Mid-week open thread...

For your threading pleasure.  

(yes, I'm still alive.  just had a lot going on over the past week.)

I wonder which happend first, Iran's  plans to open their own oil bourse or the US increased pressure and sabre-rattling towards Iran?  I ask this because it seems to me like the worlds 2nd largest oil producer selling oil for Euros(or any currency other than USD) instead of USD is a much bigger and more eminent threat to the US(especially considering the state of the USD and economy) than Iran's nuclear program. I don't know much about these topics. How close is Iran to producing nuclear WMD's? Will their oil bourse be a significant competitor to London and NYC? Has all this been covered before? I have questions, who's got answers?
In other words, is the US using Iran's nuclear program as an excuse to pressure them out of opening their oil market?
From a nationalistic perspective, having oil trade 'in country' of production sounds ideal. Countries like Iran, Venezuela, are likely to be more protectionist and want to extract more value out of a declining resource as time goes on.

I'm sure one day much of the refined gasoline in the world will come from producer nations, not from domestic consumer/importer nations.

Gonna happen in the Phillipines soon...

"I'm sure one day much of the refined gasoline in the world will come from producer nations"
I'm going to have to differ on that. Refining the gasoline is a matter of capital and efficiency, and that is one thing our market system has an ample supply of. Most resource economies tend to remain resource economies until the supplies run tight, whereas resource-poor nations (ie Japan), tend to dominate the manufacturing of secondary products.
Sounds like you need to read this article that was quoted on EnergyBulletin at the beginning of last month.

I can't remember if it talked about what came first; the Chicken (US aggression) or the Egg (Iranian Oil Bourse plans).

According to this article, though, there is a lot more here than meets the eye.

Thanks for the link to the great article.  Unfortunately it didn't answer my first question and it didnt really show how much of an effect on the USD an Iranian oil bourse would have.  I guess i'll have to read the author's book to go more in depth(and maybe take some econ. classes). I highly doubt that the US would overtly intervene in Iran.  It would be suicide.
i'm also very curious and worried about the impact of an iranian oil bourse on US dollar hegemony.
Don't forget that revelations of Karen Kwiatkowski, Lt. Col. USAF (ret.) based on her insider information on the machinations of the neocon planners in the DoD.  Her specific charge was that, amongst this group, the casus belli for war with Iraq was Saddam's pricing of his oil in Euro's.  

Richard Clark in Petrodollar Warfare connects a lot of dots regarding this view.  I found the book hard to lay donw.

CNN plays the Hurric-blame game. How come?

Doesn't anyone at CNN know about PO?

Nice to hear from you, PG.

Issam Al-Chalabi (former Iraqi Oil Minister, not the notorious Ahmad Chalabi) tells us What Is Happening To Iraqi Oil?. An excellent summary of the past and current oil industry in Iraq, everything you ever wanted to know....

Does the above sound like a reasonable plan for the US after the winter of 2005-06??  Or do ya think we will build more windmills??


Oof - thanks for posting that.  I need to see that movie, sometimes Hollywood can be pretty convincing.  Just say yes to wind turbines.
Perhaps not "new" news... I've been busy and am catching up:

Oil production growth slows in Russia

Oil production growth in Russia has dropped 2.5-fold this year compared with 2004, though the country remains the leading oil exporter outside the Organization of the Petroleum Exporting Countries (OPEC), the International Energy Agency said in its report published on Tuesday.

By preliminary estimates, Russia's oil production stood at 9.8 million barrels a day last month, 70,000 barrels a day more than in August.

Russia's oil output this year is expected to be 250,000 to 300,000 barrels a day more than in 2004. Growth is expected to remain at the same level in 2006. But IEA experts say oil production will be growing much slower over the next two years compared with last year, when oil output climbed by 740,000 barrels a day.


I would attribute the production slowdown to economics more than natural restrictions. The government still owns many of the fields, preventing their development, and then it also owns Gazprom, the oil mega-company that forcefully swallowed Yukos about a year ago, and the government has also given Gazprom an effective monopoly on most of the oil and natural gas industry there (pipelines as well, perhaps?). Gazprom has long been notorious for being incredibly inefficient. Before Yukos was annexed, it had a much larger production despite reserves that were dwarfed by those under Gazprom's management. Monopolies, especially a government backed one in an economy as undeveloped and corrupt as Russia, breed neither efficiency nor maximum increases, especially in times of high oil prices. This growing Gazprom consolidation, I believe, is the primary cause of the slowdown in Russian oil-sector growth.

I have heard (from a Russian) that the limiting factor in Russian world-production is not so much pumps as pipelines. This would be clearly evident if Russian market oil prices were much lower than world prices. Does anybody know what that Russian price is?

This is an old article on Russian proven oil reserves which are upwards of 200B barrels.

This article is more upbeat on near term Russian oil production than some of the articles I have seen.

This is recent and somewhat pessimistic.

Nice articles.

There is a pipeline monopoly!
"oil shipments via the trunk pipelines of state monopoly Transneft"

Inefficient? I thought that the reason that Yukos was taken away was inefficient (in the long run) over production. Additionally lack of maintenance in infrastructure, and a whole host of other issues, which looked like the owners planned to just maximize the money they could get for a short time and then let someone else deal with the problems.
I would really like to believe that, but it's a bit more complicated issue. It can be hard to know just what Putin's thinking, but efficiency doesn't seem to be the foremost cause, for a few reasons.

First, the Russian economy is littered with inefficiencies, ranging from a bureaucracy larger than the Soviet one, to incredible corruption at all levels, to a myriad of monopolies. Putin has not made it a priority to make things more efficient.

Second, there are many more likely causes. The actual thing that got Yukos was the accusation that it had not paid its taxes. Many, probably every Russian company and person, did not pay their full taxes at some time during the 90's. Not only was it selectively persecuted but the courts also froze all of the company's assets, effectively preventing it from paying off the taxes without selling off part of the company. There was definitely an ulterior motive. That motive could have been to block it from being bought out by Exxon (I believe?), or to create a huge Russian oil-block (under government control), or to remove someone who Putin saw as a political threat.

Whatever the motive, the persecution has succeeded in accomplishing all three of those, while not provably making the Russian oil sector any more efficient, which is why I doubt that was the cause.

Houston conference Oct 25 with Simmons and Economides on the same panel. Be interesting to watch the sparks fly.


Re:  Hubbert Linearization

Qt is total estimated cumulative oil production, where you extrapolate the P/Q versus Q linear progression down to where P closely approaches zero.  

