Drumbeat: January 30, 2012

The End of Elastic Oil

The last ten years have brought a structural change to the world oil market, with changes in demand increasingly playing a role in maintaining the supply/demand balance. These changes will come at an increasingly onerous cost to our economy unless we take steps to make our demand for oil more flexible.

We’re not running out of oil. There’s still plenty of oil still in the ground. Oil which was previously too expensive to exploit becomes economic with a rising oil price. To the uncritical observer, it might seem as if there is nothing to worry about in the oil market.

Unfortunately, there is something to worry about, at least if we want a healthy economy. The new oil reserves we’re now exploiting are not only more expensive to develop, but they also take much longer between the time the first well is drilled and the when the first oil is produced. That means it takes longer for oil supply to respond to changes in price.

Global Oil Production Update: A Strange Future Has Arrived

Since 2005, European oil consumption has fallen by 1.5 million barrels a day. And, in the same period, US oil consumption has fallen by 2 million barrels a day. If oil was priced at $60 a barrel, rather than $100 a barrel, then a fair portion of that lost demand might return. Instead, since 2005, global crude oil production has been bumping up against a ceiling around 74 million barrels a day. Thus, the tremendous growth in oil demand which emanates from the developing world, in Asia primarily, has been supplied by the reduction of demand in Europe and the United States. Why doesn’t the world simply increase the production of oil to 77, or 78 million barrels a day? After all, that is precisely the history of global oil production: a continual increase in supply to capture the advantage of rising prices.

Oil Falls a Second Day on Speculation EU Talks May Fail to Resolve Crisis

Oil dropped for a second day in New York on speculation that European Union leaders meeting today may fail to resolve the region’s debt crisis, while OPEC’s secretary-general said the market is well-supplied.

Futures slipped as much as 0.9 percent as stocks dropped and the dollar strengthened. EU chiefs will gather in Brussels today to complete a German-led deficit-control treaty and endorse a 500 billion-euro ($660 billion) rescue fund. Hedge funds and other large speculators increased wagers on rising crude prices, the Commodity Futures Trading Commission’s Commitment of Traders report on Jan. 27 showed.

OPEC Sees No Shortage Of Oil In Any Region

LONDON -- OPEC's secretary general said Monday that there is currently no shortage of oil anywhere, despite current supply concerns.

The remarks come after the oil minister for Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, said it intended to remain stable supplier to markets.

U.N. considers resolution amid reports of heavy fighting in Syria

(CNN) -- The U.N. Security Council will take up a draft resolution this week that calls on Syrian President Bashar al-Assad to step down and transfer power.

The move follows news that the Arab League suspended a mission to monitor whether al-Assad was abiding by an agreement to end a brutal crackdown against anti-government protesters.

'Terrorist' group hits Syrian pipeline

DAMASCUS, Syria (UPI) -- A "terrorist" attack Monday struck a natural gas pipeline running from the restive Syrian city of Homs, Syrian state media reported.

The official Syrian Arab News Agency reported that an "armed terrorist group" attacked a natural gas pipeline running from Homs to the western coastal city of Banyas. No injuries were reported.

China, Japan scramble for oil as Sudan shuts fields

SINGAPORE - The shutdown in Sudanese oil supply could drive up already record premiums on spot crude markets as top Sudan customers China and Japan scramble for alternatives even as they weigh the impact on oil flows of international sanctions on Iran.

South Sudan has shut down its oil output, estimated at around 350,000 barrels per day (bpd), as it and neighbour Sudan row over how to disentangle their oil industries, borders and debt.

Sudan to release oil tankers

Khartoum has announced it will release tankers carrying oil from South Sudan in a bid to end the standoff over crude exports. The dispute has led to a shutdown of oil production in South Sudan.

Sudan's seizure of the ships escalated a row over transit fees for South Sudanese crude. Efforts to broker an agreement have so far failed.

Iran Parliament Debates Ban on Oil to Europe as Nuclear Inspectors Arrive

International Atomic Energy Agency inspectors arrived in Tehran today for talks on Iran’s nuclear program while lawmakers drafted a ban on oil sales to Europe.

“We are looking forward to the start of a dialogue, a dialogue that’s overdue,” Chief Inspector Herman Nackaerts, who’s heading the six-member IAEA team, said in comments cited on the website of state-run Press TV. The delegation will stay in the country for three days, Foreign Minister Ali Akbar Salehi told reporters in Addis Ababa, the Ethiopian capital.

Gulf Arabs have plans against Hormuz closure-official

(Reuters) - Coastguards and naval forces of the Gulf Cooperation Council (GCC) group of Arab countries have contingency plans for a possible attempt by Iran to shut the Strait of Hormuz, a Kuwaiti maritime official said on Monday.

Five of the six GCC members - Saudi Arabia, Bahrain, the United Arab Emirates and Kuwait - rely on the world's most important energy shipping lane being open to export most of their oil and gas.

Iran: Oil to reach $150 a barrel

Oil prices could hit $150 a barrel as a result of the ongoing international standoff over Iran’s nuclear programme, the head of the country’s state oil company said yesterday.

Ahmad Qalehbani, chief of the National Iranian Oil Company, made the remarks as Tehran ponders cutting off exports to Europe, before a proposed EU embargo on Iranian crude is due to come into effect. The embargo is set to go into effect in the summer, but Iran says it may cut the flow of crude to Europe early. “It seems we will witness prices from $120 to $150 in the future,” Qalehbani was quoted as saying by Iran’s official news agency.

South Korean President Seeks Alternatives to Iranian Crude

South Korea's president is to visit Saudi Arabia and two other Gulf oil producers in an attempt to secure stable sources of energy. The trip will come as Seoul is considering reducing imports from Iran in line with U.S.-led sanctions. But the government of South Korea, heavily dependent on energy supplies from abroad, is expressing caution about the international movement to punish Iran for its alleged nuclear weapons development.

The consequences of war for Saudi Arabia

Discussion of a possible war between Iran and the coalition aligning against it centers on destroying Iranian nuclear sites and ensuring that oil tankers freely transit the Strait of Hormuz. Countries embarking on war scrutinize as many scenarios and possibilities as they can, but wars invariably present unexpected situations and changes within their borders are seldom anticipated.

To Mend Ties After Clash, Kazakhstan Makes an Offer

ZHANAOZEN, Kazakhstan — Despite the vast wealth of nearby oil fields, this industrial settlement in the desert of western Kazakhstan is a picture of rural poverty. Sheep meander through the town. The streets, mostly unpaved, are so deeply rutted that cars must slow to a crawl.

“Nothing remains for the people,” said Yezev Marzabai, a local oil worker. The worst part of his job, he said, was not the low pay or hard labor: it was watching tens of thousands of dollars worth of oil pass in front of his face every day. “All the wealth goes to the leaders.”

Kazakh Chevron JV says 2011 output 25.8 mln tonnes

(Reuters) - Tengizchevroil, the Kazakh oil venture led by U.S. energy major Chevron Corp, said on Monday that crude production in 2011 totalled 25.8 million tonnes, or 0.4 percent less than the 25.9 million tonnes produced in 2010.

Putin call to 'cut Gazprom stake'

Russian Prime Minister Vladimir Putin has called for the government to reduce its stake in state-owned companies, including gas monopoly Gazprom, according to a report.

Sakhalin-II Project to Reach Full Cost Recovery in Q1

The Sakhalin-II oil and gas project, which Gazprom is implementing with foreign partners on production-sharing terms off Russia’s Pacific Coast, will reach its full cost recovery in the first quarter of 2012, Energy Minister Sergei Shmatko said on Monday.

“We expect the project to reach full cost recovery in the first quarter of 2012, two years ahead of schedule,” Shmatko said.

Russia: No Further Changes To Energy Production Sharing Agreements

MOSCOW – Russian Energy Minister Sergey Shmatko said Monday that all major issues have been resolved regarding production sharing agreements, or PSAs, that were signed in the 1990s with companies such as ExxonMobil Corp. and Royal Dutch Shell PLC.

"The issue of PSAs has been settled for good," Shmatko told government officials and company executives at a meeting in Moscow.

Belarus to host more of Russia's gas

MOSCOW (UPI) -- Russian energy company Gazprom said it aims to increase the amount of natural gas it sends through Belarus to European consumers this year.

White House pressure on Gulf oil leak figures alleged

Official estimates of how much oil leaked into the Gulf of Mexico during the 2010 Deepwater Horizon disaster turned out to be well below the mark. Now an advocacy group has filed a complaint of misconduct to the US National Oceanic and Atmospheric Administration (NOAA) against the scientist who compiled the estimates, alleging he "lowballed" the numbers after political pressure from the White House, among others.

Obama's energy plan: The winners, and winners

NEW YORK (CNNMoney) -- President Obama's half dozen energy proposals will, by and large, benefit nearly all players in the energy space and result in lower prices for consumers, analysts say.

Activists enter British Gas headquarters in fuel protest

A group of activists has occupied the British Gas headquarters in Surrey to protest at fuel bills.

Fuel Poverty Action said six people had "barricaded themselves into meeting rooms" at the offices in Staines.

In a statement, the group said it was targeting British Gas as it was one of the "big six energy firms making profits out of rising energy bills".

Economics alone should drive countries away from crude oil

The analysis is robust, and the authors lament that the economic argument has been “lodged more firmly in the minds of policy-makers.” But I think another problem lies in the rhetoric behind ‘peak oil.’ For decades, environmentalists and economists have forewarned that we will one day reach peak oil, hitting a wall in production, and thus need to shift to other fuel sources. But it’s like the boy who cried wolf: every time we hear the phrase “peak oil” and the prediction goes unfulfilled, it becomes a little easier to shrug off.

Renewable Energy Deals Buck Uncertainty to Rise 40%, PWC Says

Renewable energy mergers and acquisitions rose 40 percent in value last year, bucking the uncertainty caused by the European Union debt crisis, the global consultant PwC said today.

Dubai seeks renewable power sources for the future

With electricity demand growing by the year, the emirate's Supreme Council of Energy has set targets and is on the lookout for ways it can diversify its sources.

India’s Largest Solar Program Cuts Power Rates by As Much as 33%

India’s largest solar program cut the preferential rate it pays utilities for sun power as much as 33 percent as global prices of panels declined by more than half.

A Plea for Southern Treasures

The Southern Environmental Law Center, a Virginia-based nonprofit legal advocacy group, has released its 2012 list of the Top 10 endangered places in the Southeast, environmentally speaking. While the list changes from year to year, certain places like the Chesapeake Bay remain a top concern — and issues like pollution from coal-fired power plants and the protection of public lands and old-growth forests are recurring themes. While the list only considers six states, the issues raised by each site resonate nationally, and even globally.

Selling the Farm(er): What the Trans Pacific Partnership Means for Canada's Dairy Farmers

Credit ratings of once powerful nations are in the tank. The Euro is in trouble. The Occupy movement is on the march, resonating with many who sense legitimacy behind its youthful messaging.

Add to this global concerns regarding peak oil, climate change, food security, sovereignty and safety, the buy-up of farmland by foreign investors and the transition to fuel crops and it is beyond clear that governments have a profound responsibility to enact good public policy to ensure the sustainability (read permanence) of our farm sector.

California fuels rule sparks controversy

Just as it pioneered curbs on greenhouse gas emissions from cars and light trucks a decade ago, California is championing standards that could transform the fuel that goes into their tanks.

But its new rule, which requires lowering the amount of carbon in fuel sold in the state, has become embroiled in a fierce public battle and has been barred from being enforced. In light of tight state budgets, litigation over California’s program and a strong lobbying campaign against them, the question is whether the ambitious climate policy will get off the ground.

Power paradox: Clean might not be green forever

While this kind of work is still at an early stage, some startling conclusions are already beginning to emerge. Nuclear power - including fusion - is not the long-term answer to our energy problems. Even renewable energies such as wind power will have to be used with caution, because large-scale extraction could have both local and global effects. These effects are not necessarily a bad thing, though. We might be able to exploit them to geoengineer the climate and combat global warming.

There is a fundamental problem facing any planet-bound civilisation, as Eric Chaisson of the Harvard Smithsonian Center for Astrophysics in Cambridge, Massachusetts, points out. Whatever you use energy for, it almost all ends up as waste heat.

Climate-driven heat peaks may shrink wheat crops

More intense heat waves due to global warming could diminish wheat crop yields around the world through premature ageing, according to a study published Sunday in Nature Climate Change.

Louisiana scientists working on plan to save coastline, fight global warming

A team of Louisiana scientists is laying the groundwork for creating a new carbon storage industry that could both reduce the effects of global warming and rebuild wetlands along the state’s coastline. Sarah Mack, founder of New Orleans-based Tierra Resources, and Louisiana State University wetlands scientists John W. Day and Robert Lane have come up with a method for measuring the molecules of carbon removed from the atmosphere by the soils and plants that are created with coastal restoration projects.

Developer concerned about sea level predictions

Lake Macquarie Council's effort to manage the impact of rising sea levels has again raised the ire of developer Jeff McCloy, this time over his plans to develop the former Pasminco smelter site.

A council flood study found thousands of lakeside properties would be in danger of flooding by 2100 due to rising seas.

Mr McCloy has already threatened a class action against the Council for devaluing waterfront properties.

More news regarding our province's community-based wind development initiative...

N.S. aims for big results from small power projects

Ontario’s controversial green energy program may get more attention, but Nova Scotia has also embarked on an ambitious plan to wean the province off its dependence on coal-generated electricity.

Nova Scotia has a target of generating 25 per cent of its power from renewables by 2015, and 40 per cent by 2020. Coal-based power will drop from 75 per cent to 40 per cent.

A key component of the plan is to light a fire under community-based renewable projects, by offering them a substantial pricing subsidy.

See: http://www.theglobeandmail.com/report-on-business/industry-news/energy-a...


I accept the fact the green power is never going to be as cheap as coal generated power and that FIT programs are needed to get green power costs down. However, I'm lost when I see FIT programs that persist in providing high feed in tarifs when significant progress has already been made in reducing costs. Doing this does NOT increase support for green power -- it does quite the opposite when the majority of people realize they are paying more for power so that others can be generously compensated for producing green power.

Energy costs do matter. Paying 49.9 cents per kwh for small scale wind generation when we already have the technology to generate wind power for a fraction of that cost simply doesn't make sense. It's highly unlikely that small scale wind generation could ever become competitive with large wind generators regardless of how much subsidy money we throw at it.

It's the same story in Ontario -- the government seems completely oblivious to the significant reductions in the cost of installing solar pv and is still offering 20 year contracts at 80.2 cents per kwh. Meanwhile Germany has been steadily ramping down their tarifs. That was always the plan. Ontario copied Germany's plan of offering high feed in tarifs to encourage the installation of green power, but seems to have missed the second part that tarifs need to be ramped down as costs come down.

There's a good deal more to it than merely the generating cost.

Do you know how much you're paying for Electricity when you run an emergency generator? How about that cost when you have to refuel it with a long drive through bad roads or off to other towns which 'might' still have operating gas stations? Now look at that in terms of a community being able to function, not just a household. How about a county seat with a hospital and an emergency operations center?

Maybe that sounds hyperbolic, but I would posit that those conditions have a continual range of parallels down through to the 'normal daily' situations, with proportional advantages gleaned from having distributed sources of power available to individuals and various groups.

I do agree that FIT's should not be exorbitant.. it's all a balance, and shouldn't be treated like pouring slop into the trough.. but coming back from the other end of the argument again, I would also remind you that "Green Energy DOES get cheaper than the burnt fuels".. once it reaches payback, whether financial or energetic, which might be slow, but it DOES happen.. then the scales are tipped.. far earlier, of course, when you include the externalities of the dirty fuels. And why wouldn't you? Those costs are being billed to us, and we shouldn't ring up much more of a charge on that account, since who know when and how the collection agency is going to make its appearance.. but it could be ugly.

And of course, it doesn't matter what the cost of Coal or Oil is, if the supply chain is interrupted.. while having a simple assortment of Renewable Sources already implemented nearby will very quickly show itself to have been a simply golden investment, right when all sorts of other things are just falling apart.

Smaller Wind technologies are also available in forms that are locally maintainable, meaning their dependability is further extended, even if they are considerably less efficient or economic than the big-rigs..

Very well put sir!

"Green Energy DOES get cheaper than the burnt fuels".. once it reaches payback, whether financial or energetic, which might be slow, but it DOES happen.. then the scales are tipped.. far earlier, of course, when you include the externalities of the dirty fuels. And why wouldn't you?

Because, the meme that such externalities simply are irrelavent, is so deeply embedded in our collective psyche due to decades of having faith in the Neo Classical Economic Model. This being practically a truth unto itself. Praise be unto the Invisible Hand! may it sweepeth away the long term costs of our trespasses against our descendants...

FM - "Green Energy DOES get cheaper than the burnt fuels".. once it reaches payback, whether financial or energetic, which might be slow, but it DOES happen..." That's true and a good point. But the same holds true for the wells I drill. It might cost me $10 million to drill and complete one of my deep NG wells. But I can recover $700,000 worth of NG/condenstate at an operational cost of $5,000/month before payout. After payout I may be producing $500,000 of product at the same LOE of $5,000 month. Of course, that continues to ignore extrenalities. The obvious big difference is decline rate: my well continuely declines until it no longer generates energy...may 6 to 9 years if I'm lucky. With mainteneance a WT might produce a flat average rate of energy for 20+ years. But from an investment standpoint that ole bastard, Net Present Value, slaps you upside the head with your wind investment. The value of that energy produced 10+ years out adds little to the NPV and thus adds little to the ROR. And thus by most investment standards doesn't look very attractive.

This is the one area the govt might devise special tax laws for such projects to provide a hedge against NPV. I'm not an expert in such matters so I let others flesh out that idea. But as long as I can make a better ROR by drilling NG wells for an operator than building WT's then why should he invest in wind power?

Theoretically though, shouldn't the discount rate for NPV be closer to zero when future generations are taken into account?


q - That's a nice thought but how many times have you seen someone make an investment decision not made for their primary benefit? I've seen a few but it was typically done by someone who had more money than God. And they usually got all that money by making very good short term ROR's.

If you got the money I can put you into many investments that would significantly improve life for future generations. You just have to be willing to make do with a lot less income. Less than you would be making from interest payments on your checking account. I think the only way a sufficient incentive could be generated would be for the govt to develop a tax plan that essentially does what you offer: make the net income more profitable by eliminating taxes to some degree. I like such a plan better than subsidies. If an investors loses even with a big tax break than it's his money lost...not the public's. Not taxing an investment that doesn't creat a profit costs the govt nothing.

Luckily, research has shown that communities tend to have lower discount rates than individuals.

But as long as I can make a better ROR by drilling NG wells for an operator than building WT's then why should he invest in wind power?

I realize that is our current reality and at first glance almost impossible to argue against. My point is that the way the system is set up, is particularly short sighted and the operator is getting a free ride from the costs of maintaining a viable global ecosystem. Ok, let's cut him some slack since he is only the pusher of the drug and the users also need to take responsibility for the damage they are doing with their lifestyles.

But the bottom line is the operator never has to pay the full cost so his ROR is being subsidized big time! Perhaps if we could find a way to have him pay the full cost then he might find that investing in wind turbines might make more sense after all. And the users, well, they need to go cold turkey first!

I could tell you a story about a man who complained about having a house that was too small for him and how a wise man convinced him otherwise and how in the end the man realizes what a huge house he really has... but it's a really long story.


First, by way of background, NSP's own wind costs come in at approximately $83 per MWh and the power it purchases from IPPs runs between $90 and $100 per MWh. By comparison, after allowing for capital depreciation, coal-fired power clocks in at between $80.00 and $90.00 per MWh. NSP's fuel costs have been trending steadily higher in recent years and there's a reasonably good chance that they'll continue to do so for the foreseeable future, so commercial wind power is a pretty good deal now for Nova Scotians and could very well prove to be an even better deal going forward.

Secondly, under ComFIT, NSP is paying $131 per MWh for wind that's generated by wind turbines that are greater than 50 kW in size and $499 per MWh for turbines 50 kW or less.

Source: https://nsrenewables.ca:44309/comfit-technical-details

I would propose that the vast majority of these community turbines will be larger than 50 kW and so this much lower rate of 13.1-cents per kWh will apply. At the present time, NSP's residential rate is 13.336-cents. Also, bear in mind that these ComFIT rates are locked-in for twenty-years. Any guess where electricity rates will be twenty years hence? In addition, future offers may be scaled back or the programme could be amended or withdrawn at any time if the Province should so see fit.

For argument's sake, let's say that there are two hundred 50 kW wind turbines installed under the programme, i.e., the maximum size permissible to qualify for this more generous rate. That represents just 10 MW of nameplate capacity. Let's assume that the annual capacity factor is 33 per cent (and for many smaller turbines it's likely to be lower), so we're looking at a total annual supply of 28,908 MWh. If my maths are correct, the incremental cost of this power versus commercial wind at $85.00 per MWh, say, works out to be less than $12,000.00 per annum or just under $60.00 per turbine. If you feel so inclined, take that $12,000.00 and divide by 12 TWh (NSP's annual energy sales) and see what impact this will have on electricity rates.

So I propose that there's no financial pain for ratepayers whatsoever. It's certainly my belief that the sole purpose of ComFIT is to grease the sled to make it easier for commercial wind developers to do their thing, i.e., to win over the hearts and minds of the general public, perhaps, but more so to smooth relations with various provincial municipalities and county wardens. And if that's the case, then it's a truly small pittance given the potential upside.


Nothing like good hard numbers. My guess is that any kind of advertising would probably cost more than $12,000.

I get 29,200 MWh/yr assuming 200 50KW turbines, a 33% capacity factor and a 365 day year. I don't see where you are getting an $85/MWh incremental cost via commercial wind. Should it not be $368/MWh (449-131)? I get a total extra cost of procuring power of $10,745,600/yr, or about $53,728 per turbine.

While my numbers came out higher than yours, I would agree it is not a lot of money in comparison to the total expenditure on power in the province and it will not markedly increase utility bills. I am still concerned about the optics of doing this. In the short term it may help promote green power. In the longer term as people wake up to the reality that BAU is disappearing, it may very well backfire. If people are seeing their salaries stagnate while living costs and taxes keep going up, and government services are reduced they will start to demand that governments spend their hard earned money more carefully. We've already had two significant announcements from the Federal government that fit with the leaner, meaner world we are heading towards -- increases in payments to the provinces for health care will be tied to the increase in GDP and the Old Age Security system will be modified to control the cost of supporting it in the future. These 20 year power contracts could become an albatross around the neck of the political party that agreed to them once the people realize their standard of living is dropping irreversably.

Thanks for catching the error in my estimated cost. Here's how I came up with the 28,908 MWh figure: 200 turbines x 50 kW x 0.33 capacity factor x 8,760 hours/year divided by 1,000. It appears that you have used a capacity factor of 0.333 to derive this slightly higher number.

Where things really jumped the rails is in relation to the calculated incremental cost of small wind at $499 per MWh versus the $85 value I had assigned to large-scale commercial wind. The difference is $414, not $0.414 (I had inadvertently multiplied estimated output by the incremental cost per kWh, not MWh). So the correct grand total in our hypothetical example is just under $12 million not $12 thousand. Sorry about that; I should have checked my numbers prior to posting.

