1. WHAT’S IN A FRACKING CONTRACT?
2. A CONVERSATION WITH A FRACKER
3. SOME SADNESS

Note: sometimes you feel like you are in a movie that you have seen. At least this was how it felt to me when, after six years of reading the Oil Drum, I found myself involuntarily involved in the fossil fuels business. This is my recount of the last month’s events.

Unexpected Good News
Recently my wife received notice that her father had signed a contract with the fracker. As both she and I were listed as beneficiaries we had to meet with the fracker and a notary to prove our identity and sign the contract. Since my father in law was flirting with death there was a sense of urgency by the fracker to get these signatures. My wife wanted me to read the contract and explain to her. At first I didn’t feel that this was necessary. “This is free money, he is being paid per acre and gets more on top of that- we will never live on the land that they are fracking, what was the risk?” However, as this contract could go on at least 10 years or more and as her father in law was very sick it was certain that we would come into possession of the contract- so it seemed prudent to try to understand it.

So What’s in a Fracking Contract? Glad You Asked!
At first I wanted to simplify this by naming the parties “fracker” and “fracked” but decided against this as it looked obscene after three lines. Hereafter the fracker shall be known as the “Lessee” and the homeowner shall be known as the “Lessor”. This is the simplified version highlights- I left out many standard boilerplate items about liens, etc. The initial lease amounts to about 5K per acre for 5 years and the same payment if renewed therafter. My father in law owns many acres. My comments and questions are in parentheses.

Lessee has the right to:
1. drill for five years or for as long as or oil or gas is produced by any means (forever?)
2. sublease the drilling to another company
3. conduct geophysical testing anywhere on property
4. lays pipes anywhere
5. control right of way to power, phone lines, etc. (how much?)
6. full, free and “quiet” possession of property (don’t annoy the fracker with noise)
7. pool smaller properties together for drilling purposes
8. suspend payments due to “Force Majeure” which can include anything not under the control of Leseee (over 20 items are listed including inability to find materials, accidents, repairs, etc.)

Royalty
9. Lessee will pay Lessor 19% of all “marketable” oil and gas less taxes

10. Both parties must agree to “reasonable” well locations- but Lessee has the full right to develop
11. Lessee must restore well surfaces afterwards, as far as “practical” and only if this doesn’t interfere with production (which can go on forever?)

Lessee will:
12. keep premises clean
13. pay 20K for each well pad and 3K for each disturbed acre on top of up front money already paid
14. maintain roads (how?)
15. not drill within 500 feet of occupied dwellings unless both parties agree
16. notify Lessor of “marketable” timber removal and pay a reasonable rate determined by a third party appraisal paid for by Lessee (conflict of interest?)
17. bury pipes at least 32 inches under ground (how would we know?)
18. make roads no more than 25 ft wide
19. sample water quality (note: he has well water) before and after drilling, or upon request within 48 hours, at certified independent lab (who decides “independence”?). Should it be determined drilling has hurt water quality, Lessor shall provide potable water until the water sources has been repaired (?) or replaced with similar quality water
20. Lessee hold Lessor harmless for any lawsuits for any operations, including environmental damage, death etc. related to operations and will defend Lessor against any lawsuits.

Signing the Deal
I and my wife met with the fracker rep at a bank. He seemed out of place in his jeans and plaid shirt but very much in control. I took advantage of some free time to ask a few questions. I asked him if too many companies had gotten into this game and might go into bankruptcy due to crashing gas prices. “No, we were smart, we didn’t pay too much for leases and we’re looking for “wet gas”- we think will find it on your property”. “You mean oil?” I asked. He nodded: “What you heard about was one stupid company way overpaying for leases- we’re not making that mistake. No other company I know is making that mistake- we’ll be around”.

He was nervous, or irritated, though. The banker was a stickler who refused to notarize another couple waiting there due to minor name differences. Undeterred, the fracker rep took them outside, slapping a rolled paper in his palm “I know three notaries in this city- follow me- we’ll get it done”. Somehow, I didn’t doubt him.

A Disturbing Event
After posting a book review on the TOD last week I had to rush to finish taxes and go on vacation. My family was headed to the land where all this drilling would take place. Along the way I noticed a large, but clearly domesticated, dog in the grassy median of the highway ripping the flesh off of a road kill deer.

The site unnerved me for two reasons. First, I felt as though I had been deceived. Here was man’s best friend revealed, they were simply predators after all- and somewhat sinister. Second, as soon as the dog was filled up it would try to get out from the center of a highway filled on both sides with hundreds of speeding cars. It would soon become the same as the carcass it was just recently chewing on. Here was a stupid predator about to meet the fate of its meal. After the trip, I later realized that this scene was an omen of what I was about to experience

The Valley
The area where all this fracking will occur is around Wheeling, West Virginia and along the Ohio River. Known simply as “the valley” to many locals, it was an area of great beauty but also of hard times. This is a land where high school football is religion. The Pro-football hall of fame is nearby in Canton Ohio, and the East Ohio-West Penn area seemed obliged to fill it with more than its fair share of stars. Joe Montana and Dan Marino come from the area to name but a few.

There is a way of thinking here that focuses more on the local as opposed to national or world events. This is not necessarily bad- just different. Driving around Moundsville WV, I found hundreds of local candidate signs related to the upcoming primary but not one sign for a national candidate. It is as though only the valley exists, it is not part of the nation or even the world. The longer I stayed the more I too fell under this spell. It was if the mountains blocked off not just my vision but my interests also and nothing else really existed.

Yet the world has impacted the valley. Many jobs have gone overseas. The great factories that lay at the river’s edge sit idle and rusting. Many people, like my wife, left the valley for city jobs- leaving an aging population behind living on transfer payments. There is financial hardship everywhere. Every other commercial in my hotel room seemed to be offering services on how to repair a bad credit or get money now.

Friends into foes
But now fracking came to the valley. Signs for job opportunities abound. Many were excited for the first time in a while. Yet it did not create happiness everywhere. Some hit the jackpot and have received large sums for their properties while others got very little or nothing at all. Those with large acreages in the hills generally did well while those on small valley lots did worse in the geo-lottery that fracking brought.

I spent much time talking with people at hotels, stores, and restaurants. I wanted to know how things were changing. They told me the stories that circulate the bars and beauty shops: stories of shopping and excitement, but also stories of once close family members who are suing each other, stories of children who forged their parents wills in nursing homes, stories of neighbors who no longer talk to each other. Many were happy and dreaming. But many others lived in anger that they did not share the good times. For the truly unlucky their property values are going down. Who wants to buy a place with bad water, noise and no royalties? The community seemed split- one man’s treasure was another man’s curse.

The Fracking Hurricane
When fracking comes in to an area it comes in like a hurricane with each tree knocking down the tree next to it. As my wife’s friends explained, there was really never any choice. If you didn’t sign the fracking contract and your neighbors did, then they would get the money while you put up with the bad water, smell, noise and traffic- it was the ultimate divide and conquer. Resistance was futile. About an hour up the Ohio River, in the city of Youngstown, organized crime members would certainly have recognized that what people were receiving was essentially “an offer they couldn’t refuse”. Everybody on my father in law’s hill signed. Why hold out? No wonder the fracker in the bank seemed so confident- he had just bought a county.

