Drumbeat: June 25, 2012

Oil economists predict growth until 2030

“We think that oil demand will peak by 2030 and decline thereafter,” said chief analyst at Statoil, Eirik Wærness.

Statoil presented its annual forecast for global economics and energy markets - Energy Perspectives 2012, Thursday.

According to Mr Wærness, who penned the report with analyst Kyrre M Knudsen and chief economist Klaus Mohn, Statoil expects a yearly growth of around 1 million barrels a day towards the 2020s. Demand will fall slightly during that decade, before leveling off around 2030.

The three believe lower economic growth, higher efficiency and increased use of electricity and gas will be the drivers causing demand for oil to decline after 2030.

Is Peak Oil Dead?

From the deepest waters of the Gulf of Mexico to the prairies of North Dakota, and many places in between, the production of oil and gas in the United States has greatly increased over recent years through the industry’s ability to access heretofore inaccessible and unaffordable "unconventional oil." Using new technology and financed by the rising prices of oil since the mid-2000s, national oil production has risen over the past four years from 4.95 million barrels a day (mb/d) to 5.7. The Energy Department projects 7 mb/d by 2020, while other experts claim production could eventually be 10 million, which would put the United States in the league with Saudi Arabia.

With this increased production, a growing number of people (especially from the oil industry, Wall Street, and the Republican Party) have loudly proclaimed the end of peak oil, dismissing it as a myth that has now been dispelled. We’re not running out of oil, they insist.

But peak oil is not about the end of oil. Geologically speaking, that will never happen. Rather, peak oil is about the end of the cheap, abundant, easy to extract oil, the "sweet" crude that has been the bedrock of our industrial civilization, and the basis of the economic growth we’ve come to take for granted. This older oil still accounts for 75 percent of our daily consumption, but has been disappearing at the rate of 3-4 mb/d each year, and will be largely gone in 20 years. As older fields dry up, newer ones are not being discovered. In 20 years, cheap oil will be largely gone.

Bubbles and the Collapse

I used to worry about peak oil but not so much now. The thing that is going to get our civilization first is the 30 plus year old leverage bubble bursting. The tech bubble and and housing bubbles were just sub bubbles of the over all leverage bubble and this is nothing new. Nicole Foss explains at from about 13:00 to 19:00 in the video below.

Oil Trades Below $80 for a Third Day on Economic Outlook

Oil traded below $80 a barrel for a third day in New York amid concern that Europe’s debt crisis will curb demand for fuels.

Futures slid as much as 1.2 percent as George Soros warned that a failure by European Union leaders meeting this week to produce drastic measures could spell the demise of the bloc’s shared currency. Developed economies are running into the limits of monetary policy, the Bank for International Settlements said in its annual report yesterday. Oil earlier rose as much as 1.2 percent after Tropical Storm Debby approached oil and gas installations in the Gulf of Mexico.

U.S. gas prices plunge again

(CNN) -- U.S. gasoline prices have dropped by nearly 15 cents a gallon since early June as crude oil continues to fall on global economic fears, the latest Lundberg Survey reported Sunday.

A gallon of regular gasoline dropped to an average of $3.48 per gallon in the continental United States. That's down 14.6 cents from the last biweekly Lundberg Survey, which canvasses about 2,500 filling stations across the Lower 48.

Oil Prices to Weaken Further, Providing ‘Stimulus’ for Consumers: Survey

Oil prices are set to soften further this week after data showed a slowdown in business activity from Europe to the U.S. and China reflecting continued deterioration in the global economy, according to CNBC's weekly survey of oil market sentiment. Middle East tensions and the U.S. hurricane season may limit the declines.

Tropical Storm Debby Weakens in Gulf Off Florida

Tropical Storm Debby weakened in the Gulf of Mexico off the Florida Panhandle after shifting away from oil- and natural gas-production areas where Anadarko Petroleum Corp., BP Plc and rivals halted output.

Gas boom set to inflame growth

AUSTRALIA'S natural gas boom threatens to set off a new round of interest rate rises, pushing economic growth above the level with which the Reserve Bank is comfortable.

An analysis commissioned by the industry finds that by 2016 investment in liquefied natural gas will add 2.2 per cent to gross domestic product growth.

High Oil Prices Cut the Cost of Natural Gas

There’s an unprecedented price gap in the energy patch. Oil has traded above $100 a barrel since February, while natural gas prices have dropped below $2 per million British thermal units—from $4.85 in June of last year. A divergence like this “has never happened before,” says Duane Grubert, an energy analyst with Susquehanna Financial Group. The last time natural gas prices were this low, in 2002, oil was at $20 a barrel.

In a departure from their traditional relationship, high oil prices are helping keep gas prices down. Natural gas producers are cutting production in hopes of bringing down supplies and therefore increasing prices. The industrywide gas rig count fell by 23 last week, to 624, the lowest in 10 years, according to driller Baker Hughes. Yet production keeps growing. It is projected to average 69.2 billion cubic feet per day in 2012, up from an average 66.2 billion cubic feet per day last year, according to the Energy Information Administration. And supplies keep growing. The EIA predicts natural gas in storage will reach a record 4.1 trillion cubic feet by October, compared with 2.5 trillion cubic feet now.

Saudi Aramco Said to From Venture Firm on Drilling Tech

Saudi Arabian Oil Co., the world’s largest crude exporter, is forming a venture capital company to invest in international startups developing new drilling technologies, a person with knowledge of the plan said.

Saudi Aramco, as the state-owned producer is known, wants to adopt the latest techniques and expertise for boosting output at older oil fields and fracturing rocks in underground reservoirs to speed the extraction of crude, the person said, declining to be identified because the project is confidential. The investment company will start operating soon, the person said, without specifying a date or indicating how much money it would have to invest.

OPEC Could Collapse As Shale Gas Pops Peak Oil Myth

The Organization of Petroleum Exporting Countries, which in its heyday could trigger global economic crises by turning off the oil taps, faces an uncertain future as the shale oil revolution transforms the energy business.

Saudi Arabia seeks Red Sea energy resources

Despite holding the fourth-largest reserves of natural gas, Saudi Arabia is short of gas supply and Saudi Aramco has embarked on an ambitious programme to boost gas production by a third in the five years to 2015.

Added production is desperately needed to maintain the drive towards industrial expansion, which is based on the petrochemicals sector and associated downstream industries. Petrochemicals rely heavily on gas as a feedstock, while a growing industrial base requires electricity to power it.

Saudi Arabia currently burns growing volumes of crude oil to feed its demand for power and natural gas is a preferable alternative. It is cleaner burning and also frees up higher-value crude for export.

Bahrain Banagas Reviewing Local Gas Prices, Alwatan Says

Bahrain’s National Gas Co., known as Banagas, is reviewing prices of natural gas sold locally to industrial companies, Alwatan newspaper said, citing chief executive officer Mohamed bin Khalifa Al Khalifa.

Banagas is awaiting the results of a study it’s undertaking with an international consultancy firm to determine the new pricing structure, the Bahraini daily quoted Al Khalifa as saying.

China's Sinopec eyes shale gas assets in US

It is a good time for Chinese companies to buy into US natural gas projects given the low international natural gas prices, experts said, after media reported that the head of China's largest energy company paid a visit to the US to talk about a possible gas shale assets acquisition, Global Times reported.

Norway Oil Workers Shut Platforms as Mediation Talks Fail

Norwegian offshore workers shut two platforms after mediated talks on pensions and wages failed, curtailing output in Europe’s second-largest crude and natural gas producer.

A government-led mediation was unable to bridge a divide over pensions with the labor unions, Industry Energy, Safe and Lederene, the Norwegian Oil Industry Association said today in an e-mailed statement. The talks had pushed past a midnight deadline before a strike was called.

Pertamina Workers Step Up Demonstrations at West Java Refinery

Thousands of workers at a Pertamina’s refinery in Balongan, Indramayu district in West Java rallied in protest of the Indonesian state oil and gas company’s outsourcing of labor, and general worker welfare at its facilities on Monday.

The action, which was the third demonstration this week, ultimately turned chaotic when demonstrators tried to break through the gates at the refinery, according to reports from BeritaSatu.

Coal-Plant Plunge Threatens Billions in Pollution Spend

The coal-fired power industry in the U.S. is facing the biggest plunge in asset values in a decade, risking billions of dollars in pollution-control spending by utilities such as Exelon Corp. and American Electric Power Co.

An indication of how much new emissions rules and cheaper natural gas have hammered the value of coal-burning generation will come when Exelon announces the results of the first big sale of U.S. coal-fired power plants in four years.

Chesapeake and rival plotted to suppress land prices

GAYLORD, MICHIGAN (Reuters) - Under the direction of CEO Aubrey McClendon, Chesapeake Energy Corp. plotted with its top competitor to suppress land prices in one of America’s most promising oil and gas plays, a Reuters investigation has found.

In emails between Chesapeake and Encana Corp, Canada’s largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners here.

JPMorgan Shuns Chesapeake Business That Goldman Courts

JPMorgan Chase & Co. and Goldman Sachs Group Inc. compete for banking and trading business from almost all of the world’s largest companies, with one notable exception: Chesapeake Energy Corp., the second biggest U.S. gas producer now facing a cash-flow shortage.

For more than a decade, JPMorgan bankers have declined to do business with Chesapeake and its chief executive officer, Aubrey McClendon, 52, said people with knowledge of the matter. In contrast, Goldman Sachs, which once loaned money to McClendon against his wine collection, recently helped arrange a $4 billion loan for Oklahoma City-based Chesapeake and is advising on its efforts to sell assets.

Oil Stocks Biggest Losers With Valuations Lowest Since 2009

At a time of record fuel demand, bountiful oil and natural gas, and expanding economies, no stocks are doing worse in the world than energy producers from BP Plc to Hess Corp.

The MSCI World Energy Index has declined 9.6 percent this year, more than any other group, according to data compiled by Bloomberg. The gauge has climbed 45 percent since equities bottomed in 2009, less than any industry with earnings tied to economic growth. In the U.S., the stocks are at the cheapest levels relative to the Standard & Poor’s 500 Index since 2009.

Is now a buying opportunity for oil stocks?

Oil and gas stocks are getting clobbered this year as the price of crude oil falls. But is this creating a huge buying opportunity for investors?

Egypt's incoming leader Morsi calls for peace, unity

CAIRO – Thousands of Egyptians on Sunday celebrated the presidential victory of the Muslim Brotherhood's Mohammed Morsi in the place where their democracy began —Tahrir Square.

Report: 33 Syrian army members defect to Turkey

(CNN) -- Syrian President Bashar al-Assad's military may have more cracks in its armor as dozens more soldiers, including a general and two colonels, have defected across the border, Turkish media reported Monday.

The 33 army defectors entered Turkey and were sent to a camp in southern Hatay province, the Anadolu news agency said, citing authorities.

Syria rejects Turkey claims on downed jet

(CNN) -- Syria raised the stakes Monday in a war of words with Turkey over the shooting down of a Turkish fighter jet by Syria, an incident that threatens to draw in NATO.

EU says to implement sanctions against Iran on July 1 as planned

Brussels (Platts) - The EU's sanctions against Iran -- including a ban on oil imports and a ban on the provision of insurance for tankers shipping Iranian oil -- will come into force as planned on July 1, the EU's foreign affairs chief Catherine Ashton said Monday.

In a statement ahead of talks between EU foreign ministers in Luxembourg, Ashton said there would be no review of the already agreed sanctions.

Oil imports from Iran to dry up over reinsurance

Iranian oil imports to Korea are highly likely to stop starting next month.

Despite expectations that Korea would negotiate with EU officials for exemptions to some of the union’s sanctions on Iran, the attempt failed yesterday, according to sources within the Korean government.

The European Union decided to stand firm on its decision to prohibit reinsurance contracts on oil ships delivering Iranian oil starting next month.

S.Korea reports sharp fall in Iran oil imports

South Korea's May imports of Iranian crude oil fell 39.5 percent from a year earlier to 3.96 million barrels as it cuts shipments in line with a US sanctions drive, figures showed Monday.

Imports from January to May dropped 15.7 percent from the same period last year, according to the preliminary figures from the state Korea National Oil Corporation.

India allows use of Iran ships for oil imports

(Reuters) - India has allowed state refiners to import Iranian oil, with Tehran arranging shipping and insurance, from July 1, keeping purchases of over 200,000 barrels per day (bpd) flowing after European sanctions hit insurance for the cargoes, government and industry sources said.

Report: Venezuela supplied Iran with F-16 to prepare for possible strike

Venezuela has transferred at least one F-16 fighter to Iran in an attempt to help it calibrate its air defenses, in preparation for a possible Israeli or U.S. strike on its nuclear facilities, Haaretz quoted Spanish newspaper ABC as reporting.

ABC, one of the three largest Spanish dailies and aligned with the ruling rightist party, wrote that the transfer, in 2006, was supervised by one of Venezuelan president Hugo Chavez's closest aides. The paper's Washington correspondent, Emili J. Blasco, said the story was based on both sources in Venezuela's air force and classified documents, following a tip- off by a non-Western intelligence agency.

Agency: Iran swaps first liquid gas shipment

Azerbaijan, Baku - The first sea shipment of liquid gas from a Caspian Sea littoral state has been offloaded by Iran as part of its program for swapping petroleum products.

Libya seeks to boost crude oil production

Libya is seeking to boost its oil production by a third to two million barrels a day by year-end, surpassing last year's pre-conflict level, Libyan ambassador to Washington Ali Aujali says. How fast Libya returns to pre-war levels or surpasses them "depends also on the oil companies, how fast they are returning" to restart or expand operations, Aujali said, speaking at a Bloomberg Government breakfast in Washington on Wednesday. Beyond oil, Libya is eager for American investment in tourism, health care and education, he said.

Nigeria: Oil spills drench and sicken delta communities

WARRI, Nigeria— When he was a child, Tonye Emmanuel Isenah saw men in the Niger Delta who were 70 and even 80 years old. But these days, he said, people just don’t live that long.

Isenah is now the deputy leader of the state assembly in Bayelsa State, part of Nigeria’s oil rich Niger Delta region — a land that for decades has suffered annual devastating oil spills. Experts say the yearly spills are each comparable to the Exxon Valdez spill. And the environmental degradation is causing the local people to become ill and die at earlier ages.

Ikea won’t tell where it gets its wood — and Congress is about to give it a pass

Particleboard might not be as physically off-putting as pink slime, but the source of its contents can be as hard to trace as the source of an E. coli outbreak. And while the materials in an Ikea dresser won’t make consumers physically sick, the purchaser of these products might well feel queasy. Right now, there’s no way of knowing whether or not that chest of drawers or flimsy bookshelf contains wood from old-growth or illegally logged forests — in other words, whether the product is implicated in deforestation, climate change, and drug smuggling.

Malaysia Haze Points to a Regional Problem

KUALA LUMPUR, Malaysia — For much of the year, the Petronas Towers, the world’s tallest twin buildings, are gleaming landmarks visible far from the city center here. But last weekend, the 88-story structures were shrouded in a smoky haze that prompted doctors to warn people with respiratory problems to wear masks.

The haze, attributed mostly to fires burning on the Indonesian island of Sumatra, has become a recurring summer blight, engulfing parts of Malaysia, Thailand, Brunei and Singapore, and leaving a litany of health and economic costs in its wake.

Progress on the Sidelines as Rio Conference Ends

But while the summit meeting’s 283-paragraph agreement, called “The Future We Want,” lacks enforceable commitments on climate change and other global challenges, the outcome reflects big power shifts around the world. These include a new assertiveness by developing nations in international forums and the growing capacity of grass-roots organizations and corporations to mold effective environmental action without the blessing of governments.

The Battle Over Climate Science

Climate scientists routinely face death threats, hate mail, nuisance lawsuits and political attacks. How much worse can it get?

California sea levels to rise 5-plus feet this century, study says

Sea levels along the California coast are expected to rise up to 1 foot in 20 years, 2 feet by 2050 and as much as 5-1/2 feet by the end of the century, climbing slightly more than the global average and increasing the risk of flooding and storm damage, a new study says.

That's because much of California is sinking, extending the reach of a sea that is warming and expanding because of climate change, according to a report by a committee of scientists released Friday by the National Research Council.

Study: Sea rise faster on East Coast than rest of globe

WASHINGTON (AP) – From Cape Hatteras, N.C., to just north of Boston, sea levels are rising much faster than they are around the globe, putting one of the world's most costly coasts in danger of flooding, government researchers report.

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.

Lloyd’s Details ‘Growing Impact of Climate Change’ as UN Meets

Lloyd’s has published a roundup of the environmental issues inherent in as the world grows warmer. The recently concluded Rio +20 Conference was an attempt – 20 years after the first conference – “to try to reach agreement on sustainable growth, controlling world emissions and managing the growing impact of climate change,” Lloyd’s explained. How well the 3000+ delegates did, or didn’t, accomplish these tasks future generations will learn.

Here is a summary of the environmental issues Lloyd’s selected as the most significant ones threatening the planet:

Re: Tropical Storm Debby Weakens in Gulf Off Florida

This morning's projected path suggests that Debby won't come ashore until Friday. In the mean time, the result will be lots of rain with 10-15 inches expected and up to 25 inches in isolated areas. Who needs sea level rise when that much rain falls from the sky? Add to that will be the storm surge over a large area of northwestern Florida. It's interesting that the Bloomberg story understates the amount of rain projected by the National Hurricane Center. Nothing to worry about, move along...

E. Swanson

At least it'll help with the drought zones in the area. Lots of watermelons, soy, cotton, etc. grown there.

Replenish the resivoirs yes it will help. But if the farmers are like he ones here on the plains that much rain coupled with maybe some hail, that simply destroys crops.

Go short on Florida crops?

The 11 AM EDT projected path from the NHC now shows a turn toward the East-northeast, heading toward the Atlantic (eventually). They still think Debby won't make landfall until Thursday. Your experience may differ...

E. Swanson

Reporting from central Florida. All I can say is that we've gotten a TON of rain in the last few days. Honestly, though, in Florida you don't even take notice unless it's at least a category 3. Severe thunderstorms are an every-day part of life down here.

I dunno, looks like this might be an extreme event even for Florida.

Over here on the Space Coast, I have yet to receive 1 inch from Debbie.

What a difference a month makes.

For Australian readers

10 Mouse clicks to calculate Australian crude oil depletion of 83 %

Petrol hit a many-month low of $1.20 per litre in Melbourne today ... happy motoring is here again!

Regarding Bubbles and the Collapse, above: While this video is over a year old (posted April 2011), it's value remains as it describes the process of slow deterioration of the systems that massive amounts of fossil fuels have enabled. All of the bubbles we've seen to date have formed atop a wave of oil, and will burst as the wave breaks.

Too bad Ron Beasley couldn't get Stoneleigh's name right :-/

Typo - fixed

This story from up top, tells me more than anything about Saudi reserves..


If you really had 267b bbls and were producing only 3.65b/yr (10m/d) then why would you not wait for 20-30 years until technologies for viewing what's down there were better?

To me they are getting desperate, to explore there, especially when there are claimed to be so many desert areas not yet explored.


The late "Buzz" Ivanhoe in one of his Hubbert Center Newsletters gave the number of oil fields in the US in 1989 at 31,385. Rest of the world combined? 9,779. Given this imbalance I don't find it surprising that the Saudis might be interested in doing a bit of wildcatting on the rest of their territory.


That imbalance, quite obviously, no longer exists. If the US is the most oil surveyed nation in the world, Saudi Arabia is likely a close second. They are now looking for oil in what would one of the most expensive places in the world to produce oil:

Aramco boosts drilling in seismically tough Red Sea

Aramco is seeking reserves in anticipation of global economic growth and increasing demand for oil. The Red Sea is two kilometres deep in places with a 7,000-foot thick salt sequence which can distort seismic images, according to the magazine.

And it looks like just looking for oil in such a place can be quite expensive also. From the link up top that Hide Away referred to:

"There has been a lot of drilling in the Red Sea and a lot of dry holes. There is no easy oil or assurance of finding oil and gas reserves," says Mr Al Husseini.

To drill a lot of dry holes, and keep drilling in such a place has a ring of desperation to it.

Ron P.

Well, I don't know about rankings of nations by surveying; couldn't even tell you which state leads in the US. I had another link to a source showing which nation had the most wells, but neglected to write it down. Ivanhoe also provided a breakdown of field sizes by continent and major nations in this newsletter, if you're interested. He has US/Russia/Canada for field population. KSA has no doubt been surveyed a great deal, but a lot of it is basement rock that isn't worth looking at.

The exploration is bread-and-butter deepwater, according to this item from early last year: Saudi Aramco to invest $25 billion in Red Sea oil and gas | 2B1stconsulting. About 4 times their onshore costs, but not as expensive as UDW or unconventional. They're employing contractors who have worked in these more challenging environments, of course. Also there's a ref to shallow water work; not sure if that's going on in the Red Sea as well as in the Arabian Sea or Persian Gulf.

Bear in mind that companies were wildcatting on the North Slope in the 1960s, when the price per barrel had been stuck at ca. $2 for decades and oil was turning up under every other rock; discoveries hadn't peaked. That certainly wasn't fueled by any sort of mad scramble for production at all costs.

"The unique “Landowner mineral rights” is the reason why the U.S./48 is the most thoroughly drilled nation in the world, with 3X the number of oil fields (1989=31,385) as in all the rest of the world combined (1989=9,779)."

The term "Fields" here is intresting. Could one of our resident experts speak to the term and why it seems how the U.S. defines a field or survey and the rest of the world uses the definition may be the reason for the huge imbalance. Does the number of fields really matter or is it the total quality and quantity in the field?

Nothing wrong with Saudis or anyone else doing a little exploration, just think the imbalance number may be a bit deceiving.

Badger – I can’t tell you how “fields” are defined in other countries but in the US it’s fairly simple. If an oil/NG reservoir is penetrated by a well and doesn’t fall within the relatively tight geographic boundary of an existing field it will be named as a new field. How tight is tight? Maybe less than 1,000’ away.

Regardless of the methodology counting fields is of zero relevance IMHO. A single field in Texas may have produced 300 million bbls of oil from 400 wells. Another field produced 20,000 bo from one well. Both fields would count as one in that stat. In the 80’s I made 21 new field discoveries. But 20 of those new fields consisted of a single NG well that produced very modest amount of value. Last year I drilled a 17,000' well in SW Louisian for $9 milion. Found one reservoir and gave it a new field name. That one well will drain all the NG. It is and always will be a one-well field, I could also list many dozens of individual oil fields in Texas and Louisiana that never recovered enough reserves to pay back the development costs. Yes: there are many “fields” in the US that produced so little oil they lost money.

The critical difference re: field count between the US and other countries is the combination of privately owner mineral rights and the small independent operators in the US. I suspect the number has fallen but the last time I saw the stat the Saudis were averaging about 5,000 bopd per well. The average oil well in the US is doing less than 10 bopd. That stat along should indicate the futility of using field count as an indication of anything IMHO. There are thousands of oil fields in the US that the Saudis would never have developed. And many more still producing that the NOC’s would have abandoned long ago that small US companies are still producing today. I can point to one trend in Texas where the average well is producing less tha 5 bopd with 98%+ of the production being water. And those operators are making a very sweet profit even with the recently fallen oil price. I know a very nice husband and wife who are making over $400,000/year from their little wells averaging less than 1 bopd. It's all about sweat equity. The sweat is all theirs as is all the profit.

The term "field" is somewhat ambiguous. According to the Schlumberger Oilfield Dictionary a field is:

An accumulation, pool, or group of pools of hydrocarbons or other mineral resources in the subsurface. A hydrocarbon field consists of a reservoir in a shape that will trap hydrocarbons and that is covered by an impermeable, sealing rock. Typically, the term implies an economic size.

and an oil field is:

An accumulation, pool or group of pools of oil in the subsurface. An oil field consists of a reservoir in a shape that will trap hydrocarbons and that is covered by an impermeable or sealing rock. Typically, industry professionals use the term with an implied assumption of economic size.

Each government regulatory agency will have a more exact definition, and it vary somewhat from agency to agency.

Oil fields vary drastically in size, and the main reason the US has so many more fields than other countries is that it has drilled so many more wells than other countries. The vast majority of oil fields are very small, and the US has found an awful lot of them, but the majority of the world's oil is contained a few big oil fields, most of which are in the Middle East.

Rocky – “Typically, the term implies an economic size.” And typically Blue gets it right. But this time Texas messes them up. When a new field is discovered one must give it a name acceptable to the TRRC before you allowed to produce the well. The TRRC requires no proof of profitability. How bad can this go? Two years ago drilled a new field discovery. Filed the paper work with the TRRC along with the new field name. Unfortunately the well pressure depleted in 37 days. Didn’t make enough to pay for the cement let alone the entire well. Yet for ever and ever this will be a field on the books. And it will add the same in the field count stats just like the great East Texas multi-billion bbl field.

I could have padded my resume back in the 80’s by pointing out the 22 new fields I discovered in less than 3 years. But I would make the point that 21 of those discoveries were one-well fields. Wouldn’t have been a lie to not qualify that effort. Just dishonorable. But the really fun part: I got to make up a lot of field names. Named them after my dog, my engineer and two girl friends at the time. And one to tease an ornery land owner: had a big blue sign hanging on his gate for all the neighbors (who disliked him more than me) to laugh at. Fluffy Field. Ass Hole Field would have been funnier but the TRRC does have its standards. LOL.

Oh...just remembered a story. Was told the Piceance Basin in the Rockies was originally named the Piss Ant Basin by the surveyors. But the USGS cleaned it up. Was also told piceance was the French name for the piss ant. Never have checked that out.

