Conference open thread

Given that some of us may be heading out to Denver today for the Denver World Oil Conference, this ia a good chance to raise some of the issues that might be discussed.  The program is on the ASPO America site.
I had previously posted multiple times about discrepancy in EIA data in its immediate press releases and other data on its website. I emailed them and this is the response I got.

The 4wk avg product supplied from the Navigator is weekly data only.  The other is from the latest monthly or annual data prorated to match the same time period as the weekly.

-----Original Message-----

Subject: Discrepancy in product supllied data

Hi Larry. I wanted to know why the product supplied 4 week average here

is different from the 4 week product supplied average here t/txt/wpsr.txt

I know there is a one day difference but even the previous report showed such huge discrepancy.

The difference is in the end dates 10/29/04-20,391 vs 10/28/04-20,849. But that cannot be explained by a huge supply on one day or no supply on another as it happened last week as well.

Your comments will be appreciated.

Anybody noticing the Norwegian monthly oil production figures? September 2005 came in at 2,992 Kbpd in total, giving a quarterly average of 2,934 Kbpd (OPEC estimate 3,023 Kbpd). October's preliminary figures are 2,837 Kbpd in total. October 2004 figures were 3,210 Kbpd. Is Norway's oil production now going down the steep slope of decline and will next years figures be 300Kbpd less than this years figures.
Norway's press release web page :-
I don't understand how the decline could be so small?

If I pump 5000 gallons a day; what could prevent me or limit me to only be able to pump 4500 a day instead?  Is the other 500 gallons water, air, sand, or mud?

'Pump' is a relative term in the oil business.  In primary recovery, you don't 'pump' anything out of the well.  You stick a pipe down a hole and let what flows flow.  The internal pressure of the rock does the 'pumping'.  That's where gushers come from.  So, if the related infrastructure can handle 5000 bpd, and only 4500 comes out of the pipe, you just suck it up and deal.

Beyond that, you can actually pump oil out of the well.  The pumps in question are where the TOD graphic at the top of the page comes from.  But you can't pump something that isn't there, so you only pump as fast as the well will fill.  If the fill rate slows down, you slow down the pump.  Repriming those things is not fun.

mabye I'm reading the figures wrong but it looks to me like they peaked five years ago.
fie fann og helvete

Agreed that the peak was five years ago, but there is a big difference of losing between 50kbpd and 100kbpd over a year and loosing 300kbpd over a year. 50kbpd to 100 kbpd is just past the peak of the curve, 300kbpd is going down the slope big time. That is the point I was making.
Oil production on the UK side of the North sea continues to drop precipitously. The UK trade figures for September from National Statistics Online show that the UK was a net importer of oil by value for Q3 of 2005 to the tune of GBP0.7 billion. We have been a net importer by volume for some time but the higher price per barrel of the exports had until recently balanced it out by value.

The latest more detailed but older figures from the Department of Trade and Industry
show that for July 2005 the output was 1.444 mbpd, down 387 kbpd or 21% from July 2004

totally agree with you. Point taken. I wasn't aware of the previous figures, thanks for raising it.
Norway is also under threat of the gulf stream moving, over half of the population is on the south coast but thats more to do with global warming not peak oil!!
I guess Kunstler is not going to be there but I've been waiting for an open thread to post this, which I ran into a couple of days ago:

Historic Vermont Meeting in State Capital Passes Resolution to Secede from the U.S.

The neo-con band of criminals running Washington, trampling on civil rights at home and invading countries at will overseas, has led a large group of strong-minded Vermont freedom-fighters with no choice but to secede from the United States.

And last Friday at the state capital building in Montpelier, a historic independence convention was held, the first of its kind in the United States since May 20, 1861, when South Carolina decided to leave the Union.

A packed House Chamber in the Vermont statehouse, with more than 400 gathered, started the daylong secession convention with a speech by keynote James Howard Kunstler, author of The Long Emergency, and ended with a resolution passed to secede from the United States.

Unfortunately I think this kind of activity has even stronger "nutcase" connotations than Peak Oil for the average reader. If Kunstler is keynoting the Vermont Succession movement, I wonder what else he is involved with?

