher price in Geneva. Some of the practices include finding very short-term statistical timing patterns as well: a price jump in yen in New York may be consistently followed 200 milliseconds later by a price jump in Geneva, so if you can get your order handled in 100 milliseconds, you make money.

Academic speculation -- the real information is considered deep, dark trade secrets -- is that some of the firms that specialize in this have software that can recognize a pattern, make hundreds of profitable trades, and abandon it, all within a few minutes. I have met one mathematician whose job could be described as thinking of new kinds of patterns and fast algorithms for reliably recognizing them.

Does that include ETF's ?

I cannot tell you what percentage of crude oil futures is ETFs, hedge fund trading or individual speculators. I can only say that oil futures does not lend itself to program trading. That is catching a small window of time when it would be profitable to trade the commodity verses the index because there is no index.

But hedge funds and ETFs do not move in and out of the market on an hourly, or minute, basis like traders so I suspect that they do not have nearly the volume individual traders.

ETFs have a lot of volume in their shares but that does not mean that they have an equal amount of volume in their futures trading. ETFs are either a long ETF or a short ETF. That is they hold a quantity of all long contracts or short contracts. As their share holders move in or out by the thousands they may only need to adjust their contract holdings by a small amount.

Ron P.

There is a large amount of paper gold out there which has no backing and many of the major banks use that to manipulate gold prices. The evidence for this is the fact that most of the so called gold reserves backing all the major gold ETF's have never been audited and all attempts at it have been in vain.

As of right now the price of paper and physical is the same but I don't think that will be the case if a major financial meltdown occurs(which I must admit might never happen). I know for a fact that there is a shortage of physical gold in my country because in India people don't believe in financial instruments like ETF's. I had recently inquired at many shops and they were all out of coins citing the heavy demand. I guess in the west most of the people buy gold through ETF's and hence they don't notice this thing.

Same is the case with silver, the outstanding claim is far more than the physical stock

So there's a lot of manipulation going on, although it's not the only reason for price fluctuation just as with oil, seasonal demand and investor sentiment also plays a role. I am guessing that big investors have cleared out their positions since the deluge of articles in MSM about gold in the past few months.

As for the thing about doomers and gold the association is just plain silly IMO. Gold does not provide safety to you in all circumstances. Gloom and doom scenarios vary a lot, it's not that gold will help you if a nuclear warhead hits your country or if there is a sudden economic collapse.
Gold helps you escape with your wealth in case you have to flee as a refugee to a neighboring country (as was the case with my grandfather) and start a new life. IMO that's a very specific case of gloom and doom and not at all paranoia.

Gold helps you escape with your wealth in case you have to flee as a refugee to a neighboring country (as was the case with my grandfather) and start a new life. IMO that's a very specific case of gloom and doom and not at all paranoia.

I certainly know people who have survived due to the gold they had, but it didn't protect their wealth. They were all invariably poorer afterwards, but alive. They didn't escape with their wealth. There seems to be a meme that today's ponzi wealth can be turned into gold and then miraculously turned back into wealth on the other side of the collapse. Somehow I don't think it's going to work that way.

There is a story that when the Mongols invaded Baghdad, they locked the Caliph in his treasury with all his gold and no food. When the Caliph protested that he could not eat gold, the Mongols told him he should have spent his gold on providing for his army and defense rather than hoarding it.

The Mongols also used paper money because of the problems transporting all that heavy looted gold from one end of their empire to the other. Traders could swap gold for paper money from a Mongol at one end of the the Mongol empire, and (after months riding on a camel) trade it in for gold from a Mongol at the other end.

I don't have any speculative comments. I have seen it with my own eyes multiple times so that's about it. Besides that you said it yourself, it helps you survive, that's the whole idea sometimes.

Regression to the mean- gold can be in a secular uptrend that doesn't mean that it will always be higher than the previous price. $1900/oz might just have been an overshoot and the price is just reverting to the trend line. Since 2000 it has gone up about 6 fold even with the latest correction.

LOL. Just because gold is in a bull market do you expect it go up every month? It had a 20% correction ($1920 - $1520). Most probably the correction is over. We will see.

Last day of the year gold prices: 2000 = 274.00; 2001 = 279.00; 2002 = 348.00; 2003 = 416.00; 2004 = 439.00; 2005 = 519.00; 2006 = 638.00; 2007 = 838.00; 2008 = 889.00; 2009 = 1097.00; 2010 = 1420.00; 2011 = 1566.00.

Plus 10% for 2011; outdoing all the equity averages.

It ain't over 'til it's over.

Historically gold has been worth approximately the value of one week's work by an ordinary laborer. That being said, it is overvalued today.


Never before in history have we had such a population bubble, as well as peak oil and peak gold.

The conditions for gold could not be better. At the present price it hardly strikes me as overvalued, considering the extreme valuations of all manner of other "assets."

Oilman Sachs, your comment reminds me of that cartoon of a bunch of business men and bankers at a meeting where someone says that the end of times is pretty much upon us but the economic opportunities leading up to them are looking great!

The Midas touch comes to mind as well. Gold isn't very edible and it may not be as valuable as a lot of people seem to think it is now, if and when things begin to unravel.

What amount of gold is worth one week of labour?

I'm pretty sure it's one troy ounce.

One of them magic units I see. 1 troy ounce = 31.1034768 grams according to google.

There is that same 5X as the price of oil over the same period: $25/barrel back then and flirting, again, with $125/barrel now.
Is averaged oil, basically, just tracking averaged gold?

A fun graph:

That inflation adjusted price chart clearly shows that something profound happened around 1998.

(Hint) end of easy oil.

But, why is gold so far down from its high mark last year

Of course, when you say "prices" what you mean to say is "as denominated in US dollars". There is an almost perfect negative correlation between the US dollar and gold, so the recent weakness in the price of gold as priced in $USD can mostly be attributed to the recent strength of the dollar, especially vs. the euro.

The largest global demand for gold is actually the Jewelry sector, up to two-thirds of annual demand according to wikipedia, especially China and India.

That said, there has been renewed interest from central banks, especially China:

China Gold Hoarding Turns More Traders Bullish

However, they are walking a tightrope. Sell too many of your $USD and the price of gold goes up as the dollar goes down, making future gold purchanses more expensive and reducing the value of your remaining $USD.

The other thing to watch this year is the new Pan Asian Gold Exchange which is reported to be opening this summer:

Positioning To Profit From The Pan Asia Gold Exchange

Not sure if this is a "game changer" (remember the hype about the Iranian Oil Bourse a few years ago?), but it could give many millions of Asian a whole new way to love their gold.

It is, after all, the year of the dragon.


But, why is gold so far down from its high mark last year? Are some doomers giving up the fad?

