Oil Shocks, A Pessimistic View

OK, that's enough. After reading this happy CERA drivel (hat tip, Leanan)
CERA estimated that oil production capacity -- including crude oil, condensate, natural gas liquids, oil sands, gas-to-liquids - could rise to 108 million barrels per day in 2015, up from 87 million barrels per day currently.
it seemed apparent that fantasy was the order of the day. So, given the legacy of the 20th century (the Armenian genocide, World War I, the 1929 stock crash, the Great Depression, Mao Tse Tung's "Great Cultural Revolution", Stalin's purges, Romania's Ceausescu, World War II & the Holocaust, the Korean War, the Cold War, the Vietnam War, Russia's war in Afghanistan, Imelda Marcos' shoes collection, the Rwandan genocide, the Balkans fiasco and Bosnian genocide, etc.) and a conviction that humankind has gotten no wiser in the 21st century, a more pessimistic fantasy regarding oil depletion and supply shocks seemed to be called for. So, here we go.
First, we'll start off with graph illustrating BP's world liquids production numbers from 1965 to 2004.

The Iranian Revolution occurred in 1979, Saddam Hussein's Iraq invaded Iran in 1980 and subsequently, world production fell 4.7% in one year. In the next few years production continued to fall to a bottom level in 1983 of 56.6/mbd from a high in 1979 of 66.0/mbd. Now, here's the shocker. As the graph indicates, world production did not reach its 1979 level again until 1993, a period of 14 years! And what pulled us out of that long recovery? Remember, this recovery occurred during the time when Prudhoe Bay and the North Sea were both producing, both in friendly areas.

So, let's concoct a little scenario of our own starting with this graph.

Black dots indicate oil shocks. The first two are the OPEC embargo (1974) and the Iranian Revolution (1980). The second set involve the following events occurring in three consecutive years.
  1. 2006 -- The death of Hugo Chavez. All 2.98/mbd of production (all liquids) is shutdown in the immediate civil war which follows. Who kills him? The Venezuelan political opposition with CIA help? Pat Robertson? Does he have a mortal stroke brought on by excessive narcissism? Who cares? The Americans prepare to militarily intercede in the region.
  2. 2007 -- The US decides that Iraq is a hopeless quagmire and they're losing more oil from Venezuela where the real remedial actions must be taken. The US pulls out of Iraq (except for some troops left in Kuwait left to protect interests there and in Saudi Arabia) and begins active military operations to get Venezuelan crude production back online. But the American pull-out in Iraq is immediately followed by a civil war between the Shia' and the Sunni Arabs. The Iranians (without committing troops) support the Shiites in South/Central Iraq in every way possible.
  3. 2008 -- The Kurds of Iraq, Eastern Turkey and Northern Iran see their historical opportunity for a united ethnic nation. Both the Iranians and the Turks launch military actions to stem the separatist movements within their borders.
In all three cases, world oil/liquids supply are adversely affected. In the imaginary data I used, the world loses about 6% of it's liquids supply between the 2005 high (81.9/mbd) and 2009 (76.9/mbd). I discounted new production and declines in existing production assuming that these would just even out (outside the unaffected areas eg. West Africa). After 2009, I let things drift down for a few more years given the geopolitical chaos--maybe the Russians would decide that some of those now independent FSU pipelinestans should no longer be free or maybe China decides that it has a really important strategic interest in the Caspian Sea area--which is already a factor. Who knows?

And so to the point. When CERA forecasts 10 years of light, it is also possible to forecast 10 years of darkness. And if my imaginary scenario were true--which it certainly is not--how many years would it take to ever get back to the 2005 production level cited here? Well, the world would never achieve that level ever again, would it?

But if CERA can do it, so can you. Tell us your best or worst cases, go ahead, predict the future. And then, as if it were money in your pocket, make an investment based on CERA's projections or the predictions made in this report.
All of the horrors you cite might best and most easily be described as classical 'human folly'. A great, old poetic term! For that's actually what it is. And I fear that's what it is going to be. I predict that an enormous and tragic amount of energy (human, not fossil fuel) will be expended in fighting demons that don't exist and in fighting people who are not really our enemies. Never underestimate the power of irrational thinking!

The technology is the easy part; deal with people is the hard part.

Some seemingly smart people can come up with some complete rubbish sometimes.  I'm not just thinking of CERA but also the EIA.  See this analysis of their 2001 International Energy Outlook: http://www.energybulletin.net/11370.html

In the IEO2001 forecast, North Sea production reaches a peak in 2006, at almost 6.6 million barrels/day (mb.d). Production from Norway, Western Europe's largest producer, is expected to peak at about 3.7 mb/d in 2004 and then gradually decline to about 3.1 mb/d by the end of the forecast period with the maturing of some of its large and older fields. The United Kingdom is expected to produce about 3.1 mb/d by the middle of this decade, followed by a decline to 2.7 mb/d by 2020.

The report was published in March 2001 and talks of a peak in 2006. The facts of the matter are that the North Sea had already peaked back in 1999 at 5.947 mb/d! Today we are more than 1mb/d below that 1999 peak.

For Norway they forecasted a peak of 3.7 mb/d in 2004 declining to 3.1mb/d by 2020. In fact Norway had peaked the year earlier (2000) but the real absurdity was the forecasted rate of decline post peak of 1.1% per year. Show me any province, let alone a modern offshore one with a post peak decline rate as slow as that!

The UK forecast of a 3.1mb/d peak in 2005 compares with a reality of a 2.684 mb/d peak in 1999, a full two years before this report was published. The report goes on to forecast a decline to 2.7 mb/d by 2020, an annual fall of less than 1%, when in reality the UK has seen average annual falls of over 7% from 1999.

These forecasted decline rates are most concerning, either the EIA are incredibly ignorant or they are purposefully releasing misleading information.

I seem to remember that the EIA says somewhere that their methodology was to work out the demand, assume that this demand would be met, and then to describe a scenario whereby this demand could be met.  That's why they predicted, among other things, oil from Greenland (where no one is looking) and the Falkland Islands (where exploration was abandoned after some very expensive dry holes).

Not so much lying as deliberate and excessive optimism.  

There seems to be a conspicious lack of regard to asiatic region...  

In my list of 20th century horrors, I did forget the "killing fields" of Cambodia, oh, how soon we forget.

But what do you mean?
Engineers are not "normal" people.
Engineers know about something called Murphy's Law

The Sheeple graze happily in the fields without ever being aware.

Engineers are pessimists. Sheeple are optimists.

