Drumbeat: June 23, 2012

Chinese Data Mask Depth of Slowdown, Executives Say

Hong Kong. As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.

Record-setting mountains of excess coal have accumulated at the country's biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said. Electricity production and consumption are considered a telltale sign of a wide variety of economic activity, and thus are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country's economy, because the gathering and reporting of data in China isn't considered as reliable as it is in many countries.

Oil Advances, Gaining With Equities as Bank Shares Rally

Oil climbed from an eight-month low as U.S. equities rallied after Moody’s Investors Service’s downgrade of 15 global banks was less severe than threatened.

Crude advanced 2 percent as financial shares gained and the European Central Bank said it will relax some rules on bank collateral. Prices also gained as Gulf of Mexico platforms began evacuations on the growing threat of a tropical storm. Futures fell 5.1 percent this week as manufacturing slumped in the U.S., China and Europe and American supplies rose to a 22-year high.

Why oil prices are lowest they've been in months

The free-fall in crude prices is unlikely to reverse course without significant signs that the world economy is improving.

Russia 2012 Reserve Fund Plan 'Likely to Fail'

Falling oil prices are threatening to undermine Russia's plans to set aside 800 billion rubles ($24 billion) for its anti-crisis mechanism this year, the country's finance minister said on Saturday.

"We intended that this money go toward increasing the Reserve Fund, but as oil prices are diminishing, this is not likely to happen," Anton Siluanov told reporters in St. Petersburg.

Petrobras raise Brazil fuel price, 1st since 2006

RIO DE JANEIRO (Reuters) - Brazil's state-led oil company Petrobras said on Friday it will raise gasoline and diesel prices for the first time since 2006, a move aimed at ending refining losses and paying for the world's largest corporate spending plan.

Petrobras will raise the wholesale price of gasoline by 7.83 percent and diesel by 3.94 percent effective June 25, the Rio de Janeiro-based company said in a statement sent to Brazil's securities regulator.

The Arithmetic Of Shale Gas

There are a few societal costs to the development of shale gas. Potential contamination of groundwater, complications in treating and recycling water used in fracking. Then there’s air pollution from leaking methane (a potent greenhouse gas) and from the diesel-powered rigs and trucks involved in drilling.

But all things considered the benefits of shale gas appear to outweigh the costs. Many utilities are finding that burning natural gas to generate electricity is cheaper (and cleaner) than coal. Cheaper supplies of fuel and feedstocks benefits U.S. industry, especially manufacturers and chemicals makers which have been reinvesting in the U.S. Homeowners benefit from cheaper heating and cooling and electricity. Drilling for gas has created hundreds of thousands of jobs during this economic malaise and it’s generated billions of dollars of lease payments and royalties to landowners.

Federal judge halts gas drilling plan on Colorado plateau

(Reuters) - A U.S. district judge ordered the U.S. Bureau of Land Management (BLM) on Friday to re-assess its plan to allow drilling on some 50,000 acres on the Roan Plateau, which the energy industry says contains one of the largest natural gas fields in the continental United States.

Judge Marcia Krieger said BLM had failed to thoroughly assess all the environmental impact to the ecologically sensitive plateau in western Colorado before approving energy development on the mountain.

Keeping Britain's lights on

In a little over a decade, a quarter of our existing power generation capacity will be closed because plants are coming to the end of their natural life, or else they are pumping out too much pollution. The Government's energy market reforms are designed to encourage investment in an array of low-carbon technologies, and introduce a system to succeed the ROC (renewable obligation certificate) regime that will be phased out in 2017. Firms including Centrica are holding back from making giant spending decisions until they have seen more detail.

Mississippi rejects Southern Co coal plant rate request

(Reuters) - Mississippi utility regulators on Friday denied a $55 million rate increase request linked to financing costs for Southern Co's $2.88 billion coal-gasification power plant under construction in Kemper County, Mississippi.

Iran launches first gas-to-wire project

Iran has started the implementation of its first gas-to-wire (GTW) project, which will allow the country to export electricity to the Persian Gulf littoral states in the near future, Press TV reported.

According to the Mehr news agency, with the completion of the development plan of Iran's Forouz A and B offshore gas fields, the country will be able to export electricity instead of gas to several Persian Gulf littoral states, including the United Arab Emirates, Kuwait, Oman and Bahrain.

Ahmadinejad Meets With Chavez as Nuclear Talks in Moscow Falter

Iranian President Mahmoud Ahmadinejad arrived in Venezuela to meet with President Hugo Chavez after talks stalled in Moscow over his country’s nuclear program.

The Iranian leader arrived yesterday from stops in Brazil, where he attended the United Nations Rio+20 conference in Rio de Janeiro, and Bolivia.

Syria army shells city near Iraq, kills 28-activists

AMMAN (Reuters) - Syria's army battled rebels and shelled neighbourhoods in Deir al-Zor on Saturday, killing at least 28 people in the eastern city in an oil-producing region close to the border with Iraq, opposition activists said.

The victims, who included three women and several children, were mostly civilians killed when shells hit their houses in the city's Old Airport and al-Hamidya districts, a source at a city hospital told Reuters.

Saudi Arabia plans to fund Syria rebel army

Saudi officials are preparing to pay the salaries of the Free Syria Army as a means of encouraging mass defections from the military and increasing pressure on the Assad regime, the Guardian has learned.

Tension soars as Egypt awaits vote results

CAIRO (AP) – Egypt's military and the Muslim Brotherhood traded blame for rising tensions Friday as the country awaited the outcome of a presidential runoff vote that pits an Islamist against ousted leader Hosni Mubarak's former prime minister.

Protest Cripples Pan American Energy's Argentina Oil, Gas Output

Crude output at Pan American's Cerro Dragon field in Chubut province has fallen about 75,000 barrels a day to around 19,000 barrels since Thursday, when 300 to 400 protesters took over production facilities at the field.

Natural gas production has fallen 3 million cubic meters a day, the company said, without offering more details.

The ‘energy tandem’: Putin and Sechin control the Russian energy sector

The appointment of a presidential committee on fuel and energy means that the central management and control of this strategically important sector remains in the hands of Vladimir Putin and his closest collaborator, Igor Sechin. During Putin's term as prime minister (2008-2012), the decision-making centre for energy lay in the government; Sechin was then Deputy Prime Minister for the energy sector, and headed a government commission on fuel and energy and developing the resource base.

Statoil to triple North America oil and gas output

(Reuters) - Norway's Statoil aims to triple its North American oil and natural gas production by the end of the decade as it increases spending in oil-rich prospects, the company said on Wednesday.

Max shares take a dive after drilling setbacks

Kazakhstan oil explorer Max Petroleum's shares halved in value yesterday after the company said it may have to "significantly curtail" its drilling programme.

The warning came after the drill on one of its major prospects – NUR 1 – twice became stuck in salt deposits.

Why Wait Till Gas Hits $10 a Gallon?

There’s a lot of moaning and hand-wringing whenever gasoline prices approach $4 a gallon. But all it would take for them to hit $10 a gallon overnight would be hurricanes wiping out a couple of refineries or saboteurs disabling a couple of pipelines, says Dr. R. Paul Williamson, founder and CEO of the non-profit Sustainable Systems of Colorado.

This Chart Destroys The Idea Of Peak Oil

Below is a graph that we believe cast serious doubt on peak oil theory — the idea that we are imminently in danger of exhausting the world's hydrocarbon supply.

Insidious oil finds a way despite best efforts by response teams

When Michael Locke’s phone rings late at night, it’s a pretty sure sign that some part of Canada’s oil industry is in trouble.

Mr. Locke is the equipment manager for Western Canadian Spill Services, an industry co-operative that has stationed $9-million worth of spill response gear in 36 places across B.C., Alberta and Saskatchewan. When oil leaks, especially into water, he is among the first to hear about it, because that equipment is crucial to cleaning it up.

First Tesla electric sedans hit the road

(AP) — Electric car maker Tesla's first mass-market sedans took to the road Friday, but it's not certain whether their debut will make or break the fledgling company.

The Truth Behind Electric Vehicle Fuel Savings

One of the best reasons for buying an electric vehicle is all those gallons of $3 or $4 gas you won't be paying for. There is a certain sense of freedom that comes with knowing you won't have to be tied to the gas pump. And think of all the money you'll save!

Or maybe not…

New electric car charging stations available throughout downtown Ann Arbor

Electric vehicle drivers who live in or are visiting Ann Arbor now have more options for a place to recharge.

Stakeholders and community members from throughout Ann Arbor came out June 19 to the Forest Street Parking Structure to celebrate the installation of 18 new electrical car charging stations in six locations throughout the city.

Nuclear power plant collusion

As the March 2011 reactor meltdowns at Tokyo Electric Power Co.'s Fukushima No. 1 power plant demonstrated, loss of power sources for an extended period of time at a nuclear power plant — known as a "station blackout" (SBO) — can lead to catastrophic results. It was recently reported that the Nuclear Safety Commission colluded with Tepco over the nation's SBO-related safety standard about two decades ago.

APEC meet to uphold nuke power

Energy ministers of Asia-Pacific Economic Cooperation forum members are expected to issue a joint statement after their meeting next week that will confirm the importance of nuclear energy, Jiji Press learned Thursday.

The ministers are expected to highlight the role of nuclear power in securing energy security by reducing dependence on fossil fuels and combating climate change by reducing carbon dioxide emissions, sources said.

Policy of recycling all spent nuclear fuel may be axed

The Japan Atomic Energy Commission has proposed both reprocessing and directly disposing of spent nuclear fuel if Japan's atomic energy reliance is cut to 15 percent, a departure from the current policy of total reprocessing.

"This is extremely important because it would entail a shift to a flexible nuclear fuel program, instead of the one pursued over the last 50 years" that advocated 100 percent reprocessing, the commission's vice chairman, Tatsujiro Suzuki, said during a meeting Thursday.

Utilities to give 2-hour notice of blackouts

Rolling blackouts will be implemented in the Kansai region and Hokkaido, Kyushu and Shikoku with two hours' advance notice if usage exceeds 99 percent of utilities' capacity, according to a draft government plan on summer power supply.

The draft, a copy of which was obtained Friday, states that outages will take place roughly once a day and last two hours if regional utilities remaining supply capacity falls below 1 percent.

A Hybrid Approach to Solar Power

A company comes up with a solar installation that produces hot water as well as electricity for apartment buildings, wineries and now a dairy.

Osaka Gas plans giant solar plants

OSAKA — Osaka Gas Co. said Thursday it will build three large-scale solar cell-based power plants, in Osaka, Wakayama and Okayama prefectures, with an eye to starting generation by next March.

The combined output capacity of the plants will come to 3.5 megawatts, which is equivalent to the combined consumption of 915 households, Osaka Gas said, adding all the power to be generated will be sold to electric utilities.

Flying Jets with Microbes

Brazil has long fueled its cars with ethanol brewed from sugarcane, but now the world's first airplane powered by crop has flown over Rio de Janeiro—thanks to genetically engineered microbes.

'Green' programs earn governments more: study

OTTAWA, Ont. — A new report says provinces that promote energy efficiency may forfeit some tax revenue from lower sales of fuel and electricity, but will make up for the loss -- and more -- through competitive economies that help fill their treasuries.

“Food prices up by 25-50%”

The price of foodstuffs is high all over the world, not just in the Sahel. Every month, the FAO produces an index of world food prices. It was at 214 points last month, which is higher than in 2008, during the food riots when it was at 200 points. As for the Sahel, contrary to what usually happens, the price of cereals hasn’t dropped after the harvests. Foodstuffs are between 25-50% more expensive compared to the average for the last five years. And it is thought that prices could increase again by 25-30% in July and August. The rises are between 30-40% in Niger and Chad, between 50-60% in Burkina Faso and 90% in some regions of Mali. It’s a problem because the Sahel only produces half of its food requirements. The producers are also consumers. It’s a crisis of accessibility, not availability. The products are there but people can’t afford to buy them.

Florida Struggles to Overcome Threats to Freshwater Springs

The springs scarcely bubble up. Its flow rate has dropped by a third. The current moves as slowly as the red-bellied turtles that sun themselves on logs, allowing toxic nitrates to choke the water.

The culprits, environmental experts say, are a recent drought in north-central Florida and decades of pumping groundwater out of the aquifer to meet the demands of Florida’s population boom, its sprinklers and its agricultural industry. To what degree the overconsumption of groundwater is to blame for the changes is being batted back and forth between environmentalists and the state’s water keepers. But, for the first time, a state with so much rain — the vast majority of it uncaptured — is beginning to seriously fret about water.

Cost of Minnesota Flood Estimated at $100 Million

The waters in Duluth are receding, but the damage is done: the northeastern Minnesota city estimates more than $100 million will be required to repair utilities, streets, parks and trails in the city and surrounding county of St. Louis, said Pakou Ly, a spokeswoman for Duluth. The State Department of Transportation estimates its roads have sustained $20 million worth of damage.

UN Reaps Sustainability Pledges Worth $513 Billion in Rio

The United Nations obtained pledges worth $513 billion from governments and companies for projects aimed at reducing the strain on the planet’s resources, the biggest accomplishment at a meeting that world leaders and environmentalists assailed for not setting strong enough goals.

U.S. cuts greenhouse gases despite do-nothing Congress

NEW YORK (CNNMoney) -- A curious thing is happening to the air in the United States. It's getting cleaner.

Despite there being no real effort by Congress to address global warming and America's longstanding reputation as an energy hog, U.S. carbon dioxide emissions are falling.

The lackluster economy has something to do with it. But it doesn't fully explain what's happening. Consider that even factoring in a stronger economy, forecasters see greenhouse gas emissions continuing to fall.

It's possible the country may meet its pledge to reduce emissions 17% by 2020.

US experts predict higher sea level rise: study

Global sea levels could rise two to three times higher over the next century than previous UN estimates, according to a study released Friday by the US National Research Council.

A committee of experts evaluated the latest UN data and updated those projections with new data on polar ice-cap melting that is believed to be speeding up sea level rise around the world.

By 2100, the NRC estimates that global sea levels will rise between 20-55 inches (50 and 140 centimeters).

Re: Nuclear power plant collusion

And in our neck of the woods...

Nuclear watchdog unable to closely monitor Point Lepreau
Limited resources prevent full oversight, says senior staffer

Senior staff at the Canadian Nuclear Safety Commission say the regulatory body is unable to monitor the refurbishment and pending restart of New Brunswick's Point Lepreau nuclear generating station as closely as it would like.

"We cannot assess everything," said Greg Rzentkowski, director general of power reactor regulation, during a commission hearing on Thursday that was broadcast on the internet.

He was answering questions about a recent heavy water spill at Lepreau, which is located in west Saint John.

See: http://www.cbc.ca/news/canada/new-brunswick/story/2012/06/21/nb-point-le...

Three hundred litres of heavy water here... twenty-three barrels of hydrazine laced water there.... geez, it's not like they spilled something really important like beer.



Crawfish from highly contaminated area brought into classroom for children to play with — ‘Safe enough’ after rinsing with water

"Play"? (I'm willing to give 'em study for a short time, observe anomalies, write report - but Play?)


No radioactive substances have been detected in marine products caught off Fukushima Prefecture in the first test fishing following the 2011 nuclear accident.

Even the pro nukers know that ain't true as they have argued that food has SOME radioactive material in it. None detected is a truth if "I looked at it with my eyes and I could not detect any radiation".

With the typhoon now past, the "business position" is its all under control:

Yet this you tube video sure looks like more of the reactor structure is gone. The above link called the containment pools "naked".

And then under the What The Heifer category:

Preliminary test results are blaming the deaths on the grass the cows were eating when they got sick.
The cows dropped dead several weeks ago on a ranch in Elgin, just east of Austin.
Jerry Abel opens the gate on his 80-acre ranch in Elgin, walking on a field of grass he’s been using for cattle grazing and hay for 15 years.
“This is it, a lot of leaf, it’s good, grass, tested high for protein – it should have been perfect,” said Abel.
The grass is a genetically modified (hybrid not GMO if you want to believe the maker) form of Bermuda known as Tifton 85 which has been growing here for 15 years, feeding Abel’s 18 head of Corriente cattle. Corriente are used for team roping because of their small size and horns.
Dr. Gary Warner, an Elgin veterinarian who specializes in cattle, conducted the 15 necropsy. Preliminary tests revealed the Tifton 85 grass, which has been here for years, had suddenly started producing cyanide gas, poisoning the cattle.
“Coming off the drought that we had the last two years, we’re concerned it was a combination of events that led us to this,” said Warner. “The problem is, we don’t know, and there needs to be some caution exercised until we know more about the situation.”

I thought it may be useful to cite this comment on the article regarding the grass and cow mortality:

Prussic Acid Poisoning of livestock is a well known phenomenon that has been killing herbivores in times of drought since there were grasses and herbivores.


Tifton 85 bermuda grass is in no way a GMO.

Tifton 85 is an F1 hybrid (like a mule is a cross between a horse and a donkey) between PI 290884 and Tifton 68. It is a sterile pentaploid, therefore hybrid seed must be used to plant each new stand. The grass is a perenial though and can grow in perpetuity in the absence of hard freezes. Tifton 68 is a F1 hybrid between PI 255450 and PI 293606. All three accessions in this hybridization scheme are of African origin.




I swear, nothing makes my blood boil like misinformation.

Grass Biologist
Formerly USDA-ARS
Currently The University of Texas at Austin.

Prussic Acid Poisoning of livestock is a well known phenomenon that has been killing herbivores in times of drought

Now that makes sense. (that makes 2 corrections on the original story - GMO and a known cause tied to drought. Anyone got a 3rd?)

Here's a link to the blog of the local scientist investigating. This is notable since it confirms prussic acid poisoning from a grass species in which it was previously unknown (and which reputable specialists thought could not have caused prussic acid poisoning prior to the confirmation via testing). Further, this bermuda variant is the most drought resistant common variety, and the life stage/history of the pasture was not the typical for prussic acid formation in other species (new growth after drought or frost). This is intersting stuff and a nice little mystery for some practical ag research.

It's a press report, dumbed down to fit into a paragraph or two. Here's a link to what the NHK report is probably based on.


Remember that regular seafood runs to over 300 Bq/kilo of potassium-40, rubidium-87 and other naturally-occurring isotopes. The safety limit set by the Japanese government is 100 Bq/kilo for cesium-134 and -137, much higher than the WHO recommended limits. Many of the samples look to be as safe to eat as regular seafood polluted with mercury, arsenic and cadmium usually is due to the unconstrained release of coal-fired power station waste.

As for the "sky is falling" video about Fukushima Daiichi reactor 4 it has probably escaped your notice that the engineers at the site have been demolishing the damaged structures over the top of the reactor and spent fuel pool in preparation for building a weather shield similar to the one they put in place over reactor 1 last year. After that they will install a gantry crane and start work on emptying the spent fuel pool. Later they'll open the reactor vessel itself and use the crane to remove the damaged fuel elements and other debris inside although that will be a few years yet.

The spent fuel pool in reactor 4 had a heavy steel plate cover put over the top of it a few weeks ago to prevent more debris from the demolition operation falling in and complicating the spent fuel removal operation later. This replaces a lighter cover already in place.


Apparently the enginers are planning to attempt to remove a couple of fuel rod bundles from the reactor 4 pool soon, probably using a regular crane; these bundles are ones which have not been irradiated in the reactor and so should pose no particular health hazard. It should give them an idea what's been happening to the other rod bundles in the pool with respect to damage, corrosion etc.