Texas peaked at 54% of Qt.  It looks like Norway peaked at about 55%.  I would like to see a P/Q versus Q plot for the Lower 48.  I think that Alaska distorts the U.S. plot (since Lower 48 oil production peaked years before oil from Prudhoe Bay was able to be shipped south).

In any case, once a country/region has:  (1)  decades of serious oil production and (2)  has entered the linear progression phase, can anyone find any examples of countries/regions showing increasing production beyond the 55% of Qt mark?

Saudi Arabia is at 55%.  By the way, Saudi Aramco is running full page ads in the Dallas paper, trying to get drilling and petroleum engineers to come interview.  It has a strong whiff of desperation.  If the Saudis are now where Texas was in 1972, they are about to embark on a huge--and probably futile--drilling effort.  Because of a huge drilling boom from 1972 to 1982, the number of Texas producing wells went up by 14%, but oil production fell by 30%.

Also, does anyone have an estimate for cumulative world crude oil + condensate production prior to 1960?  (Not counting NGL's).

Jeffrey J. Brown

Re: Saudi Arabia is at 55%

Interesting post. What data are you using to get that number?
I took the Saudi number off a P/Q versus Q plot that Laherrere did, which Stuart posted on his original Hubbert Linearization post.  

Texas Qt is 66 Gb.  Saudi Arabia is 180 Gb.  Texas peaked at 3.5 mmbpd.  If you divide 180 by 66 and multiply it times 3.5, to get predicted peak Saudi production, using Texas as a model, you get 9.5, which is precisely what the EIA says that the Saudis are producing.

stranger -

The Iran/US conflict has been discussed in many places, particularly those that deal with gold and silver. Anything that might weaken or threaten the dollar hegemony is something that the US will deal with quickly and surreptitously - whatever the US does, their right hand will not know where the left hand was. Dollar hegemony failing would absolutely wreck the world economy, but the US would far and away be the biggest loser. Right now, without strong alternative currency or reasonable gold prices, nobody will rock the boat. If Europes labor groups hang together and refuse to lower interest rates, then it all comes down to who blinks first - the dollar or the Euro. With the election of a slightly more right leaning personage at the German helm, it would seem like the dollar is winning. But there are so many other ways things could fall apart, and an oil bourse run by Muslims and trading in Euros is definitely one.

Remember, the enemy or my enemy is my friend. In the face of blatant US aggression, alliances will change rapidly. Should the stock market stumble, the slow exodus of foreign investors we have now may become a torrent, and the dollar would suffer greatly. The stock market is what backs the dollars value, not gold. Thus the dollar would fall as well. At what point would our creditors unload their bonds and flee en masse? I would think a quick look at our trade balances and current account deficits would answer that all too quickly.

Just some thoughts...

Some of the creditors are a bit like willing hostages. Both China and Japan continue to invest heavily in US Treasuries, despite losses, to secure a market for their exports. If they bail out, the damage to the US will have big consequences for their own economies.

They could, of course, buy huge US companies instead of holding depreciating bonds. China has over $700 billion to play with.

Dollar hegemony was established to enrich the elite running this country - not necessarily the American people. Since their control extend to European and Japanese central banks as well, it may not matter to them if Iran establishes an oil bourse in Euros. (It's only the American people getting screwed then). What they are probably more afraid of is a gold-based currency. That will bring their wrath down on Iran faster than GW can spell terrist.
"Dollar hegemony was established"??

Dollar hegemony is a direct result of ours being the largest and most stable economy, and having held that post for almost a hundred years now. It came about because we had a bunch of investors pouring money into other countries, not to create those investors.

"afraid of is a gold-based currency"

A gold based currency has proven itself obselete in markets which demand flexibility. It really makes little logical sense to limit the value of one's currency to the amount of a precious metal in circulation. Please explain what about this we would possibly fear.

In reflection, a euro oil-bourse makes little sense, seeing as the US (dollar guys) is doing most of the buying when it comes to crude, but my perception of the issue is shallow.

While you are probably right about the dollar in what you say, there have been great benefits to a dollar standard in oil trade.  Both Brazilian and Argentine economies collapsed when they were economically more heathy than the US.  I think it is true that the petro-dollar relationship keeps countries buying dollars even when China and much of the rest of the world do feel hostage. China has lost a third of its asset value by being forced to hold dollars.
"A gold based currency has proven itself obselete in markets which demand flexibility."

IMO it hasn't really "proven itself obsolete", TPTB have made it obsolete.

"It really makes little logical sense to limit the value of one's currency to the amount of a precious metal in circulation."

 Someone once said that fiat currencies rely on the belief about a belief; which is very flimsy ground to stand on. In other words the only thing that keeps the charade going is most peoples belief that everyone else believes that those little pieces of paper are worth something. Gold on the other hand is inherent store of value; its been so for thousands of years. Im not a religious person, but just in case you are, the Bible says that only gold & silver should be used as money. And I think the US Constitution says that too. I too have a shallow understanding of this issue and economics in general, but I find something wrong with your retorical question; i dont know what. I think there might be some false assumptions that you are working on, but again my grasp of the topic is minimal(too abstract for my brain) so I recomend that you look up money, currency etc. in Wikipedia and elsewhere.

"Please explain what about this we would possibly fear."

I wouldnt fear a gold based currency, but the guys with the printing presses would. It deprives them of their blank check. Because their fiat currency would inflate and lose value compared to the basicly inflation-proof gold currency.

"In reflection, a euro oil-bourse makes little sense, seeing as the US (dollar guys) is doing most of the buying when it comes to crude, but my perception of the issue is shallow."  

Did you read this article? I recomend it.

So far as gold vs. flexible currency goes, a flexible currency is a much more useful tool. With it a nation and an economy can heavily borrow, as in 85-90% of our nation's capital is always at work. The part that isn't consists primarily of the bills in your wallet. This is possible through a huge amount of trust in a system that allows for abstract bartering on a monolithic scale. Not having a gold-based currency also allows it fluctuate based on the state of our economy, allowing the dollar to value or devalue as a mechanism to keep our trade balance in line (a mechanism that has been overwhelmed by other factors).

The euro I'm not too afraid of. Germany & Italy are demonstrating that without a united monetary policy, the currency's one size fits all does not fit all of the EU member states' needs. Germany is suffering from the euro being undervalued whereas Italy suffers from it being to valuable. I'm not sure if it will hold together as long as member nations wish to hold some economic independence.

