Drumbeat: February 17, 2012

Citigroup Says Peak Oil Is Dead

Citigroup announced to the world Thursday that peak oil is dead. The controversial idea that world crude oil production is almost at its peak and will soon begin an irrevocable long-term decline has been laid to rest in the highly productive shale oil formations of North Dakota, with potentially big consequences for oil prices, the bank said.

However, despite this reading of last rites, the data suggest it would be premature to pronounce this patient dead.

Changes in oil markets in the past decade have given significant traction to the argument that world oil production is close to peaking. Despite the huge incentive of a near-threefold increase in the price of benchmark Brent crude from 2000 to 2010, the world barely managed to eke out a 10% increase in crude oil production, according to BP data.

The End of the Peak Oil Theory

Last week I got caught up in a show from a few years ago called "Mega Disasters: Oil Apocalypse" on The History Channel, spelling out the doom our economy was facing as oil production declined over the next 100 years. Domestic production was already declining, and we had no plan B. Stock up on canned soup and ammo while you still can!

If you haven't noticed, the oil apocalypse has been delayed -- again -- and the doomsday predictors are undoubtedly eating crow while they concoct another mega disaster. "Peak oil," the theory that oil production will soon hit a peak and begin declining, sending the world into an economic disaster, failed to live up to its hype again.

American Oil Shale to Kick Off New Economic Era

Founded in 1924, the World Energy Council is an international congress of scientists and energy resource experts that gathers once every three years to discuss the topic of energy: its current state and its future.

At their Rome meeting in 2007, this unsponsored, politically-unbiased pool of experts delivered in its 600-page Survey of Energy Resources Report the most significant statement ever issued by the group since its inception.

Crude Oil Set for Biggest Weekly Gain This Year on U.S. Economy, Greek Aid

Oil rose for a third day in New York, heading for the biggest weekly gain this year, as signs of an improving U.S. economy and progress on a bailout for Greece bolstered the outlook for fuel demand. Brent touched an eight- month high.

West Texas Intermediate futures climbed as much as 0.6 percent today and have gained 4.1 percent this week, the most since the five days ended Dec. 23. U.S. applications for jobless payments fell to the lowest since 2008, the Labor Department said yesterday. European governments are considering cutting interest rates on emergency loans to Greece and using European Central Bank contributions to plug a financing gap for the second bailout, two people familiar with the discussions said.

Prices at the pump soar ... and it's only February

Gas prices are back on the rise, and some analysts say it could get even worse before the summer driving season.

Payroll tax cut, meet $4 gas

The payroll tax cut is more of a cushion than a stimulus for the U.S. economy. With higher fuel prices, that cushion may already be deflating.

Consumer Prices in U.S. Likely Rose in January on Fuel

The cost of living in the U.S. probably rose in January by the most in four months, boosted by higher prices for food and energy, economists said before a report today.

Saudi Aramco to Re-Open Oldest Field to Tap Heavy Oil, EIU

Saudi Arabian Oil Co. plans to re- open the Gulf kingdom’s oldest oil field and produce there for the first time in 30 years as the company boosts output of heavy crude, the Economist Intelligence Unit said.

The state-owned producer, known as Saudi Aramco, may revive a plan from 2008 to restore production at the mothballed Dammam field, the EIU said in a report. Dammam contains some 500 million barrels of oil and may yield as much as 100,000 barrels a day of Arabian Heavy crude, according to the report.

Encana Strikes $2.9 Billion Shale Deal With Mitsubishi

The shale-gas buying spree continues.

The Encana Corporation, a Canadian natural gas producer, said on Thursday that it had formed a partnership with Mitsubishi, receiving an investment from the Japanese conglomerate worth 2.9 billion Canadian dollars, or $2.9 billion. In return, Encana has sold Mitsubishi a 40 percent stake in its holdings at Cutbank Ridge in British Columbia, where the Canadian company owns about 409,000 net acres.

US, Mexico Close To 'Major' Oil-Drilling Practices Pact

WASHINGTON -- The U.S. is close to signing a "major agreement" with Mexico that establishes oil-drilling practices in the Gulf of Mexico, a shared body of water where both countries could be affected by spills, Interior Secretary Ken Salazar said Thursday.

Norway's DNO to restart Yemeni oil output as strike ends

(Reuters) - DNO is about to restart production at several oil fields in Yemen after striking state pipeline workers there decided to go back to work, the Norwegian oil firm said on Friday.

Enbridge says Line 5 returned to service

(Reuters) - Enbridge Inc on Friday said it returned its 491,000 barrel-a-day Line 5 oil pipeline to service after repairing a leak in Michigan.

Gazprom Chases China, India as European Demand Falters: Russia Overnight

OAO Gazprom (OGZPY), the world’s largest natural gas producer, will strive to forge supply deals with India and China this year as it seeks to win customers outside of Europe, where demand is waning.

How Chinese Energy Politics Will Reshape the Middle East

China’s going to import a lot more oil from Iran and the Arab world over the next two decades. America will import far less. Those two facts will profoundly change the geopolitics of the Middle East.

China’s Arctic Powerplay

The United States is shifting its focus from the Atlantic across to the Pacific. However, if an Arctic century is on the horizon, then China is at the forefront of it. While Washington enhances its relationships across the Asia-Pacific basin, Beijing is busy engaging Arctic Ocean coastal states en masse. The Middle Kingdom is apparently interested in the commercial viability of new shipping lanes and developing the resources that lie underneath and along the Arctic seabed. Ostensibly to achieve its objectives, China is engaging the region at an unprecedented pace. Beijing’s comprehensive engagement of Arctic states demonstrates that China’s ambition isn't just to be a Pacific power, but a global one. Questions that remain are: what is Beijing’s intention in the Arctic, and by extension what type of global power will China be?

Argentina's YPF to pay debt, resume trade-source

YPF, Argentina's biggest energy company, will shortly pay a tax debt that prompted authorities to ban it from foreign trade, meaning imports and exports should not be significantly affected, a source with knowledge of the case said on Thursday.

Coal India May Revive Fuel Imports to Comply With Prime Minister’s Order

Coal India Ltd., the world’s biggest producer of the commodity, may revive plans to import the fuel to comply with Prime Minister Manmohan Singh’s order to increase supplies to utilities and avoid paying penalties.

“Coal India will have to supply the coal even if they don’t have domestic production, and this is going to force them to import,” said Kamlesh Kotak, vice president of research at Asian Markets Securities Pvt. in Mumbai. “The company is being driven into a corner to boost the power sector.”

Shipping executive: Picking up Iranian crude 'is like getting leprosy'

(CNN) -- Russian steel, Ukrainian maize, tea from India, palm oil from Malaysia -- myriad products are shipped through the Gulf emirates. Iran wants and needs them all. But in the last few months, the growing web of U.S. and European sanctions has begun to paralyze its ability to import and export key products.

Multiple banking, shipping and trade sources tell CNN that Iran is struggling to import staples and export crude oil as its access to the global financial system is curbed. As a result, inflation is rising and shortages of basic products are growing.

Japan refiners eye force majeure clause for Iran oil contracts

(Reuters) - Japanese refiners should consider having a force majeure clause in term crude contracts with Iran in case they have difficulties making payments in the face of pressure from U.S. sanctions, the industry's top official said on Friday.

The United States, angry over Iran's nuclear programme, wants Japan's oil industry to cut back on Iranian imports but Japan must import swathes of oil in the wake of the Fukushima nuclear crisis and the country's refiners have yet to make significant cuts.

Greek dependence on Iranian oil proves latest headache for EU

ATHENS : Add the prospect of running out of oil to the mountain of problems that Greece is already facing.

Iran's threat this week to cut off oil to some European countries before a boycott planned for July would do little harm to the continent's powerhouse countries. But Greece has been heavily dependent on Iran's oil, which it buys on generous terms of credit, crucial when few others trust Greece to ever pay them back.

So Much for Sanctions: China, Iran Iron Out Oil Agreement

China has, at least for now, dashed any hopes that it plans to obey tighter U.S. sanctions against Iran after hammering out an agreement to resume some imports of Iranian crude.

State-owned Unipec, one of China’s top importers, reached an agreement with National Iranian Oil Co. earlier this week to renew an annual supply contract that had lapsed at the end of the year.

Shelling continues in Syria as protesters hit the streets

Homs, Syria (CNN) -- Shelling continued in the besieged Syrian city of Homs early Friday and demonstrators hit the streets, a day after the United Nations General Assembly passed a non-binding resolution condemning the brutal government crackdown on anti-government protesters.

The shelling in the flashpoint city marks the 14th consecutive day of constant bombardment as Syrian forces targeted stronghold neighborhoods of Baba Amr, Inshaat and Khailidya.

Report: Venezuela's Chavez ships fuel to Syria regime, undermining sanctions

The government of Venezuela's Hugo Chavez is emerging as a rare supplier of diesel to Syria, potentially undermining Western sanctions and helping the Syrian government fuel its military in the middle of a bloody crackdown on civilian protests.

A cargo of diesel, which can be used to fuel army tanks or as heating fuel, was expected to arrive at Syria's Mediterranean port of Banias this week, according to two traders and shipping data reported by Reuters. The cargo could be worth up to $50 million.

Revolution brings instability to Sinai Peninsula

The overthrow of dictator Hosni Mubarak a year ago was followed by a dwindling of the presence of Egyptian security forces, giving the Bedouins more authority over their lives. Egypt analysts say it has also led to more lawlessness, making the peninsula known for its smuggling routes a possible trouble spot for extremism and banditry.

"Throughout history, few people have paid much attention to the Sinai and that's part of the problem," said Bruce Hoffman, professor and director of the Center for Peace and Security Studies Program at George Washington University. "It is an area of neglect potentially becoming much more dangerous."

Japan's nuclear safety standards called flawed

TOKYO (AP) — Japan's nuclear safety chief said Wednesday the country's regulations are flawed, outdated and below global standards, and he apologized for their failure when a tsunami crippled one plant last year.

Heinberg’s serious message has silver lining

World-renowned "Peak Oil" expert Richard Heinberg packed the 100 Mile House Community Hall on Feb. 8 to deliver his seriously troubling message that economic growth is effectively over.

The audience of 220 all stayed to hear there is a silver lining if we can curb our spending on credit and apply principles of sustainability to our resources. People came to the event to hear what we can do, locally and globally, to begin to live within our means and preserve resources for the future.

Oil refineries: Sustainable communities for the post-oil world?

A '100% self-supporting housing solution for the post-oil world,' the Oil Silo Home concept makes use of the thousands of oil storage units that will inevitably be abandoned in the peak oil era.

Al Gore takes aim at "unsustainable" capitalism

LONDON (Reuters) - Former U.S. Vice President Al Gore wants to end the default practice of quarterly earnings guidance and explore issuing loyalty-driven securities as part of an overhaul of capitalism which he says has turned many of the world's largest economies into hotbeds of irresponsible short-term investment.

Together with David Blood, senior partner of 'green' fund firm Generation Investment Management, the environmental activist has crafted a blueprint for "sustainable capitalism" he wants the financial industry to adopt to support lasting economic growth.

For Mexico City, a Repurposed Landfill

In developing countries, closing a landfill often means just that: locking the gate and walking away.

But when Mexico City’s government shut down the giant Bordo Poniente landfill last December, officials announced that they had a full-blown plan for the site. As I wrote on Friday in The New York Times, the city aims to capture the methane gas produced by the landfill to fuel a power plant that could supply electricity to as many as 35,000 homes.

Larger Turbines May Help China’s Wind Developers, Ming Yang Says

Developers of wind-power projects in China are increasing installations of larger capacity turbines to reduce costs in the world’s biggest market, the chief executive officer of China Ming Yang Wind Power Group Ltd. said.

Tracking How the World Guzzles Water

With the world’s freshwater supplies under mounting pressure from pollution and galloping consumption, understanding the how, where and why of water use is more important than ever.

To that end, scientists from the University of Twente in the Netherlands have released a new study analyzing the quantity and distribution of global water use from 1996 to 2005.

U.S. Pushes to Cut Emissions of Some Pollutants That Hasten Climate Change

WASHINGTON — Impatient with the slow pace of international climate change negotiations, a small group of countries led by the United States is starting a program to reduce emissions of common pollutants that contribute to rapid climate change and widespread health problems.

Leak Offers Glimpse of Campaign Against Climate Science

A spokesman for Microsoft, another listed donor, said that the company believes that “climate change is a serious issue that demands immediate worldwide action.” The company is shown in the documents as having contributed $59,908 last year to a Heartland technology newsletter. But the Microsoft spokesman, Mark Murray, said the gift was not a cash contribution but rather the value of free software, which Microsoft gives to thousands of nonprofit groups.

Perhaps the most intriguing aspect of the Heartland documents was what they did not contain: evidence of contributions from the major publicly traded oil companies, long suspected by environmentalists of secretly financing efforts to undermine climate science.

Web leak shows trail of climate sceptic funding

THE paper trail connecting the climate change sceptic movement in Australia and the conservative US expert panel the Heartland Institute goes back at least to 2009, documents released on the internet this week show.

Heartland Institute says leaked climate change documents were stolen, fake

Heartland Institute, a think tank in Chicago known for its undermining of climate change, announced Wednesday that leaked lists of high-profile donors and details of future projects to discredit global warming were "stolen" and that at least one was fake, according to a statement from the organization.

Bay Area Climate Change Plans Lack Regional Cooperation

Unless municipalities coordinate efforts to prepare for climate change, cities’ plans to protect themselves from rising seas and other changes could make matters worse for their neighbors.

Wow, if Gore is starting to critique capitalism, the ground in the environmental movement is really shifting.

He's only talking about tweaking it around the edges a little. He's still pushing for "sustainable growth."


“There are rather glaringly obvious problems with the way capitalism is operating today, in spite of its great virtues,” Gore said.


What really caught my eye in your Reuters story was "Today the average mutual fund in the U.S. turns over its entire portfolio every 7 months"

Entire portfolio in 7 months, that's barely enough time to get the well designed, drilled and producing.

What really caught my eye in your Reuters story was "Today the average mutual fund in the U.S. turns over its entire portfolio every 7 months"

The very large majority of shares held in the US are not held by investors, but by traders. More than half of all equity trades in the US are made because some computer is triggered by price or other near-real-time information. Any ability that Wall Street had to direct capital to the most efficient uses has been thoroughly killed by Big Finance. Unless, of course, you define "efficient" as "generate fees for Big Finance".

Yep, the U.S. economy is dominated by parasitical bloodsucking rentseekers in FIRE, the MIC, and 'healthcare.' the dominant economic paradigm is that price and value are synonymous and that profitable means productive. We spend roughly double the typical developed country share of GDP on healthcare, we spend more than the rest of the world on defense, and finance alone accounts for more than 30% of corporate profits.

Imagine if those resources were deployed to productive ends, starting with energy and resource conservation and infrastructure investment.

Imagine if those resources were deployed to productive ends, starting with energy and resource conservation and infrastructure investment.

Hold your tonque. You're speaking heresy there.

As long as our political and media system is owned by those same sectors, we're going to keep getting more of what we've got.

Let's get those voting machines in here and have a vote on it.

But still, how do you realistically start the 1000 mile journey AWAY from this economic model? If, (by miraculous luck) his initiative somehow takes root, at least this provides a place where the need to change this system will have gotten some purchase.

Otherwise, perhaps a radical, revolutionary turnover is possible (and probably solves some chunk of the population issue as well..).. but getting the outcome to go in the direction anyone wants would be FAR less likely, ISTM.

As ever, in this time of extremes, going through the messy middleground ends up being anathema to all.. sigh!

A journey of 1000 miles begins with a single step. Now that the incompetence of the Illinois Dumbocrats from Obama, down through the Daley(s), Emanuel, Quinn, Madigan, Preckwinkle ad infinitum has caused Illinois' powerhouse manufacturer Caterpillar to re-locate its small bulldozer & excavator production from Japan to Athens Georgia, because they needed access to the oceans (via the Oconee River????) and Illinois couldn't meet the logistical needs of CAT!!!!!!!!!!!!!!!! (Could the reporters have misquoted Cat's Chairman and he really said "the logical needs..."?)

Let's look at Plan B

Plan B - Instead of re-patriating EMD locomotive (Now a part of CAT) from London Ontario to Indiana, why not move it back to its ancestral home in McCook ILLINOIS? Hmmmmmmmmmmmmmmm?

There is plenty of room (Alcoa RIP). There is a trained workforce around (i.e. the guys who worked in the original plant before GM moved prodution to London [see also Al Gore on short term corporate thinking]. They would not have to train a bunch of farmers to build locomotives.

The locomotives they would be building would be modern, more fuel efficient and therefore less polluting and would move a huge percentage of all land-based freight (the biggest mover of freight overall is by water, typically by barges inland and by ships at sea).

If one vastly improved the CAFE of the rolling stock of America's railroads, one would strike blows for reducing demand for energy, lowering inflation while providing good paying jobs and the taxes that flow from them.

All it would take are REGIME CHANGES in Washington, D.C. & in Springfield Illinois and in Chicago Illinois. Is it any wonder that the first glimmerings of the Tea Party took place at Daley Plaza, City of Chicago, County of Cook, State of Illinois, United States of America?

Pitchforks and Torches anyone?

All it would take are REGIME CHANGES in Washington, D.C. & in Springfield Illinois and in Chicago Illinois. Is it any wonder that the first glimmerings of the Tea Party took place at Daley Plaza, City of Chicago, County of Cook, State of Illinois, United States of America?

Regime change between Democrats and Republicans, has been, is, and will be, a completely pointless exercise for a long time to come. To me it is like a game of ping pong without anyone really keeping score.

