Drumbeat: March 29, 2013

Egypt calls in favours as credit crunch hits key imports

LONDON/CAIRO (Reuters) - Egypt has hit breaking point in its ability to pay for imports of oil, wheat and other basic commodities, forcing it to call in diplomatic favours or seek easy payment terms from suppliers who hope for future advantage in return.

Two years after ousting Hosni Mubarak, new, Islamist leaders are struggling to win a credit line from the IMF as they try to manage the hopes of 84 million people with a depreciating currency and an economy hooked on state subsidies but starved of tourism revenues since the political upheavals began.

Fuel shortages, tighter security at petrol stations and scuffles in the streets are becoming common in Egyptian towns as state importers struggle to meet demand for diesel and gasoline.

Though Egypt's strategic importance means world powers seem unlikely to let its economy collapse, the credit crisis is now so acute that it can no longer buy crude in the market, leaving its oil minister scrambling to cut diplomatic deals with Libya, Qatar and Iraq, to add to an existing oil lifeline from Kuwait.

Energy boom begins to ripple through US economy

Marlin Steel Wire, for example, has expanded its payroll and invested in high-tech equipment to keep up with a steady pick-up in orders from other U.S. manufacturers. Orders are rising, said owner Drew Greenblatt, because his customers are receiving a widening discount in the price of natural gas and electricity.

“That’s making U.S. companies that used to be at a price disadvantage now uniquely positioned to win contracts they never won in the past -- or haven’t for a while,” he said. “Everyone talks about what’s going on in North Dakota, but it’s filtering down now to conventional factories throughout America."

Some analysts believe the energy cost savings for businesses, factories and consumers will last for decades.

“This is not going to be a one- or two-year thing,” said Ross Eisenberg, head of energy and resources policy at the National Association of Manufacturers. “We’re going to see lower natural gas prices for a long, long way into the future.”

Why Death of Peak Oil Still Won't Mean Cheap Crude Oil Prices

In a report entitled "The End is Nigh," Seth Kleinman says a combination of flattening demand and rising supply will cause oil prices to slide slightly by the end of the decade to $80-$90 a barrel.

But while oil companies have made many large new discoveries over the past few years, including big shale oil finds in North America and Australia as well as deepwater finds in the Gulf of Mexico, that doesn't mean oil prices will fall.

In fact, according to Money Morning Global Energy Strategist Dr. Kent Moors, it's far more likely that oil prices will continue to rise over the next decade.

Moors points out what most other analysts seem to be missing - that all of the new oil finds present many challenges that will add to the cost of extraction.

Peak Oil Is Dead

On November 7, 1973, President Nixon addressed the nation with a serious warning: America was running out of oil.

Oil Rises on U.S. Growth, Capping Longest Rally of 2013

West Texas Intermediate oil climbed for a fifth day, capping the longest rally this year, as the U.S. economy grew at a faster pace than previously estimated in the fourth quarter.

Prices reached a six-week high as gross domestic product rose at a 0.4 percent annual rate, up from prior estimate of 0.1 percent, the Commerce Department reported today in Washington. Oil demand in the U.S., the biggest crude-consuming country, increased by the most since December in the seven days ended March 22, the Energy Information Administration said yesterday. WTI’s discount to Brent shrank to the smallest since July.

“GDP is better than earlier estimates and a strong economy is bullish for oil,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It looks like the spread will keep contracting.”

Pain at the pump: Have gas prices peaked for 2013?

The pain at the gas pump that you've been feeling may not hurt as much the rest of the year.

After surging nearly 60 cents a gallon from late December to a recent peak of $3.79 on Feb. 27, prices have fallen for 25 of the past 29 days. Nationally, regular grade gas averages $3.65 a gallon -- about 26 cents below year-ago levels.

The month-long drop has come at a time when gasoline prices typically climb, prompting some industry forecasters to rethink early 2013 estimates of $4 a gallon or higher by the peak summer driving season.

Consumer Spending in U.S. Climbs by Most in Five Months

Labor market progress and an increase in household wealth linked to rising home values and stocks are helping Americans cushion the fallout of higher payroll taxes and costlier fuel. Strength in purchases is one reason economists project the economy picked up this quarter after slowing to a 0.4 percent annual rate in the final three months of 2012.

U.S. January Crude Imports Climb 5% from Dec.

U.S. crude imports climbed 5% to 7.953 million barrels a day in January from December, according to statistics from the U.S. Energy Information Administration Thursday.

Meanwhile, net imports of oil jumped 20% to 7.160 million barrels a day in the first month of this year from the prior month. Net imports are made up of the total amount of crude and petroleum products (such as gasoline and diesel) imported, minus the amount of crude and products exported.

Japan Crude Imports for Power Generation Decline in February

Japanese crude imports for power generation fell 30 percent in February as warmer weather curbed demand for electricity to heat buildings.

Japan, the world’s third-largest oil consumer, bought 1.17 million kiloliters of the fuel for producing electricity, equivalent to 262,000 barrels a day, data from the Ministry of Economy, Trade and Industry showed today. That’s down from 1.67 million kiloliters a year earlier. Total purchases slid 11 percent to 15.85 million kiloliters, the report also showed. Power plants accounted for 7.4 percent of imports.

Shell Plans to Spend $1 Billion a Year on China Gas

Royal Dutch Shell Plc will spend $1 billion a year developing China’s unconventional gas reserves, including shale deposits, according to Peter Voser, the company’s chief executive.

Shell has won government approval for its production sharing contract with China National Petroleum Corp., the nation’s biggest oil and gas company, Voser said in an interview in Beijing today. He didn’t specify details for the $1 billion investment.

FACTBOX-China's fledgling shale gas sector

China has invested about 7 billion yuan ($1.13 billion) in exploring shale gas up to the end of 2012, a government official said, three years after embarking on a push into the unconventional fuel.

Small test productions of around 15 million cubic metres were reported by end-2012, far behind a government-set ambitious target of 6.5 billion cubic metres for 2015.

Oil Giants Invest Heavily in Exploration Near Shetlands

LONDON — BP and three other oil giants said Thursday that they would begin a new round of drilling in a remote area about 75 kilometers west of the Shetland Islands, an archipelago north of Scotland.

Corn Supply Slumps Most Since ’75 on Ethanol Profit

Corn supplies in the U.S., the biggest grower, are shrinking at the fastest pace in almost four decades as improving demand from ethanol refiners drains reserves already diminished by drought.

Japan to Start World’s First LNG Futures Within Two Years

Japan, the biggest buyer of liquefied natural gas, plans to list the world’s first futures contract for the supercooled fuel on the Tokyo Commodity Exchange within two years.

The futures will be for cash settlement in dollars and based on an index price for spot LNG cargoes delivered to Japan, Takashi Ishizaki, the director for the commerce policy division at the Ministry of Economy, Trade and Industry, said by phone today. While the contracts won’t be for physical delivery, they will allow Exchange Futures for Physical, or so-called EFP, transactions that enable traders to swap their futures positions for a physical holding.

South Sudan May Take a Year to Reach Pre-Shutdown Oil Output

South Sudan, which is resuming oil output halted 14 months ago, may take as long as a year to reach pre-shutdown production levels because of possible damage to equipment, said analysts including Paul Tossetti at PFC Energy.

Petrobras oil output in Brazil falls 2.3pc in February

RIO DE JANEIRO: Brazilian state-controlled oil company Petrobras said domestic production fell to 1.92 million barrels a day equivalent in February, down 2.3 percent from January's average rate.

The company said in a statement released late on Thursday that the main cause of the drop was planned maintenance work on its P-33, P-37, P-53 and P-54 platforms in the Campos basin.

Britain drops pro-coal energy minister after just six months

LONDON (Reuters) - Britain replaced outspoken junior energy minister John Hayes on Thursday after only six months in the job as government efforts to overhaul the electricity sector and cut carbon emissions reach a critical juncture.

Russian FinMin says no to profit-based taxation of oil firms

MOSCOW (Reuters) - The Russian Finance Ministry said it opposes a proposed shift to a profit-based tax for oil companies rather than taxing output and exports, because its priority is to maximise revenue for state coffers.

Total to Take $1.65 Billion Loss on Canada Oil-Sands Project

Total SA, Europe’s third-biggest oil company, will book a $1.65 billion loss in the first quarter on the canceled Voyageur Upgrader project in Canada’s oil sands after selling its stake to Suncor Energy Inc.

Egypt catches divers cutting Internet cable amid disruptions

(Reuters) - Egypt's coastguard caught three divers cutting through an undersea Internet cable on Wednesday, the army said, the first suggestion criminals might be involved in days of severed connections and disruptions online.

Barclays to add $16 bln of Nigerian bonds to emerging mkts index

Africa's biggest crude oil producer will become the second sub-Saharan African country after South Africa to enter the index following reforms to improve access to its bond market.

Ghana oil output jumps but no plans to loosen policy: C.bank

ABIDJAN (Reuters) - Ghana - set to upwardly revise its 2012 growth figures on a surge in oil output - will continue to bear down on inflation, acting Central Bank Governor Henry Kofi Wampah said.

The country was Africa's fastest-growing economy in 2011 with estimated growth of 14.4 percent as it joined the ranks of the continent's oil producing countries and pumped the first crude from its offshore Jubilee field.

Stuart Staniford: Iraqi Oil Production

I expect further production gains in 2013, and, assuming the country can maintain stability, for Iraq to become a more and more important oil supplier over time. Stability remains a risk, of course. However, the country's oil production is already far more stable than it was under Saddam (due to the latter being under international sanctions, no doubt).

Wave of mosque bombings strikes Iraqi cities

Five car bombs struck Shia mosques in Baghdad and the disputed northern Iraqi city of Kirkuk, killing at least 14 people and wounding more than 70, officials said.

A police officer said the deadliest of Friday's bombing was in western Jihad neighborhood when a parked car bomb exploded as worshippers were leaving a mosque after Friday prayers.

Iran summons Saudi envoy over spy ring claim

TEHRAN, Iran (AP) — Iran has summoned a Saudi envoy to protest the kingdom's allegation that members of a spy ring arrested in the Arab country last week worked for Iranian intelligence.

The semi-official Mehr news agency said in a report late Wednesday that Iran's Foreign Ministry "strongly rejected" the claim during a meeting with the Saudi charge d'affaires in Tehran. The report says Iran is seeking an explanation from the kingdom.

Japan crude imports from Iran fall 32.3 pct in Feb y/y

(Reuters) - Japan's crude oil imports from Iran in February fell 32.3 percent from a year earlier to 953,848 kilolitres (214,268 barrels per day), the Ministry of Economy, Trade and Industry (METI) data showed on Friday, as the world's third-biggest oil consumer seeks a waiver from U.S. sanctions.

India not to halt imports from Iran

Notwithstanding the tightening of sanctions by US and European Union (EU), India does not intend to halt imports of crude oil from Iran. Instead the government is working on a scheme to insure oil import shipments from the Islamic nation to maintain smooth supply of energy supplies and also expand trade in other commodities.

Hunt Becomes Billionaire on Bakken Oil After Bankruptcy

William Herbert Hunt was once one of the wealthiest men on Earth. With his brother, Nelson Bunker Hunt, the billionaire bought more than 195 million ounces of silver -- 60 percent of the U.S. market -- in the 1970s. By early 1980, their stake was valued at more than $9 billion.