Paradise Lost
Toward the end of my three day visit, I looked out from to top of my father in law’s hill at the scenic sweep before me. Song birds were singing in the air, there was a light mist in the valleys below- and you could hear echoes of water in the wind as it magically shifted. It was really “almost heaven” as the song goes. So many of the people I talked to stated that the reason they lived here and refused to move to cities was because they loved the countryside and the peace that it brings. My wife and I spent years trying to persuade her father to move next to us: “We can help you get around; you will be next to your grandchildren”. He always refused “I love it out here, I can’t leave- the city is too noisy and scary”. Many people I talked to loved the quiet and solitude.

And yet this was the biggest surprise of all to me. They sold it all as fast as they could. The peace: gone. The quiet: gone. The beauty: gone. Paradise was about to become a construction site. I looked at the beautiful canopy of green. Soon trucks and drilling rigs will be coming. The land will be scarred, the water may be soured, and the air will be filled with industrial noise. What value was there really to “the country”? Heaven, it turned out, had a price after all.

The depletion rate of happiness
What will people get in the long run? I knew of the decline rates of the wells being drilled- in two years some wells could be 90% spent. Would the community come back together by that much? Would family members not talking to each other reconcile by that much? Would envious former friends hang out together again? I doubted it. This is a land of deep friendships but bitter splits. Just about everyone here can tell of relatives and friends they knew who never spoke again for the rest of their lives. Would the land be someday filled with absentee landlords like my wife and I, owning only to collect the royalties? How will the money help the people long term? My wife laughed: “the casino and nursing homes will get everything in the end”.

Understanding
My mind flashed back to the dog on the freeway. Now I understood why the image stayed with me the whole trip. The hurricane of fracking money had revealed the snarling animal side of many people I thought to be domesticated. True loyalties became known- wealth was put before family, friends, community and even “country living” itself. I wondered: Who are we really? Does any of us really know our neighbor? It seemed that the saying “money changes everything” really was true.

And what of this community after fracking? Would it make it off the highway safely? Would it buy renewable energy devices or invest heavily in conservation with the money? Would the money keep coming or would it be hit with oncoming low royalties and bad water? Would people look back at the influx of money into the area as a wild and foolish highway feast that lured a community into a dangerous place? Did the dog make it off the freeway safely? I will never know.

Caught in the Storm
I found myself conflicted in that bank at the signing desk. I am a big supporter of renewable energy. I drive less than 5000 miles per year. I try to educate people about Peak Oil, global warming, etc. I’m an activist who has collected signatures, gone to rallies, lobbied officeholders at the statehouse. The irony that I now might benefit, in the short term, from the destruction of the environment was not lost on me and it put me in a difficult situation. I felt a little ill.

I wanted to make a heroic Jimmy Stewart type speech: “you may own Belmont County Mr. Potter but you can’t buy me!” Yet, I heard the sound of my sons in the lobby- the sons who will need college money. My wife very much wanted to sign. If I didn’t sign, others would and everything will still happen anyway. The guys from Youngstown would have smiled. I hesitantly reached for the pen, and the hurricane broke another tree.

Donald Long, who posts here occasionally as Longtimber, sent me this link yesterday:
The Changing Energy Outlook The End of the Cheap Oil Experience. Presented to IEEE Pensacola Section April 17th, 2012 (PDF file)

He gave a presentation last night in Pensacola. I am now in North Alabama and missed it unfortunately. But from the looks of the slides it looks very good. It is quite long, 89 slides, I don't know how he covered it all but I am sure he did a great job. And I am sure he would like some comments on the slides, if anyone has the time to look at them. I did and was very impressed.

Ron P.

Re: In Poll, Many Link Weather Extremes to Climate Change

The interesting thing about this poll data is that the scientific community has tried to downplay extremes as a possible proof of climate change. Back in 1980, I was soundly berated by the director of NCAR for suggesting that the extremes at that time were the result of AGW. More recently, the extreme events have become one of the focal issues of the "debate", perhaps because people experience weather during their lives, not climate statistics. How times change!!!

E. Swanson

Washington DC subways nearing saturation

Already, the "Orange Crush" between Courthouse & Rosslyn stations (Orange Line - Virginia) is limiting ridership. One solution is WMATA is ordering 428 new subway cars with more standing room and fewer seats.

Another is moving to 8 car trains (50% 8 car trains, 50% 6 car trains soon). But the stations were built to only handle 8 car trains#

The first half of the new Silver Line to Tyson's Corner is under construction. Planning reduced the cost of the second half by $1 billion (and reduced it's utility) and still the State of Virginia can not find $300 million to contribute. So the second half. to Dulles Airport, may be delayed.

The Silver Line will add additional passengers from Courthouse to Rosslyn and beyond to DC.

The capacity per track is remarkable. WMATA can run 26 trains/hour/direction. 8 cars/train. Each car is 75' long x 10' wide. The older cars can carry 175 people each. The new series will carry 184 & 192 (cabs only on every other car) with seating against the sides.

Top speed is 75 mph.

By comparison, limited access highways carry little more than 1,000 vehicles/hour/lane.

A study on WMATA capacity (pdf)
http://www.wmata.com/pdfs/planning/CoreCapacity_ExecSum.pdf
OOPs - an old study. I will search for newer.

I used information from this one from 2008 - although they assume greatest growth in the exurbs.
http://www.wmata.com/about_metro/board_of_directors/board_docs/042408_Ra...

Paris is doubling the size of their Metro - with an expected 2 million more daily riders from 2013 to 2025 plus new surface trams.

The Washington area could significantly expand their capacity - and should post-Peak Oil. Many more surface lines plus more capacity in Metro.

I have been working with Ed Tennyson on some plans that I may run by readers on Drumbeat in a few days. Innovative (single track Metro express lines, with passing at double track stations ?)

Best Hopes for efficient Oil Free Transportation,

Alan

# Ed Tennyson, who was involved in planning for WMATA once asked "Why not build longer platforms for the future ?". He was told that if demand ever got so high that 8 car trains could not handle the loads, then "We will just build more subway lines".

"In order to pacify its population during the Arab Spring and pay for significant new infrastructure projects, Saudi Arabia has made enormous financial commitments in the past several years. The kingdom really needs $90 - $100 a barrel now to balance its budget. Other major exporters like Venezuela and Russia have similar budget-driven incentives to keep prices high."

______

What a load of rubbish! Firstly what SA or any other oil producers need is to maximize revenues- which in turn is function of VOLUME and PRICE. Secondly, what they would like or need is irrelevant- it is what they have the power to get which is important. Unless they are the marginal oil producer for all prices above $80 what they want is irrelevant to what would like or need. The thrust of the article - marginal oil is coming from unconventional sources - suggests that KSA is not the marginal producer.

Expert says all Pa. oil, gas waste needs treatment

PITTSBURGH (AP) - A former top environmental official says Pennsylvania's successful efforts to keep Marcellus Shale wastewater away from drinking water supplies should be extended to all other oil and gas drillers.
...
An AP analysis of state data found that in the second half of 2011 about 1.86 million barrels - or about 78 million gallons - of drilling wastewater from conventional oil and gas wells were still being sent to treatment plants that discharge into rivers.

link

Best hopes for effective oil/gas regulation in Pennsylvania. Some of us live here!

