In today's New York Times

On the weekends, I get the paper version of the New York Times, so I actually see articles that aren't on the front page. Today's edition is chock full o' revelant articles.

The business section is starting a week-long series called "Beyond Gasoline" that examines alternative technologies for powering cars. The first article is about ethanol.

Right next to it is a column that seems to be a follow-up to the NYT Magazine story about peak oil from a few weeks ago. It features quotes from the usual suspects—Pickens, Simmons, Yergin, Lynch.

Over in the front section, there is a lighter story about the quandary faced by gas stations where the pumps have mechanical dials that only go up to $2.99/gallon.

Finally, there is more on the Amtrak fare hikes in the Northeast corridor. The reason: high diesel costs. I can't find a source for this, but I think that the Northeast corridor is electrified, meaning that the price increases on Amtrak's only profitable line are subsidizing diesel costs incurred by the rest of the system.

Here in the UK there is a similar problem to the $2.88 pump limit.
Fuel retailers are obliged by law to display prices on large signs
visible from the road. BP is spending several million pounds on
on a crash programme of converting their signs to display prices
of 1 pound/litre or more.
also in press today:

China to start filling strategic oil reserve

 <ET Net News> - China Petroleum & Chemical (0386) president Wang Jiming revealed that the Chinese strategic oil reserve could be in services at the end of this year. He said that the construction progress of the Zhenhai Oil Reserve Base was beyond scheduled and the first phase was expected to be completed within this year. There are a total of 16 storage tanks and all tanks will start to store oil by the end of the year, mainland Oriental Morning Post reported. G=ENG&SUBTYPE=DETAIL&CLIENT=ETNETP1&NEWSID=150909193

and, venezuela must be on someone's 'hit' list:

Guyana could access oil under PetroCaribe pact within a month - PM Hinds
Guyana could begin to access fuel under the PetroCaribe bilateral agreement signed with Venezuela within a month, saving millions through a deferred payment scheme that might include bartering sugar.

However, the government is being cautious given a past experience with Trinidad and Tobago which in the 1970s cut off a line of credit, Prime Minister Sam Hinds said.

Under the agreement Guyana stands to receive some 10,000 barrels of oil per day.


Oil Aids Venezuelan Leader's Influence
SANTO DOMINGO, Dominican Republic (AP) - When nine Caribbean countries signed oil trading agreements with Venezuelan President Hugo Chavez, it was a marriage of convenience.

Fragile Caribbean economies scored modest relief from rising fuel prices, while the leftist South American leader advanced his campaign to become a counterweight to U.S. influence in the region, analysts say.

``A lot of what Chavez is doing right now is just bravado,'' said Vinay Jawahar of the Washington-based Inter-American Dialogue. ``But it's going to make the United States' life harder.''

Jawahar said Chavez is trying to increase his influence in the 34-nation Organization of American States, whose top human rights panel has often criticized the Venezuelan government.

The OAS also is the venue for negotiations for the Free Trade Area of the Americas, a U.S.-backed effort that Chavez opposes. Caribbean countries, who have concerns about how the FTAA would affect their struggling industries, often try to vote in a bloc in the OAS, making their support pivotal to many decisions.

Jawahar said Chavez also is trying to build regional support for his friend and ally, Cuban President Fidel Castro. The United States routinely backs resolutions condemning Cuba's human rights record in the United Nations. In recent years, votes on the resolutions have been close.,1280,-5269741,00.html

Still in the pause phase, recovery essentially stuck...

Hurricane Katrina Evacuation and Production Shut-in Statistics Report
as of Saturday, September 10, 2005

Today's shut-in oil production is 897,605 BOPD. This shut-in oil production is equivalent to 59.84% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.

Today's shut-in gas production is 3.821 BCFPD. This shut-in gas production is equivalent to 38.21% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.

The cumulative shut-in oil production for the period 8/26/05-9/10/05 is 17,121,430 bbls, which is equivalent to 3.127 % of the yearly production of oil in the GOM (approximately 547.5 million barrels).