I live in Vermont and am closely associated with all these Independence nuts.  While not actively involved in the Vermont Secession movement, I am peripherally and increasingly sympathetic.  What folks from the outside might not understand is that this "movement" has been building for some time, and it's present form is mainly theatre, designed to make some very strong statements, and begin a serious discussion about the ultimate act of localization, withdrawal from an increasingly dysfunctional US.  Also what people might not gather is that these types of movements are happening all over the world, as people become more and more aware that small political groups are preferrable to larger, especially in a post peak era. If a serious effort for independence can be made in Quebec, only 30 miles from Montpelier as the crow flies, a similar effort in Vermont might not be as nutty as it initially seems. Vermont is I believe the only state that reserved the right to secede when it joined the Union in the 1790's. It was an indepedent Republic for a couple of decades before that, and a lot of Vermonters never wanted to join the US in the first place. We're a pretty independent lot.  My impressions are that Kuntsler was hired to talk about Peak Oil, and holds no particular affinity for Vt. Secession, and that Vermonters don't really give much of a damn what other parts of the country might think of them.  Many important social movements recieved more virulent negative labels than "nutty" in their infancy, and went on to become the accepted mainstream.  
     For more info check out
Vermont is I believe the only state that reserved the right to secede when it joined the Union in the 1790's.

That's very interesting.  One of the first things every child in Texas learns is that because Texas was an independent republic recognized by the United States for nine years before we decided to join up, we are the only state to join the union by treaty, which is why we are allowed to fly the Texas flag on a separate pole at the same height as the U.S. flag.  Similarly, we are the only state of the Confederacy which had the right to secede.  Whether we retain that right in the aftermath of Appomattox and Reconstruction is a wholly different ball of wax.  

I agree with Sam Houston that we were dumbasses to join the Confederacy in the first place.  Fifteen seconds of careful thought and a resource map should have put paid to that bullshit.  People got suckered into it because the South was supposed to march on Washington and force a negotiated peace before an effective opposition could be constituted.  Historians will be getting tenure arguing with each other over why that didn't happen for another hundred years, but like every war since the Industrial Revolution that was supposed to be 'over by Christmas', once the quick victory failed to emerge, the side that thought they could win quick got ground into the mud.

 o.k...i'm shameless...but i wanted the TOD oil honchos to comment on a graphic that was  referred to in the "snipet" stream about Ghawar. at the end of glenn morton's web page on ghawar he posts what i believe is a horizontal cross section of ghawar:

with the following commentary:

One of the things to keep in mind as you look at the model below is that the original oil column was 1300 feet thick.  Today, the green layer is less than 150 feet thick.  One must draw the necessary conclusions that most of the oil has been removed from Ghawar.You can see for yourself, that the area occupied by oil is not very large compared with where the initial injectors were placed. One friend, a reservoir engineer, to whom I showed this picture said "It's over! Kiss your life-style goodbye!"

is this model depiction as it seems? is the oil drum ~ 90% empty?

It depends where you look.  Ghawar is a very large field that is often divided into bits (as the paper cites), and the structures and productivity of the various regions differ.  Since the graph showed only a sector of a field 6 km high by 22 km wide and the high direction is likely the one in which Ghawar is over 100 miles long this is only one part, and it may still be a bit richer to the South - though I suspect also more depleted to the North.
The illustration is from part of North Uthmaniyah.  The source, a paper by Dasgupta, can be found here: Link to article

North Uthmaniyah is probably the most depleted part of Ghawar.  Another technical paper refers to it as "the mature central part of Ghawar".  Ain Dar and Shedgum have been producing longer, but North Uthmaniyah was pushed the hardest when Aramco ramped up production during the 1979-1981 period.

It's interesting that a recovery rate of over 60% is projected according to Dasgupta.  Baqi and Saleri expressed confidence that it would be 75%, although I think Baqi and Saleri were talking about Ain Dar/Shedgum while Dasgupta is talking about the whole field.

er...i meant the ghawar oil drum
Could someone please try explaining to me the published statements/comments from talking heads that the reason for the decrease in the price of gas/crude is due to a decline in demand.

When I look at the current This Week in Petroleum - Gasoline report and particularly the demand section, the four week average is now almost the same as the four week average for last year.  Also, the weekly demand amount ONCE AGAIN is greater than a year ago.

Other than perhaps a seasonal reduction in demand, I see nothing even remotely suggesting a demand destruction scenario from these figures.

Also, how can we still have a sizable percentage of Gulf oil production shut in, demand being the same as last year, and crude stocks continuing to build?


Someone can correct me if my figures are wrong but...

  1. We have roughly 1mbpd of lost oil due to Gulf shut-in.
  2. Are we not drawing roughly several hundred thousand bpd from the SPR?
  3. Are we not also receiving roughly more than 1mbpd "loan" from Europe? (I think this loan is about to end.)

If the above scenario is right, then that would explain the temporary downward price movement as well as building stocks. (That scenario explains the situation no matter what the numbers are if they add up to more than the 1mbpd shut-in for the Gulf.)

Someone with better current numbers might be able to shed light on that.