PT in PA

Just remember - they ain't DEAD. With death being the metric trotted out by the defenders of Man's fission plan.

http://www.eurasiareview.com/18042012-japan-fukushima-woman-organizes-ra...

Tomoyuki Yamazaki, a Japanese doctor and a United Church member in Wakayama Prefecture in western Japan who provides medical counselling at the information center every month, said in an email to ENInews that an increasing number of children he has seen “have nosebleeds that don’t stop, diarrhea, dark circles under their eyes, and incurable stomatitis [an inflammation of the mucous linings in the mouth]. A growing number of children [at the centre] have pains in their chests.”

And note the 'promptly fired' here:
http://enenews.com/china-syndrome-japan-times-on-melt-through-molten-lav...

But today's money shot so far?
http://www.japantimes.co.jp/text/eo20120418a4.html

But there is also another important lesson to be learned, and it applies to all operating nuclear facilities around the world: If you have to assume something, then you are not prepared.

More:

The Japanese Government did not admit to the meltdown until three months later, nor did they admit to the damage to the containment vessels until a half year later. Our government tried to hide this important information for some reason, though judging from the amount of fission material released and from the size of the hydrogen explosion, the meltdown of the entire core was undeniable for anyone who has studied reactor engineering.

Note how being a cheapskate in ordering something too big saved #5 and #6

Its airfins were too big to fit into the basement and was luckily placed outside, and as such, this engine started to generate electricity. With a pump brought in from outside, it started to cool not only Reactor No. 6, but had enough power to cool Reactor No. 5. Of the 13 emergency generators associated with the six plants, this was the only one of the three air-cooled backups, and hence not dependent on water as the heat sink. This air-cooled diesel engine was the only one not entirely submerged in water, but in fact at one point the water level did reach up to half its height.

Three Gorges Dam Danger: 100,000 Living Near China Hydroelectric Facility May Be Forced To Move

"SHANGHAI -- Another 100,000 people may have to move away from China's Three Gorges Dam due to the risk of disastrous landslides and bank collapses around the reservoir of the world's biggest hydroelectric facility, state media said Wednesday.

The Ministry of Land Resources says the number of landslides and other disasters has increased 70 percent since the water level in the $23 billion showcase project rose to its maximum level in 2010."

One can't help wondering where people are going to be relocated. The world is getting pretty full - we're running out of places to go. Perhaps the cities will just get more people packed in.

Regarding the link, above: Iran starts $1-bn project to bring water to desert, this is an interesting study since the Caspian has no outlet and its salinity is lower than normal seawater:

The Caspian Sea is the largest enclosed body of water on Earth by area, variously classed as the world's largest lake or a full-fledged sea.[2][3] The sea has a surface area of 371,000 km2 (143,200 sq mi) (not including Garabogazköl Aylagy) and a volume of 78,200 km3 (18,800 cu mi).[4] It is in an endorheic basin (it has no outflows) and is bounded to the northwest by Russia, to the west by Azerbaijan, to the south by Iran, to the southeast by Turkmenistan, and to the northeast by Kazakhstan.

The ancient inhabitants of its littoral perceived the Caspian Sea as an ocean, probably because of its saltiness and seeming boundlessness. It has a salinity of approximately 1.2%, about a third the salinity of most seawater....

...The Caspian has characteristics common to both seas and lakes. It is often listed as the world's largest lake, although it is not a freshwater lake. The Caspian became landlocked about 5.5 million years ago due to plate tectonics.[9] The Volga River (about 80% of the inflow) and the Ural River discharge into the Caspian Sea, but it has no natural outflow other than by evaporation. Thus the Caspian ecosystem is a closed basin, with its own sea level history that is independent of the eustatic level of the world's oceans.

Exploitation of oil and gas resources, combined with polluted inflows from numerous rivers, are taking a toll on the Caspian, and natural evaporation is it's primary 'outflow', assisted by desalination plants, it seems. I expect the effects will be minimal and local,, at first.

More on Iran’s installed desalination profile.

Here are links to the latest raw GW data from HadCRUT:

http://www.realclimate.org/index.php/archives/2012/04/hadcrut4-data-now-...

And here is a handy compilation of said data in graphic form.

http://www.realclimate.org/images/hadcrut_diff.jpg

What strikes me again is that we have had just ~.8 C of warming so far, and we are already seeing extremes like the killer heatwave in Europe '03 that killed tens of thousands, the Russian heatwave of '10 that closed down their wheat exports and arguably helped ignite the Arab Spring, and the mad March we just had (not to mention any number of other extremes arguably connectable to GW).

Mainstream scientists are now discussing the possibility that we will get 3 C degrees by mid century (in 38 years) and 6 by the end of the century. They may be wrong on overstating things, but they also could be wrong in understating it (more likely, imho, given the general caution of scientists in making such claims). So there is a good likelihood that we will get a couple more degrees just in the next couple decades.

Actually, all it may take to get that level of heating much faster is for coal plants to clean up their aerosol emissions, which most are now doing. The 'aerosol parasol' may be shielding us from up to 2 degrees heating that would otherwise be with us already. Once they stop being spewed into the atmosphere, it only takes a few weeks or months for aerosols to fall or be washed out of the atmosphere.

Summary of Weekly Petroleum Data for the Week Ending April 13, 2012

U.S. crude oil refinery inputs averaged just under 14.5 million barrels per day during the week ending April 13, 99 thousand barrels per day above the previous week’s average. Refineries operated at 84.6 percent of their operable capacity last week. Gasoline production increased slightly last week, averaging 8.9 million barrels per day. Distillate fuel production increased last week, averaging 4.4 million barrels per day.

U.S. crude oil imports averaged 8.7 million barrels per day last week, up by 196 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 9.1 million barrels per day, 395 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 427 thousand barrels per day. Distillate fuel imports averaged 119 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.9 million barrels from the previous week. At 369.0 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 3.7 million barrels last week and are in the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories decreased by 2.9 million barrels last week and are in the middle of the average range for this time of year. Propane/propylene inventories increased by 0.9 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories decreased by 2.2 million barrels last week.

Total products supplied over the last four-week period have averaged about 18.6 million barrels per day, down by 2.7 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged 8.7 million barrels per day, down by 2.8 percent from the same period last year. Distillate fuel product supplied has averaged just under 3.8 million barrels per day over the last four weeks, down by 0.5 percent from the same period last year. Jet fuel product supplied is 3.7 percent higher over the last four weeks compared to the same four-week period last year.

Re: New energy-efficient light bulb goes on sale Sunday

I was speaking with my Philips rep yesterday and he tells me that his sample L-Prize lamp should arrive sometime today and that he'll pass it on to me (no doubt so I'll stop pestering him). If so, I'll report on my findings.

It's disappointing to hear that this lamp won't be sold in Canada -- the general feeling is that in the absence of utility rebates it's simply a too costly proposition for we Cannuckleheads. Thankfully, I can make other arrangements to obtain more that won't necessitate driving all the way to Bangor.