I don't think you would be able to name an oil field after your dog in Alberta, and I don't think they like one-well oil fields either. Most likely the government would tell you what to call your field. Typically it's based on the name of the nearest town or geographical feature.

BTW, Piceance originates from the Ute Indians. It means "land of tall grass."

Rocky - "I don't think you would be able to name an oil field after your dog in Alberta". Of course not...what else would you expect from a bunch of socialistic commies who take every opportunity to crush an individual's rights. There is a good reason the Texas flag has only one star in it, ya know. I still find comfort when I think of Missy Field and my long gone little mutt. The long gone girl friends...not so much. At least it's better than having their names tattooed on my butt.

Grass lands, eh? Na...I stick with the misinformation I was given...makes for a better story.

Re: OPEC Could Collapse As Shale Gas Pops Peak Oil Myth

The Organization of Petroleum Exporting Countries, which in its heyday could trigger global economic crises by turning off the oil taps, faces an uncertain future as the shale oil revolution transforms the energy business.

Given the strong implication that the heyday of OPEC, according to the article, is over, are we to assume that they mean that OPEC turning off the taps in the present would not trigger an economical crisis at the same or larger scope than that of the oil crises of past? Or, to use a more extreme example, Saudi Arabia falling into civil war would only be a blip on the radar? Saudi Arabia is part of OPEC, right?

"Whether Iraq's producing a million barrels of oil more or less is not going to mean much in 10 or 20 years. Only Saudi Arabia's output will be indispensable.


The article is buggered right from the title: ..."Shale Gas Pops Peak Oil Myth"??,,, goes on to talk about shale oil. Then there's this:

If any at the OPEC meeting doubted the travails ahead, Ryan Lance, chief executive officer of U.S. oil titan Exxon Mobil, pulled no punches. He told them bluntly: "North America could become self-sufficient in oil as well as gas by 2025."

The article also touts our "100 year supply" of natural gas. Really?

Shale Gas Reality Begins to Dawn

At some point, I predict we'll find that even bullsh@t is virtually finite. That's when the real fun starts...

Apart from the universe and human stupidity, only bullsh*t is infinite. And I'm not sure about the universe...


And I am pretty sure he was wrong about the Universe.

Tepco ex-executives get golden parachute

The former president of Tokyo Electric Power, Masataka Shimizu, is due to start a new role with Fuji Oil Company - but why has his move provoked criticism and controversy?

Mr Shimizu became a public figure when Tepco's Fukushima nuclear power plant was damaged by an earthquake and tsunami in March last year.

So, how did he score his new job?

Tepco and Fuji Oil Company's parent, AOC Holdings (AOCHD), have a close relationship. Tepco is AOCHD's biggest shareholder, with an 8.7% stake.

Last year, there were calls for Mr Shimizu and other Tepco executives to be charged with a criminal offence.

Good to see Japan is following the America's lead. At Mr Shimizu's level, the consequences for epic failure are... public bailouts followed by an even better job!

Wow, Mother Nature is beating the heck out of Peak Oil. Corn prices up over 7% today while oil prices are down over 1%. The correlation is broken -- wish I had time to graph this. Ethanol was being killed off already so this current weather pattern is going to really put a dent in production.

Corn prices set 4-month high as crop outlook dims

"Corn and soybeans are drawing support from dryness in the eastern corn-belt in the United States and wheat is drawing support from dryness in Ukraine and Russia."

I don't think the correlation is broken at all. You have to take the average of *what the ethanol plant actually paid* over about 2 years for both corn and natural gas, and then what they get paid for DDGs to know if the correlation is broken. Let's also not forget electricity as an input as well... most of the ethanol plants have really good deals on electricity from excess capacity from coal plants and wind turbines holding the price down.

And to figure out what they ethanol plant paid per bushel, you probably have to look in their annual report. They are hedged to beat hell, and the only people getting beat up are the commodity speculators. The ethanol plants probably locked in supply contracts when corn was $5.20/bushel, and now whomever took the other side of that trade is the one getting beat up. I'm going to bet the other side is food processors and feedlots, and they will just push the price on to the consumer.

Ethanol plants " are hedged to beat hell"

How about elaborating on this? The grain trade business is not one where you know exactly where your commodity will be coming from, due to weather, pests, or maybe financial constaints of local growers. The couple farmers I know that grow and sell wheat, corn and soybeans never sell the crop until the growing seasson is well along or maybe even not until after harvesting.

Should the grain elevators not be able to supply the contract, who makes up the loss?

I don't understand how hedging can work well with grains. Maybe you can explain better. I think ethanol plants are more at the mercy of periodic price changes than you portray.

The grain trade business more or less invented hedging long ago for the exact reasons you cited. There is too much risk involved in growing, selling, buying, and milling grain, so they invented all kinds of financial instruments to hedge the risks.

The oil industry has similar problems, so once the agricultural industry developed the concepts, the oil industry adopted them and used them to hedge the risks in oil trading.

Based on the ethanol plants that I have dealt with my guess is that you are overstating the amount of hedging that they do- specially with respect to the duration of the hedges. For many of the operators the cashflow associated with margin on futures (if prices should fall) is more than they can handle.

Plus by definition -hedging implies that they have a fixed price ethanol sales contract on the other side. If they didn't they would be speculating not hedging. If so those fixed price contracts could have been entered into at any time. I don't think the gas blenders have a better crystal ball than anybody else to have picked the bottom of the corn market.

The price of oil and corn became correlated as ethanol refinery capacity grew which means the price of corn was driven by the price of oil. What you are discussing has nothing to do with commodity price relationships but pertains to ethanol profitability. Ethanol is not currently profitable.

Corn Price Increases Tell a Story About Why Commodity Prices Are Rising

Today however, the linkage between oil and corn pricing has become more direct since fuel ethanol is a direct substitute for oil in gasoline. And with over 40% of U.S. corn consumption now directed towards that purpose, corn prices are increasingly reflecting the vagaries of global energy markets, supply and demand, and even geopolitical risk as opposed to growth in demand for corn as a foodstuff for (e.g.) chicken consumption or soft drink demand (where it is used as high fructose corn syrup for a sweetener). A number of consumer interest groups have questioned the wisdom of this outcome, especially given the importance of corn as a nutrient and basic foodstuff for much of the world’s population.

ethanol margins

the 2007 Renewable fuels Standard already requires gasoline blenders to use renewable fuels equal 9.23% of their gasoline sales. This is almost right up against the blend wall of 10%. Consequently, at this point conventional gasoline prices have very little impact on the price of ethanol either way- if gasoline prices fell blenders would still be required to purchase minimum ethanol volumes and if they rose there is not a lot more that they could purchase given the blend wall. Whether the EPA allows E15 or not I don't believe it will make a lot of difference in the short term since I think there will be great consumer resistance to purchase E15 for conventional engines given all the stories about it damaging engines.

The impact of oil prices on ethanol demand could be more pronounced overseas where they are not running into the problem of the blend wall.

Corn prices extend rally as yield hopes tumble

The headway, on top of the 7% gains of the last session, left the grain on track for its largest two-day rally in two years, even as soybeans and wheat gave up some of Monday's headway.

It was fuelled by further downgrades to expectations that the US crop yield may fall towards last year's disappointing level of 147.2 bushels per acre – well below the record 166.0 bushels per acre the US Department of Agriculture has pencilled in.

A USDA report overnight cut by seven points, to 56%, the proportion of the US corn crop in "good" or "excellent" condition, a larger figure than expected and one of the worst readings on record for the time of year

Rising prices ignite Sudan street protests

... This week, in an attempt to address the economic meltdown, the Sudanese government announced dramatic austerity measures. Taxes are going up, government jobs are being cut, and the Sudanese pound is officially being devalued - as economists had long warned would have to happen. And fuel subsidies will gradually be ended.

This last measure has proved the most unpopular because it will affect the price of nearly everything in the economy, from transport to domestically produced food and other goods.

Last Pinta giant tortoise Lonesome George dies

Staff at the Galapagos National Park in Ecuador say Lonesome George, a giant tortoise believed to be the last of its subspecies, has died.

Scientists estimate he was about 100 years old. Galapagos National Park officials said that with George's death, the Pinta tortoise subspecies (Chelonoidis nigra abingdoni) has become extinct.

Really sad...one more species lost.

"The last word in ignorance is the man who says of an animal or plant, 'What good is it?' If the land mechanism as a whole is good, then every part is good, whether we understand it or not. If the biota, in the course of aeons, has built something we like but do not understand, then who but a fool would discard seemingly useless parts? To keep every cog and wheel is the first precaution of intelligent tinkering." - Aldo Leopold

Regarding the talk about the oil spills in the Nigerian delta: How much of those leaks are caused by people cutting up holes in the pipes to steal the oil? I can't imagine such a thing could go un, without heavy spillage.

Nigeria Leads in Crude Oil Theft - Jonathan

"We have held serious meetings between security services, the private sector like Shell and all the key oil players. We have been holding meetings. They will have to stop it...

Goodluck with that :-0

New Report: 80% renewables in US by 2050 (with addtional cost at 25 - 50/MWh above projected future costs of conventional generation)

NREL has a new report that may interest some on the site. At 850 pages, it's a bit of a slog, but looks at technical feasibility for high renewables in the US given current technology availability and limits. It's titled: "Renewable Electricity Futures Study" (4 volumes).


MIT Tech Review has a summary of report, "The U.S. Could Run on 80-Percent Renewable Electricity by 2050." Looking mainly from a standpoint of technological feasibility (and current technology), NREL concludes US could receive 50% of it's electricity from solar and wind (intermittent renewables), and the remaining (up to 80% renewables) from biomass, hydroelectric, and conventional geothermal by 2050 (non-intermittent renewables). In addition, they estimate total cost for 80% portfolio target would add about 2.5 to 5 cents "per kilowatt hour on top of what electricity prices would have been using conventional power production." One of the more import concerns in the report is the integration and management of intermittent energy sources (50% from solar and wind). They estimate this can be done reliably with a diversity of combined approaches: storage up to 10% of generating capacity, geographically distributed resources (which are varied in the US), T&D investment, smart-grid communications, flexible conventional generation, changes in power system operations, and demand-response.

Perhaps it's worth adding that other recent studies are also being modeled and proposed along the same lines, looking at technological feasibility, costs, policy, and R&D opportunities for a high renewables generation mix (with emphasis on new strategic opportunities, change in public attitudes, declining future costs, and policy reform as major factors in bringing about change in conventional generation, subsidy, and pollution outcomes).




NREL has a handy interactive graphic highlighting possible breakdown for resource and technology mix to 2050.


From Apendix A: Cost, Environmental, and Social Implications of High-Penetration...

Finally, given uncertainties in the future cost of fossil energy sources, the analysis included 80%-by-2050 renewable electricity scenarios in which (1) the cost of fossil energy (coal and natural gas) was both higher and lower than otherwise assumed in the other scenarios, and (2) fossil energy technologies experienced greater improvements over time than assumed in the other scenarios. These scenarios are referred to as Higher and Lower Fossil Fuel Costs, and Higher Fossil Technology Improvement (Fossil-HTI) scenarios, respectively. Corresponding reference scenarios with these alternate fossil energy projections were also evaluated. These fossil sensitivities were evaluated using the RE-ITI technology projections and the low-demand assumption...

Or you may prefer Kunstler's version (referring to last weekend's Aspen Environment Forum):

It's a very odd mix of hard-headed science and the most dismaying sort of crypto-religious faith in happy endings, tinged with overtones of corporate log-rolling and government propaganda. The basic message is: the world is hopelessly f-cked up but thank God for technology. There is not even a dim apprehension that many of the aforementioned vexations originate in technology itself, and its blowbacks. Alas, this is about the best that the American intelligentsia can do right now, collectively, and it explains why we have such uniformly impotent and clueless leadership across the board in America, from the White House to the CEO offices to the diploma mills to the news media and every other realm of endeavor where thinking realistically about the future might be considered valuable.

Or how about a simplified take on both of the above, "Eat, drink, and be merry, my friends, for tomorrow we die."

To me the message of the above report is the exact opposite of "for tomorrow we die".

If the report had said that a renewable replacement for fossil-generated electricity was technically or financially impractical, then given what we know about the eventual exhaustion of finite fossil fuels "tomorrow we die" would have been reasonable summary

To the contrary, this report (which I posted a link to yesterday), says that very high renewables percentages are technically and financially practical. Contrary to Ghung's quote from Kunstler "There is not even a dim apprehension that many of the aforementioned vexations originate in technology itself, and its blowbacks", the section that Ghung chooses to quote from is titled " Cost, Environmental, and Social Implications of High-Penetration" and that section is explicitly about the impacts of renewable technologies.

Any reasonable person knows that renewables will have many impacts, but the relevant question is how those impacts compare with other options (oil sands, fracking, coal-burning, wood harvesting, etc.) because those environmentally devastating processes are in full swing today.

Along the lines of report above the following link indicates that increasing wind turbine size dramatically reduces environmental impact per kWh. Makes sense since swept area increases as the square of radius, so power output grows much faster as turbine size grows than material consumption in towers and blades).

Previously published life cycle inventories were combined with an engineering-based scaling approach as well as European wind power statistics. The results showed that the larger the turbine is, the greener the electricity becomes. This effect was caused by pure size effects of the turbine (micro level) as well as learning and experience with the technology over time (macro level). The environmental progress rate was 86%, indicating that for every cumulative production doubling, the global warming potential per kWh was reduced by 14%. The parameters, hub height and rotor diameter were identified as Environmental Key Performance Indicators that can be used to estimate the environmental impacts for a generic turbine.

"...that section is explicitly about the impacts of renewable technologies."

Which is why I countered. The impacts of the technologies cannot be divorced from the immense amount of capital, resources, and environmental costs involved in implementing them,, and diverting current wasteful, discretionary uses of these resources will be necessary and difficult, especially in our current political environment. As one who has personally adopted and promoted renewables for many years, I'm also trying to be a realist.

The additional cost of new generation is marginal (it's merely the excess cost above replacement cost). We replace all our generation sources every 40 to 60 years. NREL projects BAU costs for electricity in the range of 10 cents/kWh. The high cost with 80% renewables is 15 cents/kWh. Does this really signal to you that all hope is lost, and the sky is falling?

"Does this really signal to you that all hope is lost, and the sky is falling?"

Throw in a little global warming; sea level rise; increasing population of a clueless, disconnected species; growth and waste based BAU; credit/debt implosions; peaking oil and numerous other resources, depleted environment-fresh water-soil-oceans; social divisions/unrest;;; all essentially concurrent, well, sort of. I'll leave out asteroids, super volcanoes, and and CMEs. We're busy enough rotting in our own wastes. Beyond that, I'm pretty much an optimist.

I have little hope for hyper-complex, top-down solutions. Keepin' it local. That said, I admire your stance. Go for it.

"Beyond that, I'm pretty much an optimist".

Nearly ruined a good keyboard with tea, there ;) Likewise. I think the only solutions, if they can be called solutions, are local.

Q: "NREL projects BAU costs for electricity in the range of 10 cents/kWh. The high cost with 80% renewables is 15 cents/kWh. Does this really signal to you that all hope is lost, and the sky is falling?"

A: "Throw in a little global warming; sea level rise; increasing population of a clueless, disconnected species; growth and waste based BAU; credit/debt implosions; peaking oil and numerous other resources, depleted environment-fresh water-soil-oceans; social divisions/unrest;;; all essentially concurrent, well, sort of. I'll leave out asteroids, super volcanoes, and and CMEs."

Now That's a straw-man argument!

But, it turns out that at the beginning of that whole conversation is another straw-man in that its presence implied that it has something to do with the report: "It's a very odd mix of hard-headed science and the most dismaying sort of crypto-religious faith in happy endings...". Those words are taken from a description of an unrelated live event:
Clusterf**k Nation
Rocky Mountain High
"The techno-narcissism flowed like a melted Slurpee this torrid weekend at the annual Aspen Environment Forum where scores of scientists, media figures, authors, professors, and policy wonks convened to settle the world's hash..."

Here's another: "The whole report pretty much ignores Agriculture, Mining and Heavy Transport because they are outside the electricity high users. Ignoring them makes the whole report useless, yet it is worse than that."

The Oil Drum | Drumbeat: June 22, 2012

The Oil Drum | Drumbeat: June 16, 2012

The report is about electricity. Agriculture, mining, and heavy transport are outside the intent of the report.

Just composting all the straw-men presented here directly into fertilizer and gas would make for a brighter energy future!

The prompt appearance of so many authoritative-sounding dismissals backed by -zero- technical references is a flag.

The report seems to tweek the pro-nuclear and anti-cornucopian camps.

Here is another conversation:


The report is about electricity. Agriculture, mining, and heavy transport are outside the intent of the report.

You have to be kidding. We are at or very near peak oil, yet the assumptions in this report expect many of the renewables to get cheaper or remain the same in cost. I have exposed several of the assumptions in the report that are clearly incorrect, yet you keep saying it is a straw man argument.

As we go down the backslope of peak oil, costs are going to rise. If you have the same demand, yet a limited supply then price will rise. With oil the only way price will not rise on the downslope after the peak is if economies are collapsing. Even in a cornucopian world you need to factor in the reality of rising prices, for mining and heavy transport as they are needed to build the renewables in the first place. Agriculture is also vitally important as there is likely to be a disproportionate amount of liquid fuels allocated there in the future.

The report also uses assumptions of 2.5% GDP growth and 0.9% population growth, yet instead of using actual electricity consumption growth over the last 20 years, chooses to use a different number that works better, an EIA projection (showing much reduced electricity growth).

Please take a closer look at the numbers in the assumptions and compare them to the reality of what is actually happening.

"We are at or very near peak oil"
What is the time-frame? Consider that economic vigor and oil price/demand modulate each-other into an endless undulating plateau within which final discoveries and process changes occur.

"expect many of the renewables to get cheaper"
What has the trend been?

This would probably be a good time to set about installing the first wave of renewable energy sources.

What the report seems to offer is that there is enough sunshine and wind available within every locally interconnected patch of surface to supply some good part of the energy that might be used there. This is what anyone who has played with living with solar panels soon finds out. Wind takes it to a whole new level. Present-day common wind-turbines do not scale down to household size while maintaining any real efficiency: They are best mounted high and being large... so they would serve larger areas. This strongly invokes the connectivity, the power grid, and storage requirements if the turbine output is taken directly as electricity.

Beyond that is, yes, an invitation to endless guessing.

"The report also uses assumptions of 2.5% GDP growth and 0.9% population growth"
Well, why stop there? In keeping with the theme of trying to embed the report within speculations about a larger system analysis over a period of four decades, the more likely specter of world-wide economic chaos and inevitable wars and population devastating plagues, crop failures, and famine of the next warming half century could be invoked.

What is to be gained by dismissing the report?

What is to be gained by dismissing the report?

What is to be gained by accepting the report?

The report is issued so that everything seems OK. Current BAU can continue without any problems to current politicians.

Please read between the lines of why these types of reports are commisioned in the first place.

O.K., I'll go first, then...

Reading the report undermines the meme that renewables are a myth.

< Rant >
Everything is OK. The banks are much better off than before... and bigger, too! The well-to-do are doing well. Current BAU can continue without any problems to current corporations and their little sock-puppets: Everyone else comprises an absolutely digestible, interchangeable, and disposable pool of labor and consumption. Like Vanderbilt said "The public be d*mned!". Their welfare matters only ultimately in their active numbers contributing to the scale of returns.
< End of Rant >

I do not believe that there is going to be a mass migration away from the technologically enabled state of human existence until that state is no longer enabled or no longer necessary. Technology enables novel levels of population density and is necessary to their maintenance. When the yield from that technology fades, the population declines until it can be maintained without it. The technology of selectively breed corn and hand-dug extensive irrigation systems enabled and maintained dense populations in the past. To walk away into the jungle from such a system en-mass is to die. The simple cornucopian idea might have been anhydrous ammonia fertilizer. Today, it can be made from wind, water, and air. What use would denying mention of such, if then accomplished, technology serve?

I've got no idea what your real question is here, but I will attempt an answer of the following..

I do not believe that there is going to be a mass migration away from the technologically enabled state of human existence until that state is no longer enabled

I agree. The numbers shown on this site, especially from people like Westexas with the ELM, show that current "technologically enabled state of human existence" will not be possible due to energy constraints.

The simple fact is that renewables require a lot of energy to build in the first place, a simple fact that is often overlooked. To ramp up renewables magnitudes of order higher than present forces increases in production of glass, aluminium, concrete, steel, silver, copper, tellerium, lithium, etc. To vastly increase the supply of these raw materials, requires a vast increase in the energy used in there creation.

EVERY study on renewables overlooks this simple catch 22 and focuses on current price trend instead. There is a vast difference between using 6% of a worlds output of a resource pa and 120% of the worlds output pa, yet everything in the 'renewable future', from cornucopian sources, would have us believe there is no difference.(silver for PV BTW with a 20X increase in production, but still not enough).

You have overlooked several of us informing you there are ways around your perceived problems: using less material per panel, substitutions, concentrated PV and increased efficiency. Your assumption that PV manufacturing will not adapt creates a flawed projection. If peak oil continues to create a recessionary global economy, then expect electricity demand to decrease as well as demand for glass. Fewer homes built and fewer cars manufactured means less glass needed for those uses.

Remember Dolores Garcia's version of the Limits to Growth model, New World Model – EROEI issues August 24, 2009. The scenario with the best outcome was a concerted effort to deploy renewable energy now. In her model a renewable energy build-out did not fizzle from resource constraints. Rather civilization starts having problems next century due to loss of arable land.

I keep hearing things like 'substitution' except I dont see these coming onto the market. In regard to silver..

Silver paste is used in 90 percent of all crystalline silicon photovoltaic cells, which are the most common solar cell, according to the Photovoltaic Technology Division of the U.S. Department of Energy. And all silicon cells used in space to power satellites use silver in the form of evaporated metal to make the electrical contact. The electricity generated by photovoltaic cells is highly reliable. As soon as sunlight strikes, power begins to flow. Sunlight striking silicon cells generates electrons, which the silver conductors collect to become a useful electric current. The conductive silver, which also enhances reflection of the sunlight, is applied in the form of a glass paste with a minimum of 90 percent silver along the top and across the bottom of the silicon crystal. When fired, the silver forms a complete circuit collecting solar energy and conducting it to the power supply line. A group of roofing-tile solar cells can generate sufficient power to provide a house and also fill batteries to supply power after dark. Silver plays yet another role in the collection of solar energy: efficient reflection of solar heat. Silver is the best reflector of thermal energy (after gold).

from here..


If peak oil continues to create a recessionary global economy, then expect electricity demand to decrease as well as demand for glass. Fewer homes built and fewer cars manufactured means less glass needed for those uses.

What you are forgetting to add is that investment dollars will also dry up, plus the ability of people and corporations to pay for renewables.

The concept of renewables only work during periods of healthy economies and global growth, providing the funding to make it happen. The catch 22 is that this type of world is one of increasing materials and energy use, to the point that we will always be chasing our tails.

The concept of renewables only work during periods of healthy economies and global growth, providing the funding to make it happen. The catch 22 is that this type of world is one of increasing materials and energy use, to the point that we will always be chasing our tails.

And yet, the system up until the widespread use of oil was all based on renewables.


And yet, the system up until the widespread use of oil was all based on renewables.

'The system' used a bit of coal before oil during the industrial revolution and I would not call that a renewable.

The population prior to the IR was an order of magnitude less than today. Using the same type of renewables with todays population would lead to decimation of the natural world in a very short period of time, then collapse.
We are talking about todays renewables, PV and giant concrete and steel wind turbines producing electricity, but you knew that.

Yes, substitutes are coming into the market. The "there is no substitute for silver" meme is being pumped by the silver industry.


I think it has also been picked-up by the desperate pro-nuclear and fossil-fuel bobble-heads. Another one is that there is a shortage of the ability to make glass... even though there is no shortage of glass being installed or planned. Also offered is an inability to make the metal and concrete for wind turbines! This one seems particularly strained, since there is never a projected shortage of concrete and steel to build fleets of nuclear reactors.


Another one is that there is a shortage of the ability to make glass... even though there is no shortage of glass being installed or planned. Also offered is an inability to make the metal and concrete for wind turbines!

You have this totally wrong. There is no shortage of these materials, nor has anyone claimed there is one. What I have continually stated is that there needs to be a massive increase in production of them, which of course will take a massive increase in energy use to do so. Yet all the proclaimers of renewables talk about using LESS energy in the future.

It doesn't work having a society using less energy while trying to vastly increase the production of a whole range of base materials. A question I often ask, is who misses out on their energy use to make renewables possible?

BTW, I do not like being linked in with pro-nuclear. I am very much against it because there is no way to keep it safe as Fukushima proved. Plus there is no possibility of keeping reactors safe in a shooting war.

Sorry for confusing you with pro-nuclear, Hide_away. I apologize and hope you will accept my apology.

Yes, it will take energy to make the infrastructure that gathers renewable energies. There are immense energies flowing through the existing system.

Really, the question still stands. What is the vision that drives your responses? So far, the only revelations have been when some part of it gets stepped-on or poked at... a sort of puzzle in a box. What is this model of the future and the path to it?

I apologize and hope you will accept my apology.

No problems.

The way society is going is a race to the edge of the cliff then freefall, I cannot see it happening any other way. The current economic system relies on growth, or it collapses. Every time I look at the numbers in detail, instead of just glossing over the headlines of 'good news', I see us running into resource constraints, especially oil in the near term.