Imports are still up - see the graphs in the post last Thursday.
Our last Reserves Report incl these stats that may assist rationalization of the conflicting data out there:  July/Aug/Sept global extraction was 84.3-mbd/84.7/83.8 and speculation within the sector resulted in illegitamate demand that resulted eventually in stock builds of 2.5-mbd in 2005Q2 & 1.9-mbd in 2005Q3.  Heating oil and gasoline are back to Spring 2005 prices.  Similarly the nat'l gas spike is falling like a rock.  We are raising our USA working gas trough in March from 950-Bcf to 1000-Bcf even tho many pundits are still in the 300-450 area.  They are plainly wrong no matter how bad they feel the  winter will be.

Global production continued its pace of new monthly records in 2005.

Despite the new round of apocalypse posts at TOD surrounding the IEA Outlook, the concensus of Peak Oil and Depletion jars one back to reality...

Similarly the graphs of oil/gas/gasoline at illustrate that present stocks are ample and our problems stem from refinery capacity and distribution, not secular supply, which is clearly in growth mode.

Thanks for this post. I learned a great deal from your Trendlines site.
Could someone please try explaining to me the published statements/comments from talking heads that the reason for the decrease in the price of gas/crude is due to a decline in demand.

When I look at the current This Week in Petroleum - Gasoline report and particularly the demand section, the four week average is now almost the same as the four week average for last year.  Also, the weekly demand amount ONCE AGAIN is greater than a year ago.

Realize that the "demand" in these charts would be better described as "consumption". It's the amount of gas actually shipped for distribution.

You're right that the amount consumed is, for the second week in a row, somewhat higher than a year ago. This is despite the fact that gas prices are still higher than a year ago (although down a great deal from post-Katrina). Higher consumption with higher prices means that demand is HIGHER now than it was a year ago.

Your "talking heads" are to some extent a few weeks behind the times. Last month, consumption was lower than a year ago, so they had a point back then.

So why are gas prices falling? Well, obviously, it's supply and demand. Demand is up, so it must be that supply is up even more.

What I think is happening is that we took a bunch of measures post-Katrina and -Rita to try to boost gasoline supply. Regulations were relaxed to let the refineries increase production, we released oil from the SPR, and we borrowed oil and gasoline from Europe. But things take time, and there's always a lag from when a policy is initiated until when its effects are held. We are still experiencing the effects of these production boosts, even though we really don't need them so much any more. Supply is higher than it needs to be, and that is driving down gas prices.

Does anyone know if there are going to be online links or DVDs available of the conference? I seriously considered going but in the end did not make it. As someone who reads TOD everyday but does not post I look forward to reports from those that do make it. Thanks in advance for any replies.
I'll let you know after we register in the morning.  Rumor (AKA the ASPO website) seems to indicate that the meeting is going to be very popular. (Though the bar was not that full after dinner).

Hope you can find something out. Lookin forward to the reports. Wish I could have made it.

an interesting article about foreign investors (central banks mainly) that are getting more reluctant to buy our Treasury bond debt.  

there was a bit about inflation buried inside:

" Kraft Foods Inc., the largest U.S. foodmaker, and Kimberly- Clark Corp., the largest maker of diapers, said they are boosting prices to recover higher costs for raw materials and energy. Kraft increased the price of Oscar Mayer cold cuts and Jell-O refrigerated puddings by 3.9 percent. Kimberly-Clark will charge 6 percent more for Scott and Cottonelle toilet tissue and napkins, Viva paper towels and Huggies wipes in February."

Lee Raymond:

"The price of oil is more likely to be 'under $35' in 10 years time than at current levels just below $60 a barrel," he said.

Wall Street Journal quote from Nov. 8th.

[Just before Congressional hearings on oil company profits.]

Weighing in on the Vermont secession convention...

A far better account of it is Vermont Independence Convention: Confronting the Empire

On October 28 a statewide convention on state secession and running on the theme "Vermont Independence: An Impossible Dream or a Vision of the Future?" was held in the State House in Montpelier, VT. The last time a convention similar to this was held took place in North Carolina in 1861 when the state decided to secede from the US.

The group that organized the convention in Vermont was the Second Vermont Republic (SVR), formed in large part during the last few years. The SVR, according to its web site, "is a peaceful, democratic, grassroots solidarity movement committed to the return of Vermont to its rightful status as an independent republic as was the case in 1791 and to support Vermont's future development as a separate, sustainable nation-state."

Vermont was once a sovereign nation-state between the years 1777 and 1791 (a little known fact in US history) and Second Vermont Republicans are figuring out how to cut Vermont loose from the Empire so it can build on its more democratic and communitarian way of life.