Re: A Hybrid Approach to Solar Power

For those who say solar costs too much, here's a great example of a way to increase useful energy output and lower cost. In many situations, the need for heating is more than the need for electricity. There's no reason to use PV electricity to heat water when the "waste" heat can be used for the same purpose while producing electricity for other uses. Lets hope others understand what these folks are doing...

E. Swanson

From the company's "How It Works" PDF:

How do Echo solar systems generate thermal energy?

Solar energy capture: Sunlight shines on the solar panels and heats them. Outside air is drawn through an air space or plenum between the solar panels and the roof. The movement of the air under the solar panels efficiently transfers the thermal energy from the solar panels to the air.

Solar water heating: In an Echo solar system, the heated air from the PV panels is directed under solar thermal panels at the top of the solar array and the heat is transferred from the air to the water. In an Echo+ solar system, the heated air is directed through insulated ducts into a solar appliance called the Energy Transfer Module or ETM. After passing through a pleated MERV 8 air filter contained in the ETM, the hot air moves across a copper tube/aluminum fin coil heat exchanger. Cold water from the home’s water tank is also fed into the heat exchanger. The heat exchanger then extracts the thermal or heat energy from the air and transfers it to the water. Echo and Echo+ store the thermal energy captured as hot water in a specially insulated hot water tank.

Solar home heating (Echo+ only): After passing across the heat exchanger, the ETM directs the hot air to either the inside of the home (typically, via the heating, ventilation and air conditioning (HVAC) ducts), or to the outside of the building (when home heating is not required).

Scanning the document (which is lite on numbers/specifics) I see no estimates of how much PV performance may be enhanced due to cooling or how costs compare to separate PV and solar thermal systems. This concept may well only be a way to save space usage via integration (at an increased total cost?).

Link to performance analysis: http://www.echofirst.com/media/pdf/Echo-Solar-System-Performance-Analysi...

I'll study it when I've finished my morning picking.

The system shown in the NYT story is from a company called Cogenra. That Echo solar system may well provide a similar thermal/PV combination, but the Cogenra concentrating system has other advantages.

First off, the thermal efficiency is likely to be greater, which is a side benefit of concentration. Secondly, the low concentration they chose allows for the use of conventional silicon PV, not the high temperature resistant Gallium/Arsenide cells which have been developed for high concentration. Thirdly, they can use single axis tracking with the reflectors oriented on an east-west layout, instead of the 2 axis tracking required for higher concentration. Lastly, their reflectors are made of flat material (glass?), which is less expensive than a parabolic trough design.

They claim to produce 5 times the output of a PV system...

E. Swanson

These hybid systems can use even without concentrator ~60% of the solar energy compared to ~20% of PV.

On the other hand, in a well insulated house your demand for heat in spring-summer-autumn is very, very low, therefore, you produce a low value product (heat at 80 °C) when it has little use and waste most of it, of course you pay a higher price for the hardware. In winter both PV and solar thermal panels do not deliver. A heat pump makes hot water in summer with a small amount of the elctricity produced by PV, no real problem.

For me pure PV is the way to go in new small houses, hybrid systems make IMHO only sense for buildings with a high demand of hot water during summer like hotels, hospitals, public pools etc. or buildings for which the transmission losse can not be reduced with better insulation.

"In winter both PV and solar thermal panels do not deliver."

They may get fewer hours, but that doesn't mean they don't deliver.

In my town, Jan and Feb have a lot of Bright Clear Cold days, which offers great conditions for Solar PV and for Heat Collection. That is, of course exactly when the Heat provided is at it's most valuable.

Just because the panels don't need to offer much in fall/spring, no more makes them a 'low-value' product than do my Winter Coats or my Canoe, when they are waiting through the seasons where they are not needed.

Right on, Bob. Our PV panels have produced best during the cold, clear days of winter, especially in February (have set daily records), passive solar is remarkable, and our solar thermal panels are still producing usable hot water, enough to offset at least some of our use. While I'm not sold on hybrid systems yet, I grow weary of folks finding excuses to not adopt renewables which are clearly working for other folks. What will their alternatives be going forward? My prescription? Efficiency + reduced consumption + paying a large part of needed energy forward with sensible renewables.

That said, I must be crazy, since I spent most of the last two weeks developing a secondary water system in a climate where we get 60+ inches of annual rainfall. During this period, my sister has been showering at my house after her well pump was hit by lightning; took five days to get repaired. What happens when replacement pumps aren't available, or when there's no fuel for the well truck?

I just had the kind of neighbor-chat that we love, where my friend John and I were talking about how hard it can be to convince even yourself sometimes, never mind the spouse, siblings or peers- that 'doing the right thing' is actually the right and necessary thing to do. (He's building a green roof, and I've been sweating copper for a flat-plate H20 Preheater today..)

And he mentioned that episode of Top Gear where they were dumping on the Tesla, and allegedly, all of the points of 'failure' that they had listed were complete fabrications.. as John queried about the editorial involvement (or just the 'Aura', perhaps..) of BP, their sponsor.. - you be the judge!

(psst, don't rely on the Headings.. the fine print tells much!)

Meanwhile, I'm going back to my sweaty, copper pipes!

In existing houses without heat pump a see indeed a useful place for solar thermal panels. In new houses not.

Here a combination of optimized PV and heat pump wins.

OK, in central Europe you have no chance to produce enough from solar thermal (ST) or PV panels in winter to cover your heat demand, that I meant do not deliver, maybe a little bit unfair.

In summer you have with ST, especially when you use a hybrid system, the basic problem that your demand is usually smaller than your production, you pay for a useless product.

If you follow the discussion in Germany and Austria you find, that a combination of PV + heatpump gives much better performance than a ST system, reason is that PV became quite cheap while we do not see the same for ST, here ST is in many cases already dead. The PV product electricity is highly flexible, hot water is not; you have a much, much higher chance to use or sell elcetricity when heat is a waste (summer). A good heat pump gives me 3-5 kWh heat for 1 kWh electricity, considering prices for PV and ST panels the unit heat from PV + heat pump (if the heat pump is available) is already cheaper than a unit heat from ST. The key developement was the dramatic price reduction for PV.

Winter Coats = better insulation of your house :-)

I appreciate I'm (very) late to this thread, but you should all have a look at this system: http://www.newformenergy.com/hybrid-solar-solution. It incorporates hybrid PV-T with a water/water heat pump for upgrading the solar thermal output when its temperature is insufficient to be useful. With the right amount of insulation, low temperature heat delivery systems, and commensurate low heating demand in winter, this system can provide all hot water and heating requirements on a year-round basis.

It's not for everyone, but on this thread we have Germans and Caribbeans in the discussion: their thermal energy needs are VERY different.

Hybrid systems are relatively complicated to design to function efficiently, since thermal output must match demand relatively closely as its not possible to store large amounts of heat efficiently or cheaply for long periods of time. Having said that, we have designed and installed a number of systems in the UK where excess summer heat is ducted down boreholes for retrieval in the winter (via heat pump). One such system has already built the "down-hole" temperature to 30C at the bottom of a 90 metre borehole - this will provide for a very impressive COP (efficiency) for the heat pump in winter-heating mode.

In other areas, dumping heat is more important than buffering or using it. For example, we're about to start on the installation of the world's largest PV-T array in Saudi Arabia - the whole design here has been about dumping heat efficiently and capturing (waste) exhaust air from the building to cool the panels (via air/water heat exchange).

Whole volumes can be written about hybridisation of solar technologies and their potential uses. It is by no means always the best or cheapest solution, but it is frequently the most efficient.

I'd ask that any specific enquiries are directed to the company, rather than on this thread.. though I'm happy to (try to) answer questions here.

Disclosure: I own a piece of the company.

You make a good point about differing needs, I get tired of some of the "one size fits all" solutions I see posted. Location is not the only criteria either. In the UK the hot water tank is built into the house and plumbing it to the outside collector would be a mare. There, a PV solution would be simpler to connect as you would just need to run wiring and many tanks are equipped for electric heaters in the first place. You can also benefit from easy switching to the mains on dull days. Here, in the WWW of Mexico, the heaters tend to be outside and gas with lots of available sun, easy to plumb in for solar thermal. I suspect the situation in the USA is variable with some outdoor and some indoor tanks. Again the answer is to select the appropriate option which may vary from installation to installation. The falling PV prices certainly add a whole bag of new tools to the equation.


I see your points, thanks for clarifying.

I'm still in favor of having some Solar Thermal in the mix (for appropriate locations, surely) , as the most direct route for utilizing the Sun's Energy in a practical way.

We have a Solar Installer here who has now championed the mix of PV+Heat Pumps,
and I'm eager to find some heat pumps for my own two buildings as well.. but I tend to see the reliance on that multi-stage process as a bit of complexity and dependence on imported and manufactured parts that can be very simply bypassed with a little copper and glass. I also tend to think that the current advantages of PV+Heat Pumps is also a function of subsidies and market economics as much as pure physics.. not that these factors are any less real, but I don't see them as being permanent or durable factors, while my more materialistic side has much more confidence in the above-mentioned Copper, Water and Glass! (Cut to scene of Conan the Barbarian when the steel of his trusty sword shatters in his hand! Sometimes comic books have some fine messages to deliver!)
http://www.youtube.com/watch?v=NkMhRvEmG6s&feature=related (of course, this is just the musical theme.. "Riddle of Steel", which it turns out is all about the Brasses and the Bells.. but the lesson remains the same!)

Just the same, I am all in favor of a healthy mix of high and low technologies in good balance with each other, and of taking advantage of a good deal when it is available!


Written by Ulenspiegel:
... in a well insulated house your demand for heat in spring-summer-autumn is very, very low, therefore, you produce a low value product (heat at 80 °C) when it has little use and waste most of it, of course you pay a higher price for the hardware. In winter both PV and solar thermal panels do not deliver.

It depends on how one uses the heat. If one is heating a pool, then the pool might be drained and unused in the winter. Motels and hotels would be closed or have few customers in the winter because it is not the tourist season. During the Spring and Summer, they would need a lot of heat to replace the hot water used by customers bathing and to wash linen.

Another hybrid approach is this PV-Therm product from Wiosun that puts solar thermal collectors behind PV panels making the hybrid panels capable of heating water as well as generating electricity. These guys were all over Intersolar 2011 in San Francisco trying to interest people in the PV-Therm product. On the surface it seems to be a reasonable idea but they do not provide any results of any evaluations,

They appear to be designed for Domestic Hot Water (DHW) systems that use pumps, typical of those used in temperate climates. There is no mention of use in thermosyphon based systems. They do not provide any information on the increased output due to the cooling effect of the water and I suppose that there are so many variables that it would be difficult or time consuming to do.

My problem is that, in the tropics with virtually zero chance of freeze damage the systems used are predominantly thermosyphon driven. Adding pumps and controllers will add parasitic losses and I would imagine that, there is not much incentive for just anybody to experiment with this product to find out if it makes sense. I would think that in the tropics, these devices could heat up a small tank of water fairly quickly and wonder whether there would be any advantage to adding water to air heat exchangers (radiators) to divert the water through, once the water in the hot water tank has reached the desired temperature. This of course adds more components and increases complexity.

Only the manufacturer should be expected to find out all of this stuff and they appear not to have done so. Does anybody on TOD have any experience with this product? Does anybody think this is a game changer? If I were going to install a pump based DHW system and wanted PV as well it would be a no brainer. I just don't know if it would be better to install this product with the added complexity or just do PV and DHW with a thermosyphon based system separately.

Alan from the islands

Yair . . . islandboy. I reckon keep it simple. As I have posted here before the Australian style solar waterheaters connected to the mains or a household pressure pump are self contained with tank and panels in one unit.

They require an electrical connection for the occasional cloudy weather boosting and do not require mounting on the roof. I have had one for over thirty years and (touch wood)have never done a thing to it. It just sits up there providing all our hot warer year after year.

The 3.2 Kw PV grid connect is a seperate installation entirely. Panels are tilted on a flat roof with rear access and the inverter is connected by plugs and hangs on a wall bracket.


Scrub Puller,

Do your solar hot water units resemble these?


We have quite a few like those down here in Mexico as well as the same arrangement using a flat plate collector. Typically run at around 1,000 US for a domestic unit. The local, new coach depot has 2 very large versions on its roof.


Yair . . . Heisenberg. Yes mate, similar. Not evacuated tube or any thing fancy.

Ours is an old Solahart.

They are still in production and you can check them out here.



Scrub Puller,

Thanks for the link and the info...I will do some research and do the math on return-on-investment/payoff period for installing something like this compared to standing pat with my typical NG hot water heater. Pretty sunny here in ABQ, but I will have to run the numbers to convince the house co-commander of the financial wisdom...

Looks like we have rolled to the next DB, see you on the flip side...

New theories of human evolution link the development of large brains to extreme variations in climate.

This NOVA Documentary series, Becoming Human , examines fossils which shed light on human development, within the context of dramatic environmental change.

One wonders, with the coming extreme variations in climate, what the next adaptive steps might be.

Interesting theory. I have absolutely zero confidence in the integrity of Koch-funded NOVA however. They are probably deliberately playing this up. Although the idea is at least credible, times of ecological stress can increase Darwinian pressures.

IIRC it's a different Koch.

edit: Seems I may have been wrong. PBS responds:


I have been watching NOVA for years and I have never seen anything that could be called "Right Wing Propaganda". Though the David H. Koch Foundation is one of the funders of NOVA, the fund is not David H. Koch himself. And as NOVA Senior Executive Producer Paula Apsell says:

WGBH is committed to the editorial integrity of all our programs, adhering to the strictest journalistic standards. To maintain that integrity, and the trust of our audiences, funders are prohibited from any involvement in the editorial process. NOVA, like all WGBH programs, maintains complete, independent editorial control of its content.

I believe her. For a NOVA program that the Right Wing just hates, check out this one. It is my very favorite NOVA program. I have watched it three times since it was first broadcast in 2007.
Judgement Day: Intelligent Design On Trial

Ron P.

Retrospectively, I can see how one might think that it was greenwashed. There are a number of controversial theories put forward, however evidence is presented for each case. Some of the answers may never be known, since we cannot get much more than bones in the fossil record.

I'm not averse to the idea of climate change-caused spread of human ancestors throughout the world.

It makes sense to me that hunters and foragers would follow their food sources as both plants and animals migrated. After all, herbivores would follow plant migrations, and carnivores would follow herbivores.

I do think the series focuses too much on early humans following animals. After all, if the greater percentage of the diet was plant foods, they were just as likely, maybe more likely, to be following plant migrations in order to find familiar fruits, nuts or seeds. Eating animals is far more opportunistic in nature and not suited to the way humans eat - a number of smaller meals throughout the day, rather than one enormous meal once a week.

Logically, if one has a brain large enough to make tools, which then facilitate the ability to hunt large animals, obviously the large brain comes before the hunting, not the other way around. It seems likely to me that early human ancestors foraged for a wide range of foods, probably including insects, small mammals, reptiles and birds. Eggs, at least, which one could find in trees. Possibly, they even scavenged from dead animals on the ground.

While there are some entrenched notions in the series, I think it is food for thought.

Many contemporary theories connect the development of large brains to the increased need to communicate in increasingly complex social groups.

EDIT: in addition, the brain is fueled by glycogen - a complex form of glucose , which is more readily derived from starches and sugars, although it can, through a more complex pathway, be derived from fats. Amino acids do not make glycogen.

I think it is reasonable that the ability to hunt large game using tools - in other words, the better exploitation of available resources - came after the ability to plan ahead, strategize and communicate.

These guys make acquiring meat look easy, but they have probably done this one or twice before ;-). I wonder who the first people to figure this trick out and how many 10's or hundreds' of thousands of years ago it was first performed.

Three Men vs. Fifteen Hungry Lions

That's mental! As for the first dude to figure this out, I suspect it came about because some person was really hungry and felt they had nothing left to lose so they took their chances and when they got the meal they realised they could bluff their way to more easy meals and he told his mates about this discovery. After the first guy successfully does it I am sure other guys could make a competition out of it.

Near the end of the first episode it said the climate changed many times in a short period of time, so of course that means any rapid climate change happening now is due to the same forces of nature and nothing to do with burning of oil, gas, and coal. It's Koch-Lite, this flavor says sure there is climate change, no doubt, but it's all natural and we have evolved to thrive in it so no worries, carry on with BAU. This differs from the Koch-Orginal flavor favored by tea partiers who assure us climate change is a myth.

Later on, the series goes on to discuss how H. sap sap's population fell to about 600 individuals (estimates vary). DNA testing shows we have very little variation between people today.

That's a pretty small bottleneck.

If changing climate now causes a similar percentage of losses, several hundred thousand to only around 1000 individuals, extrapolated to several billions down to a few hundred thousand, that will be a stunning collapse.

The series posits that H. sap. sap's adaptability got us through. I think that's true - we are very adaptable. What I'm not sure about is if that will prove to be a long-term survival trait. Of course, I'm not likely to have my question answered anytime soon.

If you look at the timeline of evolution of the hominids, the interval between species seems to be shortening. i.e. hominid evolution is speeding up. That would suggest a new species lurking in us somewhere, waiting to appear, whatever that might look like.

I agree, though, that the series does view things from an anthropogenic viewpoint - our "specialness". I tried to look past the positive presentation of the human existence to the reality of what the fossil evidence shows, and form my own conclusions.

George Mobus has written quite a bit about the bottleneck and a possible future bottleneck along with evolution. I don't know if you're familiar with his writing, might be worth looking at if not.

Thanks for posting the Nova link, I always enjoyed the were did we come from, how did we get here macro view of history.

I always like to examine biases in the understanding of the facts uncovered by science.

Try this as an experiment.

Who painted the cave paintings ?

1. Men, of course, Who else? They painted animals they liked to hunt.
2. Women, of course. They didn't have much to do while the men were out.
3. Both men and women, who painted things in their local environment, for reasons we can only guess.

Now read this article.

A woman's touch: Prehistoric cave paintings were made by women as well as men, scientists discover

As one example, paintings of horses were found in caves where horse bones were not found - in other words, they were not a species hunted for food by that group.

To me, it seems likely that painting was a communal activity, to be embarked upon when all the daily tasks were completed. Maybe for storytelling.

Obviously growing leaves to use the excess atmospheric CO2, and gills to deal with rising sea level would be useful. Just think hard about it and your descendants will acquire the traits you think are desirable.

Jean-Baptiste Lamarck

"One wonders, with the coming extreme variations in climate, what the next adaptive steps might be."

Perhaps a lengthening of the spine, so that one can bend over and kiss ones arse goodbye.

One wonders, with the coming extreme variations in climate, what the next adaptive steps might be.

I suspect there are far too many human beings, across far too many ecological landscapes, and using far too much technological suppression of environmental factors, for there ever to be a significant alteration of the gene pool (for better or worse) - for evolutionary pressure to occur.

I think we are stuck with ourselves for the next few million years.

Re: Chinese Data Mask Depth of Slowdown, Executives Say

This story apparently originated in the NYT. If this report proves true, it supports the other claims on the net that the Chinese economy is slowing sharply, which has serious implications for the rest of the world's economy. The recent decline in world oil prices suggests a reduction in demand and both may be indications of another economic downturn, as the impacts of last year's high oil prices filtered thru to the consumer. And you thought "The Great Contraction" was over and Happy Days were here again...

E. Swanson

One paragraph in particular caught my eye from that article:

Manipulation of official statistics would also provide a clue as to why wholesalers of consumer goods and construction materials say that sales are now as dismal as or worse than in early 2009, during the darkest days of the global financial crisis.