Perhaps the realization is finally hitting home: gold is valuable because it is a rare metal that is malleable and pretty. Oil, on the other hand, is "merely" the foundation of our modern civilization. When oil prices break loose from gold, I hope all my ducks are in a row, because "prep time" will be over.

Global Stakes: Potential Agricultural Productivity Losses from Full Exploitation of Canada’s Oil Sands

Full exploitation of the Alberta oil sands deposit would have the most severe impacts on regions where the poorest countries are concentrated. In this note, David Wheeler suggests that full exploitation of Canada’s oil sands deposit would impose significant agricultural productivity losses on over 3 billion people in the developing world, and particularly in sub-Saharan Africa.


re: Global Stakes: Potential Agricultural Productivity Losses from Full Exploitation of Canada’s Oil Sands

The author of this paper has either gone off his meds or he is just blowing smoke. None of what he says will happen is possible to do. Let's take an example:

The Alberta Energy Resources Conservation Board currently estimates the deposit’s potential yield at 1,804 billion barrels of crude oil (AERCB 2011). For this analysis, I assume that the entire deposit will be mined and the extracted crude oil burned by 2100.

The document he is referring to is ERCB ST98-2011: Alberta's Energy Reserves 2010 and Supply / Demand Outlook. If you just Google that phrase, you can probably find a copy on the Web. It will tell you more about Alberta's energy resources than you ever wanted to know.

However, what the document really says is:

Reserves and production summary, 2010
(billion barrels)

Crude bitumen
Initial in place 1,804
Initial established 177
Cumulative production 7.5
Remaining established 169
Annual production 0.589
Ultimate recoverable 315

As experienced oil men know, the oil in place is far different than the recoverable oil. You can never recover all the oil in place, and the percentage you can recover is known as the recovery factor. For conventional oil, recovery factors range from 10% to 80%, approximately.

The "established reserves" of the oil sands is the oil than can be recovered at current prices using current technology. The ERCB estimates this originally was 177 billion barrels, giving a recovery factor of 9.8% of the oil in place. Thus less than 10% of what the author claims is the oil sands "potential yield" is actually recoverable. About 169 billion barrels of this remains to be produced, which is a lot of oil, but it's less than either Saudi Arabia or Venezuela claim they have.

Then, if you look at current production rates, they are a bit under 0.6 billion barrels per year. At that rate, it will take nearly 300 years to produce all the recoverable oil, so his assumption that 1804 barrels could be produced in the 88 years before 2100 is just completely impossible. It would take over 3000 years to produce that much oil.

If you assume that production rates can be cranked up so that production is quadrupled to 2.4 billion barrels per year, then you could conceivably produce all the established reserves by 2100, but that's still less than 1/10 of what the author is assuming. Even quadrupling oil sands production rates means that Alberta would be producing more oil than the entire United States does now. The available water, natural gas, and labor supply in Alberta probably doesn't permit that production rate.

I haven't checked all his other calculations, but I assume they are similarly whacked.

P.S. The "ultimate recoverable" reserves (URR) are those that could be produced if cost was no object using technology that hasn't been tried yet. Kind of a "blue sky" number that oil stock promoters like to use.

P.S. The "ultimate recoverable" reserves (URR) are those that could be produced if cost was no object using technology that hasn't been tried yet. Kind of a "blue sky" number that oil stock promoters like to use.

That statement is just plain wrong.

Reserves are only reserves if they are recoverable using existing economic and operating conditions. Recoverable reserves is redundant.

Oil that are not recoverable has another name: deposits

Ultimate Recoverable Reserves spins farther into gibberishland, oil that has already been produced has another name: cumulative production

Cumulative production + Reserves = Ultimate Recoverable Oil.

What you are describing is: not yet technically recoverable oil.

Okay, I was being a bit loose in my definitions. Delete the word "reserves" and substitute the word "resources". It's still abbreviated URR.

You have to realize that I'm doing a bit of translation for the rest of the world because Canada does not actually use the same system of reserve/resource classification that the US does. They have developed their own terminology. The description of what they are talking about, from the ERCB document, is:

Ultimate Potential

Ultimate potential numbers represent recoverable quantities. They are determinations done on a provincial basis and at a future end of the day timescale. These estimates are the result of considering all development of an energy resource up to the time of the estimate and looking forward to cessation of exploration activity and the type of technology that might reasonably be expected to be used in the future. Future-based economic circumstances are also considered. The goal of these estimates is to supply a reasonable look forward so that production forecasts and government policy decisions can be made with a credible look forward for energy resources.

So, what they are doing is long term planning (50+ years), estimating the amount of oil that might reasonably be recovered using technology that can reasonably be expected to be developed and prices that can reasonable be expected to be reached over that time frame.

The following Seeking Alpha item, "North American Oil Production On The Rise," linked uptop, had an excerpt from a 2007 NYT article that had another CERA/Yergin data point, showing CERA's steady decline from Peak Optimism in 2005. I have shown the new data point in bold, in an excerpt from my Yergin essay:

CERA has shown a definite, but little noticed, trend of declining rates of increase in predicted production ("capacity"). In fact, it appears that CERA hit Peak Optimism regarding future production increases several years ago, in 2005, when Daniel Yergin predicted a 20% increase in total liquids production within six years (a 3%/year rate of increase).

In 2006, Mr. Yergin’s associate, Robert Esser, predicted a 25% increase in total liquids production within nine years (a 2.5%/year rate of increase).

In 2007, Daniel Yergin predicted a 20% increase in total liquids production within 10 years (a 1.8%/year rate of increase).

In 2011, Daniel Yergin predicted a 20% increase in total liquids production within 20 years (a 0.9%/year rate of increase).

Note that there is a “Receding horizons” trend in CERA’s predictions for when the fabled 20% plus increase in total liquids production will arrive--first six years, then nine years, then 10 years, then 20 years--matched by the steady decline in the predicted rate of increase in production, from 3.0%/year to 2.5%/year to 1.8%/year to 0.9%/year. At the ongoing rate of increase in the time period required to reach the promised land of 20% higher production, in 2016 CERA will be predicting that the 20% plus increase in production will be achieved in about 55 years.

Original Yergin Article:

2007 NYT article: Oil-Rich Nations Use More Energy, Cutting Exports

"At the ongoing rate of increase in the time period required to reach the promised land of 20% higher production, in 2016 CERA will be predicting that the 20% plus increase in production will be achieved in about 55 years."

It sounds like a new Yergin unit has just been born--the "Yergin Rate Of Receding Horizons" or YRORH '-)

Interesting Eurozone fact of the day, from the WSJ: The cost of insuring $10 million of Greek bonds against default for five years has risen to $7 million.