When something like Space Shuttle Columbia happens, the Sheeple awaken for a brief shining moment: "Wha? How could something like that happen in this "day and age"?" Then they go back to sleep.

Engineers know that Murphy's primary law (What ever can go wrong, will eventually go wrong) has corollaries.

Here is the scary one (the Columbia one):

"Nothing will go wrong until the worst possible moment, and then everything will go wrong all at once."

CERA does not believe in Murphy.
CERA does not believe in Peak Oil.
Any questions?

I believe in Murphy's Oil

You and her

and "them"

Can I burn it in my stove instead of sawdust pellets?  Or maybe step back has a better suggestion and I'd be better off drinking it?
In Murphy, North Carolina, this indeed is their favorite past time :-).

Same is true for this guy out in Oregon (click on picture):

Murphy's Law is with us every year (even election years, click)

Don't fight Murphy's. Rejoice in it.

I completely agree with your dismissal of the CERA fantasy, it is full of very silly assumptions. One of the comments made by Esser was: "All regions except US will show strong growth [in net oil production] to 2020". Bonkers!

We've discussed it in threads here the last couple of days and I'll stick with my explanation that CERA are living on a different planet.

Looking forward...

While we can, and should, extrapolate on a smooth, scientific and mathematically sound basis from the best data we can get, it is important to recognise that is not the way things normally happen. Unexpected events disrupting smooth, mathematically sound forecasts are the norm.

Moreover, I think there are signs we are entering more volatile times. There are huge global financial imbalances, increasing fundamentalism in the monotheist religious groups, significant developing changes in the economic order of nations. The next 5 years will very definitely not be 'business as usual'.

Will there be sufficient stability for the major mid-east producers (Saudi, Kuwait, Iran, Iraq etc) to continue producing at current levels for the next 5 or 10 years? I suggest the chances are less than 50%.

Will Russia slow its production for economic and geopolitical advantage? Smells to me like they may already be doing so. Can we actually get oil produced round the Caspian Sea out to western markets? Will parts of the world rebel at US intransigence on climate change? Will the US get silly in attempting to militarily secure access to supplies of oil? Will persistent hurricanes continually disrupt GOM production?

Those who think nothing significant will happen to disrupt oil supply over the next 5 years are very, very likely to be incorrect. We will have a major and probably sudden shortfall of oil supply in the next 5 years, even without depletion rates behaving as many here realistically expect.

I did a post here:
yesterday, with a scenario for $500 oil in 3 months next year. Now, I don't mean it as any kind of prediction but the real world does have a nasty tendancy for disruptive events to cluster, so something similar, while improbable, is very definitely possible.

Take a look at the chart at the bottom of this article:
Looking ominous, isn't it? The last time it was behaving like it is now was going into the 1973 oil shock. Perhaps Halfin's markets are telling us something. If the pattern replicates we could get a DJIA of 1000 or a gold price of $5000 in the next 5 to 10 years.

The only significant possibility I see that would change things is a major US and global recession in advance of any caused by oil supply shortfall. The US probably (75%) does enter recession in 2006 even without major oil shocks, what worries me is that may postpone recognition of and action to ameliorate peak oil. I've been trying to feel out the relative timing and intensity of the recessions / depression and oil shortfalls for the last 18 months. Unfortunately I haven't seen it clearly yet.

Expect things to be worse than the 1930s depression in the US within 3 to 7 years.

The US has already 'gotten silly' with regard to trying to secure oil resources militarily. In fact, the military solution is the only thing we have that passes for an energy policy.

I see no indication whatsoever that we plan to do anything differently.

Thus, if it hasn't worked very well so far, it will continue to work not so very well in the future. The idea is that it is easier to take someone else's energy than to work hard to produce your own.

Correction accepted, Joule, please read as: "even sillier" for "silly".

I have this image in my mind of a giggling GW, wearing a clown's hat and red nose, announcing the US have just bombed Iran alongside a chart of the oil price gapping up to $150 and then some.

Probably the only thing worse than forgetting Murphy's Law and/or history's lessons, is assuming things will always be as they are now.

Imagine how people within the US felt during the worst of the Civil War or the Great Depression or WW II.  Or how Londoners felt during Hitler's nightly rocket attacks.  Or how Germans felt after Dresden was fire bombed.  Or how the Japanese felt after Hiroshima and Nagasaki.

The US has indeed gotten supremely stupid in its foreign relations, in terms of both energy and non-energy issues, for many decades.  In my opinion, only a fool would argue otherwise.  But I see no reason to believe that we've already reached our nation-wide level of peak intelligence (or common sense or ...).

Look at the policy reversals we've seen going from Clinton to Bush 43.  Who's to say that pendulum only swings one way?  I'm sure as hell not prepared to make that pronouncement.

Our collective energy and environmental future is going to be extremely challenging, and there will be plenty of unpleasant surprises along the way.  But there will also be some amazing breakthroughs and displays of human resilience, flexibility, and determination.

Honestly, I think that anyone, from any part of the pessimism scale, from flaming apocalypticon to brain-dead peak-oil denier, who claims to know how this will all play out is kidding him/herself and everyone else.

Good points, louGrinzo. "Imagine how people ... felt during the worst..."

The truth is, if we haven't lived through them (or very similar) we can't really know what it's like. Thereby hangs a problem: most of us can't imagine how bad things may get and what that would be like. Life has been too relatively easy these last 60 years for most people in many developed countries.

But even in the darkest days there are moments and times of joy and happiness. For most of us there is a tomorrow and the chance that it will be better than today. If you have any friends or relatives who lived through the 1930s or similar difficulties now might be a good time to talk with them about it.  

Well said!  The future is unknowable, and anybody who says otherwise is either a fool or a charlatan, or both.

Also, one should never say that 'Such and such could never happen because no reasonable or moral person would do such a thing.."; because, as you implied, history is replete with examples of the unthinkable becoming reality.

Only through the greatest of steady efforts can we hold back the relentless tendendency towards chaos.

The future is unknowable,

The future is unknowable because each of us can change it.
Now go out there and build your windmill.
Hook it to your grid.
Hook your hybrid to the grid.
Hook your grid to someone else's grid.
Build an Inter-grid-net.

(BTW, make it distributed DC at 120 Volts residential
[120 = 1 x 2 x 3 x 4 x 5])

Only through the greatest of steady efforts can we hold back the relentless tendency towards chaos...
Well this is the problem entirely isn't it?  I believe it's called entropy.  Our societies are now so complex and interdependent, so strung out on cheap fossil fuels and the quick fix that they cannot be made simpler, either by accident or design, without causing their collapse in the first place.  It is only a matter of time before this happens, entropy cannot run backwards.  Of course this does not necessarily mean the wholesale destruction of man and his cradle.  However it does imply the end of our conceited belief that we could prevail over the earth and transgress its limits.

