Drumbeat: August 27, 2012

Isaac threatens Gulf oil production

NEW YORK (CNNMoney) -- Tropical Storm Isaac is curtailing oil production along the Gulf of Mexico and threatening refineries, which could send already rising gasoline prices up another 10 cents in the coming week.

The U.S. Bureau of Safety and Environmental Enforcement, which oversees offshore oil production, said Monday that 78% of the current daily oil production in the Gulf of Mexico has been shut, with 346 platforms and 41 rigs evacuated. In addition, more than 48% of natural gas production in the Gulf has also been halted.

Isaac Takes a Hit at Refining Capacity

About 1.3 million barrels a day of refining capacity–nearly 8% of the country’s total–is offline, the U.S. Department of Energy said Monday, as refiners remove employees in anticipation of Tropical Storm Isaac making landfall within the next few days.

Oils fall as Isaac hits refinery demand

Oil operations in the Gulf of Mexico come under threat from Tropical Storm Issac, dampening demand and prompting a fall in prices.

Oil prices have fallen as Tropical Storm Isaac threatened oil and gas operations in the US Gulf of Mexico, forcing refinery shutdowns that lowered demand for crude.

BP contaminated gasoline claims reach 6,500

Contaminated gasoline from a BP refinery has so far led to some 6,500 claims from motorists trying to recoup hundreds of dollars they spent for car repairs, a spokesman said Monday.

The company, which so far has fielded about 19,000 inquiries from motorists, last week recalled 2.1 million gallons of gasoline from its refinery in Whiting, Ind. The bad gas affected service stations in three states, including the Chicago region of Illinois, Indiana and Wisconsin. Since then, BP has checked its entire distribution system, BP spokesman Scott Dean said.

Pemex prolongs critical natural gas alert through Monday

Demand for natural gas has risen sharply in Mexico because of the impact of historically very low prices for imported gas from the United States. As a result, critical alerts -- which mean the suspension of supplies to major consumers -- have been common in recent months, though they usually last only for a day.

Kuwait posts record $47bn budget surplus as oil prices, production rise

Kuwait posted a record budget surplus of 13.2bn dinars ($47bn) in the fiscal year that ended March 31 as oil prices and output rose.

Death toll rises to 48 in Venezuela refinery blast

PUNTO FIJO, Venezuela – The death toll rose to 48 at Venezuela's biggest oil refinery, where fires were still raging on Monday nearly three days after a powerful explosion.

Venezuela refinery fire spreads

A fire burning at Venezuela's biggest refinery spread to a third fuel storage tank on Monday, all but burying plans for a quick restart of operations after an explosion that killed nearly 50 people in the country's deadliest oil industry accident.

Kurdistan players pin hopes on new pipelines

This month’s move by the Kurdistan region of northern Iraq to resume oil exports through a pipeline network controlled by the country’s federal authorities has done little to placate Baghdad’s anger with western oil companies entering the region.

Deals struck over recent weeks between leading oil companies and Kurdistan’s regional government to acquire oil interests in the semi-autonomous region have faced heated opposition from the Iraqi government.

Brazil's Vale lifts force majeure at Australia coal mine

RIO DE JANEIRO (Reuters) - Brazil's Vale SA lifted a declaration of force majeure at its Carborough Downs coking coal mine in Australia after a May 31 gas leak forced the mine's closure, the Rio de Janeiro-based company said in a securities filing on Monday.

The mine will increase production and resume deliveries to clients gradually as Vale corrects the operational and geological problems that caused its closure, the company said.

FACTBOX-Angola:poverty still prevalent despite oil riches

(Reuters) - Angola holds its third national elections on Friday since independence from Portugal in 1975.

It is still recovering from a 27-year civil war that killed half a million people, uprooted more than one million, destroyed infrastructure and littered the country with landmines. The ruling MPLA party has invested heavily in rebuilding but critics say it has done too little to reduce widespread poverty in Africa's second largest oil producer.

Once-Mighty Suntech Struggles to Survive

The Chinese solar giant is in deep trouble, but even its collapse wouldn't be enough to stabilize a massively oversupplied market.

How rising well costs are reshaping the oil patch

What’s the biggest generational shift in the oil and gas industry?

Don’t feel bad if you guessed either hydraulic fracturing, horizontal drilling or drilling multiple wells from the same location (pad drilling). Asian investment or rising production from the oil sands would be impressive choices. However, the answer lies where the bit hits the ground hardest - the capital cost of drilling a well.

A well in western Canada today, on average, costs three times as much to drill and complete as it did six years ago (see attached Figure 1). The big ramp up in the transition period between 2004 and 2010 – from $1.3-million to $3.6-million per well – was not because of general inflation, but the quick migration into the capital-intense world of unconventional plays like shale gas and light, tight oil (LTO).

Oil Rises as Isaac Shuts Output; Gasoline Gains on Refinery Fire

Oil climbed the most in a week and gasoline rose to the highest in almost four months as Tropical Storm Isaac strengthened, crimping output in the Gulf of Mexico, and a fire in Venezuela shut part of the world’s No. 2 refinery.

West Texas Intermediate futures climbed as much as 1.6 percent in New York and gasoline surged 4.1 percent. The storm is expected to become a hurricane in “a day or so” as it approaches the northern Gulf coast, the U.S. National Hurricane Center said today. Isaac has shut about 24 percent of U.S. oil production and 8.2 percent of natural-gas output from the Gulf, the Bureau of Safety and Environmental Enforcement said yesterday. Firefighters in Venezuela are working to quench fires at two storage tanks after a gas explosion at the Amuay plant, part of the Paraguana complex, killed at least 39 people.

Gasoline Jumps With Crude Oil Futures on Supply Threats

Gasoline climbed to the highest in almost four months and oil gained the most in a week after a refinery explosion in Venezuela killed 39 people and Tropical Storm Isaac shut rigs in the Gulf of Mexico. U.S. stock futures rose as shares of Apple Inc. rallied.

Gas spending and prices by state

The average price for a gallon of gas is up more than 7% in August, AAA says. Mississippi residents spend a whopping 14.2% of their income on gas.

Oil prices are setting their own course

The fear factor is still strong in driving the oil market and while the lingering problem with Iran is taking a breather, fear of the long term is still there. Will there be enough oil to drive development? Will Opec countries carry their investment programmes as planned? Is peak oil real or a myth? Will the development of unconventional oil go unhindered in spite of widespread opposition by local residents and environmental groups? Will renewable energies become a real alternative to oil one day?

All these questions and many others have the potential to move the market in one direction or another and we have to live with them and oil producers can only hope to negotiate the path safely.

Hedge Fund Bets Jump to 15-Month High on Bull Rally

Hedge funds boosted bets on rising commodities to the highest in 15 months, driving prices into a bull market as the U.S. drought worsened and the Federal Reserve signaled it may take more steps to spur economic growth.

China's July fuel oil imports fall 11% on year to 1.88 mil mt

China's imports of fuel oil in July fell 11.2% year on year to 1.88 million mt, with Venezuela displacing Russia as the top supplier, data released last week from the General Administration of Customs showed.

Hurricane Warning Posted for U.S. Gulf as Isaac Nears

Tropical Storm Isaac is forecast to strengthen over the eastern Gulf of Mexico, closing oil and natural-gas production sites in its path and threatening four U.S. states with a possible hurricane.

Eerie similarites: Isaac follows track of Katrina, evacuations ordered for coast

Tampa, Florida (CNN) -- Thousands in Louisiana, Mississippi and Alabama were being told early Monday to leave their Gulf Coast homes ahead of the arrival of Tropical Storm Isaac as forecasters warned it was gaining strength as it followed the same path Hurricane Katrina took seven years earlier.

The governors of the three states each declared a state of emergency, with Alabama Gov. Robert Bentley ordering mandatory evacuations to begin at 8 a.m. for residents who live along the coast and for those in some low-lying areas inland.

Gulf oil platforms evacuating workers due to Isaac storm threat

Major oil producers, including BP, Shell and Chevron, said Sunday they would be evacuating workers from Gulf of Mexico platforms in the face of an imminent threat of high surf and winds from Tropical Storm Isaac.

The storm could affect an area that produces 23 percent of total daily U.S. oil production and 7 percent of its natural gas output.

BP Plc said it will shut production at all of its Gulf of Mexico oil and gas platforms and evacuate all workers on Sunday in light of Isaac's westerly shift and forecasts that it could strengthen into a hurricane. BP has already shut and evacuated four platforms, including Thunder Horse, the world's largest. The company said Sunday it will shut its other three platforms.

Norway's Statoil announces large oil discovery in North Sea

OSLO, Norway -- Norway's Statoil says it has discovered a high quality oil reserve in the North Sea off the coast of Stavanger.

The state-controlled oil company says the find in the Geitungen field is estimated at between 140 and 270 million barrels of recoverable oil equivalents.

BP and Eni make double gas find off Egypt

BP and Eni subsidiary International Egyptian Oil Company (IEOC) have reported two gas discoveries at Taurt North and Seth South in the pair’s North El Burg offshore concession in Egypt’s Nile Delta.

The British supermajor said the pair of finds were the fourth and fifth to be made in the concession following the Satis-1 and Satis-3 Oligocene deep discoveries and last year's Salmon-1 shallow Pleistocene discovery.

Saudi Arabia arrests suspected militants, state media reports

(CNN) -- Authorities in Saudi Arabia have disrupted a terrorist cell in Riyadh and arrested at least half a dozen suspected militants, the state-run Saudi Press Agency reported Sunday.

Saudi Aramco oil giant recovers from virus attack

About 30,000 workstation computers are back online at Saudi Aramco after a virus hit the world's largest oil producer.

Remote access was still restricted "as a precaution" the group said.

Nigeria navy frees 28 kidnapped oil workers

Nigeria's navy said it had freed 28 local oil workers who were being held hostage by a criminal gang in the oil-producing Niger Delta.

The hostages were Nigerian employees of Chinese oil servicing firm Sinopec, navy spokesman Commodore Kabir Aliyu said.

Sinopec Posts Lowest Half-Year Profit Since 2008 on Refining

China Petroleum & Chemical Corp., Asia’s biggest refiner, posted its lowest half-yearly profit since 2008 after the sale of fuels at state-controlled prices reduced earnings.

Should Canada refine its own oilsands bitumen?

Whether they're crossing the border into the United States or heading west to the British Columbia coast, the controversial pipelines linked to the Alberta oil sands have one purpose: to get the thick, heavy bitumen out of the country.

But Enbridge's Northern Gateway and TransCanada's Keystone XL pipelines, which have been fighting for the approval of governments, regulatory agencies and the public, have renewed a debate over whether Canada should be refining the raw bitumen at home instead of exporting it to be refined farther afield.

Fire shuts Iraqi crude oil pipeline to Turkey

A fire on a pipeline carrying approximately a quarter of Iraq's oil exports forced the closure of the link on Monday and halted loading at Turkey's Ceyhan export terminal, security and shipping sources said on Monday.

The cause of the fire on the Kirkuk-Ceyhan pipeline in Turkey's southeastern Şırnak province near the Iraqi border was not immediately known, but authorities suspect sabotage, security sources said. The fire was extinguished and workers tried to cool the pipeline, a 600-mile-long (970 km) double link. The firemen also found the burnt body of a woman. There was a backpack and an automatic rifle close to the body, sources said.

Venezuela Battles Flames at Largest Refinery After Deadly Blast

Firefighters in Venezuela are battling flames at two storage tanks at the country’s largest refinery for a third day after a gas explosion Aug. 25 killed at least 39 people and injured dozens, shutting down the Amuay plant.

Shell seeks more time to drill exploratory well in Chukchi Sea

Peter E. Slaiby, vice president of the Alaska venture, said Sunday that the company has proposed extending the time allowed for drilling in the Chukchi by slightly less than two weeks beyond the Sept. 24 deadline set by the U.S. Department of Interior to allow time for cleanup of any oil spill before the onset of winter sea ice.

Meeting with reporters at an Arctic Imperative Summit here, Slaiby said the company’s latest models for forecasting the onset of winter sea ice now show the first freeze-up occurring somewhat later than originally envisioned when federal officials imposed their initial deadline for ending operations in the Chukchi Sea.

10 most expensive energy projects in the world

Our growing thirst for energy means today's projects dwarf most past endeavors. The Hoover Dam cost $49 million in 1936. Adjusted for inflation, that's only $825 million today.

UAE may sign more bilateral nuclear pacts

The Emirates Nuclear Energy Corporation (Enec) expects to follow up the award of US$3 billion worth of fuel supply contracts earlier this month with more bilateral pacts as the UAE's nuclear programme gathers pace.

The Dh11.01 billion deal will lead to the purchase of about 12,000 tonnes of concentrated uranium - also known as yellowcake - enough to generate 450 million megawatt hours of nuclear energy, according to Fahad Al Qahtani, an Enec spokesman.

The many, many uses for corn

The bulk of all the corn grown rarely becomes food. Here's where it goes.

Rising food prices in North spark protest

People living in Canada’s far north are increasingly frustrated over the high cost of food.

Protests were held in Nunavut Saturday to highlight rising prices.

Sheila Katsak in Pond Inlet, Nunavut, said she spends about $60 a day to feed her family of five. Katsak said that doesn’t allow for any treats.

“It would be nice if I could buy a pizza at the end of the week. But I can't. It's not affordable,” she said.

Lightbulb moment for 'clean' stove design

The brains behind BioLite are Jonathan Cedar (31) and Alex Drummond (53), two American designers who started working on a prototype wood-burning camp stove as a side project five years ago. The gizmo they came up with is a thermo-electric generator, which converts heat from the flames directly into electricity. This in turn powers a small fan, which makes for a much more efficient fire (the wood gassifies, promoting clean combustion). Any excess electricity can be used to power phones or run lights. Only when Cedar and Drummond entered their design into a competition to find a “clean” stove, and won, did they realised their technology had potential way beyond charging iPods in the Rockies.

For Climate Change, a Possible Trial Could Echo the Scopes Monkey Case

The scientist Michael Mann has threatened to sue National Review for defamation, setting up the potential for an interesting jury trial on climate change and the hockey stick graph.

Intriguing Habitats, and Careful Discussions of Climate Change

Many zoos are fearful of alienating visitors with tours or wall labels that dwell bleakly on damaged coral reefs, melting ice caps or dying trees.

UN green climate fund, aiding poor, to pick HQ in 2012

OSLO (Reuters) - Leaders of a fledgling U.N. green fund agreed at a first meeting on Saturday to pick a headquarters this year as part of a plan to oversee billions of dollars in aid to help developing nations fight global warming.

Carbon Tax Silence, Overtaken by Events

With distressing images of weather-related disasters saturating the news media, climate change no longer seems such a distant and abstract worry — except, perhaps, in Washington. In 2009, President Obama persuaded House Democrats, then in the majority, to pass a bill aimed at curbing greenhouse gas emissions. Facing a Republican filibuster in the Senate, however, the legislation died. And its prospects dimmed further when Republicans took control of the House in 2010. Mr. Obama has remained relatively silent on the issue since then.

Is the Bay Area's Highway 37 destined to become a new waterway?

Most of the heavily traveled two- to four-lane road between Interstate 80 and Highway 101, is only 1 to 2 feet above sea level. Caltrans says it has the lowest elevations of any Bay Area highway and some portions passing through marshes even dip well below that.

And that, plus worsening traffic congestion, are why state and environmental groups are so concerned that parts of Highway 37 could some day disappear under water due to such natural events as rising ocean levels and earthquakes.

The electric grid: Extreme power risks

Extreme weather is putting America’s power grid to the test, with a yearlong run of violent storms and record heat battering a system built for fairer skies.

As the eastern United States struggles to recover from yet another weather shock, energy officials are acknowledging climate change as a force that finally has to be reckoned with – even as concern grows over other threats that can set off catastrophic blackouts.

Energy expert says world's oil production has peaked

“The maximum yearly oil production of the planet is taking place now!” That came from the CEO of a Netherlands-based company that has 70 offices in 50 countries worldwide. Their business is analyzing drilling results for all major companies and hundreds of smaller firms in the global energy-finding industry.

The company, Core Labs, has a unique view of the big picture that few, if any, others could envision. As a byproduct of their normal business activities, CLB accumulates data about the current status of all major oil and gas basins on the planet…

Basically he looks for flat, or lower, future oil generation from Mexico, Iraq, Iran, North Sea, Russia, and the shocker — Saudi Arabia.

Iraq being flat to down is a shocker for most also, though I am not shocked at all. Oil production will be down in 2013, down further in 2014 and by 2015 it will be obvious to everyone that peak oil is in the rear view mirror.

However that will likely not be in the news much because the world economy will be in the dumps and everyone will blame lower oil production on "lower demand" and not peak oil at all. And everyone in the U.S. will blame it on Obama, or Romney, or which one is in office. I don't know who, or what, folks in the rest of the world will blame it on but I doubt seriously that they will see declining oil production as having anything to do with it.