The only thing that will eventually work is a profound paradigm shift away from our current growth based economic paradigm. Nothing that I have seen suggests that either Democrats or Republicans are even aware of the necessity of such, or the slightest bit interested in real change... The political process in the US has become a complete joke!

As for pitchforks and torches, I think I'll pass and concentrate on working with true agents of change, they are out there!

Tea Party?! Surely you jest, Dr.Feyneman Mr. Thompson!


Hi Fred,

You don't believe in Regime Change? How last year! Qaddafi is dead. Bin Laden is dead. Assad is being surrounded by hostile neighbors.

Even Putin, a presumed shoo-in to become the next Czar-for-Life in Russia as recently as December 3, 2011 (less than 3 months ago!!) is feeling so much heat that he was last seen trying out for a new gig as a color sportscaster on MSNBC by trying his hand at the bobsled?

Get with the program, you've fallen way, way behind!

Later Gator

(Tuesday is Mardi Gras)

Let the good times roll! Wild things are happening in Federal Court in the Big Easy. Regime Change in Washington D.C. has begun!!!!!

You don't believe in Regime Change?

Oh, I do! Though I prefer the notion of 'Paradigm Change'. However, neither Dems nor Repubs, are it...



Bruce, I'd sooner believe that Gore has a secret love of an Economic Model that dare not speak its name, and he's just whispering the first 'come hithers', than I get any sense of there really coming any kind of fundamental, much less 'Regime' change to DC through the Regular Party Channels, be that R, D or Tea Parties.

As with the Caterpiller Juggling, most of them are just looking for new Corporate Sweetheart deals with which to secure SOME kind of future survival, if not prosperity.. but again, those are all well-matched to the classic Capital model, and don't really build on a novel change in business thinking.. while I do appreciate the need and benefits of having a few Loco-Mfrs in the States.

From the link:

While we believe that capitalism is fundamentally superior to any other system for organising economic activity, it is also clear that some of the ways in which it is now practised do not incorporate sufficient regard for its impact on people, society and the planet," Gore said.

At a briefing ahead of Thursday's launch, David Blood said capitalism has been blighted with short-termism and an obsession with instant investment results, which had ramped up market volatility, widened the gap between rich and poor and deflected attention from the deepening climate crisis.

The former CEO of Goldman Sachs Asset Management put forward five key actions which he hoped would revive the discussion on how to clean up capitalism and put companies, investors and stakeholders on the path towards long-term, sustainable profit.

One wonders if all of our doomer talk about peak everything and catastrophic climate change isn't acting as a driver for short-term thinking and volatility in the capitalist system, fueling desperation to extract as much from the system as quickly as possible; "make hay before the sun sets", so to speak. We expect these folks to make long-term investments on one hand, while insisting that massive change is occurring, short-term, on the other. Unintended consequences?

Interesting! I think "get it while you can" is the spirit of the our age. An age in dusk.

We must fish quicker before they are all gone!

Many here have criticized society's tendency to discount the future (myself included), yet it occurs to me that there are fewer discounts greater than saying "we're all screwed", even if it's true. Yet another conundrum. Oh my...

See post below for a ray of hope :-)

Best Hopes for Importing French Bureaucrats,


Kudos to the French. "Meanwhile, back at the ranch, boy":

US House transportation bill stumbles

Measures to be considered separately in the House in coming days include controversial proposals approved by the chamber's energy, tax writing and transportation committees.

These initiatives would fund part of the transportation bill through expanded domestic oil and gas drilling, would fast-track the stalled Keystone XL oil pipeline from Canada to Texas and would remove dedicated funding for mass transit.

...two steps back.

The Sierra Club Green Transportation Campaign suggests the following targets. If you live in any of these districts, please consider giving your US Representative a call.

Best Hopes for our Democracy,


Judy Biggert (IL-13)
Robert Dold (IL-10)
Adam Kinzinger (IL-11)
Tim Johnson (IL-15)
Peter Roskam (IL-06)
Peter King (NY-03)
Bob Turner (NY-09)
Michael Grimm (NY-13)
Nan Hayworth (NY-19)
Chris Gibson (NY-20)
Tom Reed (NY-29)
Ann Marie Buerkle (NY-25)
Richard Hanna (NY-24)
Rob Wittman (VA-01)
Frank Wolf (VA-10)
Rodney Freylinghuysen (NJ-11)
Jon Runyan (NJ-03)
Frank LoBiondo (NJ-02)
Scott Garret (NJ-05)
Leonard Lance (NJ-07)
Jim Gerlach (PA-06)
Michael Fitzpatrick (PA-08)
Patrick Meehan (PA-07)
Lou Barletta (PA-11)
Charles Dent (PA-15)
Joseph Pitts (PA-16)
Todd Platts (PA-19)
Candice Miller (MI-10)
Petri (WI-06)
Erik Paulsen (MN-07)
Steven LaTourette (OH-14)
Andy Harris (MD-1)
Roscoe Barlett (MD-6)
Dave Reichert (WA-08)
Rick Crawford (AR-01)
Daniel Lungren (CA-03)
Mary Bono-Mack (CA-45)
Steve Southerland (FL-02)
Daniel Webster (FL-08)
Mario Diaz-Balart (FL-21)
Vern Buchanan (FL-13)
Collin Peterson (MN-07)
Heath Shuler (NC-11)
Mike Ross (AR-04)
Leonard Boswell (IA-03)
Smith (NJ-4)
Bass (NH-2)
Young (FL-10)

Yeah, my Rep. is giving up in disgust (or cashing in, take your pick) and going home; won't seek re-election.

Appears all 48 on the SC's 'target' list are Republicans. Why don't they give up the silly SC sign over the door and put up the DNC sign instead.

Heath Shuler is a democrat,, and they aren't the DNC; they're the Sierra Club who don't like short-sighted, corporate driven policies forwarded primarily by republicans... not that democrats are much better.

Yes Boswell and Ross are also Democrats, so I stand corrected. SC and DNC are at best cousins.

How about the Republicans do some more rational transportation policy instead of assuming endless cheap oil?

Here's a nice discussion of the many problems with the proposed transportation bill:


Not to worry, Ghung. When gasoline is $10 or so per gallon, and the u/e rate is about 25%, the sheeple will demand mass transit. Only to find out that in order to have the mass transit they demand, they must first pony up for all those pesky power infrastructure changes that they refused to fund. Oh, my. You mean we can't do it instantly, when we demand it. Why, we're entitled to have what we want, when we want it... oh, and free, don't ya know.

This country / the world (?) is doomed by its own ineptitude, greed, and irresponsibility, to suffer, and maybe even die. Today all they want / demand as their entitlement is cheap automobile transportation and cheap oil. Damn the consequences, full speed ahead. We must grow our way out of our economic malaise... we are entitled to the good life and the American Way.

And so, let's burn all the gas, oil and coal we can dig up, suck out of the ground, or manufacture, no matter the ecological consequences. And while we are about it, we can destroy the farmland in Canada in order to make a few Billions by selling the underlying limestone (that serves to drain that excellent soil in times of heavy rain). Who needs food when you can have money?


"What nature doesn't do to us
will be done by our fellow man."
Kingston Trio - the John Foster Dulles song


"...we are entitled to the good life and the American Way.."

Setting aside the entitlement thing, we're pretty much fully invested in, and seemingly trapped by "the good life and the American Way". Not much wiggle room left.


one of our longtime major Rail advocates here in Northern New Jersey,
David Peter Alan, is very interested in talking to you when he
visits New Orleans in the next month.
If you google him you can find his contact info...

David Peter Alan has been fighting for Rail and Transit access for decades. Unfortunately he remains skeptical about Peak Oil but
my endless conversations to the Lackawanna Rail Coalition are having
some impact.

Pretty Tram Pictures


Pick Angers, first option on the left. Many other French trams to look at as well.

Opened in Angers, France (pop. 152,000, Metro 283,000) last summer. 12.3 km long, 283 million euros.

They are planning for a second tram line in Angers, study to be finished in 2014. Some people are advocating for building half of the second line, (which everyone knows where it will go) without waiting for such a study.

Best Hopes for Americans working with the speed, efficiency and determination of French Bureaucrats,


A Table of New Tram Projects in France


Best Hopes for Oil Free Transportation (in France),


Local tram links are a much better investment than the UK's "High Speed Rail 2" - a new rail link between London and Birmingham which is already served by rail links with speeds in excess of 100 mph : 100 miles, £17 billion, £170 million per mile, to be built by 2026.....

Spanish and French bureaucrats, working together, built 44.4 km of 350 kph track (including an 8.3 km long tunnel) for 1.1 billion euros. Opened 13 months ago.


Perhaps the British could learn something from this.


I love the photos and traction maps. Of course you know we will never be able to do that, b/c our wealthy remove the money from our economy and refuse to pay taxes. Our politicians would never be able to pass any enabling legislation at any level - city / state / federal. And, our antiquated energy infrastructure would not support wide spread electrical improvements. Again, we lack the will to do that, and are far too greedy to allow it to be done.

Sorry... you will have to move to Europe to enjoy efficient transportation.


Your tables are not very readable when you just post the numbers, so I removed them. Just post the link instead; that will work a lot better.

The population numbers are my own. No link available.

I added dashes to improve readability.

Population of New Tram Cities & Towns (since 1985)

City - City Limits - Urban - Metro

Angers - 152,337 - 283,000
Bordeaux - 232,260 - 832,605 - 1,105,000
Caen - 112,790 - 420,000
Clermont-Fermont - 138,992 - 409,558
Grenoble - 156,107 - 495,429 - 664,832
Paris - 2,211,297 - 10,354,675 - 12,089,098
Lyon - 472,305 - 1,422,331 - 2,118,132
Le Mans - 144,016 - 293,159
Marseilles - 839,043 - 1,560,343 - 1,715,096
Montpellier - 251,634 - 420,000
Mulhouse - 110,514 - 252,000 - 278,206
Nancy - 105,468 - 410,509
Nantes - 282,853 - 800,000
Nice - 347,060 - 947,337 - 1,005,230
Orleans - 113,130 - 272,000 - 369,000
Reims - 183,837 - 291,735
Rennes (Metro System) - 209,613 - 330,000
Rouen - 107,904 - 494,382 - 532,559
Strasbourg - 272,975 - 467,375 - 638,670
Toulouse - 437,715 - 864,936 - 1,202,889
Valenciennes - 42,426 - 399,677

A list is necessary to give a correct impression of the scale of the French effort to create oil free transportation.

Best Hopes for Trams for All (in France)


Might I suggest embedding the table data in <pre> and </pre> tags? This will render (at least with the way most browser preferences are set) in a mono-spaced font, and then you can do simple alignment using spaces. You can embellish with fake dividing lines, etc, like this:

City         City Limits      Urban        Metro
Bordeaux       232,260       832,605     1,105,000
Grenoble       156,107       495,429       664,832
Orleans        113,130       272,000       369,000

Takes a couple of minutes to do the alignment, but the results are much more readable, particularly in this case where some lines have two numbers, and some three, with no indication about which field is empty.

That works. Check the formatting with the preview function first. If it doesn't look right in preview, it won't look right when you post.

How about a table

City City Limits Urban Metro
Angers 152,337 283,000 -
Bordeaux 232,260 832,605 1,105,000
Caen 112,790 420,000 -
Clermont-Fermont 138,992 409,558 -
Grenoble 156,107 495,429 664,832
Paris 2,211,297 10,354,675 12,089,098
Lyon 472,305 1,422,331 2,118,132
Le Mans 144,016 293,159 -
Marseilles 839,043 1,560,343 1,715,096
Montpellier 251,634 420,000 -
Mulhouse 110,514 252,000 278,206
Nancy 105,468 410,509 -
Nantes 282,853 800,000 -
Nice 347,060 947,337 1,005,230
Orleans 113,130 272,000 369,000
Reims 183,837 291,735 -
Rennes (Metro System) 209,613 330,000 -
Rouen 107,904 494,382 532,559
Strasbourg 272,975 467,375 638,670
Toulouse 437,715 864,936 1,202,889
Valenciennes 42,426 399,677 -

Someone who doesn't know about the pre tags probably can't handle doing a table in HTML.

However, using pre to force monospacing is very easy. In fact, I had SuperG add it for that reason. We used to allow tables but not pre/code. I asked SuperG to add the pre tags because it's a really easy way to get formatting without having to know much HTML.

Yes. At least in my browser, the text-edit box uses a mono-spaced font, making the <pre> version of things WYSIWYG (but yes, I faithfully hit the preview button before I hit save). Thank you for having the tags available.

My own opinion is that HTML tables combine the worst of all worlds: you have to learn the arcane syntax, and the basic text tables are ugly. I'm an old guy and originally learned word processing and typesetting at Bell Labs, so the arcane doesn't bother me. OTOH, the ugly does. I cheerfully admit that if I want a table of any complexity, I pull up a command-line and groff/tbl, then cut and paste the resulting PDF into whatever other tool I'm using (or upload a JPEG/GIF image of it to a public server and use <img> for Web content). I'm working on a book from time to time, and for various reasons using Word for formatting. Except for tables, because at least for me, keeping the tables in a separate file for groff/tbl is faster than arguing with Word or Excel about how I want the table to look, and even the default results are better looking than what I've ever been able to get Word to do.

I'm teaching a calculus course at the local community college this semester and the department has banned hand-written exams in response to student complaints about legibility. Don't get me started about how much faster groff/eqn is than the suggested (but not required) tool, the equation editor in Word. Yeah, I'm on the other side of the learning curve, but it is painful to watch instructors use the editor.

We now return you to your normal energy-related discussions. And you darned kids get off my lawn.

Firefox users can add the 'Xinha Here' add-on that gives HTML editing and makes life easier.


Thank you for posting that - wonderful pictures of what we could have, but for the automobile. Surprisingly, not everything must be ugly, although you'd never know that from what we build here.

Great info Alan! And thank you for posting this, the compilation is useful in my own research. There are also nice videos of a lot if not all of these systems on YouTube (Search "(pick a city name)tram". Have to love the French flair for style on some of these!

I have grown fond of the Mulhouse system myself (have not been there in person, only vicariously via YouTube and Google Earth). From zero lines in 2006 to 3 tram lines + 1 tram-train line in 5 years. I know Alan knows what a tram-train is, but for the rest: tram-train takes the trams running on tram tracks in city centers then sends them via mainline railway tracks to quickly reach outer areas and nearby towns and villages.

I would also note that in that list of French cities Caen and Nancy chose guided bus "rubber tired trams" based on the Bombardier GLT system.

The GLT guidance system consists of a single central guide rail embedded in the street, which is contacted by a double-flanged wheel under the center of the bus, er, tram vehicle. The wheel is only meant for guidance, the weight of the vehicle remains on the rubber tires. Caen also used the guide rail for traction current return, thus the vehicles have pantographs, and cannot operate in electric mode away from the guideway.

At first both systems experienced frequent "derailments" from the guide rail, in consequence of which Bombardier redesigned the guidance system so more vehicle weight was placed on the guide wheel. This in turn has led to excessive noise and vibration and the "trams" have been limited to very slow speeds when in guided mode because of this. Also, because the guidance rail causes the tires to always follow the *exact* same path they have been having problems with ruts forming along the guideway as well. As usual, claims of a "new technology" that would cost less than proven existing technology have proven false, and these systems cost AT LEAST AS MUCH as a "real" tram would have.

There is also the matter of these being a propietary technology. If you want more, of either guideway or vehicles, you must go back to the original manufacturer. If you have a steel-wheeled tram system, you can hire most any construction company to lay track and install wires, and have a good choice of rail vehicle manufacturers to choose from.

Caen has had so many problems they are going to tear theirs out and start over with a real steel-wheeled tram. In addition to the technical problems noted above, Caen had an incident shortly after opening, involving a fatality of a small child. Critics have pointed out that this incident highlighted the folly of a hybrid system that can neither swerve like a bus nor stop as quickly as a tram (which can drop magnetic track brakes on the rails in an emergency).

The Nancy system was construced slighly differently from the Caen system and the vehicles can leave the guideway and run as a regular trolley bus in city streets (that have dual trolley wires), which has at least given a little more flexibility in its use. The guideway is used as a precision steering system to "thread" the buses, er, trams, through tighter areas of the city, using a lane only about as wide as the vehicle itself, as well as precision dock to floor height platforms (although this can be done by regular unguided buses using "Kassel Kerbs").

Both systems also include diesel generator sets on the buses, er, trams. These are only used for going to and from the bus garage (i.e. off wire). Theoretically they could be used to get around a blockage of the line as well.

So I guess the lesson is: "Best hopes for the speed and efficiency of most, but not all, French bureacrats!" C'est la vie.

A 12 km tramway line opened in summer 2011. Two sections in the centres of Angers and Avrillé are equipped with ground-level power supply (Alimentation par Sol) like in Bordeaux.

Presumably those two sections are sealed from pedestrian and vehicular traffic - powering trams safely from underneath is a hard trick to pull off.

The trams in Melbourne are an integral component of the city (not necessarily hugely efficient vis-à-vis cars, but nice anyway), however the overhead power lines are everywhere and often not very tidy or attractive - unlike the nice new wires in the Angers tram picture.

"Free Market" transportation solutions in Indonesia:

Take a Train in Jakarta, by ANDRE VLTCHEK:


Sounds like the Heritage/AEI vision for transportation in the US!

Citigroup Says Peak Oil Is Dead

How is it that Citigroup has any credibility on this, or frankly, any other subject?

ps, "Citigroup", in this instance, is Peter Orzag. Peter is the prototypical industry-government-think tank insider who has no expertise in the field of energy (as far as I can discover).