Dejavu from the previous time oil prices had gotten high and nipped the world economy in the bud. Now oil price has dropped maybe things will pick up and we can keep this BAU dance going.

There does seem to be a meme going around this forum that US$147 is the upper limit for oil.

I disagree. It is entirely possible that the $US falls on world markets when we are in the downslope of oil production, plus much of the rest of the world can pay higher prices. I expect the unexpected as we go to the downslope of oil production, including prices way higher than anyone thinks possible.

Realistically how much can the military afford to be without oil? This applies everywhere.

I think that average annual prices give us a better idea of fundamental supply & demand factors, and we have so far seen a progression of higher highs and higher lows. Annual Brent prices:

Through June, the average Brent price for 2012 was probably about $113. If we see a year over year decline in 2012, which now seems quite likely, it's a pretty good assumption that the 2012 average price will be well above the previous price level that we hit during the last year over year decline, in 2009, when Brent averaged $62 (Brent would have to average around $11 in the second half of 2012, for the average 2012 price to be around $62).

There does seem to be a meme going around this forum that US$147 is the upper limit for oil.

I disagree.

The reason why, is investors now know the upper limit of oil price (147 in 2008 dollars) the economy can handle without causing it to quickly slip into recession, which would cause their position in oil to plummet and they would lose money so why would they risk that? Therefore, IMHO investors are staying clear of that amount. In fact, they now may see 128 for Brent as the upper limit.

Sure, supply & demand factors in determining price - I understand. But there is a feedback between price and what the economy can handle. Darwinian posted something to that effect recently. So although at some point diminishing supply may suggest the possibility of a new record high, it's not going to happen because it causes demand destruction and that stifles the economy.

And yes, I get what you are saying wt, i.e. increasing oil price over time, but the all time high still remains 147 and recently 128. So it would seem price did go up due to competition for a limited supply, but economic feedbacks set the upper price limit. In fact one could argue that due to reduced oil exports since 05, the recent Brent high should have exceeded 147, because oil exports were less in 2012 than in 2008.

This is the problem as I see it going forward. That due to feedbacks from the world economy, oil price is boxed in to the limits mentioned above. At the same time cost of marginal extraction is increasing as EROEI lowers. Therefore, it would seem logical the price of extraction may some day exceed the price the economy can handle. That's when its game over or soon thereafter.


It is an interesting point on how high prices of oil can go, a lot depends on the time frame and how people/society react. A short sharp price rise will always catch people out and will be a drain on the economy, but a long slow rise with the correct direction from "our leaders" need not have the same effect.

The reasons I say this is a little experience I had only yesterday. I am currently on a little side trip in the UK, with their $US8/US gal fuel cost. In a small family hire car (Fiat Bravo 120t) I drove 300 miles @ approx 60 miles/imp gal (50miles/US gal)nearly all freeway, with some road works and to finish the trip bad rain and some stop /start due to heavy traffic which actually lowered my mpg rate. I was sitting on the posted 70 mph and keeping up with traffic where conditions allowed, no special hyper miling or tricks involved It is a diesel, not because I wanted a diesel, but that is what came, and by listening to the vehicles here they do seem to be in the majority. This car I would say is at the upper end of the normal driver's over here. There are the Audi 8's, BMW 5 series, Range Rovers, even seen a couple Bentleys/RR running around etc, but for the normal mums and dads this is there family car size and there are a lot of cars that are a lot smaller.

Anyway to get to my point, from what I have read the average fuel consumption for new cars sold in the US last month, is around 23mpg. So if fuel, petrol/diesel is approx $US4 per US gallon, then I spent less money to travel the same distance over here in expensive fuel land then I would have in cheap fuel land, because I only used half as much.

This sort of adjustment doesn't come over night and it doesn't come by politicians using short term thinking, but it does show that if required, economies can operate on much higher oil prices if the correct economic settings are in place to minimize usage which can work to lower the over all total cost of fuel used for a given job.

How do you convince the US market of this fact? I will leave that up to people smarter than myself.

How do you convince the US market of this fact? I will leave that up to people smarter than myself.

Sadly, you pretty much can't. People think short term.
-They'll buy the cheap incandescent even though it will end up costing more because of short life and heavy power usage
-They'll get the free razor and end up buying lots of over-priced blades
-They'll buy that $5 rock of crack because they can't afford the more expensive bag of cocaine

People are going to be buying lots of gas guzzlers as the price of gasoline drops. The best way to cure this would be to raise the price of gas with a gas tax (that is why they have those more efficient cars in the UK). But that is political suicide here so instead we raised CAFE standards and that is the best we can do to get people to make more energy-wise decisions.

Toolpush, I think part of the thinking here is what kind of experience is it for motorists on the highways? Lots of large SUV's aggressively maneuvering on state highways in big cities I think sets a mentality of intimidation and makes it difficult for smaller vehicles to see ahead, in which other people follow suit by getting something big themselves. We live in a rural setting so our decision was not affected by that but I am sure many are in urban areas. People also get large vehicles to help them feel safer, especially if they have kids. I know half a dozen families right off hand in which the mothers insisted on large vehicles to help keep the kids safe.

insisted on large vehicles to help keep the kids safe

Maybe that should be:-

insisted on large vehicles to help keep the kids safe if it is hit by a large vehicle


Maybe that should be:-

Or maybe, I had faith in your ability to figure that part out for yourself and look you did.

Unfortunately there is no tag for 'ironic commentary on the cyclic argument used to justify large SUVs" :( These people just.... argh, it fails me, they can't see that what they do is the problem when it is done by others.



A lot of people like to hide behind the safety banner to justify their attraction to large cars, my sister-in-law from Wisconsin, would argue the reason she had a large car was for safety, then drive away with no seat belt as it was her right not to have to wear it. If people were so concerned about safety, advanced driving schools with skid pads would be on every street corner, but they aren't. Many people need to find ways to justify their wants, and these days it is fashionable to use safety as the justification.

The main point of my previous post was, my realization that I had traveled 300 miles in high fuel priced Britain, for less money that it would have cost me to do the same trip in low fuel priced USA. So in theory the effect of the rising price of fuel of can be negated with the correct and timely investments in cars and transport.

So as fuel prices rise the technology and the ability is there for the US economy to continue to prosper if they are willing to adapt to the new price signals. Now if people don't want to adapt to the new environment, the economy will continue to stall every time the fuel price takes an upward movement.

With the strong resistance in the States to smaller cars it will mean the fuel price will have to go higher and cause more pain before the new reality sets in, but the plain and simple fact is, is you only have a given amount of fuel, or money to pay for it, then you have a big SUV and don't drive very far, or you get something more economical and drive further, it just depends on how much pain you can with stand before the new reality sets in.

Most people are very poor judges of risk. I am involved in the mountain climbing community, and not a few people I know have been killed in the mountains - it is, after all, a high risk sport. In some cases their bodies have never been found, so we have to assume they are still up there somewhere.

People think that there is some kind of rule that climbers have to bring the bodies of their dead companions back, but that's not true. If you get killed climbing one of the big mountains in the Himalayas, they will leave you lying face-down in the snow and and concentrate on getting themselves down alive. You can't afford to risk your life just to recover a body. The Mt. Everest region is littered with dead bodies.

An old saying is: "There are a lot of old climbers, and a lot of bold climbers, but there are not very many old, bold climbers." Race car drivers have the same saying, and it also applies to highway drivers, although a lot of people think that driving a big vehicle will make them immortal. It's not true. Statistically speaking, most SUV's have a higher fatality rate than a lot of smaller vehicles. There are some intrinsic design flaws in most SUV's that render them rather dangerous to drive.

If you really want to be safe, take the bus. Buses are much safer than private cars, trucks, and SUV's. Even planes are much safer than private automobiles, although less so than buses.

Not too many old, bold....pilots!

Even planes are much safer than private automobiles, although less so than buses.

Are you sure about that? Are you using world-wide bus statistics, or just the US? I always feel much safer in a plane than in a bus ... especially a bus in the developing world. And what metric would that be based on ... miles travelled per passenger per fatality, or something else?

Anyway - we have driven a Toyota Corolla for nearly 20 years ... IMHO the best vehicle ever put on the road - and we haven't been creamed by an SUV so far ... the "safety" argument offered by (and to) soccer mums is a crock.

Yes, I am using US statistics, and it is a passenger killed per million passenger miles (or whatever) calculation. It's something I made a note of years ago and I can't remember the source.

And, yes it may not be true that buses are always safer than planes in all countries. I've taken chicken buses (so called because half the passengers are carrying chickens) in third world countries, and no, they're not particularly safe, particularly in mountainous countries. Mind you, the airplanes aren't really that safe there, either.

Tenzing-Hillary Airport

The single runway is 1,500 feet (460 m) long, 65 feet (20 m) wide and has a 12% gradient. The elevation of the airport is 9,100 feet (2,800 m).

Due to the terrain, there is no prospect of a successful go-around on short final. There is high terrain immediately after the northern end of the runway and a steeply angled drop, of about 2,000 feet (610 m) at the southern end of the runway, into the valley below.

It's like landing on or taking off from a ski jump, and very few aircraft (e.g. Twin Otters or Dornier Do 228's) can do it. The last time I was in Nepal, a Twin Otter full of Germans tried to land in heavy rain, came in low, and crashed into the cliff below the runway. Only the pilot survived. It was the third time that particular plane had crashed. The previous two times they had fixed it and put it back in service.

Ah, the joys of third-world travel.

Are you really sure about that. Try a rattling bunch of rivets with the pilots wearing oxygen masks, light pouring in around the door, yep, they have the chickens as well. Then you do a carrier deck style take off, minus the catapult, over a cliff and hope the plane picks up enough air. The Khe Sanh landings get interesting as well. Mind you, I did insist on taking the return journey by plane, after seeing accident after accident on the road, but that was a main route. When you get into the mountains.....


The reason why, is investors now know the upper limit of oil price (147 in 2008 dollars) the economy can handle without causing it to quickly slip into recession, which would cause their position in oil to plummet and they would lose money so why would they risk that?

By "investors" I assume you mean speculators. However these guys don't buy or sell oil, they buy and sell futures contracts. They have nothing to do with supply and demand because they don't supply oil and neither do they demand oil. They never take or make delivery, only hedgers ever do that. And even in their case, most hedgers settle in cash.

However the rest of your post is spot on. You got everything right after that first misstep of thinking "investors" or "speculators" actually have something to do with the price of oil. So you had one paragraph wrong and three paragraphs right. You score a 75. ;-)

Ron P.

Realistically how much can the military afford to be without oil? This applies everywhere.

Realistically what the military can afford to pay for oil in no way determines the world price of oil. All the world's militaries combined would be customers for a small fraction of the world's oil, not nearly enough to keep the price up if most of the rest of the world was in a deep recession or perhaps a depression.

Prior to 2008 I was in your camp, but I learned my lesson from the crash. The state of the economies of the world affects the price of oil dramatically. I have no way of knowing at what price per barrel is high enough to knock the economy back down again. But I assume it varies, depending on how other factors are affecting the economy. Right now the economies of the world are pretty sick meaning, in my opinion, that they cannot take very high oil prices without getting a lot sicker.

So yes, I believe that $150 in 2008 dollars is pretty pretty close to the upper limit that oil can go without knocking the economy back down, and oil prices back down again. Of course the military, and a lot of wealthy people, can afford to pay a lot more. But the masses of people, who buy at least 90 percent of the world's oil, cannot.

Ron P.

Some more info on our top 33 net exporter analysis (top 33 net exporters in 2005, those with 100,000 bpd or more of net exports in 2005).

22 of the 33 countries showed no increase in net exports, or were down, from 2010 to 2011, as Brent averaged $111 for 2011. Here is the list of countries with flat to declining net exports, year over year (BP + Minor EIA input, total petroleum liquids):

Trinidad & Tobago
Equitorial Guinea
Republic of Congo


*Net exports less than 100,000 bpd in 2011
**Net importers

Six (18%) of the 33 of the countries that met the minimum 100,000 bpd cutoff in 2005 are now below 100,000 bpd, or they have already become net importers.

The effects on the US economy of higher oil prices are not necessarily those of the rest of the world. China continued to use and import more oil at higher prices.

The next time oil spikes upward, it could easily be accompanied by a fall in the US dollar that makes most of the pain felt by the higher prices in the US only. Obviously because the US is the main user and importer of oil, we would expect changes in US use to have the major influence on world price.

If we fast forward to when the world is in declining production, the downslope of peak oil, plus when we have a lot less Global Net Exports, the competition for the remaining exports will be high, despite falling economies.

Your scenario of collapse is something that I also believe in, yet it does not appear to happen equally everywhere. What appears to be happening is a slow motion train wreck, with Greece and Egypt the front carriages. Only if the US was the last carriage of the wreck would you expect the price to not go higher in $US terms than the existing peaks. If the collapse of the US economy was somewhere in the middle of the train wreck, when GNE were much lower, the remaining countries could afford higher prices than the US.

My point was that high oil prices have a negative effect on all the world's economies, killing demand and knocking down oil prices. That is exactly what happened in 2008 and is happening again here in 2012. Oil prices did spike upward and the pain was felt all over the world, including China.

You attempt to find a scenario where high oil prices affect only the USA. Not likely. Oil is fungible, it doesn't matter if the dollar slides or the euro slides, high oil prices will affect everyone.

Obviously because the US is the main user and importer of oil, we would expect changes in US use to have the major influence on world price.

The main user of imported oil? How about China, or Japan, or Germany, or... We live in a global economy. Even China is suffering today: Bad news: World is sliding into a new recession

Optimists think that even if rich countries get into trouble, the strength and resilience of fast-growing emerging markets - above all China - will stem the rot. Alas, China is slowing down too. The HSBC Purchasing Managers' Index shows that Chinese manufacturing has actually fallen in May and June.

China's slowdown has hit Japan, which depends on exports to that destination. Japan is now running trade deficits month after the month, for the first time in decades. This is a game-changer .

The global fall in commodity prices has sent shock waves through all countries that prospered by riding the commodity boom, including Brazil and Russia. India, a net commodity importer, should gain from falling prices. Yet its GDP growth has plummeted too.

There is just no way that the world can afford $200 oil, it just ain't gonna happen. Well not in my opinion anyway. And I doubt seriously that the world will ever see oil at the price it hit in 2008.

Ron P.

There is just no way that the world can afford $200 oil, it just ain't gonna happen. Well not in my opinion anyway. And I doubt seriously that the world will ever see oil at the price it hit in 2008.

I would agree that the world cannot afford $200 oil but I would say it could be possible that this price is reached albeit temporarily in the future when we are well into the decline phase. As we move into the future many exporting countries will require a higher price to balance their budgets. I can imagine in 5-10 years time that $100 barrel oil would be a devastating "low" price for them. If this price was maintained for a sustained period of time then they would raise the prices by curtailing supply. Now if that could not happen then the supply of oil would likely drop any way (due to economic depression in the export country) which would curtail supply above natural decline rates which would raise prices. In summary what I am suggesting is much greater price volatility with bigger spikes and troughs depending on the state of the overall economy.

Off course, once oil gets volatile enough I am pretty sure some co-ordinated action would be attempted to have a more stable price that benefits both importers and exporters. Well it is either that or we face some sort of economic collapse/political upheaval.

There is just no way that the world can afford $200 oil, it just ain't gonna happen. Well not in my opinion anyway. And I doubt seriously that the world will ever see oil at the price it hit in 2008.

Count the fallacies in that statement. What you are REALLY saying is that YOU can't afford $200 oil, and are extrapolating that to other people in other countries. The reality is that I can afford $200 oil, and there are a lot of other people in the world who can, too. One of the key differences is that we don't use as much oil as the average North American, so we can afford to pay more money for less oil. The global reality is that there are probably more people in China who can afford $200 oil than in the USA. The difference is that they don't commute to work by car every day, they only drive occasionally on weekends, and then they take 6 people in the car.

So, I wouldn't count on oil prices staying under $200/bbl as the global supply starts to decline. In the event that prices go that high, some people will continue to buy it, and some people will become road kill.

What you are REALLY saying is that YOU can't afford $200 oil, and are extrapolating that to other people in other countries.

No, no, no, that is definitely not what I am saying. Yes I can afford $200 oil or petroleum products if oil was at $200. This is not about me or what I can afford, it is all about what happens to the world's economies, or Western economies, when oil reaches a certain price range. Rocky how on earth could you have missed this point. We have discussed this on at least a dozen different threads in the last few months.

Before the summer of 2008 most of us, including me, believed that as oil got more scarce, the price would keep getting higher and higher, soaring right past the $200 mark. 2008 taught most of us, but obviously not all of us, a lesson. That lesson was that at some point, because people are paying more for petroleum products and less for other things, the economy drops into a recession.

Now there is not a general agreement at just what price oil has to be before it pushes the world, or at least the OECD countries, into depression. Last time it was just over $140 a barrel. It could have been lower this time, as it appears to have been around $128 a barrel if indeed we are going into that dreaded double-dip. But some think it could be as high as $200. I don't!

So, I wouldn't count on oil prices staying under $200/bbl as the global supply starts to decline. In the event that prices go that high, some people will continue to buy it,...

Well I think you can count on oil prices staying under $200 a barrel. Brent, on 13 March, closed at $128.14. Then it went into a nosedive because of sick economies in Europe and a US economy that was not all that healthy. Of course some people would still buy buy it if the price were above $200 a barrel. That is the point that so many people get hung up on. What some people can afford has nothing to do with it. And it is not even about what the average person can afford. It is about at what range of prices oil reaches before it starts to affect the rest of the economy in a negative way, triggering a downturn in the economies, and consequently a downturn in oil prices.

Ron P.

Personally I believe that EVENTUALLY the world will gladly pay 200 dollars per barrel for oil, in terms of constant money.

The supply is obviously going to decline sharply within the next few decades-maybe even the next few years.

As supply falls off, the remaining oil will be diverted to higher uses-the per passenger per mile fuel economy of a sixty passenger diesel bus is such that diesel at ten dollars or twelve dollars per gallon will not force up ticket prices beyond reason.It would be cheaper by far to run heavy farm equipment on fifteen or twenty dollar diesel dollar diesel than it would be to farm with draft animals.

Furthermore I believe that lawyers will drive gussied up diesel gocarts down town at 35 mph on the freeeway before their trophy wives will give up their mansions in the burbs.

The huge majority of us will be riding double on fifty cc scooters or riding electric bicycles, or traveling in fully loaded minivans , at thirty five.

We will all be getting a hundred miles per gallon per passenger, or better.

The lucky few will live within reasonable reach of light rail and streetcars.

Such economic adjustments will take a long time to work their way thru the economy.

You are probably right, almost certainly right, about the world economy crashing in the face of two hundred dollar oil and thereby forcing the price down in the near to medium term.

But ten or twenty years down the road?

"Personally I believe that EVENTUALLY the world will gladly pay 200 dollars per barrel for oil, in terms of constant money."

It's interesting to contemplate, but, IMO, such a world will see the "haves" supporting a very different oil market, and will also see far more "have-nots" falling below their MOL regarding oil. When the majority can no longer support current levels of production and credit becomes severely restricted, the velocity of capex required to extract and market difficult-to-produce resources (of all kinds) will be in shorter supply than the resources themselves. I doesn't matter how much oil is left in the ground if 'the world' can't afford to get it. Mean time, markets will be desperately seeking substitutions only to find few exist. New territory, indeed.

I don't know what that price will be, but expect we're gonna find out sooner than later.

"The world" may gladly pay $200/barrel, but not for 80-90 mbpd.