The epitaph of Edward the Black Prince:

Whoso thou be that passeth by;
Where these corps entombed lie:
Understand what I shall say,
As at this time speak I may.
Such as thou art, sometime was I,
Such as I am, such shalt thou be.



And Reuters is reporting that S&P will downgrade French and Austrian debt:


It may not implode... who knows...

Seems Spain and Italy bond sale with lower rates than what many feared.


One of the foreseeable consequences of Peak Exports is that there will not be nearly enough exported oil available to generate the economic activity necessary to service the debts that OECD countries are incurring. So it appears to me that it is when, not if, that most OECD countries that are running deficits are in the same predicament as Greece.

It's been five years since I first recommended the "ELP Plan."


I agree. ELP is quite awesome.

For the short term, at least from a novice POV, it seems investers are burning cash through the bond markets, even the shaky ones. Got to keep it moving or park it right? Well, they park it in bonds to play the game. US bonds surged after our downgrade. Spain and Italy bonds sell well and at less risk-signaling rates. So either there's some hope in the system or this is just the guy splashing before he goes under. :-(

For the long term, well... if resources peak as we stay in overshoot... all the bond games turn to electronic dust as far as I can tell.

The flow into US Treasuries reflects a worry of one's return OF ones money rather than the return ON one's money. When you have more than FDIC insured money you have a choice whether to accept the credit risk of Citi/BofA/fill in your bank's name or the credit risk of the USA.
Investors are not chasing yield by buying treasuries - they are chasing security.


Amen - that was my criteria.

In my classes I add (with credit to Mr. Brown of course)and "H" for Humanize, meaning to work on building connections with others in your community. HELP!

"Good news for homeowners: Natural gas prices are the lowest they've been in years. And they're expected to fall even further, thanks to growing production and slack demand." As mentioned before my company isn't chasing the shale gas plays. Our conventional NG plays are more profitable but now that NG prices are sliding below $3/mcf we are dropping a number of 2012 drilling projects. May start looking at NG production acquisitions from companies crippled by the low price. Yes...we do eat our own...nothing personal, just business. LOL.

But seriously, this can't bode well for the shale drilling pubcos especially the ones remaining in the non-oily shales. The companies drilling the Marcellus may have had an advantage over Gulf Coast companies with lower transport costs but the falling prices are reducing that leverage significantly.

Pure speculation: If the falling NG prices reduce the shale play drilling activity the high decline rate of those wells will quickly reduce available volumes. But what if the economy is sinking back into recession and may kill more demand and thus reducing desire for domestic NG drilling. AND if LNG imports remain viable with the lower prices? Perhaps the US will become increasingly dependent on imported NG as it has become on imported oil.

Granted, lots of what-ifs but sometimes what-ifs become reality.

Art Berman noted that about 40% of current Texas & Louisiana gas production comes from gas wells put on line within the previous 12 months.


Just to emphasize the significance of NG price movements in the last year or so: For those of us using $5/mcf a year ago as a basis for our economic analysis we're now looking at something closer to $2.70/mcf. That's almost a 50% reduction. And it can get worse: in a couple of months I'll be turning on a new well in Camron Ph, La. We'll be getting Henry Hub less $0.40. Today that looks like it's heading towards $2.40/mcf. We would have never drilled that discovery well had we used such prices in our economic analysis. Will still make a little profit but nothing to get excited about.

R- Do you know if that new well is likely to be a little wet to offset the lower price of gas?

S - Yes...it will yiend about 20 bbls of condensate for every one million cuft of NG. We try to focus on NG targets with such liquid yields. But at the end of the day it's still about ROR. By the time we have the production facilities installed it will be about a $10 million investment. My owner is a great biz man. If we can't get a return as good or better than one of his other companies part of our budget goes to them. Between lower NG pricess and anticipated loss of certain tax benefits (when president Obama is re-elected) promoting drilling we've reduced our 2012 budget from $120 million to $80 million (remember we only take 50% of a deal so our cut represents an $80 million cut in driling projects. We may start focusing on acquiring NG production from companies crippled by the low prices. I also have an EOR project I'll do a pilot program this year. I tease folks about the oil patch not being their mommy but it's really that simple: if the profit isn't there for private companies we're not going to drill. Between the economics and govt tax policies we just respond accordingly.

The best thing the public has going for it (with re: to NG supplies) is the pressure on the pubcos to keep replacing reserves even if the profitability is minimal. Between what appears to be a lack of finance capability, declining NG prices, competition from imported LNG and perhaps an awakeniing to the somewhat Ponzi nature of some of the shale plays we may seeing the Chesapeake et als heading for a wall they can't leap. It's difficult to anticipate the impact of LNG imports on domestic reserves. But remember those producers may have invested 100's of $billions on compression facilities that's a sunk cost. The operational expense isn't that great...they are using their stranded NG to fuel the operation. Thus they can cut their sales prices and still generate an attractive cash flow even though it may be generating little to no profit on the original investment.

Sounds a bit similar to the situation we've gotten ourselves in with re: to imported oil, eh?


Are you factoring associated gas from the Bakken into your calculations? The drilling for dry gas in the shale plays may let up, but the Bakken will continue to be drilled for the oil and NG liquids.


Are E&P Companies Coming To Their Senses About Gas?

The chart, however, shows the dramatic growth in the state's natural gas production since the Bakken formation oil shale play commenced in 2006 and that production continues to grow. For the last 12 months, the state's natural gas production has grown by 50%.

aws - Not so much factoring anything...just making some general statements. I don't know the Bakken very well but from what I see on TOD it looks to be somehwat better than the topical fractured shale plays we talk about. And there are some local spots in those plays that are much better than average. A friend’s company just loaned $100+ million to a company that found a very sweet spot in the Marcellus. And his company doesn't get impressed with anyone's press release: they do excellent hardnosed reservoir engineer with some of the tops hands available. Thus they've rejected the great majority of loan requests from other players in the Marcellus. That what's makes it difficult for folks to judge these plays: companies hype their big wells and publisize nothing about their disappointing efforts.

Are you factoring associated gas from the Bakken into your calculations?

I doubt he is.

More than one-third of the gas produced in North Dakota is burned off as a byproduct of the state's escalating oil production, state Department of Mineral Resources statistics show.


el 'Rockman claims it is not economical to connect these wells to sales.

On the other hand, the amount of gas produced from the Bakken will likely not decline as fast as typical oil production, due to the nature of the oil and reservoir temperature. Bakken associated gas is rich in ngls.

The recovery of ngls and dry gas from flared gas is the same - Not a fricken' gallon and not a fricken' scf.

Rockman, I'm in the middle of this Shale Mania in a way I never expected a year ago. I agree with your outlook, but I hope we are both wrong for a little while longer.