With all that said, I anticipate very few if any community based turbines will be sized at 50 kW or less. As of January 22nd, ten community-based wind projects have been approved with a combined nameplate capacity of 18.95 MW and each of these projects has either one or in some cases two turbines, so all of this wind will be priced at $131 per MWh or 13.1-cents per kWh. When you take into consideration that the cost of this power is locked-in for a full twenty years and that all of the associated risks are borne by the developer as opposed to NSP and its ratepapers, it looks to me to be an especially sweet deal, especially if fossil-fuel costs continue on their present trajectory.


Glad to hear that communities are opting for larger wind turbines. I don't have a problem with 13.1 cents per KWh. That's comparable to Ontario where the tarif is 13.5 cents per KWh. It sounds like the tarif is fixed for 20 years in NS -- in Ontario it is indexed to CPI.

There are a few issues involved in this program that bother me.

The article says:

Small wind projects, for example can get as much as 49.9 cents per kilowatt hour for the electricity they generate, while small tidal power generating plants get a whopping 65.2 cents per kwh. (By contrast, the rate Nova Scotia Power charges to domestic customers is about 12.6 cents per kwh.)

So the producers are getting 50 to 65 cents for their electricity, and the province is requiring it to be resold to consumers at a price 37 to 53 cents lower. This is a huge loss, and the money has to come from somewhere - ultimately the consumers/taxpayers since this is a government program. Nova Scotia is not a rich province and the consumers/taxpayers don't have much money.

The subsidies will start out low, but the amounts will rise rapidly as cheap coal is phased out and small renewable sources are phased in. If it actually achieves its goal of 40% renewable energy, then the subsidy system will be hemorrhaging vast amounts of money. At some point the system will break down (if only because NS Power goes bankrupt) and the consumers/taxpayers will get hit in the pocket book for the cost of fixing the debacle.

The second point is that, if you have a supply problem, which NS does, you should raise prices to discourage demand and bring it back in line with supply. You should not subsidize consumption because consumers will consume more of a scarce resource. That's economics 101.

Over all, the relatively high prices paid for renewables will encourage development without adding sharply to consumer prices, he said, because ComFIT projects form a relatively small proportion of the province’s overall power generation. “In the big picture, it encourages renewable energy, but it doesn’t have a huge impact on the overall electricity costs.”

But, as I said, when renewables and coal are each 40% of the supply, the subsidies DO have a huge impact on the overall electricity costs, because the costs of coal are only slightly below sale price, and the costs of small-scale renewables are far, far above the sale price.

Eventually, renewable energy prices will fall and become more competitive, especially as the cost of coal and oil-fired power increases, he said.

That's an example of pure wishful thinking, rather than running the numbers against an economic model and coming up with some realistic projections. In the real world you have to go with the economic models, not the "if pigs could fly" ones.

So this is really just an attempt to wallpaper over the cracks in the NS electric power system, and having once owned a 100-year old house, I can say that the cracks always win over the wallpaper.

If I may be so bold to say so, I don't believe your comments to be with merit.


In this case I think they did have merit. I think you may be letting small-wind fandom cloud your judgement here. Paying exorbitantly much for something negatively affects your cost basis. Now, I happen to believe such subsidies make sense in some cases, mainly when a small subsidy can plausibly bring the technology to a much more competitive state. For each comp[onent (small wind, residential PV, bit WTs, tidal etc.) the analysis has to be done separately. Also need need some sort of gentlemans agreement with other utilities, as for instance most of the incremental imporovement in the technology benefits that will be captured will be captured far beyond the utilities customer base.
For instance, a dollar of subsidy will help make:
(1) worldwide PV tech advance, but less than 1% of this benefit will aacrue to the local customers.
(2) Give experience to local contractors, which hopefully allows them via experience to become more efficient.

High discount rates in computing NPV and LCOE are a problem for renewables. I don't think high discounts are justified if the technical and market risks are low, i.e. for a mature tech like large WTs, or PV technological risk is known to be low, and there isn't a plausible case to be made that the market for the electricty might go away, so for these projects low discount rates would only make sense. For something like tidal generation, the technical risk is still high.

I disagree. At this moment, the programme is almost 20 per cent subscribed and all of the projects that have been approved to date are priced at $131 per MWh. And, again, as noted above, this price is locked-in for twenty years and all of the risks (e.g., higher interest rates, cost overruns, mechanical failure, etc.) are assumed by the developer and not by the utility nor its ratepayers.

Will there be any power purchased at these higher offers before the 100 MW cap is reached? It's certainly possible, but I anticipate that the 80 or so MW that are remaining will be chewed-up pretty quickly by these larger 1.5 to 2.0 MW sized projects.


Paul, I'll jump in here with my 2-cents. What gets lost in the RE generation money debate is WHERE the units are located. $131/MWh is on the high end of wind generation. However, what is the typical capacity factor in NS? That rate may be necessary to make the ROCE (return on capital employed) pay for itself.

If the units are distributed close to the loads, then network upgrades can be avoided. Now, combine the wind generation with battery systems and there is the real winner. We are looking at these systems for the network stability and generation leveling benefits. A firm in China recently commissioned a 36 MWh system.

Anyway, the arguments of over FIT energy rates are half baked unless the full unlevelized cost is considered. NS needs a FIT for many reasons, wish we had one in BC because we're going to need all we can get over the next 10 years (think increasing BC Hydro by 50%).

With a non-dispatchable resource, how will wind reduce network upgrades? I understand BC is now a net importer from Washington, is additional hydro planned?

P.S. I prefer low interest government loans to FIT

If both NS and BC have dispatchable hydro close enough by, they could avoid the network upgrades. I think they have the hydro potnetial, although to use it as a dispatclable element to balaance wind, they'd probably need at least some transmission upgrades. I.E. you run the hydrom plant at 2x the sustainable rate (given by river flow) when wind if off, and idle it when its windy. That requires more transmission and generation capacity.

site c Peace River...proposed. It could happen. Lots of opposition. With the installation of smart meters throughout Province, I imagine peak price differentials should help with conservation as bills increase.

I hadn't heard BC was net importer, though. However, it is fairly obvious folks could really cut back if they had to. We are still pretty much energy pigs for the most part imho.

Liard River 'canyon of the damned' could be investigated further. I used to fly water survey into monitoring sites for years. Of course, the Stikine could end some political careers, too.


If those FIT payments are for delivered MWhr, then the capacity factor for the turbines doesn't matter, AIUI. The payment is for electricity added to the grid...

E. Swanson


As I understand it, these community-based wind projects are capped at 2 MW and are intended to be connected directly to the local distribution system. As part of the review process, NSP must assess their impact on power flows and network stability, and without their stamp of approval (or, alternatively, the developer's commitment to pay for any necessary upgrades), an application at that point is pretty much dead in the water. It's probably fair to say that network congestion may be one of the factors that ultimately determines just how much wind energy can be added under this programme, and where.

With respect to capacity factor, in our neck of the woods it generally ranges between 33 and 38 per cent, but I'm guessing in this case it would likely fall toward the lower end of the scale as these installations can only be sited wherever there is an existing line and that may very well preclude some of the better locations. Likewise, some of the best spots may be in areas where there's little or no interest in pursuing such an endeavour or the local community lacks the financial or organizational wherewithal to make it happen.

On a brighter note, NSP is a winter peaking utility and wind output is generally strongest during the periods of highest demand (i.e., cold, blustery days), and so there's a good match in that respect. In addition, NSP actively promotes ETS heating, so there's at least some opportunity to soak-up excess wind energy during the overnight hours and the possibility of further building upon this load if that should prove helpful. But, most importantly, NSP will only pay for the power that is generated, so if a particular site should produce less energy than anticipated, it's the developer that holds the bag and not utility's ratepayers, keeping in mind that all of these proposals are ranked by a whole range of criteria and presumably the more marginal ones would never see the light of day in any event.


I think the right way to handle subsidies for renewables is through an auction process. Fix the aggregate dollar amount of subsidies that you want incur and then make people bid for it. If you set the subsidy amount at a level that ensures it is oversubscribed that I believe fosters innovation much faster than a a FIT, tax break etc. Individual bidders will then make every attempt to improve efficiencies so that they can be the low and winning bidder - they will also drive down the ROI they are prepared to settle for.

When people say 'renewables don't scale', they probably have a different business assumption in mind with that term, but I would ask people to consider that one of the great advantages of Wind and Solar is that we can carry them in our pockets and backpacks, and we can float 300 foot towers or cover warehouses with essentially the exact same approach to generating power, and that there is enormous advantage to this sort of flexibility, one which we will probably be very grateful for as the uncertainties of the next few decades make themselves known to us. We will need some of them at every range of size, if we want a fairly robust backup system on hand.

Don't forget that anything in your house that uses AA batteries is costing you something on the order of $175/kwh, AAA's are (I once calculated anyway) $400/kwh, and 9volt Transistor Batts a cool $755/kwh.

I'm just saying that it doesn't make economic sense to buy electricity (non-dispatchable electricity at that) from producers at 49.9 cents per kWh and sell it to consumers at 12.6 cents per kWh. That's a quick way for businesses to go bankrupt, and while governments can hit the taxpayers up for the difference, I don't think it is fair to them.

Now the price quoted above of $131/MWh (13.1 ¢/kWh) for power from wind turbines over 50 kW capacity is a lot more reasonable, but I think the conclusion to draw is that they shouldn't buy power from wind turbines smaller than 50 kW. Smaller is not better in this case.

However, this wind power is intermittent in nature, so it has to be backed up by peaking units, and natural gas turbines are ideal for that. So, let me put forth a hypothetical situation:

Let's say the NS government went to the owners of the Sable Island offshore gas project, and offered to buy their all their gas reserves from them. Originally there were 3 trillion cubic feet of reserves, and I don't know how much is left, but let's say it is 2 TCF.

The price of NG in their main market of New England and New York is depressed because of the shale gas bubble, so the project can't be making much money now. Let's say the NS government offers $4 per thousand cubic feet for the entire reserves. They just buy the gas, they contract the current owners to continue to operate the facilities for them for a fee, and the operators get to keep all the liquids.

In the oil and gas business, it's always "Let's make a deal" time, so this might work for the owners, in which case the NS government would hand over a cheque for $8 billion and it would be a done deal. This happens all the time in the O&G business, and the bankers won't even blink at it. They'll even lend NS the $8 billion to buy the gas.

NS has just bought 2 TCF of gas which has 2 billion GJ or 555,555 GWh of energy content. It runs it through combined cycle gas turbines at 60% efficiency and gets 333,333 GWh of electricity out of it. At the provincial consumption rate of 12,000 MWh/year, it takes 27.8 years to use up the whole gas field. If they use a mix of 50% wind / 50% NG, it would last 55.6 years.

The fuel cost for the NG electricity would be $24/MWh or 2.4 cents per kilowatt hour, versus a sales price of 12.6 ¢/kWh. Mix it with 50% wind at 13.1 ¢ and the average cost would be 7.75 ¢/kWh.

I'm just putting the concept out there. This is how we think in Alberta, and that's probably why we have more money than anybody. The gas price here is about $2.25/GJ at the moment, so the gas power plant owners are making out like bandits. I wouldn't have expected it a few years ago when they put up the plants, but it's their investment so it's their profits.

Well, given that our province is near broke, it's hardly in any position to assume another $8 billion of debt. In addition, I don't feel it fair that provincial taxpayers be asked to commit to such a liability on behalf of a privately-owned utility. Lastly, our wind is largely backed by hydro, principally NSP's 224 MW Wreck Cove facility and, if all goes to plan, we'll soon have additional hydro-electricity from the Lower Churchill Falls which can be used for balancing purposes.

BTW, I've read that Enmax's RRO for January is a whopping 15.284-cents per kWh and for February it's 13.689-cents (the drop reportedly attributed, in part, to higher wind production); doesn't seem that cheap natural gas has been all that helpful to Albertans.


Not sure about Nova Scotian and Canadian law, but I'm guessing the province could secure the gas against future needs more cheaply by denying renewal of the production facilities or raising the severance tax to the point that it isn't economic to produce unless gas prices go up significantly.

Not everybody in Florida and California who support drilling moratoriums is solely motivated by the risk of environmental damage.

You've certainly caused pupils to dilate in the legal community and no doubt some of these fine folk are now sporting a massive [*cough*].


The vast majority of natural gas in Nova Scotia is offshore and therefore under federal rather than provincial jurisdiction. I think there is a joint Canada-NS Offshore Petroleum Board, and NS does get to collect royalties on the gas, but I don't think it gets to set the rates.

IOW, they can't manipulate the system without the approval of the Canadian government, and odds are they aren't going to get it. Not the same system as the US.

The licensing on the facilities is up for renewal, and they applied to NSUARB.

BTW, I've read that Enmax's RRO for January is a whopping 15.284-cents per kWh and for February it's 13.689-cents (the drop reportedly attributed, in part, to higher wind production); doesn't seem that cheap natural gas has been all that helpful to Albertans.

Alberta has its own problems. Some of its aging coal-fired units have failed prematurely, and since they are near the end of their lives, the utilities have decided to scrap them rather than repair them. This resulted in a supply shortage.

There is more generating capacity under construction, but it isn't on-line yet, and the result is an electricity shortage. Since Alberta electricity is priced at market rates rather than controlled rates, the result is high prices.

A decade after deregulation, Alberta’s electricity prices are soaring

Since the province moved to deregulate the retail electricity market in 2000, less than 30 per cent of Alberta electricity consumers have taken the plunge.

Instead, they are sticking with the volatile Regulated Rate Option (RRO), a monthly power price approved by the Alberta Utilities Commission, which has spiked 46 per cent to record highs in January.

Consumers who aren’t signed up to contracts could end up paying nearly twice as much for their power this month as those who are. They paid 13 cents per kilowatt-hour in December, and are now paying 15 cents in January, nearly 100 per cent more than they were paying this time last year.

In July 2010, the governing Conservatives ended long-term hedging of electricity prices and collapsed the protective umbrella that had previously shielded residential, farm and small commercial consumers from wild price spikes.

Residential consumers paying the regulated rate option will feel the impact of that decision sharply this month as a result of a supply shortage caused by premature shutdown of two coal-fired power units and an unexpected maintenance shutdown of a new plant.

Energy Minister Ted Morton says prices go up and down, but on average Alberta consumers are benefiting from deregulation, and the electricity prices they pay are roughly middle of the pack compared to other Canadian jurisdictions

“On balance, when compared to other jurisdictions, we’re giving Alberta consumers competitively priced electricity given our lack of cheap hydro,” he says.

And high power prices in December and January are a mixed blessing because they will signal to consumers the need to conserve electricity and consider signing a fixed rate contract.

“High prices will make us sit up and take note and that might make us change our behaviour. It is one of the most effective ways of changing behaviour.”

Prices will level off once supply increases

Like the oil industry, the Alberta government ain't yo mama, either. People who want government to be their mama have to go elsewhere.

And Alberta's Natural Gas Rebate Programme? No skirt and apron?


Yes, the skirt and apron are gone, and you have to pay monthly rent for your childhood bedroom and pay restaurant rates for your home-cooked meals.

The Alberta Natural Gas Rebate Program ended in 2009, but nobody noticed since gas prices are so low.

Still, comforting to know that the mommy state will still be there to kiss your knee whenever Albertans fall off their tricycle.


More likely the Alberta government will be there to whack us in the head and tell us not to be so stupid when we fall off our tricycle. It's a less touchy-feely government than most.

"Like the oil industry, the Alberta government ain't yo mama"

Disregarding the patronizing and arrogant attitude of this remark, may I be so bold as to say no one is asking the Oil Industry to be anyone's "mama", thank you very much!!

What I would like to see is the Oil Industry stop misrepresenting the state of reserves and production. When the CEO of ExxonMobil goes on national television and says there are no supply problems, he has a credibility problem, to say the least.

Feeling patronized or not, people ARE asking the oil industry to be their mama. They are asking the oil industry to supply oil at lower than market prices, and the oil industry cannot and will not do that.

The companies are willing to supply oil at a price at which they can make a profit, and if they cannot make a profit, they will shut down their operations and not supply oil at all. Just look at all the refinery closings in the Northeast US.

The CEO of ExxonMobil can really only speak about ExxonMobil's situation. He doesn't have access to his competitors secret reserve estimates. When he goes on national television and says there are no supply problems, he means that ExxonMobil has no supply problems. That does not necessarily mean that you have no supply problems. ExxonMobil is willing and able to supply you with all the oil you can afford, but that may not be very much oil if prices skyrocket.

The wildest overestimates of reserves and production (after the oil stock promoters, of course) have come from the US government. The oil companies are relatively restrained about it because there are SEC rules that can land them in jail if they overestimated reserves. The politicians are under no such restrictions on lying, and of course when there are votes to be had, that's what politicians do.

It is election year in the US so look for some pretty wild claims about the glorious energy future that awaits you if only you vote for (fill in candidate's name here).

I was particularly astounded by the claim on Obama's Web site that the US is now a "net energy exporter". (After I posted a comment on TOD, they changed it to something more nebulous and less easily refuted).

Are you asserting misrepresentations of oil reserves and production are unique to ExxonMobil's CEO? Difficult to believe. In fact, I believe the Secretary General of OPEC flat out denied Peak Oil.

I am asserting that ExxonMobil's CEO doesn't really have access to his competitors' internal oil reserve estimates, and he doesn't know much about their production rates, so he doesn't really know what the big picture is. He only really knows what his own company is doing.

Similarly, in many OPEC countries, oil reserve and production data are state secrets, so only the CIA knows for sure, and then only if someone has secretly gone through their files and copied the records. In reality, we don't really have enough data to verify OPEC reserve and production data. In many cases, we suspect they are lying, but we don't know for sure.

The big question mark is the OPEC reserves, since the big state-owned oil companies (Saudi Aramco, Iranian National Oil Company, Kuwait Petroleum Corporation, etc.) have about 10 times the oil reserves of the publicly-owned multinational oil companies such as ExxonMobile, BP, and Shell.

Gee, the Oil Industry toothfairy is alive and well.

bmiller - "Disregarding the patronizing and arrogant attitude of this remark...". Just speaking for myself (the originator of "The oil patch ain't...") please don't take it as a slight. It may not come across too clearly but it's as much of an indictment against the industry as the public. The oil patch PR machine has always been more than ready to fully support the public's irrational view of natural resources. Do understand that the vast majority of the oil patch views the BIG OIL rhetoric the same as you: pure BS. But we don't get to put on those smurmy TV ads. But the fact remains that the oil patch isn't any more responsible for the public's well being than any corporation. And nor have I ever seen the public feel responsible for the oil patch's well being...like back in '86 when oil fell below $10/bbl. In fact I recall most Americans cheering our economic slump. But I didn't take it personally. It's just how the system works...like it or not.

"It's just how the system works...like it or not."

Rockman - No one is entitled to make a dollar.

??? Sorry, bmiller, totally don't get what you're trying to say - and I want to!

I am asserting that ExxonMobil's CEO doesn't really have access to his competitors' internal oil reserve estimates, and he doesn't know much about their production rates, so he doesn't really know what the big picture is. He only really knows what his own company is doing.

This is not entirely true.

Outside of state owned oil companies (such as ARAMCO), most major oil field projects have multiple co-owners. The interlocking ownership of large oilfields is quite extensive, and even minority owners will generally have access to all the production data. While Exxon (or BP for that matter) does not have a window into every big project, they will have a very good worldwide sample of non-state owned projects. You can be assured that Exxon (also BP, Shell, etc) has a pretty fair idea of what the big picture is.

He has access to his competition's publicly stated reserve estimates, but he won't have access to the internal information that they are keeping to themselves. This is their own proprietary information and they tend not to share it with anybody unless access is written into an agreement.

But as I say, 90% of the world's reserves are under the control of the state-owned monopolies, and they don't have to share information with anybody.

Is it in the state-owned companies interests to understate or overstate their reserves, though?

I've seen some pretty compelling arguments for the latter case, is there a good argument for their interests to be served by understatement?

...and he doesn't know much about their production rates, ....

If he is a co-owner in a project he has full access to production rates. Also reserve estimates, seismic data, well logs etc.

Alberta is extracting vast amounts of geologic resources. That, and not your economic philosophy is why you are raking it in. I'm sure there are many motivated capitalists in other lands who have precisely the same desires and approaches, but they lack the same abundance in exploitable reserves, or the freedom to squeeze them out to the same extent, and so are not as rich.

Yes, it's true that Alberta has a lot of natural resources. However, it's economic strategy has ensured that most of the money has ended up in the hands of its citizens rather than being frittered away and wasted by half-baked government schemes or concentrated in the hands of a power elite.

It's true that there are some very rich people in Alberta, but on the other hand there are a lot of plumbers, welders, and heavy-equipment mechanics making a six-digit income, too. In fact the average heavy-equipment mechanic in Alberta makes a six-digit income.

This is not true of most other jurisdictions with a large amount of resources. You can find any number of countries in which the average person is dirt-poor despite their huge natural resources.

You can find any number of countries in which the average person is dirt-poor despite their huge natural resources.

Nigeria, for example. But not really the right argument - you need to compare Alberta with other First World nations (or states & provinces) that have a history of affluence and high-level development that goes way beyond resource extraction (Western Australia, for example).

It is also not an either/or argument - nanny state or ruthless user-pays - successful governance is all about getting the right balance - so all citizens have opportunities and a safety net, and government is not just there to set (and enforce) the rules for the ruling class that hates any threat to their power and wealth.

This very much depends on the definition of "successful"; for the good of all people, or for the benefit of a small subset? It is much easier to garner favor with a smaller group of people. More personal power is accrued to a centralized government leader if that group is of the rich and the well defended. Power and wealth contracts and concentrates to the few... and they are very successful. There is no "trickle down" requirement in order for this mechanism to function. If wealth and power were to trickle down from the top, it would only increase the size of the group that must be pleased (to garner favor (to concentrate power (to a central government))). Perhaps that's why the kids today are trying something different.

You're actually preaching to the choir - I know all that.

By "successful" I mean very long-standing governments that have the support of a lot of the populace, because (even in the context of faux election campaign histrionics) they understand that government is about the management of the country in a civilised manner, and not just for the benefit of a ruling elite. The US has not had it for many years - if ever in fact. But other developed countries have ... and we can learn from that.

That would be a great thing.

Re: The End of Elastic Oil (uptop)

The author of this article looks at production/price relationships over a pretty long time period. I think that a more relevant and more focused comparison would be 2002 to 2005 and 2005 to 2010/2011, which is what Gregor does in his article linked above (Global Oil Production Update: A Strange Future Has Arrived). Average annual Brent crude oil prices doubled from $25 in 2002 to $55 in 2005, and then doubled again from $55 in 2005 to $111 in 2011. Following is a link to my "Gap" charts post, that shows the production/net export response to most of the time periods corresponding to these price doublings:


Focusing on small time increments isn't generally a good way to understand the macro sized picture. Otherwise it becomes way too easy to incite fear (such as the gasoline scare of 1916) or complete lack of concern (say, like 1984 through 1987) when in fact neither has the proper perspective. Cherry picking timeframes provides data support for nearly any conclusion.

Basically, the current real price environment is very similar to the scares of the 70's, particularly the late-70's. Making today out as something special ignores all the other timeframes when analysts thought that their time frame was special (without mentioning how often this has all happened before), and all the general public picked up about the issue was that the actions of the boy who cried wolf were alive and well among their politicians, pundits, and industry talking heads.