Although I agree that we cannot know the specifics of the future it is also absurd to believe that we cannot make reasonable assumptions about what the future may hold for the human race based on the existing and interrelated global trends of global warming, oil depletion, biosphere destruction, overpopulation and energy-related conflict.  Because of these and other trends, our societies are increasingly becoming unsustainable and are being run by unsustainable economic systems.  

The catalyst for collapse will probably be when the price of a barrel of oil enters the $100 - $150 range.  This price band will probably occur ahead of any eventual oil peak because of the high energy inputs that will be necessary to produce the ever increasing amounts of energy our societies require as the quantity of cheap oil decreases.  Based on the aggressive price performance of oil since 2002, and the questionable nature of stated oil reserves, one might reasonably conclude that we should reach this point sometime around 2008-9.  This will cause economic recession worldwide, and the steadily ratcheting up of the price band will succeed in stopping any chance of sustained economic recovery in future.  When this occurs, the Great Energy Depression of the twenty-first century will have begun, and the unwinding of the industrial era commenced, probably around 2012.

Just a quick response to SaturnV and some to Halfin's later post...

The oil price has increased at over 30% annually for 3 years, a straight line projection might hit $100 next year, so your 2012 may be 5 years tardy.

But many very smart minds and huge amounts of resource have been thrown at modelling and predicting the markets without much success. The Fed seem to have have concluded that the best way to predict the markets is to print lots of money and manipulate them ;)

How I expect peak oil to become apparent...

With a bang or with a whimper?

The bang will be obvious. The whimper will be harder to spot so I'll give you some clues...

This is how I expect peak oil to announce itself to the world unless some major geopolitical supply disruption occurs:

  1. Oil supply remains tight, just about meeting demand as perceived by the USA, occasional minor disruptions like hurricanes and demand peaks due to cold or hot weather bumping the price up and up, never quite falling back to previous levels.

  2. After a year or so of this there will be excuses of delayed projects causing temporary supply constraints, prices continue to bump up, now above $100 bbl.

  3. Another year and supply is getting still tighter, price is forced up beyond $200 bbl, excuses won't wash - $10 gas in USA getting hard to ignore, some major world leader says "Peak oil is here" and we must ration oil.

  4. sounds kinda familiar, don't it? Expect 2. to become apparent in 2006, and 3. to follow in 2007 or 2008.

What I really expect to happen is stages 1 and 2 of the whimper, then the bang. Best guess for that: October 2007 give or take a year.

If peak oil isn't just about happening you can expect the price of oil to drop back below $50 by mid 2006 and stay there for several years as new supply comes online without being offset by even greater declines in existing production.

I'm much more inclined to go along with Henry Groppe's ASPO Conference presentation. His bunch try hard to account for both the supply and demand side of the equation on a world-wide basis, and believe that sustained prices at $60/bbl will flatten world demand for petroleum. They forecast that much of the demand destruction will occur outside the developed economies -- for example, that developing countries will shift from oil to anything else they can get for generating electricity, mirroring the changes that the developed countries made after the oil shocks in the 1970s. Certainly a spike to $100/bbl will cause some decreased demand in the US, but will cause much greater decreases (on a percentage basis) in poorer countries. The US is the largest consumer, but in general, is not the marginal consumer. Given the present trade situation, and so long as oil is priced in dollars, China is also not the marginal consumer.

My own scenario for a US oil crisis is this: the US federal deficit is still running >$400B/yr in 2008 (>$600B if the Social Security accounting gimmicks are excluded), the Republicans win the White House promising further tax cuts, OPEC decides that dollars are a bad risk and (having converted a goodly portion of their petrodollars) announces that in the future they will price oil in euros. By 2010 oil is indeed priced at >$120/bbl, but most of the pain is confined to the US and China. Mike

Our societies are now so complex and interdependent, so strung out on cheap fossil fuels and the quick fix that they cannot be made simpler, either by accident or design, without causing their collapse in the first place.
Where's your support for that claim?  If you cut the need for e.g. motor fuel in half over a few years with efficiency or substitutes, the only thing to collapse would be the stock prices of the oil companies.
I guess that's were we differ you see peak oil as a problem in isolation whereas I look at it from a systemic viewpoint.  What you call efficency and conservation others will call job cuts and declines in living standards.  So you don't believe that competitors that have now evolved as peers in a globalised economy will not suffer the same fate when economic contraction begins as a result of peak oil?  As for the quick fix.  One local example is the NSW state government of Australia, in an attempt to do something about increasing car usage and congestion of Sydney's roads since presiding over the run down of its heavy rail system, has built toll roads that will require at least 25 years to make a profit when it's obvious even now (cost driven driver backlash, switch to alternative and unsuitable suburban routes etc) that vehicle numbers will not be available in future because of peak oil to support this infrastructure rather than spend the money on restoring rail.  These are truly roads to nowhere...http://sydneypeakoil.com/matt/100NewOilFields3of3.pdf

And your not honestly arguing, despite all evidence to the contrary, that alternatives are going to replace the exponentially rising shortfall of the concentrated energy density and richness of sweet light crude in anywhere near the volumes necessary to satisfy current and future global demand, or that price for such energy dispersed substitutes will not become even more enormously expensive than they already are once that cheap oil subsidy starts to decline.  Or that any of this will not impact on the complexity of our societies leading to instability?

I guess that's were we differ you see peak oil as a problem in isolation whereas I look at it from a systemic viewpoint.  
Don't flatter yourself.  I've been looking at this issue from domestic issues to geopolitics to farm policy to pollution control, in public, for almost two years.

I've been thinking about plug-in hybrid vehicles for nearly fourteen years now (the first thought I can document is early 1992).

What you call efficency and conservation others will call job cuts and declines in living standards.
You seem to be confusing "efficiency" and "doing without".

I call "efficiency" a doubling of vehicle MPG through better powerplants and careful attention to aerodynamics.  I still call it efficiency when we switch to battery-driven vehicles so we can burn oil in 60%-efficient combined-cycle gas turbines instead of 20%-efficient piston engines and get almost 3 times as much out of our hybrids.

When the electric vehicles let us use wind turbines or PV panels to make "motor fuel", I call that alternatives.

