Drumbeat: May 14, 2012

Peak oil debate is over, say experts

THE debate about peak oil is over and the world has used just a fraction of the petroleum it will be possible to extract, an expert believes.

Speaking at the Australian Petroleum Production and Exploration Association (APPEA) 2012 conference in Adelaide, oil major Total's chief executive Christophe de Margerie said new sources of petroleum, such as tight gas and shale oil, meant that the world had ample supplies of petroleum.

Mr de Margerie said while there were economic and environmental issues which would affect how quickly resources were exploited, there was "definitely not a concern about reserves''.

Oil prices could double by 2022, IMF warned

The International Monetary Fund (IMF) has been warned by its internal research team that there could be a permanent doubling of oil prices in the coming decade with profound implications for global trade.

"This is uncharted territory for the world economy, which has never experienced such prices for more than a few months," the report warns.

Report is here (PDF)

The difficult future facing black gold

swissinfo.ch: What is likely to happen after “peak oil”?

D.G.: There will be more pressure on the environment. Because conventional oil has already reached its peak, there has been more investment in non-conventional oil over the past few years, but oil sands in Canada, deep sea oil in the Gulf of Mexico and shale oil from the United States cause a lot of pollution. Canada has even withdrawn from the Kyoto climate protocol in order to avoid millions of dollars’ worth of fines because of its oil sands.

Then you have the problem of wars breaking out over resources. For me, the 2003 Iraq war, which killed more than 100,000 people, was quite clearly an oil raid, just like the Libyan war in 2011, with more than 30,000 dead. And Sudan and the recently independent South Sudan are now fighting over oil fields. People are being killed for oil today. That’s a cause for concern.

Peak Oil: The Sun Also Rises

While the net exports concept is a great pedagogical tool, I worry that it may distract us from the ways that even subsidized demand for oil in oil exporting countries responds to changes in the oil price. For instance, Saudi Arabian consumers may not feel the impact of changes in the world price of oil, but their government does.

Carbon, Low Carbon, And No Cash

The IEA doesnt have time for stuff like Peak Oil anymore: the global warming crisis is so serious we will have to give up oil an awful lot sooner than it runs out all on its own - which was one good bit of news. In the meantime however, Jones urged the energy corporations of the IEA countries to increase and accelerate and intensify the production of shale oil, deep offshore oil, heavy oil, Arctic oil, gas-to-oil conversion, coal-to-oil conversion, biomass-to-oil conversion, algae-based oil, biofuels, and what have you, all of them clean of course. Breakthroughs could be coming, the IEA says, on top of those which already came in the shape of shale gas and tarsand oil, the shale gas being possible to convert to oil, and the tarsand oil being possible to use as-is. Cars will of course become much more fuel efficient, due to the global warming crisis, and it goes without saying that electric cars are coming, and nuclear power to charge them up is fine as long as its nicely managed. As Jones added, China and India were aware of the oil problem and had told him they were doing serious things to cut the growth of their oil habit. It was sure.

200 Year Supply Of Oil In Green River Formation

“The Green River Formation—an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming—contains the world’s largest deposits of oil shale. USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions. The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.

Oil Falls to 2012 Low on Greek Debt, Saudi Call for Drop

Oil fell below $94 a barrel in New York for the first time since December as Europe’s debt crisis worsened and Saudi Arabia’s energy minister said prices should decline further.

West Texas Intermediate slid as much as 2.6 percent to the lowest level this year. Brent crude, trading at about $110 a barrel today, should drop to $100 as supply outweighs demand, Saudi Oil Minister Ali al-Naimi said yesterday in Adelaide, Australia. Futures also slipped after Greece failed to agree on a unity government and European Union officials considered the nation’s possible exit from the euro. Hedge funds cut bullish bets on oil by the most in three years, data showed last week.

Naimi Says Brent Oil Should Drop to $100 as Supply Tops Demand

Crude prices should fall because global supply is outweighing demand, according to Saudi Arabia’s oil minister, Ali al-Naimi.

“We want a lower price than where it is now,” al-Naimi said in Adelaide today. “We need to get the price to a level of around $100” a barrel for London’s Brent crude, he said. Saudi Arabia is the world’s biggest oil exporter.

National Hurricane Center Tracking Two Pre-Season Storms

The National Hurricane Center is tracking two pre-season storms in the Atlantic and Pacific oceans today.

The stronger of the two is located in the Pacific about 550 miles (885 kilometers) south-southwest of Acapulco, Mexico and has a 50 percent chance of becoming a tropical depression in the next day or two, according to a bulletin from the center in Miami.

UK gas prices sink on poor demand, ample supply

LONDON (Reuters) - British prompt gas prices sank on Monday due to ample supply and below-average demand but upcoming maintenance outages and cooling temperatures may drive gains later in the week.

Why China's Slowdown Could Be Good for US, Europe

China’s economy may be on track to grow at its slowest pace in a decade, but there’s a silver lining to this: lower commodity prices may actually benefit the U.S. and Europe, just when they most need it.

Palm Oil Plunges Most in 14 Months on Europe Debt Crisis

Palm oil slumped the most in more than 14 months on concerns that an escalating debt crisis in Europe and a deepening economic slowdown in China may curb demand for commodities.

Lower jeepney fares starting Tuesday

MANILA, Philippines - Commuters will once again pay P8 minimum fare for public utility jeepneys starting tomorrow (May 15). The Land Transportation Franchising and Regulatory Board (LTFRB) on Monday issued a recalll order on the P0.50 provisional fare increase being implemented since March.

The LTFRB's order came on the heels of a major price rollback implemented by oil companies on Monday. The companies cut prices by P1.70/ liter for gasoline and P1.50/liter for diesel.

In Bahrain, the spark behind Pearl Revolution still glows

While other Arab nations are engaging in elections and self-rule after the removal of dictators, Bahrain remains solidly in the control of King Hamad bin Isa Al Khalifa and his family. After negotiations with protesters broke down, Khalifa called in the troops from the Gulf Cooperation Council, a union of Gulf states dominated by Saudi Arabia, and its troops forced demonstrators from the streets.

The Bahrain Center for Human Rights says the crackdown left 73 people dead. Human Rights Watch reported serious abuses by security forces, saying five people who were detained died under torture.

UK warns of more EU Iran sanctions if no change

BRUSSELS (Reuters) - The European Union will impose tougher sanctions on Iran if it fails to take concrete steps to allay international concerns over its nuclear program, British Foreign Secretary William Hague said on Monday.

Six world powers, including Britain, are due to meet Iranian officials for another round of negotiations over the nuclear issue in Baghdad on May 23.

Turkey cuts Iranian oil imports in April vs March

Turkey's cut its crude oil imports from Iran steeply in April from unusually high levels in March but its purchases were still close to last year's average, meaning Ankara has yet to slash buying to the extent sought by Washington, data from shipping sources showed.

Turkey said on March 30 that it would cut imports of oil from Iran by 20 percent from last year's quantities, ceding to US pressure to reduce purchases.

Iran Company to Renovate Syrian Hydropower Plants, Press TV Says

Safa Nicu Sepahan Co., a privately owned Iranian company, reached an agreement with Syria’s government to renovate two hydroelectric power stations in northern Syria, the state-run Press TV reported.

The company will refurbish the al-Furat dam at an estimated cost of 14.8 million euros ($19 million) and the al-Baath plant for 767,000 euros, according to a report published on the news channel’s website. The al-Furat power station on the Euphrates River has the potential to generate 800 megawatts of electricity and the al-Baath 75 megawatts.

EU slaps new sanctions on Syria

(CNN) -- European Union foreign ministers agreed Monday to impose fresh sanctions on Syria as a U.N.-backed peace plan -- along with all other diplomatic efforts -- has yet to stop the carnage that mounts every day.

The EU ministers agreed to an assets freeze and visa ban on two firms and three people believed to provide funding for the regime, according to the office of EU foreign policy chief Catherine Ashton.

A month after 'cease-fire,' where does Syria stand?

(CNN) -- It's been a month since the "cease-fire" was due to come into effect in Syria as the first step in a U.N.-backed peace plan, with a team of U.N. monitors on the ground to observe the progress.

But clearly, there is no let-up in the violence. Daily reports spill in of bombings, shootings, explosions and more as opposition groups and the regime forces of President Bashar al-Assad battle for more than a year.

So, where does the Syria conflict stand now?

Drowned Libya oil chief feared going home

VIENNA (Reuters) - Spat at in public by a fellow Libyan who called him a thief, watching his back on long walks through Vienna, eating poorly; Muammar Gaddafi's fugitive oil supremo was a troubled man in the months before he was found drowned in the Danube two weeks ago.

Just whom, or what, Shokri Ghanem feared may hold a key to his mysterious sudden death, just as he was under mounting pressure to reveal what he knew of suspect deals with foreign oil buyers that made billionaires of the late dictator's family.

Nigeria president unlikely to risk oil graft crackdown

ABUJA (Reuters) - Nigerian President Goodluck Jonathan is coming under pressure to prosecute top officials implicated in a $6.8 billion fuel subsidy fraud, but many of the suspects are allies he is unlikely to go after if wants to keep his power base intact.

It has been three weeks since parliament produced a report detailing massive corruption in a state subsidised petrol import scheme and Jonathan has yet to indicate how he intends to respond.

Argentina as No Claims-Nation Revealed in Repsol Losses

Repsol YPF SA (REP), the Spanish oil explorer seeking $10.5 billion from Argentina for seizing its assets, will line up behind companies from Exxon Mobil Corp. to Unisys Corp. yet to be repaid by the most-sued nation on earth.

There are 26 cases pending against Argentina, more than any other country, at the World Bank’s International Centre for Settlement of Investment Disputes in Washington, the principal arbitration court for claims against sovereign countries. So far, it has refused to pay any of the tribunal’s judgments, according to a Bank of America Merrill Lynch economists’ report.

Brazil, Venezuela, and Mexico: three ways to nationalize oil

Argentina's renationalization of its biggest oil company, YPF, recently caused an outcry. But the cases of oil nationalization in Brazil, Mexico, and Venezuela show that outcomes can vary widely.

Crescent Won’t Provide Cash to Dana Gas for Sukuk Payment

Crescent Petroleum Co., Dana Gas PJSC’s biggest shareholder, has no plan to provide cash to the United Arab Emirates-based natural gas producer to help pay a $1 billion Islamic bond due in October.

BHP leaves door open to U.S. shale gas write-down

ADELAIDE (Reuters) - BHP Billiton's petroleum chief executive left the door open to the possibility of a write-down on the company's U.S. shale gas assets on Monday, but defended their long-term value.

Kurt Cobb - Chesapeake And JPMorgan: Risk (Mis)Management With Other People's Money

If I were to stake you $50,000 and set you loose in the world's largest casino, you might try your luck in a big way at a number of games to see if you could double or maybe even triple your good fortune. But it would be an entirely different matter if the $50,000 were your own money. You might decide to take advantage of the casino's restaurant for which you would at least get a meal in return for your money. You might even test your skills with a few hundred dollars. But unless you were a gambling addict, you would be on your way pretty soon after the house had taken the few hundred dollars you decided you could afford to lose.

Running some of America's largest corporations is more like the former situation than the latter. This past week, two corporate titans proved just how easy it is to gamble with other people's money, especially when you know you have little to lose personally.

Japan to Experience Power Shortages This Summer, Panel Says

Kansai Electric Power Co. and two other Japanese utilities may have power shortages this summer without supplies from nuclear reactors, a government panel said.

Kansai Electric, the utility most dependent on nuclear power, may face the biggest shortage of 14.9 percent, the independent committee said in a draft report published May 12. Kyushu Electric Power Co. and Hokkaido Electric Power Co. may have shortages of 2.2 percent and 1.9 percent, the report said.

Chevron Sells 80% of Wheatstone Gas After Deal With Tohoku

Chevron Corp., the second-largest U.S. oil company, said it sold more than 80 percent of the gas from its Wheatstone project in Western Australia after reaching an agreement with Tohoku Electric Power Co.

The Japanese electricity supplier will buy as much as 1 million tons of liquefied natural gas per year under a 20-year agreement, Roy Krzywosinski, managing director of Chevron’s Australian unit, said yesterday in Adelaide.

Tepco Expects Narrower Net Loss as Government Takes Control

Tokyo Electric Power Co. (9501) expects a narrower annual loss after a government-approved business plan proposed measures including an increase in electricity rates to return the company to profitability in two years.

Japan grapples with post-tsunami suicides

TOKYO, Japan – More than 60 people have committed suicides related to last year’s 9.0 quake and tsunami, which triggered meltdowns at a nuclear plant in Fukushima, the Japanese government says.

The data comes as a family prepares to file the first lawsuit against the Tokyo Electric Power Co. over the suicide of Hamako Watanabe, a 58-year-old woman who set herself on fire in wake of the disaster.

6 hybrid supercars on the cutting edge

Rising gas prices and tougher U.S. government gas-mileage requirements for the coming years have forced the car industry to take hybrid cars very seriously.

There's a whole new generation of so-called plug-in hybrid cars in the pipeline. These supercars can be recharged with household electricity, which is much cheaper than running a gasoline engine to recharge the battery.

Willing to Pay (a Little) for Clean Energy

The perception that the American public is adamantly opposed to higher energy costs is at the root of most political opposition to policies favoring the adoption of renewable energy. But a new study of public opinion finds that people are in fact willing to pay to move to cleaner energy.

Growing the grunt: developing green biofuels for Australia

In 300 BC, the Syrian city of Antioch had public street lighting fuelled by olive oil. At the 1900 Paris World Fair, German inventor Rudolph Diesel demonstrated his engine powered by peanut oil.

Biofuels are not new, but many of the technologies are, and interest in renewable, sustainable biofuels has recently been rising due to worry about peak oil and price pressures, vulnerability of energy supplies, dependence on imports, and greenhouse emissions.

Permaculture Visionary: "We Don't Need to Wait for Permission" to Transform Our Societies

Four years ago, a British educator and permaculturist named Rob Hopkins initiated what has since become one of the most rapidly evolving and far-reaching social experiments of our time. The Transition movement - which encourages people in cities and towns across the world to devise their own unique, local solutions to peak oil and climate change in the absence of meaningful government action - has developed a spirited and devoted following and garnered praise from the likes of Bill McKibben and Richard Heinberg. Rob's latest book, "The Transition Companion," looks at how the movement has evolved from its beginnings in tiny Totnes, England, to hundreds of communities all over the world. "The Transition Companion" is available now from Chelsea Green Publishing. Rob recently spoke with Chelsea Green Associate Editor Brianne Goodspeed.

Backfiring Cookstoves Point Way to Assessing Aid Schemes

In Orissa, households were randomly assigned to three waves of stove construction, and researchers measured a meaningful reduction in smoke inhalation in the first year after a stove was installed. Over a longer period, however, they saw no health benefits and no reduction in fuel use. That’s because once the stoves and chimneys developed cracks, the villagers generally chose not to fix or maintain their new devices but instead went back to their old, smoky ways of cooking.

This doesn’t suggest the clean-cookstove campaign should be abandoned so much as slowed down. It would be wise to test various designs in real-life settings, and, where necessary, take more time to human-proof models. Clean-cookstove advocates need to develop incentives for families to stick with the stoves, and they need to study why many villagers in the India trial embraced the devices yet continued using their conventional cooking fires as well. Otherwise, the innovative stoves of today could wind up in the same junk piles as models from efforts decades ago.

The man who takes on the environmental conservatives

Mr Hauge is the founder of Bellona, an environmental non-governmental organisation (NGO) that advocates controversial practices such as burying greenhouse-gas emissions underground. It has forged close ties with industry and government alike. Most of its annual budget, which ranges between US$10 million (Dh36.7m) and $12m a year comes from corporations.

Petition calls on Brazilian president to veto 'catastrophic' forest code

More than 1.5 million people in Europe, the US and elsewhere have petitioned the Brazilian president, Dilma Rousseff, to veto a law that critics say could lead to the loss of 220,000 square kilometres of Amazonian rainforest, an area close to the combined size of the UK and France.

Time, place and how wood is used are factors in carbon emissions from deforestation

When trees are felled to create solid wood products, such as lumber for housing, that wood retains much of its carbon for decades, the researchers found. In contrast, when wood is used for bioenergy or turned into pulp for paper, nearly all of its carbon is released into the atmosphere. Carbon is a major contributor to greenhouse gases.

"We found that 30 years after a forest clearing, between 0 percent and 62 percent of carbon from that forest might remain in storage," said lead author J. Mason Earles, a doctoral student with the UC Davis Institute of Transportation Studies. "Previous models generally assumed that it was all released immediately."

Eating wisely can lower carbon footprint: Study

London: Consumers can help curb greenhouse gas emissions by reducing the quantity of food they buy, serve and waste, a study says.

According to the study conducted at the University of Edinburgh, UK, some 360,000 tonnes of milk poured down kitchen sinks in Britain creates a carbon footprint equivalent to exhaust emissions of 20,000 cars annually, or 100,000 tonnes of CO2.

New Zealand Government Mulls Break For Importers Of Greenhouse Gas-containing Goods

WELLINGTON (Bernama) -- The New Zealand government announced Monday it was considering allowing importers of goods containing synthetic greenhouse gases to pay a levy rather than submit them to the country's fledgling emissions trading scheme (ETS).

The proposals were welcomed by new car dealers and other importers who feared the ETS obligations would be too costly, Xinhua news agency reported.

U.N. cap-and-trade system: Good for China and India, but who else?

The United Nations-administered cap and trade system to reduce planetary greenhouse gases through investment in “green” projects in developing countries has directed most of its billions of dollars in investments to China and India, two of the world’s most notorious polluters.

Indeed, China and India together have gotten more than 70 percent of the more than 4,100 projects so far registered for the system, while most developing nations, aside from a handful, have gotten hardly any at all, according to the system’s own accounts.

The Figueres family led Costa Rica's revolution, and now its green revolution

Say the name Figueres in Costa Rica and it's bound to get a reaction. José "Don Pepe" Figueres led the 1948 revolution, was president three times, nationalised the banks and gave women and black people the vote. His daughter Christiana is the UN's climate chief trying to steer almost 200 countries through the most complex international negotiations ever attempted; and her brother José María was one of Latin America's youngest ever presidents at the age of 39.

Now José María – who coined the phrase "there's no planet B" when head of the World Economic Forum – has joined his sister in the fight for a global energy revolution by taking over as head of the climate change business thinktank Carbon War Room, which aims to get business to cut gigatonnes of carbon by sharing best practice information.

Norway acts as others drag feet on carbon emissions

The industry is banking on country-specific conditions, such as a need for carbon dioxide for oil recovery in the United States or government support in China, to drive projects and technology innovation in the years ahead.

The idea of going solo when it comes to the quest to bury carbon emissions underground reflects a growing sentiment among nations that they are alone when it comes to the fight against global warming.

In Rhode Island, Protecting a Shoreline and a Lifeline

The problematic part of Matunuck is about 1,400 feet of beach, parceled into private lots, between two old sea walls that extend in opposite directions and were built before state regulations came into effect. Along some parts of this open stretch, there are less than a dozen feet of sand protecting the road — the town’s lifeline — from the water.

In theory, this leaves the neighborhood with three basic courses of action. It can protect the beachfront, it can protect the road or it can retreat and move away from the encroaching shoreline, as a growing number of environmentalists and scientists recommend.

Almost nobody here likes that last option. “If we do this, how far do we retreat?” asked Frank Tassoni, the president of the Mary Carpenter’s Homeowners’ Association, which includes residents who keep trailers and small cottages on the tract of land across the road from the beach. “If we keep doing this, Rhode Island will be gone. We’re trying to find a balance. We’re not killing baby seals out here.”

Isn't it amazing that the peak oil debate is over - right in the middle of a production plateau that's lasted six and a half years with price gains averaging double digits year after year?

Thanks, de Magerie, for once again clearing that up for us!

Cheers, Dominic

Glad some oil company officails are finally realizeing the deabate IS OVER and world production HAS PEAKED. I didn't actually read the article, I just assume and intelligent man like this would not come to any other conclusion from the available data. :(

Indeed, it's a shame the this one "expert" (not experts) doesn't even know what peak oil is and thinks reserve size is all that matters. Apart from that little factoid i'm sure he's 100% right.

In this instance i have a great opportunity for him to fund my "gold from the sea" machine. Because the gold reserves in the sea are vast... if a little spread out...

If there is one thing that makes me know i'm right when every other person thinks i'm "a little nutty", it's that the people in opposition to my views are constantly reminding me what craven liars and stupendious idiots they are.

To be seen to be on their side would be both wrong... and quite embarrassing.