What is different is that the global HL plot indicates that global conventional crude oil production was about 50% depleted in 2005. And just as Texas and North Sea production could not keep increasing in response to the rapid increases in oil prices after 1972 and 1999 respectively, global crude oil production stopped increasing in 2005, with as noted in my link above, a measurable, ongoing (and I suspect accelerating) decline in Global Net Exports (GNE).

Incidentally, I always find the Cassandra and the Boy Who Cried Wolf labels to be interesting in regard to Peak Oil predictions. I believe that Cassandra's predictions were always correct, but no one believed her, and of course at the end of the story about the wolf, the wolf did show up.

However, global crude oil production stopped growing in 2005, which is consistent with Deffeyes' prediction for a global crude oil peak in the 2004 to 2008 time frame, most likely in 2005. His prediction was that slowly increasing unconventional production would not be sufficient to keep total global crude oil production on an upslope trajectory. (He did make an erroneous observation about a 2000 peak, but he noted that it was not what his model predicted.)

Technically we have been running out of oil since we first started using it. Non-renewable resources just work that way.

Of course, when you are looking at generational timescales for change it is just as important to be timely as correct.

Note that the 10 year 2002 to 2011 inclusive time frame accounted for about 20% of all crude oil (C+C) ever produced and consumed worldwide, or if we look backward at the 10 year period ending in 2011, one out of every five barrels of crude oil ever consumed was consumed in this 10 year period.

...if we look backward at the 10 year period ending in 2011, one out of every five barrels of crude oil ever consumed was consumed in this 10 year period.

That really puts oil peaking in perspective. Consuming a finite oil supply at breakneck speed, while at the same time hitting a production plateau, with prices doubling every so many years, yet many still remain in denial. If this is crying wolf, someone's got a scoop and I want to know where all those cheap, easy to get to giant oil fields are secretly being hidden.

Most of the oil ever consumed, by a considerable margin, has been consumed in my lifetime, and I ain't even retired yet. I expect that, by the time I finally shuffle off this mortal coil, most of the oil that has ever been consumed or that ever will be consumed will have been consumed in my lifetime.

I want to know where all those cheap, easy to get to giant oil fields are secretly being hidden.

They're backin' the frakin' and Bakken, I rakken!

'Timely' has multiple meanings.

You might have meant 'timely' in the sense that the message will only penetrate the public ear when it is synchronized to the visibility of tangible problems, while I am quite happy to credit both Hubbert and Jimmy Carter as having made timely warnings, in that they were announcing the problems far enough ahead of the outwardly palpable proofs in order to actually do something sober and mature in order to avoid or minimize the collision with a radically changing reality.

As PaulS was trying to say yesterday, there are those who see Carter as being as great a fool as Reagan, but all of that purely from some 'PR- Perception of Foolishness' angle, and not in astuteness and in actual bravery of delivering a Party-crashing warning when almost noone is willing to listen to it. Reagan was cheered when he hopped into the stilled Gymnasium and poured a bunch more hooch into the Punchbowl..

In other words, it's REALLY important to be correct in this, and those who were did what they could to ring the warning bell. Were they wrong to do so, just because a bunch of knuckleheads laughed at them and continue to call them adolescent names ad-infinitum?

No mistake, I'm glad that Hubbert and others pointed out the obvious when and how they did. I just meant that to penetrate the political "fog of war" and the general public conciousness the consequences to need to be visible within a short timeframe of the warning.

There is an important place for both sorts of warnings, but it causes all sorts of problems when people in the early warning group think they are in the "call to immediate action" group and vice-versa.

The difference between saying "there are wolves out there, be careful" and "there are wolves here!"

In other words, it's REALLY important to be correct in this, and those who were did what they could to ring the warning bell. Were they wrong to do so, just because a bunch of knuckleheads laughed at them and continue to call them adolescent names ad-infinitum?

The warning bell was rung in 1886. In Pittsburgh, to be exact. There are earlier warnings of course, but they didn't have the reasoned and critical analysis that went into that clarion call of resource depletion in the near future. Certainly I have found no reference of people laughing at the rather esteemed announcer of such short comings at the time.

Beyond the HL method being debunked on this very website, I have not yet seen any indication of a sensitivity analysis showing it is relevant to much of anything. Different people, drawing lines to random combinations of the last few data points along the curve come up with wildly different answers, pretty much guarenteeing that the method can say whatever you wish.

And while I am happy to agree that Deffeyes called peak oil in 2005, he also said that the first 5 years after that time period was the timeframe he was worried about, because after that we would be in some happy age of accommodating the problem. That time period started a year or two back, and he appears to have been reasonable in that prediction as well. In other words, we're over the hump, and it is gravy from here on out. It isn't reasonable to only pick and choose predictions from any given author that you like, basically if you are in for a penny, you are in for a pound.

As far as the boy who cried wolf, using Deffeyes' prediction as an example, the wolf arrived, did a little damage, was gunned down by local animal control, and life goes on in a manner similar to how it was before. I agree with the implication that it would have been nice to see more effects, 7 years into the post peak world (as called by Deffeyes), but what we have is what we have. It would be nice if peak oil 7 years ago could stop me from running down to the local gasoline distributor and collecting a tanker truck full just because I feel the urge, but it didn't, and this is a good thing in terms of inconveniencing the fewest number of consumers I imagine.

I don't know what planet you are living on, but it sure appears that life ISN'T "similar to how it was before". Our entire economic system was based on things continuing MOL as they had been going before, but, after the price of oil pushed past $100 a barrel, things aren't going as planned. Perhaps you should try giving your income from the last 6 months to someone who has been out of work a year (or more), quit your job and then enjoy the effects of unemployment yourself before you conclude that things are "similar to how it was before"... [rant off]

E. Swanson

I think that's a bit tough and moralistic ... not to mention unnecessarily ad hominem. Bruce_S wasn't especially addressing the economic impact of the peak asserted in 2005 (even assuming that the global financial crisis of 2007 - 2008 was mostly caused by higher energy costs).

I think Bruce was simply pointing out that rationing, shortages, gas-station queues - and other major disruptions in energy supply - have not occurred in the last 7 years. Not a big point, or a reason for high dudgeon either, I would have thought.

Ah, go easy on Bruce. One of my oldest friends is in the gas piping and engineering business and he can't remember better times. He added an addition to his home far cheaper than he could have 5 years ago; labor and material costs are down. He gets up and drives to work as before, he and his wife take trips to the islands at a discount several times a year and the beaches aren't so crowded, he got season tickets at half price from a broker, and he really doesn't see what all of the brewhaha is about. A few houses in the neighborhood were foreclosed on but were soon snatched up a by nice families. Winners and losers. All seems well in his little world. He's even starting to like Obama.

Last time I stopped by, I did notice that his home owner's association had upgraded the security gate and fence around the subdivision.

I don't know what planet you are living on, but it sure appears that life ISN'T "similar to how it was before".

I was there, when rationing was taking place way back when. Versus now, when I can acquire a tanker truck of fuel at nearly any time of the day, delivered probably anywhere in the US I wish it. Certainly now is much better than then.

This is part of the macro level perspective I was discussing earlier. And nominal prices as proof of...what? Crude was just as expensive in real terms during the rationing which terrified so much of the developed world back then.

I was there too, I think. Funny thing, I don't remember "rationing" in the sense of coupons, only odd-even limits on when you could buy gas and allocations to stations. Just before Christmas, 1973, I drove from California to Georgia, then returned a couple of weeks later. On the return trip, the 55 mph speed limit had been instituted and the only place we had trouble was when we missed a fill up in the evening going thru AZ. Not much of a problem for me, because the allocation scheme set gas limits per station to a fraction of previuos sales and then people stayed home. There was lots of gas out on the Interstates, since people didn't want to travel.

Of course, that situation was a short term dislocation, not something which lasted 5 or 6 years. But then too, I wasn't trying to drive 25 miles to work one way, as I had been doing around 1970. Your experience may have been different...

E. Swanson

If those short term dislocations of the 70's HAD lasted 6 or 7 years, Jimmy would just have been more strident in his calls of conservation, detailed (and erroneous) explanations of why it was happening, and MAYBE people would have learned something. Certainly some of us did from even the small dislocations of the 70's. Too bad the rest didn't, but in their ignorance is obviously our salvation. If there weren't so many silly people riding around in SUVs and wasting crude based fuels like there was no tomorrow, there wouldn't be near enough ridiculous wastage to cut from the system with consequences no more than the attendant whining from those who confuse what they drive with the quality of their lifestyle.

It was pretty uneven geographically. At the time I was in Colorado, we were ahead of the curve. It was real tough in summer 73, I think that was before the rest of the country had any problem. Then by the time the national news was full of horror stories, we were sitting pretty. I remember hearing tales from my dad. They had to allow people to get gas on the turnpike (toll highway), or else stalled cars could lead to gridlock. So in order to get enough gas to go to work, he would do a "circular gasing up route". Get on the highway, gas up at the gas staion and get the allowed amount (not very much), exit at the next exit, and loop back on city streets. A few of these loops and he had a full tank! Needless to say, these attempts at rationing led to some very inefficient consumption patterns, and probably deepened the regional crisis.

Bruce S: Focusing on small time increments isn't generally a good way to understand the macro sized picture.

Bruce, what is your preferred time increment for understanding macro sized oil production/price analysis?

Considering the short time series involved since modern oil production started in 1859, why not discuss the entire sequence? Otherwise someone might use short time periods to try and scare (gasoline shortage of 1916, the great running out of 1943, Jimmy Carter's hysteria of the 70s) or periods of abundance to argue the opposite (Babbit in the 90's, Ronny in 1987, or the TRRC back at their inception).

Enjoy it while you can. Smoke'm if you've got'em, eh?

Consider the possibility that this very large system is very good at letting us not have to look at the costs already being borne by PO, if we choose not to. One very popular form of Auto Maintenance, as we all know, is to simply turn up the radio until the strange noises disappear.

Something is squeaking and rattling around the fringes of Europe.. related? Who knows? Do we want to know if energy costs and related economic entanglements have left Ireland and Greece hanging off the edges of what was once solid ground?

Personally, I think we've simply burned off a bit of body-fat these last few years, refusing to let up on the pedal, and continuing to fill'er'up whenever it pleased us. But as the Long-distance Runners will tell you.. once the fat is gone, your body starts to burn up muscle and other tissue. That part hurts more, and can do permanent damage.

Pay no attention to the man under the sheet. Obey your Thirst! Bottoms Up!

"One very popular form of Auto Maintenance, as we all know, is to simply turn up the radio until the strange noises disappear."

this. There's always a chance that whatever it is will fix itself if you just let it be. A slim chance, but a chance nonetheless.

Obviously, the HL method isn't perfect, but I do think that it gives us a relatively objective estimate of global conventional cumulative crude oil production. And I don't see how any objective person wouldn't conclude that Deffeyes has been the most accurate prognosticator in predicting post-2005 global crude oil production.

Regarding post-peak effects, I would point to my link at the top of the thread, which takes you to a discussion of how post-peak Cumulative Net Exports (CNE) tend to be front-end loaded, with an initially relatively low net export decline rate obscuring a very high post-peak CNE depletion rate. In other words, we are living on borrowed time.

And if you look down the thread, you will find a link about major oil companies shutting down and selling refineries in oil importing OECD countries, while previously asserting that Peak Oil is nowhere in sight:


"Actions speak louder than words."

I think any sensitivity analysis of the HL method demonstrates that it can provide any answer you wish based on nothing more than the subjectivity of who draws the line. Which means the LAST thing it is, is objective. As something better than using cumulative production and OOIP as guesses, sure, it might be better than that. Just not much, not consistently, and not repeatably.

I agree that Deffeyes to date has been the best prognosticator, both in terms of calling the year of peak oil (7 years in the past now) as well as how the world would accommodate the effects of it after the 5 year shakeup period....amazing abundance apparently characterizing this period if the consuming behavior of American commuters is any indication.

Actions do speak louder than words. So does reality. I wonder how many more years it will be before peak oil affects traffic jams, let alone actual important stuff?

Regarding HL, we can agree to disagree. It just seems like a quite a coincidence that we saw a massive inflection point in global crude oil production at precisely the point in time that Deffeyes predicted a global (conventional*) peak:


*A big weakness of the HL method is that it can't "see" producing provinces that are not developed or that are in very immature stages of development. So, I don't really think Deffeyes' projection accounts for unconventional production, but his point was that slowly increasing unconventional production would not be sufficient to keep total global crude oil production on an upward trajectory, and so far he has been right.

WT wrote:

I think that a more relevant and more focused comparison would be 2002 to 2005 and 2005 to 2010/2011,

Bruce replied:

Cherry picking timeframes provides data support for nearly any conclusion.

The time frames were the two most recent. From the last time oil was cheap until it plateaued around 2005, then from the beginning of the plateau until now. That is not cherry picking by any stretch of the imagination.

Any discussion of peak oil would, by necessity, focus on the timeframe when oil peaked. As I pointed out earlier oil OPEC oil embargo of 73 & 74 caused an oil price squeeze that everyone knew the cause. It was on TV every night with people cursing OPEC and their tactics. Then in 79 and early 80s there came the Iran-Iraqi war, then the Iranian Revolution and then the Tanker Wars that caused OPEC oil production to be cut by more than half. Yet some cornucopian wags still seem to think that people thought this was peak oil also. No they did not.

Though the finiteness of oil supplies was recognized during both these periods and pointed out by many including President Carter, it was clearly recognized by everyone that this was a man-made shortage. So I do wish people would quit pointing to this period and comparing it to the present. I lived through the oil embargo and subsequent oil shortages of the early 80s and I can tell you no one looked at that period and thought peak oil had arrived.

Ron P.

It is a little odd that he refers to a 10 year time period that corresponds to about one-fifth (about 260 Gb) of cumulative global crude oil production as "cherry picking."

IMO, I really put the beginning of the modern oil industry (at least the modern US oil industry) in 1901, with the Spindletop discovery, and I assume that the cumulative global crude oil production prior to 1901 was pretty trivial, so about 80% of all crude oil ever produced was in the 100 year period between 1901 and 2001, with about 20% being produced in the 10 year period inclusive from 2002 to 2011.

The East Texas Field is the largest oil field in the Lower 48, with cumulative production of around 6 Gb. Globally, we have consumed the equivalent of about 43 East Texas fields in the past 10 years ending in 2011.

Mind-boggling. That's a really effective way to couch things: In the last 10 years we burned 25% as much oil as in the previous century.

It isn't cherry picking to use the current timeframe, it just lacks perspective and might lead to the same type of claims of running out spanning more than a century. Lest we forget, people using current information without regard for what has happened gave us global peak oil back in 1989, fear of running out during WWII, predictions of US peak oil in 1919, and fear of wasting precious fuels that would not outlive their children...in 1886.

Yes, but don't forget that most of these early predictions didn't take into account that at that time most of the planet had not even been evaluated for oil let alone activly explored. The costs of exploration & extraction are continually rising and are only viable because demand is matching supply, it can never outstrip it without spiking in price first to kill demand.

Just imagine how much oil would be produced today if the price was capped at $20 a barrel?

You are incorrect. When the Standard Oil executive famously proclaimed he would drink all the oil discovered west of the Mississippi, from his perspective it HAD been explored. Wells had been drilled, wells were dry, the geology as he knew it wasn't conducive for oil, he was just as certain as we are now. And we aren't any better at predicting the consequences of that future of technology any better than he was, with quite possibly the same consequences.

Just imagine how much more oil is available if we put a floor under the sales price of $250. And how some of us would spend no more (in America anyway) for our commuting costs than when it was $100. Certainly I don't pay any more in gross dollars for my fuel than I did back in 2000, even with the nominal gasoline price being some 2X more. The wonders of improved efficiency. Less pickup trucks, more sedans!

Focusing on small time increments isn't generally a good way to understand the macro sized picture.

What is the best time increment to use to understand the macro sized picture in oil production/prices?

I can't find the diagram right now but I have seen a chart running about 2000 years, I think, from the year 1000 to the year 3000 or some similar timeframe. It had a spike right in the middle showing the age of oil. I think it ran about 200 years or less. Nothing, then a spike, then nothing again. That would be the best increment of time in my opinion.

Ron P.

Might this be it?

Yes, that is it, thanks. So focusing on this macro increment of time is a very good way of understanding the micro increment of time when oil existed as an energy source on planet earth, relatively speaking of course. ;-)

Ron P.

Oh, the stories they'll tell in a thousand years. It'll be like Camelot, with King Ronald the Reagan, Sir Jacko Dance-a-Lot and Hummer the Steel Steed. Legends of a lost age...

If we are lucky, it has a fat tail.

karl - Ron can probably put some appropriate details up but I don't recall any real life examples of fat tails being all that fat. Some occasional lagniappe before the end comes but not game changers. We might still see a new billion bbl oil discovery years down the road after everyone accepts the reality of PO. But it still won't push us back above the peak.

I was originally going to say that it does but is not visible on that scale but, thinking about it, people will be trying to use it up faster and faster, before it is gone, thus wiping out the tale.


My guess is that the human population curve will look like this as well. Huge burst up during the period of oil use (and other non-renewable resources). Then big crash down again. Given the damage we are doing to the *renewable* resources (in the process of eating through the non-renewable ones) I don't rule out a crash right down to zero.

The alternative case is a crash down to pre-industrial or pre-agricultural levels, too low to show on the graph.

Actually I find this one, which represents all fossil fuels, the more appropriate.

Energy Scale due to Oil
Figure 1: Image by Tom Murphy. Original caption: "On the long view, the fossil fuel age is a blip, with a down side mirroring the (more fun) up side."

Ron P.

Ha! This is exactly why my conversations about PO seldom get too far with my investment banker friends. This information, while accurate and profound, has absolutely no value to them if they can't make money on it in a weekly or monthly timeframe. They absorb it and understand it, then just shrug it off as unactionable and therefore irrelevant.

However, thanks in part to the great information on this site, I called the stock-market slump late last year about 1 month ahead of time to these same guys, anticipating that GDP numbers vs. oil prices would finally start to clue in the smarter investors, and drove home the importance of price in the otherwise misleading supply/demand balance (honestly, these guys have no idea about energy at all, except for the knowledge that anything you read about it is at least 3 steps removed from the truth). I get quite a bit more engagement on the subject nowadays. One guy who keeps a car down in South Beach that costs more than my house (for occasional business trips, ya know) actually brought the subject up with me recently, which is a big change from the don't-get-him-started attitude I was getting in 2010.

Here's to incremental progress,

Here is a good chart, I think from the Post-Carbon Institute:


The only really comparable (approximately six year) production plateau/decline was in the early Eighties, which corresponded to generally declining oil prices, as the Saudis reduced their production, in much the same way that the prior swing producer, Texas, periodically (until 1972) reduced its production in response to weak oil prices.

Of course the recent global crude oil plateau corresponded to: (1) The 50% conventional depletion mark, based on Deffeyes' work; (2) The highest crude oil production numbers in history, and (3) A doubling in global annual crude oil prices from 2005 to 2011.

It is a very interesting article, and I love how he points out that the supply-demand curve has changed since 2001 without suggesting a mechanism for the change.

That is probably the best way to provide cover for people in positions of power that know what needs to be done and why, but can't say the words without exposing themselves to attacks from certain interests.

I am a beliver in "price is truth" as that is one piece of hard data we can point to

if you take the $25 (2002) to $111(2011) price trend it is 18% / year.
take this out for 5 years = $271

when you graph this, you can speculate on the ensuing volatility - will it be one standard deviation, or two, around the trend line

My fearless* oil price prediction was/is that annual crude oil prices will show a series of doublings, but because of changes in demand, it was really not possible to predict the time periods between the doublings. Having said that, like a lot people, I underestimated the effect that weakening demand would have on prices.

But two key points. First, we have seen a series of higher lows, as successive annual price declines fall to a level that is about twice the price level reached during the prior annual year over year decline**. If this pattern holds, the next annual decline in Brent prices will be down to an average price of about $120 or so. Second, as consumers are forced to reduce their consumption, especially in OECD countries, I suspect that it will take higher and higher prices to incrementally reduce demand among higher income consumers (subject to how the overall economy performs).

Regarding the second point, I have put it this way regarding the US oil consumption pyramid: What oil price forces someone with an income of $30,000 or so per year to reduce their oil consumption, and what oil price would force Bill Gates to reduce his oil consumption? In other words, the cost of oil consumption, as a percentage of income, tends to generally decline as income increases.

*As they say, predict a price, or a time period, but not both.

**Three recent year over year declines: 1998, 2001, 2009:


But what about the other end of the spectrum?

At what price point does a bicycle delivery boy in a third world country NOT find greater utility in buying a moped and the gas to run it so that he can do five times more business over ten times the distance for half the time spent at a fraction of the physical exertion and probably with a considerable increase in reliability, enjoyment, status...?

I think we need a new measure--something like peak utility.

Most Americans long ago reached a point of diminishing returns on the utility of the gasoline they use. Much of the rest of the world is just discovering the wonders that hundreds of energy slaves can provide.

Of course, that's the premise behind our ANE metric, to-wit, that developed oil importing countries get what is left over after developing oil importing countries buy what they want. As noted down the thread, major oil companies are shutting down and selling quite a few refineries in oil importing OECD countries.

The Black Death killed at least 30% of Europe's population around 1350. The Potato Famine in Ireland reduced the Irish population by a large percentage. There are haunting paintings from that time period showing the victims of the Potato Famine. When will people wake up??

I have no idea of the pertinence... misplaced? But... The famine does make a lovely story of the landed gentry's care for the people.


The Black Death killed at least 30% of Europe's population around 1350.

Decline of world oilproduction is another Black Death.

The Potato Famine in Ireland reduced the Irish population by a large percentage.

That was a famine because of too much export of potatoes.

That was a famine because of too much export of potatoes.

Not exactly. The Irish did not export potatoes during the famine, but they did continue to export some grains and even cattle.

The Irish Potato Famine

The Irish Potato Famine left as its legacy deep and lasting feelings of bitterness and distrust toward the British. Far from being a natural disaster, many Irish were convinced that the famine was a direct outgrowth of British colonial policies. In support of this contention, they noted that during the famine's worst years, many Anglo-Irish estates continued to export grain and livestock to England.


Western Europe in the years of 1845-1846, the overpopulated subsistence farmers of Ireland were forced to export corn, wheat, barley, and oats to Britain, which left the potato as the sole dietary staple for the people and their animals. While other regions were able to turn to alternative food sources, the Irish were dependent on the potato and the results of the blight were

The famine was caused by the potato blight. Even if they had exported no grain or cattle during the famine that would have made a difference but only a small difference.

Ron P.

Not exactly. The Irish did not export potatoes during the famine, but they did continue to export some grains and even cattle.

I thought this potato export issue was mentioned in a TOD article some time ago. Apparently not so.

While the "Irish Potato Famine" may have been exacerbated by the economic/export situation, its primary cause was a blight in mono-crop potato production:

In Ireland, the Great Famine was a period of mass starvation, disease and emigration between 1845 and 1852.[1] It is also known, mostly outside Ireland, as the Irish Potato Famine.[2] In the Irish language it is called an Gorta Mór (IPA: [ənˠ ˈɡɔɾˠtˠə ˈmˠoːɾˠ], meaning "the Great Hunger")[fn 1] or an Drochshaol ([ənˠ ˈdˠɾɔxˌhiːlˠ], meaning "the bad times").