So you don't believe that competitors that have now evolved as peers in a globalised economy will not suffer the same fate when economic contraction begins as a result of peak oil?
You poor fool.  Did the world economy contract when the PC was cloned and IBM's profit margins on the product they standardized fell to the point they got out of the business?  No, the computer business grew like crazy!

What I'm saying is that the oil companies are in no way essential to the world beyond the current lack of substitutes for their products.  If you find a way to do the same job on half the gasoline, kerosene or LPG, you are not going to contract the economy.  Quite the opposite.  And if you find a way to eliminate the need for petroleum altogether, the greater the economic advantage you will have as the cost of oil rises.

Don't flatter yourself.  I've been looking at this issue from domestic issues to geopolitics to farm policy to pollution control, in public, for almost two years.
Yeah, well I've been thinking about them for 5...and studying them for 10.  So we're about equal right.

You seem to be confusing "efficiency" and "doing without".
No I believe I've got it right.  The efficiencies you call for will result in job cuts because there will be less "waste" to move around from production to disposal.

When the electric vehicles let us use wind turbines or PV panels to make "motor fuel", I call that alternatives.
I think you're dreaming.  Apart from the incredible lead time required for all of this to happen, not to mention the expense involved, the world seems to be heading towards coal-fired stations again as an answer to hydrocarbon depletion not some "clean green" capitalist utopia as you envision.  Besides the oil companies will want to be able to sell us some other liquid to fuel things to continue making the "big bucks".

You poor fool.  Did the world economy contract when the PC was cloned and IBM's profit margins on the product they standardized fell to the point they got out of the business?  No, the computer business grew like crazy!
How can you compare oil's importance to the economy with the computer when everything rests on the former - inlcuding the development of the PC?  My standard of living can survive without me personally having a PC, but can't if cheap oil isn't available for me to get me to work or to the shops, or if it can no longer afford me a job so as to buy the stuff that was manufactured and shipped to them in the first place using the same cheap oil.

No I believe I've got it right.  The efficiencies you call for will result in job cuts because there will be less "waste" to move around from production to disposal.
That is the most confused piece of nonsense I've seen in the last week (aside from the IDiots posting over at The Panda's Thumb).

You imply that waste heat from vehicles produces more economic value than the work the vehicles do.  If you've been studying this for ten years, you ought to be able to explain this in math terms (no hand-waving) and back it up with at least two examples.  I will bet $1000 that you can't do it.

the world seems to be heading towards coal-fired stations again as an answer to hydrocarbon depletion...
The world is doing both.  The US will install about 2.5 GW of wind capacity this year, raising the total capacity by 35% in just one year.  We need more like 25 GW/year for a few decades, but this is a lot closer than it looks.  If turbine production increases 35%/year we'd get to 25 GW/year in mid-2013.
Besides the oil companies will want to be able to sell us some other liquid to fuel things to continue making the "big bucks".
Are you required to buy it?  The more "big bucks" it costs, the more attractive efficiency and alternatives will be.  You can make a plug-in Prius today, and sooner or later one of the  hybrid manufacturers is going to offer it as a factory option.
How can you compare oil's importance to the economy with the computer when everything rests on the former
"Everything" does NOT rest on oil, mostly the transport sector.  If the transport sector suddenly needed half as much oil, the rest of the economy would grow.  Same for the rest; you can make just about any kind of petrochemical from syngas, and you can make syngas from oil, coal, natural gas or biomass.  Running the economy on coal is possible (though ecologically disastrous), and it would make little difference to the rest of the economy if the coal companies took over and Big Oil dried up and blew away.
If the choice were between two people, one who points out that the chocolate ration has risen to 30g recently under his brother's rule and if he's elected he'll increase (queue standing ovation) the chocolate ration to 25g the first week he's in office. Note that I said "to" and not "by" when referring to the ration's increase. The second person says that chocolate production is in decline, and the quality of America's chocolate is abysmal (note the lack of applause). We'll have to reduce our chocolate ration to 27g and there might be further reductions after that; America needs to rethink it's chocolate consumerism.

I know who I'd be voting for (3rd party! ;). However, I've met too many people who'd vote for the former. He uses terms like increase when that's not what it is, says that things are great (he's not a nay sayer!), and that they'll only get better. The other says that we need a change. A change? Change is to be feared. Change means that things aren't rosy right now... I don't think that the president should be such a pesimist.

Perhaps I've been reading too much wisdom from Step Back's Lemming institute.

Regardless, from what I've seen of the two major parties, while one might offer slightly better leadership than the other (I won't name names for sake of political flames) regarding peak oil, I think it would only be slightly better at best. Both US and Canada need to pick up their heads and actually try to start thinking long term. Canada's having yearly elections, and thus is legislating to try and keep their polls up at all times, with wolves ready to snap at their heels. The US is increasingly being run like a corporation; big awards to the BoD, small short term gains for the share holders ($300 tax refund), and the only "long term" planning is the assumption that things will be tomorrow pretty much as they are today so keep the party going.

I think any sort of full-bore military conflict between the U.S. and Iran could quickly become disastrous for the West.

Iran is next door to all the Persian Gulf oil states. If they were to shut off their own exports and take out a chunk of their neighbors' oil production with air strikes, oil prices would skyrocket. I'm not sure if there's enough oil in the European or American SPRs to neutralize six months of that.

Such a conflict would also affect civilians in a way we haven't seen since WWII. I imagine it could lead to severe consumer rationing--war is a very oil intensive business.

Though I find this scenario possible it doesn't seem likely. Attacking the neighbors is not a good way to spread Islamic unity and brotherhood.

I won a $10 bet with a friend re Bush invading Iraq.  We bet about a month before and he said even Bush is not THAT stupid.

Hence, the Bushian Law:  If there is something just too stupid, Bush will do it.  What could this moron possibly do to shift attention from Iraq? Send in the ninjas and whack Hugo Chavez.   Chaos in Venezuela.  The Chavezistas take over.  US oil supply plummets overnight.

Another joyful seasonal thought.  Osama or one of his many new clones (Bush's spawn) figures out that PO is  our Achilles heel--not just longterm, but any major disruption.  Uh oh.  A few well-placed bombs in Saudi Arabia.

But remember the sooner we go down,  the happier the dolphins will be.

o.k....so we all know that predicting the future is for fools...so here i am....now everyone knows that a shock..like invading iran or a dirty bomb in whonowswhere-astan would cause prices to go through the roof...but how about if nothing happens....just status quo....say bush goes through a rapture and becomes sane...i know what you're thinking....that's certainly not credible..but bear with me ...nothing happens and the price of oil increases like it has for the last two years....thats 50% a year, give or take...by 2010 the price is ~$250,which make gas ~$8 in the u.s.a.....bingo... new world order.
What I think would be an interesting exercise is to take raw data from the markets and create random "hypothetical" price series going forward. The markets tell you the expected mean and standard deviation of future price changes. From this you could construct an infinite number of possible curves sampled from a probability distribution based on these market-derived parameters.