Funny how things seem upside down when one is downunder:

CERAWEEK: Total's Upstream Chief Says Peak Oil Is Around The Corner

3/06/2012 @ 11:14AM

For the past couple of years executives from French oil giant Total have espoused a belief that the world is pretty close to a peak in oil supply. Today in a speech at the CERAWeek energy conference in Houston, Yves-Louis Darricarrere, president of the company’s oil and gas exploration division, said, “We think it will be difficult to produce more than 95 to 97 million barrels per day in the foreseeable future.”

This volume of oil is not far away from the 91 million bpd or so expected by the International Energy Agency this year. Getting to 97 million bpd would entail supply growth of just 600,000 bpd a year for 12 years – that’s about what China’s demand growth has averaged in recent years.

Thus, says Darricarrere, oil’s share of the global energy supply will fall, with the slack to be picked up mostly by natural gas, which he says will increase in supply from 320 billion cubic feet now to 450 billion cf per day by 2030.

He admits that his view seems “paradoxical” when considering the amazing growth of supplies from shale fields....

... or maybe de Margerie and Darricarrere are just playing good-cop/bad-cop :-/

But wait, there's more: Total's Christophe de Margerie believes the world will soon run short of oil.

In contrast to awkwardly laconic peers like ExxonMobil's Rex Tillerson, De Margerie is chatty and uncharacteristically blunt. He tells you straight up that he thinks the world will soon run short of oil and that as long as he's around Total will make deals with anyone (perhaps even the devil?) to keep the hydrocarbons flowing.

The devil is in the details, it seems.

That pesky devil is in so many details these days- finance, fluids, inflation, & public figures. If you read the doublespeak enough, they seem to admit that despite the "environment" and the inconvenient EROEI, things are looking downright cheery.

Funny how things seem upside down when one is downunder:

Nothing to do with gravity ... it's just that our beer and Chardonnay are simply irresistible to foreigners.

And yes - I would be cautious about the reporting of this. These industry conferences (in Australia, anyway) are always attended by the media and business-page reporters who are captured by the industries they report on - the become cheerleaders in short time.

Christophe de Margerie is probably the most peak oil aware oil company executive. He's at least the most high-profile one. He's always believed that peak oil was about extraction rates, not reserves.

Hard to tell from today's short article, but I wonder if he's changed his mind.

Would be nice to have the actual transcript of what de Margerie said, to know whether this comes from the journalist reporting, or if de Margerie changed his tune (suspect the tune is more : there are reserves but major investments required to put them online).

And why do these journalists always come up with these utterly stupid titles ?

I agree that the full transcript is needed before giving a final opinion. My first impression, before looking at any of the posted comments here, was that the reporter hadn't much idea what was really being said and had just cherry picked some hot phrases, and that what was actually said was that the peak oil debate is over because the event is now in the past or accepted to be in the near future and there's no point in more argument. The rest of the presentation reads like: “OK, peak oil is here but things aren’t going to be so bad after all, not for the world and especially not for the oil industry”. Why say there is “definitely not a concern about reserves” if you haven’t led up to it by mentioning concerns in other areas (i.e. production), why sat we need to prepare for a low carbon future if you aren't expecting production to fall, and why say the oil industry doesn't need renewables if you don't know oil prices are going to go higher and your profits will be protected anyway. Also the focus on technology and prices sound like pre-emptive pleas for calm from share holders, customers and governments in the face of falling production and 2P reserve numbers in future company reports. But it looks like my view is in a minority of one from the other comments here so maybe the chairman of Total (and Aramco if they have one) and the CEOs of other IOCs have had a quiet word in some ears to get everybody back in line.

Richard Eis,

Well said:

Indeed, it's a shame the this one "expert" (not experts) doesn't even know what peak oil is and thinks reserve size is all that matters.

Sometimes I think that the inability to envision context comes from inadequate reading comprehension.

Peak oil means a time when oil can no longer be extracted at an economical price, all things considered.

Which means a time when the price is not affordable to a large enough segment of society, which will therefore affect economy.

That scenario varies from country to country, from time to time, because the economies of nations fluctuate.

Another factor, using Greece as an example, is that when one country cannot handle the world price per barrel, and is economically harmed in some way, that affects the other nations' economies.

At some point it causes catastrophic economic problems, no matter how much is still in the ground.

Peak oil means a time when oil can no longer be extracted at an economical price, all things considered.

Not really, peak oil or oil production peak is simply the year, month or week, depending on time unit chosen, with the highest number of barrel extracted, along oil extraction historical period (past present and future), which means some cheap oil amongst these barrels some expensive ones, but max overall number of barrels, that's all.
(not need for any price aspect in the definition).

Not really.

What do you mean not really ?, that's the definition, that's all (doesn't mean the definition says anything about the economics consequences or drivers associated, of course)

Exactly Yvest, peak oil is the point of peak oil extraction. That's it and yes it is really that simple. It is amazing how many people can get such a simple concept so very wrong. Peak oil is the point of peak extraction regardless of the economics or geology of how much oil is left in the ground or how much they think demand is outstripping production.

Peak oi oil is peak in oil extraction and absolutely nothing else. Now some people regard peak oil as the year and some the month. Of course the peak month can happen in the same year but not necessarily. A decade from now they will be looking back on the peak year and call that peak oil, so that is the period I generally use.

Ron P.

Why is it so tricky to define ‘peak oil’?

The debate over peak oil can get pretty slippery at times. Geologists will point out the (obvious, banal) truth that there’s a finite amount of oil out there beneath the rocks and, at some point, we have to reach maximum production. Economists and other peak-oil skeptics, for their part, will say that markets can always adjust. If current supplies dwindle and oil gets pricier, then companies will find it profitable to drill for harder-to-extract oil in the Arctic and Canada’s tar sands and elsewhere. No big deal. Yet often it seems like the two sides are talking past each other.

Perhaps a clearer way of looking at matters comes from petroleum economist Chris Skrebrowski, who argues that peak oil is best defined as the point at which “the cost of incremental supply exceeds the price economies can pay without destroying growth.”...

Tricky indeed.

Ghung, if you go to Skrebrowski's actual thread: A Brief Economic Explanation of Peak Oil you will find that the author of that piece, Brad Plumer, misunderstands what Chris is saying. In that statement Chris is describing when and what will cause peak oil, not what it is.

The reality, I believe, is that both groups have part of the answer but that Peak Oil is, in fact, a complex but largely an economically driven phenomenon that is caused because the point is reached when: The cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time. While hard to definitively prove, there is considerable circumstantial evidence that there is an oil price economies cannot afford without severe negative impacts.

And when that point is reached, that will be the point of maximum extraction.

Peak oil is the point of maximum oil extraction, end of story.

However if peak oil is anything else then how do you know when it happens, or when it happened. If it is something else other than peak extraction, then it might have been in 1997, or 2002, or whenever. When did peak oil occur in the USA? 1970, everyone knows that. But how do they know? They know because that was the year of peak oil extraction and for no other reason.

Nothing tricky about it.

Ron P.

It's good to see that although the guy in the article didn't "get" peak oil, the people here understand it perfectly (tongue firmly in cheek).

Frankly though I think there is peak oil "definition" and peak oil "common usage". The definition is the dry mathematics and prediction is verboten, the common usage involves talk of markets, slope shape, exports and possibly holing up in nevada with a shotgun and lots of tinned food (what i like to call "the fun version").

The problem is "Peak Oil" is a vacuous concept because it is predicated on something else which is fundamental -- the rise and fall of Oil discoveries over time. As people are fond of saying, you can't extract Oil until you've found it. So the very fact Oil discoveries are not the topic of discussion but rather Peak Oil is testament to the myopia and greed of societies, particularly of the US.

Good point. As Roscoe Bartlett is known to say, if I had just one chart to show, to highlight our predicament, it would be this one:

Actually he uses a variation of that chart that projects discoveries out to 2050 but, anyway you look at it, that chart just about says it all. A Google search for images of "the growing gap oil discovery and production" reveals a dazzling array of images, mostly Peak Oil sites but one from the Huffington Post. Suffice to say, the image is "out there" for inquiring minds to find it.

Alan from the islands

Yep. This is one of the first ones I ever saw, and the one that made me "get" PO. The prime PO graph of all.

Indeed, thats the one I carry around in my wallet.

Why carry around a graph that's completely out of date? Where does it show the vast new discoveries of now-recoverable non-conventional oil?

What new discoveries? Canadian Tar sands? Green River Shale? Bakkan? None of these are new discoveries, none will substantially replace conventional crude.

I liked this one ... snagged from GMO Quarterly ... fair use


The problem is to think that the simple definition doesn't take "economics" or "technology" into account : it does, and it is still the definition, even if you can be sure of the actual point only some years after. That "economics" (or more technology and short term greed) can increase the global integral a bit (and propably make the other side steeper) doesn't change the definition.

Afterwards maybe you can say that geologists who have rang the bell have had a tendancy to be a bit pessimistic in their previsions (as last Gail's article about the IMF paper shows for Campbell for instance), but that doesn't mean the simple concept doesn't encompass economics (and one would also have to check what these previsions were exactly about in terms of "kind" of oil), in any case they have been much closer to the truth than any "economics" based prevision that's for sure.

Darwinian, I would add the term "rate" to your definition to make it more clear: "Peak Oil" is the peak RATE of extraction (volume/time). Reasons for that rate are immaterial, whether they be geologic limits, economic limits, technological limits, geopolitical limits, etc.

Well ... if your unit of time is a calendar year, then the year of peak rate of extraction is obviously the year of peak production - so I don't see how including "rate" value-adds anything much.

Cargill, I wasn't suggesting it because you or Darwinian or many others here don't grasp the concept of peak oil, but because so many folks seem to somehow translate "peak oil" to "running out" or "end of oil" or some such, then feel a need to challenge that prospect, which completely misses the point and consequences of having less looking forward. Everyone's grasp of language and its nuances is different of course, but for me "rate of production" seems less ambiguous than just "production" and would seem to be easier for lots of people to grasp than do so far. Reminds me of an exam I took in school many years ago, in some health and safety class, with this question: "Does alcohol increase or decrease reaction time?". I checked "increase". Well, the instructor marked it incorrect. I argued to no avail that if he had asked if alcohol increased or decreased reaction timing, of course the correct answer would be as he claimed. See the difference? "Time" (time it takes to react) is a quantity, "Timing" is a quality of the speed of reaction. Alcohol is known to degrade reaction time, or increase it...

I see your point but I think it is unnecessary. Peak production, expressed in barrels per year, would be hard to misunderstand.

Ron P.

Your instructor in the Health & Safety Class was clearly a complete dill pickle ... alcohol increases the reaction time - and of course I speak from personal experience.

But it does not translate so well to understanding simple Peak Oil - as Darwinian states, the "Year of Peak Oil" is the year in which the greatest volume of oil is extracted, with each year after that, extracting less than that peak year. And I agree it's not too hard to understand that, without needing to include an extraction rate over time - which is the same thing if the unit is a year.

Cargill wrote: "as Darwinian states, the "Year of Peak Oil" is the year in which the greatest volume of oil is extracted, with each year after that, extracting less than that peak year. And I agree it's not too hard to understand that, without needing to include an extraction rate over time - which is the same thing if the unit is a year."

The premise in this thread has been that the world seems to misunderstand the issue of peak oil. Given that, it seems odd to argue against clarifying the definition so that possibly there will be greater understanding by folks in general. I agree, that for global peak oil, a year is probably the smallest time frame to consider. Even so, most of the the data lists production in "bpd" units, or barrels per day. How many TODers can quote production in other units from memory, ie total production per year for a field, region, nation, let alone global. Yet most of us remember that for crude oil & condensates, production is hovering in the low 70 million barrels per day; all liquids in the high 80s barrels per day, etc. Example: "Peak Oil production appears to have occurred in 2005 at the rate of XX million barrels per day for that year".


Some people like to argue about "if a tree falls in the woods and no one hears it, was there a sound?"

It is silly to apply that to peak oil "if there is oil in the ground but civilization stopped using it because it was no longer economical, was that peak oil?"

Semantics can get silly.

Which is WHY it's not about either economics or reserves, while either one has 'some' relation to it, like any other above-ground factors anyone cares to include.

The PEAK, most clearly and simply, is about the rate that the stuff is getting into our hands, and when it goes from ascendency into decline. Naturally, price will be involved in this dance, and is in fact one of the complications that makes life 'interesting' when a key energy supply is no longer climbing.

But PEAK OIL is - 'Did we pump more today than yesterday?' .. not even 'Can we?', just 'Did we?'. I feel it's fair enough to incorporate EROEI, qualifying grades and extraction techniques, and also consider Barrels/Capita in the formula if you like, since these are both matters of how much oil and energy we effectively each have available for us in the end.

That's how I see it.

It is silly to apply that to peak oil "if there is oil in the ground but civilization stopped using it because it was no longer economical, was that peak oil?"

Empathically yes, that would be peak oil. (If civilization stopped using it, then that would have to be way past peak oil.) There will always be oil in the ground and quite likely there will always be a lot more oil left in the ground than was ever pumped out. That is because many reservoirs are too small or otherwise cannot be accessed. And in carbonate fields, there will always be about 65 percent left soaked into the rocks, and somewhat less in sandstone fields.

Neither semantics or economics has anything to do with it. Peak oil is the point of maximum extraction regardless of the cause.

Dredd, it is really that simple.

Edit: Neither economics or geology have anything to do with the definition of peak oil. They both have everything to do with when peak oil arrives or did arrived.

Ron P.

Although above ground factors that bring about Peak Oil are not usually considered here.

Saddam destroys every oil well in Kuwait and sets them afire, Iraq Invasion, dissolution of Soviet Union. etc. could bring about "Peak Oil" for those nations, but these factors do not graph well.


Well, yes and no. There's mathematical peak oil, which we needn't dwell on further. But there might also be social peak oil, which would be oil running short of "demand" - whatever that is - in some manner that causes social disruption.

That is, I doubt very many folks would trouble themselves over purely mathematical peak oil, any more than they troubled themselves over peak buggy whips. Like the tree falling over, if it has zero effect on anyone, then it as good as never happened; no one needs to care, it doesn't matter in the slightest (nor does the "sound", if there was any.)

But social disruption does matter, and it's also a notion that seems highly malleable. Given the many mutually incompatible proposals for dealing with oil running short of "demand", one person's "disruption" apparently may be another person's (purely theoretical, be careful what you wish for) notion of utopia. That malleability provides infinite fodder for discussion, unlike with the largely unnoticed peak buggy whips.

That is, I doubt very many folks would trouble themselves over purely mathematical peak oil, any more than they troubled themselves over peak buggy whips.

Even though I expect it is totally unintentional from you - you have made the entire point. When Peak Buggy Whips occurred, nobody cared at all, because by then they were heading off to a new thing - the horseless carriage - the motor car.

The WHOLE POINT about Peak Oil is that there is no new technology around the corner - have you not noticed that this is the case? Sheesh.

Indeed, it's a shame the this one "expert" (not experts) doesn't even know what peak oil is and thinks reserve size is all that matters.

Oh, I bet he knows better, but the propaganda needs of his employer outweighs any concerns about misleading the public this way.

...but the propaganda needs of his employer outweighs any concerns...

That employer would be News Corp... not that Rupert, et al, would have any influence :-/

And if he did he wouldn't remember.

Of course, reserves are the only thing that matters! And the tank is full...

Except here in California for finished product. Very, very strangely, the local MS news radio KNX 1070 ran a piece today saying that gasoline reserves are lower than they've been since 1994.

Took me a while to figure out what they were talking about, but eventually I realized it must have been this:


Of course, this is very different from the SPR, and gasoline supply in PADD 5 probably has more to do with refining capacity. But this does start to raise uncomfortable questions...

Great idea, "Gold From The Sea." Sounds like the title of a 1950s paperback.

A "slightly" different evaluation, based on extrapolating the 2005 to 2010 rates of change in the ratios of total petroleum liquids consumption to production for key oil exporting countries:


For Available Net Exports (ANE), we extrapolated the 2005 to 2010 rate of change in the ratio of Chindia's net oil imports to Global Net Exports*.

*Top 33 net oil exporters in 2005, BP + Minor EIA data

And in the US, it appears that we had about 1,000 rigs drilling for oil in 2011. If we use Texas RRC data for Texas crude oil production instead of the EIA data (and use the EIA data for other US areas), it appears that the net increase in US crude oil production per drilling rig (drilling for oil) in 2011 was zero bpd.

And the six year decline in regional net oil exports (Total Petroleum Liquids, BP) from the seven major net oil exporters in North & South America was 1.4 mbpd, down from 6.2 mbpd in 2004 to 4.8 mbpd in 2010.

But these numbers don't conform to what people believe about oil resources, so in most cases I expect that numbers like these are rejected, i.e., cognitive dissonance at work.

Went to Total's website to find some info. It isn't very open about the amount of its reserves or its reserve replacement ratio. Its 2012 Q1 report says nothing about how much oil and gas was extracted to produce the financial numbers. Finally found this page that provides production numbers for 2009, 2010 and 2011: Liquids kbpd 2009: 1381; 2010: 1340; 2011: 1226. Total claims proved reserves of 11.4 Bboe based on Brent at @$111/b. The production rate implies an inability to outperform the decline rate, which was said to be 5% in 2009. I assume further looking would uncover more figures confirming that inability and conforms to Chevron's recent report saying they were unable to replace the reserves they mined.

"It isn't very open about the amount of its reserves or its reserve replacement ratio"

looks like "our numbers" are Arabic in more ways than one.

Another item of interest. Seadrill, a major supplier of offshore and deep water drilling apparati, had this to say in relation to its reporting 1Q results (my emphasis):

Encouraging exploration successes in established as well as frontier basins are leading to an increasing backlog of appraisal and development drilling projects. These strong fundamentals support the expectation of continued strength in all sectors of the contract drilling industry for the foreseeable future. As a consequence we have ordered six newbuilds in the last three months and the Company now has 18 drilling units under construction. We remain bullish on the outlook for drilling services, in particular related to the demand for high-specification equipment.

Furthermore, it projects EBITDA to increase to $4 Billion/yr by 2015 from the current $2.4 Billion. IMO, the massive, rapid expansion in offshore drilling, particularly deep water, is good evidence terrestial prospects are very limited and poor, an artifact of Peak Oil reality. And even with this expansion, day rates are set to go beyond $700,000/day thanks to unquenched demand.

Isn't he basically saying that we've used the easy-to-get stuff up and now we've only got the stuff that will require heroic (and expensive) measures to get? But somehow he thinks we'll be able to continue to increase the flow rates?

Umm, OK. Good luck with that and pardon me if I bet against it.

Looks like he is playing with the definition of "peak oil", attempting to modify it to his perceived advantage.

...economic and environmental issues which would affect how quickly resources were exploited, there was "definitely not a concern about reserves''.

Let's face it. The Peak Oil debate is hopeless. Regardless, the world will party on like it's 1999. Good to the very last drop.

To All

For long time TOD readers - returning to the top article on the peak oil debate is over today and reading the comments can be enlightening. A year ago you would have found a mixture of comments most of which agree that peak oil "is just a theory".

But the comments today are quite different. A long and continuous group of comments by people who seem to "get" the idea of peaking and limits. It is quite remarkable.

Maybe reality is starting to sink in a little. Maybe.

Tex engineer,

It is changing. PO acceptance is more visible.

Visited with my older sister this past weekend. Three years ago she did not 'grok' PO, and argued about rosy BAU coming back and never weakening. Now, she listened to export limitations, and understands the effect of high oil prices on everything.

I think the fact that recovery isn't happening, oil being high despite the economic malaise, and the sheer craziness of her political leaders (she US...I'm Canadian)have all worked the reality adjustment dial.

A huge concern for her is student debt for her children, and the decline of employment opportunities.

What will our new paradigm be when job sharing becomes a social necessity?--When there won't be full employment and our lives become simpler and more focused? Will we spend real time in real education and appreciation of life and family, or will we whine about 'the good old days' and how life is supposed to be?


Peak Oil awareness is definitely moving into the mainstream
A fellow train rider had a book she just started reading on the "Coming Collapse" (or something to that effect) with a picture of an oil derrick on the cover about the economic consequences of Peak Oil...
While I have been trying to tell my fellow Green Transit riders about Peak Oil for sometime it appears they are finally seeking the information out for themselves in a serious way...

“We need to get ready for a future that is not based on traditional jet fuel or frankly we don’t have a future."

Fixed that for him.

Not really true, gas turbines can be setup to run on almost anything that can be turned into a burnable liquid. Efficiency/Power to weight ratios drop but planes and helicopters will still fly, albiet for shorter distances.

Only when we have exhausted all fossil fuels will the jets stop flying, and even then I still see military aircraft running on potato juice if necessary.