“The belief that global oil production has peaked, or is on the cusp of doing so, has helped to fuel oil’s more than decade-long rally,” Citigroup said in a note to clients. “This is now all changing because of what is happening in North Dakota,” where new technology has led to a large and unexpected surge in oil production from shale rock.

Net oil exports continue to fall and the price of a barrel of oil continues to rise and the "Peak Oil Is Dead" crowd keeps getting louder and louder and it is all because North Dakota is now producing about half a million barrels per day.

The article says shale oil imports have already slashed 1 million barrels per day off imports. But North Dakota production is only half that amount. Yet US Net Oil Imports are down 4 million barrels per day since their peak in 2005 and 2006. That means we are consuming about 3.5 million barrels per day less because of high prices and the recession those high prices brought about.

If peak oil was truly dead net oil exports would be rising instead of falling and oil prices would be falling instead of rising.

Ron P.

"Peter is the prototypical industry-government-think tank insider who has no expertise in the field of energy ..."

He knows enough to see that resource depletion (and climate change) are going to cost his capitalist economy trillions, and ultimately bring an end his way of life. These folks' desperation to keep milking the global cash cows would be funny if the stakes weren't so high. The party may not be quite over, Peter, but reality is certainly handing you and your like your hats.

BTW: How's that Euro debt thang goin'?

A metaphor I have frequently used is the old joke about a woman who walks in and find her husband in bed with another woman. He denies that he is in bed with another woman, and asks, “Who are you going to believe, me or your lying eyes?”

Many analysts point toward slowly rising US crude oil production (up from 5.4 mbpd in 2004 to about 5.65 mbpd in 2011) and a slow increase in global total liquids production (inclusive of low net energy biofuels) as evidence that we don’t have any supply problems, but they are asking consumers, in effect, not to believe their lying eyes in regard to a doubling of annual global crude oil prices in six years–which is fundamentally a result of the ongoing decline in Global Net Exports of oil (GNE), with the Chindia region consuming an increasing share of a declining volume of GNE*.

At the Chindia region’s 2005 to 2010 rate of increase in their combined net oil imports, as a percentage of GNE, the Chindia region alone would consume 100% of GNE in about 19 years.

If, for the sake of argument, the Chindia region's combined net oil imports were to approach 100% of GNE around 2029, I estimate that the total post-2005 supply of Cumulative Available Net Exports (CANE), i.e. the total cumulative post-2005 supply of (net) exported oil available to about 157 (net) oil importing countries, would be about 50% depleted by the end of next year.

The dominant trend we have seen since 2005 is that the US, and other oil importing OECD countries, are being forced to consume a declining share of a declining volume of GNE. The bottom line is that the volumetric decline in ANE (Available Net Exports, or GNE less Chindia’s net imports) was about one mbpd per year from 2005 to 2010, from 40 mbpd in 2005 to 35 mbpd in 2010. I estimate that this volumetric decline rate will accelerate to between 1.4 and 2.0 mbpd per year between 2010 and 2020, with ANE being between 15 and 21 mbpd in 2020, versus 40 mbpd in 2005.

The fact that the US became a small net exporter of refined petroleum products last year is simply evidence that the US is being forced to reduce our oil consumption, via price rationing.

Incidentally, the seven major net oil exporters in the Americas and the Caribbean are: Venezuela, Canada, Colombia, Mexico, Argentina, Ecuador, Trinidad & Tobago. Their combined net oil exports fell from 6.0 mbpd in 2005 to 4.8 mbpd in 2010 (BP)–a one-fifth decline in only five years.

Slowly increasing net oil exports from Canada could not come close to even offsetting the ongoing regional net export decline.

By the way, there is a competing report out by Mark Lewis, with Deutsche Bank, which focuses on constrained global oil exports.

*Top 33 net oil exporters in 2005, Primarily BP data base, total petroleum liquids, minor EIA data input

Our share of those crude exports continue to fall as price rationing continues to cut into consumption.

US Total Net Oil Imports in thousands of barrels per day. The last data point is September 2011 and the value is 8,051,000 barrels per day.

US Total Net Oil Imports

Ron P.

Here is some other data that is more current:


and take a look at this:


gasoline supplied to the market, has just fallen off a cliff

even as the price at the pump keeps climbing:


Citicorp: "move along, nothing to see here"

It appears that the net increase in US crude oil production has been about 150 to 170 bpd per drilling rig (drilling for oil) per year for the past two years. For example, it appears that about 1,000 rigs were drilling for oil in the US in 2011, and the increase in average annual crude oil production was about 150,000 bpd. So, a net increase of 150 bpd per rig per year. I don't think that this will be a global game changer.

Regarding shale plays, the point that many people are missing is that it is possible--for a while--to show aggregate increasing production from a group of wells with very high individual decline rates, but sooner or later the decline rates catch up with you. And a lot of shale gas drilling has been driven by companies that have to continue to replace reserves, frequently using the mythical six to one gas to BOE ratio.

In any case, Art Berman estimates that because of the current high decline rate, just to maintain current gas production rates, the US has to replace the equivalent of all natural gas production in the state of Texas--every single year.

Link to my global "Gap Charts" post:


And a link to an interview with Mark Lewis, with Deutsche Bank, who focuses on constrained global oil exports:



Your link to the Mark Lewis interview was enlightening. I stopped watching CNBC after I discovered how ignorant they were about the oil business. So I was rudely reminded of that ignorance when one of the interviewers clearly told Lewis that the US is now the biggest oil producer in the world at 10 million barrels per day.

So I will again avoid CNBC. :-)

Net exports are, of course, a huge deal.

But the top line production, based on just 500 or so fields, is also important.

Giant and supergiant oil field decline rates are the prime determinant of world oil production and the prognosis is: decline straight ahead. It doesn't matter one whit, in the global picture, that shale oil production goes up to 3.5 mb/d. (It is, of course, important to the future of the U.S. and any other owner of a shale oil basin.)

Giant oil field decline rates and their influence on world oil production

The most important contributors to the world’s total oil production are the giant oil fields. Using a comprehensive database of giant oil field production, the average decline rates of the world’s giant oil fields are estimated. Separating subclasses was necessary, since there are large differences between land and offshore fields, as well as between non-OPEC and OPEC fields. The evolution of decline rates over past decades includes the impact of new technologies and production techniques and clearly shows that the average decline rate for individual giant fields is increasing with time. These factors have significant implications for the future, since the most important world oil production base – giant fields – will decline more rapidly in the future, according to our findings. Our conclusion is that the world faces an increasing oil supply challenge, as the decline in existing production is not only high now but will be increasing in the future.

How about reversing the headline.

Peak Oil say Citigroup is Dead!

Peak Oil say Citigroup is Dead!

Love it!!! +100

Yeah nice one.

Well it's the truth isn't it. These financial behemoths are dinosaurs who can now only go extinct, abandoned by nature and by their fellow humans, who will turn to barter/cash/metals to exchange value.

Goodbye and good riddance!

Wait, you mean Citigroup isn't a collection of knowledgeable, professional geologists and other scientists with years of experience in the oil field?!?

Colour me shocked... stoney grey.

Citigroup is a part of Citibank, who is owned by Saudibank, who is owned by the country of Saudi Arabia, who is a major oil producer. Therefore Citigroups statement Peak Oil is Dead, is a business spin of BAU, not a statement of facts.

Citations? Links?

Pretty well known fact.

Clever... yknow I never put the two of those together, but it really makes sense that Citi is now partly a Saudi tentacle.

Best I can determine, somewhat confirmed by your dated link, is that Saudi Prince Al- Waleed owned 6% of the prefered/common stock, which he has since converted to all common stock (?). The Govt. of Singapore was also a 4% shareholder prior to the bailout. The US Govt. now weighs in at 36%.

Other individual and institutional shareholders of Citigroup common stocks and mutual funds.

Clarifications/corrections always welcome...

[edits made for accuracy]

Peak Oil says Citigroup is Dead

Peak Oil announced to the world Friday that Citigroup is dead. The controversial idea that Citigroup has any credibility in this area much less is a likely long term viable financial institution has been laid to rest as it relies on the flawed expertise of Peter Orzag, Peak Oil said.

It is indeed strange that Citigroup, a company that thoroughly disgraced itself during the 2008 financial crisis and has been kept alive since only by govt bailouts, should suddenly proclaim itself the oracle on Peak Oil issues.

crucnk - You think there might have been some strings attached to that helping hand? Or maybe it's no more complicated than what we say in Texas: You dance with the one what brought you.

CitiGroup . . . we couldn't get the housing market correct and that is something we specialize in. Now check out our great off-the-cuff oil analysis from a bunch of white collar guys that think stripper oil is just part of their after work entertainment.

Great timing too, guys!
Oil Set for Biggest 2012 Weekly Gain on U.S. Economy, Greek Aid Plans

Standard and Poors rated the mortgage instruments AAA. Now, they down-grade countries. What are they even still doing in business?

They are in business because they keep getting paid. In fact, some contracts require ratings - with the poor standards company being the vendor one must choose.

From previous post on TOD about the human energy required ,hrs worked,timeframe and the gallon of gasoline equivalent equals 40 hrs a week for 4 weeks ? I've used in conversation on Peak oil and what gasoline actually does for us on an everyday level.Here's my rap "Whatever mileage you car or truck gets say 20 mpg when you get to the end of that mile your auto turns into 20 lb bags of sugar and now you have to get them back home working 40 hrs a week for four weeks".Please feel free to tweak the analogy we've had fuels for so long I think it's hard for people to wrap their brain around.

How about this:

Drive your car a mile, push it back home and compare how much effort it was to drive it a mile and how quickly you got there to when you got home as you pushed it.

Just make sure when you leave home to drive uphill.

Be sure the mile contains at least one moderately steep hill, so you discover that you're not strong enough to push the car up that hill.

A lot of people probably would struggle to push their car up their own driveway if it has any degree of an angle to it.

First High-Speed Train Leaves Union Station

"It is the first time outside of Amtrak’s Northeast Corridor that trains running at 110 mph are running. The first high-speed trains in the Midwest are only running to Indiana and southwest Michigan, but eventually will likely be expanded to St. Louis, Detroit and the Twin Cities.

The faster trains could shave off two hours of travel time between Chicago and Detroit alone."

I hope this line runs at capacity, so the naysayers in other states (Wisconsin and Ohio come to mind), and, frankly, naysayers right here in Illinois, start waking up.

Maine's resurging Train Service just went into the Federal Budget crosshairs.. Pay careful attention at all Finger-crossings!

Maine Lawmakers Seek to Preserve Downeaster Funding

"It's ludicrous to think that we would shut down the operation of passenger rail when it's become so popular, and in Maine we've just been given a tremendous amount of money to expand our line and expand our service."

Maine's two Republican senators, Olympia Snowe and Susan Collins, have submitted a similar amendment for a Senate bill covering funding for two years.

The Obama administration last year allocated about $38 million in funds for a track expansion north to include stops in Freeport and Brunswick. Of course, this major federal investment won't necessarily stop Congress from considering cutting off the CMAC funds. But officials overseeing the Downeaster service say that it warrants all the federal funding it's been getting.

(1) by any standards but absurdly dumbed-down American ones, 110mph is NOT high speed. Not even close. Yawn.

(2) OK, so they shaved some time off the trip, but you've still got to wait five hours for the train. You can drive most of the trip before the train even arrives. Or all of it and then some, if you're not going all the way to Detroit. Yawn again.

The great thing about the trains in Japan was that they actually had high speed trains, and they ran often enough to be useful. Oh, and they ran on time, something that still needs to be drummed with a big hammer into the thick skull of nearly every transit manager in the USA.

OTOH the flip side, a big enabler in Japan was the massive overcrowding, wall-to-wall people. (Also high fares, often 40 to 80 US cents per passenger per mile.) But in the absence of overcrowding, can one ever really make a go of this? Or will trips inevitably cost so horrendously much time (no matter the speed of the train once, at long last, after the interminable wait, it finally arrives) that people will simply have to travel less if they can't drive as much?

In addition, a monetary expense from delays and interminable waiting is that what used to be a simple day trip may become an overnighter, possibly incurring a costly hotel bill. This, too, may deter travel if incomes go on shrinking.

I suppose we'll just have to wait and see. Maybe a century from now, if, over the years, people have mostly drifted into jammed megacities.

paul - And then there's the ticket price. I tried unsuccessfully to search for it. some years ago I read a report from the Cong. Budget office: taking into account their operational losses, it would have been cheaper for AMTRAK to buy first class airfair for every passenger it hauled from FL to CA. Not sure ehow they calculated that or if it's very accurate. But it would be the first govt organization to run at a lost in order to keep appearences up.
I do know it takes a good bit longer and costs a good bit more to take AMTRAC from Houston to New Orleans. In fact, I'm not sure the train still stops I Houston. Whenever I pass by the station in houston it looks abandoned.

"...taking into account their operational losses, it would have been cheaper for AMTRAK to buy first class airfair for every passenger it hauled from FL to CA. Not sure ehow they calculated that or if it's very accurate. But it would be the first govt organization to run at a lost in order to keep appearences up."

Then again, it may have been more profitable for some airlines to have bought their customers tickets on AMTRAK ;-)

The industry has been observed to be cyclical in its financial performance. Four or five years of poor earnings precede five or six years of improvement. But profitability even in the good years is generally low, in the range of 2-3% net profit after interest and tax. In times of profit, airlines lease new generations of airplanes and upgrade services in response to higher demand. Since 1980, the industry has not earned back the cost of capital during the best of times. Conversely, in bad times losses can be dramatically worse. Warren Buffett once said that despite all the money that has been invested in all airlines, the net profit is less than zero. He believes it is one of the hardest businesses to manage.


ghung - Quite possible. When I think of airlines I just think of Southwest. I'm cheap so cattle cars don't bother me. Typically spend more time in the airport than on the plan. But lately I've heard rumors that even SW is starting to feel the pinch. They were doing really great a few years ago when they bought a lot of jet fuel futures really cheap. But I suspect that edge is long gone.

Another sore point I have with AMTRAK: lack of common sense. Years ago I had cheap air tickets to Seatle. Big plan: take the train across the Rockies in winter. A little problem: AMTRAK left Seatle at sunset and arrived Glacier Nat. Park at sunrise. Not a very dramaic view in the dark. And if we had gotten a sleeper it would have costs about as much as the plane ticket. But made the trip anyway. Went BC Rail: loaded up in the dark and watched the Canadian Rockies go by in bright sunlite. Ant the ticket was 1/3 of the AMTRAK coach price. And then took VIA back north to the coast and eventually took the inland channel ferry back down to Victoria. A very great and relaxing and cheap trip.

Southwest just started their service out of Atlanta this week, forcing Delta to cut it's rates, and eat the losses, I'm sure. The race to the bottom continues.

AMTRAK left Seatle at sunset and arrived Glacier Nat. Park at sunrise. Not a very dramaic view in the dark.

With the greatest respect for the fine states of Washington and Idaho, there isn't THAT much to see from a train window between Seattle and West Glacier - having recently done it by car - and some part of the whole journey Seattle-Chicago needs to be overnight.

But I take the point - a lot of transport timetables seem to be determined by and for the convenience of their operators, rather than travelling punters.

The Canadian Pacific Railway line through the Canadian Rockies is one of the most spectacular train trips you might take, which is why they deliberately scheduled it to go through the Rockies in the day time. I don't think it's cheap any more, though, it's now run by a private company operating to a profit motive. BC Rail is gone now, taken over by CN Rail, which was privatized some years ago and is now one of the most profitable railways in North America.

The government-owned VIA Rail still runs through the Rockies on the northern CN line, although that isn't as spectacular as the southern CP line. The CP line was something of a triumph of engineering over common sense, while the CN line is built through a much lower mountain pass with less extreme grades.

The CPR doesn't particularly like passenger trains interfering with its freight operations, although it does run its own private excursions and charity events through the Rockies at times (you need to know someone to get invited). And, if you can afford to rent an entire passenger train c/w gourmet chefs and serving staff for you and a hundred of your closest friends, you can have a wonderful time doing it, or so I'm told.

All of the major US carriers have gone through Ch-11; some more than once. American Airlines is in Ch-11 today. Malev, Air Austrialia, and some other national carrier have recently folded their tents


Of course, being stranded in Hawaii may not be an entirely bad thing.


The beat goes on, Ghung.

If that's all there is, let's break out the booze and have a ball.


Of course if Amer. Airlines had been bailed out by government with over $50 billion as were GM and Chrysler, most of which they still have, then we would likely reading in the media where AA was also 'profitable'.

A fair bit of misdirection there, falstaff. Any political affiliations LOL? OilDrum should expect greater "truth in advertising" standards than that. (eg. what's your evidence that if an airline were loaned any chunk of money they would / could a) reduce their retail sales outlet franchises in half b) negotiate new terms with their unions c) close out three of five model lines to reduce costs. d) significantly reduce their pension liabilities. e) etc. etc.)

Keep the politics off.

Any major troubled public airline in the world would become immediately profitable if it i) removed most debt service from its balance sheet, ii) received a cash infusion comparable to gross revenue so that it could forego borrowing or borrow very cheaply, iii) have most of its tax liability removed thanks to government largess. This is easy to see from simple net income arithmetic (see e.g. Delta's 2010 $1.22b debt service against after tax income of $593m)

That would occur with no change whatsoever to business models. Sales, pension liabilities, union contracts, etc would inevitably become relevant again in the future, as they will for GM. Chasing those issues now is to miss the forest for the trees.

Business and financial facts are not political, only relevant or not. In the age of US government owned companies I think government payments are relevant to an understanding of profit/loss claims. Political content and misdirection comes about from questioning motivation, as you have.