The petro-warfare argument has been thought out, but I'm still going to label it as overly paranoid. I know many people who make their livings in economics, and not once before have I heard this theory. I won't discredit it (don't know enough), but I won't support it either.

Do we know what is going on?

The recent thread on inflation was interesting. Credible cases were made for inflation, stagflation, and deflation. That's one issue right there--plausible scenarios from thoughtful people that are in exact opposition.

Secondly, I did not note anyone who made the ceteris paribus case: that everything in the business cycle will continue on roughly normally, moderate growth punctuated by recession and recovery. Is the normal cycle broken? And if so, when will we notice?

One of my worst-case scenarios is a whimper, not a bang: the world plods along on the same couse blindly and haplessly, trying to follow outmoded strategies that will no longer work. We get confused and frustrated, but can't work out any real solutions. If that happens, we lose all preparation time because we don't perceive the situation properly until it is well and truly upon us. Thoughts?

Re: "plausible scenarios from thoughtful people that are in exact opposition...."

This is the heart of the matter. I read but didn't participate in that thread. So much speculation and uncertainty.
Interesting discussion over at Econbrowser on the stagflation question:


Prof Hamilton doesn't think we are likely to see much of it.

"Secondly, I did not note anyone who made the ceteris paribus case: that everything in the business cycle will continue on roughly normally, moderate growth punctuated by recession and recovery. Is the normal cycle broken? And if so, when will we notice?"

Broken?  No.  Overwhelmed by other events, such as a major, sustained rise in worldwide energy prices, and the social and political ramifications of those price changes?  Yes.

OK, I'll buy that. I see two broad possibilities:

  1. The model is right, but not working at the moment: It may be that the business cycle model is OK, and some of the variables have just strayed so far outside their normal range that the model doesn't predict well.

  2. The model has changed: I suspect that the model is changing, and that some factors that were either irrelevant or exogenous are now becoming endogenous. It could also be that some of our unstated assumptions are wrong (i.e., oil is fungible; supply of energy is not fixed). If this is true, it means we don't understand the new dynamics very well, and need to develop a better understanding and more relevant models.

Predicting the economic outcomes of various peak oil scenarios is absolutely critical to developing and selling effective responses. I think you are implying that our current ability to predict is not as good as it needs to be. Quick, call an economist!
I posted Canada plays the China Card in a previous thread on the GOM shut-ins. I think this is newsworthy today and be sure to look at Murray's response (he's Canadian).
It occurred to me the other day that the way to measure peak oil was not by the number of barrels of "oil" being produced, since light crude is so much more desireable than heavy sour crude.

In order to use the heavy sour crude, you need massive infrastructure development.  Its seems like if money was to be made with heavy sour crude refinement, then oil companies would be jumping over each other building refineries to use it.  But I think, just like the pessimists here at theoildrum.com, they see the end of oil and there's no reason to put their billion's to work.

I think there is some similiar argument when it comes to oil sands/oil shale/coal liquification.  What might be useful, is an estimate of the amount of energy for development of these alternative fossil fuels versus how much energy is supposedly available.  I know its very technologically dependent, but there are best case and worst case scenarios that are based on physics not conjecture.

And the reason to keep the subject towards fossil fuels and conversion to a liquid petroleum like substance is because transportation is still (and into the forseeable future) highly dependent on this form of energy.  I did a small back of the envelope calculation the other day comparing oil/coal to batteries.  Batteries technologies are often compared to each other by their gravimetric energy density in the units WATT-HOURS/KG.  I know its a weird unit here at this site.  

lead acid: 30 Wh/kg
nicad: 50 Wh/kg
li-ion: 100-300 Wh/kg
gasoline: 2300Wh/kg

I made the gross assumption of about 20% conversion efficiency for the gasoline's heat energy to useful work.  And this doesn't account for the weight of the engine (I figured the electric motor would weigh a bunch too).

In short, this is why we're up the creek without a paddle.  A battery powered 'jet airplane' would only go about 70 to 700 miles instead of 7000.  The car, could go farther than the linear approximation since you can load it down with heavy batteries, but it still takes a huge toll.

Here's another back of the envelope calculation I found enlightening:

How much electrical energy would it take to replace an oil field producing 400,000 bbl/day?  Its approximately a 10GW electric power plant.  The largest nuclear power plants in this country are about 1.2GW.  But the main thing is the oil is easily stored and transported across oceans or in vehicles.  If the US is using 25 million bbl/day, the US would need about 620 massive nuclear power plants (its hard to say, but at least $10 trillion to build them) to replace that power and there still is no way to store it or use it for transportation.

Good post.  Nice to see some numbers being spun out in a rough and ready way.

Scientific American published an article back in the seventies describing energy storage in spinning flywheels made of very strong composite materials.  They spin in a vacuum supported by magnetic bearings.  A motor/generator sits in the center.  The numbers looked very encouraging back then but I've never heard of the idea since then.  Nanotech combined with some of the carbon based composites should make a flywheel that can spin almost 500,000 rpm.

Sorry I can't quote numbers for how much energy we could store in a 300 pound flywheel spinning at 500,000 rpm.  Back to my college physics book!

The idea would be to have these flywheel storage units at electric filling stations and at various points on the grid to act as energy repositories.  This would make electrical energy storable with very little loss over periods of up to 24 hours.

Given the vacuum enclosure and magnetic bearings, I am hopeful that they could work reliably for many years.

I hope we make a transition to electric energy and that we develop effective storage methods as the need arises.  Naturally, hydrocarbons will have to become more expensive to prod us into development of such alternatives.

Your point is well taken concerning how much electrical energy we would have to generate to replace oil.  Obviously there must be some changes made to reduce our demand.

Our predicament is that, though a few of us are aware of this at an individual level, our social and economic system is not really up to the challenge.  Adam Smith's invisible hand is about to bitch-slap us I'm afraid.


This site helps calculate flywheel energy.  Have a go!


Why does a mechanichal storage need to be more complicated than lifting a weight, then propping it up?
It is hard to build a lifting up and letting down mechnism with low losses.

So far the best mechnism is pumped hydro storage where water is lifted up to a higher level with a pump and then run down thru a turbine when the power is needed. The pump and the turbine can be the same machine used in both directions. The practical limit is that it is expensive to build high reservoirs or in theory deep caves for storing the water. It is only echonomical when natural formations can be uses such as lakes in mountain areas near deep valleys.