I don't think the economics supports such a proposition. Commercial flight will regress back to being a national affair, and I'm guessing propeller planes will make a comeback as well.

The military may have use for jet planes, but I would hardly say that the world would be based on jet fuel due to that. It creates sort of amusing implications, anyway. Come war between two neighbours, once the jet fuel is all used up trying to gain air superiority, the nations can then go blitzkrieg on each other with no air power messing it up - presumably it will be done with bikes. xD

Militaries will get priority and choices of fuel sources, IMO. They're already working on the problem. The US Navy is in the "Green Fleet" process, and drones are far more efficient than manned aircraft. A nuclear Nimitz class carrier which carries about 100 aircraft could conceivably carry 1000+ drones, along with the required number of cyber-pilots, drones equipped for many missions, while reducing fuel consumption significantly.

Civilian aviation will just have to muddle through, perhaps using flex-fuel aircraft. I doubt that the militarily and financially powerful will be grounded any time soon.

Hey. The right place for drones is right here in river city. You plop in your 6 pack of CEO's , program it for cleveland or whatever, cut'er loose, and a light nap later, down to a perfect landing every time sleet or storm. And 20 minutes later up again with the next 6 pack for indianapolis. Pilots? Useless. You know where you started, and where you are going. That's plenty to do the job. Just make a recording of the pilot droning the usual drone to the snoozing customer, and let the real drone do its stuff.

Like it? Good. Now that will be $0.000 for my consulting fee.

Ghung and wimbi,

Winslow Wheeler penned an extensive, well sourced, multi-part article series breaking down the costs, performance, etc of the Reapers compared to the comparable human piloted jet fighters. I swear I found this series on another drumbeat post a few weeks back that someone posted but couldn't find it, but anyways here's part 1: http://battleland.blogs.time.com/2012/02/27/1-the-reaper-revolution-revi...

The claims of how much more cost efficient drones are than comparable fighter jets appears to be a myth created by clever slicing and dicing of the figures. (now where else have we seen that!) Part two deals specifically with costs of the MQ-9 Reaper: http://battleland.blogs.time.com/2012/02/28/2-the-mq-9s-cost-and-perform...

Additionally, the claims that they are nearly flawless landing machines also appears over-hyped, with many of them currently out of service due to crash landing. Part four deals with the crash record: http://battleland.blogs.time.com/2012/03/01/4-keeping-track-of-the-drones/

Also important to point out, according to the article, the drones ability to correctly identify targets is lacking. In part 3 he compares the Reapers operational cost and performance on the US southern border compared to a Cessna w/ FLIR. The Cessna wins hands down.


CBP subsequently purchased six Reapers[14] (reported as “Predator Bs”) for southwest border enforcement. As of June, 2011, they had flown 10,000 hours, which led to the apprehension of 4,865 undocumented aliens and 238 drug smugglers.[15] This was 1.5 percent of the total reported number of 327,577 illegal immigrants caught in the same time frame, and based on an operating cost estimate of $3,600 per hour, Reaper’s cost-effectiveness calculated to $7,054 for each illegal immigrant or drug smuggler caught.

In assessing these Reaper operations, GAO also considered a program dubbed “Big Miguel” that consisted of a manned Cessna aircraft with a forward looking infrared (FLIR) sensor acquired and operated for $1.2 million for a year—i.e. one quarter the cost of acquiring one Reaper air vehicle without its support infrastructure and without the cost of operations. According to GAO, the Cessna/FLIR program found and assisted in the apprehension of 6,500 to 8,000 undocumented aliens and the seizure of $54 million in marijuana.[16] Those numbers calculate to a cost per illegal alien for the Cessna at $230 per alien, or 3 percent of the Reaper’s per alien cost.[17]

Here is part five just to round out the series. http://battleland.blogs.time.com/2012/03/02/5-revolutionary-or-routine/

It's interesting to read.

Why pay taxes, such as for the military gangs?

If more people become more localized and are working for themselves (as opposed to as wage slaves) by, in part, growing their own food, and engaging in local/ethical currencies and gift/credit economies, where are they going to get the 'funny-money' (subject to hyperinflation and extreme devaluation) to support a fundamentally unethical large-scale centralized state that's based on violence and coercion?

Stages of Collapse

Stage 1: Financial collapse. Faith in "business as usual" is lost. The future is no longer assumed resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings are wiped out, and access to capital is lost.

Stage 2: Commercial collapse. Faith that "the market shall provide" is lost. Money is devalued and/or becomes scarce, commodities are hoarded, import and retail chains break down, and widespread shortages of survival necessities become the norm.

Stage 3: Political collapse. Faith that "the government will take care of you" is lost. As official attempts to mitigate widespread loss of access to commercial sources of survival necessities fail to make a difference, the political establishment loses legitimacy and relevance...
~ Dmitry Orlov

The over-complex system of 'corporate oligarchy' appears responsible for much of the mess we're in. Continuing its narrative as though it actually works, say, and/or will run forever, seems counterproductive to potentially far better narratives and preparedness.

...So there isn't really very much hope for the political system in the United States anymore so than there was in the Soviet Union... The good news there, is that there is no money for drug-enforcement anymore, so we should expect the level of drug-related violence to drop automatically...
~ Dmitry Orlov

Political power grows out of the barrel of a gun.
~ Mao Tse-Tung

There almost certainly are no social organizations that don't contain some form of coercion or unfairness. It is cetain that the current paradigm, at least between 1945 and the recent past, has provided more material wealth to a larger portion of the society than any other system. While I believe that the abundance of energy supplies have been necessary to accomplish that feat I am sure that was not sufficient. The market based, capitalist, democratic mixture was part of what happened.

Perhaps the end is here. It has been increasingly clear that the "trickle down" is decreasing in the US. Europe seems to be in serious trouble.

But can massive localization be an improvement for the bulk of the citizenry? I would greatly fear some kind of feudalism, lord in the manor and peasants in the field, being the end result.

There almost certainly are no social organizations that don't contain some form of coercion or unfairness.
~ jjhman

And we have a natural right to opt out. And what kinds/levels of coercion are we talking about and in what contexts/forms of social organizations? On the recieving end of a threat of prison-time, a loaded gun, or a drone strike? From entities you don't know? A person? A corporation? Where? Secrecy? Democracy? How?

Or at the risk of some social ostracism from a few neighbors?

It is cetain that the current paradigm, at least between 1945 and the recent past, has provided more material wealth to a larger portion of the society than any other system.
~ jjhman

At what expense? And is 'more material wealth' even desireable, or desireable beyond a certain threshold? What about social, spiritual or natural wealth-- and are those part of the expenses? Species/Climate stability/etc. gone forever?

A band society is the simplest form of human society...
Bands have a loose organization. Their power structure is often egalitarian and has informal leadership; the older members of the band generally are looked to for guidance and advice, and decisions are often made on a consensus basis, but there are no written laws and none of the specialised coercive roles (e.g., police) typically seen in more complex societies.

But can massive localization be an improvement for the bulk of the citizenry? I would greatly fear some kind of feudalism, lord in the manor and peasants in the field, being the end result.
~ jjhman

I've heard the term, something to the effect that history is not symmetrical. But we need to, in part, realize and exercise our natural rights and freedoms, and downscale and simplify, and whatnot too. Mother Nature will likely help us along with some of those, unceremoniously.

We are seriously out of scale in the over-complex nation-state/corporate-multinational framework.

And corporate feudalism, debt slavery, wage slavery, etc.-- call them what you like-- seem alive and well in that context anyway.

We need to realize that the reality in which we inhabit are often prisons of our minds, conctructed for and around us by media, groupthink, propaganda, brainwashing, social and psychological pressures and customs and so forth.

Plato's Caves.

The material wealth of the US since WW2 was in large part due to the reserve currency status of the dollar.

Meh. That certainly helped but I wouldn't say it was 'in large part due' to that. We were the only modern industrial country left standing after WW2 that had not been attacked (except Hawaii but that barely counts). We had decades of being on top with virtually no competitors. We had lots of innovation and we had a wealth of natural resources.

It was only in the 1970's when oil started to slow down and foreign competitors finally started to become threatening that our domination slowed down.

So it wasn't just the reserve currency. That is just a small help.

We were the only modern industrial country left standing after WW2 that had not been attacked (except Hawaii but that barely counts).

What about Canada, Sweden, Switzerland, Australia, South Africa etc.?

They are not large enough to dominate the world.

Sweden also had the benefit of not having to rebuild the industry for civilian production again. We started exporting day one. And everything everyone owned was broken. We just couldn't lose. That payed for building up our entire country.

"where are they going to get the 'funny-money' ... to support a fundamentally unethical large-scale centralized state"

Each town must provide 3% of its 18 year olds as draftees for the federal army. Failure to comply will result in harsh penalties (the town will be fire bombed from the air). There are more ways to motivate people than money.

Have you ever had a conversation with an 18 year old or even twenty-something-- assuming you, yourself, are significantly older?

Now put a high-tech weapon in their hands, manufacture a fiction about why, and send them to a foreign land-- with their experience and understanding of the world and what they are getting into.

And I'm not being that facetious with my link.

"This is the reality that soldiers are faced with, that the people of Iraq and Afghanistan are faced with, that the children are faced with, that the people living inside those houses are faced with every single day at the hands of my brothers and sisters (footage of 'surgical-strike' bombing screens overlayed over targets being bombed). We saw the murder of those civilians; what you can't see is the hundreds of civilians all around that area inside their homes cowering under their tables, under their beds. What you can't see is the children that, after these troops leave, can't sleep at night. What you can't see is the raw sewage flowing into the streets from where the tanks have run over sewage lines. This is real. And it's happening every single day. And this is but one example in a mountain of crimes that are being done in all of your names-- that I was complicit in... These wars are racist. They're genocidal. The kinds of trainings that soldiers are going through to be capable of these horrors are real, are systematic, are well thought-out, have been researched for over 200 years. Because this is nothing new to the United States of America, folks. This is nothing new. We have been doing this since our foundation. Everything we have we've stolen. You know, it took me a really long time to grasp this... It is dehumanizing, physically, mentally, emotionally, sexually. Our soldiers are being trained as predators, and they are being set loose on civilian populations that never even attacked us in the first place. I can't live with this... I don't know how people in this country live with it. I don't know how the Iraqis and Afghans live with it every single day. The mission statement of the US Army is 'To engage and destroy'... There is no nation-building, there is no humanitarian operations. The mission statement of the US Army is to engage and destroy, and that's what we are doing. And when you turn that force loose on a civilian population as we have done in Iraq and Afghanistan, it is called genocide, and it is a war crime. And the people of Iraq and Afghanistan have had their country gutted by our force-- absolutely gutted. This is real, people, and it's not going to stop. It is not going to stop until we do something about it, until we liberate ourselves from our subservience to genocide. We have had our wills subverted over and over again, but we can force the kind of movement capable of ending these crimes now and forever. We got to do something. I feel we have not built the kind of movement the government finds to be threatening... I was property of the US government... knowing the realities, we have a responsibility-- not just to the Iraqis and Afghans-- but to the young men and women who are going to carry this out..."
~ Matthis Chiroux, Iraq War Veteran

White House Says Child Soldiers Are Ok, If They Fight Terrorists
The Obama administration just decided to leave countless kids stranded on some of the world’s bloodiest battlegrounds.
November 16, 2010
“You cannot be completely happy with all these wounds—both in your body and in your mind.” —15 year-old child soldier

The phenomenon of child soldiers, like genocide, slavery and torture, seems like one of those crimes that no nation could legitimately defend. Yet the Obama administration just decided to leave countless kids stranded on some of the world’s bloodiest battlegrounds.
~ Michelle Chen, alternet.org

"The most dangerous man, to any government, is the man who is able to think things out for himself... Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable..."
~ H.L. Mencken

I guess the military's tops in FF use, too.

You have to realize that drones are in their infancy right now, over time they will get better. It's like a fight for supremacy between a gun and a bow in the 16th century. I work in computer vision algorithms, what was considered impossible ten years ago is now considered normal.

AI is at the bottom of the S-curve, it has nowhere to go but up, and it's not dependent on govt funds for research, companies fund it actively because it's going to bring major cost savings in future in the form of automation.

Indeed. Another example. Natural language processing used to be a very difficult part of the Artificial Intelligence concept. Now it's a Siri little phone app.

That's right, you have an artifical intelligence that can understand and respond to you in real time, with access to almost all of human knowledge... and your address book.

Think about that for a second.

Now it's a Siri little phone app

As I understand Siri has to send the data off to a cloud compute farm that comes up with the answer and sends it back.

Saying Siri is 'a little phone app' is like saying Reapers are more expensive than a Cesna and therefore more expensive than a plane.

Reapers are acting as a replacement for fighter jets/spy planes. Given the latest 'cant fly due to Oxygen' fighter jet, the reapers seem like a deal...if you are shopping/buying such stuff.

As I understand Siri has to send the data off to a cloud compute farm that comes up with the answer and sends it back.

Siri works on learning networks, like google translate. The more people use them the better it becomes, after a few years when the databases are ready and processors have enough juice to run them they will be ported to run on phones, no problem. The very fact that you can dictate speech to a computer and get perfect translation should send alarm bells ringing, even if it's only with the network connected.

The basic problem with fighter jets is not the jet, it's the pilots, who can't be replaced easily. With a drone the problem is less serious, a college education and playing Call of Duty at home gives you enough experience to fly a drone.

"Replicants are like any other machine. They're either a benefit or a hazard. If they're a benefit, it's not my problem." - 'Blade Runner'

As I understand Siri has to send the data off to a cloud compute farm that comes up with the answer and sends it back.

Bit like me using google then really. Or a library.

I'm also sure we could come up with something decent that would fit in your pocket right now if it was dedicated to that task and you limited its scope a little.

Wise indian is right, the drones will get better. AI is further along than people realise.

"along with the required number of cyber-pilots" no need for those pilots to be on board any ship.
Better and cheaper to keep them back home.

"along with the required number of cyber-pilots" no need for those pilots to be on board any ship.
Better and cheaper to keep them back home.

Yes! I don't see what could possibly go wrong...

The Swiss & Swedish Armies had a number of bicycle regiments during WW II.


Fairly quick & quiet, high mobility with decent cargo carrying capacity in difficult terrain. Could be refueled at local farm.

The Future of Warfare ?


Diesel dirt bike?
I haven't seen anything lately, but the idea is likely a dead end.

Diesel dirt bike?
I haven't seen anything lately, but the idea is likely a dead end.


Alas, the military version
http://www.dieselmotorcycles.com/military.html - coming soon
Yet - http://www.dieselmotorcycles.com/company.html shows pictures of 2 rows of bikes (in camo/military green) so it looks like the read-elsewhere $7500 for a military dirt bike exists.

May explain why I've not seen the $7500 models....

Thanks. Lazy me didn't goto their site.

Tis fine - I needed to follow up about it for my own personal interest anyway.

A dirt bike is more maneuverable than than a ATV but has no cargo carrying ability.
Goto any of the mfgrs sites, they all offer large racks, four wheel drive and more.

Military grade ATV's from Wired:

HERE's a link to a real world test of the diesel motorcycle. To me, the surprising thing is that the results are so poor. Surely, Craig Vetter could have put together a cleaner aero design for his entry, given his long experience in such efforts. Maybe the rules prevented him from adding extensive modifications to the bodywork. Heck, I even managed 235 mpg almost 30 years ago, but then, I was only traveling 55 mph on a freeway...

E. Swanson

Those bikes where sturdy. You can still see, rather often, military bikes on the streets. They are sold off, and used by civilians. Made with the label "Pilen" (The Arrow). Do not look very fast, but then again, my army field handbook from 1962 tells me the soldiers are supposed to go convoying behind a motor vehicle, using ropes. 20 man or so on each.

And the Vietcong.

The (Japanese) Singapore invasion forcem used Bikes to move down the Maylay penisula.

Was it fear (by the Nazi's) of the bike units that kept them from attacking? [Bot Sw countries managed to stay neutral]

Hardly. Hitler wanted to invade Sweden (we have all the iron ore in Europe), but gave the contra order to the invasion just hours before it was to set of. This is rather new discoveries so I have none of the details.

I think we should combine these ideas, and introduce Bicycle Drone Warfare as the preferred mode of combat. There would actually be a human powering it, but the weapons and navigation would be totally by remote control, the person is just used as the power source.

It's perfect if you think about it... it has the kind of absolute senselessness which is becoming the requisite design feature of all contemporary technology.

B.F. Skinner had an interesting idea long ago: pigeon-guided missiles ---

Here, in the last 1/4 of the movie, a pigeon with an electric beak is seen furiously pecking at a ship to keep it centered within the missile's field of view as the simulated weapon closes with the target:
Better version:


The Japanese did it in WW II. Sent their infantry through the jungle in bicycles, outflanked the British and delivered a crushing defeat.

The Japanese bike-blitzkrieged the Allies in Malaya on their way to Singapore.

And the Viet Minh used bikes to supply their siege force at Dien Bien Phu and presumably other places. They loaded the bikes to the gills and pushed them through the jungle. Meanwhile the French-American air force bombed the roads to little effect.

Sometimes air power -- power in general -- gets you nowhere fast.

"The bicycle troops stabbed into enemy territory, using secondary tracks to encircle allied forces mired in their armored columns on the main road...where the armor was a fat target for airplanes and big guns. Motors in flames, the British soldiers were forced to hoof it, and were quickly overtaken by troops on two-wheelers. When the allies blew the bridges, the Japanese waded across with their bikes and kept rolling. "With the infantry on bicycles," Tsuji explained, "there was no traffic congestion or delay." Tsuji claimed that a conventional campaign without bicycles would have taken over a year. The British defenses were wiped out in seventy days."

From The Cyclist's Manifesto (p. 58)


Yes we may see planes with propellers, but I am guessing they will be turbo props like a lot of commuter aircraft are today. You just can't beat a jet engine when lifting over a few thousand pounds of cargo. I do agree flying will probably have to be nationalized and it will become more and more cargo. I also agree the days of aircraft as buses will end.

Cargo by air is quite expensive. Best way to transport cargo is by barge (1/3 the cost of trains and I am a big advocate of trains).


In the future aircraft will be used by military and police operations, and not much else, IMO. When need forces the issue, we will adapt (or perish).


But unfortunately passengers boats aren't efficient at all either, see for instance page 133 below :


(a few passengers on a cargo ship that would be different)

I think the problem with passenger travel by slow boat is that you need to add cargo (food, water, etc.) for their consumption during the trip. The longer the trip, the lower the efficiency.


That is why mass transit cross-atlantic cruisers from before aircraft were optimised for speed, not comfort. They made the trip in just 3 days. Luxury cruisers are much much slower.

Liberty ships, carrying our troops during WWII, were not exceptionally fast. Of course, a few luxury cruisers and mass transit liners also served with their various virtues. My fatherinlaw told of traveling about 4-5 Kts/hr. Near the end of the war, of course, after U-Boat threat was minimized.


But the problem is also that you cannot stack people like you do with containers (even if almost done during a period..), so a passenger only boat is not as efficient per Kg-km, even the cheap ones that macKay mentions “The Economy Twins,”, were taking 8 days to cross the atlantic at 16 knts, but twice the consumption of a current plane per passenger.

And yes current cruisers are much slower than were the liners, but it would be interesting to know their consumption per passenger-km, perhaps still worse than a plane.

"The productivity and reliability of the jets greatly exceeded general expectations. A graphic example is the $5 million 707, which could carry as many transatlantic passengers in a year as the $30 million Queen Mary, and with about one-tenth of the fuel; and one 707 flew 250 million seat-miles per year compared to 50 million for a [piston-engined] DC-6B."


People discount the role of electric aviation in the future due to range, which has been limited. That situation is changing however, and the unbeatable efficiency of the electric motor makes it e-aviation inevitable, though the schedule is far from set.

To keep things interesting, I've been keeping my own little e-aviation scorecard by means of how far an electric aircraft would travel on the latest and greatest battery energy density, specifically how much of the Atlantic could be crossed in an E-aircraft , Newfoundland to Scotland (1900 miles). Assumes best Lift/Drag air frame in existence (Global Flyer):

o 190 Watt-hours/kg, 40% across, or New York to Bermuda.
o 250 Watt-hours/kg, 50% across, prepare for water landing.
o 400 watt-hours/kg, 80% across. Tail wind?
o 500 Watt-hours/kg, if it happens, required to get back on land.

o 860 watt-hours/kg to get a typical modern jet air frame across the pond, L/D = 20.

