Drumbeat: January 18, 2012

Oil demand falling, IEA warns

Oil demand is falling for the first time since the global economic crisis of 2008-2009, the International Energy Agency said.

The IEA warned in its monthly report on Wednesday that mild weather, high oil prices and a rising likelihood of a global recession will depress demand in 2012, Reuters reported.

Although worries about disruptions to Iranian oil exports have supported prices, consumption fell in the last quarter of 2011 year-on-year due to mild winter weather in the northern hemisphere and the overriding fears about an impending recession in the euro zone, the IEA said.

Oil Rises to Three-Day High in New York as Iran Tension Counters Economy

Oil rose to the highest level in three days in New York as speculation supplies from Iran will be disrupted countered concern that economic growth will slow.

Iran called on Saudi Arabia to be “more wise and responsible” after the kingdom said it could make up for any supply loss resulting from a European ban on imports of Iranian crude. The International Energy Agency reduced its 2012 global oil demand forecast, after consumption fell in the fourth quarter for the first time since 2009, warning it may cut estimates further.

Gas prices may get close to $5 in some spots

NEW YORK (CNNMoney) -- The new year has greeted Americans with the highest January gas prices ever, and some analysts say prices could get close to $5 a gallon in some areas during the warm-weather driving season.

The average price for a gallon of regular unleaded gasoline in the United States on Monday was $3.39, according to motorist group AAA. That's nearly 30 cents higher than a year ago.

Electricity Declines 50% as Shale Spurs Natural Gas Glut

A shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50 percent and reduced investment in costlier sources of energy.

With abundant new supplies of gas making it the cheapest option for new power generation, the largest U.S. wind-energy producer, NextEra Energy Inc., has shelved plans for new U.S. wind projects next year and Exelon Corp. called off plans to expand two nuclear plants. Michigan utility CMS Energy Corp. canceled a $2 billion coal plant after deciding it wasn’t financially viable in a time of “low natural-gas prices linked to expanded shale-gas supplies,” according to a company statement.

Natural gas plunges to lowest since 2002

SAN FRANCISCO (MarketWatch) — Natural gas futures plunged to their lowest in nearly a decade on Tuesday, pressured by forecasts of unseasonably warm winter weather in the U.S.

Gas prices rebound after touching 2012 lows

(Reuters) - British prompt gas prices rebounded slightly on Wednesday due to a relief rally after prices slumped to a three-week low on Tuesday and supply fell short of demand.

Commodities Rise Most in Two Weeks Amid Speculation China May Ease Policy

Commodities rose the most in two weeks amid speculation that China may ease monetary policy, boosting prospects for raw-material demand, after its economy expanded at the slowest pace in more than two years.

BP says oil to be slowest-growing fuel to 2030

(Reuters) - World oil demand will rise by 18 percent from 2010 levels to 103 million barrels per day (bpd) by 2030, making it the slowest-growing fuel in the next 20 years, BP Plc said on Wednesday.

Natural gas to be fastest growing fossil fuel-BP

(Reuters) - Natural gas is projected to be the fastest growing fossil fuel globally to 2030, with production growth in every region in the world except for Europe, BP said on Wednesday.

Saudi Arabia is not ‘targeting’ $100 oil

Commentators identifying a new Saudi “price target” at $100 per barrel are wide of the mark.

Saudi Arabia’s views on what constitutes a reasonable price for oil have less influence than analysts would like to believe.

Past experience suggests the kingdom is unwilling or unable to influence prices by adjusting production policy, except in extreme circumstances, and normally allows the market to set the price of crude with little intervention.

Inflation Strangles Argentine Provincial Finances

Santa Cruz province in southern Argentina has major oil and natural gas reserves, promising deposits of gold and silver and a population of barely one person per kilometer. Yet it lives on the verge of bankruptcy.

Last month, the local legislature tried to pass an austerity plan that included pension cuts and lay-offs among state employees. The initiative failed when hundreds of angry protesters swarmed the building.

Gazprom Price Retreat Offers EON Hope

OAO Gazprom’s decision to cut prices for five customers signals a weakening position for Russia in Europe’s gas market as the economic crisis erodes energy demand.

Russia’s gas-export monopoly said yesterday it revised the price formula for clients including Germany’s Wingas, GDF Suez (GSZ) SA of France and Sinergie Italiane Srl to reflect “changing gas market conditions.” Germany’s largest utilities EON AG and RWE AG are embroiled in arbitration with Gazprom over prices and volumes after losing billions of euros buying fuel at above- market rates.

Gazprom, Ukraine have 'constructive' talks

MOSCOW (UPI) -- Russian natural gas company Gazprom said it was ready to resume negotiations with Ukraine following a "constructive" meeting with the country's energy minister.

Gazprom Chairman Alexei Miller met with Ukrainian Energy Minister Yuri Boiko in Moscow to discuss a natural gas deal for Ukraine.

Kazakh bid to avert strikes costly for oil firms -IEA

(Reuters) - Kazakhstan's efforts to provide employment and avert a repeat of last year's strikes by oil workers are likely to raise costs for the national oil company and foreign firms operating there, the International Energy Agency (IEA) said on Wednesday.

Uncertainty troubles Nigeria after fuel subsidy strike is halted

Lagos, Nigeria (CNN) -- An uneasy calm returned to Nigeria's cities Tuesday, a day after two Nigerian labor groups suspended their nationwide strike over the elimination of the country's fuel subsidy.

An embarrassing climbdown

UNIONS in Nigeria have announced that they will suspend the strike over the removal of fuel subsidies that paralysed the country last week and threatened to shut down oil production. The decision came as the president, Goodluck Jonathan, on Monday bowed to pressure and reduced petrol prices which had risen steeply.

Chevron says Nigeria rig fire still burning

(Reuters) - Chevron Corp reported early indications that equipment failure may be the cause of a fire still burning on a drilling rig off the coast of Nigeria more than a day after it broke out.

Two contractors missing after the fire aboard the K.S. Endeavor, operated by FODE Drilling Nigeria Ltd, had not yet been found, the company said in a statement on Tuesday.

Saudi Aramco targets China amid $200 billion spending spree

DHAHRAN // Saudi Arabian Oil Company plans to build refineries in China and Indonesia as part of a $200 billion spending programme to double refining capacity and explore for oil and natural gas during the next decade.

China unlikely to prise open Saudi oil vault

(Reuters) - Saudi Arabia is unlikely to reverse its decades-old policy of prohibiting foreign involvement in oil exploration and production, despite a plea from China for the world's leading crude exporter to open up.

Chinese Premier Wen Jiabao has called on Saudi Arabia to open its huge oil and gas resources to more Chinese companies, including its upstream oil industry, which has remained under sole Saudi control for decades.

Hovensa oil refinery run by Hess, Venezuela’s PDVSA in US Virgin Islands to shut down

ST. CROIX, U.S. Virgin Islands — The president of the giant Hovensa LLC refinery in the U.S. Virgin Islands says the refinery will close and become an oil storage terminal.

Brian Lever says the shutdown on the island of St. Croix will occur by the middle of next month. He said in a statement Wednesday that losses at the refinery have totaled $1.3 billion over the past three years.

Oil rights for Abu Dhabi to go to tender

Abu Dhabi will put the rights to some of its biggest oilfields out to tender, shaking a partnership with major oil companies that dates to before the Second World War.

Iran warns against "adventurism" in global oil market

Tehran - Iran's representative to the Organization of Petroleum Exporting Countries (OPEC) has warned of the economic consequences for the European Union if an oil embargo is imposed on Tehran, the Fars news agency reported Wednesday.

'The US and some European countries should avoid adventurism in the world's oil market as any sanctions against Iran's energy sector will make the EU plunge deeper into recession,' Mohammad Ali Khatibi, Iran's OPEC governor was quoted as saying.

New Iraqi OPEC president to seek assurances from Iran

(Reuters) - Speaking in his new role as president of OPEC, Iraq's Oil Minister Abdul-Kareem Luaibi said he will visit Iran on Thursday to discuss oil market stability and would ask Tehran for assurances that all countries will work to protect waterways and oil supplies.

His comments on Wednesday were a reference to threats from Tehran that it would stop oil moving through the Strait of Hormuz if sanctions are imposed on Iran's oil exports.

India says not seeking Iran oil waiver from U.S.

(Reuters) - India is not seeking a waiver from the United States that would protect buyers of Iranian oil from a fresh round of sanctions, and New Delhi continues to import from Tehran, Indian Foreign Secretary Ranjan Mathai said on Tuesday.

Turkey Said to Tell India Help on Iran Oil Payments May End

(Bloomberg) -- Turkiye Halk Bankasi AS told Indian oil refiners it may no longer be able to be an intermediary for their purchases of Iranian crude, four people with knowledge of the matter said.

Iran's Salehi visits Turkey for nuclear talks

Iran's Foreign Minister Ali Akbar Salehi arrived in Turkey on Wednesday for talks with Turkish leaders expected to focus on Tehran's controversial nuclear programme, an embassy spokesman said.

U.S. Envoy Einhorn Says Japan Agrees on Need to Increase Pressure on Iran

A senior U.S. official said Japan agrees on the need to increase pressure on Iran to prevent the Mideast nation from developing nuclear weapons, and sought to ease concerns that doing so will drive up oil prices.

Will oil and globalisation continue to keep the peace?

With Iran threatening to close the Strait of Homurz – through which 32 per cent of global oil supplies and 28 per cent of the world's liquefied natural gas supplies pass every day - because of tighter European Union sanctions on the country's fossil fuel exports, and fears that any blockade of the vital ocean corridor could trigger both military conflict and global economic stability, the stage is set for 2012 to be just as much of a game-changer as 2011.

Truth About Middle East is Spreading

Zero Hedge has published an article, "Are The Middle East Wars Really About Forcing the World Into Dollars and Private Central Banking?" that mentions my theory that Muammar Gaddafi was overthrown because he wanted to set up a private gold-currency in Africa.

Crews Use Hose to Send Fuel to City in Alaska

ANCHORAGE (AP) — Crews on Monday began transferring 1.3 million gallons of fuel from a Russian tanker to the iced-in western Alaska city of Nome.

Norway says Arctic gas pipeline could open by 2020

OSLO (Reuters) - A pipeline extension of 1,000 kilometres (621 miles) to bring natural gas to European markets from Norway's Arctic waters could be built in eight years at a cost of more than $4 billion, pipeline operator Gassco said on Tuesday.

"A potential pipeline from the Barents Sea could be in service in 2020 and should have a relatively large capacity to accommodate potential new volumes and thus lay the foundation for continued growth in the High North as a petroleum province," Gassco said.

CNOOC says no timetable to resume production at Penglai 19-3

(Reuters) - CNOOC Ltd, China's largest offshore oil and gas producer, said on Wednesday that it has no timetable for resuming production at its Penglai 19-3 oilfield, which was hit by a spill last year.

Exxon boring holes for Montana pipeline

BILLINGS, Mont. (UPI) -- Exxon Mobil is drilling deep holes under the Yellowstone River in Montana to meet federal requirements for its Silvertip pipeline, the company said.

Exxon spokeswoman Claire Hassett told the Billings (Mont.) Gazette the company was drilling holes for replacement sections of the Silvertip oil pipeline that are, in some parts, 50 feet below the bottom of the river.

Pipeline tribunal must hear Canadian voices

The Enbridge Northern Gateway pipeline, running from the Alberta tar sands to Kitimat, B.C., is in the first phases of public feedback, and already we have seen a storm of spin doctoring from the Conservative government.

They have called any opponents of the pipeline “radicals” and have claimed that they are “foreign backed.” The have chosen to ignore that of the 19 non-Canadians speaking to the tribunal on the pipeline most are representatives of the oil companies, all foreign-backed. Our government seems to think that foreign oil companies have our best interests in mind, while anyone else who doesn’t agree is against all things Canadian.

Oil sands money trail

Last week, on the eve of the environmental review for the $5.5billion Northern Gateway pipeline project that would carry Alberta oil to Kitimat for export to Asia, Canada's Minister for Natural Resources, Joe Oliver, expressed concern that foreign-funded environmentalists would jeopardize the review and block the pipeline. Oliver didn't mention my name, but the research that raised concerns about the foreign funding of environmentalism in Canada is apparently mine.

Gas Fracking Ban Debated in Bulgaria After Chevron Loses Permit

Bulgarian lawmakers started debating a ban on hydraulic fracturing today, threatening Chevron Corp.’s plans to explore shale gas deposits in the Balkan country.

The government withdrew a previously granted exploration license from Chevron yesterday after hundreds of Bulgarians marched in central Sofia last week to protest the drilling technique known as fracking, fearing it will pollute the water and soil in Bulgaria’s most fertile farm region of Dobrudja where Chevron was planning to drill.

32,100 and Counting: New Yorkers Speak Out on Fracking

Officials with the New York State Department of Environmental Conservation say they have counted 32,100 statements so far since the close of a public comment period on Wednesday on their proposal to allow hydrofracking in the state.

Is drilling causing Ohio earthquakes?

YOUNGSTOWN, Ohio (CNNMoney) -- In what may be the nation's next boomtown, the ground is, literally, booming.

Residents here in northeastern Ohio are receiving up to $5,000 an acre from energy companies that lease their land -- plus monthly royalties. But they have also experienced at least 11 earthquakes since last March, state officials say.

Tough economy curbs clean energy investment: experts

A global economic slowdown and the eurozone debt crisis have curbed government investment in renewable energy, experts warned Tuesday.

"There are already some signs that government support may be slowing down in Europe," chief economist at the International Energy Agency, Fatih Birol, warned participants in the World Future Energy Summit in Abu Dhabi.

Government rejects latest “flawed” report on cost of renewable energy policies

Patience is obviously wearing thin. Following the release today of the third major report in the last two months criticising the cost of the Department of Energy and Climate Change's (DECC) renewable energy policy, officials have hit back branding the latest report from the Policy Exchange thinktank as "flawed" and "not credible".

New Gas Economy Rules Generate Wide Support

DETROIT — Writing new regulations that will require cars and trucks to have significantly higher fuel economy by 2025 prompted years of fighting among automakers, environmentalists, regulators and consumer groups.

N.M. Joins Push for Natural Gas Vehicles

DENVER (AP) — Eight states have now signed up in an effort to encourage U.S. automakers to develop affordable vehicles that run on natural gas.

The governors of Colorado and Oklahoma announced in November that their states, along with Pennsylvania and Wyoming, intended to seek proposals to replace vehicles in their state fleets with ones that run on natural gas.

Trump May Scrap Scottish Hotel, Housing on Wind Farm Ruling

Donald Trump will scrap plans for a hotel and housing at his golf resort in Aberdeenshire, Scotland, if the government approves an offshore wind farm in sight of his championship course due to open in June.

Wind Turbines and Health Hazards

There is no conclusive evidence so far that wind turbines are responsible for health problems ranging from balance problems to diabetes, an independent panel of health experts reports.

The (Solar) Light at the End of the Tunnel

A consultant for the Defense Department reports that introducing solar installations on nine military bases in the Mojave and Colorado Desert could generate 7,000 megawatts of power.

Depending on which yardstick you prefer, that amounts to the output of seven average nuclear plants or six large coal-fired plants. It would also amount to 25 percent of the renewable energy that California will require its utilities to produce by 2015, according to the 13 authors of the report, prepared by the consultancy ICF International.

Solar power takes giant strides

No one can accuse the renewables industry of lacking creative impetus. Solar-powered aircraft, cars and boats have featured at this year's World Future Energy Summit (WFES) in Abu Dhabi, and in the MS Tûranor PlanetSolar, the event hosts the largest solar-powered boat to brave the oceans.

Energy policy shapes today - and tomorrow

Change, relentless change, sometimes seems to be the modern world's only constant. And yet the changes the world needs most can be agonisingly slow to arrive.

Pentagon still can't define 'energy security,' much less achieve it

While diesel generators kept critical missions going during Katrina, the storm provided a wakeup call for Pentagon leaders concerned about terror attacks on the electric grid, which provides 99 percent of the energy that bases consume. Could bases withstand a power outage that outlasts their three-to-seven-days' supply of diesel for backup systems? Is it wise for the military to rely on the same power plants and transmission lines that feed homes and businesses?

Your burning energy questions answered: Part III

How can the world move quickly to a fossil-fuel free economy, and what is the role of businesses in the transition to clean energy?

In this final segment of the Global Energy Prize series, nuclear energy expert Tom Blees from the United States answers these questions from Eco-Business readers with a discussion on whether or not solar and wind energy can support a carbon-free economy on their own. And finally, what lessons are to be learned from islands, whose isolation begs for innovative solutions such as energy production from the surrounding seas?

Is there a peak of consumption?

If one were to characterize it in mathematical terms, the trajectory of our civilization is an exponential curve. Throughout the twentieth th century, energy and natural resources – and logically emissions of greenhouse gases – has increased with population growth.

But today, would we have reached a plateau? Would we have begun to reduce our consumption, or at least stabilize? Parsimony would it becoming the new luxury? This is what a crowd, who believes that Britain, a country behind the Industrial Revolution and one of the richest nations in the world, have reached a maximum of objects owned by each person before see this much decline. This is the “peak stuff” (“peak of Things”), in the vein of peak oil (peak oil) or gas peak (peak gas).

The Limits to Growth at forty: Is collapse now inevitable?

A particularly realistic aspect of these models was that it factored in the delayed response of individuals to the signs of imminent limits, as it accounted for the probability that people would continue to consume and pollute past the sustainable limits of the particular model. Of course, in the real world, many people will continue to consume until it is no longer possible. Could the models have predicted the true extent of the inaction that we have witnessed in the face of the grave threats of climate change, peak oil and bio – diversity loss?

Problems plague cleanup at Hanford nuclear waste site

HANFORD SITE, Wash. – Seven decades after scientists came here during World War II to create plutonium for the first atomic bomb, a new generation is struggling with an even more daunting task: cleaning up the radioactive mess.

Nearly 7 million bats may have died from white-nose fungus, officials say

“We’re watching a potential extinction event on the order of what we experienced with bison and passenger pigeons for this group of mammals,” said Mylea Bayless, conservation programs manager for Bat Conservation International in Austin, Tex.

“The difference is we may be seeing the regional extinction of multiple species,” Bayless said. “Unlike some of the extinction events or population depletion events we’ve seen in the past, we’re looking at a whole group of animals here, not just one species. We don’t know what that means, but it could be catastrophic.”

China’s New Strategic Target: Arctic Minerals

As policymakers in Washington focus on China’s expanding presence in Africa and growing assertiveness in the South China Sea and Indian Ocean region, Danish diplomatic assistance is opening the gate for China to establish a strategic foothold in the Arctic.

Bill McKibben: Burning America's future

An energy policy outlined by the head of the U.S. Chamber of Commerce in which we use all of the nation's coal, gas and oil is beyond dumb.

Growing Doubts in Europe on Future of Carbon Storage

MADRID — The European Union’s long-term energy plans to abate global warming while still burning fossil fuels hinge on proposals to capture carbon dioxide emissions and store them in deep underground rock formations. Yet weak support for the untested technology is putting Europe in the rear ranks of its development.

Climate Proposal Puts Practicality Ahead of Sacrifice

The current issue of the journal Science contains a proposal to slow global warming that is extraordinary for a couple of reasons:

1. In theory, it would help people living in poor countries now, instead of mainly benefiting their descendants.

2. In practice, it might actually work.

Climate and the statistics of extremes

(PhysOrg.com) -- Swiss mathematicians have shown that the risk of extreme climate events is largely underestimated. They are developing a model for better understanding the impact of climate change.

Sea temperature changes can forecast South American wildfires, study finds

Randerson and Chen proved that tiny temperature changes on the surface of distant oceans can be used to predict the severity of upcoming wildfire seasons in Amazon rainforests. These blazes often generate huge plumes of air pollution that can warm the climate and ocean waters even further, creating a vicious cycle.

“I’ve always viewed the Amazon as a giant pump that affects the global climate,” says Chen, an assistant project scientist and lead author of the paper. “There are so many processes going on that any perturbation in this ‘pump’ is worthwhile to study.”

Study: global warming related sea level rise poses big threat to Washington, D.C.

Global warming-related sea level rise constitutes a major threat to the nation’s capital, with the potential to inundate national monuments, museums, military bases, and parts of the Metro Rail system during the next several decades and beyond, according to a recent study published in the journal “Risk Analysis.” The study helps localize a problem that is more typically discussed at the global level, and makes clear that public officials must make decisions in the near-term in order to minimize future losses.

Global warming threatens China's advance

Global warming threatens China's march to prosperity by cutting crops, shrinking rivers and unleashing more droughts and floods, says the government's latest assessment of climate change, projecting big shifts in how the nation feeds itself.

The warnings are carried in the government's "Second National Assessment Report on Climate Change," which sums up advancing scientific knowledge about the consequences and costs of global warming for China - the world's second biggest economy and the biggest emitter of greenhouse gas pollution.


"...the giant Hovensa LLC refinery in the U.S. Virgin Islands...will close and become an oil storage terminal." Just one more incentive for Venezuela to ship more of its crude to China. Not sure about the recent history but at one time this refinery was a major source of fuel oil for the NE US. And those folks were already being hit with high prices and supply uncertainty this mild winter.

This refinery was downsized significantly by 150000 barrels per day. Most recently they said that it was at a competitive disadvantage to the gulf coast refiners because it did not have access to natural gas priced at Henry Hub prices.

Indeed the partners in Hovensa have reported huge losses in recent years. Venezuela has already started diverting much but not all of its exports to China and other points East.

However when adding this to the closure, or pending closure, of about 50% of the Northeast US refining capacity over the last year, the Northeast megalopolis from Washington DC to Baltimore to Philadelphia to New York City will be very vulnerable to just about any supply disturbances almost anywhere.

Meanwhile since new year's, the important Colonial Pipeline has been filled at or near maximum capacity for gasoline shipments, and sometimes even for diesel shipments, as the Northeast seeks new sources of supply.

Gasoline Rises as Hovensa Refinery to Shut; Heating Oil Declines
January 18, 2012, 1:16 PM EST

Jan. 18 (Bloomberg) -- Gasoline rose after Hovensa LLC said it will shut its St. Croix refinery in the U.S. Virgin Islands because of mounting losses and low demand.


Jan. 17 (Bloomberg) -- Gulf Coast gasoline weakened for the first time in six days as Colonial Pipeline Co. allocated shipments on the largest pipeline link between that region and U.S. Northeast markets.



With all these NE refineries closing down, does this mean that the US may loose their coveted Petroleum Product net exporting status, and do you think CNBC will have this story fully covered.
Of course I could be wrong, fuel usage may fall faster than they can shut down the refineries, but you get my drift.

Most of the increase in exports in the last two years was diesel, or similar products. Gasoline exports to Mexico have been steadily increasing but Mexico is also providing most of the crude for refining in the US, but some shipments have occasionally for example gone to Brazil. Diesel exports have increased to a number of Latin America countries and even for other destinations on a fairly consistent basis.

So it doesn't look like that export demand will fall much, and I don't believe much in the way of exports came out of the closing Northeast refineries. I would not expect the net export status to change much - short of a downturn in oil imports. If anything, it will get worse - as it seems doubtful that the US will replace the gasoline imports from Hovensa.

As far as 2012 goes, I expect some further slowdown in US demand, but it is unclear if demand will fall faster than refineries can close.


Thanks for the reply.

You say,
" I don't believe much in the way of exports came out of the closing Northeast refineries."
but surely it is irrelevant if these refineries were exporting or not, as the fuel they supplied to the domestic market will have to be replaced by other domestic suppliers, that may have exported there product, or the NE will have to import their own refined products on the world market. Both these options will decrease net exports of refined products.

One other question, is the Virgin Islands considered domestic production, or imported. I realize the Virgin Islands are a territory of the USA, but not sure how it accounted for on the balance of trade?