The cumulative shut-in gas production 8/26/05-9/10/05 is 84.232 BCF, which is equivalent to 2.308% of the yearly production of gas in the GOM (approximately 3.65 TCF).

I'm in UK and local Shell filling station seems to have gotten around the display problem.  4 star (which is more expensive than unleaded gasoline or diesel) hit 102p / litre last week and big sign simply showed '102'.  Prior to this latest hike they would have charged something like 97.9p so they've simply given up on the decimal point and rounded to a whole penny.  I would assume most filling stations could do likewise - it's quite simple to display a '1' in the left hand slot of the big signs.
It certainly makes our lives easier when a mainstream newspaper like the NYT publishes articles about this.  We can argue about solutions of one sort or another, but the first step is to raise awareness with the public about the general problem.

Regarding the economists vs geoligists debate, the arguments that the economists are making seem particularly weak.  First they claim the geologists were wrong in the past, and from this they conclude that the geologists are wrong again - kind of like the boy who cried wolf.  It is inevitable that at some point in the future oil will peak.

Secondly they wave their hands and claim that with higher prices new production will come on line.  To an extent this may be true, but until we get to a point where something that makes economic sense starts to come online (and will continue to remain economicly viable as it is scaled up), it seems particularly unwise to relax in the belief that some new technology will provide the energy to replace oil.  There are no guarantees about how much and what price energy will be available in the future.

I met a guy last winter who was working for a company that had a scheme to make diesel fuel from natural gas.  Naturally the question came up - how much would the stuff cost.  13$/gallon was the answer.  Now natural gas prices have gone up significantly, so who knows what the current price of the stuff would be.  Maybe 20$/gallon??  Jesus, I can buy biodiesel for nearly the same price as regular D2 right now...

OPEC to raise output by 2 mln bpd-Spiegel

BERLIN (Reuters) - OPEC wants to increase output by just under two million barrels a day because its members are not interested in record high prices that could trigger a recession, Acting General Secretary Shihab-Eldin Adnan was quoted as saying in an interview published on Saturday.

In an interview with Der Spiegel magazine released ahead of publication, Shihab-Eldin said OPEC members want to announce the increase at their next meeting in Vienna on September 19.

"We plan a number of measures. We will increase our production. The OPEC states with reserve capacity will participate, in particular Saudi Arabia. That will raise the OPEC production by just under 2 million barrels per day," Shihab-Eldin was quoted as saying. ws

News stories are tending towards an air of panic lately.

EU demands more and cheaper oil

After chairing a meeting of European Union finance ministers in England, British finance minister Gordon Brown called on OPEC states to raise production by half a million barrels a day ahead of its September 19 meeting.

 "This global problem needs global solutions," Brown said, highlighting estimates that, beyond the immediate threat to economic growth from world oil prices of nearly $70 a barrel, oil demand could rise 50 percent in the next 20 years.

The ministers issued a statement saying they also wanted oil companies to increase investment in oil exploration, production and refining capacity as well as alternative energy services.

"All over Europe, energy companies are making very high profits and it may be reasonable to recycle part of them" to help poor people whose bills for light and heating are soaring, Italian Economy Minister Domenico Siniscalco added.


Yes, it is good the NY times is starting to caught on, also it seems some economists are starting to catch on too. I just read in an article, that according to Canadian Imperial Bank of Commerce's chief economist "Oil may average $84 a barrel next year, $93 in 2007, and $100 in the fourth quarter of 2007, as demand outpaces supply".  Full article can be found at,

I know in the peak Oil debate it is common to pit the Geologists vs. the "Flat Earth Economists".  However, I think there is a shift taking place.  This old battle of "Geologists vs. Economists" may have been the core of the debate five years ago.  Today though, it seems economists, major oil companies and even countries are taking sides in the Peak Oil debate (fight).