During the famine approximately 1 million people died and a million more emigrated from Ireland,[3] causing the island's population to fall by between 20% and 25%.[4] The proximate cause of famine was a potato disease commonly known as potato blight.[5] Although blight ravaged potato crops throughout Europe during the 1840s, the impact and human cost in Ireland – where one-third of the population was entirely dependent on the potato for food – was exacerbated by a host of political, social and economic factors which remain the subject of historical debate.


"its primary cause was a blight in mono-crop potato production"

You're putting the cart before the horse. The primary cause was the potato itself.

The potato enabled the huge increase in population. Without the unheard of yields for small plot farmers, the population could not have spiked like northern lemmings. See the population graph in your link. Like today with fossil fuels.

Interesting perspective on the Iranian question at financialsense.com.

The Petrodollar, Iran, and Gold—What You Need to Know

The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. [...]
But that line doesn't make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends - like India - will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.

And all those energy trades between Iran and China? That will be settled in gold, yuan, and rial. With the Europeans out of the mix, in short order none of Iran's 2.4 million barrels of oil a day will be traded in petrodollars.

With all this knowledge in hand, it starts to seem pretty reasonable that the real reason tensions are mounting in the Persian Gulf is because the United States is desperate to torpedo this movement away from petrodollars. The shift is being spearheaded by Iran and backed by India, China, and Russia. That is undoubtedly enough to make Washington anxious enough to seek out an excuse to topple the regime in Iran.

the question is then , is China powerful enough to stop the USA? , and if so what world will we be living in after the fact .......

interesting times indeed !


The Chineses are not challenging US restrictions on doing dollar transactions. But on the other hand, we just need some oil and need to pay Iranians. So we need to find some other things to trade. Originally we dumped Anti-ship missiles to Iran, (in 60's-70's we fear us landing so much that we built too much sandworms ASM that they cost a lot to dissemble, so we tried to get rid them by all means we have, even a highschool nearby get one, dearmed of course, to show the kids what is a rocket/missile). Now under UN embargo, we just trade civilian stuff with them. It is just bussiness, not trying to challenge US.

I posted this conclusion to a previous drumbeat, which bears repeating:

The movement may be led by China - but it's irreversibly transnational. Once again, follow the money. BRICS members China and Brazil started bypassing the US dollar on trade in 2007. BRICS members Russia and China did the same in 2010. Japan and China - the top two Asian giants - did the same only last month.

Only last week, Saudi Arabia and China rolled out a project for a giant oil refinery in the Red Sea. And India more or less secretly is deciding to pay for Iranian oil in gold - even bypassing the current middleman, a Turkish bank.

Asia wants a new international system - and it's working for it. Inevitable long-term consequences; the US dollar - and, crucially, the petrodollar - slowly drifting into irrelevance. "Too Big to Fail" may turn out to be not a categorical imperative, but an epitaph.

Will the US Empire attack China, Russia, India, and Japan and other countries because they no longer use the dollar? Nor should we try to fool ourselves as to why they are abandoning the dollar. The author of the financialsense item makes this prediction:

2012 might end up being most famous as the year in which the world defected from the US dollar as the global currency of choice.

As the item I cited shows, the "defection" is already well underway.

...And India more or less secretly is deciding to pay for Iranian oil in gold...

I'm not sure how that will work, or for how long, considering:

#10: India

The world's second most populous country barely made the top 10 list. It's interesting that although India consumes more gold than any other, it only has 8.7% of its reserves dedicated to it. India's gold reserves are worth approximately $33 billion.

Top 10 largest gold reserves by country

I suppose the Indian government could confiscate the people's gold :-/

Even essentially bankrupt Italy has about 4 1/2 times as much gold on hand as India. If these countries start trading gold for oil, what happens to the gold/oil price ratio?

Ghung, I think what the site says are the official reserves by country.You have no idea as to how much gold is in individual hands in India .Be it the rich Indian or the poor farmer.For centuries Indians have sought gold as a source of wealth and value.The amount individuals hold is unfathomable.The first action of every woman is to convert her savings to gold ornaments.Just for your enlightenment one of the factors that undid the cornering of the silver market by the Hunt brothers was the amount of physical silver that suddenly appeared on the market from Indian private holders.Nobody knows how much is there and all estimates (at least of private holdings)are at best shooting with a blindfold.

My point was, how much gold is available for trade with Iran, especially knowing how culturally fond the Indians are of their gold.

More than enough .

Let's just say if someone can invade this country and confiscate all the gold from it's people they will be richer than all the kings, queens and emperors of history put together. Total private gold holdings in this country surpass Fort Knox many times over.

Don't give people ideas. You wanna end up with Moghuls again?

I don't have to. Plenty of people already have that idea. Oh the Moghuls were nice people, they came here thinking something else and then decided to stay back.

Kerala temple


Historians who have studied Travancore say that the temple's wealth traditionally served as an insurance policy against famine.

India is a black hole for the yellow metal. Even the Romans commented on this weird habit of stocking up on gold for absolutely no reason.

I have met plenty of Indians who buy gold. I have never met an Indian who has sold his gold. Indians only sell their gold when they are almost bankrupt. Selling your gold is seen as an act of desperation.

Our financial system will soon experience a reset. Those who hold hard assets and precious metals will have the last laugh.

Even the Romans commented on this weird habit of stocking up on gold for absolutely no reason.

The obvious reason is wealth preservation. Who would want to hold their wealth in rapidly depreciating rupees or any other paper currency?

Our financial system will soon experience a reset. Those who hold hard assets and precious metals will have the last laugh.

No, they will not. I have said this on and on and I will say it again; gold is curently in a price bubble. One we have only seen the begining of. Prices will rize much much higher. 20X to 200X base value. THEN IT WILL INFLATE. There will be a wave of suicides as the gold bubble burst. He who buy now, and sell IN TIME will have the last laugh.

The only long term investment is land. As Mark Twain said; they don't make it any more. But remember the three laws of real estate investment: Location, location and location.

This time India is one nation with nuclear weapons.

Bhadrakumar has just updated the India/Iran situation. An excert from one of his linked items: '"We (India) imports 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite US and European sanctions on Iran," the finance minister said.' Another linked item discuses the payment possibilities, which probably won't include gold. I think it far more likely that the US governemnt will confiscate gold well prior to India.

They could buy gold on the international market, then barter it to the Iranians for oil. The goal is to eliminate the paper trail regarding Iranian central bank transactions. All kind of silly and somewhat wasteful. But, the foolish embargo just invites cheating.

precisely- they could settle the trade in virtually anything. The simplest mechanism would be to establish a "convertible rupee" account with a fixed conversion rate to the dollar or Euro. The oil payments could go into that account and everything else that Iran buys from abroad would be paid out of that account. Vendors wouldn't care much since they would effectively get paid dollars by the Indian central bank for surrendering their "convertible rupee claims".

Isn't that essentially what happens on the Forex?

Even essentially bankrupt Italy has about 4 1/2 times as much gold on hand as India.

Which might indicate that gold reserves mean absolutely nothing in terms of the overall health, wealth, and credit worthiness of any particular entity, country, bank, family, whatever).

I think gold bugs are heading for the windscreen of history myself. Gold is fool's gold.

I would turn the question around. A global trading/reserve currency requires large, liquid, transparent markets for paper denominated in the currency. The Japanese yen trades in liquid, transparent markets; however, there would be considerable doubt that there is enough globally-held yen-denominated paper to do the job. Additionally, essentially any problem one wants to assert about how the US is managing the dollar applies to the yen even more so: deficits, total government debt, etc.

And the BRIC countries are not about to let go of their capital controls. China, for example, has very strict political policies about how much yuan-denominated paper they will allow the rest of the world to hold. If they want the yuan to be the reserve currency of choice, they have to let go of that control. And they have to provide enough yuan-denominated paper to meet the needs of the market for trading everything. A trading currency is worthless unless I can convert whatever else I hold into that currency today, at essentially any place in the world.

A country gains some degree of power if its currency is used by everyone else as a reserve/trading currency. The country also has to give up a lot of control over what its currency will be worth in global markets.

A more relevant question might be if the world can only function with a single trading/reserve currency or could their be several currencies or currency blocks that serve the same function? As far as the US is concerned, it is the pegs to the dollar that hold up the value, the pegs, at least in the case of the arab world, are maintained by the military.

Reserve currencies serve two functions: one is as a store-of-value because they're supposed to be stable, the other is as a trading currency because everyone will accept them. Several other currencies are used as reserve currencies: euros, British pounds, Japanese yen, Canadian dollars. However, the others can't replace the US dollar as a trade currency because of the volume problem. If the oil exporters announced tomorrow that payments must be made in Canadian dollars, we're all screwed because there isn't enough Canadian dollar-denominated paper in existence to support anything like the current volume of trade. One of the problems that was pointed out in the late 1990s when the US was running a surplus and the government debt was (hypothetically) going to be paid off by 2012 was the horrendous effect removing that much of the world's trade currency would have.

The oil exporters may threaten to price oil in something other than US dollars, but they know the disaster that would ensue if they stopped accepting dollars in payment. No other country (or even countries) is likely to issue enough currency (or near equivalents, ie, government bonds) to replace the US dollar as the world's trade currency and turn it loose outside their borders -- China, for one, has said they won't consider it for decades, if ever. Nor can any country that is in the position of sometimes accumulating a sizable number of dollars because of trade afford to see the value of that accumulation fall quickly.

Interestingly, China has proposed that the world create some entity to "print" the necessary amount of currency to support trade, and tie the value of that fiat currency to some basket of real currencies. Their proposal for the basket does not include the yuan, signaling their intention to continue to play games with foreign exchange rates.

I think it's very clear that Asia wants a new system, and when asked the whole of the Global South will say yes, too. In the eyes of the great mass of people, using dollars means supporting the agent of your repression; that's why it's called Dollar Hegemony. Events could have been vastly different IF US policy was guided by a different philosophy, something like Paul's "Golden Rule" approach to foreign policy.

Humanity faces too many challenges to waste itself and vital resources on warfare, but there's no entity looking out for humanity's interest as what acts as government is corrupted beyond belief. The whole idea behind the Oil Depletion Protocol can help ease the trasition away from PetroDollars and Dollar Hegemony, and the Chinese proposal is similar. National, Corporate, Tribal, Regional, Whatever interest must be abandoned by adopting the Human Interest. And it should be acknowledged that Civilization cannot be attained unless the Human Interest is Paramouint.

As the item I cited shows, the "defection" [away from the dollar] is already well underway.

Up until very recently, it was in everybody's interest to trade in US dollars. The US economy is just so big compared to everybody else, if you want solid money to sell your goods, it makes sense to use a currency backed 'by the mostest'.

The problem in a nutshell: the economic colossus called the United States doesn't look so colossus anymore. Hence other currencies are looking more attractive as media of exchange. Of course it's a open ended feedback loop: the less the dollar is used, the less useful it is as a global currency. Financial sense may be right, 2012 could very well end up being the tipping point when the US dollar loses its advantage as global currency of choice.

Which brings us to Iran. I doubt if the US bluster about Iran is about dollars. Placing financial restrictions on Iran along with forcing it to sell its chief resource on the black market will only serve to hurt the US dollar (albeit marginally), particularly in the short run. The State Department is probably counting on this not being a long run thing.

What's going on in Iran is straightforward: the US is eager for a regime change. The irony is that if left alone, that would probably happen anyway since the Islamic Republic has overstayed its welcome. However, this sabre rattling may be the best news possible for the powers brokers in Tehran. Iranians are no fools. They know their history. Throughout the twentieth century the West manipulated political events in Iran. First British and then American operations led to coups in 1925, 1941 and 1953 which saddled Iran with pro-western but brutal regimes at home. It's that legacy of outside interference that haunts Persia today.

The question is, why is the US eager for regime change? We don't normally get too hung up on theology and we put up with worse when it comes to nuclear proliferation, sponsorship of terrorism, or repression of individual rights. In the end, it boils down to you are either in the western economic sphere or you are a pariah state that is a threat and must be eliminated. Kadafi's mistake was attempting to leave the western economic system.

The US has been eager for a regime change in Iran since 1979. Nothing new. What has changed is that Iran is an active and major player in the Middle East today, one whose influence runs counter to the interests of America's top two allies in the region, Saudi Arabia and Israel. Saudi Arabia is smarting over the presence of a growing Shi-ite power as a counter to its Sunni hegemony in places such as Bahrain and its own Eastern Province. Israel is perturbed about Iranian support for Hamas and Hezbollah.

Iran continues to thumb its nose at the Carter doctrine. Nothing new either. Except now the stakes are higher.

The uprisings in the Middle East have not run their course. American influence is waning. Mubarak of Egypt might have been a thug, but he was Washington's thug. The strong showing of the Muslim Brotherhood in recent elections is making staff in the State Department nervous. So too is the instability of Libya. The US is eager to flex some muscle. The problem is where?

The situation in Syria remains tenuous. A full scale civil war there is threatening to shift the desert sands further.

Meanwhile, China and India are not standing idly by, allowing the United States free reign. They want oil. They want contracts. They'll play with anybody the United States leaves behind.

Nor is Russia outside the picture. Putin is using energy to assert influence. A diminished US presence in the Middle East would suit the Kremlin just fine.

All these factors are contributing to the game of diplomatic chicken.

Iran is too small a player to seriously jeopardize US dollar hegemony. As mentioned above, that's corroding all by itself.

I would venture the US wants an Iranian regime change b/c it sees it as one sure way to rid itself of a meddlesome nuisance. In the game of high stake poker, every card counts.

The American public was delivered into this situation. The oil industry, the automotive industry, and the financial industries have been serviced in deference to the public good.


What the article left out is that the gulf states currency's are pegged to the dollar. The peg is what forces the buying of US T-bills and other assets. This is no different than what the Chinese are doing. The chinese will drop the peg when it is in their interest to do so. The gulf states will drop their peg when internal threats outweigh external threats from the US and EU which, if we are lucky, will be a ways off.

Over time, as the gulf states share of production declines and more oil is produced by countries with floating currencies, the US will have the same problem as if the gulf states dropped the peg. We will lose the ability to pay for the oil that is available. In the intermediate time frame, this will likely be the larger issue for the US. We will lose our ability to pay for oil before there is no oil to be bought.

I think it possible that US consumption/demand drops close to the level of domestic all liquids production as the dollar loses value and oil priced in dollars skyrockets. And more important, which refineries are going to be able to afford to purchase imported oil as margins quickly evaporate? Perhaps it's time to investigate China's plans to make Shanghi the primary yuan trading and global financial center?

I would imagine that the timing for China will depend on when they feel that discontent in the developing and arab world has reach such a critical point that the US is no longer able to contain a run on the dollar. In the mean time, they need to dump a lot of T-bills and use the dollars to buy more US energy resources and technology that can be exported to China.

The Chinese do proffer a timeline as the article details, which seems quite reasonable. Before he was Honeytrapped, DS Khan at IMF was strongly advocating abandoning Dollar Hegemony, which presumably wasn't his position alone. All stakeholders want this change to go as smoothly as possible--except for the US Empire which doesn't want it to occur ever. But as noted by many observers, the mechanism of change is already underway. This was going to happen at some future point in an unplanned manner anyway; and IMO, better now than later.

I'm not sure any of it matters as long as the yuan and the arab currencies are pegged to the dollar. But, if this is the mechanism for a smooth transition over a number of years to freely floating currencies or currency blocks that would be desirable. Otherwise, the unplanned approach will happen after a lot of violence. The US public will notice a sudden drop in their standard of living. The depreciation of the dollar and subsequent rise in commodity prices with the ensuing recessionary wage deflation needs to happen over a long enough time frame that the public adjusts. So far, the government and Federal Reserve has been doing a pretty good job of reducing living standards without anyone noticing. They have been at it for over a decade.

Jerry Brown says cap-and-trade fees will fund high-speed rail

I say we get conventional rail in the US back to where it was in 1940 first.

Hightrekker - Amen to that. As an example, using a Southern Pacific Railroad timetable from the 1940s as a planning guide for restoring/upgrading existing trackage, along with the purchase of appropriate modern rolling stock and locomotives, a lot of people could be transported between the Bay Area and Los Angeles for a fraction of the construction time and costs involved in HSR.

Yes -- but would anyone use it - if it takes a long time, and stops quite a bit? Might have been fine in 1940 - but these days rail has to compete with flights in a 737 that take just an hour and cost less than $80 or so. That is the issue for rail (high speed or otherwise).

It took huge investment to link London to Paris (for example) in a manner which could compete with short-haul flying.

So what? As long as every last two-bit NIMBY continues to wield plenary veto power, that rail can only ever go from nowhere to nowhere. So is Governor Moonbeam really going to grow a set, steamroll the NIMBYs, and actually get 'er done? Within the lifetime of anyone now living?

For real. All it would take is one cat-lady muttering "eminent domain" at a town meeting and it's over.

A waste of good cap and trade fees. We could use them for other things, such as public education. HSR needs to stand or die based upon its own merits.

Here's one I am sure will bring smiles to all TODsters !

Saudi Arabia says it can cover any oil shortages

Saudi Arabian gas production rose to 10.7 billion cubic feet per day (bcf) in 2011 from just 1.65 bcf in 1981 and aimed to reach overall capacity 16 bcf per day by 2020.


The figures quoted apparently reflect SA's 'gross withdrawls', not dry gas production. 2010's comparable figure was 9.4 bcfd, a 14 % annual increase over 2010.

For the iron triangle believers and yet another example of media control:


RFID hacking and the bank response


As you think about the above content ponder "is the media as open as some claim?"

Thanks, Eric. From your first link:

After a long court battle, the Court dismissed the whistle blowers protection for the reporters because the Court stated that there was no law to force that the NEWS state the truth! Fact! Going on to say the NEWS was no different than other TV shows/reality shows!!

At least what most of us here already knew has been sanctioned by the courts... Corporate controlled media is free to lie, even when the lies may prove damaging or dangerous to the population at large. I wonder how I would fair in the courts were I to sell Monsanto or Fox a dangerous product while insisting it was safe? How are Monsanto and Fox (or polluting energy companies) different from the tobacco companies?

Corporations aren't persons, they are super-persons with extra-ordinary abilities. This should be obvious under the law, and to SCOTUS. The decline continues... See you on the slopes.

Yair...does anyone know if OFM is okay? I really miss his posts and he has'nt been on for a while.


Quite some time ago he mentioned taking care of an ill relative - wife?


I tried to view Mac's profile and was denied permission. Curious...

Same thing happened to me:

Permission denied
You don't have permission to access the requested content.

The last post I found ( http://www.theoildrum.com/node/8799#comment-864692 ) was on the 15th, on ethanol subsidies. Maybe they busted his still ;-)

He asked me to block him, and I obliged. So far as I know, he's fine. Just doesn't want to waste time here any more, but didn't have the willpower to walk away on his own.

Gosh, I certainly didn't view his time as wasted, but I can respect his decision. Sort of sad though.... Via Con Dios, Mac!

Ghung - Yes indeed...missed. His were some of the few rambling posts I would read. Felt he brought a healthy dose of humanity to TOD. You didn't have to agree with everything he said to appreciate his clearly spoken point of view.


Agreed. His posts was most of the time a pleasure to read. A wise old man.

Indeed. He seems deeply connected with reality.

More Mainers Relying on Two Wheels to Commute to Work


John Brooking commutes to work every day by bicycle. Okay - maybe not every day. He says about six times a year really bad weather conditions keep him home. But as for a temperature that's too cold? "I haven't found it yet," he says.

This January morning is relatively balmy for winter--a clear, sunny 30 degrees. "They say if you're comfortable in the first five minutes, you're over-dressed," he says. "So on my body I'm just wearing my regular work-clothes, business casual, with a windbreaker over it."

NPR, sometimes egregiously aloof, sometimes nicely down-to-earth.

Best Hopes for a healthy balance!

Problem with bikes is that of chicken and egg. The dutch have already made that transition. Others are yet to.

On the subject of rising bike ridership I found this marvelous quote by BikeSnob

For this reason, even though bicycle commuting is on the rise all over the country, as cyclists we remain vulnerable. We're like mammals in the waning days of the dinosaurs: far more adaptable and with much better long-term prospects, yet in the meantime still in imminent danger of being squashed.

Bikes and bikes;as a guy who has been driving the auto for over 40 years just had a first hand experience of riding a bike after a long time(probably my teens). Boy was it tough.The wind was against me,it was raining,the temperature was about freezing and I am now 58 years old.Broke my butt,my calves pedaling and out of breath(I work out intensive in a gym minimum 3-4 times a week). This is in Belgium a flat country where bicycling is culture. After this experience I have my doubts as to how people are going to shift from the auto to a bicycle.Sounds romantic but it is different when the rubber meets the ground .Was I glad to get back in my car?You bet I was.

I don't want to sound rude but a personal anecdote is not an idea of a trend. Here's the latest report from Netherlands.


Among Western nations, cycling is most popular in the Netherlands. Nearly 30 percent of Dutch commuters always travel by bicycle, and an additional 40 percent sometimes bike to work, according to FietsBeraad [PDF].
Commuters worldwide are turning to bicycles in an effort to abandon gasoline-burning vehicles and incorporate physical exercise into their travel routine. Global bicycle production increased by 3.2 percent in 2007 to 130 million units, according to the Worldwatch Institute.
In both Germany and Denmark, more than 20 percent of commuters travel by bicycle. And cycling still accounts for more than half of all trips in some Chinese cities, although private automobile use is on the rise nationwide.
In comparison, less than 2 percent of trips in North America and the United Kingdom are by bicycle.

Is the geography and climate in Belgium all that different from Netherlands?

Edit: I think there are already alternatives being developed to the problems of riding in rain. Maybe a covered bike one day which can be used for long distances. Check this out


WI,no offense taken.The geography and climate of Belgium and NL is the same.What i have observed is that people(workers/office goers)bike to work(max 10km one way)during spring and summer.Come autumn and winter and everyone reverts to the car.You don't want a fracture because your bike slipped on icy track.By the way percentages are irrelevant.Why?Biking in Belgium and NL is a recreational activity during the spring and summer. I know many,many people who bike even in winter purely for exercise.As your article says"Bicycling is most popular in NL" but it does not clarify its application.We have biking clubs that organize biking hike tours and other activities around the bike but believe me the Belgians love their cars more than they love their wives :-).

Come autumn and winter and everyone reverts to the car.You don't want a fracture because your bike slipped on icy track

Agreed. And I do not expect people to crack their hips in the attempt to ride a bike. Ride it when the weather permits. Even if it's 4 months of the year that's a lot of fuel saved.

As for your biking related problems, keep at it. I have also seen many people who go to gym everyday struggle with biking. It's a kind of habit that takes time.


You don't want a fracture because your bike slipped on icy track.

You could always ride a trike (single wheel at the back, more stable that way). That reduces the risk of tipping over somewhat.

Just to help clear up a popular misconception.

A trike will be just as stable in either configuration. It's the weight transfer under acceleration or braking that provides a difference. A front wheel config will have stability issues when braking during a corner, a single rear wheel will show the same issue when accelerating through a corner.