Good point. The EIA counts are US possessions and territories, such as the Virgin Islands and Puerto Rico, as part of the US. Therefore the Hovensa closure actually has no direct impact on import totals.

Plus there are the refinery closures in the Northeast. Is this going to turn out similarly to the way it does when the Postal Service spots some underutilized street mailboxes, closes them all down instead of only some, and leaves an entire neighborhood with no access?

The Hovensa refinery in the US Virgins is a HUGE refinery, one of the ten biggest in the world. The fact that it is closing is an indicator of how things are going to unfold in this post-peak-oil era.

And, yes it will effect fuel oil prices in the NE US.

High home heating oil costs zap consumers

Natural gas is a bargain right now compared to home heating oil. The average price for people using natural gas this winter is $671, versus $2,383 for people using heating oil, according to the U.S. Energy Information Administration.
But why is there such a dramatic difference in price?

Rebecca Jarvis explained on "CBS This Morning" that heating oil is subject to the same factors that drive oil prices up, such as uncertainty in Europe, concerns about Iran and also refineries closing.

But the basic underlying factor is Peak Oil. Stay tuned, it will get worse.

Natural gas is a bargain right now compared to home heating oil. The average price for people using natural gas this winter is $671, versus $2,383 for people using heating oil, according to the U.S. Energy Information Administration.

The price of Oil is a big f'n problem indeed. If everyone were to convert to wood - a much more economical method of heating - I wonder how long it would take to cut down all the trees?

Or coal. How long it would take to burn through all the more local sources, not to mention the soot and other pollutants from both wood or coal. A black Boston comes to mind. There'd soon be trainloads of coal being shipped and distributed ... trainloads!

I wonder what they're going to do as oil gets priced out of sight?? In days past, cities would have central steam generation that would deliver steam by pipe to a number of dwellings - perhaps that's the way things will need to go - reverting to radiator heat from centralized sources. Of course, if there were pipes, then there could be natgas deliveries ... but supposing it was possible to have centralized scrubber-equipped coal burners that generated steam that might actually work ... the cost for each calculated by square-foot and insulation R-value.

Hmm ... poor wretched Northeasterners!! Sometimes I'm glad I live in Eastern Washington!

It's a nice, robust 15 fahrenheit in Portland Maine this morning, but clear with a nice bright sun, so my top floor, with the big picture window uncurtained is helping to warm this floor nicely.

I'm still on oil, but also on wood, some solar and am mainly boosting the R-values and tightness of these buildings with every relevant task I can find, in order to move those balances in the right direction, and so that when I am able to change my main heat source out, what I replace it with can be far smaller than what I use today.

Sounds like the Northwest is almost as wretched as New England this week. Did you get hit?

Here in the Canadian Rockies, it's a brisk, invigorating -36°C (-33°F) this morning. I even plugged in the car, because my wife is going to drive to yoga, rather than walking as she usually does. Her ski lessons have been cancelled today because the course is supposed to be about skiing, not winter survival.

Other than ducking outside periodically to shovel the walks, I am doing a lot of paper shredding as a part of my annual tax planning. I've got 7 blue bags of shredded paper to recycle, and I've still got a few file boxes to go through.

It's interesting that the replacement windows in the house have much less frost on them than the older ones. As I explained to my wife, they have made some significant advances in window technology since the house was built.

You would have to pay me a GREAT deal of money to live in (let alone retire to) a place that gets to -36°C - that is an almost ridiculous temperature for human beings to aspire to live in (especially if they have other choices). We are a hot-climate species - don't you know that?

Nothing nicer than walking along a beach in the middle of winter - without a sweater needed!

And apart from the vast fossil fuel energy you all need to consume to keep yourselves from freezing. Sounds utterly nuts to me of course - but I come from a hot country down under!

There are quite a large number of Australians in this area. College students in particular come for the skiing. Our ski season is their summer vacation, so they work at the ski resorts (for very low wages) and then go home when the ski season ends.

The houses all have large amounts of insulation and central heating, so they are quite cozy in winter. We know it gets cold here, so we are prepared for it. OTOH, I have known people to come back from Australia and say they were never so cold in their lives.

If I want to walk along a beach in the middle of winter, I'll book a vacation in Mexico or the Caribbean. Most people do in winter.

Sounds like the Northwest is almost as wretched as New England this week. Did you get hit?

It's almost comical, really. For days we'd been warned we were going to get run over by snow. I live nearly 300 miles East of Seattle - it is an entirely different situation in my part of the State. After much eager waiting, yesterday, Wednesday afternoon, it finally started to snow.

We're used to snow here. Seattle is not. Their streets are set up with knobs for lane dividers and markings - incompatible with plows - whereas in my area plows are carried around on pickup trucks by opportunists looking for a parking lot job.

Seattle did get hit hard, they're suffering over there - at least until it warms up and it will soon as it always does. It's a different atmosphere.

Yesterday's snow, and more significantly today's, has left about 1 foot of accumulation - light and dry. I just finished snow blowing my street and driveway - ah, the joys of a pint of gas - and it's still snowing out there. The weather reports have been unreliable - they've been way off the mark locally for the amount that's expected to fall vs what has fallen. They're saying the temperature is supposed to rise into the higher thirties tomorrow, which is going to leave an ugly mess in places and that foot of snow will pack to about 4 inches - business as usual - perhaps a bit of flooding in places ...

Did we get hit? Sure. More than usual? Not really - more than the last couple of years, but my many years of living in this area has seen significant snowfall one year, and hardly none the next - ice roads one year (snow-melt-freeze-stay), snow and slush the next - it varies widely. I remember one winter in particular, the day after voting day when GW Bush was elected for round one, it snowed and froze (November 8th or so) and the temperature didn't rise above freezing until mid-march - and not much more than that initial snowfall fell that season.. It was an exceptional year in my experience - the local news was warning us that we'd find mildewy lawns ... LOL

In days past, cities would have central steam generation that would deliver steam by pipe to a number of dwellings - perhaps that's the way things will need to go - reverting to radiator heat from centralized sources. Of course, if there were pipes, then there could be natgas deliveries

It is more efficient to distribute natural gas to each house, and then put a 97% or higher efficiency natural gas furnace in each house. These things can be small enough to fit in a closet or hung from a ceiling if there is enough insulation (e.g. R40) in the house, and they can exhaust out the side wall with plastic pipe because the exhaust temperature is so low.

The old centralized steam systems lost too much heat in the distribution network, and they usually used coal, which is a lot less environmentally friendly than natural gas.

If your forced air furnace distributes the hot air in uninsulated attic and crawl spaces then your overall efficiency is probably closer to about 65% - 70% then 95%. Need to go with hydronic heating and a modulating/condensing boiler if you want the high overall efficiency.

What makes you think I have uninsulated attic and crawl spaces? No no no no. I built this house myself.

The attic has 12 inches of fiberglass insulation with no ducts, no light fixtures, and no breaks in the vapor barrier except the main sewer stack, and the basement has 3.5 inches of fiberglass batts and 1.5 inches of polyurethane board on the walls. The heating ducts run along the main beam in the middle of the basement ceiling.

I didn't manage to get any insulation under the basement floor (except the bathroom), but that was because the trades got in a rush to pour the concrete. If I were to do it again, I would put 2-3 inches of polyurethane under the concrete. It makes for a much warmer basement floor.

Sounds efficient as long as the return system balances the distribution system. Most houses on the west coast have crawl spaces instead of basements so the distribution system is under the house and the return ducts are in the attic. Besides the thermal losses, all the leakage from the pipes is lost. It just makes programs that switch out perfectly good 88% furnaces with 95% condensing furnaces seem more of a feel good exercise than something that makes a big difference.

Actually, the 97% efficient NG furnace is much nicer than the 85% efficient NG furnace it replaced because it has a multi-speed fan. The burner and fan adjust to higher or lower speeds depending on demand and keep temperatures nice and even at all times.

The old furnace used to kick in at full blast until it got too hot, then it would shut off until it got too cold. The result was that the house was either too hot or too cold. Now, it's always the right temperature. The temperature varies up or down by less than a degree.

Of course, you have to keep your heating system entirely inside the insulated envelope of the house. If you put ducts outside the insulation, obviously they are going to waste heat.

I didn't replace the old furnace because it was inefficient, I replaced it because it was becoming unreliable. However the better temperature control sure makes a difference.

fiberglass insulation with no ducts, no light fixtures

Those ceiling light fixtures are a problem. I suppose with LEDs, the overall heat should be low enough to allow insulation overtop. The problem is I can't count on the next owner of the house to not put in incandescent floodlights. I wouldn't want to get sued if that caused a fire. So, I'm stuck with multiple thermal bypasses.

The way to make centralized steam pay, is co-generation, where the steam is waste heat from the power plant.

The local power plants (there are two of them in town) are hydroelectric, using water from glacier-fed streams. There's not a lot of heating potential there.

60% of Canadian electricity production is hydroelectric and 15% is nuclear. You don't want nuclear power plants providing central heating to cities.

Here in Alberta, the electric utilities prefer to keep the thermal power plants well outside cities for air pollution reasons. They sometimes do use cogeneration to supply process heat to factories, plants, and greenhouses, though.

Another problem with using cogeneration to supply household heating is that it means the power plants have to keep running even when the demand for electricity is low, because otherwise people freeze. Demand for electricity is lowest in the middle of the night.

I'm not sure how it would mix into CoGen, but it seems that Ceramic (or Water) Thermal Storage Units in Residences could be created that can store both Direct Heat and Electric Heat from a CoGen supplier, so the Cogen isn't required to operate on odd schedules to serve these separate masters, so to speak, and in fact would hopefully take the best advantage of the heat output whenever it is produced..

Thermal power plants use boilers to make steam. That steam can be used to make electricity, but in doing so the water is cooled and thus can not be used for heating. So, your suggestion of a problem is actual a benefit, as the low demand for electricity leaves the plant with excess capacity to make steam. That steam could be made available for district heating at just the time of day it's most often needed, in the late night or early morning. The excess available thermal energy could be stored as hot water at each end user's structure for use later during the day.

With the other alternative, that excess generation capacity could be used for powering heat pumps, which also tend to exhibit peak demand during the coldest time of day, early morning. The trouble with heat pumps is that during the coldest periods, their output declines and the heating system switches to pure resistance mode, which would require lots of electric power and perhaps shift the peak demand from summer days to winter nights...

E. Swanson

UAE to give South Korea preferred access to oil


It is worth noting that South Korea is currently building four nuclear reactors in the United Arab Emirates.


Alan et al - ""The UAE, considering its relationship with South Korea, will prioritise crude oil supplies to South Korea". "Prioritise" says something without really saying anything. I brought this up the other day: there are more such arrangements in place todaay then many folks suspect. Be it a contractual agree such as a call or right of first refusal or a more complex agreement, a certain amount of the oil floating around in the free market isn't really in the free market. In return for bulding special refineries to handle their crude, China has tied up at least 450,000 bopd from Venazuela on long term contracts. Pure speculation on my part, but when China loaned Brazil many $billions a while back, besides an interest rate the deal might have included a ROFR of future Bz oil exports. China could have the sole right to to purchase X bopd of any Bz export volume. Such trades have been very common in the oil patch for over 30 years...for both oil and NG. Back in the late 70's in the US having the call on NG from a well was often a deciding factor for a NG utility's decision to participate in the drilling of a well. Access to the NG was as important as the cost. And the existance of such deals is rarely made public. So even backing out ELM from future production expectations, not all the net export oil wil be available on the open market for the highest bidder. I doubt there is a way to develop even a rough guess as to how much future oil production is already technically off the market as a result of these deals.

Rock: Do these ROFR deals usually contain price clauses such as a floating price up to X ceiling? I want to know for instance if China assures themselves oil in case of a shortage, do they assure themselves of a certain price at the same time or would they pay market rates of say $180 per barrel?

S - ROFR has to be tied to some marker price. Otherwise it can become a bidding war. The trade can be made very complicated by including exchange rates, benchmarks such as Brent Futures, etc. There can be min/max volumes, delivery date considerations, paper swaps. Folks who work in this world tend to know how to protect their interests as best as possible. But in the end it essentially boils down to one party being able to control, so some extet, where an exporter's oil ends up. You can imagine how valauble that would be in a PO world. The best bet for the Chinese (or any other importer) is to own a working interest in producing oil fields. Even better when they also include a ROFR on the other partner's oil. And if you can't buy in to production (like DW Brazil, for instance) you can loan them $100 billion and tie repayment to oil delivery instead of cash. I know of no company, even ExxonMobil, that can compete with the Chinese govt in such trades. And neither can the US govt, of course. And if they tried they would have to borrow the monies...likely from China.

The best bet for the Chinese (or any other importer) is to own a working interest in producing oil fields. Even better when they also include a ROFR on the other partner's oil.

They're doing a fine job of that in Canada, where they have worked their way into controlling a large portion of the output of the oil sands. It's ironic that in many cases they are buying out US oil companies, who would prefer to take their profits up front rather than wait for the oil production to come later.

The oil sands were originally developed with US money. It's ironic that US oil companies would sell out just as the investment is starting to pay off in a major way. But, it's all about the money, oil companies ain't yo' mama.

There is a fallacy in that logic. You are assuming that in a PO world the legal system will be there to enforce the contractual commitments. Absent a legal system you would need gunboats to enforce those commitments. While that might work for their interests in Africa and Asia I doubt very much that they will be able to "enforce" their rights in the Western Hemisphere.

Years ago I had a very wealthy client whose money I was managing. I gave him the usual spiel -X % in gold. He listened politely and then said " I have two questions- where is this gold held and in what form". I told him that it was in a vault at Credit Suisse in Zurich and it was in 1kg bars. His response " I have two questions- if the Russians occupy Europe how am I going to get my gold out of the vault and secondly, what do I buy with a kg bar of gold. I agree that it is useful to have gold as a last resort but what you are proposing doesn't work. What I want you do is buy the smallest gold coins you can find. Rent 5 safety deposit boxes around the world put the coins in them and send me the keys"

"Afghanistan banana stand"

Edit - Guess nobody else remembers the '72 flick The Hot Rock... a personal fav.

The reference to safe deposit boxes brought it to mind.

In a Peak Oil world, Canada does have a sophisticated legal system capable of enforcing contracts, and it does have gunboats (guided missile destroyers, actually) and is building more of them. What's the problem? If the Chinese want to buy our oil, we'll sell it to them. The US is not going to object because it doesn't have a clue what is going on in the rest of the world.

It's all about money. The Chinese have lots of money these days.

As long as the prices are tied to markets, it really doesn't matter. Prices will rise, and oil will flow to the highest bidder.

The Chinese are simply preventing other people from blocking their access to oil - they're not tieing it up.

Nick - China owns oil reserves in Angola and many other countries. That oil will be shipped to China or where China decides it will go. In my book that's "tieing it up".

What if the world price rises above what China is willing to pay? Will they be able to pay a price that's less than is prevailing at the time??

And in Canada decides it wants the oil for itself! Or if they decide that they don't want to ship it to China at some predetermined price that is now seriously below the spot market price!

Well, if Canada wants the oil, it will take the oil, but at this point in time most of the oil is going to export because Canada is able to produce a lot more oil than it needs for domestic purposes.

The Chinese will sell the oil to China at market price - they don't like anything to stand in the way of a profit. If anything, they are more capitalistic than Canadians. The point in acquiring control is to ensure security of supply, not to cut prices.

At the moment they are cheerfully selling oil to the US at high prices, but if Chinese refineries outbid American ones in a crisis (highly likely), it will go to China.

Today, the Euro is rubbish so the US dollar is worth some money. Most of China's wealth is in US dollars: I have little faith that this will be a viable currency in the long term.

I suspect that most holders of US dollars are tiptoing around the fact that it is worth ~0 due to the horrendous governance/spending policies of the US for the past decade. Because once someone points out that the emperor has no clothes not too many people are going to want to be seen walking with him...

However, once the US dollar is valued like the peso there should be some good deals on American made products like, um... er... Stuff that's made in America

One reason the Chinese are buying up so many oil sands properties is that it is one way to unload large amounts of surplus American dollars.

They pay for them with billions of American dollars, the dollars end up back in North America (and find their way back into the US from Canada), and the Chinese end up holding large amounts of oil reserves, rather than large amounts of paper money of dubious value.

Canadians use the dollars to do things such as buy second homes in Arizona (the largest of out-of-state buyers of Arizona property are Canadians). The Chinese get oil, the Canadians get land, and the Americans get their dollars back.

R - It sounds like this kind of investment is mainly just a protection against a repeat of 1973 oil shortages. They'll get all the oil they can want and a kickback on the difference between the inflated prices and the cost of production when the prices are at westexas predicted levels or more. The Chinese can then choose if they like to shield their population from much of the price increases by redistributing increased profits as a short term subsidy.

Is this right?

The Chinese will likely not shield their population from oil price increases except on a very short term basis. They will more likely allow the prices to flow through to the consumer and then encourage them to take the electrically powered trains rather than driving. They have spent a lot of money electrifying their railroads and putting in high-speed rail.

The point in locking up global oil supplies is to ensure that their industries have an adequate supply of oil in the long term. Individual consumers are very much a secondary consideration. China is not a democracy, after all.

Bulgaria bans shale oil and gas drilling

The Bulgarian parliament banned on Wednesday shale oil and gas exploration through hydraulic fracturing or fracking due to environmental concerns following widespread protests against the unconventional procedure

"The ban is permanent and applies for the whole territory of Bulgaria and our territorial waters in the Black Sea," the text of the decision read.

According to JODI, Saudi Arabia produced 10,047,000 barrels a day in November, an increase of 685,000 barrels a day from October and 1,788,000 b/d more than November 2010.


I estimate that 2011 annual Saudi net oil exports will be down by between 1.0 and 1.6 mbpd (to annual net exports of 7.5 to 8.1 mbpd), relative to their 2005 net export rate of 9.1 mbpd (BP, total petroleum liquids), as annual Brent crude oil prices doubled from $55 in 2005 to $111 in 2011.

As I have occasionally noted, this ongoing decline in net oil exports relative to 2005 is in marked contrast to the Saudis' net export response from 2002 to 2005 (from 7.3 mbpd to 9.1 mbpd), as annual Brent crude oil prices went from $25 to $55.

Using the lower estimate of 2011 net exports, 7.5 mbpd, Saudi Arabia would approach zero net oil exports in about 16 years, around 2027. Using the higher estimate of 2011 net exports, 8.1 mbpd, Saudi Arabia would approach zero net oil exports in about 19 years, around 2030 (in both cases extrapolating the 2005 to estimated 2011 rate of increase in the ratio (C/P) of Saudi consumption to production of total petroleum liquids). At the 2005 to 2010 rate of change in the C/P ratio, Saudi Arabia would have approached zero net oil exports by the end of 2024. So, the slope of the projected Saudi net export decline has changed slightly.

A rough rule of thumb* suggests that the Saudis will have shipped half of their post-2005 Cumulative Net Exports (CNE) by the end of 2012, based on the 2010 estimate, and they will have shipped half of their post-2005 CNE by the end of 2014, based on the most optimistic 2011 estimate.

*Half of post-peak CNE tend to be shipped about one third of the way into a net export decline. In other words, relatively high initial post-peak net export volumes are disguising a very high depletion rate, the depletion rate being the rate at which post-2005 CNE are being shipped. Based on the most optimistic 2011 estimate for Saudi net exports, I estimate that the 2005 to 2011 post-2005 CNE depletion rate for Saudi Arabia is about 8%/year.

Think of it this way. Let's assume you have $100,000 in the bank and you withdraw $10,000 the first year, $9,000 the second year, $8,000 the third year and $7,000 the fourth year. The rate of decline in annual withdrawals (analogous to the net export decline rate) is 12%/year, but the cash balance in the account is falling at 27%/year (analogous to the post-2005 CNE depletion rate).

Some CNE comparisons: http://i1095.photobucket.com/albums/i475/westexas/Slide1-8.jpg

Thanks westexas, but the following two estimates were probably too low:

Saudi Arabia's Crude Oil Production Peaked in 2005

Ghawar reserves update and revisions (1)

My prognostication was, and remains, that 2005 was more likely than not the final annual Saudi production peak (at least based on the BP data base; the EIA data have been a little strange of late), but that it was extremely unlikely that Saudi Arabia would ever again exceed their 2005 annual net export rate of 9.1 mbpd (BP, total petroleum liquids).

In any case, as noted above, we are talking about pretty minor changes in the projected slope of the net export decline, especially since most of the post-2005 CNE are shipped early in the decline phase. The most optimistic current C/P projection is that total Saudi post-2005 Cumulative Net Exports will be half gone in three years.

And then we have the Chindia factor.

I estimate that there are about 157 net oil importing countries in the world. If we extrapolate the Chindia region’s 2005 to 2010 rate of increase in their combined net oil imports, as a percentage of Global Net Exports of oil (GNE), in 19 years just two of these oil importing countries--China & India--would consume 100% of GNE.

According to EIA:

2005: 9.55 mb/d
2011: 9.44 mb/d (December 2011: 10.00 mb/d)

I think we get a new peak in 2012 (according to EIA data).

Note the sizable discrepancies between 2010 EIA data for Saudi Arabia versus BP and JODI. There is even a sizable discrepancy between the EIA and the Texas RRC regarding annual Texas production.

Incidentally, following are Sam Foucher's projections for Saudi Arabia, based on annual production & consumption data through 2006. The actual post-2006 data points are circled. I am estimating 2011 consumption at 3.0 mbpd, with production between 10.5 and 11.1 mbpd (total petroleum liquids), resulting in a 2011 annual net export estimate of 7.5 to 8.1 mbpd.

I don't know how many different ways that I can say that we are just looking at pretty minor changes in the projected slope of the net export decline.

The most optimistic current C/P projection is that total Saudi post-2005 Cumulative Net Exports will be half gone in three years.

Do we have any independent assessment of Saudi oil production reports? As far as I know, they do not even officially report exports, these are estimated by oil tracking companies measuring the water line of departing tankers, etc.

What is there to stop Saudi reporting rising production, and increased domestic consumption, simply to hide flat to declining production?

I have wondered exactly the same thing for years. Their stated domestic consumption curve has climbed noticeably over the course of the last decade.

Per oil tanker trackers, Saudi oil exports haven't increased much over the last year. I think the growing discrepancy between output and exports partly is due to what definition of 'oil' applies. The Saudi production report includes condensates. But even adjusting for that and an increase in internal demand, a back of the napkin calculation still doesn't add up.

One possible explanation is that oil produced is not used or exported, but simply stored. Another explanation is that the figures are, well, wrong.


How do how Tanker Trackers account for imported residual fuel for SA? The Saudi's in the past have been know to export their crude and import residual oil for their power generation, not sure if they are still doing it as I haven't seen it mentioned for a while.

Think of it this way. Let's assume you have $100,000 in the bank and you withdraw $10,000 the first year, $9,000 the second year, $8,000 the third year and $7,000 the fourth year. The rate of decline in annual withdrawals (analogous to the net export decline rate) is 12%/year, but the cash balance in the account is falling at 27%/year (analogous to the post-2005 CNE depletion rate).

You've lost me on this one. Show me the sequence of numbers in this case that has a 27% decline year over year. Here's the only two sequences I think you've shown me:

Balance    Withdrawal    Something?
100,000      10,000
 90,000       9,000
 81,000       8,000
 73,000       7,000

What goes in the "Something" column that's declining at 27% per year?

Wondered me also. From 100,000 to 90,000 doesn't seem a 27% decline in cash balance. The oilexport decline data from past peak countries that westexas publishes regularly look far more alarming, especially if a country's consumption of oil doesn't go down (something that Iran is trying to do).