(A boxing ring appears with a spot light in the middle, a man walks up to the microphone and begins the introductions)

Boxing Introducer's Voice:
In The "Peak Oil" Corner... we have the GREAT UNDERDOG for the last 50 years... Weighing in at 500 million souls and 11 trillion dollars GDP... we have, the European Governments, British Petroleum, Chevron Texaco, Matt Simmons, Jim Cramer, and their fearless leader HUBBERT...M......KING!!!!.  (applause) (applause) (applause)

In The "Cheap Oil Forever" Corner...we have the Raining Champion for the last One Hundred and Fifty Years...Weighing in at 1.8 Billion souls and 18 trillion dollars GDP...we have, the US government, the Chinese Government, Exxon Mobile, Daniel Yergin, CERA, and their fearless leader, STEVE...oil's going back to $30...FORBES!!!    (applause) (applause) (applause)

Boxing Introducer's Voice again:  "We would like to thank Mr. King... who could not be with us tonight, but he was the Original Under Dog, in this fight for the future of mankind and back then he was all alone and everyone else was in the other corner.  We all remember his Big Fight in 1970, when Mr. King got his first K.O. in the U.S. Peak Oil Title Fight.  Now, 35 years hence, we are assembled once more for the Global Championships, for the World Peak Oil Title.  The corners are more balanced now and I think Mr. King would be proud of the rag tag bunch that have taken up his under dog status.  Let's have a fair fight gentlemen."

Boxing Introducer's Voice again:  "Remember the Prize for the "World Peak Oil Title" is....uncountable Trillions of dollars in GDP, the high standard of living we all enjoy, and our "Very Way of Life".

Boxing Introducer's Voice again:  Lastly, note that the time line for tonight's fight, is just 5 Rounds (years).  That means if, NO winner is declared by then and NO quick action is taken, the Fight will be Declared a Draw and the World Losses.  Then, we get to welcome back our old friend ..."The Dark Ages".

Make your bets ladies and gentlemen!!!  LET'S..... GET READY TO RUBLE!!! DING... DING... DING (bell rings)

Me talking again: "It would be almost comical, if it were not so true."

you might need to add someone to the UNDERDOG corner ... is bill clinton now a peak oiler?

quote: "It's not clear to me that there will be enough oil to produce that growth according to traditional energy use patterns."
Nice catch on Clinton.

I'd be pretty ticked off if I were the Chinese.  The U.S. consumes ONE-FOURTH of the world's total oil production, wastes it with huge SUVs and spread out housing, doesn't even make much anymore, and the Chinese are the ones who are supposed to cut back.

China buys SUV's too. In fact, I read a while ago that SUV's sell fastest over there.

From what I saw (in a one-week visit last spring), the main traffic law is "The bigger vehicle has the right-of-way." But I suspect it's more than that: if you get successful, you want to buy toys. Same as here, but maybe even more so.

Its been reported recently that signficant taxes are being applied to larger vehicles in China (I seem to recall > 20% or some such number) - a note of it was made on TOD1 or TOD2.

China is not stupid nor are they stuck to following exactly the same path we've been on. They are working on smaller fuel efficient vehicles; they have an alternative fuels strategy; they are working on trying to produce much safer nuclear technology.

Every nation which has grown strong and remained strong did so on the back of cheap energy. I for one do not believe that they are ignorant of that, nor are they likely to simply assume that it will be easy, or even achievable, to gain access to 1/4 or more of annual world petroleum output for their growing economy which would be implied by simply following the path we took.

I have to believe (perhaps better put as want to believe) that they are somewhat smarter than that and are working plans B, C, D, E etc. If not, we are all doomed!

My sense is that they might be peak oilers themselves, and perhaps caught by surprise by the latest round of tightness, we might see evidence of them speeding up plans in that regard.

These are my thoughts on the peak oil 'debate' as summarized by th eNY times today:

As a winter of discontent in the US approaches, most are still blind to the severity of upcoming energy crisis. It is not an issue of what 'side' you are on. The whole 'debate' outlined in this article will be over and past in just a few months.