Each sample would show its own "oil shocks", "bubbles", "crashes", "bull and bear markets" and other characteristic market behaviors. You could make up a little story to go with each one of them, a possible future scenario to explain what is happening. None of the stories would be right but at least you'd be basing your prognostications on the best statistical evidence we have for how the future is likely to turn out.

America stops getting loans from the rest of the world.
America stops importing oil, oil production 80% of peak.
America produces synfuels, oil production 60% of peak.
This is the best case scenario and assumes no war.
Prognosticators are fun to read but so is fiction. I believe in Murphy's law, and facts & data. So here are some facts & data on corn burners.
I noticed a number of posts about shell corn heating. So I have been checking it out.  15% water in shell corn contains 7000 btu's of energy per pound, and 15% shell corn weighs 56 Lbs per bushel. That is 392,000 Btu's per Bushel.  At $2.00 per bushel that is $5.10 per million Btu's.   Then I checked kerosene it's about the same as distillate.  6.819 Lbs per gallon and 19,810 Btu's per pound or 135,000 Btu's per gallon,  or 7.4 gallons per Million Btu's. At $1.76 per gallon that is $13.00 per million Btu's. NG spot today was about $15.00 per million Btu's.  Now according to the USDA  a bushel of 15% corn  should yield 2.68 gallons of ethanol,and ethanol contains 14,000 Btu's per pound and weighs 6.59 Lbs per gallon. That means that a bushel of corn will yield 247,000 Btu's, so you see you lose 145,000 Btu's in the ethanol process, however the leftover mash is used for cattle feed. Also corn cobs contain 9,000 Btu's per pound, however their volume per pound is much greater than shell corn. During the 30's and the war years corn cobs were the sole source of heating and cooking in our home. In the winter when it was zero to 25 degrees it would require 3 - 6 bushel baskets of corn cobs per day. In them years with an annual harvest of 1000 to 1500 bushels of corn from 35 to 40 acres it was more than enough to keep the house warm.
I don't know the efficiency of a corn burning stove versus a gas or fuel oil furnace, however it is certainly more efficient than using it to produce ethanol, as a significant amount of energy is used in the conversion process. Most of my info came from Marks  Mech eng handbook.  Corn futures are looking better every day.
Corn burner web sites.
Thanks for the info re using corn directly as a fuel. Very interesting!

Though you are not making a highly desireable fuel that you can use in your car, when you burn corn directly, at least you use more of the initial energy content of the corn.

Being from the Northeast, I was not at all familiar with corn stoves or the fact that they were in such widespread use. If this continues I wonder what it will do to the corn market.

By the way, what is the current disposition of corn cobs?  Are they just ground up and returned to the land like the corn stover, or do they have some sort of byproduct use (other than as a substitute for toilet paper)?

Modern combine harvesters grind the cobs into little chunks and spit them out the back end onto the ground, where they do their part to reduce erosion and maintain soil fertility.
I commented earlier in the week that it would be possible (and in some cases the only available source for fuel), to use corn instead of pellets in a pellet stove, given the spread of articles commenting on their growing popularity this year, and the result that it is proving hard to get the pellets, with rumored prices of up to $300 a ton, and with corn having an equivalent calorific value.
thanks dip, for the fascinating comparison. it is astounding to me that corn costs 1/3 of the cost of gas to burn . now, this is probably field corn, but the farmers that grew it could have just as easily grown maize. ....what is happening in this society that we are essentially burning food that is so cheap we can't think of doing anything else with it??? i can almost not believe it....we are BURNING FOOD...what will future generations think of that when they sit down to dinner?
Most corn is low in human food value.

You can survive on rice (brown, not white) or beans alone, but not corn.

Though we would need to increase a lot of green veggies too, but this discounts those imputs.

Thanks for the research dipchip, especially the detail Btu data - it could be very useful.

I, too, feel that ethanol production from corn is marginal and may cost more energy than it provides. But the key is: energy that conveniently provides transportation and mobile mechanisation is at a significant premium. To use corn directly as such via heat would probably involve a steam engine and I'd bet that ethanol production and use would be more efficient.

Likewise the touted hydrogen fuel cells - converting energy into stored hydrogen then back into usable mobile energy will be pretty inefficient.

If static heat is desired the most efficient crop, particularly because it can use poor land, is probably fast growing, coppiced trees. I don't have comparative hard data with corn but that is what is being used for biomass static heat systems in Europe and it is viable for most non extreme climate.

You could actually use corn as transport fuel using a gasogene.

I'm not sure if it would work directly, but it would certainly work indirectly.  Here's how you'd do it:

  1. Convert corn to charcoal using incomplete combustion.  (You could burn the off-gas for space heat.)
  2. Use charcoal aboard vehicles to make carbon monoxide fuel gas.
If you pressed the corn for oil before carbonizing it, you could also make the fuel required for pilot ignition in a diesel engine (high-octane fuel gas is carbureted into the intake air, and is ignited by injection of a small amount of high-cetane liquid fuel).
I wonder about gasification with modern vehicles and their fuel injection.  I think that the techniques used in World War II relied on a carburetor.  Major modifications might be needed so that a modern engine could control the rate of fuel flow.  It will probably be interesting for the chippers/tweakers to see if they can change an automobile's firmware enough to cope with a different fuel and maybe a different fuel metering system.

I also wonder if anyone is thinking about Sterling-based hybrids.  With a gasifier, such a vehicle could use wood or corn for fuel.  The hybrid technolgy would reduce the thermal inertia issue of the efficient Sterling engine.

You can also burn the corn oil as diesel fuel and ferment the corn starch for alcohol for car fuel, using the mash as pig feed for it's protein content.
We can do all that and replace the corn we turn into fuel by irrigation projects in Africa if you are worried about the moral problems of burning food. Say, we replace the corn we use as fuel with corn for Africans to use as food. The cost of growing corn in Africa is not high.
So financial, moral, and climatic costs of fuel are easily soluble problems compared to going back to horses. Which are not particulary efficient at turning corn into miles on any kind of realistic basis. Do you really want to ride a horse to work, stable it outside the office, and shovel out the manure? Curry it's coat? Diagnose mange and glanders and treat them, or hire someone to do all the above?
Let's go with battery cars. It's easier than horses and cheaper than corn fuel, and we can ramp up in a few years, and we've got oil for a few years.
How long does it take to open a lead mine? Two years? And that includes the railroad spur to the mine site.
How much food value is retained in the spent mash compared to the corn?