Mea culpa. I must have inputed a wrong number into the calculator. Probably better to stick with the model and actual production/net export case histories:

If we look at the ELM, here was the point I was trying to make. Three years after the production peak, the post-peak net export decline rate was 14%/year (net exports falling from 1.0 mbpd to 0.65 mbpd), but post-peak CNE fell at 31%/year (falling from 100% of post-peak CNE to 40% of post-peak CNE).

ELM Graph, assuming production peak in 2000:


So here's the version of my little table that I think shows your point (with things linearized so the numbers are easy, instead of actually being done more realistically).

Trust Fund   Withdrawal   Consumption   "Charity"
  100,000      10,000        4,000        6,000
   90,000       9,000        4,500        5,500
   81,000       8,000        5,000        3,000
   73,000       7,000        5,500        1,500
   66,000       6,000        6,000            0
   60,000       5,000        6,500       -1,500

A trust fund (oil in the ground), limited withdrawal (technology), increasing consumption (population and economic growth), and the difference given to charity (net exports to other countries). Still lots of oil in the ground, still producing, but suddenly a net importer.

In the case of Mexico -- a situation that concerns me greatly -- sales to foreign countries generate a big chunk of their federal government's budget. Tough choices: raise domestic prices to curtail domestic demand and economic growth, or cut federal spending substantially, or both. I understand that you can find otherwise conservative businessmen in the northern tier of Mexican states that think declaring independence and "asking for asylum" as some sort of US territory is beginning to make sense.

mcain: As each of the oil exporting countries, individually, passes over from exporter to importer under the ELM model, the draw on the remaining exporters grows, not only from loss of exports by the newly oil impoverished nation, but by that oin's new status as importer.

Then those OECs run out faster, causing the rest to run out even faster.

When the end comes, it will not be a slow paced gradual withdrawal. It will be sudden, and shocking to the economies of the world.

Further, as nations like Mexico begin to contract, they break up (seek asylum as a new US territory), creating additional drag on the US (or substitute other nearby 'rich' nation), until the entire world becomes an oil importing planet.

Doesn't sound like a very good future. What do you suggest we do?


As each of the oil exporting countries, individually, passes over from exporter to importer under the ELM model, the draw on the remaining exporters grows, not only from loss of exports by the newly oil impoverished nation, but by that oin's new status as importer.

Yes zaphod, after being confronted with westexas data, I realised that this is the bottleneck of Peakoil. It crossed my mind several times and the outcome must be ugly rather quickly, unless the big oilexporters reduce their oilconsumption drastically. Iran is trying and has the gas for it (and has opened its first nuclear power plant last year) and KSA is considering nuclear power.

After delays, Iran's first nuclear power plant, Bushehr I reactor was complete with major assistance of Russian government agency RosAtom and was officially opened in a ceremony on 12 September 2011.Iran has announced that it is working on a new 360 MW nuclear power plant to be located in Darkhovin. Iran has also indicated that it will seek more medium-sized nuclear power plants and uranium mines in the future.

Doesn't sound like a very good future. What do you suggest we do?

That's a question that deserves a long, thoughtful answer. Trying to write one has turned into a book-length sort of project for me; a year in, I'm about two-thirds of the way through a draft.

I don't know what we should do. ButI have a pretty fair guess what WILL happen. Politicians like to centralize power. They take their opportunities when the chance come. I believe they willcrreate a system to manage the global oil flow so that all nations get some. Forced exports, realy. For example KSA can't produce anything other than oil, so toimport food,they will have to export oil. KSA will never cease to be net exporter of oil. When they have onlyone barrel left, they will export half of it.

This move to take controll of the oilflowis the same as taking controll of the economy. So some 15 years or so from now, we will have a central global economical system with very far reaching authority.

This is what I think will happen, and I realy realy don't like it.

Regarding the bank balance model, here is the problem. I misstated the initial balance; it should have been $55,000.

The withdrawals go like this, starting at $10,000 per year and falling at $1,000 per year.

Annual Withdrawals, Cumulative Withdrawal by year and remaining cash balance at end of year (thousands of dollars):

10 & 10 & 45
9 & 19 & 36
8 & 27 & 28
7 & 34 & 21
6 & 40 & 15
5 & 45 & 10
4 & 49 & 6
3 & 52 & 3
2 & 54 & 1
1 & 55 & 0
0 & 55

So, from $10,000/year to $7,000/year, the annual (three year) decline in the withdrawal rate was 12%/year. But the cash balance fell from $55,000 to $21,000 after four withdrawals (55 - 10 - 9 - 8 -7 = 21), which would be a cash balance depletion rate of 25%/year.

So, if you started with $55,000 in the bank and withdrew $10,000 the first year, $9,000 the second year, $8,000 the third year and $7,000 the fourth year, the rate of decline in what you were taking out would be 12%/year, but the cash balance in the account would have fallen at about 25%/year. Note that in simple percentage terms, after four withdrawals, the withdrawal rate was only down by 30% (10 to 7), but the cash balance had fallen by 62% (55 to 21).

Feel free to check my math.

The annual withdrawal rate would be analogous to annual net exports and the cash balance in the bank at the end of a given year would be analogous to remaining post-peak Cumulative Net Exports.

Using the lower estimate of 2011 net exports, 7.5 mbpd, Saudi Arabia would approach zero net oil exports in about 16 years, around 2027.

But, that's unrealistic - it assumes that KSA domestic consumption keeps rising. KSA per capita oil consumption is already above USA levels - how much more can it rise??

Oil accounts for 90% of Saudi exports. At zero net exports, you've got Yemen. That's a powerful feedback mechanism that needs to be in the net export model.

Interesting, I wonder how the Saudi's final annual production numbers for 2011 will compare to 2010.

Note that a year over year increase in annual net oil exports from Saudi Arabia, which we will almost certainly see, means an increase in the depletion rate.

The Significance of the Al-Naimi Price Comment (Stuart Staniford)

And I continue to wonder why, if Saudi Arabia can just turn the valves to 11.8mbd, it was apparently not producing 10mbd when Mr al-Naimi said it would late last year.

Well, at least according to themselves (i.e. JODI) ;-)

Saudi Arabia’s November Oil Output, Exports Rise to 30-Year High

The country pumped 10.047 million barrels a day of crude, up from 9.36 million in October, statistics posted today on JODI’s website show. The kingdom’s exports increased by 721,000 barrels a day, more than 10 percent, to 7.8 million barrels a day, according to the figures, which include condensates and exclude natural-gas liquids.

OPEC crude output rose to most in more than 3 years, IEA says

“OPEC supply is on course to rise further in January,” as U.S. sanctions and a proposed European Union oil embargo threaten purchases of Iranian oil, the IEA said. “As a result, customers have been aggressively seeking alternative supplies from other OPEC members, especially Saudi Arabia.”

The kingdom, the world’s largest crude exporter, boosted output last month by 100,000 barrels a day to 9.85 million barrels a day, the agency said.

“Production may be closer to the 10 million barrels a day mark in January, with an increase in shipments expected” to the west, the IEA said, citing tanker data.

Surprisingly, the claim of a 30-year high in Saudi crude production appears to be true, at least as far as the JODI database is concerned.

However, KSA crude exports of 7,804,000 mbpd were in fact not at a 30-year high. November 2005 showed 7,962,000 mbpd.

Incidentally, here is the ELM, assuming a production peak in 2000, with Peak net exports of 1.0 mbpd in 2000:


I have converted the Net Exports from "Export Land" to millions of barrels of oil per year. Following is what we see by year. The percentage of post-peak CNE remaining at the end of a given year would be analogous to the fuel tank on a car. Note how quickly the ELM "fuel tank" declines.

Peak Year (2000): Annual Net Exports of 365 mb, with post-peak CNE (Cumulative Net Exports) of 1,382 mb (By definition, 100% of post-peak CNE remaining)

Annual Net Exports & Remaining post-peak CNE at end of Specified Year of Decline

2001: 318 & 1064 (77% of post-peak CNE remaining)

2002: 274 & 790 (57% of post-peak CNE remaining)

2003: 230 & 560 (40% of post-peak CNE remaining)

2004: 190 & 370 (27% of post-peak CNE remaining)

2005: 150 & 220 (16% of post-peak CNE remaining)

2006: 110 & 110 (8% of post-peak CNE remaining)

2007: 73 & 37 (3% of post-peak CNE remaining)

2008: 37 & 0 (0% of post-peak CNE remaining)

2009: 0 & 0

Note that one can do "Cowboy Integration" by calculating the area under a triangle, and get a pretty good approximation for post-peak CNE by multiplying 365 mb/year X 9 Years X 0.5, (less 365 mb), which is about 1,300 mb, versus actual post-peak CNE of about 1,400 mb.

As noted up the thread, I estimate that 2011 annual Saudi net exports (total petroleum liquids) will be between 7.5 and 8.1 mbpd, versus the 2005 annual rate of 9.1 mbpd, as we are seeing a small change in the slope of the projected and ongoing net export decline.

If we take a net export rate of 7.8 mbpd as a middle case estimate, then Saudi Arabia would approach zero net oil exports some time around 2028 (I am projecting the 2005 to 2011 estimated Consumption to Production ratios, total petroleum liquids, which increased from 18% in 2005 to an estimated 28% in 2011). The 2028 estimate is consistent with Sam Foucher's projections.

Using the same approach that we used for "Export Land," post-2005 Saudi CNE would approximately be: 3.3 Gb/year X 23 years X 0.5, (less 3.3 Gb), which would be approximately 35 Gb.

2006 to estimated 2011 Saudi CNE are about 17.5 Gb, so based on this ballpark estimate, post-2005 Saudi CNE would already be about 50% depleted.

Re: The Limits to Growth at forty: Is collapse now inevitable?

The author presents a strange comment mid-story. He wrote:

The team of Scientists behind The Limits to Growth have stated that they will not be engaging in a sequel to their study, as starting from current conditions, there is now no plausible assumptions other than over shoot.

There was an up-dated version, Limits to Growth: The 30-Year Update , published in 2004. I didn't catch any reference to this later effort, although the author may have been aware of it. However, now almost 10 years further down the road, the researchers may indeed have decided there's no way out for humanity...

E. Swanson

I recall reading somewhere in the 'Limits to Growth: The 30-Year Update' that they planned a 40 year update however, as early as the ASPO-5 conference in Italy in 2006, Dennis Meadows had concluded that ... "We will not be writing a new version of LTG, as it is now too hard to think of policies for sustainable development."

see ASPO 5. Dennis Meadows - Peak Oil and Limits to Growth

Dr Meadows' presentation is here

The pooch is screwed ... it would seem.

And from the 'screw the pooch' dept. ...

Amazon Basin shifting to carbon emitter

In an overview published in the journal Nature, scientists led by Eric Davidson of the Woods Hole Research Center in Massachusetts say the Amazon is “in transition” as a result of human activity.

“Deforestation has moved the net basin-wide budget away from a possible late 20th-century net carbon sink and towards a net source,” according to their paper.

Hopkins did an interview with him and he said this interesting thing:

When we run our computer and we see the first curve peak over and go down, we just quit paying attention, because we know that when that happens its going to bring so many changes into the system that our ability now to know what’s going to happen is zero, so we just don’t pay attention to it. That’s my attitude. I think climate change, and the oil peak, either of them and certainly together, are going to introduce so many changes, that I don’t know what it’s going to be like.

I wonder if he feels it will get so chaotic that LTG type models are going to be nearly impossible to do.

I guess they went on to do some multi nation studies as part of the 70's work. But I have not tracked down a copy to read it. I wonder if there are some hints as to what we might expect as the resource base shifts from developed nations to developing ones.

Fire at PEMEX Ku Maloob Zaap platform KU-S. Biggest oilfield in Mexico shut in. Personnel evacuated.


Petroleos Mexicanos (Pemex) was forced to implement the Emergency Response Plan Monday night at 18:15 hours, after a turbocharger caught fire on the third level of the HA-KU-S platform, Process Center Ku Maloob Zaap.

"The fire was brought under control at 18:45 hrs.

Up top
Gas prices may get close to $5 in some spots


Electricity Declines 50% as Shale Spurs Natural Gas Glut

Writing on the wall? What are car makers thinking about?

Honda continues to market its NG-fueled Civic. The price differential is about $7,000 over a comparable gas-fueled Civic. Estimates are that the fuel costs for the NG will work out to the equivalent of about $1.75 per gallon gasoline. Average suburban vehicle miles is about 30/day, call it 0.9 gal/day of fuel. Then

(7000/((5-1.75)*0.9))/365 = 6.5

Call it six-and-a-half years to get back the difference in the initial price through fuel savings, ignoring the time value of money effects. Could be more or less than that, of course, depending on the actual price differential over several years. I suspect NG prices will not stay this low; the penalties under the Cross-State Air Pollution Rule are scheduled to start in 2013, and some electric utilities will be looking for a lot of new NG-fired electricity.

I make one long-distance trip by car each year, an annual handyman visit to my 80-year-old mother. There are no publicly-available CNG fueling stations between Denver, CO, and Lincoln, NE, and the NG-fueled Civic's range is too short to cover that distance. If I add in the cost to rent a gas-powered car for that week-long trip, it adds at least somewhat to the payback period.

I maintain that the price difference between gas-powered and alternate power sources for cars is too great to get most people to make the choice (ie, double the price of gas and people will shift to higher-mileage gas-powered vehicles, not CNG or electric). What will push them is gas rationing. Which I expect sometime in the next 20-25 years, in order to ensure the military, farmers, etc have access to sufficient liquid fuels.

Additionally the tax subsidies have disappeared.
Back in '06 when I bought my Prius, although in my situation, a more than doubling of my mpg over what I had been getting would have been sufficient justification for me to make the purchase, the combined Federal tax credit and State rebate were also significant factors. At that time, my tax credit was worth $3,150 and the PA state rebate was worth another $500. That represented a very nice savings over the $26,350 price tag; more than 10%.

Without tax subsidies, I think alternative energy vehicles are going nowhere except for people with unique justifications for buying them.

The Tax subsidies for hybrids disappeared but the tax-credits for cars with charged batteries in them are going strong.

You can convert an existing vehicle to NG and have it to run on both NG or gasoline(bi-fuel).

Natural gas cars are nice . . . but that is a 'bridge solution' as the shale boom will eventually end. The automakers are moving into electrification, but it is very difficult. The up-front costs are high, the range is limited, and refuel time is slow.

The biggest advantage EVs have, much cheaper fueling costs for the cars, is difficult to quantify no one knows long term oil prices and is a long-term benefit, something humans are notoriously bad at taking into consideration.

But if the auto-makers keep at it and reach mass manufacturing scales and the oil prices go up a bit more, I think we will eventually hit a tipping point. It is going to take a few years though and there will be much pain & gnashing of teeth.

spec - But is it really a bridge if it doesn't get built? The negatives you mention are well know to the players who'll have to make the huge capex investments to get that bridge built. Again, without major govt intervention, I don't see NG motor fuel ever becoming a player. And if the govt does jump in and starts trying to pick "winners"? You a betting man? LOL.

NG seems best suited for fleets like transit buses and UPS that use vehicles that are large enough to accommodate the fuel tanks and return to a central barn at night to refuel. For the rest of us, CTL and bio to liquids to supplement the tar sands, deep water and other unconventional sources of $150/bl oil seems like the more plausible route. At $6/gal gas, a lot of fuel sources will kick into the mix along with demand destruction through fuel economy and other conservation measures.

Whether or not the US sees these prices anytime soon will depend on who comes out on top when the financial system gets done digesting the trillions of bad debt. The arab countries are not self sufficient in food and so will export oil no matter what the internal demand for oil is in order to feed there population. Assumptions about net imports and exports will not hold up once easy credit has been removed from the world economy. Net importers can easily become net exporters again if the government loses the ability to subsidize fuel. All of this makes investing in alternative energy very difficult if the economics depend on future higher prices. In terms of NG, it could leave billions spent on infrastructure and vehicle design stranded if the economics leap NG to other liquid fuels.

I mostly talked about EVs. I think EVs are good for light-duty . . . heavy duty trucks could use natural gas since they need the energy density more.

I have no problem with the government picking cars with big batteries as a (somewhat) 'winner'. A few reasons:
1) There are not many options: gasoline/diesel, natural gas, biofuels, EVs, and hydrogen. Gas/diesel is what we are trying to move away from since it is finite, it is mostly imported, it pollutes, and it is CO2 intensive. Natural gas is good but a 'temporary' solution as natural gas will eventually peak as well. Hydrogen fuel cells have been a bust . . . it is difficult & expensive to make hydrogen, it is difficult to transport, it is difficult to store, it is somewhat dangerous, and fuel cell stacks have remained very expensive. Biofuels are still pretty speculative and can't make a huge dent w/o using up massive amounts of land we need to grow food on. That leaves us with EVs. EVs are still expensive and struggling . . . but they are within the ballpark. Just bit more refinement of EVs and a bit higher price of oil and EVs will start becoming popular. EVs have won . . . we are now just supporting the winner, not picking it.

2) Even though we picked cars with big batteries as a 'winner', it is still a very open-ended competition. You can make serial-hybrid PHEVs like the Chevy Volt that include a gas engine. You can make pure EVs like the Nissan Leaf. You can make sports car EVs like the Tesla Roadster. You can make cheap slow-speed Neighborhood Electric Vehicles (NEVs). You can make commuter EVs like the Smart ED. You can make EV motorcycles. You can make super-efficient EVs like the Edison ELV. You can make luxury EVs like the Tesla Model S and the Fisker Karma. You can even make fuel cell EVs that qualify for the tax-credit if you want. So there is still a lot of competition for the market to sort out.

3) Using electricity makes the transport sector very source energy agnostic. You can easily make electricity from coal, natural gas, solar, wind, geothermal, nuclear, tidal . . . even oil! So having an electrified transport system will allow us to drive our cars on whatever electrical energy source is currently the cheapest, safest, popular, regionally best, etc.

Keep in mind, the ultimate conversion of the vehicle fleet to EV at anywhere near current usage levels will require a doubling of the electric grid. That includes generation, transmission, distribution as well as the recharging facilities. That level of investment will require a significant amount of time to put in place. EVs may be the future but something else will need to get us from the current system to something that is ultimately sustainable. My guess would be multiple sources/types of liquid fuels.

Keep in mind, the ultimate conversion of the vehicle fleet to EV at anywhere near current usage levels will require a doubling of the electric grid.

No, it really doesn't. This is a common misconception. The truth is that we have vast amounts of under-utilized electricity infrastructure . . . at night. The DoE did a study on this. With just the existing infrastructure, you can charge up 73% of the existing light-duty fleet as long as you charge up at night. Just offer a reduced night-time rate. All the new EVs can be programmed when to start charging.

Of course, you probably will have to upgrade a lot of local transformers since many transformers are designed to run hot during the day but they cool off at night . . . that won't work so well if people are charging up EVs at night.

BTW, EVs are no panacea. We desperately need more public transportation. Buses, light-rail, subways, regional high-speed rail, etc.

I suppose if EVs are intended to be a way to replace/extend oil then burning coal and NG at night is one way to do this that will probably be cost effective for people with limited daily driving requirements. If enough nuke plants are built then this could be fairly sustainable. If solar is envisioned as the end game then, other than the southwest where production could be distributed, the remainder of the country will need to upgrade transmission and distribution to handle the increased day time loads as well as install pump and other storage methods. Alternatively, the extra solar power could be used to produce hydrogen and then converted to a fuel, not sure what the break even on that is though.

If you had plugin hybrids and wind. Then you charge with wind when its available, and use gas/diesel otherwise. Your annual fuel consumption is lowered. And you've created a market for variable wind power. This obviously won't work when oil becomes super scarce -but I think that day is a hundred years off. This would help during the first half of the postpeak downslope.

I suspect that first half to actually be tougher than the second half. By then the world will understand whats going on, and be ready to accept whatever lifestyle is possible, rather than trying to kill scapecoats.

And there couldn't possibly be any problems with running that antiquated, poorly maintained infrastructure at a much higher duty cycle, could there?

With a higher capacity factor you generate more funds for O&M.

We're broke, everybody's broke, that money will just go to cover debts at banks. More to the point, not only didn't we invest anything in the infrastructure, the deregulation of the electric utilities was intended to allow them to be stripped of anything that was valuable. It's not just the equipment, the organizations are empty shells now, without proper staffing either in maintenance or engineering.

Anytime your plan is to take a system and run it much closer to its maximum capacity, you are simply looking for something for nothing and setting yourself up for failure. Especially if that system is old and decrepit. The US electric grid does not have the ability to provide a significant portion of our transportation energy - my expectation is that it will be unable to continue to provide the energy it is now.

Don't forget the cost in increased road repair due to the higher weight.

wi - Are you asking why car makers aren't producing more NG fueled vehicles? I'm sure you know that answer: no NG motor fuel distribution system. Basic chicken/egg proposition: whose going to spend $billions on a NG fuel distribution system until someone spends mucho $'s on NG fueled vehicles...and vice versa. And then the final question: if by some miracle both huge capex expenditures are made and NG consumption goes through the roof what will NG cost and will supplies be adequate?

Don't be surprised to see a big drop in NG drilling over the next few months...with the possible exception of shale drillers that have a good oil yield along with the NG. Just yesterday got to hold a check for $6.7 million that I gave to the contractor that drilled our last well. When we bought the prospect NG was sell for $4.50/mcf...not the $2.80/mcf it's selling for today. The real wild card for continued NG shale development may actually be oil prices. If oil drops too much even the shale drillers with good liquids yields may have trouble staying on thier drilling treadmill.

And how much profit will we make from that well at current prices? ZERO. A dry hole...such is life in the oil patch. Unfortunately our successful wells will have a hard time making up for the dry hole at current prices. I just cut another $30 million from our drilling budget. Even with our better than average success rate a lot of conventional NG deals won't fly at these low NG prices. The entire oil patch is cutting way back on conventional NG drilling. Due to the lag time it will take several years for the cut back to show up on the production side.

The cyclic nature of NG pricing is not unknown to the big players. Making a decision to spend $billions on major projects and having to predict NG prices/availability for the next 10+ is no certain matter. As I've mentioned before I don't like seeing the govt mix in with private enterprise but I'm not sure we could ever switch significantly to NG motor fuel efficiently without such intervention.

BTW: the drilling contractor I handed that $6.7 million check to...he wasn't smiling. He drilled the well for us on a "turnkey" basis: a flat rate. The well actually cost him $11 million due to a lot of drilling problems. He and his insurance company are not happy campers. Something folks have to keep in mind when they see a company make a big profit on a well: the good ones also have to pay for the bad ones. And speaking of turnkey nightmares: just heard of another TK driller that is currently $12 million over his bid of $8 million. And they still haven't gotten the well drilled to total depth. And if they don't reach total depth? They don't get the check for $8 million either. The conventional NG prospects we have left tend to be deep (15,000'+) and mechanically difficult to drill. I just killed another $8 million prospect because none of the TK drilling contractors want to bid on it. And at NG below $3 we won't drill it on day rate.

So. Losing $4M on a well? No problem. Drill more wells! What could possibly go wrong?


Indirectly, there is a distribution system for NG as a motor fuel: the electric transmission grid. Pure EV’s and plug-in hybrids indirectly use NG as fuel, although they only represent a tiny percentage of the automotive fleet. Of course, coal, nuclear and limited renewables also fuel the fleet under that arrangement. It remains to be seen just how big a percentage of the fleet can make that shift before weak links in the system get exposed, but I do believe we’ll see a gradual and modest shift in that direction.

the electric transmission grid


Not only that, but your typical NG vehicle is at best comparable in efficiency to your worst NG peaker plants, or 30%. Most new NG electricity plants are combined cycle plants which are 60% efficient, so I'd estimate that an electric vehicle that runs on electricity produced by NG is twice as efficient as your vehicle powered directly by NG. Let's see if the numbers add up!

One can easily use the fueleconomy.com website to look up CO2 emissions (including upstream emissions) which gives one a reasonable estimate of overall efficiency.