If the center of force moves outside the triangle of the wheel baseline, then you're in unstable waters.

As braking is usually a far stronger force than acceleration, it's generally assumed that a single rear wheel is more stable.

Thanks for the clarification.

25 years ago I used to travel each day from the German boarder too Rotterdam on the coast to work total transit time less than 2 hours each way, well paid or I wouldn't have done it. Belgium and Holland are piddling little countries so there is very little change in climate. Total population about 25,000,000. When it comes to culture art and science both punch well above there weight. I wouldn't have it any other way.

...a personal anecdote is not an idea of a trend. Here's the latest report from Netherlands.

Really, we can stop right there: a report from The Netherlands is hardly more indicative of a trend. After all, it's one of those idiosyncratic European postage-stamp states, with, save for a few atolls and small marshy islands, the flattest territory on the entire planet, average daily high temperatures at or above freezing all year round (constraining the growth of thick rutted winter ice at least somewhat), and no great distance one can travel without smacking into the ocean, or into a border and a language barrier. And even with all that, the motor traffic is terrible. After all, a good deal of the (high) cycle use is seasonal and/or recreational as noted in one of the comments, and such cannot replace a car. Most of the cost of the car is incurred to have it at all, and anyway rust never sleeps, so one may as well use it in summer too.

So it just seems like wishful thinking at the very best to extrapolate a bit of oddness in a tiny corner, to any sort of trend at all in the often inhospitable wider world. After all, the big picture won't change much if bike trips rise in some much more significant region even by a substantial percentage, when that might be from 0.5% to 0.6% of total.

Oh, and while I haven't taken a survey, I still suspect that if some serious attempt were made to increase bike usage greatly, hole in head's "anecdote" would be reproduced so widely as to add up to major "data". So while said attempt might please bossy, holier-than-thou medical puritans out to frog-march entire populations into exercise regimens, it might please the voters in those populations quite a lot less.

N.B. here in the Berkeley of the Midwest, where the average mid-January high is well below freezing, you can have the cycle infrastructure very nearly to yourself today, despite modest icing this year, and despite large numbers of university students, who tend to think themselves invincible, being in residence. Come the end of the semester in May, abandoned bicycles will abound; the selection will even be slightly better than one might expect, because following graduation some of the cheap or well-worn ones will be smashed up in enthusiastic celebration of adulthood, of never having to ride the [insert choice words] thing again.

"So while said attempt might please bossy, holier-than-thou medical puritans out to frog-march entire populations into exercise regimens,"

Wow.. is the idea that more people (in MAINE) are actually biking really some kind of indication that this is some kind of Stalinist Death-Pedal-March being forced on a defenseless population? It sounds like people are out there biking because they like it.

Probably they're just too terrified to admit that someone is holding their Poodle at Gunpoint until they make their daily mileage, huh?

My point of that report from Netherlands was not to show that biking is on the rise. It was to show that given a protective environment people will take up bikes without being forced to do so.

Good point.


consider this video of Copenhagen's cycling infrastructure
And what does not show in the clip they are riding year round
in a latitude that lies to the north of the continetal US

Copenhagen was not always so bike-friendly. In an interview with our Canadian reporter, renowned architect Camilla Van Deurs explains how this city originally made the switch to bikes

especially enjoy the bike counters, the raised bikeways, converting the precious sunlit areas from parking to public areas, and not sloping every sidewalk driveway to make it more comfortable for the 'auto occupant' thus an obsticle to pedestrians.

Agree we are out there and vulnerable in the US.
We're just in the way for most drivers. But according to folks in Copenhagen it's mostly a matter of culture and perspective, and that can change.

xburb 58, 5600 hilly miles last year with my better half on the back of our tandem 'Pearl'

Thanks for that video of Cobenhaven.



"...not sloping every sidewalk driveway to make it more comfortable for the 'auto occupant' thus an obsticle to pedestrians."

I'm confused by this. Everyplace I've been, the sidewalk, if there is one, is level, or anyway as level as hilly ground might permit, with driveway aprons sloped down from the sidewalk to the street. However the aprons usually don't cut across the walk itself and tilt it. Now, snark about the "comfort of the auto occupant" aside, this configuration can be very bad for cars with fairings low to the ground, or stuff hanging low from the undercarriage (you pull out of the driveway, and "crunch!"), but there it is.

The only ramps in the sidewalk itself might be the wheelchair cuts at the ends of the block. Those have been required by law for a very long time, though they are often lacking in some places, such as Los Angeles, where some of the dilapidated sidewalks apparently date back to some antediluvian era.

OTOH, the US is a very big place. So, aside from a random spot here or there where somebody kludged something up with an asphalt roller or whatever, is it systematically different somewhere?

It is systematically different in most of the US. At least in my experience. Perhaps more so in older neighborhoods, where there is less room.

In the northeast, there are many bike lanes that are actually on the sidewalk. Cyclists are supposed to use the sidewalk. (If possible, it's made wider - 7 or 8 feet, instead of the usual 5.) But cyclists hate it, because they don't like going up and down the curb cuts. They ride in the street. The engineers who designed it are often baffled. We made you a bike lane, why don't you use it?

We have some very bad ones near here where I walk a lot, you even have to walk in the road. Bad for wheelchairs too.


Oh god, is that picture true to life. Here in Hawaii, bikes are supposed to use the streets, but in any case the sidewalks are unusable anyway because of things like this and much, much worse (various signs and obstacles cemented into the sidewalk, sidewalks in very, very bad condition, etc.). The roads are often in barely better condition, to be fair.

I'm very much in favor of bicycles on streets, but then you have to do something about the cars! As much as I hate to say it, the speed and mass difference is too much for it to be truly safe to "share the road". Unfortunately, I think the only way we'll see better infrastructure for bikes in most places is if people are forced onto bikes by being unable to afford cars.

"the speed and mass difference is too much for it to be truly safe to "share the road"."

Easy--change the maximum speed of cars on roads to ~ 20 mph as they did in much of Paris recently.

Cars are more likely to see an approaching bicyclist on the street than on the sidewalk. So you are often safer riding in the street.

It snowed in Paris today and I saw some people on bycycles and lots walking, as well as lots of parked scooters. There was car traffic too.

I think a big thing might be a culture where people are fit enough, and bike savy enough, to potter around on a bike in normal clothing. Not lycra and helmets and huffing puffing sweating. If you can pick a few things up at the store, and still arrive at work wearing normal clothes and smelling/looking normal much more likely to use a bike.


This won't solve your issue with the cold and rain (appropriate clothing would help) but an electrically assisted bike would ease the physical effort.

Stevens put together this bike using the Bionx motor.

Stevens e-bike

Unfortunately the Stevens e-assist bike is set up for the European market, which means its unavailable for me here in Canada, but you should be able to find it in Belgium. Along with loads of other e-assist bikes.


Andrew,E bikes are the in thing here.Costs Euro 2500-3000.Postal dept is using these extensively,but very few individuals.You can get a second hand car(not fancy) for the same price which works well if you want to do 20 km per day.As to clothing I was wearing a winter jacket and leggings,gloves and cap.The next best would be to cover my self in some form of a warm insulated burqa.But then can I bike?What can you do with the rain in your face and winds at 75-100km/h against you?Lets get real.


Are there colour options with that burqa.

In a few months when its nice out the e-assisted bike will be a lot more pleasant to ride and gas in Belgium will cost... ?


This time if year is a bad time to ride a bike in the US. However, it's a good time to buy a bike, such as this electric with a lithium battery, or this neat fold up, found on eBay. Or, you can buy the motor/wheel/electronics kit and build your own. As always, there's quality and then there's the other stuff...

E. Swanson

Keep at it! I've been back on my bike now for a year and a quarter. Yep, the first days then weeks were hard work but now I cycle up slopes I couldn't when I started. I used to find 10-15 km were a long way but now don't think anything of 20-30 km. Although I have never had 'high' blood pressure my blood pressure is now quite comfortable. I feel a lot better and legs are in great shape. What did you do when you started gym? Started easy and built yourself up. What are you doing on your bike? Sounds like trying to go at it full pelt. Build it up. I will grant you that our weather here does not have the wet and cold you get in the lowlands but when it is hot and humid it bites the other way and you need a LOT of fluid. If you are getting cramps, rather than pain, in your calves you may be low on Na/K salts. I get that here, as I generally don't put much salt on food, and have to watch my summer salt intake so I don't get cramp. If pain are you doing warm ups/downs and stretches like the gym :)? Maybe you need to adjust your position on the bike, if your legs are in a bad relation to the pedals that can hurt the legs.

As for others shifting from auto to bicycle, that's their problem and they will have to make their own choices as their time comes. Bike or walk or stay at home. It will really be that simple.


I know its tough as we get older. I'm 60, and biking is a lot tougher than it was at 50 (or 58). But anything you haven't been doing for a long time, will require you to buildup the specific capabiulities for. I hope you don't give up. Maybe wait for somewhat more pleasant weather. The muscle use is somewhat different, and you legs aren't tuned for efficient cycling yet.

Tks EOS.I think I stick to the car until I can afford to fill up or until they allow me to fill up.No use killing yourself to validate a viewpoint.

Ditto with NAOM and EOS on bike fit, quality of bike and conditioning.

One may also consider a heart rate monitor. They are pretty reasonable for what they tell you. Nothing causes fatigue like laboring in too high a HR Zone for even a short period espescially early on in the training. As mentioned when the muscles 'learn' better the speed, distance and ease will improve.

Cycling is designed to be easier than running or even walking, By varying your cadence and gearing while occasionally checking your HR you will begin to find the sweet spot for different conditions enabling comfortable riding for longer periods.

What should my heart rate be to achieve a given result?

There are various online HR Zone calculators like this one which can give you an individual reference.

Nice calc, thanks.


Oh you bet NAOM

I had to get back in touch with my aging endurance level and found HR was a good guide.

Basically a lower Max. and
1 hr @ >80% = done
5 hr @ <60% = still good to go

you ought to try a recumbent - they sell them with nice hoods that protect against the element. just like riding in a car only you have to keep pushing the peddle over and over :)

I've been riding bicycles for 45 years, even in some of the worst cycling locales in the US (Tampa, Atlanta). I am willing to admit that some people do not get it, and never will, and for them I hope someday we have trains. I have also seen the power of the bicycle to transform people in ways nothing else can. I encourage people to give it a serious try, serious being to put some thought into it, and work at it a little. There is a tipping point where people either give up or it takes off and becomes a great thing in their lives, and I think people give up too easily.

My brother has had three bouts with leukemia and a very serious heart attack, but at age 53 he can kick most 30 year old's ass on a bike. He loves to ride and commutes all year round in the center of Chicago, missing very few days. He is convinced he would have died three times over if it wasn't for the fitness brought to him by the bike.

A tremendous sense of power comes from being able to load a bike with enough gear to last a week, and just ride off on your own. My 50 year old wife did this last summer, riding through the Colorado Rockies on her own from east to west, climbing several daunting mountain passes and combining camping with local lodging. She had done a few bike tours before, but not in the previous 15 years and never on her own. It was another of those transformative events that the bicycle has the power to bring about. She now has more confidence, more fitness, and is totally ready to go again this summer.

I myself have had more peak experiences on a bicycle than I can count. I've ridden across the US, in every corner of the country, I've ridden over 600km in one continuous ride, I've ridden at night, in sand storms, thunderstorms, snow storms, in temperatures ranging from below zero Fahrenheit to 110F, at altitudes over 14,000 feet, and over some of the roughest and steepest terrain anywhere. The bottom line is that if you think it can't be done on a bicycle, you just haven't noticed that someone has already done it, and was exhilarated by the experience.

I think an ebike would be a great place for people to start, but many of the current crop of ebikes are just crap when it comes to the bicycle side and the electronics are not much better. There are some great ebikes available, but they are expensive. We need a middle ground that straddles good enough and cheap enough. Of course, the ebike is just a luxury, and after you become a strong enough rider you'll discard the electrics anyway.

The bicycle is one of the technologies that will be key in determining whether societies wither and die or thrive in new ways going forward.

I stopped biking to work. The ground do not provide enough friction to guarantee my safety any more. I'll pick up biking again when the thaw sets in. And the lock on the bike melsts open. Till then, I walk.

No big deal anyway. I realy don't like biking in -10C. But yesterday when I went home from work at 16:15 I saw the sun, just above the horizon. Nice it is still up now. Days are getting longer.

'And the lock on the bike melsts open.'



Strike Brings Belgium to a Halt

Trains and public transport are paralyzed across Belgium during a day of nationwide strikes to protest austerity measures that have in part been imposed through European Union pressure.

Hours before the start of Monday's European Union summit in Brussels that aims to seek more growth and jobs, Belgium's three main unions served warning that efforts to reinvigorate the European economy should center on taxing multinationals instead of slashing public services and imposing a pension reform that forces people to work longer and cuts payments in some cases.

Spanair collapses, stranding 20,000 people

Spain's fourth-largest airline Spanair has collapsed, leaving more than 20,000 passengers stranded across Europe and Africa

Volcanic origin for Little Ice Age

... The new study, led by Gifford Miller at the University of Colorado at Boulder, US, links back to a series of four explosive volcanic eruptions between about 1250 and 1300 in the tropics, which would have blasted huge clouds of sulphate particles into the upper atmosphere.

When the researchers plugged in the sequence of eruptions into a computer model of climate, they found that the short but intense burst of cooling was enough to initiate growth of summer ice sheets around the Arctic Ocean, as well as glaciers.

The extra ice in turn reflected more solar radiation back into space, and weakened the Atlantic ocean circulation commonly known as the Gulf Stream.

The article is available in pre-print from the AGU.

"Abrupt onset of the Little Ice Age triggered by volcanism and sustained by sea-ice/ocean feedbacks",

Gifford H. Miller, Á. Geirsdóttir, Y. Zhong, D. J. Larsen, B. L. Otto-Bliesner, M. M. Holland, D. A. Bailey, K. A. Refsnider, S. J. Lehman, J. R. Southon, C. Anderson, H. Bjornsson, T. Thordarson


Northern Hemisphere summer temperatures over the past 8000 years have been paced by the slow decrease in summer insolation resulting from the precession of the equinoxes. However, the causes of superposed century-scale cold summer anomalies, of which the Little Ice Age (LIA) is the most extreme, remain debated, largely because the natural forcings are either weak or, in the case of volcanism, short lived. Here we present precisely dated records of ice-cap growth from Arctic Canada and Iceland showing that LIA summer cold and ice growth began abruptly between 1275 and 1300 AD, followed by a substantial intensification 1430-1455 AD. Intervals of sudden ice growth coincide with two of the most volcanically perturbed half centuries of the past millennium. A transient climate model simulation shows that explosive volcanism produces abrupt summer cooling at these times, and that cold summers can be maintained by sea-ice/ocean feedbacks long after volcanic aerosols are removed. Our results suggest that the onset of the LIA can be linked to an unusual 50-year-long episode with four large sulfur-rich explosive eruptions, each with global sulfate loading >60 Tg. The persistence of cold summers is best explained by consequent sea-ice/ocean feedbacks during a hemispheric summer insolation minimum; large changes in solar irradiance are not required.

The large spike in atmospheric sulfate attributed to an eruption at around 1259CE has been known for quite a while. Also, the 1452CE eruption of Kuwae clearly resulted in short term cooling (which has been previously reported), which may have contributed to longer term cooling as well. The authors of this report provide data which supports the claim that the Little Ice Age was triggered by volcanic activity amplified by positive feedback as the result of the slow response of NH glaciers. The authors also use a simulation to investigate this hypothesis. The impact of minimums in solar activity appear to have added to the volcanic effects, but solar variation alone doesn't fully explain the LIA.

Finally, the authors comment that their data suggests that the warm period known as the Medieval Warm Period appears to have been cooler than present conditions. They state:

The 24 Canadian sites that became ice-covered ~800-900 AD (Table 4) and did not melt again until the past decade demonstrate that multi-decadal average summer temperatures in Arctic Canada now exceed those of Medieval times.

E. Swanson

So perhaps strategically-placed nukes could collapse a piece of the Yellowstone caldera roof, causing the superheated volatiles beneath to flash into gas and expand the eruption. The resulting temporary cooling might add enough snow to high latitudes to affect the earth's albedo and slow down runaway positive feedbacks, plus you'd have to think it would slow down the world economy and thus fossil fuel consumption rate.

I don't generally back geo-engineering solutions, but I don't see a real downside to this one.

Of course, I live in Hawaii...

greenie - Not sure if you're being sarcastic or not. But I've seen models of a Yellowstone eruption on the order of what's been documented in the geologic record. Very simply it would destroy the economy of the US along with eventually being responsible for the deaths of hundreds of thousands if not millions. If folks envision something on the order of Mt. St. Helen they are way underestimating such an event.

The death toll would not be in millions, it would be in billions. The last supervolcano, Toba, which blew some 73,000 years ago, almost wiped out the human race.

The Toba-induced volcanic winter hit these small bands hard, reducing their numbers drastically; in what is known as a population bottleneck, the worldwide human population shrank to as small as 10,000 people or even less (estimates vary).5 The temperature drop and climatic effects around the world hit populations in higher latitudes the hardest; humans most likely to survive were those who lived in tropical regions, where the temperature would be warmer.

Yellowstone last erupted 640,000 years ago and wiped out most animal life as far east as Ohio. They were buried in ash. Another such eruption would likely cause a worldwide worldwide famine due to crop failure around the world. The population of the earth would likely be reduced to less than half a billion.

Incidentally, historically Yellowstone has erupted about every 600,000 years. This means it is about 40,000 years overdue.

Ron P.


But the human population is probably going to take that hit from overshoot anyhow within the next couple centuries if not much sooner. When you add to that a possible 6-8 degrees of global heating with no significant negative feedbacks in sight, half a billion starts looking better.

The non-fossil-fueled carrying capacity of the earth in an overheated, desertified world with acidic, anoxic seas and no rainforests may be far below that. Just sayin'.

I'm using the device of a hypothetical engineered yellowstone super-eruption to put the CO2-methane thing in a visceral perspective, with boiled-away spent fuel ponds and other stuff just sideshows.

The planet recovered handily from yellowstone's past eruptions, and humans would survive.


Is there a chance we could trigger this by drilling a big hole ad sining a big nuke into it? I desperatly want to invest into a doomsday device. They are so cool.

(EDIT - whups - this is meant as a reply to Rockman)

My tongue's firmly in cheek when I say "no downside". But the preposterous irony is that such an action might actually be an immense net good for the human race long-term, a commensurate mega-yang to the fossil-fueled mega-yin. It's a sort of commentary on the CO2 predicament as it seems to be unfolding that unleashing a supervolcano slightly ahead of its schedule might be the lesser of two evils. Over the coming million years, humans might well do better in the supervolcano scenario than BAU. Particularly since that caldera will probably erupt on its own once or twice in that period anyhow.

The very fact that that it's possible to reasonably arguable is the point of the comment; guess not everyone's used to my dark green sense of humor.

I won't hold my breath though; they couldn't even bury radwaste at yucca mountain. So we're probably locked into the boiling frogs thing unless we get some James Bond supervillian action going.

Of course, the volatile content of the yellowstone magma might be too heavy in CO2 and too light in sulfate aerosols to make sense.

If there was still a "campfire" here I might've advanced that for discussion pro & con; clearly it would be a heckuva mess for some centuries, but if one looks at the longer term - as any non-sociopathic actually-sentient species should, it ain't so clear...


I got it 'nish, though I wasn't going there after my tounge-in-cheek thread about nuking the Macondo blowout ;-/ Too bad you may be correct; human hubris likely needs a major smackdown for the sake of the planet. I doubt we would learn much though.

Ditto on the Campfire...

We really don't know what Yellowstone is going to do. Perhaps it was only good for three supereruptions. Perhaps it still has one left, but its thousands of years off. My guesse:
If you used nuke mines on it a few years before it was gonna blow anyway, you would probably set it off early. But, before that, maybe not, maybe you'd just get a medium sized pressure releasing event.
They don't really understand why some volcanoes are supereruptions, but others just have lots of small to medium sized eruptions. For some reason for the super, the ground just builds up a large dome over thousands or hundreds of thousands of years of magma injection. Then when the confinement is broken many hundreds of cubic kilometers of magma are involved. Whereas normal volcanoes, release small eruptions every few years to few hundred years, and just don't accumulate monster magma chambers.

greenie/eos - There was actually some growing concern a few years ago. About 7-10 years ago the Rangers noticed trees were dying at one end of a big lake (L. Yellowstone?) The discovered the trees had drowned: the lake had flooded into that section of the forest. On the opposite side the lake retreated. Checking old survey data they discovered the area had been bulging upwards for some time. The obvious concern was the magma chamber was expanding and perhaps heading for an eruption of uncertain magnitude. They set up new monitoring stations. After X years they noted the bulging had stopped and receded somewhat.

Not only does no one when it might erupt again the magnitude of such an eruption is at best a WAG. IMHO. Did you know that vulcanologists have the highest mortality rate of any profession? Not that being a volcano geologist is all that risky. It's just that there are so few of them that when one or two get gassed it knocks the stats way up. I had at one time wanted to go that direction (nice field work in cool places) but there have never been very many paying jobs in the field.

Darwinian, Greenish, EOS, Rockman, et al:

For some perspective on Yellowstone, I reccommend you take a look at the Yellowstone Volcano Observatory website. In particular, spend some time perusing their FAQ page. Here are a couple of nuggets from that page:

How often do volcanic eruptions occur at Yellowstone?
Three extremely large explosive eruptions have occurred at Yellowstone in the past 2.1 million years with a recurrence interval of about 600,000 to 800,000 years. More frequent eruptions of basalt and rhyolite lava flows have occurred before and after the large caldera-forming events. For example, scientists have identified at least 27 different rhyolite lava flows that erupted after the most recent caldera eruptions, about 640,000 years ago, from vents inside the caldera. The most recent was about 70,000 years ago. Many of these eruptions were separated in time by several tens of thousands of years. Because the evidence of earlier eruptions may have been either buried or destroyed, we do not really know how often the volcano has actually erupted.

Is it true that the next caldera-forming eruption of Yellowstone is overdue?
No. First of all, one cannot present recurrence intervals based on only two values. It would be statistically meaningless. But for those who insist... let's do the arithmetic. The three eruptions occurred 2.1 million, 1.3 million and 0.64 million years ago. The two intervals are thus 0.8 and 0.66 million years, averaging to a 0.73 million-year interval. Again, the last eruption was 0.64 million years ago, implying that we are still about 90,000 years away from the time when we might consider calling Yellowstone overdue for another caldera-forming eruption. Nevertheless, we cannot discount the possibility of another such eruption occurring some time in the future, given Yellowstone's volcanic history and the continued presence of magma beneath the Yellowstone caldera.

Maritime Choke Points and the Global Energy System: Charting a Way Forward

•The global energy transport system is vulnerable to disruption at key maritime choke points such as the Straits of Malacca and Singapore, Bab Al-Mandab, the Suez Canal, the Turkish Straits and the Strait of Hormuz.

•The impact of a disruption on energy supply, prices and markets depends on its extent and duration. Perceptions and the interaction of 'wet barrel' and 'paper barrel' markets play a major role in determining price level and volatility.