I wasn't proposing gasogenes as long-term prospects; they are good reactions to short-term problems, where we can draw on an undervalued resource (like stockpiles of $2/bu corn) while we gear up to do something more permanent.  In the long term, batteries are going to be it (though I'd say lead for the medium term and lithium for the long term).

I see you reached the same conclusion I did back in September.  Good to see that the numbers are easily reproduced - maybe that will get more people to accept the inevitable conclusion.

I wouldn't invest in corn futures just yet.  ADM and the rest of the ethanol lobby are very powerful, and if it's not in their interest for their major feedstock to get more expensive they may find some way to prevent it from going as heating fuel.

Today some corn is ground up as ear corn, that's with the corn on the cob and fed to cattle as bulk feed.  Most of the corn is shelled by the harvester and the cobs are left in the field. Don't stand with in 50 feet of an operating corn harvester or you will be hit by flying corn cobs. BTW When I was a kid we never used corn cobs for toilet paper it was always the sears or monkey ward catalog, however my father would spend time in the hog yard looking for the softest corn cob.
Random thoughts:
If abiotic oil is for real why hasn't any seeped out some where in the oceans and covered the shoreline with black goo somewhere on earth?  Perhaps because it occurs at such a low rate that it is currently all locked up from tectonic movement, or its all fossil fuel.
Did you know that about a 50 to 100 feet below the surface of land the temperature is equal to the average decadal temperature at the surface, and there is a temperature gradient there across the US that ranges from about 80 degrees in South Texas to about 40 degrees at the Canadian border? In the middle latitudes of the US this is the perfect temperature for heat pump AC in summer and Heat pump heating in winter.
Did you know that there is a positive temperature coefficient  with respect to depth below the surface that is equal to a little more than 1 degree F per 100 feet of depth? Of course it varies somewhat depending on location and the below surface rock structure.
Did you know that the porosity of oil bearing sandstone seldom exceeds 22% that is the volume of fluids by volume, and carbonates are much lower, because the pores are so much smaller.
Did you know  that the first ragline electrical data log of an open hole oil-well was performed in Russia in 1927?
Did you know that 29  states set there all time high temperature records in the 1930's and only 6 states have set new high records since 1990, however 7 states have set all time record low temperatures since 1990? Credit the 2005 world almanac for the data.
Methinks temperature and economic spikes are about to replicate themselves, there are some funny cycles at about 70 years - ask Kondratieff (sp?)

The 29 states temperature records etc do surprise me, perhaps that's why the US regime doesn't believe climate change is occuring. However, 8 of the hottest 10 years in the last 150 have occured since 1990 according to what seems to be reliable and globally scientifically accepted data.

Correct on abiotic oil. The issue is: is sufficient abiotic oil produced sufficiently rapidly and in concentrated amounts such that it can be mined to produce a few mbpd. I know of no recorded usable production of abiotic oil to date and about a trillion barrels of presumed biotic oil production so far.

Where does CERA get 87mbpd for current production? I thought we were at about 84mbpd including NGLs.
Astounding!  You made a point there, but I think it was the wrong point! :-)

You said <Now, here's the shocker. As the graph indicates, world production did not reach its 1979 level again until 1993, a period of 14 years!>

Now, my checking of those dates and numbers proved to me that you are essentially correct, but, (coincidence?), Those were some of the best years the American and world economies have ever had, and among the greatest period of investment, money making and comfort in the United States history, before or since WWII!!

Are we now to assume that low oil production is GREAT for the U.S. economy?
Furthermore, since peoples standard of living rose, are we to assume that lower oil production means a rising standard of living (just think how great that will be when, as the peak oil estimates assume, we are off some 30% on production by 2030 or 2040...we'll be living large!!

Of course, that is not what will happen, but exactly how did we survive the 1980's if oil production was down, not up?
Of course we know....first, there was a massive drop in consumption due to (a)resizing of autos and home energy efficiency rising (houses built in the late 1970's are still among the best insulated in U.S. history! Even more so compared to the open barns of the pre war years!),(b) great advances in efficiency in industrial use of oil (the combined cycle ideas that are still so good, using waste heat, process heat, etc, and recycling almost every BTU), and the biggie...(c) fuel switching for much energy use to natural gas.  This is one of the great untold stories in energy use history.  The rise in natural gas consumption through the 1980's and 1990's was STAGGERING.  But, as all good things must come to an end, we now know where that lead....and we will not have that one to turn to again, without mass importing of natural gas by way of LNG.  BUT....your chart does indicate a fascinating thing:  Declining oil production, IN AND OF ITSELF can be withstood for long periods of time, and adjustments made, IF there are alternatives to use as adjusters, and if efficiency becomes the order of the day....we did it in the 1980's without a mass expansion of nuclear power (which was tempting), or a mass opening of the off limits areas of the continental shelf and rockies (again this is tempting!) and without massive legal limits forbidding driving or other draconian measures.  Your chart make me think and think hard about the reasons for optimism, IF we get off our duff and develop advanced renewables, plug hybrid cars, newer better batteries, etc.
We may make it after all......:-)

There were other major factors, not just oil and efficiency, going on as well. Reagan took the cumulative national debt (1776 through 1980) and tripled it. Much of the boom was fueled by massive deficit spending on productive projects like the StarWars missile shield.
Bingo!  We did not just change the type of fuel we used and reduce consumption.  We fundamentaly changed the structure of our economy.  We borrowed like hell.
... massive deficit spending on productive projects like the StarWars missile shield.

Of course, you say that with great jest.

Economists refer to unproductive taking of money as "wealth transfer". This is when wealth is moved from one population group (i.e tax payers) to another group (defense contracters) and nothing of equal or greater value is given in return.

Reagan Republicans claim that they are very much opposed to wealth transfer, most voiciferously when it comes under the label of "welfare". Amazing is it not, how thrilled they are when the wealth transfer is vise versa, from the poor to the corrupt defense contracters.

(Thank you for standing up and outing the truth about Reagan. I was gagging convusively last year as the Republicans came out with flags and glory to bury their High on the Horse(sh*t) Hero after his unfortunate demise. RR was the first actor to start our country down the happy trail to collapse. GWB is act II.)