As it happens, a new e-mail just popped up on my screen with the following link: http://abcnews.go.com/Business/video/light-brand-bulbs-16157639

BTW, supplies of the 12-watt EnduraLED A19 have been extremely tight for sometime now, with back orders stretching into the many tens of thousands. In fact, pretty much every LED product we use is in short supply, although I've nicknamed our Philips rep "The Puppet Master" as he's rather good at pulling strings.

Cheers,
Paul

I was listening to a podcast of Car Talk on NPR, a call-in show where the hosts offer humorous ways to cope with car problems. One woman called in asking for suggestions for a large SUV. The hosts wanted to know why she wanted such a large and expensive vehicle. The caller admitted that she really needed the towing abilities of an SUV only a few times a year. This led me to think about what seems to be a common problem.

Since most people can afford only one or two vehicles, they buy them suitable for the maximum-load case (number of passengers, cargo or towing capacity). The typical usage for most vehicles, however, are single-occupancy trips with no cargo which could be handled by a much smaller and more fuel efficient vehicle.

Here is a free idea for car share companies like ZipCar: Offer a service to existing (mostly suburban) car owners that would allow them to buy cars for the normal use case and easily obtain larger vehicles for the few times a year when they are really needed. You would drive up to the car-share lot in your car and drive off with the larger vehicle. Could this be a simple way to persuade people to give up big gas guzzlers?

http://www.desdemonadespair.net/2012/04/human-made-earthquakes-reported-...

Human-made earthquakes reported in central U.S

Great graph here.

Rivers flowing into the sea offer vast potential as electricity source

A new genre of electric power-generating stations could supply electricity for more than a half billion people by tapping just one-tenth of the global potential of a little-known energy source that exists where rivers flow into the ocean, a new analysis has concluded. A report on the process — which requires no fuel, is sustainable and releases no carbon dioxide (the main greenhouse gas) — appears in ACS' journal Environmental Science & Technology.

FOR ALL

This issue comes up occasionally and I usually let it pass without comment. Too many misleading statements this time, though.

"As the cheap oil from old mature fields is depleted, and we replace it with expensive new oil from unconventional sources, it forces the overall price of oil up. This is because oil prices are set at the margin, as are the prices of most commodities. The most expensive new barrel essentially sets the price for the lot."

This is completely misleading. Real life examples are better than theory, as ole dead Matt use to say. Last year I drilled an oil/ NG well in La. It was a deep and rather difficult well...costs ran over about 30%. By the time it was completed and producing (about 2 months ago) I was around $10 million in the hole. I'm getting Light La. Sweet for the condensate (around $120/bbl) and less than $3/mcf for the NG. Guess what? I would be getting those prices whether my well costs $1 million, $10 million or $100 million. My oil/NG buyers have no idea what I spent on my well. Nor do they care. They pay me based on the current market conditions. A year ago when we committed to drill this well NG was selling for 60% higher than we're getting now. Again, my NG buyer doesn't care what price I ran my economics on. Many wells are drilled/produced and never recover their cost. Me and the all the other operators would love to force buyers to pay us for what it cost us to drill. Just doesn't work like that.

They dynamics are just the opposite: high prices allow us to drill more expensive/risky wells. If the oil prices had dropped to $50/bbl a year ago many of the wells currently being drilled would not be drilling. It doesn't matter whether the hydrocarbons are easy or difficult to find. Doesn't matter whether my well is a commercial success or not. Oil/NG will sell for what the market will allow. If I drill a well tomorrow that cost me $8 million but has only $4 million (at today's prices) I'm going to sell that production at the price the market will allow. If that $8 million well finds $60 million worth of oil/NG I'm going to sell that production at the same price I sell my production from the money losing well. The oil/NG buyers don't set their prices on what it costs me to drill.

"At the other end, the cost of production establishes a floor for oil prices". Here's the other problem: terminology. To me and the rest of the oil patch "production cost" is what I spend to actually produce the oil/NG from a well...not what it cost me to drill and complete that well. We use the term "LOE": Lease Operating Expense. LOE can vary greatly depending on the reservoir. I might spend $2/bbl to produce a well or it might cost me $40/bbl. Again, my crude buyer doesn't care what my LOE might be...he's going to offer me the current market price. And again my $2 per bbl LOE well might ultimately net me just half of what I spent to drill the well. Doesn't matter: I'll still only get the price the buyer offers. And my $40/bbl LOE might make me 5X what it cost me to drill it. Again, the oil buyer isn't going to offer me less for that oil because my profit margin is so much higher. I can have two wells sitting 500' apart. I drilled one 20 years ago and have made 5X times my investment. The other well I drilled last month and will never recover what I spent on it. Both wells are making 100 bopd of the same quality oil. I sell production from both wells for the same price. If the market price is $100/bbl that's what I get. If the market drops to $70/bbl that's what I get.

Tightening of the US gas market

Does anyone have feel for how much the US gas market has tightened recently? Based upon heating degree day response, it appears to be significant (d(Storage) = change in storage in bcf, and is approximate since the EIA doesn't update monthly data in a reasonable time frame):

Month   HDD  d(Storage)
10/11   281    +411
11/11   512    +57
12/11   775    -383
1/12    813    -540
2/12    714    -455
3/12    410    +49

If you do a simple linear regression to the Oct.-Jan. storage response to HDD, it suggests there should have been an injection of more than 300 bcf during March, i.e., the market is roughly 10 bcf/day tighter now than in Oct./Nov. This continues; compare last week to similar HDD weeks in Oct./Nov.:

Week     HDD   d(Storage)
Oct. 22   71    +92
Oct. 29   91    +78
Nov. 5    117   +37
Nov. 12   117   +12
Apr. 7    87     +8

Compare last week with Oct. 29 - similar HDD, but a 70-ish bcf difference in storage injection.

I realize there are all kinds of issues with desire to inject, etc., but I was under the impression that current shut-ins are on the order of about 1 bcf/day, way too small to explain this difference. Keep in mind that we are only on the cusp of the collapse in drilling activity, assuming a 3 or so month lag from rig activity to supply hitting the market. There may be the potential for some serious market balance issues at some point later this year, esp. if this tightness is driven by depletion rather than demand increase...

Thoughts?

Study raises questions over entrepreneurship policies

Policymakers who try to boost the economy by creating a more favourable environment for entrepreneurs “can’t have their cake and eat it”, a new study has warned.

Such initiatives may well lead to new businesses but will also bring about more closures, according to major research into tax policy’s effects on entrepreneurship.

The findings come as the UK government continues to stress entrepreneurship’s role in aiding economic recovery in the wake of the global financial crisis.David Cameron has repeatedly signalled his support for 'risk-takers and go-getters' and last year described entrepreneurs as Britain’s 'only strategy' for growth.

Michael Economides Making 'Shambles' of 'Oil Peak Myth'

In his presentation to Montana Energy 2012, Michael Economides told Montanans, "You are already a superpower in oil production. You have already defied the trends and once again showed the can-do attitude of this industry, smashing the myth of the 'peak oil'"...

He said that "peak oil may never happen. Natural gas will contribute a massive share of transportation fuel.

Ron P.

Here's a commentary from MarketWatch regarding the effect of speculators on the oil markets. The author's conclusion is that speculators aren't setting the price for oil...