The above is based on aircraft range fundamentals:

Max Range (meters) = (Fuel-or-battery specific capacity [J/kg] / gravity) * power train efficiency * L/D * fuel-or-battery fraction of aircraft mass
eff = 80% battery, ducted fan e-motor
mass fraction = 60%
L/D = 32 (Global Flyer)

Not sure using an airframe that has better glide characteristics than most gliders is fair and over 80% of the takeoff weight was fuel. That being said do you have any information on the energy ratios when you take into account from start to finish a battery operated aircraft weighs almost exactly the same and a liquid fuel aircraft can shed an enormous amount of weight on an Atlantic crossing, just wondering how much it might affect the figures.

60% fuel-battery takeoff weight. The Boeing 747 has gone 50% fuel takeoff weight on long distance runs. The battery-motor-fan efficiency is 80%.

I used the high L/D = 37, because, 1) hey, its my game and 2) the aircraft actually exists. But use L/D=20 if you like for commercial jets (see last entry).

Googling for max range on traditional aircraft will answer the other question for you. I believe the non-stop long distance record for commercial flight was 16,560 km, 747, 1989.

Is 20 the _best_ L/D of current airliners, or the one achieved at their choice of speed, higher than best L/D speed?

What is an easily achieved L/D with today's technology if one accepts lower speeds?

L/D=20 comes from an example I found of a 737 (I believe) that lost power and had to glide home. In that case the aircraft clearly chose a flight envelope to maimize L/D. The equation I gave above is indeed for max range, but other performance measures can be chosen instead that sacrifice max range - max velocity, max altitude, etc.

The L/D ratio is a characteristic of the airplane's wing design, mol. With a low mass glider, long narrow wings result in a high L/D ratio. However, for a craft which will carry large cargoes (or, heavy batteries), the maximum width of the wings and the wing loading precludes high L/D designs. L/D isn't a function of speed, but the lift provided by the wing is, thus, higher speed craft can lift more mass than slower ones for the same total wing area. But higher speeds result in greater drag and thus greater power to move the craft thru the air. The electric powered craft which I've seen are little more than gliders which fly very slow.

I think the result is that an electric aircraft isn't going to replace a jet for carrying may people over long distances at high speeds...

E. Swanson

For a given aircraft and altitude, flight at any constant speed means the lift equals the weight. So L is a constant WRT speed. But with higher speed there's more (parasitic) drag as you said. Thus the ratio L/D decreases with speed (above some fairly low max-L/D speed, below which induced drag rises and the L/D gets worse).

The work (and thus fuel energy - or altitude lost in a glide) needed to cover a given distance is proportional to the drag (energy = force * distance), thus flying slower (up to a point) does increase range. Cargo ships (albeit with different drag formulas) have been reportedly cruising slower in recent years to save expensive fuel, despite losing some income due to lost time.

The limit on best L/D for airliners has to do with the structural cost and the operational disadvantages (on the ground) of longer wings. As fuel gets dearer I expect to see slightly longer wings and smaller fuselages, and somewhat slower cruising speeds. And if turboprops are indeed more efficient then they'll be back.

Even the DC3 (C47) had a decent glide ratio:

The requirement for a large-capacity high-speed transport glider, to be towed by a C-54, resulted in experimental conversion of a C-47 to serve in this role ... [the] cargo glider had a successful test programme, demonstrating a towed speed of 290 mph (467 km/h), stalling speed of only 35 mph (56 km/h) and a glide ratio of 14:1. Payload was 14,000 lbs ...

(alas it does not say what the best-glide speed was)

- vtpeaknik, who's also a glider guider

Heavy batteries? Recognize that the max fuel load of a 747 is 192 tons.

With regards to speed, most of the thrust for a turbo-fan jet engine already comes from the fan, not the combustion exhaust (recent GE engines are 90% thrust from bypass air, i.e. fan thrust), so an electric motor could theoretically replace the turbo fan jet engine from a total power standpoint. However, the jet engine has a higher power density (~7kW/kg) than the electric motor (~4kW/kg), so some improvements are required yet, possibly by constructing the motor with superconductors (~10kW/kg). Meanwhile the RC electric ducted fan hobbyists hit 200mph+ for fun.

That sounds well within the capabilities of fuel cells.

The actual fuel cell stack now hits around 2kw/kg:

Carbon fibre tank storage now hits around 4.8% hydrogen by weight.
A kilogram of hydrogen has around 40kwh of energy, or about 2kwh/kg of the total storage weight.

At around 50% efficiency you are getting about 1kwh/kg of electrical power, which should be enough for your purposes.

Does this sound about right?

Sure fuel cells surpass batteries in energy density and they may be the eventual way to go for aviation, which is why I took care to hyphenate battery-fuel above. Meanwhile, there are several disadvantages to fuel cells:

o H2 has a lower mass energy density and volumetric energy density than jet fuel, even with liquid H2. Of course H2 is better in this regard than batteries, though the battery can hit 90-95% efficiency and thus can go further on the same energy.
o Fuel cells, being at most ~50-60% efficient generate a lot of heat which must be rejected from the aircraft, unlike the best batteries. Thus an 50MW aircraft fuel cell stack would need access to the external air stream, whereas a battery can be contained in the aircraft using smallish heat exchangers.
o Fuel cells require O2, and lot of it, just like a jet engine. Thus a fuel cell has an altitude ceiling, whereas current non-metal air batteries would have effectively no power plant imposed ceiling. Instead, wing stall alone would establish ceiling.
o Fuel cells are expensive compared to batteries.
o Currently there's no large scale hydrogen infrastructure at airports (or anywhere else at the point of tentative use). It could be built (electrolyzers, etc), but there's plenty of electric power for topping off batteries already there.

At 400watt-hopur/KG, you might be able to make it across traveling eastward, -with a good jetstream. If you design your plane for low airspeed, and travel downwind, you can do a lot better.

I'm an EV advocate but I don't think batteries have much of a future in aviation outside of a few hobbyists. Energy density is key and it is hard to beat liquid fuels. When oil eventually becomes really scarce (long from now), I suspect biofuels will be better for aviation than batteries.

But E-aviation does not have "beat" liquid fuels in terms of energy density, it only has to be good enough, which is the point of my cross the Atlantic game. Yes with liquid fuels one can nearly circle the globe in jet aircraft, but one does not often have to circle the globe, if ever. Once good enough happens, the cost savings and efficiency gains are a huge win for e-aviation. Biofuels have to become less than ~$20/gallon to win in aviation.

Yay, Jeffrey

Peak Oil: The Sun Also Rises

I concede the point on Net Exports. In particular, after a discussion in the comments with Jeffrey Brown (the geologist who created the concept), I believe Net Exports help to clearly explain the combined dangers of peak oil and oil subsidies.


My followup comment:

Subsidies will certainly accelerate a net export decline, but one key point to keep in mind is that given an ongoing production decline in an oil exporting country, unless they cut their consumption at the same rate as the rate of decline in production, or at a rate faster than the rate of decline in production, the resulting net export decline rate will exceed the rate of decline in production, and the net export decline rate will accelerate with time.

Denmark is a case history of an oil exporting country, showing an ongoing production decline, that heavily taxes oil consumption, and they saw consumption decline at 1.4%/year from 2005 to 2010. They successfully cut consumption, but their production decline rate was 8.3%/year, resulting in a net export decline rate of 19.5%/year from 2005 to 2010 (BP data base).

In other words, even though Denmark successfully cut their consumption, their net exports fell about two and a half times faster than the rate of decline in production, from 2005 to 2010.

For more info on “Net Export Math,” you can search for: Peak Oil Versus Peak Exports.

As I have, on occasion, noted, this is not an opinion, or even a theory, it is a mathematical fact.

Hey Jeff, I thought this was interesting. I was googling up Saudi population growth, and ran across this story from the Saudi Gazette. It is mostly about the water issue, but as you can imagine, the energy use is always present.

Opportunities abound in GCC desalination sector amid expanding demand

Over the next decade, as the GCC population sets to soar by 30 percent to over 50 million people, the region will see an increasing strain on its supplies of electricity, food and water. The ways in which the region faces up to these demands and growth will have a major impact on its prosperity and quality of life, not only toward 2020 but for decades to come.


In the coming decade, Tabari forecast that GCC countries will face pressure to use their energy resources more efficiently, in order to supply their rapidly growing populations, free up resources for export, and address concerns about climate change and pollution.

I love that bit about "free up resources for export", hehe

EDIT: Oh, and good job jetting into the Forbes article!

Wait! 30% pop growth in a DECADE? Wow. Just wow.

Oh, yeah -- the population of the Persian Gulf countries has soared in the last three decades -- especially Saudi Arabia:


New drivers are constantly being added to the DMV rolls in Saudi Arabia:


There's lots of videos on YouTube showing Saudi "drifting" -- one of the ways the growing numbers of underemployed Saudi young men find to occupy their time...

This is what happens when you run a nation with a Dark Ages mindset that prohibits women from receiving a proper education, or having any say over their own bodies, much less how the government is run.

That 30% number makes for exciting copy but is difficult to believe. I'm in full agreement with the article about the huge importance of IWPP's (Integrated Water and Power Plant) and their energy consumption. But I take offense when people play fast and loose with numbers.

Yes, populations in GCC nations are growing at a healthy clip but Saudi Arabia accounts for about 65% of the total GCC population and SA had a population growth of only 19% between 2000 and 2010 with the rate of growth declining throughout that entire period. Kuwait and the United Arab Emirates had growth rates above 30% over the last decade but much of that was from immigration. (According to NationMaster the immigrant population in Kuwait and UAE is 62% and 71%.) Even with their own high immigrant worker populations, Bahrain, Oman and Qatar all have current annual growth rates below 2% which would translate into a decadal growth rate of 22%. As each of these nations encounters economic headwinds and seeks to provide employment for their own citizens, I would expect immigration rates to decline rapidly. (Could immigrant workers even be sent home?)

If I had to make a guess I would expect GCC population to still soar, but only by about 15-20% from current levels. For comparison, the US population is expected to grow by 9% over the next decade.

Whenever you see an "unbelievable" claim like that 30% number, you can do your own quick fact check at the Population Trends databrowser:

That notch at 1990 is interesting. I presume there was a panic when Saddam took over Kuwait and threatened Saudi Arabia. But the Gulf War pushed Saddam back and the partying resumed! (Even making up for lost time.)

As each of these nations encounters economic headwinds and seeks to provide employment for their own citizens, I would expect immigration rates to decline rapidly. (Could immigrant workers even be sent home?)

IIRC, immigrant workers in Saudi Arabia have a visa good for a maximum of four years, at which point it can be renewed (by the sponsoring employer). Workers whose visas are not renewed have to leave. So the entire immigrant work force could be eliminated in fairly short order.

OTOH, a large part of the immigrant work force is employed in low-skill positions such as domestic service. There is apparently considerable resistance amongst the Saudis to taking such jobs.

One of the passtimes Americans have there is to hang out at a mall and bet on when the next local will come in carrying anything heavier than a wallet.

Thanks for the help.

KSA do not grow by 30%, but still to fast given they have nothing besides oil and sand. Have a look at Yemen, my favourite worry country. That is not good.

While the efforts of individual countries/governments should be applauded. This does nothing on a Global scale. It's fine for a developed nation to increase efficiency and drop a few percent per captia here or there. But how do you tell the other ~5 Billion that they need to use less fossil fuels and can't get a new refrigerator, when thier consumption is Zero and they never had a refrigerator to begin with. A simple case in point is China look at thier utilization curve, now imagine the nightmare scenario if by some miracle they turned into a Democratic/Capitalistic society next month.

China is a capitalist society *now*. It is not Democratic.

Technically, the same is true of the U.S., though we still have a few democratic freedoms and institutions that have managed to survive the onslaught of corporate money (for now).

The internet is still free ... for now.

I expect this website to be shut down at some point when things get bad.

"it is not democratic"

Let me add: "...and unlikely to become democratic in the forseeable future".

Neither is America.

Right, be sure not to vote then.

Exactly - how is an "electoral college" "Democratic"?

Do explain how, with "voting" the monied interests seem to be in charge? (Isn't that the way it seems to be in China right now?)

And, do explain the whole Ron Paul delegate/media 'blackout' issue is "Democratic"?

Finally - The CIA and the Foundling Fathers called the Nation a Republic, not a Democracy.

Oh, and if voting is all that it takes to be a "Democracy" - why wasn't Iraq under Saddam a "Democracy"?

FWIW, the Founding Fathers distrusted direct democracy and the tyranny of the majority. As a result, the current federal system represents a whole set of compromises. The House, with two year terms, was supposed to represent changing public opinion. The Senate, with six year terms, was supposed to provide a more slowly changing, let's-take-a-longer-look perspective. The electoral college was a compromise so that small-population states would go along at all. Not to mention that the Founders didn't think all that much about the executive; real power was supposed to reside in Congress, and the President carried out the legislative orders that he was given.

A functioning "democracy" in the modern sense can answer "yes" to three questions: (1) Is there more than one political party? (2) Does the party in power change from time to time? (3) Is the transfer of power peaceful? The Western "democracies" clearly pass this test; China clearly fails; for much of the 20th century Mexico failed #2.

(1) Is there more than one political party? (2) Does the party in power change from time to time?

While the label may change - what meaningful differences exist between the 2 major parties exist in the US of A?

Looks the the same flakes - both are milled corn just in a different box and shilled by different groups. Ok, one batch of flakes may have a high fructose corn syrup coating, but its still the same mashed and flattened corn.

I might have agreed until the Clinton-Bush transition. Yes manny things stayed the same but there was a palpable shift to a more aggressive foreign policy and a more irresponsible domestic policy. Even though Bush managed to keep his pants on.

Also, call it socialism if you like, the Obama administration pushed through a universal health care bill. That never would have happened with the current Republican party. OK, it was a crappy bill but the Dems tried and got what they could. Obama has paid a hugh price to make that happen.

People often claim they are the same and they are in some areas. But there are clearly stark differences. One party is for giving gay people full rights and the other isn't. One party listens to scientists and the other party rejects scientists if they don't like the message. One party is pro-choice and other has people that still don't accept birth control. One party mostly tries to keep religion out government and the other party allows the dominant religion to get pieces of their dogma enacted as policy.

Both parties get pushed around by special interest groups and have members that fall to corruption or sex scandals. But the parties are not the same.

Every western government is owned, literally, by central banks. Our governments are not sovereign. They do not represent the people. They cannot issue their own money. They are quasi-private corporations funded by taxpayers but owned and directed by banks for the purpose of siphoning wealth from the middle class to the oligarchs.

Do explain how, with "voting" the monied interests seem to be in charge?

2500 years ago, the Athenians correctly noted that voting would lead to a government of the rich.

Inequality, i.e., the existence of the rich, leads to a government of the rich. That's what being rich is: having control over resources.

And furthermore, China has never been democratic and will never be so given its history and culture.

"Never" is a rather long time, wouldn't you say? Though I'd agree that short-term, under one party rule, it's very unlikely.

One could also argue that the U.S. is not really that democratic, and is becoming less so over time as moneyed corporate interests dominate all aspects of law making and goverment policies, and capture regulators and "elected" officials alike. Also, our system is rigged to prevent any candidate outside the (thoroughly bought and corrupt) dominant two parties from gaining enough media coverage and support to win. The extremely few independent and third party candidates who --through some miracle-- *do* manage to survive the process and get elected generally find themselves isolated among corrupt colleagues who refuse to consider any serious efforts at reform, and marginalized by the corporate media, who dismiss such efforts as "crazy" or "extreme".

Given the transnational power of Corporations and how well they seem to do in a non-democratic system why would they want to see Democracies?

Re: "Jeffrey Brown (the geologist who created the concept)"

I added a clarifying comment on the Forbes website--That I first started looking into net exports because of some of Matt Simmons' early work, and I noted Sam Foucher's important work on modeling net exports from the top net oil exporting countries. Sam and I have been jointly looking into net exports since early 2006.

Also, I think that there was at least one academic paper (which I wasn't aware of) published on the topic of net exports prior to my early 2006 essay on the "Export Land Model." I think that it would be more accurate to say that I proposed a simple mathematical model, which makes it easier to understand "Net Export Math."

He's still clueless, as is the publication. As Richard Heinberg said, energy is the economy.

I find it mildly amusing (okay, frustrating) when "economists" (I am one) dismiss work like yours because it doesn't fit their "model" yet they never present their "model" for inspection. Apparently, we're just supposed to read their minds. The tools are fairly simple; I don't know why they don't use them. It could be very enlightening.

Economists: please show me a supply curve so we can discuss your assumptions about its elasticity (I believe it's highly inelastic--nearly vertical, in fact). Please show me a demand curve so we can discuss your assumptions about consumer behavior and whether demand is falling because consumers have for some reason lost interest in buying petroleum (hardly!) or because the price has risen and the market has found an equilibrium at a higher price and lower quantity. Are there kinks in the demand curve where consumer behavior changes dramatically above a certain price? What references are you citing that estimate supply and demand elasticities, specifically for oil markets? How current are they? Then let's talk about how prices and quantities seek equilibrium in the oil markets over time. What do producers do? Is that a movement along the supply curve or a shift in the curve itself? We can also talk about what happens over time as exogenous variables (assumptions about incomes, consumer preferences, prices of substitutes) change and the initial supply and demand curves shift. What evidence do you have that suggests the supply curve will shift right (more supply) rather than left (less supply)? Under what conditions?

Please explain why the Export Land Model is irrelevant, by integrating individual supply and demand curves for each market and also please include factors accounting for political "stickiness" (e.g., export restrictions) across markets. Oh, well, that would be too hard and wouldn't neatly fit preconceived theories about how these markets are *supposed* to work (not how they actually work, mind you--the models can't handle that).

Without any real analysis, it's all just hand waving and useless chatter. Sometimes I wonder if these guys actually understand their own field.

Thanks for all your great work, Jeff.

Ernst Schumacher was an economist who saw natural resources for what they are -- finite -- and wrote a book "Small Is Beautiful: Economics As If People Mattered" in 1973 which today is largely forgotten, at least outside of environmental circles. I only discovered Schumacher in my research on Peak Oil.


"Ernst Schumacher was an economist who saw natural resources for what they are -- finite -- and wrote a book "Small Is Beautiful: Economics As If People Mattered" in 1973 which today is largely forgotten, at least outside of environmental circles. I only discovered Schumacher in my research on Peak Oil."

Yes, that was - is - a great book. I recall that it was dismissed as being some sort of lefty foolishness, but it wasn't. Time to unearth a copy and reread it.

Agree - Schumacher was a great thinker. I was steered to him a few years back by some references to his work by John Michael Greer.

He has another small book called "A Guide for the Perplexed" (I think).

Yes, a fantastic article: Peak Oil: The Sun Also Rises The author of this article, in Forbes, credits Jeffery, with convincing him that net oil exports are a serious concern and a result of Peak Oil. The chart created by Jim Hansen below puts the lie to the article linked to up top: Peak oil debate is over, say experts.

This chart clearly shows that although Saudi Arabia increased its production to a new high recently, their exports have dropped a full two million barrels per day since they peaked in 2005. The decline in net oil exports are really what matters to all importing nations. Peak oil, as measured to oil available to all importing nations, is very clearly in the rear view mirror.

Also you may wish to check out this article, Tedious peak oil claims from the EU Energy Policy Blog, especially the comments section where Jeffery debates Tom Konrad, the author of the Forbes article, "Peak Oil:The Sun Also rises.

Ron P.

As you noted some time ago, what most people don't understand is that an increase in the production rate, i.e., delivering more oil to the markets, results in an increase in the depletion rate, i.e., the rate that a country uses up its remaining resources.

The single scariest aspect of "Net Export Math" is that an initially relatively low net export decline rate tends to obscure a sky high rate of depletion in post-peak Cumulative Net Exports (CNE).

In the link above (also shown below), I estimated--based on extrapolating the 2005 to 2010 rate of change in Saudi Arabia's ratio of consumption to production of total petroleum liquids--that Saudi Arabia's post-2005 CNE depletion rate for 2005 to 2010 was 13%/year.

If we use a 2011 estimate of about 7.8 mbpd for Saudi net oil exports, their 2005 to 2011 post-2005 CNE depletion rate was about 11%/year, versus an estimated 2005 to 2011 net export decline rate of 2.6%/year.

Post-2005 CNE numbers: http://i1095.photobucket.com/albums/i475/westexas/Slide5-2.jpg

The author of this article, in Forbes, credits Jeffery, with convincing him that net oil exports are a serious concern and a result of Peak Oil.

That is not what it says. Tom Konrad was always convinced that net exports mattered; he just thought they were adequately covered with the economic idea of elasticity.

Why did I persist in my resistance to the net exports concept so long? Because, from an economics perspective, net exports are an unnecessary complication to my oil supply/demand elasticity model. If the world were filled with economists, there would probably be no need for the concept of net exports. Economist Mike Giberson certainly thinks so.