Civilizations have collapsed in the past and I see plenty of evidence ours will go the same way. I also believe that because of modern technology and complexity our current civilization can collapse much faster than previous examples. If food does not get to the cities, how far off is anarchy?

My responses are an attempt to draw out some shred of hope that can be backed up by real numbers of what is happening, not a wish list. We have had 40 years for preparation of resource constraints, yet mannaged to squander that time, now we have a few years if we are lucky, yet our economies are completely unprepared. Egypt and Greece are the canaries, there is no money for investment in anything there. The environment is likely to suffer a huge assault as the population there grabs whatever wood they need for cooking and heating, and everything that can possibly be eaten is.

Everyone expects answers, sometimes problems have no solutions.


Within that context, one can make the observation that the world is not uniform. The future is like a contest. Some groups will have made better moves than others... while also benefiting from a better setting. It is not a single unbroken expanse of yeast.

From the report...

Renewable electricity generation from technologies that are commercially available today

NAOM, what type of panels are you talking about? How much are they? What is the life span, efficiency etc?

Google is your friend ;) {winking smiley} You can find plenty about it in just a few minutes as I did.
:) {smiley}


Q: "What is to be gained by dismissing the report?"
A: "What is to be gained by accepting the report?... I've got no idea what your real question is here"

So, the question still stands:
What is to be gained by dismissing the report?

The essay that begins "The simple fact is that renewables require a lot of energy to build..." implies savings.

Two wars fought on credit and a gambling debt assumed from the financial industry contravene the very concept of savings. It would be better to invest in hard assets. I fully understand that there is a difference in these forms of capital. I also understand that in the end-game of a civilization, the remaining capital is gambled away:

1) The founders of a civilization invest.
2) The next generations live on the return from that investment.
3) The following ones consume the capital itself.
4) The last gamble away what's left.

In America, the founders wiped-away the indigenous peoples and made roads, distribution, factories, mines, logging operations, fisheries, and farms.

The next generations ran those and lived on the returns. The trees and fish and soil became money.

The following ones pocketed money by letting the infrastructure decay and selling the factories.

The concepts of savings and investment are both out of step at this point. Investment at least sequesters some capital away from the high-level looters.

It isn't putting up strawmen to attempt to consider the environment in which a proposed process must occur.

"The report is about electricity. Agriculture, mining, and heavy transport are outside the intent of the report."

...but will absolutely affect it's implementation, as will the other things I mentioned. I agree that, like many things we've done, it is presented as a noble cause (one I could easily embrace), like so many other noble causes we've embarked upon. Yet here we are... in a huge mess of our own making. The first rule of RE, one I consider scalable: REDUCE THY CONSUMPTION.

This all applies equally well to making chocolate shakes in thirty years.

Absolutely. If chocolate shakes are important enough, I'll beat and flog any proposal to make them in 30 years and see what it's weaknesses are. That's what the anti-chocolate-shake folks are going to do. Too bad someone didn't put the Solyndra thing through this process before so much damage was done (and so many dollars pissed away).

BTW: I wouldn't count on consuming too many chocolate shakes in thirty years.

I think that a large part of the failure of Solyndra was the economic downturn and the problems with the financial system after 2007. Not to mention the fact that China went into PV production in a big way about the same time and undercut prices. Solyndra wasn't the only US based solar company to go out of business, for example, there was also Evergreen Solar, which pioneered a way to make low cost PV cells. They had just finished a new plant in Massachusetts with considerable support from local government, but still hit the wall because of financial problems. Then too, the Europeans, especially Germany, cut their solar subsidies, which had been a great stimulus for the entire PV industry. I'm wouldn't be not surprised to hear that Evergreen's new plant was bought at auction by some Chinese company.

In other words, it probably doesn't matter what the technical merits of the chocolate-shake debate are, if the economic and political side of the discussion turns against chocolate-shake consumption because of problems with too much obesity (or what ever)...

E. Swanson

After reading this Wikipedia page on Solyndra I think Eric is largely right, However, I think that a large part of the failure of Solyndra was that it was a dumb idea. I distinctly remember being at InterSolar 2011 in San Francisco last year and seeing what IIRC was Solyndra displaying their product, a cylindrical PV cell that could capture light from all directions in a given plane. Again IIRC the idea was to capture light reflected from behind and the side of the modules. I remember thinking to myself, "What a dumb idea. Increase complexity of manufacturing to solve a problem that does not exist".

As far as I know, existing modules do an excellent job of generating electricity from sunlight falling on their surfaces and little to no light passes through them so, there is usually no light reflecting from behind them. In addition, the solar PV installation course I had done a year before, spent a good deal of time outlining how to create conditions for the best exposure to sunlight, for as long as possible during the day. As far as I'm concerned the Solyndra idea was as way to waste good PV material going after marginal light. Much better to just lay the darned things flat and point them as close to directly at the sun as possible! If I could have a few words with whoever thought it was a good idea to support Solyndra with government money, I'm pretty sure I could make them feel rather silly.

Alan from the islands

There were a couple of potentially good points about the tubes. One was that their system was supposedly lighter, and that might mean that flat roofs with marginal load bearing capacity could host their solution whereas tradition panels were alleged to be too heavy. The second was that the curve of power versus time of day is flatter with the solyndra system versus flat panels. The real kicker would (maybe maybe maybe) have been if the cyllinders allowed cheaper construction, by piggy backing on the florescent tube industry. But, even given those gee wizzes, I still that it was an odd idea -nit worthy of throwing so many eggs at.

It never seemed like a great idea to me but I don't think the shape killed them, it was the fact that silicon prices dropped like a rock. The thin-film revolution didn't quite happen because silicon-based PV suddenly dropped heavily.

Ice cream of the future, now!

Too bad someone didn't put the Solyndra thing through this process before so much damage was done (and so many dollars p*ssed away).

Solyndra, 500 million dollars

Hobbit movie, 500 million dollars

F-35, priceless

The noise machine is really really hard to talk over. Elsewhere around here, there is much reflected noise about how renewables are bankrupting Ontario.

I had posted this a few weeks back

The Jet That Ate the Pentagon

This month, we learned that the Pentagon has increased the price tag for the F-35 by another $289 million -- just the latest in a long string of cost increases -- and that the program is expected to account for a whopping 38 percent of Pentagon procurement for defense programs, assuming its cost will grow no more.

Just astonishing

But we need a hyper-sonic stealth jet plane because terrorists in caves can easily knock down F-16s. ;-)

unfortunately I do not think that this story is going to go away/get a lot better.

unfortunately almost all people and their elected representatives do not hold the DoD's feet to the fire to show requirements traceability to fundamental first-case desired effects. For those who might log on and cry foul and say 'yes they do'...I got news for ya, they do not do it well at all...if one looks clear to the left of the acquisition chart/process the first fundamental flubs are in what used to be called the capabilities-based (gaps) analysis and the functional need analyses. To many golden calf unchallengeable fundamental assumptions.

I wonder what will be done about the sequester?

The military contractors are not stupid. They make sure that component makers are spread out into almost every district of every state. That way every Congressman can proclaim to be protecting jobs when the keep an expensive weapon system that we don't need.

Peak Military bang-for-the buck.

Inflation in the 'military economy' is rampant.

Of course the first question is what and how much of 'it' do we need...to produce what desired effects?

A workmate told me yesterday that the first Gerald Ford-class carrier (the Ford) is estimated as requirement some $14 to initially field...cost of air wing and 50-year O&M extra.

The Ford class is slated to replace the Nimitz-class...all ten of them...The one-of-a-kind Enterprise will also retire by 2015 or earlier (nuclear carrier #11).

I think the great steaming MIC dinosaur is starting to collapse under its own weight.

If the report had said that a renewable replacement for fossil-generated electricity was technically or financially impractical, then given what we know about the eventual exhaustion of finite fossil fuels "tomorrow we die" would have been reasonable summary

I've only had a chance to skim the report so far, but some of the assumptions, particularly for the Eastern Interconnect portion of the US grid, strike me as unreasonable. Perhaps after I've had a chance to dig into it in more detail I'll feel differently.

Here is what I wrote the other day in a drumbeat about this report...

This report will continue to raise its ugly head for a long time for cornucopians to say "see there is no problem". The other day I posted the following about this report...

You have a 950 page report that uses as its high demand case a FORECAST from the EIA, not anything to do with reality of what is happening. We are not talking about the low case here.

In the past I have been involved in the production of government reports in a different area and know a little bit about how the system works. To start you need to know what answer you have to produce, then work backwards, including using assumptions that will give the correct answer.

Many other assumptions in various parts of the report show prices coming down or remaining constant for both capital and ongoing expenses. For example in PV the Balance of System costs are to halve by 2050. Then there is the delivered price for dry matter in the biopower section remaining at $82.60/tonne.

In a world of peak oil, such assumptions for 38 years time are just ludicrous. The high demand case with less than 3% PHEV assumes something else is powering the transportation of the nation, even the low case with 40% of the light vehicle fleet being PEVs assumes heavy transport to be diesel or something else.

The whole report pretty much ignores Agriculture, Mining and Heavy Transport because they are outside the electricity high users. Ignoring them makes the whole report useless, yet it is worse than that.

It is another report that cornucopian politicians can wave about and claim that there are no energy problems and we can continue on with BAU by tweaking a couple of things over the next few decades. We don't have to do anything now as there is plenty of time.


You will always get 'the answer' to anything in this type of report. There is nothing there as it does not deal with reality, all of which is highlighted by the initial assumptions. Looking at the executive summary of the report is the wrong place to look, study the assumptions.

It looks like my initial assesment of this report being waved around as evidence is already coming true. The assumptions are garbage and do not reflect reality.

Read the section on storage for a real laugh, if you can laugh at a report whose conclusions are in no way supported by the evidence offered.

They have 'shown' that the objectives can be achieved, if you close your eyes and wish really hard, and simply assume that all the difficult bits will be magiced away by the God of 'technological progress'

So far:
"The claims are grandiose, but the document fails to back them up."
"...conclusions are in no way supported by the evidence offered."
"...They do a nice headline though."


"Read the section on storage for a real laugh"


Here's part of the introduction:

Energy storage is used in electric grids in the United States and worldwide. It is dominated by pumped-storage hydropower (PSH), with about 20 GW deployed in the United States and more than 127 GW deployed worldwide (EIA 2008; Ingram 2010). In the United States, PSH was built largely in response to market conditions in the 1970s, including high oil and natural gas prices, regulatory restrictions on plants burning oil and gas, dependence on low-efficiency steam plants for peaking power, and anticipated “build-out” of a largely inflexible nuclear fleet (Denholm et al. 2010). In addition to PSH, a single, 110-MW compressed air energy storage (CAES) facility has been constructed in the United States (EPRI/DOE 2003). CAES is described in Section
Deployment of storage in the United States over the past two decades has been limited by low natural gas prices, availability of high-efficiency and flexible gas turbines, and limited cost reductions in storage technologies. In addition, the regulatory treatment of storage, costly licensing and permitting, challenges with storage valuation, as well as utility risk aversion (including market uncertainty) have also limited storage development (EAC 2008). Figure 12-1 shows the installations of bulk energy storage in the United States.

--Following this, there are descriptions of the storage systems that have been installed.--

"if you close your eyes and wish really hard...(for the) God of 'technological progress'"

12.3.3 Technologies Not Included in RE Futures Scenario Analysis
The following technologies offer substantial potential benefits in many applications, but were not included in the Renewable Electricity Futures modeling as they either provide services not explicitly evaluated in the analysis or have not yet been significantly commercialized in grid storage applications. Flywheels Capacitors Superconducting Magnetic Energy Storage High-Power Batteries Electric Vehicles and the Role of Vehicle-to-Grid Hydrogen Energy Storage and Fuel Production

--It looks like they actually throw out a lot of technological progress that has not yet been proven in large applications in the US. The Role of Vehicle-to-Grid is an operational reality elsewhere in the world.--

In addition to EV's, there are end-user Heat and Cool storage strategies which can go far towards moderating both grid storage concerns, as well as offering those users more resilience in how and when they need to buy energy to keep homes and businesses well supplied.

Meanwhile, it seems like the Nuclear power advocates are the ones fervently dreaming that such a beast can be reasonably managed as its fleet steadily ages and as our economy and climate rankle under newly acknowledged hardships.

Ah yes, the home thermal storage the Canadians were talking about here. That one isn't even mentioned in the report. Rather than grasping at straws, as the authoritative sounding dismissive comments without references portray it, the report limits itself to the most mundane means of energy storage.

Yeah . . . it is very low-tech but such heat/cool storage technologies can be very effective when combined with a smart grid. Generate lots of ice overnight when there is excess capacity and used that ice to help cool buildings on very hot peak energy days.

From my email inbox:

EIA examines alternate scenarios for the future of U.S. energy

The U.S. Energy Information Administration (EIA) today released the complete version of Annual Energy Outlook 2012 (AEO2012) which, in addition to the Reference case projections, includes 29 alternative cases which show how different assumptions regarding market, policy, and technology drivers affect projections of energy production, consumption, technology, and market trends and the direction they may take in the future.

"Uncertainty is inherent in long-term projections," said EIA Administrator Adam Sieminski. "By modeling scenarios using a range of assumptions about market, policy, and technology drivers, we gain a better understanding of the potential impacts in critical areas of uncertainty."

And it can all be found here: ANNUAL ENERGY OUTLOOK 2012

So far I have only looked at: A1 Total Energy Supply and Disposition Demand. They have US Crude + Condensate production peaking in 2020 at 14.40 quadrillion BTU, verses 12.35 quadrillion btu in 2012. They have US imports of crude oil peaking in 2010 at 20.14 quadrillion btu.

They do not have total energy production peaking at all, going from 78.47 in 2012 to 94.67 quadrillion btu in 2035. However they do have total energy imports going from 29.56 in 2009, the first year on the chart, declining every year until it hits 24.69 quadrillion btu in 2036.

Ron P.

Adam Sieminski? Interesting. He was Deutsche Bank's chief energy economist for a number of years. Apparently he was appointed to EIA Administrator earlier this year. He is known as a sharp analyst, although he could not have had much influence on this AEO -- it was well in production when he showed up.

FOR ALL – Re: the "end of PO" BS above I teased Ghung the other day about ignoring such fools and their endless string of straw man arguments. But as I sit here in my lounger recovering from a bad reaction to a med procedure this morning I have some time to waste. As most here understand the PO discussion centers of global PO. Obviously US PO occurred about 40 years ago. No debate there…numbers are available to everyone. And despite the recent rise in US production primarily due to higher prices (and not to new tech/trends with the exception of DW GOM) we are still producing around 60% of our peak. The Energy Dept can predict any amount of growth they want but those will only be proven right or wrong in the rear view mirror. Their words prove nothing today IMHO.

Even the author can’t get the definition of PO correct: ”… peak oil is about the end of the cheap, abundant, easy to extract oil, the "sweet" crude that has been the bedrock of our industrial civilization…”. Most on TOD understand that neither the quality nor the price of oil are part of the definition. Unfortunately most of the J6P’s out there won’t catch the more subtle points of the argument and all they’ll take away is that “we have plenty of oil”. And even many of those politicians who do appreciate the reality of the situation don’t want to be the messenger bearing bad news and thus fall into disfavor with the voters.

The inmates have control of the asylum. As I’ve pointed out before: it doesn’t pay to try to teach pigs to roller skate: it only frustrates you and pisses the pigs off.

Too true, your comment reminded me of this article I read earlier today on business insider:

North America Is Poised For Huge Natural Gas Shock (Business Insider)

It has long been our position at The Automatic Earth that North America is collectively dreaming with regard to unconventional natural gas. While gas is undeniably there, the Energy Returned On Energy Invested (EROEI) is dramatically lower than for conventional supplies. The critical nature of EROEI has been widely ignored, but will ultimately determine what is and is not an energy source, and shale gas is going to fail the test.

As we pointed out in Get Ready for the North American Gas Shock in July 2011, the natural gas situation is not what it seems at all...

Much of the information provided in the article is sound (although granted some is a little dubious) but just read the comments that accompany the article. Various insults have been thrown around and many even question the competency of the writer and most ironic of all, one claims it is a propaganda speech that is given to increase stock prices of shale oil. It is a clear case of the pigs being pissed off when you try to teach them to roller skate.

I am the author. I used to be an editor here. My focus was largely on herding behaviour in markets and the need to take a contrarian stance. I stand by my prediction that natural gas prices are set to rise sharply in the coming years.

The original article appeared at The Automatic Earth. Business Insider frequently carries our work.

I agree with the overall thrust of your article that prices are too low, by too low I mean the price is unable to cover the cost of production and therefore the industry is not sustainable. There is a lot of hype and it has a general gold rush vibe to it with the main beneficiaries of this hype being the lease holders and the oil service companies that provide the infrastructure necessary for the fracking.

However the main contention I have with the article you posted and the reason I added dubious statement to my previous comment is because of the suggestion that market prices are mainly the result of the perception of a gas glut. I think the main driving force in the low price is the relative oversupply in the market which will correct in time. Also I have my doubts the most important point (at least for the companies drilling the wells) is EROEI. I think cash-flow or more precisely the lack of it is the most pressing matter as is the need to increase year on year reserves to please the investors on Wall Street and maintain stock prices. This need for cash-flow and reserves increases is what is driving these companies to the ground and not the poor EROEI returns. I think that point could have been stressed a bit more.

Still, the article was good and besides even if you had presented those facts it would not have changed the comments you received. People will believe what they want to believe and anything that challenges this notion will be attacked with great vigor. It will be interesting to see how people will react once the supply crunch is well and truly felt. I get the feeling those critics will suddenly change their tune and pretend they saw this bust coming years ago.

Rockman which article are you referring?

It can't be Is Peak Oil Dead? In that Tim Stevenson sucks in the cornicopian with the first 2 paragraphs and then slams them with reality.

Edit: Don't answer that, I think I see the one your referring.

That is a great article. As you mention he does a good job of drawing in the cornucopians. I like the part blockquoted below on EROEI, which I think more than any other aspect of oil is what the cornucopians fail to comprehend. They think unconventional sources simply means more oil, ah, but it means much more expensive and environmentally damaging oil.

Despite their apparent promise of a bright future, however, this shift to unconventional fossil fuels has a very dark side. For one thing, their extraction and processing is extremely expensive. The Energy Returned on Energy Investment (EROEI) for the Bakken shale in North Dakota, for example is 4:1, which means it takes one barrel of energy to produce four barrels of shale oil, and that is before refining the oil to finished products. The tar sands net energy in Alberta is 3:1. These compare with the halcyon days of cheap oil - the 1930s and 1940s - where the EROEI produced 100:1 net-energy. In order to recoup their considerable investment, energy companies will have to charge triple digit sums for a barrel of oil. Historically, the U.S. goes into a recession when we spend more than 4.6 percent of our GDP on oil, around $60 a barrel. Charles Hall, at the State University of New York, has calculated that it is not possible to run our complex civilization on a net-energy below about a 6:1ratio.

That 6:1 ratio for a complx society is a scary thought, we are already ~10:1 and with the new supplies coming online in the 4:1 range it will not take long at all to drop to 6:1.

I think it depends on the kind of energy return you need. If Alberta oil sand is 5:1 then it's below that threshold. But I think we could be sustained by that for a while because most of that 20%-in that is needed to produce the 100%-out is just used for heat and they could easily take that from the produced bitumen rather than external natural gas as is done today.

Other low EROEI sources like deepwater oil etc. have a more complex re-routing of the 20% back to provide the 100% out, like for example powering all the drilling equipment and offshore platforms, etc. That would not be so easily accommodated by burning some of the produced oil, so that would likely not work below that 6:1 figure.

This leads into the "indirect EROEI" idea that not only do you have to factor in all the direct energy in EROEI, but also all the indirect energy needed to manufacture equipment and support workers. For example, here in Canada they show pictures of all the complex upgraders and refineries in Alberta and sell this as a jobs creation bonanza, that this is "development", not discussing the fact that the only reason we need all those pipes and complex stuff (indirect EROEI) is because light sweet crude doesn't squirt out of the ground by itself anymore. That overall EROEI is what's most important in determining at what point society falls off a cliff and can no longer be supported by that energy source. If everyone is needed to make pipes and pumps for upgraders leaving no surplus energy left over, rather than teaching kids at school or farming food, then it's game over.

The reason people invest in oil sands production is that the alternatives are worse. An EROEI for oil sands of 5:1 seem pretty bad, but the EROEI of a dry hole is 0:1. The much vaunted Bakken shale and shale gas ventures that some people think will save the US from having to cut back on its gas-guzzling life style probably have an EROEI that is much worse than 5:1 once all the energy inputs are calculated and the dry holes are counted. That is the fundamental flaw in the cornucopians' expectations that shale oil and shale gas will save them from having to conserve.

I have to echo what Rocky is saying.

An advantage of the oil sands is that you know the oil is there. Recovery in surface mining is guaranteed and even the in-situ methods are pretty reliable.

Also IMO technology development in oil sands extraction is in its infancy compared to things like fracking, so while the EROEI is 5:1 right now as new technologies are developed that EROEI can only go up.

Most new oil is not coming on line at anywhere near 4:1. That would mean production cost of $22.5 per barrel at $90 oil.

Statoil: Sees Global Oil Demand Peak At 103 Million B/D Around 2030

The company estimated the current cost of marginal oil barrels to be in the range of $75 to $90 a barrel, up from only $30 to $35 a barrel in the early 2000s. The most expensive barrels come from Canadian oil sands projects, the company said.

Ron P.

Most new oil is not coming on line at anywhere near 4:1. That would mean production cost of $22.5 per barrel at $90 oil.

That is a simple and elegant way of putting it.

There has been a lot of talk about how EROI could be calculated in dollars when it's mainly concerned about Joules.
However, it follows that any production with an EROI of 4:1 system-wide (including maintenance) can be expressed with the same ration in currency.

This opens an issue that seems rarely talked about on TOD. It seems to me that oil-producing countries need a sell price of at least > 100$, while oil-consumer only seem to operate in environments of <100$.
The investment in dollar is not giving a 4:1 ratio, or a 400% rise anymore. Given a 7% year over year growth would be around 40 years or so? Oil supplies are certainly not growing on that scale.

There is a clear mismatch. It looks like we are already beyond the point were the oil we produce is high enough to cover the expenses of finding and refining the stuff.

However, it follows that any production with an EROI of 4:1 system-wide (including maintenance) can be expressed with the same ration in currency.

No it can't. All energy is not fungible.

To take an example - an oil sands thermal project and upgrader with a (typical) EROEI of 6:1.

The syncrude which is produced may indeed have a value of $90, but it contains 6 GJ of energy, and the natural gas that produced it is currently trading at $2/GJ in the area. It would take 1 GJ of gas to produce that $90 worth of oil, which would cost $2 at current prices.

The vast majority of the costs would be in the form of wages, royalties, taxes, depreciation, and amortization, which are hard to quantify in GJ's.

Most new oil is not coming on line at anywhere near 4:1. That would mean production cost of $22.5 per barrel at $90 oil.

Hi Ron,

According to RockyMountainGuy the oil sands EROEI is around 5:1, and he seems pretty familiar with the oil scene in Alberta, though I have seen estimates as low as 3:1. I am pretty sure that the energy and cost numbers are not interchangeable, this would make perfect sense when one considers that much of the energy input into oil sands production is natural gas rather than crude.

In addition, Rockman often points out that nobody in the oil business considers EROEI, they are more concerned with dollars and cents, even if EROEI were 1:1, if people want oil because it is a very convenient energy dense liquid fuel that is very desirable, it will still be produced as long as it is profitable. In this situation, other fuels would be used as inputs wherever possible, natural gas, coal, hydro, other renewables, and nuclear would be used for any heat processes and to produce electricity.

As you have pointed out to me before, it is all about supply and demand and their interaction will determine the price of oil. The profit maximizing oil firm aims to produce oil that costs less per barrel than the price per barrel. Rockman is fond of pointing out that often prices change or that costs per barrel are higher than expected so that the price is less than the cost. Clearly this cannot be true for every case and on average if the oil industry is to remain viable profits must be made and no privately held firm purposely plans to produce oil that will lose money. No doubt they plan on a healthy profit per barrel due to the risk involved such that any planned investment in a new project forsees a cost per barrel considerably lower than the expected future price. Hints from Rockman (he usually holds back on real numbers) suggest that if a firm expected the price would be $100/ barrel they would be unlikely to proceed with a project if the expected cost/barrel was over $50/barrel (I am guessing at this number, it might be as high as $75).
As oil depletes and more of the projects become higher in cost/barrel, the price of oil must go up or the projects will not go forward. On the demand side, high prices lead to reduced consumption and lower economic output as well as lower demand for oil. This reduced demand reduces oil prices, increases oil demand and economic output and then oil prices rise. The crucial question is: can oil prices rise high enough to increase the oil supply before the higher prices start the economy spiraling downward again?


DC, there are a lot of different opinions as to what the EROEI of the tar sands are:

Oil Shale/Oil Sands


The above diagram shows the ranges of EROI (which is the same measurement as EROEI) for oil sands from various studies. They tend to stay low from 1.5 to 4, with some rarer areas where it can go as high as 7 to 13 (3) (4). EROI for oil shale tends to be roughly the same or lower.

The crucial question is: can oil prices rise high enough to increase the oil supply before the higher prices start the economy spiraling downward again?

Again? Aren't you a little behind on your news updates?

Ron P.