Absolutely correct - there just isn't enough money in the world for $200 * 85 mbpd. That's over 6 TRILLION dollars/year expected to be paid for by countries like Greece, South America, Chinda ... and the USA.

How about $200 / barrel for 37 Mb/d of crude oil? That's only $2.7 trillion / year.

According to The Economist the Gross World Product is about $65 trillion per year. $6 trillion would be about 10% of that, which is not necessarily unaffordable.

10% of GDP for 30% of global primary energy supply?

There will be a lot of demand destruction before we get to that point.

Furthermore I believe that lawyers will drive gussied up diesel gocarts down town at 35 mph on the freeeway before their trophy wives will give up their mansions in the burbs.

Just a minor point but lawyers are not immune to the declining economy. This last year has seen big layoffs from big law firms and declared bankruptcies for several major firms. Some attorneys I know are contemplating career changes.

This is indeed true. And it is a terrible market for new graduates. Dewey Labouffe going under was a huge collapse. There will always be a lot of rich lawyers out there but there are a lot of poor ones too doing hard work like public criminal defense.

I'll be fine with $200 oil. I want my share of oil to go to tractors to grow me food and big trucks & trains to haul things around. I'll be fine with public transport, bicycles, and electric cars.

No I didn't miss any points. What we have is a fundamental disagreement about economic theory.

What I am saying is that there are various levels of affordability of oil depending on peoples circumstances. Some people can afford higher prices, and some cannot. As the amount of oil available falls, and the price rises, fewer and fewer people can afford it. Eventually enough people will fall out of the market that it will stabilize at some price. This is economics 101.

However, you are arguing that a high price will trigger a global depression that will stop the price from rising too high. I am arguing that it won't. This is because of our different experiences in the 2008 recession. You were in the US (I think, I didn't check), which took a heavy hit, and I was in Canada, which didn't suffer that badly. This produces a different perspective on the issues.

The fundamental difference is that the Canadian government had been relatively prudent, and had not permitted the banks to lend money to people who couldn't pay it back. OTOH, the US government let the banks lend to anyone with detectable heartbeat and respiration (an English comedy act called this the "Unemployed black man sitting on his porch in a string vest lending fund".) It basically consisted of nothing down and no payments for a year or two, followed by huge payments the borrower couldn't possibly meet.

As a result, when TSHTF, Americans walked away from their loans, the bottom fell out of the US lending market and hordes of banks went bankrupt, whereas in Canada default rates reached record low levels, and none of the banks were in trouble. The Europeans were in a similar position to the US and took a heavy hit, whereas Canada emerged relatively unscathed. China more or less ignored the situation since its problems were completely different.

The thing about China is that it is a huge overpopulated country which, while it needs to import oil, it doesn't need nearly as much per capita as the US. The Chinese have discovered they can buy all the resources they need, and if necessary they can outbid the US for it. The Chinese economy is basically coal-based rather than oil-based and oil is only used for high value-added purposes. So, don't count on the inability of American consumers to pay for the oil they need as a limit on the global price of oil, since there are other people who can pay more. There are ultimate limits on the price of oil, but they are well about $200/bbl.

However, you are arguing that a high price will trigger a global depression that will stop the price from rising too high. I am arguing that it won't.

I used the word "depression" once and "recession" once. My error, I should have used "recession" both times. Anyway I have history on my side. The deep recession was worldwide though some nations were affected much worse than others. And oil prices plunged all over the world, including in Canada.

Brent prices reached $128 a barrel in March of this year. Then some European nations, already at the brink, tumbled further into deep, or I should say, a "deeper" recession.

Now many will say that oil prices had little to do with the recessions of 2008 and second dip of 2012, but I would disagree. It was really the oil supply that caused most of the problems. The oil supply stopped growing and then a few years later, quite naturally, economies stopped growing. This lack of growth was what really caused the recession. I don't think many would argue with that.

So when the oil supply starts to decline in a few years, economies will stop growing. High oil prices will stunt growth but a declining oil supply will be the true culprit. And oil prices will not skyrocket. I expect $150 will be the top price, if that. But definitely not $200. If the oil supply drops enough to sent oil prices that high, then the GDP shrinkage all over the world will send the world into a deep recession.

There is just no way world economies can keep from shrinking if the oil supply starts to shrink. Impossible! And in a deep recession oil prices will just naturally be depressed. Economics 101. And history supports that economic theory.

Ron P.

Written by Darwinian:
There is just no way world economies can keep from shrinking if the oil supply starts to shrink. Impossible! And in a deep recession oil prices will just naturally be depressed. Economics 101.

Consider the rate of decline of the bell curve. There is no decline at the peak. Coming off the peak the rate of decline is slow. At the inflection point on the falling edge, the decline is at maximum rate. Afterwards the decline rate slows and moves off asymptotically.

Because liquid fuels include things from natural gas wells and the global production of natural gas has not peaked yet, its supply is exponentially increasing. Coming off the peak of crude oil, my guess is the exponential increase in NGL, condensate and biofuels will beat the exponential decrease in crude oil. You may have to wait until we are near the inflection point on the falling edge of crude oil production until liquid fuels begins declining.

The oil price shock of 2008 beat down world demand for crude oil by ~3 Mb/d. That is a decline rate of about 4% in less than a year. Will the decline in world crude oil production ever exceed that rate? If it comes close to that rate, then I think there will be an oil price shock about once per year which might be enough to blend the price shocks together. The result might be price volatility with an average that rises each year for a decade or more. This is the sort of stress on the world economy that, if it happens when the global production of natural gas peaks, could cause collapse, the last country standing falls to the ground. Canada is sitting pretty selling its resources until there are no more international buyers.

Looking at dcoyne78's graph below posted on June 23, 2012, 4:55pm, the maximum decline rate appears to be -2 billion barrels/year per 5 year interval or about -1.1 (Mb/d)/year. At that rate oil price shocks might occur with a minimum period of 2 years.

The 2005 to 2011 data are pretty clear--the volume of Global Net Exports (GNE) available to importers other than China & India, what I call Available Net Exports (ANE), fell from 40 mbpd in 2005 to 35 mbpd in 2011, with developed countries like the US being forced to take a declining share of a falling volume of GNE--but the $64 trillion question is what happens in the next six years, and in following years.

The following chart shows 10 years of actual data (2002 to 2011), showing the ratio of GNE to Chindia's Net Imports (CNI):


Note that the 2009 to 2011 (inclusive) data points fell faster than the projection, based on the 2005 to 2008 decline. If the actual data points continue to fall anywhere close to the projection, we are, to quote a former President of the United States, "In deep doo-doo."

And the EIA is reporting that China's domestic oil production was flat year over year. When US oil production peaked in 1970, our rate of increase in net imports went from 11%/year (1949 to 1970) to 14%/year (1970 to 1977). US net imports doubled in about five years, after we peaked in 1970.

An extrapolation of the 2005 to 2011 rate of decline in the GNE/CNI ratio suggests that total post-2005 Cumulative Available Net Exports (CANE) are about 168 Gb, with about 80 Gb already having been consumed. So this estimate puts post-2005 CANE about 48% depleted through 2011.

When we extrapolated the initial three year rates of decline in what I now call the Export Capacity Index (ECI, or Production to consumption ratio) for the IUKE (Indonesia, UK, Egypt) countries, the predicted combined post-peak CNE number was 4.0 Gb, and the actual combined post-peak CNE number was 4.0 Gb. Following chart shows C/P ratios for Export Land + IUKE, but the results are the same:


These numbers are why I continue to use the "Midnight on the Titanic" metaphor.

I forgot ELM when I was thinking about the maximum decline rate. The maximum rate of decline for global exports should be faster, but will it be faster than the decline in demand after the oil price shock of 2008, -3 Mb/d / year? From your GNE/CNI graph, -7.7% / year of 35 Mb/d is -2.7 (Mb/d)/year. In 2016 I expect GNE will be less than 35 Mb/d making this estimate too high.

I do not think China's economy will continue surging forward increasing its crude oil consumption while the rest of the importers get shortchanged. China's real estate bubble popped last year. China is probably the last importing domino to fall rather than independent of the global economy. The more oil China imports, the greater their economic damage from high oil prices. I think CNI is based on an excessively optimistic growth forecast for China and India. The -7.7% / year decline based on GNE/CNI is probably too large. At some time China's and India's imports will level off and then decline probably before they are the only importers. Maybe they level off this year.

I have history on my side.

Correlation is not causation.

A vast array of commodity prices peaked at the height of the economic bubble, and crashed afterwards, oil included.

The high price of oil was more important than other commodities, because oil is a large percentage of the overall commodity basket, but it was not the most important factor to the Great Recession. A contributor, no doubt, but a bubble is a bubble, and has to pop sooner or later.

There is just no way world economies can keep from shrinking if the oil supply starts to shrink.

I just don't understand why oil is considered by some to be so magical.

Sure, increasing import bills are a problem, but please note that OPEC countries are working very hard to spend their new income - that will tend to raise their non-oil imports, and raise oil-importer exports.

Yes, the cost of capex for substitutes will slow the economy down, but that's not overwhelming or permanent.

Yes, an oil shock can cause FUD, which slows down capex, but that's not permanent either. At a certain point EVs will gear up, and people will spend their money on them. In fact, car sales may go up, as there's actually a reason to buy a new car.

We have plenty of electricity, and plenty of time to transition from fossil fuel sources of electricity to renewable sources (not that we shouldn't transition away from FF much more quickly to reduce CO2 emissions...).

Our current operational problem is liquid fuels, and there are plenty of good substitutes for liquid fuels: electric vehicles (and their variants: hybrids, plug-in hybrids, extended range EVs, etc); freight reducing fuel consumption by 2/3 by moving from trucks to diesel trains, and then electric trains; heat pumps; and for the small percentage of energy that's needed for long-distance transportation, synthetic liquid fuels will work just fine.

At some point all the EVs etc will have been bought, and we'll not be worrying about oil any more.

Interesting. I was reading "The Naked Ape" yesterday. In that the author mentions that in an overcrowded ecosystem animals (esp higher mammals, primates) kill each other in a struggle for resources long before actual constraints come into picture. At least those are the observations of a zoologist.

Unfortunately, there's nothing irrational about a coal miner fighting to save his job.

It is kind of irrational for a Koch to fight desperately to prevent a reduction in his billions, but you gotta remember: single-minded devotion to the buck is how they (or their parents) got to where they are now, and how do they know when to stop?


It seems to me that the USG can learn a thing or two from the Canadian government. Or I should say that also the US populace can learn a thing or two from the wisdom of their Canadian brothers and sisters.

Banking governance and regulation...national/universal health care...not trying to be the 'World Cop'...

One note: The English comedy act you referenced is pretty tone-deaf on treating all folks, regardless of color, with basic dignity. There are plenty of folks in the USA who are described in terms other than 'black' who are either poor and/or got in over their head financially, particularly with respect to home mortgages...and some of them might even wear scrubby clothing to boot.

The English comedy skit wasn't very politically correct, but it was financially correct. ("You can't call it an "Unemployed black man in a string vest fund!" "No, of course not, we'll call it a High Performance Fund." "Oh, that's much better, I like the sound of that.")

Know what you're buying before you put down your money.

Then again...a lot of people think the Canadian real estate bubble just hasn't burst yet.

Sitting in Vancouver, watching people agree to pay over a million dollars for a small detached house on a half-sized lot .. yeah, when this bubble goes it's going to be nasty.

Written by Darwinian:
There is just no way that the world can afford $200 oil, it just ain't gonna happen. Well not in my opinion anyway. And I doubt seriously that the world will ever see oil at the price it hit in 2008.

Several factors can allow for a higher price. If the U.S. dollar devalues, the price can be higher. If the U.S. imports little crude oil, then the price can be higher. If the wasteful uses are eliminated and efficiency is improved, then a higher price can be tolerated.

When measured in Euros, the oil price shock of 2012 was higher than the one in 2008. When measured in U.S. dollars, the opposite is true. During an oil price shock the price will rise until something in the world economy snaps causing demand to decline. All countries will not be effected equally. For the oil price shock of 2008 the American economy snapped. For the oil price shock of 2012 I suspect the European and Chinese economies snapped, but not the American. Due to globalization all economies are effected but some get hammered down harder than others. One of them, battered, bruised and tattered, will be the last one standing.

In all the discussion about the price of oil and its limits one important thing to remember is that any prediction of a certain number as the maximum it can go to, can come back to haunt the predictor. It gives fuel (couldn't help that one), to the cornucopians to point at another failure of 'peak oil doomers' to get it right, should a set of circumstances allow the price to go above the 'limit'.

While I certainly agree that high oil prices coupled with constrained supplies are going to cripple economies and most likely collapse them, setting any limit as to how how the price can go seems foolish. Any number of different situations can unfold as we go on the downslope of supply, as different economies collapse, disruptions to existing supplies seem highly likey. Westexas's models of ELM, GNE and ANE are what I see as the optimistic scenario, if nothing goes wrong anywhere.

To be frank, it is known that Chinese National Grid and Southern Grid are two vertically controlled companies and is not under the direction of local goverments. It is very hard to fake electricity production data without central government's knowledge. However, it is true that local government had extensive discussion about how much electricity to generate with local plants. Because currently, coal price is too high and electricity price are too low, power plant are generating at a loss. So they talk with local goverment to share the loss.

Simply put, there is a lot demand for cheap electricity, but not as much as for expensive electricity. As coal price gradually moves up (easy coal are gone), most cheap electricity generation capacity is used up and Energy corps like Huaneng can no longer increase cheap electricity generation capacity like before.

Above: This Chart Destroys The Idea Of Peak Oil

Another idiot author that thinks reserves are more important than extraction rate.

No, reserves are not the same thing as extraction. This article just proves what I have claimed for years, that "Lies about OPEC reserves" really matter. They give the public, and most of the main stream media the wrong impression about how much oil is left.

OPEC claims to have 81.33% of all the world oil reserves, or they did in 2010. When people realize that at least half of this oil is just not there, that will be the day that peak oil will gain new life. It will be the shock felt around the world.


Reserves didn't do the US much good:

US Reserves and Production

The sharp spike at 1970 is Prudhoe Bay being booked, right before production peaked. Bet those reserves made people feel quite rosy about the prospects for the US. Robert Rapier has a rather different profile for US reserves in his new piece on How Much Oil is Left in the World? This is based on BP, which perhaps differs from the EIA numbers I used; or it's just that my chart has a wider X axis.

Another curio: James Hamilton posted a piece on Robert's site about Modifying Hubbert’s Model of Peak Oil to Account for a Rise in Production Due to Higher Prices, based on an IMF paper. They have a chart of 3 of Colin Campbell's forecasts, which are based on his very restrictive definition of oil: not just only crude oil, but also leaving out unconventional and polar oil. What's noteworthy is that the result shows a peak in 2005, and decline thereafter.

This got me thinking about seeing what would happen with reserves if you chop out various components. OPEC, oil sands. Could be illuminating.

...not to mention that peak oil is again re-defined:

...peak oil theory — the idea that we are imminently in danger of exhausting the world's hydrocarbon supply.

Ghung – Leanan and I were bouncing this subject around yesterday. The problem goes beyond just someone tossing a straw man via a faulty redefinition. Pick any subject and a quick web search will likely yield someone offering an incorrect analysis and/or prediction on almost any subject you pick. More unfortunate the source will typically have some appearance of authority at least as far as the general public goes. Want to belittle folks who believe Elvis is still alive or that the moon landing was faked? I bet a little search will turn up someone the MSM gave their 15 minutes of fame.

I’m sure you could find any number of folks predicting a Mad Max world in the US by today thanks to PO. Now all one has to do is present them as the voice of PO, expose the foolishness of their forecast and then condemn all proponents of PO on that basis. It seems that this approach has become very common on so many subjects today. And wielded by players of every stripe: liberal, conservative, R, D, Catholic, Jew, environmentalist, oil company suite, AGW believer/denier, etc, etc. And as quickly as one side of a debate pulls that card from their sleeve the other side will often retaliate in kind.

The choice is either ignore them or engage in dead end discussion IMHO. Unfortunately it’s so damn hard to not respond.

There's a third choice; simply call them on it whenever possible. I agree about avoiding useless discussions, but ignoring their lies gives them free license to propagate. These pundits certainly have no interest in truth or accuracy, but a few of their readers may, and I was brought up to stand and be counted. Just can't help myself, though it may only make a difference to me, myself and I. The three of us have to get along ;-)

A lie can travel halfway around the world while the truth is putting on its shoes.

Mark Twain, (attributed)
US humorist, novelist, short story author, & wit (1835 - 1910)

You got to call folks on the lie, or it grows. But it does get tiresome.

Truth is mighty and will prevail. There is nothing the matter with this, except that it ain't so.


Ghung and Rockman,

Re: http://www.businessinsider.com/chart-of-the-day-peak-oil-2012-6

You are both correct and so is Darwinian regarding the OPEC Reserves that are quite questionable. We seem to not communicate to the world at large that peak oil is about the peak in output over some period of time (barrels per day for example). Rockman in particular seems to bring us back to this point again and again when we start spending too much time discussing reserves, but briefly, the increase in reserves from 2001 to 2011 was due to Canadian oil sands and Orinoco belt reserves. These reserves will help mitigate the decline, but they are not produced as easily as conventional oil.

I recently created a future oil scenario using WebHubbleTelescope's Shock model where I modeled Canadian oil sands and Orinoco belt extra heavy separately to account for the slower development of these resources. I also modeled natural gas to forecast NGL output, making assumptions about how the NGL per unit of natural gas produced might progress in the future (I made the optimistic assumption that worldwide levels of NGL/cu ft of natural gas would increase to US levels over 20 years then remain constant). NGL and biofuels were adjusted to account for their lower energy content per barrel (NGL by 75 %, ethanol by 57 % and biodiesel by 88 %). I also included shale oil (from Green river shale) and processing gains + other liquids (these two remain constant after 2030). I made no guess about coal to liquids or gas to liquids, but I assumed that biofuels would increase by 33 % over the next 20 years, while processing gains would stay level. This is optimistic because crude output will be declining after 2020 (it is possible that coal to liquids or gas to liquids could rise to fill the gap of smaller refinery processing gains). So the chart is below with a peak around 2020, URR = 3950 Gb without Green river shale and 4530 Gb when Green river shale output is included out to 2300 (output is constrained by water availability) these numbers are for all liquids (for C+C+NGL URR= 3330 Gb out to 2500). Note that about 1250 Gb were produced to 2011 and there are 1650 Gb of reserves according to BP for a total of 2900 Gb:


eh = extra heavy (oil sands and Orinoco belt) and shale = oil from Green River deposit, note that the oil sands and Orinoco belt delay the peak by only a couple of years (from 2016 to 2018), biofuels could delay it to 2019, and shale oil (from kerogen rather than tight oil from shale) could push the peak out to 2020.

larger chart: https://sites.google.com/site/dc78image/images/futureoil.png


This chart assumes some great technological advances to make oil from Green River shale affordable. Likewise Orinoco basin oil will somehow be produced at reasonable cost according to BP. I would dissagree.

Fact is that the major economies of the world cannot continue growth if resource inputs continue to go up in price. The lesson that most economists should have learned but did not is this:
High price of oil reduces consumption, demand drops causes drop in oil price, then oil production drops as higher cost to locate and produce drives some oil companies to contract or exit business. World oil production goes down, but low price (some below development and production cost) causes demand to jump again, then price rises again beyond what some users can afford.

Some oil like that from shale in western US and probably much of the extra heavy in Orinoco River Basin will never be produced, not just because low EROEI but because many of the world's users simply cannot afford it.