But the world is filled with people with limited understanding of the “dismal science,” and the economic realities of peak oil affect everyone. It falls to us to explain those economic realities to everyone in the clearest terms possible. And net experts are a lot clearer than elasticity models.

He's accepted it as useful in explaining things to lay people. He didn't change his mind on peak oil, and whether it would lead to declining exports. His blog is called "Green Stocks," so I suspect he's always accepted peak oil.

Here is a link to Tom's original post:

Peak Oil: Net exports aren't everyting

I thought it was a dismissive and condescending response - as if to say "well it's fully covered by economics 101, but if you want to explain it to the proles, it might be useful...".

Economics may be dismal, but it sure as hell isn't a science. Science seeks out and loves simple models for understanding what's going on. Maths is fine, and maths is useful, but a good gut grasp of what is happening is what really moves understanding forward.

His "supply/demand elasticity model" doesn't cover the key elements of exportland - that exports seem to fall off a cliff (don't act proportionately) and that the pain isn't evenly spread but flows down to those later in the chain. Take that forward into the generalised "'lands" model and the outcome is the individual entity DOESN'T get the chance to adapt - the impact is a swift and final cutting off of access for that purpose.

Economists have many failings, but one of the key ones is the idea of gradual, proportionate, mathematical, change - even when the evidence shows 'crash' is more the order of business. They don't really, truly, understand societal systems/feedbacks/limits.

His "supply/demand elasticity model" doesn't cover the key elements of exportland - that exports seem to fall off a cliff (don't act proportionately) and that the pain isn't evenly spread but flows down to those later in the chain.

And he doesn't think that part of exportland is true. Moreover, I think he may be right. Or at least, that he has part of the truth.

As he points out in the article (and many others have pointed out here), the high cost of oil is causing pain for the governments subsidizing fuel use. (Exhibit A: Nigeria.) Many countries that subsidize consumption have been forced to cut back. Even Saudi Arabia is feeling the pressure. They import 80% of their food. They can't let oil exports drop to zero; it would hurt them as much or more than it would hurt their customers.

Yep, I think I'm one of the main ones saying that Saudi have a plan that doesn't involve zero exports.

However, my model is something of a Murphy's Law version - that the pain will collapse importers, and the cost of the exportland countries being out of step with a depressed world will in turn collapse them as well. By being essentially selfish, the instability created will knock out key supporting pillars of all countries.

And then there is climate change, which we are and will do nothing about.

Although at the current rate of progress, I think the finance community will destroy everything before even peak oil gets the chance to have its effect. There is just so much stupid to go round.

We looked at the top 33 net oil exporters* in 2005, those with 100,000 bpd or more of net exports in 2005, which we defined as Global Net Exports. Only 12 of the 33 showed increasing net exports from 2005 to 2010, and 22 of the 33 showed declining net exports from 2005 to 2010.

Nigeria was the only county in the declining group that showed a production decline rate in excess of their net export decline rate. The other 21 declining countries showed a net export decline rate that was about the same as the production decline, or (far more common), they showed a net export decline rate in excess of the production rate of change.

And Nigeria is a case history that most exporting countries probably don't want to emulate.

Here is a chart showing the net export rates of change for the top 33 for 2005 to 2010:


I usually try to talk about a net exporting country “approaching” zero net oil exports, but a focus on the endgame, in my opinion, is misplaced, because mathematically and empirically, the largest volumetric depletions occur early in the decline phase.

The following chart summarizes key metrics for the ELM, Indonesia, UK and Egypt. A key point is that a rough rule of thumb is that about one-half of post-peak Cumulative Net Exports (CNE) are shipped about one-third of the way into a net export decline period.

Regarding subsidies, once in place they are extremely hard to get rid of, e.g., US farm subsidies, and the Indonesian government is still trying to reduce petroleum consumption subsides, several years after they slipped into net importer status. However, as noted elsewhere, given an ongoing production decline, subsidies only steepen the net export decline curve.

Given an ongoing production decline, unless the exporting country cuts their consumption at the same rate as the production decline rate, or at a faster rate, the net export decline rate will exceed the production decline rate, and the net export decline rate will accelerate with time.

As noted elsewhere, Denmark "successfully" cut their petroleum consumption from 2005 to 2010, but their net export decline rate for 2005 to 2010 was almost 20%/year, versus a production decline rate of about 8%/year.

And of course, a doubling in annual global crude oil prices from 2005 to 2011 has meant that most oil exporting countries showing declining net oil exports have so far seen stable to rising cash flows from export sales.

But my principal point is that in my opinion we are only maintaining something resembling Business As Usual because of a sky high depletion rate in the post-2005 cumulative supply of Global Net Exports of oil (GNE) and in Available Net Exports of oil (ANE, or GNE less Chindia’s net imports). Based on extrapolating the 2005 to 2010 data, the estimated post-2005 cumulative GNE and ANE depletion rates for 2005 to 2010 were 5%/year and 10%/year respectively.

Based on the foregoing model and case histories, and based on extrapolating the 2005 to 2010 data, I am estimating that about half of the post-2005 cumulative supply of Global Net Exports of oil will have been consumed by the end of 2020, and I am estimating that about one-half of the post-2005 cumulative supply of Available Net Exports will have been consumed by the end of next year, 2013.

*BP + Minor EIA data, total petroleum liquids

Perhaps we need a new metric for exporters, VNE (viable net exports): How much can a producing country export without crashing their own country's economy. As we've seen with recently higher prices, KSA exports can drop while revenues increase. Makes the math a bit more complex (and volatile), but I expect we're seeing a lot of that. Combined VNE (ANE) doesn't have to drop much to have a large effect on net-importing economies.

I've suggested that we will see what I call Phase One and Phase Two declines. In a Phase One decline, generally rising oil prices offset the decline in the volume of net exports. In a Phase Two decline, generally rising oil prices can no longer offset the decline in the volume of net exports.

Incidentally, I sometimes have difficulty with higher level math. The above should read:

"Only 12 of the 33 showed increasing net exports from 2005 to 2010, and 21 (not 22) of the 33 showed declining net exports from 2005 to 2010."

It seems that KSA and some others are attempting to ride the Phase One sweet spot as long as they can. This is a powerful incentive for countries (eg: Argentina) to take control of their oil industries; gain more control of production and net exports.

Argentina may not be a net exporter much longer. Their 2002 to 2010 rate of change in production was -2.9%/year, and their consumption rate of change was +4.4%/year, resulting in a net export rate of change of -18.9%/year, down from net exports of 440,000 bpd in 2002 to 94,000 bpd in 2010 (BP, Total Petroleum Liquids).

In other words, Net Export Math strikes again.

Extrapolating the 2002 to 2010 data suggests that Argentina will approach zero net oil exports around 2012 to 2013.

Incidentally, note that the 2002 to 2010 increase in net oil exports from Canada, 250,000 bpd, could not even offset the decline in net oil exports from Argentina over the same time frame, 346,000 bpd.

And coincidently, Argentina has been casting renewed covetous eyes towards the Falklands; trying embargo type efforts to attempt to lay claim to the islands - and the very large swathes of South Atlantic that the UN Convention on the Law of the Sea is likely to give them - with attendant oil prospects.

Did the US ever get down off their high horse and accept UNCLOS? If not then they are going to scream when territorial waters off other signatory countries get extended, and their's don't.

Seriously, what business to the Brits have owning the Falklands? They are a busted empire, and the islands are right in Argentina's neighborhood. Eventually, they will return to Argentina. Imagine if Hawaii was located where Taiwan is and we were no longer a world power.

Intellectually? The UK inhabited the Falklands before Argentina existed and their inhabitants want nothing to do with Argentina.

Practically? Oil, resources, and access to Antarctica. Oh, and people would countenance bombing Buenos Aires if the Argentinians invaded again. It's simply not on the cards that any change of hands will happen.

And Hawaii & Alaska are particular interesting examples...

Maybe Britain should stop operating Tax-Havens off the coast of the United States.

And how about they stop having 'rogue divisions' do crazy trading that hurts US companies like AIG and JPMorgan.

Economics may be dismal

I think it's been a long time since main stream economics has been dismal, though I'm sure this aspect will make a strong comeback. Modern day economics could much more accurately be named "The Deluded Science".


Perhaps this lends some explanation to Iraq becoming number two in OPEC before the end of the year, and doubling its production by 2015.

Double? From what point? No doubt that Iraq will overtake Iran but mostly because Iran's production is collapsing due to sanctions and a lot of other problems. But to double their production would put them somewhere around 5.5 or 6 mb/d by 2015. That just ain't gonna happen.

All the new production in Iran is supposed to come from infill drilling in very old and declining fields. No doubt they can increase production somewhat but this will not double their current production levels.

Infill drilling is a way of slowing the decline rate, and actually increasing it if you drill enough horizontal wells. This allows them to suck the cream right off the top of the reservoir with very little water. But all they are doing is putting more straws in the bottle. It does not add more oil to the reservoir.

Iraq Crude Only production in kb/d according to OPEC's Oil Market Report. Last date point is April 2012.


Don't let the increased output in the last two month fool you, that won't last but a few more months at most.

Ron P.

Just curious, what are the various estimates of Iraqi proven reserves and potential vs. S. Arabia? This Financial Times article from 2010 puts Iraq at 143bn barrels vs SA at 266.


Well no, the Financial Times is just reporting what Hussain al-Shahristani, Iran's oil minister said. And the IEA, the EIA, BP and various others like World Oil only report what they are told by the various OPEC countries as to their reserves. Although not all have updated their estimates reflecting the latest "reserves battle" between Iran and Iraq.

In truth no one really knows what Middle East reserves really are. Everyone has an opinion however and even some people are so foolish as to really believe what these Middle East countries say they have. ;-) I also have no idea what they are but I can guess. My guess would put Middle East OPEC reserves at about one third what they claim. But then that is just my WAG.

Ron P.

They all had something to gain from high reserves and increased the numbers then needed. They never experienced decline and as long as they have enough money they will probably not care.

Why bother to look there have always been enough?


The source is Bloomberg:

Iraq, seeking to more than double oil output by 2015, is poised to overtake Iran as OPEC’s second- largest producer by the end of the year as sanctions hobble crude production in its Persian Gulf neighbor.

Good question, "double from what?" Ask Bloomberg, they have email addresses at the bottom of their article.

Not much use in that. I have tried that before, never got me much. Anyway I just assume they mean doubling their output form the last few months. That would put them somewhere between 5 and 6 million barrels per day. They will not do that by 2015 and I doubt they will ever do that.

Ron P.


Yeah, "doubled" from what, when, or where is not clear.

What we do know is that no other major nation is increasing production so dramatically.

New wells in new fields, as well as massaging of old wells in old fields, is ongoing at a furious pace headed up by BP and ExxonMobil.

New wells in new fields, as well as massaging of old wells in old fields, is ongoing at a furious pace headed up by BP and ExxonMobil.

Okay, I think you misread my post, especially the part I put in bold. What I wrote was:
"All the new production in Iran is supposed to come from infill drilling in very old and declining fields."
There are no new wells in new fields. Here is where all that new oil is supposed to come from:
Iraq Could Delay Peak Oil a Decade

Field(s) 	   Plateau (mbd) Co. 	          Resv (gb)  Depletion 	Fee ($/b)  Links
Rumaila 	   2.85      BP, CNPC 	            17          6.1% 	$2.00 	   1
West Qurna Ph I    2.33      Exxon, Shell 	     8.7 	9.8% 	$1.90 	   1, 2
West Qurna Ph II   1.8 	     Lukoil, Statoil 	    13 	        5.1% 	$1.15 	   1
Majnoon 	   1.8 	     Shell, Petronas 	    12.6 	5.2% 	$1.39 	   1, 2, 3
Halfaya 	   0.535     CNPC, Total, Petronas   4.1 	4.8% 	$1.40 	   1, 2, 3
Zubair 	           1.125     ENI, Kogas, Occidenta  l6.6 	6.2% 	$2.00 	   1, 2
Gharaf 	           0.23      Petronas, Japex 	     0.86 	9.8% 	$1.49 	   1, 2
Badra 	           0.17      Gazprom, Petronas, Kogas0.8 	7.8% 	$5.50 	   1, 2, 3
Al-Ahdab 	   0.115     CNPC 	             N/A 	N/A 	$3 	   1
Qaiyarah 	   0.12      Sonangol 	             0.8 	5.5% 	$5.00 	   1, 2
Najmah 	           0.11      Sonangol 	             0.9 	4.5% 	$6.00 	   1, 2
Total 	          11.185 		            65.36 

As you can see there are no new fields in their grand scheme. Also, look at Stuart Staniford's PNG for Expected Iraq Production. At the end of 2010 they were supposed to be at 4.9 mb/d and at the end of 2011 they expected to be at about 6.4 mb/d, Not even close. And as I said earlier, don't let the last two months fool you, that will not continue for very long.

There is some debate as to whether these fields are in decline or not. But Iraqi production peaked in 1979 at about 3.5 mb/d. They have certainly declined from that point.

Ron P.

Here is our chart showing the rates of change in net oil exports for the top 33 from 2005 to 2010:


Iraq is of course one of the 12 net exporters, out of the top 33, that showed increasing net oil exports from 2005 to 2010, although their net exports have basically been flat to down starting in 2008. Following are Iraq's annual net oil exports for 2005 to 2010 (BP). I have shown an estimate for 2011. 

Iraq's Net Oil Exports (Total Petroleum Liquids, mbpd): 

2005:  1.29 

2006: 1.47 

2007: 1.57 

2008: 1.82 

2009: 1.81 

2010: 1.72 

2011:  1.85* 

*EIA production data for 2011, consumption data for 2011 based on 2005 to 2010 rate of increase in consumption (6.3%/year, BP data) 

Here are the BP data for 2010:

Production - Consumption = Net Exports (mbpd):

2.46 - 0.74 = 1.72

At their 2005 to 2010 rate of increase in consumption, they would have to increase (total petroleum liquids) production from 2.46 mbpd in 2010 to 3.1 mbpd in 2020 (+2.3%/year), just to maintain constant net oil exports of 1.72 mbpd.

At their 2005 to 2010 rate of increase in consumption, they would have to increase (total petroleum liquids) production from 2.46 mbpd in 2010 to 4.1 mbpd in 2020 (+5%/year), to show a net increase of one mbpd in net exports, up from 1.72 mbpd in 2010 to 2.72 mbpd in 2020.

It looks like that they will show an increase in net exports in 2012, but I would put it in the incremental, but not material, category.   

For example, the 2005 to 2010 increase in Iraq's net oil exports was 430,000 bpd.  Over the same time frame, Norway's net oil exports fell by 850,000 bpd (BP data base in both cases).  So, just to offset the 2005 to 2010 decline in net oil exports from Norway, we would have needed the increase in net exports from two countries like Iraq.

Incidentally, to fully offset the 2005 to 2010 global decline in Available Net Exports, we would have needed the net increase from 12 countries like Iraq.

Iraq will more than double electrical generation capacity in the next two years. 24/7 air conditioning in the summer is a sure political winner !

I have tried to trace the oil/natural gas mix. However, the domestic natural gas pipelines are not so large and widely distributed.

And the Iraqis were not happy with some of the NG units that the US bought for them right after the invasion.

So I suspect a good % of these new units will be oil fired.

ELM bites again !


Alan, boilers that burn natural gas can also burn oil. They are all NG/Oil units.

Ron P.

Darwinian I really enjoy your various production statistics. Just curious, how do you get the data that you use?

I have primarily three sources. The Iraq data above comes from OPEC. Click on "Oil Market Report". That brings up a huge PDF file so you must search on the word "secondary". Your third hit will bring up "OPEC Crude Oil Production".

Another source I use is the EIA's International energy statistics. Mouse over "Petroleum" and in the dropdown click on "Monthly/Quarterly". That will bring up "Total Oil Supply". That is not what I use. Click on the down arrow beside "product" then click on "Crude Oil including Lease Condensate", then "Update". That data can be downloaded to Excel.

Then I use the JODI data. Click on "Joint Organisations Data Initiative Oil", either all data or the last 15 months, whichever you desire. The data only goes back to 2002. That was when JODI first started gathering data. Their data is always incomplete because a few nations don't report. Also sometimes a country will fail to report then JODI just leaves that month blank. That really messes things up. I average the data in the blank months and add EIA data for the countries that do not report at all. The data here is Crude + Condensate.

Ron P.

Looks like BHP is trying to spin themselves away from Chesapeake's recent bad PR:

"BHP bought the Fayetteville and Petrohawk shale gas assets last year for a total of $17 billion. Shale gas prices have halved since the acquisitions, and analysts say the world's biggest miner could write down the value of the assets."

"But Yeager said the long-term value of the assets was still high."Our approach is the same as everybody else's," he said in a presentation at an industry event earlier. "We'll scale back, reduce rig count and wait."

Waiting has its cost also. First, most leases these days have a "rental clause": on the anniversary of the original lease signing a payment has to be made if the lease hasn't been drilled yet. And often these rental payments are equal to the original lease bonus. In those cases a company is essentially leasing the acreage over and over until they drill or the lease expires.

And there's the other problem BHP faces: lease expiration. They may pay the rental every year but eventually if they don't drill the lease expires at the end of the primary term. Most primary terms are 3 years and sometimes as much as 5 years. Seldom longer than that in Texas. Thus scaling back and waiting might not help BHP very much with expiring assets.

Also, those newly producing fractured shale wells they acquired, thanks to those high decline rates, will be generating very little revenue in "4 or 5 years" regardless of what NG prices might be at that time. So BHP faces the same dilemma CHK does: drill your assets at a time when the economics look rather bleak and your cash flow/borrowing base have shrunk or wait to drill when prices are better but lose much of your assets by not drilling them up in a timely manner.

Like the man rolling around on the ground wrestling with that alligator said:"Hell no...I don't need help holding on. I need help letting go!" LOL.

Yeah, ROCK, your alligator analogy applies to our overall energy situation just as well. We're gonna have a helluva time letting go of fossil fuels without a lot of pain. Damned if you do....

Is there any distinction made between drilling and producing? Is thier any economic viability in drilling the well and then waiting on prices to recover to produce the well? Or is the cost of drilling and short term debt so high that they may as well just pay the clauses in the lease?

Badger - Lots of distinctions depending on the particular aspect. When I drill a well there's the cost to drill, the anticipated reserves/flow rate, the probability of the reserve/flow rate being accurate and the price I expect to sell my production at years down the road. Production economics are a lot simpler: how much I can flow the well at right now, what it costs me to flow the well at that rate right now and what I'll get paid for it right now. That either nets me a profit right now or it doesn't. Easy decision at that point.

Drill and wait to produce? Economics are typically based upon time discounted cash flow. Waiting 5 years to produce a volume of reserves from a particular well decreases the NPV (Net Present Value) of those reserves and thus reduces the ROR. OTOH waiting to sell those reserves at a much higher price might increase the NPV if the price inflation is greater than the discount rate (sorta like reverse interest) used. And thus improves the ROR. But that situation rarely happens and when it does it's nearly unpredictable.

But from a practical stand point most operators can't afford to give up the cash flow even if cutting their production back eventually produces a better ROR. In fact, it's common that when prices fall many operators try to increase their production rates to increase cash flow to cover overhead, debt payments and provide operational capex to carry on drilling. We've cut our NG production rates because, thank goodness, we don't need that income to carry on our business plan. Chesapeake, OTOH, has to keep drilling to replace their rapidly depleting reserves. Which is difficult with lower income from their NG production due to falling prices let alone reducing that production volume voluntarily.

Additionally they have a great deal of debt to service. Can't let that slide while they're in the process of trying to borrow more money to sustain their drilling effort...doesn't look good to a future lender. But the potential lender looks at CHK's need to keep drilling even as the economics of those efforts deteriorate with falling NG prices.

IOW if they let go of that alligator (stop drilling and pay their debts) they get their head bit off by Wall Street for not increasing their reserve base which would allow WS to hype their stock. If they hang on to that gator and borrow more money to drill wells with marginal value they'll get their head bit off by the capex sources for running their debt up in the face of low NG prices that many anticipate staying low for a while. And some of those sources also wonder what might happen to CHK's oil revenue if we are slipping into another recession that could bring the price of oil down a tad...or more.

Pay rentals or not? That's a decision an operator has to make every time a rental comes due on every lease. OTOH it might make economic sense to drop the leases instead of paying rentals. OTOOH if they (public oils) drop leases to which they've assigned asset value the SEC requires them to reduce their booked value by that amount. I've seen many operators choose to pay rentals on leases they don't expect to ever drill so they don't have to take the right down at the time. They'll wait until, hopefully, there's a more advantageous time to book the loss. I've also seen operators turn down good offers to buy some of their producing properties because that fair market price+ wasn't as high as their booked value for that production. Even though they might get a decent payday by selling they don't want to take the write down. Wall Street can get very upset with a company that does this.