Here are the CO2 g/mi numbers from the tailpipe and upstream for the 2011 Civics:

Civic CNG: 252g / 130g : Total 382
Civic Gas: 306g / 76g : Total 382

Hmm, kind of interesting that the 2 are the same. FWIW, the 2012 Civic Gas (CNG not yet rated) is listed at 278 / 68 total 346 g/mi, but let's stick with the 2011 numbers for now.

The full life cycle CO2 emissions of a kWh of electricity from a modern combined cycle gas plant is around 500g/kWh.

The EPA says that the LEAF (closest comparable car to the Civic) will use about 34 kWh / 100 mi or 2.94 mi / kWh, or 170 g/mi if powered by a combined cycle NG plant. Which is slightly less than half the g/mi of a CNG civic - I love it when the numbers match up!

So the moral of the story is: Push for electrification of the vehicle fleet and modern combined cycle gas plants. Not only will we clean up the grid (which we need to do anyway) but we'll also clean up our vehicle fleet as well.

Personally - a huge benefit of electric cars are the elimination of tailpipe emissions - I hate breathing car exhaust and it's everywhere!

So the moral of the story is: Push for electrification of the vehicle fleet and modern combined cycle gas plants. Not only will we clean up the grid (which we need to do anyway) but we'll also clean up our vehicle fleet as well.

I'm on board with this plan. Also put PV panels on your roof to help generate electricity during those daytime peaks. And keep building wind turbines. We will also probably need to build more nukes . . . but we gotta be extremely careful about it. Fukushima is going to be a slow-motion decades long train-wreck for Japan.

Great site, thank for the link.

My '91 CRX checks in at 207-228 g/mi. And though the mileage has dropped significantly since it passed 150,000 miles, the Smog Check numbers are still low enough to freak out my mechanic.

It's such a pity we built such heavy cars over the past 20 years, that we feel compelled to drive them tens of thousands of miles a year, and throw them away like cigarette wrappers.

Don't tell me it would be safer if it were heavier. 15 years ago, I drove like a lunatic; I had three bad crashes, barely tweaked the frame.

There again is the comment from ROCKMAN about shale gas that I recalled in Drumbeat, january 4 in answer to the article 'shale gas turns energy tables'. In Iran they are doing a great job in turning all the cars (and fuel stations) in dual-fuel vehicles, but one (of the) big difference(s): it is not shale gas

That is really a clever move by Iran. It is difficult to export gas unless you have pipelines. But oil is easy to export and much more valuable. So they want to use their vast local natural gas supplies for cars and export the very valuable and easy to export oil for hard currency.

At least I'd expect new petrol/diesel models to stop coming to the market. And I haven't seen any dual-fuel launches by the car makers either. Here in India CNG vehicles are small in number but growing rapidly, lots of small and medium enterprises engaged in petrol to CNG conversion business.

They are coming soon:


The Ford F-250 and F-350 pickups with the bi-fuel Westport WiNG™ have undergone the same rigorous Original Equipment Manufacturer (OEM) testing for safety and durability required for all OEM products. Engineered at the new Westport technical facility in Plymouth, Michigan, it will be installed and the trucks will be ready to roll when they reach authorized Ford dealers. They are designed to meet both EPA 2012 and CARB 2012 standards.
Westport will demonstrate the WiNG™-powered F-250 through a "ride and drive" at two conferences to be held in Texas in October. The F-250 and F-350 pickup trucks are expected to ship in the second quarter of 2012.

There has been a lot of discussion here about the rapid depletion rate of fracked gas wells and the contrast between the cost of fracking and the rapidly dropping price of natural gas due to the glut of gas. We talked also about the movement of drilling efforts from gas to oil as prices of the two have moved in opposite direction. Is anyone willing to make a prediction of when these changing circumstances are going to cause a reversal in the price of natural gas?

I think the ng rig count will continue to decrease over the next couple of months (from ~800 to ~600) and next winter prices will rise by $1-1.50. If the ng rig count falls below 400 then prices could skyrocket next winter. If there is a recession then all bets are off...

It won't be fast, I believe, because wet gas wells will still produce a lot of gas paid for by oil. Unless oil drops drastically, these plays are probably still sound. I'd like to hear Rockman's take on this.

I am not an unbiased observer, as I intend to provide equipment into either sort of well, but I'm betting that dry gas fields slow way down this Spring, while wet gas fields will remain a boom town bonanza.

paleo - I lean in your direction. NG drill rig counts can move up and down a lot faster than actual production. So can prices. The strongest fast impact on the entire process is economic activity...i.e consumption. Can see big swings in that area in 12-18 months. And that leads to big swings in prices which can lead to big swings in drilling. But production rates? Not so much. The volume of existing/producing NG is huge compared to any changes in gain/loss. As I've mentioned before it might make sense for producers to cut NG production rates when prices drop. But the pressure is just the opposite: lower prices = lower cash flow = efforts to increase rates. Not for all companies but for most. Cash flow is almost always king. And cutting back production rates only makes sense if you expect prices to swing back up relatively soon. And absolutely no one I know has any such expectations. In fact, just the opposite.

I wouldn't expect a significant drop in NG drilling to show up on the production side for a number of years. I probably wouldn't have drilled half the NG wells I've drilled in the last 3 years if prices were where they are today. In fact, my company might not have been formed at all. But that's history and can't be changed now. Those wells I did drill will keep producing NG as fast as possible. The typical time lag is measured in several years at a minimum. The US will have relatively cheap NG for some years IMHO...especially if we are slipping back towards recession.

The drops in rig counts the last decade both resulted in an almost immediate drop (a few months lag) in production. I would graph this but it appears I would have to summarize the weekly Baker-Hughes rig counts into monthly averages since EIA data is monthly. Too time-consuming when one can just look at the data and get a feel for it.

EIA Marketed Production

Baker-Hughes Rig Counts

gog - Might seem that way but not likely. You may be looking at a combination of other factors that make it look that way. Typically in can take several months (or more...my last swamp well took 14 months to begin production)for a newly drilled NG well to begin production. If the NG drill rig count dropped to zero in January you would still have the same number of new wells coming on during the first quarter: wells drilled during the last quarter of the previous year. And the lost production from all those wells not drilled in January couldn't be seen for a number of months either. Also consider how much NG is currently being produced in the country and compare that to how much new NG comes to maket every month. The new production is just a tiny percentage of current production. Thus fluctuations in the volume of new NG coming to market would be difficult to see on a month to month basis.

IMHO other factors such as reduced consumption and diversion to storage would show up more clearly than a rig count rate. I can't predict how the shale players wil react to the contiued drop of NG prices but I do know conventional companies like mine are cutting back NG drilling. And that will show up in the production stats. But better seen a year or two from today IMHO...not over the next few months.

We had a similar discussion 3 years ago. I guess I'll have to analyse the data myself since I still think that rig count and production are strongly correlated. On your side, CHK's analysis of rig counts and production that Jon Friese shared in a key post didn't work out too well in retrospect. I should probably look back at that though and make sure I remember correctly.

As I've mentioned before it might make sense for producers to cut NG production rates when prices drop. But the pressure is just the opposite: lower prices = lower cash flow = efforts to increase rates.

So they are losing money on the each new production unit, but making up for it in volume? ;)

Re: Problems plague cleanup at Hanford nuclear waste site

My cousin used to work for a firm that designs cleanup plans for various sorts of environmental problems, including nuclear. He tells me that after seeing some of the classified info on Hanford that the firm was given access to when they were invited to bid on some aspect of the cleanup, the risk management officer overruled everyone and said, "We will not bid this job at any price."

Problems plague cleanup at Hanford nuclear waste site

It is a good article. The scientists and engineers have grave concerns.

I'm sorry I'm so cynical... I guess I've just seen too much... The scientists and engineers are silly, innocent little bumpkins, or "boffins", as the British would have it. The purpose of the project is not to clean up anything. The purpose of the project is to re-distribute twelve billion dollars. "The stuff is perfectly safe, anyway", as some would say: "Show me one death directly related to the "worlds biggest radioactive hazard". Just one!"*

I wonder what the problems are with vitrification in-place? Sinking smaller cylinders down into the tanks, mixing in the sand-like glass materials, electrically fusing the stuff under a cover-gas with fume recovery, and then pulling the glass-filled cylinders back out?

"In Situ Vitrification"

$200 per cubic yard is quoted... call it $1500 per cubic yard?

*Not that I'm being critical of the DOE. I love the government and all of its offices and departments. I love the leader. Corporations love us and care for us better than family! DHS is keeping us very, very safe.
I would agree that anyone who replies to any post disrespectful of our loving officials probably knows someone who knows someone who knows someone who makes phone calls to a country that has an Al Qaeda member in it. Bless the NDAA.

** +10

** I support your unquestioning and unequivocal support of everything the USG does.

U.S. America prevails!



Carry on, good citizen. May you be a shining example to the rest.


The Hanford facility is a nasty piece of work, and there are plenty of casualty figures associated with it. There will probably be a lot more over time.

Among the nastiest things is tanks filled with an unsorted mix of chemical and radiologic poisons. If a terrorist tried to raid Hanford for WMD materials they probably wouldn't survive long enough to leave the site, even if they managed to evade all the guards and security measures.

It is a very good example of how to *not* handle radioactive waste, and a lesson that appears to have been learned by all countries currently involved in nuclear power (including the organization that set it up in the first place).

With all that said, even Hanford doesn't match the lethality of "clean, safe" natural gas. It isn't even a near contest.

http://english.cri.cn/6966/2012/01/19/1461s676981.htm 10 injured, property damage
http://www.guardian.co.uk/world/2011/dec/23/colombia-pipeline-explosion 11 fatalities
http://www.zanesvilletimesrecorder.com/article/20120118/NEWS01/201180324 No fatalities, property damage
http://www.csmonitor.com/World/terrorism-security/2012/0103/Syria-pipeli... Terrorist do use gas pipelines as targets and weapons.

This is just one aspect of one fuel that we are using instead of nuclear.

A certain biblical reference to logs and motes comes to mind.

With all that said, even Hanford doesn't match the lethality of "clean, safe" natural gas. It isn't even a near contest.

How do you think a gas pipeline will compare to a nuclear facility or nuclear waste site, a few hundred years from now should civilization unravel? Do you think the lethality levels will still be the same for both? Do we today have any responsibility with regard to future risks?

We do have a responsibility for future risks, but should we let that outweigh our concern for current risks that don't rely on a particular path of future events?

Could you elaborate?

Natural gas, oil, and coal are killing people now as well as poisoning the environment in a persistent and dispersed manner. Chemical and radioactive contaminants in coal ash are spread about the landscape willy-nilly, CO2 release is an inevitable effect of oxidizing carbon for the energy released, and the water vapor released as a co-product from hydrocarbon fuel burning is also a powerful greenhouse gas. This is on top of the immediate hazards from uncontrolled reactions I pointed out above.

Nuclear power does involve hazards, and should civilization collapse those hazards will not be well controlled, but they will be point hazards with minor dispersion at worst, very similar to the hazards posed by naturally occurring radioactive mineral deposits.

It's like complaining about how unsafe a sharp knife is while standing under an anvil held up by twine.

they will be point hazards with minor dispersion at worst,

20 and 30 mile no-go zones are "point hazards?

very similar to the hazards posed by naturally occurring radioactive mineral deposits.

Sure. Guess the 'natural' minerals do this:

But we could not spot any signs of fuel, unfortunately.

The 'natural' stuff just goes missing cuz it's on a walk-about also?
(Hint: The link talks about how Fukushima #2 is missing its fuel.)

I don't think you actually read that article, except to find the partial quote that best supports your lack of case. They know where the fuel is, their pet 'bot just couldn't get a picture of it on that pass. Nobody has gone running off with it (or even tried or there would be at least one more fatality associated with this whole mess).

The link talks about robotic imaging in the Fukushima reactors, and even supposes that a fair amount of it might have dropped to the floor under the reactor's primary containment. There are no apocalyptic revalations there unless that's all you can see anywhere.

If it pleases the court of public opinion - r4andom did not attempt to rebut the counter claim that 20 and 30 mile exclusion zones are "point source" issues.

Why should I? Anybody with a sense of scale can see that they are.

and the water vapor released as a co-product from hydrocarbon fuel burning is also a powerful greenhouse gas.

You had me until that one. The greenhouse threat of human released water vapour isn't an issue. The halflife of atmospheric moisture is about a week. We would have to compete against the global rate of evaporation, which is huge, to have a measurable effect. Bisically it doesn't build up to any significant extent because it rains out. The extra greenhouse forcing from the 4-5% increase in atmospheric moisture levels is entirely caused by increased temperatures from the other things we've done (mainly the persistent GHGes). H2O is best considered as a feedback effect, if the global temp rises for any reason, H2O vapour increases, and that warms things some more. Releasing condensable GHGes, just aren't a problem.

Just throwing everything out there that I could think of quickly. Evaporation is clearly the dominant source of atmospheric water vapor, but with hydrocarbons you get at least one H2O for each CO2.

Thinking about it again, jet contrails are probably the only place where this actually matters.

Among the nastiest things is tanks filled with an unsorted mix of chemical and radiologic poisons.

Yes. My cousin wouldn't reveal any of the actual classified information, but his company had done a bunch of work to recreate from the records a better history of what had been dumped in various tanks. Chemists then went through to consider what kinds of problems might have been created. He told a story about one of the chemists at a meeting who suddenly looked up from the papers and shouted, "Someone let them mix 20,000 gallons of that together?!?"

Hey, the DOE was my employer for five years. Best career break I ever got. Even learned stuff that was useful later on in my career.

Just yanking General Dynamic's chain: DOE is on their watch-list of social-media conversation subjects. I have greatly appreciated their surplus books and tools.

Re: Solar power takes giant strides, up top:

Solar pumps in Nicaragua

Matt Mushalik from Australia asked me to mention a new post he recently wrote, since it is difficult for him to post during daytime hours.

Nigeria: Oil Producers Try to Reduce Subsidies

Re: Natural gas, fracking links, up top:

The Promise and Problems of Shale Gas

Here would be an apt place to inquire of the knowedgeable contributors about shale oil and gas (gas in particular). I keep having these questions come up, so here is one for today:

After a well is drilled and the frac'ing process is complete, is it possible to cap the well and wait before extracting the product. Or, as seems plausable at least, does the value of the frac'ing diminish whether or not the product is extracted, so that after the well is completed and frac'd the producer must withdraw as much oil/gas as possible as quickly as possible in order to maximize ROI from the expense of the process?


zap - Once a well is flowed back and the frac fluids are unloaded it can be curtailed or shut in completely. With current low NG prices that temptation would be there. Yes...hurts ROR and payout time. But even worse is the loss of cash flow. Nearly all the shale gas players need that revenue to drill the next well to replace the last one. Especially true of all the pubcos that have to prove to Wall Street they are at lest replacing their produced reserves. And with those high decline rates they can't wait a few years to drill that next well.

And shuting in a well isn't usually free: the company may have to pay a "shutin royalty". They might even have a provision in their lease that would cause them to lose the well if they don't produce a minimal amount of revenue.

Aren't most leases for a time certain? Drill within x and out by y?


zap - A lease typically allows 3 to 5 years for me to drill a well. But once the lease passes that "primary term" it typically can only be "HBP" (held by production). Stop producing for more than 30 days and you lose ownership of the lease. But sometimes you can pay a shutin royallty" or produce for a day or two and shutin the rest of the month.

No-go on Keystone XL.

Huffo reporting :-

"The State Department will not approve a permit for the construction of the Keystone XL oil pipeline across the U.S.-Canada border, sources told multiple media outlets on Wednesday".

For now . . .

It ain't over till it's over.

[... you have an all out prize fight, you wait until the fight is over, one guy is left standing. And that's how you know who won. ... "That's" the "Chicago" way! Untouchables - 1987]

Some members of Congress are looking at their 'legal' options ...

from Congressional Research Service ... Legal Issues Associated with the Proposed Keystone XL Pipeline

The court stated that the authority to regulate the cross-border pipeline lies with either Congress or the President. The court found that “Congress has failed to create a federal regulatory scheme for the construction of oil pipelines, and has delegated this authority to the states. Therefore, the President has the sole authority to allow oil pipeline border crossings under his inherent constitutional authority to conduct foreign affairs.

The court also noted that these permits had been issued many times before and that “Congress has not attempted to exercise any exclusive authority over the permitting process. Congress’s inaction suggests that Congress has accepted the authority of the President to issue cross-border permits.”31 Based on the historical recognition of the President’s authority to issue those permits and Congress’s implied approval through inaction, the court found the permit requirement for border facilities constitutional.

I think that if the Obama kills the Keystone pipeline at this point in time, it more or less ensures the oil will go to China instead of the US.

The wind is definitely blowing in that direction.

Did anyone actually think it was going to the US anyway ?

spring - I don't know this for a fact with Keystone, but I've never seen a major pipeline built without have the thru put commodity under long term contract. The oil will be shipped thru the pipeline at some cost per bbl. But the profit margn is completely dependent upon the volume moved. IMHO no transportation system for that oil will be built without a pre-agreed contract for the oil as well as all govt approvals. That's how the p/l biz has always worked and always will...especially in an era where supply security is an obvious issue.

Rocky - I could certainly be wrong but some time ago I mused that the 2012 POTUS election may be determined by the price of gasoline in Nov 2012. Certainly sad if true even though president Obama wouldn't be my choice. A sad comment on the lack of vision on the part of my fellow citizens. I'm sure some folks on the president's staff have similar thoughts. And now some folks are predicting $5/gal in the fall and a potential worsening of the fuel oil situation in the NE. And if those factors come to pass and the president hasn't approved the p/l at that point??? And if by some cruel fate the Canadians announce some sort of deal right before the election with China to eventually get at least some of that oil to them? I'm not a betting man (like you I get enough of that on the job) but I think I would bet on the POTUS election...and give some points too. LOL.

It is highly likely that the price of gasoline will be in excess of $5/gal by the time of the US election in November - especially in the NE with all these refinery closures. It is also likely that some kind of deal between Canada and China will come down the pike before then.

The Canadian government has been getting severely irritated with the US government lately, and while the Conservatives were rather anti-Chinese when they first came to power, after a few years having to deal with the US government, they are starting to think the Chinese are not that bad after all. At least the Chinese know what they want.

Keystone XL: Canada to diversify oil exports, Harper tells Obama

Prime Minister Stephen Harper told President Barack Obama today that Canada will move to diversify its energy exports following the U.S. decision to reject the proposed Keystone XL pipeline.

Mr. Harper's office said the Prime Minister expressed his "profound disappointment" over the decision, and said Canada will try to diversify its oil exports.

It is highly likely that the price of gasoline will be in excess of $5/gal by the time of the US election in November - especially in the NE with all these refinery closures.

Excellent. America needs kicked squarely in the pocketbook, and short sighted politicians sound like they are going to make sure we get exactly what we need. I suppose sometimes it is better to be lucky than good? And to heck with $5/gal, I want $7. Time to bring on the burn and get with the program.

I pay £1.43/litre at the moment, $2.208 /litre, $8.35 /gallon (US) for diesel.

For that I get 55 miles in my car, average. Under ideal conditions it will go 75 miles (if I'm not in a hurry).

A UK gallon costs me $10.03

Apart from a few safety and emissions regulations these cars could be on sale in the US.

One proposal being thrown out is to trade Keystone approval for a 4year renewal of the (wind) production tax credit. Right now the US PTC expires at the end of the year, and roughly 80,000 wind industry jobs could vanish overnight.


I disagree with China getting the bitumen.

I have lived around radical natives and worked with them for the last 40 years. There is a huge sense of entitlement to 'the good life' without a realization of having to move where the jobs are, or secure a good education. (In/for the most part) While negotiations with Enbridge are ongoing with individual bands, the blocking Northern Gateway rhetoric is reaching a determined if not fevered pitch with the hearings underway. I think it will be blocked by BC First Nations as there are virtually no treaties in place. Your opinion has been that the Harper Govt will unilaterally enforce construction through parliamentary decree. I believe that this action would/will only fan the flames and ensure a defeat at the polls next election with Liberal resurgence and a strong NDP forming a coalition to stop it with one or the other in power as a minority.

I don't think the sites will even get prepped much less any pipes welded up and placed. Maybe prepped up to the BC/Alberta border, but not past.

Perhaps in this time frame it is far more likely to get Keystone tweaked and approved after the 2012 election? It isn't that far away.

As an aside, as a very strong believer in the development of Sands projects, nevertheless, I would lie in front of dozers to stop the pipeline from allowing tankers to transport crude through our waters. I spent too many years flying the coast to stand by and watch it turn into a Baku with one tanker f#** up. Can't happen? Well, Queen of the North is still leaking and they might even have an Italian ex cruise ship captain on the Bridge. sarc off. Seriously. I am pretty red necked and conservative, but I know multi-national machinantions and exploitation when I see it. I bet the protests would make OWS look like kindegarten. I get pissed off just thinking about it. There are not enough soldiers to guard the damn thing and people are slo-mo angry at the foreign multi-nationals that have ruled our land for so long. Just MHO, though. I lived through Weyerhauser destroying the coastal forest industry on Vancouver Island and saw them run off by folks who wouldn't put up with it anymore. It happens.


I would lie in front of dozers to stop the pipeline from allowing tankers to transport crude through our waters.

Well, you're too late, they are already transporting crude through BC waters, and they've been doing it for 60 years. The Kinder Morgan TransMountain pipeline is now delivering 300,000 bpd of oil to Vancouver, and Vancouver has only one oil refinery capable of handling 64,000 bpd. Guess where the rest is going?. Crude oil tanker traffic out of Vancouver is increasing rapidly.

Kinder Morgan is proposing to more than double the capacity of the TransMountain pipeline to Vancouver to 700,000 bpd, and that means more and more supertankers moving in and out of Vancouver Harbor. I don't think that's a really good idea because they barely fit under the Second Narrows Bridge, and barely clear the river bottom and the bridge piers on each side, but with a little dredging they can make it all work. Don't get in their way because it takes a supertanker up to 8 miles to stop from full speed, and 2 miles to make a turn.

The Kitimat project is better in that Kitimat Harbor is not nearly as congested as Vancouver Harbor, which in fact is the busiest harbor on the west coasts of North and South America, never mind Canada. San Francisco and Los Angeles are small by comparison.

Neither the pipeline expansion nor the port expansion require any NEB approvals because they are doing the same thing they've always done, just more of it. They are grandfathered into the approval process.

I don't actually know what the Harper government is going to do, but I suspect they are going to wait until after the BC election in May, and then do something drastic. They don't want to screw up the BC election, but they want to allow time for the dust to clear and people to calm down before the next federal election in 2015 or 2016.

RMG, you may have answered this question for me before, but why not take the pipeline to Prince Rupert instead of Kitimat? There is already a large utility corridor there (road, rail, power lines), and a deepwater port that does not require supertankers to go up a long coastal channel.

I'm sure this route is a little longer, but seems to be much lower environmental impact and risk.

I'm sure Harper would love to build his version of the Cdn Pacific railway, would be a good legacy project. I'm not sure there would be the reaction in the east that Paulo suggests, especially once those people get in an oil squeeze as they are reliant on imported oil. As long as he makes sure the oil flows both east and west, the outcry won;t be too bad, IMO.

Enbridge claims the slopes going into Prince Rupert would be too steep for the pipeline. I am not too sure about that claim because I don't know of any such problems that couldn't be solved with a little engineering. After all, CN Rail did manage to run a mainline railway in there with no more than a 0.7% grade, so why would a pipeline be a problem?

I could speculate the difference is that Kitimat is one of the very few private ports in the country, so they may prefer that to dealing with a public port such as Prince Rupert.

The main issue Enbridge has is that they would run into the same conflicts with the environmentalists and natives going into Prince Rupert as Kitimat. It's not overwhelmingly different.