E. Swanson

Cost of Advanced Lithium-Ion Batteries for EVs Dropped 14% Last Year, 30% Since 2009

Nothing is more important for the long-term success of electric cars than a steady reduction in the cost of advanced batteries.

Quake assessment projects nearly 10,000 dead in Tokyo

A massive quake beneath northern Tokyo Bay would kill about 9,700 people, the Tokyo Metropolitan Government said Wednesday.

In its latest damage projection report, the metropolitan government said approximately 70 percent of the area covered by Tokyo's 23 wards would suffer a destructive temblor of upper 6 or stronger on the Japanese seismic intensity scale.

This is worse than the previous estimate of six years ago, which envisaged an earthquake of magnitude 7.3 striking the greater Tokyo area, and reflects new findings from the March 11 quake and tsunami. It also takes into account a recent study by the science ministry that a massive inland quake threatening the metropolitan areas will top the 7-level Japanese seismic intensity scale.

Wikileaks founder Julian Assange, launched his new series of interviews for RT Moscow yesterday. First interview was with Hezbollah leader Sayyid Nasrallah can be seen at http://assange.rt.com/ (he's even got his own sub domain).

RT Reports on reaction at Smear & Loathing: Assange show FSB-filmed Putin propaganda

RE: Cheer up: The world has plenty of oil

Funny, I couldn't help but notice that the author seems to put the big lie to the entire screed with this single observation:

The combination of new technologies and scarcity rents has led to several disappointments and the phenomenon of receding horizons, as technologies that were marginally economic at $20 per barrel oil prices remain marginal at $80. This is not unique to unconventional oil, but has bedevilled nuclear power and some renewables.

Yes, if the oil price were to fall, the pace of unconventional developments would no doubt slacken off, but the break-even price would fall back – as it did after the 2008 economic crisis, when Shell saw new oil sands projects as economic at $50 per barrel.

Hmm, OK. Perhaps the title of the article should be amended to read:

Cheer up: the world has plenty of oil, er, I mean really expensive unconventional hydrocarbons..., at least, that is, until receding horizons push the marginal price to a point that collapses the global economy. But don't worry, none of that has anything to do with the resource being depleted at an exponential rate.

I also love the part where the author debunks resource wars by crowing about the multinationals swooping in on the "new" Iraq.

Um..., oh nevermind.

Cheers,
Jerry

Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans

(Reuters) - Aubrey K. McClendon is one of the most successful energy entrepreneurs of recent decades. But he hasn't always proved popular with shareholders of the company he co-founded, Chesapeake Energy Corp., the second-largest natural gas producer in the United States.

McClendon, 52, helped cause Chesapeake shares to plummet amid the financial crisis when he sold hundreds of millions of dollars in stock to raise cash for himself. Later, to settle a lawsuit by shareholders, he agreed to buy back a $12 million map collection that he'd sold to Chesapeake.

His approach to running his company also is renowned: Among other employee perks, on-site Botox treatments are available at its headquarters in Oklahoma City, Oklahoma.

Now, a series of previously undisclosed loans to McClendon could once again put Chesapeake's CEO and shareholders at odds.

McClendon has borrowed as much as $1.1 billion in the last three years by pledging his stake in the company's oil and natural gas wells as collateral, documents reviewed by Reuters show.

The loans were made through three companies controlled by McClendon that list Chesapeake's headquarters as their address. The money is being used to help finance what could be a lucrative perk of his job - the opportunity to buy into the very same well stakes that he is using as collateral for the borrowings.

The size and nature of the loans raise concerns about whether McClendon's personal financial deals could compromise his fiduciary duty to Chesapeake investors, according to more than a dozen academics, analysts and attorneys who reviewed the loan agreements for Reuters.

Anyone have any comment on this? I'm not sure how to interpret it. He sure seems like a gambler.

The CHK shares dropped by up to 10% initially but has come back to only a 5% drop as of right now.

MSM/PBS Alert.....Episode 2 of "America Revealed", 10 PM EDT (in Atlanta market), is on transportation. Episode 1, "Food Machine", was quite good; leads inquiring viewers to a sort of TOD perspective.

edit: time is 10PM EDT

More:

"Commander" Chuck Street has had a bird's-eye view of the increasing volume on U.S. highways.

Long a helicopter-borne staple of Los Angeles radio until financial cutbacks ended his latest run in February, Street regularly informed listeners how traffic was -- or wasn't -- flowing. While still on the job, he took host Yul Kwon (winner of CBS' "Survivor: Cook Islands") up in the air for a transportation-oriented episode of the new PBS miniseries "America Revealed" that airs Wednesday, April 18 (check local listings)...

...Subtitled "Nation on the Move," the "America Revealed" hour also considers the responses by air and rail systems to the ever-rising demand in getting people where they're going.

In his daily time aloft, Street often didn't have to worry about traveling someplace by the modes most people use. He recalls that in 2010, "I had jury duty. I remember fighting my way over to the courthouse, and I thought, 'This is what people have to deal with.' "

So what happens in the future in terms of transportation congestion, especially in a metropolis at or near the size of LA? "If I knew the answer to that question, I would be a millionaire," Street reflects. "I think it just has to get so bad that people are forced to change their behaviors.

Dudes -

I know I am taking serious way-off-topic-liberties here - Leanan please do indulge me...

The top flight of American Football is the NFL? Youngsters from all over the States dream of running out for an NFL team, right? But if I understand it right, the NFL is a cartel? No club is relegated from, and none is promoted to it?

What about baseball? Do clubs come and go - up and down the leagues? Could a small baseball club from the back of beyond reach for the stars and progress through the lower divisions to become crowned Champions?

I hope so.

All though I must admit, I don't get American sports. What is sport without true competition?

Re: Is Facebook Making Us Lonely?

Why yes... That's why I joined The Oil Drum. Now, my life is fulfilling, complete.

I'll bet those tool and die apprenticeships require more maths than your average liberal arts degree.

But demand for these apprenticeships is always high. If there is a shortage of qualified workers, its because not enough apprenticeships were provided. These apprenticeships require collaboration between industry and government, and I'll bet industry was too concerned with cutting costs and government with funding liberal arts degrees.

Good news for Gail the Actuary suffering without Green Transit in Atlanta.
MARTA is planning a major expansion!

http://www.thetransportpolitic.com/2012/04/17/in-an-atlanta-desperate-fo...

In an Atlanta Desperate for More Transit Options, New Rail Plans for Eastern Suburbs

... The Transportation Investment Act (TIA) would raise the sales tax across regional counties by 1% over the course of 10 years. ARC’s announced list of priority investments would bring new rail and bus links throughout the region thanks to more than $8.5 billion expected to be raised (about half of which will go to roads projects). MARTA, the operator of urban bus services and the city’s metro rail line, would be the single greatest beneficiary of the funds thanks to line extensions and renovations of the existing network.

Will Atlanta, for years the poster child of wanton suburban sprawl in a major city, finally enter the age of Green Transit overcoming its years of racist opposition?

If so this would be very good news for the prospects to save oil and greenhouse emissions in one of the US' worst offenders.

Youth increasingly turning to Green Transit rather than Auto Addiction:

http://blog.tstc.org/2012/04/06/study-americans-driving-less-especially-...