Ron P.

However that will likely not be in the news much because the world economy will be in the dumps and everyone will blame lower oil production on "lower demand" and not peak oil at all

Moreover things like CTL, GTL and other unconventional liquids will mask it temporarily so the event will go unnoticed for a few years.

I think the only significant CTL producer is SASOL in South Africa - around 250,000 bpd. Are you aware of others of that size? It takes some time to build these, and I don't believe there are many on the drawing board. GTL is also limited currently (Quatar?). I just don't see a huge move to CTL or GTL.

I don't think building CTL/GTL plants is that critical, in addition to the plants you mention. A lot of industries use oil as a feedstock in some form or other, if they start replacing it with coal/gas it works like a CTL/GTL plant. See recent TOD post regarding use of coal in chemical industries here

EDIT :I agree that the consumption of oil as a feedstock is not much but it's enough to temporarily mask some effects.

I think the only significant CTL producer is SASOL in South Africa - around 250,000 bpd. It takes some time to build these, and I don't believe there are many on the drawing board.

Indeed. China planned a big one, but a few years ago they had doubts to go for it. IIRC because of costs and huge amounts of water needed. Forget CTL the next years for masking oil production decline.

Also, even if water wasn't an issue, to get CTL to a high enough oil production is incredibly inefficient. Mikael Höök at Aleklett's Uppsala energy group has studied it, and his conclusion was that it takes about 3 years to get a plant up and running, it costs a lot, the expertise is very limited(in South Africa, but it can be learnt rather quickly).

The major problem is that the oil equivalent from coal is hugely inefficient. To get something like 10 mb/d you'd need to burn over half the world's coal. And China's net energy is still around 71 % from coal so China would have it's economy shut down either way, it would be from oil or coal, that would be the choice, but the outcome would be the same.

GTL is as you say neglible.

As I've written down below, the only hope is Iraq, unconventional from Brazil and North America(offshore from Africa will be very subdued).

I still doubt his(the CEO in the article) view on Iraq.

They can continue to increase, the oil is there.
The main problem is political between the semi-autonomous Kurds who are getting bolder and bolder and the increasingly outraged Baghdad central government who lashes out at them.

I think an independent Kurdistan is only a matter of time. And Western governments will allow it to happen because an internal war in Iraq would be a disaster and we need that oil and the kurds are sitting on a lot of it and unlike the central government they are mostly dishing it out to Western IOC's instead to Chinese state petroleum companies(the kurds are smart! or are they advised by someone?).

I agree that CTL on a big scale is not possible.

About Kurdistan..not feasible. Turkey won't allow it, they have been dealing with this problem for as long as one can remember, they aren't just going to allow it to metamorphose into an even bigger problem.

There is a Chinese joint venture in South Australia looking towards CTL (and electricity generation).


However, at this stage they have not yet completed a Bankable Feasibility Study for the project.

The CEO for Core Labs also says we are on a plateau and we will come off the plateau in 3-4 years.

Here is a link to the presentation. He discusses this around the 6:00 minute mark.


d - Excellent link. Folks: this is much more interesting than I expected. The fellow does talk fast and tosses around some techospeak but much can be understood. Most interesting is his characterization of the new east Africa offshore plays.

Also very interesting: enhanced recovery from existing giant fields. This is a big part of their services. They work for all of Big Oil as well as many NOC's. One example: a field with 40 billion bbls of still recoverable oil. Talks about running CAT scan on the rock in the lab in an effort to increase recovery 2.5% for this field...or about 1 billion bbls.

Though a "service company" they are actually one of the leaders in researching and implimenting EOR. Big Oil long ago gave up basic research and analysis. It's the service companies doing most of the cutting edge work these days.

Thanks a million for this link D. He says we have a 2.5 percent net decline rate so we need to replace 2.3 million barrels a day of production every year. Doing the math, that puts world oil production at 92.4 million barrels a day. That seems a bit high even for total liquids.

Also a net decline rate of 2.5 percent seems a bit low. That is about 2 percent lower than the EIA or the IEA estimates. And I know for a fact that this is way, way lower than the the North Sea or GOM fields are declining. But perhaps by the term net decline he is talking about something different.

However his estimate that we will remain on the plateau for 3 to 4 years is in line with Robert Hirsch's estimate of 1 to 4 years before we fall off the plateau. My estimate is six months to one year. :-) The above link is to a video of Hirsch's ASPO speech this year.

Ron P.

Everybody has to stop for a minute and think what these guys at Core Labs are saying. They probably have better data(at least with oil) than IHS Cera, Platts, IEA and EIA and every other energy research firm out there.

D, this may be true but we do have the actual production data, published in many cases by the producing countries themselves. For instance there is no better data than that from the North Sea. The EIA figures reflect the exact data published by Norway, the UK and Denmark. Here I have graphed the North Sea decline rate. Each data point represents the decline of the 12 month average from the same 12 month average the year before. In other words the June 06 point is the decline rate of the 12 month average from June 05 and so on. This is the decline in the 12 month average from year to year, not the decline of month to month data.

North Sea Decline Rate

This is the decline rate in spite of any new fields that came on line. Notice the spike that started up in January of 2007. That was the UK Buzzard Field that came on line with new oil and lowered the decline rate until it headed back down in May of 2009.

The decline rate for the last 7 years, June of 2005 until May of 2012, has averaged 7.5 percent. Again this is despite of all new oil that they have brought on line during that period. The actual decline rate of individual fields is far higher, in the neighborhood of 10 to 15 percent. The average decline rate in the deep water GOM is even higher, around 20 percent.

So the average decline rate of all the world must be much higher than 2.5 percent. I would buy 2.5 percent for super-giant fields. But newer, much smaller fields, and especially deep water fields, have a much higher rate of decline.

I am not saying that the guys at Core Labs don't know what they are talking about. I am saying that what they call "net decline" is something different than what the EIA, the IEA and everyone else is calling net decline.

Ron P.

ExxonMobil put the decline rate from existing wellbores worldwide at 4% to 6% per year. If we use 5%/year as a midpoint, and look at crude production, the industry would need to bring on line about about 30 mbpd of new crude oil production and from enhanced recovery projects over the next 10 years, just to offset the decline from existing wellbores.

But as you pointed out, depletion is a one way street, and the higher the production rate, the faster that we are depleting remaining resources.

And I think that a post-2005 production plateau by the (2005) top 33 net oil exporters is obscuring a sky-high post-2005 CNE (Cumulative Net Export) depletion rate.

Good comments..

Yes I was a little confused by the "net decline" numbers. As with you I am not sure if he was referring to something else. My main point was that a company with this much information about the state of worldwide field reseviors is saying we will come of this plateau in 3-4 year is very telling.

Don Westlund

So what would be the effect if the Ryan plan shifts most of the costs of health care on to seniors after 2024? Health care costs have inflated at a 6-8% rate for 10 years. If that rate continues and oil escalates in price, does anyone think that the under 54 year old crowd will be able to pay for their health care?

Hi Don,

I found an explanation of "net decline" at the following link:


I am not sure if the definition is the same in the presentation you linked to.

Basically average decline refers only to the average of fields that are in decline whereas "net decline" includes all mature fields (this is not defined, but usually refers to fields that have reached their maximum daily output and are either on plateau or in decline).

I have done a few scenarios on crude plus condensate output based on Webhubbletelescope's Shock Model:



details can be found at


Thanks DC ...

Nice charts!

Perhaps Core Labs thinks like this: Suppose the production decline of a specific field is 5%. Further suppose that the production was throttled back 3% because of less demand that is included in the 5%. Hence the real net decline of the field that exhaust the reserves is 5 – 3 = 2%.

No, they are experts. Fuzzy math isn't their thing nor is empty theorizing on unproven concepts. Demand destruction isn't at all calculated in the decline rate, it's a purely geological concept.

The 2.5 % decline rate makes sense. It would go a long way, but not the whole way, of exaplaining why we've had a plateau for all these years despite middling amount of new oil taken online.

A decline rate of 1 % would be bad, but containable, although still incredibly difficult. A 2.5 % decline each year would be far, far worse.

Robert Hirsh's estimate uses two scenarios, one for a 1 % decline and another for a 3-4 % decline rate. The latter is the one he describes as having an 'enormous impact'.

And it should be noted that both CERA and the IEA uses a 6.7 % estimate(which both got from IHS), which would be truly cataclysmic if that set it in.

Still, his low estimate is still plausable since they got better access than the IHS, far better, and a lot of work has been done to stem the decline rates(which pushes up CapEx costs to record highs each year).

Saudi's natural decline rate is 8 % but is pushed down to 2 % by very expensive techniques(at the expense of future production).
It's not inconceiveable that Russia and other countries do the same.

Robert Hirsh's estimate uses two scenarios, one for a 1 % decline and another for a 3-4 % decline rate. The latter is the one he describes as having an 'enormous impact'.

And it should be noted that both CERA and the IEA uses a 6.7 % estimate(which both got from IHS), which would be truly cataclysmic if that set it in.

You are mixing apples and oranges Svamp. Hirsh is talking about the decline rate of world oil production after the peak. That is, he is talking about the total decline in spite of any new oil that comes on line. The chart of world oil production, which is now on a plateau, would, in one to four years, start to decline by a given percent. The decline rate right now is zero, and actually a little positive if measured from 2005.

CERA and the IES are talking about the average decline rate of fields already in decline. And it has already set in. Only new oil coming on line is ofsetting that decline. Neither CERA nor the IEA have made any productions as to the decline after the peak. In fact CERA sees no peak in sight, only an undulating plateau beginning sometime around 2040.

CERA and the IEA were talking about what is happening right now, not what might "set in" as you called it. On the other hand Hirsch was talking about what would happen when the decline does set in after the peak. If the decline then, is 1 percent, then we can cope. On the other hand if the decline rate then, in spite of all new oil coming on line, is 3 to 4 percent, then we cannot cope.

The decline rate of fields in production varies according to size and depth. And the average decline rate of all fields that are past peak production, which happens to all fields a couple of years after they come on line when most of their wells are in production, is really quite high.

So when you are talking about decline rate you must understand what kind of decline rate you are talking about, now or later and total decline rate or decline not counting new fields that are coming on line or will come on line later.

Saudi's natural decline rate is 8 % but is pushed down to 2 % by very expensive techniques(at the expense of future production).
It's not inconceiveable that Russia and other countries do the same.

In 2006 Saudi announced that they had gotten their decline rate down from 8 percent to "near" 2 percent with infill drilling. They actually started that program years earlier. Russia, and everyone else in the world has also been doing the very same thing for many years.
Alex Burgansky: Russian Oil and Gas Industry Surprises Analysts

There are plenty of projects in Russia, both, new projects and existing brownfield projects. Russia is a very mature producer. If you exclude all the drilling activity taking place every year, then Russian organic decline in production is close to 19%. To compensate for that organic decline, Russia drills somewhere between 5,000 and 6,000 wells every year.

Ron P.


Let me just take the time to thank you for the wonderful job you are doing. Your explanations and analysis are flawless and easy to understand. You have educated a lot of people who visit this blog. It is the hard work of people like Leanan, you, Jeffrey Brown and many others which makes it worthwhile to spend time here.


I too want to say that I appreciate Ron's additions to this site.
I mean that wholeheartedly.

However, in this case, his comment is wrong and it's wrong because I was unclear.

The Core Labs guy spoke about a 2.5 % decline rate right now. The IHS number which both CERA and IEA uses is 6.7 %.

The Hirsch number is seperate, however, because it isn't a fixed number. It's a fluid number that is still based on a large number of variables which are still moving.

The decline rate of today, which is between 2.5 % if you believe Core Labs to 6.7 % if you believe IHS will at some point morph into the decline rate after the peak.

Both ends can end up as 1 % or 3 to 4% depending on a lot of factors.

That was the point. That Hirsch's number was an estimate of future decline rates and that the Core Logic's and IHS' numbers were an estimation of today's decline rates should have more clearly pointed out, but there is a correlation. They are not the same, but the former can and will move towards the latter(although it's also far from clear that Hirsch's estimates will be anywhere near the accurate range).

The reason that Hirsch has such a huge discrepancy between his two estimates is precisely because he understands that it is so hard to predict where the decline rate for all fields will be once you hit the peak but when anyone who tries to estimate future decline rates must look at current decline rates, look at the fields which are not yet declining, what type of field they are and they make a good guess.

That's how both numbers are correlated. You can't guess a future decline rate out of your hat, you need a reference and then build an independent forecast.

And I was probably unclear on that point earlier on but I wouldn't change much about my earlier comment, except the part of explaining that since it isn't (apparently) self-explainatory.

See my comment above.

Decline rate is the average rate of decline of all fields which are currently in decline (usually it is a subset, for example all fields producing more than x barrels per day which are in decline). The "net decline" is the decline of all mature fields. Mature field was not defined in the source for net decline, but I believe a mature field is one which has reached its targeted maximum output level. Rockman or others can correct me if I am mistaken about the definition of a mature oil field.


dc - I've never seen anyone in the oil patch try to quantify what defines a "mature field". "...targeted maximum output level.": that sounds like max production rate prior to the onset of decline. I doubt many (if any) in the oil patch would call that the break over to "mature". It's sort of like what the member of the SCOTUS said: I don't know how to define pornography (a mature field) but I know it when I see it. Seriously.

The Core Labs guy spoke about a 2.5 % decline rate right now. The IHS number which both CERA and IEA uses is 6.7 %.

No it's not the CERA IHS number is 4.5%. CERA-IHS: Worldwide oil field decline rate at 4.5%/year

The aggregate global decline rate for producing oil fields is 4.5%/year rather than the 8%/year sometimes cited in other studies, Cambridge Energy Research Associates (CERA) and IHS Inc. said in a report entitled "Finding the Critical Numbers."

The CERA-IHS analysis was based on production characteristics of 811 oil fields that account for about two thirds of current global production and half of the total estimated proved and probable conventional oil reserves base. The report was released Jan. 17. (2010)

And from this same report, something I find highly suspect, in bold:

-- Individual offshore fields are declining at a 10%/year rate compared with 6%/year for onshore fields. Deepwater fields decline at 18%/year compared with 10%/year for shallow-water fields. Offshore fields held by production outside the Organization of Petroleum Exporting Countries decline 5%/year compared with 12%/year for offshore fields belonging to OPEC members.

I don't believe it. North Sea Fields are declining at a rate of over 10% a year and GOM deep water fields are declining at a rate of 20% a year. GOM shallow water fields are declining at about 7% a year. Deepwater fields decline at a much faster rate than shallow water fields it simply doesn't matter who owns the fields.

Anyway I find the whole CERA-IHS study highly suspect. They claim that decline rates are not increasing. That is nonsense. The newer the field the smaller it is on average. Smaller fields decline at a much faster rate than larger fields so, on average, decline rates have to be increasing.

Ron P.

Ron, as I said, you're using an incorrect number.

The article you're linking to is outdated. That's an old number. From your article:

CERA said the study reinforced its global liquids capacity model showing that liquids capacity of about 91 million b/d in 2007 could climb to 112 million b/d by 2017.

This was written in 2007 at the latest.

The newest number that CERA and IEA uses is from IHS, which was calculated in 2009.

Heading Out, a regular contributor to this site, is explaining this on his personal blog here:


Using 4.5 % as a baseline for CERA/IEA/IHS is an understandable mistake, it used to be the case, but is no longer case for neither of these organizations(since several years as a matter in fact). And it shouldn't be used as a reference for what they calculate anymore. Your stats need updating.

Also, here's Stephen Sorrel at this site of all places using these very same numbers as a reference to slam down Maugeri:


This isn't to say that the current decline rate is 6.7 %, these are all estimates but it's important to note that the estimates for many organizations have gone up significantly over the last few years.

Still, in this sense, Core Labs' estimates of current decline rates are interesting as I said, and if true, they would go a long way explaining why we've been on a plateau for so long.

Svamp, I see your problem. The 6.7% decline rate from the IEA is for all post peak fields. The smaller rate you quote is for all fields in production which includes new fields that were recently brought on line. I would expect that rate to be about 4 to 4.5 percent. But 2.5 percent is just a little bit absurd.

As I said when one talks about decline rates then you must define exactly what you are talking about.

Ron P.

Neither CERA nor the IEA have made any productions as to the decline after the peak.

productions: read predictions.

That point, of course, is very hard for those of us on the outside of the whole industry to judge, where we get to hear everybody claiming to have wonderful data and a great overview of the situation.

How does their position both give them this kind of Data Access, in addition leaving them feeling free enough to share it so publically and to the industry? I don't say this to challenge this thread, just to understand a little better. Aren't they a service company that depends on the industry leaders for their position in the market?

I'd love to hear your thoughts on the relative roles of players like this.


Bob - You should be ashamed of yourself...doubting this fellow's motives. Obviously he knows what he's talking about otherwise Big Oil wouldn't be paying his company hundreds of $millions to provide reserve reports the companies can then show Wall Street that they do have the capability of carrying on BAU. Shame on YOU! Shame...shame...shame. LOL.