Thus the peak of world oil production is dependent on affordability of oil, not just availability.

(edit for clarity)

This chart assumes some great technological advances to make oil from Green River shale affordable. Likewise Orinoco basin oil will somehow be produced at reasonable cost according to BP. I would disagree.

Hi mbnewtrain,

I agree that the oil from kerogen in the Green river deposit (Colorado, US mostly) is not likely. The point of showing it on the chart was that even if it could be produced, it would make little difference and you could ignore the orange dotted curve (I would agree with that assessment, but there are some who are more optimistic than me.)

I disagree on the oil in the Orinoco belt from a technical perspective, the problems there are more political and might be solved in time. If the government of Venezuela allowed more foreign investment the Orinoco belt could be produced as easily as the Canadian oil sands (possibly more easily due to warmer temperatures year round). The Canadian Association of Petroleum Producers (CAPP) forecasts Canadian oil production each year and I developed my scenario for Canadian oil sands output based on their forecast and an optimistic URR of 400 Gb of Oil Sands output, which is more than double what the Canadians predict. Canada considers about 10 % of the resource is recoverable and arrives at about 170 Gb of recoverable oil from the oil sands deposits in Alberta. Venezuela assumes about 20 % of the resource in the Orinoco belt is recoverable and claims reserves of 220 Gb. I have assumed that the oil sands can also be recovered at a 20 % level which doubles the oil sands URR to 340 Gb. I have also assumed that there will be some reserve growth and technological advances over the next 60 years which would boost the URR of both the oil sands and the Orinoco belt to a total URR of 645 Gb (403 Gb from oil sands and 242 Gb from Orinoco belt) with a peak in 2074 of 5140 million barrels per year.

Is this scenario optimistic? I would say yes. My reasoning is to give an upper bound to a peak oil scenario because often we give pessimistic scenarios which tend to underestimate the peak. This scenario tries to account for NGL growth (but adjusts for the lower energy content of NGL, about 75 % less, compared to crude oil), growth in extra heavy (this combines oil sands and Orinoco output), growth in biofuels (included in the processing gains and other category), and even growth in Green river oil shale (which is extremely optimistic in my view). In every case these different sources of potential output will push the peak out by one to three years, but even this very optimistic scenario still peaks by 2020. If we don’t want to consider extra heavy, the peak would be 2015, when extra heavy output is added the peak moves to 2018, adding biofuels pushes it out to 2019, and oil shale would move it to 2020. If the extra heavy scenario is cut in half the peak would be moved back by a year or two.

Finally the shape of the curves in this scenario would change depending on how the world economy fares as peak liquid fuel output approaches and the cost of producing the oil increases. This story has been repeated often: oil prices rise, world economy declines, demand for oil falls, oil prices fall, world economy recovers, oil demand rises and we are back to square one. This scenario would result in an undulating plateau rather than a well defined peak in oil output and we might be at the start of this total liquid fuel plateau right now (when we adjust NGL and biofuels for their lower energy per unit volume, NGL 75 %, ethanol 57 %, biodiesel 88 %). If the plateau scenario is more accurate, where output varies up and down around this plateau as world real GDP goes up and down, then the plateau might extend to between 2030 and 2035 with output staying near its current level of 31 billion barrels of oil equivalent (energy content adjusted) per year.


DC – “If the government of Venezuela allowed more foreign investment the Orinoco belt could be produced as easily as the Canadian oil sands…”. If Hugo is replaced by a more free market friendly govt the uptick may be greater than many might expect. And not just for heavy oil resources. About 20 years ago a US company acquired a Vz field doing less than 400 bopd. The then current production tech was primitive even compared to 1960 US methodology. Within several years they increased production to 40,000 bopd. It could have gone higher but the concession required 100% of the revenue beyond 40,000 bopd to go to the Vz govt. If this transformation did occur I suspect the Chinese would have much of the advantage. But US refiners and consumers could still benefit directly.

"If Hugo is replaced by a more free market friendly govt the uptick may be greater than many might expect."

I appreciate your optimism ROCKMAN, but history does not suggest such a change.
Many years ago a friend told the experience of his father running an oil exploration business in Venzuela (back in the 1940's to early 1950's). The governement of Venezuela decided that the foreign oil companies were making too much money off the country's resources, even though all leases were in place and huge royalties were paid to the government. Venezuela's federal government nationalized all the oil company assets and my friends father's company was paid pennies on the dollar for the investment.

Then back in the 1980's I had a girlfriend with relatives in Venzuela and she made several trips there. Her impression was the people were very nationalistic and leary of the US government's intentions. All they had to do was look next door at Columbia to see how the US would try to intervene in the government to get what they wanted.

So maybe China has a chance to bennefit from Venzuela heavy oil production, but the US has little chance of ever getting its energy corporations involved in exploiting Orinoco in the forseeable future. At any rate I doubt that Venezuela will let any foreign power or foreign company take an upper hand at oil production. The country is just too socialistic, and as indigent population increases there, it will remain so.

I think that if the Orinoco oil sands were located in the USA, they would be economic at current oil prices and companies would be developing them enthusiastically. The problem is that they are in Venezuela, and Venezuela is in a self-inflicted downward economic and political spiral.

The Green River shales might become economic in future, but I would pick 2050 as about the first possible date for large scale commercial production - if it ever happens at all. It will likely not become viable until Canadian oil sands production peaks, because the Canadian oil sands are much more cost-effective and energy efficient, not to mention bigger than the Green River shales.

As far as I have heard about about the Green River shales they have the same energy content as baked potato and wood is a better fuel. Under such circumstances it would be profitable then all other better fossil fuels run out and the trees have been cut down.

The only thing they have going for them -- and at least IMO it's not a sufficient reason to develop them -- is that the path from kerogen-bearing rock to gasoline/diesel liquid fuels is somewhat simpler than producing such fuels from baked potato or wood. But the process isn't cheap, so it's never been profitable to make the investments and acquire the other inputs like water.

OTOH, over the last several years, Shell has bought up a lot of water rights in NW Colorado.

I also included shale oil (from Green river shale)

There is no oil from the Green River Shale, and never will be.


But to date, commercial oil in significant quantities from oil shale remains a fond hope, subject to wry statements including: "Shale oil--fuel of the future and always will be." In 1946, a real estate promoter erected a sign along what is now U. S. 70, regarding the minor shale oil boom at the time: "Get In On the Ground Floor." It is still not too late to get in on the ground floor. But all plans to do so have been at least temporarily discontinued.

But you can still get in on the ground floor if you are really interested.

Shell has an in situ pilot project where it inserts electric heaters in the ground and heats the oil from three to four years to turn the kerogen into oil and gas. They put a freeze wall with reification rods around the parameter of the project to keep the oil from escaping. Haven't heard from that project in years however but don't count on that to deliver much oil.

Ron P.

Hi Ron,

I agree with your comment. See my response to mbtrain above for an explanation of why I included oil shale, just ignore the orange dotted curve for the scenario where oilshale output is zero. The scenario is purposely optimistic to give an upper bound, the reality will be somewhere between the c+c+ngl-eh curve and the total-shale curve, if the world economy doesn't crash completely. The total crash scenario would be under the c+c-eh scenario, but I will leave it to others to determine the downward slope of that curve. :)

Also the curve labelled total-shale = c+c+ngl+pg+other (essentially EIA total supply, but adjusted for energy content: NGL reduced by 75 %, ethanol reduced by 57%, and biodiesel reduced by 88 %)

Also notice the shale scenario only ramps up around 2020 and is water constrained so that output levels off at 3 mb/d in 2050, but I do agree it is unlikely, it is based on the following report by Rand (2005):


And finally (third edit) a spreadsheet in excel and open document format with data for the chart can be found here:



I fail to see how people can argue against a bell curve by suggesting those that conceived of it suggest it is cut in half, that once reaching its peak the other half of the bell is somehow missing and the very next step is to suddenly plummet to zero. Either they are idiots or they have reasoned that something they choose not to like can be rejected by lying.

Easy to destroy an idea if you first fail to state what the idea is, compile some statistics, make a "chart" from those stats that do NOT reflect the numbers quoted in the chart, and totally and completely fail to comprehend that your own statement actually makes to case for the idea that you are supposedly debunking.

If you add all of the numbers in each grouping, you find that the total does not come near the amount quoted at top. M
aybe they neglected to include oil from the moon?

Then you notice that there will be some problems involving cost around getting that imagined oil out of the ground, which last time I heard was pretty much the prediction made by peak oil "theory."

I mean, this has to be the lamest attempt to claim nothing is happening here that I have seen in many years reading TOD.

The question that we should really be asking is whether or not the spike we see today in oil price to $90+/bbl is going to hold up. If so, what does that mean for the world economy?

I think these guys are starting to believe their own junk. Drinking their own Kool-Ade will not solve any problems. and will not assist us in learning how to adjust to our predicament.

Good luck y'all... now that there is obviously no need for TOD or ASPO!


America's loss, our gain?

Wind developers look to Ontario in the midst of PTC uncertainty

Planning for wind energy developments in the U.S. for 2013 is literally at a stand-still due to the uncertainty of an extension of the Production Tax Credit (PTC). But that isn’t stopping some developers from moving forward with new projects for next year. These new builds might, however, pop up not in the U.S., but in a community with a stable government support for renewable energy – Ontario.

Established in 2010, the Ontario Power Authority’s Feed-in Tariff (FIT) Program was North America’s first guaranteed pricing structure for renewable energy generation. The provincial government’s goal is to reach 10,700 MW of non-hydro renewable generation installed by 2018. This drive for mostly wind and solar installations has led many developers, like Pattern Energy, to head north as they wait out the uncertainty period in the U.S.

See: http://www.power-eng.com/articles/2012/06/wind-developers-look-to-ontari...


I'm all intrigued today with the new ideas about using wind-power to make fuel from air and water. This would allow all kinds of things. Distributed/local fuel generation would mean that rural areas, even individual properties, could be independent of centralized fuel sources and relieved from the fuel transportation costs. Wind power could be stored in tanks. The energy could be transported through pipes or shipped to serve other markets.

There has recently been discovered a solid-state means of ammonia synthesis. Nitrogen and water participate in the process on opposite sides of a barrier: a heated and electrified catalytic "membrane" made of refractory/ceramic material. Ammonia is released.

Solid State Ammonia Synthesis (SSAS)
for Sustainable Fuel
and Energy Storage Applications

Ammonia powered car:

Ammonia powered bus, Belgium, 1943:

When ammonia burns, it is all-hydrogen fire.

Ammonia is NH3: One nitrogen with three Hydrogen atoms. It burns to make water and release nitrogen.
Ammonia liquifies at 150Psi: It is as easy to store as propane. Ammonia stores hydrogen in an easier form than methane or hydrogen gas itself require. A volume of ammonia liquid has half of the energy as the same volume of diesel. The energy density by weight, however, is much higher than that of batteries.

Methane, natural gas, burns cleaner than other hydrocarbons such as oil because it has more hydrogens per carbon. Methane is CH4: one carbon with four hydrogens. It burns to make water and carbon dioxide. A lot of the energy is stored as hydrogen. There are hydrogen fires burning, making water... and there is a carbon fire burning making carbon dioxide. Other hydrocarbons are more heavily burdened with carbon. For example, unlike natural gas, benzene, C6H6, burns with a yellow, sooty flame:

Ammonia burns cleanly with a greenish-yellow flame that produces steam, nitrogen, and no carbon dioxide:

Back in the day, it was chosen to power the X-15 because it wouldn't soot-up the reusable rocket engine.
@ 8:15... Note the color.

There is a pilot project proposed in Alaska:
Solid State Ammonia Synthesis (SSAS) Pilot Plant Demonstration System for Renewable Energy (RE) Storage, Transmission, and Export

Ammonia is also the primary source of nitrogen fertilizer used in agriculture. It is in those white propane-looking tanks on wheels seen on farmland. A windmill making fertilizer and fuel would supply a good portion of a farm's energy needs. The process releases oxygen. Burning the fuel releases steam and nitrogen. The system runs on wind, water, and air.


I used to be rather skeptical of wind-powered ammonia synthesis as a partial replacement for oil-derived fuels....I am less skeptical as time goes on.

However, if the glut in NG continues or even grows, it seems to me that methane may be adopted for some transportation applications such as long-haul trucking, more bus applications, and more fleet vehicles, as well as some modest penetration into the personal vehicle segment.

That being said, I think it is important to keep the flame alive for ammonia fuel application R&D.

On one of the YouTube vids, posters said that ammonia has either 30K or 40K BTU per gallon, compared with 116K/gallon BTU for gasoline.

Here is a reference found quickly:
Ammonia Fuel

Ammonia 40,500 BTU/Gallon
Gasoline 116,090 BTU/Gallon
CNG@2400psi 19,800 BTU/Gallon

130 Octane

Ammonia has twice the energy density of CNG (compressed natural gas).
Liquid hydrogen is shown as 30,459 BTU/Gallon... also less than ammonia, surprisingly.

So, the car has to carry three times as much weight in ammonia to go as far as it would on gas. That is still much better than the weight of today,s commonly used batteries to go the same distance.

30 pounds of gasoline
90 pounds of ammonia
600 pounds of batteries

Thank you for the great references.

You seem to always provide links to your material, good show!


My numbers should be:

10 gallons of gasoline
30 gallons of ammonia
600 pounds of batteries

60 pounds of gasoline at 6Lbs/gallon
150 pounds of ammonia at 5Lbs/gallon
600 pounds of batteries


I think my number for battery weight is low.

Liquid hydrogen is the least dense liquid known, at 0.14kg/litre or 1/7 as dense as water. There's a whole bunch of other problems with it when it is used as a tank-stored fuel; rockets only use it because the engineers and operators are willing to expend the effort and energy to overcome those problems since its energy return is better than most other fuels.


For less lofty applications, ammonia offers a denser packaging of the same energy currency.

Comparing my latest bill with one from the end of 2007, I can see that my cost per kwh has increased almost 45% in a little over 4 years. The skyrocketing cost of electricity is a major factor driving jobs out of Ontario. The road that Ontario is on is not sustainable and will do irreparable harm to Ontario's economy.

The program became a flashpoint in last year's provincial election. Conservatives campaigned on a promise to slash the program. The program was highly politicized.

Check out the spin in this article:
Ontario electricity rates going up

"But critics say the governing Liberals' expensive foray into wind and solar power is the main culprit behind higher hydro rates. Ontario pays up to 80.2 cents a kilowatt hour for small rooftop solar power and 13.5 cents per kWh for wind power. Ontario Power Generation, the government-owned utility, is paid 5.6 cents a kWh for nuclear power and between two cents and 3.5 cents per kWh for power from its hydro-electric facilities. Residential consumers pay between 6.2 cents and 10.8 cents a kWh."

O.K. ... The residential customers are paying about what the utility is paying for nuclear... but now the text screams the words of Conservative Leader Tim Hudak: "We're on the wrong path. We just can't afford to keep paying 10 times the price of power for wind and solar. It's hitting families hard in the pocketbook and it's chasing jobs out of the province,"

Energy Minister Chris Bentley said the rate increase mainly reflects the cost of upgrading Ontario's electricity system, not what the province pays for green power. "The reality is that very little of the price increase we see is as a result of the renewable energy approach."

Wind really scares the carbon industry.

BTW, there is no such thing as a "carbon industry". It's a fictional oversimplification.

Ontario is becoming the graveyard of failed government energy plans. What should scare the people of Ontario is the delusional state of government energy planning. They seem to be zigzagging back and forth between nuclear and renewable without any reasonable attempt to figure out the actual costs. You can assume that whatever estimated costs they quote are wrong.

They are caught between a rock and a hard place, and banging their heads against each one in turn.

Yes, "carbon industry" is a symbol used to save a lot of words.

It looks like the power is on in Ontario, costs between 6.2 cents and 10.8 cents a kWh, and is delivered over a system that is being upgraded.

In Los Angeles, the power is costing 20 cents a kWh US. Some of the transformers go back to the early 1900's. There are some pretty spectacular electrical vault explosions. The nearby nuclear generating station was sabotaged by its own operator. During the deregulation of the industry, the cost of power in nearby San Diego went up 10X, 1000%.

Ontario? It could always be worse! Too bad the whole renewables effort became a political football.

Average Energy Prices in the Los Angeles Area – May 2012

San Onofre Nuclear Generating Station 2012 Shutdown

California electricity crisis

... By the way: Any references? I've heard about the nuclear station cost overruns.

In addition to cost overruns on construction, the real problem with the CANDU nuclear power reactors was long-term reliability. They had only half the service life expected - 20 years before problems developed, rather than 40 years. This wrecked the economics of them, since electricity prices were based on a 40 years life. Since Ontario Hydro was government owned, the taxpayers ate the costs of the miscalculation rather than the electricity customers. The costs were simply added to the provincial government debt - $19.4 billion in "stranded debt" was transferred to the Ontario Electricity Financial Corporation. See: CANDU reactor in Canada.

The ongoing problem is that Ontario just doesn't have the capability to generate new power for the 6.2 cents to 10.8 cents they are selling it at. The government is paying up to 80.2 cents/kWh for solar power and 13.5 cents/kWh for wind power, and that's the "Buy High and Sell Low" formula for going bankrupt.

California is a different case. The government stuck the utilities with the cost overruns, and the utilities did go bankrupt, so now the consumers now are bearing the full cost of power generation because there's nowhere to hide the costs any more.

BI-WEEKLY FIT and microFIT REPORT June 11 2012
...Shows 51MW of solar in commercial operation.

Independent Electricity System Operator
...Shows 19,000MW demand for Ontario.

Is 51MW/19,000MW -or- 0.3% really driving up prices? And I imagine that 51MW is the nameplate rating, the claimed capacity of the total number of panels, not the actual power they are generating, especially at night.

UPDATE 4-Ontario cuts green power rates, commits to targets
"The program... became a flashpoint in last year's provincial election... Conservatives campaigned on a promise to slash the program."

The rates were cut in half. The 80 cents became 40 cents per kWh for one third of one percent, 0.3%, of the power. The feed-in tariffs for solar are lost in the financial noise, perhaps on-par with the expenditures on doughnuts?.

PG&E in California went bankrupt because of the deregulation of the industry spawning the Enron debacle. This had no connection to renewables.
California energy crisis deepened by bankruptcy filing of utility company
Unnatural Disaster:
Deregulated California Utilities are Electrocuting the Public

...but the disinformation campaigns are much louder than any quiet private whispers that are raised in reply.

And during periods of extremely high demand when the province has found itself critically short of capacity, Ontario has paid as much as $2,000.00 per MW ($2.00 per kWh) for imported power.


Romania to review moratorium on shale gas

Romania will review its stand on shale gas when a drilling moratorium expires in December and align itself with a future joint EU position on the controversial issue, Prime Minister Victor Ponta said Friday.

Ponta, whose Social-Democrat Party has campaigned against shale gas tapping, said time was not of the essence, since the exploration phase would not be over before 2018.

God, Money and Planet Earth

... What if the problem is deeper than greed, or the evil rich? Seldom does the analysis get beyond the concept of greed, whether corporate or individual. Instead, an obvious solution is advanced: Get the greedy ones out of power. And there the analysis tends to stop, because the path to doing so quickly gets incredibly vague.

... What generally remains unquestioned is the nature of money itself.

In his book Sacred Economics, Charles Eisenstein point out that our notion of spirit "is that of something separate and nonworldly, that yet can miraculously intervene in material affairs, and that even animates and directs them in some mysterious way."