Another way of storing power is by compressing a gas. A problem with that is that the gas is heated up by the compression, the heat leaks away and the heat energy is lost.

Flywheels are limited by the strenght of the chemical bonds in them. To much strain when spun too fast and they break.  Batteries/accumulators have more or less the same kind of limit. The magical thing with storing energy as fuel is that you only have to store half of the material for you reaction, the other half is taken from the atmosphere. And you need less "structural" material for containing the fuel then you nedd "structural" material for transfering the electricity between the active components in an accumulator and to the terminals.

It is possible to store energy in a magnetic field in a superconduction coil. But  you still have to handle the forces trying to rip the coil apart and the cooling for the coil. But the adding and withdrawal of energy can be very efficient.

Myself I hope it is possible to increase the efficience of making hydrogen with electricity. Then it becomes reasonable to build lots of nuclear reactors, windmills etc and during nights and other low load times make hydrogen instead of storing the excess electricity. This hydrogen can then be used in refineries for upgrading heavy crude and it can be used for making methane and FT-diesel with coal from fossil coal or biomass. It can also be used in fuel cells to produce electricity. I do not regard hydrogen as a good wehicle fuel since it is hard to handle.

For Mr. Smokes :
you mentioned "the end of oil " .  It is my understanding that the end of oil will never come .  We won't even get close .  Frightening!  
On a positive note, I wish to commend you for driving home the concept of scalability .  Some, who have not put in much time studying the peak oil issue , are incredibly unaware of daily life in an era where we have access to 5% of the energy with which we are currently accustomed .  
Those of us who think that an impressive reduction in human population is just around the corner are accused of wanting that to happen .  That is a classic case of a major human flaw commonly referred to "kill the messenger " .  
I question the 10$ trillion number. If we're going to build 650 of them (more like 1000, since they won't all be mega reactors) I bet we could get the price down to a billion per, it being an economy of scale.
I struggled with the cost of building nuclear power plants in my posts and your right that its probably the weakest part of my post. I'm well aware that the costs could come down.  But they could also go up.  In the end I used my engineering experience and used the cost of building recent nuclear power plants.  

For the sake of argument; I agree that with standardization and regulatory relaxation one could bring down the cost of nuclear power plants.  But I also think that the cost of raw materials (steel and concrete) could inflate even more than they have in the past few years driving the cost even higher.  One more nuclear accident and the cost of building them would be even higher...  In short, we don't know, so I just used some of the recent mega reactors as a guideline - $15 billion for a 1GW reactor might be high.  But it might be low too.  Since the last one was completed in the 1980's and we're talking 2005 dollars, I think I'm about at the right order of magnitude, if not the the exact dollar amount.

Regardless, there are some extremely huge infrastructure costs that aren't even guessed at here.  This so called "hydrogen economy" would be pretty expensive too.  Its not like the cars would be able to run on extension cords.

I agree the required investment in nukes/renewables is almost certainly now unachievable unless the public would accept the kind of sacrifices they made in World War II. Our supposedly smart economic system should have seen peak oil coming 20 years ago and made gradual changes in time for a smooth transition.  Moreover I see no way that partially grid charged hybrid cars can replace more than a fraction of today's 630 million wholly fuel dependent clunkers. Even if the recharging process can be made quicker it's hard to envisage an increasingly poorer middle class affording such cars.
I reject the notion that "the public" wouldn't make a sacrifice if the problem were articulated properly.  History from the Depression to Katrina says "the public" is really our best bet.  I believe the exigencies of short-term, quarter-on-quarter corporate governance plus the prerogatives of the very wealthy make sacrifice of the sort implied in the above comment impossible.   As long as sacrifice to ensure a common future means a decrease in consumption and a smaller GDP, forget about it.

To illustrate -- let's say people all cut back discretionary spending and didn't buy their third DVD player and "Grand Theft Auto -- the New Orleans PD" this Christmas, and instead made cakes for each other and sang carols round the tree in the center of Whoville because they believe it will deliver a future to their kids?  Let's say this catches on and people really start to well, just buy less shit.  Who would be unhappy  -- the "public" or the Walton family and the Citibank board?  So maybe this scenario might be bad for the publicans because then Corporate America'd be forced to cut good-paying US manufacturing jobs but, well, good luck finding 'em.

Maybe we should forego the Sweeps Month 2006 invasion of North Koresyiran and plan for our own future instead.  


Uhh, don't tread on me.

I'm not sure that this will fly. There are people who are raising their kids who believe they should never say, "No." to their kids. Yes, there are a lot of people doing excellent jobs raising their kids, but what of the middle ground between the "no is a four letter word" camp and the "welcome to reality and I'm going to help you learn the rules to play the game" camp is what the question is. How close are they to which side of the fence?

The govenment through mc'carthyism and drug wars has destroyed much of its credibility. There are some people who will conserve when they're told. The rest will only conserve when they can get their hands on no more money to spend. Sadly, I think that most in the former are/would be close to being in the later camp anyways. Which means that we're firmly depending on the invisible hand to guide and protect us.

In the third world, there are riots when the invisible hand says that they've had enough. Why will it be any better in the first?

Those who promote the idea of using rechargeable batteries for transport often ignore the limited cycle life of lead acid batteries. Using a Yuasa  type NPC 65Ah 12 volt battery as an example I worked out the total energy stored during its life. It is quoted as 300 cycles of 80% discharge retaining 100% capacity, 600 cycles before degrading to 50% capacity and 1400 cycles at 30%  capacity. With linear interpolation that is equivalent to 845  80% discharge cycles retaining full capacity.

100% capacity = 65 x 12 Whr = 2.81 MJ.   At 80% discharge that is 2.25MJ and 845 80% discharge cycles gives 1900MJ for its lifetime  storage capacity

Gasoline energy density is about 31.5 MJ/litre so the lifetime storage capacity is equivalent to 60.3litres or 16 US gallons of gasoline. I do not have US prices for the battery but in the UK it sells for GBP 111, that's $195 at GBP 1 = $ 1.75. If we allow that energy efficiency in an electric vehicle is twice that in a gasoline vehicle then US gasoline prices will have to hit $6.10/ US gallon before such vehicles are price competitive even were the electricity to be free

Some advocates of rechargeable battery vehicles recognise the need for exchangeable battery packs but some still talk of recharging at service stations. Pumps in the UK deliver at about a litre /second and it is not unusual at large stations on major road to have 20 pumps in use at the same time. That means that the energy delivery rate is 630MW, equivalent to a moderate sized power station. It is clearly impractical to have roadside recharging stations were there widespread adoption of battery vehicles. Even the handling of 1000 or more large heavy exchangeable battery pack is no small matter.