Actually there is a dirty little secret we don't talk about out loud in the oil patch. For instance Halliburton just did a frac job for Chesapeake that produced a great well. I own the lease right next to that well. Would I ask Halliburton to tell me the procedure they used to frac the CHK well? Of course not...that would be unethical. Nor would Big Red tell me anyway...that would be even more unethical.

Of course, ethics don't prevent me from asking Halliburton to design a frac job for my well. After all, that's their business. Wanna guess how similar my frac design will be to the CHK design? Good guess, joker. LOL. I mentioned this some time back: Big Oil hasn't developed any of this "new" tech: 3d seismic, horizontal drilling, frac'ng, etc. Big Oil gave up such research over 30 years ago for the most part. As I've pointer out before a semisubmersible rig drilling a horizontal well in the DW GOM may have 140 souls on board. And it's possible only a couple work for the oil company. And sometimes no company employees will be out there. The oil company might buy the lease, put the X on the map and pay all the bills. But it's the service companies that develop most of the operational procedures and do the work.

Hey Rock;
I guess my point sounded more accusatory than I meant.. (I say while trying to read through your good-natured harangues.. a very imprecise science if there ever was one!)

I'm not as much wondering about hidden motives and such, as I am about how you see the position of a company like Core Labs, and the reliability you might see in their announcements as opposed to others around the field. Do they have a particularly clear or unimpeded overview of resource potential?

It sounds like an important bit of news coming from the industry, but as I said above, I have no way of characterizing this source, so I'm eager to hear how they fit into the crowd.. (apologies if that's plainly stated in your previous post.. I'm still deciphering! Sorry, I'm a bit slow that way..)

But fear not. I'm still very deeply ashamed. I feel just awful..


Bob - I have no doubt that Core Lab has a better data base than any one or 5 companies combined. I also know a good oil patch salesman can sell ice cubes to an Eskimo. And I do not say that disrespectfully. His primary job is to get contracts from the oil companies. The secondary goal is to impart their knowledge upon us so we can take advantage of (and pay out the *ss for) that knowledge. I would always prefer to listen to this guys BS vs. that of any oil company exec. I understand his motivation and thus the need for optimism. But he also knows that if I catch him pushing the limits of the "truth" too far he loses credibility and Core Lab will never work for me again. That threat tends to him more realistic than it would Mr. XOM.

Thanks, Rock.

Ron - Just a WAG but this guy is also a salesman for his company services used to enhance recovery from old fields. That may be where the "net" comes from. Also, I'm not sure how he (or anyone else) defines the "end of a plateau". Presumably it when that last peak on the plateau is never again reached. But even from there is it a low downward slope or steep one? And what do low and steep mean?

Again, just my WAG but I've never expected a very steep slope on the backside of the plateau. As I've described before I've seen individual wells go into extremely steep decline...months, weeks and even days. I've seen fields go into fairly steep decline: years or even months. I've seen trends go into somewhat steep declines: many years. I've seen regions like the Gulf Coast Basin go into declines: over decades. But the entire world? Since we've never seen that happen (yet...maybe). But I would have to assume many decades. I also wonder if our Core Lab hand is projecting a lower decline rate as a result of increased recovery via EOR. It may be part of his sales pitch but he's also in a better position than any one oil company to foresee that future. ExxonMobil and Royal Dutch Shell each know what they know. But Core Lab knows what many of them know.

A steep decline on the backside of the plateau will be bought about by economic/financial collapse if it occurs.

Remember we have growth model economies, not economies that happen to have growth as a feature. The oil supply has not grown fast enough to produce sufficient GDP growth to pay for industrial civilization; this has been destroying the financial and economic systems of industrial countries at varying rates for some time. This can be seen in the massive debts that industrial countries have taken on to maintain a system that does not pay for itself.

How will these systems handle year over year declines in oil supply? My guess is not very well.

Mark - I tend to agree. I think going forward the hills and valleys of the plateau will be much more dominated by politics and economics than geology.

And perhaps the weather. ;)

Mark, you might try looking at this from the opposite point of view. The oil supply has managed to keep up pretty well with excess demand that has been brought forward over the last two decades by the lending and optimistic financial forecasts (8% pension returns, etc.) brought about by the fractional reserve banking system and central banks. The pile of debt has enabled a lot of oil consumption that would not have otherwise occurred.

My take is that industrial civilization has been destroyed by the financial and economic systems that allowed excessive consumption thru debt financing rather than the other way around.

I appreciate your perspective Nonconformist, fractional reserve banking and excessive consumption, pollution and population growth all seem to go hand in hand.

I do think industrial civilization would have eventually depleted its resources and crashed; fractional reserve banking enabled a spectacular era of growth and will give us the most spectacular crash in human history. Civilization crashes from the past are likely to be as similar to the crash of industrial civilization as the crash of an ox cart would be to the crash of jumbo jet. We are in uncharted territory.

I've seen regions like the Gulf Coast Basin go into declines: over decades. But the entire world?

Rockman, surely you don't think that I was implying that every field in the world would go into decline in the next year or so. No, no, I know that is not what you meant but your statement made it look that was what I was saying.

Now here is what I am saying. Very old super-giant fields are likely declining at a rate of between 2.5 percent and 3 percent and this is in spite of any infill drilling they are doing. Of course all super-giant fields are very old. Smaller fields are declining at a higher rate and very small fields and deep water fields are all declining at a rate well above 10 percent.

However this decline is mitigated, and disguised, by new fields that come on line every year. For instance I have noticed that some Russian oil companies are in decline. But one company, Rosneft, is increasing production... in jerks. That is they will decline for a few months then suddenly they will jump several thousand barrels per day. That is when they bring on a new field. Overall they are still increasing their production. But this has only kept Russia flat for the last year or so.

What will happen, or rather what is happening right now, is that new oil is just not quite keeping up with declines. Declines that I believe are in the neighborhood of 5 to 6 percent per year... average. And this decline rate is increasing every year as more and more oil is coming from very high decline rate fields. That is shale fields, smaller fields and deep water fields.

We need about 4 million barrels per day of new crude oil every year just to stay even. That figure increases a little each year. We are now right at the tipping point where not quite enough new oil is coming on line each year. And this problem will get a little worse each year.

Ron P.

But the entire world? ... every field in the world would go into decline in the next year or so

I believe Roger Whittaker said something like this: the first time that we said hello / began our last good bye

Once one removes the 1st unit from a field begins that fields decline. Tis part of living on a finite world.

Once one removes the 1st unit from a field begins that fields decline.

That is called depletion. Decline is past peak and starts a couple of years/decades after removing the first unit from a field.

Actually decline can start well before the first unit is removed from a field. Individual wells can simply produce less and less each month or year. Look at the decline per well in the Bakken, it starts out at about 40% per year.

Saudi has removed many units from Ghawar because they were vertical wells with very high water cut. They replaced them with horizontal wells. That's how they got their water cut down in Ghawar. Of course they have done the same thing in other fields as we.

A field usually peaks usually within a couple of years after being brought on line. Prudhoe Bay took a lot longer because of pipeline constrictions. But Thunder horse Main peaked in just eight months. Then Thunder Horse North came on line and that peaked also in eight months. The two combined peaked in sixteen months from when Main came on line.

Thunder Horse Oil Production in kb/d. The last data point is June 2012.

Thunder Horse

Ron P.

Actually decline can start well before the first unit is removed from a field. Individual wells can simply produce less and less each month or year. Look at the decline per well in the Bakken, it starts out at about 40% per year.

Ok Ron, Bakken is not a 'normal' oil field. I just wanted to repeat the difference between depletion and decline, because there is so much confusion in articles and on TOD.

A field usually peaks usually within a couple of years after being brought on line.

A supergiant oilfield as a whole, like Ghawar, peaks after many decades of production.

There is no other supergiant like Ghawar, it is one of a kind. And of course the larger the field the longer it takes to peak. There are no fields that have been brought on line in the last two decades that will take more than a few years to peak. Prudhoe Bay, one of the last supergiants to come on line, would have peaked in about seven years but it reached a plateau, because of pipeline constraints, in just five years. That is typical of supergiants, except no more are being found and the old ones have long been in production and virtually all are well past their peak.

Chart 1 – source: presentation from Chris Skrebowski at ASPO-V

I repeat, the fields being brought on line today usually peaks within a couple of years of being brought on line, most of them within months. Of course these are all small fields, like Thunder Horse, because all the giant fields have been found.

Correction: Above my chart of Thunder Horse above I put "in kb/d". That is an error I should have said "in barrels per day". I am so used to everything being in kb/d that I messed up when it was not.

Ron P.

Is not Kashagan (the 15+ years to develop Phase I, $100+ billion to fully develop field) a super giant - even if a runt in that litter ?


Ron - Very enlightening. Thanks. BTW one of the most illustrative plots I pull for fields from my data base in cumulative production vs. time. But we plot in on a log-normal scale with time on the horizontal normal axis. If folks think your blue curve is dramatic try plotting it on log-normal. Short of additional drilling or significant EOR efforts it's rather easy to project URR for any mature field and not too difficult for a middle aged field. I've used such plots to put many a cornucopian geologist in his place.

the fields being brought on line today usually peaks within a couple of years of being brought on line, most of them within months.

'Today', that was the word omitted in previous post. To make it clear for the ones with less knowledge of the principles of oilfield oil extraction.

Han - "Bakken is not a 'normal' oil field." I'll go you one better: the Bakken isn't any kind of a "field". It is a geologic formation that produces oil from a number of fields within a trend. I'm not trying to be picky but that's a distinction that might be causing some confusion. If all Bakken drilling stopped today we would see an X% decline rate. Then in 10 years not much coming out of the Bakken. But if at that time a big drilling program started up we could, in time, see a higher production rate then every seen before from the Bakken. IOW the production rate/decline rate is not a function of the "Bakken Field" size because it isn't a field in any sense of the word.

Of course, given the nature of the reservoir it might be difficult to distinguish separate fields within the trend. Maybe a Bakken expert could join in but I believe numerous separate individual productive areas have been identified. In the case of the Eagle Ford Shale I can be more definitive: there is no such thing as THE EFS field. There are wells drilled and completed in the EFS but for practical reasons each well could be considered its own field. The TRRC may have a number of different EFS "fields" identified but that's more of a lease protocol than a geologic protocol. IOW two EFS wells drilled 1,200' apart, just as many are, might be put under two different field names because they are on two different leases owned by two different operators. Today the TRRC recognizes 21 different EFS "fields" but they better described as different geographical field areas than fields per se.

I saw the jagged line of that graph and emediately thought "Thunder horse". Have I been here to long?

What will happen, or rather what is happening right now, is that new oil is just not quite keeping up with declines.

Could make one think of the 'The Oil Pyramid' published by Simmons. I would have put the picture here if I know how to do it but the normal way of copy and paste doesn't work here. Very telling picture. Could someone publish it ?


Thanks Ghung. How you managed to copy and paste it ?

Using the img tag

Best to use a (free) photo sharing site like photobucket.com. Save and edit the photo locally, then upload to your album on photobucket (or wherever). When you open the photo in photobucket you'll get a menu of sharing choices including the html code. Copy it and paste it into your TOD post. Keep the size/quality low (I reduced the pyramid from a 168 KB .png file to a 26 KB .jpg) and beware of copyrights. I downloaded this pyramid some time ago from an open source. Moderators will delete posts with overly large or irrelevant photos and charts, or ones with questionable permissions. Usually best to provide a link; uses less bandwidth.

Are you saying just because new-type fields have a high decline rate, the net decline must too be a high rate of decline? There can be many new-type fields that come online to make the high decline rate look smaller. Statistically, the large number of new fields may average out the decline rate. Of course, the assumption here is that there are enough new fields coming online and we all know and agree this is not possible on a finite planet.

sonny/Ghung - I've never seen that pyramid before...very interesting. Here's my take based upon 37 years experience in the Gulf Coast which may not be completely applicable to the entire world. The smallest fields representing the top layer tend to have very slow decline rates because most are very mature...been producing for decades. Such fields in my area are declining at a fraction of 1% per year. OTOH they are producing at very low rates per well...often less than 10 bopd each.

New fields often have a three mode decline profile: very little decline during the initial high rate production phase, a significant decline rate during the middle phase and then back to a very low decline rate in their final phase. Again, a generality. Always exceptions... sometimes big ones like Mexico's Cantarell Field. The N2 injection program kept production fairly static but as the N2 began reaching the producing wells decline started to kick in big time. And if Cantarell is typical of most offshore fields it won't persist long during its low flow rate period due to the high fixed costs of offshore operations.

The 14 big fields are another matter. I've never worked a biggie first hand. But due their huge in place reserves they are capable of employing massive EOR efforts that smaller fields can't support. That could lead to a much lower net decline rate. Horizontal redevelopment is one obvious method although it could also hasten the lower production rate period. But other methods that might not produce a significant rate increase could provide increases that could last for many years if not decades.

Just my WAG but the top and bottom of the pyramid seem to support my expectation of a prolonged plateau. IOW some fields might fall off a cliff but globally I just don't perceive that as a realistic possibility. At least not due to geology.

RM: Don't the horizontal wells tend to have fairly steady production, and then crash very rapidly at the end? It would seem to me that when water began inching up the vertical columns, the water cut increased gradually, but steadily, until it was necessary to do horizontal redevelopment. When that water reaches the horizontal level, it does so all at once. Or at least I would think it would.

Just asking.


zap - You're exactly right with respect to strong water drive reservoirs with readily movable oil. They can go from 100% to high water % in a year or less. OTOH in many cases the production rate can be ramped up much higher than a vert well so the absolute amount of oil can still be significant. of course, that higher rate during the water cut phase also hastens depletion.

But Mother Earth doesn't like to make matters so simple. if the oil is thick and not very movable and if the water drive is weak or moves in laterally vs. vertically the high water cut phase may develop more slowly. But that also typically represents a relatively low production rate compared to the first example. So while the oil rate may not decline as fast it also isn't producing that much either.

And, as I'm sure you understand, horizontal wells in fractured reservoirs are a completely different dynamic. they suffer the same decline profile as a vert well in such a reservoir. The difference between a vert and hz in such circumstances is that the hz may cut more fractures and have a high flow rate and URR. But still has the same high decline rate profile.

zap - You're exactly right with respect to strong water drive reservoirs with readily movable oil. They can go from 100% to high water % in a year or less. OTOH in many cases the production rate can be ramped up much higher than a vert well so the absolute amount of oil can still be significant. of course, that higher rate during the water cut phase also hastens depletion.

But Mother Earth doesn't like to make matters so simple. If the oil is thick/not very movable and if the water drive is weak or moves in laterally vs. vertically the high water cut phase may develop more slowly. But that also typically represents a relatively low production rate compared to the first example. So while the oil rate may not decline as fast it also isn't producing that much either.

And, as I'm sure you understand, horizontal wells in fractured reservoirs are a completely different dynamic. they suffer the same decline profile as a vert well in such a reservoir. The difference between a vert and hz in such circumstances is that the hz may cut more fractures and have a high flow rate and URR. But still has the same high decline rate profile.

Are you saying just because new-type fields have a high decline rate, the net decline must too be a high rate of decline?

No, the point is that it are mostly small fields that have to compensate for the decline that is happening in a lot of giant (URR of more than 500 million (0,5 Gb) barrels) oilfields. And that a high percentage (20% + 6% + 9% + 12% = 47%) of world oilproduction comes from all giant oilfields together. So it is very difficult to replace the decline from giant oilfield.

Statistically, the large number of new fields may average out the decline rate. Of course, the assumption here is that there are enough new fields coming online

Indeed, a lot of new small fields have to come online every year to stay on the undulating plateau. And don't forget that a lot of small fields that count for the 53% of oilproduction are already in decline, and that a lot are offshore fields that tend to go in steep decline after only few years of production

The slides that go with the talk are currently at:


Thanks for the link to the webcast - very interesting....

sunny - Most excellent. For those interested in the subject this slide show is much easier to absorb.

Iraq being flat to down is a shocker for most also, though I am not shocked at all.

It would surprise me if Iraq couldn't raise production at least a little. Although their giant oilfields started to produce long time ago they have way underproduced for many decades. Not that Iraq could make a hopeless situation much better if indeed Russia and KSA go soon in terminal decline. Iraq's oilproduction has to go up more than a little to be able to export much more oil.

Basically, the only thing that can 'save' the peak is unconventional from Brazil and North America. These are the areas which are capable, in theory, of significant oil production.

Brazil is going from bad to worse. Petrobras is attempting, as a percentage of GDP, an oil project which is 10x greater than the Apollo project(moon landing for those who are confused).

20-25 % of Brazil's entire GDP is going to be invested towards 2020 for oil production. The problem is that Petrobras is far from an efficient organization, it's basically being used as Pemex is, as a way for Brazilian pols to increase employment.