Over three hundred people from Vermont and from various areas in the States and Canada filed into the State House that brisk Vermont morning, walking past "Ethan Allen" (aka Jim Hogue) dressed in full continental regalia, sitting atop a horse. A fellow Vermonter, also in continental garb, was holding the famed green and blue flag of the Green Mountain Boys which has also been adopted by the SVR.

The convention began when the "Irreverand" Ben Matchstick opened with a very poetic "prayer" calling for secession.

Matchstick was followed by "Ethan Allen" who gave a grandiose speech recounting his takeover of Fort Ticonderoga during the American Revolution.

Thomas Naylor then took the floor. Naylor is unarguably the architect of the secessionist/independence movement, having come to the decision of secession after realizing, along with fellow Vermonters, that the US Empire "has become too big, too centralized, too powerful, too intrusive, too materialistic, too high-tech, too globalized, too militarized, too imperialistic, too violent, too undemocratic, and too unresponsive to the needs of individual citizens and small communities" as he stated in his most recent book "The Vermont Manifesto".

Naylor pointed out the rationale for secession. In sum, the two main problems are that the US government "has lost its soul and has become both unsustainable and unfixable."

Naylor made comparisons between the USSR and the USA, citing among other things that the USSR "pretended to have a multiparty political system"; similarly, the US "has gone down the same path and has one party taking the guise of two."

After Naylor's brief introduction, executive director of the Vermont Historical Society, J. Kevin Graffagnino spoke about the historical significance of Vermont's "larger-than-life frontier hero" Ethan Allen. He pointed out that Ethan Allen's departure from the norm of the so-called "founding fathers" of the US has caused much celebration and adoration of the historical figure by Vermonters of "all political stripes and persuasions". Interestingly, in what is commonly known as "Ethan Allen's Bible", Ethan declared that "we must return to the religion of nature and reason." Apart from Vermont taking a different road of independence, no wonder many of the more puritan "founding fathers" loathed Ethan.

A professor at UVM was next to speak - Dr. Frank Bryan. Bryan is a veteran secessionist and in the 1970s was even involved with the Decentralist League in Vermont which he founded along with none other than prominent Anarchist theorist and activist Murray Bookchin, also a Vermonter.

Bryan pointed out the historical tradition of secession in Vermont. In 1990 he raised the issue of secession into the public lime light and seven Vermont towns voted to secede from the US. He also spoke of his personal feelings on the issue of secession. He had become a Republican in the past because the Democrats "were anti-small town and were proponents of the [much hated] interstate highway system" in Vermont. He was quick to point out that "being a Republican in Vermont is really being a decentralist communitarian." But he left the Republican Party during Reagan's anti-states' rights years, among other things.

Some of the most important aspects of Bryan's speech were his calls for smaller scale. "Scale is critical to tolerance and stability," Bryan pointed out. "Government needs to become small and local" in order for things to work better. He also vocalized some of his well-grounded fears that the Vermont independence movement would lose strength and momentum whenever a liberal Democrat comes to power as president. He urged Second Vermont Republicans not to make the issue of secession into "that type of thing."

The keynote address was given by author of "The Long Emergency", Howard Kunstler. He gave a damning speech against certain aspects of the current system, especially that of suburbia.

"Suburbs represent the greatest misrepresentation of allocation of funds in the history of the world," Kunstler cried out to the cheering throngs in the State House. Similar to Naylor, he made allusions to the decadent, corrupt and failed system in the USSR and the overwhelming similarities it has with the US. "I've traveled all over the country. Travel it! You'll see a country that looks like a former soviet republic... go to Elmira and Utica, NY! You'll see what I mean!"

Kunstler warned of the coming days ahead where America, even during peak oil and its aftermath, will continue to be a car-dependent society. The result? Suburbs will crumble, the federal government will become impotent and people will be forced to live in small-scale societies, much like what Vermonters have been used to over the years. He said that in the future, there will be "a clearer distinction between town and country... we won't be able to afford to abide by building codes... [and] turbulence will be the rule."

His book "The Long Emergency" gives a fuller description of the end of the American Empire during peak oil. Hopefully, Vermonters are making the right moves in getting out of the Empire while they can and scaling down in size to avoid future destruction and disaster.

After a brief lunch break, Naylor spoke again. He argued for Vermont's right to self-determination, direct democracy and self preservation. He also laid out the constitutional legality for Vermont's secession.

He made sure to drive home the point that neither he nor Vermonters are or will decide Vermont's independence; rather, it will be "Bush, Rice, Hillary Clinton [etc.], the cheap oil end game, the collapse of the dollar, etc."