What has happened to pension liabilities of airlines that have gone bankrupt? Have any gone to the PBGC? What have they done to their union contracts? And what tax liability do they have? Do they have NOL's that go on forever?
How about the pay structure for the pilot and co pilot on the Buffalo flight that didn't make it?
Down the comment thread someone mentions the cost of building and maintaining airports and what about the whole air traffic control system? Are there some subsidies?

I believe that some of the FAA Air Route Traffic Control Control System is funded through airline fees (coming from your ticket/fee prices) and some from the General Fund apportioned to the FAA.



he Federal Aviation Administration would get nearly $15.2 billion next fiscal year, a nearly 5% reduction that mostly targeted airport grants, under President Obama's proposal released Monday.

The proposal includes $1 billion to modernize the air-traffic control system, under a program called NextGen.

The official U.S. FAA Budget document (PDF) (An easy read actually, for a government document):


Don't worry, they'll be hailed as profitable again once they abrogate whatever is left of their contracts with employees and retirees for services already provided.

There's a Sydney accounting firm that has been able to create an entire business out of administering failed Australian carriers. The general theory is that the country can long-term support 2.5 major airlines, so the third one is always going broke.

And the situation for the airline industry is even worse (both in the US and here) - if you consider the number of ailing airlines that have been swallowed up by the now-existing ones. Ansett here (failed spectacularly in September 2001) was the "sum" of 63 other airlines over about 50 years.

Remember that nearly all airports are publicly owned. TSA provides screening, and the military provides all types of situational backups. Even then, the airline industry has been marked by many bankruptcies. In effect, American almost had to go into Chapter 11 to be competitive. Of course, in every bankruptcy, someone loses -- employees, stockholders, vendors, etc. Airlines struggle both with capital costs and with operational costs, Higher oil prices will eventually pare service down to those routes that can provide nearly full loads in very large capacity planes.

Amtrak is everyone's favorite punching bag, much like local public transit. However, Amtrak has increased its ridership by 50 percent over the last decade without adding routes. It meets 85 percent of its operating costs. Congress has been very inconsistent in providing capital funding, and much of what it does provide goes to the Northeast Corridor, a line now owned by Amtrak but which was nearly wreaked by Conrail and the Interstate Commerce Commission.

Transportation is a derived demand. That means that most travelers are not traveling just to travel but rather trying to get somewhere. The complicating factor, going back to the original turnpikes and canels in the US, has been paying for the capital and operating costs by a collection system that is both equable and affordable. Even motorists don't pay the true cost of the roads they drive on. The result is a complex system of fees, charges, and subsidies. No mode truly pays for itself over time unless we assign indirect benefits, and that is how we end up justifying public ownership/subsidy of roads, airports, and even Amtrak.

A mayor once told me that he could give all his bus riders a free car for the cost of operating the bus system. I told him he probably could, but on his system 75 percent of them could not legally or physically operate the vehicles, so what was his point? Sometimes we forget just who comprises the public and what the ranges of needs are.

Given the current regulatory system, the fastest we can build a highway is 15 years, more likely 20. We cannot even afford to maintain what we have now. Airlines are cutting back flights. Motorists are driving about ten percent fewer miles than in 2007, and gasoline sales (and thus gas taxes) are considerably lower than six or seven years ago. By the time reality hits elected officials, we will have neither the time or the money to build a high-speed rail system. We will be lucky to get a few regional routes out there along with commercial buses to help off-set the shorter routes the airlines drop.

At least Amtrak has retained within its employee base the institutional knowledge of how to operate a passenger rail system. We are less than 70 years past a time (World War II) when passenger rail was the primary means of travel. The chance that we will need that knowledge again cannot be ignored.

YEMEN goes from exporting about 300,000 barrels per day in 2001 to a net oil importer in January of 2012.

In May, oil exports were reported by the Centre for Global Energy Studies as being less than 70 percent of their normal level. Further attacks on the pipeline occurred and by January 2012, Yemen was reliant on crude and product imports as its main refinery was shut in November.


Ron P.

Interesting. Noodling around on that site, I see that those lines crossed for Egypt back in '08.


It took a while, there, for that loss of revenue to lead to open revolt. Presumably, NG exports helped stem the tide for a while. I wonder what the new government, however it ends up getting constituted, will fund the ambitious projects it hopes to set in motion: reclaiming the desert, high speed rail, rapid build up of nuclear power... (according to a presentation I just saw by some Egyptian revolutionaries).

Yeah, you can be surprised by what you can come up with on these EIA country specific sites. Found this on Saudi Arabia, last updated January 2011.

Challenges to the Upstream Development Program
One challenge the Saudis face in achieving their strategic vision to add production capacity is that their existing fields experience 6 to 8 percent annual "decline rates on average (as reported by PlattsOilgram in 2006) in existing fields, meaning that the country needs around 700,000 bbl/d in additional capacity each year just to compensate for natural decline. Decline estimates for Saudi Arabia vary widely, however. The Ministry of Petroleum maintains that decline rates in Saudi Arabia are around 2 percent annually. Saudi Aramco has stated that it will also conduct additional drilling at existing fields in order to help compensate for the natural declines from the mature fields.

And from Iran, November 2011.

Over 50 percent of reserves are confined to six supergiant fields. Of those onshore reserves, 85 percent are located in the southwestern Khuzestan Basin near the Iraqi border. Iran's crude oil is generally medium in sulfur content and in the 28°-35° API range. Iran faces continued depletion of its production capacity, as its fields have relatively high natural decline rates (8-13 percent), coupled with an already low recovery rate of around 20-30 percent. Sanctions and prohibitive contractual terms have impeded the necessary investment to halt this decline.

8 to 13 percent is an extremely high decline rate. I am predicting that Iran's production will fall faster than Iraq's will rise. We must not forget that Iraq's fields have a very high decline rate as well and most of the great increase they expect comes from those old fields that are already in steep decline. They are expecting great wonders from infield drilling.

Ron P.

8 to 13 percent is an extremely high decline rate. I am predicting that Iran's production will fall faster than Iraq's will rise. We must not forget that Iraq's fields have a very high decline rate as well and most of the great increase they expect comes from those old fields that are already in steep decline. They are expecting great wonders from infield drilling.

Try sticking another straw into an empty soda glass and see how much more soda pop you can suck up. Or, stick an extra straw into an almost empty glass and see how much faaster the soda disappears with two straws sucking on the remaining soda pop.

Maybe they have "magic wells" that add more oil to the original oil in place - Then the oil can last forever?

The muslim world certainly seems to be a place where magical thinking predominates, so why not "magic wells"? They already have magic lamps and carpets!

Their Floor Decor may have prettier patterns, but I don't think the Arabs are anywhere near to the level of believing their own unsubstantiated Fantasies as are those trudging over the Bland, Polyester Berber Matts at Broad and Wall Sts.

It's not whether you tell the more colorful stories, it's whether you believe them yourself.

Yemem is such a sad case. Between water and oil depletion, I think that place is going to become a failed state within 20 years or so. :-(

What do you mean "within 20 years or so"?


Or better still

The End of Peak Oil Theory because now it is a reality!


Just because it's reality doesn't mean it's no longer theory, since theory is based on facts and those facts are found in realityland, which is to say that Peak Oil has always been reality.

I do not remember any 'fission reactors turned back on to heat Europe' stories here on TOD. But it seems France is importing electricity.

Interesting to note that France didn't JUST import energy, they "imported from Germany at full capacity in nearly all hourly blocks, grid operator data showed." AT FULL CAPACITY.

Interesting behaviour.....

This can be explained by, I would guess, the majority of homes in France relying on electrical heating. This makes sense for a country with an abundance of electricity as it would be cheaper than gas or heating oil. Also it removes the reliance on Russia. In contrast I'd imagine Germany has quite a lot more gas heating.

Nothing more than wishful thinking from the media most likely. Most likely a slow news day.

"Citigroup Says Peak Oil Is Dead"

We need a surge in Agnotology.

The discovery of a surge in perverted information is one aspect of Agnotology.

Just when we think we have reached the peak of ********, The Heartland Institute injects more-of-the-same into the veins of the mainstream media.

Thanks for that new word of the day!

Citigroup is less than credible. They got it wrong on the Housing Bubble Crash and about everything else. I once had a Citi credit card and every monthly statement was rife with errors. Especially on balance transfers which they totally bungled. I just can't believe the crap spewing from their mouths (or is it the other end? Its hard to tell....), given their stunning track record.

Supply and Demand simply insists that if oil is abundant the price should be going down at the pump, generally speaking. Instead, gas and about everything else is going up and up and up and up.....

Citi's been good to me - I once got in the mail a special one-time offer, a check good for cash, with a 1.9% "for the life of the loan" interest rate.

I maxed my account (starting balance zero), wrote the check for about 21K, and sure enough paid that sucker back quickly as I played with the cash.

All my cars were bought with a Citibank credit card "life of the loan" low interest rate, transferred from my other high limit credit card. They've started closing them on me, though, since all four of my Citi cards are not used which is probably dinging my "utilized credit" rate a bit though that's nearly taken care of - no credit used on two credit cards is the same as a bit used on four credit cards.

Not that it was easy. I had to make damned sure the payments were made on-time from an account that had sufficient funds - the consequences of a "screwup" were enormous - what they're hoping you do is fail to make a payment and *blam* they jack your interest from less than 4% to 21% or more!! I remember one day in particular where realized the due date was a federal holiday (a Monday) and I was certain they didn't take online payments on Saturday. But they do (or did), and I was saved, but for a moment there divorce was in the air ...

So, citi's been good to me - but that's because I'm playing their game on their terms - and I survived. I owe them nothing now. Oops, they're where my mortgage payment goes.

One other thing they tried, was as the credit card dwindled, they began to bombard me with transfer offers with interest rates lower than that in the remaining balance (say, if it was 3.99% they offered 2.99%) - like clockwork, every time I had a balance start to get small I could expect a deluge. That's all stopped though, I've not had a "life of the balance" offer in some time now.

I ditched them after they announced they were moving me to a "better" checking account which was really one with more complicated fees.

I have a small checking account with Wells Fargo, if only because online banking is decent and they have lots of locations. Whenever I go in to get something done, all of the brainless employees ask why I don't have a savings account.

I refrain from explaining to them that Bernanke has made savings accounts worthless and that my savings are in real, physical money in locations that I would rather keep quite secret.

My opinions and hunches, for what they are worth:

Declaring that Peak Oil is dead has little to do with the factual basis of such a statement, and everything to do with waving a red flag that says "we are open for business and ready to lend!"

We are in a little boomlet that goes along with the four year convergence of the Summer Olympics and what appears to be a controversial, competitive, and spendy U.S. general election. The banks are trying to figure out who is voting with their dollars in this polarized election environment, and trying to corral those dollars while the boomlet lasts.

I look for the EU to band-aid Greece and other Eurozone basket cases as needed so they can focus on London 2012. As I noted above, the U.S. will be distracted by the election campaigns which will build in interest and $$$ as the Congressional races get underway. My guess is Dow in the high 13s through mid-year, global oil testing its all-time highs.

The music stops in late August, and a race that looked pretty comfortable for Pres. Obama will suddenly tighten as the U.S. economy contracts, China wobbles, and the EU gets a serious hangover. It won't be as bad as 2008, especially in the U.S., but it will be a noticeable leg down.

The music stops in late August, and a race that looked pretty comfortable for Pres. Obama will suddenly tighten as the U.S. economy contracts, China wobbles, and the EU gets a serious hangover. It won't be as bad as 2008, especially in the U.S., but it will be a noticeable leg down.

I agree, and would add the GOP in conjunction with their CEO buddies of US oil will collude to raise fuel at pump prices so high it forces a recession in order to oust Obama.

+100 LOL. Just like last attempt, (tried to hang the obviously democratic follower to W in 2008 with a huge economic disaster) but they missed the timing by about four months early.


Another new word courtesy of Dredd!

Thanks! Can't wait to drop this on someone!

Not to mention the commonly 30% to 50% pure CO2 that comes out of the well alongside the natural gas and is simply separated and vented. Claims do differ, IF provided, but the Japanese working offshore Indonesia are bragging about the efficiency of their separation equipment on the 50% CO2 coming up there, meaning they're hoping to sell it to other operators.

Hey Stepback and Dave Cohen

Do you remember a post by Dave several years ago (I think it was concerning Yergin/CERA propaganda) in which Step Back said, "they are not talking to you, they are talking PAST you" in the comments??

Like Ghandi said, "First they ignore you, then they laugh at you, then they fight you, then you..."

It looks like we are now in the "laugh at/fight with you" stage. Just like the way M. King Hubbert was loudly ridiculed in 1969-70 - just before the decline in US oil production.

So "we" are making progress?

But, does it matter?

In terms of public perception, We are now where Climate Change was a decade ago... and what progress has been made concerning climate change ??

Little to nothing of any consequence.

Unfortunately, being correct about the timing of Peak Oil is not really a "win".

RAndom, for a "Win", I was thinking in terms of the Public Perceptions.

For now most people still have never heard of peak oil, and if they have, are more than likely to think it is "bunk." It would be a "win" just to get to the point where the public was aware of the discussion, and took it seriously.

My point: even a "win" in terms of public perception, as happened with "Climate Change," would make little or no difference in terms of policy and actions by our governments.

I really am happy to see we are beyond the "they ignore you" stage, and now into "they Laugh/Fight You" stage.

But I am no longer naive enough to believe it really makes any difference. We do not have enough decades left for education to have an effect. Especially in the Land of Narcissism and Discontent.

"The Plan" seems to be to "Outlast, Outwit, Out-right-crush" those competing with us for resources. The American Way of Life is Non-negotiable... etc.

Yep, even if the education is successful the reaction is unpredictable.

Some folks really do go all-out greedy when they perceive a resource as limited.

We do not have enough decades left for education to have an effect. Especially in the Land of Narcissism and Discontent.

Sadly - I think you are completely and utterly correct.

It seems to me that the wealthy Anglo countries (among the wealthiest, if not the happiest, societies that the world has ever seen - USA, UK, Australia, Canada, NZ, etc) have developed a culture which says that even the tiniest disruption to their happy lives has two critical responses.

(1) there is absolutely no way we trust those in control (corporations and governments, in effect), to help us, therefore we will NOT be patient, and (2) an extremely angry response to a set-back (no matter how unavoidable or accidental) is my total moral right, and will be forthcoming - because I'm a very privileged person who has been screwed - or even just inconvenienced.

I think this stuff happens every day - and just yesterday Air Australia (a small budget airline) went guts-up and all its flights were grounded. Our TV news services are full of angry punters in nice places like Phuket, Hawaii, Bali, etc - screaming at the cameras like they have been impaled on a stake. Thai security services had to intervene to calm things down. The reporters are sympathetic, and call for "action" from someone.

Okay - no-one on holidays lies being stuffed around by an airline bankruptcy - but the reality is that the TV news yells at you with the enormous sense of ENTITLEMENT that these people feel. Goodness knows what will happen when something actually serious goes down ... like an oil shortage, for instance.

I think all of this could end quite badly ... I'm off to stock up on ammo.

Lehman Brothers Subpoenas Geithner In JP Morgan Fight

Lehman Brothers Holdings Inc. (LEHMQ) and its creditors late Thursday said they want to subpoena Treasury Secretary Timothy Geithner to question him under oath over allegations J.P. Morgan Chase & Co. (JPM) illegally siphoned billions of dollars from the collapsing investment bank in the days before it filed for the largest bankruptcy in U.S. history.

Hmm, wasn't J.P. Morgan also at the heart of the recent pillaging of MF Global...

It is very hard to mitigate Peak Oil when you have criminals running the financial system and embedded in high places of the government.

Oil refineries: Sustainable communities for the post-oil world?

A '100% self-supporting housing solution for the post-oil world,' the Oil Silo Home concept makes use of the thousands of oil storage units that will inevitably be abandoned in the peak oil era.

Okay, I hate to interrupt everybody while they're holding hands and singing "Kumbaya", but I feel I have a moral responsibility to bring some inside oil industry knowledge to this fascinating, forward-thinking adaptive reuse housing concept.

Oil refineries frequently spill toxic chemicals on the ground. In fact companies have spilled so many toxic chemicals around their refineries over the past 100 years that they will probably never again willingly sell an old refinery site for reuse as a housing development. It would be just asking for lawsuits from parents of mutant tumor-covered three-headed children. (Just based on past experience.)

So forget this concept of reusing old refinery sites for low-cost, low-maintenance domiciles. If you want a low-cost, low-maintenance domicile, get yourself a piece of land in the woods, buy some 2x4s and plywood, and build it yourself.

You seem to enjoy getting a big laugh out of other people's misfortunes. Maybe you shouldn't be so quick in your rejoicing.

bmiller - "...100% self-supporting housing solution for the post-oil world...". I'm not sure whose misfortunes you're referring to. Is it folks who are being conned about a "100% sustainable housing solution" or the companies who will never be able to sell their toxic wastelands. A little clarification, please.

Where was the big laugh? Seemed perfectly reasonable to me. Anyone planning on setting up home on an ex industrial site needs to take careful consideration of any industrial legacy. Some legacies are likely to be more toxic than others. Rock Mtn was really making a very valid point that there is little upside in litigious jurisdictions in selling a petrochemical installation for housing where the profits of sale are going to be cancelled out by legal and clean-up costs. Seems not too difficult for me as an Average Joe to comprehend. What's your excuse?

Yeah, you're right. Kinda like telling someone with AIDS to be more careful next time.

I'm not telling people with AIDS to be careful the next time, I'm telling people without AIDS to be careful the first time. You have to realize that this is a gentle warning to the naive that what they are trying to do may not be safe. It's like telling a child not to stick a fork into an electrical socket.