So instead of allowing significant foreign investment(and expertise), Petrobras is forced to hire a bunch of local amateurs just to boost the employment stats up(otherwise the enormous sum is hard to sell to the public).

Lula, the hailed 'hero' of Brazil wasn't exceptional in any way, he was just a classic left-wing demagogue. He was just lucky as China started to seriously thirst for Brazilian commodities and was able to use that cash to explore the offshore basin.

Now Petrobras is cutting their 2020 forecast of oil production every 6 months, their stock is down 60 % over the last year. Things are horrible.

U.S. shale oil is well-adressed. As always, you get the initial burst and then the cataclysmic decline rates set in.

Canada is the only bright spot, but it's too small a bright spot to make a difference.
It's exceptionally high per-capita energy use(together with generous immigration laws) will keep oil consumption high and exports subdued.

Now to be fair, technology has abated the peak significantly. Olivier Rech, the former top IMF man at the recent ASPO conference, did a very good presentation on this where he showed that the CapEx costs have risen a lot over the past decade for oil investments - including for offshore.

But while there used to be a far higher cost for the deep and ultra-deep offshore compared to shallow offshore, he showed that the cost per barrel has actually been the same for all and that the rise in CapEx costs have stabilised over the past 2-3 years

Nonetheless, if the bumbling of Petrobras is any guide, this won't matter that much but it may smoothe the decline rates.

Because aside from unconventional from North America and Brazil, where is the oil going to come from?

Iraq is the place which everyone said, and I still think he may be wrong there. But even if Iraq doubled it's production, it wouldn't even cover a full year of declines from the rest of the world's oil fields. Iraq was never a magic rabbit since the everyone else is either flatlining or declining(in ever higher rates).


I agree with you that Lula was a fluke, that Brazil is going from bad to worse and that Petrobras may be barking up the wrong tree, I don't support BAU or its dependence on oil, BUT:

So instead of allowing significant foreign investment(and expertise), Petrobras is forced to hire a bunch of local amateurs just to boost the employment stats up(otherwise the enormous sum is hard to sell to the public).

Necessary disclaimer, I'm a native born Brazilian, so perhaps I'm being just a wee bit biased here, however...

Brazilian scientists and engineers are not amateurs, sir! Their expertise is first rate. Deepwater Petrobras technology is currently even being used in the Gulf of Mexico.


Hurricane Isaac - weak and disorganized.

Last night, the local meteorologist I trust most, pointed out that if Isaac did not have a clearly defined eyewall by this morning, it would be difficult to reach Cat 2 strength before it hit land.

But as long as it is disorganized, predicting it's path will be difficult.

So watchful waiting here,

Best Hopes for Relieving the Drought in Arkansas,


Yesterday, Jeff Masters mentioned the large area covered by Hurricane Isaac as an indication of the potential damage. He suggested that the storm surge would be rather large, even though the central pressure drop was not as great as that seen in other hurricanes, such as Katrina. Also, the predictions for storm track late yesterday still exhibited some wide variation, so the point of landfall may change from the track provided by the National Hurricane Center, which is an average of several model forecasts...

E. Swanson

Continued dis-organization is the best defense.

Sop up hot water for later hurricanes till October 1 (the end of strong hurricanes of the Gulf Coast).

Batten down for heavy rains - 20" in one day is our limit for just street flooding. (Lower limits in the suburbs).


Interesting post about the possibility of a long-duration event:

Bryan Norcross' Official Blog
11:49 AM GMT, 8/27/12

The nightmare scenario of a long-duration landfall I wrote about last night continues. The forecast consensus is that the storm will slow to a crawl near southeastern Louisiana keeping southeast to east winds into the corner between Louisiana and Mississippi, and southerly winds against southern Alabama and the western Florida Panhandle, for an EXTENDED period of time. This will continue to push Gulf water over the coast and into Mobile Bay and other inlets for longer than normal in a landfalling hurricane.

New Orleans has decided NOT to order an evacuation, trusting the new levees. It's important to remember, however, this storm could well put much worse weather over New Orleans than Katrina. If you recall, dry air was filtering into the left side of Katrina when it made landfall. There was very little damage from wind in the city. Top readings were mostly of tropical storm strength, except on the far east side. Issac may put higher winds over the city proper meaning people will have to take precautions in their homes that were not required in Katrina.

Other areas outside the massive new levee system WILL require evacuations, however. It's extremely important that people take action today to get to a safe, comfortable place with plans and supplies to ride out a relentless attack of wind, rain, and high water from Isaac.

Continued dis-organization is the best defense.

I once asked a climate scientist frat brother of mine whether intense deployment of tall wind turbines along the gulf coast would grind a hurricane down and break its organization. He was skeptical of the former but had no answer of the latter, climate not being the same as weather.

More likely the WTs would be seriously damaged/destroyed. In any case WTs are locked out at high wind speeds, so just when you need them the most they aren't there.

" ..so just when you need them the most they aren't there."

..apart from these ones, though, which is one of a number of reasons I like them.

http://www.windside.com/gallery (I know, they're far from Megawatt scale units, but they are part of looking much differently at the whole situation, I believe)

(I know, they're far from Megawatt scale units, but they are part of looking much differently at the whole situation, I believe)

Softly dripping on a hard rock, water, eventually bores through it...

True and Proven!

(But also, if that takes too long, I'll also go with the analogy of the little Proto-mammals scampering around under the radar as the Scaly Gargantuans starved out and crumbled.)

I'll also go with the analogy of the little Proto-mammals scampering around under the radar as the Scaly Gargantuans starved out and crumbled.)

It will be kinda sad to watch when the Scaly Gargantuans finally see the writing on the wall and try to change and adapt... it will be too little, too late and they won't even understand why they aren't succeeding!


This graphic is especially for those of you out there who still believe that EVs such as the Chevy Volt are even remotely sustainable..., (you know who you are) >;-)


While the fossil record makes it hard to get the right Color-correct for each make/model, I think that the Velocimobile-raptors were at least a bit more Greenish than the Rexes..

Best hopes for Spry In-betweens!

Also, it is possible they had feathers.

ps. Great Image, Fred! I might have to print that one!

..ever see this one on coping?


..ever see this one on coping?

Good one! BTW, that's one of my favorite hand tools.

If you're nice, maybe I'll give you a ride to the grocery store in my PV solar powered Chevy Volt... :-)

Or to put it another way, PV and electric cars are going to work a whole lot better than alternatives when there is an oil shortage. (I ride bikes a lot, but I'd hate to carry multiple sacks of cement and groceries up the mountain on a bike, as I have done with electric cars.)

Yes, I think PV and electric cars are sustainable.

And what's your alternative? Crawl in a hole and die?

Yes, I think PV and electric cars are sustainable.

To be blunt, you are badly mistaken. See the above discussion on electronics longevity and combine with many discussions of complexity/supply chain vulnerability. The complexity of electronic systems in your Volt is extremely high, and it can be rendered useless by the failure of one small electronic component - how long will replacement parts be available to you (within your ability to afford)? From what I can see many of the subsystems in the Volt were contract designed, and probably contract assembled in various locations.

I say this as someone who designs electronics, and who has taken apart iPhones (complete dis-assembly and rebuild), laptops which I routinely repair and modify, and have been repairing and modifying automobiles for many decades. I'm probably one of the few people who would have a chance of fixing one of those boards on your Volt, but I would not give me very good odds.

Here's a tear-down of the Volt's electronic suite:
Battery pack
Charge controller
Motor drive

It is rather more complex than it needs to be. For example, the clutch is controlled by a 32-bit computer capable of 120 million operations per second and supported by 192,000 bytes of memory. Many a university of old would have been proud to have such a machine occupying a room on their campus.

I'm sure, if you had to, you could do something rude and make that car go anyway.

They lock down at 50MPH. But the storm spends a good while bringing milder winds to the shore before finally making landfall, and all that while the turbines could be sapping its energy and disrupting its coherence.

Turbines would effect weak tropical storms, but large, strong hurricanes are ruled by winds from 25,000 to 50,000 feet.


There are occasions when low-level and upper-level winds are very different in direction and speed (a "shearing/sheared" environment). It turns out weak tropical cyclones routinely are steered by lower-level winds than are hurricanes and strong hurricanes which are typically deep and hence steered by deep layer averaged winds. Upper level wind steering (from about 25,000-50,000 feet) becomes very important in strong hurricanes.

"... whether intense deployment of tall wind turbines along the gulf coast would grind a hurricane down and break its organization."

Whisper on a scream, IMO. The WT's are tall, but the water, ground, trees, houses, etc would have much more of an impact overall at slowing down the airmass. In fact with water that's pretty much the definition of storm surge...imagine trying to slow down a hurricane with wind turbines which has already moved an ocean.

I don't know how many times I've thought "whew, they just dodged a bullet, when some cat4 or 5 storm appeared to self destruct, only to find out a few days later that inland flooding was catastrophic.

Its been surprising how this baby can't get over 55knots. Time is running out. But, the deluge may be large. Welcomed by some, but will be damamging for others.

The last couple of weeks we've been getting a lot of rain from storms that have dissipated or missed us. We even get it from those that hit the east coast and have to cross Mexico to get to us.


Back when I lived in central New Mexico, blowoffs from hurricanes and tropical storms for a very important source of moisture. We too could get remnants (by then no more than blobs of moisture) from either Atlantic or Pacific systems. Offentimes it would just be the high altitude blowoffs from Pacific storms that would mix into the monsoon moisture. As much trouble as these storms are, the moisture is essential to a lot of areas not so close to the ocean.

Along those lines at 0600 I just ordered our S. La. wells to be shut in. Our partners on outside operated wells are doing the same. Takes a while to get the oil tanks drained and filled with water to keep them from floating away. Shut down the location build on that well close to the sink hole. Right now the storm is projected to pass right over the sink hole. Be interesting to see how that shakes out.

Oil firms, refiners brace for Louisiana-bound Isaac

The Gulf of Mexico and U.S. Gulf Coast region accounts for nearly a quarter of U.S. oil production and around 45 percent of U.S. refining, part of which was being idled.

Louisiana plants usually process around 3.25 million barrels per day. On Monday, companies including Marathon Petroleum, Chevron, Valero, and Phillips66 had closed -- or were in the process of closing -- nearly 1.4 million barrels per day (bpd) of the state's refining capacity, according to industry and government estimates.

... According to Thomson Reuters division Weather Insight, around 88 percent of U.S. Gulf offshore crude output -- or 1.16 million bpd -- was shut in, while 80 percent of offshore natural gas production was idle.

Marathon Petroleum Corp said on Monday it was initiating the shutdown of its 490,000 barrels-per-day (bpd) refinery in Garyville, Louisiana.

Phillips66 said it was in the process of shutting down its 247,000 barrel-per-day (bpd) Alliance refinery in Belle Chase, Louisiana, and that the plant would be offline by late Monday.

Louisiana Governor Bobby Jindal said on Sunday that Chevron Corp is "in the process" of shutting its 330,000 barrels-per-day (bpd) refinery in Pascagoula, Mississippi.

That's another MMBD+ refinery capacity offline. Better fill'er up.

The other day I made an original post about how US gasoline supplies were to be heavily stressed by refinery fires - even excluding the effects of Isaac. [The Amuay Disaster/The Richmond Legacy: Update, http://www.theoildrum.com/node/9443/913661].

Finally someone shares my opinion about the precarious state of US gasoline supplies: Reuters has a more comprehensive and updated article on the same subject:

Amuay, Isaac ambush complacent oil market: Campbell

Aug 27 (Reuters) - Oil products markets are facing a potentially devastating one-two punch after a summer of complacency over falling fuel inventories looks primed to blow up in traders' faces.


Meanwhile wholesale gasoline prices on the Gulf coast traded as high as 35 cents/gallon over the NY futures price, which itself was up about 8 cents/gallon today.

Gulf Coast Gasoline Hits Four-Year High on Isaac, Amuay

Bloomberg Gulf Coast 87 RBOB Gasoline Prompt-Month Differential

It remains to be seen if even an SPR release will now be enough to avoid local gasoline shortages.

Got gas?

August 27, 2012, 7:23 p.m. ET

Gasoline Rises as Refineries Close
Fuel Traders Brace for Possible Shortages as Tropical Storm Isaac Aims at Gulf Coast; Crude Falls

Some grades of regular conventional gasoline along the Gulf Coast traded as much as 35 cents a gallon above the Nymex price on Monday. In Chicago, regular gasoline grades, such as CBOB, the benchmark for the region, were trading at a 42-cent premium, up from about 15 cents on Friday.


If remaining online refineries are already running at 95%+ capacity, what good will SPR oil do? It still needs to be refined. I wouldn't be surprised if we lose more refineries, as hard as they're being run. I may be missing something, but it seems like a YIKES moment, at least for certain regions, especially those areas on the Colonial pipeline. I'm sure they're pumping like crazy, if they have anything left to pump..

IEA Head Says Oil Market Doesn’t Have Serious Supply Outage

... “We don’t have a serious disruption of supply,” Maria van der Hoeven, head of the Paris-based energy adviser, said today in an interview in Stavanger, Norway. “The market is sufficiently well supplied and when there is the collective action needed as there was last year, it can only be when we are talking about a serious disruption of supply.”

U.S. authorities haven’t contacted the IEA on the use of emergency supplies, Hoeven said.

S - "The market is sufficiently well supplied..." Such statements always strike me as odd. Of course the market for $100/bbl is well supplied: every buyer who can afford to pay $100/bbl is buying all he wants. OTOH the $40/bbl market has virtually no oil available to buy. And I'm sure if oil reaches near $150/bbl again the market (those who can afford $150/bbl) will also be well supplies. Of course, at that time, the market that can't afford to pay more than $100/bbl will have zero supply available to them. That seems to beg the question: at what price of oil will the market be unable to supply all the buyers? I assume the answer is when oil prices drop low enough so there's are more buyers at that price than the market could supply. Which leads to the next obvious question: why would oil sellers price their product that low? "I don't know" is the only response I can think of. LOL. Thus it seems as long as the oil exporters don't start selling at bargain basement prices the oil buying market will always be well supplied.

Venezuela Crude Refinery Burns a Fourth Day After 48 Killed

Meridith Kohut for The New York Times
Residents near the Amuay oil refinery in Punto Fijo, Venezuela, ran to safety when a gasoline storage tank exploded on Monday.

Fires Still Burning in Aftermath of Deadly Venezuela Blast

When you have a breather, you may be interested in the new CFAN hurricane forecasting system that claims longer range more accurate forecasting. See Judith Curry's Hurricane (?) Isaac

David - Thanks. Looks useful

Hurricane Isaac now has its own post at http://www.theoildrum.com/node/9447

Further comments in the drumbeat are likely to be deleted as I've just found out. I thought simply posting the confirmation of Hurricane status to Drumbeat would be ok but apparently not.

Regarding Lightbulb moment for 'clean' stove design, above...

Interesting little stove, basically a forced-air rocket stove with a thermo-electric generator attached. I went to the BioLite site and checked the specs.

Camp stove:

Weight: 2.05 pounds/935 grams
Fire Power Output (peak): 3.4 kW [LO mode], 5.5 kW [HI mode]
USB Power Output: 2W @ 5V [max continunous], 4W @ 5V [peak]
Time to boil 1L water: Varies based on strength of fire. With strong fire, 4.5 minutes.

One caveat: it needs a rechargable lithium battery to run the fan until it gets up to temp. I would look for a way around this requirement, perhaps a small hand operated bellows.

Anybody know how much of a distinction there is between TEG's and Refrigerator Peltier Junction Panels, or Electronics Cooling Peltier's? I understand PJ's are bi-directional, converting delta T into volts and vice versa, but do they customize the technology for one function over the other?

For you EEs:

Is silver based solder a viable alternative to lead based solder for long life (no whiskers) ? And do all silver solders have higher flow temperatures than classic lead-tin solder ?



Lead–Free Silver Solder
Ideal for general purpose electronic repair and assembly use. Silver formulation provides improved conductivity performance, lower melting point while continuing to meet requirements for lead free solder use.


Melting Point:
Lead–Free Silver Solder 217C
Tin/Lead 188C
Lead free 277C

Will this solder (Tin + 3.5%Ag + 0.5% Cu) avoid the "tin whiskers" problem that limits the life of current electronics ?

It would seem that with the high Sn content, likely not. Unless Ag & Cu somehow inhibit whiskers.


Sorry, I would like those answers myself. Also why can't a coating be used to prevent whiskers? And what are the rules, as you can still buy regular solder?

I have to look into the silver content solder - I know the solder paste we use here has some silver content, but it also has lead. However, the tin whisker problem is crystal growth from withing the metal, it is not an oxidation issue from contact with external oxygen, so sealing it off with typical coatings doesn't really help. In fact you need very little lead added to stop the tin whisker formation.