In the last six months I have moved away from the Gulf Coast to get away from Hurricanes and to prepare for peak oil or even a currency collapse(yeah I'm a doomer). I aquired a 40+ acre mini cattle ranch, then later another 20 acres adjacent to it in Central Louisiana. The previous owners for some reason did not reserve mineral rights which I really didn't care about when I made my offers. I care now!

Well a couple of days ago a Landman for an oil properties company based in Lafayette La. came buy offering 200 dollars an acre lease for 3 years with 20% royalty which a few people in the area jumped on post haste. I don't know whether to follow my instincs about the shale craze being short lived and take the money now, or wait for the oil company that may try to put a unit together to pick me up at the end of the process possibly just prior to getting a force pool order. My problem is that if this land company is just speculating there may not be a well drilled in our area for a while and I will have given up free money.

I'm currently trying to research recent wells in the Tuscaloosa maring shale so I can make a wise decision. Any thoughts from anyone?

As an aside the Ultra Deep Water GOM is getting ready to have more rigs than qualified employees that they need to run and service them. It's getting real goofy, real soon unless we have a major market downturn.

wild man - All I can is offer ignorant unreliable advice...so here goes. If they are playing the TMS then it's all speculation at the moment. Devon has at least 250,000 acs in the Florida parishes and has done some drilling. But no details on the results. But it will take a long time (a couple of years at least) to get even a slippery handle on the TMS potential IMHO.

I give you the same advice I give all land owners that don't have access to the technical details of the play: take the money. But in La. you do have a better shot at a forced pooling. And try to make them give you a check when you sign if you go that route. Otherwise they'll try to play you as an option. With NG prices going south I can see a lot of shale gas land plays not closing.

Good luck.

When I worked in the land department of an oil company, we let most of the leases drop without drilling them. We would buy up leases in an area before we drilled the first well because if we bought them after we hit something major, the cost would be astronomical.

The fact was, however, that we didn't hit something big very often. In most cases, after the first two or three wells, we gave up because we were wasting our time.

The $12,000 bonus payment is money in your pocket, the royalty rate of 20% sounds reasonable (I can remember when the standard was 12.5%), and if they don't drill it (highly likely) the lease will drop after 3 years and you can lease it to someone else if gas prices improve. However, you might want to check with your neighbors to see if what they are being offered is comparable.

You also want to read the fine print carefully and have a lawyer check it because you are, after all, in the US. I was working in Canada, where if there was any shady dealing, the provincial government would revoke the landman's license and give the oil company a slap upside the head. The US tends to be different.

Thanks for the advice guys it really gives me another perspective. I'm going to do a little more research, but I have some knowledge that one of the large drilling contractors in the Haynesville is planning the mobilize some rigs into my Parish.

Man I wish I could find my magic 8 ball.

The unseasonably warm, dry weather that we have been enjoying on the west coast has depressed demand for NG here. But, since we get a fair amount of power from hydro, I'm wondering what will happen this spring to demand when the gas turbine plants kick in to make up for the lack of spring runoff.

Looking at the EIA ng supply figures and the relatively mild weather forecasted, I can't see how a shake out can be avoided. We're half-way through winter now and ng is selling at a ten year low. Wall Street may have been willing to finance the overproduction based on the reserves story, but that will come to an end. Investors require a return at some point. And when the money guys figure out they've been played for chumps (as I believe they have been), I wouldn't be surprised to see a headlong dash for the exits. Then it may be much harder for the NG players to get Wall Street to ante up for next go round.

NG rig count has been dropping since October, there has to be a reckoning and I don't think it's far off.

Baker-hughes US gas rig count down to 791 today. That is 111 less rigs drilling than this week last year. The latest estimate on keeping production stable that I have read was 800 rigs. Can you imagine revenue with a fall in production and prices staying this low?

I have to believe that there are a lot of disappointed investors out there asking where's the payoff. The problem is, who knows what the real breakeven price is? Rockman says $5/mcf was enough to be attractive a year ago, but at current prices, I think money will start drying up. NG has been subject to so much hype in the past few years that time is ripe for disillusionment.

Saving a limited resource while providing a low price to the consumer? It is, indeed, tragic.

KD: I'm guessing you're being sarcastic. If I'm wrong, tell me. But clearly we are not saving a limited resource -- just the opposite, we are depleting that limited resource as fast as possible which is why the price is low. Yes, the consumer gets the benefit of a low price for a period of time, but for how long? And every cf of NG they extract now is one less that will be available down the road.

Americans have been fed a story of natural gas as our energy savior, investors have bought into it, politicians have bought into it. The low prices we see today are not a reflection of the true value of NG but rather of the insane way we allocate resources. But we are human, after all, and if it's on the plate, we're going to eat it. Portion control does not apply at the energy buffet.

Yes... poorly worded on my part.
If there is no drive to drill more, then the resource is conserved (relative to the situation where they drill a lot and release a lot more). In the meantime, the price is low.

"if it's on the plate, we're going to eat it"
Down to the very last of our ability, I fear. The Gorilla situation, at the bottom of this Drumbeat, is most disturbing to me.

Re: Petrobras to Accelerate Oil Reserve Growth With New Platforms, CFO Says, up top:

P-57 oil platform construction

P-57, um navio-plataforma de 54 mil toneladas

IBM creates magnetic memory out of atoms

Scientists from IBM Research have demonstrated the ability to store information in as few as 12 magnetic atoms. This is significantly less than today's disk drives, which use about one million atoms to store a single bit of information.

Ok I admit I was wrong about peak innovation in electronics, looks like miniaturization is alive and kicking, though this doesn't change my stance about energy consumption due to electronic gadgets, Jevon's paradox is alive and kicking as well, last month I happened to see a demonstration of tiny cameras and a storage device embedded in the cop's hat in China. Just goes to show that as electronics becomes more efficient it will become more ubiquitous as well.

The last paragraph in the article is telling:

The scientists at IBM Research used a scanning tunneling microscope (STM) to atomically engineer a grouping of twelve antiferromagnetically coupled atoms that stored a bit of data for hours at low temperatures.

I admit that it's an interesting result: 12 atoms can form a stable magnetic structure whose state can be changed and will persist for hours at some low temperature. OTOH, STMs seem to be priced in the low tens of thousands of dollars; each atom has to be individually placed by the STM, and the STM is necessary to read or write the state of the bit; IBM's video implies that the tip of the STM has to be positioned at an accuracy approximately as wide as the atom for any of this to work. Nothing I've found says exactly what "low temperatures" means, but they do say it's well below room temperature, and these are researches where liquid nitrogen is often considered warm.