Even as the price of natural gas has doubled in one year, and oil up about 50%, the optimists on this debate stick to their party line. Claiming to be believers in the free markets, they seem to ignore what the free market is screaming out to them - that demand growth is catching up and exceeding supply growth.

If Pickens and Simmons are right about the limitations of oil production, we will surely know soon and we will see continued high and rising energy prices. Unfortunately the bright, shining tomorrow of increased energy availability portrayed by Lynch and Yergin hasn't appeared in the cold dark reality of declining post-Katrina US oil and natural gas production.

Yergin and Lynch seemed to have also overlooked, besides possible natural and political disasters, that depletion rates of existing oil & natural gas fields appear to be accelerating - thereby offsetting most if not all the energy gain from new production sites.

segments of the NE Amtrak line ARE diesel powered... though its far from the "high traffic" parts of the line.

I know that between Hartford CT and (I assume) everything north of that, but headed towards Springfield MASS and beyond are diesel powered.

I went to college in Central Mass, so I've taken that train many a-time between school and home in PHL.

I actually really like framing the argument that way. Geologists vs. Economists. The funny thing is that I bet if you asked the average person who is more of a "scientist", geologists sound far more grounded (pardon the pun) than economists.

Geologists: "A rock is a rock."

Economists: "It might be a rock now, but if given the right incentives, it could become oil. Just let the market work its magic through the alchemy of the invisible hand."

I think the public would trust a highly credentialed geologist anyday over an economist. We just need to get him or her on the Today Show to debate Dr. Freakonomics.

I have little respect for economists in general. Modern economics is little more than a system the promotes wealth transfer from the poor to the rich. When you look at what American-style free trade has brought to this world, I hope it makes others as sick as it makes me. Unfettered growth, mostly by taking advantage of less advanced countries, is little more than modern slavery. It benefits the well to do and few others. Sure the factory worker in Mexico may make $0.45/hr -- but try to support a family on that salary in working conditions that would make an OSHA reject cringe.

It has taken us thousands of years of society to develop great technology, but we've ravaged the world to get where we're at. We've forgotten any notions of living in harmony with each other much less our environment. It's like somebody handed a toddler a 38 special and sent him to a playground to play cops and robbers.

History is full of lessons which we've ignored for too long. I'm not some chicken little wingnut; I don't think the world is just going to end. However, I do think what we face may turn out to be one of the greatest tests of humanity yet. I think we're up to the challenge. But the price we pay may be great and I'll be saddened to know that it didn't HAVE to be that way.

Am I the only one that thinks that this constant smearing of anti-economist nonsense on this site is really too much? The way it seems at the moment a witch would have better chance in a Salem trial than an economist trying to post on this site..... As an economist myself, it's really quite insulting that every time I read these boards I get words shoved in my mouth by people who know nothing about economics.

Economics is one of the smallest and least understood sciences in the world. Like any science it actually has a range of opinions....some of which are "pro-peak oil" or "anti-peak oil", perhaps some of you should consider that.

Geologists: "A rock is a rock."
Strangely enough, the average geologist will know more than the average economist about rocks. However, suddenly geologists think they know all about the market and pricing mechanisms due to what their rocks are telling them.
Economists: "It might be a rock now, but if given the right incentives, it could become oil. Just let the market work its magic through the alchemy of the invisible hand."
There is no such thing as magic. Please stop pretending economists are magicians.

The most amusing thing about this economists versus geologists debate is that most economists don't even know about the argument, and many would probably take the geologists' side. It seems to me the whole thing is simply a way for geologists to make their unimaginably uninteresting science heard on the world forum.

Most prominent sceptics of peak oil, or in general sceptics of the idea that natural resource constraints will be important to humanity's future, have been economists. Julian Simon, Michael Lynch, Morris Adelman... While the stereotype might be simplistic, there is something to it.