These people haven't built any of these clever projects yet, and they don't know what they're getting into. I'm saying that if they suddenly come into possession of an abandoned oil refinery (which is not totally unlikely in Europe given the number of oil refiners who are about to bankrupt there), that they should NOT convert it into a low-cost housing development. There are easier and less hazardous ways to build low-cost housing.

Mind you, I do know of instances where people have built houses on old refinery sites. In one case I can think of, the oil company was forced to buy back entire the housing development from the already settled families, excavate all the soil to six feet below ground level, and haul it away to a hazardous waste disposal facility. Then they replaced all the excavated soil with clean soil from nearby farms.

Of course, now it's fine to live there, but was an expensive and unpleasant experience for all concerned.

Wait, you mean the Oil Silo Home article WASN'T from the Onion?

Be true to your school.
The Belmont Learning Complex in Los Angeles was built atop an oil field. It's a long story....

The more than $400-million school atop an oil field, just west of the 110 Freeway downtown, became notorious not only as an allegedly toxic site but as the nation's most expensive high school construction project.

And everyone, including Braxton, has been reassured about the campus' safety. The gas-mitigation system cost more than $17 million to design and install, and will cost $250,000 to $500,000 a year to operate.

In the playing fields, the gases can dissipate harmlessly when they hit the open air. This process is assisted by a layer of sand beneath the turf, which allows vapors to spread out and dilute before rising to the surface.


In the playing fields, the gases can dissipate harmlessly when they hit the open air. This process is assisted by a layer of sand beneath the turf, which allows vapors to spread out and dilute before rising to the surface.

That might make for an interesting half time show if the visiting team starts shooting roman candles at the playing turf?

Building a school on top of an oil field isn't an unreasonable thing to do. In my travels through oil country, I've seen a few schools with a pumping oil well in the school yard. When you see something like that, you know you are looking at a town with no problems financing its school programs.

Here's a picture of the Oklahoma State Capitol, which sits on top of an active oil field, with an operating oil well beside it. Most places would have disguised the oil well as something else, but this is Oklahoma, after all. They like the voters to see who is paying for their public services.

An old oil refinery is an entirely different type of problem. People tend to assume that oil refineries take the toxic chemicals out of the oil when they produce gasoline. That's not at all true. Oil refineries put toxic chemicals INTO the gasoline rather than take them out. The stuff left over is asphalt, which is what they used to pave the street in front of your house, and how toxic is that?

The biggest problem with old refinery sites is tetra-ethyl lead, which used to be used as an antiknock additive in gasoline before it was banned. As a result of leaking storage tanks and other indiscretions, it resulted in the ground around refineries being contaminated with large amounts of lead.

Noise noise noise from the heart of corrupt American financial imperium.

When will these jokers just go away and choke on their own losses rather than trying to extract more fiat money away from everybody else.

Lehman, JP Morgan, Geithner, MF Global, who cares, they're all the same cast.

Got metal?

criminals running the financial system and embedded in high places of the government.

Out of the crooked timber of humanity no straight thing was ever made.

The inside story on climate scientists under siege
Michael Mann reveals his account of attacks by entrenched interests seeking to undermine his 'hockey stick' graph

• Interactive: Everything you need to know about climate change
• How US attack machine undermines climate science


Did someone declare today "Irrational Optimism Day" in the US?

First we have:

  • Citigroup Says Peak Oil Is Dead
  • The End of the Peak Oil Theory
  • American Oil Shale to Kick Off New Economic Era

and then the real world starts to intrude into this rosy delusion:

  • Crude Oil Set for Biggest Weekly Gain This Year on U.S. Economy, Greek Aid
  • Prices at the pump soar ... and it's only February
  • Payroll tax cut, meet $4 gas
  • Consumer Prices in U.S. Likely Rose in January on Fuel

Most thinking people would start to wonder, "Well, if Peak Oil is dead, why are we paying so much for gasoline?" Anybody who has taken economics 101 could explain it, but unfortunately most people haven't, so they have to blame something other than insufficient supply.

However, this is interesting:
Saudi Aramco to Re-Open Oldest Field to Tap Heavy Oil, EIU
Dammam is Saudi Arabia's oldest oil field, and was shut in about 30 years ago. They are going to restart the old oil field and maybe get 100,000 barrels per day out of it.

I can remember when Saudi Arabia could get 100,000 bpd out of a single oil well. Now they are spending $1.2 billion to get that much production out of an entire oil field. They planned to restart it back in 2008, and pulled the plug on it because it would be too expensive. Now, they are going back to the plan to restart it.

It suggests that they are running out of good alternatives for maintaining production, and are having to fall back on some rather bad ones. By the way, at that production rate, Dammam will last about 13 years before it's completely dry.

"Oil" shales, "modern enhanced recovery techniques", re-opening old fields, ultra-deep water drilling, $100+/barrel prices seemingly the norm; all point to one thing... That's what I tell folks, and let them fill in the blank.

Scraping the bottom of the proverbial barrel we are.

...and tar sands.

The first well in Los Angeles was drilled with a tree... It was that easy.

There should be alarms going off. Instead, the industry is focused on cleverness in getting the last of the product to the consumer. I guess it is just like tuna. One big tuna sold in Japan for $250,000. They are going fast. There are cans of tuna at the store. They cost a lot more now, but there is no warning or alarm visible about their relative rarity.


"Well, if Peak Oil is dead, why are we paying so much for gasoline?"

There is no mystery to many. I repeat a posting from a week or so ago.

1. Obama is restricting drilling in the US which is causing US prices to rise.
2. Speculators are driving up the price of oil.
3. Big oil companies are driving up the price of oil.
4. Saudi Arabia is driving up the price of oil.
(and new for this week! ...)
5. Environmentalists prevent the building of required refineries leading to a US shortage in gasoline.
6. Gasoline would be cheaper if we repealed all those taxes.

Pick as many as necessary to convince yourself that there are no fundmental (geologic) issues in oil/gasoline supply.

(and new for this week! ...)
5. Environmentalists prevent the building of required refineries leading to a US shortage in gasoline.

That is not a new one . . . it is an old one. You can go dig up thousands of articles from years past about how gas prices are so high because those tree-hugger hippies won't allow any new refineries to be built due environmental restrictions.

But here we are in 2012 and one of the USA's biggest exports is refined petroleum products. We import foreign crude, refine it (with our over-capacity of refining capability) and export it. They could not be proved any more conclusively wrong with that old saw.

But yeah . . . the people are easily fooled with that list especially with Fox News coaxing them along.

I have always loved the mantra that the U.S. has not built any or I guess it's now 1 new refinery in 30 years. This is always pointed out as the summer driving season starts and prices start to go up. What they always fail to acknowledge is that capacity at these existing 30+ year old refineries had doubled or trippled or quadrupled and continues to increase with very a few if any exceptions.

They haven't built any, but they've closed quite a few.

As he said . . . What they always fail to acknowledge is that capacity at these existing 30+ year old refineries had doubled or trippled or quadrupled and continues to increase with very a few if any exceptions.

And we are closing refiners due to ovrproduction leading to a lack of pricing power.

Yes, I just always want the talking point purveyors to pause for a minute to explain whether it was regulation (refinery overcapacity) or de-regulation (refinery consolidation and expansion leading to closures and no new refineries) which was evil, since they have used both too many and too few refineries to demonize the left at different points in time.

5. Environmentalists prevent the building of required refineries leading to a US shortage in gasoline.

Yes, that one is a classic. Half the oil refineries in the Northeast US probably going to shut down and be scrapped sometime this year. They can't make money in the refining business because demand in the US has collapsed due to gasoline high prices, and their feedstock prices from OPEC are even higher - meaning their profit margins are negative.

The net export position the US is in will probably come to an end when that happens. When the refineries shut down, they will stop exporting surplus fuel to Europe.

When you refine crude oil, there is a certain range of gasoline and a certain range of diesel fuel you can produce. Refiners in Europe typically sell their surplus gasoline to the US, and refiners in the US sell their surplus diesel fuel to Europe. If the US refiners shut down because they can't make money selling gasoline, and the European refiners shut down because they can't make money selling diesel fuel, then nobody will be selling surplus fuel anywhere. As a result, the US will be short of gasoline and Europe will be short of diesel fuel. Odds are prices will rise both places.

That's kind of the "extra credits" version of Oil Marketing 101.

I've tried to explain that phenomena as part of my explanation regarding the coming rise in fuel prices, which escalate as I type, but most can't/won't believe.

If this was a nationalized or "for the public good" system, would it make sense to retain the distributed refining capacity? -to maintain the distributed gasoline production capacity?

I must say, the shutting-down (not to mention scrapping) of capacity reminds me of the Enron days when generating capacity was taken off-line because of the profit-multiplying effects that could be had.

You have to realize that companies are shutting down these oil refineries, not because they want to maximize profits, but because they are going broke.

Selling fuel at a loss for every litre sold, but trying to make it up on volume is a very poor business strategy. Bankruptcy is a very real possibility for many of them, and some of them (notably in Europe) are already in bankruptcy proceedings. This involves some very big companies.

If governments had nationalized the refineries, then they would be going broke now instead. Oops! Too late! They already are broke.

Welcome to Peak Oil. It only gets worse from here.

Who is supplying the market at a price that is undercutting these refineries? Is it Gulf Coast undercutting Northeast? Who is undercutting the European (French right?) refiners?
Now decreasing U.S. demand could be the reason that the less efficient are closing now but haven't the refineries been going through this for at least the last fifteen years? Living in the PetroMetro it seems that refinery juggling is an ongoing activity and I just never fully understood the crises in refinery profitability. I mean they are an integral cog in the process. Thanks.

Well, basically, it is new Canadian oil sands production that is flooding into the mid-continent area of the US, forcing down prices, and supplying refineries in the middle of the US with cheap feedstock. That oil, though, has few if any pipelines to take it to coastal refineries - the assumption always was that they would be supplied by ship.

Recent prices:
North Sea Brent Blend: $120 per barrel
West Texas Intermediate: $104/bbl
Western Canadian Select: $74/bbl

Even given that WCS is lower quality oil than Brent or WTI, refineries that can buy it at $74 (e.g. in the US Midwest) are going to do much better than refineries that are stuck buying Brent at $120 (e.g. in the US Northeast or Europe). The former are running at 95% capacity and making fistfuls of money these days, whereas the latter are running at part-capacity, losing money, and will be shutting down soon.

It's true that refineries have been barely breaking even for decades, but the recent decline in demand in the US and Europe means that most of them are running at much less than full capacity lately, and a refinery has to run at or near full capacity to make any profit at all.

A refinery that is running at part capacity is going to lose a fortune. It's not like an automobile factory that can cut back from two shifts to one and lay off workers if demand falls off. A refinery has to run 24/7 or not at all, and if it can't run full time, then it has to shut down. Labor costs are insignificant - the workers are just there to start it back up if it shuts down for some reason.

From that description, the Canadian oil sounds very much like wind or solar. The wind blows hard and the sun shines always brightly... but not geographically convenient to where the energy is needed. In that aspect, these are infrastructure problems.

The part about refineries needing to run a near capacity is helpful but two other factors are required here. 1) Midwest refiners must have the ability to ship the refined product to the east coast. Not having worked with liquids pipelines I don't have this answer. (I thought the big liquids lines were like Colonial going from Gulf to East and pipes to take jet fuel from Gulf to Chicago etc.) B)There must be significant over capacity in the U.S. refining sector.

There is no mystery to many. I repeat a posting from a week or so ago.

1. Obama...
2. Speculators...
3. Big oil companies...
4. Saudi Arabia...
5. Environmentalists...
6. Gasoline would be cheaper if we repealed all those taxes...

Pick as many as necessary to convince yourself that there are no fundmental (geologic) issues in oil/gasoline supply.

Are you serious or just being sarcastic? It's really difficult to tell on this site. If we talked face-to-face I would drop a trick question into the conversation like, "What is a Kelly Bushing?", and if you knew the answer, I would know you were being sarcastic.

OTOH if it was Fox News I would know you were serious, and would have to hit my head repeatedly against the wall to stop myself from throwing the TV set out the window.

He's explaining various means of mass delusion, per the upthread request. He's not saying any of these tropes aren't deluded.

Very good, you managed to Google what a Kelly bushing is.

We always wanted to know the exact Kelly bushing elevation (KBE) on every oil well (height of the Kelly Bushing above sea level), because the drillers measured the depth of the subsurface formations from the Kelly bushing. Everything was expressed in depth below Kelly bushing (KB).

Once we had the Kelly bushing elevation, we could reduce all the measurements of the subsurface formations to true vertical depth (TVD), which means using the data from all the wells, we could draw contour maps of the subsurface formations for the geologists to puzzle over.

There is a more complete explanation of it on Wikipedia at Depth in a well.

I truly enjoy technology, any technology or technique, of art, science, or engineering. It is my living. It is ALL done with words. Knowing the word, the wording, is a major, major key. "Water vapor pumping" in vacuum technology is a good example. Without those exact words, the subject is opaque.

Not only is Ron *not* kidding, this mentality is prevalent even among self-described liberals and other people who do not watch Fox News. Just had a conversation at work with 2 left-of-center colleagues, both intelligent and relatively well educated, who believed rising gas prices were due to #2-4 and had their suspicions about #6.

What is a Kelly Bushing?

Kelly bushing


The kelly is a special section of pipe that has flattened sides that are either square or hexagonal in shape. The kelly fits inside an opening called a kelly bushing. The kelly bushing, in turn, fits into a part of the rotary table called the master bushing. As the master bushing rotates, the kelly bushing rotates. The turning kelly rotates the drill stem and thus the bit. Since the kelly slides through the opening in the kelly bushing, the kelly can move down as the drilling progresses.

Power to rotate the drill stem comes from the rotary table. This is equipped with its master bushing and kelly bushing. When the kelly and kelly bushing are removed, the hole left in the master bushing accommodates slips that have teeth-like gripping elements called dies. These are placed around the drill pipe and keep it suspended in the hole when the kelly is disconnected and an additional section of drill pipe and/or casing is attached.


KalimankuDenku left some links to definitions upthread, and I provided some industry information that the MSM wouldn't be able to Google and find on Wikipedia because they wouldn't know where to look.

MSM meet reality

I can remember when Saudi Arabia could get 100,000 bpd out of a single oil well. Now they are spending $1.2 billion to get that much production out of an entire oil field. They planned to restart it back in 2008, and pulled the plug on it because it would be too expensive. Now, they are going back to the plan to restart it.

It suggests that they are running out of good alternatives for maintaining production, and are having to fall back on some rather bad ones. By the way, at that production rate, Dammam will last about 13 years before it's completely dry.

What happened to leaving some of it in the ground for the kids?

What happened to leaving some of it in the ground for the kids?

Kids want the money now or else they might go all Arab spring.

spec - And isn't that what we're doing now: using the ff our grandparents left in the ground for us? Just like their grandparents left all those whales in the ocean for them?

Hmmm...how does that "Circle of Life" song go?

What happened to leaving some of it in the ground for the kids?

Well, the King of Saudi Arabia has been quoted as saying that it might be a good idea. Of course, by now it's getting to be a little late to reserve the oil for future generations.

There is an Arab saying, "My father rode a camel, I drive a car, my son flys a jet plane, his son will ride a camel." It is not an old Arab saying, it is a new one, but that doesn't make it less valid.

It's just a variation on an old American saying, "Shirt sleeves to shirt sleeves in three generations", which in itself is a variation on an old Lancashire one, "there’s nobbut three generations atween a clog and clog." You can find variations on it in many different languages, but they all mean the same thing.

It's just a variation on an old American saying, "Shirt sleeves to shirt sleeves in three generations"

Wow, *if only* America had that level of class mobility any more! Nowadays, for the 1% it's "riches to more riches to... even more riches!" For everyone else, it's "better count yourself lucky to even have shirtsleeves, bub!". The old French and Russian aristocracy have nothing on us. Hell, we even *abolished* the estate tax as "unfair"!

Thanks Rocky, I missed that one: I try to check out all of Leanan's links up top every day but today has been busy and I just missed: Saudi Aramco to Re-Open Oldest Field to Tap Heavy Oil, EIU

The state-owned producer, known as Saudi Aramco, may revive a plan from 2008 to restore production at the mothballed Dammam, the EIU said in a report. Dammam contains some 500 million barrels of oil and may yield as much as 100,000 barrels a day of Arabian Heavy crude, according to the report.

Saudi, According to OPEC has 264.52 billion barrels of reserves. So they are going to re-open the Old Dammma field, Aramco's first and oldest site, to get an extra half billion of very heavy oil?

And they are speeding up the Manifa project, for more very heavy oil. Well with their old fields declining at a rate of 700,000 barrels per year they need every barrel they can produce, just to stay even, even if it is stuff so heavy and sour that they must sell it at a discount.

Ron P.

You went from Arabian Heavy to very heavy oil to stuff so heavy and sour that they must sell it at a discount.

Saudi Aramco refers to 27 deg API and below as Arabian Heavy.

Manifa produces 24 to 27 deg API oil. Prudhoe bay, by contrast averages 24 deg API.

Bakken oil is sweet 40 deg API oil, it sells at a discount.

DBunker, give us a break. Heavy oil has always sold at a discount to light sweet and always will because it costs less to refine. The Bakken sells at a discount because of pipeline constraints, the very same reason WTI sells at a discount to Brent. The fact that you would use that to try to prove your point just proves that you have no interest in a fair discussion of the subject.

Sometimes a light will sell at a higher price than heavy because of pipeline or shipping constraints. But all things being equal heavy sour will always sell at a discount to light sweet.