You seem to forget that the 80s was a time when homelessness multiplied and unemployment almost hit double digits. There are parts of Michigan that still haven't recovered from the damage Reagen inflicted on the auto industry.
For those who don't remember or were not yet bornized, see "Reaganomics"

When you see wealth transfer from American taxpayers to Halliburton for unproductive projects, it just sends shivers of rememberance through your bones, eh?

But if CERA can do it, so can you. Tell us your best or worst cases, go ahead, predict the future. And then, as if it were money in your pocket, make an investment based on CERA's projections or the predictions made in this report:

Okay ....
The following story about Israel bombing Iran has been advertised for many moons. Just to add my tuppenny- ha'penny's worth to the conspiracy theory and perhaps warm the blood on a cold winter's night, especially those to the east of Hemel Hempstead as I am. This was in the Sunday Times newspaper this morning.
Link to web pages :-

Israel readies forces for strike on nuclear Iran
Uzi Mahnaimi, Tel Aviv, and Sarah Baxter, Washington

ISRAEL'S armed forces have been ordered by Ariel Sharon, the prime minister, to be ready by the end of March for possible strikes on secret uranium enrichment sites in Iran, military sources have revealed.
The order came after Israeli intelligence warned the government that Iran was operating enrichment facilities, believed to be small and concealed in civilian locations.

Iran's stand-off with the International Atomic Energy Agency (IAEA) over nuclear inspections and aggressive rhetoric from Mahmoud Ahmadinejad, the Iranian president, who said last week that Israel should be moved to Europe, are causing mounting concern.

The crisis is set to come to a head in early March, when Mohamed El-Baradei, the head of the IAEA, will present his next report on Iran. El-Baradei, who received the Nobel peace prize yesterday, warned that the world was "losing patience" with Iran.

A senior White House source said the threat of a nuclear Iran was moving to the top of the international agenda and the issue now was: "What next?" That question would have to be answered in the next few months, he said.

Defence sources in Israel believe the end of March to be the "point of no return" after which Iran will have the technical expertise to enrich uranium in sufficient quantities to build a nuclear warhead in two to four years.

"Israel -- and not only Israel -- cannot accept a nuclear Iran," Sharon warned recently. "We have the ability to deal with this and we're making all the necessary preparations to be ready for such a situation."

The order to prepare for a possible attack went through the Israeli defence ministry to the chief of staff. Sources inside special forces command confirmed that "G" readiness -- the highest stage -- for an operation was announced last week.

Gholamreza Aghazadeah, head of the Atomic Organisation of Iran, warned yesterday that his country would produce nuclear fuel. "There is no doubt that we have to carry out uranium enrichment," he said.

He promised it would not be done during forthcoming talks with European negotiators. But although Iran insists it wants only nuclear energy, Israeli intelligence has concluded it is deceiving the world and has no intention of giving up what it believes is its right to develop nuclear weapons.

A "massive" Israeli intelligence operation has been underway since Iran was designated the "top priority for 2005", according to security sources.

Cross-border operations and signal intelligence from a base established by the Israelis in northern Iraq are said to have identified a number of Iranian uranium enrichment sites unknown to the the IAEA.

Since Israel destroyed the Osirak nuclear reactor in Iraq in 1981, "it has been understood that the lesson is, don't have one site, have 50 sites", a White House source said.

If a military operation is approved, Israel will use air and ground forces against several nuclear targets in the hope of stalling Tehran's nuclear programme for years, according to Israeli military sources.

It is believed Israel would call on its top special forces brigade, Unit 262 -- the equivalent of the SAS -- and the F-15I strategic 69 Squadron, which can strike Iran and return to Israel without refuelling.

"If we opt for the military strike," said a source, "it must be not less than 100% successful. It will resemble the destruction of the Egyptian air force in three hours in June 1967."
Aharon Zeevi Farkash, the Israeli military intelligence chief, stepped up the pressure on Iran this month when he warned Israel's parliament, the Knesset, that "if by the end of March the international community is unable to refer the Iranian issue to the United Nations security council, then we can say the international effort has run its course".

The March deadline set for military readiness also stems from fears that Iran is improving its own intelligence-gathering capability. In October it launched its first satellite, the Sinah-1, which was carried by a Russian space launcher.

"The Iranians' space programme is a matter of deep concern to us," said an Israeli defence source. "If and when we launch an attack on several Iranian targets, the last thing we need is Iranian early warning received by satellite."

Russia last week signed an estimated $1 billion contract -- its largest since 2000 -- to sell Iran advanced Tor-M1 systems capable of destroying guided missiles and laser-guided bombs from aircraft.

"Once the Iranians get the Tor-M1, it will make our life much more difficult," said an Israeli air force source. "The installation of this system can be relatively quick and we can't waste time on this one."

The date set for possible Israeli strikes on Iran also coincides with Israel's general election on March 28, prompting speculation that Sharon may be sabre-rattling for votes.

Benjamin Netanyahu, the frontrunner to lead Likud into the elections, said that if Sharon did not act against Iran, "then when I form the new Israeli government, we'll do what we did in the past against Saddam's reactor, which gave us 20 years of tranquillity".

Damnit! :-((

I've told Ariel before not to take my silly predictions seriously. First splitting Likud, now this. He's going to end up mad before long, just like I am. Make sure you don't overfly Saudi airspace, OK Ariel?

I believe that the leaders of the US and Israel are insane, but I don't know if they are suicidal enough to attack Iran.  Still, it is impossible to truly understand the thought processes of people that delusional.  I go back and forth on it - sometimes I think that some small part of reality must intrude and give them pause, and then other times I think about what has already happened and I realize that anything is likely.  

There is only one reasonable reaction on the day we hear reports of an attack on Iran:  fear.  There is no chance of anything that could be called success; it would ignite the powder keg.  If it happens, then the doomsday scenarios immediately move from "worst case" to "most likely".  If Iran is attacked, then you may as well go over to FTW and read up on what's coming.

The Iranians were defeating the Iraqis, despite Iraq's superior military technology.   It was no match for the human wave attacks and the losses Iran was willing to suffer.  This was the reason Iraq needed our help with chemical weapons - it was a desperation play to hold off the Iranians.

Here is a link to the history of the Iran - Iraq war that I read years ago and found enlightening:


Israel is quite convinced they did the right thing when they took out Saddam's reactor two decades ago. Much of the world, certainly including the US and GB, does too. Further, I doubt Iran's Sunni Arab neighbors really want the Shia Persians to have the bomb. Iran is of course a founding member of the Evil Empire, but is also on the Brit shit list because of fomenting unrest in Basra.