I'm not holding my breath. IBM has been working (unsuccessfully) for most of 20 years to make MRAM competitive. I believe that the limit that will eventually bind in the semiconductor business is Rock's Law (sometimes known as Moore's Second Law), which says that the cost of a state-of-the-art fab line doubles every 48 months. At some point, the size of the market for devices that can only be built on a state-of-the-art fab will be too small to justify the cost of the fab itself (eg, a $100B fab with a market of 100M devices means the devices must sell for at least $1,000 just to cover the cost of the fab). At that point, building a new fab is a "bet the company" risk -- you only get to be wrong once.

The NY Times article is actually better than the IEEE one:
It is a demonstration of principle: How small can a magnetic bit be?

The article I read indicated that researchers planned to investigate larger groups of atoms, and anticipated stability at room temperature in the range of several hundred atoms. Compared with about a million atoms per bit with today's densest hard drives.

That would imply thumb drives in the range of 10 TB to 100 TB. At that point they could delete the delete key. Nifty if they can make it work.

Not sure if this had been posted previously, and commented on, but I did a quick search - so apologies for a possible repeat.

Energy efficiency is an over-rated policy tool when it comes to cutting energy use and CO2 emissions—that’s the basic message promoted by the US think tank the Breakthrough Institute (BTI), and amplified in major news outlets like the New Yorker and the New York Times. Their logic is that every action to conserve energy through efficient use leads to an opposite reaction to consume more energy—a “rebound” mechanism, which, according to the BTI, can negate as much as 60-100% of saved energy, and in some cases can backfire to increase net energy consumption.

fuzed - I understand that point to a degree. But re: that saved money through increased efficiency: how much will be going to buying additional energy and how much towards buying that amount of net energy at the higher prices many are anticipating? Or more simply: if folks are spending the same gross amount post-efficiency impovement as they were before, they may not have the capability to buy more energy. Through efficiency you might reduce your demand 30% but that remaining 70% might cost more than your original consumption. You'll certainly be better off with the efficiency gain than without it but not necessarially able to increase you consumption. In fact, might not be able to afford your reduced consumption let alone increase it if prices rise high enough.

However, a combination with increasing price will result in less pain than price increase without efficiency boost.

The linked article actually makes the opposite point from the excerpt that you quoted, and debunks (with good measured data) the "rebound" or "Jevons" effect as typically less than 30% (depending on the efficiency measure, of course). Although people may turn up the thermostat after they insulate the attic, they are unlikely to turn it up to 100 F.

Here are some quotes that more accurately reflect the linked article's conclusions.

In this research note we refute this policy message and show that the BTI, as well as its champions in the media, have overplayed their hand, supporting their case with anecdotes and analysis that don’t measure up against theory and data….
We provide new statistical evidence to show that energy efficiency policies and programs can reliably cut energy use—a finding that is consistent with the policy stance of leading experts and organizations like the US Energy Information Agency (EIA) and the World Bank. Additionally, we take our policy message one step further—by using new insights from the emerging multi-disciplinary literature on “energy efficiency gap,” we recommend that the world needs more energy efficiency policies and programs to cut greenhouse gases—not less as implied by the BTI and its cohorts in the media...
Our analysis contradicts the Washington Post, the New York Times and New Yorker storylines, and shows that the case for energy efficiency is rather straightforward and clear. Rebound is there but is in the range of 10-30% for households as reported in published literature (Greening et. al. 2000). And for transport, the Rebound effect from fuel efficiency improvements in the US is estimated to be around 10.7% based on the data covering the period 1997-2001 (Small and Dender 2007). This still leaves a net savings of 70-90% that can buck the trend of energy use per capita...
Thrusting Energy Rebound into climate policy discussions in a way that it pits one policy against the other is a distraction. We believe that the BTI-led anti-energy efficiency campaign hurts our collective effort to develop a comprehensive climate policy framework. By promoting insufficiently reviewed literature that undermines policy solutions to climate change, the BTI is putting tried-and-true ideas into silos.
The BTI’s position on energy efficiency aligns with its overall intellectual approach reflected in from the group’s 2004 “The Death of Environmentalism”, and its more recent 2010 “Post-Partisan Power” and 2011 “Climate Pragmatism.” BTI seeks to be a voice apart from the environmental movement, but its commitment to unique approaches seems to have overridden its commitment to fact.

Thrusting Energy Rebound into climate policy discussions in a way that it pits one policy against the other is a distraction. We believe that the BTI-led anti-energy efficiency campaign hurts our collective effort to develop a comprehensive climate policy framework. By promoting insufficiently reviewed literature that undermines policy solutions to climate change, the BTI is putting tried-and-true ideas into silos.

When the world is adding nearly 80 million people a year and the energy burn is at peak, what else is there but to promote efficiency as a panacea?

Where is the "saved energy"? It's certainly not in the ground, we are exploring, exploiting, burning and fracking everything we can get our hands on. Unless the proponents of "efficiency" also place a fence around the "saved" energy then I personally think they are promoting their own agenda which is keeping the markets viable and the consumer consuming.......BAU.

If energy was abundant business including the utilities would not be promoting efficiency, they would promote waste which was the case a few decades ago. Now with growth a light of other days, big businesses are in a fight to the death. The plan is to battle on with efficiency gains including asset sales, synergies and staff cuts and hope the other guy goes bankrupt first, that leaves more consumers to exploit on the ride down.

If we are energy limited, then greater efficiency means greater utility. It also means the societal cost of switching to alternate forms is lower. So it is a definite help, although if it is the only thing we do, it only prolongs the inevitable.

Again, BTI is simply trying to promote fossil fuel consumption, and will make up anything that supports their cause.

Local news on Nissan's Leaf...

See: http://www.cbc.ca/news/canada/nova-scotia/story/2012/01/13/ns-electric-c...

One of our electrical contractors has been approached by a major auto manufacturer to bid on the installation of charging stations to be placed at various locations throughout HRM. It seems things are slowly moving forward.


Condolences. This is news of the onset of a cancer. Building infrastructure for "electric" cars, in the absence of an overarching and suitably radical plan for downsizing and sustainability, is yet another wild misallocation of dwindling resources. Having the electrical grid cater to suburban automobile charging is hardly a wise move, from the perspective of the future.

Fortunately, "electric" cars are looking like white elephants, especially in cold climates, so you may dodge this self-inflicted disease.

I don't consider electric vehicles to be a panacea for all that ails us, but I expect that they'll have a role to play as we transition away from oil. Due to the nature of my work I require a personal vehicle for business purposes, and given a choice I'd prefer that it be electric as opposed to petrol, e.g., an all-electric Dodge Caravan would be ideal.


There's little chance that we're going to see the end of 'all cars'.. I think this particular target of yours is quite a bit too extreme. We have a lot of steps to take, even to start this journey, and they so far start in a world which has had wheeled vehicles on roads for many centuries.