The Hunts’ position imploded when silver prices plummeted 80 percent over the course of a few weeks in March 1980, culminating 33 years ago this week on what traders called Silver Thursday. The crash rattled Wall Street and sent the Texas brothers into bankruptcy.

Ecuador auctions off Amazon to Chinese oil firms

Ecuador plans to auction off more than three million hectares of pristine Amazonian rainforest to Chinese oil companies, angering indigenous groups and underlining the global environmental toll of China's insatiable thirst for energy.

Nigeria: Agencies demand oil spill compensation of $11.5 billion from Shell

Two Nigerian government agencies have demanded that oil giant Royal Dutch Shell P.L.C pay $11.5 billion in compensation for an oil spill that took place at offshore Bonga field in December 2011, Reuters reported.

State Department Won’t Release Comments on Keystone Study

The U.S. State Department will not make public the responses it receives to a draft analysis that found the Keystone XL pipeline posed no significant risks to the environment.

The department is accepting comments to a draft study, which environmental groups have criticized for underplaying Keystone’s potential effect on greenhouse gas emissions. TransCanada Corp. (TRP) is proposing to build the project to link Alberta’s oil sands with refineries in the Gulf Coast.

Pipelines are the safest way to transport energy

WASHINGTON (MarketWatch) — Wednesday’s 714-barrel oil spill in Minnesota came not from oil drilling or hydrofracturing, but from the derailment of a Canadian Pacific Railway train bringing Canadian oil to America.

How odd that those who profess concern for the environment are trying to block construction of oil pipelines, the safest way of transporting oil.

“It cannot happen here”: Pipeline pushback attends Exxon Valdez anniversary

The Canadian government has joined oil giant Enbridge in a push for approval of the proposed Northern Gateway pipeline.

Utah governor says Chevron leak is unacceptable

SALT LAKE CITY – A series of spills from ruptured pipelines operated by Chevron Corp. has Utah's governor calling for more oversight.

Gov. Gary Herbert left no doubt about his displeasure Thursday when asked about the latest spill at a monthly televised news conference. He said the federal agency responsible for interstate pipelines isn't doing its job and that Utah will step up its own efforts to ensure pipeline safety.

Can Fracking and Farming Mix in America’s Biggest Ag State?

We all know oil and water don’t mix, but what about oil extraction and water-intensive farming? Can both take place safely in California’s Central Valley? That’s the growing question as the nation’s biggest farm state comes ever closer to embracing hydraulic fracturing or “fracking.”

EPA taking aim at auto emissions, sulfur in gas

WASHINGTON (AP) -- Reducing sulfur in gasoline and tightening emissions standards on cars beginning in 2017, as the Obama administration is proposing, would come with costs as well as rewards. The cost at the pump for cleaner air across the country could be less than a penny or as high as 9 cents a gallon, depending on who is providing the estimate.

An oil industry study says the proposed rule being unveiled Friday by the administration could increase gasoline prices by 6 cents to 9 cents a gallon. The Environmental Protection Agency estimates an increase of less than a penny and an additional $130 to the cost of a vehicle in 2025.

Japan turns to coal as yen drives up energy costs

TOKYO/SINGAPORE, March 28 (Reuters) - Japan is boosting its use of cheaper coal at the expense of oil and LNG to counter a jump in energy import costs that are rising because of a weak yen and with little prospect of a near-term return of nuclear power after the Fukushima crisis in 2011.

Google adds Street View to ghost town inside Japan nuclear zone

TOKYO — Concrete rubble litters streets lined with shuttered shops and dark windows. A collapsed roof juts from the ground. A ship sits stranded on a stretch of dirt flattened when the tsunami roared across the coastline. There isn't a person in sight.

Google Street View is giving the world a rare glimpse into one of Japan's eerie ghost towns, created when the March 2011 earthquake and tsunami sparked a nuclear disaster that has left the area uninhabitable.

German Solar to Gain From Cyprus Crisis as Investors Seek Safety

Germany’s solar industry is set to benefit from the financial crisis in Cyprus as investors seek a haven in the guaranteed returns provided by clean-energy plants.

Turning Pristine U.S. Public Lands Into Solar Energy Farms

For the last four years, President Barack Obama has used the same executive powers to reduce Interior’s focus on oil and enact his own green agenda, as reported in Bloomberg Businessweek’s March 29 issue. Under outgoing Department of the Interior Secretary Ken Salazar, the administration has on average sold 1,000 fewer leases annually for drilling on public lands than Bush, according to data compiled by the Institute for Energy Research, a Washington-based organization.

Companies peddling green energy projects, on the other hand, are enjoying unprecedented access to the 248 million acres overseen by Interior’s Bureau of Land Management. In mid-March, Salazar greenlighted three massive, privately funded clean energy developments on federal properties.

Dairy Finds a Way to Let Cows Power Trucks

The farm is now turning the extra manure into fuel for its delivery trucks, powering 42 tractor-trailers that make daily runs to raw milk processing plants in Indiana, Kentucky and Tennessee. Officials from the federal Department of Energy called the endeavor a “pacesetter” for the dairy industry, and said it was the largest natural gas fleet using agricultural waste to drive this nation’s roads.

“As long as we keep milking cows, we never run out of gas,” said Gary Corbett, chief executive of Fair Oaks, which held a ribbon-cutting event for the project this month and opened two fueling stations to the public.

Blue Sky Thinking

The entirely serious plan to collect solar energy by spaceship and beam it back to Earth with lasers.

Boxcar Energy

Brilliant new strategies for storing power. No. 4: First you roll a train uphill …

Hot cities more sustainable than cold ones, study says

When it's hot outside, people crank up air conditioners that usually suck electricity from coal- and natural gas-fired power plants at the root of human-caused global warming. This seems like a recipe for disaster, but it's more sustainable than living in a cold climate and cranking up the heat, a new paper suggests.

"The traditional view that living in hot desert areas is not sustainable should be re-examined," Michael Sivak, a research professor at the University of Michigan, Ann Arbor, told NBC News. "Because my data suggest that from this point of view — mainly a climate control point of view — living in very cold areas is less sustainable than hot areas."

Big fat weddings weigh down Qatari grooms

Jamal Qassim said he spent 450,000 Qatari riyals ($123,600) on his wedding. He worked and saved for nine years to pay for it. "I didn't even travel once outside of Qatar. I was saving and saving. I didn't buy myself a fancy car." He said he now regrets paying that much. At the end of 2012, he was in the process of getting a divorce.

Marriage rates in Qatar have declined markedly over the last three years, which Qatar government statistics attribute to the high cost of marriage, as well as the advancing educational status of women and their rising participation in the work force.

Figures also show Qatari women are having their first child at a later age and having fewer children overall. Divorce rates have risen since 2001. And local press reports say a quarter of marriageable Qatari women remain single. These are worrying trends for a country where nationals are already heavily outnumbered by migrants.

Accordingly, Qatar has been taking measures to ensure "the continuity of cohesive families and large households", which it sees as "crucial to the national vision", according to Qatar's National Development Strategy Report.

How Green Is Your School?

Whether because of increased student demand or new hiring strategies among employers, business schools are paying greater attention to environmental issues. And while they are integrating sustainability into their curriculums, experts debate how these topics should be best taught, both inside and outside the classroom.

Google to deliver goods to online shoppers

SAN FRANCISCO (AP) — Internet search leader Google is taking another step beyond information retrieval into grocery delivery.

The new service, called Google Shopping Express, will initially provide same-day delivery of food and other products bought online by a small group of consumers in San Francisco and suburbs located south of the city. The company, based in Mountain View, Calif., didn't say how many people will be part of the test.

If the pilot program goes well, Google plans to expand delivery service to other markets.

Mystery Malady Kills More Bees, Heightening Worry on Farms

BAKERSFIELD, Calif. — A mysterious malady that has been killing honeybees en masse for several years appears to have expanded drastically in the last year, commercial beekeepers say, wiping out 40 percent or even 50 percent of the hives needed to pollinate many of the nation’s fruits and vegetables.

A conclusive explanation so far has escaped scientists studying the ailment, colony collapse disorder, since it first surfaced around 2005. But beekeepers and some researchers say there is growing evidence that a powerful new class of pesticides known as neonicotinoids, incorporated into the plants themselves, could be an important factor.

Carbon in Worst Quarter Since 2011 Set for Rescue Vote

Europe’s emissions market is likely to be left all but broken should the region’s parliament fail to agree next month on combating the surplus of carbon permits, after the biggest quarterly slide in prices since 2011.

Allowances, which have plunged 28 percent this year to 4.81 euros ($6.20) a metric ton, will average 5 euros in 2013, according to the median forecast of five analysts surveyed by Bloomberg this week. Prices will probably drop below 2 euros if the European Union doesn’t enact a November plan to delay the sale of some emission rights, according to UBS AG.

Canada quietly pulls out of UN convention to combat drought, desertification

Whether you like it or not, Prime Minister Stephen Harper's Conservative government is reshaping Canada's relationship with the rest of the world.

Keeping rising sea levels at bay

SARASOTA - Picture Longboat, Siesta and Manasota keys with beaches five times as wide as they are now.

Or with human-engineered barrier islands rising between the keys and the Gulf of Mexico.

Or with ranks of invisible walls that flip up from underwater whenever a storm surge is on its way.

These are attempts to counter rising sea levels that are currently under construction in the Netherlands (the beaches and the barrier islands) and the city of Venice, Italy (the undersea wall), climatologist Pier Vellinga told an audience Wednesday at Sarasota's Tiger Bay Club.

Most in U.S. concerned about sea level rise, poll finds

Nearly three-fourths of respondents agree that rising sea level resulting from climate change is a threat to the U.S., and 82% believe we should prepare for the effects.

RE: http://www.businessinsider.com/death-of-peak-oil-2013-3

The theory of peak oil as espoused by the Hubbert Peak is what is problematic. To replace this we need to move toward other analyses that take in to account other sources of variability, such as artificial mechanisms (shocks) and natural effects (diffusion). I would recommend moving to the oil shock model, which can model the plateau, and dispersive/diffusive models, which can model tight oil, so that we don't continue to fool ourselves with our misleading analysis approaches. Everything is not a symmetric "bell-shaped" Hubbert curve.

“… there is remarkable consistency in the history of resource exploitation.
We suggest that such consistency is in part due to the following:
Large levels of natural variability mask effects of overexploitation.
Thus, initial overexploitation is not detectable until it is severe …”

D. Ludwig, R. Hilborn, and C. Walters, “Uncertainty, resource exploitation, and conservation: lessons from history.,” Science(Washington), vol. 260, no. 5104, p. 17, 1993.

Of course, the analysis is only one part of the equation, but is the part that is used to combat the propaganda coming from the BAU crowd.

The theory of peak oil as espoused by the Hubbert Peak is what is problematic.

I think that's fair. One can certainly question whether a model of peak production of particular fields or particular oil provinces would necessarily hold for global peak production, for which for a variety of reasons the decline part of the curve might not be symmetric with the ascent part of the curve. That means, however, that we would need to at least consider the possibility that the decline part of the curve might be more steep rather than less steep than the ascent part (the notorious "shark fin").

Of course the particular article you cited contains absolute nonsense:

But today, it is probably safe to say we have slayed "peak oil" once and for all, thanks to the combination new shale oil and gas production techniques and declining fuel use.