From 2007 when WTI was selling at a slight premium to Brent:
UPDATE 1-Canadian heavy oil sells at $50 discount-Frontier

Ron P.


Maybe you should add a few notes about sour vs. sweet. Isn't a lot of the problem w/sour oil that most refineries are not able to process with all the sulfer?


Yes it just cost more to remove all that sulfur. However light oil requires less cracking to get the good stuff out. Sour vs. Sweet Crude

"A big reason why Valero has been so profitable is because it is one of the largest refiners of heavy “sour” crude. Valero decided long ago to go after this segment of the market, and it has turned out to be a brilliant strategy. Why? Because there is a widening price gap between heavy “sour” crude and light “sweet” crude. The price gap has ranged between $9 and $20 this year and is currently over $15 per barrel. Last year the price gap averaged around $11, and in 2003, it was only $7.


That costs a little more (it costs Valero only $1.5 to $2 more for refining sour versus sweet), but those that can are cashing in on the price difference and their stock prices reflect that.

Ron P.

...and are having to fall back on some rather bad ones.

$12,000 per bopd ?
Payback in a few months ?
$ 2.40/barrel (re)-development costs ?

That's easy oil.

Yes, by Western standards it's easy oil, but remember, this is Saudi Arabia. 100,000 bpd is a drop in the bucket for them. It was shut down 30 years ago because they didn't need it. So why are they now reactivating an old oil field that produces only small amounts of poor-quality oil?

And then there is the fact that major urban areas have grown up around the field in the 30 hears since it was shut down. It is something like trying to do a major heavy oil field development in the suburbs of New York or Los Angeles.

No Peak Oil - Why Then is Saudi Aramco Opening Old Wells for Heavy Crude?

In the 30 years since its closure the Dammam area has changed vastly and is now surrounded by metropolitan areas, which could make drilling for oil a very difficult challenge, and one that will receive much protest and opposition by local residents. However Husseini has assured that Saudi Aramco will proceed “in the most modern, environmentally sensitive and professional manner that least affects the adjacent community.”

A Question Rocky, doesn't the oil from that field have a high Vanadium content or am I thinking of another one?

No, it is Manifa that has the vanadium, not Dammam.

Ron P.

No, Manifa is the field that has the spectacularly high vanadium content in the oil. Nobody in the world wants to buy its oil, which is why Saudi Arabia is going to have to build its own specialized oil refinery to handle it.

Of course, they're developing Manifa, too, which definitely suggests that they are running out of easier alternatives.

None of this is unreasonable from a commercial standpoint, but it does imply that all of the easy oil has been produced in Saudi Arabia, and they are having to bring their more difficult oil fields on production because they have no alternative.

I think Saudi Arabia's days as the world's "swing producer" are over. From now on they are just going to be trying to keep up with demand.

And today's Alfred E. Neuman "What, Me Worry?" award goes to:

U.S. ambassador to Canada not worried about Canada-China energy deals

The U.S. ambassador to Canada says he's not worried about the impact of any energy agreements between Canada and China.

Prime Minister Stephen Harper visited the Asian country last week and signed several deals amid speculation of possible free-trade talks in the future between the two countries.

Ambassador David Jacobson said in Montreal on Thursday it's good for the United States when its largest trading partner increases its trade in new markets — particularly in Asia. "If it's goods, there's going to be more U.S. content that's incorporated in those goods (and) if it's energy, there's going to be U.S. equipment used to extract that energy," he told reporters. Jacobson added that trade is not a zero-sum game —"everybody wins."

In Toronto later in the day, Jacobson dismissed suggestions that encouraging the sale of oil to China while holding up plans for the Keystone pipeline may anger Canadians. "Keystone has nothing to do with this," he said after a speech to Toronto's Board of Trade. "The decision the president made a few weeks ago had nothing to with the viability of the pipeline, it had everything to do with the viability of the 60-day timeline."

Just so Americans know how concerned their Ambassador to Canada is about their future energy supplies...

Americans don't particularly care for your news. At least this American doesn't.

Ahh! RMG is just one of our Canadian exceptionalists; generally tolerable once you get to know him ;-)

He seems to know which side his car is buttered on.

The question is, when it falls to the floor, which side does it land on? Stay tuned.

Leanan - Why isn't your bio posted on the Oil Drum? I take the website as about as seriously as I take you -- which is not much.

Feeling bit grumpy today, bm? Didn't see your bio posted either. Just sayin'...

First of all, I don't control the content of the Oil Drum.

But since you're so interested, I'll tell you. I'm an independent investor who has BA in History with a strong background in science and mathematics. I semi-retired in 2000 and have been playing the financial markets since. I first heard of Peak Oil in 2008 and have been following it since then.

But like I said, I don't control the content of the Oil Drum.

"I don't control the content of the Oil Drum."

Neither does Leanan. She just has the big, fat delete key for the Drumbeat :-0

BTW: Most of us had bios posted on our accounts. They were removed during a site change-over, and many of us haven't bothered to repost them. As for Leanan, she's the site's "Mystery Mistress".

As for Leanan, she's the site's "Mystery Mistress".

Then I really don't see the point of the Oil Drum except maybe as a social chit-chat site with a passing interest in Peak Oil.

"I really don't see the point of the Oil Drum..."

...which begs the question: Why waste our your time here? May I recommend this site? Enjoy!

There you go.

Leanan - Since you have no shortage of supporters I take it you're a Nobel Prize winner or some other award winning personage.

Long time readers have become familiar with Leanan's views, just as we have with some of each other's. I find them credible and reasonable and worth listening to, no one said you had to. It's a pretty long running conversation, and when someone new pops in just to say none of it should be taken seriously and cast aspersions on some of the participants, well, you know.....

Everyone brings joy, some when they come, some when they leave.

Perhaps you would like to contribute; something you consider useful and an example of the type of constructive discussion you would prefer to see here. Go ahead; you can do it... start your own thread. New perspectives are always welcome here, though validation of your positions are not necessarily guaranteed.

Why don't you go do a carbon emission analysis for paper production versus server farms and let us know how many years of storage it takes for inert paper from a tropical pulpwood plantation on previously deforested land to be more carbon efficient than cloud storage? An analysis of the frequency of duplication of content on the web may be necessary. If you need more variables to keep you busy let us know. Hint: the physical carbon content of the paper is sequestered (and the tree is harvested at the point where growth slows and replaced by a seedling which continues to extract CO2 from the air), so you are only concerned about supply chain emissions.

Yep, all nice and seqestered, till that warehouse full of paper burns down. Probably just need to go back to stone, we can buy "carbon credits" for the energy consumed in getting the stone. Course explaining to your HMO about how you lost a finger writing a memo ends up being problematic too.

Why are you being so churlish? Leanan is one of a number of Ed's on this site.. you can look up top for the other names, and you can search the history to see what they present and how they interact.

They aren't here 'offering investment advice', and as such, have no real obligation to tell you about their personal details.. and by the way you demanded it, I'm sure they would not have any inclination to offer it now.

I'm definitely a fan (of sorts).. yes, there's chit chat, and yes, there's information, and sometimes they are both the same thing. Much of it is cordial and intelligent enough.. and it's free! So what's your problem?

Sounds like he's mainly concerned that he hasn't picked up any new tidbits to enhance his day trading ripoff schemes LOL.

You can always go some place else more worth your time.

Like back under his bridge?

How are we supposed to take you seriously if you admit to not taking the Oil Drum seriously?

What is the point of that? Play the ball not the player.

If you disagree with the thesis of the Oil Drum, you are free to post a counter-argument. Please do. I need something to give me hope for my descendents, because every time I revisit the numbers and the arguments I find the resource-replacement problem insurmountable at a tolerable cost to maintain current societal complexity. Decline is inevitable without a technological step change or large scale demand reduction, neither of which is getting political attention. Rate of decline is up for debate at present but I think a "long emergency " is a reasonable description.

So what arguments do you have? Ad hominem is a sign of someone losing the argument. I dont want ad hominem, especially versus Leanan who really does a good job putting this Drumbeat together. Help me out, I cant take you seriously unless you have something serious to say?

You deserve a good flaming, but that would just waste bandwidth. Ta!

Models Underestimate Future Temperature Variability; Food Security at Risk

Current climate models do not adequately reflect feedbacks from the relationship between the atmosphere and soil, which causes them to underestimate the increase of variability in summertime temperatures, said David Battisti, a UW professor of atmospheric sciences.

While warmer temperatures already have implications for food production in the tropics [Earlier research has shown that by the end of this century, the increase in average growing season temperature, if other factors remain the same, will likely reduce yields of rice, corn and soybean 30 to 40 percent], the new findings suggest the increase in the volatility of summertime temperatures will have serious effects in grain-growing regions of Europe and North and South America, Battisti said.

“If there’s greater variability, the odds of the temperature being so high that you can’t grow a crop are greater,” he said.

“In terms of regional and global food security, it’s not good news.”

Drought fears for Britain prompt water summit

The environment secretary is to meet water companies, farmers and wildlife groups amid fears that parts of Britain may face the worst drought since 1976.

Parts of south-east England, East Anglia and the east Midlands are among the worst affected areas. This week the Centre for Hydrology and Ecology reported that average rainfall so far this winter was the lowest since 1972.

Trevor Bishop, head of water resources at the Environment Agency (EA), says it is "planning for the worst". Last month EA experts said water levels were so worryingly low that twice the average rainfall was needed if rivers are to recover and a hosepipe ban is to be avoided.

My in-laws are in East Anglia and I drove across UK west to east last summer. I was stuck how yellow and dry everything east of Birmingham was. Water sure was more short in the East (for Britain: we are not talking Australian Outback levels of dryness!). I still think the UK can work through the water supply problem. The aquifers in the east are being mined out, but upland Wales and Cumbria get plenty of rain. We just need to invest in engineering to capture and transport the water, or limit population growth to the West side of the UK which need the economic boost far more than the affluent South-east.

limit population growth to the West side of the UK

Do you really want to put more people on your island!?!

Steady on - the punter wasn't advocating greater population growth, but such growth in the UK is inevitable for the next 30-50 years, so they are suggesting that that growth should be outside the already congested (and apparently dry) Southeast.

Not sure how you do it (other than putting up armed roadblocks in Oxford or something), but the sentiment seems reasonable to me - even though hundreds of years of experience tells us that population goes to where the jobs and the money already are, whatever anyone tries to do about it.

Well, on the one hand, I was just semi-dramatically making the point that the UK, being an already overpopulated island with rapidly diminishing FF resources, (and apparently now water as well) is perhaps the OECD country in the deepest imminent doo-doo.

On the other, do you really think conditions will allow current population trends to continue for 30-50 years!?!

People have been claiming the end of the world is nigh - for a very long time now. Yes - I expect UK's population to grow for another couple of generations (and the standard of living to drop). Whether at the current rate or not - impossible for anyone to say.

Great Britain doesn't need any more people. Adding more people at this point is going to cost more, over the long term, than population stabilization.

I hope they succeed. In Australia, I doubt our rivers will ever recover, and we have had hosepipe bans for years - almost a generation - but the upside is, at least we're used to brown lawns and withered gardens in summer.

Canadian government is 'muzzling its scientists'

Speakers at a major science meeting being held in Canada said communication of vital research on health and environment issues is being suppressed.

"The Prime Minister (Stephen Harper) is keen to keep control of the message, I think to ensure that the government won't be embarrassed by scientific findings of its scientists that run counter to sound environmental stewardship," he said.

"I suspect the federal government would prefer that its scientists don't discuss research that points out just how serious the climate change challenge is."

Indeed there is a real chill that has set in upon the Public Service.

Agreed. The Harper Conservatives are a LITTLE bit less radically right than their idols, the US Republicans, but not much.

Yesterday, fake pharmaceuticals; Today, fake US Federal Reserve Bonds ...

Fake US bonds worth trillions seized

Worth $6 trillion, the bonds were found in three metal boxes in a warehouse in the Swiss city of Zurich.

Fake US securities have been seized in Italy before and there were at least three cases in 2009.

But this case is on a different scale to previous investigations, as the fake bonds have a value equivalent to almost half of the entire US debt pile.

U.S. bond traders took a light-hearted view of the news.

"If there's that much less supply now, Treasuries should be rallying," joked Kevin Flanagan, fixed-income strategist at Morgan Stanley. "It's kind of like fake inflation I guess, if you take it to the max, but I don't think it means that much."

... sounds alot like U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

I like that the knowledgeable trader isn't a bit surprised, sorta like "well yeah, so what's new?"

This is not the 1st fake bond thing. 4-5 years ago there was a whole shipping container worth that made the news in the pacific islands. Got stopped over 20Kish of fees not paid as I remember.

Peak Oilers are viewed as chicken littles.

Once you become a Peak Oiler, can there be apostasy?

Foxy Loxy (consumption) is tricky, sly as a fox, as it were.

4 dollars per gallon for a gallon of gas will alter consumption.

If consumption (demand) drops, then so will production. If production drops, that is evidence of peak oil. I'm not sure what your point is.

Once you become a Peak Oiler, can there be apostasy?

Not if one understands mathematics and thermodynamics. IMO, Peak Oil is self-evident.

In the bigger picture, PO is just one symptom of the problem, not the cause. Ten new Ghawars, or fusion (hot or cold) will only alter the timeline, not the outcome.

4 dollars per gallon for a gallon of gas will alter consumption.

Sure, particularly the discretionary consumption, which is large and very elastic in the USA, but keep in mind that there are a lot of countries that would be happy to have $4 gasoline right now.

If there is any apostasy on my part, it is my failure to comprehend just how far TPTB will go to extend and pretend; such as suspending the rule of law and eviscerating various constitutions. This is just to protect an illusory fiat system, for now. When hard physical limits become more apparent, things will get more interesting.

I think we have a number of years yet for this to play out, and I wouldn't have said that five years ago. I'm definitely in the catabolic collapse camp now. As generations turn over, the slide will only be dramatic to students of history.

Just a month ago, a young fellow (~25) asked me what Kodachrome was. :-)

" ...particularly the discretionary consumption, which is large and very elastic in the USA,...

...and which a lot of non-discretionary incomes depend on, so maybe not quite as elastic as some may think.

But the driver deciding whether or not to do that discretionary trip to the movies or wherever, doesn't care about anyone else' job than his own.

So I think we will see some elasticity, it is just that lower fuel consumption for those reasons will lead to (even) greater unemployment.

Sure, there will be a contraction spiral, but that's all part of the discretionary elasticity.

I don't want to end up in a semantic mess here, but it depends on what you view as discretionary. Discretionary used to mean money left over after all the bills were paid. Discretionary now means as long as the credit card is accepted. If we reverted to the spending/consumption patterns of the late fifties or early sixties, the drop in resource demand would be huge, but people would still have a comfortable lifestyle.

OTOH, if one considers the latest iPhone to be an absolute necessity, that would be the same as Armageddon.

IIRC, Nate Hagens said we don't have a shortage of resources as much as a longage of expectations, so gauging how much "fat" is in the systems is open to interpretation.


Either way, referencing the original thread, it's still Peak Oil.

Cheers, .

A lot of employment comes from that wastage. And the taxes and other trickle-through that result from that employment.

I wouldn't mind having shorter hours, a decent amount of vacation, and the ability to take it when I want to. They can afford it now if the allocation of productivity between capital and labor were to return to historic norms, with increased efficiencies it'd be even easier. Efficiency, not curtailment of demand.

"if the allocation of productivity between capital and labor were to return to historic norms" -- Yes, exactly. I did some rough numbers for a paper mill I worked summers in in the 1970's and found that labour and onsite managers got about 15% of gross sales, capital got about 15% (interest on debt plus dividends) and the rest went to input raw materials plus maintenance expense. Today, so-called "investors" care little for either interest or dividends, instead expect to "earn" their entire gain from changes in share values either up or down (by shorting). Thats a situation which is clearly unsustainable, which many have learned their first lesson in recently, more to come.

Unlike abandoning a religion, political party or cause, peak oil is a natural phenomenon and thus is not subject to apostasy. I've come to realize over the years that only dogmatic people consider peak oil a dogma.

Been out the loop a bit on PO -when's the latest when the TSWHTF? -I had 2012 pencilled in but unless we get some Mayan-esque debacle it looks like we might get through this one OK... :o) 2014?

personally i don't think the **** will hit the fan in the foreseeable future, just a long grind downward. but that's just my opinion, and i'm no authority.

or to put it a different way, i think the **** has already hit the fan. rome wasn't built in a day, and it didn't fall apart in a day either. frederick was crowned holy roman emperor in 1155.

Aww, man! You totally missed it. It was awesome!

Now we're back to the same-old same-old again.

WHY did you blink?! .. Never blink! constant vigilance.. oops, my show is on, excuse me.

Meanwhile, it's 50 fahrenheit in Portland, Maine in Feb, and WTI is back up to $104.. maybe they'll do a couple encores...

I thought the impact would be a chronic problem, not an acute problem. : )

Budget issues. They had to get it over with quick.

Should be on Pay-per-view in a week or so..

'The REVOLUTION is being TELEVIZED!' ..has been cancelled. /sarc

...acutely chronic for many, chronically acute for others.

I think TS is H(ing)TF as we speak. But for now, in most of the developed world, it is just a little mist of TS spraying out at this time.

It really, really "stinks" already, but sensory fatigue has set in so most don't seem to notice ;)

My "bet" is we go over the Seneca Cliff this decade.

Bush/Cheney predicted "20-30 years" of terror back in 2002 or so. I think they were being as honest as possible about the time-table.