CN Rail, OTOH, already has an existing first-class rail line into Prince Rupert so they have no regulatory hurdles to jump. If they were building their line today rather than 100 years ago, it might be tougher to get it approved.

And yes, the federal government might be prudent to build an oil line to the Maritime Provinces, much as Frank McKenna has suggested. The optics would be good on that.

Either way you go I am sure it is a lot more environmentally friendly than forging across the rugged plains of Nebraska.

Rugged plains? Huh?

Forging across the rugged plains of Nebraska.

The rugged plains of Nebraska? You could forge across them in a 2WD Mazda pickup. Forging across the Coast Range of BC requires a helicopter, or 2,000 workers and an unlimited supply of dynamite.

the slopes going into Prince Rupert would be too steep for the pipeline.

The TAPs was put in over Thompson pass in Alaska on quite steep slopes. With close to the heaviest annual snowfall in the world, and obvious avalnche potential. It costs more, but is doable. Taps crossed, three major ranges, Brooks, Alaska, and (is it Chugach or Wrangle at that point).

That's why I question Enbridge's claim that the slopes going into Prince Rupert are too steep. 100 years ago the railroads managed to put a rail line into Prince Rupert with a 0.7% grade. I'm sure it took a lot of dynamite and a lot of Chinese workers, but Enbridge can buy dynamite, too, and the Chinese will sell them lots of bulldozers in lieu of workers.

BC won't have an election until 2013. Besides, the NDP are pretty much guaranteed to win, and they won't be pro-pipeline. If this thing is going to happen it needs to happen this year.

I really don't know if it'll happen, though. There really isn't a whole lot of benefit to BC from this pipeline. A few maintenance and tanker terminal jobs hardly make up for the optics.

In BC, it involves about 3,000 short term construction jobs and 500-600 long-term jobs, plus about $1.2 billion in tax revenues over the next 30 years, which is why the BC government is staying quiet and not objecting to it.

For the Canadian government and the Alberta government, it involves billions of dollars in taxes and royalties per year, which is why they are being quite vociferous in supporting it. The Saskatchwan government will make a few billion in taxes and royalties from it over the long term, too. They kind of enjoy having become one of the "rich" provinces in Canada, after generations of being Alberta's poor rural cousin.

If the next BC election is in 2013, then I think we will see something happen long before then.

I maintain that this is merely a delay of the pipeline and using it as a bargaining chip. They'll say no for now but ask for a rerouting of the pipeline. They'll approve it eventually but use it to help get other legislation passed.

spec - But I'm sure you know the outcome of some games of "chicken": neither party steers clear at the last moment. Usually not a pretty picture. LOL.

Oh, they do. We have had like 3 government shut-down threats in the past few years . . . it still hasn't happened. I think Obama is tired of being the victim of the strategy all the time and is now going on the offensive. He's going to use the pipeline as a bargaining chip the way the GOP has been using government shut-down as a bargaining chip.

The White House Statement on Keystone XL:

Statement by the President on the Keystone XL Pipeline

Earlier today, I received the Secretary of State’s recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree.

This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico – even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.


A great victory for the future, but likely a fleeting one.

dohboi - I know and appreciate were your heart lies. But you do expect all that oil won't be burned by someone whether Keystone is built or not? I suspect I know your answer and truly regret how it must make you feel.

There is a serious chance the global warming will get bad enough that any of these pipelines will become stranded assets long before their design life spans. Some Chinese are worried:


By the way, how many years of drought do you want in Texas?

targ - Doesn't matter what you or I want. What matters is what the great majority of the world wants: more energy. BTW: in my part of Texas rainfall has been higher than normal recently.

Not sure what you mean. If the supposed victory is about CO2, I doubt that it will matter much if a bit of the ongoing Northern Hemisphere atmospheric injection is diverted to China from North America. The one likely net effect would seem to be an increase in the average distance oil travels before it is consumed. That would raise the CO2 injection rate slightly, though with no particular effect on the total injected in the long term. Therefore, yes, a fleeting effect. And probably an effect mainly on political theatrics.

The longer this pipeline is delayed, the sooner the US goes into economic meltdown, and the sooner the collapse of industrial society is triggered. The majority of the remaining fossil fuels will then become stranded assets, which will not be added as CO2 to the atmosphere, and the sooner the global population will start to decline, and the less extreme the collapse.

Climate change will not be so bad, fewer species will be driven to extinction, less fertile land will be depleted to desert, less natural habitat will be destroyed.

Eventually, in a few centuries, there will be still some fossil fuels left for a more rational society to employ to less destructive ends.

You are ignoring China and India, which is where the bulk of the increase in emissions of CO2 are coming from. Most of their emissions come from burning coal in power plants and heavy industry.

The Keystone XL pipeline will have zero impact on their emissions increase - in fact constraining their oil supply might increase CO2 emissions because they will substitute coal for the oil they might otherwise have burned.

They also have about 1/3 of the world's population.

I'm thinking of secondary or tertiary impacts. Economic tipping points, collapse of global financial system leading to collapse of trade leading to resource wars leading to... you get the picture. China is as likely to collapse from internal problems as external ones - desertification, real estate bubble, demographics etc.

The Chinese, unfortunately for your global collapse model, are on top of things, starting with their "one child" policy to control population growth. India, less so.

The Chinese also are buying up the world's critical resources to ensure that they don't run out, even if everybody else does.

The one child policy is a two edged sword. It has lead to the world's most unbalanced demography. Not only does each working age adult face having two ageing parents to support, but the cultural preference for a male heir to inherit has lead to an imbalance of several percent between the sexes. That is a lot of testosterone to keep under control. Not too difficult in a world of rising expectations and entertainments, harder when energy scarcity starts to bite. Even now Chinese numbers are still rising.

The Chinese may own large numbers of overseas assets, but do they have enough military projection (yet) to assert that ownership when the locals start getting hungry and decide to tear up the contracts? I agree China has done a lot of things right, but I am not sure they have prevented collapse yet.

India will see mass starvation, but I think Indian society is more cohesive than Chinese.

Ralph - Perhaps it's like the old joke about two guys being chased by a bear: it doesn't matter whether you run faster than the bear but can you run faster than the other guy. You might escape the first attack but eventually your time will be up too. I think some folks don't appreciate the huge advantage the Chinese companies have locking up various commodities around the globe. Besides having a long term plan (compared to quarterly plans of corporations) they also have the financial backing of the Chinese govt which makes even ExxonMobil look like a poor cousin. Then add the political clout: don't play fair with the Chinese companies and you might suffer in a variety of ways, such as the Chinese govt not loaning you as much money you need to run your govt.

Depending on where you live in China it's way more than a few percent. In some rural areas there's only one marriage age woman for every 3-5 single men. BTW: the rural areas are the prime recruitment grounds for the military. Even in larger towns it was noticeable. I adopted my daughter in China in 2000 in Jiujang, a city of 2 million, and it seemed obvious. They even have a slang term for those men that translates as "barren limbs/trees".

The Chinese, unfortunately for your global collapse model, are on top of things, starting with their "one child" policy to control population growth. India, less so.

Both these countries seem to be "on top of things" somewhat inadvertently. China has apparently reached its peak production for coal, and the remaining resources are harder to mine and remote from population centers. No doubt it will do its best to supplement declining production with imports, but the scale of China's consumption of coal is so large relative to the world trade in coal and available export facilities (in Australia and Indonesia in particular) that it seems to me inevitable that China's consumption of coal will drop in the coming years.

India is encountering persistent coal shortages, so it looks like the Indians are in the same position.

Shortages do not equate to peak, although it cannot be many years off. There is no doubt that Chinese exponential economic growth is being rapidly reigned back, and that will lead to internal dissent. I think momentum will keep them going for a few more years, but when the tide goes out there will be a lot of stranded assets.

China's predicaments looked a little less obvious to me after I read this

You mean a great victory for Obama. He may be a fraud, but he's a skillful politician, I'll give him that.

If enough deluded liberals show up in November, he'll stay in, just as enough deluded conservatives showed up in 2004 to re-elect Bush. Our comeuppance will come whenever the pipeline is approved, as it inevitably will be, as surely as the sun rises.

If human beings are still around writing history in the future, Bush and Obama will be remembered just like the late emperors of Rome are remembered: blind, corrupt, and decadent.

More like the last years of the republic. Just before the civil wars got going in earnest.

I live near the route of the recently completed Ruby natural gas pipeline that runs from Wyoming to Oregon. The rumors floating around here are that another pipeline is going to be constructed on the now-approved Ruby ROW. No additional environmental assessments, archeology, etc apparently needed. It would only take a minor amount of new routing to connect this with the pre-existing Canada pipeline, and the construction of an oil export terminal in Oregon, apparently already approved as an LNG import terminal near Coos Bay. Maybe RockyMtnGuy can weigh in on the feasibility of this. It would result in a win for just about all of the players involved: Obama, Canadian Big Oil, China, the Texas producers who Rockman says are opposes to the competition that the original Keystone product would create for them, American union jobs, etc...

The Ruby pipeline is a natural gas pipeline, not an oil pipeline. It is designed to take natural gas from the Rocky Mountain states to Washington, Oregon, California, and Nevada.

From the Canadian perspective it's not very useful because there are already natural gas pipelines in place to take Canadian natural gas to Washington, Oregon, California, and Nevada.

At this point in time, Canadian oil pipelines go as far as Vancouver, British Columbia and Washington State. From there, oil can be (and is) loaded onto tankers and moved to California (there are no primary oil refineries in Oregon). It is entirely possible that the oil could go to China from Vancouver - that in fact is one of the alternatives to the Northern Gateway pipeline.

What would prevent the construction of an oil pipeline alongside the Ruby natural gas pipeline, utilizing the same right-of-way? That was my perception of what might be proposed, not that I think it's a good or bad idea.

Well, they could drop an oil pipeline in alongside the Ruby natural gas pipeline, but I don't see what the point is.

Washington refineries already have access to Canadian oil via pipeline, Oregon doesn't have any real refineries, and California is passing laws to discourage use of Canadian oil. The Rock Mountain states are already connected into the Canadian oil pipelines, but there's no point in taking the oil any further.

All things considered, most of the extra oil production will go to Asia instead of the US West Coast, but it will be shipped out of Vancouver or Kitimat.

The point from an American perspective would be that it would be a fast-tracked US construction project not needing the vetting that the Keystone XL faces, as opposed to a Canadian construction project. No refinery is needed, just an export terminal in Oregon to take the crude to Asian markets. Isn't the real goal to expose the tar sand oil to the world market, not to refine it for North American consumption? At present there is a bottleneck apparently, restricting Canadian oil to WTI Cushing prices. At any rate the local rumor amongst ex-Ruby pipeline workers is that another project is in the making. If it was to be a gas line you'd think they would have put it in at the same time--the project was just completed last summer. Guess, we'll just see in due time...

"...but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people." So, in plain English, he had wanted to "gather information" forever without ever being responsible for approval or disapproval. (Really, how long could it take the plush-bottomed bureaucrats to gather the actually necessary information if they ever set their minds to it? They should have had it in hand months ago.) Break out the popcorn, it will get "interesting", as per the comment upthread about the price of gas on election day.

X...thanks for the extra links.

Like BB King says on 'Bluesville", "that'sssss what I'm talkin about".

This is just the beginning.


The Washington Post is also reporting the Keystone XL announcement.

Super Slow Peel P50 Makes Its Comeback

The Peel P50 was never meant to burn rubber. First produced by Peel Engineering in 1962 on the Isle of Man, it was built to be a city commuter’s dream—made for ferrying “one adult and a shopping bag” through London’s congested streets. With Lilliputian dimensions (54 x 41 x 48 inches) and a weight to match (130 pounds), the P50 makes a Smart car seem like a tank: The three-wheeled, 4.2-horsepower ride topped out at 43 mph. Peel Engineering ended production of the P50 in 1965, after building only 50 of the autos. But a recent resurgence, thanks to a trio of British businessmen, has brought a limited number of Peels back to the blacktop. Today’s P50 mirrors the original, with its boxy shape and micro size, but it’s available with an eco-friendly 4.2-hp electric motor that can shove this snail all the way to 50 mph.

also http://homepage.ntlworld.com/andy.carter/

Motorized shopping cart? ... or the 302 HP Ford F-150 has 298 HP too many

the problem with the Smart is that they want $17,500 or so for the purchase. Or, in the way of modern economics, you can lease it for $99 a month (and probably owe a bunch at the end). In any case not an afordable care for the average family, even if they can manage with a 2-seater.

P50 is, as you note, a comuter's car. Gets one person to work, protected from the weather, and a fare speed. What is the range on the electric version? I would suppose that it weighs a bit more than the stated 130 pounds (would that the price was 130 pounds!)


It's is kind of sad how it seems noone would seriously contemplate a car like that nowadays. Maybe the current personal motor vehicle is our civilizations Easter Island statue? It seems crazy that we build cars to survive impacts at 40-60MPH when it'd be a lot more effective to simply drive at 40MPH instead of 60MPH+. Build them heavier, build them safer but heaven forbid changing our behaviour.

The car was designed and built on the Isle of Man. With no road more than 23 miles long, roundtrip range is less than 50 miles.

When cycling, I frequently get held up or slowed down by cars and other motorised vehicles that have, supposedly, been designed to go at these high speeds but are travelling far slower.


The US laws on automobiles need to change . . . they prevent anything but 4 wheel beasts since cars must pass all sorts of safety tests.

Not going to happen any time soon. There's an obvious - in the sense of being easy for even an uneducated voter to understand - risk that the vehicle will eventually collide with something, such as someone else who has run a light or a stop sign (never the fault of the vehicle's own driver mind you.) Meanwhile the "consumer" and "environmental" movements have been training "consumers " (i.e. uneducated voters) to spend without limit to avoid even hypothetical or utterly trivial risks, never mind real risks, as a tactic of warfare against the evil, wicked, what has become called the 1%. In addition, once bureaucracy gets clamped onto anything, there's no way short of revolution ever to unclamp it again. Thus the tactic has succeeded brilliantly, which will lead to consequences, but there will at least be the consolation that even the most blithering idiot will be "safe".

Interesting, how the auto industry had to be dragged kicking and screaming (by Ralph Nadar) into the safety business. Now it has become an almost insutmountable barrier to wannabe competitors. Be careful what you oppose, it may become your best friend tomorrow.

Just wondering - if anybody here has ever used a vehicle similar to that, how does it handle in snow? (And in the USA, wouldn't the mandatory safety gear weigh a lot more than 130 pounds?)

... how does it handle in snow?

Sure, I know people can put conventional cars into the ditch. I've seen a number of them since it finally started snowing. But while the picture is amusing, it's totally unresponsive to my question. And besides, it raises more questions - how fast did the car have to go to do that? I've seen lots of cars in the ditch, but never one upended, and never mind one upended as neatly as that. How did it get there so neatly without leaving a highly conspicuous lateral track analogous to the straight one leading to the other car at the shoulder? Magic? Levitation? Photoshop?

The three wheeler seems rather tall relative to its wheelbase - read: potentially less stable under less-than-ideal conditions. It's very light, which means the wheels may not press snow aside way very effectively, so it might well ride up and tip over if there's a little bit of a snowbank as there often is. And, on the face of things, the geometry of three wheels instead of four does nothing to help stability. So to repeat, does anybody have experience with those things in snow? Or is it a known no-no?

If the three-wheeler is essentially a seasonal vehicle like a bicycle or motorcycle, then it's not really a transportation solution in many parts of the country, however useful it might be under selected circumstances. After all, with the economy the way it is, most people will have more than enough with payments and insurance on their year-round car(s) without piling on duplicate costs for summer car(s).

Drive in the snow? I have two cars, one which is newer which I drive 9 months of the year and one I drive in winter when it snows. Why is that? Well, our state road maintenance folks apply salt and some liquid salt compound to the roads, which tend to rapidly rust out a car's body and suspension. Then too, as you note, crashes tend to happen with some greater frequency on snow and ice covered roads, so one is likely to destroy a car that way as well.

If one is forced to drive only one car, then one will need to replace it more frequently, as the body will surely be gone long before the mechanical systems die. My winter "beater" cost me about $650 several years ago, not including the cost of transport from NJ, so I won't mind it very much when it's time to haul it to the scrap dealer. Besides, I've another one almost like it which I can keep moving with parts taken from the first.

We've come to enjoy declining prices for oil since WW II, but, after Peak Oil, that trend can be expected to reverse and those old ways of thinking about life will die out. When the price of gas rises to British levels, (around $8 a gallon, last I heard), you can be sure that many more people in the US will take to riding bicycles, scooters, motorcycles, trikes and any other alternative modes. I saw some guy riding his motorcycle today in near freezing temperatures, though the road was not snow covered. Perhaps I was seeing the future...

E. Swanson

Our EV was our extra car, so I left it in the garage if the snow was too thick. Too easy for it to get caught up in a big snow drift where the plows went. Of course, it was also light enough to push off said snow drift pretty easily, but since it wasn't crucial that I use it, I usually didn't drive it in heavy snow. Another reason, above bad battery performance, that ev's as they exist now, aren't ideal for most severe winter conditions.

No one has posted a link to the Top Gear episode about that P50 yet? Really?


I think that trikes would provide a foundation for an acceptable small in-town vehicle. Maybe a bit of added coach work around the sides and a top to keep the rain off, nothing too complicated. Since trikes are considered motorcycles, the safety requirements wouldn't be as much of a hurdle as those of a 4 wheel car. Such vehicles could move faster than a neighborhood "golf cart" type vehicle, while giving great gas mileage, due to the fore-and-aft seating. Makes me rather sad that Aptera couldn't make a go of it. Just wait until the Chinese get into the action, now that the concept has been tested...

E. Swanson

I'm still trying to spot again the trike I see around here. When I find out what it is I will post details.


The only ones I've seen on a highway were a pair of Can-Am Spyders. Pretty cool, but really recreational vehicles more than practical. Terrible mileage, like most bigger motorcycles.

Spanish fold-up car to be unveiled at EU

A tiny revolutionary electric fold-up car designed in Spain's Basque country as the answer to urban stress and pollution is to be unveiled next week before hitting Europe's cities in 2013.

Its makers are in talks with a number of European cities to assemble the tiny cars that can run 120 kilometres (75 miles) without a recharge and whose speed is electronically set to respect city limits

Oil demand destruction -- unless it's coming from replacements for oil, which I highly doubt, this a warning indicator for another worldwide economic downturn. The IMF is saying that world growth will be about 2.5 percent. But the IMF hedges by saying a European debt crisis would subtract 4 percent from the already anemic figure. If demand destruction continues into spring, you'll know that high prices, the continued downward wage and employment spiral, and the rickety financial system have taken their toll.


Has anyone read the book "Soft Apocalypse?" World is looking more and more like it with each passing year.

Best to all.


Decline of old-line retail chains in the U.S. : Sears/K-Mart.


Video killed the radio star, and a combination of the Internet (Amazon et al)price, performance/convenience, along with brick and mortal store's poor service, poor selection, traffic/parking lot hassles, and 'People of Wal Mart' people are driving the stake into the heart of old-line retail in the U.S.

Impact on jobs: negative
Impact on fuel consumption: reduced it somewhat, I think?

I also read an article yesterday about how U.S> movie/theater ticket sales are continuing to slide...

Maybe theaters are hurting because a small popcorn is $4.25, is about the size of a small coke and is called the child. Now how is a grown man suppose to order something called the child? But the next size up is 6.50 and its called the junior. The next size is called regular and is 8.50. I have to spend 8.50 just to get a popcorn called regular?! Forget it, like the rest of America I'll stay home with the family and pop in Netflix and a micro popcorn we call the Jumbo for .69 cents. A month of movies for 14.95 vs. how much to take the family to a theatre? Goodbye cinema.

They should rename the sizes, from smallest to biggest, the pathetic, the loser, the jerk and the winner. I'll have two losers and a jerk please. Do you want butter on your losers and jerks. Yes, please, %$#@!

So how is Wal-Mart doing nowadays?

Anyhow I guess the crux of the matter is that one guy in a warehouse is a lot more efficient and productive than a guy working in a checkout and they can position themselves further away from cities for cheaper land prices. To be honest I really loathe big box stores and in the age of the internet they seem quite obsolete. Why go shopping when you can do it in less than half the time and at a lower price by doing it from home? The only thing really keeping these stores alive is customer inertia IMO.

In the 1980’s, celebrated futurist, Faith Popcorn, coined the word “cocooning” in her now famous book, The Popcorn Report, to describe the widespread trend of people spending more time in their homes. She correctly predicted that with the changing demographics and the uncertain economic times experienced in that tumultuous decade, many people would curtail their restaurant dining, exotic holidaying and other outside-the-home activities in favor of family activities that could be conducted at home.


I guess when you've got your McMansion and heaps of yard space and the kitchen that looks like you can cook like a 5 star chef, why would you want to go anywhere else? Especially if somewhere else is at least 15 minutes away via car?

If Americans are staying home (or staying put anywhere), I'm surely not seeing it. Except for the wee hours of the late night / early morning, the roads of America are packed, at all times. The vast majority of people I know don't give a second thought to going out.

I'll give you a concrete example, lest you think I'm imagining things. Where I work, almost everyone - and believe me, these are people of modest means - regularly goes out to lunch. Rarely, if ever, do they stay in the office, where there's plenty of space to eat. They don't think to prepare and bring a lunch. It's off to the fast food place, or restaurant if there's enough time. And what do these folk talk about when they get to work on Monday? Where they went over the weekend. What do they talk about Tuesday through Friday? Where they went last evening.

Heck, most people I know could not tell you how much gasoline they burn in their cars, because they've never done the calculation.

Americans are incapable of not going anywhere, which is the proper response to liquid fuel decline. But we'll learn.

As someone who would be considered a hermit in this society (though I would be normal in 90% of countries), believe me, you ain't seen nothing yet when it comes to Americans staying in place.

How can anyone claim any form of impoverishment if they insist on always buying lunch and going out? To me that kind of attitude seems crazy and wasteful. Buying lunch even if you're reasonably well off to me is like a once a week thing. I guess different cultures means different attitudes, right?

In my experience, frugality is often correlated positively with income. Where I work its mostly upper 10percenters, and most bring their own lunch. Stop at the quickie mart to buy gas, and those people struggling to make ends meet, are buying junkfood (at double grocery store prices), and topping it off with lottery tickets.

In large parts of America the car dependence is so strong why wouldn't you do this? A car is like a second pair of legs. And if you don't have a car or someone to drive you its like being handicapped. Its telling that the drivers license is the de facto national id. How will America cope when cars becomes too expensive for everyday people? You know its probably going to happen, but it seems unimaginable.

brick and mortal store

H, that line says it all, I'll have to remember it.


Either came from my subconscious or just another expression of my hideous typing skills...any which way, have fun with it!


P.E. partially nailed it. But really, going to a theater just to see a movie has become one of the few things that's more absurd than flying a long distance merely to hear a speech. At least with the speech you might be getting a live performance. Then again you might end up watching it on a screen anyhow as often happens nowadays. Not that this is new; consider the old college lecture halls lined with TV monitors in order that people could actually see the lecturer.

Certainly there might be an exception once in a blue moon, but really, why bother with the hassle and expense of traveling, just to watch something on a screen?

Some movies are worth seeing on the big screen. About twice a year, for me.

I went to one over Christmas and was quite surprised. Our local cinema complex has recently converted half the theatres into some kind of super-deluxe setup with huge comfy seats and no advertisements. It costs like $19.00 (vs the $12.50 they were charging before). They even have staff running around taking food orders inside before the movie. Adapting to the times, I guess. Costly, but damn I hate paying to see ads.

This morning I heard that Best Buy is consolidating its stores with the Magnolia and Pacific Sales stores, high end electronics and appliances respectively.