Naylor also answered some very important questions on whether or not Vermont would even be able to sustain itself if secession became a reality. His manifesto goes into further detail but he did point out that there are 50 nations that are the same size or smaller than Vermont in population; some of these nations also happen to be 5 of the 10 richest in the world.

Fellow Second Vermont Republicans spoke throughout the afternoon to discuss some very important issues at hand.

The last main speaker was Kirkpatrick Sale, author of "Human Scale" among many other books. Sale is perhaps one of the greatest decentralist writers in the twentieth century. He focused his talk on organizing the Middlebury Institute which would be dedicated in promoting "the serious study of separatism, secession, self-determination and similar devolutionary trends and developments, on both national and international scales."

A member in the audience asked Sale if Vermonters will ever use violence to achieve the goal of secession. Sale responded that although the SVR encourages non-violence and a peaceful dissolution, it would have to be Vermonters themselves who make their decisions.

At the end of the daylong convention, a majority of people present voted in favor of supporting two resolutions that were brought to the table: one calling for Vermont's return to an independent Vermont republic and the other urging the SVR to apply for membership in the Unrepresented Nations and Peoples Organization (UNPO).

The SVR is not, as some critics may argue, a vanguardist group - members of the SVR have no interest in running in elections on a secessionist party ticket. It can perhaps be best described as "a movement." And maybe this struggle, when it gains more ground, may be described as a "national liberation struggle"; of course, not in the sense of the struggles that shook the world throughout the middle and latter parts of the twentieth century.

The makeup of SVR's membership is quite interesting: progressives, libertarians, greens, conservatives and even radicals make up the motley crew that is the SVR. This makes it possible for a large variation of ideas to enter the independence debate.

However, if Vermont ever declares its independence officially, what type of government will take its place? Some Second Vermont Republicans envision a system that combines a federal structure with Vermont's long history of direct democracy and town meetings. A president will still be in place and so will a congress. But why end there? Why should Vermonters detach themselves from the shackles of one state apparatus and place themselves under the weight of a new state? Don't Vermonters deserve better than that?

The SVR appears to be taking a similar road to that of national liberation struggles in the past. However well meaning national liberation struggles and groups may have been in the past, the name of their struggle (emphasis on NATIONAL liberation) describes well the intentions and eventual outcome of their situations. Some advice for the SVR: read Frantz Fanon's "The Wretched of The Earth" to get a sense of the kind of nationalist struggle he wrote of - one that is internationalist in perspective.

Or if Fanon isn't what SVR folk are looking for, they don't have to look far to find answers. After all, Solzhenitsyn lived in Vermont as did Bookchin.

Maybe the type of democracy the SVR is looking for can be found in the Langdon Street Café in Montpelier, where many SVR meetings have taken place in the past. Langdon has been in existence for a year. It's a worker's owned and controlled collective where all the workers are also bosses. The Café sells a wide variety of organic food and local brews and beverages. Local bands perform quite often. Local artists auction off or display their work. And on the second floor, a small, radical bookstore named Black Sheep Books has set up shop.

This is just what, or so it appears, Kunstler, Sale, Bryan and Naylor were talking about throughout the day: a sustainable, small scale, democratic alternative to the Empire surrounding them and they had to look no farther than a few blocks down the street. Whatever road the Vermont independence movement takes, the possibilities are indeed infinite.

For some audio coverage, visit:

and extensive coverage can be found here:

This is not "nutcase" activity, although some who read into it from afar might be. It is, however, brilliant political theater. I applaud Kunstler for participating in it.

Re:  Norwegian Production

I did a P/Q versus Q plot of the entire North Sea.  The region peaked at 52% of Qt (total estimated cumulative oil production) in 1999.  The North Sea is 70% depleted, and they only have about 18 Gb left using this analysis.     At current rates of production, the North Sea would be exhausted in 10 years, which obviously implies a very steep decline rate--which is precisely what we are seeing.

This is critical since the North Sea produces light, sweet crude oil.  

Arrived in Denver today after @1500 mile drive from Oregon. Paid 2.30/gal regular at Ogden this am; cheapest gas I've bought in over a year.

Denver is just as crazy as I remember, with far more concrete and sprawl than 1993 when I left.

I think it very interesting that Chris Skrebowsky gets the first words, to be followed by a Q&A session and the mid-morning break.

I feel the Q&A sessions crucial.

I'm at the Warwick and hope there are some other drumheads here. I'll do my best to report.

Kunstler vs The Market

James Howard Kunstler:

The American public's failure to pay attention reached supernatural levels this week as our mass media gloated over falling gasoline prices -- down 24 cents, average, to pre-hurricane levels. The news media took this to mean that all the end-of-the-summer trouble is over with and things can now get back to normal, including especially an economy based on trade in suburban houses.