Hi Ron,

"Again? Aren't you a little behind on your news updates?"
Who me, what recession? ;)

No smiley, indicates to me that maybe you were serious. I may have been unclear, sorry. I will try it this way: once the economy starts to recover (hypothetically) and oil prices rise, will oil supply increase in response to higher oil prices before economy crashes again? If the answer is no, the decline begins, not so much because it cannot be produced, but because it cannot be produced profitably due to a lack of demand at prices which might make more supply available. This gets back to another point you sometimes emphasize, that it's the demand that is the determining factor, in the past I have focused more on supply. If you were thinking along these lines, I get it now, where I missed it in our earlier conversations.


EROEI is not a measure normally used in the oil industry, but you can infer it by comparing the fuel input of facilities to their bitumen output, and reducing both to gigajoules. Since natural gas is sold in gigajoules in Alberta, the input side is particularly easy to calculate.

The energy content of oil produced varies somewhat, but is generally around 6 GJ per barrel. The usual estimate I see quoted is around 1 GJ of gas to produce 1 barrel of oil, with a considerable amount of variability from project to project. That gives an EROEI of about 6:1.

What is the energy balance for oil sands production?

Based on National Energy Board data for natural gas inputs and petroleum outputs, the energy balance for oilsands mining-upgrading projects is about 1:12 and it is about 1:6 for in-situ bitumen production. In addition, about 14 per cent of the raw bitumen is consumed to produce energy during upgrading or is converted into by products such as coke and sulphur. As a result if the raw bitumen from in-situ projects is then upgraded into synthetic crude oil, the energy balance is as low as 1:4.

The energy balance for oilsands is roughly comparable to that for ethanol produced from sugar cane in Brazil – where one unit of energy input produces about eight units of ethanol fuel energy – and it is much better than ethanol produced from corn in North America, where one unit of energy input only produces about 1.3 units of ethanol fuel energy.

Since the early 1990s, energy use per barrel in oilsands mining and extraction has been reduced about 45 per cent through the use of new technologies such as hydrotransport, which is more efficient than conveyors or truck transport. New, low-temperature extraction processes further reduce energy use.

The last paragraph is particularly important because it indicates that research in improving the efficiency of oil sands production is producing good results in reducing fuel consumption at the plants. They are continuing to devise new ways to improve their energy efficiency of the plants, so the EROEI is slowly but steadily increasing.

The problem with many of the estimates seen in the media is that they are based on 30-year old or older data, and things have improved considerably since oil sands production started. What's worse, much of it is based on US oil shale and oil sands data, and the American deposits are nowhere near as big or as easy to produce as the Canadian oil sands. In addition, American researchers are not nearly as experienced with modern oil sands technology as Canadians since there is no significant oil sands or oil shale production in the US.

It's worth noting also that the input energy is mostly in the form of natural gas, which is selling for a small fraction of its energy value compared to oil. For many companies, it's an effective way of turning their surplus gas for which they have no market into oil which they can sell for higher prices.


Thanks for this information. I believe that EROEI includes all of the energy embodied in the investments and the output, so the example you gave of energy inputs into the production process may have left out the energy embodied in the equipment used to produce the bitumen (this might be close enough to zero, compared to the natural gas inputs to ignore). If natural gas prices rise to say $8/GJ, would the oil sands remain profitable at $80/barrel for WTI (the bitumen sells for less than WTI, I am not sure how much less on average.)
At some point natural gas prices will have to rise because at current prices a lot of producers are losing money, I imagine prices will rise to at least $5/GJ, $8/GJ is a worst case scenario.


It's worth noting also that the input energy is mostly in the form of natural gas, which is selling for a small fraction of its energy value compared to oil. For many companies, it's an effective way of turning their surplus gas for which they have no market into oil which they can sell for higher prices.

I understand this economically . . . we value liquid fuels highly because of their energy density and safety. They are just great as transportation fuels. But on an efficiency basis, this seems so wrong. We are wasting so much energy just to transform from one form to another. I can't help but think that someday we'll look back at this and think "You wasted all that great natural gas just to make a smaller amount of synthetic crude? Why?!?!"

But that is the way economics works . . . you waste something if you have extra.

You are not wasting natural gas to make a smaller amount of synthetic crude, you are using a smaller amount of natural gas to make a larger amount of syncrude: Typically 1 GJ gas -> 6 GJ oil.

Where it doesn't make sense is using natural gas to make corn ethanol: Typically 1 GJ gas -> 1 GJ ethanol. The real objective there is to make money for politically powerful US corn growers, not to solve any energy problems.

Oh, I understand using natural gas in the processing to improve the syncrude. I'm thinking more about natural gas that is simply burned to heat steam for SAGD operations. Isn't that done more on a price arbitration basis wherein you burn cheap gas to obtain more valuable liquid fuel even though there is little gain on a energy basis.

I wish these "peak oil myth", "peak oil is dead", and other such articles at least said "Peak oil is postponed" or "Peak oil delayed". Only the abiotic oil nuts have a view that would be compatible with peak oil not being real. Tight oil, deepwater oil, oil sands, oil shale . . . these things can only postpone peak oil.

A direct consequence of PO

Jet fuel prices spark turboprop comeback

As fuel prices soar to record highs and airlines struggle to maintain profitability, the unglamorous but fuel-efficient turboprop regional airliner is making a remarkable comeback.

The revival of the propeller-driven planes — which typically consume a quarter to a third less fuel than equivalent jets — marks a significant new trend in the industry. Until recently, many commuter airlines had been determined to consign the planes to history and convert to all-jet fleets, which offer greater passenger comfort.

Oh well, so we are back to the 50's again, next up is a comeback for Ocean liners.

Turboprops use a jet engine to push a propeller. They are much slower than a typical jet but are much more fuel efficient. So welcome to the age of hybrids.

Yup...I got it wrong. Hybrid it is. Though unlike their hybrid car cousins Turboprop passenger flights were in use once and discarded later.

A news item from the dawn of the century...
Twilight Of Turboprops?; Passengers Go Out of Their Way To Catch Jets

Like many other airline passengers, Michael Gallagher has gone out of his way to avoid flying a turboprop plane. When he attended an Orbital Sciences shareholder meeting a few years ago in Washington, for example, he changed his schedule at the last minute to fly on a jet.


Within the next three years, Continental Airlines will spend around $2 billion to supplant all its turboprops with regional jets: twin-engine planes carrying up to 70 passengers. Delta Air Lines will pay $4 billion for 200 regional jets and start service to 100 cities.

Weird what a decade can do. Who says you can't go back in time.

Something over 20 years ago I flew into Charleston, West Virginia on a turboprop. We were skirting the edge of a blizzard, and it was the most terrifying approach and landing I can remember ever making. For the flight out in the evening, it was all I could do to get on the plane. But it was a small jet, which just stood on its tail and climbed out of the muck without even a bounce. There is something to be said for being overpowered...

Wiseindian is correct. Turboprops were developed in the late 1940's and by the 1950's had replaced most piston driven airplanes, while the first pure jet, the British "Comet", was developed in the mid 1950's. Most airplanes in commercial aviation in the 1950's were turboprops,IIRC.

What about the german jet fighters that they almost got in place at the end of WWII? I ampretty sure the war ended before the 50ies.

The Gloster Meteor did enter production earlier than the Me262, though it did not see substantial action during WWII: http://en.wikipedia.org/wiki/Gloster_Meteor

A total of 890 Meteors were lost in service with the RAF (145 crashes in 1953 alone), resulting in the deaths of 450 pilots...

Now days, the USAF has problems with the loss of one or two planes, such as that due to the F-22 oxygen problems, but these days, pilots cost more money to train...

E. Swanson

Jet Engine Development in Germany


That Youtube was well worth the time spent.

I fully agree

Subject here is commercial passenger airplanes. Yes the Germans did have production jet fighter planes at the last few months of WWII, but they never transferred the technology to passenger planes (transports), or even bombers during the war. After the war the technology was advanced by the US and Great Britain.

As a long time commercial pilot one of the biggest problems (no, the biggest problem) with affordable power plants in new aircraft is product liability.

Turbines are wasteful, but they have been developed. Therefore, they are tweaked and used.

There are actually light weight gas automoble engines (converted to hang on an airframe and turn a prop) that are far more efficient. There are light weight diesels that have been tried. But the insurance costs for new innovations are prohibitive. The reason? Everytime a retired farmer pounds his Cub into the ground the family sues Piper, and this is for something developed over 60 years ago. Any incident brings out the legal jackals and there is no way around it in the US.

My favourite machine was a piston Beaver. I have thousands of hours in them. Engine design...1929. Magnetos for gods sake...two of them, they might weigh 40 lbs each? You can't even switch to electronic ignition!! I could swap out ignition parts in a C-185 with Ford...they are identical. (Voltage regs, etc.) I have done so. Get caught or get in an accident, your company is history as well as your family's inheritance.

Lawyers and US citizens desire to sue the ass off anyone and everything does a lot to retard innovation.


"There are actually light weight gas automoble engines (converted to hang on an airframe and turn a prop) that are far more efficient."

One of my favorite planes of all time was the Mooney PFM(Porsche Flug Motor) or more simply known as the Mooney Porsche. A very slightly modified engine from the 911 of the time period.

Ocean liners are quite fuel inefficient though I suppose you could build a nuclear powered ocean liner. Perhaps we'll see a return to the use of intermediate stops such as Gander NL and Reykjavik Iceland along the Great Circle route to Europe as that would be more economical than carrying enough fuel to fly non-stop.

Not really...see this analysis

It all depends on how many passengers one is willing to carry, the cruising speed etc and more than that one must remember, there has been very little investment on improving the efficiency of ocean liners for more than half a century while jets are constantly squeezing efficiency out of them. In the long run I would put my money on the ocean liners, after all, transport by water beats all other modes of transport any day.

There was recently some renewed research on sail powered ships, IMO by combining different alternatives (a hybrid) ocean liners can once again become extremely competitive.

Edit : The analysis is incomplete and uses watts, see the comments for a complete analysis.

Water transport beats everything else for freight, especially when the freight needs no care (e.g. refrigeration) and you can just set it down or dump it into a hold. The trouble with water transport for passengers is that it moves very very slowly if it is efficient, so that one must pay through the nose to rent human-habitable space, and hire crew to staff it, for a very very long time. This is not cheap, and it's probably why international travel didn't really "take off" until jets came into use. It surely also helps make long-distance train travel so very expensive; for diesel trains, one might even wonder whether the train ticket would typically cost more than the air ticket no matter the oil price.

for diesel trains, one might even wonder whether the train ticket would typically cost more than the air ticket no matter the oil price.

In the real world, the economic crossover point where jets become cheaper than trains has always depended on trip distance (At no diesel price will it be cheaper to take a jet instead of a train from Silver Spring to downtown DC). So there is a step function when train travel is long enough duration to require sleeper quarters, just as jets have a big disadvantage because they cannot board/disembark passengers in city centers like trains.

In Europe, contrary to your contention high speed rail is displacing air travel very significantly on short trips (like Marseilles-Paris, etc.) Interesting article from "AirGuide", (slightly suprising source) on this subject.


The new generation of high-speed trains is setting the pace for business travel within Europe. Why fly when you often can get more comfortably, conveniently and faster by high-speed train, sometimes for a third of the of the cost of a business-class air ticket?

The train can beat the plane and the automobile from center to center on trips up to 650 km/400 miles. On short flights, flying time can be as little as 20 percent of the total journey time. The time-distance equation is shifting in favor of high-speed rail versus air travel, but bear in mind that comparisons usually cite departure to arrival times for air travel but does not include the time it takes you to get to the train station and then to your final destination for rail trips.

But as high-speed trains become even faster, business travelers will be able to save time on longer trips, which may make the airline option less attractive. What counts with rail travel is the quality of the time. Going by plane, the time is fraught and fragmented, allowing more time that you need to get to the airport, checking in an hour before, standing in line, getting on and off the plane, taking a taxi at the other end. And high-speed trains offer superb comfort, especially first class where you can expect airline-style seating and service worthy of long-haul business class, with wide seats, plenty of legroom and meals and drinks served at your seat, plus the run of executive lounges at major terminals, all in the price of your ticket. Take your laptop and mobile phone and do a pile of work in peace.

The patience span for the business travelers seems to be about three hours for train journeys; if it is much longer than that they will struggle out at the airport according to travel agents dealing with corporate travelers. Eurostar, which takes three hours from London to Paris is a roaring success. But London-Brussels which takes over three hours is not seen to be worth it. Three hours seems to be the critical cutoff point. People catching Eurostar from work or go to work on Eurostar. If they start their journey from home, they are more likely to go to the airport. There is an enormous temptation for people in the City of London who need to go to Paris just to go to Waterloo and get on the Eurostar rather than trying to get out of Heathrow.

Eurostar with services between London and Paris and Brussels has proved a winning formula since it ran the first trains through the Channel Tunnel in 1994. More than 25 trains a day among the three cities will carry 6 million passengers this year. Eurostar claims that its market share between London and Paris is 60 percent of air and rail travelers. The London-Brussels share of 50 percent is expected to rocket with the opening of a new high-speed line between Lille and Brussels las Sunday, which cuts the trip time between London and Brussels by 30 minutes to two hours and 30 minutes.

Other high-speed links in Europe and city center to city center time:

Destination: Train/Air:

Geneva-Paris 3:36 /3:05
Geneva-Zurich 3:00 Regular train 2:50
Geneva-Milan 3:40/3:15
Paris-Brussels 1:26/2:50
Brussels-Amsterdam 2:40/2:50
London-Cologne 5:30/3:35
Paris-Cologne 4:00/2:55
Brussels-Cologne 2:30 soon will be 1:45

By 2003:
London-Paris 2:20
London-Brussels 2:00

Eurostar has pitched fares to compare with airlines. Premium First is interchangeable with British Midland business-class tickets between London and Paris or Brussels. So your can take the train one way and fly back or vice versa. If you take the train both ways, you get a free Standard Class ticket. The round trip from Paris to London costs a little less than the air fare. You are allowed a 10 minute check-in, a limo transport from Waterloo station to central London, a taxi from Gare du Nord to any central Paris address, and other frills. A regular first-class and Second Plus budget business round-trip fares cost up to 40% less than full-fare economy round-trip airline ticket.

It’s not easy.

Rail travel, however, is not always easy to book. The problem is that travel agents find it hard to call up railway schedules on their screens. Even rail experts have problems. One can book airlines around the world on a screen, but you can’t do that with rail. The rail reservation systems do not have their act together, especially for cross-border travel. Airlines computer reservation systems are not displaying rail schedules, at least not at a place where you can easily find them. So they don’t come up as an option to agents on the screen. We can issue about 60 percent of rail tickets across Europe on the screen, but it is a nightmare.

One of the best features in favor of rail travel remains the fact that one has ample undisturbed time to work or to rest. If the total travel time from city center to city center is three hours, the train gives you as much as 2:30 minutes of undisturbed time, where on a similar trip by air will only give you thirty minutes to one hour due to the fact that the traveler has to take several modes of transport to get to the airport and also walk quite a bit to get the aircraft. Even though air travel gives the impression of speed, it seems doubtful that is as rapid and comfortable as a high-speed train for trip of three hours or less.

I did say long distance. So, "In Europe, contrary to your contention high speed rail is displacing air travel very significantly on short trips (like Marseilles-Paris, etc.)" proves nothing about the "contention" I didn't make. (Though I suppose that, well, some in the petty micro-states of Western Europe might think of Marseilles-Paris as a long distance.) Airliners use quite a lot of fuel to get to altitude, so they'll do best for long distances.

And let's not forget that for now, even trains so expensive as to cost more than solo driving (as can happen in Japan), may sometimes displace more air travel than expected at short or even medium distances. The baroque theater of air "security" is becoming ever more absurd and time-consuming, though that may not last as a disadvantage, considering what happened in Chicago recently, where Metra banned everyone from carrying much of anything at all during the summit conference. And some travelers may actually even be headed downtown, though in the USA, travel-intensive businesses may locate their offices, or at least satellite offices, near the airport.

So I'm still left to wonder about what I actually asked: whether there's any crossover point to be reached for long distances - say, 1000 miles or more. Or, even if a crossover point exists, whether most folks would need to care, or whether, by the time it were reached, long-distance travel would mainly be beyond the means of any but the very, very affluent, as in the early 20th century and before.

(N.B. naturally, one is not obliged to consider diesel for Silver Spring since the electric Metro stops there and goes downtown. OTOH, considering, say, Tom Toles's repeated cartoons (see June 22, June 8) about the incompetence, corruption and apparent general worthlessness of the authorities running the Metro, maybe that's not saying much.)

I have been thinking about your "crossover point" for long distance for some time. While I have not built an effective model based on real data, a few boundaries seem to emerge. First, for the business traveler, the US Northeast Corridor is the classic test. There, the range of 100-350 mile distance with good travel times, lots of amenities, and central city, high quality stations with solid local transit service is a clear winner for rail. Amtrak is even winning the NYC-Boston and (to a significant extent) the DC-Boston corridors. Some parallels can be found in the California corridors and certain corridors tied to Chicago. The cross-over point is about 480 miles, certainly no greater than 500 miles.

However, the business traveler is not the only travel customer. What I observe on long distance Amtrak trains are several other traveler classes. For day trips, the family going to a vacation spot (say Disney World) will chose a five to eight hour ride with the availability of a rental car at the end of the journey, even if the average speed of the train is only 50 mph; That is a 250-400 mile range. Another passenger class, often with small children and/or retired, will chose an overnight trip of 10 to 15 hours duration (500 to 750 miles) and sleep in the coach; these riders will use the snack bar rather than the diner, since cost is a major factor, more so than for the vacation family.

A third passenger class is the student or single adult willing to endure a route far from their optimum one in order to avoid the cross-country bus trip yet still go as cheaply as possible. These young people (they are almost always young) may spend up to three nights on the train and forego a shower in order to make the trip. Given the economic conditions for people under 35, this is likely a growing population group. The average trip for this passenger will range from 750 to 3,000 miles. This is probably the customer that all transportation services choose to ignore, yet these can also be lifetime customers if treated right.

Finally, there are those such as my wife and I who choose not to fly (for a variety of reasons), drive up to five hours if necessary to reach an Amtrak station, book an expensive sleeper accommodation, eat in the dining car, and consider the journey to be the destination. For us a minimum trip is likely to be 400 miles, with a maximum one way trip being a Chicago to west coast run of 2,000 + miles. We are the reason certain long distance trains get booked up months in advance in terms of sleeper accommodations.

As you can see there is not one answer due to the wide variety of passenger classes.

If trains can do an average of 75 miles an hour which is not that big a deal, for an overnight journey it comes around as 10 X 75 = 750 miles. If the infrastructure is improved and this goes to 100 miles an hour, you get 1000 miles. Many passenger groups don't mind overnight journey by rail if you have sound sleeping quarters since it doesn't really waste their time. It's a win win scenario IMO, and the ability to drop passengers at their respective stops is unbeatable, no need for feeder services. The crew required to service an overnight journey is also low for obvious reasons. No need for a dining car, ask passengers to get their own dinner or buy it at the station. In the morning you get down before Breakfast and have it at the station or take it at your destination.

Is it really that hard to do ? I guess a lot of dots on the map can be connected within the 750-1000 mile radius without any obvious loss of productivity.

My Mother-in-law much prefers rail travel, and takes Amtrak from Silver Springs MD either up to us in Maine, or to her family in Iowa. I believe she did a Toronto trip not long ago as well. Retirees may be another class to consider, while this may cross with you and your wife. ?

"A third passenger class is the student or single adult willing to endure a route far from their optimum one in order to avoid the cross-country bus trip yet still go as cheaply as possible."

To me, the odd thing about this is that back in student days, I stopped using Amtrak for ca. 950 miles each way to visit the relatives, once the novelty wore off, because it was cheaper to fly, even compared to just a coach seat on the train. The bus was cheaper still, but far too awful to contemplate (although, it was nice when the CTA train was extended from Jefferson Park out to O'Hare, because it became feasible to visit Chicago via airport bus, which was just enough less awful than a dog of a bus to be usable.)

I still have to figure that the cost of renting space on the vehicle, and hiring crew, both for such a long time, must count considerably, compared to air. Plus, there's the cost of maintaining the rail line the whole way, rather than just runways at each end of the trip.

Those costs can certainly be borne by, affluent, let's call them cruise-ship-train (à la the Orient Express) passengers. However, as with actual cruise ships, I'd question that as an affordable way to go and visit Grandma. And I'd wonder about the politics of subsidizing that sort of passenger on any scale. So I'm still left to wonder, as ever, about the crossover, if any, for most people, not looking for a cruise (maybe they've already seen the scenery on the way to Grandma's umpteen times and don't give a stuff about seeing it yet again), but just trying to get someplace as efficiently as possible.

I'm getting curious. Many of you seem to be saying that the long distance bus is so bad and that makes me wonder what is so bad about it?


That's not a lot of us.. that's PaulS, saying it over and over and over again.

It's pretty crampy on a bus, but it's not hell.

Actually, in this subthread, Dark Fired Tobacco seems to be the first to mention a bus:

A third passenger class is the student or single adult willing to endure a route far from their optimum one in order to avoid the cross-country bus trip yet still go as cheaply as possible.

and in a way that seemed to take the awfulness of it for granted (else why bother to "endure a route far from optimum" just to avoid it.) I was agreeing. In the USA, buses that aren't so bad seem mostly to be confined to airport runs from nearby cities. They can sometimes be found outside the USA; someone mentioned Japan, correctly IMO.

(Of course, this is all wandering rather far afield from the question of whether there is a crossover point from air to rail for long distances, as oil prices rise, or whether, instead, the need to rent and crew the slower rail vehicle for a very long time offsets any savings on fuel cost.)

At least for the USA, if you even have to ask, it will not really be possible to explain it. There may be exceptions, but, the pervasive reek of diesel fumes and/or lavatory chemicals, the icky stops in the seediest parts of town, the guy hacking and coughing god knows what germs all over you for endless hours from inches away (bad enough on a plane but at least a plane ride usually ends), the carsickness-inducing suspension, etc. etc. etc. Yecch.

One of the issues in this discussion is that "long distance" is undefined, and yet the crossover points between different travel modes depend heavily on distance traveled.

So if you define "long distance" as inter-city, bus travel in the US is actually increasing rapidly. But PaulS is correct that traditional US inter-city bus transport by Greyhound and the like has been relegated to under-class usage ("the bus, it is not just a white-trash terrarium") with nasty stations, dirty buses, and sketchy clientele. Bolt, Megabus, and the "China Town Buses" are changing this picture and my kids and their friends on the US East Coast use buses as their first choice for DC to NYC, etc.(cheaper than air/rail, wifi/power included,etc.). So bus travel does not have to mean "riding the Dirty Dog", but a generation grew up with Greyhound and got the impression that bus travel and stink/dirt/delay were inseparable, but a younger generation has a different view.

And other countries have deluxe bus travel systems that do not exist at all in the US. Argentina has multiple levels of bus travel, ranging from just a seat to semi-cama to super-cama (in Super-Cama you get a fully reclining bed with curtains around it on a double-decker bus with movies and stewardesses who ply you with food and drink {even whiskey before bedtime} which makes the 20+ hours from Buenos Aires to Patagonia quite pleasant). Long-distance bus travel is not inherently so bad, but US implementations can be pretty nasty.


1. The intercity bus was the sole major long-distance passenger transportation mode that grew
appreciably in 2011. Daily bus operations expanded by 7.1%, a marked increase in the
annual growth from previous years.
2. “Curbside operators,” led by BoltBus and Megabus, grew at a particularly rapid rate,
expanding the number of departures from 589 to 778, a 32.1% increase.
3. Passenger traffic on curbside operators grew by approximately 30%. In absolute terms, we
believe this represents the largest expansion of passenger traffic on curbside operators
since the sector emerged as a significant transportation mode in 2006.
4. Evidence suggests that the two largest Megabus.com hubs, Chicago and New York, are
now profitable, indicating that the core business model is financially sustainable.

I took some overnight buses in Japan, which were very nice - the seats were very comfortable and reclined to almost flat, so you could sleep easily. Plus it was cheaper than taking the train. I would do it again, for sure.

However, some of the operators, especially the "Chinatown" type, have other chronic problems, exemplified by this from last year: Feds shut down 26 bus companies that shuttle passengers between New York and Florida for safety violations. So I wouldn't be rushing out to ride on those either; there seems to be a long litany of weird crashes. Also, long "curbside" waits in the pouring rain, or stewing in the hot sun, with no amenities, don't exactly seem like a selling point. Oh, and make sure not to drink one of Bloomberg's large sodas, 'cos without amenities the results may prove embarrassing.

Note, BTW: there used to be a semi-deluxe bus along the lakeshore from Milwaukee, WI, north to the resort area of Door County. IIRC, that folded; it's easy enough to drive it that there really isn't much business left even for a halfway decent bus. Plus, one really wants a car anyway in an area like Door County.

Also note: the original question, now utterly lost, was about an economic crossover between air and rail, versus oil price; so "long distance" meant, to me, a distance long enough to be reasonable for air travel these days - at least on the order of 500-700 miles considering all the "security" fiddling and the way the system breaks down into endlessly delayed chaos at the smallest hint of routine summer rain. So, for example, the 220 miles or so from Washington DC to New York wouldn't really count, and it wouldn't usually make sense to fly it except as part of a longer plane trip.

An amusing note on that PDF - even going by bus you can't avoid being detoured through Atlanta!

What Amtrak (and VIA in Canada) face is the entry cost to a corridor. One needs stations and upgraded track regardless of how many daily trains are utilized. Since Congress effectively mandates a single train each way per day, the fixed costs are very high. Add more trains per day, plus more connections with other new trains on other new routes, and the ridership increases, lowering the fixed cost per passenger.