There are a lot of other issues relating to lead free solder beyond tin whisker growth after the fact, especially in surface mount assembly - if you don't get reliable solder joints to begin with it doesn't matter much about the whiskers, and that is the biggest problem with lead free. It does not wet as well, the temperatures required are higher, etc. I'm far more concerned with initial solder joint quality than later tin whisker growth.

FYI conformal coating have been shown to be effective at suppressing Sn whiskers. They do not do it by sealing the o2 and water. They do it by physically restraining the crystal growth, with the correct coating the whiskers usually cannot penetrate the coating, and if they do somehow the things they will land on are insulated.

Here is one link for work done by NASA lots of other work done by various defense contractors and satellite manufactures, some of which you can get by Googling

http://nepp.nasa.gov/whisker/reference/tech_papers/2010-Panashchenko-IPC... (big pdf)

Thanks, I'll look at that. The coating we considered did not do that, but then not all coatings were suitable for application to our products either. And while we don't do lead free, we did have a tin whisker problem anyway - they grew above the solder joint on the Sn leads of the component!

The limits on 'old' electronics is the chemicals in the capacitors becoming non-liquid. (for electrolytic caps)

The limits on 'new' electronics is the smaller gate size. This effects dopant migration. This migration is effected by heat. The secondary effect is the geometry of the chip. Modern chips have 'less atoms per junction' due to the smaller physical size. Thus as more migration happens, the odds for non-working happens. The smaller size makes it simplered for high voltage from static electricity to 'zap' a junction non-functional.

And if you hold onto your old electronics - how will the makers sell you the new stuff? Best they go south sooner VS later.

I've studied Sn whiskers pretty extensively

In general the SAC solders are not the problem, the additions of Ag and Cu to the Sn generally suppress whisker formation from the solder.

The problem is the "universal" finishes component makers put of their components to make them compatible with the lead free sodlers, they are generally pure Sn and subject to whiskers. Components with Sn finishes are for all practical purposes unavoidable today. This means you can get whiskers nowadays even if you use PbSn solder.

The best solution for high rel applications is to apply a conformal coating to the PC board. Its reasonably cheap and easy most board stuffers can do it for you or its easy to do it yourself.

Some types of conformal coatings have been shown in long term tests to eliminate the effect of the whiskers.

Little different from a Sierra Stove other than a thermo couple added. I've used my Sierra for nearly 20 years when really going deep for extended periods -- much lighter than any other camp stove once the fuel canisters are added. Does soot the pans;-)

I also bought a Canadian made full sized barbecue some 8 years ago that works on the same principle of fanned airflow. It was on the market for only two years. It works well with minimal wood needed and is going strong.

Development and optimization of a stove-powered thermoelectric generator
-Takes a while to load.-
The Peltier cell solder junctions melt unless care is taken.

Generating Electricity for Families in Northern Sweden

Thermoelectric Generators (TEG) Products
15 Watt High Temperature TEG Panel
$87 350C 660F... where the solder melts...
12 Volt TE Battery Charger
200 Watt Fluid to Fluid Heat Transfer TEG

Re: US Population Growth

The WSJ has an article today about how already weak GDP numbers look even worse when converted to per capita GDP, because of population growth, and I was amazed at how fast the US population is still growing.

According to the Census Bureau, from July, 2005 to July, 2011, US population increased by about 16 million people, an annual rate of about 0.9%/year (you can click on individual or multiple states):


In any case, from 2005 to 2011 we added the equivalent of two Virginias (8.1 million people in Virginia in 2011), or another comparison is that the entire population of Greece in 2011 was 11.3 million people.

The 2008 Recession has reduced births by at least a half million (likely more today) and reduced net immigration (many Hispanic construction workers just went home).

I hope to see US population growth rates drop to +0.7% soon. Add in increased mortality from obesity soon,

Best Hopes ?


It seems like in the DC area, 3 is the new 2 when it comes to having children. Everyone wants to have 3-4 kids. My wife thinks it's a status symbol - when you can afford to have 3-4 kids who are all going to expensive private schools and have the most expensive strollers and clothing then it proves you are rich....or so they say.

The key is that in the past, it was not altogether clear whether children would survive and reproduce themselves...infant and child mortality was higher. Also, the world was much more open in the past, there was alot of land to be settled and developed. This is how the Anglo world dealt with population pressure, by settlement of North America and Australia.

Whereas nowadays, everybody thinks that every last one of their kids will become rich and live a long time (not to mention that they think they themselves will live a long time, and that their kids will volunteer to take care of them when the time comes).

The assumptions are just staggering, people. We are in for a big fall, there's no two ways about it.

I've got 3... the last one was a definite oops.

Copper IUDs... They work very well.

FWIW, a caution on copper IUDs.

My wife had one inserted when she was in her early 20s. She experienced regular discomfort and eventually pain, so it was removed.
Several years later, with no pregnancy, she went to specialists to find out why.
If I'm remembering this correctly (30 years later) she was diagnosed with endometriosis, which had damaged/kinked her fallopian tubes. She had surgery, had one ectopic pregnancy and never was able to conceive.

Rightly or wrongly, she blames her infertility on the copper IUD: she never had chronic pelvic pain until the thing was implanted. Also, her doctors did not indicate surprise by the connection: rather, we got the impression that the particular brand/model which she had was far from trouble-free.
Just one couple's experience....

Well we'll certainly see increased mortality from something, eventually.
Modern industry and medicine can't keep people alive forever, no matter how hard it wants to.


blues, instead of Orwell's "boot stamping on a human face . . . forever", the vision of the future for humans is an "anti-bubble" collapse (after a 250-year faster-than-exponential bubble) of the human ape population back to the log line at the population of the 18th century.

Rather than the Vulcan "live long and prosper", perhaps we need a normative cultural meme that advocates "die young and well".

We often hear about bubbles in stock and unreal estate prices, commodities, etc., but the greatest bubble in human history in scope and global scale BY FAR is the human population bubble. When it bursts, the world will experience a scale of human suffering and death as a share of total population to make the Black Death and WW II look positively meager in comparison.

Yep, the numbers are staggering. If you assume the population must decline to 2 billion over 30 years that works out to excess deaths of 456,000 per day! (Actually way more than that even since births currently exceed deaths by about 190,000 per day) A couple of tsunamis per day every day for 30 years. And that assumes 2 billion can be supported with all the damage to the planets ecosystems that will surely ensue.

Probably more likely down to <<1 billion in the next 100 years, since it'll overshoot to the downside of whatever "sustainable" is by then.

There's an outside chance the next 30 years could see the overshoot population significantly maintained, though with "issues". Still, the per-day and per-year average of any reasonable human population reversion to the earth's non-fossil-fuel-enhanced carrying capacity is going to be really something.

For such an inevitable reality, only a tiny fraction of humanity will believe it, even when it's happening. I'd have enjoyed having kids and grandkids, but the best thing I could do for them was not to inflict that on them. The numbers will be pretty stark, however they shake out.

Overshoot would be expected. Perhaps the planet will see a phenomena such as took place on St. Matthews Island.


The question is whether there will be a breeding population left. Maybe we can survive. It is just not a certainty given our history.

Strange species, homo sapiens sapiens. Wonder if they'll be missed.


Following a Link after the 10 most expensive Energy Proj's article (Boy, a lot of Aussie money going into gas, eh?) .. I saw this one.. hope it's not a repeat..

Oil companies desperately seek water amid Kansas drought


Some companies are paying farmers for any remaining water they have left in their ponds, drilling their own water wells, digging ponds next to streams or trucking in water from as far away as Pennsylvania -- all of which is costing them a handsome sum of money and time.

"This has been the most unique challenge I've run into in a while," said Ruben Alba, partner at Petro River Oil, one of the smaller oil companies that has entered the oil play in Kansas over the past year.

...By the time drilling was complete, the company had paid nearly triple the amount it originally budgeted.


If the drought worsens or persists for too much longer, however, it could threaten the oil boom, particularly among the smaller drilling companies that can't afford the added costs and delays, he said.

.. darn those 'above ground factors'!!

It was discussed in the August 10 Drumbeat.

Found a story about this in our local newspaper, methane releases when reservoirs are drawndown:

A new global warming culprit-dam drawdowns.

"Reservoirs have typically been looked at as a green energy source,” says Deemer. "But their role in greenhouse gas emissions has been overlooked.”


Another unexpected complexity?

I wish that was more extensive. Do they mean purely a drawdown due to outflow/draining of a reservoir, or are the implications the same when a reservoir simply dries to to a combination of less rain and higher temperatures?

If you're going to drain a reservoir, you have a source of energy in the form of the flowing water, and the study cites biological processes that use methane as an energy source, but those are always bound by available oxygen. Maybe some sort of draining water driving aeration scheme would foster the bacteria needed to deal with methane before it escapes the water?

I've seen multiple scenarios where such a thing seemed to make sense, but I'm not enough of a scientist to put pencil to paper and see if it's at all workable. As an example, what sort of environmental benefit would come from a wind turbine mounted on an abandoned offshore platform driving a compressor injecting air at the base? If the platform is tall enough (30M) to get above turbulence a vertical axis turbine would work, and then most of the maintenance is three men in a boat instead of a large vessel with a crane. If the goal is purely moving air a largely mechanical system would work also - mechanical gearbox does most of the work, small generator attached provides the instrument and control power.

Once you're aerating the water column you can introduce bacteria periodically and then you've got a point source for a plume of water with the right critters to clean up an oil spill.

I suppose the math is completely unworkable and there will be solid arguments to keep any turbine we can build busy on land as a counter to coal use, but it is an interesting thought exercise.

and the study cites biological processes that use methane as an energy source, but those are always bound by available oxygen.

Forgive me if I've mis-parsed this and the cited study refers only to specific processes that meet that criterion, but... as a stand-alone, the bolded is false. Consider a process called anaerobic oxidation of methane (AOM), which uses sulfate instead of O2 as its terminal electron acceptor. This is how methanotrophic archaea [or some of them at least] make a living.

Food shortages could force world into vegetarianism, warn scientists

Leading water scientists have issued one of the sternest warnings yet about global food supplies, saying that the world's population may have to switch almost completely to a vegetarian diet over the next 40 years to avoid catastrophic shortages.

Humans derive about 20% of their protein from animal-based products now, but this may need to drop to just 5% to feed the extra 2 billion people expected to be alive by 2050, according to research by some of the world's leading water scientists.

"There will not be enough water available on current croplands to produce food for the expected 9 billion population in 2050 if we follow current trends and changes towards diets common in western nations," the report by Malik Falkenmark and colleagues at the Stockholm International Water Institute (SIWI) said.

"There will be just enough water if the proportion of animal-based foods is limited to 5% of total calories and considerable regional water deficits can be met by a … reliable system of food trade."

The report is Feeding a Thirsty World - Challenges and Opportunities for a Water and Food Secure Future

I think that a general change to a vegetarian diet is unlikely to happen because the areas of the world that are most water and food poor are the same areas where the population growth is projected to happen. Since those areas also have limited resources to trade for food, the population growth will not happen to the extent predicted. Therefore, diets will change less in other regions.

Interesting, although I don't think the meat industry is going down without a fight.


(Although they won't win it, regardless).

Exactly. This report also glosses over a couple of other elephants in the room, namely:

1. Why should *I* curtail my protein consumption (and increase my risk of obesity & diabetes thanks to a high-carb diet) all because fundamentalist countries like KSA, Iran, etc. refuse to allow access to birth control or even basic education to women, who are still treated as child-bearing chattel?

2. Human population growth is not some inevitable force of nature that cannot be tamed, and logically cannot go on forever just as trees cannot grow to the sky. The main reason it's still going up is that (a) most people are dangerously ignorant and dominated by magical thinking and (b) choose or accept leaders that are just as dangerously ignorant and superstitious as they are.

I agree. I also don't like "either/or" thinking, as in either we eat steak and burgers every day, or we become vegetarian.

The world has been out of balance for so long that nobody even knows what balance is anymore.


People can eat what they want, meat may become more expensive, so it is a personal choice.

From an environmental perspective (if you care), chicken probably is the lowest impact animal source (game might also be low impact, but if everyone hunted we would quickly drive those species to extinction.)

Vegitarianism is not necessarily high carb, unless one means a Vegan diet. You can get plenty of protein from dairy and eggs, I have for over 30 years and am at a healthy weight( 75 kg and 180 cm), YMMV.

I agree that no one should tell someone what they should eat, meat in appropriate amounts is fine (probably healthier if grass fed IMO) for good health.

I also agree that population growth must be reversed. As the world becomes more developed hopefully this will be accomplished in a humane fashion, rather than by war, famine and other natural methods.


If the report is correct, then the reason that "*I* curtail my protein consumption" is likely to be economic. If meat becomes scarce, it will also become expensive. Rather than becoming vegetarian people are just likely to eat less meat, just like right now they eat less caviar.

Equating less-meat with high-carb is just wrong. Vegetarian diets can be high fat (olive oil, avocados, other elements of Mediterranean diet, which much lower meat than the US diet and much healthier according to any research I have seen), or high protein (tofu, soy products, beans), or high fiber (vegetables, fruits).

The theory that more meat means better health is contradicted by pretty much every study on the subject.
See http://www.vitamedica.com/red-meat-linked-to-shorter-lifespan/ etc.,etc.

It’s not uncommon for many Americans to consume at least one serving of red meat each day. However, it may be time to rethink this practice, as a new study published in the American Medical Association’s Archives of Internal Medicine links red meat consumption to a shorter life span.
Researchers analyzed the meat-eating habits of 37,698 male participants (aged 40-75 years) in the Health Professionals Follow-up Study and 83,644 female participants (aged 30-55 years) in the Nurse’s Health Study.
Those who consumed red meat, especially those who consumed a lot of it, were at increased risk of premature death, including death due to cardiovascular disease (CVD) and cancer...
Researchers found that increasing red meat consumption by just one serving raised the death risk by 13% for unprocessed red meat and 20% for processed red meat. And of the processed meat products, bacon and hot dogs were the worst offenders, being associated with higher risk than other items.
They estimated that 9.3% of deaths in men and 7.6% in women could have been prevented if the individuals consumed fewer than half a serving per day of total red meat. The same applies for 8.6% of men and 12.2% of women who died from CVD.

And I know that meat-eaters will dispute all studies that reach such conclusions, but it is at least interesting that no study has yet produced the opposite result (more meat equals longer life). At a certain point, meat advocates remind me of nuclear advocates, having a conclusion in search of supporting data, rather than reviewing the data and drawing a conclusion.

Meat tastes good and people will eat it if they can afford it, but I think the study is correct, that meat cannot remain affordable for all the billions of people on the planet, since meat production systems are so incredibly unsustainable and high impact (CAFOs, feedlots, etc.,etc.)

While I don't support a 'the more meat the more healthy you'll be' view, as if it's a dose-response, I also can't take that study seriously, knowing the kinds of meats that are available to most people, and the kinds of preservatives and other clear losers contained in mainstream Hot Dogs and Bacon are going to 'salt' that study heavily. They do even acknowledge that they are looking at associative results, and not causative mechanisms.

But when they say this,

"If you want to selectively add red meat, be sure to add only the leanest cuts."

.. I know that they are still focused on the wrong targets, as far as I'm concerned. I think the fat in the animal is not the problem at all, but the quality of its raising and its feed is the overwhelming factor. Also, the focus on muscle alone is misguided, as many essential nutrients are only going to be found in organ meats or bone broths.. I think the CHD problem comes from White Bread, Cake, Coke and Margarine, to paint it with the quickest brush.

Also, the article notes that the iron in red meat could be the problem. Hemochromatosis is the most common genetic defect in the US. It causes people to absorb too much iron from food. This can lead to cancer as well as heart disease.

And I know that meat-eaters will dispute all studies that reach such conclusions, but it is at least interesting that no study has yet produced the opposite result (more meat equals longer life).

This is actually incorrect. There are studies pointing in all directions when it comes to nutrition. There was at least one linked here in the past that found women who ate more processed meat lived longer. Almost no one actually believes processed meat is good for you.

But I think the real problem with this kind of nutritional study is that it can't take into account the fact that differences in diet reflect different kinds of people. Taubes uses the example of a drug study that found people who took the pills regularly lived longer than those who didn't. Does it prove the drugs work? No, because people who took the placebos regularly also lived longer. Conscientious people live longer, the drug had nothing to do with it.

Similarly, people who eat a lot of red meat are different from people who don't. They are more sedentary, they smoke more, they drink more, they're fatter. They are people who are less interested in health and nutrition in general. Sure, researchers try to correct for this statistically, but it doesn't work. This becomes evident when they try to confirm the cause and effect relationship experimentally (rather than observationally) and it fails.

One of my favorite Far Side cartoons: "Early Vegetarians Returning With the Kill"


On the other hand I still think insects/arthropods are the food of the future for a lot of us.

Would YOU eat an insect burger?
The United Nations want YOU to eat insects. Find out why below...

Great cartoon.

Several decapods are quite tasty -- in gumbo, with drawn butter, or with Bay seasoning, depending.

I just had my second Insect-burger of the summer last Thursday, remarking on the fact that if it was ANY other sort of similar creature apart from some Crabs, I would have run away screaming.

I hope I still have some delicious bugs to survive on in the years to come!


The larve from wasps is not bad fried in butter.

More than once have I seen military survival teachers claim the ppl who lived were those who ate bugs. Remember that the heat of fire helps to make some bug 'safe' to eat - and others you need to 'fix' 'em right. Grasshoppers as an example.


The more likely scenario is increasing isolationist views in the U.S. and the other breadbasket countries. There has been off and on discussion over the years about a bilateral food/oil trade axis. We are getting down off this population overshoot and I don't think a planet wide chorus of Kumbaya is part of the plan.

Tom Whipple asserted today that ethanol is now cheaper than gasoline, so removing the mandate for adding ethanol to gasoline is unlikely to result in less ethanol being used for transportation fuel. (...and thus, unlikely to provide any relief for food prices.)

Questions for the TOD crowd...

1) Do you agree with his assessment?

2) If you do, how long do you estimate that the situation has been thus? (Have I just been missing this?)

3) Do you or do you not think that, if true, this is kind of extraordinary and has profound implications? Are we locked into using corn for fuel in a manner that will be difficult to undo?

jag - I'm with you. We need to hear from our eth-TODsters. Last I heard even with the govt subsidy many ethanol plants were losing money especially as corn prices rose. Now with the sub gone and higher corn prices its gotten cheape? Tom doesn't offer anything but the comment that ethanol is cheaper than gasoline. Not much to analyze there.

Ethanol production in the U.S. has declined because the amount needed to blend E-10 has declined due to the reduction in demand for gasoline. Maybe there is a glut of ethanol from too many producers reducing the price. The failure of the corn crop might change the price soon. The recent allowed increase in blending to E-15 might eliminate the glut in time. U.S. ethanol production peaked at 963 kb/d in the week of 12/30/2011, and was at 823 kb/s in the week of 8/17/2012.

The projected U.S. gasoline consumption for the end of August is about 8.6 Mb/d which means 860 kb/d of ethanol if it is all E-10. The fire at Chevron's Richmond refinery may have reduced the production of gasoline, and thus demand for ethanol, further.

EIA: U.S. Oxygenate Plant Production of Fuel Ethanol

EIA: Estimated U.S. gasoline consumption low compared to five-year average

Iowa State University Extension has a spreadsheet on "Ethanol Profitability". It looks like ethanol is just worse than breakeven at current costs and revenue. But the situation for a given producer probably varies depending on their fixed costs. But without a government mandate for increased ethanol consumption, building or expanding a plant seems like a bad idea.

Merrill - It may be similar to a bad oil patch investment. I may only recover $4 million of the $6 million I spent to drill a well. But I may still be making a nice monthly cash flow by producing the well. Some of ethanol plants (especially those owned by grower coops) might make a positive cash flow by continuing production but may never recoup their original investment.

Most farmers that are in business went for years operating on negative return on investment, where it cost $4.25 to produce a $4.00 bushel of corn. Now all these farmers own their land outright.

It's possible some of the new guys are overextended with debt, and will want out if they own shares in an ethanol plant that's an operating loss. But there are plenty of guys like me for which ownership in a completely grower co-op ethanol operation is worth it regardless of if it ever pays back, because it guarantees us a market for corn. We don't care if the plant loses money if it gives us a tax writeoff, and keeps the corn price above cost of production.

What's the cost of production if you own the land? I'm hearing noises about $350/acre rent. I'd rather invest in an ethanol plant that will never pay back than land rent.

Ben - Great insider account. Mucho thanks.

As ethanol is currently cheaper than gasoline to produce, some 96 percent of the “gasoline” sold in the US now contains ethanol. Corn prices would have to rise to circa $10 a gallon or oil fall to less than $70 before there would be an economic incentive for gasoline companies to stop using ethanol.

Huh? $10 a gallon for corn? Has Tom been sipping the moonshine again? Something is definitely getting lost in the translation here.

This from an article on the true costs of corn ethanol back in May 2011 and I believe the cost benefit ratio has gotten worse since then...


The total crop used for corn-based ethanol in 2010 was about 4.77 billion bushels and 13.2 billion gallons of ethanol were produced. This means 2.77 gallons of ethanol are produced from each bushel of corn. This is a widely accepted number in the industry. At the current corn price of around $7.00 per bushel, just the corn feedstock cost for corn-based ethanol should be about $2.53 per gallon. On an equivalent energy basis, the cost of the corn feedstock for corn-based ethanol is $3.80 per gallon of gasoline. This doesn’t include the cost of production of the ethanol, the cost of transportation, or any other cost besides the corn. When the other costs are added in, corn based ethanol is a money losing proposition.

Rockman, Merril, Fred,

So Whipple seems to be off-base (not the first time) and this is probably not such a big deal. Ethanol is probably already closer to $10/gallon than it is to the price of gasoline.

It would be interesting to review how high the oil price would have to rise to meet the current price of ethanol, with or without assuming an interrelation between the two. And in any case it seems likely that the ethanol price will rise faster in the near term if drought (i.e. climate change) continues to limit corn production in coming years.

Neither article posted covers every aspect of the ethanol markets. I believe ethanol production will continue regardless of the mandate. The biggest obstacle to ethanol may be localized supply shortages developing in the early summer of 2013. To understand one aspect of this issue better, I would need to learn the federal and state oxygenate laws.

In the EIA graph, you can see ethanol production fall as corn costs increased, however, the price of ethanol rose and the price of DDGs doubled due to falling supply causing a slight rebound in production in the last few weeks.

So price of DDGs goes up, causing soybean prices to go up, triggering more planting of soybeans, and less corn (or maybe just a return to a sane corn-soybean rotation). I think either way farmers (or anyone owning farmland) might be looking to pick up some ethanol plants if a short-sighted investor wants to unload.

While ethanol does serve as a substitute for MTBE it is my understanding that it doesn't have to be blended at the 10% level for that purpose. As a substitute for MTBE there is about a 5-6 billion gallon demand for ethanol. Compared with 13 billion plus ethanol capacity.

Thanks. That must be the floor for production which is still quite high when you consider the amount of corn available for this harvest. The states could easily relax the laws, though.

While Whipple is completely off base - so is this analysis. You get about 2.80 gallons of ethanol from a bushel of corn you also get Distillers Dried or Wet Grains from the process which is worth about 30% of the corn input. So ethanol's corn cost is not $7 divided by 2.80 or $2.50/gallon but rather $5/2.80 or about $1.80/gallon

I suspect Whipple intended to say $10/bushel, not gallon. That would seem to make sense using your numbers.

Do you know how much of the cost base of ethanol production is natural gas used for distillation? Lower gas prices could have a big impact on profitability if producers can get supply at or near Henry hub prices.

takes about 20,000 BTU to produce a gallon of ethanol- so at $2.50 NG that works out to be about 5c/gallon compared with 10c/gallon if NG was $5.00. Given the margins that some of thes folks operate at that is a pretty significant margin but in its comparison to gasoline not so much.

This piece from Reuters provides more background:


Even without the standard, a third of the U.S. gasoline supply must contain ethanol to meet unrelated clean air rules, mostly in California and on the East Coast. No other available substance can oxygenate gasoline as effectively, helping it burn more cleanly.

More importantly, ethanol is as much as $1 cheaper than other types of octane boosters like reformate, which refiners use to increase the efficiency of their fuel.

Makes more sense than ethanol being cheaper than gasoline. Whipple may have been conflating the facts a bit.

EDIT: and here's a quote that echoes the quote from Whipple (cited above):

Cannon reckons that corn, which hit a record high of $8.43-3/4 a bushel, would have rise to $10 a bushel and crude oil, currently trading around $97 a barrel, must drop below $70 in order to make ethanol too expensive to blend.

Whipple should have attributed his statement, especially since without the context it looks like a straight-up comparison of economics -- ethanol vs. gasoline -- when in reality it is more complicated.

While ethanol may be needed as an octane booster and oxygenator, it can be produced more cheaply from coal or natural gas than from organics. Requiring that it be sourced from organics is a political choice, rather than a technical or economic choice.

TCX Technology

This is a relatively new process. Perhaps with corn prices up and refiners needing to rationalize, we'll see this take market share over the next few years. If it really proves out cheaper, it will add to pressure to drop the ethanol mandate.

I think that previously there were other processes used to produce industrial ethanol from ethene and other petrochemical precursors. Prior to the biofuels legislation, corn alcohol was for drinking.

How does adding an oxygenate to fuel help it burn more cleanly? Every automobile made for the last few decades has an oxygen sensor, so the mixture will be adjusted to have the same exhaust oxygen content regardless.

It just decreases the incidence of incomplete combusion, so fewer CO and un-/partially combusted hydrocarbons molecules are emitted. Afterall, ethanol already has 1 carbon-oxygen bond, thus less oxidation has to occur overall. This also partially explains why ethanol has a lower energy content that pure petroleum fuels.

Twilight had it right - "oxygenates" such as ethanol do not work today because of fuel injection. The computer in conjunction with the oxygen sensor adjust the fuel-air mixture on the fly to stoichiometric. Back in the days of carburetors the metering jets and venturi passages would account for the proper fuel-air ratio, but when you add in something like alcohol which takes up some of the volume of gasoline but keep the same level of air going in, it will cause the engine to run a little "lean" at a lower fuel-air ratio. When you have more fuel than necessary it's called "rich" - and this is done purposefully at start-up or the engine would run like garbage...in the carburetor days this was done with the "choke."

The feedback fuel system will simply add more fuel if the fuel contains more oxygen. Also, on a properly tuned non-feedback fuel system arbitrarily making the mixture leaner is not a good thing at all - in extreme it can lead to lean surge and misfire, which results in unburned fuel in the exhaust. I've never understood this whole oxygenated fuel concept, it just seems to be the result of complete ignorance, and can only improve vehicles that are running rich, at the cost of making properly tunes engines run poorly and making engines with feedback fuel systems use more fuel. Why not prevent poorly tuned vehicles from being driven?

Why not prevent poorly tuned vehicles from being driven?

This is why a few states require smog checks. Of course, one of those is Cali, which also requires the ethanol.

The problem with this is that where the fuel has ethanol year-round, the people with the hot rods and classics are going to re-jet the carbs (put in different metering jets to make it put in more fuel per volume of air). Thus even with those cars it won't matter what's in the fuel...and those cars are usually exempt from emissions anyway. All of the beaters left that I've seen are fuel-injected and even in a decrepit state are significantly cleaner than a carburetor car and again not affected by "oxygenates."

Air Pollution Control Engineering

During cold start and maximum power, the engine's control systems ignore the reading of the exhaust gas oxygen sensor (which reads ~ 0 in these circumstances) and mix fuel and air by weight. The oxygenated fuels have lower (A/F)stoichiometric, so that at an equal (A/F) they have a larger lambda than a conventional gasoline. In the warmed-up steady driving situation the engine control system adjusts the (A/F) to have the correct O2 content for the three-way catalyst; the oxygen in the fuel has negligible effect in this circumstance.

(A/F) is air to fuel ratio. Lambda is the normalized (A/F).

Modern engines have heated oxygen sensors. And they ignore the sensors under certain conditions where the sensor would lead to an incorrect mixture. Adding random oxygen does not help at all there.

The point is that the engine control systems can operate differently under different conditions. One set of conditions is utilized for a cold engine (run rich), where much of the exhaust pollution originates; utilize another set of conditions when the engine is hot.

With respect to the oxygenates methanol, ethanol and MTBE:

All these fuels have lower boiling points than the highest molecular weight components of gasoline, so they are more easily converted to the all-gas state. That leads to better and more complete combustion.

The observation that oxygen-bearing fuels lead to lower HC and CO emissions (mostly CO emissions) has led to the 1990 Clean Air Act Amendments requiring regions with severe winter CO problems to use only gasoline that contains at least 2.7 weight percent oxygen during the winter months.

same source as above

Ethanol is cheaper than gasoline only if you choose to ignore that is has only 2/3 the BTU as gasoline. December Ethanol Futures are at $2.55/gallon and adjusted for BTU that would be about 3.83/gallon gasoline equivalent. December Gasoline is $2.77/gallon.

If in fact it was actually cheaper than gasoline- then there would be no need for the ethanol blending mandate - gasoline blenders would be using it up to the 10% limit on their own volition without any pressure from the government. The fact that Renewable Fuels Association is pulling out all the stops to preserve the mandate should tell you that they are not counting on their "cheaper product selling itself". Secondly, if it is cheaper than gasoline why did Valero (who bought all their ethanol refineries from a bankrupt producers) shut down their ethanol plants?

One has to wonder what Whipples agenda is? The fact that he is associated with ASPO USA is the best gift to the Peak Oil deniers. His credibility with me is zero based on this comment.

It also depends upon how its used. A designed to burn ethanol engine can have a higher compression ration, and get a lot more mechanical energy per BTU. For engines optimized for the fuel they consume, I think ethanol gets nearly the mechanical energy per gallon as gasoline. But, if we simply mix it with gasoline and burn it in gasoline engines we don't get that boost.

I think Valero shut down a couple of plants because they could not source corn locally not because of economics.

Yet another sign of the times..

"Unilever Says 'Poverty Is Returning To Europe' And That It's Now Selling Products The Way It Does In Emerging Markets"


I guess it never left the U.S. That's why we have dollar stores.

Or Walmart.

I don't think Wal-Mart qualifies. You need a certain amount of wealth to be able to drive out to a Wal-Mart in the average town.

The link posted referred to the dollar store strategy. Laundry detergent, diapers, coffee, etc. all sold in small packages. To get the price to just a dollar, because people can't afford to buy a full size package. Of course they pay more per use. Like the saying goes, it's expensive to be poor.

Wich is why I buy jumbo pack if I can. My mother buys toilet paper in two-packs for about 20 kronor/pack. I buy them in 64 pack for about 100 kronor/pack. Do the math. Also, a 64 pack last for more than a year in a single home like mine.

The problem is with stuff that have 3 days to live after the lid is opened (food stuff that ain't dry). There I buy the smallest pack I can find, and still have a high waste cut.

Sad but true. And then add poor food selection choices on top of that. For a while I worked with a group that tried to teach the poor how to shop/cook/eat nutritiously utilizing very cheap foods. Growing up in New Orleans I can cook a mean pot of beans, etc. Last night we had a big pot of lentils flavored with smoked ham hocks and veggies. Probably cost less than $1.50/serving. Just about everyone in the program loved my beans. But eventually they still went back to high carb/sugar. And, as you point out, small packages but high cost per calorie items. Sugared cereals were one of the worse. Common complaint: took too long. And then when I added up just how little time in the kitchen it took to make a pot of good beans when the entire process might run 12 hours counting soak time many would just stare at me.

Granted my dietary habits (thanks to BBIC) aren't the best in the world but I know a poor family can eat healthy and relatively cheap if they are willing to try. Still frustrates the heck out of me to see a family of 4 that's obviously not well off financially drop $20+ at McD's. And tonight? We're having chicken breast strips (formerly frozen) baked in a nice and spicey mole sauces. With some rice probably less than $2/person. A lot less and better tasting/healthier than a big MC and fries.

Some are unlucky and get poor but for some there is a reason. They just spend to much or are not able to do simple bean counting.

My recently unemployed wife is finding ways to replace her lost income by learning to prepare foods that have low raw materials cost. It can be amazing how much less dinner for four can cost when there's someone to prepare it.

Yes. This is something that Sharon Astyk writes about a lot. Even with meals that don't require a lot of prep time, you have to spend time planning ahead - making sure you have the ingredients, doing things like soaking beans, etc. It's never ending, and people are no longer taught to do this. With both parents working (or only one parent), it's easier to just buy something already prepared.

As one who manages the household food economy and cooking, let me heartily agree - it is never ending. It also becomes a creative endeavor - how to use this and that to make a tasty supper. It's sort of a sport for the time being, but I consider it practice for the real deal...

Just come back from summer camp (70 people about 35 of them kids) 7 days food bill for all meals came in at £30 ($45) /head. Cooking was communal, on gas rings in a field, mostly but not entirely vegetarian. At the end there were boxes of excess food to be distributed.

Matt – My sweetie has gone the same route after I convinced 18 years with Wal-Mart was enough. Best of all I convinced her she wouldn’t blow up the kitchen with a pressure cooker. So very cheap meals with tough cuts. It also led to a canning frenzy when all the summer veggies got cheap. So thank goodness: between the cooking and the two dogs she leaves me alone much of the time LOL

Almost every dollar store has many many cars outside also, but then again I live where you drive to dollar stores or you do not go.

I don't think Wal-Mart qualifies. You need a certain amount of wealth to be able to drive out to a Wal-Mart in the average town.

Actually, I believe War-Mart makes an effort to make sure their stores are located on public transportation routes if possible. At least my local Wal-Mart has a big bus-stop that serves multiple different bus routes right next to it. So that is pretty clever of them.

I agree Leanan, we always seem to have a large amount of poor people in the U.S., even during the good years.

Yes. In the U.S., there has always been an astonishing resistance to taxing rich people or corporations to pay for *any* Progressive/liberal policy, especially social/anti-poverty programs, healthcare or education subsidies for the working poor, etc. Unions have never been that popular as compared to Europe, and participation is now at a multi-decade low. Add to that we were one of the last democracies to outlaw slavery, have the largest incarceration rate in the worl d by a large margin, and have just recently elevated banks and corporations to the status of super-citizens with unlimited power to legally bribe politicians and... you get the picture.

As I read recently in another comment section, "America's national religions is "F**kyouIgotmine!" That might explain a thing or three about the willingess to be taxed...

Interesting item by a Saudi writer:

Saudi Arabia’s ‘blessing’ and the shrinking of the middle class
By Jamal Khashoggi

The Eid feast and its joys have elapsed and it is time to get back to discussing the hardships of life, such as the erosion of the middle class in Saudi Arabia.

The Saudi newspaper Asharq threw a bombshell on this at the end of July. The paper based its report on a study done by economic professor at the King Fahad University in Dahran, Dr. Abd el-Qahab al-Qahtani . . .

Last year Ministry of Social affair admitted that no less 600,000 Saudi families are receiving welfare. Six hundred (thousand) families make up 3 million citizens (more than 20 percent of the total population). Many Saudi officials should be alarmed when they are informed that a little less than a quarter of the kingdom’s population lives in poverty or near poverty . . .

The Saudi economic cycle today is in one direction only: from the state to the citizen, by much or by little, with just distribution or not; the important thing is that it is not a complete cycle and this is what produced a distorted economy. What makes things worse is the number of foreign expats who occupy most jobs and badly distorts the country’s economy and the culture of work and production. This is also a reason for the shrinking of the middle class.

(Still) Profiting from poverty...
(Unilever apparently bought the Pears soap company and ran the soap into the ground.)

From the article:

"In Indonesia, we sell individual packs of shampoo 2 to 3 cents and still make decent money," said Mr Zijderveld.

Unilever by Chumbawamba (retired last month), from their first album, 'Pictures of Starving Children Sell Records'.

When you don't want to feed the world
When you just want to feed your bank balance
Wash your guilt away
Unilever washes whiter

How long into collapse before Unilever et al can't ship/sell its products anymore?

Tesoro importing Korean fuel to U.S. market

Chevron Corp. recently suffered a refinery fire in Richmond, Calif., that has impacted fuel supplies in the state. The refinery is expected to be closed for repairs for up to six months, according to the report.

This is creating opportunities for refiners like San Antonio-based Tesoro (NYSE: TSO) to ship in fuel from overseas markets. Tesoro has booked a vessel to carry 35,000 tons of jet fuel from South Korea to the United States, the report said, citing shipping records. This is the first time Tesoro has imported fuel from overseas this year.

also Tesoro to ship jet fuel from Asia to US West Coast

The socialists will see to it that during election years prices don't get too out of hand.

Conn. Nuclear Plant Unit Reopens With Cooler Water

Connecticut's nuclear power plant has returned to full service nearly two weeks after one of its two units was forced to shut down because seawater used to cool it down was too warm.

As Dominion considers long-term changes in weather and the possibility that excessively warm water will be the rule rather than the exception, it's looking at doing an engineering analysis allowing the plant to operate at higher Long Island Sound temperatures, Holt said.

Re:Rising food prices in North spark protest

I went to the grocery store this morning and was going to buy some beef. It had gone up from $4.99 per pound to $5.39 per pound. A 40 cent increase in just a week. I told the meat counter person that I don't buy meat over $5 per pound. Period!
I find it interesting that due to the drought many farmers are being forced to sell their cattle at dramatically lower prices than just recently. So farmers are getting sometimes 1/2 what they were getting, but the price of meat in the grocery store goes up dramatically? The grocery store isn't making much if any more profit from the increase, so all the windfall profit is going to the few large monopoly meat packing plants.
I am going to have to start raising my own beef next year!
Anyone else run into this problem in their grocery store?


If grain and meat production weren't subsidized by the federal government, $5.00 would be a wonderful bargain.

Meat production is not subsidized by the government. One could argue that grain subsidies indirectly subsidize meat, but it's a weak argument. Especially at the producer level. The government inspects meat through the USDA, but that is consumer driven. To my knowledge, there is not even government subsidy for marketing, unlike fruit and vegetables. Marketing of meat is borne by producer checkoff dollars at auction.

Cattle grazing on public lands is a huge subsidy.
Cattle ranchers in the West, are for the most part, huge welfare recipients.
I eat grass fed beef, and have a roast in the oven right now.

Grazing fees on federal lands have increased several times since all the hoopla approx 15 yrs ago. I know of sevveral federal rates more expensive than private leases on a cow-calf unit bassis, but then, private leases are smaller, and ease of operation, distance and tradition continue the prior lease. Several government policies work diametrically opposed to the leasee, say wolf protection. That said, I don't know of any recent analysis, and would appreciate up to date studies you may know of.

Timber remains a large federal subsidy. The various federal transfer payments were initiated in part because the government is by far the largest landowner. See payments to local schools. Very difficult for it provide a tax base, or to change hands. Finally, you shouldn't forget the subsidy to states for wildlife-hunting and fishing fees-or the biggy-power. Not to mention cheap produce for the cities via subsidized water. And then you might compare them to the urban and eastern subsidies.

"My country, 'tis of thee.
Sweet land of subsidy
Of thee I sing"

"Timber remains a large federal subsidy." Some sourcing please.

In the last dust-up with Canada, the US position was that it was the Canadians who were subsidizing timber, and as a result (before the crash) limits were put on the import of Canadian softwood lumber into the US.

The stumpage price for timber is what the mills will pay for it. Most federal sales are bid. The mills bid for the right to harvest. The feds can set a minimum price.

In Washington state the local schools tax (the part of it that comes from timber sales) is predominantly from state lands. As the demand for lumber slackens with decreased house sales, local school revenue drops off.

I have some property in "open range". That means that cattle on "the range" get to munch on my property for free unless I build (at my own expense) fencing to keep them out. Me, and a lot of small landowners, are subsidizing a few cattle producers on a small scale.

If you hit a cow on the highway in "open range" it is your fault. You will pay for the cow.

Beef has been crazy cheap here for a couple of weeks now. Picked up a couple of T-bones last weekend for half the price they were a few months ago. Expecting this to reverse soon, though.

Find some farmers and just buy a whole cow.


Or if you can pick it up in Iowa I can probably get you a much better deal.

I'm in newish to Des Moines, any sites like this for around here?

We just took a cow into the butcher (she failed to breed the second time). We are charging 5.49 per pound of 90% lean grass-fed ground beef. No tax. So far we have orders for around 350 lbs. We are
keeping the filets and ribeyes for ourselves even though she was 8 yrs old. All our breeding cows have been DNA tested for the currently-known tenderness genes and the last one we had done this way was exceptionally tender for the steaks even at 12 yrs old. The drought (last year as well as this year) has forced sale of a little over half our breeding herd.

Yair . . . BenjegerdesFarms. Eight dollars a pound for a bulk buy of mince? And they actualy advertise it?

I'm amazed. That is crazy expensive.


'Cloud catchers' aid parched Peruvians

... Twenty nets have been set up on the hills to trap fog. The tightly woven fabrics end up heavily dampened, condensing water from the fog. Drop by drop, a plastic tube used as a canal carries the water that fills 20 tanks. ... The cloud catchers at Cerro Nueva Esperanza are six-by-four metres and have the capacity to condense around 90 litres per day. “Altogether, we are talking about 3,000 litres at its best”, says Abel Cruz.

also Risk of water wars rises with scarcity

Sea Ice in Arctic Measured at Record Low

The amount of sea ice in the Arctic has fallen to the lowest level on record, a confirmation of the drastic warming in the region and a likely harbinger of larger changes to come.

Satellites tracking the extent of the sea ice found over the weekend that it covered about 1.58 million square miles, or less than 30 percent of the Arctic Ocean’s surface, scientists said. That is only slightly below the previous record low, set in 2007, but with weeks still to go in the summer melting season, it is clear that the record will be beaten by a wide margin.

The National Snow and Ice Data Center, a government-sponsored research agency in Boulder, Colo., announced the findings on Monday in collaboration with NASA. The agency bases its numbers on a slightly conservative five-day moving average of sea ice extent.

Dr. Francis is one of a small group of climate scientists who argue that the decline of sea ice is already having consequences for weather in the Northern Hemisphere’s middle latitudes, including the United States. She has published research suggesting that air circulation patterns are being altered in a way that favors more extremes, like heat waves and droughts.

Such ideas are not considered proven, but they are getting more attention as the weather careens from one extreme to another.


Arctic sea ice extent fell to 4.10 million square kilometers (1.58 million square miles) on August 26, 2012. This was 70,000 square kilometers (27,000 square miles) below the September 18, 2007 daily extent of 4.17 million square kilometers (1.61 million square miles).
After tracking near 2007 levels through July, the extent declined rapidly in early August. Since then, the loss rate has slowed some, averaging about 75,000 square kilometers (29,000 square miles) per day—equivalent to the size of the state of South Carolina. However, this is still much faster than the normal rate at this time of year of about 40,000 square kilometers per day (15,000 square miles).

{sarc}I'm sure the republicans will be hurriedly re-tooling their con-vention to address the perils of AGW.{/sarc}

Alaska, here's a link to a NOAA 42 second animation showing the loss of multi-year (old) Arctic ice:


The loss starting in 1987 is obviously noticable when it hits 2005, disappearing at a rapid rate.

Thanks, I hadn't seen that. It's one thing to see the lines on a map, but the animation really drives it home.

The tongue of ice in the Fram Strait appears to be normal this year, which likely indicates that the flow of multi-year ice out of the Arctic Ocean is fairly robust.

The almost complete melting in the Beaufort, East Siberian, and Laptev Seas likely indicates that the clockwise east-west flow of ice from northern Canada is not replenishing the multi-year ice in the Eurasian half of the Arctic Ocean.

So minimum ice coverage should decline from here fairly rapidly, although the graph below is somewhat deceptive with the y-axis starting at 2.

Still heading down like a rock!

Tropical Rainfall Rate in Arctic Alaska

From the National Weather Service in Alaska:

Roughly one third of the annual precipitation has fallen in Northwest Alaska over the past 4 days! 3.5 inches of rain at Kivalina, 2.5 inches at Kotzebue and 5 inches at Red Dog Mine, a region where rainfall in excess of 3 inches over 3 days is a once-in-a-hundred-year event.

is a once-in-a-hundred-year event.

Seems like I hear that most every week! That phrase really needs to move into the past-tense.

When will drenched Kivalina be able to open its school?

“Given that the community doesn’t have safe drinking water or water for hygiene purposes, the school district chose to hold its teachers in Kotzebue until the issue is resolved,” Wendy Schaeffer, deputy director of public services for the Northwest Arctic Borough, said last week.

Many residents continue to collect rainwater runoff for drinking.

Swan declared the situation a disaster about a week ago after high water infiltrated the community landfill and muddy waters caused by heavy rains threatened the clean-water supplies. High waters also damaged a pipe that feeds from the river into the village's water storage facilities.

“We’ve got really high levels in lagoon again,” Swan said Saturday. “It’s hitting banks. The tundra is partially underwater.”

The mixing of lagoon waters with the landfill waste poses a danger to residents’ health, Schaeffer said. Kivalina has no sewer system outside of its school facility, so residents rely on honeybuckets for sanitation. The content of those honeybuckets -- along with used oil, batteries and defunct machinery -- end up in the landfill.

And the rain keeps coming.

Are the rains going to persist as heavy snowfalls later in the fall, and will they move across into northern Canada?

More precipitation is needed than currently falls over the Hudson Bay area in order to generate a mile-thick glacier. Perhaps an open Arctic Ocean is what is needed.

"More precipitation is needed than currently falls over the Hudson Bay area in order to generate a mile-thick glacier. Perhaps an open Arctic Ocean is what is needed."

When I was in high-school there was a hypothesis that exactly that started the Wisconsin glaciation. "Lake effect" snow piled up really deep, and the cool summers of that part of the orbital cycles failed to melt it. A decade or two of that, and the positive feedback took over, and we had glaciers.


Note the graph runs "backwards" so if you look at the mini-peak just left of the Eemian arrow, then notice the sudden drop down of about a degree and half in the width of the line, then it steadies, but soon drops down into the full blown ice age. Something interesting happened there.

Yes. I'm trying to round out the bottom part in my mind.

For Climate Change, a Possible Trial Could Echo the Scopes Monkey Case

That is not a stretch, at least not a stretch too far, because oil companies have already been found theoretically liable in civil cases.

One wonders if criminal liability well also develop in the law:

As record-breaking floods, fires, and drought affect more regions of the world, the risk of not just more loss of life but massive and sustained loss of life becomes statistically inevitable. How any one of us responds to the risk of harm to others defines whether we are morally clear or morally clouded. Here is a simple analogy about our moral and legal responsibility for taking risks:

You take little Jenny to school and you are met by the principal who says his electrician tells him the school's electrical wiring is old and faulty and there is significant chance it will overheat in places and cause a fire. The principal, who has no expertise in inspecting wiring, says the electrician doesn't know what he is talking about. Any school official or parent who knowingly sent their child into that school would be held criminally negligent if it caught fire.

The same is true for climate change; we have to make morally coherent choices based on the information currently available to us if we don't want to be held accountable as accessories to what may be the crime of the century.

(The Peak of Sanity - 5). Some oil patch bullies think that the public is at fault, so they shift the blame on to them for oil pollution and global warming induced climate change.

Ah, the old privitization of resources under the public's feet, but the socialization of guilt and liability for the results of extracting, developing, and expanding the pollution of the Earth.

Nice guys.

Doug Casey Uncovers the Real Price of Peak Oil

Doug Casey: We like to have a range of defensible views represented at our conferences. But personally, I don't think it's realistic to suggest oil prices will drop as low as $40/bbl. I am of the opinion that the Hubbert peak oil theory is correct...

There will always be plenty of oil at some given price, but to produce oil—even conventional, shallow, light sweet crude—now costs close to $40/bbl in in many places. It's extremely expensive to produce oil through unconventional techniques like horizontal drilling and fracking. Producing oil from tar sands is very expensive and problematical. Drilling 15,000 feet under the ocean is very expensive, and has a lot of risk. Drilling in politically unstable jurisdictions with sparse infrastructure is neither cheap nor fun. We're talking about production costs of at least $80/bbl in many cases.

I don't think oil is going down much from here...

Look forward to a lot more of this type of article in the months and years to come. There is nothing like hard data to make people understand the fact of peak oil.

And we will be seeing a lot fewer predictions like this: Porter Stansberry: U.S. Shifts to Gas Export Role

PS: Over the next 18 months, I expect a major correction in the price of oil and gas, with oil falling back to $40/bbl. It won't stay there long, but it will be a big correction...

Obviously, you can't have record levels of hydrocarbon production if you're supposedly running out of oil, so serious proponents of peak oil have their heads in the sand.

Ron P.

That interview is somewhat laughable. At least one instance in the interview regarding natural gas, Stansberry has his dates demonstrably incorrect, off by years actually. I wouldn't put much stock in the rest of it if that's any indication.

Ron - Mr. Casey does seem to have a firm understanding of the situation. But I suspect he may still be a tad optimistic:

"There will always be plenty of oil at some given price, but to produce oil—even conventional, shallow, light sweet crude—now costs close to $40/bbl in many places."

I'm sure he knows the difference just as you and most of TOD but very little of the oil in the world costs $40/bbl to PRODUCE. Often the LOE (Lease Operating Expense) is less than $10/bbl...sometimes a good bit less. Of course, to develop (explore for and set up for production) new oil reserves can cost considerably more. But even when some folks estimate the actual costs (say $40/bbl) to develop some new oil (an Eagle Ford well that comes on at 900 bopd and may well recover 400,000 bo) that number may not be representative of the whole.

That may be the metric for that one well. Perhaps that same operator has drilled wells and only a 1/3 came in as such and the others considerably less. So in aggregate maybe the average is more like $50/bbl than $40/bbl. But even that number doesn't include the $XX millions that company paid for leases so maybe that yields an actual finding cost of $55/bbl. And often when I see the more optimistic folks toss out numbers they don't seem to reduced that URR by the royalty and production taxes. Reduce that URR to net URR that generates the cash flow to the operator (URR less 30% for royalty and severance tax) and the $55/bbl finding cost becomes $78/bbl. IOW depending on just how diligent the person works the number that $40/bbl finding cost could be almost twice that amount. Given the recently developed softness in EFS drilling as oil prices slid down a bit that $78/bbl guesstimate may not be too far off.

As far as Mr. Porter's statement: "With America the Saudi Arabia of natural gas... U.S. energy independence is no longer a pipe dream." Well, DA! Given that the US is the largest producer of NG in the world and has been (occasionally swapping that title with Russia) for decades it doesn't take much guts to make that proclamation. OTOH there's a bit of difference between the US and the KSA: we consume almost every bit of the NG we produce while the KSA exports the great majority of its oil. I'm sure you agree a rather different set of dynamics. He seems to imply the potential for the US to become the KSA equivalent of a NG exporting country. In fact, given the increased demand we're seeing for NG by the electric plants (due to low NG prices) our potential for exporting NG seems to have decreased.

For the most part the US is NG independent. "Energy" independent? Not so much so. Imported oil independent? Not even close. "Net energy independent"? No but thanks to our huge NG resources we're in better shape than many other countries. Compare us to England. They just became a net oil importer in 2006. And today they may be close to importing the same % as the US. But look how close they came to being unable to supply British homes with adequate NG in the past couple of winters. Folks should be glad that US NG hasn't been as exportable as oil otherwise we might have found ourselves in the same situation as our Brit cousins have found themselves after exporting so much of their N. Sea riches. And as NG reserves deplete and, hopefully, the economy recoveries NG prices will rise and reserves will continue to be developed. And IMHO as long as the pubcos have no alternative for growth they'll continue developing unconventional NG reserves as long as they can scrape the capex together.

Peak PV

... Japanese company Kyocera is selling a system that pairs solar PV panels with lithium-ion batteries for the residential market. The battery storage is rated at 7.1kWh and weighs about 200 kgms. It’s emerged it seems because of demand for residential backup power supply following the Fukushima nuclear disaster and to take advantage of the new PV feed-in tariff. But Li-ion batteries are still expensive, so without extra government incentives, residential energy storage isn’t likely to take off quickly. And some would say having storage at the domestic level it is not the best approach-it would be better to feed excess power out on the grid to balance power taken in when there is a shortfall. That after all is what FiTs are all about. If you need storage its should be done on a larger utility scale - via pumped hydro, compressed air, cryogenic air storage, vanadium flow batteries or whatever.

That said, there are seductive small-scale options emerging, like the Fronius Energy Cell system in which any excess electricity from a PV cell used to decompose water into oxygen and hydrogen by electrolysis. The hydrogen is then stored ready to be converted back into electricity in a fuel cell when it is needed. www.fronius.com/cps/rde/xchg/SID-2038DABF-BEA034DD/froniusinternational/...

that fronius link didn't work for me.

Lithium-Ion is too precious to be used in stationary applications. I'd rather like to see the Sodium-Sulfur (NaS) battery at residential levels. It has it's own issues, such at high temperature operation, but should be cheaper at mass-production levels and has excellent lifespan and cycle efficiency.

Cooled coal emissions would clean air and lower health and climate-change costs

Refrigerating coal-plant emissions would reduce levels of dangerous chemicals that pour into the air – including carbon dioxide by more than 90 percent – at a cost of 25 percent efficiency, according to a simple math-driven formula designed by a team of University of Oregon physicists.

... According to the Physical Review E paper, carbon dioxide would be captured in its solid phase, then warmed and compressed into a gas that could be moved by pipeline at near ambient temperatures to dedicated storage facilities that could be hundreds of miles away. Other chemicals such as sulfur dioxide, some nitrogen oxides and mercury also would be condensed and safely removed from the exhaust stream of the plants.

Last December the U.S. Environmental Protection Agency issued new mercury and air toxic standards (MATS), calling for the trapping of 41 percent of sulfur dioxide and 90 percent of mercury emissions. A cryogenic system would do better based on the conservatively produced computations by Donnelly's team – capturing at least 98 percent of sulfur dioxide, virtually 100 percent of mercury and, in addition, 90 percent of carbon dioxide.

"Last December the U.S. Environmental Protection Agency issued new mercury and air toxic standards (MATS), calling for the trapping of 41 percent of sulfur dioxide and 90 percent of mercury emissions."

Since the courts reversed these standards, no "need" for reducing these emissions :-/

Hold the fort. The courts struck down a different rule, the Cross State Air Pollution Rule, which was due to take effect start of next year. MATS is still in place. That's the reason this particular ruling is noted in the article as a 'minor battle.'

MATS has a better chance of surviving appeal because it is strictly a technology standard, whereas Cross State attempted to leverage the existing SOx and NOx cap-and-trade programs. EPA's proposed implementation of Cross State is what the courts threw out.

Thanks for the clarification, Steve. If Romney gets elected, all bets are off.

Possibly, but I see it a little differently. The MATS rulemaking has been going on so long that even an EPA Admin with total antipathy would have a hard time unwinding the administrative record. Romney could bake in a few years' delay.

The more likely scenario, IMHO, is that Romney quashes the recent Greenhouse Gas standard, declares victory, and moves on.

Meteorological Society: Warming Is ‘Unequivocal’, We’re The ‘Dominant Cause’, We Need ‘Rapid Reduction’ Of CO2

The American Meteorological Society has updated and strengthened its statement on global warming. Here are its summary conclusions, “based on the peer-reviewed scientific literature and is consistent with the vast weight of current scientific understanding ...

There is unequivocal evidence that Earth’s lower atmosphere, ocean, and land surface are warming; sea level is rising; and snow cover, mountain glaciers, and Arctic sea ice are shrinking. The dominant cause of the warming since the 1950s is human activities. This scientific finding is based on a large and persuasive body of research. The observed warming will be irreversible for many years into the future, and even larger temperature increases will occur as greenhouse gases continue to accumulate in the atmosphere. Avoiding this future warming will require a large and rapid reduction in global greenhouse gas emissions.

... Prudence dictates extreme care in accounting for our relationship with the only planet known to be capable of sustaining human life.

22 Of The Top 25 CO2 Emitting Congressional Districts In 2009 Were Republican

... according to data released by the Center for Global Development, which tracked emissions from 60,000 power plants in the U.S. and around the world.

The top five CO2 emitting districts were all Republican, with percentage of fossil-based electricity in those areas ranging between 91 percent and 100 percent.

Given this trend, it’s not surprising that the National Republican platform on energy is almost entirely about supporting more fossil fuels — particularly coal — while completely ignoring the threat of climate change. That platform was just released this morning:...

and Romney Opposes Fuel Efficiency Standards That Are Actually Moving U.S. Toward Energy Independence

Today, the Obama Administration is set to announce new rules that boost fuel efficiency to 54.5 miles per gallon by 2025, which would save 3 million barrels of oil per day, 2 billion metric tons of carbon pollution, and create 570,000 jobs by 2030.

Romney not only opposes these new rules, but he would undo existing standards requiring new cars reach an average of 35.5 MPG by 2016, the first improvement the fuel economy standards stalled for two decades.

ROMNEY: In my view, the industry got in trouble because the UAW asked for too much, management gave too much and made other mistakes, and the government CAFE [Corporate Average Fuel Economy] standards hurt domestic automakers and provided a benefit to some of the foreign automakers.

and Military Spending on Biofuels Draws Fire

... Representative Mike Conaway, a Texas Republican who introduced House legislation that would limit biofuel purchasing and production and has been critical of the Great Green Fleet, said Democrats were using the military to pursue an environmental agenda. “We just want to require the Department of Defense to do exactly what every other American does when they buy fuel: they try to get the best price they can,” he said.

Rules to double U.S. fuel economy to 54.5 mpg by 2024

NEW YORK (CNNMoney) -- The Obama administration finalized new fuel economy rules Tuesday that within 12 years will almost double today's standard for cars and light trucks to 54.5 miles per gallon.

The rules, which have been in the works for several years, will add thousands of dollars to the cost of new cars. But in the long run, regulators say, drivers will spend less on gas, outweighing the additional cost at the dealership. They say the rules will also help reduce the nation's oil imports.

The standard takes effect in 2024 when 2025 model-year cars begin to hit dealer lots...

..."The rule finalized today by the Obama Administration will hurt American consumers by forcing them to drive more expensive and less safe automobiles," said a statement by the Republican leaders of the House Oversight and Government Reform Committee, which had asked that the rules be reevaluated.

Be afraid, be very afraid...No worries, Romney will make us safe again.

"He who trusts in his riches will fall...
He who troubles his own house will inherit the wind
--Proverbs 11

To Serve & Protect

Vehicle Miles Driven Just Hit A New Post-Crisis Low

The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through June. Travel on all roads and streets changed by 0.4% (1.1 billion vehicle miles) for June 2012 as compared with June 2011. However, the 12-month moving average of miles driven declined by 0.2% from June a year ago (PDF report). And the total population-adjusted data likewise has set a new post-crisis trough.

The last graph is interesting...the curve stops accelerating around 1998 (the tangent line goes from increasingly positive to decreasingly positive). It seemed to be heading for a plateau around 1,875B but then in 2006 at about 1,840B it just fell off a cliff with the economy. The acceleration in gasoline prices also seems to have slowed as well and it also appears to be flattening to something under $4.50/gal. Trying to draw a trend from it would be folly though - geopolitics could black-swan any trend attempt on a day's notice.

It would be interesting to see real wages included on that graph too.

It's only under Obama that future CAFE standards have FINALLY exceeded the 1980-81 CAFE order Reagan rescinded after defeating Carter.

Brazil Supreme Court approves work on Amazon dam

Brazil's Supreme Court has approved the resumption of work on the huge Belo Monte dam in the Amazon, which was halted earlier this month after protests from indigenous groups.

Behind a Mining Monopoly

Canada is seen as a friendly nation but many indigenous communities say they have a dirty secret. Canada's mining industry, the largest in the world, controls a majority of Latin American mining. Activists say they pollute and violate human rights without accountability from the Canadian government. Mining companies argue they build schools, health centres, roads and provide jobs.

... Conflicts between indigenous groups and mining companies in El Salvador have led to the deaths of at least four activists over the last few years. Locals fear that mining companies and government officials infatuated with the promise of profits from mineral extraction either initiate or are complicit in violence against anti-mining activists.

... In Mexico, protests against Canadian mining operations "have resulted in attacks, death threats and the murder of anti-mining leaders, carried out by municipal police or private security forces contracted by the companies".

... those living downstream from mines "have seen unnaturally high rates of cancer, skin diseases, birth defects and illness in the fish and livestock vital to their survival". A comprehensive list of social and environmental conflicts caused by mineral extraction in Latin America can be found on this interactive map.

A similar story. Locals opposing "green" energy (they don't quite see it that way).

A friend of mine is working with indigenous and local people to oppose a Canadian geothermal company doing preliminary work at Lake Atitlan, Guatemala. Seems leases were granted by the govt without any input form the local population. If anyone's interested, I'll find the links.

Mining Watch Canada

Changing public policy and mining practices to ensure the health of individuals, communities and ecosystems

The present Canadian government doesn’t understand or value environmental assessment any more than it understands or values sustainable development. We are taking a stand to try to save what’s left of the federal environmental assessment process, and with it the possibility of building a coherent and consistent framework for planning for real sustainability.


Harper’s chief of staff faces scrutiny over Barrick Gold links

Pirates seize Greek oil tanker off Togo

Pirates have seized a Greek-owned oil tanker and its 24 crew off the coast of Togo, a maritime group reports.

Ships are usually held for several days and the cargo transferred to a waiting tanker, before the crew of the original ship is freed.

This is a different method to that used by Somali pirates, who demand a ransom for the ships they capture and often keep both vessels and crew for many months until they are paid.

French government, oil industry agree fuel price cut

PARIS, Aug 28 (Reuters) - The French government and energy industry have agreed to cut fuel prices by up to 6 euro cents per litre for three months to help drivers hit by a recent increase in prices, Finance Minister Pierre Moscovici said on Tuesday.

He said the burden of the "extremely substantial" cut would be shared equally between the French state, oil companies and supermarket chains such as Carrefour, with each contributing 3 euro cents per litre.

"This means it will cost 1.50 euro less to put 25 litres in the fuel tank. It's a substantial amount, especially for people with low revenues or who have to drive a lot," Moscovici told a news conference after talks with industry representatives.

The Collapse Wager

On the evening on April 14th, 1912, was someone banished from the Titanic’s captain’s table for being so rude as to mention that the ship was sinking?

It troubles me deeply that bringing up the subject of immanent collapse is regarded as uncouth, while blithely talking about the satisfactory present and an ever-more-agreeable future is not seen as irresponsible denial. (“Forget about the lifeboats, and try some of this pheasant. It’s delicious!”)

... I have been doing a slow burn for some time over the fact that people like these continue to be enablers for the scoundrels who have already destroyed our economy and political system. Why should their complacent denial be accepted as polite dinner conversation, when looking realistically at the situation or, indeed, even trying to warn people about what’s coming is considered antisocial?

9th circuit rules that the 'just and reasonable' part of FERC's New Deal era FPA authority still has teeth, but declines to expand FERC jurisdiction to allow refunds to be ordered from non-jurisdictional utilities like municipal utilities. This opens the way for civil suits to proceed against public utilities for ill-gotten gains dating to the California power crisis.



Energy official wants contractor relieved in nuclear cleanup

The company hired to clean up the government's biggest radioactive mess should be removed from key aspects of the project because it made critical errors designing a massive plant to treat the waste, according to an internal Energy Department memo.

The memo details 34 technical problems attributed to Bechtel National, which designed and built the plant to stabilize and contain 56 million gallons of radioactive waste from a half-century of nuclear weapons production at the Hanford Site in central Washington. A USA TODAY investigation this year highlighted technical problems with the project.

"The behavior and performance of Bechtel engineering places unnecessarily high risk that the (plant) design will not be effectively completed," says the memo by Gary Brunson, the Energy Department official overseeing engineering for the project.

The project's $12.3 billion price tag, which has tripled since it launched more than a decade ago, is likely to grow substantially as a result.

also DOE director wants Bechtel authority for vit plant cut

We need to insert this over on Gail's contentious post, see how much hand waving it produces.

Drought raises concern about Kansas nuclear plant

BURLINGTON, Kan. -- The continuing drought is causing concern about operating the Wolf Creek Nuclear Power Plant.

The Kansas Water Office projects the John Redmond Reservoir will be almost dry by Nov. 1, if current weather patterns persist.

Wolf Creek officials say it would be difficult to operate the plant if the drought continues for the next several months.

Oil spill fouls Curacao shore, threatens flamingos

The leader of a local environmental group asserted Monday that the spill of crude oil at Curacao's Jan Kok preserve was from at least one storage tank owned by the Isla oil refinery, the largest business and employer on the southern Caribbean island best known for its diving opportunities and colorful capital of Willemstad. The island's refinery is run by the state-owned oil company of Venezuela, only about 40 miles away.

I don't know if this has been posted before, but a friend sent this link to me for a time lapse video from space of the Bakken oil field.


Sorry I don't know how to make a nice link like everyone else does.

...video from space of the Bakken oil field.

You really undersold that one! That video is spectacular...and of the entire Earth. The part where it's panned up and you see the auroras and stars out in space - spectacular. At the same time it's also depressing because of all the light pollution and human development destroying the Earth.

Alberta pipeline leaks 300,000 litres of tar sands-tainted water

(2m video)

APTN National News delivers the news of the day and provides a more in-depth look at the issues facing Aboriginal communities in Canada and around the world.

Lights blue touch paper, steps back

Or, why we're doomed.

Free movie: Edible City

Edible City is a feature-length documentary film that tells the stories of extraordinary people who are digging their hands into the dirt, working to transform their communities and do something truly revolutionary: grow local Good Food Systems that are socially just, environmentally sound, and economically resilient.

Seeing as there's some discussion hereon about meat and arthropods; in the film, a rabbit appears humanely killed and skinned. It was tough to watch, but there, there is a reconnection of something of our reality that has been lost.
It seems that for many, our realities are based on disconnection: water comes from a tap; food and clothes magically appear from far away in grocery and clothing stores, respectively; homes are less built so much as bought; and so-called leadership is self-appointed, by distance, with little consent, and essentially anonymous, where the decisions/actions-- often on the backs of wage-slave labor-- affect distant local environments and populations. (And then there are remote-controlled killings by drone attacks; social "gatherings/interaction" by internet; debt-based financing based on future growth & prosperity; energy drawn on fossil fuels; and so on.)

When you think about it, it is really a bizarre existence. In a sense, we are already extinct.

[We are] persuaded

...to spend money we don’t have on things we don’t need to create impressions that won’t last on people we don’t care about.
~ Tim Jackson

Obviously, certain kinds/speeds of collapses/declines/etc. don't necessarily have to happen if we throw down the gauntlet and do something about it/them and truly reconnect, but at the moment, it appears as though many of us are like the chained prisoners of Plato's Cave; able to look over our shoulders to see the shadows for what they are, but unable to do anything about it. To unchain.

Return To Source: Philosophy & The Matrix

You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.