By the way, that figure is totally wrong. According to gas prices are down more like 70 cents from their peaks, not 24!

What they failed to notice is this: since the hurricanes shredded our Gulf of Mexico oil and gas capacity, Europe has been sending us 2 million barrels of crude oil and "refined product" a day from its collective strategic petroleum reserve. The "refined product" includes 800,000 barrels of gasoline, plus diesel, aviation, and heating fuel. Meanwhile, US domestic production has fallen to around 4 million barrels of conventional crude a day. America uses close to 22 million barrels of oil a day. Bottom line: post-hurricane, total imports have accounted for 80 percent of America's oil consumption..

These figures aren't consistent with t/pdf/table12.pdf

They show production last week at 4.3 MBPD, not far from Kunstler's 4, but total crude input to refineries is 14.3 MBPD, not 22! That's a pretty big difference.

Now, the important part of all this is that last week the International Energy Agency (IEA), Europe's energy security watchdog, declared that it would now end the 2 million barrel a day shipments to the US. Not because they are hateful meanies, but because, after all, it is Europe's strategic reserve and they can't sell it all to us because, well, some strategic emergency might come up for them, too.

It will take a few weeks for the last of Europe's tankers to offload supplies and for the various fuels to work their way through the US fuels retail system. With US production and refining still crippled, we can look forward to watching the price of gasoline, heating oil, diesel and aviation fuel kick back up through Thanksgiving and on into the heart of the Christmas shopping season. At the same time, homeowners will be getting their first substantial heating bills of the season.

So here's the test. Look at near-term gasoline futures prices. Today's close was $1.55 for December and $1.61 for January. By that time the European imports should be over. According to Kunstler, gasoline prices will "kick back up" through this period and we should see major new highs. Yet these prices don't show any such effect.

So who is right, Kunstler or the markets? If Kunstler is right and prices are pretty much certain to rise in the next two months, we can make a very nice profit by buying gasoline futures now. Of course, if market participants believed that, they would have factored that into their investments and the price would already be bid up. Because it's not, we can conclude that the market does not believe that gasoline prices are going to rise substantially between now and January.

Which is more likely: that one guy, who happens to be a little loose with his figures, is wrong?  Or that thousands of people who are betting their kids' college money are totally ignorant about this elementary information that Kunstler reports?

My recommendation is to go with the consensus of people who are putting their money where their mouths are. There are other factors here that Kunstler either doesn't know about or chooses not to tell us. What are those factors? It doesn't matter! You don't even need to know! Just trust that the market motivates people to bet on what they really believe will happen, because that is how they make the biggest profits. We have the luxury of sitting back, not investing a penny, but benefiting from the collective wisdom that is revealed in these market prices.

That is the great social benefit performed by markets like these. They tell us that Kunstler is wrong, and we don't even have to know why.

I am no fan of Kunstler, largely because I believe he is an ideologue and has a fixed adgenda that is is trying to promote. Nevertheless, he serves a very useful purpose in making people more aware of the problems we face.

On the other hand, neither do I have quite the almost religious belief in 'The Market' that some of those who post here seem to have. Let us ask: What is  a market? It is a collection of entities buying and selling, most of which have little or no relation to each other. Thus, to call this activity a 'Market' is to imply an intelligence and purpose to something that is almost inherently chaotic.

When someone says that 'The Market knows',  he is merely saying that a consensus of buyers and sellers appear to think more or less alike on any given day.

Historically, the 'Wisdom of the Market' does not have that great of a track record. Just go back to October 1929 to see all the glowing prognostications by the best and brightest experts as to what a good investment stocks would be.

Obviously, no one can predict the future with any certainty much above total randomness. Those who claim they can are charlatans; those who blindly believe those predictions are fools. Thus, charlatans and fools are running the show.

What is  a market? It is a collection of entities buying and selling, most of which have little or no relation to each other. Thus, to call this activity a 'Market' is to imply an intelligence and purpose to something that is almost inherently chaotic. When someone says that 'The Market knows',  he is merely saying that a consensus of buyers and sellers appear to think more or less alike on any given day.

I share your derision for that TV show: "Market Knows Best" (a pun on an oldie goldie 1950's TV show called "Father Knows Best")

However, when it comes to arguing that buyers and sellers have no relation to one another, that is not reality. Sellers employ something called "marketing". They use it to brainwash buyers into believing that a certain product or service XYZ is a must have. Fancy bottled water anybody?

Markets are not chaotic. They are driven by sellers and by their manipulation of the buyers.

True.  I must admit that I may have succumbed to a bit of hyperbole in my comments re 'The Market'.