•Measures closing international straits are generally illegal in peacetime, and international law requires maintaining rights of transit passage during war.

•Establishing and maintaining legal and political norms around the security of maritime choke points – involving user states, consumer states and international bodies – are essential.

•Cooperative mechanisms between coastal states can enhance confidence, while the likelihood of deliberate disruptions would be reduced by industry and government measures to mitigate their effects.

•The security of maritime choke points ultimately rests on the observance of international law, and on the willingness and capacity of interested members of the international community to enforce it if necessary.

"“All the wealth goes to the leaders.”"

"Union organizers... routinely beaten and intimidated... prevented by government security forces from organizing at Western-financed operations such as Tengiz, run by Chevron.

The unrest has posed a challenge... to Western oil companies like Chevron and ExxonMobil that invest heavily in the region.

The police were sent in to break up the strike on Dec. 16, Kazakhstan’s Independence Day, firing into the crowd on the anniversary of the day Soviet troops fired on pro-independence protesters here in 1986."

Police being police:

"On a recent visit, workers were already chipping off and replacing bullet-pocked tiles from a fountain on the central square."

Hiding the evidence. (Note to government: must pass laws making illegal photographing police.)

“All the wealth goes to the leaders.”

That's the beauty thing about oil. All you have to do is cut a deal with the few people with guns, the leaders, the aristocracy. Then you can pump the wealth right out from under the little people, the nothings, the nobodys, the peasants, the natives, the population. You can recoup your expenses by selling even better weapons to the few. The money for oil is blood money.


Although I think the article is off-base in the reasons why gasoline demand has fallen, I liked the graph. My belief is that there is a significant portion of the population that have permanently fallen out of the economy and cannot afford a private passenger automobile. My city has the worst bus service in the USA and almost nobody rides the bus unless they have to, this last month December ridership exceeded past Decembers by over 10% (Indy Bus Ridership).

Consumers Confident, Sick of Expensive Gas

My gut instinct says you're correct.

If we are correct then demand can be elastic within a growing economy. The more wealthy citizens can continue to consume and keep the economy moving while the poorer and less important people (in regards to GDP) can disappear from the oil demand picture. This is another one of those unforeseen consequences of peak oil -- I remember the consensus opinion (if there is such a thing) was that demand is inelastic. Of course, this is just peak-lite and once we have real decline led by Saudi Arabia and Russia these effects will probably be completely different.

Of course, this is just peak-lite and once we have real decline led by Saudi Arabia and Russia these effects will probably be completely different.

Peak-lite is right. Just enough to gnaw away at the fringes, on the less fortunate and capable, shutting them out of the game. Right now Romney is running to be another champion of the top 1/10th of 1%, just as bush jr. was. Super-pac money is driving his campaign to the top in Florida and maybe on to a battle with Obama. I heard Romney will have 350 million dollars of super-pac money behind him in the Prez campaign. Money put up by big corporations and super wealthy individuals that want Romney to reduce their taxation further by cutting entitlements and social safety nets. And we all know how powerful TV ads are to a populace stupified in a prescription drug induced (Fahrenheit 451 style) daze.

All at the same time that more and more people are being disenfranchised. There's an article on Google news about how Freddie Mac in 2010, that's 2 years after the mortgage meltdown fiasco started, has been betting on people failing to meet their high mortgage payments, and get this, putting up roadblocks and super high fees to dissuade refinancing so they can profit from people losing their homes!!!

With peak-lite like you say turning into something much worse when oil descends from its current plateau, this situation of recession, disenfranchised, lower taxes on the top earners, huge deficits will converge into a firestorm. I really hope most of us are still in the game to avoid the pitfalls of disenfranchisement. Because society really doesn't care about those people.

If America can't grow anymore, we will lash out at the world and then eat each other.

For all of its wonders, America is just a country of oversized adolescents, I'm beginning to become more and more convinced of this.

The parallels to pre-WWII Germany... We will be on the wrong side of history.


"Freddie Mac in 2010, that's 2 years after the mortgage meltdown fiasco started, has been betting on people failing to meet their high mortgage payments, and get this, putting up roadblocks and super high fees to dissuade refinancing so they can profit from people losing their homes!!!"

Isn't that something, though. The scam continues. The injured beast, bailed-out, goes back to consuming the people. I understand that the next rounds of financial gaming were/are/remain in play.

There were some gringos on our local bus the other day. One of them commented about how full the bus was and why does the driver still let them get on. I turned and commented that it was only half full. Well, maybe I exaggerated a little but it was still nowhere near 'full' as people were still able to get on.


I got scolded by a paris metro worker yesterday for jumping on a train like it was Caracas...turns out that it was "too full" even though I could get inside without pushing or anything... It is amazing how a few years in a different environemnt will alter your perception of personal space and needs.

I think my budget hostel is at least 3 stars too. Sure they don't provide towels, but they provide toilet paper, the electricity is good, and they clean daily. The bunk beds don't even sway when you climb on!

Leaked documents indicate EU looking to reclassify carbon emissions from biofuels

... In Europe, the EU back in 2009 enacted laws that stipulated that renewable energy sources such as those derived from plants should make up a minimum of 10% of all fuels used for transportation purposes in the Eurozone by 2020.

Unfortunately, it appears, according to a leaked report obtained by EurActiv, that the EU believes initial environmental impact reports were flawed and as a result the governing body is about to revise its estimates regarding the true environmental impact; a move that could have a major implications regarding the future of biofuel use in Europe.

Specifically, the report says, when Indirect Land Use Change (ILUC) is taken into account, biofuels made from palm oil, soybeans and rapeseed, actually produce more greenhouse gas emissions than do fossil fuels.

... industry and civil society sources described the data as credible and in line with other studies. One said it would sound a death knell for the biodiesel industry, if published.

Unemployment in the post peak scenario.I work in Hungary and Belgium.Both countries with a negative population growth.Whereas the youth unemployment in places like Spain is 51%,Portugal,Greece above 35% I observe that this is not the case in these two countries .The young have job offers (at least those who want to work)immediately on finishing education whether university or technical school.Also they have no fear that they will be unemployed and leave jobs for frivolous reasons and do usually have a new job within a week or so.My conclusion is that as these societies grow old the replacement rate of new entrants in the workforce is not enough.After all you need someone to pick up the garbage and clean the streets. I think the new entrants are just enough to keep the MOL of society functioning.Can we presume that in the post peak scenario societies(countries) with low populations will be at an advantage?All inputs,comments viewpoints are welcome.

hih - Maybe not at an advantage but not as disadvantaged as the rest of us. From what I've read Japan could serve as a model for some countries with negative pop growth. OTOH Japan is still venerable to PO. Their recent disaster didn't help. OTOH China still has a significant pop growth. But I think what's more important than those numbers is the increase demand for a more affluent lifestyle by the existing population. Lots of factors often offsetting each other. And then there's the question of how one defines "happiness". For some it's a simpler life; for others more complex and filled with expensive toys.

When poverty sets in and stay sofor a while,people will eventually get used to the idea that the rich days are not comming back. With that,they willlose the feeling of entitlement. It may be a good thing. I know from my contacts with teenagers they mostlydonot have much hope for the future. They know it will be a crappy one and expect no less. Hopefully this mindset will have some effecton peoples will to consume.

Depends on a country's attributes, once known as comparative advantage, and the specifics of how our extremely complex global society decomplexifies as it collapses, plus the added unknown of Climate Change's influences. In your case, will the complexities that make current employment possible exist as time goes forward and with the expectation that decomplexification will be the primary, initial outcome of Overshoot and the collapse it brings? Generally, smaller populations require fewer inputs and assets to subsist, but much depends on how much carrying capacity a particular population borrows already--very few countries can currently subsist on their individual carrying capacities thanks primarily to energy slaves and the amount of complexity they've allowed to occur. So, an increasing or decreasing populus shouldn't be the focus of your question. How well can a country/bioregion exist within its carrying capacity IMO is what ought to be asked.

Karlof,well laid out,but we do need a certain MOL of a labor force to function.Without that any society will collapse no matter how high in the pecking order.In my opinion(correct me if I am wrong)whereas Europe is in economic overshoot India,China,MENA etc are in both economic overshoot and population overshoot.This will be a disaster for countries with too much population.

Overshoot is fundamentally an ecological concept founded on carrying capacity as conceived by Catton. There are very few places on the planet capacle of escaping being Overshoot classified--all you mentioned are in Overshoot. As Catton explains, it is possible to buy your way out of being in Overshoot, but only temporarilly. If you haven't read this very important work, I highly suggest you do so--Alibris has used copies starting at $16.80, while most good libraries will have a copy.

Population gets discussed here very often and usually rather heatedly; you've been a member here long enough to have participated in a few. As you note, Tainter's societal complexity also plays a large role in the matter: Who keeps the machines and infrastructure running when there arern't enough technicians regardless of population size? (a point Assimov raised over 60 years ago in his Foundation Series). The general conclusion is global population will decline, but nobody can predict how rapidly.

well one could also argue that europe is in population overshoot:


population densities in many european countries are much higher than in mena countries or china. india is comparable to europe. of course in china and mena countries there are large deserts but still.

Correct what is important is population density in relation to arable land.

Oil & Gas Paradigm Shift: Exxon Sells Japanese Downstream Assets For $3.9B

Reinforcing a trend that seems to be taking hold of the oil and gas industry, ExxonMobil announced it was selling 99% of its Japanese refining operations to joint-venture partner TonenGeneral for $3.9 billion. Like many of its competitors, Exxon is putting its chips on higher-margin exploration and production operations.

Fragmentation and divestiture seems to be the name of the game among big integrated oil and gas names. ConocoPhillips is in the midst of a restructuring process that will see the creation of two publicly traded companies, splitting its up and downstream operations. Chevron, which posted earnings last week, saw its bottom-line results dragged down by weakness in its refining operations. BP and Royal Dutch Shell, two of the biggest names in the game, have been selling refineries in Western Europe, according to DealBook.

The volumetric decline in Available Net Exports (ANE, or Global Net Exports less Chindia's net imports) was about one mbpd per year from 2005 to 2010. I estimate that the volumetric decline in ANE will accelerate to between 1.4 and 2.0 mbpd per year between 2010 and 2020.

It's interesting that major oil companies are selling and closing refineries in oil importing OECD countries. As they say, actions speak louder than words.

ExxonMobil Advertisement in New York Times, June 2, 2006:

"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"

Arctic scientists warn of dangerous climate change

The future of human kind faces dire consequences due to arguably the first signs of dangerous climate change in the Arctic, say leading international scientists from The University of Western Australia.

They say the Arctic region is fast approaching a series of imminent "tipping points" that could trigger an abrupt domino effect of large-scale climate change across the entire planet.

"If set in motion, they can generate profound climate change which places the Arctic not at the periphery but at the core of the Earth system," Professor Duarte said. "There is evidence that these forces are starting to be set in motion."

Professor Duarte said the rate of Arctic climate change was now faster than ecosystems and traditional Arctic societies could adapt to. The Arctic was expected to stop being a carbon dioxide sink and become a source of greenhouse gases if seawater temperatures rose 4-5ºC.

Little doubt as to that conclusion IMHO. Does remind me of the experimental results of a group of researchers from last year who were doing computer modeling of "complex systems", Climate included just because it is such a complex system with so many of the variables unknown.

What the researchers found with such systems and their associated "steady state" and "tipping points" was that invariably, they observed a series of "oscillations" prior to reaching a "tipping point" and shifting rapidly thereafter to whatever new point of stability the system will reach. Seems like such "oscillations" are here now.


One of the main conclusions from studying non-linear dynamic systems is just this. When the system is in balance it will hoover around a mean value for the parameters you chose to observe. Change input factors and you will get more chaos, but not a change to the mean values. Instead there will be larger variation centered around muchly the same mean. But if you overdo it, the system will first hit a series of heavy and chaotic osciliations, before it rapidly switches over to the next level. Then, the system will calm down, chaos will cease, and we will find ourselves in a new system.

I am not the only one who suspects that the ongoing climate chaos is the signs of a change to a new climate level going on right outside our windows.

One problem with climate change is that so many look for outright warming. What is more important, at present, is the increase of energy of the environment and that is absorbing some of the warming eg it takes a lot of energy to melt a glacier but the temperature will still hover around 0. That energy will show up in things like winds and changes to ocean currents, changes in weather patterns etc. Once the ice has melted - watch out!


Once the ice has melted - watch out!

Unfortunately, we may find out sooner than some of the most dire warnings. Recent studies using gravitometry show that the Eastern Antarctic is not stable or growing, as previously thought but is losing ice and the loss rate is accelerating.

Meanwhile, in the Arctic, the ice loss trend is continuing unabated. This winter the sea ice formation is slow, even compared to the "banner" year of 2006-2007.

The satellite measurements have only been taken for just over 30 years so trends are difficult to discern in a very noisy time series but the later years are showing a possible accelerating loss, rather than that which fit a linear model fairly well.

I have received the historical data from NSIDC and I'm processing it as time allows. I am looking for the occurrence of high frequency components to see if I can observe any change or anomalous behaviour which might indicate system instability precursors.

It might lead to nothing, but we do this all the time to monitor the health of control systems and rotating equipment, so I figured, "Why not?".

Annecdotal comment:

I have lived in western Canada most of my life and I can not recall a winter as strange as this one. So far we have had about a week of what I would call winter, with a continuous strong westerly flow keeping our overnight lows high, often above our historic daily highs. This area is renowned for variability, but not like this. This is in spite of a La Nina condition, on which Environment Canada predicted the coldest winter in 25 years. (oops!)

Yes, I know weather is not clime and vice versa, but still....

Truly extreme weather conditions could be a sign that the climate is changing. Need a few more years of baseline to be sure of it, of course.

Do you mean just for western Canada? Otherwise, the comment seems a bit strange in light of what many experts have been saying recently about the increasingly bizarre weather globally.


I can only report what I see directly. As I noted, it was an anecdotal comment.

That said, I don't see how my comment was strange, as it is consistent with what Jeff Masters said, regarding high temperatures in spite of La Nina.

Perhaps I misunderstand.

Thanks for the link BTW, Wunderground is one of my fave sources and Dr. Masters has always proven credible.



Can I plead Minnesotan understatement?

Same thing here in MN.

Interesting and worrying. The last year's weather has been pretty weird down here too. Every other year I'd have had a duvet on the bed by now but I had to go out and get a thin blanket as the duvet would have been OTT.


We're expecting 60* in the New England area tomorrow....the 1st of February. Somewhat unusual to say the least.

I wonder what summer is going to be like?

I worry what summer is going to be like.


So it goes. The paper itself is concealed behind a very high paywall, fuhgeddabodit. The press release is mainly breathless gobbledygook about abstruse matters exclusively of concern to biology or climate wonks. The only substantive statement of even potential practical interest to a regular voter might be towards the end of this:

Research showed that the Arctic was warming at three times the global average and the loss of sea ice - which had melted faster in summer than predicted - was linked tentatively to recent extreme cold winters in Europe.

But even this is very small beer, since the literature, and the mainstream news, are both full of tentative links to this, that and the other thing. It can be safely consigned to the "nyah, nyah, type A's beware, coffee causes cancer; no it doesn't, nyah, nyah, it reduces incidence slightly, and anyway type B's aren't productive enough" shelf, which is already overcrowded with statistically insignificant blather ultimately rooted in typical university-campus high-and-mighty social-engineering memes.

Which of course reminds me that how to afford the next beer, small or not - or more to the point the next lunch - will be far more concerning to a good many southern Europeans right now than anything whatsoever in the press release. The abstruse notion that, "the Arctic was warming at three times the global average," will likely carry about the same importance as the discovery of Supernova 2012A. Even the "abrupt knock-on effects" will fail the "so what" test miserably, inasmuch as the press release declines altogether to specify what they might be, and hollow unspecified threats (many in the vast hoard on the "nyah nyah" shelf) are already a penny a billion in the news media.

I'm left to wonder just exactly what the UWA professoriate was trying to accomplish by issuing that substance-free press release, beyond, perhaps, telling an empty ghost story in order to help scare some political personages into providing next year's grant.

Wow, you managed to write quite a bit without saying...anything.

The future of human kind faces dire consequences due to arguably the first signs of dangerous climate change in the Arctic, say leading international scientists from The University of Western Australia.

Yes, and Australian scientist are such prominent experts on Arctic conditions. If I were them I would worry more about Australia, which is likely to suffer far more from a warmer climate than the Arctic.

Meanwhile, in Northern Canada, there are other environmental issues which nobody really expected.

Eider duck population declining in Arctic as polar bears devour eggs

An Arctic duck is at risk because polar bears have developed a newfound appetite for their eggs, scientists say.

The eider populations in Nunavut and Nunavik, Que., are declining partly because the bears have been eating more of their eggs, which are laid on the southern coasts of Baffin Island and Southampton Island.

“The bears were essentially eating every single egg on the islands,” said Samuel Iverson, a field researcher with Environment Canada. “We are seeing just major nest depredation.”

Over the past three decades, climate change has caused sea ice to disappear, making it more difficult for polar bears to hunt for seals, their primary prey. To compensate, the bears have been raiding eider nests for food.

Killer whales finding prey further north as Arctic ice melts, Inuit tell scientists

Warming Arctic waters and depleting sea ice are making it easier for killer whales to swim ever northward in search of sources of prey, including other species of whales, a new study has found.

After spending three years interviewing more than 100 Inuit hunters from 11 different Nunavut communities, researchers from Fisheries and Oceans Canada and the University of Manitoba believe killer whales, also known as orcas, are increasingly targeting prey in northern areas where they didn’t previously .

“Killer whales have been seen more and further into the Canadian Arctic, and when they go there, they eat,” said Steven Ferguson, a marine biologist with Fisheries and Oceans Canada and co-author of the study, published Monday in the online journal Aquatic Biosystems.

“Now it looks like some species might be depleted due to predation by killer whales. That’s something we didn’t expect.”

Inuit hunters interviewed for the study reported seeing more killer whales targeting narwhals, belugas and bowhead whales, which often grow much larger than orcas. Sightings were reported as far north as Foxe Basin, north of Hudson Bay, and Lancaster Sound, between Devon and Baffin Islands.

Maybe this is EXACTLY why professors at UWA are interested in Arctic studies, as it will very likely affect their continent just as much as any place.

You really think he shouldn't be sticking his nose so far North?

"In a paper published in the Royal Swedish Academy of Sciences' journal AMBIO and a parallel commentary in Nature Climate Change, the lead author and Director of the University's Oceans Institute, Winthrop Professor Carlos Duarte, said the Arctic region contained arguably the greatest concentration of potential tipping elements for global climate change.

Professor Duarte - winner of last year's prestigious Prix d'Excellence awarded by the International Council for the Exploration of the Sea - "

I don't think a shortage of eider-down comforters or narwhale blubber is going to have much effect on Australians. However, I do think they do need to investigate what effect climate change might have on Australia's wheat crop, since they are one of the world's largest wheat exporters.

I have little doubt that they are well able to study the climate effects on their own continent, and still have a few researchers around to look beyond their own borders.. hardly a subject that should incline anyone to narrow their focus, no?

They do need to investigate that. But what goes on in Arctica does not stay in Arctica. It spreads over the whole world.

When the aussies want to know what climate change will do to them, they must first get a grasp on the inputs.

Climate researchers spend most of their professional time at home -unusally at a university. Theory can be done anywhere with a good computer system. Those doing field work, have a short field season, then the rest of the year is spent analysing data and/or running various tests on specimens. Quite easy to have a world class expert based half a world away from his subject.

Iranian Aircraft Carriers in the Gulf of Mexico

Exclusive: New Iranian Commando Team Operating Near U.S.

(Tehran, FNA) The Fars News Agency has confirmed with the Republican Guard’s North American Operations Command that a new elite Iranian commando team is operating in the U.S.-Mexican border region. The primary day-to-day mission of the team, known as the Joint Special Operations Gulf of Mexico Task Force, or JSOG-MTF, is to mentor Mexican military units in the border areas in their war with the deadly drug cartels. The task force provides “highly trained personnel that excel in uncertain environments,” Maj. Amir Arastoo, a spokesman for Republican Guard special operations forces in North America, tells Fars, and “seeks to confront irregular threats...”

"Okay, so I made that up. Sue me. But first admit that, a line or two in, you knew it was fiction."

Tom Englehardt (same post, 3rd para.)

Tomdispatch is a great site. I don't know why I stopped going there regularly. Its time I put it back on the list of sites I go to at least weekly.

Mexico finds new distribution point for fuel stolen from pipelines: gas stations

Thieves in Mexico had long been thought to flog stolen oil products on shadowy black markets. But it now appears the thefts have taken on a new sophistication, using a gas station that until 2010 had an official concession to legally sell gas.

A raid over the weekend found about 12,690 gallons of apparently stolen gasoline at the station, even though it had not had a legitimate delivery in months.

Kinda like the loaves and fishes story. Maybe it's from abiotic oil.

Three BNSF engines were parked on a siding along the main line. 15 thousand gallons of diesel fuel went missing from the tanks in those 3 engines.

High prices mean somebody would rather steal the fuel than pay for it.

You save 60 grand. One way to cut corners.

Miss Piggy: "That's as laughable as us accusing Fox news of being,,,uh,,, news!"

The response from the Media Research Center: "It's amazing how far the liberals will go to manipulate your kids!"

Where's Sponge Bob when you need him?

Her facial expressions as she says this are priceless.

Thanks, X, for a real good belly laugh (which kinda hurts when you're nursing cracked ribs).


Fox News asks the silliest questions. "Is liberal Hollywood using class warfare to brainwash our kids?"

Considering the wasteland of American pop culture, it's hard to take seriously anyone who takes exception to the Muppets.

Hollywood's job is to make money - by way of entertainment, by telling stories, you know, the world of make believe.

Fox News' job is to make money - by way of entertainment, by telling stories, you know, the world of make believe.


One of the modern masters of such media control was the German Communist from whom Joseph Goebbels learned his trade, Willi Münzenberg. Münzenberg was not only the inventor of spin, he was also the first person who perfected the art of creating a network of opinion-forming journalists who propagated views which were germane to the needs of the Communist Party in Germany and to the Soviet Union. He also made a huge fortune in the process, since he amassed a considerable media empire from which he creamed off the profits.

Sounds like anyone who's alive today?

The model is far more profitable for rightists as for leftists. Most of the big political money goes that way.

It's just that some people use make-believe to say something truthful, and some don't.

I'll go with the talking pig and banjo-picking frog.

Miss Piggy delivered the killer line . . .

Following Kermit's comments, Miss Piggy chimed in. "It's almost as laughable as accusing Fox News of, you know, being news."

Kermit then said, "Boy, that's going to be all over the Internet." Good call, Kermit.

Piggy gets revenge on the Fox!

The next Dust Bowl cometh: cattle herds forced north


Good article.

Couple of comments-the trend of a declining national cattle herd has been ongoing for many years. USDA announced in fall, 2010 that calves held for replacement had reached it's lowest point since 1954. With fewer replacements, it was obvious that the national herd would shrink. And so it does. The original causes of recession reduced demand for beef and spiking feed costs are now joined with drought.

With Cattleman's Association figuring today's profit at a little over $100/cow, I'm skeptical these trends will reverse for quite some time. It takes nearly 2 yrs to raise that animal for market.