As always thank you for your insight, knowledge and ability to epress it clearly.

Rockman, I thought almost all of BHP's Fayetteville and Haynesville were hbp by now, so lease expiration may not be an issue.

joe - We don't have access to the data but I recall when the acquisitions were made the emphasis was on the undeveloped acreage potential. The existing producing wells at the time of the acquisition had little forward value given their high decline rates. I can only offer a generic scenario. Assume 300,000 acres under lease at the time of the acquisition. Assume the average individual lease size is 200 acres. Acreage ownership in the region tends to run about this size. That would indicate they were holding about 1,500 individual leases. Typical unit size in the play is 160 acres so it would take a minimum of 1,500 new wells to hold all the acreage by production.

So you're left with two possible situations: they haven't drilled the majority of those leases and thus waiting to drill will butt up against expirations. Or they have drilled most of those leases and they are being held by production. But if that's the case all that now developed acreage from the acquisition should be producing very little in the near future given the 50% to 90% decline rate. As their CEO said they are going to sit tight and wait. Waiting won't help their HBP acreage generate significant income since those wells will be well past their prime very soon. For those wells it won't matter if NG prices increase 4X in the next "4 or 5 years": they'll be producing marginal revenue at best at that time. If BHP has in fact drilled up most of the acquired acreage and have been selling NG at the recent low prices than I suspect the acquisition has become a significant loss for them. At the time they did the acquistion I suspect they used future NG prices in the economic analysis that were 2X-3X what they've actually sold at. So if he's projecting a better future by waiting "4 or 5 years" it has to be from future drilling activity IMHO. That means wells punched on undrilled acreage. And that means lease expiration timing will be a very critical factor.

Just my estimate from what I've seen in the trend but BHP has to be drilling now and drilling fast in order to stay ahead of expiration dates. But the CEO has said they will sit back and wait. I take that to mean they are going to sit back and pray NG prices increase fast enough and high enough so they can return to drilling before those expensive assets they acquired disappear as they expire.

And remember what the shale gas trends represent to the public oils: a method to quickly add booked reserves (even if they are of marginal value) to satisfy Wall Street's demand for sizzle to hype. And if you ain't drilling you ain't sizzling. And that means WS ain't pushing your stock.

Wash. ferries considering natural gas as fuel

The Washington state ferry system is exploring using liquefied natural gas as a way to save money on fuel prices.

Ferry officials want to switch six boats from handling diesel to natural gas, the Kitsap Sun reported. WSF director David Moseley told the newspaper he'd like go to the 2013 Legislature with a security and operations plan approved by the Coast Guard and ask to begin the retrofit program.

Re: 200 Year Supply Of Oil In Green River Formation

I must be feeling more paranoid than usual this morning. The use of the phrase "...located in a largely vacant region of mostly federal land..." seems to carry a flavor of "so we don't have to pay attention to what the yocals in Colorado, Utah and Wyoming might think." Turning the Mountain West into a de-facto energy colony for the rest of the country, with no regard to the local impacts, is one of my nightmare scenarios.

Yeah, pray no one finds any fossil fuels near any place you love.

That's the same keragen -- not oil -- that's been talked about since Jimmy Carter, right?

Same stuff, and people were talking about it long before Carter. The Pickett Act of 1910 gave the President authority to set aside potential oil-bearing lands to provide fuel oil for the Navy, and Taft set aside some oil shale lands. There have been pilot extraction programs of one sort or another at least as far back as the 1940s -- eg, the Anvil Points mine and research facility near Rifle, Colorado. Hope springs eternal...

"...located in a largely vacant region of mostly federal land..."

This phrase also implies that it is the Federal Government (Obama Administration) that is blocking the development of the Green River Formation. The author conveniently forgets that no one has been able to economically develop this resource in the past 40 years.

jarhead - And I'll also point out that about half the Green River Shale acreage is privately owned and could be leased by anyone at anytime by simply writting a check. The feds can't stop you from developing all those billions of bbls of oil on that land.

And yes Michael - there ain't no oil in that oil shale.

No need for the readers of the post to worry. A "largely vacant region" means it can easily be turned into another "national sacrifice area", since the only people who would think of living there are some tree huggers and hippies who actually like the outdoors. They must be weird people, not living in suburbia or some big city such as NYC, LA, Chicago or DC, like most everybody else. Sort of like West Virginia, only with taller mountains and less water and we know what the coal companies are doing there.

I notice that the commentary is based on a GAO statement presented before the House Subcommittee on Energy and Environment, Committee on Science, Space, and Technology, which took place last Thursday. The presenter is the GAO's Director Natural Resources and Environment. Since the House is run by the Repugs, it's not surprising that there's no mention of CO2 emissions or climate change in the statement. The witness list looks rather one sided as well, with no participation by anyone representing environmental interests. Worse, this is the science committee...

E. Swanson

Come visit our "Energy Coast" with numerous canals conveniently dredged through the bayous to provide easy access - for both you and saltwater.

Tar balls are a bit harder to find this year than last year though.

Good political support for the oil industry due to many high paying jobs - and severance taxes to the state.

After 2017, the state finally gets a share (3/8ths) of the royalties from off-shore.

Best Hopes for our Local economy when first the Shallow water and then deep water wells run dry,


Except for far-enough offshore, at least Louisiana gets a say in what can/can't be produced, can establish regulations that must be followed, and sets the severance tax rates. In Wyoming, Utah, and Colorado, the federal government owns 37-57% of the land, and can do as it damned well pleases on that land. Some of the federal designations on land-use for their areas greatly limits the choices state/private land owners have (eg, designation of the Grand Staircase-Escalante National Monument blocked Utah's ability to develop some lands held in trust for state schools). The feds have also enforced their power to dictate a considerable amount of water policy (and westerners have been fighting over water for well over 100 years) based on that land ownership.

The Sagebrush Rebellion was the last quasi-organized attempt by western states to gain more control over land use within their borders. Although there seems to be some growing momentum for another push in the last few years.

It's amazing that the same people who are so passionate about being able to use their private property as they choose are so cavalier with regard to the Federal Government's right to use its property as it determines fit ?

A lot of folks have a real problem with collective ownership of anything; a sort of socio-economic phobia. They don't see government as a mechanism to protect everyones' interests, they see governments as an obstruction to their own; don't play well with others unless there's personal gain involved.

I've known folks who consider the National Park system socialism, something to be stamped out. They never visit these parks and resent having to pay for them. A former employer always went to private resorts for this reason. He felt all property should be privately held and exploitable.

And there is a third group who likes public lands, but recognizes that when the Federal Government owns over half of all the land in an area, that economic development is stillborn. And then you end up with situations where good farmland is plowed up to make room for urban expansion, while rocky wasteland that would be just fine for housing and factories is left bare because the Feds own it, and they will not sell.

And it's especially annoying when the New York Congressional delegation always wants more Federal land, and more wilderness, but none of this land proposed to be transferred to Federal control is in New York State, which has about the lowest percentage of Federal land in the country.

PVguy said:

"And it's especially annoying when the New York Congressional delegation always wants more Federal land, and more wilderness, but none of this land proposed to be transferred to Federal control is in New York State, which has about the lowest percentage of Federal land in the country."

Not to argue, but just pointing out: "The Adirondack Park [in New York state]was created in 1892 by the State of New York amid concerns for the water and timber resources of the region. Today the Park is the largest publicly protected area in the contiguous United States, greater in size than Yellowstone, Everglades, Glacier, and Grand Canyon National Park combined."


Re: 200 Year Supply Of Oil In Green River Formation

Then there is a practically endless supply of methane on Titan. All we have to do is build a pipeline or an LNG spaceport...

Welcome news, if true...

Green initiatives will save householders £94 a year

Energy Minister Fergus Ewing today welcomed analysis which shows that household bills will be lower with green policies and renewable energy than if we continue with the status quo.

The Department for Energy and Climate Change estimates that consumer bills by 2020 will be £94 lower with low carbon policies than without them.

See: http://www.egovmonitor.com/node/50049

Reportedly, wind power supplied by independent power producers in this province is already cost-competitive with coal and the contracted price is locked-in for twenty or twenty-five years (see: http://thechronicleherald.ca/business/95060-latest-rate-application-has-...).


Here is my counterview to the rejection of Austerity in Europe by Greek, French and now German voters to the handwringing by the elites. It is increasingly likely as has been predicted by many Peak Oil theorists since the European debt crisis began (such as James Kunstler and many others) that Greece will say heave-ho to the banksters.
Of course the 1% always warns of horrible, dire consequences if they do not get their pound of flesh. However if you look at Iceland since the financial meltdown they have actually returned to economic growth:
Of course the same thing happened when Argentina told the IMF and World Bank banksters to get lost in the early 2000's. Although Argentina went through some pain, ultimately they turned their economy around.
Hence I expect that although the 1% will have to eat losses from the pushbacks against Austerity that the European 99% will be better off and GDP growth will resume temporarily and ratchet back up oil demand.
Of course BAU economic growth is unsustainable in the long term but we can also expect that as the Social Democrats and the Greens regain ascendency in Germany they will resume the push for the Green Transition which Angela Merkel has slowed down.

If my math is correct they are having something like 12% annual inflation (2.9% in 3 months):

Consumer price index (CPI)
Base in 1988
Jan 387.1
Feb 391.0
Mar 395.1
Apr 398.2

That's not so good.

The 99% will not be better off and if growth resumes it will be from a much lower base. The unwinding of the debt bubble will be very painful for all.

Despite all of the austerity measures so far, Greece is still running a primary budget deficit. I.e. even if you exclude all interest payments spending is still bigger than income.

So even if they defaulted on all debt, they would still have to go through with even more austerity measures (or increase taxes) as one can assume they would not receive any further credit. Furthermore, some of the debt were presumably Greek assets, be it from Greek banks or e.g. retirement funds of ordinary Greeks which will also have a negative impact.

Perhaps in the long run it is beneficial to default, but in the short term I can only see it getting worse for the "99%".

I wonder if fracking is the new hydrogen car. Recall that our roads were supposed to full of them by now but for some reason it didn't happen. Now all our anxieties have melted away because shale oil and gas will keep us going for centuries. As others point out this is eerily similar to the denial stage of grief.

The oil & gas conference in South Australia came at an anxious time. The State gets 44% of its power from gas from ageing basins, perhaps with as little as ten years reliable supply left. The next big project was expanding Olympic Dam mine in the outback. That will require 650 MW of new power supply and the building of a large desalination plant on the coast. There were fears it couldn't go ahead due to lack of local gas, nuclear being illegal in Australia despite the fact uranium is a major product of the mine. However yesterday's announcement of large unconventional gas reserves must now mean all is well.

As for de Marjerie I'm sure he said world oil will never exceed 90 mbpd now he has also drunk the fracking Kool Aid. What if drilling in these areas comes up dry? Perhaps US shale geology is different so results won't be replicated in other countries. Australia has plenty of offshore gas and the conference suggested it should all be exported as LNG. A year ago some had said a lot of offshore gas should be reserved for domestic demand. No need apparently.

My fear is that yesterday's conference is based on false optimism just like the hydrogen car. If places like Adelaide assume they have reliable gas supplies for decades longer it could turn bad. However if unconventional gas disappoints they can still get gas from offshore but at export equivalent prices. See what that is doing to Japan.

I can't help wondering about the impact of, say, 3,000 MW of solar PV scatted around South Australia.

If wind is not good in South Australia (don't know), make a deal with Tasmania to erect some there with a new HV DC line north by northwest.

Best Hopes for Better Alternatives,


PS: A certain irony - mining uranium with renewable power.

SA is actually a good place for both wind and solar being largely arid just above the Roaring Forties tradewinds. Residential PV was 127 MW (with a feed-in tariff of 44c/kwh at one time) and installed wind over 1100 MW last year. Plans to add another 800 MW wind may have been held back to gas backup concerns.

The underwater HVDC cable from Tasmania is normally limited to 500 MW as the end stations have overheated in the past. It's unlikely another cable will be built. If the SA Olympic Dam expansion goes ahead it could supply half the world's uranium for decades. The plan was to build a pipeline from the ageing gas field to a power station at the mine. Now they are saying fracking and horizontal drilling will give the gas field another 85 tcf.

BHP Billiton the owner of OD mine are smart cookies and they wouldn't commit to gas power unless a good price was guaranteed. They blackmailed the Federal govt into backing down on a cut to the diesel for mining subsidy. Let's see how they react to this new found optimism about gas supplies.

A couple of years ago, possibly because of drought, Tasmania was buying coal fired electricity from the mainland cheaper than they could use their hydro. I'm not sure why I think that too was ironic.


My car is partly a hydrogen car (the H in Hydrocarbon, part that is), perhaps 2/3rds of the fuel molecules......

Pretty much.

Methane burns the cleanest. Four hydrogens attached to a single carbon (CH4) explosively burns/combines with four oxygens to make one carbon dioxide and two water molecules:

Ethane, six hydrogens attached to two carbons, burns to make two carbon dioxide and three water molecules. Going from one carbon to two did not burn as cleanly as two separate methane molecules would have:

Hydrocarbons, fuels, more complex than methane have more carbon to less hydrogen and so make more carbon dioxide when burned.

Propane, C3H8, burns to make three carbon dioxides and four water molecules:

Hydrocarbon fuels cover a large range of carbon content and molecular structure.

Benzene has six carbons in a ring with half of the bonds being double bonds. The double bonding replaces six hydrogens. Only space for six hydrogens remains, making C6H6 the formula for benzene. It burns to make six carbon dioxides and three water molecules... much dirtier than ethane:

Tar sand bitumen/goo is a branched mass of bonds making rings and other structures without as much hydrogen as the simpler hydrocarbons have. Processing it releases lots of CO2.

I'll take your "6 hybrid supercars on the cutting edge" and raise you one battery electric supercar for the 0.1%

With a 92-kWh battery powering the electric motors at each wheel, the Rimac is said to be capable of rocketing to 62 from a standstill in just 2.8 seconds while traveling as far as 372 miles on a single charge. The team of former Pininfarina designers penned an attractive shape to go with it, the Bulgarian leathercrafters extraordinaires at Vilner were brought in to work on the interior, HRE developed a unique set of monoblock alloys and Vredestein debuted its new Ultrac Vorti tires designed by Giugiaro all for the Concept_One.

Impressive specs, all, but what's most impressive is that the Concept_One is no mere concept – you can actually buy it, assuming you've got the scratch. Upon showcasing the electric supercar at the Top Marques show in Monaco, Rimac announced a limited run of 88 examples will be built, each fetching $980,000 – a price as princely as the regent who was on hand to check it out in Monte Carlo. Which only goes to prove that you can, indeed, have your cake and eat it too, but it'll cost you dearly.

Say what you will but, this is an impressive effort from a team of gearheads headed by a 23 year old innovator from Croatia of all places! I'v seen thes guys before on Youtube, linked to from Autobloggreen.com, drag racing their BMW 3 series (E30) conversion and just found this 2 year old Youtube video of their original build. They refined that car, culminating in the car featured in this 7 minute video of excerpts from a half hour TV slot on their effort that, describes the evolution of the car. By the builders account, the first build used largely off the shelf components but, the team was not satisfied so they started designing and building their own systems to make the car more powerfull faster and lighter.

Apparently the experience of doing this conversion convinced the team that they could design and build a car to tangle with the best of them. A brief history of the man and his car can be read at:


If these guys deliver as few as 10 of these creations, I would see it as a big embarrassment to all of the established top marques since, on paper, this car would outperform quite a few of them. All of this from abunch of geeks from Croatia. Makes me wonder about all the talk of collapse. Did these Croats source their components from all over the globe? Looks like they used Italian designers, Bulgarian leathercrafter, wheels from Germany and tyres from the Netherlands. That makes it a largely European effort. I wonder how vulnerable their supply chains are to the effects of Peak Oil.

The BMW conversion was apparently done so young Mr. Rimac could continue his effort to learn the art of "drifting", having destroyed the original motor. This is the same pursuit of young un(der)employed Saudis highlighted in the above post so, he could help the Saudis with a (really) small portion of their internal consumption. These young Saudis could charge the car using solar PV and "drift" to their hearts content without using gasoline!

Alan from the islands

"May 14, 2012 By Paul Gipe While North America continues to dawdle on the road to the renewable revolution, the conservative, oil-rich Kingdom of Saudi Arabia has proposed one of the most sweeping and massive moves to renewable energy on the planet. In typical Saudi fashion, where everything from oil fields to opulence is done on a colossal scale, the proposed renewable program is gargantuan. Starting from zero, the Kingdom plans to install a staggering 54,000 MW of renewable-generating capacity during the next two decades."


Note the high concentration of Centralized CSP as well as distributed PV. Works in the Desert where there is little ray scattering moisture (dust?), Back to the Future with 1.21 gigawatts in 1.21 years? *Peak Oil enabled PV* Next - Food for kWh with HVDC lines to Northern Europe.

Let's "do the math" on this.

According to the original Bloomberg article the plan for 2032 is:

Saudi Arabia is seeking investors for a $109 billion plan to create a solar industry that generates a third of the nation’s electricity by 2032, according to officials at the agency developing the plan.

The world’s largest crude oil exporter aims to have 41,000 megawatts of solar capacity within two decades, said Maher al- Odan, a consultant at the King Abdullah City for Atomic and Renewable Energy. Khalid al-Suliman, vice president for the organization known as Ka-care, said on May 8 in Riyadh that nuclear, wind and geothermal would contribute 21,000 megawatts.

If 41 GW of capacity is "a third" of demand, then demand in 2032 will be 123 GW.

  123 GW - 41 GW solar - 21 GW nuke-wind-geo = 61 GW fossil fuels

In another al arabiya article we read that current installed capacity is only 50GW.

  61 GW from fossil fuels - 50 GW installed = 11 GW new fossil fuel

According to these simple calculations, 11 GW of power must be generated from new fossil fuel plants between now and 2032, assuming the massive and unprecedented buildout of solar, nuclear, wind and geothermal goes according to plan. (What could go wrong?)

And we haven't even mentioned desalination plants!

I wouldn't be counting on electricity exports from the desert kingdom in 2032. Even counting on oil exports seems risky.


It's a start from nothing. They talking kw capacity or kWh? assume capacity. Fix tilt PV temp de-rate-capacity factor in KSA would be something like ~20%. So shooting from the hip, each kW installed would harvest 5 kWh/day. 5,000 kWh/day per Megawatt / 1700 (kWh/Barrel) = THREE Barrels crude/day per MW of PV assuming no war. 41,000 MW = 123,000 Barrels Crude/day. That's a lot of ICE cubes if they had the water, Just 1.5% of 9 million BPD current production. Time to Bootstrap. What else they going to do with the $'s ? Don't Answer that :-)

Do these calculations take into account the heat rate of the power plant? According to this EIA FAQ page it takes one barrel of oil to generate 610kWh. That would make the calculation 5,000 kWh/day per Megawatt / 610 (kWh/Barrel) = EIGHT Barrels crude/day per MW of PV assuming no war. 41,000 MW x 8 = 328,000 Barrels Crude/day = 3.6% of 9 million BPD current production. Using what I understand to be closer to the current data, it works out at about 3.3% of 10 mbpd current production or more importantly, 16% of 2 mbpd current consumption.

My initial reaction to the OP was, meh, Germany has installed half of that in just the last five years. See the table below excerpted from a table on this Wikipedia page:

Year 2006 2007 2008 2009 2010 2011
Capacity (GW) 2.90 4.17 6.12 9.914 17.32 24.8
Generation (TW·h) 2.220 3.075 4.420 6.578 12 18
% of total consumption 0.4 0.5 0.7 1.1 2.0 3.2

As should be obvious by now, I am fascinated by what is going on in Germany with renewable energy in general and Solar PV in particular.

Edit: They hit 17.3 GW at peak May 14 (yesterday)!

Alan from the islands

German Energy Mix Graphs


Past and Future.

It seems as if they could have gotten rid of coal, but chose to get rid of nukes instead,

Conservation & efficiency are major parts of the plan.

Best Hopes for Germany,


It also looks like they're not expecting any significant declines in oil anytime soon. Maybe it's a good thing their renewables are ahead of schedule. They just might need more of them a little ahead of schedule if things go as some of us here fear they might.

Alan from the islands

While I certainly don't agree with their decision to shutdown all their nuclear plants in the near future, in the long run nuclear is not a good fit with renewables. With the high capital costs of nuclear power, it is best used to support the base load, running at full power 24 hours a day. If you have to idle back your nuclear plants during daylight hours or when large amounts of wind power are available, they are no longer cost effective.