Yet, I still think that we tend to create a fiction that 'The Market' is a real, sentient thing.... almost a real thinking person. It is not. It is an abstraction created by economists to enable them to better explain what takes place between buyers, sellers, and producers. Is the 'Market' anything more than the collective expectations of people who buy and sell? They can be wrong as often as they are right. And the proof of that is that in any transaction there is a buyer who thinks he's getting a good deal, and a seller who thinks he's unloading a turkey. Obviously, one of the two has to be wrong.

What bothers me a lot is that the financial transactions are becoming more and more removed from the phsyical reality of the stuff in the ground.

While people can hypothesize about how many candy bars are left in the candy machine, the cold reality is that what is in the machine is what is in the machine, and no amount of financial machination is going to change that simple fact.

Very good. Your are starting to get it Joule.
Noise sets like, "The Market", "The Economy" are part of a mind "framing" game used by econmists (often unintentionally). They singularize and anthromorphize abstract concepts, causing you to immediately fall into the trap of accepting that each of these economic forces is a singular being with powers of intelligent action.

Examples: The Market reacted well to today's news that ...

The Fed says that The Economy is recovering from ....

Yes, the Market is just the collective opinions of a large group, some informed, some not.  It may be that Kunstler is wrong, but that implies nothing about the "wisdom" of the Market.  Since most people have a hard time envisioning a future that does not look like the past, markets are not so great at predicting step changes.  Predicting such changes is hardly an exact science - usually there will be some well informed individuals who did figure it out before hand, but it is only afterwards that we know who they are.

So sitting back and watching is to some extent what I'm doing.  Like probably most on this site, I think something is coming but can't figure out the time frame.  So I'm watching for signals, looking for trends, seeing which theories seem to be working out.  I hope within the next year we will have a better picture.

But honestly, when I look around and see the dismal results of the collective wisdom of my fellow man, I'm not much inclined to put any money there.  So I'm left hoping that if  I can get better informed, I can make a better choice, or at lest be better prepared for possible outcomes.

True that I am probably a nut job, but I believe that the security markets are manipulated by the Fed and its cronies by flooding the markets with liquidity thereby driving up asset prices.  I believe that this maipulation has been extremely evident recently.  I suggest that since it is also in the interest of the various administrations in power (worldwide) for oil prices to go down as it is for asset prices to go up, that the oil markets may also have been easily manipulated to drive prices lower than they should with all things being equal.  After all, what do the short sellers at Citi have to lose in the oil markets?  Remember when they were short before Katrina, the market declared a force majeur benefiting the people who were wrong and screwing those who were right.
  Doesn't sound all that nutty to me. Do you have figures around how you see things being manipulated recently?
The EXTREMELY short term indicators that I monitor are two.  The first is the TICKs.  The past days there has been an exceedingly large number of TICK readings over 1200 despite their producing relatively little movement in the S&P 500 futures.  The second is the market depth, or the number of bids below the market and the offers above the market.  In the past couple of days there has been a substantial change in this since there are stronger positions being shown in the number of bids below the market.  This strength is shown to scare the sellers (and it does not take much these days after all the Fed conditioning that has been done).  It is not driving the market up, except in a few blasts occurring at the regular times, but it is preventing the market from going down, which is all that is needed.

On a longer term, program trading as published by the NYSE appears to be at an all time high and has been consistently well over 50 percent of all trades.  Since there are relatively few entities that do program trading, it is easy to coordinate their action as the Fed's Bank of New York indicates on their web site with their daily collusion with the 22 primary dealers.

Finally, I recently noticed that even Goldman Sachs is advertising that everyone should sign up for the free money from the Fed.  They have on their sight that one can "lend" their portfolio to maximize profits.  So, one loans their portfolio to the Fed for the Fed's market operations; gets a bundle of money plus interest in return; can still trade their portfolio as if nothing happened; and then buy more stock on margin from the loan proceeds thereby increasing profits (iff the market goes up).

Truly a dandy way for the Fed to increase liquidity to buy assets while they say that they are increasing interest rates.

I am probably a nut job, but I believe that the security markets are manipulated by ...

Patents, ... I know nut jobs, ... and you sir, are no nut job.

Essentially all "markets" are manipulated.

This morning on SquawkingChicken (CNBC Squawk Box), Frank Barney explained how the "Executive Compensation Market" is no market at all. It is a rigged game. You have corporate executives negotiating with themselves for higher and higher compensation.

According to FB, in many corporate plunder organizations, executives take for themeselves, over 10% of the corporate profits.

I'd venture that FB is being overly polite and that in most corporate plunder organizations, executives take for themeselves, over 100% of the corporate assets, leaving nothing but bankrupt debris behind. Then they move on to the next corporate "opportunity".