Just a short marker regarding the untimely death of Anthony Shadid, a committed voice for clarity. Some may remember him as one of the four reporters detained by the Libyan Govt. last march. He first came to my attention when a Lebanese friend loaned me his book "Night Draws Near, an empathetic look at how the war has impacted the Iraqi people beyond the clichés of liberation and insurgency" (2005), well worth the read.

Here's to more fully understanding things ... Rest in peace.

Does anyone know of an online article that lays out the whole peak oil / limits to growth story and in particular the impacts in a way that:

1. Covers all the bases---transportation, agriculture, technology, etc.
2. Presents a realistic, moderate portrait and timeline (i.e. I think of Greer as being pretty balanced whereas Orlov, while entertaining, isn't)
3. Is fairly up-to-date (i.e. written in the last 4 years or so)

Kunstler's long emergency excerpt from 2005 is the kind of thing I'm looking for, but more up-to-date than that. (The references to declining natural gas production, for example, don't look so good.)

I'd like to be able to send this to interested friends who want to learn more but don't want to have to read a whole book to get the picture, and don't just want to read a bunch of oil production statistics.

While I have my differences with Chris Martenson, his "Crash Course" series (20 chapters on youtube) has been very effective at getting some of my mainstream friends' attention. While it doesn't cover all of the bases you mention, it's a format many folks are used to and lays some pretty good groundwork. "Covering all the bases" can be a bit overwhelming to the uninitiated. Break 'em in gently at first ;-)

I agree Martenson is good for many folks (and like you, despite my differences with him), but I'm looking for something a) written, b) shorter, and c) for a more educated audience.

My friends and family have heard me talk about oil depletion or energy issues and know the basics, but they want to know a fuller story without having to read a whole book on it.

I recommend "The Last Oil Shock" by David Strahan (2007).
I think it's the best look at where we are, the problems with all the non-oil alternatives etc. Much better than "The Long Emergency".

Is there an article length version of it online?

I agree, Hinson

I've carefully read about 15 books on PO, including what appears to be the first book on the topic (Beyond Oil, 1986, which predates the use of the term, "peak oil").

If I had to choose only one to recommend to someone who is relatively unfamiliar with the issue of FF depletion, I would choose Strahan. His chapter 9 re Mr. Wicks & UK gov't inaction is masterful.

Just received this from a buddy. Household budget analogy...sometimes called 'folk economics'....but it is interesting.

This is really well put, in terms the average person can understand…..

Food for thought..... because it puts the US downgrade into a much better perspective and is also relevant for many countries in Europe...

Why the USA was downgraded:

* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Now let's remove 8 zeros and pretend it's a household budget:

* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts: $385

Got It ?????

OK now Lesson # 2:
Here's another way to look at the Debt Ceiling:

Let's say you come home from work and find there has been a sewer backup in your neighbourhood....and your home has sewage all the way up to your ceilings.

What do you think you should do ......
Raise the ceilings, or pump out the crap?

Cheers Paulo


Dad in the family is actually earning 50,000 but refuses to pay into the budget.
We are trying to balance the budget while the wage earners are gambling in Vegas!


It also ignores that much of the money is owed by the kids to each other (trust funds), and the debt increase is really on the zero interest line of credit (T-bills), while there was a larger decrease in the credit card balance (private debt deleveraging).

For the debt limit I prefer the levee example, the waters keep eroding the levee (inflation), do you keep replacing sandbags until the pumps can catch up, or stop?

"For the debt limit I prefer the levee example, the waters keep eroding the levee (inflation), do you keep replacing sandbags until the pumps can catch up, or stop?"

That depends on how much confidence you have that the pumps can eventually catch up, and that they will last long enough to do so. If you doubt either condition, the rational thing to do is to stop putting resources into a lost cause, and save them for rebuilding afterwords.

By the way, if the kids are planning to pay off their loans to each other with their trust funds, they aren't going to be using the same cash (because there isn't any) to go to college or even buy a beer when they come of age.

I take your point but the troubling thing about that analogy is that the rising water (spending) is somehow out of our control, an act of God. It's not.

Ben Bernanke last week

Even the prospect of unsustainable deficits has costs, including an increased possibility of a sudden fiscal crisis. As we have seen in a number of countries recently, interest rates can soar quickly if investors lose confidence in the ability of a government to manage its fiscal policy.... public debt would increase markedly, we can be sure that, without corrective action, our fiscal trajectory will move the nation ever closer to that point.

To this warning he added our deficits were 'structural'. I take this to mean that without them the stool does not stand.

It is not news to anyone here that in Greece.

Tax evasion is rampant while
GDP is shrinking
Creditors who are being asked to take a 50+% haircut are making heavy austerity conditions contingent on settlement.
National assets are being liquidated.
Pensions are evaporating while user fees skyrocket
Folks with a strong sense of entitlement are burning shops and public buildings.

Yep, share your concerns.

It is called a leveraged buyout.

Structural unemployment means that the workforce is no longer needed because the factories moved to China. It's not that nobody is hiring, it is that nobody is left who hires.

nobody is left who hires.

An example of at least one persons thinking on the topic.

Leveraged Buyout yes very well put.

As for structural deficit,. He was likely referring to the borrowed 40% of every Fed dollar spent that is currently propping up the economy in the US.

40% of Defense contractors, research grants, highway construction whatever have you that the govt funds is essentially not really there w/o borrowing in some form. Take that away (or have the costs soar out of control b/c of lost investor confidence) and daily life looks much different.

Deficts, can't live w/o them and eventually can't live with them either.

"Borrowing", aka: "Stealing-from-the-future".

yes What a moment in time!
The abiliy to exploit eons worth of past sunlight, using money taken from the future, in order to consume fully in the present.

What a time to have lived, yes?! Hate to see it go. (Damn, the car's turning into a pumpkin again...)

Cut back medical entitlements simply to what people actually pay into them as intended, cut defense back to what was spent at the height of the cold war (at least), eliminate unemployment insurance, give food aid only to those in abject poverty, and the remaining revenue could pave highways and research grants with gold, much less require a dime borrowed from anyone.

I would settle for the beginnings of real transfomation away from FF transport.

says Defense and Security 20%
Safety net 14%
Medicare, Medicade, CHIP 21%

So 55% of budget - 40% of spending currently borrowed =15% (left of current funding) divided amonst those three areas to just 'break even' or balance today.

If we planned on paying down any of the 16 trillion still owed that would have to come from somewhere too. Not to mention interest on that 16 trillion which I did not take off yet. Now those three areas are down to almost nothing. It's a very tough problem IMHO.

Raise taxes on the rich back to where they were in the heydays of America: 90+%. Otherwise, the rich simply horde. The concentration of wealth to them removes wealth from everybody else. Want to go back to the gold standard? might be good, might be bad: After the people with access to legal representation, selling currently at at $1200 an hour, and armed enforcement... get theirs, how much would be left for you?

Absent those that hide money under the mattress, what the 'rich' overwhelmingly do with their money is invest it. Invest, as in GDP = C + G + I + ...

...But not, it appears, in jobs. The finance industry is doing quite well. The corporations are sitting on record amounts of liquidity. Where are the jobs?

At the moment a great deal of investment money is sucked into treasury notes, of which there is large supply due to the $1.3 trillion deficit. All the banks have unprecedented amounts of treasuries on their balance sheets now. The rate is low, but they make it up on volume, and the regulators like treasury holdings just fine.

It is not the same as a household budget.

To continue with your analogy;

Those who deal with flooded houses know one thing: it's over. No one is moving right back in when the water recedes. And seldom do houses flood in the singular to the ceiling.

So, you generate and sell more of your debt, which is a commodity at this scale. You use the money to put the neighborhood back to work building second stories. Everyone gets a boat, too. Life is strange for a while. When the flood recedes, the workforce has survived, further work makes things less strange.

If you don't need a workforce, you seed the waters with cholera, turn off health care and unemployment, steal the pension money, drive the survivors off with foreclosures and sheriffs, and lay claim to the land. It takes a while, but all the value of the land when the waters recede concentrates to just you... and you win!

That's how the smart lads play.

Thank you for not giggling at analogy and commodity.

Most debt is two sided. When the US gvt sells a bond (borrows money) somebody else buys it (lends money). The net of the two is zero.
The US may have a debt of 15T but that means that somebody has an asset of 15T. What matters strategically is who owns the debt.
US individuals and institutions: 42%
Social security: 18%
China/HK: 7%
Japan: 6%
All other foreign nations:12%
Oil exporters: 1.6%

In other words, a lot though clearly not all of the US debt is owed to itself.


The net of the two [actions] is zero.

No. It's not.

And there lies the fallacy of thinking "economically", of thinking with numbers and of thinking that because you used numbers, you must be thinking "logically".

Worse yet is that the proposed logic of the thinking throws into the mix, the fallacy of the US Gov't being an "exceptionalism blessed" type of borrower rather than an ordinary, risk taking and mortal borrower. No organization is too big to be mortal.

When a bond is sold and an obligation to re-pay with interest is undertaken, a thing called "money" is being created at that moment and out of thin air. That out-of-thin-air created money (the present day value amount of the to-be-paid in the future interest amount) enters the money flow of the economy immediately.

So for that reason alone the net effect of the two actions is not zero.

There's more, but who has patience in this ADHD age to delve deeper?

Thanks for the response.
Borrowing causes money to pop into existence which, depending on what is done with the new money can be inflationary or not.
As you point out when you borrow money you usually have to pay interest and/but that also means that the lender receives that interest.
I also agree that the net effect is not zero (again, depending on what it is used for), but I think I was merely refering to the quantity of money, not the net effect.
the US is not a blessed type of borrower, it simply, at this point in time, in pretty much the only country which has the toys to back up it currency and that is something a lot of people like. But when you look at gold/silver you can see that not everybody is in that camp.


step back:
"That out-of-thin-air created money... enters the money flow of the economy immediately."

"The US may have a debt of 15T but that means that somebody has an asset of 15T."

Even more amusing: The money that enters the worker's economy flows to China; holder of debt, supplier of all things workers buy.

The debt is a political talking point of those "on message".

Even more amusing: The money ... flows to China

Part of it does.
Part of it stays with the company that decided to manufacture in China.
That second part is called "profits".

The influx of money improves the situation.

Great post Paulo. Reducing numbers to household realm really helps get the picture across. Also, shows how minor the budget cuts were.

How about this one: If we balanced the budget every year and paid down the debt $100 billion, it would take over 142 years to pay the debt down to zero. And that's just the principal.

Is voting for Ron Paul preferred in order to replace these minor budget cuts with major budget cuts?

What I am trying to analyze is my perception that there are many people who say they are upset by the U.S. budget deficit and the accumulating debt, but who also recoil in distaste at the thought of Ron Paul (or someone else with his budgetary philosophy)being elected and enacting major budget austerity.

I believe you said above, in so many words, that half-measures wrt budget cuts won't get us where we want (allegedly) to go.

It seems to me that opining about the huge budget deficits and debt is something of a national sport, but in reality, it is nothing more than a venting exercise, because the great majority of folks lamenting the debt would scream bloody murder if Daddy took their T-Birds away (Social Security, Medicare, MIC jobs/stock profits, etc).

It seems to me that wrt the debt mess, one either advocates breaking a lot of glass and going 'all in' on changing the revenue/expenditure paradigms, else any other courses of action with small haircut and revenue raises here and there is blowing soap bub;es or building sand castles in the surf zone at low tide.

Perk, I am not laying this question at your doorstep or loading this horse collar around your shoulders, but this post is an overhead question on how to square the circle of many folks complaining/warning of the dangers of our debt, but balking at the thought of honestly changing our ways to pay that down then live within our means.

The cases of Tea-Party folks with signs about excessive debt and government socialism, alongside fellow travelers with signs saying 'Get you government hands off my Medicare' comes to mind as but one of a myriad of examples of muddled thinking/holding two contrary thoughts in the head concurrently.

Such a comprehensive query, my small take.

Would cuts be shared equitably across sectors and demographics? Would the military really be slashed? Would the weatlthy pay a truly high tax rate?

If a comprehensive debt reduction means BOTH strong austerity and high taxes simultaneously, who is advocating this? Don't believe even RP is.

If it were solid, yes I would take my lumps with the rest. But it means the 'economy' will crash in the short run. There would be massive u/e and unrest. Lots of broken glass as you note.

Living within our means while simultaneously paying debt would be a huge shock to the system. IMHO it will not be done through any ballot box.

Mind you I belive we get this anyway and perhaps worse (largely aggravated by poor choices) ,by and by.

...many people who say they are upset by the U.S. budget deficit and the accumulating debt, but who also recoil in distaste at the thought of ... major budget austerity...

It's all, er, Greek to me - people everywhere want to have everything both (or more) ways - loll endlessly in the sunshine and retire young, but yet enjoy the best of everything from mega-houses to infrastructure to medical "care". Well, there's always "that fellow behind the tree" to pay for it all. Consider, too all the folks who bitch mightily about the top "one percent", but lack the brains, themselves, to do anything more with a spare weekend afternoon or Monday night than to shovel big bucks at the top twenty percent of the top one percent of that top one percent, namely "star" ballplayers. Watch what they do, ignore what they say.

As Emerson said, "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."
Maybe we've reached the point where any consistency is widely seen as foolish.

xburg and Paul S...great comments.

It is, as Darwinian says, a dilemma.

I just grow weary of folks out there complaining about the smallness of budget cuts, yet who would defend all their goodies tooth and nail, seeking those 'folks behind the trees' to take the brunt of the pain.

I would be all-in for having my 'government cheese' removed, as long as I was part of a widespread, comprehensive shared sacrifice in the U.S.

Alas, what will likely happen is that as the total pie shrinks, the rich will get richer and everyone else will do with less...

...while the rich continue to use Fox News and other chosen outlets to get the shrinking 'middle class' to blame the poor for the M.C. not being able to get rich.

Bread, circuses, and expert magicians' misdirections....

They are doing this in other countries, too. Are we to return to the days of kingdoms?

Send it back to your buddy.
As Paul Krugman will point out again and again, the U.S. gov't is not a household and should not be run as one. This is total right wing bs. The reason that Standard and Poors downgraded the U.S. was because of the threats by some of our legislators to to default on our debt. S & P explicitly said this. And what happened after the downgrade? the cost of issuing treasuries decrease even further.

Paul Nash and I have discussed how utility incentives/rebates can often seem overly generous, e.g., our province's feed-in tariffs. For a little good natured ribbing, I'd like to cast the spotlight on BC Hydro if I may. Earlier today, I purchased 250 cases of 8-watt EnduraLED A19s for one of our lighting retrofits. BC Hydro offers a $30.00 rebate on this lamp (see: http://www.bchydro.com/ecatalog/eCatServlet?cmd=product_details&prdId=18...) which is a pretty sweet deal given that my cost is substantially less than this. Let's just say the difference would have paid for a nice holiday at a 5-star resort with plenty of spending cash left over.

As it turns out, the required quantity was three shy of a full case, so I purchased the remaining three lamps for my own use. When I came across the product listing on BC Hydro's website, it showed that it uses 8.77-watts which struck me as kinda odd, so out of curiosity I plugged all three into my power monitor and, low and behold, their combined draw comes to exactly twenty-four watts.

See: http://i362.photobucket.com/albums/oo69/HereinHalifax/EnduraLEDA19-Power...

It was only after I checked the packaging that I noticed that these lamps are rated at 470 lumens as opposed to the 507.5 lumens shown on this page.

See: http://i362.photobucket.com/albums/oo69/HereinHalifax/EnduraLEDA19-Packa...

It appears that Philips has de-tuned this lamp to get its power draw down to exactly eight watts, sacrificing some lumens along the way.

Lastly, worth noting that the forthcoming L-Prize version of this lamp will provide twice as many lumens for only 1.7-watts more, a true testament to just how quickly this technology is evolving.


What's BC hydro doing subsidizing bulb purchase on the other side of the country?
250 cases. Sounds like a lot of bulbs! My biggest LED order was 10bulbs.

They're not. It's just that someone in BC could presumably buy this same lamp from a national distributor for what I paid for it here on the east coast.

Three adjoining condominiums with hallway fixtures each fitted with two 40-watt incandescents, operating 24-hours a day; post retrofit: an equivalent amount of light, much less waste heat, a twenty-five fold increase in service life and, most importantly, an eighty per cent reduction in electrical demand.


BC Hydro doesn't, Paul's pointing out how sweet the incentive is for small commercial BC Hydro customers, not saying he actually received it. Following his link:
"The Product Incentive Program (PIP) provides financial incentives to BC Hydro business customers (with no key account manager and who spend less than $200K annually on electricity) who replace inefficient products with energy efficient technologies listed below."

1497 bulbs? $30 is higher than retail (nevermind the multiplier you'll be buying at for that size purchase), by the way, the incentive does require installation, but then how long does it take to screw a light bulb into an existing fixture?

Note that to receive incentive invoices must be submitted, and the invoices must come from a supplier on the "Power Smart Alliance."

"..but then how long does it take to screw a light bulb into an existing fixture?"

It sounds like you're just giving him the setup for the ACTUAL East-West punchline..

For once BC Hydro has an overly generous incentive - but not one that I can take advantage of!

I would send this off to a couple of hotels I know, but if the new one coming out is that much better/more efficient, then i think they are better off to wait.

Which seems to be what quite a few people are doing, but you are not - does that mean you have concluded the payback on that existing lamp is "good enough"?

And, the technology must come up against some theoretical limits to the lumens/watt at some point, are we anywhere near that?

For aesthetic reasons, I have to go with two lamps per fixture, so this particular lamp will provide an equivalent amount of light for sixteen watts, whereas the L-Prize version will supply twice as much light but my replacement load goes up by 20 per cent and, at the same time, my material costs effectively double. So although I'd love to use the L-Prize lamp, I can't justify the added premium and the resulting loss in energy savings, particularly when existing light levels are more than adequate.