I missed half of the Story, As has been drilled into us by now, Oil is NOT Electricity & vice <> versa. 16% of Consumption is Impressive for Starters, For Panels shading a rooftop in that hell for climate, factor in reduction in Air Conditioning as well as distribution losses. A LOCAL Solar kW on roof can be worth several kW at a remote central plant when "burnt" for cooling. The Big story in Germany that have the IOU's in a frenzy is the Revenue loss from % loss of "Cream" Peak kWh revenue flow. Distribution Generation is just starting.

North Dakota: riding the oil rush
Oil has brought money and jobs to this sparsely populated region – but residents fear a ban on fracking will stop the boom


Yves Smith with an interested takedown of the man who may have crushed "hope" in America for a generation:


I know that Obama has helped kill off any hope I had in this country. He wasn't the only reason, but he was a part of it.

It's hard not to under-deliver when their was so much promise. The Repubicans in Congress certainly guaranteed nothing would be delivered after the midterms.

I watched the Frontline series "Money, Power & Wall Street" last week.

Came away a little disappointed at how few concessions, possibly none, he asked from Wall Street for all the bail-out money they got.

Still I think you have to be better off with him than Mittens.

It does not matter?
TPP is coming.
It will be on a congressional luge run: limited debate... like the patriot act or the defense act.
The corporations become the prime authority.
We are watching the looting of the country... like the fall of Russia.
I do believe it is over. That's why the republicans have just been running out in-front of the cameras like little schoolchildren rather than presenting a serious presidential campaign. Only an idiot would run against the fall-guy. Think about the antics of Herman Cain or Newt in that light.


Obama has not disappointed me at all, he has done exactly what I expected of him. Why anyone ever expected any more is beyond me. There was nothing in his record or in the content of what he said, or in the money and interests who backed him that would give any reason to believe he represented change in any way. But then I only read his words and blocked out all the emotional appeals of radio and television.

As for the TPP and fears of perpetual police state power, these don't bother me. We've been talking about the impacts of peak oil here on TOD for quite some time now (over 6 years for me), and we're seeing it now in real time. It goes a little slower than I once thought it would, but in hindsite the pace of change is rather breathtaking. There is no doubt that the existing power structures will try like heck to hold on, and that personal rights and freedoms will suffer, but in fact the resource and energy base to keep the empire going is failing. Therefore the empire will fall. The TPP is one of those efforts, but I believe global free trade will be going the other way, toward more localized economies.

I think that many of the rights and freedoms we've enjoyed are also directly the results of our energy slaves, so we can expect them to be curtailed to some extent. We may be unfortunate to live through much more repressive systems, but all is transitory now. None of the structures being put together by the existing power base will last long - that's what collapse is all about.

The Clean Energy Ministerial: What I Learned about Solar PV and Global Governance

I had the privilege of chairing the public-private session on solar photovoltaic (PV) energy yesterday afternoon, and summarized highlights of our deliberations for the collected ministers this morning. The session itself was held under the Chatham House Rule, but the readout to ministers wasn’t. Here’s what I told them:

So basically Newt & Bachmann were just blowing a lot of smoke (as if you did not already know that). Oil is a globally traded commodity. To really change the price on the supply side, you'd have to increase the global supply by a noticeable amount. Given the US reserve base, I just don't see that happening. (Although clear those people who think the USA will become a net oil exporter in 10+ years think it could happen. I can't see that happening. )

I have been following TOD for more than 2 years and is very thankful for the information and learning I get.

My country Indonesia has been plagued with decreasing production too, and the gov't is trying hard to increase the production, by inviting the companies to invest in new blocks while ramping the production from the existing ones.

The problem is also exacerbated by the country addiction to subsidized gasoline (RON 88) which is priced at IDR 4,500/liter - or about USD 1.84/gallon. Octane 92 and 95 are priced at about market level and changed biweekly, but with the current price, even few mercedes are spotted filling at the subsidized pumps.

Indonesian gov't has been talking a lot about increasing the price of subsidy since last year, since it affects negatively on state budget which funds could be used for advancing educations, health care, etc. The talk was promoted further by daily advertisement on TV, Radio and newspaper to educate public that most subsidy is being enjoyed by the "rich". The increase was scheduled earlier this year, but big demonstration by university students (ironically) turned violent made the gov't think twice about really implementing it.

It is to be noted that public transportation system and road condition still leaves much to be desired, and we do not have subway/MRT system even in the capital city of Jakarta. Traffic jam is a major problem which occurs daily, sometimes even during the weekends. Motorcycles are the most common transport.

I will try to promote TOD articles and discussions to my friends and public; hope there will be more understanding and urgency to change the paradigm. Thanks again all!


Wow... when you mentioned octane above 91, my Miata began whining plaintively and stamping her tires. (I only drive her about 2,000 miles per year, a guilty pleasure at a horrific 21 MPG around town. My daily driver is a 20-year-old CRX that gets about 31 in the city and 42 highway, but has no air conditioning and I'm too old to drive it in the summer.)

Are there really production cars that need more than 91 octane? Maybe they are tuned differently over there; I know the Miata has problems with less than 91, but that's our limit here.

For the subsidized gas, is that imperial or US gallon? Just curious.

Here's hoping light rail comes your way... or electric scooters or bicycles, which we are beginning to see here.

It is in US Gallon.

We do have trains, but the condition needs to be heavily upgraded with better and newer tracks and trains. Google "Indonesian trains surfer" and you will see quite interesting pictures, although we do have executive trains.

Very, very interesting. Sometimes the people here in the western countries get so self absorbed with our life and having to pay a small fraction more of our income on fuel. If more people would learn how others are struggling, maybe they would have a different perspective.

It appears that your government does not have a real solution to help most people. They are trying to increase the price of gasoline which the upper class can still afford. And, after looking at the pictures of the "Indonesian trains surfer", I see that they are going to start building cement balls on the train tracks to knock the free riders off. This looks like war on the poor.

"If more people would learn how others are struggling, maybe they would have a different perspective."

My experience is that, for most folks who haven't traveled extensively, it doesn't factor into their 'thinking' much. Conditions on the other side of the planet are just another virtual reality to them; out of sight, out of mind, as soon as they change the channel.

Of course, the US does this too, but we put 'pretty fabric coverings on the cement balls'.. the Indonesian gov't is just a bit less subtle, it seems.

*the US versions are usually part of economic or regulatory policy.

Higher octane is usually needed for high compression engines,either due to forced filling (supercharging or turbo charging) or naturally aspirated with compression ratios above approximately 10:1

As the air/fuel mix gets compressed before ignition, it heats up. If the octane rating is too low, the fuel can ignite prematurely, damaging the engine.

If your Miata tends to ping, try replacing the Oxygen sensors in the exhaust with new ones if 'nothing else seems to help'

I'm surprised no one's caught this yet...

...(RON 88) which is priced at IDR 4,500/liter - or about USD 1.84/gallon. Octane 92 and 95 are priced at about market level and changed biweekly, but with the current price, even few mercedes are spotted filling at the subsidized pumps.

The "RON 88" is a giveaway...these octane numbers are inflated compared to United States numbers which use a RON+MON/2.

Can Cleaner Cookstoves Help Save the World?

This is a robust problem. 1,000,000 children a year die from pneumonia brought on by the three rock fire. A lot of the world cooks food in pots resting on three rocks with wood pushed in from the three directions between the rocks. These are burned in huts. The smoke can kill the deadly beetles in the roofing thatch if there is thatch. Dried dung is often the only available fuel. Dung does not fall through grates when it burns.

Designing a stove to replace the three rock fire is much more difficult than designing a supercomputer. The supercomputer problem has an infinite number of solutions including buying 65,536 whole home computers and lots of Ethernet cables from Walmart.

Once such a stove has been known by many, it would become part of the human bag of tricks, like making canoes or cloth.

Indian stove
Indian nuclear missile


The article from Bloomberg is a very strange article! Did anyone else notice that it didn’t bear any writer’s name, and was simply attributed to “the editors”. I also noticed that this article was in the opinions section, which apparently is assumed to relieve them of any need to tell us anything about what stove designs they were talking about. This smells much like a deliberate disinformation campaign to me.

Yes, the article rambles off in ugly directions. I keyed on the cooking problem itself.

Ok, I'll be the asshole. Given the state of resources and human nature, would it not make sense to let the infant/child mortality rate increase? The only problem is to get this to affect all soci/economic classes evenly. We are victims of our own ingenuity and brilliance.

Two related articles from my neck of the woods. One might ask how they are related to energy but, it's quite simple. It's how the interaction plays out between two trading partners, one with indegenous FF resources and one without. What could happen if Saudi Arabia or Rusia or Australia decided to develop their own manufacturing sector instead of importing manufactured goods from the same people they export energy to, China, Taiwan and Germany.

Manufacturers' grouses leave Samuda scratching head

The JCC president was reacting to complaints by local manufacturers that they were unable to compete with their T&T counterparts because of the huge government subsidies they receive.

He urged them to stop complaining and seek redress through the Caribbean Court of Justice (CCJ).

Samuda conceded that the mechanisms in place to deal with these grouses at the CCJ are not "inexpensive", but questioned whether there was the commitment among local businesses to fight their causes through those channels.

Of course he would "urge them to stop complaining and seek redress through the legal system" because, he is a lawyer and has a very good handle on the fact "that the mechanisms in place to deal with these grouses at the CCJ are not 'inexpensive'". I would not be surprised to learn that a conected party isseeking to represent the Jamaican manufacturers in this case.

Trinidad manufacturers call for truce with Jamaica

Jamaican maufacturers have complained that they are at a disadvantage to their Trinidadian counterparts, who get strong support from their government.

Trade figures between both countries show that Port-of-Spain accounts for most of the nearly US$1.2 billion trade deficit between Jamaica and the wider Caribbean community.

It really is all about energy.

Alan from the islands

I think green countries and regions are allowing dirty industry to go offshore to make their emissions data look better. The hope is that service industries will take the place of the polluting industry so that for example steelworkers become solar panel installers. If Australia loses its steel and aluminium industries to India and China those countries get the jobs and profits. And whaddayaknow they don't have serious carbon tax. Q1 is that helping global emissions? Q2 what happens if war breaks out and there is no local industry?

In Australia we will have the crazy situation where we import steel from Asia away but the iron ore and coking coal is mined here. For now the deal is metals industries get 94.5% exempted from carbon tax but that reduces 1.3% a year.

Gail may find this interesting:

4 degrees with 0% unemployment:

Bette Wiebke
Majored in Actuarial Science, Class of `12
Drake University

Why become an actuary? My parents kind of planted the idea in my head from an early age, because math was always my favorite subject in school. Plus, they knew it would be a lucrative profession.

An actuary is basically supposed to predict the future, estimating future risks and costs. Being able to do that well is so valuable to a company.

A lot of actuarial wannabes around here ;-)

Other degrees in demand: Astrophysics, pharmacology, geophysics.

Jeez,,, fortune tellers, star gazers, drugs, and energy.

I read recently that over 50% of law degree graduates from 2012 will never practice law. That we already have too many lawyers isn't really a surprise, but a shortage of fortune tellers??

Foretelling the future is officially one of my hobbies. That is why I am dragging around here all the time. I care about the energy situation, because it is one of the key factors for predicting the future.

I never did maths. No point since I care little about dates, but totally about trends. When Israel begun building the barrier, I predicted a palestinian civil war. I never said when. It came within a few years. I am quite good at this. The key is to absorb data of all kinds. Right now I am studying up on WWI. Didn't know much about it realy, strange for a war geek like me. I had another period studying up on soviet Russia. History is also a key factor. Social trends are important too. But there is very little that is not ineresting. Sport is among the exceptions.

have you read Tuchman's book, The Guns of August yet? I found it very interesting...

E. Swanson

I give my highest recommendation to Gabriel Kolko's The Century of War. Fair warning: he never uses 1 word when he can use 10. But his analysis of the arrogance of Europe's ruling classes in the run-up to WWI is unmatched.

I'll save those titles on my to-look-up book list.
Yesterday I finished reading Peter Englunds "Stridens skönhet och sorg". If it ever gets translated to english, I'll let you know. World War 1, as if you where there your self.

I am outdated. The book has been translated to 16 languages. This is the article about it on the authors own web site.


If you have not read this one yet, might find it enjoyable: "Friday" by Heinlein.


For a completely different view of the early 20th century I'm reading Leon Trotsky's "History of the Russian Revolution". Definitly "directly from the horse's mouth"!

I find it mysterious that astrophysics would be described as a field having anything like 0% unemployment. I recall that it had a dubious reputation when I was a physics undergrad in the early 1970's - there were a few openings for postdoctoral fellows (i.e., low paying temporary jobs in academia), but that was about it. I suppose it may be that there are not that many graduates and, being smart people, they manage one way or another.

What do they say about home builders? kidding...

People pretending to know the future always do well from disasters and fear.

'Over-consumption' threatening Earth

Latest survey says we are using 50 per cent more resources than what can be sustainably produced.

The environmental conservation charity World Wildlife Fund (WWF) in a report released on Tuesday said the demand on natural resources has become unsustainable and is putting "tremendous" pressure on the planet's biodiversity.

"We are living as if we have an extra planet at our disposal," said Jim Leape, WWF international director general.

"We are using 50 per cent more resources that the Earth can sustainably produce and unless we change course, that number will grow fast -- by 2030 even two planets will not be enough," added Leape.

Report: http://wwf.panda.org/about_our_earth/all_publications/living_planet_report/

also China builds 'instant high-rise' in just 9 days

Elgin gas leak operation under way at Total platform in North Sea

The operation to stop gas leaking from the Elgin platform in the North Sea is under way.

The effort to stop the leak involves the pumping of heavy mud into the well from the main support vessel, the West Phoenix semi-submersible drilling rig, via a temporary pipeline.

Republicans Order Navy to Quit Buying Biofuels

On Monday, the U.S. Navy will officially announce the ships for its demonstration of the “Great Green Fleet” — an entire aircraft carrier strike group powered by biofuels and other eco-friendly energy sources. If a powerful congressional panel has its way, it could be the last time the Navy ever uses biofuels to run its ships and jets.

In its report on next year’s Pentagon budget, the House Armed Services Committee banned the Defense Department from making or buying an alternative fuel that costs more than a “traditional fossil fuel.” It’s a standard that may be almost impossible to meet, energy experts believe; there’s almost no way the tiny, experimental biofuel industry can hope to compete on price with the massive, century-old fossil fuels business.

Committee Republicans, like Rep. Randy Forbes, insist this isn’t an attempt to kill off military biofuels before they have a chance to start. “Now, look, I love green energy,” he said in February. “It’s a matter of priorities.”

... “I understand that alternative fuels may help our guys in the field, but wouldn’t you agree that the thing they’d be more concerned about is having more ships, more planes, more prepositioned stocks,” Rep. Randy Forbes said during a February hearing with [Navy Secretary Ray] Mabus. “Shouldn’t we refocus our priorities and make those things our priorities instead of advancing a biofuels market?” Then he told Mabus: “You’re not the secretary of the Energy. You’re the secretary of the Navy.

Interesting: special interests and factions actually preventing the military from preserving its ability to project power. This fits in well with Greer's "The Descent into Stasis" post this week - you've got some group with a limited power base and the ability to protect its golden goose by wielding veto power, but none actually have the power to accomplish anything. It's a sign of weakness, not of strength.

It is time to turn the Republicans weapon back on them and war-mongering neoliberal Democrats - filibuster ALL Military expenditures!

Need a number on how much conventional energy it took to make the "biofuels" for the green fleet.

This is advanced military planning. Someday, far from now, we will be low on oil. Or someday, supplied lines to oil could be cut off. So the military wants to work on making sure there are other means for powering their equipment even if oil supplies were cut off. What good is our military if we don't have the fuel to run it? It becomes a toothless tiger.

It is very long-term and speculative planning but that is what we pay them for . . . to be ready for anything.

New MSM 'Doomer Porn' ...

What happens to society when all forms of power cease to exist?

NBC Series: Revolution

Fifteen years after the power outage, society takes on a new structure.

Viewing the trailer/pictures, as usual, the characters are all wearing fairly intact, clean/modern, untattered clothing....15 years after the collapse of "all energy sources"? These folks need to hire some TOD doomers as consultants. Matters not; it doesn't start until fall, by which time we may well be into a real revolution ;-/

Weird weather ...

Heatwaves, bushfires predicted to hammer NSW

The Climate Commission has released a report predicting record heatwaves, bushfires and rising sea levels in New South Wales because of climate change.

Snow hits Bosnian capital

SARAJEVO — The Bosnian capital and its surroundings were covered by snow on Monday, the first time in half a century snow has settled in Sarajevo at this time of year, as temperatures plunged to just above freezing.

40 killed during hour-long hailstorm in China

Forty people were killed when a brief but violent hailstorm and torrential rain swept through a mountainous region of northwest China.

Rare supercell thunderstorm in Hawaii produces record size hailstone

Supercells are a type of thunderstorm common in the central plains of the United States, but almost unheard of in Hawaii, where the previous hail size record was only around an inch.

A practical guide to green products and services

A new report published today by the European Commission's in-house science service, the Joint Research Centre (JRC), provides key information for policy makers and business managers on how to assess the environmental impacts of products and services. It helps to pave the way towards a resource-efficient Europe and aims to help design more sustainable products, which are indispensable in a world of 7 billion people and limited resources.

Nearly one-tenth of hemisphere's mammals unlikely to outrun climate change: study

A safe haven could be out of reach for 9 percent of the Western Hemisphere's mammals, and as much as 40 percent in certain regions, because the animals just won't move swiftly enough to outpace climate change.

Those factors mean that nearly all the hemisphere's primates will experience severe reductions in their ranges, Schloss said, on average about 75 percent. At the same time species with high dispersal rates that face slower-paced climate change are expected to expand their ranges.

"Our figures are a fairly conservative – even optimistic – view of what could happen because our approach assumes that animals always go in the direction needed to avoid climate change and at the maximum rate possible for them," Lawler said.

"Our figures are a fairly conservative – even optimistic – view of what could happen because our approach assumes that animals always go in the direction needed to avoid climate change and at the maximum rate possible for them," Lawler said.

Why the hell would you assume that? It's pretty obvious that it will be a random walk for individual groups for a species migration, and the average of that is well known.

What they mean is: they do not assume there are humans around. No large cities along the coast lines, no giant monocrop fields from horizon to horizon, only large contionual areas of undestroyed pure natural habitats. If you add in those obstacles, things get even more complicated.

Tiny plants could cut costs, shrink environmental footprint

Tall, waving corn fields that line Midwestern roads may one day be replaced by dwarfed versions that require less water, fertilizer and other inputs, thanks to a fungicide commonly used on golf courses.

... just what we need - more chemicals in our food.

New look at prolonged radiation exposure: Study suggests that at low dose-rate, radiation poses little risk to DNA

A new study from MIT scientists suggests that the guidelines governments use to determine when to evacuate people following a nuclear accident may be too conservative.

The study, led by Bevin Engelward and Jacquelyn Yanch and published in the journal Environmental Health Perspectives, found that when mice were exposed to radiation doses about 400 times greater than background levels for five weeks, no DNA damage could be detected.

Current U.S. regulations require that residents of any area that reaches radiation levels eight times higher than background should be evacuated. However, the financial and emotional cost of such relocation may not be worthwhile, the researchers say.

Unfortunately, [most] humans live longer than 5 weeks. I suggest the researcher bring home some potent alpha, beta and gamma sources and see how his family fares in 20 years.

... What's a little fallout, heh? Have a nice day! -WATER VENDOR
- Mad Max -Beyond Thunderdome

NNSA measuring background radiation over Baltimore

The agency in charge of national nuclear security and incident response is flying a helicopter over the city of Baltimore to conduct background radiation checks in the city between May 14 and 16.

The agency has said aerial radiation measurements have been used in the U.S. to respond to nuclear incidents and to characterize currently existing radiation around U.S. nuclear sites. The agency flew radiation detection equipment to Japan last year to support monitoring efforts following the Fukushima Daiichi nuclear power plant accident in Japan.

Now they know what number to multiply by 400

Kodak had secret nuclear reactor

It has been revealed that ailing imaging company Kodak had a secret nuclear reactor hidden in a US research facility for more than 30 years.

The reactor, which contained 1.5kg of enriched "weapons-grade" uranium, was a Californium Flux Multiplier (CFX) acquired by the company in 1974 and only decommissioned in 2006.

But Kodak, which filed for bankruptcy in January, claims that the device was fully licensed and perfectly safe.

The reactor was housed in a bunker with two-foot-thick concrete walls under a research facility in Rochester, New York, without anyone batting an eyelid - until now.

The company insists that the device was never a secret, it just wasn't publicised

Kodak was no stranger to nuclear science, having operated the Y-12 plant at Oak Ridge that did the final enrichment of U-235.