"It is hugely ironic and hugely significant," he continues, "that the one thing on the planet most closely resembling the forgoing conception of the divine is money. It is an invisible, immortal force that surrounds and steers all things, omnipotent and limitless, an 'invisible hand' that, it is said, makes the world go 'round."

Or, if it so chooses, money can decide to make the world uninhabitable. It works in mysterious ways ...

The destructive nature of our current monetary system, according to Eisenstein, is due to that which backs it, rendering helpless everyone who deals with money, because what backs it becomes what we are, in essence, forced to worship. If gold backs money, people worship gold. But some time ago, our monetary system evolved beyond the backing of material substances. Money, now an electronic notation on a computer screen, is backed by none other than growth itself -- by the creation of more money.

"Created as interest-bearing debt, (money's) sustained value depends on the endless expansion of the realm of goods and services," Eisenstein writes. "Whatever backs money becomes sacred: accordingly, growth has occupied a sacred status for many centuries."

Or, if it so chooses, money can decide to make the world uninhabitable. It works in mysterious ways ...

Behold the wonderful magical powers of inanimate objects. Yup, reminds me of "cars driving down the highway" (leaving aside the Google car.) Who knows when those dollar bills or euro notes in your pocket might just leap out and dig the ground from under your feet or something? Best to be "precautionary" and always wear snowshoes.

But not to lose the point. Eisenstein and Koehler's primal moan seems to be that the world declines to conform itself to their visions, preferring instead to go its own way. Oh, the horror. Cry me a river of crocodile tears. Still, there is one takeaway to be had: woolly-minded postmodern twaddle remains an infinitely renewable resource.

Honestly, what ISN'T acceptable to you? Would you be happy with China-style smog? Would you cheer when the last rhino or tiger dies, because that's what the market wants, and it's "good for people"? I can't see any limits to what you think is acceptable in terms of environmental damage.

Please enlighten me as to where your limits are. Is mountaintop removal mining OK? What about eating the last Atlantic Bluefin tuna? Is caring that the we might destroy or irreversibly damage forests, rivers, and oceans "postmodern twaddle"?

Doesn't matter what my limits are, although, frankly, I don't miss the passenger pigeon one little bit, nor, for similar reasons, would I miss the mosquito or the tick, good riddance to both. Nor would I miss the malaria parasite, though it too is part of "nature", as is the smallpox virus or guinea worm, good riddance to those too. Nor do I miss the T.Rex, nor any of the other 99.5% of "species" that disappeared throughout earth history without any human assistance.

Nor would I want anything to do with a tiger, be it the last one or not, except if it were safely caged - there's nothing about a tiger to justify taking any risk whatever, it's merely yet another marginally-differentiated self-filling stomach with four appendages for self-propulsion, and a highly dangerous one at that. But that's an issue for countries in the tiger's range, and none of my affair.

In the world of biology, there is birth and death, the origin and demise of "species", and so on. There is nothing of the everlasting stasis that seems the ardently sought-after ideal of the fashionably "green" crowd. Biological life is a dance, not a tableau, and whatever fails to dance dies, that's all.

But again, my views don't matter much; people's mileage varies and the average will tend to set the pace. And on the whole, that average has involved accepting "species" extinctions as well as extensive landscape changes for, apparently, millennia. In one ancient story fairly well-known in the West, the fig tree that fails to produce figs is to be cast into the fire. No quantity of mystical postmodern twaddle seems likely to change any of that very much, as we just saw for the umpteenth time with the fatuous exhalation of Eurozone-style empty piety - and grand CO2 synthesis-fest - known as Rio+20.

For actual change, it would probably have to come down in part to practical modeling (in the sense of a coach modeling a behavior, not in the sense of constructing abstract computer models) rather than merely waving a wand while airily declaiming the latest fashionable bunch of "oughts". (Especially since the propounded sets of "oughts" so often look so suspiciously self-inconsistent or downright unworkable.) Practical modeling still seems quite thin on the ground. No wonder that almost everyone concerned acts - regardless of their talk - on the proposition that there is hardly any useful or practicable alternative to muddling along more or less as they are already doing.

So, yes, Eisenstein and Koehler waved their postmodern wands, moaned, and twaddled, and, as with countless other tries, nothing happened. Surprise, surprise.

Your argument degenerates to the final point that you think it's perfectly proper for every man to take what he/she pleases from his surroundings. With that philosophy, there's no place for long term planning at all and government becomes just a hindrance. Pure Social Darwinism clearly allows only survival of those with the greatest strength or willing to exert the most brutality and the rest become slaves if allowed to survive.

Such thinking ignores the problem called "The Tragedy of the Commons", which is, that which seems good for the individual may be bad for the group. Trouble is, the more people there are in an area, the more rules (stated or internalized) are required just to keep them from bumping into each other. Do you drive on the left side in North America and keep going thru STOP signs? That's what you are advocating, IMHO...

E. Swanson

In fairness to Paul, he seems content to accept pre-modern sociopathy over "postmodern twaddle", as he puts it. While I've reached the conclusion that his opinions about our species may be correct, I refuse to accept it in myself; don't want to die alone and unappreciated. It's that last cognitive moment when it becomes clear :-/ At least some of us can say we tried...

Right, now we get to the heart of things.

The current financial system of the world depends on endless, infinite growth of population and energy.

If we don't have infinite growth in population or energy, the financial system of the world collapses. It's that simple.

Or you could choose not to believe me, or this author. Keep your money in the bank, keep on buying those Treasury bonds, keep on believing it's worth something and stick your fingers in your ears and cry "I can't hear you."

Keep your money in the bank, keep on buying those Treasury bonds, keep on believing it's worth something and stick your fingers in your ears and cry "I can't hear you."

I needed a good laugh today, and that reality check did it - thanks. Those treasury bonds are the last 'illusion' or if you prefer delusion of investment security, with people buying them with the idea they are safe! Sure will be a lot of unhappy people when those bonds come up snake eyes, in spite of their best efforts to hear no evil.

Are we sustainable?

Resource wars, global warming-driven extreme weather events, poverty, and the disparity between poor and rich are at all time highs and escalating.

Researchers told Al Jazeera they believe the solution lies in localising food production, transportation, and water issues. But can this be accomplished on a global level?

"We have to get off fossil fuels as quickly as we can both for environmental and economic reasons," Richard Heinberg, author of ten books related to peak oil and its impact on our economic, food, and transportation systems, told Al Jazeera. "The way it's usually framed is 'we want to continue producing more energy to fuel more economic growth', but that's not what we need. If we're going to have sustainability, the first thing we have to think about is reducing global consumption 30 per cent over the next 20 years."

Oxfam's Chief Executive in Great Britain, Barbara Stocking, told Al Jazeera that lowering fossil fuel use is also one of the goals of her organisation. "We have to do something to reduce fossil fuel use and lower the atmospheric CO2 concentration," she said. "We are looking for a way to create a safer world, so that we live within the planet's boundaries."

Rob Hopkins, the originator of the Transition Town concept that promotes community-driven responses to the sustainability crisis, offered another solution. "We need to stop subsidising the fossil fuel industry, which still gets massive subsidies from governments."

The article mentions the Rio+20 'Future we Want' draft document. The document makes repeated claims regarding "sustainability", but also says:

We also reaffirm the need to achieve sustainable development by: promoting sustained, inclusive and equitable economic growth, creating greater opportunities for all, reducing inequalities, raising basic standards of living; fostering equitable social development and inclusion; and promoting integrated and sustainable management of natural resources and ecosystems that supports inter alia economic, social and human development while facilitating ecosystem conservation, regeneration and restoration and resilience in the face of new and emerging challenges.

That's one heck of a long sentence. Further on, we again see:

..we reaffirm the need to achieve economic stability and sustained economic growth...

Trouble is, sustained economic growth isn't sustainable, given the finite nature of the Earth's natural resources. One needs to scan down to paragraph 125 to see their section on energy. They want to provide energy services to 1.4 billion people who do not now have access to energy. And what happens after Peak Oil? Not a word that I could find with a quick scan.

That document has more buzz words than a State of the Union speech and less content, IMHO. The word "sustainable" appears 388 times, "development" appears 443 times. Trying to read it made my head hurt. Small wonder that the people on the outside were so pi$$ed off...

E. Swanson

Yes that's what sustainability means right now...hundred people sit in an auditorium, listen to songs, speeches, pose for pictures, eat expensive food, and at the end of it all put out a worthless pledge that gives the feeling that people want to do something but can't.

LOL. you said it right. I wish there was a "like" button on TOD ;)

I don't think that many people are actually fooled by these meetings and their pledges.

I get a strong sense that very few who are engaged in the processes at Kyoto, Copenhagen, Cancun or Rio really feel we are accomplishing Anything approaching a 'good start'.. EVEN IF they come out of it spluttering out that it 'was a good start'.

Business is not onboard (because, as Naomi Klein points out a lot recently, any decent action does NOT include 'regular economic growth'), and so governments are not onboard, and no significant commitments are being made.

It's easy to see what blather is being produced out there.. but let's not give it TOO much attention. Read the Aljazeera article that started this thread, and see if you can give that the 'Likes' it deserves.

It does seem, at least that they have the ability to Sustain Talks that result in no clear commitments.. that's one form of Sustainability, I guess.

Naomi Klein is completely wrong, and doing a lot of harm.

The fact is that renewable energy is completely consistent with economic growth, and it's being blocked by a minority of special interests who will be harmed by the transition.

I don't think Klein is opposed to growth in appropriate industries, she is simply saying that conservatives who have looked at the needs of addressing climate and energy issues will include a number of downsizing factors that are simply anathema to those who are too in love with industry to allow for ANYTHING to be so moderated in its excesses.. not unlike those voices who are so threatened by taxing the rich and the industries at levels that most feel are more balanced.


"All of this means that the climate movement needs to have one hell of a comeback. For this to happen, the left is going to have to learn from the right. Denialists gained traction by making climate about economics: action will destroy capitalism, they have claimed, killing jobs and sending prices soaring. But at a time when a growing number of people agree with the protesters at Occupy Wall Street, many of whom argue that capitalism-as-usual is itself the cause of lost jobs and debt slavery, there is a unique opportunity to seize the economic terrain from the right. This would require making a persuasive case that the real solutions to the climate crisis are also our best hope of building a much more enlightened economic system—one that closes deep inequalities, strengthens and transforms the public sphere, generates plentiful, dignified work and radically reins in corporate power. It would also require a shift away from the notion that climate action is just one issue on a laundry list of worthy causes vying for progressive attention. Just as climate denialism has become a core identity issue on the right, utterly entwined with defending current systems of power and wealth, the scientific reality of climate change must, for progressives, occupy a central place in a coherent narrative about the perils of unrestrained greed and the need for real alternatives."

You have to be careful with broadside terms like 'Economic Growth', knowing that different people will attach different assumptions to such language. Some sectors can and must grow, while the overall might stay flat, or it might have to level down to a much different nominal height.

Your statements here at TOD seem to be frequently full of hopeful promises that sound like that Free-market ideal which I find to be overly credulous about the amount of excess that we currently think of as 'normal and sustainable', and the amount of disruption and pain that could very well be experienced as we transition from one to the next ..

..as ever, 'the truth will out'.. I guess we'll see.


Climate Change and PO denial are driven by simple narrow economic self interest on the part of employees and investors in industries threatened by the transition away from FF.

That transition is practical and affordable, and doesn't require massive structural social change. Those who say otherwise (often unwittingly) collude with obstructionists, and are causing great harm.

the overall might stay flat, or it might have to level down to a much different nominal height.

Well, if you include military spending as a "good", that might be true. If you don't....

Your statements here at TOD seem to be frequently full of hopeful promises that sound like that Free-market ideal

Actually, you're thinking of people who pretend to believe in "Free-market ideals", but actually believe in freedom for people to defraud and steal (which is inconsistent with traditional Libertarianism).

For instance, IMO a true libertarian would recognize pollution as a case of unacceptable theft.

New from Congressional Research Service [CRS] ...

Job Creation in the Manufacturing Revival (pdf)

The health of the U.S. manufacturing sector is of intense interest to Congress. Numerous bills aimed at promoting manufacturing have been introduced in Congress, often with the stated goal of creating jobs. Implicit in many of these bills is the assumption that the manufacturing sector is uniquely able to provide well-paid employment for workers who have not pursued advanced education.

U.S. manufacturing output has risen significantly over the past two years as the economy has recovered from recession. This upswing in manufacturing activity, however, has resulted in negligible employment growth.

The past few years have seen important changes in the nature of manufacturing work. A steadily smaller proportion of manufacturing workers is involved in physical production processes, while larger shares are engaged in managerial and professional work. These changes are reflected in increasing skill requirements for manufacturing workers and severely diminished opportunities for workers without education beyond high school. Even if increased manufacturing output leads to additional employment in the manufacturing sector, it is likely to generate little of the routine production work historically performed by workers with low education levels.

As manufacturing processes have changed, factories with large numbers of workers have become much less common than they once were. This suggests that promotion of manufacturing as a tool to stimulate local economies is likely to meet with limited success; even if newly established factories prosper, few are likely to require large amounts of labor.

"As manufacturing processes have changed, factories with large numbers of workers have become much less common than they once were."

Even the local "we fix metal things" shop has an orbital welding machine and a CNC plasma cutter.

The people in demand are PLC programmers and tig/mig welders certified for stainless steel and high-nickel alloys.

AS the TV ad says, "High school is not enough." However, this does not imply that a four-year degree is needed either. The local community college teaches welding and PLC programming.

Also from Congressional Research Service ...

Double-Dip Recession: Previous Experience and Current Prospect

Concerns have been expressed that growth in the United States may falter to the point where the U.S. economy again experiences recession. A double-dip or W-shaped recession occurs when the economy emerges from a recession, has a short period of growth, but then, still well short of a full recovery, falls back into recession. This prospect raises policy questions about the current level of economic stimulus and whether added stimulus may be needed.

Double-dip recessions are rare. There are only two modern examples of a double-dip recession for the United States: the recession of 1937-1938 and the recession of 1981-1982. They both had the common attribute of resulting from a change in economic policy.

This report discusses factors suggesting an increased risk of a double-dip recession. It also discusses other factors that suggest economic recovery will continue. It presents the U.S. historical experience with double-dip recessions. It examines the role of deleveraging by households and businesses in the aftermath of the recent financial crisis in shaping the likely pace of economic recovery. The report concludes with a look at current economic projections

Background....................................................... 1
Factors That Suggest Increased Risk of Double-Dip Recession ..... 2
    Indicators of Continued Economic Weakness ................... 2
    Possible Negative Economic Shocks............................ 3
Historical Experiences with Double–Dip Recession ................ 4
    The 1937-1938 Recession: A Premature Removal of Econ.Stimulus 5
    The 1981-1982 Recession: A Policy of Disinflation ........... 6
The Pattern of Past and Present Economic Recoveries ............. 6
    The Impact of a Financial Crisis on the Pace of the Recovery  7
    The Drag of Deleveraging on U.S. Economic Growth............. 8
    More Support from the Foreign Sector?........................ 9
    Economic Policy Response .................................... 9
Economic Projections ........................................... 10

Ha, ha, double-dip recession. The economy will be up and down at every oil price shock until the U.S. stops importing crude oil, switches to something else or collapses.

The economy will be up and down at every oil price shock until the U.S. stops importing crude oil, switches to something else or collapses.

Until the U.S. stops importing oil and switches to something else? Damn! Why didn't I think of that?

Get involved people. Write your congressman and tell them to pass a bill that forces the U.S. to stop importing oil and switch to something else.

Ron P.

Well, there is a new report from America's National Renewable Energy Lab (NREL) offering that 80% of the nation's electrical power needs, as an issue separate from utilization, could be met with renewables within four decades for things that are running, at that time, on electricity. I haven't seen the report predicting that there will be an America in four decades... or who or what the emperor will be... but any positive ruminations on such subjects should not be dismissed off-hand.


Renewable Electricity Futures Report


Some portion of the cars may be running on electricity rather than oil. Some portion of transportation, including aircraft, might be running on, say (just for today) ammonia.

Robert Hirsch says in this video, The Impending World Oil Shortage: Learning from the Past, that we are talking about a liquid fuels problem. It is not an energy problem in the way people often talk about. Worldwide there is from 50 to 100 trillion dollars invested in capital equipment that use liquid fuel. Electrification from renewables is not going to have any impact quickly and it is extremely important that be understood.

In other words, we are not going to just switch to something else, not any way soon anyway. Fifty to one hundred trillion dollars in equipment will not be replaced quickly.

Running the airline industry on ammonia? Really now? Anyway ammonia is created from natural gas, another fossil fuel. Natural gas will peak a decade or two after oil at current use. But if we start running airlines and other stuff on that fossil fuel, it will peak sooner.

Ron P.

The discussion was about the United States of America:

BlueTwilight: until the U.S. stops importing crude oil
Darwinian: a bill that forces the U.S. to stop importing oil
Darwinian: Worldwide there is from 50 to 100 trillion dollars invested in capital equipment that use liquid fuel.
Which morphs to...
Darwinian: we are not going to just switch to something else, not any way soon anyway. Fifty to one hundred trillion dollars in equipment will not be replaced quickly.

How close is the USA to running on its own hydrocarbon resources? Hydrocarbon, that is... like the natural gas they're going to pump out from under the peasants very feet so they can sell it to Asia... Now, there's a loaded question, for sure.

One way to cut back on the consumption of oil is to tank the economy. That seems to be proceeding nicely in this run-up to the election. I've heard rumor of $2/gallon gasoline by November... making this strategy a two-edged sword.

"ammonia is created from natural gas"
There are new methods.
Ammonia can be made from wind, air, and water.

Some wind-powered airplanes... something poetic about that.

Ammonia was used to power the X-15 to the edge of space.

How close is the USA to running on its own hydrocarbon resources?

It doesn't matter. The USA is way past peak oil. Though fracking has temporarily reversed the downward trend, it will resume soon. Anyway the US, unless we have an economic collapse, will never be energy independent.

Yes I realize the discussion was about the US but it is foolish to think this is only a US problem. Peak oil means the peaking of world oil production.

Anyway how many trillion of that 50 to 100 trillion dollars in liquid fuel equipment is in the USA? Twenty five percent, because that is the percentage of the world's crude oil we consume. So we have from 12.5 to 25 trillion dollars worth of capital equipment that runs on liquid fuel. That is not going to be replaced any time soon.

Ron P.

I think you are missing the point that the equipment which uses all that liquid fuel does not stay in use for very long. The half life of an automobile is said to be about 8 years and heavy trucks may not last that long, especially if driven 300,000 miles a year for cross country transport. Commercial aircraft are replaced at regular intervals, because newer craft tend to be more fuel efficient and there is a definite fatigue lifetime for the airframes. Similarly, equipment for HVAC and hot water heating also must be replaced at regular intervals. There is a considerable investment in fixed fuel processing and distribution, but that too depreciates and must be regularly replaced or updated. Without oil, most of that oil burning equipment will be scrapped anyway, the only question is what happens next. The US was warned twice back in the 1970's, but our refusal to listen has resulted in 30 years of lost time to make the transition. Instead, we got Ronnie Raygun's "Morning in America" delusion, which has since morphed into the Tea Party of NO REALITY ALLOWED...

E. Swanson

I think you are confusing "half-life" with "average age". They are not the same thing. I googled automobile half life in half a dozen different ways and got nothing but unrelated articles. Anyway Our cars are getting older, too: Average age now 10.8 years. That is the average age of cars on the road, not the expected lifespan.

The average age of people in the US is about 37 years but the average lifespan is just over 78. However opinions on the expected lifespan of the automobile do usually range around 8 to 10 years. But those estimates cannot be right if the average age of cars on the road is 10.8 years.