Upgrading tracks to higher speeds (up to 110 mph) is possible in some locations, and that can increase the average train speed from 45 or 50 mph up to 75 mph, but many potential routes will need to operate as they did in the post- WWII era even if dramatic rail expansion occurs in a post-peak world.

That leaves two possible train types: 1) the daylight operation serving business riders and the general public who wish to ride less than eight hours and are content with a single on-board snack and drinks, and 2) overnight hauls with sleeper car and dining car accommodations having travel lengths up to 15 hours. In the later case, sleeper accommodations would be provided by hotel chains, much like the Pullman company did years ago. This is actually already happening on Amtrak's Chicago-New Orleans and Chicago-NYC runs on an experimental basis. The transcontinental rail trip will remain one requiring heavy subsidy for decades ahead unless speeds can be increased substantially.

Rail and bus will work in complimentary fashion, with joint stations wherever possible (again, already happening in key cities). Rail and bus will replace the short-haul air service that will not work economically in a post-peak world while offering the auto driver an option to intercity roadways that are no longer being maintained to levels drivers have come to expect.

Rail and bus will replace the short-haul air service...

Precisely. The TSA is already seeing to that. But because of the other costs, it's hard to see them replacing the longer-haul service we were actually discussing.

A quick update - the article quoted is a few years old - travel times from London to Paris are now 2 hours 15, but to Brussels have reduced to 1 hour 51 minutes. And trains now leave from St Pancras, where they use the HS1 high speed line built since the original article.

I am fascinated how I hear on "Green" websites that one should avoid short-haul airplane flights as the takeoff/climb/descent is least efficient.

On the other hand as a pilot I see how on long flights fuel displaces payload. So a trans-Pacific flight will carry about twice the payload (a guess, this is not my department) with one stop in Hawaii/Fiji.

As an Australian-Canadian I constantly hear people say "I couldn't do that 14 hour flight" - The alternative being?...
So last trip back from down under I took a cruise ship repositioning which was 'cheap' per day but almost a month long. I did a quick calculation from the Captain's numbers and we used 2.5 times as much fuel per person as a 747 would have used. So for a ship to replace jet aircraft perhaps one would have to triple the passenger density, which would not be outrageous.

But it is not an obvious increase in efficiency by switching to surface travel, perhaps because wasteful lightweight optimized aluminum beats heavy old efficient steel technology .

I don't have any ethical objections to flying, just that it will become unaffordable. In a world where economic opportunities are far and few people wouldn't mind taking a little longer to travel. It's unavoidable IMO, it's hard to argue against this.

because wasteful lightweight optimized aluminum beats heavy old efficient steel technology

As I already mentioned we are yet to see major efficiency improvements in passenger ships. So this point about old vs new is moot. Moreover it's not like planes are going away, there will be plenty of them around for a long time to come because they have a specialized role that is hard to fill, very much like Oil.

Several years ago there was a development in military ships where a 'small' change in design - adding what appears to be a swim deck at the stern - gave a significant improvement in power / speed ratio. Other than an decrease in stern /mediterranean docking ability it looked like a pretty simple fix.

Well, it looks like Ontario will have plenty of electricity on tap over the near-term and is well on its way to eliminating the last of its coal-fired generation.

IESO's 18-Month Outlook Shows Sufficient Supply of Electricity

Ontario is expected to have an adequate supply of electricity to handle the increased demand resulting from air conditioning use over the summer, even under hotter than normal weather conditions. Over the longer term, Ontario's electricity demand-supply forecast remains positive, with sufficient power to meet consumers' needs for the next year and a half, the Independent Electricity System Operator (IESO) reported in its latest 18-Month Outlook.

During that period, there will be more than 2,000 megawatts (MW) of capacity added to the grid, comprising approximately 1,500 MW of nuclear generation and 500 MW of grid-connected renewable generation. By November 2013, total wind and solar generation connected to the transmission and distribution networks in Ontario will reach approximately 3,800 MW.

But the real kicker for me:

"As part of the transition to a more sustainable fuel mix, 3,500 MW of flexible, coal-fired generation will be eliminated over the next two years," said Bruce Campbell, Vice-President of Resource Integration at the IESO.

See: http://www.newswire.ca/en/story/998199/ieso-s-18-month-outlook-shows-suf...

Back in 1983, my first year with the Ontario Ministry of Energy, almost one-third of the province's electricity was generated through the burning of coal -- some 35.8 TWh in all; by 2011, coal's contribution had fallen to just 2.7 per cent (4.1 TWh), and in two years' time coal will be completely gone from the picture.

And even with the added expense of phasing-out fossil-fuels, Ontario's 2011 wholesale cost was 7.16-cents per kWh, which compares favourably to that of Alberta, say, at 7.7-cents.


"...and in two years' time coal will be completely gone from the picture."

Well, sort of. As the world's seventh largest coal exporter (2011), it's not like Canada's coal is going to remained buried. I'm sure China has good use for it though.

Admittedly, my scope is narrow, for I speak only of Ontario's use of coal with respect to power generation.

As recently as 2007, 80 per cent of our province's electricity was coal-fired. That has since fallen to 57 per cent and with the seasonal shut-down of two of NSP's largest coal-fired units the year-end results should come in closer to 40 or 45 per cent. Still way too high, but progress nonetheless.


@ ghung

another new mine going in by Courtenay/Campbell River on Vancouver Island. This one will haul the stuff to Port Alberni on the west coast of the island...lobbying for a new road to boot.

West Coast for.....you guessed it. You win the prize.

It is certainly good to see the use of coal eliminated in Ontario. However, hydro costs have been skyrocketing in Ontario over the last four years. If I calculate the overall cost per kwh by dividing my total bill by the consumption (and ignoring the idiotic "Green Energy Rebate" which is just a cross subsidization of hydro from other tax revenue) it looks like the cost per kwh has increased almost 45% since the end of 2007. Luckily, we have been able to reduce our consumption over the same time period so we are not actually being billed 45% more. Hydro costs are expected to continue to rise well beyond the inflation rate for years to come.

My understanding is that Ontario has also started to shield large industrial power consumers from picking up their entire share of global adjustment charges. That means residential customers such as myself will be asked to pickup a larger share.

While ratepayers may disagree, from a global environmental point of view, displacing the dirtiest fuel (coal) and increasing prices to incentivize more efficient use of electricity is a win-win.

Increased prices if they were in the form of a carbon tax or other form of tax that generates revenue that could be usefully employed by the province would be ok. Of course, other than an 8% increase due to imposition of the HST tax on hydro, that isn't what has been driving up hydro costs in Ontario.

Ontario used to have a publicly owned and managed hydro system called Ontario Hydro. As a government owned monopoly a lot of people were not happy with it. A Conservative premier, Mike Harris, decided to create a market for electricity and let private sector companies compete to provide power. As other jurisdictions have discovered, this is a great idea in theory but a lousy idea in practice. Ontario Hydro had a lot of debt and a lot of its power generators could not operate with market set rates. The private sector was also reluctant to make large investments without some guarantee as to how much power they would be able to sell and at what rates. The result is that a high percentage of power producers are guaranteed a minimum rate for their power regardless of what the market rate is and/or are compensated if their power isn't required. Since the actual cost of power is typically far in excess of the market rate there is a "global adjustment" to cover the difference. Demand for electricity has dropped significantly in recent years as manufacturers flee the province while additional high cost sources of electricity have been added to the system. The result is that the global adjustment charges have skyrocketed over the last couple of years. It is expected that global adjustment charges will further increase in the future and there will be more frequent situations where the market rate goes negative. A negative market rate essentially means we are paying (not selling!!) someone outside of the province to take our excess electricity.

It is heart breaking to see what had been one of the most successful publicly owned hydro utilities in the world turned into a big scam where power producers make lots of money while residential customers see their bills go up well beyond the rate of inflation. Higher electricity prices are also one of the factors driving businesses out of the province.

Only because of coal can many of the poor of the world afford the luxury of electricity. We, who are more affluent, shouldn't be so indifferent to those needs.

If I may, I'd like to propose a different take on this. We, who are more affluent, should be working diligently to reduce our consumption of coal to the greatest extent possible, given all that we know, and this should be an easier proposition for wealthier nations such as our own than for those of lesser means. But beyond that, we should be encouraging the use of affordable and environmentally sustainable energy world-wide.

But I agree that we're mostly indifferent, but I attribute that to greed and our self-absorbed and self-indulgent nature.


Not sure how the "poor of the world" applies to electric generation in Ontario, Canada's social safety net did not have too many holes last time I looked.

And the "poor of the world" will bear the consequences of climate change, while the rich can pay to escape them. Poor people already drown by the thousands in Bangla Desh, and rising seas from coal's carbon can only make that worse. There are 1.6 billion people on the planet who are not even connected to an electric grid, so coal power will not reach them, but the rising temperatures, seas, and natural disasters resulting from climate change will.

So Ontario burning less coal is pretty much good news for the "poor of the world", not that there is not more than enough bad news to go around.

I'm gonna have to pile on a bit here too; why is it considered okay for the third world to have second class energy, with the attendant pollution? Why should we encourage developing nations to invest in something that will be a long term loss, as it not only will damage their environment, but is also a non-renewable resource? Not to mention negative health effects, which may be outweighed in the short term by improvements such as electric cookstoves that save lives, but will eventually become serious (Beijing smog).

The arguments for dirty fuel in the developing world are condescending, though usually it is claimed that arguing for renewables somehow is... Though it is somewhat hypocritical to argue for renewables from a first world nation that runs on fossil fuels. So it depends on whether you prefer to be a hypocrit or to condescend.

Since so many of these nations are in the tropics or at least in sunnier climes than Europe, I can't see why solar isn't a good idea for many of them. This also can avoid the need for a large grid, which can be problematic in many of these countries. To be honest, though, at one end are issues that go back way further than electricity - the smokey cookstove issue was fixed in Europe and America long before electricity. Basic water and sewers are also critical, but again, even having decent outhouses and clean water sources would be a major improvement in many of these areas. Electricity is not a fix-all, but just one issue of many.

I agree. The framing usually goes, the (currently) rich world got there by dirty development therefore it is immoral to tell others not to. That is akin to saying "don't learn from our mistakes -or partake of the better alternatives made possible by technological advance. In many rural parts of the world, solar is far more affordable than extending the power grid. PV also allows local control/ownership of the means of producing power. There should be advantages, as well as disadvantages to being late to the party. The "moral" thing to do is to help them to maximize the advantages and minimize the disadvantages.

That's what's so sad about China. I remember thinking as a kid that China could look at all of the mistakes made in America and start with a clean slate. But, no... They re-created America and are advancing away from that position.

Still, good for them! We don't get amorphous metal-glass transformers here in America... unless we buy them overseas.

I agree with tommyvee. As a ratepayer, I'm not exactly thrilled when the cost of electricity goes up, but higher rates do encourage more efficient use. I assume that you're on a TOU meter and if that's the case, then shifting at least some portion of your discretionary demand to the off-peak hours should help ease the pain (7:00 pm to 7:00 am weekdays and all day weekends and holidays). Off-peak is currently 6.5-cents per kWh for energy, plus an additional 4 to 5-cents in T&D and various ancillary charges as determined by your local provider. No question, consumption during mid and on-peaks is going to sting a bit (energy currently priced at 10.0 and 11.7-cents respectively) but, here again, it should help encourage consumers to reduce their on-peak demands which should prove beneficial to all ratepayers over the long haul.


On a slightly different track, I thought you might find this interesting. I stopped in at a nearby big-box retail store this afternoon, and they've installed motion-sensor lights in the coolers.

Granted, it's a drop in a bucket when one considers their energy use overall, but I though it was cool.

A year or so ago, one of Canada's largest grocery chains based here in Nova Scotia converted seven thousand refrigeration case doors to Philips Affinium LED strips controlled by motion sensors. Shortly thereafter, the motion sensors were all yanked out because shoppers found it too distracting. The hit in savings wasn't huge because the end strips draw just 15-watts and the centre strips which illuminate two doors consume 22-watts (the HO and VHO T12 fluorescents they replaced consumed as many as 130-watts each).


Wow - could shoppers get more distracted ? The only negative I could see what that you have to actually read the overhead signs above the aisles, instead of scanning ahead to see the shelf contents, if that could be called a negative.

Interesting. I would have imagined the shoppers not being so much distracted (huh?), as constantly yanking on the doors just to turn on the lights to see if what they were looking for was actually there, cancelling out the savings from the sensors many times over.

Our new supermarket has them, and it did take some getting used to the lights coming on 20 feet in front of you.


Bubbles and the Collapse

I used to worry about peak oil but not so much now. The thing that is going to get our civilization first is the 30 plus year old leverage bubble bursting. The tech bubble and and housing bubbles were just sub bubbles of the over all leverage bubble and this is nothing new. Nicole Voss explains at from about 13:00 to 19:00 in the video below.

I used to be an editor for this website. Is it too much to ask for my name to be spelled correctly on the very rare occasion when my continuing work in this field is acknowledged here?

Nicole Foss (Stoneleigh)

That is a quote from a news article and that it should not be edited when posted in the DB -- that would be dishonest of Leanan. Barking up the wrong tree.

It's hardly out of order to request as much.. wouldn't take much to note a minor correction in brackets for respects' sake.

A bit of an oversight from busy people in tough times..

Best regards, Nicole!

I already called Ron Beasley on his mistake, above. He responded that he had corrected his "typo", but his response was removed, perhaps because he didn't correct all of his "Voss" typos. Anyway, Nicole, we've got your back (at least we're trin' ;-)

I'm sorry you were offended, I fixed the other mistake. Keep in mind I did not ask for this post to be linked by Oil Drum, it was intended for my readers. I would imagine that Nicole would be pleased that that her ideas were receiving some additional exposure. I hope you will not delete this and if you do you are an ......

It's OK, Ron ;-) I'm certainly not offended (and can't fix or delete stuff here; just a slug who comments). I just figured Stoneleigh would notice at some point. BTW, there are two primary assets one can bring to TOD: Accuracy and thick skin. ...and I am something of an ....

I am fine with it Ron. I am not offended and am happy to see my work shared. I was merely surprised to see that spelling crop up here where I worked for a long time and my name was well known. My material very rarely ends up at TOD since I left to set up The Automatic Earth (because I was told not to cover finance here and I couldn't leave that out of my big picture).

I left to set up The Automatic Earth (because I was told not to cover finance here and I couldn't leave that out of my big picture).

Unbelievable! The crash of 2008 should have given everyone a clue that finance, is very much a part of the big picture. Other than perhaps supply, there is no bigger part of the big picture than finance.

I would bet Nicole, that they would have a different take on the importance of finance today.

(I assume you are using the word "finance" as a synonym for "economics".)

Ron P.

To be fair, to most it didn't seem so urgent in January 2008 when I left. I wrote The Resurgence of Risk here in August 2007 warning of a credit crunch, but then it seemed somewhat alarmist (much less so when it was rerun in October 2008). Timely warnings are rarely credible.

Since 2008, people have developed a much more immediate interest in economics and finance, although more and more slipped back into complacency as the long counter trend rally continued. That is over now, and phase 2 of the credit crunch is beginning. It's going to have major effects on the energy sector, as on the rest of the economy. We are headed straight into the teeth of a major economic depression.

You are correct. I was one of those who, prior to the crash of 2008, thought that oil prices would hit $200 and not even look back, just keep on climbing. The crash forced me to reexamine my theory. I did and found it full of holes. You simply cannot separate the state of the economy from the price of oil. And, I must add, you cannot separate the price of oil from the health of the economy. They both affect each other.

As the price of oil rises people have less and less to spend on other things. They start to cut back on everything, including driving and long vacations. This knocks the economy into the dirt, we hit a recession and the price of oil plummets.

I find shocking the number of people who cannot understand this oh so simple principle. Some even believe we can have a major recession, or even a depression, and oil prices will still keep climbing.

We are headed straight into the teeth of a major economic depression.

You're scaring the hell out of me now.

Ron P.

Ron, I agree with just about all of this, and it pretty much followed my line of thinking as well.

I was one of those who, prior to the crash of 2008, thought that oil prices would hit $200 and not even look back, just keep on climbing. The crash forced me to reexamine my theory. I did and found it full of holes. You simply cannot separate the state of the economy from the price of oil. And, I must add, you cannot separate the price of oil from the health of the economy. They both affect each other.

As the price of oil rises people have less and less to spend on other things. They start to cut back on everything, including driving and long vacations. This knocks the economy into the dirt, we hit a recession and the price of oil plummets.

One aspect though is that from 2008 to now we have been on the oil production plateau. GNE have only decreased slightly. In 2009 oil prices rebounded smartly from the lows in January in response to the lowering of supply by a couple of mbbls/d. When the price recovered supply again increased, yet price continued to rise, mainly because of new users in developing countries.

Some even believe we can have a major recession, or even a depression, and oil prices will still keep climbing.

Yes, I'm one of those crazy people, because...

In the future, at some point the scenario painted above will be unable to be replayed. Instead of a plateau of production we will have falling production and accelerating declines in GNE. The decline in production will not be something artificial like the Saudis turning down the flow, it will be permanent. When some demand has been curtailed because of economies tanking the price will of course dip, but the supply constraint will again smartly increase prices from a new base, just like 2009. It is when the price starts rising again, instead of the Saudis turning up the flow, the flow will continue to decline, net exports will continue to decline.
The least efficient users will get priced out of the market. At a current useage of 21.5 bbls/person/year the US is much less efficient in oil use than the Chinese at 2.6 bbls/person/year.
I do not expect things to be linear and directly comparable to the GFC. We will have governments taking all sorts of strange actions in an attempt to maintain BAU during their watch.

You're scaring the hell out of me now.


Yes, I'm one of those crazy people, because...

I am not. Your "because..." completely left economics out of the equation. In the real world that is impossible. The situation you described will cause a severe worldwide depression. Oil prices will plunge, not rise. As for governments doing everything they can to maintain BAU... well that's exactly what they are doing now. Governments are not magicians... or God... there is some things they just cannot do.

Do you actually believe that if we are headed into the teeth of a major economic depression as Nicole predicts that oil prices can just keep on rising and rising? If so then you believe in miracles. Do you believe in angels also? ;-)

Ron P.

I think it's possible oil will hit $200. Not if we hit a global major depression, but I could see Deffeyes' scenario unfolding. Higher highs, and higher lows. In a sense, it's preparing us for higher prices.

Back when this site first started, when the Saudi target was $25, $100 oil seemed outrageous. Most of the talking heads didn't think it was possible, and many of us peak oilers thought the effect on the economy, on civilization itself, would be catastrophic. But we've gotten used to $100 oil, and I think it's at least possible we could get used a higher price, perhaps much higher. Oil has quadrupled in price; $200 is just a doubling.

Yes the oil price did more than quadruple in 2008... and guess what happened? And if it goes that high again, in 2008 dollars, guess what will happen?

Errr... wait a minute... it is happening, right now.

"Those who cannot remember the past are condemned to repeat it." George Santayana

Ron P.

Following are the recent annual high Brent prices preceding year over year annual price declines, showing the progression in higher annual highs and higher annual lows. While it seems a virtual certainty that we will see an annual decline from 2011 to 2012, it also seems almost impossible for the 2012 annual price not to exceed the previous annual year over decline level ($62 in 2009).

1997 to 1998: $19/$13

2000 to 2001: $29/$24

2008 to 2009: $97/$62

2011 to 2012: $111/?

Have you considered that what happened in the past is that we got used to oil at four times the price, and it could happen again?

Actually, what happened was oil went to six times the price, then dropped down to a "manageable" four times the price. I'm not saying it's desirable or painless, but do you really think it's completely impossible that it will happen again?

We really didn't get used to prices four times the price of the early double zeros. When oil prices hit six times they plunged then went back to four or five times. Then the recession we were already in just got worse. Normal times have never returned, we haven't gotten used to anything yet, and likely never will.

Ron P.

Leanan - Not sure if $200 will be the next high high but the point is very valid IMHO. I'm not sure I would say we've gotten used to the higher prices. More a matter of accepting what we have no choice but to accept...at least in the short run. I wouldn't say those folks in the 8%+ unemployed demographics would say they've become comfortable with the higher prices. Nor the many tens of millions of US consumers who are spending money on energy they would be spending on more enjoyable aspects of life. One could make the argument that the economy "could handle" $200 oil. The "economy" but probably not many millions of individuals. A 15% unemployment rate may sound scary. But that would mean 85% of the population is still employed and has some ability to pay for the energy they need. As long as someone can pay the price it will be paid. And if production continues to decline there will be a need for fewer such buyers. In a perverse way such high prices could benefit many: those who can afford/profitably utilize the remaining production won't have to share what's available with those without the ability to pay the higher price. Which, now that I think of it, is exactly what's happening today between the richer economies and the poorer ones. Now the US, China and some other countries fall into that category. Makes me wonder how Americans will react if they see us being pushed out of that buyers club.

One could make the argument that the economy "could handle" $200 oil. The "economy" but probably not many millions of individuals.

Many millions of individuals are the economy.

As long as someone can pay the price it will be paid.

This is the point that, try as I may in post after post, I just cannot seem to get across. There will always be people who can afford to pay any price for oil! And as the price rises, the number of these folks get smaller and smaller. The military can afford to pay any price for oil because the government can just print money and give it to them. However...

The U.S. government, as a whole, consumes not quite 2% of all the liquid fuel that the entire U.S. economy uses in a given year. That translates into about 440,000 barrels of oil per day, or slightly more than the entire output of the oil field at Prudhoe Bay, ...

One person the other day pointed out that the military will pay any price demanded for oil and therefore he concluded, oil prices could go way over $200. NO, that is dead wrong. The military consumes less than two percent of all the oil we consume. And those others you mention, who can afford to pay any price, probably are even less than 2%. Therefore... that dog won't hunt Rockman. So come up with a new theory.

The price of oil can go only so high as the economy an stand before the adverse effects of high oil prices knock the price back down again. That happened before and it is happening right now... again.

Ron P.

The price of oil is very unstable. Spot market prices went from $10/bbl in 1999 to $148/bbl in 2008, down to $38/bbl in 2009, and back up to over $120/bbl (Brent prices) in 2011. You can't really predict what it is going to do next, but a spike to over $200/bbl is certainly possible, and over $400/bbl is within the realm of possibility if things go very bad in the international market. You just don't know what will happen.

I personally think it could best be modeled using Catastrophe Theory, but that kind of mathematics is beyond the ken of most economists. Even basic calculus is a bit of a stretch for most economists.

The driving factor behind it is geology, though, and the geological reality is that there just isn't enough oil in the world to allow everyone to live the life style that Americans and Europeans have become accustomed to. As the oil supply is further constrained, and the developing (including oil producing) countries use up more and more of what is available, there will be some serious adjustments which will need to be made by everyone involved.

I don't see much sign that people are making those adjustments, especially not in Europe and America.

The driving factor behind it is geology, though, and the geological reality is that there just isn't enough oil in the world to allow everyone to live the life style that Americans and Europeans have become accustomed to.

Well, the geology is part of the driving factor . . . the other is implied in the rest of your sentence, the growing demand. China and the rest of the developing world is growing like crazy. More cars are now sold in China each year than in the USA. So even if we keep slowing increasing oil production with deepwater, oil sands, and tight oil; those increases in production can be more than swallowed up by increased demand. A lot people (especially Americans) are just not appreciating this so they come up with all sorts of conspiracy theories as to why oil prices remain high despite record production from the Bakken & Alberta.

Did you see the prediction offered about $2 gas by November?

Foreign Policy - The Coming Oil Crash
Verleger, the Colorado-based oil economist


I think those cheap shots are beneath you. I have too much respect for your posts to bother commenting further on them. I have probably failed to explain my concept clearly enough.

I am talking about oil scarcity. Even in a depression it is possible for the price of oil to rise if the demand destruction happens slower than the supply reductions. It is simple economics 101.

A major economic depression as Nicole predicts is very likely to bring major internal problems to gulf countries. An 'arab spring' could cripple world exports in the course of a few months. This is a scenario that could easily lead to greater supply reduction than the demand destruction.

The lesson from 2008 was; supply constant - demand destruction = price drop. The situation you are looking at with prices falling all seem to be demand dropping faster than supply. What I'm saying is that even with demand dropping it is possible for supply to drop faster which would lead to higher prices.
Thinking further about a major economic depression and the consequent trade difficulties associated with it, we may be heading to a situation where there is no 'world price' for oil. Trade could become so disfunctional that there are many regional prices that vary vastly from one another.

Hide away, I put a winking smiley face after that comment. I was joking! That's what a smiley face means. I am shocked that you missed a simple smiley face. It means "This is a joke!".

In reply to the rest of your post, see my reply to Rockman above. High oil prices as well as a declining oil supply have a very dramatic effect on the economy. You guys are dramatically underestimating these two very powerful hammers that have the ability to knock the economy into the dirt. In such an economy, even though the supply is falling, the economy will fall even faster.

We are headed there right now. Things are getting worse and will continue to get worse. I don't believe prices will ever return to those stratospheric levels again.

Ron P.

All my browser showed me was semicolon dash end bracket. I'm not computer savvy enough to know what that meant.

There are a lot of posters that can see various situations where the price of oil goes higher than the past peaks. The one commonality we all have is that it will make the economic situation worse.

This is a smiley face: :-) It means "This was a joke. This is a winking smiley face: ;-) It means the same thing but winks just to make sure you understand it was a joke. This has been part of the internet jargon since the internet came into being. There are lots of acronyms and symbols that I also do not recognize. But these two are kinda self explanatory.