I'm waiting for the volatility of today's weather to impact corn. Will the future fall of US corn production allow a moratorium on the US ethanol mandate?

Solar Panel prices fell 51 percent last year after the 10 largest manufacturers doubled production capacity.

The calculations are changing rapidly.

"We humans use a little over 16 terawatts (TW) of power at any one moment, which is nothing compared with the 120,000 TW of solar power absorbed by the Earth at the same time."



One of the unintended side effects of this will be partial energy independence, small communities will no longer have to depend on the central grid for everything.
This may inspire claims for political independence as well.

The crash of solar PV panel prices has got to be one of the biggest energy stories around. But the mainstream media seems quite disinterested. They are far more interested in rehashing the collapse of Solyndra which came about because of the PV panel price collapse. And they often paint the story as "The solar industry is failing . . . just look at Solyndra."

Well natural gas prices have collapsed too and I'm sure some mom & pop wells are unprofitable. Do we look at the low price of natural gas and say "The natural gas industry is failing!" Quite the opposite actually . . . it is a "natural gas boom"!

Why such a double-standard?

Why such a double-standard?

Why? Who is it that butters their bread? Thats right they serve the fossil interests!

And the PV price collapse is mixed news. A big part of the reason is oversupply. And its truly difficult for many players to survive this period. So what happens afterwards. Also there is a trade action, started by solarworld against the Chinese manufacturers. It they win, and tariffs get slapped on Chinese PV, where will prices be then? We can't be sure where this thing will end up.
Last year global manufacturing capability increased 40%, but demand only 20%. And this was enough to collapse spot market prices by 2x. Anyones guess where we will be at the end of the year. But if substantial tariffs raise prices to $1.50 or $2 per watt, I bet demand will drop.

Bob Lutz cries about the conservative media bashing the Chevy Volt

The recent media coverage of so-called “Chevrolet Volt fires,” especially by the conservative talk shows and Fox News, has attracted my attention and ire.

Sorry Bob . . . I feel sorry for the Volt team, but I have no sympathy for you. You personally bash climate science and then cry about this? You reap what you sow.

I've noticed that a lot of people on the right seem to like the right says about other issues but in their area of expertise, the right seems to get it wrong. Examples:
Bob Lutz - Car guy that says the right gets the Volt wrong.
Colin Powell - The only combat vet in the Bush administration was the only one who was against the Iraq war. They should have listened to him.
T. Boone Pickens - Hardcore conservative oil tycoon that says "We can't drill our way out this [oil] problem."
Any conservative biologist/zoologist/etc. - Knows that the right is kooky about evolution.

But Spec.., "only Nixon could go to China", eh?

At least Lutz is going to get something of a hearing from the crowds, and I do think he get some nice Eyejabs in at Rush, Dobbs and O,Really?..

In attempting to explain why Chevy has sold fewer than 8,000 Volts, Dobbs (on O'Reilly) states, flatly, “It doesn’t work.” He elaborates, “It doesn’t go fast and go far on electricity. What happens is it catches fire,” adding that Chevy has recalled some 8,000 Volts.

..What on Earth is wrong with the conservative media movement that it feels it’s OK to spread false information, OK to damage the reputation of perhaps the finest piece of mechanical technology our country has produced since the space shuttle, OK to hurt an iconic American company that is roaring back to global pre-eminence, OK to hurt American employment in Hamtramck, Mich., as long as it damages the Obama administration’s reputation?

He just made a more audible case for electrics than either of us could. (and he closes it off with yet another jab at Climate Science! He's just made US-made EV's an Apple-pie Cause Celebre')

Anyone have any personal experiences with buying and operating a Volt?

You could post your question on the green.autoblog.com boards. There are several Volt owners that read & post there.

I'd take a Volt in a heartbeat, if i could afford one. I've done the research (check out the forums on the Volt) and read about issues. Its still better then any other car for my needs.

I wouldn't have any place to plug it in.

Yeah, me neither.

I saw one yesterday proudly proclaiming ZERO EMISSIONS! But as far as I know all our electricity here comes from burning natural gas. Maybe they have a bunch of solar panels, who knows. It just seems disengenuous and myopic. Sort of like how massive consumption doesn't matter as long as you recycle the packaging.

Nothing spews out of it where it drives. The heat of inefficiency is also left behind at the power plant. At the power plant, the emissions could be controlled for all the cars connected to it. The unused heat could be used for some good purpose. A combustion engine sheds the "waste" heat uselessly and expensively ( fan, radiator, poisonous anti-freeze, did the fan belt break?, is the radiator nearly empty?, did the freeze crack the block?, oh... so sorry, your engine's ruined) into the environment from each individual vehicle. The electric car offers these possibilities for the common good. Such things are often, however, at odds with pure profit.

Well, that's not what the message "ZERO EMISSIONS!" across the side of the car in 8-inch letters says, or even implies. It doesn't say, "My emmissions come from a central power plant where externalities could possibly, maybe, someday, be mitigated!" I think a lot of people who see it will take it at face value. It's misleading, at best.

And I can't plug it in at work, and I live in a city and park on the street at home. Electric cars will not be a solution or stepping stone for me.

I'm seeing a lot more electric bikes, which might be an option for me. Arguably, one of the most effienct ways to move a human 8 miles to work and 8 miles back. If I can carry it up half a flight of stairs to bring it inside, then I can charge it!

If there were no gas stations for that combustion engine, the horses would still look pretty good. It is, indeed, the infrastructure.

That bikes should be able to climb stairs is an interesting observation. I dealt with an electric scooter once. It weighed a lot. Perhaps a special low gear and/or the tri-star wheel design.

The government of Cambodia has announced that it is planning to import and refine oil from Iran in clear defiance of recent US sanctions on Iranian oil imports.

Turkey has defied Western calls to ban Iranian crude imports, saying Ankara will not go along with the EU and US sanctions on Iranian oil.

Iran's First Vice President Mohammad Reza Rahimi has downplayed threats of a military strike against Tehran, saying that the Islamic Republic does not see the possibility of a military conflict in the region.


Please don't make the entire quote clickable. It's difficult to read orange on white text.

The government of Cambodia has announced that it is planning to import and refine oil from Iran in clear defiance of recent US sanctions on Iranian oil imports.

I figure America's pro-business politicians must appreciate other country's interest and procurement of Iranian oil, in spite of the sanctions. Afterall, they are for reinstating the deregulation that led to the mortgage meltdown, right? And they are ok with Freddie-Mac putting up roadblocks to troubled mortgage holders from refinancing so their bets on those same mortgage holders will pay off when they lose their homes through default.

Any kind of profit making however morally hideous it may be to the observer, is considered part of the free enterprise system. Well, if their so in love with that mentality, it should be ok with them for other country's to import Iranian oil.

At least that's the logic. But of course we know how that works.

But, its people in other countries getting the benefit. Its only acceptable if they make big political contributions. Also I really don't think the whole Iranian (or Cuban) thing is driven by people at the top with an agenda, but rather by tough-guy political grandstanding.

Maybe the strategy of Europe and the U.S. is to eliminate their dependance on Iranian crude oil and retool their refineries to process different crude oil grades from other sources in advance of a disruption of Iranian oil production or a blocking of the Strait of Hormuz. Countries that continue to purchase Iranian crude oil will adopt the risk. Help Iran at your peril.

Put a fork in the e-Cat. It's done. (Or should be. Judging from Steorn's Orbo, it will linger far longer than it should.)

The University of Bologna is terminating their deal with Rossi. He was supposed to provide funding to test his device. The deadline was Jan. 15, and he hasn't come through. They offered to test it themselves, as long as the results could be made public. He is not interested.

Well, I guess that makes you, like me, part of the "Global Conspiracy" trying to keep the e-Cat off the market.

Attempting to be surprised by this.

Nope, not happening.

Folks like Rossi upset me a lot, not because they might take some fools money, but because of the ideas that they place in people's heads that ignorance of the laws of physics will let you break them with impunity.

This isn't Star Trek.

But wait until the next round of "Gyre"-fuelled free energy fakers. I'm sure it won't take nearly as long as it should before they are posting on here...

Link: http://arstechnica.com/science/news/2012/01/how-the-craziest-fing-theory...

Often times people believe because the want to believe. Sadly, that opens the door for con artists.

As someone that has followed the electric vehicle biz news for a few years, I can tell you that the biz is filled with dreamers and con men. Mostly dreamers that think they can produce something great but they just can't due to physics, economics, etc. But sadly there are con men than prey upon the people that want to believe.

While for the owners (lessees) of the EV1, and the remaining RAV4 owners, it sounds like the physics didn't get in the way of making an EV that drivers really liked and have been devoted to, and the economics were tolerable enough to create a waiting list..

.. so there is actually some solid evidence to believe in that particular dream.

I'm a big fan of EVs but some of those EV1 and RAV4 people were a bit naive and unrealistic. Yes, they were willing up to sign up for those leases but even with those pricey leases, the EVs were a money-losing obligation that was forced onto the car companies. (Obviously, if the leases were profitable, they would made more cars and signed up everyone willing to lease.) Many of those people don't seem to accept that those vehicles were massively subsidized by the auto-makers, that is why the auto-makers didn't like them.

That said, the crushing and shredding of the cars was inexcusable. I can't see how that made any sense. They just should have had liability waivers and told them that no spare parts would be available.

But the past is prologue. Things are different now. We now have relatively inexpensive high-energy density lithium-ion batteries. There is a lot of room for improvement, especially in cost. But with the cheaper li-ions and higher gas prices, EVs are now on the edge of competing with gas cars.

They were only money-losing BECAUSE they were in runs of a couple thousand each. There was no way these cars would pay for their R&D in such a constricted run. They were hated for a number of reasons, but overall, an EV is a much simpler piece of machinery than an ICE car, and will ultimately be cheaper both to build and to own.. but obviously until you have a factory tooled and running for a bit, you're still playing catch up.

But there is no way you could find enough buyers for a larger run. Not with near $1/gallon gasoline at the time.

GM did screw up. (1) They should not have crushed the cars. Just have people sign waivers and sell them off. And (2) they should have kept a skunkworks group working on EVs in the background since then. Nissan got the jump on everyone because they kept working on EVs the entire time. Prototypes, builds, testing, new ideas, etc. And when gas prices shot up, they were able to get an EV out the door pretty quickly.

There may have been things in the cars that would expose GM/Hughes/Delco to risk... like parts relabeled as to manufacturer as a wild example.

Ill. nuclear reactor loses power, venting steam

CHICAGO (AP) — A nuclear reactor at a northern Illinois plant shut down Monday after losing power, and steam was being vented to reduce pressure, according to officials from Exelon Nuclear and federal regulators.

Some sixty miles north of Byron, IL, there was a small, 2.4 magnitude earthquake, at McHenry.

Neither got a lot of play in the local news. Just a gentle reminder that we have nuclear plants near fault lines in Illinois.

Chicago Breaking News has this :-

Switchyard equipment may be culprit in Byron nuclear plant power failure

NRC wants U.S. nuclear operators to adopt new seismic model

The Nuclear Regulatory Commission said Tuesday the agency wants nuclear plant operators in the central and eastern United States to use a new seismic model to reassess the potential for earthquakes in their area.

The study, which gathered historical earthquake and geological data from 1568 through 2008, determined the largest potential earthquakes in the eastern and central parts of the country could occur near New Madrid, Missouri, and also in Charleston, South Carolina, where large magnitude seismic activity has occurred in the past.

also Indian Point to reassess risk from earthquakes after new report

Indian Point and other nuclear plants in United States will likely have to reassess potential for earthquakes after a federal study released this morning showed “an increased likelihood” of ground movement than in previous studies.

NRC Report: Central Eastern United States - Seismic Source Characterization for Nuclear Facilities

also http://www.ceus-ssc.com/

"an electrical insulator"

A single-point failure puts the reactor on emergency generators and heading toward a station-blackout if nobody intervenes. Really?


"Some pumps are designed to switch off after a set period of time after detecting an undervoltage to prevent damage, then must be manually restarted. But some of those pumps shut down and restarted on their own after Monday’s power outage..."

"...said there was no danger because the plant has multiple backup pumps..."

"In an unrelated issue last April, the commission said it was conducting special inspections of backup water pumps at the Byron and Braidwood generating stations after the agency’s inspectors raised concerns about whether the pumps would be able to cool the reactors if the normal system wasn’t working. The plants’ operator, Exelon Corp., initially said the pumps would work but later concluded they wouldn’t."

So... If the incoming power dips, then pumps turn off until they are restarted by hand... but some of them restarted anyway... but it's OK because there are backup pumps... which won't really do the job.

Perhaps these are not robust designs. Italics mine.

Blizzard? Chicago flirts with record warmth

"A year ago, the Chicago area was bracing for a paralyzing blizzard. Today, we will flirt with 60 and could even break a record for warmth."

Some pretty amazing numbers regarding Saudi Arabia, from a WSJ article:

Saudis Push Young People, Including Women, Into Jobs

. . . half of its own population is 18 or younger . .

Currently, expatriate workers hold 90% of jobs in Saudi's private sector . . .

Despite youth unemployment figures that are among the highest in the world, Saudi's private sector hired 1.7 million foreigners that year—and just over 100,000 Saudis . . .

The Saudi government employs 80% of all working Saudis . . .

Annual population growth here is 2.5%, a rate four times as high as in advanced economies, the International Monetary Fund said.

Yeah . . . when that place implodes, it is going to go out with a bang. A toxic brew of fundamentalist religion, money, corruption, unemployment, a large population of frustrated young males, etc.

They seem quite stable for now . . . they still have billions of barrels of oil and the price of oil is high. But some day that country is going to have a heck of a reckoning. If I lived there, I'd have a bug-out plan.

Almost every nation wants a growing population. The growth here in Australia is 1.5% pa I think, in Canada its similar, in America a little lower - and the mass media celebrates these insanely high growth rates as a great achievement. A handful of nations achieve population stability and this is a cause for despair.

But the Kingdom is an extreme example. Already in massive population overshoot, and still due to double over the next 30 years. They had ambitious plans to feed their population with industrial scale wheat production but had to wind these back when the aquifers ran low. I'm sure there's plenty of officials there in a panic over this, but the majority, particularly the religious authorities, are probably unaware of the true magnitude of the looming disaster.

Canada is the second-biggest country on Earth and is actually underpopulated in relation to its enormous resource base. It is bigger than the US or Europe (excluding Russia) but has few people than either California or Spain.

Saudi Arabia is quite different and is a prime candidate for overshoot (although I'm not a believer in the idea that all countries will overshoot). By the time it runs out of oil, it will have more people than Canada, and not enough water or agricultural land to support them. The only significant resource it has is oil.

By contrast, in Canada, if civilization collapsed, everybody could go out into the forests, chop down some trees, build a log cabin, and plant enough potatoes and cabbages to live on. It wouldn't be a lot of fun for most of them (some of them would have fun), but they could all survive. All it takes is an ax and some potatoes and cabbage seeds.

Cutoff plans for Asian carp

"Asian carp should be permanently cut off from Lake Michigan by sheet pile or impermeable land bridges, effectively re-reversing the flow of the Chicago River, according to a study set to be released Tuesday by a coalition of Great Lakes states and cities."

One idea that seems feasible is the "Mid System" approach, which would cost about $4.27 billion and would pose "the fewest challenges for stormwater management, flood management, water quality and transportation," the study stated.

I'm confused. Didn't the original diversion take it away from Lake Michigan in the first place?


The diversion now causes the Chicago River to run from Lake Michigan into the Mississippi watershed. They're worried about the carp swimming upstream through the canal system into the lake.


Here's the history of the flow of the Chicago River :-


It was reversed in 1900, in order to stop raw sewage entering the Lake near the water intake cribs. Reversing the flow connected the Chicago River to the Mississippi River via a man-made canal. This has enabled access for the carp up the Mississippi, up the Chicago River and into the Lake.

The other Great Lakes states have been after Illinois to put the flow back to where it was before 1900. This would have a serious effect on the current water-management infrastructure, as well as barge transportation for a lot of bulk items such as ores and grain.

This new plan would allow the Lake to be separated, once again, from the river, while still allowing storm water management and transportation to occur. As for the exact details of how it would work, the article I listed is all I know at this time. It is a plan being heavily promoted at the moment.

Leanan's link, A Plea for Southern Treasures, above, hits close to home for those of us who live in the Southern Appalachians and tend to be quite protective of the natural beauty here. One proposal to open the North Carolina piedmont to gas exploration is particularly concerning since it looks like the Republicans may take full control of state govt.. Dem. Governor Bev Perdue has decided to not seek reelection and it looks like North Carolina is swinging right. Uranium exploration and mining is being proposed just north of us in Virginia, and attempts to punch more four lane highways through the Nantahala and Smokey mountains are ramping up.

Parts of Interstate 40 is again closed due to major rock slides after being closed for months in 2009 -2010 (rock slide) between Asheville and Knoxville, yet growth-happy politicians want to push another major highway through, south of the Smokeys. This "Corridor K" will go through two major gorges; Nantahala Gorge just South of Cherokee, and Ocoee Gorge in East Tennessee where the Olympic Whitewater center is located. Both of these routes are already prone to rock slides (US 64 through Ocoee was closed for several weeks (rock slide) last year. The more they undercut these mountains, the more they just keep coming down; very old and steep rock faces.

Another proposed Interstate, I-3, connecting Savannah, GA and Knoxville, TN is bogged down in environmental and NIMBY challenges. Its proposed route would take it a few miles from our home and through one of the most unique and environmentally sensitive areas in the US. One proponent of these roads claims they will save millions of gallons of fuel annually :-/

This what we get when those in power have no concept of limits to growth and have little concern for the nature of the predicaments we face. Suggestions to develop and improve existing rail corridors along some of these routes have been dismissed, as has the idea that we won't have the funds nor the resources to support this new infrastructure. We can't even afford to repave the roads we have. The madness continues as these folks know nothing else. So it goes...

Thanks, ghung!

Caltrans is proposing to abandon a popular, cliff-hanging highway in the San Gabriel Mountains because it is too expensive to maintain.

It doesn't sound like it's too expensive to maintain. It's $1.5 million a year - chicken feed for California. At least for now.

"Putting up a gate at the southern end of the highway and simply handing over the keys to the Forest Service is another option."

About 500 people rely on the highway to reach their homes, said Barret Wetherby, former president of the San Gabriel Canyon Homeowners Assn. Wetherby said he does not believe the road will ever be abandoned.

"I think Caltrans is bluffing, and it's not going to work," he said. "It's the gateway to the San Gabriel Mountains, and we need it open every day and night so that flatlanders can recreate up there, and folks can evacuate in the event of an emergency."

Might be an attempt to get more funding. Or at least preserve what funding they have.

This road used to go thru to Angeles Crest Hwy. Caltrans abandoned that section about 20 years ago. In addition to the residents and recreaters, it would be quite convenient for some of us in avoiding freeways at rush hour as it would give a southern access point to cross the San Gabriel Mtns between La Canada-Flintridge and Cajon Pass. There are 53 miles of freeways between the current access points and this is in the middle.

This is part of an environmental effort to reduce access to Angeles National Forest (including the islanded private plots and long-ago permitted cabins), in my opinion. They are trying to make multi-use forest a wilderness area.

UN panel says retool world economy for sustainability

The world can no longer afford to ignore the environmental cost of economic growth and must redefine the very concept of national wealth, a UN panel of heads of state and environment ministers said Monday.

The panel challenged leaders to recognise that "current global development is unsustainable."

Another 'landmark' report to tell us what we already know. Perhaps these recommendations will be as actionable as the ones that came out of the much touted "Earth Summit" 20 years ago, which lead to the Kyoto Protocol, another dog that won't hunt. Best hopes that awareness will lead to meaningful action someday...

Find report here. (Large PDF warning) The 50 recommendations begin on page 31. Section on energy begins on page 44; no mention of liquid/transportation fuels, peak oil, etc..but you'll love the technucopian solutions suggested (more cell phones?!)

Opening letter (in part):

Letter dated 30 January 2012 from the Co-Chairs of the High-level
Panel on Global Sustainability addressed to the Secretary-General

We have the privilege to submit to you the report of the High-level Panel on
Global Sustainability, entitled “Resilient People, Resilient Planet: A Future Worth Choosing”.

We undertook this report during a period of global volatility and uncertainty.
Economies are teetering. Inequality is growing. And global temperatures continue to rise. We are testing the capacity of the planet to sustain us. Efforts to reach the Millennium Development Goals and other social and economic targets are hampered by both the inability to agree on decisive and coordinated action in national and multilateral fora, and by unmet commitments for financial support.

The signposts are clear: We need to change dramatically, beginning with how
we think about our relationship to each other, to future generations, and to the
eco-systems that support us. Our mission as a Panel was to reflect on and formulate a new vision for sustainable growth and prosperity, along with mechanisms for achieving it.

With seven billion of us now inhabiting our planet, it is time to reflect on our
current path. Today we stand at a crossroads. Continuing on the same path will put people and our planet at greatly heightened risk. The other path, we believe,
provides extraordinary opportunity, but we must be committed and courageous in following it. Changing course will not be easy. But over time, we believe that
following a more sustainable path will enhance human well-being, further global
justice, strengthen gender equity, and preserve the Earth’s life-support systems for future generations.

Nearly twenty years after the Rio Earth Summit, the challenge — and opportunities — of sustainable development are more relevant than ever. Today we see with increasing clarity that economic growth, environmental protection, and social equity are one and the same agenda: the sustainable development agenda. We cannot make lasting progress in one without progress on all...

Methinks this report is 'worthy' of its own post :-0

This will get both the Right (It's all a hoax and an excuse for Socialism!) and the Left (Everything will be OK if we just recycle plastic and drive a Prius!) upset because NOBODY wants to make the drastic changes that are going to be forced upon us. Well, too bad, it's going to happen anyway and it isn't going to be pretty.

Everything will be OK if we just recycle plastic and drive a Prius!

Indeed, I find it depressing how few people know that recycling requires inputs and generates pollution too. Most seem to think overconsumption is fine as long as you recycle the packaging.

Yesterday, I sat through a 3 hour long (all morning) "Sustainability Audit" that an outside company has been hired to do for our institution.
What a freaking total waste of time. The embedded assumptions in these exercises are naive and simplistic in the extreme: a) by 2050 there will be 9 billion people on planet Earth. b) by 2050 we will be using 50% more energy than we're using now. c) growth of the "middle class" will propel consumption to ever higher and higher levels.

Half of those 9 billion people will be working for General Motors, driving electric cars and buying iPads and iPhones by the dozen!....Gonna' Happen; FOR SURE.

I didn't try to swim upstream. I didn't try explaining that by 2050 there is a much greater chance that the U.S. will look more like a giant version of Guatemala than a global super power.

I didn't try explaining that the trajectory that these people are assuming has ALREADY CHANGED as of FOUR YEARS ago!

God grant me the serenity to accept the things I cannot change.
The courage to try to change the things I can.
And the wisdom to know the difference.

The report continuously repeats the terms "sustainable development " and "green growth", both bordering on the oxymoronical, IMO. I suppose folks need a positive message these days... no tedious math or physics to dampen the mood more.

That is very hopeful... to see the subject brought up in a world forum.