With respect to hitting the theoretical limits, I don't think we're quite there yet.


Using the numbers for this lamp and the L-Prize he mentions, it's the difference between an 80% reduction in energy and an 88% reduction (assuming all the fixtures are in locations where they can be replaced one for two). Assuming zero capital cost due to incentive, waiting 6 months has a roughly 5 year payback (which is longer than bulb life if a 24/7 application).

B - thanks for that - I was too lazy to do those calcs myself - even though I should have known - I have had identical cases, and results, with water efficiency products.

So the conclusion is that, with that over generous incentive, these are indeed "good enough", and every day they wait is costing...

I'll see if I can get myself a free stay at the ski resort hotels for saving them a bunch...

Well, the theoretical limits are a bit squishy but they are being approached. For monochromatic green light, the peak of the curve is around 660 lumens/watt. But if you want white light, you also need wavelengths that are much less visually effective. For good light, 300 lumens might be a limit, or 250 if you're being more practical. Most "white" LEDs right now downconvert blue light, which brings it down some more, to around less than 200. The brightest readily available component LEDs seem to be at about 130, with a rather bluish color. (See luminous efficacy, which is confusingly referenced to electrical power in, or else light power out, almost at whim. If it's referenced to light power out, then it's also the best possible efficiency for a particular desired color or spectrum. Also, the emitted light has a finite effective temperature, so one might in principle go a smidge over 100% in the conversion from electricity, i.e. a perfectly efficient LED would not shed heat, but refrigerate itself ever so slightly.)

There are also power supply losses in converting 120 or 220 volts AC; as well as losses in the fixture. 58lm/W in the original post isn't too awful at the moment, and doubling it in the near future seems reasonable since the necessary components are already (but expensively) available. Probably the efficiency will follow an asymptotic curve, improving ever more slowly with time; as is also the case with certain other matters discussed here, the low hanging fruit gets plucked first.

Note that it has come a long way since early days. The first visible LEDs on the civilian market that I've heard of used an up-converting phosphor (much like a green laser pointer) on an infrared die. According to a General Electric SSL-3 data sheet, dated July 1969, they got 80 foot-lamberts from the surface of a very tiny coated die, probably less than a microwatt, for 140mW in, putting the efficiency on the order of 0.0005%. They also made similarly dim SiC yellow LEDs, SSL-1, SSL-6, and SSL-11. They cost on the order of $20 each in small quantities at the time.

I found some old red LEDs I had left over from about 20 years ago, bright type, thought I might be able to use them as a safelight. I was stunned comparing them against modern LEDs, talk about candle to a floodlight! With the blue LEDs I bought recently you can see the blue, clearly, at as little as 1uA - one micro ampere!


Might they have had heat related issues so cut back?


I have another source (online bulb retailer) showing it detuned all the way to 450 lm (which I think is the 40W class cutoff).

Heat is definitely a concern with this application, but not the lamp itself per se. The halls were originally illuminated by 13-watt PL fluorescent drums, but over the years the plastic lenses discoloured or were broken and they couldn't find suitable replacements. Thus, they were replaced by a decorative shallow glass bowl fixture fitted with two 13-watt mini-twists. Although there's a small air gap around the upper lip of the bowl, the heat build-up inside these fixtures was killing these CFLs in short order, so they ended up swapping out the CFLs for 40-watt incandescents. So, now, instead of merely doubling their lighting load its increased six-fold, and they're still running around with a step ladder replacing lamps as they burn out (as you can imagine, their utility bills are out of this world).

These EnduraLEDs are supposedly more heat tolerant and at 16-watts versus 26-watts for the two CFLs there's 40 per cent less heat generated. I confess I'm still a little leery about this, but I have the assurance of my Philips rep that they'll fully honour the 3-year warranty. And unlike another of the Big Three lighting manufacturers that we've used in the past, Philips will not try to weasel/slime ball their way out of a warranty issue and hang you out to dry with your customer like these other smarmy, back-stabbing pr*cks.


Interesting comments about the CFL's. I had a hotel switch to them in their hallway sconces, and the owner said the life wasn't nearly what he's been told to expect - sounds like the heat build up was the culprit. He went back to incandescent, but maybe this is the solution - except I think he was using 75W bulbs...

Lots of applications for these things though - especially at that price...

Philips offers a 17-watt EnduraLED A21 that cranks out 1,100 lumens or about as much light as a 75-watt incandescent. It's currently available in the US, but the last time I checked it wasn't certified for sale here in Canada. That said, the L-Prize gives you 940 lumens which is not too far off the mark and it clocks in at just 9.7-watts which is a fairly substantial reduction in both energy demand and heat. Plus, the CRI runs between 92 and 94 versus 81, so it's a nice step up in that respect as well.


On a separate note, I had an interesting discussion today with sales guy from the company that makes these 100kWe/200kWth cogen units;


For the ski resort I work with, we are looking at putting in up to 16 of these things - a 1.6MWe district heating system without having to bury a single yard of insulated water pipe!

They are very interesting units, and the fact they can also provide automatic backup in the event of grid failure is a great bonus - they get one outage a month there in winter -on the end of a 37km 25kV line!

I am hopeful of doing some small hydro projects there, (10, 50 and 400kW) but because we don't have your generous feed-in tariff they are marginal, for now...

I take it these co-gens would run on propane, Paul? Do the space heating and DHW loads match up well? And given the relatively low-cost of hydro, especially off-peak, would it not make more sense to go with just one or two units for emergency power and possibly peak shaving?


The cogens could run on propane, but there's not much point in doing that as the propane is more expensive than the electricity produced, so you would be going backwards!

But there is a bit more to this project than that..

This ski resort does have a piped propane system. It is planned, at some point, to connect the resort to the NG system, and the pipes were all sized with this in mind, but it needs a 20km, $15m connecting pipeline across the mountains to do so....

So, my idea to them (10yrs ago) was to do a big central cogen system, which would up the NG load enough to make the pipeline affordable. At the time though, gas was more expensive and propane and elec were cheaper.

Now it's all changed so we are revisiting the idea - resort customers are paying $26/GJ for propane, so there's a lot of interest in NG, but still that pipeline cost to be dealt with...

The centralised Cogen unit is not that practical - would require putting lots of insulated hot water lines into the completed village core, and having the cogen plant not too far away.

These units can be placed in the parkades of the hotels, right close to mech rooms etc - solves a lot of problems. They can also load follow, and the inverter based grid connection allows them to operate as backup gens, which is a big bonus.

So, I think we can get about 16 of these in various places (hotels, outdoor pools, the two daylodges, a new conference centre), and they would than take up the baseload heating +DHW for the winter. About four of them would have enough heat demand to run for the summer.

BC Hydro will by all the power produced at about 10.5c/kWh, their buyback schedule has different rates for different months and time of day, but even in winter, the largest difference, in January, is from 14 to 10.5c, and most of the time is about 12 to 10, and in May-June is 9 to 7c . Still profitable to run them even at 8c, as long as the heat produced is actually needed. In summer time, when most would have to dump the heat, it is not worth it.

So, this will up the resort gas load by about a third, and makes the NG pipeline worth doing now. The cogen units would of course, only be put in at the same time. The engines have about a 20,000hr life, and the company has a service program of swapping them out. The engine is actually a minor cost of the units, the inverter and emissions controls are the expensive part, and they don;t wear out.

Kinda odd to deliberately increase the gas consumption of a place, but in this case there are real benefits to doing so, to switch the whole place from expensive propane to cheap(er) NG. Would save the resort homes +business about $1m/yr.

BC Hydro is supporting district heating systems too..

BTW, those rates are also what any hydro system of 50kW to 15MW gets paid (averages 10.5c) - that's why I',m jealous of NSP's feed in tariff!

Thanks for filling in the blanks, Paul; much appreciated. I was wondering how you could afford to run these things on propane, but with natural gas the economics improve considerably. Other factors to consider too, no doubt. Good luck !


Paul; (and Paul..)
Have you gotten to see how any of the LED's have held up in places with notoriously spikey power? I'm in contact with a local grocer who is looking to switch over, but their Halogens have been hell on them because of Spike-induced blowouts, and I'm concerned that LED's might be just as bad, and then far more pricey to replace.

Do you ever run across line-conditioners (term?), spike/surge protection that get wired into individual circuits?

I would imagine the compressors for their fridges/freezers are probably hell on the lines.


Hi Bob,

Knock on wood, of all the installations we've completed thus far, I've had only one 17-watt EnduraLED PAR38 fail at a clothing retailer and I lost a driver for some freezer case lighting, both of which were covered under warranty. A year or so ago, Philips retrofitted over two thousand refrigeration case doors for a large national grocery chain based here in Nova Scotia, and I'm told that there hasn't been a single failure to date. Frankly, I could have never imagined this level of performance.

In general, I would expect halogens to be far more sensitive to over voltage, but nothing beats a mock-up/proof-of-concept. My Philips rep would simply toss me a case of lamps and say "Here, have your client try these out and let me know what they think". There's a three-year no-hassle replacement warranty in any event (actually, the Philips warranty on LED PAR lamps covers 26,280 hours over 36 months, i.e., three years continuous duty or, alternatively, 21,900 hours over 60 months, i.e., five years at an average of 12 hours per day). If it would be helpful, I could ask my guy to get you connected with the person who serves your area and hopefully this individual can help you out.

Best of luck on this, Bob. Good lighting as you know is half-art, half-science, and you've got both ends nailed down pat.


Many, many thanks, Paul! As ever..


If you think about the CFL they have a fair amount of electronics in the base. It forms a switched mode power supply. Google around and you will find quite a few circuit diagrams. Too much heat will shorten the life of the components especially transistors(dopant migration) and capacitors(drying out). A lot of power cycling, not in HiH's application, will increase thermal stress on interconnections. I'd like to see a dissection of those EnduraLED lights and what goes into them.


I'm guessing there is a switched-mode supply in them, too. The other LED A.C. mains lamps have them to reduce, or "buck" the voltage.

Quite a few of the LED spots I have seen here use a separate SMPS that will drive up to 3 lamps. Maybe the screw in replacements have a built in SMPS which is why I am curious about what is in them especially as they are dimable, something smps might not like.


That's a concern for me as well. With all the work they do to enclose and compress the footprint of these things, half the time all I want to do is rip them open and let them breathe.

Why kill them off early for 'appearance's' sake? To me, appropriate and conscientious design is really the heart of beauty. But that's me..

as someone described the essentials of Writing..

"You should write the way you would design clothing.. Make it Long Enough to Cover the Subject, and Short enough to keep it interesting!"

(And I have an Old CFL whose ballast-case broke open, and the fixture it hangs in isn't bothered or unsafe from it, so it gets to be open to the breezes, and just keeps on ticking! -Alas, I never marked the start-date on the lamp!)

MSNBC is running a story on oil prices....a graph they have up:

Huh? The US produces how much oil?


Yes, they are using "all liquids" for the US, not oil, and I doubt that graph, as shown came from the EIA.

Per the EIA for Nov 2011, crude oil was 5.842 mbd, NGL's were 2.842, and ethanol was 0.945. Add them all up and you get 9.6mbd, which seems to be about what that graph is showing for the US.

But "all liquids" is certainly not "oil", most of those NGL's are propane, propylene, ethylene etc - not anything you can run your car on.

The hoax continues...

My sister-in-law's brother runs his personal pickup on propane ... he works for the propane co-op.

Unsubsidized battery locomotives do exist, although rare, they are useful for track maintenance on 3rd-rail style undergrounds. There is at least one subsidized full battery-electric switcher on the Norfolk Southern, there are a few 'Green Goat' battery hybrid switchers out there, although I think the producer went out of business when oil dipped sharply early in the recession.

Well, yes you can a car on propane butane, even propylene or ethylene if you want, but you likely can;t run *your* car on it!

In Australia, lots of people run their cars on Liquefied Petroluem Gas (LPG) which is 1/3 butane and 2/3 propane (your BBW cylinder, and your sil's brother are actually pure propane.
In fact, there are over 500,000, and growing, LPG cars in Australia. I had my own car there converted back in 1991..

The "green goat"company has indeed gone under. I think there is a niche for hybrid switching loco's - a stop-start vehicle if ever there was one- but obviously they didn't hit the mark.

We should see Caterpillar and the likes doing (hydraulic) hybrid front end loaders too - they are possibly the most stop-start vehicle you can get.

Lots of niche applications...

What's wrong with the chart? I don't see anything obviously off...

Well for starters it shows the US producing even far more "all liquids" than the EIA says we produced.
Total Energy-Petroleum

The US produced, according to the EIA, an average of 7.8 million barrels per day of all liquids. Eyeballing that chart it shows about 9.5 mb/d.

Ron P.

Hmm. Well I assume "all liquids" these days (not because it's accurate, but because it's the unfortunate new standard). And as Paul says above, it adds up.

I forgot to put in my link to the EIA.

It comes from the Petroleum and Other Liquids part of their site. Click on the link third from the top for the "US daily average supply and disposition of petroleum products" for the chart where I got the numbers.

The organisation of the EIA website makes it easy to use the wrong numbers, if you don't know what you are talking about, which is clearly the case with these guys...

Not unfortunate, it is a signal that things are not as claimed. The true numbers are being obfuscated and the obvious question is why. I just wonder when we will see NG included in the 'oil', cough, production figures.


Hello, just a comment for people posting about led numbers..... There has been a lot of hype from most led manufacturers regarding hid lumen relevance. This has been hugely dissapointing for cannabis growers and much can be found on related forums. The generally accepted equation by growers now is an led is equal to an hid of twice the wattage. This may apply differently to human vision or incandescents, but don't put it past them to lie through their teeth, I assure you, they do so readily. An interesting light technology is microwave plasma sulphur. It has the spectrum of the sun and lasts longer than led as well. They are already being used in high end projectors, by doctors to treat seasonal effective disorder, and a few other applications. Last I heard, lp was attempting a 200,00w version. Cheers!
p.s. Thank god for tod. Long time follower here. Although I don't say much, I feel at home here. When I talk with friends about peak, they think i'm either nuts or a downer, then ignore me, berate me, or give me a bunch of hippy bull. thanks for really keeping it real.

Are you a "Trini" by any chance? The bacchanal part of your handle has me wondering. If so, how's carnival shaping up this year?

Alan from the islands

I wish! Last residence was New Orleans, currently preparing to work pumps around Odessa.

Forgive me for my ignorance of the meaning and usage of the term. A quick Google search reveals among the definitions "A drunken or riotous celebration." which I guess, could describe just about all the Fat Tuesday Carnivals held in this part of the World (Brazil, Trinidad and New Orleans). Trinis use the word a lot to describe their carnival/soca parties and it features prominently in the lyrics of much of their carnival music so, I suppose I could be forgiven for associating the word with the island.

Alan from the islands

Lumens are defined in terms of a "standard [human] eyeball", see Luminous Efficacy, already cited elsewhere. Since green plants notoriously lack such eyeballs, lumens are very problematical units in that application. After all, a typical human eye is most sensitive to green, but that is reflected, rather than utilized, by most plants. And indeed, spectrally-matched grow lights tend to have a strong magenta (blue+red) cast.

I finally tracked down this amazing graphical data resource that was reported a few years ago:


Interesting. Pull up the groundwater recharge map, Australia and the middle east disappear, Africa shrinks, and South America gets huge.

Ha! Greenhouse gas

India is increasing in size? All the stories coming out of India seem to point in other way i.e. water table is dropping. Am I reading this right?

Question for Paul in Halifax

What do you think of the under-cabinets led strips as opposed to pucks? Are they around for the long haul? Cheap enough, anyway.


Hi Paulo,

I recently replaced our T4 fluorescent under-cabinet lighting with 3 and 5-watt RAB LED strips. They're amazingly thin, as evidenced below:

They're also amazingly bright !

I bought three 5-watt and two 3-watt strips, plus two 6-watt and one 12-watt power supplies (they ship with mounting hardware and connecting cables as well).

My cost was $276.55 before tax. You can view the breakout at: http://i362.photobucket.com/albums/oo69/HereinHalifax/UnderCabinetPricin...

The combined load in this case falls from 62-watts to 21. Now, 41-watts may not seem like a lot but these fixtures get a fair amount of usage and the one above the kitchen sink operates an average of eight hours a day so the savings add up (the original T4 lamps have a 10,000 hour rated life and they're expensive to replace and difficult to source, so the biggest savings will come from not having to replace the lamps as opposed to the energy saved). Nonetheless, those 41-watts are enough to power the twelve 3-watt BA11 LEDs in our dinning room chandelier plus the two 2-watt BA11s in our buffet lamps (I always think in terms of budgets...if I do this, then I can in turn do that).

Oh, one thing I should note... the light is directional with a very sharp cut-off, so there's not a whole lot of light cast between the front edge of the counter and the valance... best to check this out in advance.


Leds often have 45°-90° light spread, but can be less or more than that. It should be on the box with better brands, some you may have to dig for the info.

I just checked the spec sheets and manufacturer's web site and I can't find any reference to light spread. I can tell you that very little light gets past the valance, so the front half of the counter is relatively dark whereas the back half is fine. Personally, I don't have a problem with this, particularly if the overhead fixtures are on, but others may find it less than satisfactory, e.g., if you're peeling or chopping vegetables, the cutting board will have to move closer to the back wall.

I can't do this during daylight hours, but I have a light meter so I can take detailed readings and link to a few photos.


In case anyone is interested, I recently visited a new Key rig manufacturing building. They have been buying from CA, but now have a huge brand spanking new building, with about 4 dozen new welders being installed right now.

A - Where at? My ex used to work for them in Texas