50 years or more or research has not come up with a better battery type for transport than the lead-acid battery and progress with the basic parameters of energy density, power density and cycle life of lead-acid batteries has been modest. To trust that technology will suddenly solve these problems is to make the same error we accuse opponents of peak oil ideas of making.

There probably is a future for rechargeable battery vehicles but it will not be a direct replacement for cars anywhere near the specification of present cars. There will thankfully never be a battery driven Hummer. Public acceptance of very much reduced mobility in smaller slower vehicles is much more of a problem than the technical development of vehicles.  

You might want to take a look at this before you write batteries off.  I don't understand why this news hasn't received more press.


Why it hasn't received more press? What are the costs of a production unit. How many units can be produced at that price. Where is the real world concrete application. Where is the prototype driving around?

When those questions are (well) answered, there will likely be more press.

That press release is a half year old. They predicted products in 2006 (what quarter). Is there an update, possibly with a quarter and a price? If not, then it's only an old press release of possible vapor ware.

New product roll outs typically take time to ramp up the infrastructure to make it happen. If we see more than 10,000 electric (or even hybrid) cars produced in a year with this sort of battery before 2010 I'll be quite impressed. I'd like to be impressed.

That battery indeed looks promising.  Sounds like they're making progress on the recharge cycles of the battery and some of the temperature issues with batteries too.  Not to mention the recharge time - though another poster noted that to recharge an electric car with the electric energy equivalent of gasoline, a reasonable refueling station would need to be able to supply 100's megawatts of power - something us engineers would love to design.

But fundamentally, they are not even close to the energy density of fossil fuels.  That's what I was trying to get at in my post.  Most hi performance li-ion cells are in the 130 Wh/kg range.  This blurb says its about the same.  Gasoline is about 2300 Wh/kg (after 20% conversion to useful work).  That is a big difference and is the reason that electric cars, even when loaded down to the hilt, don't go very far.   Jet planes are even more of an issue.

Most people like to think that technology will save us, and it might.  But what I'm trying to get at is that its a long way-a-way.  Conservation now, and prudent planning could get us there without nearly as much death, pain and destruction as there will be otherwise.

I think there definitely is a future for all-electric cars, but they won't completely replace gasoline vehicles without a major breakthrough.

GCC (link below) has an article about the 2010 Mitsubishi Colt EV, top speed of 93MPH, range of 93 miles.  That would be a very acceptable "second car" for a lot of families, even if virtually no one would want to rely on it as their only vehicle.


In general, this is where we're headed--away from monolithic patterns of energy consumption and towards a much more diverse mix of technologies in all parts of the energy infrastructure.

Re: Light crude peaking (actual data!)

I've seen a lot of commentary/questioning about whether or not light sweet crude has peak.  ENI (major Italian integrated energy company) has some of the most detailed global information available, including historical crude production for every oil producer broken out into ten quality categories (i.e., ultralight, light and sweet, heavy and sour, etc.).  Per their info, which does NOT include the lower 48 states, light sweet crude reached a recent peak in 1997, and has fallen about 1 mbpd since.  

It is worth noting that just because a crude is light and sweet, it is not necessarily the easiest oil to produce (point in fact, roughly 40% of our light sweet production comes from offshore fields).  Also, only 400,000 bpd of it were from the middle east.  Relative to global production, light sweet crude accounts for about 12 million bpd, which, while important, pales in comparision to medium and sour crude (29 million bpd).  While light crude declining slowly is a big issue refinery wise, we are by no means totally dependent on it for gasoline, although it definitally makes meeting environmental standards a lot easier.

With light sweet crude, effectively all of the declines in recent years are due to losses in North Sea.  In Africa, production is up over the Inolast 5 years, and there is strong potential for near terms gains in Algeria, Libya, Congo and Nigeria, thinking happy geopolitical thoughts.  I don't have hard data on reserves by crude at the moment, although much of the current light sweet production is from weakening areas (Norway, UK, Indonesia), a lot is not.  For the record, by this source Ghawar is mostly medium and light sour crudes.

Again, all of this data is excluding the lower 48 states, although I doubt that would significantly change the underly trend behind this information

Can anyone comment on this question: If the world supply is shifting to a mix of predominately heavy sour crudes, for which there is insufficient refinery capacity, will we be soon seeing a lowering of refinery utilization for those refineries that are processing sweet light crude oils?
It was interesting to note this year the OPEC shift to a heavier "basket of crude" oil mix.  Valero has a sharp management team with vision and are geared to process the heavier oils, since much of the remianing oil is of this type.

I remember reading where mounds of sulfer around the Caspian Sea are visible from satellite.  That seems like an ecological disaster waiting to happen.

What does Valero do with the sulfer they extract from the oil?  Is there a demand for it?  Do we need that many lead acid batteries?

Can you post a link?
The ENI data can be found here:
http://www.eni.it/eniit/eni/internal.do?menu=true&RID=@22VDF|0?xoidcmWopk&portalId=0&lan g=en&sessionId=8909734

They also a ton of data on refinery capacity, finished products, natural gas, etc, the report is 200+ pages, way more complete than BP's.  Its worth mentioning that they do use a broader definition of crude oil than BP does, including some other production byproducts in addition to crude and NGLs.  Well worth looking at, and if you ask nicely they'll mail you a full color hard copy.  

The beginning of the end of Suburbs? (BusinessWeek)

I can just see Kunstler rubbing his hands together saying "See! See! I told you so!".

Here was an interesting article in WaPo. While not directly related to Peak Oil, I belive it is applicable as a scenario for Oil demand destruction. The article "The Vanishing Middle" talks about the Delphi bancruptcy.

In it he says "As Delphi executives tell the tale, they need to reduce the hourly pay of their 34,000 unionized employees from the current $26 to $30 range to a somewhat more modest $10 to $12." As contrasted to "In 1914, one year after he opened his first assembly line, Henry Ford doubled the daily pay of his workers, saying he wanted them to make enough to buy the cars they produced."

"If Delphi gets its way, its employees will clearly not be able to buy new GM cars. (At the rate things are going, they'll have to save up to buy gas.) In the face of the combined onslaught of globalization, de-unionization and deregulation, the bottom may not be falling out of the American economy, but the middle certainly is. The very notion of a decently paid working-class job has become a defining oxymoron of our time."