"Energy price war...". Ha ha. Not in South California.
The local utility San Diego Gas and Electric, in 2011 filed for a rate increase.
From UCAN:
SDG&E has submitted its Notice of Intent to File a General Rate Case Application. SDG&E requests that the CPUC authorize a combined $1.851 billion in rates. An unprecendent 7% increase compared to currently effective rates. The filing with the Public Utilities Commission explains why. In the midst of the greatest economic recession in almost a century, SDG&E has requested the largest rate hike in its history. And it wants it to last for four years.

Here are the details according to SDG&E's own documents. The company is seeking to increase electric rates (on average) by 7% and increase its gas rates by 6.9%. The monthly bill impacts would be about 10% (on average) -- 3% for electric customers and 7% for gas service. Because of the way rates are designed, the impacts on residential and small business customers will likely be larger than on big business customers. The utility claims that typical residential customer would see monthly bills go up about 5 percent, by $6.50 or so, to $129 from $122.50.


...The filing with the Public Utilities Commission explains why..., but the article doesn't. Our local electric utility has had several rate increases in recent years. While demand was expected to increase, and the costs of providing services and expansion have gone up, demand has been flat or (in our area) dropping. Fewer revenues to cover increasing costs = higher rates. So much for reduced consumption and demand destruction. In our case the utility is a coop which must balance its books annually, so rate increases are necessary, though I imagine the same pressures apply to public utilities.

My PV panels look better every day; currently producing 3.66kw, a bit above rated.

Sorry about this, but has the Oil Drum changed its font? A couple of the days ago, the font changed to something near unreadable to me, it's painful on the eyes, it's like an old typewriter font. I read TOD using Mozilla Firefox. No other website that I visit has changed. I've tried twiddling everything I can think of but I can't see how how to change back or even set fonts at all. Alternatively, cat on keyboard might have changed something (but usually I can fix that). I miss my fix of TOD! Thanks in advance.

I've noticed the font change too. Happened a couple days ago.

I noticed the same thing but I think it is a page/site browser setting. I "fix" it every time by hitting CTRL+ mousewheel (or CTRL+"+") to increase the magnification. PITA but it works.


I reset my zoom (Firefox 7.0.1 for Ubuntu) while on TOD home page, then exited Firefox normally (saving the settings). Been fine since. Fonts are also affected by your video drivers. Sometimes an update will alter/reset them.

Yes, they switched to a font with extremely thin strokes that display only one pixel wide unless zoomed to an extremely large size. It displays OK on a well-adjusted high resolution high contrast flat-screen monitor, but very, very poorly indeed on a CRT. It's not clear whether there's any benefit gained in exchange.

For what it is worth I also noticed the change but for me it was an improvement in readability. Go figure.

I use Firefox on a Mac.

Somewhere in my Firefox preferences is a check box for "allow pages to choose their own fonts" which I never allow. I also choose a relatively large minimum font size (old eyes). Granted this causes occasional problems -- the folks who lay out newspapers seem to be the worst offenders for assuming that their request for a tiny font size will be honored -- but my view of the Web is much more consistent, and more pleasing to my eye, than my wife's, who lets the designers do their own thing.

edit-> preferences-> content-> fonts and colors

In most web browsers you can set the minimum or default font.

It is probably somewhere like Edit => Preferences => Fonts and Colors => Default Font, Font Size

I noticed it, too. The problem I run into is if you use Firefox's zoom text function to increase the size of the text, it makes the titles and such immense. So big they overlap themselves. It's really ugly.

Yes, I don't care for the font change either, as long as someone is bringing it up. It's like I'm wearing someone else's glasses while having a tilapia reaction.

Don't blame the cat. It is just the links, top and bottom, of each comment that hurt for me. The rest of it seems fine. The text around this tryping box are pretty skinny too.


Same here, first noticed a couple days ago, although different effect. All text looks like a bold font now, not unreadable, just annoying.
Firefox 4 on Windows XP.


No change here with Firefox on Windows 7. I always see Times New Roman font in the articles and comments. Arial on the titles and links on the sides of pages.

Likewise here, CM - Firefox 9.0.1 on Win7 Pro. Looks fine to these old eyes. :-)

The bold and italic bold got weird on my rig.

This web page actually is quite a bit more readable on my netbook with page styles turned off (View > Page Style in Firefox). Then the text uses the entire screen instead of only the middle third, and you can enlarge the text as much as you want.

SuperG said he switched back to the old font. I'm still seeing the new one, though. Might have to clear your cookies, log out, and log back in.

If you're still seeing the new font, clear your TOD cookies, empty your cache (clear history), and you should revert back to the old font.

I use a Squid proxy server so I had to flush the cache there. Anyone else who is going through a proxy, maybe browsing at work, may have to wait for the cache to renew. A Reload brought the update in on Firefox for me, another one to try is a shift-Reload. You shouldn't need to touch the cookies or log out/in though the browser cache may need clearing in some cases.


US is to restore full Burma ties: US to exchange ambassadors with Burma

US Secretary of State Hillary Clinton has announced that Washington will start the process of exchanging ambassadors with Burma.

The announcement came hours after most of the country's political prominent dissidents were released from jail.


as the math teacher in 'The Incredibles' said. Coincidence ... I think not!

Emotional news framing affects public response to crises

... "Crises are going to happen," Cameron said. "Unfortunately, planes will crash and there will be oil spills. This study helps to show how the public will react to different types of news coverage of crises, and subsequently, what the best ways are for corporations to handle any crises they may encounter.

Cameron says these findings illustrate the importance of controlling the message during a crisis. ... this research is important, not to help corporations shirk responsibility, but rather to handle crisis situations in the best way possible.

California imposes energy-efficiency standards on battery chargers

The California Energy Commission votes to approve efficiency standards designed to cut energy use by 'vampire' charging systems that waste as much as 60% of the electricity they consume.

The regulations generated strong opposition from appliance and consumer products makers.

Next-generation light bulb shines at CES

... "You pick this because it doesn't have mercury; you can dim it; it loves cold weather; there is no ultra-violet so they don't draw any bugs outdoors, and it fits in any fixture an incandescent bulb goes in."

"We actually get more light out of the LEDs with liquid in the glass dome than if there was air in there."

Switch bulbs, which are being launched in 65- and 75-watt models, are priced at $35 each but the price was expected to drop under $20 by the end of the year.

Even at a price of $35, businesses recover the cost in six months while homeowners hit that mark in two years, according to Sharenow.

We've been reading about Switch LED lamps for sometime now but they're still not available for purchase. When you visit their website and click on "Where to Buy" the following message is displayed:

Things are lighting up! Our bulbs are currently shipping to several distinctive hospitality properties. As soon as we have been able to collect feedback from these first users that our bulbs are of brilliant quality, we will make them available online to our fans.