The report’s key findings are encouraging for transportation and sustainable development advocates:

From 2001 to 2009, the annual number of vehicle-miles traveled by young people (ages 16 to 34) decreased from 10,300 miles to 7,900 miles – a drop of 23%.
In 2009, 16 to 34-year-olds took 24% more bike trips than they did in 2001.
In 2009, 16 to 34-year-olds walked to destinations 16% more frequently than in 2001
Between 2001 and 2009, the annual number of miles traveled by 16 to 34 year olds on public transit such as trains and buses increased by 40 percent.

There is hope for the future if the young lead the way!

US bases in Japan set for another summer of energy shortages

U.S. military officials in Japan said this week the Japanese government and utility companies have yet to advise them about the potential for energy shortages during peak hours in summer, when many homes and businesses switch on air conditioners. However, officials at Yokota Air Base, who expect their power prices to increase by 18 percent due to the reactor shutdowns, said the Tokyo Electric Power Company could make a request for the U.S. military to reduce its electricity consumption in Japan again this summer.

Last year, bases instituted energy-savings programs from mid-June until October in a successful effort to avert blackouts by cutting peak power consumption by 15 percent or more.

The need to limit electricity use on bases this summer will depend on temperatures and the availability of non-nuclear fuels such as coal, oil and gas for Japanese power plants, the Yokota officials said.

Udall: Energy Security Is Smart Military And Economic Policy, Saves Lives

Today, Mark Udall led 17 of his Senate colleagues in commending Secretary of the Navy Ray Mabus's commitment to developing and employing renewable energy technologies, which is key to maintaining America's strategic advantage in the world. Udall strongly agrees with senior defense leaders that saving energy saves American lives, and he is proud to support smart military investments that help to protect our troops, cut our country's dependence on foreign oil, and create new jobs at home as these technologies make their way to civilian markets.

... Udall has been a vocal advocate for shoring up both our country's energy and national security. Last year, Udall introduced the Department of Defense Energy Security Act of 2011 with Arizona Congresswoman Gabrielle Giffords to help the military save money and lives by reducing its reliance on foreign fossil fuel, and he fought to include key provisions of it in the 2011 National Defense Authorization Act.

versus McCain: Military now tasked with ‘alternative energy research’ [VIDEO]

During a event to celebrate the release of Citizen’s Against Government Waste’s annual Congressional Pig Book on Wednesday, Arizona Republican Sen. John McCain criticized earmarks for”alternative energy research” in defense appropriations bills, which he said cost taxpayers $120 million.

“We’re talking about cutting the Army by 100,000 people, the Marines by 80,000 people, and yet we’re now have our armed services in the business of advanced alternative energy research?” said McCain.

According to the DOD Comptroller, the Department of Defense's annual fuel bill increases by $130 million for every dollar increase in the cost per barrel of oil

McCain is either (a)brain-dead or (b)enjoys watching his fellow soldiers die needlessly in servitude of corporations and a society addicted to oil. Maybe he expects those 180,000 men and women to do their part as 'cannon fodder' while he and his wife enjoy their $140 million, 14% tax rate, and free medical insurance.

Perspective on 2012 Defense Appropriation bill:

$530 billion in non-emergency funding Defense Appropriations
$119 billion in emergency spending for Defense GWOT.
$ 57 billion in Homeland Security funding
$ 75 billion in Nuclear Weapons funding

$781.0 billion Total
$  0.1 billion in alternate energy research

UK-bound Trinidad LNG diverted to Chile

The Methane Nile Eagle liquefied natural gas tanker, which had been due to deliver Trinidad LNG to the UK's Dragon terminal in early April, is on course to deliver it to Chile on April 24, according to ship tracking and local port authority data.

According to ship tracking data on Reuters the vessel left Trinidad for the UK in March but did a u-turn after crossing most of the North Atlantic and headed south to the southern tip of South America.

Weather Underground Launches New Climate Change Center in Honor of Earth Day

Weather Underground, the world's first online weather service, announced today that it has added a new Climate Change Center to its popular site, wunderground.com. The primary goal of the new center is to present users with hard facts about how climate is changing in their local neighborhoods and empower people to form their own opinions on the climate change debate. The center is now live at www.wunderground.com/climate

The 'Skeptical Science' section debunks common myths about climate change.

Mexican volcano hurls hot rock half-mile into sky

Mexico's Popocatepetl volcano has hurled super-heated rock fragments half a mile (a kilometer) into the air and officials warn more and bigger outbursts are likely.

The volcano southeast of Mexico City has sent giant plumes of ash and water vapor into the air, which may trigger fallouts of gritty, abrasive volcanic ash that can ruin car engines and block drains.

Mexico City metropolitan area population is 21.2 million people

New from Congressional Research Service [CRS]

Pension Benefit Guaranty Corporation (PBGC): A Fact Sheet (pdf)

The multiemployer program had a surplus from 1982 to 2002, but the PBGC reported that it had a deficit of $473 million at the end of FY2008, $869 million at the end of FY2009, $1.4 billion at the end of FY2010, and $2.8 billion at the end of FY2011.

Defined contribution plans, such as §401(k) plans, are not insured.

Pension plan underfunding has increased in recent years. An analysis by Milliman found that the average funding by the 100 largest corporate defined benefit DB plans has been less than 100% since July 2008 and was 72.4% as of December 31, 2011.

meanwhile Corporations Hoard Cash Overseas In Anticipation Of Congress Giving Them A Huge Tax Break

A POLITICO review of annual reports and Securities and Exchange Commission filings shows that a dozen of the most vocal corporate critics of U.S. tax policy finished 2011 with more than $455 billion in cash, investments and other earnings held by foreign subsidiaries — up from $381 billion the year earlier.

and Where Is All That Corporate Cash, Anyway?

AMERICAN COMPANIES HAVE HUGE cash stashes overseas for several reasons. Some generate the money abroad and keep it there to fund local capital expenditures and acquisitions. Others establish foreign subsidiaries in low-tax locales. Above all, many companies have been reluctant to incur a repatriation tax that could climb as high as 35% when corporate cash is returned to the U.S.

... Microsoft has $6.4 billion of cash and investments in the U.S. and $51.0 billion in other countries. Cisco Systems is holding $3.8 billion in the U.S. and $40.6 billion elsewhere. At Oracle, the breakdown is similar, if not as extreme: $8.5 billion held in the U.S., and $23 billion invested internationally.

Eye C none have posted the latest Buzz.
http://naturalsociety.com/monsanto-bee-collapse-buys-bee-research-firm/#...

Monsanto, the massive biotechnology company being blamed for contributing to the dwindling bee population, has bought up one of the leading bee collapse research organizations. Recently banned from Poland with one of the primary reasons being that the company’s genetically modified corn may be devastating the dying bee population, it is evident that Monsanto is under serious fire for their role in the downfall of the vital insects. It is therefore quite apparent why Monsanto bought one of the largest bee research firms on the planet.

Secrecy Orders for Economically Significant Patents

The Subcommittee has raised the concern of a potential risk of loss of competitive advantage ...