Israel bombing Iran's nuclear facilities is not the same as America invading, except that Iran is likely to withhold oil exports for a time out of spite in either case. Afer a period they will resume exports because they want to feed their people, and because they will become envious of their neighbors reaping high prices for their oil.

An attack would certainly be wildly popular in Israel, clearly leading to Sharon's reelection. Timing is critical  - the holidays must pass, including Jan 11, a major moslem holy day, but for maximum electoral benefit, maybe mid Feb would work out best. Tricky calculation...

The Chinese would be happy to keep buying Iranian oil, so I see no need for Iran to go broke.  And when the Chinese tankers arrive to load, what will we do?  Does Venezuela cut us off too?  There is no inherent limit to such a conflict, and the idea that one could predict what would happen is folly.  
It's crazy to attack Iran......
The leader of Iran thinks the Holocaust didn't happen want's to destroy Israel to a man and may have nukes.
It's crazy not to attack Iran......

This is a disaster coming and going and I have no idea what should be done.

The leader of Iran thinks the Holocaust didn't happen want's to destroy Israel to a man

I think it is prudent to be very careful about believing this kind of propaganda.  The internal Iranian political situation is extremely complicated, and it is not really clear who the "leader" is, or what the motivations behind such statements are.  Frankly, it is no more stupid than some of the things our misleader has said.  

As far as nukes go, the only thing that has been verified is that they have a nuclear power program, which is perfectly legal and reasonable.  Given what is happening to their oil production, their internal requirements, and their desire to become an industrial nation, it would appear they will need the power.  And if they want nuclear weapons, you could hardly blame them, given Israel's program and the irresponsible behavior of the US and Israel in the region.   Remember that we have failed to live up to our obligations as part of the Nuclear NPT (we are supposed to be reducing the number of weapons we have).  

If the US attacks Iran, it will be all about the oil - both because we want theirs, and because we need to eliminate a serious competitor for control in the Middle East.  For Israel, it would appear to be just another part of their national psychosis.  There are just so many lies - lies upon lies upon lies, on all sides.

I hope like hell it doesn't happen.  

Propaganda?  I think there's little doubt that the President said it.   The question of who's in charge is certanly valid, can he command a very popular attack on Israel?  

I don't want the US or Israel to "Attack" Iran,  I want Iran to rid themselves of this nut.  As far as trying to produce the bomb.... as has been pointed out you can hardly blame them.

A bomb in this man's hands is a disaster in the making.
Attacking their production of a bomb is also a disaster.

it is not really clear who the "leader" is, or what the motivations behind such statements are.  Frankly, it is no more stupid than some of the things our misleader has said.

Without an understanding of fundamentlist Islam, you really do not know what you say ... I forgive you, for you know not what you do ...

For a devout Muslim, it is an abomination to have an infidel encampment (Israel) in the midst of the Holy lands, especially one where women walk around almost naked (no burkahs). This infidel encampment is like Sodom & Gomorrah and must be wiped out, "erased" --isn't that the word Iran Pres used? Later he toned it down with a new "final solution" --we'll move them to concentration camps in Europe, that will solve "the problem" ...

Obviously, the children of the Holocaust survivors are "over reacting" to such harmless talk, right?

(As to the Holocaust not being real, I think he meant the Holocaust didn't finish "the job" properly. And guess what, oh christian brother (where do you think thou art)? after Iran's president finishes with the jews, there is this matter of "the others" who do not believe in the "one" Allah but rather in a three-headed abomination. So yes. Ignore and deny what your ears hear. It does not affect you.

A touch of reality from MSM:

CNN:  (Dec. 14th, 2005) President Mahmoud Ahmadinejad has described the Holocaust as "a myth" and suggested that Israel be moved to Europe, the United States, Canada or Alaska.

Well at least there is fossil fuels in Canada or Alaska

USA has not yet withdrawn its "Ship of Fools" edict.
So probably Jews will not find much refuge in Skoki, Illinois & places like that ... maybe they should just roll over and die

Bloomberg ...
Right! They all decided to visit tatoo parlors one fine Sabbath morning and imprint serial numbers on their forearms for fun!!!

Aljarzeera: "Israel must be wiped off the map ... The Islamic world will not let its historic enemy live in its heartland."
Obviously this is in code language that means the opposite of what it says

Is this the first step? The first beat of our drumroll as we march to (another) war? Will we soon see the talking heads on Sunday morning political media outlets spewing rubbish about reasons for invasion and the U.N. being "irrelavent". Is this GW & Neocon INC. using Israel as pony engine to start our Oil War Bulldozer?

How do you get a pissed-off country so tired of war to invade another country? Fear, Baby!!

--Merry (insert un-offensive holiday here), America. Vice Pres. Cheney's gonna read you a bedtime story while visions of mushroom clouds dance in your head.

Terror Level:Phony*Terror Level:Phony

I certanly don't want War with Iran, neither I would imagine does GW.  This sounds like something that one would read in the early 30's about another crazy leader.

Fear is probably the only valid reason to attack someone.  Self preservation rules when you get down to cases,  we need oil they sell it all is at peace.

They desire to blow me up I desire to live peace is at an end.

Yes, I saw this on CNN yesterday (Sunday), in fact, accompanied by the usual saber-rattling crap from the US administration regarding Iran's nuclear ambitions and the need to quell them (no doubt with overwhelming military force, increasingly the neo-cons only answer to any problem).

Now the Israelis can bomb the Iranian's nuclear research sites, with the US's compicit wink and nod (overfly Iraq, avoid Saudi airspace), thus preventing the Iranians from opening their Euro based oil bourse next year.

Looks like Agric was right (again) with his "how to get oil at $500/bbl" theorizing:

Actually the timing of this would seem to indicate that they'll give the bourse a week or so to operate to see how it's doing, then commence with the operation.
I've never known the Israeli's to just call someones bluff. I might be wrong on that. But when the Israeli's say they are going to do something, they follow through with it. Through completion! they don't mess around.
But, now i am reading that it will not happen? this was all a sham? concocted story?

Right here

Ahh, technology is dangerously leading edge. Sometimes we just need to stand back and wait n' watch what unfolds.

but i reiterate, i've never known the Israel to call someones bluff. they mean what they say!
Iran is not the next Oil Shock

Iran is not the next Oil Shock

Iran is not the next Oil Shock

keep repeating

Hitler said if you repeat often enough, any lie becomes a truth
More on Iran turmoil (Dec. 14, 2005)

Didn't GW Bush say something like that last statement of yours recently, too? ;)