That seems to mean either:

1. That the production of oil will never peak but will continue to rise forever, or

2. That "fuel use" will eventually decline to zero because, after all, an economy does not need energy to function.

Perhaps it means both. Both meanings are equally nonsensical, and their combination is even more nonsensical than either considered alone: Oil production will continue to rise forever while oil use falls to zero.

Sometimes it is really more of an appearance thing than anything substantive. So the piece features a Hubbert Curve chart and states that it didn't happen symmetrically and so is somehow debunked. We all know that is not the case.

The piece also states that we are all "acolytes" of Peak Oil as if it is strictly a doom discipline.

"So unlike some of his acolytes, we'd imagine he'd probably be rather pleased to be disproved."

Hubbert was a smart guy but he was using primitive math that didn't benefit from the advances made since his time. I bet he would have been pleased to see how much the math could be improved. Some of us are more interested in the analysis than in the gloom and doom.

I think there is as much reason to be interested in the gloom and doom as there is to be interested in the analysis. If you just consider the analysis and not the implications of an analysis, then your response to any assertion that oil production has peaked, is now peaking, or will peak in the near future could be "So what?"

I happen to think that the economic consequences of peak oil will turn out to be very serious, if not necessarily the Apocalypse. I am even more worried about peak fossil fuels, which could lag peak oil by a good couple of decades if production of coal and natural gas continue to rise even as production of oil falls. Peak fossil fuels, that's the Apocalypse, as I don't think there's much likelihood of getting to that point and then staving off a global economic disaster on the scale of the Great Depression -- or, indeed, much worse -- given the way our economy is currently organized and given the likely available substitutes.

Of course if we didn't experience peak fossil fuels, there's every reason to believe that we would just continue to burn them at ever increasing rates until we tipped over into apocalyptic climate change. If so, then it's really just a case of trying to figure out which apocalypse we end up having to deal with -- and hoping that we don't have to deal with both of them at the same time.

I still think Hubbert was spot-on. The logistic equation is self-evident for predicting depletion once you understand exactly what it is modeling.

However, we have one huge sway influencer the logistic equation does not account for, and that is economics.

The logistic equation quite accurately predicted the depletion of $10 oil.

Economics of increased effort to recover "past the peak" will skew that peak to the right, substantially, but at the peril of a substantial increase of collapse velocity as the economics that supported high priced extraction fail.

It is my belief that we are well past the Hubbert peak, but this is not going to overlay nicely on a Hubbert prediction based solely on extraction rate, as the relentless uptick in price shifts the peak forward in time.

We have been fortunate so far that energy stored as oil has been an incredibly small fraction of the cost of energy from other sources ( horse or human ). Even with an order of magnitude cost increase for oil, its still cheaper by far than paying the price of energy from other sources. But sooner or later, two converging lines will cross unless something changes. That is one line of benefit and the other line of cost.

I feel what we have been seeing lately is the powers that be trying to keep the theater calm knowing there is a fire, kinda like the captain of the Titanic wanted to keep it under wraps as long as possible the ship had a fatal wound. No leader wants to work in a panicked environment where it will be next to impossible to maintain a pecking order or collect taxes. If they can convince most of us its "business as usual", marketeers can continue to expect "growth" year after year, and money keeps changing hands, and tax revenues continue as usual. When the "SHTF", there are gonna be a lot of bills unpaid... can you imagine trying to collect rents from people who have no money because the economy has collapsed and they have no income?

There is one word in the electronics industry I work in that I feel describes the scenario. Hystersis. What I see seems to model a Schmitt Trigger circuit, with ecomomic gain providing positive feedback to keep the output ramping up... but once a threshold is reached, this circuit snaps the other way. Fast.

BTW, what is driving this week's rampup of oil prices?

The IMF model (lead by Michael Kumhof_ combined the Hubbert logistics curve with and economic curve for growth in supplies as prices rose.
You might Google and download the paper (too dangerous to post a link).

The middle case is oil prices double every decade while the volume increases by 0.9%/year - until "we" (the oil importing nations) cannot afford it anymore.

IMO, the best model of the future yet.

Best Hopes for Increasing the Elasticity of Demand for Oil (by providing oil free alternatives),


Too dangerous to post a link?

"Comment queued for moderation"

Posting a link seems to be the single biggest trigger for it.

Too dangerous to post a link?

Did you not get the memo? The TOD spambots are watching >;-)

Alan, I took your advice, googled around a bit, and found this... Thanks!

PDF Warning: It's almost a 1 megabyte.

The Future of Oil: Geology versus Technology.

It goes a lot into the math behind the economics, much of which is beyond me. It looks to me Michael Kumhof is very aware of the flipping nature of this model, as well as Export Land modeling and entropy analysis. I am somewhat relieved to find some influential people at the helm aware of this peril.

And Leanan, I feel for you trying to keep the spam off this board. Another board I frequent is currently getting nailed so much well over half the posts are offtopic cut and paste junk.

Thanks, this is a new paper to me (but clearly linked to earlier papers).

And Best Hopes for Serious Research,



Regarding your comment on posting links.. it looks like your observation as to posting links being held for moderation seems to be related to the new automated spam rejector module Leanan referred to downthread.

From what I can tell, the new module Leanan referred to is mollom. Website www dot mollom dot com.

When I linked to it as a "dot com" in another post in this thread, it held me back too for moderation, but did not do so for the "dot pdf" file I posted here. Apparently spammers mostly want to link us to active content ( htm, html, asp, whatever ), not files ( pdf, jpg, png , etc. ). When we do the same, it thinks maybe we are spamming as well. Apparently a lot of people may have their machines compromised with "spambots" that allow others to upload crap in our name... anyway that's the gist of what I inferred from mollom's website.

It looks like until the mollom system gets acquainted with who is who around here, people like you with what I feel are excellent credentials as a long term member get the same treatment as some clown trying to sell snake oil.

Super G is in contact with the Mollom people. He's trying to reduce the aggressiveness of the filter. If that's not possible, we will probably be trying a different product.

Thank you for both the compliment and the information :-)

Best Hopes for Less Spam,


(too dangerous to post a link)
Try posting it as a text string "www.mysite.com/page.htm"

That may work

Drumbeats seem more tolerant than key posts.

No, the Drumbeats just have more of a moderator presence. Queued posts are approved more quickly - sometimes so quickly people don't realize they were blocked.

I didn't get the memo. Can you point me to a discusion or some more information. Should I not post links in the comments? I read here often, but not daily, and post infrequently.


Starting a couple of weeks ago, we've been hammered by spam. Like, 10 spam comments for every real one. Super G blocked a bunch of likely spammers...there were 70,000 of them. We've been forced to install an anti-spam module.

It does a fairly good job of blocking spam, but is also blocking a lot of legitimate posts. Posts containing links and images seem especially prone to be wrongly flagged as spam.

If your comment is caught in the spam filter, you'll get a message at the top of the screen saying your post is queued for moderation. Be patient, and we'll approve it. Do not keep submitting your comment hoping it gets through; it won't. Also, if your comment was caught in the spam filter, do not edit it once it appears. That will put it back in the spam corral.

I'm hesitant to create a post explaining all this, because I'm not sure how long all this is going to last. We might change the settings, or switch to a different spam filter, or something. As it is, it's a right pain, for both us on staff and the rank and file user. But letting the spammers continue unabated is not an option.

Leanan: Quite a few of us here, and you know who we are, respect this board highly and have no intention of abusing it. By the nature of this board and what we discuss here, links and images are the primary content of a useful informative post.

I see where you have engaged the services of Mollom to help keep the site free of spam. They seem to be doing a pretty good job. Apparently they have a database of IP addresses of known spammers. I get the strong idea the false positives seen by some here have a strong likelihood of sharing a subnet with a known spammer. With the magic of dynamic IP comes the likelihood one is issued a IP address that a spammer just used to deliver a load of crap to someone else. The stink is still in the air when the soiled address is dynamically reassigned to an innocent waiting for his IP from his service provider.

This board is one of my favorite reads of the day. This forum is well populated with industry people and students of the trade who post very interesting discussions of our energy situation.

Sometimes I run a concept up the flagpole to see if anyone salutes. The people here have been very keen to either reinforce me, or tell me where I am wrong. Either response is very welcome.

The last time I made any significant posts was over Rossi's eCAT device and Terawatt, neither of which to me stood up to scientific analysis, and I left my blogs on this site where others could see the analysis and where I was coming from. I hate to see snake oil salesmen living high on the hog from the ignorance of others or the taxation authority of their government buddies, then insulating themselves from making good on their promises by weaselwording their contract.

70,000 spams is a heck of a lot of work to fish out. I truly thank you for your housekeeping efforts.

It also depends upon the distribution of the difficulty of the resource. The logistics curve might be somewhat likely if it is a simple log-normal curve. What if the resource is the sum of two types of resource, say easy-oil, and tough oil. Then in the early days you would think the simple logistics curve is working, up until the secondary resource starts being tapped in a meaningfull way. Perhaps that's what we are seeing with oil, conventional, and then unconventional resources. We are ramping up the later, whilst the former is winding down.

Canadian oil production displays that sort of compound curve, with conventional oil rising to a sharp peak in 1973, a steep decline paralleling that of the US for a decade after that, and then a reversal of the decline and a slow but steady climb to new heights as non-conventional oil came on production. Canadian oil production is now approaching twice the rate of the false peak in 1973.

However, that is because of the vast amounts of oil in the Canadian oil sands which can be produced at prices as high or higher than current ones. It is questionable whether there is enough non-conventional oil in the rest of the world which can be produced at affordable prices to make a big difference in the global supply curve. There is only one other deposit of non-conventional oil in the world comparable in size and cost of production to the Canadian oil sands, and that is the Venezuelan oil sands - and Venezuela production has been declining rather than increasing in recent years. Higher prices have not been enough to offset bad government management of the resource.

Well could the Venezuela oil sands offset peak oil... if it is the size of Canada seems like it could stretch out the plateau a lot longer.

Venezuelan oil production is declining, while at the same time Venezuelan oil consumption is rising rapidly. It is exporting less and less oil. Venezuela is not so much a solution to peak oil as part of the problem.

OTOH, in Canada oil production has doubled since 1980, while oil consumption is no higher than it was in 1980. The increase in production is basically all being exported to the US, so Canada is part of the solution, at least as far as the US is concerned.

Canada wisely does not subsidize its gasoline/diesel. In fact they tax it (slightly) more than the USA (though not nearly at European levels).

A lot of that Venezuelan gasoline is probably smuggled to neighboring countries.

I still think that Venezuela will eventually turn its situation around. They've got a LOT of valuable oil. Yes, much of it is difficult to extract. But it is going to be extracted one way or another. Either the Chinese or Russians will extract it with their agreements with Venezuela or the political climate will change the the western IOCs will extract it. But it is not going to stay in the ground for the next 50 years.

Well we can't really move to something else. Peak oil is already out there and can't really be pulled back. That being said, I really don't see anything wrong with it. The plateau is just lasting a little longer than most peak oilers expected.

All peak oil really says is that oil will one day peak and then decline... forever. All this stuff about a bell shaped curve is just is just something some people envisioned, but not necessarily part of the peak oil paradigm. So just because we have not seen a bell shaped curve, gives some people the idea that peak oil is something that will not happen.

So we are now worried about people who express such an opinion? On the contrary, I think this is great fun. What I mean by that is that we have all these peak oil deniers publishing their opinions right when oil is peaking... or just after the actual peak.

So Web, don't get impatient. It will not be very long until we can witness all those deniers eating crow.

'Ah, all things come to those who wait,'
(I say these words to make me glad),
But something answers soft and sad,
'They come, but often come too late.'

Ah, but in this case they will not come too late.

Ron P.

True it is fun waiting it out, and it does provide me with much of my motivation. If I made some really bad projections, I would probably run away and try to forget about them. But we are not like most people, and we don't mind staring into a potential abyss.

The piece that I quoted by Ludwig on variability is the impatience squasher, and what leads to procrastination by the general public. So that anytime a hint of promise with respect to resource surpluses reveals itself, the public loses whatever resolve has built up. That's why the techniques that include randomness and probability are so powerful in that they can accommodate these excursions that we see in resource supplies, and provide warning that these may in fact just be fleeting fluctuations.

Somebody on RealClimate linked to the concept of the "sliding scale" of expectations:

Five Principles of Effective Management :
Our lack of understanding and inability to predict require a cautious approach to resource exploitation. Here are some suggestions for management:
1) Study human motivation and responses as part of the system
2) Act before scientific consensus is achieved
3) Rely on scientists to recognize problems, but not to remedy them (interdisciplinary problems / external pressures)
4) Distrust claims of sustainability. Be always ready to act
5) Confront uncertainty. Effective policies are possible under conditions of uncertainty, but they must take uncertainty into account

What I am doing in my analysis is using all the tools of uncertainty quantification and applying it to resource and environmental issues. These bullet points actually reflect my own thinking, which I don't always articulate properly.

BTW, I am working on an environmental modeling web server, which should be fully online within a few months (send me an email if you want a peak at a cloud-hosted prototype version). This is a semantic web server backed by an ontology so it will function as a knowledge-base as well as a modeling and simulation platform. The general motif of the tool is to provide a platform for understanding and applying what our natural environment (land, aquatic, atmospheric) has to offer.

Web, just interested in your thoughts.

For instance, it is clear that you are not a fan of Hubbert Linearization since it is based on a bell-shapped curve:

"Everything is not a symmetric "bell-shaped" Hubbert curve", as you say.

But as I understand it, the problem is that there are almost no examples of resource depletion of a major natural resource from start to end, so it seems to me that it is kind of hard to make that statement. I know some have looked at whale oil and a few other smallish things. But I have posted the the graph below before of the distribution of the production of high-grade iron ore from the Iron Range in norther Minnesota (from many different mines), which is the best case I know of for a complete cycle resource depletion of a major natural resource [the blue line is the high-grade 60+% iron ore, the red line is the since increase in low grade taconite}, and it is pretty darn symetrical, and would have been even more so if it hadn't been the huge drop in production due to the Great Depression.

Also, if you go to page 21 of Jean Laherrere's recent report on world oil production linked below, it shows the linearization of crude production minus Extra-heavy for both the world and Non-OPEC and I am not sure how you can argue with a straight line.

Anyway, just some observations and thoughts.

Image and video hosting by TinyPic

And at a minimum, Deffeyes (using HL) accurately predicted a major inflection point in global crude oil production, at a time when most analysts, e.g., Yergin & CERA, were predicting an indefinite 3%/year rate of increase in production.

Given that 32% of the earth's crust is iron, we are never going to run out of it. Your analysis of the Iron range in Minnesota is simply the same kind of analysis as the depletion of an individual oil field.

I don't think that it is quite analogous to an individual oil field, since it is a range of iron mines. The open pit and underground mines in the "Iron Range" also included the spatially separated Cuyuna, Vermillion, Mesabi, and Gunflint ranges and these were not discovered and exploited simultaneously. The statistical dispersion in timing and extraction is what always gives rise to the overall shape. That's what makes the underlying math analysis so useful when doing these comparisons.

Given that 32% of the earth's crust is iron, we are never going to run out of it.

Pasttense, you should make better use of the internet and Google. It is really quite easy.
Which Elements Are Contained In The Earth's Crust?

Element	Percentage
Oxygen	   47.0
Silicon	   28.0
Aluminum    8.0
Iron	    4.5
Calcium	    3.5
Magnesium   2.5

Ron P.

Thee is always the earth's core - but to describe the technical difficulties in extracting it as formidable would be an understatement.

>>"Given that 32% of the earth's crust is iron, we are never going to run out of it."<<

Gosh, that sounds so familiar, I wonder where I have heard that before? Fact is, everyone agrees that we will never run out of oil either--I have been to the first oil well drilled in the US, and I assure you it is still producing--just not very much.

Here is the Wiki site for iron ore:

Here is a comment on world iron ore productin from that site:

>>"Available world iron ore resourcesThe Iron ore reserves at present seem quite vast, but some are starting to suggest that the math of continual exponential increase in consumption can even make this resource seem quite finite. For instance, Lester Brown of the Worldwatch Institute has suggested iron ore could run out within 64 years based on an extremely conservative extrapolation of 2% growth per year.[10]"<<

Meanwhile, the Minnesota Iron Range provided all the high grade ore used up through WW2. When that high-grade ore peaked, the US was no longer the worlds largest producer of iron ore. So in that respect it was similar to Hubbert's Peak for oil. The iron range still produces iron ore, but it is a much more expensive operation requiring the crushing, then magnetic seperation, and then pellitizing of the low grade taconite that is left.

So in many ways it is very similar to the rise and decline of oil production in the US--which as Hubbert theorized, also was a basically bell-shapped curve. So I am not so sure that a bell-shaped curve can be automatically dismissed as a curve type for most of the world's resources.

Actually, the Drake well in Titusville is only for show. A few years after it was first developed it was redrilled about another 100 feet down. They failed to find much more oil. Later, when the site was tourist-ified, they filled it up with cement to the original depth of 69 feet and poured one barrel of Pennsylvania crude into it, which they pump up and let dribble back down again as a demonstration.


See, the oil will never run out.


Geez, I do hate being the dumb tourist, but I guess I were one. But it seemed plausible, though, when the guy showed the daily oil extracted in a tiny vial--seemed possible that they could still extract that small amount. Makes one wonder if the term "oil-stained brine" even has any real truth to it.

That's a great graphic and it shows the influences of shocks to the system. The shock between 1928 and 1932 is clearly due to the start of the great depression. So something like the shock model would apply here.
(Another case is the UK North Sea oil production, which has two peaks, split by the Piper oil platform disaster)

The other aspect is the noise in the system, which is reflected by the fluctuations in the production level. This is effectively modeled as a stochastic system, something that the Hubbert Peak could never accommodate.

Other than that, a stochastic model could also show close to a symmetric peak. I described this in a top-level TOD post from several years ago:

In general, these all describe growth curves and the approach is very general. To get something symmetric requires underlying properties of a specific nature. In the case of a symmetric Hubbert Curve, it does require perfect exponential growth and also uncertainty in the parameters that are damped exponential.

BTW, I am guessing that the red line in your figure is that of taconite production? This is the case of diminishing returns of pure iron being replaced by a lower grade of iron (taconite) once the economics are right.

This is cool because I think it is the analogous situation for the crude oil to Bakken oil transition.

Thanks for the reply, Web. I was responding to Pastense before I had read your reply.

Yes, the red line is the taconite production. Just shows that if you have enough cheap energy just about any resource can be mined to infinity. But when the energy runs out--watch out!

I have read that early man actually could make copper impliments fairly easily, since early sources of almost 100% copper could be found. Now as I understand it, most ore is in the 1% range or less. Once the energy runs out for that, Future Man won't even have the copper resources early man had--they have all been used up.

Going back isn't going to be as easy as going forward was.

Just shows that if you have enough cheap energy just about any resource can be mined to infinity. But when the energy runs out--watch out!

See Ugo Bardi on the Universal Mining Machine.

Thank you, P. Coyle. That was an excellant post by Bardi. I read it, and then printed it out and will read it again, just to make sure I understand completely all the variables involved.

This is what the Piper Alpha explosion did to UK North Sea Oil production

Note the highlighted areas, the extraction rate dipped near the time of the disaster in 1988 and then took a while to recover. Currently,, the extraction rate is near the historical average but the production is falling.

This has nothing to do with the Hubbert Logistics function but is an application of dispersive discovery and the oil shock model.

Your point is well taken on the limitations of the logistic curve used by Hubbert. In some ways maybe a victim of his success in projecting the peak of U.S. production. IMO, the logistic curve is a pretty good model of production of a well-defined commodity, continuously produced, over a proscribed geographic area. Beyond that fairly 'ideal' condition, as you say, things get messy.

L. F. Buz Ivanhoe on what Hubbert actually said


Re: Carbon in Worst Quarter Since 2011 Set for Rescue Vote

This story shows that the European Cap-and-Trade scheme isn't working very well. Perhaps that should be a warning for those in the US who think a similar system in the US would be a good idea.

The apparent failure of the Cap-and-Trade approach doesn't apply to a direct rationing system. Cap-and-Trade filters down from the industrial users to the individual consumers as a price increase, much like a tax, whereas a direct rationing system would put a limit on each individual's use. With a white market for trading some of the allocations, a reduction in the market price would be seen as a success, as it would indicate that people and businesses were actually able to achieve the desired reduction in emissions...

E. Swanson

Cap and Trade is a market-oriented system. As such, it can work in an environment where multiple competing 'fixes' can be tested in the marketplace, with the best ones getting adopted, and users benefiting from the flexibility to choose from many potential solutions. The problem is that such fixes do not exist -- may not ever exist -- for CO2 emissions. Absent ways to reduce emissions, Cap and Trade can't be any better than a carbon tax. And the EU's experience shows it can be clearly inferior.

Simply having a market mechanism implies the need for a system to buy and sell those allocations and each trade involves a transaction cost. The people who run the market make a profit, no matter what happens to the allocation price, much like the stock markets. I think that part of the problem with Cap-and-Trade is that the market for the allocations promotes hoarding and speculation. And at the end of the line, the effect on the population is much like that of a tax, except the revenue doesn't necessarily flow to government, which might use that revenue for beneficial purposes.

The fact that the price of allocations has fallen so low during this period of economic slowdown also shows a weakness, as this might be a great time to put those unused resources to work building low carbon alternative energy systems. A tax system or a direct allocation scheme would continue to promote the desired goal of reducing CO2 emissions. The use of a tax might impact economic activity in a negative way, while a direct allocation approach wouldn't add to price increases even as the incentive for reductions in CO2 emissions remains in effect...

E. Swanson

Can't one argue that the collapse of CO2 prices in a period of economic slowdown is a good thing?

If prices collapse during recession, and sharply rise during boom times, it forces society to invest into reductions during boom times, i.e. at times they can actually afford to invest into environmental measures. During recessions, it might on the other hand be good if there is some relief from rising coasts.

A cap-and-trade schema compared to a tax can therefore potentially smooth out the social / sociatle coasts of the tough decisions to reduce CO2?


I agree that the Cap and trade system has not worked well,and I think a carbon tax or possibly a fee and dividend system would be better. The problem with direct allocation is that the resource will tend to be misallocated. Your solution (and I think it is a good one) is to create a white market (I assume it will be run by the government) so that the market will be allowed to allocate the resoyrce more efficiently. I think that there would likely be transaction costs here as well, and if it is clear that a government run market would have lower transaction costs we could have the government run the Cap and trade market.

The biggest problem with cap and trade is that too many allowances were given away for free. One way to get the market back to where it needs to be would be for the government to buy up excess allowances and to no longer give away free allowances. Or the entire thing could be scrapped.

You are correct that direct allocation (or rationing) would work best because we would only allow so much carbon into the atmosphere, by setting limits. Taxes (or fees) would require that the taxes be adjusted upwards if they were not high enough to reach a carbon target and politically that would never happen.

As I see it it would be an even bigger problem politically to get people to agree to fossil fuel (or carbon) rationing. If we could get past that your solution would be great.


I agree it can't be better than a carbon tax. Although that isn't true unless one defines what he means by better than. A cap&trade system, assuming all sorts of outs weren't negotiated into it, assures a given level of emissions, the price will wind up as whatever it takes to deliver X. A tax, fixes the price, and lets emissions adjust.
Two big things hurting the EU system. One, they gave out too many alliances, -the result of too many special interests with too much power to gum things up. And then the great financial crash, and Europe's embrace of austerity means emissions were gonna drop anyway, so the price needed to meat the targets is ridiculously low. Had the target been set realistically (which might have required an economic crystal ball), and politics not made such a hash out of it -it might have worked.

Does anyone have a good and honest analysis of why the prices have collapsed so much?

As Black_Dog mentioned, one could see that as a great success. If prices for CO2 have collapsed so much, it means it is way cheaper to reduce CO2 than initially expected (or convinced by industry lobbyists). I.e. industries much rather just reduce their own emissions than to buy CO2 certificates at anything more than a tiny price. That would be the best proof that the economic costs to reduce CO2 are manageable and that it isn't really an issue to aim for tougher goals on CO2 reduction.

On the other hand I have also heard the version that prices have collapsed, as the market has been flooded by dubious CO2 offset measures outside of the EU. So basically the cap-and-trade wasn't a cap-and-trade but a expand-and-trade which then obviously doesn't work to well. That would then indeed be a failure in terms of environmental protection, but not so much of the cap-and-trade system, but the way the EU implemented it.

There is also the aspect that the highly subsidised renewable energy schemas have distored the CO2 market, as the reductions of CO2 in the power sector weren't due to CO2 market conditions. However, in that case, if consumers pay a high price for reducing the CO2 in the power sector, perhaps they deserve to get a break in other sectors?

So what does the collapse of CO2 prices really tell us about the achievability of CO2 reductions and their economics coasts?

The fact the European cap and trade scheme doesn't work well could be because it is refereed to the standards of TV wrestling. Tighten that up and the inefficiency and fraud could disappear. As I see it the main problems are issuing of free permits ('grandfathering') without a time limit and allowing carbon credits of questionable merit. That is every permit to emit a tonne of CO2 must be purchased upfront. Carbon credits must meet tough criteria so they represent genuine savings. Permits and credits will then hold their price in the resale market because they represent value.

The alternative seems to be a mixture of carbon tax and a command system like renewable energy targets. The Australian experience so far has been weak emissions reductions and escalating power bills. With cap and trade minus the freebies the spot CO2 price should represent what the economy can afford. The daily CO2 price will get quoted on business news like the price of oil or gold.

What carbon tax and renewable targets have come to in Australia is this; a political party which may remove or water them down seems set to win the next Federal election. Major power companies are threatening not to play ball. Billions of dollars in supplementary handouts have been given to ease the pain for brown coal burners and aluminium smelters but nothing changes. Meanwhile millions of tonnes of coal get exported to countries with no serious carbon tax while we kid ourselves wind and solar will do the heavy lifting. It's time I think to try cap and trade with no freebies or openings for manipulators.


That's a link to a youtube video on methane in the arctic. It's interesting from the standpoint that how much more of a greenhouse gas methane is relative to CO2, is a mandated number stretching methanes effect out to a hundred years vs. it's value if there is a short term very large increase in methane being released. Currently the mandated number is 25 times greater, but according to the scientists in this video, over a short term methane release like the one that occurred at the end of the Younger Dryas (taking place in just 10 years), the multiplier would be 100 time greater.

That spike in temps at the end of the Younger Dryas was 12C and only took 10 years! So a little more than 1C per year increase over that short time period in which methane would have had an effect of 100 times greater than CO2.

I think you are overstating the global warming after the Younger Dryas. Some of the Greenland Ice core data show a large spike, but that data is high latitude where the effects of a sudden Greenhouse Gas spike would be greatest. Also, the Greenland data is influenced by what happens in the high North Atlantic and Nordic Seas and the Younger Dryas is thought to have been caused by a shutdown in the THC, which would have produced local cooling, with much smaller global impact.

The d18O warming transition at 14.7 ka was the most rapid and occurred within a remarkable 3 years, whereas the warming transition at 11.7 ka lasted 60 years; both correspond to a warming of more than 10 K (6, 20). d18O records from the GRIP (9, 21), GISP2 (9), and DYE-3 (7, 17) ice cores across the 11.7 ka transition show a similar duration. The d18O cooling transition at 12.9 ka lasted more than two centuries, much longer than the warming transitions, and does not meet the above criteria for being
described as a ramp shift...

Source: High-Resolution Greenland Ice Core Data Show Abrupt Climate Change Happens in Few Years, Science 321, 680 1 August 2008
DOI: 10.1126/science.1157707

This more recent core data is sampled at sub-yearly resolution, that is, around 3 samples per year. Also note that the proxy for temperature, d18O, represents the temperature of the moisture source which produces the snow falling at the site. Thus, changes in source region via changes in atmospheric circulation over the site must also be taken into account. There were 2 replies to this report, available online with the report from SCIENCE, discussing this problem...

E. Swanson

It seems that the activation energy of the methane compounds, such as methane clathrate, is what is important. The activation energy relates to the heat of vaporization and that is what is sensitive to temperature and potential positive feedback. According to the Boltzmann relation, the higher the activation energy the faster the rate that outgassing of methane can occur.

I would ask the question of what kind of activation energy are we talking about here? Is it like the rather small value of 0.2 to 0.3 eV of dissolved CO2 in water, or is it some higher value nearing 1 eV of an unstable methane clathrate type of compound. It's hard to find definitive values for these methane sources.

There are other issues such as that ocean temperatures are always moderated by the heat sink of surrounding waters, while land temperatures areas show more direct heating. Also that the residence time of methane is relatively short in comparison to CO2.

You would think that there is a lot written about methane clathrate properties since the Japanese and others are considering using it as an energy source to replace conventional fossil fuels. It is either a ticking time bomb or our salvation. Weird times.

I agree with the framing above by E.Swanson, looking at the body of work.

However, I also give serious consideration to studies like this one about the history of Siberian permafrost.

In a rather non-alarming way, they suggest that vast areas of permafrost can melt more quickly that we thought possible.

To me this is just another factor to consider as you look at GHG from one source or another.

I personally fear that estimates of anthropogenic climate forcing are far too conservative. In other words, if the feedback loop gets rolling, we're down for 2C in 40 years and 4C in 60. (That's just my opinion, based on what I read.)

I think you are overstating the global warming after the Younger Dryas.

Actually I'm not overstating, but rather repeating what is said in the video, which is shown as a graph with a spike in temps of 12C over a 10 year period. Whether that temp. rise is local to the Arctic or worldwide is not specified. But even if it is regional, I mean really, 12C! How would that not be catastrophic worldwide? The point they make is the temp. rise coincided in parallel with methane increases. Which of course means it could happen again in that short a period of time and in such a case methane would be 100 times greater a greenhouse effect than CO2.

I think one must consider the mechanism(s) for those warming/cooling events. It's likely that the Younger Dryas cooling was the result of a massive flooding of the North Atlantic and Nordic Seas as water from the melting ice sheets over Canada was suddenly released into the ocean. Obviously, since there aren't any ice sheets today over Canada, this mechanism isn't going to be repeated. The later warming at the end of the Younger Dryas reversed the cooling, perhaps as the THC were re-established in the Nordic Seas. There was another such event, the 8200yr BP event, which may have been the result of another such release, but, again, there's no large glacial lake(s) available to cause such flooding.

The melting of the Greenland ice cap might eventually produce cooling, but that would depend upon how fast this was to occur. The complete melting of the sea-ice over the Arctic might also result in a reduction of the THC, which I suspect to be more likely and may be now underway. Faster accumulation of methane in the atmosphere would exacerbate the rate of warming. My WAG is that this would not result in a rapid warming with a rate similar to that of the end of the Younger Dryas, as you suggest...

E. Swanson

The later warming at the end of the Younger Dryas reversed the cooling, perhaps as the THC were re-established in the Nordic Seas.

Their graphs show a direct correlation between temp. rise and methane released in that rapid warming period of 10 years ending the Younger Dryas. So are you suggesting a change in ocean circulation was the cause of the methane released at the end of the Younger Dryas? If so, what difference would it make whether the source of methane increasing is rise in temps. due to change in ocean circulation or CO2 emissions?

Not sure if you've viewed that youtube video which is about half an hour yet, but I recommend it. Sure it's long winded and the latter portion very redundant but the correlation they show between temp. rise and methane released I found very interesting.

The real difficulty seems to be that we are heading into unchartered waters, so to speak. We have never had these conditions in the past, where CO2 is a pre-curser to a new large warming event. Always before something else created the spike, and we have a geological record of events that then transpired.

Today, we have massive increases in CO2, and the possibility of several theoretical consequences, any of which could create rapid warming. And we do not have any way to know which if any of these consequences will take place. The fact that any one of them could be disasterous makes our situation especially fraught with peril. More than one tipping point could spell the end of civilization as we know it.

Is it possible that all life would be wiped out by a worst-case scenario? No one can say that it would, or even could. Past history shows that life is tenacious on this Planet - and most would acknowledge that the end of all of it would be difficult to predict. On the other hand, we also have the nearby planet Venus, where CO2 seems to have rendered the planet uninhabitable by any sort of life.

In any case, continuing to go forward, burning fossil fuels and releasing increasing quantities of CO2 is incredibly stupid, and requires an unbelieveable amount of greed and hubris. All of which are present only in Corporations in the amount needed to continue. But BAU is all they know, so my predicition is not a prediction at all, but rather, "we will all see what we will see." We can only hope that some sort of civilization survives its excesses, and at some time we are able to escape our predicament.


Craig wrote:

Is it possible that all life would be wiped out by a worst-case scenario? No one can say that it would, or even could. Past history shows that life is tenacious on this Planet...

Yes, I agree that it would be difficult to "wipe out" all life on the Earth. But, that statement does not preclude the situation where the remaining "life" is completely different from what which we now find on the surface. As I recall, for millions of years, there was no life on land. And, what there was living within the oceans were rather primitive, single celled critters, eventually followed by higher order species. Civilizations (aka, people) are built on top of the existing ecosystems and when those are gone, civilization (and lots of people) probably will vanish as well.

Hope for the future won't stop humanity's mad race to the cliff...

E. Swanson

We have never had these conditions in the past, where CO2 is a pre-curser to a new large warming event.

Good point. One of the interesting aspects to what is being presented (in the video from my first post on this thread) is they plot three different measurements on the graphs, temp. rise, methane and CO2. Although all three look like they are in close lock step to one another, they make the point that methane is more closely correlated to temp. rise than CO2. They also describe how most policies towards AGW have been in regards to slow warming via CO2 increases, but their data from ice cores shows great potential trouble could come from quick methane releases like the one at the end of the Younger Dryas, (of 12C in only 10 years). Government policy makers may have their head wrapped around 2C in regards to possibly limiting CO2 emissions, but feedbacks may kick in huge quick methane releases. Of course in this time period CO2 would be the initiater of methane releasing, however even though CO2 levels have risen from 280 in pre-industrial period 1880 to 395 now the associated warming has only been .8C. It's the feedbacks that may release huge amounts of methane that they are warning about.

Indeed, I watched the video as I commented. Since methane is oxidized to CO2 and H2O over time, it's residence time within the atmosphere is short, a half life of 12 years if I understand the presentation. Thus, increasing methane concentrations require an increasing rate of release, which then brings up the problem of Methane Clathrate melting. HERE's an even more scary video, FYI. The problem of the global warming potential of methane turns into one of a faster growth of CO2, if the sea bottom release speeds up, as the CO2 would remain in the atmosphere much longer. And, unlike fossil fuels, a large fraction of the store of clathrates might be released as warming of the Arctic progresses.

As for the fast rise in methane found in the ice corers and the tight link between the methane concentration and temperature, that methane might have been sourced from land based wetlands, not ocean clathrates. AIUI, Siberia was NOT covered by ice sheets as seen over Canada at LGM. Another possibility is the anaerobic decomposition of organic material released by the retreat of the ice sheets...

E. Swanson

As for the fast rise in methane found in the ice corers and the tight link between the methane concentration and temperature, that methane might have been sourced from land based wetlands, not ocean clathrates.

Yes, that may be possible.

Thanks for the link, had seen it before. Definitely a concerning, developing story to keep an eye on.

And he didn't mention permafrost. A lot of permafrost must have melted as the ice age ended. Earlier the fact that this hadn't been seen (at the time) was an argument against the Clathrate (or permafrost) gun hypothesis. Now, does this new data point change that?

Earlier the fact that this hadn't been seen (at the time) was an argument against the Clathrate (or permafrost) gun hypothesis. Now, does this new data point change that?

Well, the 12C warming occurred over 10 years, so it would seem the gun hypothesis has been resurrected.

Peak Earl guy, please remember that the 12C change was essentially local, not global. That change might have been the result of a switch in direction of the prevailing winds from westerly to easterly, thus from cold to warm. The abrupt warming simply returned the climate to the path of overall warming which marked the end of the ice sheets after the Last Glacial Maximum. While an important episode in that warming period, I don't think there's the possibility that another such jump would happen that way today because the jump was directly associated with the previous sharp cooling which resulted in a return to glacial conditions over Greenland...

E. Swanson

Also, as I recall, methane rather quickly breaks down into CO2, which lingers in higher quantities for much longer.

Again, as previously noted, we have not had this particular dynamic in the past. Who knows what all of the methane contained in the shallow lakes and bogs will do as they warm; who knows how much and how fast it will release from the wetlands, or from the sea bottom for that matter. There is also the problem of oceanic acidification to consider, and how that impacts the ability of the seas to absorb excess heat (and CO2).

There are just too many problem areas, none of which have been encountered in just these circumstances and quantities in the past. The deniers rightly say we are guessing. The wrongly go on to say, "therefore we can just go ahead as we have been." Waiting to see when your best case guesses are disasterous, and your worst are nightmares, is the definition of stupidity. It's like saying, "Well the worst case is we all die, and the best is a few of us might survive. I propose that I will be one of the survivors. What could possibly go wrong?"

I just do not understand that mindset. If it is an actual MINDset.


"I just do not understand that mindset. If it is an actual MINDset."

I understand your lack of understanding. It's not just the Deniers or Joe SixPack. Even here on TOD, when I bring up the question "Why are we still trying to figure out how to increase our rate of oil pumping when this is what we are facing?" I get hit with "We're doing it because YOU want it, you're part of the problem too."

I fully admit and understand that and have not only made major reductions in my usage but am learning how to make more lifestyle changes to further reduce it. But it seems that even here on TOD that same mindset is the major one. If FF prices went WAY up, I might not like it but I would completely understand the necessity.

There are many here who give no thought to the idea that we should be reducing the rate at which we bring the FF out of the ground. They say they understand it but they still actively work to increase it. I guess it's just a variation of the old "We were just following orders." i.e. "We were just giving the customer what he wants." Who cares that it not only kills the customer but the seller too.

Honestly, I think you should name names because I do not know who these "many people" are. I think there are those who are saying that we will continue to do everything possible to take stuff out of the ground unless we can find a way to reduce the demand for that stuff. There are those, of course, who are actively trying to get stuff out of the ground because that is their business. They are not following orders. They are in many cases giving the orders.

I think most regulars here understand the nature of the predicament; damned if we do, and all that. Reporting/discussing production rates and methods for increasing such shouldn't be interpreted as an endorsement, IMO. I just think some folks have trouble with getting their heads around the consequences. It all seems like a hypothetical excercise in real-time. Twenty years from now, I expect many folks, even TODers, will ask; WTF were we thinking? We just played the cards we were dealt.

Twenty years from now, I expect many folks, even TODers, will ask; WTF were we thinking?

Twenty years from now, my grandchildren will be adults, maybe with children, and they will be asking, "What in the Hell were you doing? You knew what was happening, we remember you telling us. So, what went wrong? Why didn't you change anything?"

And, I doubt I will have an answer (assumes I reach my 90's and can answer). I don't have one now. It drives me crazy!!

Frankly, I don't give a good rats arse about the economy tanking. That is easier to deal with than 4 degree+ of warming!

Meanwhile, there's a buck to be made, eh, Ghung?


Frankly, I don't give a good rats arse about the economy tanking. That is easier to deal with than 4 degree+ of warming!

I actually almost wish it would tank, the sooner the better! At least then we could get on with the business of doing what we all should have been doing voluntarily a long time ago.

Meanwhile, there's a buck to be made, eh, Ghung?

Psst! Ya wanna buy a couple extra lbs. of bootleg R-22 for that old AC of yours?!
I can even get you a couple gallons of biodiesel for that generator your AC is hooked up to.
What?! You think my price is too high? Temps tomorrow will be 115 F in the shade, take it or leave it sucker!

Pssst, hey! I have an old Siemans panel and some good wire... Let your big Boer buck breed my does for a couple of years, we'll restore that old boat battery and get some lights for your grandkids to study by, maybe get a fan going at your place. Wadda you say?

Pssst, hey! I have an old Siemans panel and some good wire...

The work of the devil I tell you! >;-)

The work of the devil I tell you! >;-)

I have this melted sand here that you put in the sun and it makes electricity...

Some of us (I'm probably a decade younger than you), are visibly making our own changes. So at least the kids will be able to say, Dad did his part -but he couldn't get the world to go along. That's probably about the best you can do.

Some of these posters did -and many still do, work in the industry, -so their paycheck depends upon the (local) application of getting more oil out. Sometimes it can be hard to disambiguate between reporting of knowledge and cheerleading.

Written by augjohnson:
... when I bring up the question "Why are we still trying to figure out how to increase our rate of oil pumping when this is what we are facing?" I get hit with "We're doing it because YOU want it, you're part of the problem too."

The ones who make this argument, work in the oil industry, and the only reason they extract oil is for profit. Humans like to blame others. It may be a retort to the assertion that oil companies are committing crimes against humanity by running a disinformation campaign about global warming and oil supply.

I don't want it, but all my neighbors do.

I'm in the oil industry and I agree statement "We're doing it because YOU want it, you're part of the problem too." That line is a tried and tested debate winner, when your dealing with thoughtful people that are honest with themselves. For the Hollywood pipeline or fracking protesters that jets from LA to New York to protest something they are way too stupid to see the hypocrisy.

I would bet that if people quit using oil products the companies I work for would quit spending billions every year to bring oil products to the market. I would lose my job and I would have to change my lifestyle in many ways. Would small time crack dealers stand on the corner in the dead of winter if no one bought crack?

Re: Iraqi Oil Production (uptop)

Based on BP + EIA data, Iraq's average rate of increase in net exports from 2008 to 2011 was 45,000 bpd per year, to 2.0 mbpd in 2011. I estimate that their net exports in 2012 were around 2.1 mbpd.

Even though Iraq's net exports increased slightly from 2008 to 2011, their ECI Ratio fell from 4.15 in 2008 to 3.42 in 2011, a -6.4%/year rate of change, because the rapid increase in the rate of consumption exceeded the rate of increase in production. At this rate of decline in the ECI ratio, they would approach a ratio of 1.0, and thus zero net exports, around 2031.

In a similar fashion, ANE were up from 2002 to 2005, and then declined, but the GNE/CNI ratio fell from 2002 on (because the rate of increase in CNI exceeded the rate of increase in GNE from 2002 to 2005). In other words, the falling GNE/CNI ratio from 2002 to 2005 was forecasting future problems with the ANE supply, so to characterize Iraq as a "More and more important oil supplier over time," may be a tad too optimistic.




GNE = Global Net Exports, the top 33 net exporters in 2005, BP + EIA data, total petroleum liquids
CNI = Chindia's (China + India's) Net Imports
ANE = GNE less CNI
ECI Ratio = Ratio of total petroleum liquids production to liquids consumption

Texzon Utilities announces 4th patent for Invention that stores AC power as real AC power, making it the first and only AC battery.


How does it work?
The RPM stores AC energy in the form of a ring of traveling electromagnetic waves that can be tapped instantaneously as constant amplitude and frequency, with 50/60 Hz AC energy available to fluctuating loads. The electromagnetic ring isolates the load from the source by instantaneously buffering against changing voltage, current, and phase.

This sounds good, but is really as good as they claim, as opposed to say a flywheel?

Sounds great, but keep in mind it is conditioning energy output which is great for improving grids to accept renewable energy and disburse it more effectively, and in that sense is a helpful game changer, but not a game changer from the standpoint of energy production. We still have the problem of a net energy decline.

Calling this an "AC battery" is misleading. Its purpose is only for instantaneous power conditioning, not either storing much energy, nor delivering energy over a long period of time.

EIA: US economy and electricity demand linked, but relationship is changing

A country's economy and its energy use, particularly electricity use, are linked. Short-term changes in electricity use are often positively correlated with changes in economic output (measured by gross domestic product (GDP)). However, the underlying long-term trends in the two indicators may differ. All else equal, a growing economy leads to greater energy and electricity use. However, in developed countries like the United States, the relationship has been changing for some time, as economic growth now outpaces electricity growth.

See: http://www.pennenergy.com/articles/pennenergy/2013/03/us-economy-and-ele...

I've been convinced for sometime now that we'll see a contraction in electricity demand. As we know, there are endless opportunities to improve end-use efficiency, e.g., I'm replacing electric baseboard heat in commercial and institutional applications with high efficiency heat pumps, effectively cutting space heating demand by two-thirds or more.

At the warehouse shown in the link below, we cut the lighting load by 70 per cent; here, one hundred and seventy-one 2-lamp F96T12 industrials (30.9 kW) were replaced by ninety-three F32T8 twin-tandem industrials (9.1 kW). Light levels are 35 per cent higher.

See: http://i362.photobucket.com/albums/oo69/HereinHalifax/ALW_zpsd0b4827c.jpg

[You can see part of the original lighting system at the far right.]


Dylan Rattigan's new project...
Last Fall, I moved from NYC to north San Diego County, just outside of the Camp Pendleton Marine Base, to work full-time with Colin and Karen Archipley at their hydroponic organic farm, “Archi’s Acres.” After realizing how impressive their ideas and effectiveness are, I decided to invest the money that I earned for writing Greedy Bastards (which when combined with a loan from Whole Foods) to build a 30,000 square foot “farm incubator” that can serve as the prototype for job-creating, water-saving, food-producing, veteran-led hydroponic organic greenhouses nationwide. We’ve even enlisted Major General Melvin Spiese and his wife Filomena to join us in support of our mission to make this program more diverse and robust enough to build it into a nationwide network.

Re Egypt calls in favours as credit crunch hits key imports

A comprehensive background on how energy issues are pushing Egypt toward failed state status is available in the following posts written before and during the Egyptian revolution:

Egypt's high-energy suburbs (April, 2010)

It looks like Egypt is less than a decade away from shifting firmly into the camp of the net energy importers.

Egypt's natural gas treds and potential impacts (February , 2011)

Increased internal consumption combined with a relatively mature natural gas province imply that exports of Egyptian gas will begin their inevitable decline sooner than anticipated. Indeed, Egypt may be scrambling to live within it’s own energy means before the end of the decade.


Wood Mackenzie has an interesting presentation Tight oil drives L48 investment . (pdf approx. 1.5 MB)
Some interesting maps showing sweet spots in Bakken (slide 9) and Eagle Ford (slide 11).

- Rune

Slide 15 was VERY revealing, if accurate. It shows that in the competition for capex between tight gas and oil, NG price will have to hit $6-$8/mcf to match the IRR% of Bakken tight oil (at $80/bbl). I'd assume that as oil prices go up, shale gas plays become even less competitive at attracting capex. So tell me more about that cheap, abundant US NG that will revolutionize our economy...

When I look at the $100's of billions (or trillions) of capital we are throwing into soon-to-be-abandoned holes in the ground, instead of into long-term renewable energy-producing or energy-saving assets that will maintain/improve our lives for many decades, it makes me ill.

You are not the only one.

Just 1/4th of the US subsidy for cheap gasoline & diesel would allow the USA to build as much urban rail, per capita, as fast as the French (if we are as efficient as French bureaucrats).

See my blog or the first Drumbeat post of the immediately previous Drumbeat, March 27th.

Best Hopes for Those That Prepare,


Hey folks - just thinking out loud here and wanted some feedback - I realize a scenario like this is not considered likely but have been thinking about it as a "what if". What happens if adoption of renewables takes place faster than anticipated and significantly displaces oil use before "crunch" that everyone on here seems to expect will take place when the world price of oil exceeds the economy's ability to pay for it?

What happens if adoption of renewables takes place faster than anticipated and significantly displaces oil use before "crunch" that everyone on here seems to expect will take place when the world price of oil exceeds the economy's ability to pay for it?

The oil age will have ended but not because oil age man ran out of oil... Unfortunately that by itself won´t solve our predicament of ecological and thermodynamical overshoot. It may well even exacerbate it significantly.

Right, but if we somehow don't kill off the biosphere with carbon by, for example going solar right now, but merely eat everything we can digest, we will be gone, but the remainder of the biosphere will be soooo happy.

Of course none of us can afford the price of oil. We all know this. So how come we still bother to talk about it's price as if we could??

... when the world price of oil exceeds the economy's ability to pay for it?

Which economy's ability to pay for it? Greece?, Ireland? Egypt?

World economies are very varied while the price of oil is pretty uniform. The price of oil already exceeds many economies' ability to pay for it with more economies falling off the wagon each year it seems.

In the US different regions have widely varying economies and I would expect to see fuel poverty and economic stagnation in the rural South long before it hits some of the coastal urban areas. Isn't this already happening?


The price of oil already exceeds many economies' ability to pay for it . . .

That, Jon, is called triage. And that is precisely how the invisible hand will select who gets the rest of the oil. Of course, it is not just money, but equally political and military power that will make many of the decisions.

Well before the US A begins to fragment, IMO we will see most small nations, and not just a few larger ones, failing as they find themselves far into economic overshoot.

It really can't happen fast enough, though, since the more FF that is extracted and consumed, the deeper our environmental hole becomes. Until, at last, we are like the ant that is trapped in the spider's sand pit, unable to extract ourselves from our predicament. If that is we have not already arrived at that particular point already.


It really can't happen fast enough, though, since the more FF that is extracted and consumed, the deeper our environmental hole becomes. Until, at last, we are like the ant that is trapped in the spider's sand pit, unable to extract ourselves from our predicament.

Are we not in a sense trapped ants now? Sure, many are living like kings by having committed an entire world's economy to the burning of FF, but the act itself has also committed us to a most likely climate tipping point in which the continuation of civilization is unlikely. Currently its as if we are being softened up economically by way of higher priced energy, to be followed by the coup de gras, abrupt climate change from a sudden release of methane from Arctic waters and surrounding permafrost. The spider is mother earth and we have set the trap for ourselves.

Renewables are not able to displace oil use because wind turbines and photovoltaic panels generate electricity. There is not enough biomass on Earth to create biofuel to replace gasoline and diesel. Hydrogen leaks out of all known containers. Electric cars and trains are not included in renewables because it refers to fuel, not vehicles. Thus all known replacements for crude oil used as transportation fuel are more expensive and less versatile meaning humans will have to be drug kicking and squealing through the transition. Even Germany is only converting its electricity production to renewable sources after consuming all but their last domestic fossil fuel, lignite, the lowest grade of coal. Because Saudi Arabia has nothing of value without crude oil there is no chance they will stop using it proactively.

To convert proactively away from consuming crude oil means that all countries must spend more money on renewable fuel, endure less convenience and bear economic hardship while allowing the cheapest, most versatile fuel to remain unused in the ground.

Saudi Arabia: 12.5 people/km2, no water area

"Even Germany is only converting its electricity production to renewable sources after consuming all but their last domestic fossil fuel, lignite, the lowest grade of coal."

That is not correct. The deliberate flooding of the German underground hard coal mines is destroying huge reserves. There is a real chance that within 10 years these could be cheaper than the imported coal of lower quality from surface mining.

"Thus all known replacements for crude oil used as transportation fuel are more expensive and less versatile meaning humans will have to be drug kicking and squealing through the transition."

Sorry, whether the repalcements are really more expensive when the crude reaches again 140 USD is debatable. However, the main issue is that most people use their car in a large extend for spare time activities or shopping, therefore, we have much fat to burn, i.e. we can fuel much of the transition with savings. The alternative is doing nothing and spending the resources pegged for the transition for oil in a futile attempt to maintain BAU, that would be the real desaster. Hence, let the people bitch.

Hey Ulenspiegel;
Thanks, by the way for your continued clarifications of many of the activities in Germany, I always appreciate them..

A question. How do you see the state of, and attitudes toward personal Auto use in Germany these days, as compared to what you hear from the US, UK, Australia, etc? Are there any considerable movements in Koln, Berlin, Stuttgart for example, towards better cycle access and growth in mass transit? (My last bus rides in Stuttgart or Munich were in 1982!)

Hoffentlich, alles gute!


In Germany and Austria a car is still an important status symbol for many people, however, this is changing esp. in urban districts. Many of colleagues, some of them are from the USA and UK, do not have a car, neither me.

The diffrence between the US and central Europe usually is that most of us have in principle alternatives in form of busses, tramways and commuter trains, not as convenient as cars but available. Another aspect is that most people here are used to high fule prices due to high taxation and the same increase of crude prices does not hit them as bad as J6P.

Re public transport and bicycles: The pendulum is swinging back, after the mass destruction of public transport in the 1970-1980ies we see now more projects that improve the situation. IMHO the most important part is that the attitude of decision makers has changed, now it is not longer important that the decisions improve the situation of car owners. OTOH with low interest rates Germany and Austria could finance much more projects with credit but do not. Many German cities had tramways until 1970 and it would be no real problem to reinvent them.

Sales of bicycles and e-bikes are very high in Austria and Germany, but I do not know whether these actually replace car milage or are only spare time gadgets, we will see in the next years.

Hence, let the people bitch.
That rarely works out. I'll take Cyprus as an example. I think TPTB, determined and proposed the least damaging fix, but the plebes were horrified at the haircut. So plan B, which avoids the haircut, but will kill the golden goose (financial center for foreigners), and cost very many of those plebes their livelihoods. So it will probably be with oil. If the government tries to impose a least-cost plan, it will be rejected -or the gov will be overthrown, and some sort of chaotic and catastrophic plan B will emerge.

I think Cyprus is only an example of bad communication, the hard facts were all available at the beginning. It was clear for years that the Cypriot government was not able to cover all accounts under 10000 EUR, therefore, the solution must include some losses, it was more about a bankruptcy of Cyprus, not only of two banks.

However, it was a severe tactical mistake of the EU not to point to these problems in some clear press releases, this would have avoided the stunts of the Cypriot government to get money from small savers to avoid losses of their Russian investors. (15% of the Russian money would have been enough to finance the 6 billion, it was not Schäubles idea to tax accounts under 100000 EUR :-)).

If savers want a real EU guarantee for their savings (100000 EUR) then I request clear European rules how banks operate in order to avoid their typical playing the system and then socialise the losses, or as alternative, personally I am happy with the current rules, i.e. each country is resposible for the accounts of its savers.

In case of people bitching about their fuel bills I suggest to simply explain some basic correlations between their (potential) decision to build a house in rural areas and as result depending on two cars with a fuel bill that increases by 5% per year. Most people have alternatives which are less risky, but do not choose them.

Went through sixty years of EIA data and determined net energy of US oil production available for transportation after backing out energy content of NGLs and ethanol, refinery losses, falling EROEI of US oil production, condensate energy content, and percentage of oil able to be turned into transportation fuels. Charts and graphs.


"The energy isn't there"

Yet the spin goes on, all is well, keep on truckin, y'all!

Very well done & insightful !

Well worth a read for those interested.

Best Hopes for Using Energy More Efficiently,


taomom, that is an excellent blog.

Yes, I agree--excellent effort

Is Oil-Demand Plateauing?

The huge finds in Natural Gas and historically low prices on a per BTU basis is driving more more big energy consumers away from Crude Oil. This could lead to a global plateau in Oil demand by the end of the decade, according to Seth Kleinman, the head of European energy research at Citigroup.

Cheaper green energy storage solution invented by Calgary profs
Chat over beer generates lower-cost way to make hydrogen from water

A new discovery by a pair of University of Calgary chemists could make the large-scale use of wind and solar energy more feasible.

Curtis Berlinguette and Simon Trudel have invented an environmentally friendly, highly customizable way to make a key component in a process that stores electricity by turning water into hydrogen fuel — at a price they say is roughly 1,000 times cheaper than current methods for making that component.

See: http://www.cbc.ca/news/technology/story/2013/03/29/technology-water-elec...


So if I get this straight, they are using iron oxide instead of precious metals for electrolyzer catalysts?

So what?

The cost of electrolysis is mostly the cost of the electricity.
(I think the following assumption on cost - page 12 - is 67% electrolyzer efficiency).
Even if efficiency went to 100%, electricity is still the main cost, on all but the smallest systems.
And even there, catalyst material cost is minimal.
Most large installations use alkaline electrolyzers, which already use non-noble metal catalysts.

There are many people working on this already - here's "1/10 traditional electrode cost" back in 2007:

Dr. Bragi Árnason of the University of Iceland discovered that heating the water (cheap geothermal in Iceland) reduced the energy required.

From very vague memory (I talked to him in his office), 25 C > 90 C reduces electricity required by 19%.

I can see using solar water heating to aid electrolysis.