Please check back for updates on when you can get your hands on these beauties or join our Facebook community and be the first to know.

See: http://switchlightbulbs.com/where_to_buy.html

In the next couple of months, Philip's L-Prize lamp should be hitting the shelves. This lamp consumes 9.7-watts and supplies 910 lumens (93 lpw), its correlated color temperature is 2727K and the CRI is 93. It underwent eighteen months of rigorous DOE testing and extended field trials (see: http://www.lightingprize.org/index.stm) and so it's "battle proven".

For now, Home Depot sells the Philips 12.5-watt Ambient LED A19 (60-watt equivalent) for $24.97 and the 17-watt version (75-watt equivalent) for $39.97, both of which are excellent performers. Expect these prices to fall by spring.


Alaska gets lower 48 snow:

Record snow in Anchorage as Alaskan communities run out of shovels following 27ft snowfall... and there's more to come!
Prince William Sound community of Cordova has had 172 inches of snow
Nearby coastal community of Valdez has seen an astonishing 318 inches
Russian tanker with 1.3m gallons of fuel moves towards iced-in Nome
Anchorage has experienced snowiest-ever period, with 81.3 inches


Comment from Mark analyzes the situation:

Since I am a meteorologist by trade, here is what is really going on. The Jet Stream that guides storm system tracks has been over southern Alaska for several weeks now due to a large ridge of high pressure dominating the western 2/3rd's of the continental United States and western Canada. As a result, the normal storm track for this time of year is not over the Pacific Northwest where it should be, thus Alaska. This is not unusual during a La Nina pattern. The La Nina is quickly weakening and this will change the flow to a more zonal flow affecting the west coast. This will finally allow moisture laden storms to pass through the Pacific Northwest all the way down into central California. This will help the snow starved regions of the Sierra Nevada mountain range as well as moving inland and dropping snow over the Colorado Rockies which are experiencing there worst snow dearth in five decades.
- Mark, Sun City, CA, 13/1/2012 16:25

Cordova Snow Storm

130 Inches of Snow: National Guard dig out buried Alaska town

Operation Dig Out in Alaska

As a long time resident of California, I can tell you just from casual observation of our weather that since we first moved here in 63, over these recent decades the high pressure system didn't use to build in for very long at any time of the year. We've had numerous times in recent years when the high pressure will build in during the summer for 10 days or more, whereas when I was a kid 2-3 days was the norm.

Now when I see high pressure build in, I wonder how long it will last. We are getting the usual cold nights, but the days are gloriously warm (mid 60's), clear and dry. But the weather is finally suppose to switch gears this coming wednesday. Maybe some rain? Maybe a break for Alaska?


For much of North America, a winter without January.

While it's far too early to tell, lots of folks have a hypothesis that the record jet stream behavior is attributed to AGW.

Good read on it was in drumbeat a while back


Local sources in Colorado are describing it this week as the fourth driest winter (to this point) in 30 years, which is less apocalyptic-sounding than "worst... in five decades". There's a pronounced difference between the east and west sides of the Continental Divide. As of today's snow pack report, east of the Divide is running about 80% of normal; west of the Divide, a little less than 60%. Denver Water's system-wide reservoir levels are above the median for the date, and the reservoirs in northern Colorado are well above normal levels. The big months for mountain snow here are March and April.

The consensus of the various climate change models seems to be that northern Colorado gets wetter winters in the future (along with the rest of the northern Rockies and Great Plains) and southern Colorado gets drier winters (following the trend of the overall US Southwest).

I wonder if higher snowfall at higher latitudes is some kind of climate-stabilizing mechanism?

The UK's Daily Mail is highly unreliable as a news source and has been known to be deliberately perverse. Always needs a careful check especially on matters meteorological.

Last year, or if it was the winter before, we had hundreds of roof collapses due to all the snow in Sweden. We don't have that problem now...

Saudi forces clash with protesters in Qatif

Saudi security forces have clashed with protesters in the country’s Eastern Province, home to a large Shia minority, killing one person, the interior ministry and activists reported.

At least three other people were wounded as security forces opened fire late on Thursday after protesters threw stones at a police vehicle in the village of Awamiya, the Shia Rasid website reported

Saudi Arabia's Shia population is mostly based in two oasis districts of the Eastern Province - Qatif on the Gulf coast, and al-Ahsa, southwest of the provincial capital al-Khobar. The Shia community accounts for somewhere between 10 to 15 per cent of the total population.

Is Pakistan facing a military coup?

Aljazeera's Inside Story, James Bay, discusses with guests: Hamid Nawaz, a retired Pakistani general and military analyst; Moeed Pirzada, a political analyst; and Zafar Jaspal, a security analyst and associate professor of International Relations at Quaid-i-Azam University.

Tissue holders pulled from stores in NY, elsewhere

Bed, Bath & Beyond Inc. said in a statement Thursday its Dual Ridge Metal boutique tissue holder has been carried in about 200 of its stores since July.

Authorities say the tissue holders contain manmade cobalt-60 radioactive material.

Oops ... :-<

Cobalt-60 half-life = 5.27 years

Ad for Bad Bath & Beyond 30 years from now: "Vintage boutique tissue holders only $19.99! Grab them while they're hot!"

Russia says would be threatened by Iran military action

Jan 13 (Reuters) - Russia would regard any military intervention linked to Iran's nuclear programme as a threat to its own security, Moscow's departing ambassador to NATO warned on Friday.

This is the reason behind the assassinations of Iranian nuclear scientists. It avoids direct confrontation with Russia and slows down Iran's nuclear program:

Is Israel Behind Iran Killings?

Events that happen unnaturally:

History Of Mossad part 1

History Of Mossad part 2

The elder brother of current Israeli Prime Minister Netanyahu was killed at Entebbe. He is no stranger to covert operations.

History Of Mossad part 3

History Of Mossad part 4

History Of Mossad part 5

How Much Is an Earth, and Do You Have One in Extra Large?

A new book suggests that "It's the economy, stupid," may be more than political strategy; it may also be the key to environmental sustainability. The book is "Green Washed: Why We Can't Buy Our Way to a Green Planet," by Kendra Pierre-Louis. The argument developed is not just that the consumer choices of an individual won't save the planet without collective action, but also that the only collective action that will save us is abandoning the whole idea of consumer choices.

New Zealand rated friendliest country on Earth.


New Zealand is the friendliest place on earth, according to a survey of expats - and Australia ranks well with people who don't call the country home.

A total of 3385 expatriates living in 100 countries were asked a number of questions as part of the 2011 HSBC Expat Explorer Survey.

The results show many expats rate New Zealand highly in a number of categories, including how easy it is to befriend locals, fit into a new culture and learn the language.

Up to 75 per cent of expats said they were integrating well into the community.

Australia came second in the friendly stakes, followed by South Africa, Canada and America.

Well that proves it. We're like the best, ever.

Beijing Apple Store Pelted with Eggs After iPhone 4S Launch Cancelled

"It seems that a few bad eggs ruined it for all of those in Beijing who were hoping to get their hands on an iPhone 4S, which officially launched Friday in China.


One thing we seem to be good at is exporting crazy consumerism...

Cargo boat and US navy ship powered by algal oil in marine fuel trials
Substituting biofuel for bunker fuel may bring about revolution in world's shipping fleets


Is this a feasible proposition, EROEI wise?

Having seen an algae farm in action (they were growing it for fish food and cosmetics), I think its EROEI is probably in the same range as producing fuel ethanol from corn, and as we all know, the EROEI of that is dismal. Well, most of us know that.

Thanks, thought as much.

Important Update

International Energy Statistics (IES) system on the EIA Web Site is now updated with new monthly / quarterly oil data, and with corresponding new annual data. IES has now been updated with the following data:

· World petroleum production statistics through September 2011, and third quarter of 2011

· OECD country petroleum demand, stocks, and imports data through August 2011, and second quarter of 2011

Annual data have been updated to be consistent with these new monthly / quarterly data.

I was mistaken in reporting that this monthly update had been discontinued, though they are about one month late with this update. But I am glad it is still there.

I will post more tomorrow if there are any data updates wort mentioning.

Ron P.

Towns vie to be the final resting spot for Canada’s nuclear garbage

As roadside attractions go, “Home of Canada’s Nuclear Waste Burial Ground” isn’t one you’d normally put on a souvenir keychain.

But strange as the title sounds, nine Canadian communities are in the running to claim it – along with the opportunity to host the country’s spent uranium in underground bunkers for the rest of time.

The towns, scattered across Saskatchewan and Ontario, are responding to a call for volunteers from an organization the federal government has charged with finding a permanent resting place for Canada’s radioactive detritus. They’re a combination of native reserves, old mining and lumber towns and cottage enclaves. Many have spent the past decade watching their populations shrink and economies crater, and are desperate for an economic boost – even if it comes with an eternity’s worth of radioactive waste.

Canada’s nuclear waste is stored first in pools, then in dry casks near reactors at the plants. It’s safe there for the foreseeable future – but not forever.

The long-term plan endorsed by the federal government in 2007 is to take all of the waste – about 40,000 tonnes and counting – and bury it 500 metres underground on one site. The Nuclear Waste Management Organization executing the plan is designing reinforced bunkers to keep the spent uranium safe for millennia, while making it possible to monitor and retrieve it should the need or desire arise.

First, the tricky part: Find what Mr. Nash calls “an informed and willing host community.” Any one of the nine towns in the running can drop out at any time. This week, five more said they are considering throwing their hats in the ring.

The site-selection process worked in Sweden, where Osthammar beat out another town to host the country’s nuclear waste in 2010. But opposition in Nevada to the U.S. plan to bury nuclear waste in Yucca Mountain stymied the project decades into its development, after billions had been spent.

Has anyone seen this video on LENR 'low energy nuclear reactions'. I know Rossi has been investigating this but now NASA is touting it as a possibility. Could this be the energy game-changer?


There's some discussion in the previous Drumbeat.

They're killing and butchering the gorillas. That is very sad.
"It's part of what is clearly a luxury trade," says Brashares. "They could go and buy a filet mignon in London for what they're paying for baboon."

I still remember reading sci-fi comic book way back in the 70s...a story depicting mankind's slaughter of the last of the other animals on Earth...and the question at the end from one character to another....what is Man going to do when it is just us left?

Soylent Green is people?

A very good movie...too bad its message was roundly ignored.

There's another dimension to the killing of chimps, bonobos, gorillas etc for profit and snacking.

Some may consider "life" to be just one monolithic thing, and "species" to be fungible. Often on here I'll see someone note that heck, we can't hurt the earth, new species will arise. As indeed they will until the planet eventually goes venus. Insects are hardy, as are many bacteria.

However, life has several of what might be reasonably considered by us to be qualitative thresholds. Is an ocean full of salps and jellyfish a reasonable trade for the one full of fish and the krill food chain? Are stratified acidic/anoxic oceans a good trade for the ones which built coral reefs and allowed dolphins and whales to evolve to their current existence, along with the amazing diversity popularized by old Jacques Cousteau?

Self-aware consciousness is a very difficult threshold to reach, it takes a pretty long time. It's what makes us us. If there's a "worst possible crime" in the universe, it must be the intentional wiping out of a self-aware species for trivial reason. Each self-aware lineage we remove from the future limits the consciousness of the living universe.

And we're not sure just how likely the chain of events leading to consciousness & self-awareness is. It might on average take 100 billion years or more to happen even given a planet with the requisite conditions, which would make consciousness pretty doggone rare in a universe in which stars don't last that long. It was pretty late in the earthlife's existence that it originated, and even that may have been a spectacular stroke of luck.

I just read an article similar to this one in the magazine 'The Week':


'Dolphin: Bushmeat of the sea?'

Beyond sad...we will ruin it all...

Yes, that's the issue I've spent much of my career on. A large portion of the "legal" whalemeat in Japan's markets is dolphin. The consumers are being simultaneously swindled and poisoned at the high prices charged, because dolphin meat tends to have a lot higher level of bioaccumulating schmutz like heavy metals. When we did DNA sweeps of Japan's markets, guess what, endangered whales, lots of dolphins, etc all packaged in the supermarkets as kujira (whale). Pretty much anything can get through the yakuza-controlled docksides and distributed through a dozen changes of hands until its laundered. Of course "kujira" is promoted by the government as a health food, since it theoretically comes from pristine waters. I expect a huge rise in the trade for netted dolphins into Japan as the population turns to "kujira" instead of locally-caught fish.

And if someone were to be able to infiltrate the bushmeat trade with one of our suitcase DNA labs, I'll bet some human tissue would show up. Might be worth doing such a study... but I'm not sure it would make the price go down...

I like humans, but my loyalties lie with the self-aware beings who are not in gross overshoot.

I've known dolphins well, they're just as much "people" as we are.

Although the prevalence of planets in our galaxy may verge on an average of at least one per star, based on very preliminary guesses based on various exo-planet survey data, I have a hunch that the Ward and Brownlee 'Rare Earth' hypothesis may have merit.

But...even if the Universe was teeming with life, and even had a huge amount of self-aware life, I still would find what we have done and are doing to other species on this planet a crime.


drop me an email sometime if you like, click my user name.

Well, totally drug resistant TB seems to be spreading so that is one bacterium that is breaking off its human shackles. As far as the oceans go, start looking for recipes for jellyfish, they are going to be about the most abundant thing to catch.