... this Notice seeks to obtain feedback on whether the the United States Government should institute a new regulatory scheme, modeled from that applied to national security concerns. This new procedure would institute a secrecy order that forbids applicants from disclosing subject matter deemed to be detrimental to national economic security for such period as the national interest requires.

What are the risks that an economic secrecy order regime would influence other nations to implement similar laws? Would the global implementation of an economic secrecy order regime benefit or hinder the progress of innovation in the United States?

A couple of drumbeats ago I posed a link to The Authortarians as a reply to a comment about religion.
http://www.upi.com/Top_News/US/2012/04/18/Belief-in-God-found-in-decline...

CHICAGO, April 18 (UPI) -- Belief in God is declining gradually worldwide, with faith highest among older people, a report released by the University of Chicago Wednesday found.

I'm not even sure what is the correct frame for this one? Vanity? PR pandering?
http://enenews.com/beauty-contest-prettiest-student-ate-only-food-fukush...

, he took a picture at a beauty contest – with support from the minister for agriculture, a contest was held to find the prettiest student who ate only food from the Fukushima region

Someone will make a satire of this - one of 'em will be lighthearted (with outakes of the naked protests) and one will be pictures of people with radiation burns.

Exclusive: France would not support oil release under Hollande

PARIS (Reuters) - France would withdraw support from a U.S.-British plan to release strategic oil stocks if Socialist front-runner Francois Hollande beats President Nicolas Sarkozy in the presidential election run-off on May 6, the energy adviser to Hollande said on Thursday

Iraq excludes Exxon from May energy auction

BAGHDAD (AP) — Iraq's Oil Ministry said Thursday that the U.S. oil giant Exxon Mobil Corp. is not allowed to bid in the May energy auction because of its oil deals with the northern self-ruled Kurdish region in Iraq.

... Thursday's decision is not a big blow to Exxon. "The much more appetizing Iraqi Kurdistan (regional government) contracts and terms might feel like a better choice by Exxon at this stage," Ciszuk added.

Nearly 70 percent of the blocs on offer hold natural gas and the rest a combination of oil and gas. They are expected to add about 29 trillion cubic feet of natural gas to the current 126.7 trillion cubic feet in reserves, and about 10 billion barrels of oil to the current proven 143.1 billion barrels of proven reserves.

2 years later, fish sick near BP oil spill site

BARATARIA BAY, La. (AP) — Two years after the Deepwater Horizon rig exploded and sank in the Gulf of Mexico, touching off the worst offshore spill in U.S. history, research into the disaster's environmental effects is turning up ailing fish that bear hallmarks of diseases tied to petroleum and other pollutants.

— A recent batch of test results revealed the presence of oil in the bile extracted from fish caught in August 2011, a year after BP's broken well was capped and nearly 15 months after it first blew out on April 20, 2010, leading to the rig explosion that killed 11 men.

"Bile tells you what a fish's last meal was," ... Bile in red snapper, yellow-edge grouper and a few other species contained on average 125 parts per million of naphthalene, a compound found in crude oil, Murawski said. Scientists expect to find almost none of the toxin in fish captured in the open ocean.

"Those levels are indicative of polluted urban estuaries," he said.

also Sick, deformed fish spotted after BP Gulf of Mexico oil spill

and Gulf seafood deformities alarm scientists

"We've fished here all our lives and have never seen anything like this,"

... According to Kuhns, at least 50 per cent of the shrimp caught in that period in Barataria Bay, a popular shrimping area that was heavily impacted by BP's oil and dispersants, were eyeless. Kuhns added: "Disturbingly, not only do the shrimp lack eyes, they even lack eye sockets." We are finding shrimp with tumors on their heads, and are seeing this everyday."

"We also seeing eyeless fish, and fish lacking even eye-sockets, and fish with lesions, fish without covers over their gills, and others with large pink masses hanging off their eyes and gills."

and Gulf fisheries in decline after oil disaster

Geothermal Heating System Draws on Limitless Fuel: Sewage

Among the many renewable energy sources - wind, solar, hydroelectric, biofuels - there is one to which we all contribute that has not yet managed to attract the romantic advocates who have embraced other forms of green energy.

We're speaking about the gray river of warmth flowing right beneath our feet: sewage. ... During the winter, sewage is about 60 degrees, and in summer it can exceed 75 degrees. That's plenty of energy that can be extracted through a conventional heat pump.

Retrofit large commercial buildings to create significant HVAC energy cost reductions. Up to 60% Reduction in HVAC Costs

Georgia Tech Researchers Address Bus Bunching

As any city dweller knows, buses are rarely on time. It’s typical to wait a while, only to have several buses show up one after another, a phenomenon known as bus bunching.

... The first step toward reliable bus service, Bartholdi says, is to abandon the fixed schedule and have drivers go with the flow of traffic.

Under the “self-equalizing” plan, each bus is equipped with a GPS and cellphone. The GPS constantly reports the bus’s position to a central server. When the server recognizes the bus has reached a stop, it sends a message via cellphone telling the driver how long to wait and when to proceed.

That departure time is calculated through the “self-equalizing” equation, which changes the headway of each newly arrived bus to an average of its former headway and the headway of the trailing bus. For example, if its former headway was larger, its new headway becomes smaller. Using the equation, gaps between buses will equalize even if a bus is added or removed, or if the bus route changes.

Solar-grade silicon at low cost

... the [old] manufacturing methods commonly used to make crude silicon produce some 10 tons of CO2 for every ton of silicon produced, and the refinement stage (the Siemens process) produces a further 45 tons of CO2 as well as toxic gases.

... “Crucially, this (new) process requires minimal energy consumption, generates O2 rather than CO2 as a by-product, and is easily up-scalable because it involves fewer production stages,”

Based on the results of an independent economic survey, he believes that the process will drive down the cost of manufacturing solar-grade silicon from around the current $40–200/kg to a maximum of $8/kg, making solar power a more affordable option to generate power

Oil Dispute May Yield Africa’s Newest War

Weeks of fighting over a major disputed oil field along an ill-defined border between Sudan and the world’s newest nation, the breakaway Republic of South Sudan, has escalated to the brink of war. Welcome to Africa’s newest conflict, something the Obama administration worked hard to prevent.

Sudanese President Omar al-Bashir — an indicted war criminal dating to his role in the Darfur genocide — told troops in the border state of South Kordofan on Thursday that they won’t stop with just taking back the disputed oil field, but “in a final lesson of force” his troops “shall go all the way to Juba,” South Sudan’s capital, according to the Wall Street Journal. On Tuesday, Sudan’s parliament declared that South Sudan’s government “must be fought until it is defeated.”

Hey WesTexas, your email has a wrong date in the subject line.

Skills That Pay the Bills: Top 10 Maker Schools

With a whole new ecosystem of schools, proto-universities, and DIY collectives springing up to teach maker skills to the masses, now couldn't be a better time to bone up on an old interest or acquire a new one. Sign up for a class at one of these 10 outposts of learning and you may be moving up that quit-your-day-job date.

Loss of key resin supply may hurt U.S. vehicle production

"It is now clear that a significant portion of the global production capacity of PA-12 (polyamide 12, nylon 12) has been compromised," said AIAG in a statement.

... The plastic is used to make fuel tanks, coatings and connectors for fuel and brake systems, and seat fabrics. It's also used in coatings in off-shore oil pipelines, medical devices, solar panels and some sporting goods.