Around here Best Buy is the only specialist electronics store left. Circuit City, Good Guys, all the others, large and small, are gone. If they can't make it with a virtual monopoly and Sears/Kmart is in trouble then I predict that the number of viable producers of electronics and appliances will shrink to two or three. Brand shopping when you can't actually see the difference between two different brands gets to be a pretty iffy situation. I predict that for most consumers choice is going to be reduced to the lowest price online as name brands have come to mean virtually nothing already.

We bought a 32inch LED TV for X-mass. First we shopped Best Buy, but it turned out Target had much better prices!

A while back on Drumbeat there was a discussion about the airlines and several folks discussed surprise that more of them had not discussed bankruptcy in light of the great increases in jet fuel price.

Just saw this: http://is.gd/54EvzH

Apparently the airlines have been making rapid adjustments to fuel costs in order to survive (for now).


That is an interesting chart, thanks for sharing.

I keep up with the aviation industry, and the airframers and engine makers seem to be staying ahead of the power curve with ever-more fuel-efficient designs:


Key targets for the program include reducing noise by a cumulative 42 db compared to current Stage 4 levels, cutting emissions of nitrous oxides by 75% on takeoff and landing and 70% in cruise, and slashing fuel consumption by 50% relative to a 1998 technology baseline.

As oil gets really dear, we will see airlines increasing use these for domestic routes:


Xian Aircraft is also developing the MA700. Even though the name sounds similar to the MA600, Xian Aircraft promises this will be a completely new type and in no way will resemble the MA600. AviationWeek reported in April that the MA700, which is due for entry into service in 2015, will be a 70 and 90-seater. Presently there are no 90-seat turboprops in the world, but it is a market segment ATR and Bombardier says is viable.

No question the airlines have done a good job on fuel per passenger-mile, the chart from the linked report;

Now if only we could do the same for fuel used per vehicle mile travelled.

Interesting that the Chinese co is considering larger prop planes.

Of course, propeller driven planes have always been more fuel efficient than jets, it is only with the Airbus A380 and the 787 Dreamliner that the fuel per seat mile is less than what the Lockheed Constellation achieved in the 50's;

from Low Tech Magazine

The turboprop planes, like the Bombardier Q-400 (formerly the "dash-8) use about 1/3 less fuel per person than small jets on short haul flights, and for really short flights (<200miles) they are actually faster, as they do not need to climb as high. The difference in flight time on a 450 mile flight (Portland Or to Scramento CA) is less than 15 minutes.

Best hopes for fuel efficient aircraft.

Southwest May Delay Flying Growth to 2014 With Oil Near $100

Jan. 19 (Bloomberg) -- Southwest Airlines Co. may delay any expansion in flying to as late as 2014 as $100-a-barrel oil erodes profit growth, Chief Executive Officer Gary Kelly said.

Analysts track airlines’ capacity because a tighter supply of seats improves carriers’ ability to increase prices. With Southwest paying an average of 35 percent more for each gallon of jet fuel in 2011, the Dallas-based airline is under pressure to curb a history of expanding faster than its peers.

All the Aviation Week and Space technology and other source stories I have read over the past year paint a picture of booming business for airline aircraft manufacturers:



Airbus reported (17-Jan-2012) it delivered 534 commercial aircraft to 88 customers (10 new) and booked 1419 net orders in 2011, making it the most successful year in the company’s history and the 10th consecutive annual production increase. Airbus' commercial aircraft order backlog is 4437 aircraft, valued at over USD588 billion at list prices, equivalent to seven to eight years production. The manufacturer will continue to ramp-up production of all aircraft families. In 2011, 4500 new employees were hired, increasing the active workforce to 55,000. Airbus is targeting more than 4000 new hires in 2012.

And Boeing...


SEATTLE, Jan. 5, 2012 /PRNewswire/ -- Boeing (NYSE: BA) booked 805 net commercial airplane orders in 2011, fueled by a late flurry of record-breaking deals. The company also delivered 477 airplanes, ending the year with a strong backlog of 3,771 unfilled commercial orders.

On top of a strong backlog, the growing demand for Boeing airplanes is driving production rate increases across most of our airplane programs over the next two years. Most notably, 737 will increase production to 38 airplanes per month (35 per month rate begins this month), 777 to 8.3 airplanes per month (currently at 7 per month), and 787 to 10 airplanes per month (currently at 2.5 per month).

It seems that a combination of rising passenger demand (outside of the U.S. primarily I think) and the imperative for more fuel-efficient aircraft is causing happy daze for Airbus and Boeing for the next decade or so...

Keep in mind that none of these backlogged aircraft are the advanced designs in my OP on the subject above...those designs are perhaps to be on the market by the mid-late 2020s I think.

All that being said, the old saw I have heard many times is:

An airline is a great way to make a million bucks...out of a hundred million...

Airliner manufacturers: Doing well

Airlines (at least in the U.S.): Not so much...

All this assumes a linear trend in predicted economic factors...a large and especially enduring shock to BAU will, of course, upset these apple carts...

The turboprop planes, like the Bombardier Q-400 (formerly the "dash-8) use about 1/3 less fuel per person than small jets on short haul flights, and for really short flights (<200miles) they are actually faster...

WestJet plan a new threat to Air Canada

WestJet Airlines Ltd. plans to create a regional carrier next year to combat Air Canada, placing a bet that lower fares will lure passengers in smaller markets.

The Calgary-based company unveiled its proposal to employees on Monday, saying it expects to break with its strategy of maintaining a single fleet of Boeing 737s and will acquire 40 turboprops. The new WestJet operation will oversee short-haul flights, mostly targeting service between smaller cities and major hubs within Canada.

Industry analysts estimate WestJet will invest between $800-million and $1-billion over several years to acquire the turboprops, likely the Canadian-built Bombardier Q400. The turboprops could also be deployed during off-peak hours on selected major routes, such as the Toronto-New York run.

Despite its name, WestJet doesn’t fly non-stop on routes such as Regina-to-Winnipeg because its Boeing 737's are too large, given the demand. The new turboprops would clear the way for much faster service between the two provincial capitals.

The 70-seat Bombardier Q400 could be used during non-peak times between Toronto and New York’s LaGuardia Airport. On the Calgary-Vancouver route, WestJet will have the flexibility to schedule turboprops during non-peak times.

They will have to name the new subsidiary something like "WestPropeller", though. Okay, maybe "WestPro".

Having studied briefly in an aero engineering department, I find those proposals quite interesting. I am rather surprised that none of the designs use forward wings (canards) to cut the induced drag. Maybe the "flying wing" approach avoids this problem, but not from what little I learned along the way. The Lockheed concept is seriously different from anything I know of, but I haven't followed the experimental aircraft efforts lately. There was a time that I wanted to build my own craft, such as the Dragonfly (1), (2) which has rather low drag at cruise and is thus able to achieve higher speeds for a given horsepower (165 mph cruise with a 70 hp VW engine). As fuel becomes more expensive, I suspect we will see more aircraft which are designed to fly at slower speeds, such as the present turboprops...

E. Swanson

Hydraulic fracturing groundwater impacts can be informed by local water well operators

... Before the actual hydraulic fracturing process commences, the oil and gas companies fill up a man-made pond at the drill site that will hold the 4-8 million gallons of water typically needed for the fracturing. In the case of much of South Texas, and the Eagle Ford formation, the water comes from the local underground sources of drinking water. As explained at the Cuero town hall, the rate at which groundwater is being pumped into the holding ponds might be causing much or all of the impacts on local water wells.

Under normal conditions, water flows in a preferred direction in an aquifer, and relatively slowly at that. This slow flow rate and constant preferred direction settles out sediments and orients them against rock pore surfaces accordingly (like getting sediment build-up at a dam). If a water well begins extracting water at a high enough rate, it can cause pressure changes in the aquifer such that reversal of local water flow can occur. When this reversed flow occurs, it can dislodge sediments and minerals that will then move with the water flowing in a new direction. With these sediments now mixed with the aquifer water, they can sometimes be seen in individual water wells when before there were no sediments. Thus, it would be easy to conclude that hydraulic fracturing IS the cause of water well contamination, at least temporarily.

The reality is that the life cycle impacts of hydraulic fracturing can be larger than the specific process of fracturing itself.

I think we finally have a good explanation for the well water contamination. If What Rock et al were saying was correct as well as wells being contaminated then this is the best explanation we have to fit both sides of the story.

S - What was described we've known in the oil patch for decades. We call it "fines migration" and can cause production problems with oil/NG wells. But not so much a contamination problem but reduces the flow capability of the reservoir. I suspect many cases of increased sediment from a water well (I lived on well water for years and it always produced fine clay particle I would flush out the holding tank yearly) could be the result of folks pumping their water wells harder/longer if the frac water production reduced the flow character of the aquifer. I also consider it a tad disingenuous to call the sediment "contamination". Nearly all water wells produce some sediment. My biggest "contamination" problem was the high natural iron content in my well water: really mucked up the plumbing over time.

THE problem with frac fluids will always be illegal dumping. The film clip that spec offers shows why if you read between the lines. They are hauling frac water from PA to Ohio. The state charges $1 million/yr to companies to bring it into the state. The disposal company charges $3/bbl but that's probably only half of what it costs to transport the fluid hundreds of miles. Where I work in Texas it can cost me $6-8/bbl to dispose in an injection well. And the transport distance is short and the injection companies compete for your biz. So I suspect the total cost for Ohio injection is $10/bbl at a minmum. Thus the millions of bbls of frac fluids injected costs the oil patch 100's of millions. Thus the incentive to cheat. And not by the drilling companies as a rule but by the disposal companies: they'll still charge the operator the same price but that tanker truck doesn't drive 200 miles to the injection well but makes a "midnight haul": stops on an isolated road, drop his drain hole and lets it run off into a field. This is where the regulators have to do their job and have companies certify their hauls...and have inspectors in the field to make sure the records aren't being fabricated. That's how we do it in Texas. Some still try to cheat but most don't: the penalties are huge...including potential jail time. The state of Ohio could use some of those $millions they collect for enforcement.

So, pump all the water out of the aquifier, then frac the oil wells;
now, have a nice glass of oil, pump some onto the crops, and relax.
Rinse (with oil) and repeat.


Skeptical Science has an interview with Shakhova, one of the researchers of Arctic methane release:


we now know without doubt that methane is venting to Earth's atmosphere from parts of the ESAS seabed in copious quantities as a response - a positive feedback - to warming.

Thanks for the link ... and for keeping on top of this.

It would be very interesting to see a graph (when it becomes available) showing the ESAS annual rate of methane venting increase per year.

Well, that's exactly what we don't have. It looks to me from satellite measurements that methane is coming from the Arctic in larger quantities, especially in late fall and early winter after the big drops in ice cover, particularly the big 07 drop and then again this year. But there isn't yet very good instrumental indication of the kind of really vast eruption many of us fear and that Shakhova is still saying could happen any time.

I don't think the data exists. It can only be estimated from methane concentration data hundreds or thousands of miles away. We don't have a good handle on current emissions, yet alone the history of them.

The best thing I've found are these monthly satellite maps of Arctic methane, but they measure levels pretty high in the troposphere


Compare especially Novembers over the last few years.

The methane certainly seems more concentrated this most recent November, but not the vast areas of 2ppm + concentrations one might expect from a really big blowout.

[Edit: Ah, I see the December image is now up--and it shows quite strong concentrations over the ESAS as well as the southern-most reaches of the tundra, aka permamelt:


Compare that image with any other December image and you will find it strikingly darker red over these areas this year than any other--something is definitely afoot with Arctic methane this year!]

A world without ice?

... As atmospheric CO2 is reaching a level unknown for the last three million years, the disconnection between science and the human response is growing. Despite warnings over the last 30 years, we are still developing global infrastructures to extract every economically accessible tonne of coal, barrel of conventional or shale/sand oil and cubic meter of natural gas and coal-seam gas.

Contrarian claims by sceptics, misrepresenting direct observations in nature and ignoring the laws of physics, have been adopted by neo-conservative political parties. A corporate media maintains a “balance” between facts and fiction. The best that governments seem able to do is devise cosmetic solutions, or promise further discussions, while time is running out.

Good planets are hard to come by.

I thought this chart in the comments at Skeptical Science was instructive:

Many of the responses from the climatologists, especially the recent posts at RealClimate blog, seem to be along the lines of "one or two years does not make a trend, a few gigatons either way is no big deal, don't get so excited".

In contrast, the chart shows that we are altering the atmosphere at a rate many, MANY times faster than what has occured in the geologic past. Whatever comes next, it probably won't have a happy ending.


The altitude for those data (400 mb pressure level) isn't so high. Recall that 500 mb is roughly half way thru the atmosphere and these days that level is at an elevation between 5.1 and 5.8 km over the US. Over the Antarctic, due to the much colder atmosphere in winter, the tropopause appears at roughly 300 mb...

E. Swanson

US Energy Production Facing Limits of Water Scarcity

“Per megawatt hour, coal uses 500 to 1000 gallons of water for the production of just one megawatt hour of electricity," said Ochs. "If we look at all the plants combined in the U.S., all the thermo-electric plants [powered by steam] in the U.S. in 2008 alone, they drew 60 billion to 170 billion gallons of water, per year.”

Without water, most types of energy could not be produced. Even renewable energy, like geothermal and solar, use water to cool equipment and to clean the collector panels.

See Black Mesa coal mine and pipeline. The mine closed Dec. 2005. A 273 mile long slurry line used one billion gallons of water per year.

Of course, the water was re-used at the Mohave generating station (after separating the coal) at the other end, so attributing all of that water to the pipeline is a bit disingenuous. Moving the coal that way used less energy (and a lot less petroleum) than moving it by train.

Trump May Scrap Scottish Hotel, Housing on Wind Farm Ruling

Good, don't let the county it you on the way out. Like Scotland needs golf courses and 5 star hotels more than it needs clean energy?!?

Big spenders on Capitol Hill got big tax breaks

As the economy tanked, some Fortune 500 firms raked in huge profits, all while benefiting from government tax breaks.

The new Report is from the left-leaning U.S. Public Interest Research Group and Citizens for Tax Justice. They highlight companies they call "especially aggressive at dodging taxes and lobbying Congress: the Dirty Thirty."

One-third of them are energy companies. Together, between 2008 and 2010, they reported $164 billion in U.S. profits. Yet the report says most paid what amounts to a negative tax rate, meaning they got more in tax rebates than they paid in taxes. And they spent close to half a billion dollars lobbying Congress.

Altogether they collected $10.6 billion in tax rebates from the federal government, while skirting a total of $67.9 billion in taxes.

Ordinary American taxpayers and small businesses must pick up the tab when major corporations avoid their taxes. Spread out over every individual tax filer in America, the taxes avoided by the Dirty Thirty break down to an average of $481 per taxpayer.

This is what I don't understand about the recent efforts to reduce corp. taxes even farther, and Obama is ok with those efforts so far. Our govt. is becoming more like all the other corrupt govt's around the world. And now the political picture has been corrupted by super pacs. It's all very discouraging.

Don't think of our government as a government - think of it as the legal arm of an organized criminal syndicate. It's easier to picture in your mind. Then their actions make sense.

That was beautiful.

I concur.

Its very understandable. Those with the big lobbying bucks get what they want. Its not a hard rule, sounds like today's SOPA internet blackouts are having an effect, and some legislators are bailing on the bill. Don't know how it will come up, but if you can get a large chunk of the public motivated it can turn change results. But, then they go back to their bread and circuses, and ten more corporate giveaways slip under the radar.

Discouraging for sure. While the big public battle over supreme court seats seemed to the public to be about pro v anti abortion, it was really about packing the court with pro-corp cronies. So now we are just so screwed.

One-third of them are energy companies.

When I think of "energy companies" I think of companies that produce oil, gas, or coal. Without going into details of the "energy companies" listed which I don't know much about, I can say that the ones I do know about -- Centerpoint, Duke Energy, and NextEra -- are not this kind of "energy company" at all: Centerpoint is an electricity and natural gas distribution company, and the other two are primarily electricity generators, power station companies.

Two thirds of the untaxed profits generated by these thirty companies come from Wells Fargo, Verizon, and General Electric.

Not one of these is an energy company by any definition. Wells Fargo is a bank; Verizon is a phone company; and General Electric is a conglomerate which gets most of its business from financial services.

In summary, most of the profits listed in this Report come from banks, other financial services, and communications. The "energy companies" included appear to be predominantly electricity generators, distributors, and marketers, but together they only add up to about 15% of the taxes avoided.

"Nuclear Aftershocks"
The PBS program Frontline examines nuclear power in the aftermath of the Daiichi Power Plant incident.
Goto PBS to view on-line or find air dates/times.

See an excerpt from the documentary and a story at Wired.

From the "Wired" Story:

"Almost incredibly, when the smoke cleared over Fukushima Daiichi Power Plant, not a single employee or local resident had even received a life-threatening radiation dose."

How long did it take, precisely, for the smoke to clear, and for what reason is that particular milestone significant? Life-threatening in what way and over what time period? What does "local" mean?

I love the mainstream media. I remember working in the control room of a television talk show in the '80s; we would just make up weird soundbites like this, type them into the teleprompter, and pump it right out into people's homes all over the country.

The odds of my blood clot recurring while I am writing this post are so low they are not worth calculating. Decreasing my tire pressure to 20 PSI is unlikely to have a measurable impact on my gas mileage for at least ten miles of driving, and the results of the Republican Primary are very unlikely to have much impact on most herbivores over the next 180 days.

I love the mainstream media. I remember working in the control room of a television talk show in the '80s; we would just make up weird soundbites like this, type them into the teleprompter, and pump it right out into people's homes all over the country.

You should read a short story by Jack Vance entitled "Dodkin's Job". Kind of fits your experience.

"Almost incredibly, when the smoke cleared over Fukushima Daiichi Power Plant, not a single employee or local resident had even received a life-threatening radiation dose."

Fukushima Docs 1: NOT A DRILL

Kock, Andrea
From: Franovich, Mike
Sent: Tuesday, March 15, 2011 8:51 PM
To: Ostendorff, William
Cc: Nieh, Ho; Warnick, Greg; Kock, Andrea; Zorn, Jason
Subject: UPDATE: 2000 EDT Telecon on Fukushima Daiichi

Unit 4 remains problematic. A new fire has broken out. Doses are stable in the area of Unit 4 around 30R/hr. Fire fighting and pool cooling strategy still being worked out.

* Units 5 and 6 have spent fuel pool temperature at approximately 80 degrees C.

* I asked Grobe (yep lots of questions from me tonight), if TEPCO was cycling operators in and out of the site to relieve personnel. No info on that other than TEPCO did evacuate nonessential personnel. Five individuals may have received a lethal dose.

” Chairman joined the bridge late asking for status on new fire for Unit 4. ET will give him an update before tomorrow am.

Wonder where these five individuals are now?

So do I.

Though given the history of the past few months, if any of them had died I am sure we would have heard about it by now.

Another reference to these individuals described them as members of the Japanese Self Defence Force and not TEPCO employees - may or may not be correct. I remain of the opinion we are very much in the dark as to what really happened at Unit 4's spent fuel pool and what actions may have been taken to bring it at least partially under control - although not apparently before the unloaded core caught fire.

Radioactivity from Fukushima Dai-ichi in air over Europe; part 2: what can it tell us about the accident?

It is shown which information can be extracted from the monitoring of radionuclides emitted from the Fukushima Dai-ichi nuclear power plant and transported to Europe. In this part the focus will be on the analysis of the concentration ratios. While (131)I, (134)Cs and (137)Cs were reported by most stations, other detected radionuclides, reported by some, are (95)Nb, (129m)Te, (132)Te, (132)I, (136)Cs and (140)La. From their activity ratios a mean burn-up of 26.7 GWd/t of the fuel from which they originated is estimated. Based on these data, inventories of radionuclides present at the time of the accident are calculated. The caesium activity ratios indicate emissions from the core of unit 4 which had been unloaded into the fuel storage pool prior to the accident.

if any of them had died I am sure we would have heard about it by now.

And what do you base this position on?

An open society with powerful interests in competition that gleefully expose each other's failings.

What do you base your contrary opinion on?

An open society with powerful interests in competition that gleefully expose each other's failings.

Nice flowery languange.

What do you base your contrary opinion on?

Actual past events and statements by participants of a controlled media.

John Swinton's statements.
Operation Mockingbird.
Willingness of nuclear operators to replace the bones of the dead with broomsticks.
Books like Public Relations.
Observers like Greenpeace not being allowed to gather readings.
EPA shutting down its public reporting of radiation readings.
TOD's own Iron Triangle position.

Statements like

the following compiled by Makiko Segawa, a staff writer at the Shingetsu News Agency. She prepared this report from Fukushima and Tokyo for www.japanfocus.org: Freelance journalists and foreign media are pursuing the facts, even going into the radiation exclusion zone. However, surprisingly, the Japan government continues to prevent freelance journalists and overseas media from gaining access to official press conferences at the prime minister's house and government.


Effects of radiation do not come to people that are happy… They come to people that are weak-spirited


Internal emails seen by Guardian show PR campaign was launched to protect UK nuclear plans .... "This has the potential to set the nuclear industry back globally," wrote one official at the Department for Business, Innovation and Skills (BIS), whose name has been redacted. "We need to ensure the anti-nuclear chaps and chapesses do not gain ground on this. We need to occupy the territory and hold it. We really need to show the safety of nuclear."

But do go ahead. Show where the 100% accuracy of reporting what is happening is supported. You've made the statement - now show how the data supports your position.

For the rest of you the magic words "fukushima media blackout" will give the open mind plenty to absorb.

Bodies are harder to hide than you seem to think, and you appear to be assuming that the nuclear power industry is the most powerful group with media access out there.

I think the very evidence you present to support your position in fact supports mine: you have that information and are able to present it.

Bodies are harder to hide than you seem to think,

And yet:
These statistics are shocking! There are 900,000 people who go missing each year or 2,300 every day in the United States. The missing are mostly under 18 and 50,000 are adults

No bodies no nothing. Never found.

and you appear to be assuming

There would be no need for fission power if the straw men you keep putting out were were just gassified for power.

I note that you did not actually answer the challenge to show the 100% truthful coverage of the Fukushima demonstration of the failure of fission power.

I think the very evidence you present to support your position in fact supports mine: you have that information and are able to present it.

Let the record show that r4andom agrees the fission power industry does engage in deception and lies about what they are doing.

Let the record show that eric blair has such a poor case he feels the need to attack me for pointing out how bad it is.

'nuff said.

Why smart growth frustrates players in the system: study

Maryland planners, developers and land-use advocates consider the state's smart growth tools too weak, frustrating their desire for development within existing urban areas, finds a new University of Maryland study based on interviews with a representative group of stakeholders.

"The findings of this report confirm what we have been saying for some time: Priority Funding Areas need to be strengthened if Maryland wants to grow smart," Knaap says. "But the unanimity of opinion is striking. The majority want more effective tools and better coordination of policies."

•More than three-quarters of respondents say PFAs are only "somewhat effective" or "not effective at all."
•Nearly four times as many respondents say it's more difficult to develop land inside than outside PFAs.
•High rise apartments and mixed use developments are viewed as the most difficult products to develop within PFAs.
•Zoning and the adequacy of infrastructure are viewed as the most influential public policy tools.


Smart Growth?! That has got to be one of the stupidest oxymorons ever!


Perhaps a few other TODers would like to join me in letting them know that... I'm sending them all a permalink to this comment of mine. I'm tired of being nice! I'm not going to take it anymore, enough BS!

The Executive Committee for the National Center for Smart Growth Research and Education is comprised of the Provost of the University of Maryland College Park and the deans of the four participating schools.

Ann G. Wylie
Senior Vice President and Provost

Cheng-i Wei
College of Agriculture and Natural Resources

David Cronrath
School of Architecture, Planning and Preservation

Darryll Pines
A. James Clark School of Engineering

Donald Kettl
School of Public Policy

@FM: Please forgive them for they know not that they have been brain washed.