The sheeple keep buying into one Enron con job after the next, hoping that this next time, they instead of the corporate insiders will win the "game".

Kunstler said America "uses" 22 mbpd. From the very chart you reference, your 14 mbpd figure is the "crude oil input to refineries" which is not the same thing. Go down in the table and look at line 19, "total product supplied for domestic use" and you see that it's 20.147mbpd. That's still not 22 but it's alot more than 14mbpd. I think your figures are a bit looser than Kunstler's figures here.
For November 4th figures :- Crude imput to the refineries is 14,395 Kbpd (Gross). However, total oil products supplied is 20,174 Kbpd. Total oil product supplied by US refineries is 15,497 Kbpd, the rest I assume are imports from the rest of the world. My feeling is people say one thing, but actually mean another (saying oil but meaning oil products). If you make an assumption that the numbers are correct, but the wording doesn't make sense, trace the numbers to the original context and see what words the person has substituted.
Actually, futures prices aren't determined by guesses about the future. Quoting from Malkiel's classic "A Random Walk Down Wall Street":
Futures prices depend on the interest rate and storage costs. Moreover, one additional factor is likely to enter the equation--the so-called "convenience yield" of having the inventory directly on hand. In general, futures prices will be above the spot price because of the interest and storage factors, but it could in some circumstances be lower when the convenience yield is very high, as might happen if the commodity was in very short supply.
If you really want to bet on oil prices, I'd leave futures to the professionals and simply pick some E&P company stocks.
Of course futures prices are determined by guesses about the future! A futures contract at a certain price commits you to a transaction in the commodity at that price. If people thought gas was going to be selling for $2.50 in December they wouldn't be entering into a commitment to sell it then for $1.50, would they?
I think the point is that any information about the future that the market is able to absorb gets pretty immediately arbitraged into current prices. This is really clear in an R^2 analysis of past spot and future prices - futures prices essentially have no information about future spot prices that isn't in present spot prices. However, markets do move, and some people make lots of money by being better at predicting the future than others. Whether Kunstler is one of them is not a position I would care to defend :-)
There is also a seccesionist movement in Michigan's upper peninsula. The high rate of unemployment and cuts in socail services have the Yoopers wanting to join Canada. The Canadians like the idea because they need the unused mineshafts to bury Toronto's garbage.
In a bit of hurricane obsessiveness,I have been every now and again been checking out the MMS page with daily updates. And then once (or thrice) a week head over to the EIA page that talke about Katrina/Rita vs. Ivan

Now if you modify the MMS update URL you can look at any date in the past you want. When comparing this data (shut in %) with that at the EIA data there appears to be a discrepancy. I'm not sure why, but any explanation for such discrepancy would be helpful.

The actual barrel numbers are correct. It's the percentage that differs. One of these organizations believes that the normal output of GOM production is higher than the other organization.
What's the reality on so called "oil shale" or "oil sands"?  I know they are there, but is it possible or even viable to mine it or bring it up and refine it?
Try the Oil Drum seach engine for "oil shale" or "tar sands"--there are a lot of good historical posts on this. Also look at Ken Deffeyes' book Beyond Oil.

To oversimplify: oil shale looks infeasible, period. The Canadian tar sands are being successfully converted to oil, at a great cost in terms of natural gas input, use of water, enormous capital requirements, and environmental degradation. For perspective: EnCana intends to upgrade their output from 42,000 bpd to 500,000 bpd by 2015, at an initial capital cost of $5 billion, plus another $7.5 billion to run over the following 25-30 years.

Bubba offers wise words on Oil Shale here:

and Tar Sands, which are not "Oil Sands" at all, here:

This is a story from 321 energy web site. Sadad Husseini says that Saudi oil expansion plan may face delays because of shortages of equipment (caused by Katrina/Rita?). It also mentions that the IEA expect the Kingdom to pump only 18 Mbpd by 2030 to meet booming demand. I am sure that the IEA wanted much more than that by then.
The full story is the link below:-
More and more it appears that:
Matt Simmons is the sooth sayer of truth and
those who seek to blemish his reputation are merely slingers of manure-mixed-with-mud
If you're being told to take alternate transportation, notice that Amtrak board has fired the guy who seemed to be steering them in a profitable direction:

Mr. Gunn, who is credited with turning around New York City's subway system in the 1980's and came out of retirement three years ago to steer Amtrak successfully during a financial crisis, described the reason for his dismissal as "ideological."

"Obviously, what their goal is - and it's been their goal from the beginning - is to liquidate the company," Mr. Gunn said in the interview.

New York city discusses "congestion pricing" as a means to change automobile traffic inside the city.