I understand there are lots of posters who can see situations where the price goes higher and higher. I was one of those posters prior to the late summer and fall of 2008. Then, with the help of people like Gail the Actuary, Stoneleigh and a number of others on other blogs, I began to reexamine my position. Then I slapped my head and said to myself: "Damn, why didn't I see that earlier? It is just so damn simple. How on earth could I have missed such a simple concept? But I did. And I shall never make that mistake again.

But alas, some still do not understand that the economy is half the oil price equation. High oil prices combined with the oil supply not growing, keeps the economy from growing. That is a recession.

"We are headed straight into the teeth of a major economic depression."

...at the risk of seeming somewhat alarmist,, again ;-/

[prays fervently to the economic gods to give him just one more year]

The lesson I think is don't blog right before you go to bend and had perhaps one too many glasses of wine. I have been following you for years and certainly know your name.

No problem Ron, all is forgiven ;)

None of Ronbeas' comments has been removed. At least, not recently. (He's been a member of TOD longer than I have, so I can't vouch for the distant past. ;-)

He responded yesterday to my comment near the top, and then his response was gone. That's all I know.

Sorry, Ron, didn't mean to ruffle feathers :-0

Oops, I did remove it. I didn't recognize him as the author of the piece, and assumed his brief message was of the "never mind, I deleted my post" variety. I'll put it back.

I apologize and I fixed it.

Sorry, I'm a truly terrible copy editor. I changed "Nichole" to "Nicole," but frankly didn't even notice the last name was wrong, too. What can I say, I'm an INTP. Details are not my forte. I see the forest, not the trees.

No forests, no trees...

Goodbye to Mountain Forests?
When the smoke finally clears and new plant life pokes up from the scorched earth after the wildfires raging in the southern Rockies, what emerges will look radically different than what was there just a few weeks ago. According to Craig Allen, a research ecologist with the United States Geological Survey in Los Alamos, New Mexico, forests in the region have not been regenerating after the vast wildfires that have been raging for the last decade and a half.


Thank you.

As a retired copy editor, I can attest that the typos most likely to be missed are ones that follow an error you just corrected.

Interesting how those things work. The standard advice when I was in graduate school was that while writing your thesis/dissertation, if there was a paragraph that you really, really wanted your adviser and committee to leave alone, put at least two grammar and three spelling errors in the paragraphs leading up to it. The hypothesis was that when they hit your controversial paragraph, they would be reading for grammar/spelling, not for content.

I will remember this wisdom, and if I ever proof read someting in the future and find a glut of grammar/spelling typos, start looking for content issues stright thereafter. Thank you for this.

I thought I was having a bad day until I read this one: http://rss.sciam.com/click.phdo?i=da4dc7938b713dcd3a8f7763fb1c28c6

Apparently the new upgraded Saudi refinery in TX experienced a small problem. Sorry if someone else posted this already.

It has been discussed some, but this article is very informative. Thanks for posting! This bit is interesting:

"Rather than cut and run, we pressed ahead with our long-term commitment," Al-Falih said of Aramco's faith in the project, which he described as the company's largest investment outside Saudi Arabia. "We're confident the return on investment, despite the cost, will be very healthy."

Translation: Without this refinery, Aramco has no market for the heavy crude, none. This was going to be KSA's new source of spare capacity. And so they will try to sink another billion to get Motiva up and running. A post peak oil catastrophe of epic proportions. Fortunately only a market catastrophe, as opposed to Texas City.

Wasn't China building refineries to handle KSA's heavy sour crude?

Steve – They weren’t going to “cut and run”? I wouldn't think so given they have $5 billion tied up in the plant. And they only have to pay half the repair bill...the Dutchmen will cover the other half.

Spec – A couple of years ago China cut a deal with Venezuela: China would build several tankers and several refineries in China to handle the Vz heavy. In return China got first right to an escalating volume of crude. I think they were supposed to be up to 450,000 bopd by now. I hadn’t thought about it but they might as easily handle KSA heavy.

The only ones who will benefit economically from this is the lawyers. This comment made me smile.

There may be some very difficult things to repair there, but the most difficult part of this whole thing is going to be finding a way to blame the whole thing on President Obama.

It was discussed some recently (by me and others) and one poster (who I can't remember) appears to have guessed almost exactly what had happened - which shows the quality of the posters here. Still I find it hard to believe Motiva would miss a small mistake could cost billions $, but other small mistakes have also lead to some great disasters within the last ten years in the US energy industry.

There is some limited market even within the US refinery industry for Saudi oil that can not be used by Motiva. However generally speaking, the Saudis can produce more of this type of oil than can be used worldwide at this moment.

While the financial press seems to have already dismissed any impact by Motiva on US gasoline supplies, probably by looking at only the current futures price for gasoline (before today), the ripples of this refinery upset will spread quite rapidly.

Possibly due to the indirect effects of Motiva, prices in the wholesale spot market for gasoline in the NYC area have actually increased notably over the last week. Futures prices also had an outsized gain today.

N.Y. Gasoline Strengthens After Sunoco Refinery Shuts Equipment

Some supply shortages remain in parts of the Midwest where Magellan
Midstream Partners is still allocating N-grade gasoline at its northern

In the New York Harbor market, F2 RBOB gasoline held on to its recent highs
due to a continuing supply squeeze, with barrels for delivery at the end of the
month trading at 15/16 cents over NYMEX futures, up 3.50 cents a gallon.


http://www.theoildrum.com/node/9271/900910 June 18 2012


"Oops. Hope it's not something so simple as not drying the pipes following a hydrotest."

Is that the one you are thinking of?

I mailed it to my brother, a chemical processing engineer. Hope he likes it.

Article proposing possible hazards of deep underground waste disposal, including but not limited to fracing fluids, with some mention of the TRC:


From Mother Jones, written in an alarmist tone, I am interested in hearing what the relevant experts who frequent TOD have to say.

H - Probably best to break the discussion into two areas: deep reservoirs leaking to the surface and contamination via bad wells. In the first case I've never seen one documented example. It really is nearly impossible for this to happen.

But that's a very different situation than faulty wells...especially injections wells. That has happened, is happening today and will continue to happen in the future. Even if an injector well is properly design and drilled it can still leak eventually. Most injected fluids are very corrosive...especially something as seemingly benign as salt water. If you have ever dealt with anything metal near the ocean you know the problem well. An injector may dispose of 100's of millions of gallons of nasties over its life time. Eliminate deteriorating casing and the problem is eliminated.

Unfortunately corrosion, like its twin sister rust, never sleeps. It's impossible to guarantee such results. The best the regulators can do is heavily fine the operator to force the best effort possible. Same goes for civil actions. Make it too expensive for operators and they'll conduct the safest activities possible. If the rancher in Chico can document his problems as being caused by that nearby oil patch activity the TRRC will fine the heck out of the company. And with that in hand the rancher should be able to extract a big compensation from the company also. The civil courts in Texas are very protective of land owner rights.

But the process will never be 100% risk free. Despite best efforts children die in school bus accidents every year but the cost is acceptable to the public...at least the majority. This discussion takes me back to comments about the BP Macondo blow out. The feds and industry can say all they want about improving procedures but the potential for a similar incident can never be eliminated. The only way to eliminate the possibility of a repeat is to never allow another offshore well to be drilled. The only way to ever prevent any incident of ground water contamination by industry produced nasties it either never allow them to be produced in the first pace or require very expensive alternative disposal methods.

Of course, there's the problem: the various industries, and society as a whole, benefit from these activities. Consider the Marcellus play in the NE. If the citizens of NY and PA want to eliminate all possibilities of ground water contamination all they need do is force the politicians to ban drilling in their states. And if those politicians don't...elect new ones who will. But if they decide the benefits are more important than the induced problems than they've made their choice even if it conflicts with the opinions of the minority. Every gallon of waste that was legally disposed but still contaminated was authorized by some regulator.

But even when the minority loses it can still have the right for fair compensation. Nothing motivates an oil patch operator to make the best effort possible than losing $millions in fines and law suits. I've seen more than one operator put out of business by such legal actions. It may be too late to prevent the damage but there is some accountability. My impression so far of the problems in the NE is that very little accountability has been forced upon the operators and the regulators.

The article is obviously written by someone with not a lot of knowledge about the oil industry. The problem with some of the injection projects was that they were injecting fluids into old oil fields, and some of the old producing wells had not been properly plugged and abandoned. Naturally, when you inject fluids under pressure, it will come back up through any improperly abandoned wells. You have to check that all the wells which have ever been drilled into the formation have been properly abandoned before you start injecting. This is not necessarily easy because in some of the older fields you might not even know where wells were drilled - nobody kept records, or they have been lost.

The problem with improperly abandoned wells is a big one in old oil and gas fields, and not confined to ones used to dispose of waste. Things in the early half of the 20th century were pretty much non-controlled, and a lot of those old wells are leaking. Some of the things that come up them can be pretty dangerous, particularly in sour gas fields (hydrogen sulfide is as toxic as carbon monoxide, and methane can leak into people's basements and cause an explosion). I know of an old hotel in the middle of an old gas field that was destroyed when a maid went down into the basement, switched on the light, and *BOOM* the whole hotel was blown into the air. Gas had been leaking from an old well drilled nearby into the basement.

In late 2008, samples of Chico's municipal drinking water were found to contain radium, a radioactive derivative of uranium and a common attribute of drilling waste.

Totally inaccurate. Drilling wastes don't contain radium and/or uranium. Reading between the lines, I would say that Chico's drinking water contains radon gas, not radium, and the reason is that they might have a potential uranium mine somewhere under the city. Uranium is a fairly common mineral (granite rock is typically about 2% uranium) and it offgasses radon into nearby water reservoirs. This has nothing to do with the oil industry. A lot of towns nowhere near an oil field have radon in their well water. Environmental agencies take a "Don't ask, don't tell" approach to this problem because they can't fix it.

Ultimately, the energy industry won a critical change in the federal government's legal definition of waste: Since 1988, all material resulting from the oil and gas drilling process is considered nonhazardous, regardless of its content or toxicity.

That's because it's not hazardous. Drilling mud is mostly Bentonite clay - the most dangerous thing in it is rock chips. In the Alberta oil industry we used to spread it on the farmers' fields, after we had done some soil tests and added a few chemicals. Bentonite clay improves the water-holding capacity of sandy soils, and our added chemicals filled in the gaps in the soil mineral balance, so after we had done it a few times in an area, we would have farmers lined up to dispose of our drilling mud for us.

When sewage flowed from 20 Class 1 wells near Miami into the Upper Floridan aquifer, it challenged some of scientists' fundamental assumptions about the injection system.

The wells—which had helped fuel the growth of South Florida by eliminating the need for expensive water treatment plants—had passed rigorous EPA and state evaluation throughout the 1980s and 1990s.

Which brings up the question, "Why is the EPA or the state allowing a city to bypass building a sewage treatment plant by injecting sewage into underground formations"? What Miami should do was build a modern high-tech sewage plant to improve the water to where it was suitable for fish, and then pipeline it far out into the Atlantic before releasing it. They were just taking the cheap & dirty approach to sewage disposal.

Not that Canada is necessarily much better. The City of Victoria, BC, still doesn't have a sewage treatment plant but disposes of raw sewage by dumping it into the ocean - and it's the capital of British Columbia. It makes it pretty hazardous to eat oysters from the nearby waters. Every time people in BC complain about Alberta's oil sands to us, we bring up the topic of Victoria's sewage, but they do their best to ignore us.

Rocky - "I would say that Chico's drinking water contains radon gas, not radium, and the reason is that they might have a potential uranium mine somewhere under the city."

Actually no "might have" about it. From Wikipedia: "The uranium district of south Texas was discovered by accident in 1954 by an airborne survey looking for petroleum deposits. The coastal plain had previously been regarded as highly unfavorable for uranium deposits. The uranium occurs in roll-front type deposits in sandstones of Eocene, Oligocene and Miocene age. The deposits are distributed along about 200 miles (320 km) of coastal plain...". I've logged many uranium rich sands at the base of fresh water aquifers over the last 30 years. A water pit I filled from a shallow supply well was the prettiest blue shade you ever saw. A uranium geologist told me that was deuterium which is usually associated with rich uranium deposit. I logged a 50' thick sand with an obvious radioactive zone at 1,900'. The same geologist told me that if had been 900' shallower it would have been commercial to develop. He also suggested the rancher not let the cattle drink from the pit...and I probably shouldn't skinny dip. Wasn't going to happen anyway - too many water moccasins.

From http://chicotxchat.blogspot.com/ -"The Texas Commission of Environmental Quality has notified the City of Chico water system that the drinking water being supplied to customers had exceeded the maximum contaminant Level for URANIMUM.”

Not far from Chico: An investigation of residents of Karnes County, Texas, showed the following results: "We found that individuals who resided near uranium mining operations had a higher mean frequency of cells with chromosome aberrations and higher deletion frequency but lower dicentric frequency than the reference group, although the difference was not statistically significant. After cells were challenged by exposure to gamma-rays, the target population had a significantly higher frequency of cells with chromosome aberrations and deletion frequency than the reference group. The latter observation is indicative of abnormal DNA repair response in the target population."

Almost all those old uranium operations are long gone and there's no one left to sue. Now that there are drilling rigs in the area there are some deep pockets to go after. Unfortunately for those litigants uranium contamination was identified in the region long before the drill rigs showed up. Again, oil patch operations do cause environmental damage at times. It does happen on occasion. But just because you can see a drill rig doesn't automatically mean it's the cause of your particular problem. Of course, your attorney may say otherwise. LOL.

Rockman and RMG, thank you both for putting that article into realistic perspective.

Bottom line: all locales should model their regulations and enforcement on TX RRC and TX in general, industry will do a pretty good job, and when the inevitable and hopefully rare incident occurs the landowner(s) will get just compensation.

Question for Admin: I've been getting a message - Authentication Required. Enter username and password for http://tracking.sitemeter.com. Is this normal Drupal behavior or should I be concerned? Never seen this before. Just askin'.

I've been getting it since last night. Windows 7. Just got an Windows update yesterday.

I'd guess that's a Sitemeter issue, not a Drupal issue.

Sitemeter is a third party thing used by many web sites to analyze site traffic. It's not necessary. You can block it (via Ad-Block or similar), and it will not affect your use of the site.

Thanks, Leanan. As a rule, I don't give my password to a third party; don't trust and verify seems prudent these days.

I got it twice this morning. Just hit cancel & it went away.

Turkey Threatens Force if Syrian Troops Near Border

In Ankara, Mr. Erdogan said Turkey had revised its military rules of engagement toward Syria.

“Every military element that approaches the Turkish border from Syria in a manner that constitutes a security risk or danger would be considered as a threat and would be treated as a military target,” he said in a speech to lawmakers attended by Arab diplomats.

To me it looks like Turkey is about to invade Syria with the blessing of the rest of NATO. Anyone else's take on this situation?

"To me it looks like Turkey is about to invade Syria with the blessing of the rest of NATO."

...or perhaps Turkey wants to push NATO involvement, with or without their blessing.

I don't think Turkey nor NATO want to get involved. It would very likely get real ugly. My guess, is that they are talking tough primarily for domestic political consumption. They might actually mean to shell a few army units near the border so as to say "don't mess with us". But, that's a far cry from an invasion. [Its the sort of limited action I'd consider if I were in their situation]

Yeah, it could get real crazy. Russia is backing Syria pretty strongly so could theoretically turn into a WW3 NATO v. Russia kind of thing. Extremely unlikely but that is how crazy the whole thing is.

Lawmakers recast their portfolios as economy sank

WASHINGTON - In January 2008, President George W. Bush was scrambling to bolster the American economy. The subprime mortgage industry was collapsing, and the Dow Jones industrial average had lost more than 2,000 points in less than three months.

On Jan. 23, Boehner, R-Ohio, met Treasury Secretary Henry Paulson for breakfast. Boehner would later report the rearrangement of a portion of his own financial portfolio made on that same day. He sold between $50,000 and $100,000 from a more aggressive mutual fund and moved money into a safer investment.

The next day, the White House unveiled the stimulus package.

Boehner is one of 34 members of Congress who took steps to recast their financial portfolios during the financial crisis after phone calls or meetings with Paulson; his successor, Timothy Geithner; or Federal Reserve Chairman Ben Bernanke, according to a Washington Post examination of appointment calendars and congressional disclosure forms.

The lawmakers, many of whom held leadership positions and committee chairmanships in the House and Senate, changed portions of their portfolios a total of 166 times within two business days of speaking or meeting with the administration officials.

... "They shouldn't be making these trades when they know what they are going to do," said Richard W. Painter, who was chief ethics lawyer for President George W. Bush. "And what they are going to do is then going to influence the market. If this was going on in the private sector or it was going on in the executive branch, I think the SEC would be investigating."

"I think the SEC would be investigating."

It seems insider trading laws (among others) don't apply to our elected officials. Privileged information can be quite handy.

Unfortunately is legal for them to do this.

One of the hour-long "Investigative" news programs did a segment a few months back about congress and their frequent involvement in insider trading. The report did not cover this particular incident but it pretty much concluded that, barring an act from congress :-), their making trades on privileged information is legally allowable.

Of course token legislation is introduced every now and again just to placate the ignorant masses.

IEA Interactive Energy Technology Perspectives Infographic

This three-part interactive visualisation relies on the data and figures behind Energy Technology Perspectives 2012, the IEA’s flagship publication on energy technologies.

The infographics illustrate how the overall energy system will evolve from now to 2050.

- The Emissions Reduction visualisation allows you to quickly and easily see what impact countries, technologies and sectors may have on carbon dioxide emissions in the decades to come.

- The Energy Flows visualisation focuses on the transport, industry and buildings sectors, highlighting the different fuels (from oil to biofuels), sectors (from petrochemicals to residential) and end uses (from water heating to lighting) that will be affected in the years ahead.

- The transport visualisation lets you compare selected indicators – from annual roadway travel to roadway length – across countries and regions.

Maritime Administration [MARAD] Cancels TORP Offshore LNG Terminal

The Maritime Administration (MARAD) announces TORP Terminal LP's (TORP) withdrawal of the deepwater port license application for the proposed Bienville Offshore Energy Terminal (BOET).

MARAD received notification from the applicant, TORP Terminal LP, of the withdrawal of its application to own, construct, and operate a deepwater port for a liquefied natural gas deepwater [im]port facility, located approximately 62.6 miles south of Fort Morgan, Alabama in the Federal waters of the Outer Continental Shelf (OCS) on Main Pass Block 258 and connected to existing offshore pipelines.

S - Not a big surprise given Chenier's decision to spend several $billion to convert their LNG import facility to an export mode. That's the problem with running economics on big capex projects that take years to construct: predicting future market conditions. Even smaller projects run the same risk: crippled a lot of E. Texas shale gas players who were expecting $10+/mcf and are getting a less than 1/3 of that today.

Consider this cancelled LNG import project. It would take X years to build but using prevailing price projections from a few years ago it would take perhaps 5 years to recover 100% of the initial investments. That requires a fairly accurate price projection for the next 10 years or so. Given the volatility of the markets, especially due to spurts and slumps on the consumer side of that equation, such projections will always have significant risks IMHO. It's one thing for those of us not responsible for such a project to cavalierly predict the LNG market will be $X mcf 6 or 8 years down the road. A different matter when you're trying to convince someone to write a $5 billion check.

After Rio, we know. Governments have given up on the planet

It is, perhaps, the greatest failure of collective leadership since the first world war. The Earth's living systems are collapsing, and the leaders of some of the most powerful nations – the United States, the UK, Germany, Russia – could not even be bothered to turn up and discuss it. Those who did attend the Earth summit in Rio last week solemnly agreed to keep stoking the destructive fires: sixteen times in their text they pledged to pursue "sustained growth", the primary cause of the biosphere's losses.

The efforts of governments are concentrated not on defending the living Earth from destruction, but on defending the machine that is destroying it. Whenever consumer capitalism becomes snarled up by its own contradictions, governments scramble to mend the machine, to ensure – though it consumes the conditions that sustain our lives – that it runs faster than ever before.

The thought that it might be the wrong machine, pursuing the wrong task, cannot even be voiced in mainstream politics. The machine greatly enriches the economic elite, while insulating the political elite from the mass movements it might otherwise confront. We have our bread; now we are wandering, in spellbound reverie, among the circuses.

The End Is Near

... In 1992, governments finally got together in Rio and took some baby steps. In 2012, they reconvened and collectively proclaimed, "To hell with all that. This rock may be doomed, but that's our great-grandchildren's problem. Screw them! This is Rio. Roll down the windows. Turn up the air conditioning. Pass me a drink!" Well, actually, a few scientists and diplomats stood off to the side and muttered, "What we need to save us is a really bad catastrophe."

How quaintly and quintessentially English, Monbiot's histrionic, puritanical, hankering to retreat into a feverishly imagined glorious past:

Rewilding – the mass restoration of ecosystems – offers the best hope we have of creating refuges for the natural world, which is why I've decided to spend much of the next few years promoting it here and abroad.

Of course, in the real past - before, or even during, the time of the satanic mills - the population of England was a very small fraction of what it is now, and life was often very short and nasty. So one must wonder just what he would plan to do, in pursuit of this pipe dream of "rewilding", with the 50 million people now crammed with no easy escape or relief into an area smaller than the average US state. Maybe they should just up and disappear?

You missed the boat...the point of the article was to say that in the real past before or even during the time of the satanic mills the ecosystems of the planet were not in doldrums. However to bash the article you have converted it into a binary if or logic with a bit of straw man thrown in.

There's absolutely no reason why we can't have a lifespan of 80 years without trashing the ecosystem.

I hate to agree with both of you at once... But as much as Paul annoys me, he is pretty much right about one thing; as long as there is a huge human population, the environment, the wild, basically everything not tamed and farmed, is always going to come last. Until there is a population crash, humans will transform everything around them.

But it IS a choice we have made, and could have decided not to make. The environmental movement started in the early 70's, right? Since then, we have managed to get cleaner air and water in the US... But we didn't really do much about development and our major river systems and estuaries, notably the Mississippi and Chesapeake Bay, are still a mess (slightly better in some ways, but still bad). I would say we got less than halfway before it was declared "good enough", and environmentalism became a bad word to the right. As though they have another planet once we poison this one...

We could and can live long lives without destroying everything around us. What makes up live long are medical advances, the first of which are antibiotics (of which we need to develop new ones, now that we've screwed the pooch by feeding them to livestock and doling them out like candy), and the others are advances on heart disease and cancer. OSHA and improvements in safety also deserve some credit. None of these things have anything to do with more or fewer cars, or more or less spread out housing, or anything like that.

He is pretty much right about one thing; as long as there is a huge human population, the environment, the wild, basically everything not tamed and farmed, is always going to come last. Until there is a population crash, humans will transform everything around them.

A lot of people here are nihilists and they have a point, I too am certain that our animal instincts will win in the end and we will end up screwing our future for a long time in one way or the other. But it's pretty darn hard to detect that tone in Paul's reply.

We could and can live long lives without destroying everything around us. What makes up live long are medical advances, the first of which are antibiotics (of which we need to develop new ones, now that we've screwed the pooch by feeding them to livestock and doling them out like candy), and the others are advances on heart disease and cancer

This has been a major theme in all environment related discussions, I guess it's better to break down the leading characters behind increase in human longevity.

My list includes
1. Basic sanitation : Most deaths in pre-industrial age occurred from things like, diarrhea, cholera, plague, malaria etc. Barring the odd freak accident, these are almost unheard of in developed countries. Even in developing countries like mine, places where people are educated and follow even the most basic sanitation practices these things don't exist.
2. Vaccines : Most mass vaccination programs were conducted well before the 70's. Some developing countries are still doing them but it's safe to say that most major vaccines were invented prior to the 50's. Polio was the last IIRC.
3. Antibiotics : You already mentioned.
4. Best medical practices : This includes disposable syringes, safety during blood transfusion and a host of other practices.
5. Heart and cancer diseases : This is the last major advancement medicine has made and I must add here that the returns have been meager, this is not to belittle the advances but to stress that most heart diseases and cancers can be prevented if we adopt healthy lifestyles and clean up the environment. The death rates also tend to be lower from these two causes under natural circumstances.
6. Abundance of food : This is the only thing that can be linked directly to resource depletion and consumption and this is where cornucopians and doomers diverge, if we could voluntarily reduce our population and consumption, perhaps we wouldn't need to face this monster every fifty years.

Just as a total aside, The leading causes of death in America for those between 15 and 24 years old are car accidents followed by gun shots.


Some fine points. I have some gratitude for our advances in Medicine, but the chemistry that has made those advances possible has also been busy at work creating that many more poisons for which we must now start to find cures.

Just on this page today, Seraph notified us about the correlations just discovered between childhood obesity and Phthalates, and some other new hazards credited to BPA.. while not two months ago we were hearing about correlations between Elderly Onset Diabetes (which brings my Dad into the conversation), and Phthalates.

Ah, the modern world, where life can be Nasty, Brutish and Long!

Bisphenol A

Fits well-enough into a receptor for estrogen

Which looks a lot like testosterone

and cortisol

There are over 700 receptors

that are just looking for something close-enough.

(The joins where lines just meet like in those hexagons are each a carbon atom. Attached to each of those are hydrogen atoms that are also not shown. Organic chemistry is fairly fascinating and utterly endless. The trigger chemicals are mostly fairly simple. The receptors are more complex. There are fleets of entire molecular machines within the cells.)

Inner life of a cell
Beautiful movie
Nice music
8 minutes

EDITORIAL - North-south highway welcome, but ...