"This could be very significant. They're certainly looking very hard at substitutes. But if there were easy substitutes, they would have been thought of already,"

Nylon 11 (PA11) and Nylon 12 (PA12) for high pressure pipe.

During the past 15 years nylon 11 (or PA11) has been extensively tested as a piping material for natural gas at pressures up to 200 psig. During the past 6 years several manufacturers of PA12 evaluated that material for the same application.

For natural gas distribution pipe both materials have earned a hydrostatic design basis of 3150 psi at room temperature and 1600 psi at 80° C. Although similar, they are different enough that they should never be mixed together for processing.

and New Deep Sea [Pipe] Liner Technology

Swagelining will combine its established polymer liner technology with Evonik’s custom-tailored VESTAMID® polyamide 12 to produce a solution which can be used instead of the costly corrosion resistant alloy pipes currently used for many offshore oil production flowlines.

Evonik is was the worldwide leading producer of polyamide 12 for flexible pipes for subsea oil production.

US military has contingency for civilian safe havens if Syria violence escalates

US defence secretary Leon Panetta disclosed Thursday the Pentagon has plans in place for establishing humanitarian corridors in Syria, an idea publicly aired by French president Nicholas Sarkozy earlier in the day in Paris.

Team Identifies Water Vulnerability in Border Region

The Arizona-Sonora region has been called the front line of ongoing climate change, with global climate models projecting severe precipitation decreases and temperature increases coupled with vulnerability from urbanization, industrialization and agricultural intensification.

The researchers were supported by a grant from the National Oceanic and Atmospheric Administration, known as NOAA, and produced detailed case studies of the water-climate vulnerability and adaptation situation for four communities: Tucson, Ariz.; the twinned border cities of Nogales, Ariz., and Nogales, Sonora; Hermosillo, Sonora.; and Puerto Peñasco, Sonora.

This is a critical area. The unclassified version of the National Intelligence Council Report: Global Water Security 'left out' the U.S./Mexico border issue regarding water scarcity.

However, the National Intelligence Council Workshop Report: Mexico, the Caribbean, and Central America: The Impact of Climate Change to 2030 and National Intelligence Council Summary: Mexico, The Caribbean, and Central America: The Impact of Climate Change to 2030: Geopolitical Implications both suggest that the idea of 'uninhabitable' regions along the Mexico/SouthWest U.S. border are no longer unthinkable. Timeline for this falls within a 10-20 year window.

Water Resources. The majority of the population in most of the countries reviewed lives in coastal areas, which are highly vulnerable to severe climate changes. As populations continue to grow in the same areas, increasing water extraction and rising sea levels are expected to have severe impacts on the quantity and quality of water available. Many of these countries’ aquifers are open to ocean waters and are already experiencing increased salinity. Rising sea levels will accelerate the deterioration of aquifers and available water resources.

Agriculture. The agricultural sector climate related research for most of the countries in this review is limited. Where research is available, productivity losses are projected for optimist, moderate, and pessimist scenarios for some key food crops with estimates that vary from 10 percent to more than 50 percent by the year 2030.

pg 24... The US-Mexican Border. Increases in the frequency and scale of natural disasters caused from climate change could have a threat multiplier effect on immigration to the United States. US immigration is principally rooted in issues of economic deprivation and disparity. If certain areas of Mexico, Central America, and the Caribbean become uninhabitable—either due to rising sea levels and temperatures, or because traditional agricultural and water resources cannot be sustained—then pressure on the US-Mexican border will increase. The potential for new climate-related epidemics may also affect the prerogatives for border security. The US-Mexican border may emerge as a future flashpoint, not as an area directly affected by climate change, but rather as a force to contend with the intensified migratory patterns that result.

Mexico’s drought destroys crops, endangers life, and opens corn market to U.S. farmers

India Declares Itself Major Missile Power

India Thursday said it successfully test-fired a new missile capable of carrying a nuclear warhead as far as Beijing - announcing itself as a major "missile power."

Great. Just what we need. :-<

Inequality and Investment Bubbles

That the rich really are different is a common opinion. It turns out that the rich even have their own physics.

... a plot of the cumulative percentage of the population versus income shows that the actual income distribution (the data coming from the IRS) for the poorer 97% of reported returns follows a type of curve---the Boltzmann-Gibbs curve---that applies to the energy distribution of molecules in a gas. By contrast, the upper 3 percent or so of incomes, starting at a tax-return level of about $140,000, lie along a Pareto curve.

"A mathematical analysis of the empirical data clearly demonstrates the two-class structure of a society," Yakovenko says. The lower-97% curve is an example of exponential behavior, while the upper-3% curve is an example of a power-law behavior. The power-law curve is conspicuously different from the exponential curve in having a long tail.

Then, Yakovenko plots the percentage of total income lying in that tail on through the years. He finds that the periods of greatest inequality are also periods of bursting investment bubbles. Most recently the inequality peaks lined up very closely with the housing bubble of 2008, the dot.com bubble of 2000, and the savings-and-loan crisis of the late 1980s.

Rumors flying of US Air, American Airlines merger

... Driving these marriages are the industry's own problems. Since the airline sector was deregulated in 1978, there have been hopes that carriers could make money by wringing redundancies out of the system and by better managing their businesses. When that didn't work, companies turned to mergers to improve their bottom lines.

The results have been mixed, even as consolidation has reduced the number of competitors. Unfortunately, the improved financial performance of the surviving airlines has come at the expense of consumers. Airlines have reduced capacity, shut down unprofitable routes, and increased prices and fees.

AMR Unions Said Prepared to Back US Airways Takeover Bid

American Airlines’ three largest unions have agreed to support a possible takeover offer from US Airways Group Inc. rather than remain independent, three people familiar with the matter said.

Prospect of fuel tanker driver strike looms after peace deal rejected

The prospect of a strike by fuel tanker drivers which could cripple petrol supplies has re-emerged after union officials overwhelmingly rejected a proposed deal aimed at averting industrial action.

Motorists were urged not to panic buy fuel as Unite said it wanted a negotiated settlement and stressed that it had not yet decided whether to name dates for action.

... This morning (Thursday) queues had been reported at the Esso garage in Newmarket in Louth as news from the union began to filter through the national news

http://www.louthleader.co.uk/news/local/fears-of-petrol-shortage-in-lout...

AA president Edmund King said: "Our message to drivers is to continue with their normal buying pattern for fuel.

"There is no shortage of fuel and we don't want to re-create another self-inflicted shortage."

http://www.bbc.co.uk/news/uk-17753488

Iranian Oil-Tanker Fleet Status by Satellite Signals

Following is a table of the status of Iran’s oil-tanker fleet according to the most recent signals from the vessels captured by IHS Inc.

Japan's fuel imports push trade deficit to record

Disaster-battered Japan reported its biggest annual trade deficit ever Thursday, a contrast from decades of surpluses, as a nuclear crisis boosted expensive oil and gas imports.

The Finance Ministry's preliminary trade data showed a 4.41 trillion yen ($54 billion Cdn) trade deficit for the fiscal year that ended March 31.

A possible 'stairstep' in a slow collapse?