Is this the way for oil "demand destruction" to happen?

This isn't demand destruction of jobs. It's the effect of global competition for jobs, which reduces wages to the lowest common denominator. It's what the EU has been fighting since it's birth, and what the US has been exporting via NAFTA, CAFTA, etc. In order to drive the economy at a fever pace, profits must attract investors. More profits, more money in the system. With inflation eating away at profits, the machine seeks to get more margin by crushing the working wage. In the end, it can go but one way - bankruptcy. And what makes it even more insane is that the guys running these fine corporations will get financially rewarded.

It's not about products or employees or company picnics or even customre service anymore. It is all about a single thing - profits. Human nature and corruption are the reasons pure capitalism never works, and why socialism needs to be included in any representative government - it's the defacto conscience.

I'm sure rabid capitalists and economists will argue this, but from my well over half a century perspective, what ails us here in the US is simply greed and selfishness.

I don't think the downside of globalization should necessarily be veiwed as a capitalism vs socialism type of thing. It is more a case of corporate America trying to get something for nothing: in this case increased profits from low-wage outsourced employment while at the same time expecting the nation's consumer pool to have the same purchasing power it had when wages were high.

Though it should be glaringly obvious, I get the impression that corporate America doesn't acknowledge the simple fact that their employees are also consumers; and the less money their employees make, the less they will have to spend. Maybe they do realize it but don't care and just want to maximize the profits for the next quarter or two, and feel that by the time the harmful effects fully set in, they will be confortably out of the picture reaping the rewards of their golden parachutes. Again, it's another example of the pitfalls of short-term thinking.

For example, how many of those Delphi employees whose wages are going to be severely cut are still going to be able to afford to buy brand new GM vehicles?  Could this be one the reasons why the American auto industry has in recent years been focusing on large SUVs, full-size pickups and high-end models: in that they expect a shrinking pool of US car buyers and therefore expect to generate more of their revenue by selling more expensive cars to a smaller pool of buyers? Is it any coincidence that about the only realtively healthy division of GM is GMAC, it's defacto lending bank that enables people to 'buy' cars?

The logical extrapolation of globalization will be a largely uniform global wage that varies from country to country only within a very narrow band width.  Chinese will make more than the do now, and Americans will make much less. This will create a true global proletariat, with all the negative connotations that word implies.

> The logical extrapolation of globalization will be a largely uniform global wage that varies from country to country only within a very narrow band width.  Chinese will make more than the do now, and Americans will make much less.

That would also mean that none will starve and with a reasonable worldwide productivity it will also be easy for local communities to everywhere provide schools etc.

You getting 1/4 of your previus annual income due to being uncopetetive with newly industrialsing countries with a workforce happy to rise above absolute powerty is a personal disaster but it is not the start of a global proletariat.

I use the word 'proletariat' in the orginal sense, as it was used to describe that social class in ancient Rome that had the lowest status and possessed little if any property.

If YOU were to find yourself with 1/4 of your current income, your standard of living would be more akin to that of a worker in a Chinese sweat shop, i.e.,  an impoverished true proletarian.

However, if the word proletariat is too strong for you, then perhaps I should rephrase things and say that the logical extrapolation of globalization will be the almost complete destruction of the broad American middle class as we have known it.

Money is power; people without money have no power; and people without power soon have no liberty.  Therefore, a country that losses its middle classs soon becomes a country without liberty.

Iraq doing long term harm to it's oil fields?


One such worrisome practice is the way oil workers are re-injecting residual fuel oil into the northern wells of Kirkuk, Qureshi says. Workers have no place to store the oil as fast as it is being produced, so the excess oil is re-injected into the well for later pumping.

But the process could irrevocably harm the oil fields, Qureshi says.

"All these practices are continuing and potentially causing long-term damage," Qureshi says. "People are worrying about this."

Any good sites or articles on the following?:

Agriculture -  food prices an early casualty of PO.  Read somewhere the US agri energy budget equals that used in France's total GDP.   Can that be!?  Also, read somewhere that with no oil we could feed about 2 billion.  Let's see--but we've got 6.5 B now.   I know fertilizer made from NG has gone way up last few years==and farmers have to pump water and burn diesel.  Adding to the fun, as Lester Brown reports, China has become a gross importer of GRAIN only in the last few years (so badly have they trashed their own ag.)

Bottom line.  We could be a very hungry country soon.  A lot of diet programs will be out of business.

Are you a smart cookie or what?  If you'll permit me to make a wild ass guess, I think that without fossil fuels the United States can feed 1/3 of our population .  I'm also under the impression that the residents of China depend on the United States for food .  Some time back, I looked in the chart depicting the demographic distribution of the Chinese .  China can never duplicate the American century .  The demographics are wrong and the age of cheap fossil fuels is over forever . Chicken little is in Donald trump is out .  
I suspect that this winter , if we make it , will produce a very positive insight into the future of humanity . At 62 years of age , having lived through more than half of the American century , I can guarantee you that Americans have no cultural memory of a world in which inexpensive concentrated energy is Not there .
The energy bottleneck in the gulf of Mexico is a two edged sword. The best outcome is if we make it through until spring.  If that happens, U.S. citizens will be hypersensitive to energy concerns .  That would give the U.S.a leg up on the future .  If we don't make it , we will take down the entire global economy .  No one will be happy with this .    

I don't think we go hungry. A very large amount of crop is corn. That's used for animal feed, i.e. meat production. It's about ten times less efficient than just eating the stuff yourself.

What will happen is that the price of wheat will go up, but the price of meat will go up much faster.

So we won't go hungry, but hamburgers will become expensive. And when food gets even more expensive, people will drive less i.s.o. skipping dinner.

Bingo!  This is precisely the way we have to look at our energy situation.  Richard, you get an Adam Smith SuperEconomist Secret Decoder Ring as a prize.

Rising energy prices will NOT affect the consumption patterns of all goods equally, nor will they affect all income groups in the same way.  This is the mistake a lot of people make in trying to predict what the end of cheap energy will mean--they make linear projects based on the current ratios of consumption patterns, when we know that consumers don't work that way.  They often consume less overall in response to higher prices, but they almost always consume differently.  Instead of that three-day getaway they buy and install extra attic insulation.  When they need/want to replace their family car, they look for something more fuel efficient.  


I like Mr Smith. Especially the invisible hand stuff. Harry Potter-ish!