Our support for the project is based, in part, on our long-held position that the transport link between the two critical regions of the Jamaican economy, the commercial south coast, including the capital Kingston, and the tourism industry of the northern shore, is woefully inadequate - a narrow, winding road over a difficult mountain, and across a Spanish-built single-lane, centuries-old bridge that is usually impassable during heavy rain.

The prospect of doing the trip in less than an hour, especially if it demands no substantial outlay from taxpayers, is enticing. Existing analyses of the economic viability of a toll road on this route notwithstanding, we believe it will drive commerce and probably belie current projections. Moreover, an expenditure of US$600 million over three years will provide some stimulus for a weak economy where fiscal constraints limit the Government's ability for infrastructure spending.

Missed this one yesterday but, just thought I should bring it up to juxtapose it with the article I linked to in a post to the DB late on Sunday, with the headline Limits to growth - Is Seaga right about energy alternatives?. The article ends:

Similarly, in an article in American Scientist, Charles Hall and John Day note that the MIT group's 1972 predictions were "right on the mark in their general assessment, if not always in the details or exact timing, about the dangers of the continued growth of human population and their increasing levels of consumption in a world increasingly approaching very real material constraints."

The authors importantly add that, as predicted back in 1972, we now find ourselves trapped in the limits of an outmoded "petroleum age", yet needing to make swift transition to a post-industrial "solar age" because, "together, oil and natural gas supply nearly two-thirds of the energy used in the world, and coal another 20 per cent ... . Unfortunately, that will soon end."

Beyond the golden calf of growth

What all of this implies is that unchecked growth, based on insatiable consumerism and reckless exploitation of limited fossil fuels and other natural resources, cannot provide a realistic basis for a sustainable human civilisation. In the long run, growth is not the answer to our economic woes; ecological balance is. Some of the world's finest scientists were already urgently warning us, fully 40 years ago, to quickly wind down our fossil fuel dependence and explore more cost-effective and sustainable energy alternatives like solar - and a former prime minister is warning us now. We need to listen, for our children's sake, if not for our own.

Beyond just thinking in terms of short-term financial gain, and political advantage, there is the longer-term need for responsible private- and public-sector leaders to recognise that the very practices that bring us these goods and services we crave are destroying our habitat as a species. Our land, our air and our oceans are being transformed from life-supporting systems into repositories of waste. We are losing our topsoil, forests, fisheries, coral reefs, climate stability and biodiversity.

If we continue to ignore these things, as the old Cree Indian prophecy admonishes, "Only after the last tree has been cut down, only after the last river has been poisoned, only after the last fish has been caught, only then will you find that money cannot be eaten."

It appears to me that the person who wrote yesterdays editorial does not subscribe to a word in the article from Sunday on Limits to Growth. Here they are supporting a multimillion dollar highway project in, what I expect most reasonable people reading Sunday's article would describe as, the twilight of the age of oil. I guess the answer lies in the following sentence from Sunday's piece:

So its implications have been quietly ignored by four decades of economists and politicians, who preferred to keep promising their investors and their citizens an 'unlimited growth' pie in the sky. Being scientifically honest about the hard realities of accelerating resource depletion, overpopulation, ecosystem pollution, and finite limits to growth neither boosts stocks nor wins elections.

I would add nor sells newspapers and newspaper adds. Add to that the following sentence:

Their findings were deeply disturbing, hence the tendency to denial.

and there, that explains it! The author of Sunday's piece used to lecture in the Department of Government at the local university and IIRC was the supervising professor for a friend of mine while she was doing her masters thesis. I had no idea he subscribed to these wild ideas, Limits to Growth and all!

Alan from the islands

Homegrown wind energy cost effective, clean choice to meet increased electricity demand in British Columbia, report finds

Wind energy is a cost competitive and clean choice to supply the significant amounts of new electricity the Canadian province of British Columbia will require due to increased industrial development, according to a new analysis commissioned by the Canadian Wind Energy Association (CanWEA) and carried out by wind consulting firm GL Garrad Hassan.

The cost of developing clean wind energy has dropped significantly in the past three years while technology improvements have increased productivity, the report found. The report updates older cost and productivity estimates for 121 potential onshore wind development sites across the province that are used by BC Hydro for electricity system analysis. CanWEA said in a news release that it "hopes this new data can make a useful contribution to the work underway to develop a new Integrated Resource Plan for the province."

See: http://www.awea.org/blog/index.cfm?customel_dataPageID_1699=16941

Ninety per cent of British Columbia's power is hydro-electric and wind would augment this rather nicely. Presently, the province has 248 MW of wind capacity in place which is even less than that of Nova Scotia (317 MW), and their electricity requirements are six times greater than our own.


"Ninety per cent of British Columbia's power is hydro-electric"

That is very interesting. In Ontario, the noise machine is screaming that wind is bankrupting the place, driving away business, ruining families hopes and dreams for the future, and bringing on an onslaught of disease among the struggling survivors. Ontario gets 75% of its electrical energy from coal, gas, and nuclear. Perhaps 3% comes from wind.


For completeness, you might want to add impotence, male pattern baldness and the imminent arrival of the antichrist to the list.

In 2011, Onario's electricity fuel mix was as follows: 56.9% Nuclear, 22.2% Hydro, 2.7% Coal, 14.7% Natural Gas, 2.6% Wind, 0.8% Other.

Wind supplied through Ontario's FIT is currently priced at 13.5-cents, escalating with the Ontario Consumer Price Index over a twenty-year term (by comparison, Nova Scotia's wind FIT is slightly higher at 13.8-cents, but that price is locked-in for a full twenty years and thus falls each year in relation to the CPI).

There's one key consideration that's often overlooked by critics of wind: at last count, the cost of new nuclear power in Ontario was pegged at over $10,000.00 per kW and all of these risks are borne by ratepayers (worth noting that Darlington, the last NGS built in Ontario, came in at six times its original budget estimate); with wind, the risks are largely those of the independent power producer.


Wind scares 'em real good and deep.

Help me out Paul.. while I'm still sniggering.. I need somebody to blame for this Midlife-onset ADHD I seem to have picked up somewhere!

Ninety per cent of British Columbia's power is hydro-electric

Ontario's electricity fuel mix was as follows: 56.9% Nuclear, 22.2% Hydro, 2.7% Coal, 14.7% Natural Gas, 2.6% Wind, 0.8% Other.

People in Ontario aren't going to like this, but I'm going to say it anyway. Not only is 90% of BC's power hydro-electric, but BC still has numerous undeveloped potential hydro sites. Ontario doesn't. In addition, BC has massive coal resources (I can point to areas on the map which have coal seams 2000 feet thick), and the undeveloped shale gas resources in NE BC may exceed those of the entire United States. Ontario's coal and natural gas resources are insignificant by comparison.

Also, Alberta has more energy resources of every type except hydro than BC, including the vast oil sands, plus several times as much farmland as either BC or Ontario.

The bottom line: The population of Canada may have to shift West if people want to take advantage of the country's energy resources. The shift is already underway, but many people don't understand why it is happening.

BC has a lot of untapped hydro-electric potential, which is great if you don't mind flooding valleys and destroying what lies underneath, e.g., BC Hydro's proposed Site C will reportedly wipe-out roughly 5,000 hectares of fertile agricultural land. As for coal, I think we all know the story there. Rather than submerging much of the province under water, BC should be investing in energy efficiency and then, only if so required, low-impact renewable energy such as small hydro, wind and bio-gas.

Let's be smart and choose the best options, rather than simply repeating the same mistakes.


UK homes getting more hungry for electricity

UK homes are consuming much more electricity than previously estimated, a report described as the most detailed of its kind has suggested.

For example, it found that up to 16% of households' energy bills are spent on devices left on standby.

It is estimated that domestic energy use accounts for more than a quarter of the nation's CO2 emissions.

The modern home contained an average of 41 devices, compared with a dozen or so in the 1970s.

Spain's economic crisis turns middle-class families into illegal squatters

The fact the crisis is taking a toll in a relatively wealthy part of Spain surprises those who work with the most vulnerable.

"We have noticed a huge increase in people asking for food assistance – around three times more than a year ago," said Ester Soto, a manager at Terrassa's Red Cross homeless shelter.

...More startlingly, the Red Cross is also seeing evidence of infant malnutrition for the first time in decades, Soto added.

"And this is not a poor town," she said.

Cyprus bailout may equal half its economy

NICOSIA — Cyprus, the fifth euro zone country to seek emergency funding from Europe, may need a bailout of up to 10 billion euros — over half the size of its economy — officials said on Tuesday.

New loo turns poo into power

Scientists from Nanyang Technological University (NTU) have invented a new toilet system that will turn human waste into electricity and fertilisers and also reduce the amount of water needed for flushing by up to 90 per cent compared to current toilet systems in Singapore.

... gives new meaning to the phrase 'Seat of Power'

BPA exposure in pregnant mice changes gene expression of female offspring

The study, led by Hugh Taylor, MD, professor and chief of the reproductive endocrinology section at Yale University School of Medicine, observed "major and permanent changes in gene expression" in female mice exposed to BPA as a fetus. Taylor said these differences were apparent only after estrogen exposure, either naturally at puberty or with estrogen treatment.

"Hyperresponsiveness to estrogens is a potential mechanism to explain the increased incidence of estrogen-related disorders seen after exposure to endocrine disrupters like BPA," Taylor said.

also Phthalate, environmental chemical is linked to higher rates of childhood obesity

Obese children show greater exposure than nonobese children to a phthalate, a chemical used to soften plastics in some children's toys and many household products, according to a new study, which found that the obesity risk increases according to the level of the chemical found in the bloodstream.

Scientists spark new interest in the century-old Edison battery

"The Edison battery is very durable, but it has a number of drawbacks," said Hongjie Dai, a professor of chemistry at Stanford. "A typical battery can take hours to charge, and the rate of discharge is also very slow."

Now, Dai and his Stanford colleagues have dramatically improved the performance of this century-old technology. The Stanford team has created an ultrafast nickel-iron battery that can be fully charged in about 2 minutes and discharged in less than 30 seconds.

Edison, an early advocate of all-electric vehicles, began marketing the nickel-iron battery around 1900. It was used in electric cars until about 1920. The battery's long life and reliability made it a popular backup power source for railroads, mines and other industries until the mid-20th century.

"It's definitely scalable," Wang said. "Nickel, iron and carbon are relatively inexpensive. And the electrolyte is just water with potassium hydroxide, which is also very cheap and safe. It won't blow up in a car."

also The 21st Century Electric Car

"And the electrolyte is just water with potassium hydroxide, which is also very cheap and safe. It won't blow up in a car."

Potassium hydroxide is just as nasty and unsafe as sodium hydroxide, as in drain cleaner. It won't blow up, but it will dissolve flesh, aluminum, zinc, and Viton. It also will do a number on stainless steel, if the reports about the Motiva refinery are correct. (That was sodium hydroxide, but KOH would act the same way.)


The common AA "Alkaline Battery" uses potassium hydroxide in the same way as the battery in the article, as an electrolyte.

The Nickel Metal Hydride batteries in the Toyota Prius use a mixture of potassium hydroxide and sodium hydroxide. The batteries in the internal combustion engine cars use sulfuric acid. Looking up images of sulfuric acid burns is not recommended.

The battery featured in the article is another development based on carbon. Graphene, an allotrope of carbon, is a sheet of carbon atoms that looks like honeycomb. The number of recent amazements from these materials is, well, amazing!

Naw, PVguy, if ya wanna gross 'em out and put them off electric cars or power grid storage for PV or wind... tell 'em about washing their hands after handling caustics like lye. See, they'll soap-up and wash, and wash, and wash, and the soap just never seems to go away or wash off. That's called sapponification: The caustic is turning the flesh into soap. Diphoterine stops the reaction.

Sodium Hydroxide Spill Management

And You Thought It Would Be Easy? Graduating the Class of 2012 Onto Our Overheated Planet

... Think of it this way, class of 2012: for 40 years, they’ve been busily rigging the game, stacking the deck. Now, with their power at the ready and regularly on display, they would like you to think that you’ve got nothing going for you, that your only choice is to accept the world they have on tap for you on their terms.

... you’re about to head off campus into a world in which the concentration of wealth, power, and war-making capability is unprecedented, at least in our time, and yet here’s the counterintuitive thing: at a moment when it looks like all of you couldn’t do less, this planet never needed you more. This country never needed you more. American politics never needed you more. We never needed you more. But it won’t be easy.

We never needed you more.

US court upholds EPA's greenhouse gas rules

The U.S. Court of Appeals for the District of Columbia Circuit unanimously ruled that the EPA's finding that carbon dioxide is a public danger and setting limits for emissions from cars and light trucks were "neither arbitrary nor capricious."

In the 82-page ruling, the court also found that the EPA's interpretation of the Clean Air Act to regulate carbon dioxide regulations is "unambiguously correct."

Next stop, the Supremes!

E. Swanson

By the time SCOTUS rules on this (if they do) we'll all be medium well.

Maybe not.

The decision in favor of EPA was so decisive in this case it might not be worth an appeal. It might be better for industry to put their effort into other legal challenges, chiefly to EPA's authority to mandate State Implementation Plans for GHGs.

The court affirmed that the scientific basis for finding that GHGs were a threat to public health was sound. Notably, industry plaintiffs did not cite any 'climate skeptics' or 'unsettled science' to undermine EPAs case, arguing only that EPA was arbitrary and capricious.

The same court also issued their opinion on the Vermont Yankee nuclear power station case they heard. It's a piece of writing only a lawyer could love (and I'm not), but the bottom line appears to be that once you have your NRC license in hand, states can't block plant operation.

"the bottom line appears to be that once you have your NRC license in hand, states can't block plant operation."

Live by the Supremacy of the Federal government (AZ immigration law mostly shot down), then die by the Supremacy of the Federal government, (No state oversight of nuclear plants.)

28% of Americans have no emergency savings

Most Americans don't have nearly enough money stashed away for emergencies and more than one-in-four don't even have a single penny saved.

While the general rule of thumb is to have an emergency fund that will cover at least six months of expenses, only 25% of Americans have that amount saved, research released Monday by Bankrate.com finds.

About 49% of Americans don't even have enough money saved to cover three months of expenses -- slightly worse than the 46% of Americans who reported having less than three months worth of savings last year.

And 28% don't have any cushion whatsoever -- up from 24% last year, according to the report, which was based on a survey of 1,000 adults

Right but America is land of the brave, home of the free, we can go into an infinite amount of debt. It's our God given right.

Savings? Who needs savings?

Middle Class incomes have been flat to falling for decades.. I'm hardly surprised.

NPR did a piece about the folks with Million Dollar homes who are suddenly seeing their 'Low-tide Tanlines'


"These are the folks that are losing their jobs on Wall Street. These are the folks that live in Scarsdale and Bronxville," says Geoffrey Anderson, executive director of Westchester Residential Opportunities, a housing counseling group that's been fielding calls from wealthy New York suburbs.

"These are the people that own million-dollar homes, who have used up all their life savings — and are now coming to us because they have no other choice," Anderson says.

Nothing like the illusion of wealth, poofing out to reveal the Mirage we'd been strutting our hours away in.. ultimately, it's the way we regard our savings and our reserves, whether we are way up there or notta so much. It seems we treat those 'raw materials' like any other these days.. it's all grist for the mill, smoke'em if you got em!

Coal-Plant Plunge Threatens Billions in Pollution Spend

A decision in the Federal Court of Appeals for the District of Columbia decided, today, against their wishes, as concerns green house gas emissions:

We begin with a brief primer on greenhouse gases. As their name suggests, when released into the atmosphere, these gases act “like the ceiling of a greenhouse, trapping solar energy and retarding the escape of reflected heat.” Massachusetts v. EPA, 549 U.S. at 505. A wide variety of modern human activities result in greenhouse gas emissions; cars, power plants, and industrial sites all release significant amounts of these heat-trapping gases. In recent decades “[a] well-documented rise in global temperatures has coincided with a significant increase in the concentration of [greenhouse gases] in the atmosphere.” Id. at 504-05. Many scientists believe that mankind’s greenhouse gas emissions are driving this climate change. These scientists predict that global climate change will cause a host of deleterious consequences, including drought, increasingly severe weather events, and rising sea levels.

(Coalition for Responsible Reg v. EPA). In that case various states and companies had sued the EPA over new green house gas emission regulations.

The court, Sentelle, Rogers, and Tatel, JJ., ruled in favor of the EPA, holding that its regulations were appropriate.

Reminders of mortality increase concern for environmental legacy

In a study published in Psychological Science, a publication of the Association for Psychological Science, Kimberly Wade-Benzoni, of Duke University Fuqua School of Business, and her colleagues decided to focus on a kind of problem they call an "intergenerational dilemma," examining whether certain factors might lead the current generation to make sacrifices on behalf of future generations, even when there aren't any material or economic incentives to do so. ... These dilemmas are unique because there isn't just a temporal distance between decision-maker and beneficiary, there's a social distance, too.

... "Acting on the behalf of future generations can paradoxically represent a dramatic form of self-interest – immortality striving," she explains. "Believing that we have made a difference by leaving a group, an organization, a professional field, or the world a better place helps us to gain a sense of purpose in our lives and buffer the threat of meaninglessness posed by death."

And might be usefully combined with research by Sheldon, Nichols & Kasser (2011).

Americans Recommend Smaller Ecological Footprints When Reminded of Intrinsic American Values of Self-Expression, Family, and Generosity. [Full PDF]

ABSTRACT: Extrinsic values for money, image, and status are known to be associated with less sustainable ecological attitudes and to be relatively high among American citizens. But America also has a long history of prioritizing the intrinsic values of self-expression, family, and helping the world to be a better place, aims which past studies show promote more sustainable environmental behaviors. We therefore tested whether activating these types of American identities, compared to various control conditions, would affect U.S. college students' policy recommendations about the size of Ecological Footprints (EFs) Americans should have. Results showed that participants primed with an intrinsic American identity recommended significantly lower EFs than did participants primed with an extrinsic American identity, an unqualified American identity, or two control identities (i.e., human and University of Missouri student). Results were stronger for the housing and travel components of the EF than for the food component. Findings suggest that communicators and educators might do well to attempt to activate the aspects of the American national character connected with intrinsic values in their attempts to promote acceptance of policies that support environmental sustainability. [Emphasis added]

Mysterious noctilucent clouds as seen from the international space station

Mysterious “night shining” or noctilucent clouds are beautiful to behold, and this stunning image offers an unusual view of these clouds as seen by astronauts on board the International Space Station. Also called polar mesospheric clouds, these clouds are puzzling scientists with their recent dramatic changes. They used to be considered rare, but now the clouds are growing brighter, are seen more frequently, are visible at lower and lower latitudes than ever before, and sometimes they are even appearing during the day.

... There's something happening here. What it is ain't exactly clear - Buffalo Springfield

Get ready to crank up the AC in the TN Valley and Southern Apps:






TRI-CITIES......96/1952... 95/1952... 95/1959... 98/1959
KNOXVILLE......100/1952... 101/1936... 100/1952... 100/1954
CHATTANOOGA....104/1952... 102/1936... 103/1952... 101/1954


Time to test the grid. Anyone know when the new cooling towers at Brown's Ferry will be operational?

ERCOT urges Texans to reduce electrical consumption:


EnerNOC: heat wave drives record demand for services

Tim Healy, chairman and CEO of EnerNOC, told Mass High Tech that last year, the company got a call about once a day on average. To get called 21 times in one week during a moderate heat wave tells him that demand response is becoming a more accepted method of managing the grid, he said.

To put it in perspective, demand response is a last line of defense resource,” said Healy. “What I think we’re seeing is, this is a resource that the grid operators are using a little more frequently.”

“If the first part of the summer is any indication of rest, I wouldn’t be surprised if we saw more demand response incidents than last year, which saw more than the year before.... [and the year before that ... and the year before ....]

Another 'win' for deregulation. It must be the darn environmental regulations keeping the market from automatically providing more generation than is needed to make a profit.

More evidence that the South needs more PV panels on people's roofs. They are reasonably priced these days and they generate lots of power at times like this. And they don't require lots of water, very low risk, not much need for transmission lines, and they don't pollute.

They shade a portion of the roof as well, especially if racked a few inches above the roof.

Funny, I just turned the heat back on downstairs. Our high today is 17°C/63°F, heading down to an overnight low of 13°C/55°F. Oh, to be in Yellowknife, NWT where it's currently a balmy 23°C.


Gosh, Paul, we open our windows in weather like that. Cools the thermal mass down for hotter days. We use the dogs to stay warm, if they get cold ;-)

The relatively humidity outside is 100 per cent and if I let the temperature fall too low the dehumidifier runs continuously but doesn't do much good. And if I don't keep on top of this mould and mildew will quickly take hold.


Here in the Canadian Rockies it is currently raining and 9°C (48°F) with a low of 3°C (37°F) expected tonight. Fortunately it's summer now, so it hasn't snowed for a couple of weeks.

But, it's not that bad. The trees and grass are doing really well, and my wife is painting all the doors in the house while I sit here typing. The sauna is warming up so I think I'll go into it in about 10 minutes.

That pretty much shows the jetstream wavelength. Over in California we are (barely) reaching 80F for the first time in almost a week. We had a four standard deviation low just off the coast, and I often had to put on a hoody to do work outside. At the same time Colorado was having a truly epic heatwave. Now the low is moving out, and the heat is headed east.

Funny thing, we had temperatures near 50F this AM here in NW NC and the dew point dropped to near 40F. The high on my thermometer today was 76F. I had the windows open for a while this AM, but closed them when things got too cool...

E. Swanson

Elsewhere ...

Colorado firefighters hampered by searing heat in bid to contain wildfires

Temperatures of over 100F (38C) and low humidity means fires continue to spread – with more hot weather forecast

Colorado has endured nearly a week of temperatures over 100F (38C) days and low humidity, sapping moisture from timber and grass, creating a devastating formula for volatile wildfires across the state and punishing conditions for firefighters.

"When it's that hot, it just dries the fuels even more. That can make the fuels explosive," said Steve Segin, a fire spokesman for the US forest service.

... As Robin Williams would say: What's the weather like out there? ... "It's hot. Damn hot! Real hot! ... "Fool, it's hot! I told you again! Were you born on the sun? It's damn hot!

Colorado wildfires worsen, 32,000 flee homes

El Paso County Sheriff Terry Maketa said 32,000 people had been evacuated, and fire information officer Rob Deyerberg said the evacuation zone included the southern part of the Air Force Academy grounds, including a residential area.

"We are in a very critical situation now. Unfortunately we do have structures and homes that are burning in the northwest corner of Colorado Springs. We have mandatory evacuation over a considerable area," Deyerberg told Reuters.

A mushroom cloud of gray, black and brown smoke, topped by billowing, white cumulus clouds, rose nearly 20,000 feet into the sky and hung over residents as they scrambled to heed evacuation orders.

The sudden closure of service stations along with other businesses, leaving fleeing motorists unable to fill up their cars, added to a sense of urgency as roads filled with traffic.

Meanwhile, in Scandinavia:


For those who don't read Swedish: Rain and cold.

Chances are this is the wettest june since measurements begune in the 1780ies. We'll know that by the end of this week.

At least with your own PV you can cook breakfast and listen to your wireless whenever you like. Lucky sod.

Sydney Morning Herald, December 22, 1945


Sigh. The high here today was 52, and I don't mean Celsius. I have the heat pump on again, as the house was only 62 when I got home.

Tomorrow is supposed to start at 45, then make a determined run for 70. I'll have to see if we make it.

You can all abandon your seats at the Amphitheater of Doom ... it turns out we're saved after all:

When Solar Crossover Hits the World Will Quake

I like this line though:

My point today is not that you should sell the cat and buy NatCore. There are, in fact, dozens of small companies like NatCore, at various stages in the research, discovery and commercialization process.

Sell the cat?

I don't know if there will ever actually be a cross-over point. There are receding horizons issues because solar panel factories are generally powered by fossil fuel plants. But that doesn't really have to happen for PV to be very useful and advantageous. Use them in the right areas and for the right applications. They are part of an energy mix, not some salvation.

I don't know if there will ever actually be a cross-over point.

Like the article says "crossover" happens at specific locations and times. There is no doubt that crossover, where PV is cheaper than grid power, has already happened plenty of places, so events have overtaken your "will ever". Sunny places like parts of Hawaii with high electricity costs obviously crossover sooner than cloudy places with cheap (usually dirty coal) electricity (especially if the deaths and sicknesses resulting from coal burning are excluded from economic analysis, like they almost always are, making other people sick and dead is free, what a business opportunity).


s shown in this chart, solar PV is already price competitive in areas with high peak electricity costs and consistently high levels of sunlight. At $3.50/watt today, power generated by a solar farm is already crossing over in Hawaii, California, New York, and Texas.

Re: Sell the cat


Talk to the civilian with a non-kitten cat in your inventory. Civilians are located north-west inside West Ardougne. You do not have to sell the cat to complete this task. This includes Purple cats and Hellcats, fully Grown, Overgrown, Wily and Lazy cats.

WARNING: Using your cat on the civilian will result in your cat being sold, without the task being completed!

From an online game called Runescape.

Greenland ice may exaggerate magnitude of 13,000-year-old deep freeze

According to a study published today by the Proceedings of the National Academy of Sciences, the Greenland ice core drifts notably from other records of Northern Hemisphere temperatures during the Younger Dryas, a period beginning nearly 13,000 years ago of cooling so abrupt it's believed to be unmatched since.