Anyway these cars are being replaced by... guess what? They are being replaced by other gasoline powered cars. Sure, without oil all these vehicles will be scrapped, that't the entire point. When they are scrapped many people will be walking. People who buy older cars because that is what they can afford, will not be able to buy a battery powered car or whatever replaces the liquid powered car sometime in the "not so near' future.

But that is your point also isn't it? Glad we can agree on that at least. ;-)

Ron P.

Hi Ron,

That USA today article has some other interesting numbers. The total cars and trucks in the US are about 240 million and car and truck sales are about 15 million per year. The total number of cars and trucks has been growing slowly of late so let's assume the total holds steady and that as new cars are sold the same number of old cars are scrapped, in that case the fleet turns over in 16 years. Although unlikely, as oil prices rise more fuel efficient cars will replace the cars that are scrapped and more hybrids and EVs will be sold to the people that can afford them. As the number of hybrids and evs sold increases, the cost will come down and more will be sold. You are correct that this will not happen quickly but as the liquid fuel decline begins in 2017 to 2035 (depending upon how things play out, long plateau vs sharp peak) oil prices are likely to rise and demand for alternative forms of transport (trains, light rail, evs, e-bikes) will increase. At that point (or before), you envision that the wheels will be off the bus, whereas the optimists think we may muddle along and somehow transition to a lower impact more sustainable path. The way things currently stand in the US, Japan, and Europe it is pretty hard to see how the optimistic scenario comes to pass. Free markets are pretty efficient at allocating scarce resources (though they don't handle externalities very well), but they are not magical.

There is some action by European governments to address these problems, but much of it seems too little too late, and the US response has been pitiful (essentially there has been no response at all.)


DC, thanks for the reply. I am a bit more pessimistic than you. The world's oil supply stopped growing in 2005 and we have been on a plateau ever since. It was 2008 before things started to get bad because of a lack of growth in the oil supply. Our debt based capitalistic economic system must grow or collapse. Without a growth in the oil supply, our economy cannot grow... for very long anyway.

I expect, beginning in a couple of years, that the world oil supply will start to drop by 1 to 1.5 percent per year, for two or three years. Then the decline will accelerate to 3 to 4 percent per year. There is just no way the world can muddle through with that kind of decline rate.

Not that it is not theoretically possible because it is. It is just not possible with our debt based economic system. We already know from 200 years of experience with this system that the when growth stopped we had a recession. And if growth stops long enough, or goes negative for long enough, we have a depression. That happened in 1929 and lasted for over about 12 years.

The end of growth is the beginning of collapse.

Ron P.

It is just not possible with our debt based economic system. We already know from 200 years of experience with this system that the when growth stopped we had a recession.

Well, OK, there's a technical NBER definition of "recession". But really, in lay terms, isn't a growth stoppage the same thing as a recession - after all, population is still growing, so if the economy is not, people's own income must go downhill. So isn't this about like complaining that if growth stopped, then growth would be stopped?

Oh, and about that fashionable obsession with "debt": what other system - with or without "debt", or regardless of whatever sort of postmodern fairy-dust might be sprinkled on it - could ever conceivably get around the simple fact that if the economy is not growing, and the population is growing, then people will have less and less, and will experience recession conditions irrespective of the NBER label or lack of one?

A recession is a period of negative growth by definition - it is usually defined as two successive quarters of negative growth. A depression is more loosely defined as a severe recession - e.g. one with two or more years of negative growth or >10% decline in the GDP.

These things have always happened - the economy goes up and down and up and down. It happened in 2008 and it happened in paleolithic times when the currency consisted of beads and the main source of fuel was wood.

Rocky – My basic point was that I see nothing useful in the definition of “recession”. A quarter or two of negative growth followed by years of positive growth of 4% or 5% is one world to imagine. Now imagine an economy that has no recession for the next 50 or 60 years. Nice vision, eh? Did I mention that growth during that same period stayed consistently under 2%? Sometimes very low but never dropping below zero for even one quarter. And a population that continues to slowly grow. And a population that has a expanding over 60 yo faction. And a growing welfare state thanks to unemployment staying in the 8% to 10%. And a growing national debt as a result of insufficient tax revenue from a growing but anemic economy. And an economy facing ever increasing energy costs.

Such thoughts perhaps cause me more concern than you because you’re Canadian. That’s understandable. The more I learn about Canada and how they manage their affairs the more envious I grow. Being blessed with abundant natural resources beyond your needs doesn’t hurt either. LOL.

Perhaps that puts a little more flesh on to my Economic Plateau model. As such we may not be heading into a double dip recession but just one more valley into our terrain of small peaks and valleys which, like a plateau in oil production, ultimately slides lower and lower.

The definition of a recession is useful to know because people find recessions stressful, and depressions even more stressful. People become very unhappy during an economic downturn, much more so than during a period of slow growth.

As far as I know, the longest period the US has gone without a downturn was the 8 years of the Clinton administration. I believe it set a record, and kudos to Clinton for holding things together for that long. Unfortunately, it went to the politicians' heads, and when G.W. Bush came in, he put the economy straight into the dumpster. He also ended his 8 years on a similar low note with a bigger recession.

One of the advantages Canada had was that it had gone through a similar financial trauma a decade before when the rest of the world was chugging along quite nicely. It wasn't that big a crash because the export markets held up and pulled the Canadian economy out of its dive, but it was a learning experience for the politicians so they resolved to get the Canadian financial house in order and clamp down on the banking system. As a result, when the crash of 2008 hit, the Canadian financial house was in order and the banking system was clamped down on, so it wasn't as big a trauma as it was for the US and Europe.

If the Canadian financial systems and banks hadn't been subject to that discipline a decade earlier, Canada might have had just as bad an experience as the US and Europe. It also helps that Canada is a major oil exporter, but that isn't an accident either - it's the result of years of planning.

Ahhh... 1998: I Was There!

THE CLINTON BUDGET: THE PROJECTED SURPLUS; Clinton Sees $1.1 Trillion in Excess Revenue in Decade

The Budget and Deficit Under Clinton

I remember Bush acknowledging the surplus he inherited from Clinton... part of his "political capital".


It was a classic case of counting your eggs before they hatch, or more accurately, spending all your egg money before your eggs start hatching.

Bush managed to stop the financial eggs from hatching with his poorly thought-out tax cuts, but he did spend all the egg money regardless.

The world's oil supply stopped growing in 2005 and we have been on a plateau ever since.

Hi Ron,

I disagree with your above statement. If you said the world's supply of crude plus condensate stopped growing in 2005, that would be close, although different data sources give slightly different numbers some show a slow rise in output since 2005 (EIA) others show a decline (JODI). If we consider liquid fuels however these have continued a slow rise since 2005 even when we adjust for the lower energy content per barrel of NGL and biofuels.

I think for the reasons you have stated in some of your posts in this drumbeat (reduced GDP and reduced demand for oil because of high oil prices)that a plateau in liquid fuel supply out to about 2033 is likely. The month to month output will fluctuate around this plateau level due to the ups and downs in real oil price which are likely to lead to ups and downs in world real GDP.

The question is: "Can the economy adjust?" I believe your answer would be, "no" or maybe "highly unlikely." Consider the following scenario. The world begins to realize that we do indeed have a liquid fuel supply problem and begins to take measures to adjust. More trains, light rail, hybrids, evs, wind power, passive solar houses, pv and thermal solar are produced and there is an effort to increase energy effiency in general by retrofitting older buildings and replacing inefficient equipment.

What does all this mean? More economic activity, more jobs, more income. This would lead to greater energy use, but now some of this energy is produced by wind, solar, nuclear, geothermal, and maybe some of the waste heat from natural gas power plants is used for district heating to improve efficiency. This is all part of the muddling through that could allow us to transition to a slower growth, more sustainable system.

If we can make it to the point where population levels off and then starts to decline we could stop overall growth while maintaining growth in per capita income. Remember that debt is two sided, one person's debt is another person's asset, though growth is needed to cover interest payments. Growth requires energy, but not necessarily liquid energy, society is adaptable and substitution is possible given time and the right price signals. If I were a gambler I wouldn't make this bet, but only time will tell how things will go.


The 50 to 100 trillion dollars in liquid fuel equipment fall in value with increasing price of liquid fuel, it might turn out to be a really bad investment.

I own a house which was rebuilt during the seventies with electric heating. It have been retrofitted with wood pellets heating. Actually if use the original electric heating the interest payments or mortgage are a lot less of a problem than the heating bill. I guess during the winter it might cost two or three times as much to heat the house as paying the interest or mortgage if the original electric heating is used.

Basically if you have an asset that can not produce a profit it will essentially be worthless no matter how good it is or how much it cost to acquire.

Basically if you have an asset that can not produce a profit it will essentially be worthless no matter how good it is or how much it cost to acquire.

That's a keeper! Can I quote you? IMHO, this one deserves a spot at the top of the right hand column on TOD.

Alan from the islands

Despite some of the other comments, thanks for the pointer. I'm more concerned about the electricity supplies than petroleum supplies, and appreciate this. I've only had a chance to skim it, but some of the assumptions needed to deliver enough power in the US Eastern Interconnect seem questionable to me.

Thanks for taking the time to check it out.

The lab that produced the report is mainly concerned with energy sources. The lab has a focus on both solar and wind.

NREL began operating in 1977. Under the Jimmy Carter administration, it was the recipient of a large budget and its activities went beyond research and development. During the Ronald Reagan administration, Jimmy Carter's solar panels were removed from the white-house roof and the institute's budget was cut by some 90%.

Easy - just pass a stiff carbon/"liquid fuel security of supply" tax, rebated by FICA reductions. Maybe $4/gallon, increased by $.05/month for 80 months.

The US would eliminate imports in maybe 10 years.

The only(!) problem: insane resistance from the Koch's of the world.

Nick - I also suspect you would see significant resistance from tens of millions of Democrats aso. And more importantly Democrat oliticians depndent upon to D voters to get reelected. there was s hort period when Democrats had cmplete control for the fed govt And nothing along the lines of your idea was ven floated let passed. For over 3 years we've had a president who wasn't shy about pushing any agenda he believed in. And we've seen nothing substantial done to change our energy habits IMHO.

Once again, from Pogo: We have met the enemy and he is US.

For over 3 years we've had a president who wasn't shy about pushing any agenda he believed in.

Huh! What planet have you been on? He is shy of pushing anything which the opposition might deride, which basically includes anything at all. He has been a total pushover. btw, never had anything like a filibuster proof majority (although if he had been willing to be confrontational he could have used the "reconciliation process which only requires a simple majority). Now with the tea partiers in the house he is blocked from doing practically anything at all.


It is very hard to have a discussion using the database supplied by the American media.

Except when pushing Republican policies, President Obama has been blocked by the Unified Republican Party of No. Meanwhile the Republicans in charge of the House of Representatives have been pontificating on the most anti-scientific, anti-environmental, anti-American, pro-corporate gibberish I have heard in my lifetime.


If a carbon tax were done properly, it could be used to reduce income taxes and be revenue neutral, for example the legislation intoduced by Susan Collins and Maria Cantwell in the US Senate.


Obama has pushed his agenda as most people in his position would do, not much was accomplished because 40 Senators who stick together can prevent much of anything from happening. If you are a conservative, you might even be pleased. The congress did try to pass cap and trade legislation, which is not the best approach IMO, but it would be better than no policy, the legislation could not be brought to a vote in the senate because it could not get 60 votes to end debate. If the democrats don't have 60 votes in the Senate(and the Presidency and control in the house of representatives) they do not have control of the Federal Government. When Romney is elected, you can count on the Democrats to do the same as the Republicans have done for 3.5 years(just say no), gridlock is a beautiful thing if you hate the Federal Government.


Written by Nick:
... pass a stiff carbon/"liquid fuel security of supply" tax, rebated by FICA reductions. Maybe $4/gallon, increased by $.05/month for 80 months

This would fail to eliminate imports because you are giving most of the money back through reductions in Social Security tax. They would just pay the higher price. The retired, unemployed and underemployed would be utterly screwed by this. They would have to pay for the increasing price of necessities while receiving no rebate. The wealthy would not get a full rebate, but only they care about themselves.

Just increase the gasoline tax when the price of crude oil is falling and spend the money to repair the roads. If there is any left over, then pay down the national debt.

They would just pay the higher price.

I don't know why. Gas has been dirt cheap for decades, but if that changed, why would people throw away their money when an ERVE/PHEV/hybrid was much cheaper??

The retired, unemployed and underemployed would be utterly screwed by this.

Well, I was trying to be brief. There might be better ways, such as a negative income tax.

Currently the initial cost of an EV or PHEV is not much cheaper than a gasoline powered vehicle. An EV battery also lacks durability needed for those who drive infrequently or minimal distance. The reduction in FICA tax would not be enough to purchase a new vehicle, but it would be sufficient to pay for the increased price of gasoline. The resale value of EV's and PHEV's is still mysterious.

Redistribution of wealth will not drive people to purchase EV's and PHEV's. It would maintain BAU for the middle class and drive businesses with large vehicle fleets (like semi-trailer trucks) to switch to natural gas.

An EV battery also lacks durability needed for those who drive infrequently or minimal distance.

I'm not sure what you mean.

The reduction in FICA tax would not be enough to purchase a new vehicle, but it would be sufficient to pay for the increased price of gasoline.

Most people won't throw their money away, just because they have money in the bank. In my observation, as income goes up people demand more value for their money, not less. They may be willing to pay for intangibles, but they squeeze their pennies nevertheless.

More Priuses are driven by the middleclass and wealthy.....

Redistribution of wealth will not drive people to purchase EV's and PHEV's.

Of course not. But, high gas prices certainly would.

Sure, a few not very smart people would say that their gasoline rebate check/FICA reduction/negative income tax would pay for the increased cost of gas. But, most people are smarter than that. They'll put the rebate check in the bank, and then they'll turn around and ask:

"How can I pay less for gas??".

And the EREV/PHEV/Hybrid sales people will say:

"Have I got a deal for you!"

The U.S. is not doing much of a coordinated response to peak oil. It is allowing market forces (i.e. the price) to force the change. The law that you sarcastically propose would cause the international price of crude oil to plummet due to an oversupply causing their economies to boom while the U.S. economy would be crushed by an abrupt shortage of transportation fuel. Until or if a country's economy collapses, economic forces will shape the behavior. Therefore, high prices, even when in the form of oil price shocks, decrease demand for crude oil by whatever means (unemployment, reduced manufacturing, walk, drive slower, drive less, carpool, increase fuel efficiency, use substitute fuel...). You have seen the EIA's numbers showing U.S. crude oil imports decreasing over the last 4 to 5 years. The large amount of imported oil makes an oil price shock especially damaging to the U.S. economy because it sends a large amount of money out of the country. If the U.S. imported little or no crude oil, then little or no money would flow out of the country during an oil price shock lessening its impact on the U.S. economy. Money would change hands between Americans. If the U.S. does not import crude oil and does not allow domestic production to be exported, then the U.S. price would decouple from the international price, just like it does for natural gas. The period of oil price shocks would increase and have less of an economic impact.

Yes, the problem is with liquid transportation fuel, but do not forget that the main energy input into ethanol is natural gas. Ethanol is a way of converting other energy sources into a liquid fuel that is compatible with our current gasoline distribution system. It will not scale up to full replacement, but it provides a significant fraction until other resource constraints are reached.

I have asked this question before on TOD, but no one answered. You seem to think collapse is nigh, so what is the minimum operating level for crude oil for modern society? If it is zero, it means that we can substitute it or do without it. If it is larger than zero, then all world economies will collapse at some future date.

Zero is a funny number... tricky.

Modern society... who's modern society? For how many? In America's modern society, one quarter of the children are living in poverty. Does India count?

What I'm coming to appreciate is that before oil, all these other means and methods had their day. Oil won primarily because it was the "best" (including easiest, cheapest, most profitable, safest, most convienient) solution at the time. HDPE won the plastics war for the same reasons... even though there were many other plastics in play along the way, including nitrocellulose.

As oil declines from the position of being "best" for the most number of people, all of these other competing means and methods of doing the same thing will be waiting for their days... except their numbers will be bolstered and their advantages sharpened by all that has been learned in the time between.


I'll meet you then, in the time between
where wilted fields are evergreen
where both the light and dark are keen--the warming sun in the cold ravine
where long forgotten things are seen
obsidian and tourmaline
with a heart both anguished and serene
you'll find me in the time between

Kate Price


Current population and whatever configuration of society and technology can maintain the population.

Is the MOL the minimum petroleum necessary to keep government, military, agriculture and essential commercial transport running? Some of that can be technically switched to another fuel.

Blue – I believe I get your point. I’ve had a similar thought for a good while. First, I really don’t care about the statistical definition of recession. It tends to ignore the humanity behind the numbers IMHO. Declining purchasing power and unemployment determine the well being of the country in general. Needless to say that health isn’t very good today regardless of those faceless GDP numbers. Granted we’ve had other problems but it’s difficult to not lay the bulk of the blame on rising energy costs. Then add the resources and lives we spent “defending democracy” in the ME and the immense cost of PO seems rather undeniable.

Granted it’s always dangerous for a geologist to comment on global economics. But it seems like the cycle rate between strong growth and recessions won’t hold very well anymore. High energy costs pull the economy down which in turn slows the economies and thus lowers demand and, subsequently lowers prices. But even as prices fall PO eventually reduces supply availability. And, of course, lower prices reduce the extraction efforts and contribute to the PO dynamics. Thus it’s difficult for me to imagine a sustained growth period long enough to bring the country back to a very healthy state.

I’ve always felt a Peak Plateau fits the dynamic better than Peak Oil. In a similar manner it seems as though we’ve left recessions and growth spurts behind and are now dealing with an EP: Economic Plateau. Never gets too bad and never too good. But, perhaps like PP, a slow overall decline over a lengthy period.

From the Economist: Uncovering an ocean

Much of the change in the Arctic is understood; little of it is reassuring

... One of the best available guides to this risk is a survey of 41 permafrost scientists published in Nature last year. They predicted that at the current rate of global warming between 48% and 63% of terrestrial permafrost would be thawed to a depth of 3 metres by 2100. In the process, they expected between 7% and 11% of its stored organic matter to be released into the atmosphere. Only a little over 2% of that would be in the form of methane, but this would be responsible for 30-50% of the resultant warming. It would be impossible to prevent these emissions: they would probably continue for centuries.

9,000 evacuated in Utah fire; crews counterattack

Some 2,300 homes were evacuated after the so-called Dump fire exploded on Friday. It had started Thursday in the Kiowa Valley near a landfill for Saratoga Springs, a town of 18,000 people about 35 miles south of Salt Lake City.

The blaze was one of 15 large, uncontained wildfires being fought across the country on Friday, most in six Western states - Utah, Colorado, Wyoming, Nevada, New Mexico and Arizona, the National Interagency Fire Center in Boise, Idaho, reported.

1200 evacuated on west side of Colorado Springs

Number evacuated probably north of 10000 by now.
Sent email to my workplace asking for the charge number for "Trapped by fire."

'charge number'...I presume you are a 'tractor'? Support USG?

Bingo. Lower than the meanest private.

Fire is not contained at all, but they are holding the line protecting 250 gated community households worth 400 million dollars. The evac notice on Manitou Springs has been lifted, so the evac numbers will drop back down to 1-3 thousand soon.

They will be getting infrared mapping overnight to assess the growth. I've been listening to radio chatter over the internet.