They also operated the plant that manufactured the high explosive lenses to implode the plutonium devices.

So if only someone had just asked if a company known for photgraphic processes had a nuclear reactor squirrled away at a research facilty, they would have been more than happy to tell the truth and say "yes we do"!?

Kinda brings new meaning to thier old slogan "You press the button , We do the rest".....

NRC Releases Missing Record on San Onofre Plant

Federal regulators Monday released a key presentation on generator design changes at San Onofre Nuclear Generating Station that had been missing from records of the public meeting where it was presented.

The 2006 presentation by plant operator Southern California Edison to the U.S. Nuclear Regulatory Commission was billed as an overview of its plans to modify and install replacement generators.

The presentation, however, didn’t include major design alterations that an outside nuclear expert has concluded were responsible for a minor radiation leak in late January. And several of the changes that were not in the presentation should have triggered a much more thorough review by the government, according to the expert, Arnie Gundersen.


Here is the engineering report from the article:
I had to try a few times before the PDF reader accepted it.

Changes were made to the steam generator design. The regulating authority failed to detect the changes. New steam generators were made to the new design and installed. Components within the new generators are failing in such a way as to (1) present a continuous and immediate problem and (2) to multiply the effect of a failure, a pipe breaking, elsewhere in the system. Changing them back to the original design may take four years and almost a billion dollars.

I don't think low level radiation exposure is a serious risk. Clearly it is not good for you but pilots all get exposed to more radiation and they don't seem to be dropping like flies.

I'm often more concerned with contamination from nuclear particles than direct radiation exposure. If you end up breathing in or ingesting a large number of radioactive particles inside your body and they continue to emit radiation inside of you for years, I suspect that is a much more serious health threat.

Study shows trees absorb less carbon than earlier thought; leaf activity drops during summer

Correctly accounting for the impact of photoperiod on tree leaf activity adjusts global estimates of carbon sequestration downward by more than 3 percent, according to the study

Tree leaves, responding to shorter days, simply do not fix the planet’s fast-rising carbon dioxide levels to the extent that scientists earlier assumed, the nine researchers write. That is true even when warm temperatures delay signs of aging in tree leaves.

New from Congressional Research Service [CRS]

Ukraine: Current Issues and U.S. Policy

U.S. and EU officials have expressed concern that opposition leaders have been targeted for selective prosecution. In the most prominent case, on October 11, 2011 Tymoshenko was convicted of abuse of power arising out of her role in signing a natural gas supply agreement with Russia and sentenced to seven years in prison.

Keystone XL Pipeline Project: Key Issues

In the wake of the State Department’s denial of the Presidential Permit, Congress has debated legislative options addressing the Keystone XL pipeline. The Surface Transportation Extension Act of 2012, Part II (H.R. 4348) and the North American Energy Access Act (H.R. 3548) would transfer the permitting authority for the Keystone XL pipeline project to the Federal Energy Regulatory Commission, requiring FERC to issue a permit within 30 days of enactment.

The Keystone For a Secure Tomorrow Act (H.R. 3811), the Grow America Act of 2012 (S. 2199), S. 2041 (a bill to approve the Keystone XL pipeline), the EXPAND Act (H.R. 4301), and the Energizing America through Employment Act (H.R. 4000) would immediately approve the original permit application filed by TransCanada. All seven bills include provisions allowing for later alteration of the pipeline route in Nebraska. S. 2100 and H.R. 4211 would suspend sales of petroleum products from the Strategic Petroleum Reserve until issuance of a Presidential Permit for the Keystone XL project.

Carbon Capture and Sequestration (CCS): A Primer

Pakistan’s Nuclear Weapons: Proliferation and Security Issues

Medicare: History of Insolvency Projections

Job Growth During the Recovery

Youth and the Labor Force: Background and Trends

Understanding China’s Political System

Excelerate to build first floating U.S. LNG export plant

Excelerate Energy, the U.S. liquefied natural gas company founded by Oklahoma billionaire George Kaiser, said on Tuesday it will develop the country's first floating LNG export plant off the Gulf Coast, joining a queue of projects awaiting government approval to ship out surplus gas.

The Lavaca Bay LNG project off Texas, expected to start exporting by 2017, would initially have the capacity to ship 3 million to 4 million metric tons per year (mtpa) of LNG, Excelerate said in a statement. It could be expanded to 8 mtpa, or about 1 percent of daily U.S. supply.

Gas Prices Spike, Southern Californians Not Thrilled

Gas prices on the west coast jumped 16 cents since last week due to a reported shortage in fuel.

Oil companies are blaming the recent spike in prices on several different reasons, including a 20-year shortage of fuel for the month of May.

I think Charles MacKay called this a few days ago here

also West Coast spike in gas prices tied to refineries

Thanks. The situation in California dramatically improved this afternoon, but not in the Northwest (Oregon & Washington). Gasoline consumers there may have to suffer through another week or too of higher prices.

Although your referenced article states this is 'not the new normal', I won't be saying that anytime soon. Since West Coast gasoline supplies have been sharply depleted over the last six weeks, it remains to be seen just how fast inventories can return to normal before the start of the summer 'driving season' - about the end of May.

May 15, 2012
Reuters News 21:21:51

US WCoast Products - Gasoline plummets on restart

HOUSTON, May 15 (Reuters) - Gasoline in the Los Angeles spot market plummeted 27.5 cents on Tuesday as BP Plc continued restarting its 225,000 barrel-per-day Cherry Point, Washington refinery, traders said.

The refinery had halted the restart to correct a minor problem late last week and resumed restoring production on Monday. The plant was shut by a crude distillation unit fire in February and has been out of production for nearly three months.

May-delivery CARBOB gasoline fell to a 26-cent premium on top of June NYMEX RBOB gasoline on Tuesday in the Los Angeles market, traders said.

Gasoline in the Portland, Oregon, market, was priced between 50 cents and 70 cents over June RBOB.


California-Blend Gasoline Tumbles to Two-Week Low on Unit Starts
By Lynn Doan - May 15, 2012 1:49 PM ET

The drought threat hasn't gone away in the Corn Belt, yet. The rains completely missed my neighborhood lately and the 250 gallon water collection container that we setup for the community garden is about 1/2 way down -- in May.

La Nada! Much better to write than ENSO neutral conditions.

A Tour Of Drought As It Unfolds Across The U.S.

Fortunately, La Niña has diminished, with neither La Niña or El Niño conditions likely for the next few months, according to NOAA’s Climate Prediction Center and forecasters affiliated with Columbia University (some researchers refer to the absence of La Niña and El Niño as “La Nada”).

Costa Rica: There Could Be A Gas Shortage Starting Tuesday

The continuing conflict between Costa Rica's transporters of fuel and the Ministerio del Ambiente, Energía y Telecomunicaciones (MINAET) could result in parked trucks and causing a fuel shortage starting Tuesday.

If the truckers decided to stall deliveries, many of the country's gasoline stations will be left without fuel.

New product to replace fishmeal could help prevent global food shortage

Scientists at the University of Liverpool are developing a new plant-based product that could replace fishmeal, reducing the need for farmers to feed fish to other fish at a time when more than 90% of EU waters are at risk from overfishing.

It is estimated that in order to satisfy consumer need for fish in an expanding human population, the UK market would need to increase supplies by more than 1.9 million tonnes by 2035.

Currently farmed fish, such as salmon, are fed food containing fishmeal, which means that several kilograms of wild fish are consumed to produce one kilogram of farmed fish. This has fuelled concerns that there could be a global shortage of fish in the next 20 years.

US proposed rule change may inadvertently boost volatility: monthly IEA report

A recent move by the US government to reduce volatility and prevent excess speculation in oil markets may in fact have the opposite effect, according to the International Energy Agency’s latest Oil Market Report.

The US government’s proposed rule – which has not taken effect yet as it still needs Congressional approval – is that significantly increasing the margin that has to be paid with every trade will act as a deterrent to aggressive speculation as traders will not want to take the risk of losing a large amount of money they put down as collateral. This will, the government contends, reduce price volatility and prevent excessive speculation.

The OMR, however, argues that this measure will limit the participation of certain traders, hedgers and cash constrained small speculators due to higher trading costs. This will leave the playing field open only to large traders with a small diversity of views.

In such a situation, the OMR believes that far from reducing volatility in oil markets, increasing the margin cost may well lead to a rise in volatility.

Why U.S. Politicians Are Quiet About Europe's Meltdown

... If the next Greek election produces an anti-austerity government, Greece will almost certainly make a speedy exit from the euro. If this happens — and it is looking increasingly inevitable — the consequences for the global economy are spectacularly gloomy. Yet U.S. media and U.S. politicians are largely silent on the issue, almost as if nothing were happening.

How would the U.S. be affected by a European Union meltdown? The Bank for International Settlements claims that U.S. banks have loaned $96.8 billion to the weakest European nations in the public and private sector, with an additional $275.8 billion to German and French banks, who would suffer directly if the weak nations drowned.

Furthermore, the European Union is the U.S.' largest trading partner; U.S. exports to the EU would instantly plummet if the above scenario were played out.

Which brings us to the silence of the U.S. politicians on the issue. The giant austerity measures that are driving Europe to the edge of revolution have been delayed on the federal level in the U.S. until after the November elections. Then, the seldom discussed budget "sequesters" will go into effect — automatic cuts to federal spending of $100 billion, every year until 2021.

also Moody’s downgrades 26 Italian banks; ratings now among the lowest in Western Europe

Moody’s said Italy relapsed into recession in early 2012 and there are no clear signs of recovery.

Just curious, does anyone actually believe that politicians will allow the much maligned "fiscal cliff" to come to fruition? If there's one thing I'm sure of, it's that they'll figure out some way to worm their way out of it. By hook or crook, none of the real cuts will occur, and likely no real reform will occur either. Maybe that's why everybody's silent on it. The politicians all want us to forget about it and the media and civilian population all know that it's a bunch of BS anyway.

Extend and pretend and hope for the best. Let external factors determine when it falls apart and then blame the foreigners. After that, WW III ???

In the short term Congress will blame the president. The Senate will blame the House. The deficit will increase.

The amount of trade across the Atlantic is such that the two are inextricably linked: the two or no longer "other worlds" as it were. A meltdown on one side of the Atlantic should lead to a meltdown on the other side.

Have faith, the Feds job is to paper this over. With any luck, the US will benefit, in the short term, from the inflow of safe haven funds, lower commodity prices, and increased purchasing power. It's the dollar pegs of various sorts that we need to keep an eye on.

So... Jamie Diamond can flush at least two billion dollars down the toilet, look up and giggle, and get paid twenty two million... A seventy seven billion dollar fleet of F22 fighters can be constrained to fly close circles on a kiddie carousel because they tend to snuff their pilots... and yet one hundred billion spent on the little people is a disastrous number. There is some kind of terrible scale problem here.

I think it's because they only really believe in fighting fire with fire. Using water would be too soft, somehow.

(Maybe a snap of Borgnine in Poseidon Adventure for this one? He looked scary in Emperor!)

White House & Dems Back Banks over Protests: Newly Discovered Homeland Security Files Show Feds Central to Occupy Crackdown

A new trove of heavily redacted documents provided by the US Department of Homeland Security (DHS) in response to a Freedom of Information Act (FOIA) request filed by the Partnership for Civil Justice Fund (PCJF) on behalf of filmmaker Michael Moore and the National Lawyers Guild makes it increasingly evident that there was and is a nationally coordinated campaign to disrupt and crush the Occupy Movement.

Remember, this sprawling yet centralized operation -- what Verheyden-Hilliard describes as “a vast, tentacled, national intelligence and domestic spying network that the U.S. government operates against its own people” -- was in this case deployed not against some terrorist organization or even mob or drug cartel, but rather against a loose-knit band of protesters, all conscientiously and publicly committed to nonviolence, who were exercising their Constitutionally-protected right to gather in public places and to speak out against the crimes and abuses of the corporate elite and the politicians who are bought and paid by that elite

April 2012 heats up as 5th warmest month globally

Unseasonable weather pushed last month to the fifth warmest April on record worldwide, federal weather statistics show.

The National Oceanic and Atmospheric Administration's National Climatic Data Center calculated that April's average temperature of 57.9 degrees (14.4 degrees Celsius) was nearly 1.2 degrees (0.7 degrees Celsius) above the 20th Century normal. Two years ago was the hottest April since recordkeeping started in 1880.

Last month was the third hottest April in the United States and unusually warm in Russia, but cooler than normal in parts of western Europe. This is despite a now ended La Nina which generally lowers global temperatures.

The last time the globe had a month that averaged below the 20th Century normal was February 1985. April makes it 326 months in a row. Nearly half the population of the world has never seen a month that was cooler than normal, according to United Nations data.

also April 2012 Selected Climate Anomalies and Events Map

and http://www.ncdc.noaa.gov/sotc/global/2012/4

Sugar Makes You Stupid: Study shows High-Fructose Diet Sabotages Learning, Memory

"Our findings illustrate that what you eat affects how you think," said Fernando Gomez-Pinilla, a professor of neurosurgery at the David Geffen School of Medicine at UCLA and a professor of integrative biology and physiology in the UCLA College of Letters and Science. "Eating a high-fructose diet over the long term alters your brain's ability to learn and remember information. But adding omega-3 fatty acids to your meals can help minimize the damage."

And here's how you can get that Omega-3 with your sweet munchies!


AMY GOODMAN: There you are being arrested in your suit outside the Drug Enforcement Administration. Explain what hemp is and how you use it in Dr. Bronner’s soap, why you think it’s so important.

DAVID BRONNER: Sure. So, in our soap, hemp oil is a super fatty ingredient. It contains an unparalleled content of omega-3 and omega-6 fatty acids, which are—omega-3 is really good to eat internally. The American diet is chronically deficient in. Doctors recommend fish, certain kinds of fish; however, there’s also mercury concerns. So hemp oil is a really good source of omega-3. And then, in a soap product, it makes the lather smoother and less drying.

(Damn Hippies..!)

Ukraine Vows to Boost Natural Gas Production

KIEV, Ukraine—Ukraine will increase its natural gas production by as much as 25% in the next three years in order to wean itself off costly Russian supplies and wriggle free of Moscow's influence, Prime Minister Mykola Azarov said in an interview.

Ukraine consumes around 60 billion cubic meters of gas per year, around two-thirds of which is imported from Russia.

Mr. Azarov said two new drilling rigs, one of which arrives on Ukraine's Black Sea shelf this month, will help boost production by three to five billion cubic meters by 2015.

He hailed recent agreements with Royal Dutch Shell and Chevron Corp. to explore two large shale natural gas fields as critical steps to increase the country's energy independence. He said shale gas could hold the key to eventually "covering all of Ukraine's needs." Officials say they expect to start producing from five to 15 billion cubic meters of shale gas per year by 2020, depending on the results of exploration.

Drudge headline (from CNBC): Bank runs in Greece


Strange Days: Part II: Gasoline Demand hits new high for 2012

Just when you thought that the US economy was in an interminable recession, and that US gasoline demand would keep falling, gasoline demand suddenly perked up to a high for the year – and for no obvious reason. Yes, strange days have found us again.

In retrospect, the signs we saw of increasing gasoline demand last week now make more sense. The EIA previously reported that its measurement of 'gasoline product supplied' by refiners and terminals advanced in the week ending May 4 – maybe in anticipation of increased demand by gas retailers. Also skyrocketing West Coast wholesale gasoline prices now appear to be less of a fluke. (See Strange Days: West Coast gasoline prices soar even as oil tankers are sent back to Alaska still loaded with oil ).

Also, as it has been the case most of the time the last few months, the API again reported that gasoline inventories fell. In particular, the API notes that West Coast gasoline supplies declined significantly again. We won't get confirmation of gasoline supply levels from the EIA until tomorrow, but if West Coast supplies are falling as fast as the API says, don't expect retail prices to fall in that region any time soon. If anything, prices may rise more in the coming week.

US Gasoline Weekly Use Up 4.5% At 8.976 Million B/D – SpendingPulse

NEW YORK -(Dow Jones)- U.S. weekly gasoline demand rose 4.5% to 8.976 million barrels a day in the week ended May 11, according to a SpendingPulse report released Tuesday by MasterCard Advisors LLC, a division of MasterCard Inc. (MA).

The gain of 385,000 barrels a day from the previous week put demand at its strongest level since Dec. 23.

Demand fell 331,000 barrels a day, or 3.6%, from the same week a year ago. Gasoline demand has lagged the year-ago level for 37 straight weeks.

Four-week demand fell 5.2%, or 482,000 barrels a day, from a year ago, to 8.726 million barrels a day. Four-week gasoline demand hasn't topped the year-ago level since March 18, 2011. .


US crude stocks surge again, Cushing jumps 2.8 mln bbls- API

Gasoline inventories fell by 2.6 million barrels last week, far more than the 500,000-barrel drop analysts had projected. The decline was split between the Midwest and West Coast, both of which fell by about 1.5 million barrels.

Domestic distillate stockpiles also fell, by 1.6 million barrels, compared with forecasts for a 600,000-barrel draw.


Charles – Speaking of strange. Not earth shattering but a little odd. Last week while driving to a La. well I noticed gasoline prices. Between Lake Charles and Baton Rouge (two huge sources of motor fuel) the spread on reg unleaded was $0.61/gallon. All highway gas stations where repeat customers are not generally anticipated. Perhaps about a 180 mile stretch. Didn’t seem to matter if they were major or independents. Didn’t notice that they were clustered either. I make that run on a fairly regular basis and a $.15 - $.20 spread seems normal.

No sure what it meant or if it meant anything. Just odd.

Courtesy of our Harper government....

Delays in carbon rules will cost: research

OTTAWA – Delays in regulating greenhouse gas emissions mean Canada is quickly locking in old-fashioned infrastructure that will fill the air with carbon for decades to come, new research shows.

The longer the federal government waits to clamp down on emissions and business continues as usual, the more difficult and costly it becomes to meet environmental targets, the research concludes.

The new research comes from the soon-to-be-defunct National Round Table on the Environment and the Economy, the federally funded advisory group formed to give advice and research on sustainable development.

The Harper government is in the process of abolishing the agency.

See: http://metronews.ca/news/canada/225296/delays-in-carbon-rules-will-cost-...

Is anyone surprised by any of this? Really?


Unfortunately, No!

Oil rigs at Google Maps. Yes, now in 4 colour!

I don't know if you have noticed, but Google have uppgrded the offshore data-density at maps.google.com. You can now search for off shore features that was not there last time I looked. Of interest for this site is platforms in the GOM, as well as parts of the "Oil Stone" complex in the Caspian sea.

Go to the web site, select sattelite view, and look for spots on the water with a somewhat different colour. In the centre of them, you will find some sort of platform quite often.

ROCKMAN, I can see where you left your hat!

Hey, just checked the Persian Gulf. They got some quite good resolution of P-gulf platforms there. Nice new playtoy there!

I received my home insurance renewal in the mail this week. One page was devoted to an announcement on changes to water damage insurance for ground water and sewer.

From the notice...

Due to Canadian climate changes in recent years, the insurance industry has noticed a constant rise in the number of claims related to natural disasters and water damage. In order to maintain accessibility to our Water Damage Endorsement for Ground Water and Sewer, the amount of insurance offered for this protection has been decreased to $15,000

Yet another externalized cost of our CO2 emissions.

Contrast the notice in my insurance renewal with HIH's link above to an article in the G&M about Harper shutting down the National Round Table on the Environment. Madness, sheer madness!

OK, this may get zapped....however, this critter is swirling around a drill stack of some description at a depth of some 5K feet as far as I can tell from the ROV readout.
I know there are a lot of people coming to T.O.D. with a wide knowledge of various disciplines. Anyone care to comment on the animal(?) shown in the video?


Ok...if this is not faked, it is one funky creature...perhaps related to some kind of jellyfish?

Viral marketing for the next James Cameron movie?

IANAMB (iam not a marine biologist) but i just showed this to one. She says the five-fold symmetry suggests this is a cnidarian (eg.. jellyfish). Not all of these animals have mesoglea (the jelly, that give jellyfish their form), so there is just a 'bag'. Too bad there is no scale indicator on the screen. Was it 2 inches or 20 feet?

Thanks for the info. Scale would be a big help but I would guess that pipe must be at least 2-3 feet in diameter? I thought the patterning and reflectivity of it's "skin" was fascinating. Spooky creature though.

It's a jellyfish.

"This bag-like jelly is not that rare, but is large, so rarely seen intact," Haddock and his colleagues write on the JellyWatch Facebook page. "In the video, the swirling from the sub makes the medusa appear to undulate, and it even turns inside-out." They provide a helpful picture of a more typical specimen.

I find it very funny hat this expert of the sea life is named Haddock.

Yes, coincidences like that can be hilarious.