"In terms of temperature during the Younger Dryas, the only thing that looks like Greenland ice cores are Greenland ice cores," Carlson says. "They are supposed to be iconic for the Northern Hemisphere, but we have four other records that do not agree with the Greenland ice cores for that time. That abrupt cooling is there, just not to the same degree."

Are they trying to say whatever happened in Greenland did not happen anywhere else? Therefore what did happen there is an exaggeration? No, whatever happened there happened, now find out why.

The article suggests that Greenland temperature estimates based on oxygen isotope ratios used as temperature proxies were skewed because some of the water/ice was derived from Pacific ocean water vapor rather than North Atlantic water vapor. Each ocean has it's own oxygen isotope ratio fingerprint.

There was an abrupt climate change - just not as large as originally estimated.

I was ready to crash - sleep, when I read that article earlier today and couldn't make head or tails of it. Now I'm back up, your post cut through and clarified - thanks.

Nuclear fuel recycling could offer plentiful energy

To date, nuclear energy remains the only stable, large-scale source of carbon-free electricity. Reactors are sprouting across Asia as its developing powers need more energy; China alone has quintupled its nuclear capacity in just the past decade.

... Argonne scientists and engineers continue to work on ways to make fuel recycling safer, cheaper and more efficient. Their brainchild is a technique called “pyroprocessing”, which uses an electrical current to sift out the useful elements and does not separate pure plutonium.

When used fuel comes out of a light-water reactor, it’s in a hard ceramic form, and almost all of it is still just uranium – about 95 percent, along with one percent other long-lived radioactive elements, called actinides. Both of these can be recycled as fuel. The remaining four percent are fission products, which are truly unusable.

Pyroprocessing begins by chopping the ceramic fuel into little pieces and converting it into metal. Then it’s submerged in a vat of molten salts, and an electric current separates out uranium and other reusable elements, which can be shaped back into fuel rods.

The truly useless fission products stay behind to be removed from the electrorefiner and cast into stable glass discs. These leftovers do have to be put into permanent storage, but they revert back to the radioactivity of naturally occurring uranium in a few hundred years – far less than the thousands of years that untreated used fuel needs to be stored.

... there's 65,000 tons sitting in our spent fuel pools. They can start anytime they're ready.

Hanford waste plant sees new costs, delays

KENNEWICK, Wash. (AP) — A new cost estimate and construction schedule for a massive waste plant being built at the nation's most contaminated nuclear site will be delayed at least a year as workers try to resolve serious technical problems raised by whistleblowers about design and safety, the U.S. Department of Energy said Tuesday.

The $12.3 billion plant at south-central Washington's Hanford nuclear reservation is being built to convert highly radioactive waste into a stable glass form for permanent disposal underground.

The plant is currently scheduled to begin operating in 2019, but several workers have raised concerns about safety, particularly about erosion and corrosion in tanks and piping inside the plant.

The issues are significant because the problem areas are inside so-called black cells, which will be closed off and inaccessible due to high radioactivity after the plant begins operating.

"Their brainchild is a technique called “pyroprocessing”, which uses an electrical current to sift out the useful elements and does not separate pure plutonium."

Sadly that was all figured decades ago at EBRII/IFR. And we never did anything with it.


Cyber attacks hit global banks for $80 mn: study

A wave of cyber attacks has likely stolen at least $80 million from bank accounts in Europe, the United States and elsewhere, a security report said Tuesday.

The report from the two US firms said the attacks tried to steal between $75 million and $2.5 billion (60 million to two billion euros) from at least 60 banks worldwide.

It said the attacks hit "every class of financial institution: credit union, large global bank, and regional bank."

In some attacks, transactions were routed through a server in California, but the researchers said they "found evidence of the fraudster logging in from Moscow, Russia, to manipulate some of the transactions."

... "And...It's Gone!"

"And...It's gone!" Great video.

The Scam Wall Street Learned From the Mafia

Japan Reactor Building Is Tilting but Not a Risk, Operator Says

The Tokyo Electric Power Company, or Tepco, said in a report on Monday to Japanese nuclear regulators that at least two of the walls of the No. 4 reactor building are bulging outward at various points and that the building is tilting.

... the tilt does not pose a risk to the integrity of the building, according to the plant’s operator.

also Fears Accompany Fishermen in Japanese Disaster Region

... It is unclear whether a public that is jittery about radiation generally will trust fish caught off Fukushima. Many Japanese are wary of the government’s assurances about test results, and Tokyo Electric has made people more suspicious by refusing to let independent experts survey waters inside the roughly 12-mile exclusion zone around the plant.

Yeah, that tilting building is really not so nice... And TEPCO has proven its incompetence many times over. It would be nice if somebody could find a way to do something about that waste before something like another earthquake happens! I hope they manage to get it all out way ahead of schedule.

Honestly, the spent pools worry me more now than the melted down reactors. And what worries me most is people forgetting about this accident and starting up the nukes again.

Not a problem. It's all about branding: just rename it "The Leaning Tower of TEPCO" and charge an admission fee. Done & dusted.

Research suggests denser development is good for single-family home values

A study conducted by researchers at the University of Washington College of Built Environments and a South Korean university shows that, contrary to popular belief, there's a positive association between higher neighborhood density and the value of single-family residential properties.

Researchers modeled the values of single-family homes, multifamily rental buildings, commercial spaces and offices in King County, Wash., which includes Seattle. They used property values as a measure of economic value, analyzing them in relation to neighborhood characteristics that correlate with walking, including access to open space and public transportation, mixed-use zoning and pedestrian infrastructure such as sidewalks.

They learned that pedestrian aids, such as sidewalks and shorter street blocks, as well as a mix of retail, commercial and residential properties significantly contributed to increases in multifamily rental property values.

That's true. Most residential developments in North America are built out at too low a density to make them walkable, provide convenient access to neighborhood service, and provide reasonable levels of public transit service. As a result, communities that are built at a higher than average density have higher than average property values because of their convenience.

In this Peak Oil era, higher density communities will become increasingly more attractive, and the less dense outer suburbs will just have to be abandoned to rot away and turn into weeds. That's just the way it is going to be.

less dense outer suburbs will just have to be abandoned to rot away and turn into weeds

Yeah, but don't you live in a low density area?

Well, this area is relatively low density, but that's partly because we are adjacent to an official wildlife corridor running past us, and we have to make room for all the grizzly bears and elk to bypass us (despite which they walk through my back yard anyway since they can't read signs).

However, I am within walking distance of downtown, and my wife walks down to do yoga every morning and meet me at the Bagel Co. on Main Street for coffee and lunch most days. This is a somewhat unique location.

It's other people's suburbs that will turn into weeds. The aspen and spruce trees here are taking over my yard. It's unbelievable how well they are doing. I didn't think aspen could turn into giant trees.

They learned that pedestrian aids, such as sidewalks and shorter street blocks, as well as a mix of retail, commercial and residential properties significantly contributed to increases in multifamily rental property values.

For which, read, in plain English: pedestrian aids [etc.] ... contributed to astronomical rents. Which is how the US societal "we" ended up with lots and lots of suburbs in the first place. (And how France ended up with its sometimes rather awful cités.) A bit of a dilemma.

Pedestrian aids (etc) such as wider sidewalks only contributed to higher rents insofar as they increase demand for areas with those features.

Sidewalks aren't actually very expensive, and if you look at the actual cost of building a higher density community, it is actually lower because utility lines are shorter and streets are both shorter and narrower.

The reality is that higher density communities are actually cheaper to build than lower density ones. The problem in the US is that zoning regulations and developers profit expectations force lot sizes to be too large, streets to be too wide, and houses to be too big. If what people actually want was the main consideration, the lots would be smaller, the streets narrower, the speed limits lower, the sidewalks wider, and the houses smaller and more affordable.

"They make you buy more house than you need" is how I've heard it put.

Basic city paths for the humans that actually "live" in the city and make it a "city" and are the point of the "city" are called Pedestrian Aids ?!?

It's hilarious. In America humans are a secondary concern to planners. An inconvenience like having to add disability ramps.

Law Grads Face Brutal Job Market .

Members of the law-school class of 2011 had little better than a 50-50 shot of landing a job as a lawyer within nine months of receiving a degree, according to a Wall Street Journal analysis of new data that provides the most detailed picture yet of the grim market for law jobs.

... Whittier, with annual tuition of about $39,000, reported that 17% of its 2011 graduates were in full-time long-term legal jobs nine months out, among the lowest in the nation. Forty-one percent of the school's graduates were unemployed and seeking jobs, the data show.

America has too many lawyers as it is.

Too bad the ambulance chasing and ethnic shakedowns and gobbledygook writing gravy train has run out.

Good riddance, I say. Time to learn how to do some real work.

From WSJ: Has Peak Oil Peaked?

Remember the days when a threatened hurricane and news of Syria downing a Turkish jet would send oil prices spiking?

Peak oil, the Malthusian scenario whereby global oil-supply growth has reached its limit, appears to have, er, peaked. Oil prices aren't responding to the usual stimuli. Moreover, the beta version of Google's Insights for Search tool shows Web searches for the phrase "peak oil" surged in early 2008, since when interest has waned. So far in June, the number of "peak oil" searches is less than one-tenth of the level in May 2008.

It isn't just that demand in the Western world is down, although it is, offsetting roughly half of the gain in emerging-markets demand since 2005. The more troublesome development for peak oil proponents is on the supply side, where recent events such as the shale-based resumption of oil-output growth in the U.S. suggest terminal decline isn't the only option.

A new report from the Harvard Kennedy School's Belfer Center for Science and International Affairs suggests the world could be capable of producing 110.6 million barrels a day by 2020, up from 93 million barrels a day now. Moreover, the report concludes more than 80% of the new oil production looks profitable at a long-term oil price of just $70 a barrel. That isn't a return to cheap oil, but it would be less than what the world has been conditioned to expect.

The report's author, Leonardo Maugeri, a former executive vice president of Italian oil major Eni, is a well-known critic of peak oil theories. While the report wasn't commissioned by BP, his report was produced under the auspices of the Belfer Center's Geopolitics of Energy project, which is supported in part by a general grant from the oil major

Remember the days when a threatened hurricane and news of Syria downing a Turkish jet would send oil prices spiking?

There is no real hurricane threat right now and Syria downing a Turkish jet would never affect oil prices much . . . neither Syria nor Turkey have much oil. Nice strawman.

The report says US production capacity in 2011 was 8 million bpd. Really? We had nearly 3 mbpd of surplus production capacity and it couldn't be made available when Brent Crude went to nearly $130/bbl? It may be a question of definition, but I find that a little suspect.

Now let's talk about marginal cost, regarding which he has this:

In fact, the mere dynamics of supply, demand, and spare capacity cannot explain the high level of oil prices today. At more than $100 per barrel, the international benchmark crude Brent is $20 to $25 above the marginal cost of oil production. Only geopolitical and psychological factors (above all, a major crisis related to Iran) and a still deep-rooted belief that oil is about to become a scarce commodity, can explain the departure of oil prices from economic fundamentals.

To paraphrase: We spend so much on oil because we don't know any better, BUT we can dismiss out of hand any uncertainty about the true marginal cost of oil production. It's $70/bbl. Any questions?

My BS meter is in the red zone, although I haven't looked at the detailed analysis.

Reading through it a bit more carefully, it is clear that no detailed cost analysis is included. The author assumes that all plays he evaluates can be profitable at prices above $70/bbl (in todays $$), and there is no particular reason for that parameter to change.

I also mis-spoke slightly above, U.S. crude production in 2011 was 5.6 mbpd, so implied spare capacity was a mere 2.4 mbpd. Elsewhere he identifies KSA as the only holder of spare capacity globally, which seems like a contradiction.

He also likes to use the expression 'oil supply capacity' instead of 'oil supply'. Makes it easier to compare apples and oranges

I'm halfway expecting someone to suggest--echoing comments about nuclear power in the 1950's--that gasoline will soon be too cheap and abundant to meter, we will just pay a flat monthly fee.

I think the expression was 'drill here, drill now, pay less'.....

This article is vastly more silly than most. He states that the real news today is that US oil production has "exploded".

I went back to the EIA plot of US oil production and could not find the explosion.

One interesting feature of this report is that it concludes that the world has plenty of spare capacity to live on should Iran's contributions be subtracted. Coming from the Kennedy School for International Affairs, I wonder just how, er, 'supported' that view was. That is, I think this report tells some powerful folks exactly what they want to hear?

As with the silly reports coming out of the Fed in 2007 stating, and quantitatively at that, that there was no housing bubble, I'll take the 'under' side of this bet.

Finally, there was enough emotionally charged language in this report that I have to discount it a bit. As with any research or evidence based approach, as soon as emotions come into play one has to guard extra carefully against bias.

For example he writes (on pg 10):

"Even the most oil-rich country in the world, Saudi Arabia, still has much potential to exploit. Despite a flurry of recent doubts about the actual size of its reserves (a renewed attempt to discredit the country’s role as the world’s Central Bank for oil), the Kingdom will probably continue to defy skeptics for decades to come."

Wow. Uh, I did not realize that my doubts about the unwavering nature of KSAs stated oil reserves despite decades of production were motivated by a desire to discredit the country's role as the world's central bank for oil. I thought I was troubled by the fact that reserve additions exactly matched by production volumes and this seemed unlikely.

If one parses the language in this report it is clear the author has an axe to grind. I'm not saying this proves the reports is wrong, it may well be right, it's just that it would have been far more effective in swaying it's potential detractors if it steered away from unbacked claims, emotionally charged language and strawman arguments.

The author seems to be relying on some kind of assumption that lower prices means that there is more supply relative to demand, and that future supplies will not be affected by lower prices.

While the first assumption may be rational if the world was not facing continued financial crisis that affects all kinds of prices, there is not much rational basis to assume that lower prices will have no effect on future production.

According to oil tanker tracker, Oil Movements, OPEC exports are slightly less now than at the start of the year. Granted that can be attributed to reduced Iranian exports, my point is that there is no evidence that more oil is available now than a few months ago or so when prices were higher - in fact less.

In other words, price doesn't always follow supply and demand, but to explain what is difficult to understand for most, the main stream media has their own memes for dealing with price changes. When prices drop, the assumption usually is that there is excess supply. When prices rise, usually it assumed that speculators or some covert group is using unfair practices to raise prices.

Charles - "...and that future supplies will not be affected by lower prices". As usual many of these prognosticators don't acknowledge the time lag between changes in drilling economics and production. Consider the situation with NG in the US. The NG rig count peaked in Sept '08 at 1,606. Currently the count is 541 rigs. Obvious the fall in NG prices from $13/mcf to below $3/mcf is easy to understand as the cause of decreasing efforts to find NG. Some cornucopians would take that as proof that prices don't affect future supplies: NG production is doing just fine throughout this period.

Operators decrease drilling efforts when prices drop be it NG or oil. But few if any decrease the production rates of their existing wells in the face of falling prices. In fact, many will make efforts to increase production to compensate for lower cash flows. Another factor the optimists are either ignorant of or just chose to ignore: the Independence Deep Water NG Hub in the GOM. At the same time NG prices began their collapse the IDWH started delivering 1 bcf/day literally almost overnight. Construction had begun years earlier. Companies sold their NG at whatever price they get and continue to do so today.

The decrease in NG drilling will have a huge impact of NG production...years from now. And when NG prices increase significantly there will be a proportional rise in drilling efforts. But just as the lag time affects drilling down turns it will take years for the increasing rig count to manifest itself in production rates. There's an old joke in S. La: Why do you give a Cajun his pay check every week instead of every 2 weeks? Because that first weekend he's the richest SOB on the bayou and spending like a drunken sailor. And then dirt poor for most of the next two weeks. Time lag.

And the same dynamic works equally well with respect to oil production. The only question is to what degree the current oil price softness will decrease drilling efforts. What is certain is that to whatever degree drilling for oil slows down it will take years for it to show up on the production rate side.

Oil Lease Sale in U.S. Beaufort Sea Delayed by Two Years to 2017

The Obama administration pushed back by two years a sale of oil leases in Alaska’s Beaufort Sea to collect additional scientific information about the region, the Interior Department said.

The agency plans to auction rights in the Arctic spanning the U.S.-Canada border in 2017, Interior Secretary Ken Salazar said today on a conference call with reporters. A draft leasing plan for 2012-2017 released in November set the sale in 2015.

The agency plans to auction rights in the Arctic spanning the U.S.-Canada border in 2017

Rights in the Arctic spanning the US-Canada border? There is a bit of an unresolved international boundary dispute in the area. The Obama administration is already in Canada's bad books for not being particularly cooperative lately. We don't want to be pushy, but accidents do happen.

World oil supply up but spare capacity tight: EIA

Global fuels output exceeded consumption by an average of 1 million barrels per day in May and June, helping to push oil inventories higher and prices lower, the Energy Information Administration said in a report, obtained by Reuters ahead of its publication.

... With only a thin spare oil supply cushion, unforeseen oil production outages, such as major damage to oil platforms from hurricanes in the Gulf of Mexico or an upsurge of violence in producers such as Nigeria can quickly boost oil prices.

The other day, someone mentioned cattle death during a drought. It might have been the weeds ...

Calf grazing deaths rise in drought years

Veterinarians are reporting an increase in the number of calf deaths from grazing on toxic weed species so far this summer, a telltale sign that the drought is knocking down some of the grasses on which many ranchers rely to keep their herds thriving, according to a report from Kansas State University Research & Extension. The most common ailment is in liver toxicity that's common when calves graze on weeds and other plants that aren't around in a year with normal precipitation.

I was on the Baja peninsula of Mexico last fall, and there were dead cows lying by the side of the road in many places. If the rains fail, the Mexicans can't afford to buy food for their cattle, so they die.

It's really a lack of hurricanes. Baja gets most of its rainfall in hurricanes, and they haven't had one for two years.

Early season hurricanes tend to spin off into the Pacific and are more likely to head for Hawaii. It is the late season hurricanes that tend to hook around and head for Baja. It is unlikely relief will come before August/September.


I am planning to be kayaking in Baja in October/November, so hopefully a hurricane or two will have come through and things will have calmed down by then. The prospect of kayaking in a hurricane doesn't appeal to me.

Uh, good luck, the end of the season is around October but I wouldn't like to speculate which part with all the funny weather going on also there looks like there will be an El Nino too. Remember that Hurricane Kenna was October 22-26th. Have a good trip, at least you can enjoy the Tequila from our state :)


Well, last time I was there a hurricane did go by, but it hit the Mexican coast south of Baja and didn't affect us much except to make the waves a bit high. The previous time, the last hurricane of the season had gone through a couple of weeks before. The next-of-kin of the missing fishermen were asking for donations for fuel to go look for them, but I doubt there was much chance of them being found alive.

The Tequila, though, is extremely good!

I'm not much of a worrier. If I was, I wouldn't ski on avalanche slopes.

Koch Brothers Firm, BP Targets of Terrorist Elicitation Attempt

Based on the information provided, it is possible to say that the Koch Brothers Flint Hill Resources refinery in McFarland Wisconsin was a target of a possible Islamist terrorist targeting in late November 2008.

Newly declassified records show that on November 21, 2008, “an Arabic gentleman” posing as an investigator for an never identified Atlanta law firm. The caller, seeking information as to "whether Flint Hills could track where the gas tankers were going" had a particular interest in BP shipments.

also DHS, FBI Warn Law Enforcement of Terrorists Asking Questions

Louisiana Fuel Team Playbook (pdf)

The Louisiana Fuel Team is comprised of members from multiple governmental agencies and representatives from the private sector and trade organizations.

The purpose of this document is to establish and provide operational concepts, organizational arrangements, roles, and technology requirements for optimizing public fuel availability for coastal evacuees and recovery efforts in the event of an emergency situation along Louisiana’s Coast and to minimize the potential or realized disruptions to the public fuel supply. Fuel for emergency response is managed under a separate response function.

This document, developed with an all-hazards approach, shall supplement the State of Louisiana’s Emergency Operations Plan in order to ensure that the state of Louisiana is prepared for and ready to be responsive in a coordinated, effective, and efficient manner towards disruptions to the public fuel supply. The Louisiana Department of Natural Resources (LDNR) serves as the lead state agency to oversee this function

Noa well starts supplying Israel with natural gas

Natural gas from the Noa field in the Mediterranean has started to flow, one of the partners of the exploration group said on Sunday, which will help Israel prevent an electricity shortage in the wake of Egypt's decision to cut natural gas supplies.

The new supplies will replace more expensive and dirtier fuels Israel has had to turn to, like diesel and fuel oil, and save the economy about $170 million this summer. Israeli electricity rates have jumped as natural gas supply dwindled.

Last month, Noble Energy and its partners -- which include Delek Drilling -- began laying pipelines connecting Noa and the nearby Pinnacles prospects to the larger Mari-B well off Israel's Mediterranean coast.

Mari-B is expected to be depleted by the end of 2012 as production has risen due to repeated supply disruptions from Egypt.

As the large Tamar field, with estimated gas reserves of 9.7 trillion cubic feet, is not expected to come online until the middle of 2013, Israel is braced for months of natural gas and electricity shortages.

85 Octane Revisited: S.D. governor issues emergency rules to allow continued sale of "illegal" fuel

[South Dakota Governor Dennis Daugaard released the following statement concerning legal issues that have arisen over the sale of 85-octane gasoline in the state]

"I want to protect South Dakota consumers. I want to avoid a fuel shortage in South Dakota. And I want to keep gas prices down.

"This spring, state inspectors discovered that some gas stations were selling low-grade 85-octane gasoline, but mislabeling the fuel as 87 octane. The state immediately acted to stop the practice of mislabeling ...

"Western South Dakota gets its fuel from Colorado and Wyoming, where 85 octane is refined and sold. Refiners told me that, if the state immediately banned 85 octane, there would be fuel shortages West River. July and August have a high risk for fuel shortages anyway because of the busy travel and tourism season. In fact, late last week I waived regulations on the hours of operation for fuel trucks to allow fuel to be trucked into South Dakota more quickly, because areas of the state were coming close to shortages.

... in the short term, South Dakota cannot risk a gas shortage over the summer. We will accept the word of the refiners in the short term, while we scrutinize their claims for the long term.

... nobody asked what they did with the price differential

Other than the question about the price differential, and some legally dotted i's and crossed t's, what exactly is the problem here? Do people in Colorado and Wyoming experience any particular problems? If they do, why haven't they screamed and yelled to get their state minimums changed to the more common 87? If not, why should South Dakota (or anyone else) "ban" 85 octane? Why not just correct the labeling by slapping a temporary sticker over the 87 number at the pump?

I would expect the engine control systems of modern cars would attempt to accommodate the reduced octane by measures such as retarding the ignition timing and/or restricting the allowable throttle opening. There is a fine line between the optimal operating conditions for maximum power and fuel economy on one hand and engine knock on the other. Engine knock can, depending on its severity, cause engine damage due to the increased stresses. If the engine control system does have to make adjustments to avoid engine knock, the main effects would be a reduction in the maximum power obtainable without knock and fuel economy. Most motorists might not notice them or, if they did, would not necessarily associate them with the fuel. Also, in areas at higher elevations, the reduced air pressure would alleviate the potential issues in operating with the lower octane fuel (this is the best case scenario).

Prior to this I've never heard of 85 octane fuel - it sounds like something that might result if corners were cut in the production process. I'd certainly be leery about buying it. There could also be issues with warranty coverage.

"Prior to this I've never heard of 85 octane fuel"

I used to buy 85 octane gas in Idaho all the time. It would ping a bit on a hot day while climbing out of the valley, but once I was up to 3000 feet it ran fine.

High altitude states like Colorado, Wyoming, and Idaho permit 85 octane gasoline because the lower air pressure at high altitude reduces the pressure in the cylinders to the point that it is equivalent to 87 octane in lower altitude states. South Dakota is not a particularly high altitude state.

That being said, the electronic ignition systems in modern cars will back off the ignition timing if they detect knocking in the cylinders caused by low octane fuel... but they will experience a loss in engine performance and fuel economy if that happens. IOW, drivers are being ripped off by being sold cheaper gasoline than standard.

80 octane fuel in New Mexico at 9000 feet. It was freakin' rocket fuel! Made the truck peppy and zippy when down at 7000 feet!

What you need at that altitude is a turbocharger. It will give the same performance at 9000 ft. as it does at sea level. However, you do need to use high-octane fuel to get maximum benefit out of it.

During WWII one of the advantages the Allies had was that the American oil refineries started increasing the octane ratings on their gasoline, and every time they increased the octane, Rolls-Royce increased the boost on their supercharged engines. By the end of the war, the RR engines were the same size and weight as they were at the start, but were putting out twice as much power.

Meanwhile the Germans, not having the American refining technology, were trying to keep up by putting bigger engines in their fighters, which made them nose-heavy, clumsy, and used up too much fuel. It was an unfair competition. By the end of the war, the American Mustang fighter (which used a RR engine and equaled the performance of the British Spitfire, but was much longer range) could reach Berlin, which made things much safer for the Allied bombers, and much less safe for the German fighters.

Saudi Arabia is short of gas supply and Saudi Aramco has embarked on an ambitious programme to boost gas production by a third in the five years to 2015.

Hasn't Saudi Arabia been in a crash course to increase natural gas supplies for a decade now? I believe it is even mentioned in the book "Twilight in the Desert". Saudi Arabia asked the international oil companies to come in and help them find gas. They got all excited until they learned it only applied to natural gas not oil. It seems (1) Saudi Arabia hasn't been very successful with these efforts; and (2) they are really desperate for more gas for local power generation so they have more oil to export.

SA has optimal conditions to provide during daytime cheap electricity by photovoltaic, each barrel of oil they burn is a loss when they could sell the barrel for more than 60$.