Exxon Profit Rises as Crude Oil Prices Soar

Exxon Mobil Corp. (XOM), the world’s largest energy company by market value, declined after fourth- quarter sales fell short of analysts’ estimates and oil production slumped on five continents.

Revenue rose 16 percent to $121.6 billion during the quarter, less than the $124.4 billion average of five analysts’ estimates compiled by Bloomberg. Exxon fell 1.4 percent to $84.29 at 10:25 a.m. in New York.

Oil and natural-gas production declined 8.8 percent during the final three months of 2011 to the equivalent of 4.53 million barrels of crude a day, the Irving, Texas-based company said in an e-mailed statement today. Paul Cheng, a Barclays Capital Plc analyst, had forecast daily output of 4.719 million barrels in a Jan. 27 note to clients.


Crude output from Exxon’s wells declined 11 percent, shrinking in every region where the company conducts operations except Asia, where production was unchanged, according to today’s statement.

See: http://www.bloomberg.com/news/2012-01-31/exxon-reports-fourth-quarter-pr...

A bit of a mixed bag here?


No, sorry, he won't be strung up by his toes (well, for now anyway).

Ex-RBS Chief Goodwin Stripped of Knighthood

Fred Goodwin, Royal Bank of Scotland Group Plc (RBS)’s former chief executive officer, was stripped of his knighthood by the U.K. authorities after he led the 285-year-old lender into the world’s biggest bank bailout.


The U.K. government has injected 45.5 billion pounds into RBS since 2008 and Goodwin, now 53, was the “dominant decision maker” at the time of its collapse, the Cabinet Office said, saying the committee had drawn on reports by the Financial Services Authority and the House of Commons Treasury Select Committee in making its decision.

See: http://www.bloomberg.com/news/2012-01-31/former-rbs-chief-executive-fred...

My good friend, Tom, aka Zadok_the_Priest, passed on the following link to me recently:

RBS: Inside the Bank That Ran Out of Money (BBC Documentary)


Like Tom, I would highly recommend this documentary to anyone.

And in case you missed it, Bill Moyer's How Big Banks are Rewriting the Rules of our Economy is another great presentation.

See: http://billmoyers.com/episode/full-show-how-big-banks-are-rewriting-the-...


Good to see Sir Fred as just plain Fred again. Doesn't surprise me his knighthood was revoked. Too bad they couldn't take a bit of his healthy severance bonus.

IIRC, in late 2008 just weeks after the wheels came off the bus, the Queen and Prince Philip visited the City (London's financial district). She asked, in a very quiet way, if you people are so smart, how did you miss this coming down on top of you? It sent many of them scrambling for some kind of answer. Her Majesty was not amused. After eighty and more years, she probably has seen it all. The crash - willful self-destruction at the expense of others on a colossal scale - is likely a memory that ranks right up there with the Suez Crisis and her annus horribilis. I suspect the Queen was quite happy to oblige when asked to humble her disgraced knight.

I had missed Bill Moyers' interview with John Reed and Byron Dorgan. Thanks Paul for the link. Sober reflection on what happened in 2008. Even more sobering to think how little has changed.

I hadn't heard that Her Majesty had taken some of these City boys to task. Good for her. One can only imagine what she would have said had she had the opportunity to do so in private.

This three-part Bill Moyers series is downright chilling. You watch it and quickly realize that we're doomed to repeat these same mistakes again and again. "Misery, Gloom and Despair. How may I direct your call?"

Well, the perfect antidote to all this: http://www.cbc.ca/republicofdoyle/


Please. The Queen is the exemplar of the ruling class. She only went to the City to check on whether her boys were doing okay, in the circs. Would they still turn up to the polo on Saturday, and then the partridge shoot on Sunday ... that sot of thing.

The BBC documentary is blocked in the U.S.A.
Another source:

From the Moyers page:
The long demise of Glass-Steagall:

"There’s no clearer example of the collusion between government and corporate finance than the Citicorp-Travelers merger, which — thanks to the removal of Glass-Steagall — enabled the formation of the financial behemoth known as Citigroup."

"Citigroup’s shakiest days are over, Saudi Arabian Prince Alwaleed bin Talal al Saud, the biggest individual shareholder of the bank’s stock..." http://www.cnbc.com/id/42034426/Citigroup_s_Worst_Days_Behind_It_Saudi_P...

"Given the 2008 meltdown, he’s surprised Wall Street still has so much power over Washington lawmakers.
“I’m quite surprised the political establishment would listen to groups that have been so discredited,”"

Bernanke and Geithner are still there, too.

Isn't that something.

Cadmium spill threatens water supplies of major Chinese city

Chinese emergency personnel are erecting barrages and pouring hundreds of tonnes of [aluminum] chloride into a river in southern China in a desperate effort to prevent a toxic spill from contaminating the supplies of a major city.

The flow of cadmium - discharged into the Liu River earlier this month - has continued despite three previous containment operations, and now threatens the 3.2 million residents of Liuzhou city in Guangxi province.

Thousands of police, soldiers and fire brigade officers have been mobilised to halt the spill, which has sparked panic buying of bottled water and underscored the environmental cost that China is paying for its rapid economic growth.

also http://www.dawn.com/2012/01/31/china-cadmium-spill-threatens-city-water-...

and http://www.bloomberg.com/news/2012-01-31/chinese-cadmium-spill-won-t-hal...

and in our country we arrest people who report on spills

Enviro Says TVA Arrested Him for Reporting

KNOXVILLE, Tenn. (CN) - An environmentalist claims Tennessee Valley Authority police arrested him twice for reporting on the enormous 2008 Kingston coal ash spill.

... Jones, a volunteer with the Knoxville-based environmental group United Mountain Defense (UMD) and Knoxville Independent Media, says he tried to inform affected residents and to document the extent of the disaster.

... he and other volunteers tested water, distributed information about the chemicals in the fly ash, advised people not to boil water, as the TVA suggested, but to use bottled water instead, and took other actions to protect residents from contamination.

... he was "threatened by TVA employees and TVA police for pulling off the side of the road and taking pictures of the coal fly ash."

TVA ash sludge spill: Yet another disaster that just keeps on giving. This was very bad, and still is. The power of TVA is awesome around here. Rate payers pay all the costs -- fines, judgements, and cleanup. It is truly incredible.

Advising people to boil water in response to cadmium contamination?

Get a rope.

Pipeline Explosion: Round 2

Explosion ‘rocks Syrian oil pipeline’

Fire engulfed a crude oil pipeline in Syria following an explosion on Tuesday, a report has claimed. The pipeline feeds crude to a refinery near the city of Homs, Reuters reported.

The latest reports follows claims on Monday that an “armed terrorist group” had carried out an explosion on a gas pipeline near the border with Lebanon, allegedly leading to the leaking of around 46,000 cubic metres of gas. No casualties were reported but two electricity generation plants were shut due to the blast, state news agency SANA said.

On Saturday “and armed terrorist group launched a sabotage attack” on an oil pipeline near al-Quriya city in Deir Ezzor province, the news agency also reported. Some 2000 barrels of oil were lost in the explosion and fire, it said

I guess the Ghandi method was not working and the armed conflict has begun?

Step down Assad.

I am sure that the Syrian people have long ago had the demonstration that nonviolence does not work against a ruthless power.

3:08 is pretty good. 3:33 someone throws a balloon. More shots ring out. These are your kids, folks... the ones that know they can't have the same hopes you did.

Pythons apparently wiping out Everglades mammals

... The National Park Service has counted 1,825 Burmese pythons that have been caught in and around Everglades National Park since 2000. Among the largest so far was a 156-pound, 16.4-foot one captured earlier this month.

For the study, researchers drove 39,000 miles along Everglades-area roads from 2003 through 2011, counting wildlife spotted along the way and comparing the results with surveys conducted on the same routes in 1996 and 1997.

The researchers found staggering declines in animal sightings: a drop of 99.3 percent among raccoons, 98.9 percent for opossums, 94.1 percent for white-tailed deer and 87.5 percent for bobcats. Along roads where python populations are believed to be smaller, declines were lower but still notable.

It's past time for python boots to come back in style. Python cell phone cases, python briefcases, python belts.... and if your python boots are too tight..

That's pretty much the crux of the biscuit.

Pythons by land, lionfish by sea, rising waters coming, what else is in store?

What's next? Asian Carp in Lake Michigan. Maybe they eat zebra muscles.

Columbia engineers map energy use in NYC buildings

... A new study by Columbia Engineering School will help urban planners, policy makers, and engineers understand the local dynamics of building energy use in New York City—where over two-thirds of the energy consumption is from buildings—and help jumpstart the exchange of ideas.

"The lack of information about building energy use is staggering," said the study's lead author Bianca Howard, a Ph.D. student in mechanical engineering at Columbia Engineering. "We want to start the conversation for the average New Yorker about energy efficiency and conservation by placing their energy consumption in the context of other New Yorkers. Just knowing about your own consumption can change your entire perspective."

... This energy use was further broken down into what the building uses for space heating, space cooling, water heating, and base electric applications such as lighting, and, with this information, the Columbia Engineering team created an interactive web map that shows what type of energy is being used, for which purpose, and in what quantity. "This map will enable NYC building owners to see whether their own building consumes more or less than what an average building with similar function and size would,"

... the zoom feature on the interactive map allows you to drill down and evaluate individual addresses

New from Chatham House ...

Middle East and North Africa Energy 2012: Investing for the Future in Turbulent Times

The oil and gas resources of the Middle East and North African region are crucial to meeting the world’s energy demand but many of the region’s states face the challenge of rapidly rising domestic energy consumption and a demographic and budgetary pressure to generate economic growth.

Today, the region is rocked by popular unrest and faces a time of unprecedented upheaval. Established political dynamics are changing and rebalancing at a domestic, regional and international level.

What are the implications of the Arab Spring for the future of global energy supplies?
How will the relationships between all those involved in the energy sector - governments, national oil companies, international oil companies and service companies - change as a result of the recent developments in the region?

HE Abdalla S. El-Badri OPEC Secretary General The MENA Region in the International Arena Transcript

... Our Members in the MENA region are expected to invest around $200 billion in 83 upstream projects through 2015. This is expected to result in an estimated net increase of liquids capacity of about 4.6 million b/d. In addition, downstream investment projects across the entire MENA region continue to point to the growing importance of oil and gas products. Capital requirements for the oil and gas downstream, for example, across the entire MENA region are expected to be in the range of $207 billion.

... The growing use of Enhanced Oil Recovery techniques, for example, has helped many of them increase their proven reserves, keep older oil fields productive and be better prepared to respond to supply emergencies.

But ongoing coordinated efforts are needed to make sure that global supply is balanced and that the market is stable. Any situation of oversupply, for example, would be detrimental to the industry ...

HE Ali I. Al-Naimi Minister of Petroleum and Mineral Resources, Kingdom of Saudi Arabia Investing for the Future in Turbulent Times Transcript

... We live in dynamic times.

Make Repsol "bleed" if Cuban well leaks: lawmaker

... "We need to figure out what we can do to inflict maximum pain, maximum punishment, to bleed Repsol of whatever resources they may have if there's a potential for a spill that would affect the U.S. coast," Representative David Rivera, a Florida Republican, told a congressional subcommittee that oversees the U.S. Coast Guard.

Representative Ileana Ros-Lehtinen, a Cuban-American Republican from Florida, said the United States should impose sanctions against nations that help Cuba develop its oilfields.

... The Norwegian-designed, Chinese-made rig is owned by an Italian company and flagged in the Bahamas, ...

Experts: US ill-prepared for oil spill off Cuba

... The Norwegian-designed, Chinese-made rig is owned by an Italian company and flagged in the Bahamas, ...

Well that will be one heck of a lawsuit if there is a catastrophic failure.

Remember how much MSM optimism there was the last qtr of 2011, as Xmas consumption increased over 2010! Well, here's how the 1st qtr of 2012 is starting out!


'Home prices drop, consumers turn gloomier'

The data frustrated expectations for an increase after sharp gains in consumer confidence in November and December.

"We are braced for a more bumpy picture over the next few months. A lot of expectations probably ran away or got a little too lofty coming into the end of the year," said Sean Incremona, economist at 4Cast Ltd in New York.

Regarding real estate value downturns: "The reality is the housing market is so far from normal that it will take years to get back to its normal state. Similarly it will take a while before it really is contributing properly to economic growth."

How about this part. Remember how the Bush jr. admin. was so proud of having presided over a time period when there were more homeowners than ever? Well, get this:

Aside from the second quarter of 2011 when the rate was at 65.9 percent, homeownership is at its lowest level since the second quarter of 1998.

So that record home ownership was brought to us by liar loans, deregulation and all the casino type bundles of loans being sold and resold. Instead of being something to be proud of, it should it have been considered something to question, as in danger-danger!

And then there's this gem:

"Today's number, coupled with yesterday's disappointing personal spending data, offers a reminder that underlying demand is still too soft to absorb the economy's excess slack."

Doesn't soft demand conincide with softer oil demand. Remember yesterday's article about oil supply inelasticity which translates then into demand elasticity? Are we not seeing that across a broad consumer spectrum in the form of reduced discretionary income, which is what Gail has pointed out many times.

I was really wondering if consumers deciding to go in big this past Xmas could be a game changer and wondered if the consumerism would be short lived. Looks like that is the case. Supply of oil as it affects price is still the tiller pointing the direction this economy takes.

The numbers appear to be changing which will be interesting to watch unfold. Wall Street never believes it's "different this time." What may be happening is:

Consumers are driving more of their spending toward electronics and smart phone, tablet purchases. Also, the cost of energy is taking money from the movie theaters and shopping malls and being redirected to oil companies and oil service players. This is causing a huge reduction in miles driven and, as the API just reported, inventories of oil are up 2.1 million barrels this week which leads one to believe that we are using less oil but spending more for it. I've said a number of times, certain industries will fall off a cliff while others experience periods of unprecedented growth. Whole industries come and go all the time. It's terrible the price this exacts on families and bread winners, but its all part of the process. Perhaps the market is working as it should. The real question is "can we reduce consumption at a faster rate than the fall of production?" As for the economy, money still changes hands, people working in essential services will continue to find ways to get themselves to work. However, those people working in the "fancy ashtray factory" will have to rethink their career path. The days of spending money on fancy ashtrays and candy dishes are over.

The reality is the housing market is so far from normal that it will take years to get back to its normal state.

This real estate writer might want to re-assess their working definition of normalcy, I would think.

Drought forces Texas town to truck in water

SPICEWOOD - Tanker trucks loaded with water have become the lifeline for a Texas lakefront village that came precariously close to becoming the state's first community to run out of drinking water during a historic drought.

Drought May Cause Shutdown Of Texas Rice Production

“This is going to be a huge, huge deal,” Rose said during a presentation at the annual meeting of the American Meteorological Society in New Orleans. “What’s going to happen is that there will be no water for agriculture in Texas this year.”

David Brown - On the Record-Breaking Texas Drought

Jan 24, 2012 Texas_Severe water shortage grips Central Texas community

LCRA begins hauling water to Spicewood Beach

Lake Travis Aerials - January 2012 - A Bird's Eye Look

Low lake levels are providing a unique opportunity to eliminate boating hazards.

After some pretty heavy rains, most of North Texas is actually in relatively good shape.

Drought forces Texas town to drink beer

closer to the mark

"Beer's for drinking, water's for fighting".

Drought May Cause Shutdown Of Texas Rice Production

What nutter thought that Texas was a good place to grow rice? Even in Australia - rice-growers have gone broke through lack of water - thank goodness.

Our northern neighbor seems to have caught the cold...

Insight: Borrowing spree pushes Canada to edge of debt cliff

The growth of household debt in Canada to levels approaching those seen in the United States before the 2008-2009 crash seems to be keeping a lot of people awake - from central bankers to economists, lenders, real estate agents and the indebted consumers.


New Report by Agency Lowers Estimates of Natural Gas in U.S.

The agency estimated that there are 482 trillion cubic feet of shale gas in the United States, down from the 2011 estimate of 827 trillion cubic feet — a drop of more than 40 percent. The report also said the Marcellus region, a rock formation under parts of New York, Ohio, Pennsylvania and West Virginia, contained 141 trillion cubic feet of gas. That represents a 66 percent drop from the 410 trillion cubic feet estimate offered in the agency’s last report.
Under the agency’s new estimates, the Marcellus shale, which was previously thought to hold enough gas to meet the entire nation’s demand for 17 years at current consumption rates, contains instead a six-year supply. The report comes just five months after the United States Geological Survey released its own estimate of 84 trillion cubic feet for the Marcellus shale.
Some of the earliest and most optimistic estimates of gas resources have come from academia. In 2009, Terry Engelder, a geosciences professor at Pennsylvania State University, helped accelerate the rush to drill for natural gas in Pennsylvania and surrounding states by projecting that more than 500 trillion cubic feet of natural gas could be produced from the Marcellus.This estimate is more than three times as high as the estimate for the Marcellus region from Energy Information Administration, and it is higher than what federal energy officials now say can be found in the entire country.


Europe's lost generation: how it feels to be young and struggling in the EU

Now is not the time to be a twentysomething in Spain. According to figures last week, 51.4% of 16-24 year-olds are now without work, as the total unemployment count passed the 5 million barrier.


These are staggering figures. What do they do all day? I might be wearing rose-coloured glasses in my middle age, but I feel we Boomers would have led a revolution back in the day ... if this had been our reality. Or maybe we would have just passed the bong around - who knows?

The Big Bounce Continues

For the third week in a row, US retail gasoline sales improved, bouncing back from rather weak levels around the time of Christmas & New Year’s holidays. Demand is about 6% higher than the low point around New Year's. The weekly oil inventory from the API this Tuesday evening (usually less accurate than the EIA reports that comes on Wednesday morning) indicates that, even though gasoline demand remains about 5% or more less than the comparable 2011 week, refiners still failed to keep up with demand. There is a strong seasonal trend for US gasoline inventories to grow in January and February, and this year, inventory building is lagging well behind the average.

While US refiners, distributors, and importers made an effort to catch up with final gasoline demand, unexpected refinery ‘upsets’ and slowing volumes of imports from Europe appear to be significant obstacles towards meeting consumer demand. Further, if a planned wide spread refinery strike goes ahead tomorrow, we may begin counting down the weeks before the US begins to see the same kind of local transport fuel shortages that are starting to pop up in England this last week.

The largest cross-country pipeline by volume, the Colonial Pipeline, was still operating at or near maximum capacity for gasoline and diesel shipments over the last few four weeks. Some Northeast refiners are even attempting to ship oil for gasoline refining in the Philadelphia/New Jersey/New York region through out-of-the-way pipelines and by barge.

So even high NE gasoline prices (relative to most of the US) may not be enough to get the Washington-Baltimore-Philadelphia-NYC-Boston metropolis safely through the upcoming ‘summer driving season’ without a shortage. The closures of refiners in Europe and the Caribbean have eliminated a traditional safety valve of imported supplies that was usually available when needed.

Consumer demand may be running into a brick wall of constrained supply before long. Stay tuned.

US Gasoline Use +0.4% In Week To 8.508 Million B/D - SpendingPulse

The API also reported gasoline stocks declined 461,000 barrels, and stockpiles of distillates rose 970,000 barrels.

Exxon, Valero Receive Union Strike Notices for Refineries

US retail gasoline sales improved

Charles, along with many here, I'm sure, I highly value your market updates. Your insights and info are always illuminating. I have just one nit to pick, and it's not just you, it's rampant in market reporting (I pick it with you, 'cuz you're 'our' insider). The use of the word 'improved' includes an underlying assumption or values statement. 'Increased' or 'decreased' would be values neutral, and at least as accurate. In fact, sometimes, when reading (others', not your) market reports, I can actually get confused as to which direction something is moving in, as not all of us see infinite growth in consumption of everything on this finites sphere we call home in the same light. When something 'strengthens', for example, is the price going up due to a reduction in supply, or is supply going up?

Again, not dissing you - quite the opposite, in fact. Just taking the opportunity to make a point. Thanks for listening.

OPEC oil output hits highest since 2008-survey

Supply from all 12 members of the Organization of the Petroleum Exporting Countries totalled 30.95 million barrels per day (bpd), up from 30.74 million bpd in December, the survey of sources at oil companies, OPEC officials and analysts found.

Libyan oil exports and refinery demand have climbed to 930,000 bpd in January, according to the survey, up 180,000 bpd from December. The survey is still finding lower figures than those given by Libyan officials.


CIA chief says appears Saudi oil "ramping up"

Reuters) - Saudi Arabia's oil production appears to be "ramping up" and can fill some of the demand shortfalls caused by sanctions on Iranian exports, CIA Director David Petraeus said on Tuesday.

Not much of a story.


Peter Orszag: Fracking Boom Could Finally Cap Myth of Peak Oil

By Peter Orszag Jan 31, 2012 4:00 PM

The U.S. oil market could be on the verge of its own fracking revolution, similar to what the natural-gas market is already experiencing. As a result, domestic production is now projected to rise significantly over the coming decades, reducing the relative share of imports in U.S. oil consumption.

Really, Peter, really? Wall Street is paying you millions for that kind of analysis? Perhaps you should check with some oil people first.

I dropped this into the comments.. never sure if it will be cleared or not..

"Nawar, I don't know why you're encouraging him.

"Tight oil will make the oil market less tight.." Classic! - Imagine the sound of a soda straw, working well down into the ice-cubes, looking for that last, sweet hit of pop.

Dare to dream! "

Good luck jokuhl

Bloomberg is notorious for screening out critical comments. My track record on their site comments is that about 20% of them are accepted. And i am a (fairly) respectful commenter.

They let it in..

Looks like he's getting his medicine this morning, we'll see if the fever persists.

spec - Sometimes I can be a tad sympathetic which such silly statements if I allow that the speaker just isn't to educated on the subject. The worse aspect of such a proclamation is that the public will think some new tech is here to save them. I've made the point numerous times: frac'ng isn't new tech...been doing big ones for over 30 years. Some improvements along the way...especially using horizontal well bores (a 25+ old tech itself). We may be seeing at least some significant (and possibly shorter) improvements in oil production rates. But what's critical IMHO for the public to understand is the base cause: higher oil prices along with the necessity of the pubcos to drill something/anything to replace their depleting reserve bases. If they did they would understand that any major effort to produce more oil can only be sustained by continued high oil prices.

Shale gas estimates: I don't have any problem with anyone saying there are XXX tcf of NG that could, or even will, be produced from those formations. The critical question, as always, is at what rate and at what price support. One critical aspect of these reserve reductions is WHY? Did they calculate that resource volume has declined...not as much NG in place as originally estimated? Or did they recalculate the amount of ECONOMICALLY RECOVERABLE reserves by using a lower price expectation? In the last week I've eliminated over $150 million worth of potential NG reserves from our drilling schedule. They existed at a price of $4.50/mcf. But at my current price point of $2.60/mcf they have ceased to exist. Prices come back up and those reserves will reappear. But until then they don't count.

I've always viewed this as a classic case of the glass-half-full folks against the glass-half-empty minority, but, IMO, nothing proves the case for peak oil better than the increasingly complex and expensive lengths that oilcos are going to to get at what's left. And, as goes the oil, so will the gas go. Increasing reliance upon gas will likely result in higher prices, but as with oil, only if markets can afford it. What will an economy built around $3 natural gas look like in ten years?

Check out the numbers I emailed you.