I will not forgive them for they have both the credentials and the positions to know better!
BTW I did send all of them a permalink to my comment. I hope they read it and start thinking a little more deeply about reality.

I assume you know what smart growth means. It does not mean that growth is smart. It means that if things are built, they should be built in a manner that is as sustainable as possible. Does that seem like a bad idea? I am assuming that you would prefer that nothing will ever be built from now until eternity. Good plan, eventually. For now, maybe we could go for "less stupid community planning." :)


I assume you know what smart growth means.

Yes, I read their website and it is still an oxymoron! It still means growth! And growth is not smart!
We have to stop using that term as if it were something possible or good! So yes I consider it a very bad idea indeed. This has absolutely nothing to do with building things in the future which of course must be built in a sustainable manner if we are to survive at all. This has to do with acknowledging that business as usual is a very dead horse and the way we use language happens to be very important!

I hope I have made myself crystal clear! What we need to be doing is having a conversation about smart contraction.

You're point on, as usual, Fred.

People should consider the impact of continuous growth over time. Growing up, West of Chicago, there were open fields, widespread corn and dairy farming and generally rural lands between Aurora and Chicago, through Kane and DuPage Counties. Today there is only unbroken urban construct (other than the odd park or arboretum). When the system providing food to the residents thereabouts breaks down, there is nowhere to farm - other than the odd park, backyard, etc.

There has been no real planning, by which I mean planning that embodies reality, only fanciful fiat planning, using fiat money. Sadly that comment encompasses most of the USA.

Legjobb reméli a valóság.


The business and financial community has co-opted the word "sustainable" by combining it with "growth" to create the nice sounding phrase "sustainable growth". I've seen this phrase repeated numerous times in various media commentaries including comments made by various politicians. Trouble is, "sustainable growth" isn't sustainable. So, now they want to use the phrase "smart growth" instead? Maybe these folks are just being "smart" about how to grow their incomes...

E. Swanson

Hi FM,

I agree on the "top level" and had the same reaction.

OTOH, one could interpret "smart growth" to mean: immediate and drastic curtailment of all activities that will not be able to be supported on the downside of the slope, *and* re-direction of remaining resources towards attempts at risk management, salvage of what can be salvaged, i.e., "how to cope."

An example might be: managed cessation of non-sustainable agriculture, and use of those resources to re-structure the nation's food supply, convert commercial ag to sustainable ag, etc. ditto for any system.

In other words, there are uses to which remaining resources may be put that might (one could argue) be seen as "growth" in that particular sense: growth of sustainable and local farming, is the example that comes to mind. Growth of local, regional bicycle manufacture, so growth in the bicycle manufacturing industry and its conversion to one of the non-FF wedges in Gail's article illustration, for fuel for this industry. If you see what I mean. :)

Hi Aniya,

I take your point and would like to keep an open mind with regards the good intentions of the people involved in this so called 'Smart Growth' initiative. However I'm totally convinced that even using the word 'Growth' in this context should be avoided like the plague!

I realize that 'Sustainable Contraction' doesn't roll off the tongue quite so easily and is probably not sexy enough for the average consumption and growth addict to get behind. Still, I'm going to stick by my guns and totally reject the term 'Growth' here.



There is no more growth "accross the board". I'd call any growth now 'cunning growth".
Growth comes from increasing sales via increased consumerism. What corrporations and businesses have now is overstating assets and projected "growth" and understating liabilities. Increased debt and bad debts not being the least.

Because growth is no longer possible accross the board due to declining EROEI amoungst other, corporations and businesses must look to reducing costs via synergies as in mergers and takeovers, closing retail outlets or offices, reducing staff and wages and the big one, waiting for Joe down the road to go bankrupt and obtain increased business that way. No more growth accross the board means if one business has growth it's nearly entirely due to a decline in growth somewhere else. So it's the proverbial trying to outrun the other guy when the bear is chasing.

I wouldn't like to be buying a coffee shop, not unless it's in an area of lots of coffee shops then maybe you could survive by outlasting them, by understanding what's happening locally and the world......by being cunning.

Really it's just that simple, trying to outlast the competition. That will apply eventually to the lowest common denominator, the consumer, the people on the street, the people in the suburbs, that is where outrunning the other guy when the bear is chasing gets down to survival. The ride down to the bottleneck won't be steady or equal, winners and losers will find luck the biggest determination of success or failure.

Thanks, Fred,

Yeah, I know. It's the bigger picture necessity they apparently don't get.

I like your phrase "sustainable contraction." It's an accurate term for what I'm trying to talk about. The thing that's so hard for me to take and to witness is when I see how resources are being used as "we" continue BAU (locally: examples I've mentioned before, new airport - when the old one was quite sufficient and cute, too - new ice-skating rink. Ice-skating rink? Geeez.) So much nice farmland could be saved, so many young 'uns encouraged to learn sustainable ag. etc.

Or, maybe "contraction towards sustainability."

It's funny, I heard a little bit of an interview on NPR today about a new film about a group of pygmies who practice (still) a hunter-gatherer lifestyle, and one of the film-makers said that in twenty years, there probably won't be anyone engaged in that lifestyle.


BP sees China as top oil user in 2027

China will drive the world's growth in oil demand in the next two decades and in 2027 will overtake the United States as the world's top oil consumer, BP Plc said on Wednesday.

World demand will rise to 103 million barrels per day (bpd) by 2030, up 18 percent from 2010, BP said. More than half of the rise in liquid fuel demand is in China, which BP expects to overtake the U.S. as the top oil importer by 2018.

China and India will become the world's largest- and third-largest economies and energy consumers by 2030, BP said. The U.S. is currently the world's largest economy.

BP, in its Energy Outlook 2030, also said oil was set to be the slowest-growing fuel in the next 20 years, restrained by higher prices and a gradual move towards market rather than subsidised fuel prices in emerging economies.
. . .
Demand growth will come entirely from outside developed countries of the Organisation for Economic Co-operation and Development, BP said,

I like how the oil companies are now telling people "Look . . . the price of oil is going to go up and you will be using less of it because the price will be so high." yet people remain in denial about it. They continue to buy gas guzzlers.

Well, they can't say that there were not warned.

Snowstorm 'unusual sight' in Algeria

A cold snap in Algeria led to an unusual sight in the North African country, with scenes of palm trees surrounded by snow.

How do you describe "rare" and "weird" weather when it's not really "rare" and "weird" anymore?

(Reuters) - Storms in four central states on Tuesday brought reports of at least 10 tornadoes touching down, a rare event for this time of winter, including two in the Louisville, Kentucky metropolitan area, the National Weather Service said.


Locally, we're experiencing near total global warming failure: It's -36°C (-33°F) outside here this morning.

Western Canada hit by blast of winter weather Freezing rain, snow hit parts of eastern Ontario and Quebec

Frigid temperatures and wind chill warnings have people bundling up across Western Canada, while people in parts of Ontario and Quebec are dealing with snow and freezing rain.

In Alberta, cold Arctic air was blanketing much of the province. Environment Canada issued wind chill warnings for a broad swath of the province, including Edmonton, where wind chill values of –40 to –50 were expected to develop overnight and last through Wednesday morning.

Mind you, this cannot be considered rare or weird in Canada, it's just what happens in winter. Fortunately, natural gas is cheap so the main issue is that it's too cold to go out skiing. Even if we weren't risking frostbite, the snow is like sandpaper at these temperatures.

Yes but the slopes (I am assuming you mean alpine skiing) are a lot less crowded so you can let um rip. I must admit I've only skiied at -20 F (temp not wind chill) and it was not much fun (brain freeze behind the goggles).

Just out of curiosity, are your overnight low temperatures higher in the summer than in earlier years? That is where I notice the biggest difference in Maine (hotter summer nights).


No, I haven't seen any difference in overnight low temperatures here in the Canadian Rockies. It's still freakin' cold at night, even in the middle of summer. It's the high elevation, low humidity, and clear skies that cause it. And you're still lucky if it doesn't snow in July.

Oh, I thought you guys had local weather in Canada. But hey, what do I know. Obviously you have global weather in the Rocky Mountains.

Without the cold these northern outposts wouldn't survive. They need the Ice Roads ...

Bitter cold hangs over Manitoba

... The frigid weather will help crews who are two weeks behind on winter road construction to remote northern communities.

But it's still slow going in some places because a few waterways remain mushy. Spring-like mild weather earlier this month had some wondering if the roads would be built at all this year.

The roads are temporary byways carved through bush and across frozen muskeg, lakes, rivers and creeks to connect those remote regions — some of which are only accessible by air during warmer months — with the rest of the province.

They enable trucks to haul in a year's worth of supplies, such as food, fuel and construction materials from urban centres like Winnipeg.

No, we have local weather here in the Canadian Rockies - it's different on one side of a mountain from the other side. Global weather is something that other people have.

We're looking forward to signs of global warming, but we're still not seeing much effect so far. June is really bad. we try to go somewhere else in June so we don't get hypothermia.

You often hear the "Global warming come" chant from frozen countries. But then there are these reports that GW will bring warmer summers, but even colder winters in some far north areas. Climate change is NOT intuitive.

"Locally [..] global warming [..]"

That's funny!

Anyone with a basic grasp of statistics should be able to understand the importance of this new paper by James Hansen et. al.

Hansen determined the standard deviation of every temperature station on the earth. Then they divide the the anomalies for each station by the standard deviation to determine how many standard deviations the anomaly has wandered from climatology (the mean over a 30 year period). This produces the following map:

Jun-Jul-Aug surface temperature anomalies in 1955, 1965, 1975 and the past nine years relative to 1951-1980 mean. Number on upper right is the global (area with data) mean.

Black is +3σ hotter than normal (relative to 1951-1980 climatology). The chances of any area on earth experiencing a +3σ event in a world without global warming is about 0.13%. So in any given year (without global warming) we expect to see 0.13% of the worlds surface showing up as black in the above image. Instead in 2010 the black areas covered about 13% of the earth.

This should make one ponder where we're going from here.

Natural Gas could be Interrupted

With temperatures today forecast at a high of 3 degrees — with wind chill values between 17 below and 27 below — there are 19 customers in Albert Lea, MN who have been asked to cease usage today. Another round of customers could be warned this morning about ceasing Friday usage.

Included in this Friday list are a couple of schools in the Albert Lea School District and at least three industrial users

No problem here in the US of A. Day before yesterday, we enjoyed 85 record high temperatures and another 18 yesterday either set or tied. That is, unless you happen to live in the Seattle area or Alaska. Ever wonder why Canadians like to retire in Florida? Better grab your spot quick before they are all gone...

E. Swanson

Locally, we're experiencing near total global warming failure

Isn't that how Fox News attempts to discredit GW, by citing localized anomolies? You could probably get on Fox as a special guest, present your local data and rant about scientists trying to get grants to have fun, take field trips into the wild to collect false data about something they're conspiring to perpetrate so they can continue to take field trips, instead of growing up and living like adults. They'd love you for it and ask you back on numerous occasions. You could make a lot of money that way. Then join forces with Inhofe for talking engagements. "Just look at the data we collected locally that completely and utterly and finally disproves GW once an for all. We should arrest Gore and have him waterboarded in Guantanomo Bay, Cuba!!!"

Indeed, even in a warming world there will be places which are colder the usual at any given time. Look at the graph above for examples. The fact that the lay public has difficulty grasping such basic ideas is what the people interested in misinformation are happily abusing.

It tends to go over badly with most people when the experts warn them about the dangers of global warming at the same time that it is so cold where they live than their cars won't start.

They have trouble seeing what is wrong with global warming. I'm not saying it is a completely valid POV, I am just saying that it is how most people think.

Actually, I am having trouble visualizing the dangers of global warming myself, at the moment, but it is supposed to warm up toward the weekend, and then maybe it will come into focus. Or, more likely, I'll go skiing because it will be warm enough to ski.

Working Man's Death

Working Man's Death looks at the state of physical work across the world today. Work that is dreary, demanding and, at times, dangerous.

In this episode, we go to Ukraine where, amid a bleak landscape, freelance miners spend long days crawling underground to dig out the last pieces of coal from exhausted mine shafts.

What work in the post-peak world may look like

also http://www.aljazeera.com/programmes/workingmansdeath/2012/01/20121101364...

I suppose this could go under one of several posts above. I want it to be set out alone, in it's stark severity. And it is a part of Rockman's post earlier:

But you do expect all that oil won't be burned by someone whether Keystone is built or not?

And that, friends, is what will be our collective downfall; the ultimate expression of individual greed, and fear: basically, if we don't do it others will, so what the hell, let's make a buck!

Flows straight out from the Chicago School of Economics' "Greed is Good." Coming from their religious view that all men are greedy to a greater or lesser degree, and that we should not only not decry it but encourage it.

My view is that mankind got where it is through cooperation, working together and dividing labor to help one another. Chicago School folks say otherwise. They are wrong, and their fanatical adherence to their insane creed, their religious devotion to their God, Friedman and their Saint, Ronnie the Wrong, has led to economic devastation and is still pushing us to ultimate ecological, and climatic ruin. They have taken advantage, like so many little Nietches, of the 'weakness' of the rest of mankind to establish financial hegemony, controlling media ala Goebels in order to keep the masses in check. I suppose that some of them might find their way to an island somewhere where the elevation is sufficient to survive even the ultimate of 200 meter sea level rise, and holding off the angry populace (or simply hiding). Aliens one day will find strange primates on a few islands on a devastated planet, fighting each other for nuts and berries.

Ah... that felt good. Point is that Rockman is correct, and we do indeed know it, and it does make us feel terrible, especially when we find ourselves going along with it.

So I ask again, what do you suggest we do?


Keystone XL is a chimera, and not just because the oil will get mined, refined, and burned even without it.

The problem is demand, not supply. Foregoing or re-routing Keystone does nothing to address the demand for oil, which, in the USA, is 75 percent automotive.

The day McKibben rallies 1,200 people to get arrested for public transport and reconstruction of railroads and towns -- that will be the day somebody finally gets serious about the problem at hand. Until then, it's all poses and gestures. Criminally silly ones, too.


McKibben is very much in favor of public transport. Protests are generally not the best strategy for constructing them, though. They are better for stopping foolish and dangerous projects.

LOL, not likely that a demo would cause very many to "get serious". Try it this way: on the one hand, 200 million cars, driven by roughly as many people, day in and day out. On the other, 100 dozen demonstrators. The evening news would tell of a handful of crackpots amidst an immensely larger - and sane - majority. Worse still, in a day or three, someone would count up the parking tickets for the cars left behind by the arrestees. All the world would then learn that 1180 of the 1200 drove to the demo. The snark eruption on the talk shows would be quite entertaining, and perhaps rightly so.

Did you say, Chicago School? As in Fredrich Hayek, student of Ludwig von Mises and his Austrian School of Economics and later Milton Friedman's mentor? The man who Charles Koch invited to became "distinguished senior scholar" at Institute for Humane Studies? I've read two of his books and clearly Hayek was a very intelligent man, but his time was WW II and shortly thereafter, so he probably wouldn't have been able to grasp the serious environmental problems we now face. That doesn't stop his followers from spreading his free market dogma, after it's been proven so completely wrong these past few years.

Well, HERE's the founder of the Heartland Institute, who is another "graduate" of the Chicago School that appears to be carrying on the Libertarian tradition, with funding from the Koch brothers. These guys haven't been tightly connected to the Earth, as they would push our natural life support systems to collapse with their uncontrolled "free market" exploitation of every resource which they can grab and market for profit...

E. Swanson

That would be the same Hayek who wrote, in The Road to Serfdom that conservatives seem so enamored of:

There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security should not be guaranteed to all without endangering general freedom…there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody…Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision.

Note that we are, as a society, enormously wealthier in terms at least of things, than we were when he wrote it.

The really funny thing is that Hayek wasn't a conservative. Two decades after his book The Road to Serfdom appeared at the beginning of WW II, he wrote a great essay trashing conservatives as a chapter in his later book, The Constitution of Liberty. I wonder how many Tea Party Republicans would find Hayek so agreeable after reading that...

E. Swanson

Great article; thanks.

Note that Hayek takes exception with the definition of conservative. If I can control what a thing is called, I will own the debate.

Of greater note is that overall he does agree with me that it is the radicalism of the two sided debates that has changed. As well, of course, as the definition of conservative, progressive and liberal.

I know many people, each who might claim the title conservative, progressive, etc., and after a bit of calming to settle down the rhetorical riots, amost all of them share similar core beliefs, and find some in the defined category of choice, whilst ignoring the absense of the rest. It is how Faux News keeps the suckers coming - and MSNBC, of course, but a differet subset thereof. Emphasize the few areas of common belief Most Christians I know claim Republican/Conservative as their political party of choice, because the Republicans/Conservatives pump up the base while never passing a meaningful law constricting say, abortion, or repealing gun controls. They need the unconstitutional laws to feed to SCOTUS, knowing they will uphold the law and strike unconstitutional excesses, which they then rant about to their "Christian" constituency.

Meanwhile, they really listen to their contributors, not to the Christians (who have far too little money to move these guys). And, their contributors do NOT want to hear about peak oil. AGW, or sustainable growth, to say nothing of sustainable contraction. And so, one may confidently predict that laws will continue to favor "the 1%", that whatever can be done to perpetuate the insanity of suburban America will be done, and that AGW will continue to heat the planet until either we all die, or run out of fossil fuels. At which time nature will take us back to sustainable, if there is such a thing by then.

My recommendation: find someplace far from DC, LA, or other major centers; it should be one of the places we read will have exceptionally heavy rain from time to time (as opposed to placed where they see exceptional draught), far enough north to avoid the 125 degree (F) line, and start a small farm. Then figure out how to keep the savages away.

Best hope for a progressive future.


I've already made that move away form the Big City and I'm afraid that my choice of locations isn't so wonderful after all. While it's true that I'm out in the country, it appears that lots of other folks have made similar life changes and thus the local population has grown rather rapidly. Then too, I'm old enough to qualify for Social Security and have no wife or children, so there's little point in trying to survive when TSHTF. And the local meth zombies appear very capable of pushing me over the edge, if things get down to kill-or-be-killed.

The official unemployment rate for the county was over 11%, but that is said to be improving. Just in my little subdivision, there are now 7 (or 8?) males who aren't working or who are retired (not including the 2 families who moved to Kentucky for work, one of which still owns a place here). Who knows whether (or when) there will be some breaking point, resulting in much pain...

E. Swanson

Greetings, and (belated) Happy New Year,

Jeffrey, this Q is partly directed to you and Sam:

re: NYT article on "Research Gate" - the exclusive forum: http://www.nytimes.com/2012/01/17/science/open-science-challenges-journa...

I'm curious: Are there any TODers with 1) access to the forum; or 2) credentials to obtain an account? The reason I'm wondering is...

I'm curious if there is any discussion on any of the topic categories - (i.e., do they have a geology, geophysics, earth systems, environmental, population or any other topic/sub-topic that would in any way relate to PO?) - of the matters we discuss here.

I'm particularly interested to see if any one is even looking at PO, let alone ELM or anything like it. I mean take one look at Jeffrey's post above - (in terms of shock and severity and challenge, or what should be a challenge to any educated person?)

Or, is the entire mainstream scientific community...despite (relative) youth, hipness and tenure...just completely unaware?

You won't be surprised to hear that "clever people" are completely focused on landing the next Federal research grant to keep their army of post-docs, grad students, grant writers, and technical folk employed. Resource depletion doesn't register, "we'll just build more nukes until fusion is ready" my fellow academics tell me, even as they respond to the latest DOE/NSF "fad de jour".

Meanwhile perceptive undergrads totally get it, and wonder why the eminent faculty have their brains up their butts and teach 20th century concepts that ignore looming Peak Everything trends. The Greater Depression will be a surprise to many jet-setting academics.


Thanks. (I mean, it's sad...but validating.)

So, what's your opinion on the NAS? Do you think they would sabotage a PO study? As per our quixotic effort here: www.oildepletion.wordpress.com.

It's very strange to me, the mix of opinions I've received.

I also wonder...despite the norm you describe, do you think there's any possibility of starting a "letter of concern" by people (such as perhaps, yourself, as an academic)?
I was thinking as a way to educate, inform and perhaps - depending on your view of the NAS idea (which, BTW, includes a request for an examination of impacts and policy options) - have an objective (or, more objective) source for people to look to for help with planning. The IPCC is there for GCC, and I realize all the counter-arguments, still, those who might wish to take action could (including communities), if they had something to go on. Well, anyway, would like to know your take on this.

I've posted this before.
Here where I work (a scientific research institution) no one wants to hear about Peak Oil. Even in my department, populated by geologists, mainly. People are dimly aware that there is a problem, but it won't amount to anything. At least not for many years into the future. Technology will come to the rescue; it always does.

Alternatively, even if there IS a problem, there isn't anything much anyone can do about it. So why bother to waste time on it? (Some of the people here actually have some of the books on the subject, by Heinberg, for instance, but they "don't have the time" to read them.)

The thing that's particularly disturbing to me is that no one wants to connect the dots. I get blank stares when I try to explain how Peak Oil is affecting RIGHT NOW people's retirement accounts and the job prospects that people's kids will have going forward. That there are implications for being able to pay down the ENORMOUS college tuition loans these folks are encouraging their children to take out, etc.

Part of the problem is that I do not possess the personal credibility necessary to convey this message to these people. I do not have any specific credentials in the relevant areas and most of the scientists here have advanced academic degrees far in excess of my own modest BFA. Okay, I GET that. I'm NOT an expert. But it's still very frustrating, not because I need the ego validation, but because these people here are my FRIENDS!

Hi jabberwock,

I can relate. I'm so sorry about your friends. PO is just an extremely difficult topic, emotionally. Not intellectually (IMVHO) and not, I really believe, scientifically (IMVHO again), say, as opposed to GCC (though no point debating it).

I wonder if there's any way to engage them. I feel like I've developed the ultimate two-minute talk - people get it, it never fails. That doesn't mean they'll keep talking to me. :)

Anyway, if you'd like to share some ideas for on this general issue, please do get in touch.

Especially disturbing to me is the "why waste time" argument, coming from folks who "stand on the shoulders of giants," so to speak.

I mean, if people who are making use of the tremendous achievement of the scientific way of thinking, the scientific legacy (not to mention public support of their research)...cannot see the value of attempting to deal with the "global problematique"...

It seems they lack appreciation for science itself.

Anyway, you don't have to be an expert, IMVHO (again again). There are plenty around who can be quoted.

US gasoline demand bounces back from holiday stupor

After about four weeks of weak gasoline demand, US gasoline sales suddenly bounced back last week.

The recent fall in gasoline demand may be possibly partly related to more 'holiday time off' than is usual around New Year’s, and perhaps the end of extended unemployment benefits for many at year end.

While it is too early to say whether this evening’s API oil inventory report accurately reflects the more detailed EIA report to come tomorrow, refiners – especially Gulf Coast refiners – appeared to have stepped up output to meet the increased retail demand. The Colonial Pipeline has been essentially operating at maximum capacity in the transport of gasoline from the Gulf (of Mexico) Coast area to the Northeast in the last 10 days.

US Gasoline Use +4.1% In Week To 8.37 Million B/D - SpendingPulse
Written By -- Year-on-year demand down for 20th straight week
Published January 18, 2012


Oil Stockpiles Declined, Gasoline Advanced Last Week, API Says
January 18, 2012, 4:55 PM EST


Moving MENA solar to Europe with high voltage DC cables:

Desertec - Electricity from the Desert for Europe

And who in their right mind wants be in complete thrall to MENA, riddled with endless wars for millennia, on a millisecond-by-millisecond basis?

The Europeans have every reason to want North Africa's economies to improve so that their residents don't feel hard pressed to swarm across the Mediterrenean.

Desertec is a very good way to bring that about.