The cost of surplus electricity from wind and solar is free. For me to use my surplus electricity from my overbuilt PV system to make hydrogen to replace the small amount of propane that I use requires the electrolyzer and tank to be inexpensive.

If the surplus electricity is free, and hydrogen requirements minimal, then no need for electrocatalysts to wring some percentage points of efficiency. Consider what materials were likely at hand in 1800 when Nicholson and Carlisle did the first recorded electrolysis of water (rather accidentally - while replicating Volta's experiments - thus likely copper and zinc.).

electrolyzer: simple glass/plastic unipolar electrolyzer (perhaps even diaphragmless) using a 20-30% KOH solution with nickel plated copper electrodes.
n.b. polycarbonate ("Lexan") and PET do not resist bases very well. Polyethylene, ABS, PVC, polypropylene and acrylic ("Plexiglass") are common "cheap" plastics that would work depending on the temperature.

Presumably you get bonus points for using "potash" from wood ashes from your woodstove and slaked lime to make your own potassium hydroxide. Something to think about the next time you make lye soap. ;-)

Hmmm - scratch of head - intermittent operation with KOH (or any alkaline electrolyte) may exacerbate the carbonate formation problem, might have to use acid and something like silver plated copper (or graphite) electrodes.

Maybe you want to solar distill the feed water and condense it at a fairly high temp to limit the CO2 uptake.
Perhaps use the oxygen to sparge the feed water to remove as much CO2 as possible.

storage: a big plastic/rubber/leather bag in an outbuilding to keep it from blowing away, and a bit of weight on top (sheet of plywood?) to provide a bit of pressure.
A compressor that is hydrogen embrittlement resistant (never mind a pressure tank) seems like way too expensive for the application you describe.

If you try hydrogen work, please be careful of the flammability/explosion hazard.

My complaint about the beer drinking professors' publicity is that it is touted as a miracle and novel breakthrough,
but seems to be of minor import.
Rather like the pundit's pronouncement that thin film PV "has to be cheaper than" crystalline silicon, but in fact is not (substantially or at all),
Proton Exchange Membrane electrolyzers (and their precious metal electrocatalysts) are the "next big thing", but in fact alkaline electrolyzers with their rather mundane electrocatalysts are the cheaper workhorses of real/large systems, and they keep improving at least as fast as the PEM electrolyzers.

You can make slight improvements in electrolysis and in fuel cells, but it still takes electricity. If you have the electricity it is best used on the grid and not to make hydrogen.

At 80% efficient hydrogen and 60% efficient fuel cells, you are still less than 50% round trip (.8 x .6 = .48)
A battery can be 90% round trip, so you are better off using those. Put the electricity on the grid and charge home batteries and your car.

For a high % renewable grid, stored hydrogen has a place. Especially for seasonal shifting of power.

Wind peaks in winter, hydro in spring (if snow accumulates), solar on June 21/22 - but always declines towards dusk and zero @ night. A heatwave is late August still needs a/c at 6:30 PM/ Minimal other renewables.

But the excess wind @ 3 AM in the winter, the excess solar @ noon in early June, etc can be stored as hydrogen for use then.


Has anyone ever posted data on Mass/Energy ratio for batteries versus Hydrogen + container? Perhaps I shall study this.

"...solar on June 21/22..."

Just a note - All of our record PV production days have come in the month prior to, or around, spring equinox and very high production in the month after fall equinox. This is mainly due to lower temperatures than are realised around summer solstice, and that most fixed arrays have their elevation set to their location's latitude, directly facing the sun at (solar) noon on the equinoxes. Since most of our arrays are tracking and adjusted for elevation seasonally, I expect temperature is the main contributor. This will, of course, vary with location.

This doesn't really alter your point. I'm currently seeking advice on how to produce and store either hydrogen or oxyhydrogen ("Brown's gas) without blowing myself up, if only for fun ;-/ It may come in handy for cooking, etc., someday. Currently converting surplus PV to hot water; working quite nicely.

Good luck with Brown's Gas, Ghung. Accordint to Wikki,

"Brown's Gas" is simply oxyhydrogen with a 2:1 molar ratio of H2 and O2 gases, the same proportion as water. It's named after Yull Brown who claimed that it could be used as a fuel for the internal combustion engine.[4][14] It's also called "HHO gas" after the claims of fringe physicist[15] Ruggero Santilli, who claims that his HHO gas, produced by a special apparatus, is "a new form of water", with new properties, based on his (fringe) theory of "magnecules".[14]

Oxyhydrogen is also often mentioned in conjunction with vehicles that claim to use water as a fuel. The most common and decisive counter-argument against producing this gas on board to use as a fuel or fuel additive is that the energy required to split water molecules exceeds the energy recouped by burning it.[4][16] Additionally, the number of liters per minute of gas that can be produced for on-demand consumption through electrolysis is very small in comparison to the liters per minute consumed by an internal combustion engine.[17]

My usual comment about H2 in general is that it is difficult to store, explosive, corrosive to its' containers, and not particularly efficient. IMO, I am better of with a battery, which will store energy long term, and is transportable. H2 gas requires special containers. E.g. extremely high pressures are needed to contain useful quantities, and require correspondingly thick walled containers and special valves. Also, it is known to leak (remember, this is the smallest molecule you can work with). For many of these reasons, fusion researchers are going towards He rather than H2 for fuel, He3 in particular. Which, of course, is rare on Earth and abundent on the Moon. Perhaps that is why we have been hearing rumblings about putting men back on Luna?


Green energy storage, Seems to me that what I am working on is far easier than hydrogen- I and countless others are suggesting:

1) When the sun shines, use PV to store desired result, not electricity--coolth in ice/salt ice, and pumped up domestic water storage tanks, etc,

2) when no sun, use biomass + heat engine (my favorite, stirling thermocompressor) to deliver electricity on demand thru small battery or other short term thing, and inverter,

Same plan can extend beyond domestic uses.

In my case, my wood stove is delivering typically about 10kW thermal, which would be more than generous to supply a heat engine as above giving me my off-sun needs.

Canada Discusses Forced Depositor Bail-In Procedures for "Too Big To Fail" Banks in 2013 Budget

"The Government proposes to implement a bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail- in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants."

In case you are unfamiliar with bank parlance, deposits are not "assets" they are "liabilities". A plan that would turn "certain bank liabilities" into regulatory capital is a plan to confiscate deposits.

Not really sure what to make of this...


Do they realize that anything that would be perceived as putting deposits at risk would result in massive bank runs if things were to reach the point where there was even the imagined possibility of a bank failure?

Do they realize that anything that would be perceived as putting deposits at risk would result in massive bank runs if things were to reach the point where there was even the imagined possibility of a bank failure?

I think that's exactly the message the Canadian government is sending to large institutional depositors: Your deposits ARE at risk even if you put them in a bank that is "too big to fail". The taxpayers are not going to bail the bank out, YOU are! It's a matter of moral risk - the government thinks these institutions have become too complacent as a result of the experience in the US and UK where the taxpayers bailed out the banks and the large institutions walked away scot-free.

Scot-free: From Old English scotfreo ("exempt from royal tax"); 1. (archaic) Free of scot, free of tax; 2. (colloquial) Without consequences or penalties. - No reference to what happened to the Scottish banks.

Reading between the lines, it sounds like in the event of a run on a "too-big-to-fail Canadian bank, the government will lock the doors, convert the larger bank deposits of institutions into equity - they get shares in the bank instead of cash, and then reopen the doors with the remaining deposits backed up by large amounts of new equity capital (that used to be deposits). From that point forward it is a whole new ballgame because the bank is now adequately capitalized.

Most likely they will convert only the large deposits which are not already government insured (i.e. > $100,000). The depositors won't necessarily lose money, they will end up trading their cash for shares in the bank - which they probably don't want to do. On the flip side, the shareholders will probably end up taking a haircut because the value of their shares will be diluted by the new shares issued to the new shareholders.

The key point is that it costs the taxpayers nothing, which is the government's main concern. It doesn't necessarily cost the depositors anything as long as they play ball and stay invested. It likely will cost the shareholders some hair, but they probably will all be invited into a large room and have it explained to them that they get a choice: short back-and-sides, crew-cut, or shaved bald. The latter is what happens if they don't cooperate.

Just my take on what it means.

In previous banking crises the BoC has informed the commercial banks that they all MUST make much higher profits until the weaker banks work their way out of trouble. The commercial bankers looked around at each other and said, "Well, if you FORCE us to make higher profits, I guess we have to." Totally behind closed doors, of course. The Canadian banks are a very cozy group.

Most likely they will convert only the large deposits which are not already government insured (i.e. > $100,000). The depositors won't necessarily lose money, they will end up trading their cash for shares in the bank - which they probably don't want to do. On the flip side, the shareholders will probably end up taking a haircut because the value of their shares will be diluted by the new shares issued to the new shareholders.

RMG: The shares would not be 'diluted' in the ordinary sense. The bank, after all, would acquire the deposits as capital. In fact, since many shareholders may have purchased stock at a price below that at which the new shares were issued, they might actually benefit in some material sense.

What is bad is that many of those depositors whose deposits were taken (by the bank) will now lose their 'safe' income. To the extent that those folks are middle class people (upper class more likely to already own shares in the first place), they can not afford that, and so long as the economy heads south, no dividends are likely to be paid on the stock. Which means the depositors who hold more than the guaranteed deposit go south as well.

Driving down values of real estate, making more banks more likely to fail, and : rinse and repeat?



While there are multiple markets for UAS in the NAS, this research concludes that precision agriculture and public safety are the most promising commercial and civil markets. These two markets are thought to comprise approximately 90% of the known potential markets for UAS

Not only are drones good for blowing people up, they can help feed them as well. Seems like a rather literal example of turning swords into plowbills.

Was watching the YouTubes and there was an advertisement that caught my attention for "Fuel Freedom Foundation"


Some dude named Eyal Aronoff. Doesn't actually come out and say "peak oil" but mentions that "drill baby drill" won't fix oil prices, says conservation won't work and that what's needed is "competition" in fuels. Something about it...raises red flags. Especially the emphasis that seems to be on ethanol and methanol - though natural gas and electric is thrown in the mix.

About Fuel Freedom
Fuel Freedom is a non-profit campaign dedicated to breaking America's oil addiction and reducing the cost of gas and other fuels

Tis curious.

Yesterday 3-29 EIA released NG Production Consumption data for Jan. 2013



Jan. 2013 was the first month since Mar. 2010 that year on year monthly production has decreased. Monthly year on year production had increased since Apr. 2010 by an increasing amount each month thru Feb of 2012. The monthly year on year production increases then began to get smaller each month thru Dec. 2012.

Here is the year on year monthly increases.
Apr 2010; 32 billion Cu. Ft.
Feb 2012; 242 billion Cu. Ft.
Dec 2012; 7 billion Cu. Ft.
Jan 2013; -21 billion Cu. Ft.

US 2012 Dry production 24 trillion Cu. Ft.
US 2012 Net consumption 26.4 trillion Cu. Ft. Considering Exports and Imports.

It is my inept opinion that we shall see decreasing monthly NG production thru the balance of the year and if the economy can continue bouncing along at +1%; NG prices will climb at an accelerating rate.
We may even see some NG storage problems next winter if the summer is exceptionally hot and the 13-14 winter is a repeat of this winter.

NG futures may out pace everything else on the investment front for the coming year.
Most all my spread sheets date back to April of 05, when I discovered the Oil Drum.