Where can I pick up my ring?

The Energy Bulletin website has a food section.  BTW, it is my understanding that the U.S. will become a net food importer this year.
I guess it's another imbalance caused by globalism. I went to the grocery the other day, and a can of California asparagus was $2.80. Chinese asparagus was $.99 at Big Lots and $1.29 at WalMart.

Wages are apparently so low in China that even taking these transport costs into account, there is profit for them at $.99 a can.

If globalism continues, Americans will be forced to compete with the Chinese for everything, and the only way to match them is to match their lower wages.

Oil scarcity will correct this and end globalism, which will be a good thing for the middle class, methinks.

Uh, unh. Ship transport uses about 1% the energy per ton-mile of trucking by road. On the West Coast, we are going to be energetically as close to the Chinese coast as we will be to the midwest (down the Mississipi in barges, change into boats at, what was that city again? and then round the Panama canal).
However, if you use large lighter than air craft, It becomes just as efficient as water based transport energywise

The eminent (and imminent) sense of LTA craft has been a personal hobby  horse of mine ever since I read "Job: A Comedy of Justice" by Heinlein.  Also, I saw a documentary that showed that the Hindenburg burned not because of the hydrogen, but that the zeppelin was covered in canvas which had a coating that is practically the same as solid rocket fuel (Doh!).


On an aside, you may find the following of interest

Table 1.  U.S. Petroleum Balance Sheet,
4 Weeks Ending 10/07/2005 from EIA (all numbers in mbd).

4 week average ending
10/07/05    10/07/04

Crude inputs to refineries
 13,562      14,972

Total Usage
  20,014     20,600


Cumulative Daily Avg (279 days)
   2005         2004

Crude inputs to refineries
  15,368       15,472

Total Usage
  20,626       20,656


This data is from the EIA as of today.
Interesting data. Some retabulation on this.

Usage year to date is absolutely flat. Usage for the month of September was down by 2.8% versus year ago. That does not sound like much of a drop, considering the huge area of devastation that took untold numbers of vehicles and businesses offline. It implies essentially zero conservation efforts by the bulk of the population.

At the risk of comparing apples to oranges, here are the EIA retail prices for refined products the week of 10/10/05:

     gasoline $2.848, up 42.9% versus year ago
     diesel $3.150, up 50.6% versus year ago

I don't know how much of the incremental refined product shipped in from Europe and other places arrived in September. However, we can roughly say a 40% to 50% price rise in end products results in a 2.8% drop in refinery inputs, but only if you destroy a large refineries, vehicles, homes and businesses.

Apparently, at current price levels, short-term demand is almost completely inelastic. Demand destruction will take a lot more pain than $3.00 per gallon.

Re: "short-term demand is almost completely inelastic..." and "It implies essentially zero conservation efforts by the bulk of the population..."

Thanks, Rick, for the elaboration. It was the whole reason behind my post though I did not do the more thorough analysis as you did....
What if the Jose Padilla case is the real reason that Bush wants his puppet on the Supreme Court?  

What is more critical to our onward march toward a police state in a post-Peak Oil world than Bush's ability to indefinitely imprison any American citizen, without due process, based merely on his assertion that the detainee is an enemy combatant?  Remember that the Bush Administration listed the Padilla case as one of their "successes" regarding the "War on Terror."

Cato summary of Padilla case:  

Another website:  

westexas -

I fully agree!  

The Joseph Padilla case is real travesty, and I am amazed that most Americans aren't even aware of it, much less comprehend its frightening ramifications.

If the Feds get their way in the Padilla case, then none of us are safe, and I don't think I am being an alarmist when I say that.  It will come to the point where any person who objects to what the government is doing is considered to be obstructing the War on Terror and therefore considered to be an enemy combatant and thus eligible for being 'disappeared'.

Notice that the main thing FEMA did in New Orleans was to impose de facto marshall law and interfere with other relief efforts. It should now be clear that FEMA's main reason for being is to assert federal authority and power during a crisis. Helping crisis victems is a distant second. There are those who say that New Orleans was just a dress rehearsal for what's to come.

Let's keep our fingers crossed that the feds lose the Padilla case.

Trade means each region doing what it does best and exporting that. China has low wages, so if asparagus is labor intensive, it will produce that cheaper than we can, even though land is in short supply. We do great at mechanized farming, and therefore ship them wheat. They use more wheat than we do asparagus, so we have an agriculture advantage that will not go away, or at least not for a long time, PO notwithstanding.

Globalization is not going away anytime soon. The poster noted a $1+ savings by buying asparagus from Chinal. The cost to ship a can of asparagus, or socks, from China to the US is very low, probably less than $.01, and will still be low when oil goes to $200. The cost to truck the asparagus across the country is high, so we will likely shift from trucking to railroads. (A recent report had truckers calling for price controls, not exactly something that would hasten needed changes.) Indeed, the coming sharp reduction in motor fuels usage will mostly come from a reduction in short distance travel (commuting), which is both least efficient and (in the US) consumes most of the supply. This may be an advantage - a fat man can last longer than a skinny man.

High US salaries might be maintained in areas where we excel, such as design, movies, finance, and where foreigners can't compete, such as service. Manufacturing is likely to suffer, not least because the reason such jobs became high paying was because workers had (and still retain) the power to halt production; in the absence of competition it was always easier to simply give in and pass the higher costs to the rest of society's (lower paid) workers. With competition the power to stop production has become the power to resign en masse, so is now used sparingly.

Of course, failings of the US car industry to develop more fuel efficient cars (such as the Prius) is indeed a damning indictment of our leaders' concern of short-term profits combined with a criminal lack of vision - an inability to see the past, a la the seventies, as well as the coming future. If ford and gm go under and are replaced with japanese owned plants producing fuel efficient vehicles, would the country be better or worse off?

Some jobs are being lost on account of internal competition. Doing away with the CAB (one of Carter's few accomplishments) suddenly empowered upstarts with a plane or two to enter the business. Moaners about lower industiral salaries do not complain that air travel pricing has not increased over the past thirty years, unless of course they work in the industry. These lower prices also meant the demise of the local travel agent, but few non-agents complain. Real estate agents are fighting a rear guard action to maintain their high commissions, but this is a losing battle.

Competition is vital to maintaining a healthy economy, whether it is the local, regional, national or international level. As we become more efficient society produces more goods and services, so living standards rise. Of course, our ability to compete in the global society is increasingly dependent on our education system.  Our failings here may be a better reason for being pessimistic about the future than PO.