South Carolina Congressman Joe Wilson (R) is on C-SPAN Journal now explaining why the KeyStone Pipeline would be "economically" great for SC because SC makes the replacement rubber tires that oil sands seem to eat up.

Background info:

Congressman Joe Wilson defended the oil and gas industry [position re Keystone], saying “Oil and gas aren’t addicting, they are liberating.” He then argued for the XL Pipeline, pointing out that at least a dozen businesses located in South Carolina provide materials, equipment, engineering support and supplies to the effort. “I’ve been to Alberta and seen first-hand the services and supplies South Carolina based companies provide to the proposed pipeline. I challenge anyone to say this much needed project doesn’t impact our state positively,” Wilson stated.

Former Canadian Ambassador David Wilkins echoed those sentiments, saying, “Approving a pipeline that ships oil from Canada – a trusted ally and a steadfast partner in our pursuit of economic and energy security – should be a ‘no-brainer.’ Yet it has fallen victim to the worst kind of partisan politics in Washington, D.C.” Continuing, Wilkins stated, “It unfortunately shows what we all know – that the U.S. is sorely lacking a comprehensive energy strategy. That is why events like this are so important.”

Link to source is here.

Jobless claims drop to near four-year low

Meanwhile the agency also reported that consumer prices were flat for a second straight month in December as gasoline fell and food rose moderately, suggesting scope for further monetary easing should economic growth falter.

Who posted recently, suggesting it's helpful to look at the Employment Figures instead of the Unemployment. I'm not even sure who ( BLS? ) has them differentiated that way.. but I'm wondering how many are unreported because they're simply outside the system, have timed out of the Unemployed figures.

joker - I've wondered about that myself. As I understand once a person's unemployment benfits runs out they are no longer classified as unemployed whether thay have a job or not. Also, if I've been told correctly, the 135,000 new graduates that come into the job market every month aren't counted as unemployed even if none of them get a job: you have to be employed and then unemployed to apply for benefits. Thus they are invisible. If that info isn't correct I'm sure one of our resident smarty pants will straighten me out.

I think you are mixing apples and oranges. For the BLS household survey (the one that is used to calculate the unemployment rate)you have to be looking for work or working in the previous 4 weeks (??) to be considered part of the labor force and if you have no job you are considered unemployed.

In order to collect unemployment benefits you have to have to be looking for work- it is part of the certification process. So while collecting benefits people will respond affirmatively in the household survey. When their benefits run out there is no need for them to say that they are looking for work - and so they drop out of the ranks of the unemployed for purposes of the Household survey. So you get the bizarre result- as unemployment benefits run out the unemployment rate goes down!

It is part of the reason why the unemployment rate is such a useless indicator- the numerator and denominator can change and often as the economy weakens people give up looking for jobs -leading to lower unemployment and as it strengthens the rate can go up as more people start looking for jobs. Would have been much better if they kept the denominator fixed (the working age population) and let the numerator be the number of people with a job.

Excellent explanation of how UI benefits impact unemployment rates even though there is no direct connection. The number to look at is the employment to population ratio, but this is only useful if you already know the trend value.

The statistic Leanan reported are *initial* unemployment claims. This is counted when you first lose your job, and file for your first claim. It has nothing to do with continuing claims (which start with week #2 of the UI process). Nor does the monthly BLS unemployment survey have anything to do with it(which is a completely different thing). The people who file an initial UI claim have only a minicule chance of being one of the same people interviewed for the monthly BLS survey.

Basically, initial UI claims reflects the pace of layoffs. The declining trend the past several months means there are fewer layoffs.

I know all that, and the '400,000' magic number, too. It's good info, but it only means what it means. In the case of initial claims somebody who lost a job thought they would qualify for UI and needed it so they applied. Be careful comparing to historical levels. Have you seen the lengths some states are going to to depress initial claims? Checkout FL.

No, the official monthly unemployment data is not directly related to the number of people who collect unemployment insurance. The BLS uses a sampling process to estimate unemployment and a person is considered unemployed if they are out of work, available to work and tried to find a job in the previous month. HERE's the BLS explanation. The number of new applications for unemployment is another measure, perhaps pointing to changes to be found later with the official survey. Mister Market's invisible hand likes to know things before the rest of us know...

E. Swanson


The way I understand it, when an unemployed person stops actively looking for a job they are no longer considered unemployed. They may still not have a job, but they are not unemployed!

There are no doubt many unemployed Americans who have given up looking for work because they realize there aren't any jobs to be found!

The best way to look at this is the employment-population ratio (black line) and participation rate (blue line).


(from Calculated Risk, url of graph)

Calculated Risk's Employment-Population Ratio

That's frequently me, and I did find the numbers a while ago on the BLS site though I didn't save a link to them.

The relevant keyphrase is "workforce participation"

One problem with 'employment' statistics (vs. UN-employment) is that they are taken from "a non-random polling" of employers and count folks with more than one job as two (or three, etc.) employed persons. Quite a few folks have more than one part time job, it seems.

BLS stats include various categories of unemployment, including U-6, etc.. and good explanations.

An alternate to govt. stats is ShadowStats.

Nuke support in UK hits record high

Public support for nuclear energy has reached an all-time high in the UK, less than a year after the Fukushima incident. There is an interesting gender gap, though.

Pollsters Ipsos MORI, who buttonholed about 1,000 Brits last month for its survey, found that 40 per cent of the sample [PDF] now hold favourable views of nuclear power, compared to 19 per cent who don't. Men (55 per cent) are much more likely than women (26 per cent) to view it positively. Nuclear energy has been viewed more positively than negatively since 2004.

The recovery comes about 10 months after the most publicised civilian nuclear emergency in 25 years: the incident at the Fukushima-Daiichi power plant, caused by a tsunami wiping out Japan's shores. Support for nuclear energy dipped but rapidly recovered.

Summary of Weekly Petroleum Data for the Week Ending January 13, 2012

U.S. crude oil refinery inputs averaged just under 14.6 million barrels per day during the week ending January 13, 352 thousand barrels per day below the previous week’s average. Refineries operated at 83.7 percent of their operable capacity last week. Gasoline production increased last week, averaging nearly 8.8 million barrels per day. Distillate fuel production decreased last week, averaging about 4.5 million barrels per day.

U.S. crude oil imports averaged just under 8.3 million barrels per day last week, down by 1.6 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 9.0 million barrels per day, 259 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 553 thousand barrels per day. Distillate fuel imports averaged 219 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the previous week. At 331.2 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 3.7 million barrels last week and are in the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories increased by 0.4 million barrels last week and are in the middle of the average range for this time of year. Propane/propylene inventories decreased by 1.1 million barrels last week and are in the upper limit of the average range. Total commercial petroleum inventories decreased by 2.1 million barrels last week.

Total products supplied over the last four-week period have averaged about 18.1 million barrels per day, down by 7.2 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged 8.4 million barrels per day, down by 6.1 percent from the same period last year. Distillate fuel product supplied has averaged about 3.6 million barrels per day over the last four weeks, down by 4.4 percent from the same period last year. Jet fuel product supplied is 5.6 percent lower over the last four weeks compared to the same four-week period last year.

What's going on here? Where is this huge reduction actually happening? It's certainly not in my area. Is there some EIA accounting gimmick going on? If I were to take this at face value it would lead me to believe that the economy is in the process of collapsing, yet the exact opposite is being peddled everyday by the government/media and in general people around here are optimistic about things improving quite a bit.

Mastercard reports validate the EIA numbers for unleaded demand. Mastercard reported a 4% increase the past week and that should show up in the EIA numbers next week. I guess everybody made it their New Year's resolution not to drive. Looks like quite a few threw in the towel this past week. I suppose that is a pretty normal length of time for resolutions.

[Norway] Oil minister keen on more production

... “Norway will continue to produce substantial amounts of oil and gas for decades, and even generations, to come,” Moe said during a meeting with members of the Foreign Press Association in Oslo on Thursday. Moe made it clear he’s all in favour of more exploration, as evidenced by this week’s record large licensing round, and hopes it will lead to more production.

Moe’s bullishness on the oil industry has provoked both environmental groups, fellow government ministers including Erik Solheim, who’s in charge of environmental issues, and even his own party leader, Liv Signe Navarsete of the small Center Party, in recent months. Navarsete is known for sporting green jackets and she has been skeptical about proposals to allow oil exploration off scenic Lofoten. Moe has seemed to favour it, but that thorny issue has been carefully tucked away and won’t be dealt with by the current government or Parliament. It will instead be an issue during next year’s election campaign and be acted upon after the election in the fall of 2013, according to Moe.

The Norwegian oil minister commented on a wide range of [fossil fuel related] subjects, among them: ...

Rainforest in Transition: Is the Amazon Transforming before Our Eyes?

The Amazon rainforest is in flux, thanks to agricultural expansion and climate change. In other words, humans have "become important agents of disturbance in the Amazon Basin," as an international consortium of scientists wrote in a review of the state of the science on the world's largest rainforest published in Nature on January 19. (Scientific American is part of Nature Publishing Group.) The dry season is growing longer in areas where humans have been clearing the trees—as has water discharge from Amazon River tributaries in those regions. Multiyear and more frequent severe droughts, like those in 2005 and 2010, are killing trees that humans don't cut down as well as increasing the risks of more common fires (both man-made and otherwise).

Energy Efficiency Paves Way to a Low-Carbon Future, But Barriers Persist

Former Secretary of Defense William Perry, now a Stanford University professor emeritus of management science and engineering, lists biomass, plug-in hybrid cars, nuclear power, more natural gas and energy efficiency as the only potential near-term answers to easing the United States' emissions of greenhouse gases and addiction to oil.

... Perhaps surprisingly, Perry is not the only former military chief pressing for greater energy efficiency. At the same meeting, Robert M. Hill, Australia's former minister of defense, described his country's renewed attempts to cut waste. The Low Carbon Australia trust, which finances efficiency improvements in private buildings with public funds, is chaired by Hill, a member of Australia's main conservative party and a professor at the University of Sydney.

"It's quite criminal how much energy we waste," Hill said at the U.S.-Australia Dialogue on Energy Efficiency conference, organized by Stanford's Precourt Energy Efficiency Center (PEEC) and the government of Australia through its consulate in Los Angeles

Despite the potential benefits to the environment, economy and national security, most governments have not acted decisively to reduce energy waste. "Visionary statements" have been followed up by little real action, said Howard Bamsey, a professor of climate change and energy security at the University of Sydney's U.S. Studies Centre.

Many of those who control energy research dollars are fundamentally hostile to any area but technology, said PEEC Director James Sweeney. "We as a nation talk a damn good game, but we play a very bad one."

related Behavior, Energy and Climate Change Conference

Former Secretary of Defense William Perry, now a Stanford University professor emeritus of management science and engineering, lists biomass, plug-in hybrid cars, nuclear power, more natural gas and energy efficiency as the only potential near-term answers to easing the United States' emissions of greenhouse gases and addiction to oil.

The usual nostrums from the Oil/Auto/Nuke lobby.
At least there is a dawning recognition of "addiction to oil".
But there is no recognition that we cannot continue our Auto Addiction
by other means which directly consumes almost 70% of US oil usage and generates
almost 38% of US greenhouse emissions. Indirectly there are a lot more
expenses for materials for all the private cars, shipping, road maintenance,
obesity (35% of Americans are now officially fat), traffic cops, traffic courts, 30,000 deaths, hundreds of thousands of injuries, emergency rooms,etc.
If we are serious about saving oil we would run Green transit trains, trolleys, buses, bikeways and walking.
We would stop building any more new highways or highway lanes, cloverleaf monsters and suburban sprawl.
Europe and Japan use 3 times less oil per capita than the US.
As "Transportation Revolutions: Moving People and Freight without Oil" points
out between 1941-1945 the US totally turned around its auto addicted path
and increased intercity rail, buses and local transit by 4x in just 4 years
saving huge amounts of oil. (unfortunately the oil was for the destructive War effort)
( http://transportrevolutions.info )
The US already has 233,000 miles of Rail all over the country - chances are there are rail tracks within a few miles of 90% of American readers of TOD.
Indeed Brookings found that 70% of working age Americans in 100 US Metro areas already live within 3/4ths mile of a transit stop NOW.
This could be turned around with serious effort and will and actually most
Americans would like no longer being chauffeurs to their kids, being able
to avoid spending over $7500 per year on auto transportation, getting in shape by actually walking, seniors who can no longer drive not trapped in their homes.

NASA Sees Repeating La Niña Hitting its Peak

La Niña, "the diva of drought," is peaking, increasing the odds that the Pacific Northwest will have more stormy weather this winter and spring, while the southwestern and southern United States will be dry.

"Conditions are ripe for a stormy, wet winter in the Pacific Northwest and a dry, relatively rainless winter in Southern California, the Southwest and the southern tier of the United States," says climatologist Bill Patzert of JPL. "After more than a decade of mostly dry years on the Colorado River watershed and in the American Southwest, and only two normal rain years in the past six years in Southern California, low water supplies are lurking. This La Niña could deepen the drought in the already parched Southwest and could also worsen conditions that have fueled recent deadly wildfires."

Low Temperatures Enhance Ozone Degradation above the Arctic

Extraordinarily cold temperatures in the winter of 2010/2011 caused the most massive destruction of the ozone layer above the Arctic so far: The mechanisms leading to the first ozone hole above the North Pole were studied by scientists of the KIT Institute of Meteorology and Climate Research (IMK).

According to these studies, further cooling of the ozone layer may enhance the influence of ozone-destroying substances, e.g. chlorofluorocarbons (CFC), such that repeated occurrence of an ozone hole above the Arctic has to be expected.

"We found that further decrease in temperature by just 1°C would be sufficient to cause a nearly complete destruction of the Arctic ozone layer in certain areas," says Dr. Björn-Martin Sinnhuber, main author of the study. Observations over the past thirty years indicate that the stratosphere in cold Arctic winters cooled down by about 1°C per decade on the average.

Do note that these are stratospheric temperatures, not ground temps. Greenhouse gases actually cool the stratosphere, by providing a pathway for heatloss. The heat mainly comes from solar UV being absorbed by the ozone.

When It Comes To Accepting Evolution, Gut Feelings Trump Facts

... "We're assuming that people accept something or don't accept it on a completely rational basis. Or, they're part of a belief community that as a group accept or don't accept. But the findings just made those simple answers untenable."

Haury and his colleagues tapped into cognitive science research showing that our brains don't just process ideas logically—we also rely on how true something feels when judging an idea. "Research in neuroscience has shown that when there's a conflict between facts and feeling in the brain, feeling wins," he says.

'Truthiness' trumps facts ... applies to PO also.

I didn't really "get" this article. Surely your gut feeling is going to be related to your understanding of the theory and how much you have been primed with related knowledge.

Are they saying that knowing more "facts" and being able to parrot them back is no good? Well duh.

Although I can certainly get behind the idea that the more complex an idea, the less intuitive it is and therefore the less likely it is to be believed.

My gut feeling is this article is wrong.

Findings prove Miscanthus x giganteus has great potential as an alternative energy source

The growing conditions were adequate at each location in different years. However, late planting and extreme winter temperatures during 2008 affected establishment rates at the Illinois site. Lower yields occurred at the New Jersey site in 2010, which could be attributed to the site's sandy soils and warm, dry weather conditions in that year.

"For the most part, we found that Miscanthus responds to sites in which water is adequately available," Voigt said. "The combination of warm temperatures and adequate precipitation spread throughout the growing season creates ideal growing conditions."

... "We want bioenergy crops to find their way into more marginal settings where ground is less easy to work with. Miscanthus can work where food crops can't."

Actually their findings prove that Miscanthus requires the same conditions as food crops - thus, it will compete with food crops.

Also Miscanthus, a biofuels crop, can host western corn rootworm


Sunspot 1402 Eruption: A major eruption starting at 14:30 UTC Thursday took place around Sunspot 1402. This long duration event peaked at M3.2. A large Two-Wave (CME) is seen in the latest images, a portion of which appears to be Earth directed. The major bulk of the plasma cloud appears to be directed north.

A type II Sweep Frequency Event was also detected. Stay Tuned to SolarHam.com for the latest updates. Video presentation will be available soon.

UPDATE: The 1st CME wave was overtaken by the 2nd wave due to its higher speed velocity.

ALERT: Type II Radio Emission
Begin Time: 2012 Jan 19 1252 UTC
Estimated Velocity: 933 km/s

Looks like the Eye of Sauron.

Earth directed component now confirmed.


NASA's twin STEREO spacecraft recorded an impressive CME emerging from the blast site: movie #1, movie #2. Analysts at the Goddard Space Weather Lab confirm that the CME is heading for Earth, and they say strong geomagnetic storms are possible when the cloud arrives during the late hours of Jan. 21st. Their animated forecast track predicts an impact on Jan. 21st at 22:30 UT (+/- 7 hrs).

Any space watchers out there have any idea why SOHO is missing over 4 hours of data including the peak measured value?


Data from GOES confirms the event was M class level for about 4 hours. This was a much larger event than yesterday's yet the SOHO data cuts off at a lower value than recorded yesterday.

An alert Type IV has also just been issued in addition to the earlier Alert Type II

Data looks there to me on that page.


Yes, it seems the missing data has now been added retrospectively. Wonder if they had downlink problems during the flare and got the data later. SOHO is directly in line with the sun after all.

Is this enough to be concerned about or will it be just another fancy light show?

Answer B.

One interesting thing about this flare is the duration of the associated CME impact. The current NASA prediction is for the CME to take up to 20 hours to completely pass earth. Normally it is a much shorter duration. Hopefully that just means better chances of seeing auroras.

Oil rig arrives for Cuba offshore exploration work

HAVANA, Jan 19 (Reuters) - A Chinese-built drilling rig to be used for in the first major exploration for oil in Cuba's offshore waters arrived on Thursday off the coast of the communist-ruled island's capital.

Starting later this month, Spanish oil giant Repsol YPF , working in partnership with Norway's Statoil and a unit of India's ONGC, is expected to drill at least two wells in Cuban waters about 70 miles (112 km) from the Florida Keys.

Malaysia's Petronas, in partnership with Russia's Gazprom Neft, also will drill a well using the Scarabeo 9. The rig has been contracted from its owner Saipem, a unit of Italian oil company Eni.

All the wells will be in water at least a mile (1.6 km) deep, like that of the BP well that blew out and spilled millions of gallons of oil in the U.S. part of the Gulf of Mexico in 2010.

also Huge rig arrives off Havana to explore for oil, in latest point of contention between US, Cuba

I can definitely see similarities in this and the Canadian oil pipeline debate. Not building the pipeline to the US gulf coast will probably have the same result in the end. We don't want drilling in the eastern Gulf of Mexico, but Cuba ends up drilling anyway. We don't want the oil sands developed and the emissions sent into the atmosphere, but the pipeline will end up being built a different direction and all of the tar sands oil will be burned up anyway. I am not saying these are good outcomes, but they seem like reality to me.

Supreme Court Says Congress May Re-Copyright Public Domain Works

Congress may take books, musical compositions and other works out of the public domain, where they can be freely used and adapted, and grant them copyright status again, the Supreme Court ruled Wednesday.

Writing for the majority, Justice Ruth Ginsburg said “some restriction on expression is the inherent and intended effect of every grant of copyright.”

Anthony Falzone, executive director of the Fair Use Project at Stanford University and a plaintiff’s lawyer in the case, called the decision “unfortunate” and said it “suggests Congress is not required to pay particularly close attention to the interests of the public when it passes copyright laws.”

The lead plaintiff in the case, Lawrence Golan, told the high court that it will not longer be able to perform Prokofiev’s Classical Symphony and Peter and the Wolf, or Shostakovich’s Symphony 14, Cello Concerto because of licensing fees.


... anything for a buck. U.S. prevails

Thieves Seek Restaurants’ Used Fryer Oil

But with a demand for biofuel rising, fryer oil now trades on a booming commodities market, commanding around 40 cents per pound, about four times what it sold for 10 years ago. That makes it a tempting target for thieves, especially in hard times.

... To be fair, it is not the easiest sell to prosecutors. Jon A. Jaworski, a lawyer in Houston who represents people accused of stealing grease, said that in the early 1990s he had won more than a dozen cases by arguing that grease should be considered abandoned property and therefore free to take — like Dumpster-diving, just oozier.

also Liquid Gold? Greenwich PD Investigates Thefts of Used Cooking Oil

EPA urged to disregard oilsands emissions in Keystone decision: letters

"Given that the possible consequences of greenhouse gas emissions are global in nature, they include potential impacts on the United States, and we believe it is appropriate that the State Department consider these upstream greenhouse gas emissions in its evaluation," EPA Administrator Lisa Jackson wrote on Dec. 7, 2010 in response to a letter from [Canada's U.S. ambassador Gary] Doer.

Six Democrats propose "Reasonable Profits" Board to regulate US oil company profits:

Dems propose 'Reasonable Profits Board' to regulate oil company profits

According to the bill, a windfall tax of 50 percent would be applied when the sale of oil or gas leads to a profit of between 100 percent and 102 percent of a reasonable profit. The windfall tax would jump to 75 percent when the profit is between 102 and 105 percent of a reasonable profit, and above that, the windfall tax would be 100 percent. The bill also specifies that the oil-and-gas companies, as the seller, would have to pay this tax.

Kucinich said these tax revenues would be used to fund alternative transportation programs when oil-and-gas prices spike. "Gas prices continue to rise, creating a hardship for the American people," he said. "At the same time, oil companies are making record profits gouging their customers.

I think that this is typical of what we should expect to see when we don't see the decades of rising global crude oil production that most of the US oil industry has been promising consumers that we would see:


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

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


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

ExxonMobil Advertisement in New York Times,
June 2, 2006

I think the blog likely got the break points wrong, which I think might be: 100 to 120%, 120 to 150%, then above 150% of whatever is claimed to be a "reasonable profit". All righty then, lets ask Congress to apply that same logic to the financial world as well, while they're at it.

But, having just watched the latest round of Republican candidate debates, I can hear Gingrich now, saying: "This is an incredibly STUPID idea". Especially so during an election year, one might add...

E. Swanson

Tanker Tracker ‘Oil Movements’ Sees Significant Fall in OPEC Exports

Just when you thought OPEC would ‘make up’ for any fall in sanctioned Iranian oil exports, well, we find out instead the most significant fall in OPEC exports in months is developing. This also follows many recent media reports about how OPEC’s December meeting ‘failed’ to restrain oil production, that Saudi Arabia would ‘ramp up’ oil output at the first sign Iranian exports were lagging, and in general, oil was ‘over-priced’ and heading for a major fall due to OPEC’s ‘excess capacity’.

If Saudi Arabia, or even OPEC in general, has spare excess capacity, they don’t appear to be using it for exports.

OPEC oil exports fell 300,000 bpd in the latest weekly report from the 23.65 mbpd level that prevailed for about six weeks. In general, OPEC exports are now running about 700,000 bpd less than about one year ago - which is an even greater amount than the 600,000 bpd fall in Libya’s oil exports over the same period.

OPEC to Cut Exports as Asian Demand Declines, Oil Movements Says
By Grant Smith - Jan 19, 2012 11:30 AM ET

The Organization of Petroleum Exporting Countries will ship 23.35 million barrels a day in the four weeks to Feb. 4, 0.5 percent less than the 23.47 million transported in the period to Jan. 7, the Halifax, England-based researcher said today in an e-mailed report. The figures exclude Angola and Ecuador.

“Middle East shipments are down largely because of sailings eastbound,” said Roy Mason, Oil Movements’ founder, adding that flows are likely to rebound later in February as winter volumes reach their final peak.


This is the first weekly estimate since October to report a decline in shipments in the coming four-week period. "The reason it's gone down is declining eastbound shipments from the Gulf," said Roy Mason of Oil Movements. 1/19/12 REUTERS 16:29:59

Some ball park estimates for post-2005 Saudi Cumulative Net Exports (CNE) up the thread that you might find interesting: