Drumbeat: October 8, 2012

UK may lift restrictions on shale gas, offer tax help

LONDON (Reuters) - The British government expressed support for shale gas on Monday, with the energy minister saying he hoped to allow more exploration and the finance minister talking of a favourable tax regime for the energy source opposed by many environmentalists.

Edward Davey, who heads Britain's Department of Energy and Climate Change (DECC), said he hoped to lift a suspension on new shale gas exploration that was imposed last year due to concerns about the fracking technology used to exploit it.

"I hope it will prove possible for me to give a green light to shale," Davey told a gas conference in London.

Britain's gas supply prey to Qatar marketing strategy

LONDON (Reuters) - Britain is in danger of suffering a long-term loss of liquefied natural gas (LNG) supply as top exporter Qatar sends only left-over short-term deliveries to the UK while more and more of its LNG goes to higher paying Asian customers.

Analysts and British energy companies say the strategy rewards Qatar but puts Britain at a significant disadvantage.

Oil Declines a Second Day as Europe Ministers Meet Amid Slowdown

Crude fell for a second day in New York before a meeting of European officials amid speculation the region’s debt crisis and an economic slowdown in Asia will curb fuel demand.

Futures pared losses after sliding as much as 1.9 percent. Prices capped a third weekly decline on Oct. 5, the longest run of losses since June. Finance ministers meet in Luxembourg today to discuss Spain’s finances and closer banking cooperation. Speculators cut bullish bets on oil in the week ended Oct. 2, a report showed. Economic growth in developing East Asia, including China, will be the slowest since 2001, according to the World Bank.

Gas prices cheapest in these Southern states

Since June, gasoline prices have climbed more or less steadily and are now 35 cents per gallon higher than they were a year ago. According to AAA’s daily fuel gauge report, which measures gas prices around the country, gas prices have hit daily record highs at least once in each of the past six weeks. In Michigan and Ohio, prices rose by 50 cents per gallon in the past year. As of Oct. 1, there were seven states with gas prices above $4 per gallon.

While the price at the pump has risen in every state compared to a year ago, in some states the price of gas has increased at a much slower rate, and many are much closer to $3.50 than to $4 per gallon, well below the national average. In 10 states the average price of a gallon of gas is $3.60 or less -- 18 cents less than the national average of $3.78 per gallon.

California Facing $5 Gasoline Stirs Brown to Relax Rules

The California Air Resources Board yesterday granted refineries permission to make an early shift to winter-blend gasoline, typically not sold until after Oct. 31. Due to the composition of the gasoline, refiners can produce more of the winter blend than the summer blend.

“It’s absolutely outrageous,” said Tonnie Katz, 67, a retired newspaper editor who stopped at a Los Angeles gas station for a $69 fill-up. “I don’t think anyone understands it. For seniors, this is an awful big chunk out of our budgets.”

Calif. gasoline prices hit all-time high - twice

LOS ANGELES (AP) — California motorists faced another day of record-breaking gasoline prices Sunday, though relief appeared to be on the way.

In its latest update early Sunday, AAA reported that the statewide average price for a gallon of regular unleaded gasoline was $4.655. Saturday's average of $4.6140 was the highest since June 19, 2008, when it was $4.6096.

Nearly 1,000 Gallons Stolen From Roseville Gas Station

ROSEVILLE (AP) – Police in the Northern California city of Roseville are investigating the theft of nearly 1,000 gallons of gas from a Shell station.

The station’s manager, Tony Sandhu, said Saturday that thieves in a pickup truck somehow disabled the meter to steal 300 gallons of gas after business hours on Sept. 27.

Petrol prices to be slashed by 56 paise from Tuesday

(Reuters) - Indian state-fuel retailers will marginally cut petrol prices from Tuesday, reflecting a strengthening rupee, the country's largest fuel retailer Indian Oil Corp (IOC.NS) said on Monday.

Reliance's key Indian gas fields may run out in 5 yrs-analysts

(Reuters) - Reliance Industries' key gas producing fields off India's east coast could be exhausted in five years, Morgan Stanley analysts said in a report.

The researchers' findings are based on estimates by block D6 partner Niko Resources that total proved plus probable reserves at the block had decreased to 1.93 trillion cubic feet as of March 31.

Saudi Arabia Doubles Tankers to U.S. as Motiva Unit Seen Opening

Saudi Arabian Oil Co. doubled the number of crude tankers booked to ship oil to the Gulf of Mexico this month as two people familiar with its U.S. refinery operations said a damaged crude unit may restart in December.

Gazprom ups gas flows to Turkey after pipeline blast

(Reuters) - Russia's gas export monopoly Gazprom said it increased daily gas supplies to Turkey by 60 percent to 48 million cubic metres on Monday after an explosion damaged a pipeline carrying Iranian gas.

The company said it increased gas supplies through the Blue Stream underwater pipeline following Turkey's request.

Norway to nudge up oil money spending, hike carbon tax

(Reuters) - The Norwegian government plans to spend more of its oil revenues in 2013 than it has earmarked for this year, when it expects the economy to grow faster than earlier thought, a budget draft showed on Monday.

It also plans to nearly double its carbon taxes on the oil industry in 2013 and raise cash to help developing nations protect tropical forests as part of measures to combat climate change, the draft showed.

BP sells Texas City refinery to Marathon Petroleum

FINDLAY, Ohio (AP) -- BP has finally found a buyer for its Texas City refinery, one of the largest and most complex in the U.S.

Gazprom CEO: Nord Stream To Build Two More Pipelines -Report

Nord Stream, the consortium that operates a natural gas pipeline that ships Russian gas to Western Europe, will build two more pipelines to expand capacity, the chief executive of OAO Gazprom (GAZP.RS), which has a 51% stake in the company, said Monday, Russian newswires Interfax and Prime reported.

Azeri gas group in talks for stake in Nabucco pipeline

(Reuters) - The partners in Azerbaijan's Shah Deniz II gas field are in talks to take a stake in the Nabucco consortium that is competing to build the first pipeline to deliver Azeri gas to Europe, Austria's economy and energy minister said on Monday.

Nigeria on track to raise oil output to 4 mil b/d by 2020: NNPC

Lagos (Platts)- State-run Nigerian National Petroleum Corp said on Sunday that Nigeria remains on course to increase its oil production to 4 million b/d and its reserves to 40 billion barrels by 2020, despite security challenges facing the country's industry.

ConocoPhillips to leave Peru blocks as it continues asset divestment

PERU -- ConocoPhillips said it won't pursue further exploration activities in certain Peru blocks, part of the exploration and production company’s effort to divest itself of billion of dollars in assets this year. ConocoPhillips will withdraw as operator and opt out of the next exploration period for Peru blocks 123 and 129.

Kazakh opposition leader jailed after oil town unrest

AKTAU, Kazakhstan (Reuters) - An outspoken critic of Kazakh President Nursultan Nazarbayev was jailed for seven-and-a-half years on Monday for his part in a failed attempt to overthrow the government of the oil-producing Central Asian state.

Vladimir Kozlov, leader of the unofficial Alga! party, was found guilty of orchestrating dissent among striking oil workers in the prelude to riots last December that left 15 people dead and dented Kazakhstan's reputation for stability.

Libyan Premier Ousted After Lawmakers Reject Cabinet

Libyan lawmakers were to meet today to weigh their options after rejecting a revised Cabinet list submitted by Prime Minister-elect Mustafa Abushagur and firing him from his post.

Chavez Extends Socialist Rule With Venezuelan Election Win

Chavez solidified his support by tapping the world’s biggest oil reserves to subsidize food, provide low-cost housing and expand health care among the poor. Questions about his health following three cancer-related surgeries mean attention will now shift to who would succeed Chavez if he gets too sick to remain in office, said former Brazilian Foreign Minister Luiz Felipe Lampreia.

Tensions flare in Syria, Turkey; rebels open to idea of VP leading transition

(CNN) -- After days of Syrian projectiles falling across the border into Turkey, tensions -- and carnage -- are mounting on both sides of the border.

The stray shelling has prompted Turkey to respond with threats and weapons fire, fueling concerns that the Syrian civil war will bleed into a greater regional battle.

Question marks over EU sanctions on Iran

BRUSSELS - Greece is temporarily blocking an EU gas embargo on Iran. But the big question is: are EU sanctions hurting or helping Iranian leader Ali Khamenei?

Interrupting Iran's Oil: The Price The West Can Now Afford

For many years, it seemed as if the West’s real plan for dealing with the Iranian regime was to talk it to death. Occasionally, a new round of sanctions would be announced, but they were never really very serious sanctions. Sure, they angered their targets in Tehran, but not enough to stop them from doing anything they really wanted to do. The world was willing to pay any price, bear any burden, to stop Iran from getting nuclear weapons. Any price, that is, except the only one which would have made a difference: interrupting the flow of Iranian oil.

Iran fails to impose stronger rial rate, market frozen

DUBAI (Reuters) - Iran's government was locked in a test of wills with currency dealers on Saturday as it tried unsuccessfully to impose a stronger rial exchange rate, after a plunge by the currency earlier in the week triggered street protests.

Cyber attackers target Iranian oil platforms - official

DUBAI (Reuters) - Cyber attackers have targeted communication networks on Iranian offshore oil and gas platforms in the past few weeks, but their attacks have been repelled, a state official was quoted as saying on Monday.

Iran, the world's No. 5 oil exporter, has tightened cyber security since its uranium enrichment centrifuges were hit in 2010 by the Stuxnet computer worm, which Tehran believes was planted by Israel or the United States.

Israel eyes Lebanon after drone downed

Jerusalem (CNN) -- Israeli military experts Sunday worked around the clock to examine the remains of a mysterious drone that was shot down after penetrating Israeli airspace from the Mediterranean Sea.

The Israeli military announced Saturday that the unmanned aerial vehicle was shot down over the northern Negev Desert. They say the drone did not take off from Gaza, leading them to consider the possibility that it originated in Lebanon.

Peak Oil, Peak Innovation, and Sustainable Notions

When consumption will only increase and production will only decrease, we've hit peak-oil. It's fairly easy to understand and most economists and resource managers acknowledge and appreciate the importance of the historic event. Much more difficult to appreciate or acknowledge is the parallel notion of peak-innovation.. Several researchers of innovation have suggested by the end of this year, we'll have hit peak-innovation: when consumption of innovation will only increase and production of innovation will only decrease.

WHY IT MATTERS: Infrastructure

From bridges to broadband, America's infrastructure is supposed to be speeding along commerce, delivering us to work and piping energy and water into our homes and businesses. But just repairing all the breakdowns and potholes would cost tens of billions more than we're currently spending each year. Experts warn the resulting infrastructure and innovation deficit is jeopardizing our global economic competitiveness. Traditionally nonpartisan territory, spending for transportation and other megaprojects is now routinely caught up in politics, with Democrats and Republicans divided over how to pay for public works and which ones.

Romney’s Goals on Environmental Regulation Would Face Difficult Path

WASHINGTON — Mitt Romney vowed in a campaign appearance earlier this year to “take a weed whacker” to the thicket of federal regulations adopted by the Obama administration and promised to impose a rigid freeze and cost cap on all new government rules.

China's epic traffic nightmares

China is already the world's largest market for car sales. The popularity is apparent on the streets, where traffic can be atrocious.

Leaked EU nuclear stress tests reveal hundreds of defects

BRUSSELS - Hundreds of defects have been found throughout Europe’s nuclear reactors and mostly in France, according to a EU stress test report leaked to the German and French media.

High Hotels at Greenfield Corporate Center Offer Electric Vehicle Charging Stations

Lancaster, Pa. (PRWEB) High Hotels Ltd., a Lancaster, Pa.-based operator of nationally branded hotels, has introduced electric vehicle charging stations at its properties in Greenfield Corporate Center in East Lampeter Township. Guests of the Courtyard by Marriott, at 1931 Hospitality Drive, and the Hampton Inn, at 545 Greenfield Road, can fully charge their all-electric or plug-in hybrid vehicles in two to four hours.

The sickening truth about wind farm syndrome

Hilltop turbines are being blamed for myriad maladies. What is the truth behind these outlandish claims?

Russia, Kyrgyzstan to accelerate ratification of hydropower agreements

Russia and Kyrgyzstan agreed to accelerate the ratification of agreements in the sphere of hydropower, Russian Foreign Minister Sergey Lavrov said, RIA Novosti reported.

Single mom starts bike shop for women

When she was laid off from L'Oréal in 2009 after her division was sold, she decided to take an interim job at a local cycling store.

Within no time, she says, "women began to come in just to talk to me, and to ask questions like what trails were good with kids and what bra I wore when I rode."

The experience gave her the idea to create a bike-shopping experience for women that, as she says, wasn't all about how fast you rode or what scars you'd acquired. She imagined a boutique featuring feminine décor, stylish cycling apparel, and positive messages.

Volunteers take to fields in harvest against hunger

On a sunny September morning, more than 100 volunteers gathered at John and Carolyn Marker's orchards near Winchester, Va., to pick apples that had fallen to the ground.

Ready for consumption but not suitable for the supermarket, where consumers have come to expect near-perfection, the Golden Delicious were sent to nearby food banks.

The process, called gleaning, is one of the growing trends in the struggle against hunger in America.

Even After Rains, Facing Long-Term Water Needs

SAN ANGELO — With its pretty rivers and lakes, this city of 95,000 people is sometimes called the oasis of West Texas. But San Angelo recently came within a year of running out of water, as it faced a severe drought that produced brown lawns, dying bushes and fear.

British Soil Is Battlefield Over Peat, for Bogs’ Sake

DICKLEBURGH, England — For Britain’s legion of gardeners, peat has long been as essential to gardening as beer is to the corner pub. So trowels flew after the British government — heeding environmental concerns — announced plans to gradually eliminate peat from all gardening products, setting off an intense battle over how to prioritize two of this country’s defining passions: indulging the yard and protecting the planet.

While many gardeners regard the partially decomposed plant matter known as peat as an almost magical elixir, environmentalists say using it is problematic because it is scraped off the tops of centuries-old bogs, which are vital ecosystems that also serve as natural stores of carbon, just like rain forests.

Greenhouse gases rise with GDP, slower to fall in recession

OSLO (Reuters) - Greenhouse gas emissions rise when economies expand but don't fall as quickly when recession strikes, perhaps because people stick with a higher-emitting lifestyle from the boom times, a study showed.

The report in Monday's edition of the journal Nature Climate Change dents many governments' hopes that recession can at least bring the consolation of a sharp contraction in greenhouse gas emissions.

Energy poverty is a dark killer

(gigaom.com) -- “All I maintain is that on this earth there are pestilences and there are victims, and it’s up to us, so far as possible, not to join forces with the pestilences.”

Albert Camus, The Plague

Sometimes I’m reminded just how luxurious our First World problems can be: I can’t find the cell-phone charger and my iPhone battery is drained; the power went out and now the Internet is down; and yes, I burned the rice again because I walked away from my clean-burning gas stove.

While these issues may feel important to us in economically developed nations, according to the International Energy Agency, over 1.3 billion people have no access to electricity and 2.7 billion people subsist without clean cooking facilities. Clearly, the lack of universal electrification is a dire social problem with widespread economic consequences,...

Interesting to find this via CNN/Money, albeit, buried on the second page. Here in the land of energy-spoiled 'first-world' consumers, I'm sure this issue will be viewed as just another third-world health crisis like malaria or hunger. Give it time.

I often observe poor people walking or biking along freeways or major roads, sometimes in the morning darkness when you can hardly see them until its almost too late- I know some of them will get hit. I see children all packed into small cars because the parents can't afford the gas or the price for a bigger one. I shudder when I think of what will happen if they get in an accident. Many poor cannot afford to heat homes properly and use space heaters with extension cords that can inflame. Those who cannot afford the AC bills in the summer swelter in their apartments and some with ailments die from this. Peak Oil will hit the poor the hardest in the US- our nation is too unequal and we care too little for each other. They will die silently, for the "journalists" will be focused on celebrities.

AAA reported that ... unleaded gasoline was $4.655. Saturday's average of $4.6140 was the highest since June 19, 2008, when it was $4.6096.

The June 19, 2008 price was $4.93 in 2012 dollars when adjusted for inflation.

It would be interesting to create a pain index. Since median incomes have fallen and prices have inflated on other goods besides gasoline, this current price hike cuts much harder on the 99-percenters (excepting the fact that we are already used to higher gasoline prices).

Slip slidin’ away

Median household incomes continued to slide in the U.S and more so in California. In the U.S. the income of typical households fell from $54,489 to $50,054 or by 8.1% (-$4,435) from the last economic peak of 2007 to 2011. Income in California plunged by an astonishing 13.5% (-$8,341) from its 2006 peak of $61,708 to just $53,367 in 2011; slightly above typical income in the state in 1984.

While I rarely trust price spikes and other numbers in an election year (here in the US), and considered the 2008 oil price spike to be a bit of a fluke (if not a warning), I think reality is taking it's toll. I got a strong sense from last week's presidential debate that reality was certainly taking its toll on Obama; he seemed a bit overwhelmed by the numbers he knew he couldn't talk about (and expect to get elected), while Romney was, as yet, unaffected by reality. This didn't escape Kunstler:

What a jaunty fellow Mitt came off as, compared to poor Mr. Obama, cloaked in presidential gloom, the wearisome woes of high office and all that - or perhaps just some indigestible tidbit served out of Air Force One's galley, an infected cocktail weenie, a shrimp with attitude, or an empanada with the E coli blues, who knows....

To be sure, Mr. Romney's ebullience had a crafted tang to it, like one of those pumpkin-flavored beers made for the season, especially since all that verve was employed in the service of ebullient lying, statistical confabulation, and self-contradiction. At times his sheer manic zest veered in the direction of what used to be called hebephrenia in the old clinical sense of someone euphorically out-of-touch with reality...

...To me, Mr. Romney just gave off the odor of someone who will do anything to get elected while Mr. Obama evinced the dejection of someone doubting it was worth it.

We escaped the reality of our rural fringe this weekend and went to a dog show three hours away. A couple of things: The show had a lower attendance than in past years; and there is very much of a witch hunt mentality developing amongst the middle class. Most folks are looking for someone/something to blame for their declining condition, economically; something besides the deeply systemical and essentially permanent process of limits to growth unfolding. I've noticed this a lot lately, and Leanan's link, above, The sickening truth about wind farm syndrome is a fine example; blaming wind farms for just about anything. Situational awareness is too painful for many, it seems. Best to invent something as the cause. If it can be willed into the "reality-sphere" then it can be wished/prayed/voted away. Right?


"unaffected by reality"

Good one.

Perhaps the reason is the new political myth, reinventing candidates, to the point some writers are saying that it seems Romney is trying to convert his party from "severe conservatives" into "kinder and gentler liberals."

But still, one has to wonder if some of the peak oil and other petroleum industry / pollution issues would be changed much by those reinventions.

Income in California plunged by an astonishing 13.5% (-$8,341) from its 2006 peak of $61,708 to just $53,367 in 2011; slightly above typical income in the state in 1984.

And yet, house prices in most areas seem to be rebounding, at least if you assume the numbers reported by local media are reasonably accurate. Around my neck of the woods (East Bay), a very average 1500sft older detached house in a decent heighborhood will set you back half a million and up.

Gotta love all that Fed money printing and the resulting 3% FHA mortgages! Get that housing bubble reinflated --pronto!

There is no rebound in places like Stockton, Lancaster, or Temecula. Check zillow or other pricing sites. The far suburban fringe prices went down over half and are flat since 2009.

Yes. I'm in the transition zone, on the edge of the Bay Area. Our valuations have just started to rise a bit, but are well under half of peak. So we are the best value in the Bay Area, but not nearly as depressed as the central valley. The housing price recovery was slow in moving from say Livermore, to where I live, that took several months. I doubt it will bleed over into the valley, thats too far to commute.


I've posted this guy's site here before - it's worthy of attention when talking about US housing generally and California in specific. I swear the guy must read TOD when he comes out with stuff like this:

The Future of American Housing – McMansion withdrawal, rethinking commutes, designing housing with lower incomes in mind, and the impact of a fully subsidized mortgage market.

It is still amazing how few people realize how subsidized the housing market really is. I have talked to people that walked into a too big to fail bank, received a government-backed mortgage yet assume this is somehow the “free market” at work.

What you're talking about there is what he calls Shadow Inventory. A massive backlog of foreclosed or pre-foreclosed/delinquent houses that have been held off the market and slowly leaked out to push prices up.

Managing shadow inventory – California home prices up 12 percent year-over-year while household incomes remain stagnant.

At first shadow inventory did not exist. Then it was an issue of defining what constituted shadow inventory. Now, with half a decade of action items we realize that:

-a. Suspension of mark-to-market was largely the first step in creating a massive amount of shadow inventory

-b. Deny this pool of properties exists while working behind the scenes to off load properties initially. Now banks are selling into a largely controlled system (i.e., the Fed/GSEs are the only game in town)

-c. If the market was truly functioning, why in the world would the Fed need a market intervention program like QE3?

One of the best comments I have read about housing is " our current stock of housing reflects the preferences of a previous generation" ( I wish I could remember who said that). IMO any prognosticator of the housing market who doesn't acknowledge that really doesn't understand the market at all.

Housing preferences can change for many reasons but I believe the most important are demographics and crime (demand for good schools are a functions of demographics). From a demographic perspective we have two large population cohorts- the boomers and the millenials and a bust generation sandwiched in between. The middle generation simply isn't large enough to absorb all the suburban housing (largely the stock that was built in the last 20 years) that the boomers are looking to give up. Add to that the housing preferences for the middle generation are different than their parents (my kids have absolutely no interest in moving out of the city) and you have a really dramatic shortfall in demand for our existing housing stock. However, simultaneously there is a tremendous shortfall in the supply of housing that is in demand- city apartments demanded by retiring boomers looking to downsize and be closer to the services they need, the millenials just starting out and the sandwich generation not willing to move out of the city.

Thus we will simultaneously see price declines in much of our existing housing stock and price increases and new building in the areas in demand. That will only end when suburban housing is at a sufficient price discount- which I think will be much larger than most people think. Interestingly, the research suggests that urban schools improve after populations move in rather than the other way around. If that is in fact the case then expect to see urban schools improve as suburban ones decline.

It appears that the Hedge fund plutocrats have been buying up foreclosed or underwater properties for a song (maybe "Brother can you spare a dime"! lol) and holding them off the market helped by the Fed. My sister was considering moving from Texas to Florida and had
heard from connected friends in the Tampa area that ordinary people cannot get foreclosed properties as that market has been locked up by the hedge fund wheeler dealers.

We are finally getting some push-back from other than peak oilers on Leonardo Maugeri's paper, which originally appeared in Petroleum Intelligence Weekly, proclaiming a cornucopia of oil and collapsing oil prices by 2020 and that decline rates were no greater than 2 to 3 percent. The push-back is coming from none other than Sadad al-Husseini, formerly of Aramco.

The story of plenty is yet to be realized (Requires registration but if you news.google "peak oil" you can get the article without registering.)

One example of this revisionism is a recent study by Leonardo Maugeri, the former head of strategy at Italian major Eni, which sought to assess recent increases in global oil production capacity. His conclusion: “Contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level it might outpace consumption.”...

But it is a controversial view. Writing in Petroleum Intelligence Weekly, where Mr Maugeri’s essay originally appeared, Sadad al-Husseini, a former head of exploration at Saudi Aramco, the state oil company, begged to differ. He faulted the Italian’s study for setting aside technical realities such as the difference between non-gas liquids and conventional oil. He said Mr Maugeri underestimated the rate of global oil capacity decline, citing International Energy Agency data showing decline rates of 6.7 per cent per year for oil fields that had passed their production peak – a rate it predicted would rise to 8.6 per cent by 2030.

Ron P.

That is interesting. My sense right now is that we are entering a cycle that will be supportive of Maugeri, meme-wise. We appear to be heading for a new high in all-liquids production (barely, just barely), which will embolden the cornucopian crowd to project further 2% growth in 2013. Things are getting so bad in Europe that demand collapse there is more than offsetting demand growth in China (where growth has moderated a bit this year) and India (where growth has stalled). Higher production + lower demand = lower prices. Broadly speaking, we are seeing this now with the downward move in WTI. More grist for the cornucopian mill.

Perfectly reasonable counter-arguments abound. Brent is firm at $110/bbl. The observed supply results are still noise level compared to a 2005 baseline and has had to rely on increasing unconventional supplies. Low WTI prices may stifle U.S. production growth next year.

But my bet is the next quarter or so will feature more cornucopian noise than usual. We shall see.

That sounds entirely reasonable to me.
In one respect I differ slightly, I think we'll see a significant re-alignment of the peak of all liquids, Iraq will make sure of it.

Thus far, the stagnant producers have been able to replace their own depletion somewhat successfully, helped by higher prices, technological improvements and an increased hunger for NGPLs.

We are going to see America significantly increase its domestic crude production until about mid-2014. That is also the date when Iraq really starts to take off as their infrastructure bottlenecks start to be cleared via a buildout of SPM(Single Point Mooring) terminals.

The primary phase of growth will be 2014-2017. Some of it will be offset by declining production elsewhere but not all.

Still, I believe that the oil price will continue its crawl upwards, holding growth back. A recession would help, and it is most likely on its way(after all, recessions always come) in the short term future. Growth is heading down everywhere. Global trade is stagnating or even collapsing in some areas.

But, even with all these factors in play, it's important to remember that a higher production value means a higher absolutel decline in mb/d, too. A decline rate of 5% is much harder to replace for 85 mb/d than for 75 mb/d(not that I think crude will get to those levels, but we could see 3-4 mb/d more in all liquids in the next 4-5 years).

The more you try to push production up, the sharper the eventual decline curve as depletion takes it toll.
And, after Iraq and the U.S. have done their share, who will step up? Canada and Brazil are not going to add a big number of new production up.

You grossly overestimate the future the US production and also the Iraqi Production . The US production of NGL's is constrained since the shale gas boom is going to go into a prepetual decline(see Ruke's) latest analysis .As to Iraqi production ,too many above ground factors that will inhibit the growth in production.We are running on empty but for how long ???? Your guess is as good as mine .

What is amazing about these articles is that they still stick to adjectives and "conflicting viewpoints", and will never display a very simple curve being the world crude production on a plateau since 2005 (let alone the peaked production curves of the US or North Sea on a sufficiently long time scale : that maybe could ring a few bells).
But I guess it's the essence of "journalism", you need conflicting viewpoints, and a story to tell around them ...
(as well as maintaining a mystery cloud around some "peak oil theory" that would be some hard concept being currently analyzed ..)
Or real "interests" pressure behind of course, also ..

Underestimating the dangers of peak oil and climate change

So, just because high oil prices in the past have eventually led to low oil prices does not necessarily mean they will this time. Oil is a finite resource. At some point it will never be plentiful again. Has that point come? Is that even the question we should be asking? I'll elaborate below.

Again the Christian Science Monitor proves my bias against 'christian' publications to be wrong. I can only remember decent analysis from them, at least regarding peak oil and climate change. In this case it is a gentle introduction to PO and CC, and the reason we need to prepare for these events.

The author of that piece is long time peak oiler Kurt Cobb.

When I was in college, my journalism professor told me that the least biased newspaper in the country is...Christian Science Monitor.

My stepdaughter, who wrote for CSM, and is also a human rights worker, has the same view.

A schoolteacher told us the same thing about the CSM... in 1964.

CSM is a good paper. Christian Science (the people who pray to treat disease) is complete bunk. I don't know how that happened.

My father's family are Christian Scientists and my dad used to take me to Christian Science Sunday School every Sunday. It was held in these creepy sort of catacombs under the main church. My dad told me, "Go in there and do what the other kids do." Which I did. I stood when the other kids stood, and sat when they sat, and listened when they listened, and understood not one word. To this day I cannot tell you the first thing about Christian Science.

I used to attend with my first wife. Great for catching up on my sleep. But I used to read and subscribe to CSM and considered it my best news source.

I remember using CSM alot when I debated in high school. Good foreign policy articles.

As far as reporting on anything domestically, it's mainstream like pretty much anything found in America. It should be clear to everybody that if you want honest reporting on things which are actually happening in America, you have to go to foreign sources. Nowadays I like listening to interview shows like Max Keiser and Lauren Lyster of Capital Account.

I agree, CSM is the best of the major commercial US sources. I think their charter made good journalism a priority over winning readers and advertisers by telling them what they want to hear.
I think Al Jazeera is the best, they seem to have the greatest integrity. But most Americans would consider them to be the enemy, so its hard to sell their product.

Al Jazeera is hardly the best, they have plenty of biases and agendas of their own. Most notably the interests of Saudi and Qatari kingdoms. It so happens that some issues aren't covered in their agenda or they don't care about them so it gives an appearance that they are unbiased. Happens with every new network in town. Ultimately you have to know what the biases are and sift through the chaff.

KSA broke ties with Al Jazeera early on (a prince was involved early on) and does not much care for them at all, officially. Lately, Al Jazeera has taken major heat from neighbors for covering democratic uprisings.

Qatari state money does fund the network, but it is hands-down the best international news programming. More than any other "network" they are fair to the truth, rather than creating false balance by trying to "present facts."

The significant problem in the US, very much like the pre-depression period or the WWII period, we do not have a media who can report the truth or cares to do so. Then we have at least half the population who refuses to accept any truth.

There we be no soft landing.

Qatar will not dare oppose KSA, so any question about Al-Jazeera pursuing the truth on KSA does not arise. Their coverage of the Syrian conflict is a case in point, where they are mostly toeing the line of western news channels. I also find the coverage extremely biased when it comes to Indian subcontinent, they seem to be pushing the OIC agenda when it comes to coverage of the subcontinent. If you happen to read their opinions and editorial section they are overtly activist in nature to the point that it looks like they are shouting, even though I am a liberal myself it looks like an eye sore.

If you are a CNN or a BBC listener sure it looks like a breath of fresh air but the bias is quite obvious, as I mentioned previously they have their own agenda, it's more apparent to me because I live in a country where that conflicts with 'our facts'. I like to go through different news sources for the same news item, that way individual bias becomes apparent, sometimes it means listening to fox.

Agreed on Al-Jazeera - good but they definitely have a Sunni kingdom bias. What's your opinion of Asia Times?

Edit: spelling.

I have only read a couple of articles by Pepe Escobar, from whatever I read IMO he has a different take on things which I appreciate sorta like alternative history. Beyond that I have no idea about Asia Times. I read Chomsky and Chris Hedges and Rushdie whenever I find time. I don't agree with them completely but you don't get to read what these guys have to offer elsewhere.

I'd say its good to have a wide array news sources so you can compare and contrast biases. I like Al Jazeera because they actually discuss (over)population in some programs.

That is the key - all sources of information have biases. The search for the perfect unbiased source is foolish. What happens when you find it? Would one then expect to swallow whatever that source put out unquestioningly? No, staying informed should be an active, not passive activity. It takes work and thought and consideration, and then one has the burden of forming one's own opinion, not parroting that of someone else. Most cannot be bothered, as they do not understand the value of the exercise, nor the vulnerabilities of not doing it.

I used to like them, but I so hated the popup adds (which would often crash browsers etc.), that I quit them. I suspected some amount of Chinese Communist influence, (probably stronger than the Al Jazeera Gulf mentality).

I've had the impression that the reporters at CSM (not, in general Chr. Scientists at all, IIRC) suffer from the same syndrome as reporters at the Times and NPR, which is that they seem to come from the Ivy League and Prep Schools, which has a set of middle class cultural blinders that can be very hard to see around, because you are convinced (probably like people in any cultural group) that you don't HAVE cultural filters, and you don't speak with an accent.

I was raised by Prep School wolves and carry many of the same filters.. some of which I hope I have at least noticed and named..

True. CSM is only relatively better. They make an effort, but at the same time they've absorbed a lot of the cultural memes surrounding them. A useful, but flawed resource.

This is how most swedes view them self. We actually believe we don't have cultural blinders. We are of the opinion that if you pealof all cultural layers of someone from anywhere in the world, when you are done the remaining person will think, act and be as a swede. Because we have no culture.

Not true, off course.

My Morfar came over from Linkoping, I'm a little familiar with the attitude.

At least It doesn't seem to be as domineering as the scolding tone I hear from the BBC as they do some international interviews.. (the sheer pluck of some people not to arrive at the expected conclusions!)

Give me Robert Fisk any old day!


"When it comes to international law, to moral compromise, to sheer hypocrisy, the Western powers take the biscuit. La Clinton raves on about Syrian depravity when Syrian shells slaughter a Turkish woman and her four children – which they did – but gives succour to the gunmen who torture and kill and suicide-bomb the regime's supporters inside Syria. Clinton's predecessors at the State Department took a quite different view about Northern Ireland. William Hague rabbits on about our "non-lethal" aid to Syrian rebels; but didn't the Irish authorities give "non-lethal aid" (bandages, funds, intelligence information) to our political and military enemies in Northern Ireland?"

Maybe you don't watch TV. But if you do, check out Current TV. It is not mainstream unless I am missing something. Also check out FSTV. These have a point of view which may be another way to say they are biased. But if a commentator on TV announces their bias, I don't see anything wrong with that. Also, if one is a bit discerning, one can assess accuracy over time. Just because there is bias, does not mean there is inaccuracy. The worst news networks are those who pretend they are objective or hide their biases. Fair and balanced, anyone?

Current TV is Al Gore's channel. I haven't watched it, but I suppose it to be good because they have Cenk Uygur on it. If you're interested in some serious political deconstruction check out TYT (The Young Turks) on YouTube - they have their own channel. They do some fluff pieces (which they've referred to jokingly as "side-boob") but the rest is good stuff. Also part of the TYT Network is The Point and they have good discussions, mostly social issues but recently one on Climate Change and GMOs.

Good for CSM.

The CSM has very little cultural connection to mainstream Christianity. It's a good example of why people should remember that the term can cover a very wide range of realities.

Jimmy Carter, George W Bush and Daniel Berrigan are all Christians, (and White American Men to boot) one might note.

CSM has often been a very good source of international reporting.

Scientists Adopt Tiny Island as a Warming Bellwether

During a research trip in 2000, Dr. Pfister and Dr. Wootton first began testing the pH of water samples. They found the water around Tatoosh and along nearby coastlines to be 10 times as acidic as what accepted climate change models were predicting. Even after collecting seven years of data, when they published their findings in the Proceedings of the National Academy of Sciences in 2008, their data were met with skepticism.

“People think we just don’t know how to use the instrument — I still hear that,” Dr. Pfister said. “Luckily for our reputations, I guess, this has been corroborated by a lot of other people.”

While some species may be able to adapt to new oceanic conditions, many will not.

“You can predict change,” Dr. Paine said, “and most of the changes are going to be in a direction we don’t want.”


Tatoosh Island -- Testing Nature's Limits
We Humans Tend To Keep Fishing, Logging Or Developing On The Assumption That What Didn't Break An Ecosystem Yesterday Won't Break It Tomorrow.

Zoologist Robert Paine Thinks That Confidence Is Misplaced.

One of his former students, Jennifer Ruesink of the University of British Columbia, tested natural limits by dropping hermit crabs into a Tupperware container cemented on wave-washed rocks. The crabs eat microscopic plants called diatoms, which in turn shade algae, the base of the food chain, from drying out. How many crabs could the tiny enclosure sustain? One crab was fine. So was two. And three. Then, with a fourth, the whole system broke down and everything died.

An enclosure that seemed to be able to sustain an ever-increasing population abruptly, with the addition of one too many, collapsed without warning.

But we are the wild card. We can accomplish as much disruption in a day or a year or a decade as nature might match in a century or millennium. We can disrupt entirely a coast or watershed that a natural disturbance would only nick. We can develop a taste for a handful of species and unknowingly unbalance an entire ecosystem. And finally, the system can snap.

At least that's what the hermit crabs scuttling in cemented Tupperware on Tatoosh Island would seem to be telling us.

Is anybody listening? Paine sighed.

"My definition of ecology is a 300-year-old advertising campaign by scientists that has fallen on deaf ears," he said.


...At least that's what the hermit crabs scuttling in cemented Tupperware on Tatoosh Island would seem to be telling us.

Now suppose the crabs in this story, for a while, had the ability to artificially increase the carrying capacity of their little Tupperware environment... and then they didn't.

Haw! Good one.

Better yet, even as they face sudden collapse without warning, how many of the hermit crabs would continue to insist that there is no problem? That hermit crab ingenuity always and forever overcomes limits to tupperware?

How may hermit crabs will reluctantly admit that yes, maybe there is a problem, but it can easily be solved with more and better diatoms? Perhaps genetically engineered diatoms?

How many will sneer at any talk of collapse as "doomerism" and insist with utterly oblivious sincerity that the solution to all their problems is "alternative" or "renewable" diatoms?

Isn't that a beautiful metaphor for our lovely little speck of a planet? Will future historians, should there be any, wonder if we are, after all, any smarter than hermit crabs in a little tupperware?


Who is our modern-day Jonathan Swift?

James Howard Kunstler: http://www.kunstler.com/index.php
or perhaps Hunter S Thompson or George Carlin (posthumously)

Jon Stewart or Lewis Black maybe

Humans have broken plenty of ecosystems, the ones I know best are the ocean ones. Chesapeake bay, the Grand Banks, the oyster banks of New York, etc. That's just in the US - Europe has had a much more dramatic history of destruction of their fisheries and the environments upon which their fisheries depend, which continues to today as tuna are being fished out of the Mediterranean.

There is a lot of resilience in nature, but there is no guarantee that what you get when you let it come back will be the same as you had before, or that anything much will come back within any reasonable time frame. And ultimately, any hope for saving things rest on leaving them alone. The Amazon rainforest partly exists on the remains of what was once cleared agricultural land that natives lived in - but then, I doubt that even a large society at that time had the impact of what we can do in a couple years, such as the Mega Rice Project that destroyed the peat forests of Borneo and led to massive fires. Plus the world population was much smaller.

Right now, with global warming and ocean acidification added to the mix, everything much worse. With the other human pressures on top of that - fishing in the ocean, development on land, pollution everywhere - it makes things very hard. Perhaps we could hope for adaptation, if we were starting with healthy ecosystems in the first place, but we're starting with severely degraded ecosystems. What will come out of all this is going to be radically different than what we started with.

I recently learned that a declining atmospheric CO2 concentration from about 10000 years ago was halted about 8000 years ago, and a declining methane rate was halted about 5000 years ago. It is speculated that the first was caused by the cutting of forests to make way for agriculture and the second the increased cultivation of paddy. This was the first time I had heard of human activity other than the last 200 years affecting the atmosphere.

Source: Waking the Giant by Bill McGuire

I guess one could speculate that absent those influences the Holocene might have been considerably colder than it turned out to be. If human activity could influence the climate then it surely can do so now. The question is whether a much warmer planet is a bad thing- after all the Paleocene_Eocene thermal Maximum did generate a huge explosion in different life forms. Palm trees in Siberia maybe not a such a bad thing? Clearly for the current life style of Homo Sapiens not so good. It is what makes US opposition to fighting climate change so inexplicable- if you are already king of the heap why would you want to shake things up?

There is also a potential US could be turned into a desert country, it is just a little bit further north than Sahara.

On the other hand, the Sahara, Arabian penninsula and southern Iran/Pakistan were a grassland until about 75,000 years ago when the climate became colder.

You've all heard the story about when Paul Bunion was applying for a lumberjack job in Minnesota and was asked where he worked previously and he replied "the Sahara forest". the boss said " but that's a desert" Paul replied "it is now"


By burning wood, humans have been significant contributors to greenhouse gas emissions as far back as the Roman Empire, researchers say.

Some of the commentary in the article sounds a little strange:

In their Oct. 3 study detailed in the journal Nature, the researchers found that methane production was high around 100 B.C., during the heyday of the Roman Empire, and waned around A.D. 200 as the empire faltered. The methane was released when Romans burned down forest to clear land for crops and expanding settlements, Sapart said.

This time period also coincided with the peak of China's Han dynasty, which burned large amounts of wood to forge swords. Once the dynasty collapsed around A.D. 200, atmospheric methane levels dropped.

Methane production also spiked during Europe’s mini-ice age, around 1400, as people burned wood to stay toasty inside, she said. Across the time period the researchers studied, human activities such as growing food or keeping warm were responsible for 20 percent to 30 percent of the methane released from burning organic matter. Of course, the historical methane emissions were still small in comparison with modern levels.

Yeah, it does sound like a bit of odd equivocating on our current impact, considering our species pop in AD 200 was supposed to be around 190 million, and in 100 BC, another 30 or 40 million less than that.., or about 3% of our numbers today (?),and that without the obscene volumes of energy produced per capita today on top of it all..

This is not news to the climate folks, although it probably is step towards better pinning things down. We are talking about rather minor climate drivers here, a few ppm of CO2, and some increase in Methane. These matter, but are much smaller than current rates. It took these civilizations three centuries to have the purported effect.

The conjecture that methane emissions from rice growing may have prevented the next ice age from starting a couple of thousand years ago also made the rounds a few years back. I don't hear it much anymore, so perhaps its been largely refuted.

I was struck by the claim that they could see the effect of the wood burned by the Han dynasty Chinese to forge swords. They did include a "hockey stick" chart, making it obvious how small the pre-1800 effect was compared to now.

Just a tad OT, but as an undergrad at UW-Seattle I took Bob Paine's invertebrate zoo class. We camped out on weekends at various intertidal sites and sampled the local fauna, both scientifically and gastronomically. It was my most favorite class of all! He is a great teacher.

Never met Bob Paine, but I took an invert zoo class which had a week long field trip to UW's Friday Harbor Lab in the early 70's. Excellent immersion for a landlocked student, excellent student experimental facilities at the time.

I was just up at FHL; the facilities (and people) are still wonderful, though budget cuts have only just started to bite significantly in the last 2-3 years. I've probably lived there at least a year's worth of time since 2005. I often wonder how they will weather the coming decades.

Oil boom brings hope, anxiety to Alaska town
Shell's drilling operations in the Chukchi Sea promise an economic boom in Wainwright, Alaska. But some see the transformation as a threat to the ancient indigenous culture there.


Is this a joke, or do they realy have a "National Petroleum Reserve"?

Yup. Wiki has a good article about it. Interesting to note

An assessment by the United States Geological Survey (USGS) in 2010 estimated that the amount of oil yet to be discovered in the NPRA is only one-tenth of what was believed to be there in the previous assessment, completed in 2002.[2]

Full item: http://en.wikipedia.org/wiki/National_Petroleum_Reserve%E2%80%93Alaska


JW - Yep: The National Petroleum Reserve in Alaska(NPR-A) is an area of land on the Alaska North Slope owned by the United States federal government and managed by the Department of the Interior, Bureau of Land Management (BLM). It lies to the west of the Arctic National Wildlife Refuge, which as a U.S. Fish and Wildlife Service managed National Wildlife Refuge, is also federal land. At a size of 23.5 million acres (95,000 km²), the NPR-A has been described as "the largest tract of undisturbed public land in the United States" (the Arctic National Wildlife Refuge is 19 million acres (77,000 km²).

Yeah, I have to embarrassingly admit that I had never heard of the "National Petroleum Reserve" either.

What a ridiculous name. It is confusingly similar to the "Strategic Petroleum Reserve". Is it supposed to be a natural version of the Strategic Petroleum Reserve? Is it supposed to be a place where Petroleum and run free and not be chased down by hunters? ;-)

spec - You might want to catch up on some of the dirty history. You think that name is ridiculous how about the "U.S. Naval Petroleum Reserve"...in Wyoming. LOL.

"...an unprecedented secret arrangement in which the secretary of the Interior, without competitive bidding, had leased the U.S. naval petroleum reserve at Wyoming's Teapot Dome to a private oil company."

And then there's the Elk Hills Naval Petroleum Reserve in California's San Joaquin Basin. The EHNPR was created in 1912 by President Taft to assure a supply of oil for the Navy in the event of war or a national emergency. Production was started in 1976 by Carter in response to the Arab Oil Embargo of 1973-1974. Under the Clinton Administration, this reserve was sold to Occidental Petroleum Corporation, the largest divestiture of federal property in the history of the U.S. The Elk Hills NPR was located west of Bakersfield, California. A part of Bill's legacy you don't hear much about. Wanna guess what Elk Hills is worth now compared to what they govt got for back when oil was selling dirt cheap?

Elk Hills is one of the most productive oil fields in the country, and for 86 years it was owned by the federal government. In 1998 (when oil was selling for $13/bbl) it was sold to Occidental Petroleum for $3.65 billion, the largest federal divestiture in American history. The National Petroleum Reserve was established in 1912 as a backup source of crude oil for the federal government, originally for the Navy (it is often still referred to as the Naval Petroleum Reserve). Four sites in the country comprised the Naval Petroleum Reserve: Naval Petroleum Reserve No. 2 is adjacent to Elk Hills, and encompasses another major oil field, the 30,000 acre Buena Vista field; No. 3 is near Casper, Wyoming, and No. 4 is in Alaska, and is shut down. The Reserve gained notoriety for the Teapot Dome scandal of the 1920's, which involved Elk Hills, but primarily the Teapot Dome reserve in Wyoming. Before being sold to Occidental, Elk Hills was owned by the Department of Energy, and had been selling its crude oil on the commercial market since 1977. In addition to producing over 1 billion barrels of oil since 1912, Elk Hills is the largest producer of natural gas and natural gas liquids in California, and is the 11th largest oil field in the United States. Elk Hills is a 47,000 acre (75 square mile) field with over 1,000 individual oil pumping units, three power plants, and a co-generation facility.

I'll do the math for you: oil today is selling for more than 700% greater than when the govt sold Elk Hills. With all the political/energy news today it's interesting the MSM has never put these little facts out to the public, eh? The govt sold the 11th largest oil field in the United States when oil prices were in the toilet and no one is talking about it since oil hit $147/bbl. Hmm....

I never brought it up since I assumed folks knew. Having down my grad this is on one of the other fields in the area it was just old news to me.

Thanks for this delicious tidbit Rockman. I knew Clinton was corrupt since he deregulated the banks, but this is a good one! Sarconal off
Damn, as hard as I try, it's impossible to be cynical enough!

Paleo – From


“President Clinton last week issued a presidential decree locking away nearly two million acres of Utah land as a "national monument…he created the "Grand Staircase-Escalante National Monument" in southern Utah. At 1.7 million acres, it is the largest national monument in the lower 48 states, and neither Congress nor the citizens or government of Utah had a say in the matter…It is the largest unmined coal reserve in the country”

The common critism was that the president did this to help his re-election efforts. I did read just one story that had an even nastier spin: this move increased the value of a powerful Indonisian family’s coal reserves by $billions. An Indonisian family who were good friends with the Clnton family that had on occasion stayed at the home of that family. To be fair and balanced the Bush baby also supported the move. I guess he had friends that owned coal mines.

"Production was started in 1976 by Carter in response to the Arab Oil Embargo of 1973-1974."

Would not like to sound like a broken record, but the "Arab embargo", in terms of the oil market, in terms of barrels taken out of the market and especially towards the US, was a COMPLETE NON EVENT. linking the first oil shock to this is simply a myth, or a practical label chosen if you prefer.

Plus tankers kept on going from KSA to the US throughout the embargo (through Barhrain to make it more discrete).
Really some information that could be known a bit more for people interested in oil and peak oil.

Check James Akins interview below at 24:10 (unfortunately dubbed) :

Basically :
Some senators started to have serious voices about the embargo
I asked the permission to tell them what was going on, nobody had to know the Saudis were breaking the embargo
I told them, they shat up, there was never any leak.

And looking at below, such an import spike is quite strange for a period called "the oil embargo", no ?

The first oil shock was simply the direct consequence of 1971 US production peak (first producer of the time by far), price rise and even shortages (in the US) started from there, and if it had been called this way, maybe things would be a bit different.

Even Maugeri see it this way by the way :

From :

Y - True and I was tempted to change that sentence but I try not to edit quotes I pull off the net even if I don’t supply the reference. One aspect of that event that keeps the misconception alive is the memories of all that gasoline being hoarded by folks and hidden by the oil companies. I still have vivid memories on H. Rivera flying along the CA coating looking for tankers cruising in circles waiting for prices to rise. Long after those foolish stories and embargo hype ended the huge volume of gasoline that disappeared almost overnight was discovered: it was hidden in the fuel tanks of almost every American vehicle. Instead of filling up when gas tanks got low many began filling up as they approach half a tank…or more. When they estimated this volume it matched the hundreds of millions of gallons that “disappeared”. Once the refineries replaced their inventory (which didn’t take too long since there wasn’t an embargo) the lines at the gas stations disappeared. But the hype still reinforced the embargo meme.

The same thing happens when a hurricane threatens. Everyone rushes to fill their tanks, worrying that power may be off for days after the storm, or about having enough fuel to get out of the storm's path, lines form at the pumps, and stations start running out.

Rock, ah yes didn't see it was a quote, sorry.

But if there is one thing that delayed the understanding of the situation, it is really this embargo meme, bringing with it "the first oil shock (as a price transition) was political and not due to physical constraints", and the overall ignorance of the US 1971 peak...

I remember the Oil Embargo days, indeed, I worked at a San Francisco gas station then, and to say that it was a non-event doesn’t match the reality. The gas lines, the price increasing from the long time 25-35 cents a gallon level to a post-embargo level of 79-89 cents a gallon.

I will agree that the US peak in 1970 (not 1971) made the embargo as successful as it was. An embargo was attempted at the time of the June, 1967 Arab-Israeli war, and it flopped. It flopped primarily due to the fact that the US had not yet peaked, and was able to amp up production sufficiently to blunt the effects of that short-lived embargo.

The 1970 peak was certainly critical to the embargo’s success, but to say that the embargo simply had no effect is absurd.

Antoinetta III

I'm not saying that the first oil shock (as defined as the barrel price rising quickly to a new plateau, and staying there up to the second 79 schock) is a myth, of course.

The point is that the so called "embargo"(lasted 3 months, not even effective from KSA to the US, only towards a few countries, very limited in number of barrels retained), is an almost complete non event with respect to the first oil shock or oil market, that is all.

The first oil shock was : production of the then first world producer BY FAR reaching its peak in a fast growing world market, don't you think this is a major market event ?
(and in the background OPEC countries moving out of the seven sisters era, that is willing to get a higher share of each barrel extracted from their soil)

But the "embargo" has been chosen as a name for the first oil shock.

In other words this name choice can be defined as a group lie, a myth, or the biggest PR lie around XXth century oil history.

And don't forget that 1971 is also :
- dropping of Bretton-Woods, move to the fiat $, ensuing devaluation of the dollar (that is lost revenues for oil exporters, added pressure on barrel price rise), and this before the "embargo", again ...

Besides, a higher barrel price is always good for oil majors, further to US peak a price rise was REQUIRED to start more expensive plays, and the price rise was effectively *pushed* by US diplomacy.

y - In an odd sense one could say the US had endured an oil embargo for much of the 25 years prior to the "Arab embargo" of the late 70's. Consider the definition: An embargo is the partial or complete prohibition of commerce and trade with a particular country. During the 50's and 60's that's exactly what was happening to American consumers: a very power force was restricting the amount of oil that was being shipped to US refineries. As the definition puts it we we're subject to a partial prohibition. This "cartel" of one essentially determined the global price of oil by allocating, on a monthly basis, how much oil was shipped to American consumers.

And who was this evil force that had such a death grip on oil resources for those 20+ years? The Texas Rail Road Commission. This "allowable regulation", which is still in effect today, set the percentage of oil every well in Texas could produce for the next 30 days. IOW if the combined production rate of all oil wells in Texas was 6 million bopd and the TRRC set the allowable at 50%, operators could only sell 3 million bopd for that month. In effect the TRRC "embargo'd" 3 million bopd from US consumers. And they weren't shy about the motive: the reg clearly stated it existed in order to maintain high oil prices by limiting the amount that could reach the market place.

Years before the "Arab embargo" the TRRC essentially recognized the coming US PO and began setting the monthly allowable at 100% where it has sat since that time. And yes: even today every month the TRRC commissioners (elected positions) vote on the allowable. Difficult to imagine the circumstance but next month the TRRC could set the allowable at 50% and the country would lose half of the state's oil production overnight. Obviously the feds would be all over such a move like a duck on a June bug. But it is the law of the land and had never been challenged by the fed govt.

So yes: for a very long period the US consumers suffered a partial embargo of oil dictated by a powerful cartel fully supported by its political masters: the Texas state senate. And some folks wonder where the phrase "Don't Mess With Texas" came from.

R. Thanks a lot for the info, heard of it before but never had it better explained for sure.
Somehow you could also say that Texas through the TRRC was exherting a tax on other states.

Made me think of when did the US became a net importer ? The EIA doesn't go far back enough but from below :
"The United States has been concerned about dependence on foreign oil since it became a net oil
importer in the late 1940s."
(and before the US had been a major exporter, the first I think in between the two world wars, with 70% of world output in 1925 for instance, would be interesting to have more precise figures from these times).

But so, as the US was already a net importer in the 1950 1970 period, did the TRRC also had some power on the volume of oil imported ? Was there import tarrifs at that time ?

Also you could compare the role the TRRC had, and the one OPEC today has (through the quotas) or is trying to have (and maybe they took the idea from the TRRC ?). And most probably the quota rule is today almost completely meaningless (and not sure when it was meaningful, especially during wars between members such as Iran/Iraq in the 80ies), corresponding to the monthly allowable at 100% from the TRRC before US peak...

Y - I recall westexas noting the US became a net importer around 1950. I've not heard one way or the other if we had tariffs at that time. I doubt the TRRC had any control on import volumes other than indirectly controlling the market price. The allowable rule is effectively meaningless today because it has been set at 100% for decades now. But it wasn't 60 years ago. Texas essentially set the global price for oil at that time.

OTOH it's difficult to imagine the exact scenario for the TRRC to decrease the allowable in the future. But many decades ago when NG supplies got tite, Texas got into a bit of a pissing match with the feds over limiting NG shipments out of Texas towards northern consumers. Some blustering Texas politicians talked of sending the state guard out to shut down pipelines exporting NG out of the state. Some Texas some companies had to shut down for lack of NG. If you didn't catch it at the time this was when the bumper sticker "Let the Yankees Freeze in the Dark" became popular in Texas. And yes...they were serious.

The allowable reg doesn't address the distribution of oil/NG AFAIK. But the state does own an amount of oil/NG royalties from our public lands. There is the possibility the state could require these payments as well as the state production tax to be paid in kind instead of a cash payment. In that situation the state could directly own 5% to 10% of all the oil/NG produced in the state. They could thus require any refiner/marketer to sell products and NG only to Texas consumers. I doubt the feds could do anything about such a situation. OTOH reducing the allowable would certainly bring in the prospect of interference with interstate commerce complaints by the feds.

Yes, the embargo triggered the gas shortage. I do remember, though, realizing (and telling some people) that the cost of energy was going up, which would eventually cut into our living standards. I also remember a co-worker expounding a theory that the rate of extraction of petroleum had only passed the rate at which petroleum was being created in the previous decade (the 1960s). I guess that was a form of "peak oil". Without any expertise in geology, I still felt that was a bit optimistic on the formation rate for petroleum.

No, it is more (as Rockman explains) : "the idea of the embargo" triggered a gas hoarding movement leading to perceived gas shortage (and actual ones at some pumps).
But in terms of number of barrels available to the US their was never any shortage.
What there was was a barrel price going up, yes.

What a ridiculous name. It is confusingly similar to the "Strategic Petroleum Reserve". Is it supposed to be a natural version of the Strategic Petroleum Reserve? Is it supposed to be a place where Petroleum and run free and not be chased down by hunters? ;-)

The name results from the history of the place. Is it any more ridiculous that an agency called "The Rairoad Commission of Texas" actually regulates oil and gas, pipelines, coal and uranium mining? But has nothing to do with railroads anymore?

The National Petroleum Reserve Alaska was originally set aside in 1923 by President Harding as the "Naval Petroleum Reserve 4". This followed the setting aside of NPR 1, 2, and 3, by President Taft. At the time the US Navy was converting from coal to oil, and there was concern about availability of sufficient fuel for the battlships. Early explorers on the Alaskan coast had noted oil seeps at Simpson Lagoon, which had long been used by the Inupiat people.

During WW2 the Navy decided to determine if there was, in fact, enough oil in NPR-4 to develop if needed for the war effort. Working under the Navy, the USGS conducted an exploration program from 1944 to 1953. Among other things, they discovered Umiat Oil Field, which is still undeveloped (though currently being evaluated by Linc). In 1976 the NPR-4 was transferred from the Navy to the BLM and renamed "National Petroleum Reserve Alaska". A second exploration phase was conducted from 1975-1983 by the USGS and Husky (as a contractor).

Subsequently there has been leasing by BLM and drilling by industry. The current BLM leasing plan is quite controversial. Much of the most prospective area (near the coast and around Teshekpuk Lake) has been placed off limits to leasing due to environmental concerns. A further question regards whether Shell would be permitted to build a pipeline across NPRA, should their exploration in the Chukchi prove successful.

California Gasoline Price Superspike Deflates

According to the latest quotes from 'Bloomberg' for standard California gasoline (85.5 Octane CARBOB), wholesale prices in California are now only about 40 cents/gallon higher than the NY futures price for gasoline - as compared to about 80 cents last Friday, and at one point last week, $1.40 more than NY prices.

Also, major gasoline distributors are not reporting that they are allocating supplies, although it is not clear if all distributors have enough supply yet to fully meet demand. Moves by California's government to allow the early use of 'winter grade' gasoline appears to have resolved the gasoline shortage problem, at least for now.

... use of 'winter grade' gasoline appears to have resolved the gasoline shortage problem, at least for now.

Charles, it is good to hear that the worst is likely behind them.

Yes. Also in the Northeast, a shortage may have only been avoided by an earlier change to 'winter blend' than in California, which started shipping a few weeks ago for sale starting around October 1 in some NE states.

California Gasoline Premium Sinks After Brown Relaxes Fuel Rules

October 8, 2012, 12:50 p.m. ET
California Moves to Ease Pump Prices

California wholesale, or spot, gasoline prices were $3.35 a gallon in Los Angeles, down 12% from last Friday's $3.805 and down 18% from the recent peak of $4.095 last Thursday. Prices have soared over the past few weeks amid a series of refinery disruptions across the region.

Winter blend greatly improves the prospects of importing gasoline supplies from outside the state, Mr. Young said. Refiners elsewhere are freed from the environmentally stringent rules for California gasoline during the summer.

"We estimate this will result in an increase of up to 10% in fuel supplies in California," Mr. Young added.


It's a General Motors conspiracy!!

Just kidding. But seriously - has anyone seen a better advertisement for the Chevy Volt or Nissan Leaf than this snafu in California? The water-cooler conversations complaining about gas prices and availability must go silent when the plug-in or electric owner shows up.

"I had to wait 4 hours for gas and it was 5 bucks when I finally got some."

"What? Is there something going on? I haven't gotten gas for two months..."

I did that! I have a Volt and hadn't purchased any gas in a few weeks. I finally heard the chatter about exploding gas prices and realized I was "out of the loop". It's funny - once gas-purchasing isn't a big concern, you stop noticing the posted gas prices at every gas station you pass. I did end up getting some $5 gas Monday - 4 gallons - to top off the tank before leaving for a long business trip which would not have recharging options. $20 to fill the tank...ouch!;)

"What? Is there something going on? I haven't gotten gas for two months..."

Works for telecommuters, too ; )

Except when this telecommuter went out for some errands and had to get a few gallons. I wished I'd simply filled up the last time - would have been worthwhile.

It's not over - California Superspike reinflated some today, by about 20 cents/gallon vs futures:

California Gasoline Premium Jumps After Exxon Plans Flaring
By Aaron Clark - Oct 9, 2012 3:57 PM ET

California gasoline premiums surged as a result of the outage and after a fire that knocked out a crude-processing unit at Chevron Corp. (CVX)’s plant in Richmond, near San Francisco, in August. The shutdown of a Chevron pipeline that delivers crude to Northern California because of contamination also reduced supplies.

The premium for California-blend gasoline in Los Angeles versus futures on the New York Mercantile Exchange surged 22.5 cents to 57.5 cents a gallon at 1:43 p.m. in New York, according to data compiled by Bloomberg. The same fuel in San Francisco jumped 22.5 cents to 49.5 cents above futures.


Ouch! This is going to hurt: Chevron refinery unit to remain closed, matches worst-case forecasts for outage

Chevron's Richmond refinery CDU shut for rest of year
Tue Oct 9, 2012 6:28pm EDT

HOUSTON, Oct 9 (Reuters) - Chevron Corp said on Tuesday the central crude oil refining unit at its 245,000 barrel-per-day (bpd) Richmond, California, refinery would remain shut for the rest of the year.

The announcement of a shutdown lasting about five months confirms worst-case scenario forecasts for the outage, which sources familiar with operations at the refinery and industry analysts had said would extend between three and six months from the Aug. 6 fire which shut the CDU.



Oil sands crude will face obstacles in California

California passed rules discouraging the state’s refiners from processing types of crude that release more carbon when produced and delivered, such as output from Canada’s oil sands.
The regulation will raise the costs of refining in California and eventually boost retail gasoline and diesel prices, David Hackett, president of energy consultant Stillwater Associates said in a telephone interview. “After Alaska, you’d rather get the rest from Canada next door than from Saudi Arabia halfway around the world but these rules make it so you can’t use that dirty Canadian stuff.”
And now Californian people complain because they cannot have both ways: Cleaner energy and a lower price.

Not a problem. We'll just refine dirty Canadian crude here in the Pacific Northwest and ship it to California.

Ghana’s Gold Sparks Conflict With Illegal Chinese Miners


We know the chinese are very focused on fouling their own nest, now here they are to wreck the place in Ghana(though US companies still seem to dominate).

"Only when the last tree has died and the last river been poisoned and the last fish been caught will we realize we cannot eat money." ~ Cree Indian Proverb

That's the downside of money, it also makes extracting and accumulating wealth easier, benefiting the few. Well organised centralised systems controlling the money can ravage the planet. It's a bit like fracking, the money is used to fracture the existing economic/social system that controls the resource and frees it up for extraction. The benefits flow to the Centre and the fractured economic, social and ecosystems are left to the impoverished inhabitants.

It is hard to see how anyone can escape the money trap. Human desires and wants make them easy prey to trap and once trapped there is no escape. Using a local currency with strict social adherence to curb unfettered desires may help, but difficult to achieve. Few if any social structures have managed to keep the insidious financial system in check and are quickly broken apart by it.

What you say strikes me as just crazy crazy crazy. And yet if I look around, that seems to be exactly whats happening.

Burgundy - Outstanding! "It's a bit like fracking, the money is used to fracture the existing economic/social system that controls the resource and frees it up for extraction." I had not thought of it in this way but some good analogies. Most of the shale frac'ng is done by companies using borrowed monies. Much of the banking system relies on borrowed/created monies. And like a shale well there can be a big immediate payback. But like many of the shale wells the rush disappears quickly and replaced by the demand to do it again. And although both efforts produce some short term advantages it requires continual repetition. Repetition that can become difficult if not impossible to maintain. And just like musical chairs you don't want to be the last one standing when the ultimate bill comes due. Huge profits to be made if you know when to cut and run. Just as Petrohawk did when they sold their undrilled Eagle Ford Shale acreage for $12 billion. perhaps that what we should be looking for: signs the big players are in the process of bailing out.

The story above about people stealing gas from a gas station illustrates why Peak Oil will hit the US so much harder than other nations.

1. We have an infrastructure that makes auto dependency unavoidable
2. We have a money making mindset that drives high levels of theft and crime compared to other industrialized nations

Americans will not only be going thrugh Peak Oil but a massive crime spree- valuable resources will be diverted to locking up and securing gas in stations, trucks, cars, generators. Expensive repairs will be had as thieves go to more destructive measures to get around this security by doing things such as drilling through gas tanks, etc. There is an invisible tax in the US on all our purchases- the security tax- and it will rise every year.

I fear that if copper gets much more expensive, the transmission grid and wind turbines will be next.

Note that most large transmission lines are Aluminum not copper.

True. Its more like wiring and plumbing in buildings that are at risk. But things like WT and PV farms tend to have a lot of the stuff, and being spread out over a large area makes them tougher to protect. Are most power transformers winding copper?

I quite literally watched three aluminized Mylar balloons turn half of a small city dark for a half-hour one day. There was a festival going on and someone lost some helium balloons which got caught in the lines and one by one they would flap around until they bridged one of the phases and LIGHTNING BOLT ::darkness:: as soon as the power tried to come back on the next one would hit. A friend back in high school knocked out the power to the town for a few hours when she plowed down a pole with her car.

The electrical distribution system is so fragile...worse than thieves would be some nut-job purposely looking to eff things up. The day is probably coming when a group decides to "protest" or just has malicious intent and sets out to ground-out a line or takes a chainsaw to a bunch of poles.

Having a stable society is a key ingredient to most modern infrastructure.

Having a stable society is a key ingredient to most modern infrastructure

Tell me about it. I can't put solar panels on the roof for fear of theft. They even cut the fuel pipes on motorcycles. I'd give away the fuel for free if they promise to spare me the agony of replacing the nozzle every time. Anything that isn't bolted down is stolen. A year back some thief tried to steal a $1 plastic tap from the kitchen (on the 2nd floor), the entire house was flooded. I can't imagine the acrobatics he did just to steal a $1 tap.

Poverty is a great motivator.

I quite literally watched three aluminized Mylar balloons turn half of a small city dark for a half-hour one day.

A friend of mine grew up on a farm in a western state, and told me once about how he found out about the fragility of the electrical distribution system.

When he was about fifteen, he and his brother were playing with a makeshift "frisbee", a hoop made from fencing wire, when they were supposed to be checking on some cattle, just as the sun set in the west. In the shadowed valley below, the town started to light up as the street lights came on, and people moved indoors and turned on their lights. A high voltage power line crossed the farm.

The hoop of wire went back and forth between the two boys, higher and higher. Suddenly, it was as if lightning had struck the power lines above them, and the town instantly went dark. They walked back to the darkened farmhouse, agreeing without saying a word that they would not mention what happened.

Edit: corrected spelling.

In the late 1950s southern Florida was hit by a blackout, from below Miami up to, IIRC, West Palm Beach. Power was out for several hours. It was later determined that an insulator on a high voltage line had been damaged by a bullet. Nothing happened when the insulator was hit, but during later maintenance work the voltage was increased on the line the damaged insulator was attached to, and it shorted.

Are most power transformers winding copper?

enemy of state, yes, most power transformers have copper windings. Some transformers may have aluminum windings but that is not as common.


For wiring 1st we used silver, now copper, next aluminum, as costs/scarcity rise....

And I remember people cutting down light poles with chain saws along I-95 in south Florida to "harvest" the aluminum.

Don't make a difference. One of our local ratacobres came to a toasty end trying to steal some aluminium thinking it was copper.


One of ours (Scotland) took out a large chunk of communication in the NW Highlands thinking optical fibre was copper. No big bang of course, but "cash was king" for a while in all the shops. There again, we are getting UK widespread if occasional lock-outs from bank accounts on seemingly a regular basis these days. And thats the heavy-handedness of the banks' software. Makes a bigger difference even than a chainsaw through an optical cable.

Not a commonly known term, "ratacobres", even on Google.mx. You used it in in May, too: Copper rats (probably not "brass rat"). Is Spanish agglutinative (!) in this way?

Yeah, we call thieves 'ratas', rats, two legged rats. Saw a bunch of women chasing down and cornering a guy while screaming 'rata, rata!'. Mind you, you sometimes have to be careful to make it clear when talking about 4 legged rats. It may be local but we do tend to stick two words together like that.


I need some help. I keep hearing about these billion dollar subsidies that the BIG oil companies are getting, and would like to know exactly what they are for. I've heard that they are not necessarily specific to oil companies but large businesses in general, but again I just don't know.

If this has been covered before (and I can't see how it hasn't) I apologize for my ignorance, please just send me a link.


Here you go Aggie. First I suppose it’s how you define subsidy. The govt giving money to a company is certainly a subsidy. In 37 years I’ve never worked for a single oil company that was given a check from the govt. But is not collecting as much taxes from a company via various write offs an industry subsidy? I don’t have a particular problem with that definition. But that also means $trillions of subsidies are given to all industries in this country. And then their the $trillions in subsidies given to individual tax payers such as mortgage interest deductions.

Personally I’ve never used a tax write off that I didn’t think was fair. Unlike most of the write offs I’ve seen other take. LOL

The supposed huge oil subsidies are business deductions allowed to all companies.

The only special subsidies I remember are Carbon Capture and Storage research related for coal.

Small producers (less than 1000 barrels of oil per day total company production) have the option to use a unique "percentage depletion" accounting for tax relief, in some scenarios (particularly with high priced oil) will actually let them deduct from taxes more than their original capital cost. But only allowed if total production <1000 bopd.

But the vast majority of what the politicians quote as oil subsidies are standard deductions available to all companies. (Allowed to depreciate capital investments, plus U.S. manufacturing tax allowance which lowers effective tax rate to 33% instead of 35%).

Politicans don't count the roads/infrastructure or military as a subsidy of course.

Thank you all for replying

I did some checking because I still wanted to know more. Come to find out the largest so called subsidy - incorrect terminology as the US Treasury gives no money to oil companies - is: #1 the strategic petroleum reserve, #2 fuel subsidies (there's that word again) for agriculture, #3 heating oil assistance for low income families, and #4 IRS code 199 which has something to do with retaining manufacturing jobs for ALL businesses in the US. There are others but this is the vast majority of the 4 billion I hear the politicians yammering about. Sure surprised me.


The DOE sponsors, by paying for part of, the cost of 'demonstration projects'. The projects are suppose to demonstrate new and innovative technology. The requirements are not ridgid, anything the operator can convince the DOE of can be approved.

That qualifies, in my opinion, as corporate welfare.....um........er ....... subsidies, i meant subsidies,...... i meant subsidies.

In the big picture these DOE demonstration projects don't amount to much.

Now Halliburton in Iraq, that is a different story altogether.

A headline you won't see (but probably should): "High Gas Prices Help San Francisco Avoid Total Gridlock during 'Eventageddon'."

This last weekend San Francisco expected a million extra people to show up in it's 49 square miles because an insane number of events were all scheduled during the same 72 hour period: the Hardly Strictly Bluegrass Festival, Fleet Week (Blue Angels airshow), America's cup races, two Giants' playoff games, a 49er's game, the Castro Street Fair and the Italian Heritage parade.(Plus in the Bay Area both Stanford and Cal had home football games. Plus the weather was lovely.)

All these events ended up jam-packed with people, but thankfully gridlock did not occur. BART added extra and longer trains and had its greatest single day ridership ever on Saturday (319,484); in fact, it skyrocketed through its prior record day by 11%.(Sunday's ridership levels have not yet been announced.) Muni--San Francisco's bus and light rail system--add extra buses and had all sorts of drivers working overtime. It estimates it carried half a million people each weekend day (it generally carries 375,000 on weekend days). The number of ferries from East Bay to San Francisco were tripled. Parts of the Embarcadero were closed down to provide bike and foot traffic only. The Hardly Strictly Bluegrass Festival had bike parking for over 3000 bikes that was extremely well-used. People even took Amtrak to see the Fleet Week airshow from as far away as Fresno (to Emeryville, and then an Amtrak bus over the Bay Bridge.)

Caltrain, however, added no extra or longer trains except the couple they usually run for Giants' games, and the report is people were packed on like sardines and many passengers had to stand for a large portion of their trip. (This is unfortunate because Caltrain is normally quite pleasant to ride, and if people's first experience with public transit is negative, it may be a long time before they return.)

I'm sure all the media hype around "eventageddon" helped persuade people not to drive to the city, but a desire not to refill one's gas tank while prices are so high no doubt helped. I know we biked pretty much everywhere we went this last weekend. It goes to show large numbers of people will take mass transit (and bike and walk) when highly motivated.


Part 2 of Michael Filloon articles about Likvern's Red Queen North Dakota Bakken Plateauing

The Red Queen article stated an oil price of $80-$90/barrel was needed for Bakken wells to make commercial sense. Using an $80/barrel oil price we see that the majority of middle Bakken wells produce enough revenue to pay back costs in the first year of production. The author also made the mistake of not including natural gas, as he stated the potential contribution is marginal at $3 per Mcf. It is obvious the author is not familiar with Bakken production as wells in NE McKenzie County can produce up to 11% NGLs. Using a $40 per barrel price, in the first year revenues from NGLs are over $730,000. The author made another mistake in using what he believes to be the average Bakken well production for the first twelve months. I believe he found these average wells using old well information. Using current EURs, we see that average production numbers are far higher than those used in his research. Mr. Likvern also believes that Bakken well productivity is decreasing, and stated from 2010 to 2011 this has decreased by 25%. This could be from increased development of the upper Three Forks. This pay zone is less productive than the middle Bakken in the 20% to 25% range. Also, less productive areas are being drilled to get acreage held by production.

Mr. Likvern's conclusions are incorrect. Well costs are improving in the Bakken, and will continue to do so through 2012. Pad drilling, sliding sleeves, shorter drill times, and other efficiencies have all helped. Initial production rates and EURs are also increasing. More frac stages, water, proppant and better completions continue to push these numbers higher. This should continue going forward as oil producers are beginning pad drilling programs, and are able to increase production with fewer rigs while utilizing zipper fracs to decrease completion times.

I had added some information about zipper fracs and real-time microseismic fracture mapping

There is also an EIA forecast to Jan 2014.

EIA is forecasting Texas to have almost 2.5 million bbl/d by January, 2014.

The Bakken tight oil formation has accounted for nearly all of the new production in North Dakota. EIA forecasts total Williston Basin production, including North Dakota and Montana, will approach 1.1 million bbl/d by January 2014.


I’m sure Rune could address the particulars of the review better than I can but I do recall a few details.

“The author made another mistake in using what he believes to be the average Bakken well production for the first twelve months. I believe he found these average wells using old well information.” If you read Rune’s stats you know he not only didn’t use “old information” but used the official production stats put out by the state. And they were the most current numbers: remember the latest first 12 month cumulative production has to be 12 months in arrears.

“Using an $80/barrel oil price we see that the majority of middle Bakken wells produce enough revenue to pay back costs in the first year of production.” A statement with n supporting details. Unlike Rune who presented third party supported details.

“Using current EURs, we see that average production numbers are far higher than those used in his research” Again no actual data presented, unlike Rune. Also EUR’s are someone’s extrapolation which may or may not eventually be correct. But EUR’s are not “data” and most certainly aren’t facts.

“Mr. Likvern also believes that Bakken well productivity is decreasing...” Rune is free to believe whatever he want just like the rest of us. But the decrease in productivity (that initial 12 month cum) presented wasn’t his “belief” but the stats provided by the Dakota regulators...the only source of such information. And “Also, less productive areas are being drilled to get acreage held by production.” That statement truly baffles me: so Bakken productivity isn’t decreasing because they are drilling “less productive areas”. Perhaps he’s misquoted; otherwise it makes no sense.

“Initial production rates and EURs are also increasing.” IP’s may or may not be increasing but again no data presented to support that claim. But not very important since IP’s don’t directly correlate to URR. And EUR’s are increasing. Since the E means Estimated than an EUR is, again, someone’s interpretation. Certainly some may be increasing the estimate jus as others are decreasing their projections. I get the sense the confusion between EUR and URR. URR are not estimates...that the cumulative production once a well fully depletes. Since few if any of the recent Bakken wells have reached that stage there are very few URR stats available...yet.

IMHO one utterly absurd Filloon statement not quoted: “The Thompson 1-29/32H well produced 262,916 barrels of oil in the first 366 days. If Helis can produce these types of results, I am sure other companies will be able to do this as well.” So every operators can expect similar results from their efforts. This should be an easy claim to support: just post the first 366 production average of all wells drilled 12 months ago. Can’t wait to see the state’s numbers prove it.

Amazing contrast between the two presentations. Rune works is composed of very detailed charting and data references. Filloon offers little of this type of info but lots anecdotal cherry picking IMHO. Most of the “data” offered are a variety of EUR. As I said earlier everyone is free to ESTIMATE anything they want. But IMHO if they expect any credibility they should really back it up with DATA...as Rune has done

You're harshin their mellow man.

As an outsider to the FF industry, but as an engineer and an interested citizen, what I see reflected here are two different objectives. One (TOD), as far as I've observed to date, seeks to educate and provide objective evidence for projecting where we are heading in regards to petroleum production over the medium and long term.

Articles such as Mr. Filloon's seem intended to portray a glowing picture of the future in the FF industry with the purpose of selling stock (i.e. in trading 'paper'). Such articles would have worked on me on the past - but after having been burned in the 2001, and 2008 downturns I am now much more skeptical of sources that appear to use facts selectively and are only knowledgeable in the business from a trading perspective.

For the investment community - TOD comes across as excessively pessimistic and a direct threat to their income if investors internalize the underlying message presented here. Conversely, their message to the investment community 'must' be cornucopian in tone because no one (except those taking a short position) would be interested in putting money in stock for an industry that appears to be facing strong headwinds (or even one that might only break even). The 'greater fool' theory is in play and education cuts down on the number of available 'fools' if all evidence is made available and potential investors are willing to evaluate the quality of such evidence.

I do appreciate the rebuttals to such articles since they are also educational (I expect, however, that it will be a Sisyphean effort to address all such articles since the investment community are driven by different motivations).

Thank you for your hard work and generous expertise. It means a lot.


Hello, (and nice find advancednano)

I am grateful to see that Mr. Filloon so generously provides evidence in his own writing that he has not read my article.
For now I will just come with a few comments.

I believe he found these average wells using old well information. Using current EURs, we see that average production numbers are far higher than those used in his research. Mr. Likvern also believes that Bakken well productivity is decreasing, and stated from 2010 to 2011 this has decreased by 25%.

Note how Mr. Filloon uses the word believe, if he had read my article he could have established for himself that the data I used included the most recent published by the North Dakota Industrial Commission, which was as of July 2012 when the article was published on The Oil Drum. This is clearly shown on several of the charts accompanying my article.

That raises another question; What is Mr. Filloon’s sources for actual data?

This could be from increased development of the upper Three Forks.

Again Mr. Filloon provides evidence he has not read my article, for those who read it would have found that the wells was from Alger Bakken, (there may have been 2 or 3 wells out of several hundred from Upper Three Forks in Brigham’s portfolio), all the wells to Marathon was in Reunion Bay, and Whitting’s in Sanish. Therefore it is possible to identify all the wells and verify the information I used in my article just by going through the data from North Dakota Industrial Commission.
Mr. Filloon obviously confuses things repeatedly. He uses forecasts to compare against actual data.

The Red Queen tries to paint a Bakken picture that has very few great wells with large initial production or IP rates. It states most wells are marginal at best, but the best wells are in press releases.

Why does not Mr. Filloon produce actual numbers for his readers, as opposed to producing claims that shows the distribution of wells by classes, like distribution of cumulative for the first 12 months, 24 months, 36 months etc. and then list the sources for his data, well identification (according to the system used by the North Dakota Industrial Commission) so that anyone that wishes may verify them

Apparently Mr. Filloon also missed what happened with shale gas.

In general Mr. Filloon does not produce sufficient data on what may be considered a significant amount of wells. He cherry picks data for a few wells …but there is no way for his readers to tell if these are representative for the Bakken area or make an independent verification.

On using current EURs, EUR; Estimated Ultimate Recovery……..there is so far little data on what the wells will actually produce…..that is still some years away.

In conclusion, the Red Queen article stated an oil price of $80-$90/barrel was needed for Bakken wells to make commercial sense. Using an $80/barrel oil price we see that the majority of middle Bakken wells produce enough revenue to pay back costs in the first year of…

Mr. Filloon does not provide transparency on elements like operational expenses, transport costs, royalties and taxes, in other word he does not net back earnings to the wellhead in his table of a few selected and unidentified wells. Further he does not offer any information about rate of return used in his assessments.


Great response, Rune! Thanks for being clear, concise, and factual.

You are one of the (many) reasons that TOD remains one of the best sources for information about the energy situation. Indepsensible!


I seek the wisdom of the collective.

Why is propane not used for grid electricity generation?

Way too valuable. Propane is like three times the cost of natural gas for a residence. Maybe industry could get it cheaper, but considering all its uses, I doubt it.

Bottled propane is really handy stuff; portable, and can be stored almost indefinitely. Too handy for mere electrical generation, too valuable to compete with natural gas and coal.

Natural gas, methane, pours right out of holes drilled in the ground. Propane is a contaminant of natural gas and must be removed so that it does not condense in the piping. So there is a lot less propane than methane. Propane also comes from the processing of oil. The advantage of propane is that it turns into a liquid at a pressure of something less than 180 Psi. This makes it much easier to store than natural gas, methane, that takes tanks rated to better than 3600 Psi -or- cryogenic cooling to store.

Propane is an alkane: methane, ethane, propane, butane, pentane, hexane, heptane, octane, nonane, and decane have chain lengths of one through ten carbons, respectively. When the chains get long enough, say 20 carbons or more, the material is waxy. The whole family of linear chain alkanes are known as paraffins. Paraffin wax is about 25 carbons. Much longer than that is bitumen or asphalt... but not "tar": tar is from the pyrolytic decomposition or roasting of organic material. Circles of carbons are called cyclo-. For example, the three carbons of propane tied back around in a ring makes cyclopropane: the most common anesthetic gas. Alkanes have all single bonds between the carbons. Alkenes have one or more double bonds among the carbons: "ethylene", "propene".

Organic chemistry is totally endless.
Image: http://sydney.edu.au/science/chemistry/~mjcgroup/images/975_ftp-2.jpg
(PDF) http://www.rad.nd.edu/recent_pubs/Site/Subtask%203_files/3_2004_Hasobe_A...
Molecular engines:
http://www.youtube.com/watch?v=vTIsj_WTfZI - Beautiful animation with music
http://www.youtube.com/watch?v=GigxU1UXZXo - ...with narration

http://en.wikipedia.org/wiki/UHMWPE !

Sometimes this site makes me think I'm in one of the Gulag Universities of the Stalin Era..

ok.. that's maybe a little drastic.. but thanks for the ongoing long-chains of arcane and alkane details!

Nostrovia, Arkady

За здоровье!

Sometimes this site makes me think I'm in one of the Gulag Universities of the Stalin Era..

Psst! You wannna make a little ethanol? Just wait till you get into the Yeast Biochemical Pathway Database...


There will be a quiz and if you don't pass you will get your own hammer and a free train ticket to Siberia... >;-)

Stay away from 'old' potatoes ...

Botulism outbreak in Utah prison linked to homebrew, baked potato

An outbreak of the deadly toxin Clostridium botulinum at a Utah prison last year was caused by a tainted batch of a prisoner-brewed alcoholic beverage called pruno, according to a report from the Centers for Disease Control and Prevention. The offending ingredient: a moldy baked potato added at the last minute.

CDC epidemiologists believe the toxin was produced when the potato, which sat at room temperature for several weeks, was added to the sealed plastic bag: The low-acidity, anaerobic environment is ideal for toxin growth, the investigators noted.

You can read the CDC's report here.

So the people inside a prison might not be the group with the best decision-making skills, but this makes me wonder: If society was disrupted tomorrow in such a way that much less processed foods and other goods were available, how many of us would die or almost die from our "home cooking" attempts.

I suspect that cooking would be less of a problem than finding and storing food. The problem those prisoners had was not understanding that a baked potato does not keep like a raw potato. As the supermarkets empty out, knowing how to store and preserve any food that is surplus to immediate needs will be a valuable skill. Knowing how to find food in the first place will be another valuable skill. (If you do have a decent sized garden, you may find that your neighbors expect you to share with them, with or without your consent.) Very few of us are prepared to live off the land. I have noticed the abundance of acorns falling around the house this season, and they could be used as an emergency food, but I have only a vague idea of how to process acorns to remove the tannins. I have even less idea what else in the area is edible.

I think it has to do with prices. Nat gas is certainly cheaper.

Because methane is cheaper would be the short answer.

(Natural Gas is mostly methane and it is delivered in very large volumes via pipeline)


'Saudi weapons' seen at Syria rebel base

BBC News has uncovered evidence that weapons intended for the Saudi military have been diverted to Syrian rebels.

Three crates from an arms manufacturer - addressed to Saudi Arabia - have been seen in a base being used by rebel fighters in the city of Aleppo.

How the small crates reached Aleppo is unknown, and the BBC was not allowed to film their contents. Saudi Arabia has refused to comment on the matter.

The geopolitical machinations of the middle east are fraught with so many dangers these days heaven knows how this will play out. So many of the players are interlinked - Syria, Hezbollah, Iran, Russia, China, Turkey, the US, Israel, Saudi Arabia - that it is very difficult to know what's really happening and what's smoke and mirrors.

But we are told that presidential hopeful Mitt Romney will put it right.

Romney says U.S. should be more assertive in Middle East

Saying there is, "a longing for American leadership in the Middle East," Romney called for the U.S. to take a more assertive role in Syria. He also wants new conditions on aid to Egypt and would impose tighter sanctions on Iran.

Bearing in mind that this is Republican rhetoric intended for domestic consumption - with no immediate influence on either the State or Defense departments - the statement still begs the question, what would a "more assertive role" for the US even look like in Syria? Would overt U.S. involvement in Syria (or anywhere else for that matter in the middle east) be in anybody's interest? Do serious people in the beltway of American decision-making hold any credence to the idea that the middle east is "longing for American leadership"? And if so, who exactly do they think is "longing" for this leadership and why?

Let's hope is that this is mere grandstanding and that smarter heads will prevail among policy makers, diplomats, and generals, regardless of November's election result. Part of the public relations problem that America is facing is that "it is over there". More of "over there" would likely only add to the volatility of the region.

Romney did make a statement in his VMI speech about the Palestinian Question:

“I will recommit America to the goal of a democratic, prosperous Palestinian state living side by side in peace and security with the Jewish state of Israel.”

That would seem to be a flip-flop from his previous position in support of Israel. The NYT notes:

And last spring, Mr. Romney was caught on tape telling donors he believed there was “just no way” a two-state solution to the Israeli-Palestinian conflict could work.

Considering that two states has been the obvious solution since the formation of the State of Israel, one wonders what took him so long.

EDIT: One might argue that the Two State Option has not been implemented because many people in Israel have wanted to expand their borders into lands formerly claimed by Palestinians, including Jerusalem. Recall that the Camp David Accords reached thru the efforts of Jimmy Carter included the right of self government for the Palestinians. The building of illegal settlements on Palestinian lands was just one aspect of the land grab. Now that the borders have reached beyond those before the 1967 war, it's well past time such tactics ceased, IMHO...

E. Swanson

His very next bullet after supporting the two state solution was that there be no daylight between the US an Israeli positions. So the two state solution is totally contingent on what Israel wants. O be honest given the strength of the Israel lobby, thats the only policy the US is going to have for the foreseeable future. We are stuck in our current policy rut, and will just have to keep dealing with whatever blowback it generates.

When Peak Oil arrives and the price of gasoline starts to skyrocket, who's Romney gonna call, the Saudis (and the Iranians) or the Israelis? If the Israelis decide to hit Iran without the US agreeing, are we going to get sucked into WW III, (not to mention the associated animosity from the rest of the Islamic world)? Remember Catch 22, anybody who is doing something which is likely to get you killed is your enemy, even if they are supposed to be on your side of a fight, (unless you are an al-Qaeda suicide bomber)...

E. Swanson

I think Peal Oil has arrived. Talk of stealing fuel from cars' tanks is not new, it happened here in Britain a couple of years ago when supplies were temporarily interrupted, and notwithstanding world economic sclerosis oil prices refuse to fall. This is simple supply and demand as far as I am concerned, even allowing for political and supply details flitting about the periphery of it all.

The world is shifting towards a paridigm where everything is in short supply: energy, food, water, commodities - you name it - the only piece of the jigsaw still missing is that most people are totally unaware, or at least in denial, and still expecting that "They" will do something about "it", whatever "it" means to them. Even here in dying Britain the government is finally beginning to wonder if it is a good idea to encourage unemployed and penniless single girls to have babies by giving them free money and housing. For many liberal people to even question this state benevolence is seen as shocking, but it is the beginning of something far bigger that will snowball as our economies shrink.

Yeah, right. So America should send troops into Syria but then what happens if Russia decides to help its Syrian allies? Do the Republicans think anything through?


Calling for a "more assertive role in Syria" is a long way from sending in "troops". Some air support as was done in Bosnia or Libya, or maybe a no-fly zone, or even giving the Turks a green light would likely do a great deal.

If Assad goes, the Iranian influence in Syria also likely goes. Assad gone weakens Iran and, with the Iranians unable to supply Hezbollah via Syria any longer, lessens the pressure on Israel to do anything about Iran.

Yawn, does it really matter if the troops are boots on the ground or planes in the air if Russia decides to weigh in?


Slightly lessens the chances of things spinning out of control.
I think the real issue will be putting a broken Syria back together. Can't imagine that going smoothly.

Yes, air-only versus ground troops matters a great deal, in many different ways: risk to US military personnel, cost (100:1), time to enter and exit, likelihood that Russia would, or could, interfere.

The Russians have "weighed in" before by the way to support another ongoing massacre. They supported the Serbs in the Bosnian war - both via material and attempts via international diplomacy to block US involvement.

There are risks, cost, and possible complications. As it happens, I do *not* think large scale US air involvement is warranted in Syria, yet, for the little my opinion is worth. But I don't come to that conclusion by pretending that there are not 30K dead already, or that there will likely be that many more, or pretending that the US does not possess the military capability of stopping the carnage.

Sorry to wake you.

Russians will support Serbs no matter what.
But nobody will risk a global confrontation because of Syria.

And if so, who exactly do they think is "longing" for this leadership and why?

The families of the 25,000 killed by Assad (so far) to start.

The families of victims of civil war are longing for peace, justice, and responsible government. A serious response to the situation must take into consideration the question, where has American leadership or intervention ensured that lately?

Despite stated noble intentions, the history of US and western involvement in the middle east has left residents wary and cynical. Whatever hope or faith local citizens or players may have once had in the shining example of freedom symbolized by the United States has long since dissipated with the war on terror. Right now, America is as welcomed as a skunk at a garden party.

Entertaining a more assertive role for the US may appeal to home base, but such sentiment is anathema among peoples living elsewhere. The problem, to reiterate from a middle east perspective, is that the US is "over there". More in-your-face "over there" is hardly a solution.

The families of victims of civil war are longing for peace, justice, and responsible government.

I'm a US citizen and I also long for peace, justice and responsible government.

But we are told that presidential hopeful Mitt Romney will put it right.

Perhaps he should listen to Tim Minchin... Peace Anthem For Palestine

We have already seen the results of Obama and Hillary Clinton's arming of Libyan "rebels"
that Ghaddafi at the time claimed were Al Queda supporters. Lo and behold now there are
issues with Libya because there are too many weapons spread around and the warning of Al Queda involvement a year ago by those opposed to military intervention is forgotten.
"The United States of Amnesia" Gore Vidal called it.

Romney and his war-mongering neoconservatives have every intention of continuing War War War ad nauseum including arming anything that moves which temporarily appears to be on the side the US is supporting this week.

Long long ago in a land far, far away pesky Peace Activists were warning that it was a really BAD idea to be arming religious fanatics in Afghanistan to make trouble for the Soviet Union and the secular regime it was supporting which had the audacity to educate women.

But again it is the "United States of Amnesia" and the Corporate media conveniently forgets what happened last decade, last year, last month, last week when it is convenient to do so. If we do not end these Wars we will not survive people...

Romney represents the War mongers and Merchants of Death in all their grisly glory just as he represents vulture Capitalism cannibalizing our industries, jobs and life on the planet.

If we do not end these Wars we will not survive people...

I think we will survive. Its just that we will keep shoveling more and more money to the MIC, and less and less to everything else. Great for the owners of the weapons establishment.

The real problem is there is no such thing as 'Syria'

Why tribes matter in Syria

... From the Gulf to Iraq to Syria, the area is interlinked in a complex web of tribal relations. The Syrian tribes originated in Arabia and moved north with the Muslim campaigns in the seventh century and later in search of water and grazing for livestock.

This expanse of the tribes was split by the Sykes-Picot Agreement between France and Britain in 1916 along artificial national borders that persist today. Relations between these tribes, nonetheless, have been sustained.

The Shammar confederation has at least one million members in Syria and is one of the largest tribes in the region. The Jubour has a presence in eastern Syria and Iraq and sustains strong relations with relatives in the Gulf, more than other tribes. The Eniza is another prominent Gulf tribal confederation with numerous members in eastern Syria and the governorates of Suwaida, Homs, Hama and Aleppo.

The N'eim is the prominent tribal confederation in Deraa, with a considerable number in Homs too, and a strong presence in the Gulf. Some top leaders of the Free Syrian Army come from this tribe. The Baggara is a prominent tribe in both Iraq and Syria (approximately 1.2 million, mainly in Deir Ezzor and Aleppo), with a modest presence in the Gulf. ...

... this is the same problem encountered in Iraq, Libya, Afganistan, Yemen, and most of the Middle East. Failure to understand that cost the lives of 4000 troops, 25,000 wounded, and 500,000 Iraqis killed and 2,000,000 displaced along with 2 nations treasure.

This hubris and idiocy [of both Romney and the electorate that buys this rubbish] will be the death of this empire.

NATO: Military plans ready to defend Turkey if shelling continues

BEIRUT -- NATO is ready to defend alliance member Turkey amid artillery and mortar exchanges with Syria, its top official said Tuesday, as Ankara sent additional fighter jets to reinforce an air base close to the Syria border where tensions have escalated dramatically over the past week.

The comments by NATO Secretary-General Anders Fogh Rasmussen were the strongest show of support to Ankara since the firing began Wednesday -- though the solidarity is largely symbolic. Turkey has sought NATO backing but not direct intervention and the alliance is thought to be reluctant to get involved military at a time when its main priority is the war in Afghanistan. Ahead of a meeting of NATO defence ministers in Brussels, Fogh Rasmussen backed Turkey's right to defend itself.

"Obviously Turkey can rely on NATO solidarity," he added. "We have all necessary plans in place to protect and defend Turkey if necessary."

REPORT: It Was A NATO Mortar That Killed 5 Turkish Civilians Last Week

Possibilities include:
- Syrian insurgents mistakenly fired mortar into Turkey.
- Syrian insurgents deliberately fired mortar into Turkey in order to create an incident that would enlist Turkish help.
- Syrian Army captured mortar from insurgents and mistakenly fired mortar into Turkey.
- Syrian captured mortar from insurgents an deliberately fired mortar into Turkey in retaliation for their supplying the insurgents.
- Turkish mortar team crossed the border and fired the mortar shell into Turkey as a "false flag" operation.

Possibilities include:
- Syrian insurgents mistakenly fired mortar into Turkey.
- Syrian insurgents deliberately fired mortar into Turkey in order to create an incident that would enlist Turkish help.
- Syrian Army captured mortar from insurgents and mistakenly fired mortar into Turkey.
- Syrian captured mortar from insurgents an deliberately fired mortar into Turkey in retaliation for their supplying the insurgents.
- Turkish mortar team crossed the border and fired the mortar shell into Turkey as a "false flag" operation.

This Turkish/Syrian thing really does have the stink of manipulation around it. OTOH, in an area with so many factions with enmities to exploit, this kind of thing might be inevitable.

I suspect Assad wants to be able to claim his country is under foreign attack. That way he can paint the FSA as traitors who support the enemy. I fear Turkey may unwittingly provide him with the sought result.

One way or another, this bloodbath is set to escalate. Sadly, too many pokers in the fire for it not to do so.

Seraph, I think you nailed the main reason why the Arab Spring and its aftermath is so dangerous and volatile. The borders of middle eastern nation-states are not in long run sustainable. They are a result of post World War 1 western powers carving up the fragmenting Ottoman Empire. The lines drawn literally in the sand bear little relationship to the reality of the people on the ground.

Amid shifting bonds of loyalty across artificial boundaries, it is important to know who gets to decide where potential future boundaries (and alliances) may lay. Everyone has a stake and everyone wants to make sure their stake is enhanced and protected. That's why all the main power brokers are watching each other like hawks and playing one proxy against the other.

There's more than a grain of truth in the old diddly, Humpty Dumpty. After falling off a wall almost a hundred years ago, the world is still trying to figure out how to put the pieces together again.

I often think about Humpty Dumpty when KingCoal comes up with the abject nonsense that they can put blown up mountains back together again. /OT

Here is what seems to be a good article/review on the divvying up of land after WW I. I've not read Churchill's Folly yet, but intend to.


I do not believe that our PTB are as ignorant as they pretend to be. Not at all.

I do believe that Mitt Romney is, however.

I do not believe that our PTB are as ignorant as they pretend to be. Not at all.

Nor do I. One can not ignore hard history and keep the boots on the ground without finding out a fact or two. Nor can western interests be served by being blind to the way the past is shaping the present. The folks at state and defense and the CIA are not stupid - dense sometimes, pliable at other times, but rarely out and out stupid.

The political masters, on the other hand, tend to share the narrow view and prejudices of the home front. Most US Presidents come to the job without knowing much about - and almost never visiting - the various hot spots they are called upon to make decisions about. All any of us can hope for, when it comes to the most powerful office in the world is good advice by the underlings and an open approach by the incumbent.

I suspect George Tenet has subsequently regretted the "slam dunk" remark that put the CIA on the hook for the faulty intelligence on WMD and Iraq. He chose the path of least resistance instead of remaining steadfast in his proper role. Tenet unwisely gave in to what he thought Dubya wanted to hear. My hope is that any current or future CIA director will learn a valuable lesson from this: you can only serve your country well if you give the information you know and if this means speaking truth to power (no matter how contradictory it is to the wishes of the President) then so be it. In all fairness to the military, the generals were much more cautious and realistic about Iraq than ninety percent of Congress. Then again, most of them had spent time on the ground, and many had cut their teeth in the middle east, which is a lot more than what can be said for politicians.

No point in growing older if you can't grow wiser. True with nation states as much as people. Unfortunately, sometimes people grow older and rather than wiser, go batty or senile. Let's hope that is not our collective fate.

In the Race for What's Left (two year old fillies running on air) we have only a few more laps to go! Its pouring with rain here today and the track is very muddy already and slower by the minute!

The US has been in the lead for some time with favorite TarSands leading FracGas by a narrow margin. DrillBabyDrill is under the whip but starting to fade in spite of her rider's best efforts and ColdOil out of DutchHarbor and ShellBarge was scratched before the start.

Japan's pony FukuNuku had a strong early showing but she has drifted to the back of the field - seems like she's blown up and we wont see her finish.

Holland's nag is slow and steady with plenty in reserve provided her jockey doesn't ride her too hard in the middle. She's paying even money so nothing in it for the owner.

Brazil's DeepSaltBasin out of Atlantic and GreatWhiteHope has been looking sprightly but she started badly and is yet to impress. It looks like she's going to have to dig too deep to make the running here which will rub salt in her trainer's wound as a lot of money is riding on that runner.

Europe's offering FallingStar out of FracBaby was trying to come up through the field but has been stymied by trouble at home and her rider falling off.

Now! Look out! Russia's ICanFrak2 out of InfiniteResources and sire TidyUpLater is looking very strong - has a lot of backing on this one, here she comes up through the field! But wait - what's that! The trainers have run out onto the track and taken her down - Ah! I've just heard that the trainers have money on OldOilnGas and can't afford to let ICanFrak2 win! I've never seen that before!

But here comes Great Britian's FracOrNoFrac (out of Decc and Davey) from behind after looking good near the front for a moment and falling back. Now she's surging again as she's given her head and a tax incentive - but who knows what legs she's really got.

Well folks there are still another couple of laps to go and who knows how this race will pan out. One thing is certain is that its getting dirtier by the furlong and there may not be any winners in the end! Don't throw your tickets away yet!

Very well done! Bravo.

nigwil, I have not laughed that hard since viewing the "Oh Long Johnson" talking cat video on youtube...thanks.

TERRIFIC! I am now going to pour a glass of red wine for a toast to greatness.

3 minutes later: Virtual Clink!

Canada, Russia will share Arctic riches, scientist predicts"

ST. PETERSBURG – The scientist responsible for preparing Russia’s claim to seabed rights at the top of the world says Canada and his country are both poised to reap staggering economic benefits when a deal on who owns title to what in the northern ocean is finally struck.

“Canada has a wonderful shelf and basin, so of course Canada can get very rich from this,” said Victor Posyolov, deputy director of Russia’s Institute of World Ocean Geology and the head of its Arctic research program.

Poring over maps tracking the evidence that he is amassing for Russia’s claim, Posyolov estimated that his country, with the longest Arctic coastline, would gain rights to about 1.2 million square kilometres of seabed. He reckoned Canada would get about 800,000 square kilometres of sub-surface territory. That would be about twice as much seabed as the other claimants, Denmark and the United States, are likely to get.

Canada poised for massive undersea land grab

Canada is poised to claim ownership of a vast new expanse of undersea territory beyond its Atlantic and Arctic coasts that's bigger than Quebec and equal to about 20 per cent of the country's surface area, Post-media News has learned.

The huge seabed land grab has been in the works since 1994, when federal scientists first conducted a "desktop study" of Canada's potential territorial expansion under a new United Nations treaty allowing countries to extend their offshore jurisdictions well past the current 200-nautical mile (370-kilometre) limit of "Exclusive Economic Zones" in coastal waters.

This article would tend to confirm my contention (resulting from having done some research there) that the oil sands are naturally contaminated, and the oil sands producers are merely cleaning up the world's largest natural oil spill.

New study finds little environmental impact from oil sands

In 2010, a single oil-sands operation run by Suncor Energy released into the atmosphere 28,940 tonnes of volatile organic compounds, 22,210 tonnes of sulphur dioxide and 14,011 tonnes of particulate matter.

Yet when scientists drilled into lake bottoms 200 kilometres from those oil-sands mines, they discovered something surprising: At that distance, levels of those pollutants were negligible. In fact, the lake sediments, whose layers opened a window onto hundreds of years of air and water quality, showed that in many ways those lakes are cleaner today than they were decades, and even centuries, ago.

Dr. Hall said, the level of pollutants travelling by air and water to a place like Fort Chipewyan are not high enough to merit the concern that has been expressed. Instead, he said, “the conclusion in our paper is that natural sources of PACs” – polycyclic aromatic compounds – “via the water continue to be a main process that’s delivering them.”

In other words, toxins well downstream of the oil sands come from the environment, not big steel stacks – a finding that suggests the industrial impact on the environment is largely local, rather than broadly regional.

The researchers found levels of airborne metals peaked in the late 1950s and 1960s – before the advent of the oil sands – while arsenic has now fallen to pre-industrial levels and lead is now 10 per cent above “background” concentrations. The researchers attributed some of the pollutant declines to the switch away from leaded fuels and to the end of smelting operations at Yellowknife’s Giant Mine, which, according to Dr. Hall, vented as much arsenic in one 1950s day as the entire oil-sands industry in 45 years.

Perhaps most intriguing: They found levels of polycyclic aromatic compounds, which can cause cataracts, organ damage and cancer in humans, were at their lowest between 1975 and 1995, a period of oil-sands growth. The most PACs came between the mid-1700s and mid-1800s, a dry pre-settlement period on the Prairies that saw substantial forest-fire activity.

The article would tend to confirm your ability to see what you want to see, despite all evidence to the contrary. The pretzel-like mental acrobatics and three-alarm cognitive dissonance required to equate tar sands ops with "cleaning up a natural oil spill" is nothing short of breathtaking. A page straight out of the Industry Shill Playbook.

Nevermind the mile upon mile of taiga "overburden" that is ripped up, probably never to be replaced. Nevermind the ponds of insanely toxic wastewater so large they can be seen from space. Nevermind the gigatons of CO2 destined to cuisinart our atmosphere and acidify our oceans for centuries to come.

The end of smelting operations at Yellowknife mine, forest fire activity two centuries ago, and phasing out of leaded gasoline all have exactly one thing in common: Absolutely zero relevance to the epic environmental tragedy that is the tar sands operations.


I think it is you who are doing some selective three-alarm reading of the article. In fact the "ponds of insanely toxic waste water" are no more toxic than the oil sands themselves - with most of the toxic compounds removed - because that is where the fine silt in them originated. The soil and overburden are being stockpiled for replacement when the mines are reclaimed, which they eventually will be. The CO2 released by the oil sands plants is about 1/50th of those emitted by the thermal power plants in North America, so it is the latter that are going to be the greater modifiers of the climate.

It is not hard to find bigger environmental problems than the oil sands mines. Take for example the aforementioned Giant Mine in Yellowknife.

Mining operations over four decades created a massive environmental liability, a problem which the mine's previous owners left to the Canadian and Northwest Territories governments to sort out. The Giant Mine contains 237,000 t (233,000 long tons; 261,000 short tons) of arsenic trioxide dust produced during the gold roasting process. This dust is water soluble and contains approximately 60% arsenic. The site's 950 ha (2,300 acres) footprint includes 8 open pits, 4 tailing ponds, 325,000 m3 (11,500,000 cu ft) of contaminated soils, and approximately 100 buildings including a roaster/bag house complex that is highly contaminated with arsenic and fibrous asbestos.

If that's not bad enough, go and see the abandoned Anaconda Copper Mine overlooking Butte, Montana.

"Toxic compared to what?" is my question. I'm just trying to put it all in perspective.

I don't think that comparing relative toxicity is a valid critique. My problem with the oils sands is that they use up natural gas, and they destroy fresh water, of which we have a diminishing supply that may become a critical shortage in the not so distant future.

Other than that, saying the soils will be replaced when mining is done is easy... let's wait though and see. By the time they are done, we will be in far worse shape than today. The corporate owners will have already paid out all of the earnings as salaries, bonuses, and maybe some dividends. There will be no money left for that project, and rather than repairing the damage they will file for bankruptcy - probably just for the operating company, leaving the financial company intact. So, all you Canadian taxpayers and citizens, here's what you will have - a mess and no money to fix it. Do you think that even Canada will be able to float a bond to pay for that when there is no oil left? Fat chance!

Corporations know that they can say whatever they want. By the time they are called to task, the owners will be laughing all the way to the bank.


Comparing toxicity is valid when it is arsenic trioxide versus crude bitumen. The latter is not much different than the asphalt they use to pave roads, and in fact I have seen them pave roads with raw oil sands in the Fort McMurray area.

Natural gas is in surplus supply at the moment, and the oil sands give companies some way to get rid of gas they cannot sell due to the current US shale gas surplus. As for water, only about 5% of the water in the rivers in the oil sands is allocated to any purpose, whereas about 70% of the rivers in Southern Alberta are allocated to cities and agriculture, and over 100% of Southwestern US rivers such as the Colorado are allocated. BTW, the Athabasca River which flows through the oil sands is the size of the Colorado, and the nearby Peace River is even bigger.

"Soil" is something of a loose concept in the oil sands area. It tends heavily toward peat bogs, which are waterlogged, acidic, and have little natural fertility. The long term plan is to plant alfalfa and turn it into grazing land, thereby expanding Alberta's agricultural area. This may not sit well with the environmental movement, but it is popular with the ranchers and provincial government.

The corporations have already been forced to set aside money for this, the government's involvement will mainly involve collecting billions of dollars in royalties and taxes. If you are wondering why Canadian governments are so supportive of oil sands development, having to pay for universal health care and other expensive programs would be the reason.

"Natural gas is in surplus supply at the moment, and the oil sands give companies some way to get rid of gas"

...kind of like that nasty surplus of trees. Conserving the resource for the future would make less money RIGHT NOW.

"If you are wondering why Canadian governments are so supportive of oil sands development, having to pay for universal health care and other expensive programs would be the reason."

Beautiful! Equating/tying/justifying environmental destruction with "socialist" healthcare! The API couldn't have done a better job directly.

This is Canadian politics. Even the Conservatives support universal health care, and the American Petroleum Institute has nothing to do with the oil industry.

"the American Petroleum Institute has nothing to do with the oil industry"

Once a comment is replied to, it can not be edited.

I am just going to caution against the description you're putting up of the peat bogs of the oil sands area. Many places have been characterized as "wastelands" or "infertile" by people who did not realize their value, and wetlands in particular tend to get that description. In the Southern US, it gradually has become clear that the swamps and other wetlands are very rich and valuable. Peat bogs, as well, are gradually becoming a major issue (as they are one of the few types of wetlands that remain mostly fair game) - in Britain recently, they are doing away with using peat for gardening due to the way it encourages destruction of peat bogs. And, of course, who can forget the Mega Rice Project, where Indonesia drained Borneo's peat bogs in an attempt to make it a rice cultivation center, but ended up drying out the forest which caught on fire, massively. It was one of the biggest environmental fiascos of all time, an environment crime on a massive scale. But some people made a lot of money logging those forests...

Human development of the land is as old as agriculture (well, probably as old as fire), but it is best to have some humility when you set out to change the environment. Even a "worthless waste" may turn out to have value far beyond the pure monetary one that is gained by developing it. Your characterization of the peat bogs reeks of industry PR.

Development can be justified, but it must also be done in a measured fashion, with an eye to doing the least harm. Even peat bogs are valuable for more than just the money you can get destroying them. Probably even oil soaked peat bogs.

Britain has an area of about 200,000 square kilometers, the Canadian boreal forests are over 4 million square kilometers, or over 1/3 of the country. There is no shortage of peat bogs in Canada. In addition, they are lacking in species diversity - there are a limited number of species living in them, although the numbers of any particular species are large.

In addition, the environment is rather robust - the forests burn down and regrow once or twice per century on average. The forests in the oil sands last burned down in the 1960s.

I'm just trying to put it in perspective. Comparing it to other places is not necessarily meaningful.

"The Giant Mine contains 237,000 t (233,000 long tons; 261,000 short tons) of arsenic trioxide dust"

That is a lot of solar cells. Assuming they can find a matching amount of gallium.

Suncor funded the study! Gives me lots of confidence that the right questions were asked, the right stuff studied, the right methodology used, the right statistical analysis was carried out, and the conclusions were not spun by the funder, who likely had the final say.


the oil sands producers are merely cleaning up the world's largest natural oil spill

Well yes of course. Pollution is just a redistribution of compounds found naturally on Earth (in a manner that is convenient to human beings) and 'Mother nature' alters geology and climate all the time. Where have I heard this argument before ?

Of _course_ they did not detect high levels of pollutants if they sampled lakes isolated from the Athabasca River, into which runoff from the oil sands operation drains. If they had sampled the delta of the Athabasca River this work would be significant for water borne pollution. My guess is the investigators were looking for looking for air borne pollution and sampled lakes with a minimum of water flow through them.

Preventing runoff from entering the Athabasca River seems difficult. I paddled down the Athabasca River near the mining operation in 1985 and saw ponds along the river created to intercept seepage. The water in them was pumped away from the river. The water was crystal clear and very smelly. Nothing grew in the water.


Did you notice that in many places the river banks are black and glisten in the sunlight? This is because the ground is saturated with oil. The oil sands are an incomplete oil reservoir with no cap rock, and as a result the oil is continually leaking out into the rivers, which it has done for millions of years.

The Athabasca River is naturally contaminated with oil, and was so long before human beings appeared on the scene. It also has natural sources of mercury and arsenic contamination somewhere along its length, so I can't really recommend drinking the water or eating large amounts of fish from it.

The real question is, "Did oil sands production make the contamination worse?" and according to this latest study the answer is "No".

They don't have any base-line data so they can't make a definitive assessment, but in general I would say that the presence of contamination in the river is not proof it is man-made.

The river banks were unremarkable.

The crude oil in the deposit, known as bitumen, is "too thick to flow -- it's about the consistency of peanut butter" And we all know how fast cold peanut butter flows. My source of information is Chemical and Engineering News September 5,2011,pp 56-59. So diffusion to the surface is slow and weathering is very likely removing all but trace amounts.


Will Iraq’s energy boom postpone peak oil yet again?

Well, here is a shocker for the peak oil camp.

Iraq’s oil output will more than double from 2.6 million to 6 million barrels a day (b/d) by the end of the decade. This is 45pc of world oil supply growth over these years.

It will reach 8 million b/d by 2035. By then, Iraq will have overtaken Russia to become the world’s second biggest oil exporter – supplying China with 2 million b/d in a modern marine revival of the silk trade – and earning $200 billion a year in revenues.

We have heard all this before. At least the IEA has Iraq producing 1.5 mb/d less than Maugeri by 2020. However Forbes energy writer Matthew Hulbert has a different opinion.
Iraq's Rise To No. 2 Oil Producer In OPEC Is Bad News For World

Put all that together, and Iraq will struggle to nudge output towards 4mb/d over the next few years, let alone hitting 5, 6, or 7mb/d over the next decade. As for 12mb/d production targets by 2017 as a the new ‘swing producer’, forget it. Iraq has squeezed out all it can from its older fields; any further gains will be attritional, at best.

Ron P.

Ron, Ambrose Evans-Pritchard's commentary ends with a conclusion which is the opposite of that implied in your first quote. He points out several pressing reasons that Iraq is unlikely to increase oil production to the levels projected in the IEA study...

E. Swanson

Well, yes and no. He actually says:

As the IEA says, this will require $530 billion of new investment. "The obstacles are formidable: political, logistical, legal, regulatory, financial, lack of security and insufficient skilled labour," it said.

Good luck to the Iraqis. Let us hope that they – with the help of BP, Shell, Exxon, et al – can pull it off.

Implied in that statement is that if they do get $530 billion in new investment, and overcome all those political and skilled labor problems, they could pull it off. I don't think so.

What no one seems to mention, or understand, is this great increase in Iraqi oil production involves not a single new field. It is all supposed to come from infill drilling in their already tired old giants. Giants that are already in decline. Now infill drilling, especially in fields that have had little maintenance or new wells in the last two decades, can increase production somewhat. But it cannot work miracles.

Ron P.

$530 Billion would be better invested in solar and wind energy in the desert!

Why are people throwing money down the rathole of fossil fuel production which is
destroying the planet and is unsustainable?

You don't understand, it's not their $530 billion. They hope to get it from folks like Exxon, BP, Total and others. In return the oil companies will get from $1.15 to $2.00 a barrel for all the extra oil they produce from the giant fields. A bit more for four very tiny fields.

In fact Iraq will make money off the deal even if no new oil is produced according to this Bloomberg article

Iraq will get about $200 billion a year from the development contracts awarded to international companies in the two rounds. The winning bidders will spend about $100 billion developing the deposits, al-Shahristani said after the auction ended in Baghdad yesterday. The work is scheduled to start about six months from the signing of the deals.

That has to be the deal of the Century... as far as Iraq is concerned anyway.

Quite obviously oil companies would not be interested in investing in wind or solar energy in Iraq.

Ron P.

CNN was quick to jump in: Iraq oil output to double by 2020: IEA

By Mark Thompson @CNNMoney October 9, 2012: 8:14 AM ET

LONDON (CNNMoney) -- Iraqi oil production could double by the end of this decade, putting the country on track to become the second-biggest supplier to world markets after Saudi Arabia by the 2030s, the International Energy Agency said Tuesday.

Production could reach 6.1 million barrels per day by 2020, up from the current output of around 3 million barrels a day, and top more than 8 million barrels by 2035, the Paris-based agency said in a special edition of its World Energy Outlook.

Not sure how an additional 3MMBD (declines notwithstanding) is going to save the global economy, but I suppose just the perception of ever-abundant petroleum resources is worth more than the oil itself,, at least for a while.

Quick profits!

$530 Billion would be better invested in solar and wind energy in the desert!

orbit7er, that sounds like a good idea to me.

Kindhearted - But a better investment for whom? That's the key question of course. For Iraq? I doubt it. Their country is torn apart and they desperately need income more than energy. And as Ron points out it isn't their money anyway. I'm sure they would have no problem with anyone coming in and spending $billion for alt energy production. OTOH do you know of anyone who would find that a good investment? Maybe decades from now the Iraq govt might give it a try as their production declines. But even then only if they have the capital.

There's no lack of technically feasible alternative energy opportunities out there. Lots of clever TODsters repeated point them out. OTOH so what? If there isn't a financial motivation why would such projects be undertaken? It seems to be an equally simple and sad fact: $trillions need to be spent to get us off of FF but who's going to put the money up? The various govts offer some incentives but not game changers IMHO. And investors require some acceptable return that, as of yet, appears to be lacking in many projects. Yes...a good idea for the environment. And when Mother Earth can start writing the check the game will change. Until then IMHO we'll remain in the trap that has taken over 100 years to develop.

Perhaps when enough people wake up and realize that we are truly facing a planetary
emergency as the world faced in WW II or the nuclear standoff actions will be taken.
Somehow the US could waste trillions on War in Iraq and now proposed $ 1/2 trillion for
more oil but nothing can be invested for sustainability?

Here is the report on military expenditures in Iraq (by all forces):


The value for Military expenditure (current LCU) in Iraq was 5,734,000,000,000 as of 2010. As the graph below shows, over the past 6 years this indicator reached a maximum value of 6,352,000,000,000 in 2008 and a minimum value of 892,000,000,000 in 2004.

Iraq itself only spent $9 Billion on its military in 2011 according to several sources. (Jane's Weekly and Global Security )

When enough people get serious about this (and last summer's droughts. tornados and
bizarre weather finally convinced some Americans about global warming) then a carbon tax might be a source of funding for energy conservation and renewable energy.

$530 Billion is a huge investment and emphasizes the point by the TOD pessimists about the constraints to even invest in alternatives in time.

orbit - But we're still back to the same problem, aren't we? Even if the govt raises $billions where is that money going to go? Is the govt going to get directly into alt development? Maybe start giving huge subsidies for alt development? The govt could have been spending those $trillions on alts for the last 10 years but they chose not to do so. It's not difficult for me to imagine that if the govt did start collecting huge sums from a carbon tax it might earmark only a small portion of it for alt development.

Just because we need alt development doesn't mean the govt would spend in accordingly. I don't consider that a pessimistic view but just the simple acknowledgement of how the govt has dealt with the energy situation for decades. I've seen nothing from either party yet indicating a change from their SOP. I would very happy to let go of my expectations. I just need something more than just an obvious need for a change. IMHO we've had more than enough happen in the last 10 years to motivate a change from BAU. But I haven't seen it happen to any significant level yet.

Another report on the EIA's very optimistic Iraqi oil production outlook.
IEA optimistic about future of Iraq oil industry

Increased oil production in Iraq is also crucial for international markets, as Iraq is expected to account for nearly half of the expected growth in global oil output in the current decade, the IEA said....

A more pessimistic IEA forecast sees Iraqi oil output rising to just 4 million barrels a day in 2020 and to 5.3 billion barrels in 2035.

I put them at 4 mb/d by 2020 and at 1.5 mb/d by 2035. Pumping oil out faster from those old already depleted fields will only increase the depletion rate. And when they start to decline again, it will be fast and furious. The idea that they could be pumping 5.3 mb/d in 2035 is insane.

I have previously stated that their absolute maximum production would be 5 mb/d but I would be surprised if they ever hit that mark.

Ron P.

We have heard all this before.

Who Moved My Peak Oil?


The peak-oil theorists haven't given up. Instead, they keep revising their peak forecasts, pushing the dates for production crests further out in time.

It certainly hasn't happened over the last decade. As the next chart reminds, production is up in several of the key oil-producing nations, including Saudi Arabia. According to the EIA, Saudi output is higher by nearly one-third over the past 10 years through June 2012.

Iraq is up about 95%.

Iraq is up about 95%.

Up 95% from when? Iraq is up about 18% from when they announced their great leap forward in 2009.

The EIA data is only out for June. They are now just over 3 million barrels per day in August according to the OPEC Oil Market Report. The new OMR with the September data is due out tomorrow.

They peaked at 3,477,000 bp/d in 1979 and produced 2,897,000 bp/d in 1989.

Iraqi C+C production in kb/d from the EIA. The 2012 data is average for the first 6 months.
Iraq C C

Ron P.

Saudi Net Oil Exports

The following graph shows the ECI ratio (ratio of domestic total petroleum liquids production to liquids consumption, BP) for Saudi Arabia, from 2002 to 2011:

The observed 2005 to 2008 net export decline rate was 2.7%/year, as Saudi net exports fell from 9.1 mbpd in 2005 to 8.4 mbpd in 2008.

The 2005 to 2008 rate of decline in the ECI ratio (6.5%/year), suggested that Saudi Arabia would approach zero net oil exports around 2032, with estimated post-2005 CNE (Cumulative Net Exports) of about 41 Gb. I estimate that the 2005 to 2008 post-2005 Saudi CNE depletion rate was about 8.3%/year.

The observed 2005 to 2011 net export decline rate slowed to 1.5%/year, as Saudi net exports fell from 9.1 mbpd in 2005 to 8.3 mbpd in 2011 (with lower values in most intervening years).

The extrapolation on the preceding Saudi graph is based on extrapolating the 2005 to 2011 decline in the Saudi ECI ratio. The 2005 to 2011 rate of decline in the ECI ratio (6.0%/year), suggested that Saudi Arabia would approach zero net oil exports around 2034, with estimated post-2005 CNE (Cumulative Net Exports) of about 45 Gb. I estimate that the 2005 to 2011 post-2005 Saudi CNE depletion rate was about 8.0%/year, with estimated remaining post-2005 CNE of about 28 Gb.

Six Country* (IUKE + VAM) Real World Model

I think that the Six Country* (IUKE + VAM) Real World Model is useful because they showed a combined "Undulating Plateau" of sorts, starting in 1995. From 1995 to 1999 inclusive, combined production (BP) ranged from 6.9 to 7.0 mbpd. In 2011, production was only down to 6.5 mbpd, versus the 6.9 mbpd rate that they showed in 1995. The following sketch shows normalized Six Country production and remaining post-1995 CNE (Cumulative Net Exports) by year:

Combined production fell at 1%/year from 1995 to 2001, but this slow rate of decline in production obscured a catastrophic post-1995 CNE depletion rate of 23%/year.

Note that an extrapolation of the initial six year 1995 to 2001 rate of decline in the Six Country ECI ratio (2.7%/year) suggested that they would approach zero net oil exports around 2015, 20 years after their combined production virtually stopped increasing. They actually hit zero net oil exports in 2007, 12 years after production virtually stopped increasing.

In other words, an extrapolation of the initial six year rate of decline in the Six Country ECI ratio produced a post-1995 CNE estimate that was too optimistic, and an extrapolation of the six year (2005 to 2011) rate of decline in the Saudi ECI ratio suggests that remaining post-2005 Saudi Cumulative Net Exports total about 28 billion barrels.

*Indonesia, UK, Egypt, Vietnam, Argentina, Malaysia

Six Country ECI ratio:


EDITORIAL - Chavez's victory and the LNG project


The beneficial effect of PetroCaribe to the Jamaican economy is obvious. First, the country does not immediately have to find all the foreign exchange to pay for around a third of its domestic oil imports. Further, the soft loans generated, and managed through the PetroCaribe Fund, are available to finance development projects.

Indeed, in the absence of PetroCaribe, Jamaica would have to find an additional US$500 million a year in upfront payments for its oil imports, with all its implications for an already straitened economy.

The debate here, in my neck of the woods, continues to frustrate me as, it seems people have lost sight of what LNG is, a means of transporting NG from producer to consumer over long distances. There are other means but, supply constraints back in 2006 to 2007 frustrated efforts to use CNG instead of LNG. Not that LNG supplies were any better, the LNG project having been born out of discussions between the former Jamaican and Trinidadian prime ministers, who enjoyed a very good relationship at the time.

Since then, no firm commitments from any source for long term supplies of LNG at concessionary prices have been forthcoming, resulting in the government renouncing it's involvement in the LNG project. Since 2006/2007 Colombia has significantly increased NG production, is seeking to increase it further and is opening up to looking for new export markets. None of the interested parties in Jamaica seemed to have taken note,

Alan from the islands

What do you guys think about this fellow? He is all into fungi. At the end he shows that fungi could create bio fuel from corn. As usual we need the corn first and most people understand there are not enough to go around. But still. Opinions?


He's very renowned/famous at least in the lefternmost USA. Along with David Arora they are the shroomer's superstars.

Try some of his Bioneer's presentations.

Paul's online fungi store:grow your own products,books,etc-
I've been shopping for property so I can grow some of Paul's products and more.I really wanna grow rabbits ;)
This would work : http://www.seattlehouses.com/Detail.aspx?mlsno=412458&Address=269+Mox+Ch...

There are large companies working on algae pools. So far, nothing major has come of it, but there are a lot of smart synthetic biologists with significant capital resources. I don't think the numbers look good from a Peak Oil perspective - scaling algae pools or other types of biologics to replace our current oil habit is simply not feasible in the near term. Long-term, engineered biomass could provide liquid fuels and feedstocks for things like air travel and chemicals in some sort of post-peak utopia where our energy needs are met by other renewables.

I'd rather grow talapia and duck weed for food than pond scum for fuel..

Perilous Pathways: How Drilling Near An Abandoned Well Produced a Methane Geyser

Com­pa­nies have been extract­ing oil and gas from Pennsylvania’s sub­sur­face since 1859, when Edwin Drake drilled the world’s first com­mer­cial oil well. Over that 150-year times­pan, as many as 300,000 wells have been drilled, an unknown num­ber of them left behind as hid­den holes in the ground. Nobody knows how many because most of those wells were drilled long before Penn­syl­va­nia required per­mits, record-keeping or any kind of regulation.

... What most likely hap­pened to cause the geyser in June, Shell and state reg­u­la­tors say, was some­thing of a chain reac­tion. As Shell was drilling and then hydrauli­cally frac­tur­ing its nearby well, the activ­ity dis­placed shal­low pock­ets of nat­ural gas — pos­si­bly some of the same pock­ets the Mor­ris Run Coal com­pany ran into in 1932. The gas dis­trubed by Shell’s drilling moved under­ground until it found its way to the But­ters well, and then shot up to the surface.

S - Same potential problem in Texas. That's why the TRRC requires a survey and test of any abandoned well within a short distance of any frac'ng activity or salt water injection. Of course that only works if you know the well is there.

Climate change to hit Central America's food crops

Climate change is expected to reduce maize and bean harvests across Central America, leading to economic losses of more than $120 million a year by the 2020s and threatening the incomes of around 1 million small farmers, says a new scientific study.

Honda offers $3,000 discounts on natural-gas Civic

As if paying a little more than $2 a gallon for fuel isn't enough inducement, Honda is throwing $3,000 on the hood of its natural-gas powered Civic sedans.

It will come in the form of a $3,000 debit card good for buying natural gas at the Clean Energy chain of fueling stations.

Honda says natural gas prices vary at Clean Energy stations, but that the price was equal to $2.19 per gallon of gasoline in Anaheim, Calif., this week. That's half the price of a gallon of self-serve regular.

Thanksgiving turkey to be among first to show drought price hike

Grocery shoppers can expect to see drought-related price increases in the coming weeks on turkey, eggs, vegetable oils and dairy products.

Poultry prices are 5.6 percent higher than prices last year, with chicken prices up 5.3 percent and other poultry prices, including turkey, up 6.9 percent, according to the latest Consumer Price Index figures. The poultry category has been expected to be among the first to reflect price increases caused by the drought.

But the biggest pain won’t hit until next year, when the impact of the drought is expected to be felt on a wide range of foods from cereals to soups, the U.S. Department of Agriculture’s Energy Research Services forecasts.

Fair And Balanced? Fox News' Hour-Long Attack On Obama's "Green Agenda"

A Fox News special on President Obama's "green agenda" presented a one-sided discussion of Environmental Protection Agency rules that distorted the intention and impact of regulations, downplayed the threat of climate change, and ignored the public health threats of coal use.

Fox's hour-long special painted a one-sided picture of environmental regulations, featuring 18 critics and only 1 supporter of EPA clean air and water rules. Fox interviewed three Republican politicians, an industry executive, a radio host, and five coal miners, but not a single scientist, Democratic member of Congress, or environmental group to discuss the threats of air pollution and global warming.

In a segment on the EPA's supposed "mission creep," the host of the special, Bret Baier, questioned whether global warming is a "real problem":

Well they can just burn in You-know-where.. and we get to watch, because we'll be burning right along beside them!

If they finally come around, just wait, they'll be a whole lot of 'forgiveness' talk at that point. Pictures of Tammy Faye and Jimmy Baker blubbering in operatic repentance come bubbling to mind.

Some how they will turn it and spin it so that it was Barack Obama's fault. He must have cast a spell on them so they could not see what was plain as day. That and those damned high taxes on wealthy individuals. How can a mogul reason when he has to pay his offshored Indian accountants 3 bucks an hour to keep track of where his money is and how to keep it from being taxed. It's all those Democrats' fault!



I certainly would not want to censor Fox.

But I certainly wonder at times whether some regulation should prevent them from using the moniker "news" when it is clearly all opinion/propaganda.

I certainly would not want to censor Fox.

Time for my favorite Chomsky quote

If we don't believe in freedom of expression for people we despise, we don't believe in it at all
--- Noam Chomsky

Also Things Mainstream Reporters Can’t Say: Mitt Romney Is Lying About The Environmental Protection Agency

It’s not that Mitt Romney doesn’t have his facts straight about the Environmental Protection Agency. It’s not that reasonable people can disagree with the Environmental Protection Agency about the best approach to solving a set of problems.

Mitt Romney is choosing to lie about the Environmental Protection Agency because he thinks that will give him a political advantage.

But as Paul Krugman said on ABC’s This Week, “The press just doesn’t know how to handle flat-out untruths,” ...

and From Kermit To Coal, Book Reveals How World’s Top Brands Greenwash The Public

“I GUESS it is easy being green,” said Kermit the Frog as he bounced around a Ford Escape Hybrid in a 2006 television ad campaign.

But had Kermit blinked, he would have missed the small print at the bottom of the ad which showed that at the time, this “green” vehicle had a fuel consumption slightly worse than the US average.

But that seems to be the rule when it comes to claims of climate-friendliness made by some of the world’s biggest brands.

and Coal Workers Say Murray Energy ‘Coerces’ Them To Make GOP Donations: ‘If You Don’t Contribute, Your Job’s At Stake’

and GOP Rep. Promises To ‘Reverse This Trend Of Public Ownership Of Lands’

Unwanted stories are simply buried:
Legislative Candidate Endorses Death Penalty For Rebellious Children

"Therefore, a child who disrespects his parents must be permanently removed from society in a way that gives an example to all other children of the importance of respect for parents. "

Ah, the beautiful conflation of respect into fear! Ten easy steps for brutalizing ourselves back to greatness!

A study in adaptability: Why do we change our beliefs?

... Neuroscientists have long been interested in this adaptability, particularly in the moment when an individual discards an old belief and begins to formulate a new one. "You go from being confident in your model of the world to being uncertain and then abandoning the model altogether," says Alla Karpova, a group leader at the Howard Hughes Medical Institute's Janelia Farm Research Campus. She and her colleagues wondered what goes on in the brain when this happens. In rats, they found that the rejection of an old belief correlates with abrupt changes in activity in the medial prefrontal cortex, a brain region involved in cognitive functions such as reward anticipation and decision-making.

A mini-Bhopal that slipped under the MSM radar ...

S. Korea labels chemical leak area 'disaster' zone

The South Korean government on Monday designated an area hit by a toxic chemical leak as a "special disaster" zone, after more than 3,000 people were treated for ailments ranging from nausea to chest pain.

The September 27 incident at a chemical plant near the southeastern city of Gumi resulted in the leakage of eight tonnes of hydrofluoric acid that caused widespread damage to crops and livestock.

Five people were killed in an initial explosion that led to the leak as workers were unloading the acid from a tanker.

It also damaged more than 200 hectares (500 acres) of farmland and affected 3,200 head of livestock.

Gumi Designated as Gas Leak Disaster Zone (Video)

... as most chemist will tell you, hydrofluoric acid is one of the nastiest of the nasty. It will dissolve glass, and bones if any gets on you.

Contracts for Community Support Agriculture

University of Illinois professor of agricultural law A. Bryan Endres and his wife are both lawyers so, between the two of them, they've read a lot of legal documents, but when they became members of their local Community Supported Agriculture (CSA), even they struggled to understand the agreement they were asked to sign. Endres's experience as a consumer led him to develop simple contracts that can clarify expectations, avoid misunderstandings, and protect farmers and their customers.

"The purpose of the membership agreement isn't to make it more legalistic, but to formalize the expectations of both parties and explain in better detail that as a CSA member you really are sharing the risk of production—including droughts."

The downloadable contracts are available online at http://www.directfarmbusiness.org/csa-introduction/ . Endres said the forms are written in a nontechnical format with a readability level that's clear to both sides, not like reading a formal lease or, even worse, a cellphone contract.

Global financial confidence "very fragile", euro crisis key threat: IMF

In its semi-annual check on the world's financial health, the Fund said the euro area's debt crisis was a key threat and the risks to global financial stability had risen in the last six months leaving confidence "very fragile".

The euro area's plodding progress means European banks are likely to offload $2.8 trillion in assets over two years to reduce their risk exposure, an increase of $200 billion from a prediction six months ago, the IMF estimated.

"Despite many important steps already taken by policymakers, this agenda remains critically incomplete, exposing the euro area to a downward spiral of capital flight, breakup fears and economic decline," the IMF said in its Global Financial Stability Report (GFSR) released on Wednesday

Court Lets Stand Telecom Immunity in Wiretap Case

The Supreme Court is leaving in place a federal law that gives telecommunications companies legal immunity for helping the government with its email and telephone eavesdropping program.

Lawsuits filed by the American Civil Liberties Union and Electronic Frontier Foundation accused the companies of violating the law and customers' privacy through collaboration with the National Security Agency on intelligence gathering.

Chevron Decries Court Refusal to Block Ecuador Fine

Oil giant Chevron said it was disappointed by the US Supreme Court's decision not to block an $18 billion fine sought by Ecuador for environmental damage in the Amazon.

"While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs' lawyers' attempts to enforce the fraudulent Ecuadorean judgment," the company said in an email statement.

"While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs' lawyers' attempts to enforce the fraudulent Ecuadorean judgment," the company said in an email statement.

Meaning that they will simply ignore the ruling of the Highest Court in the USA. And you know something... they will probably get away with it.

My good friend, Bob, aka jokuhl, and I have a bit of a cross-border rivalry going on when it comes to improving the energy performance of our homes. It's impossible to keep up with the guy, although God knows I foolishly try....sooooo, when Bob casually remarked the other day that *he* was going to buy a Nyle heat pump to reduce his water heating costs, well, gosh, say no more...

See: http://i362.photobucket.com/albums/oo69/HereinHalifax/Img_1914.jpg

I had toyed with the idea of buying a Nyle for several years but the units they sold up until recently were designed to work with electric water heaters only and I have an indirect water heater attached to my oil-fired boiler, plus a small 70-litre 115-volt/1.38 kW electric unit that pre-heats the water fed to this tank. However, Nyle now offers a unit that works with any electric, solar, gas, oil-fired or indirect water heater (the Geyser RO) so we're back in business.

This is a 115-volt system that plugs into a standard household outlet and draws approximately 850-watts; it has a rated heating capacity in the order of 1.8 kW (6,275 BTU/hr), which is more than adequate for our two person household. The cost at $1,150.00 CDN is not unreasonable (it was purchased through a local distributor).

This device works in conjunction with your existing water heater, as opposed to replacing it. That's a big plus because it eliminates the risk of hot water run outs or sub-par performance; in other words, if your electric or oil-fired water heater can keep up with your DHW demands today, it will be no different tomorrow or the day after, except that the Nyle will presumably assume the lion's share of the work. Installation is pretty straight forward and you don't have to scrap your existing tank or modify your plumbing.

Another nice thing for us is that the Nyle will supply us with all the DHW we need (at roughly half the cost of a conventional electric water heater) and it will provide us with "free" dehumidification. As it stands now, I run our dehumidifier eight months of the year, seemingly non-stop some days, and so this responsibility will be handed over in whole or in part to the Nyle; in effect, we'll receive two services for the price of one. In addition, we'll have the added benefit of free coolth during the summertime. But what about the winter months you ask? No worries. Our home is heated by two high efficiency ductless heat pumps that supply us, on average, two and a half to three kWh of heat for every kWh they consume. The Nyle will "steal" some of this heat to heat our DHW, but we're still miles ahead in that the heat we sacrifice will have been provided to us at as little as one-third the cost of oil or electric resistance.

My partner and I are both pretty frugal by nature, especially when it comes to our use of utilities, so I don't expect the savings to be all that significant. But I don't care... it's more important that we keep up with the Bobs of this world. :-)



I have been thinking about the Geyser since Jokhul posted news of his Geyser installation. I have a geo-exchange heat pump with a de-superheater which provides hot water to a 40 gallon storage tank that then feeds into a 40 gallon electric hot water heater. Since the heat pump is only used for heating, the Geyser seemed like it would be a good fit in summer as I would also benefit from the dehumidification in the basement

That said, I just read a post on HPWHs and was planning on posting it. I hope I am not raining on your parade. Hopefully you will see different results with the Geyser than Marc Rosenbaum did. If you plan to track energy usage and demand with the Geyser like you do with your mini-splits, I (and others) would look forward to a post on the results.



Getting Into Hot Water — Part 4
Monitoring data show that the Geyser heat-pump water heater didn’t save very much electricity, while a Stiebel Eltron unit performed better

Water heating strategies

To sum up how I'm thinking on how to make domestic hot water, given my preference to think in terms of electrically powered buildings to mate with renewable power generation:

- Low DHW users, say up to 20 gallons/day, should use electric resistance in either a superinsulated tank or maybe distributed instantaneous electric heaters. (Caveat emptor: lots and lots of amps!)

- Medium DHW users, say 20 - 50 gallons/day, should consider a heat-pump water heater. Pick the highest efficiency and one with a large tank, which keeps the electric backup off.

- Large users of DHW should consider a solar thermal system. Look at the Wagner system, which is a clever packaged drainback system, as one possibility.

Marc Rosenbaum is director of engineering at South Mountain Company on the island of Martha's Vineyard in Massachusetts. He writes a blog called Thriving on Low Carbon.

Thx for the extra reports, AWS.

I'm hoping I see good results considering all the waste heat I can throw at this unit.. It's easily going to be better than the Oil I've been doing ALL that bldg's water heating with.. but I'll report in as I see some actual numbers come in..


Marc Rosenbaum had basement temps in the 50s in winter, which would have lowered the COP so the more waste heat you can throw at it the more efficient the Geyser will be. I worry a bit about exhausting bathroom air, as you are considering, into the area where the geyser is. Yes, old houses (more to the point, houses with lots of air leakage) usually are dry in winter, but you don't want to create a building moisture problem while in search of an energy efficiency solution.


That will be the concern, of course, but as I understand it, this HP works as a dehumidifier as an intrinsic part of its operation. Includes condensate drainage hose, etc.. The problem with the Dryer and the Showers is that I already have moisture issues I need to take on, so I'm hoping this can get both birds with the same stone.

In previous winters, I have already been rerouting the Dryer Vent indoors, and the moisture in the basement has been reasonable, certainly less than the summer levels with sweating pipes and bits of rainstorm seepage.

Knocking wood..

(and I have designs for creating an HRV as a next step if that doesn't play out..)

Thanks, Andrew, for the link to this article; much appreciated. I'll be closely monitoring the energy consumption of our new Nyle and logging this data in a spreadsheet. Our electric water heater consumes about 4 kWh a day so the potential savings are admittedly modest. Be that as it may, I want to get some hands-on experience with this product because Efficiency Nova Scotia is asking us to expand our bag of tricks and this is something that we could conceivably offer our small business clients.

BTW, you can learn more about the performance of the Stiebel at: http://www.nrel.gov/docs/fy11osti/52635.pdf (it's identified as Unit "D")

I'll report on my findings once I get the little guy up and running.



BTW, Off topic, I tracked down a supplier of fanless (noiseless) LED MR16 bulbS.

I am impressed so far with the 9 bulbs I bought. And no noise! They don't have the same reputation as the Phillips bulbs, but so far so good. The on-line retailer currently has a 15% web discount; see the bottom of this page.


Thanks, Andrew. Good to know that there are other options out there. We're installing a tonne of LED products through Efficiency Nova Scotia's Direct Retail LED initiative. If you own or operate a business that currently uses halogen lighting, we'll replace those lamps with a good quality (Philips) LED product at absolutely no charge. You'll benefit from an 80 to 90 per cent reduction in lighting costs (e.g., a 50-watt GU10 replaced by a 5.5-watt LED), plus the corresponding reduction in air conditioning demand; the quality of the light is phenomenal; and, at a rated service life of 45,000 hours you won't have to change that new lamp for many years to come. Needless to say, we're having a hard time keeping up with the demand, but every kWh that we save is another half kilo of coal that won't be burned (at least by us), so I'm pushing this to the max.


Well, we're neck and neck, then! (Except that you're miles ahead of me.. at the very least in looking at the rotation of the planet!) But one step at a time!

I just picked mine up yesterday in Searsport, maybe 1/6 of the way between Portland and Halifax, coming back from camping with the girls on Mt Desert Isle.. Just gawking at the pretty brass pieces.

I finished coiling up some 300' of 3/4" pex for my heat exchanger, since this is all feeding a big storage tank that will also be fed by rooftop solar heat, and in addition to the waste Laundry Heat (in our 3 unit rental building), I've got one unit with a moisture problem in their bath, since they have more people taking showers than when we lived there, so I just had the brilliant notion of exhausting their shower-steam down to the heat pump as well, instead of dumping it out into the winter air.. this will clean up the moisture and reclaim the heat, all without putting more negative air pressure on the building, which would tend to draw IN more of the cold winter air through cracks, etc..!!

We'll see if ANY of it actually works! (I'm chomping on getting a cool-tube dug in under the slab, too, to keep the air pressure leaning positive.. (Might have to rename it a Jokuhl Tube, though)

Congrats on a very wise purchase, if I may say so myself!

Just a small note from the super simple small scale gang. I use a solar water heater - just a 2 ft by 20 ft rubber mat with tubes in it, lying on the ground surrounded in bubble wrap, for summer hot water. Works fine. When no sun, I have a very small wood stove outside the bathroom that will take just sticks in the yard to give us 50 gallons of HOT water in about 90 minutes.

In the heating season (now) I have a coil of copper in the exhaust stack of my wood stove, and it gives us more hot water than we need all winter, so I dump some of the heat into the bathroom.

Totally not ff or electricity anywhere.-- Just a tiny bit of PV to run the solar circulator in the summer.

PS- the shop has a wood fired stirling that finally is really doing its job of topping off the batteries when no sun on the pv. Problem is I had to cheat a bit and use a small pilot jet of propane to keep the heat steady on the engine. Trying to get rid of that.

And my congratulations to you, Bob; looking forward to comparing our notes. Since the Nyle operates at 115-volts and plugs into a standard household receptacle there's nothing to prevent you from slipping an inexpensive power monitor at the end of that cord. :-)

We installed a heat recovery ventilation system in our home and on its low setting it draws some 170-watts, so that's 4 kWh a day spent to shuffle air around. Keep that in mind if you plan to supply air to your HPWH. Also, I'd echo Andrew's concerns about potential moisture problems, even taking into consideration your sill plate leakage. It might be best to exhaust that excess moisture straight outdoors.


Good reminder. The Kill-a-watt is just sitting there staring at me like our rabbit, imploring me to let it do something, anything!

The controls on the Geyser seem to be manually tweakable enough that I should be able to trigger the HP on an airflow or a humidity signal whenever either Bath A, B or the Dryer is running, so it would be handling the moisture right out of the gate, so to speak.. I am going to be puzzling a bit over the moisture in the Vent Hose that brings it to the Basement, though, to make sure that drains or dries properly between wettings.. (Legionaires, etc..) possibly a UV mold/bacteria killer, in the worst case.. but it's a straight down shot to the HP from the Bath.

The best thing about a big Thermal Storage Tank is that I can be adding calories to it any old time, so all these systems can function 'on-demand'.. as long as I can make the triggering function right.

I'd move cautiously on this, Bob. I'm thinking that much of the moisture that you introduce into this space will condense on cold surfaces before the Nyle has an opportunity to pull that moisture back out. I ran our dehumidifier for six hours before heading off to bed at 02h30 and had to turn it back on again at 07h30 this morning because the humidity had shot back up again (the relative humidity outside as I type this is 100 per cent). I've seen first-hand what moisture can do to a building and it ain't pretty. This is one person's opinion, but I think you'd be wise to give this particular option a pass.



I see a few 4' T8, floro tube replacements in LED. Have you tried then are are they worth while.
Are they a straight one for one replacement, or do you need to do a little rewiring to by pass the ballast etc.

And one last thing, does a floro light only use the stated capacity marked on the tube. The reason i ask, is when I ran a 240v 18 watt T8 in an off grid setup, it drew 5 amps at 12v. So 60 watts instead of 18. Now this was a modified sign wave inverter.

Look forward to any feedback.

Hi TP,

I would avoid these T8 LED replacements -- they're expensive and relatively poor performers and you have to by-pass the ballast, so you're feeding 120-volts directly to the tombstones (and, of course, fluorescent fixtures here in Canada may very well operate at 347-volts, or 277-volts south of the border). Technically speaking, you can't made a change like this without having the fixture recertified by CSA/UL, so from an insurance perspective you're asking for trouble.

You can't rely on the lamp wattage to tell you the full story because the number of watts consumed will be determined by the ballast's ballast factor (BF). Most ballasts operate at a 0.88 BF (normal), so a 32-watt T8 lamp is being feed 28-watts. The energy saving low-output ballasts that we typically use in our work drive the lamps at a 0.77 BF, so a 32-watt lamp is actually operating at just under 25-watts. Conversely, a high-output ballast as may be used in a high bay fluorescent fixture (e.g., a warehouse application) may drive the lamps at a 1.18 or 1.20 BF, so each lamp would consume roughly 38-watts. An instant-start 2-lamp NEMA Premium ballast might add a watt or so to the mix and a rapid-start or programme-start ballast perhaps another watt or two beyond that, and that's it. In the case of older T12 systems, the ballast draw could very well be twenty or even thirty watts in the case of an F96T12.

DC-based control gear is a different beast altogether and I'll let someone more knowledgeable take a stab at that.



Great information, thanks for your time.


Hi Paul;
Thanks for the cautions.. don't worry, I'll keep my eyes open and a few retreat routes available - And I'll share all the operatic crescendos here!... B)

Or, you can always pre-heat your water with a homemade water jacket inside your woodstove. Of course we have free wood and the exercise beats going to a gym. It doesn't have to be high tech in the search for efficiencies.


The Pressure Is on as UPS Adds More Hydraulic Hybrids

After testing out a few hydraulic hybrid vans back in 2009, the company is ready to debut 40 of them in the Baltimore and Atlanta markets. Even if the demonstrator fleet is small, it’s a good chance for those working on the somewhat obscure technology to showcase their work in a real-world application.

In the case of UPS’ hydraulic hybrids, the delivery vans will gain about 90 minutes of engine-off time on most routes, which will reduce emissions in addition to improving fuel economy. The company says the new trucks will reduce CO2 emissions up to 30 percent over traditional diesel delivery vans, and will improve fuel economy by up to 35 percent. That can add up to significant savings for a company whose profits depend on gas prices

Massive US-Israel air defense drill set for October

10/10/2012 01:21
Three-week exercise, postponed from spring, will be largest of its kind to date, simulate missile defense scenarios.

The US and Israel will commence the largest-ever joint air defense drill of its kind in Israel on October 21, an army source said on Tuesday.

The exercise, named Austere Challenge 12, was originally scheduled for last spring but was postponed due to regional tensions with Iran.

On October 14, large numbers of American soldiers are expected to begin arriving in Israel, where they will set up aerial defense positions on Israeli territory and on US Navy vessels off the Israeli coastline.

The three-week drill will simulate various missile defense scenarios, and is expected to end with a live-fire interception of a decoy incoming Patriot missile.