As other countries get richer we are more likely to sell them our products instead of sending them our soldiers. Try to remember how we interacted with China before Nixon went there - compare the pre-Nixon US/Chinese era with how we deal now with North Korea. China has become a fierce competitor, but as their middle class grows in numbers and wealth, the possibility of war is reduced.

You make some very good points, and I am not dogmatically against global trade. However, this Economics 101 concept of 'comparative advantage' can only be taken so far before some built-in falacies appear.  

Permit me to do a little thought experiment. Let us say that we unexpectedly discover a race of self-replicating androids who are every bit as intelligent and physically able as any human. Furthermore, let us say that they don't even eat, as they get all of their energy from moon beams.  They have no ego and no personal desires and are perfectly willing to work 24/7 for nothing. It doesn't take long for the global economy to discover this new labor source and to replace all of its human workers with androids that don't have to be paid or fed.  The cost of manufactured goods drops to a new low because the labor costs are essentially zero.  But with all the world's workers now unemployed, what happens to the market for these goods and when the world's consumers  no longer have any money to buy them?  

Where I am headed with this little exercise in reductio ad absurdum is that it is my opinion that once wages collectively fall below some optimum level, bad rather than good things happen to the economy, comparative advantage notwithstanding. That is why I believe that imposing  a Third World wage structure on the US will in the long run destroy the US economy. As as the US consumer is the largest purchaser of goods from China, it will also wreck the Chinese economy.

You also seem to  have faith in the notion that trade has a pacifying effect between nations and that as China's middle class grows the chances of war between the US and China diminishes.  Unfortunately, history is not on that side of the argument.  In Europe prior to August 1914 there was a tremendous amount of trade between Great Britain, France, Germany, and Russia. As the arms race between the main powers accelerated and as concerns over possible war grew, there were many knowledgeable people at the time saying that an all-out European war was impossible because the countries were so economically dependent upon each other as the result of trade.  The lesson is that the vanities, delusions, and paranoia of ruthless politicans always trumps common sense and sound economic reasoning.

As America sends more and more manufacturing offshore, it has less and less to sell the world. Look at China and Japan--they are buying US T-bills, not products and services. Much of the intellectual property America produces (software, movies, music, pharmaceuticals) is easy to pirate, and it is being pirated. And there is more and better competition for what is still made in the US.

Add in the fact that America has greatly damaged its reputation abroad, which does affect demand for products and services. Look at the the bombings of foreign McDonald's as a proxy for American interests, or the creation of Mecca Cola to compete with Coke. There is a lot of work to be done.

Another thought experiment:

Country A starts importing food staple from country B, due to better economics; Gradually, country A loses the infrastructure and worker skill level needed to sustain domestic production; country B, whose efficiency included dangerously low genetic diversity, suffers massive crop failure (or, weather damage, or _).  Oops.

Most recent EIA Short Term Energy Outlook is up (yesterday):


Here's the bit on global oil markets, with my emphasis:

International Petroleum Markets

Prices. The WTI crude oil price averaged about $66 per barrel in September, with an average price of about $64 per barrel projected for October under the baseline weather scenario, accounting for hurricane damage. Quarterly averages for the WTI price are projected to remain above $63 per barrel for the rest of 2005 and 2006. Continued high crude oil prices had been expected prior to Hurricanes Katrina and Rita.

Under the baseline weather scenario, the projected fourth-quarter average WTI price of $64.40 per barrel is approximately $16 per barrel above the year-ago level, but is about $3 per barrel lower than in the previous Outlook, which was made prior to the additional loss of crude oil production and refining capacity resulting from Hurricane Rita. While oil product prices rose in response to the resulting product shortages, the loss of operable refining capacity from Rita (which was more than twice as large as the shut-in crude production resulting from Katrina) reduced the demand for crude oil, moderating WTI prices. Should 10-percent colder weather prevail in the United States this winter, WTI prices are projected to be $ 4 per barrel higher than the baseline. Should the U.S. winter be 10 percent milder, WTI prices are expected to be $3 per barrel lower this winter. WTI prices will also be significantly impacted by demand in other parts of the world, which is sensitive to both weather and economic conditions, and by global supply developments.

Demand. Worldwide petroleum demand growth is projected to slow from 2004 levels, but still remain strong during 2005 and 2006, averaging 1.8 percent per year over the 2-year period, compared with 3.2 percent in 2004. This reflects a downward revision from the previous Outlook. The average annual worldwide oil demand growth is now projected to be about 1.2 million barrels per day in 2005, down from the 1.7-million-barrels-per-day growth projected for 2005 in the previous Outlook.

Production. Moreover, only weak production growth in countries outside of the Organization of Petroleum Exporting Countries (OPEC) is expected. With the loss of production in the Gulf of Mexico from the hurricanes, production declines in the North Sea, and the slowdown in growth in Russian oil production, non-OPEC supply is projected to increase by an annual average of only 0.1 million barrels per day during 2005 before increasing by 0.9 million barrels per day in 2006. In addition, worldwide spare production capacity is at its lowest level in 3 decades; and in reality, only Saudi Arabia has any spare crude oil production capacity available. Lastly, the continued geo-political risks, such as the insurgency in Iraq and potential troubles in Nigeria and Venezuela, have boosted the level of uncertainty in world oil markets.

High levels of production from OPEC members contributed to inventory builds in the Organization for Economic Cooperation and Development (OECD) countries in the first half of 2005, with these stocks moving above the upper end of the 5-year historical range. However, OECD stocks have not grown as quickly in terms of days' supply (the number of days that inventories would satisfy demand) because demand has grown rapidly as well. In addition, stocks were drawn down in the aftermath of hurricanes Katrina and Rita, with OECD inventories moving back towards the middle of the 5-year historical range.

America's advantage in manufacturing consumer goods ended about 25-30 years ago. The number of Americans who work at manufacturing consumer goods is a small percentage of the total workforce. America's big advantage is manufacturing capital goods where quality is more important than price. It's only a matter of time until automation technology reaches the point of undercutting the wages of even the world's lowest paid workers. It will be a repeat of what has happened in agriculture in the last century. Where an industry once needed 50 workers it now only needs one and the goods are so cheap we pay the government to give it away. A new middle class of skilled service workers could emerge if there are major changes in how government taxes and spends which would be almost the opposite of GOP ideology.
Has everyone seen this weeks Petroleum statistics?

Gas down, Distillate down and Propane down.