The fire was promoted to Tier 1, highest priority in the country. Lots of aircraft flying. Dozers going where no dozer has gone before.

Highway 24 was closed through the pass that connects the city to the mountains. The town at the top of the pass is Woodland Park. Some stations have run out of gasoline although there are reports that the stations have been inventoried and there is sufficient fuel here. Didn't stop me from packing away a few extra gallons.

'Lower than the meanest private.'

Hah! I know what you say...

I hit a deer at dusk near Woodland Park once, while the family was camping at Farish.

Took the cog railway and drove to the top of Pike's Peak.

Pretty country.

If we keep having these dry years, I fear for the Sandia Mountains next to ABQ.

I wish you and the other folks up there luck in avoiding the fire.

Drought fears spread across much of Corn Belt

A National Weather Service forecast issued Friday shows that much of the Corn Belt from eastern Nebraska through Iowa and into Illinois, Indiana and Ohio will be under abnormally dry or drought conditions through the end of September.

Citing drought, Wyoming governor seeks disaster declaration

Wyoming's governor, citing drought conditions, has asked for a federal disaster declaration after dwindling runoff from meager winter snowpack combined with an especially dry spring and early summer hit ranchers hard, his office said on Friday.

"There has been a lot of liquidation of cattle this year in Wyoming based on how far behind we were on precipitation," ...

Data compiled by the National Drought Mitigation Center in Lincoln, Nebraska, shows that more than two thirds of the topsoil in Wyoming was now rated as either too dry for normal plant growth or too dry for any growth or seed germination

Anecdotally, I can report that Chicago has been very dry for most of June. Our rainfall is several inches below normal.

Developing Drought Over Northern Illinois and Northwest Indiana

"While precipitation for the year is running below average, the rainfall deficits for the past month since May 8th is particularly severe, with the exception of the corridor from far northern Iroquois through eastern Kankakee and into portions of Lake, Porter, Newton and Jasper counties that received torrential rains on June 16. This dry weather the past month plus is occuring during the start of what is typically the wettest time of year in the region and at a time that is critical for farmers to get adequate rainfall toward the start of the growing season for the corn and soybean fields."

Every time rain threatens, we get a sprinkle and then it's gone.

Albuquerque is very dry...we had a fire in the Bosque (strip of woodland/scrub along the Rio not-so-grande a few days ago...firefighters worked double-time to extinguish it because a NG pipeline was very near to under where the fire was...

For those not familiar with the state; New Mexico has two forest ecosystems. The Bosque, is a small strip watered by the RioGrande. At higher elevations you have mountain forests. In between no much. They were always having Bosque fires during the summer season.
With any luck the monsoon should be due to start soon.

Anyone wonder how much ethanol is going to cost? Which is to say how much extra will gas cost to meet the mandated ethanol blend in gas?

The poor will have to do without food, SUVs must be satisfied!

Oil companies shut in Gulf production on storm threat

HOUSTON (Reuters) - Energy companies began shutting in production and evacuating personnel from operations in the Gulf of Mexico on Friday as a weather system threatened to form into the first tropical cyclone to hit the oil and gas producing region this year.

BHP Billiton evacuated all workers from its platforms and shut in 170,000 barrels per day (bpd) of oil output and 100 million cubic feet per day of natural gas production in preparation. BHP operates two platforms, Shenzi and Neptune.

The U.S. National Hurricane Center said a low pressure system in the Gulf of Mexico, home to 20 percent of U.S. oil production and 6 percent of natural output, had a 70 percent chance of developing into a tropical cyclone over the next two days.

Tropical Weather Outlook
NWS National Hurricane Center Miami FL
800 AM EDT SAT JUN 23 2012

For The North Atlantic...Caribbean Sea and the Gulf of Mexico...

1. The center of circulation of the broad area of low pressure over the Gulf of Mexico appears to be becoming better defined about 275 miles south-southeast of the mouth of the Mississippi river. In addition...showers and thunderstorms have been increasing over the eastern Gulf of Mexico...and a NOAA buoy located about 130 miles east-northeast of the center has produced tropical-storm-force winds within the past couple of hours. A tropical depression...or more likely a tropical storm...could form later today or tonight if the development trend continues. this system has a high chance... 90 percent...of becoming a tropical cyclone as it moves slowly northward during the next 48 hours.

also Dr. Jeff Masters: Gulf of Mexico disturbance 96L close to tropical storm status

Radar Image: http://icons.wxug.com/hurricane/2012/jun23_sat.jpg

Debby's initial prediction is to fake towards Louisiana then take a long, slow route to Texas. How long has it been since we had any significant hurricane shutins?

Great time for it. Probably won't make it far enough West to refill the ponds and reservoirs that fracs require.

Down there water trucks are a dominant form of road transportation. Everywhere, all day long.

Gustav/Ike in 2008 caused some supply shortages after knocking out refineries. Katrina/Rita had a multi year effect on Gom oil production.

Debbie, Please, after you have showered TX with your life-giving water, see fit yo keep going West, swing North, and fly over Albuquerque!

Note to the engineers at Sandia National Laboratories: please deactivate the notoriously effective Albuquerque weather-shield!

Although that's the official NHC cone, it must be said computer models are currently all over the map. Some models are still saying East to Florida.

EDIT: Note significant track forecast change in 11am EDT advisory and warning of future uncertainty.


Statement as of 10:00 am CDT on June 24, 2012

It is a very difficult and highly uncertain forecast this morning.
Debby has been moving very slowly toward the northeast...040 at 3
knots...while the wind radii have been expanding in the eastern
semicircle. This has prompted additional tropical storm warnings
and watches for portions of the Florida coast.

Debby continues to be sheared with most of the thunderstorm activity
north and east of the center. This shear is expected to continue
for the next day or so...although some decrease in the shear is
possible after that...particularly if the ECMWF verifies. The
official forecast is a little less aggressive than the previous
forecast...but remains above most of the explicit intensity

The track forecast is even more complex. The GFS insists on a track
toward the northeast as Debby becomes embedded within a large
mid-latitude trough. However...the ECMWF and the HWRF build a ridge
to the north of Debby and forecast a westward track. Given the
westward turn inherited from the previous forecast...as well as the
historical strong record of the ECMWF...the new official forecast
moves Debby initially a little bit to the northeast to reflect
current trends but then turns the cyclone back toward the west or
west-northwest in 24 to 36 hours. A majority of the GFS ensemble
members now are consistent with the deterministic run...which was
not the case yesterday...making a stronger case for the eastward
solution. We must be ready to make a change of the forecast track
at any time

As of 1PM CDT (2PM EDT), TS Debby is moving NE at 5 mph...


Could be a wild ride...

E. Swanson

The 4PM CDT (5PM EDT) NHS discussion for DEBBY comments that the forecast now excludes westward motion.


E. Swanson

I seem to recall about half of a tropical storm remnant per year on average. More likely from Pacific storms, than Gulf storms however. More frequently moisture from Pacific storms gets incorporated into the monsoon flow.

Update on shut ins and shipping:

About 25% of Gulf of Mexico oil output is currently shut-in, or about 350,000 bpd.

Perhaps more importantly, shipping and off-loading is being disrupted. The Louisiana Offshore Oil Port, where very large oil tankers can off load their cargo of oil, is now closed.

It is not thought there is any imminent problem to refinery operations if the storm remains roughly about where it is, and later heads directly north or east, and does not head generally westward.

BP says shutting all Gulf of Mexico output
HOUSTON | Sun Jun 24, 2012 1:59pm EDT

(Reuters) - BP Plc, the largest oil producer in the Gulf of Mexico, was shutting in all of its oil and gas offshore platforms on Sunday as Tropical Storm Debby was forecast to make a sharp turn later this week into the heart of the U.S. offshore oil patch.

The Louisiana Offshore Oil Port (LOOP), the single location where the largest oil tanker ships can directly deliver crude, stopped offloading tankers on Sunday morning, as rough seas were building at its sea terminal. The LOOP continued delivers to Gulf Coast refiners from underground storage caverns onshore.


I remember some months ago a discussion about big instutions firing the last people with knowlege about the legacy system and how bad it could end up...
Seems to be a good exemple :

My brother is one of those people. And, he is taking no small delight in the knowledge that many of the core systems at his prior employer were far from "user friendly" and required many arcane and obscure tweaks to keep them up and running.
"La vengeance se mange très-bien froide..."

The prevailing opinion here (from my point of view) is that "we" peaked in 2005 at 85-86 million barrels a day or some such, with crude consisting of around 70mbpd. I guess the rest is biofuels, condensate, NGL, und zu weiter. A lot of the new production since then has been more of these lower grade liquids, whose energy content is in the area of 70% of a barrel of the conventional sweet crude (from what I've read here).

A lot of the new production since then has been from tar sands field development, oil shale (Bakken, Marcellus) fracking
with poor EREOI and maybe some spare capacity from Saudi Arabia which is heavy crude and thus requires more of an energy overhead to refine. If light, sweet conventional crude cannot rise from its 67-70mbpd all the while we're moving towards 90+ mbpd of overall liquid production, wouldn't this entail a net energy peak? If we assume a 5-6-7% drop in production in conventional fields which cannot be offset by anything but lower grade production coming online, we may not be peaking in terms of volume as of yet, but in net energy, which is more significant?

I made some relevant rage comics from ideas during my hike today.


Good to have a laugh about our predicament.

Uh, I hate those.
Still, I had to smile :)

And yeah, it is good to laugh.

Its actually a pretty good way to communicate the issue. A lot of people relate to that sort of presentation much more readily than to hard data.

1 rage comic is worth 1000 oil production statistics. (maybe more, depends whether we are talking RRC data or not)

Maybe make a rage comic based on the Saudi saying:

My father rode a camel. I drive a car. My son flies an airplane. My grandson will ride a camel.

AL - Excellent perspective IMHO. I think you can lay an additional layer on to that dynamic. And that will be who acquires how much of that net energy pie. Beyond the ELM factor there are the various angles towards ownership/access to the remaining energy resources. China buying in ground reserves. Infrastructure investments such as pipelines to cheaply haul Canadian oil to Gulf Coast refineries. New US refineries designed to crack heavy/sour crude from the KSA or Venezuela. Increased military presence in exporting regions.

IOW the significance of PO or, as you point out, Peak Energy, will likely be over written by Peak Energy Import. For some economies PEI may come many years later than for others. Balancing that factor, to perhaps a small degree, may be Peak Internal Energy. Renewables are growing but rather slowly in many markets. I’ve seen reports of significant hydropower potential for regions of Canada. If so this could allow them to maintain exports much longer than might be projected. Thus internal energy resources in one economy could supplement energy requirements in another. The other side of the coin would be the KSA where population increases are reducing the export potential in future years even if production levels hold static.

Not too difficult to come up with all the various scenarios. The trick is to quantify them and, more importantly, predict the winners and losers

Egyptian Elections

Ahmed Shafiq 48.27%
Mohammed Mursi 51.73%

Winner Mohammed Mursi of the Muslim Brotherhood.

PhD in Engineering from USC, taught at CSUN on tenure track, worked for NASA on space shuttle engines (metallurgy), 2 of 5 children are U.S. citizens, did 7 months in Egyptian jail after protesting conduct of 2005 election.

Thanks for posting this information. Stereotypes are built up so quickly.

The Great German energy experiment:


Did Japan restart any of its nuclear reactors yet?

Preparations are underway for a restart of 2 reactors on the direct order of the Japanese PM but they have not yet started up. Tens of thousands have been demonstrating on the streets in Japan against the restart. Restart of both reactors currently planned for July.

Details of the plan at http://www1.kepco.co.jp/english/ir/pdf/2012_jun_1.pdf

I wonder how much overlap there will be between this set of protesters and the thousands that will take to the streets later this summer if the two-hour rolling blackouts the government is planning for have to be implemented. Sigh... everyone wants large reliable supplies of electricity, but no one wants the downsides of the various methods for generating and distributing such.

My thought was there are 10s of millions not protesting.


Apparently that's a huge protest by Japanese standards and opinion polls show a clear majority against restart.

How many barrels of oil equivalent are they burning through each day to keep electricity running in the absence of these reactors firing?

A LOT -- I think it's about 1 million bdoe: about 50/50 crude/LNG, but I haven't checked lately and memory might be in error. Japan restarting 50 nukes is probably the biggest thing the world could do to spur economic recovery in the short term.

The second biggest thing they could do over the not so short term is follow Germany's example of providing incentives for renewables. It will be interesting to see what happens over the next few years following the introduction of German style incentives starting in less than a week, July 1.

Alan from the islands

"Japan restarting 50 nukes is probably the biggest thing the world could do to spur economic recovery in the short term."

Any references?


"Japan's factory production fell in February in its first decline in three months, the government said Friday, as demand for exports weakened..."

Less than half a million barrels a day. America consumes 15 million barrels a day... the world, 85.


LNG can meet about two-thirds of Japan’s electricity needs when all its nuclear reactors are offline
Utilities are burning about 400,000 barrels (of oil) a day...
“In a global market characterized by supply-side constraints, we think sustained incremental demand of nearly 400,000 barrels a day from Japan would help keep crude prices well supported...”
Japan, the world’s biggest buyer of LNG, has imported record amounts of the fuel in response to the March 11, 2011 earthquake and tsunami that wrecked three reactors at the Fukushima plant northeast of Tokyo, triggering the worst radiation leak since Chernobyl in the 1980s.
LNG prices paid by Japan climbed to a record $16.96 per million British thermal units...
Japan, turning to alternative sources of energy after last year’s Fukushima Dai-Ichi nuclear disaster...

All that extra spending on gas, oil, and renewable technology must be supporting economies elsewhere in this world.

I was including increased LNG use in my BOE estimate. Your number is pretty close to what I said for oil. Japan is paying for both nuclear and artificially inflated gas/oil and doing artificial curtailment, which is really hurting their economy. Oil/LNG markets are relatively inelastic, such that this demand is causing significant increases in price for the rest of the oil and LNG importing world as well. The stimulus effect on oil producers is smaller (lower multiple) than the anti-stimulus on energy importers. The key qualifier in my statement was "in the short term." I have previously laid out measures to reduce U.S. oil consumption by 50%, but much of what is required takes a few years of time and requires changes not readily accepted by the public. Japan can much more easily reduce demand in the short term than any other importer. Nor can any exporter unilaterally increase supply as quickly as Japan could reduce demand.

Oops! I missed the "E": Barrels of Oil Equivalent.


But I would much rather hear the answer to:

"Japan restarting 50 nukes is probably the biggest thing the world could do to spur economic recovery in the short term."

Any references?

Are you looking for a paper estimating the international stimulus effects of restarting Japan's nukes? I don't know of one. I laid out my train of thought above. My conjecture included the word probably. In context, I was talking short-term and energy related. I will amplify a little bit more. 1mbdoe of Japanese oil/LNG avoided is more than $300B in annual direct stimulus to the Japanese (still 3rd largest in world) economy. That's several percent of GDP. Lack of curtailment and lower energy prices will also have an indirect stimulus effect in Japan, equal to another several percent of GDP. The reduction in energy spending comes out of the pockets of energy exporters, and largely results in a reduction in exporter saving rather than a reduction in spending, limiting the negative impact on world GDP. The world price of oil and the Pacific price of LNG will drop dramatically (recent estimates are that doubling the price of oil reduces consumption by 5%, conversely reducing consumption by 0.5% should reduce world prices by 10%). A 10% fall in the world price of oil puts money in the to-let pockets of energy importers while taking it from the savings accounts of energy exporters. This represents a stimulus of about 1/2 a percent of world GDP, concentrated in energy importing countries, with lower energy price knock-on effects roughly doubling the impact.

So, my back of the envelope says in the very short term, turning on Japan's nukes should be about a 1% stimulus on world GDP. It's very sloppy, sure, but I'd defend the OOM. The real question is how fast part of it fades as lower prices lead to increased consumption leading to higher prices, and whether the world would or could implement physical capital investment in the short but slightly longer term, further reducing demand fast enough to keep the world economy growing in the mid-term without running into the demand shock buzzsaw.

I see, I see...

I hear that the war drums are starting up again: Israel to attack Iran before the November presidential elections, or so says the news here. Even just the current broadcasting of this story is probably acting to starve/stall/reverse economic recovery in the short term. I would offer that the prospect of Japan cutting back on some part of a percent of world energy consumption is lost in the noise.

There have already been cutbacks in power. The offices are hot, the lights reduced, many elevators turned off. The power protests that come up in a search have been about nuclear.

Japan is a different place. Cooperation and sacrifice for the good of the group is strong.

I would think that only goes so far. But a homogeneous population and a cultural inclination to work for the group's best interest would make the band stretch farther than for instance the US.

US experts predict higher sea level rise: study

That piece says:

Global sea levels could rise two to three times higher over the next century than previous UN estimates, according to a study released Friday by the US National Research Council.

A new paper published in the journal Nature - Climate Change ties in with that:

U.S. Geological Survey scientists call the 600-mile swath a "hot spot" for climbing sea levels caused by global warming. Along the region, the Atlantic Ocean is rising at an annual rate three times to four times faster than the global average since 1990, according to the study published Sunday in the journal Nature Climate Change.

(USA Today). That means NYC may face a sea level rise 16 times higher, and four times faster, than expected.

Reality is happening now.

Limits to growth - Is Seaga right about energy alternatives?

The larger question, to which issues of oil depletion and energy alternatives are inevitably attached, is the meta-issue of finite limits to growth - of whether our present lifestyle on this planet is ecologically sustainable. Realistically, it simply does not appear possible to sustain our current patterns of massive materialistic production and consumption (in either capitalist or socialist economies) for very much longer without generating worse and worse consequences for ourselves, and running out of critical resources.

Actually this is not a 'new' realisation at all. In fact, by chance this year happens to be the 40th anniversary of an insightful, but little-heeded, landmark scientific study called The Limits to Growth: A Report of the Club of Rome's Project on the Predicament of Mankind. The study was based on groundbreaking empirical research, conducted at the Massachusetts Institute of Technology (MIT) by a team of the world's most talented scientists from 10 different countries - but with a very unpleasant prognosis for the future, that few wanted to hear, what today we would call an 'inconvenient truth'.

It's been a busy weekend for me so I only just saw this response to an article written by a former prime minister of my island that I linked in a DB a Sunday or two ago. The plot thickens! I'm really having a hard time believing that this was actually published. I feel like going out and buying the dead tree edition to make sure it's not just online. At least three people have read it in addition to me since they commented.

Alan from the islands

The bottom line from:

Their findings were deeply disturbing, hence the tendency to denial. The model predicted that if human civilisation were to continue at accustomed levels of growth and consumption, the global economy would collapse sometime between 2030 and 2070, population losses would ensue, and there would be an "irretrievable breakdown of the world system" as we know it.

Was their timeframe too conservative, since most developed economies are already at less than accustomed levels of growth?

The Scam Wall Street Learned From the Mafia

GE Capital
J.P. Morgan Chase
Bank of America
Wells Fargo
Lehman Brothers
Bear Stearns
Goldman Sachs

"...Bank of America even entered the SEC's leniency program, which is tantamount to admitting that it committed felonies."

"grotesque corruption"

"That, ultimately, is what this case was about. Capitalism is a system for determining objective value. What these Wall Street criminals have created is an opposite system of value by fiat. Prices are not objectively determined by collisions of price information from all over the market, but instead are collectively negotiated in secret, then dictated from above."

"how to reach into the penny jars of dying hospitals and schools and transform their desperation and civic panic into fat year-end bonuses"

Too depressing. I can't recommend reading this.

Smiling Faces

Much more fun!